exv10w14






Exhibit 10.14




Patriot Capital Funding, Inc.




Employee Restricted Stock Plan

Restricted Stock Agreement for Executive Officers




Date of Grant:                    




               1. Grant of Employee Restricted Stock. Subject to the terms and conditions herein
and the provisions of the Patriot Capital Funding, Inc. Employee Restricted Stock Plan (the
“Plan”), Patriot Capital Funding, Inc. (the “Company”) on the above date has granted to the Grantee
named below (the “Grantee”) Shares subject to the restrictions in this Agreement (“Restricted
Stock”) as shown below:


Grantee: [name of Grantee]

Restricted Stock: [number of Shares]




               All capitalized terms used herein shall have the same meaning as set forth in the Plan, except
as otherwise specified in this Agreement.



               2. Vesting. The Grantee shall become vested in the Restricted Stock evidenced by
this Agreement, and the forfeiture and transferability provisions set forth in Section 3 and 5 of
this Agreement shall lapse, in accordance with the following schedule:




[     % of the] Shares on the first anniversary of Date of Grant;

[     % of the] Shares on the second anniversary of Date of Grant:

[     % of the] Shares on the third anniversary of Date of Grant;

[     % of the] Shares on the fourth anniversary of Date of Grant.



               Notwithstanding the foregoing, the Grantee will become vested in all of the Restricted Stock
upon the occurrence of any of the following events:





     (a) the Grantee’s termination of employment by the Company without Cause (as defined
below) or by the Grantee for Good Reason (as defined below); or




     (b) a Change in Control of the Company (as defined below).



          “Cause” has the meaning set forth in the Grantee’s employment agreement with the Company in
effect at the time of Grantee’s termination of employment. If no such employment agreement is in
effect at the time of Grantee’s termination of employment or if such employment agreement does not
contain a definition of the term “Cause,” “Cause” means (i) the Grantee’s willful and continued
failure to perform substantially his duties with the Company (other than any such failure resulting
from the Grantee’s incapacity due to physical or mental illness or any such failure subsequent to
the Grantee being delivered a notice of termination without Cause by the Company or delivering a
notice of termination for Good Reason to the Company that results in the Grantee’s termination of
employment) after a written demand for substantial performance is delivered to the Grantee by the
Company which specifically identifies the manner in which the Company believes that the Grantee has
failed to perform substantially his duties; (ii) the Grantee’s willfully engaging in illegal
conduct or gross misconduct which is demonstrably and materially injurious to the Company or its
Affiliates (as defined below), (iii) the Grantee’s ineligibility to serve as an employee, officer,
or director of the Company pursuant to Section 9 of the Investment Company Act of 1940, as amended
(the “1940 Act”), or (iv) the Grantee’s conviction of a felony or crime involving moral turpitude;
provided, however, that a failure on the part of the Grantee to achieve performance objectives set
by the Company shall not in and of itself constitute Cause pursuant to clause (i) hereof. Prior to
terminating the Grantee’s employment for Cause, the Company must notify the Grantee in writing of
any event purporting to constitute Cause within 45 days of the Board’s knowledge of its existence
and, if curable, must provide the Grantee with at least 20 days to cure such event. If such event
is not cured by the Grantee in such time period, or is incurable, then the Grantee’s employment
shall be terminated for Cause if 2/3 of the independent members of the Board determine in writing
to so terminate his employment.




               “Good Reason” has the meaning set forth in the Grantee’s employment agreement with the Company
in effect at the time of Grantee’s termination of employment. If no such employment agreement is
in effect at the time of Grantee’s termination of employment or if such employment agreement does
not contain a definition of the term “Good Reason,” “Good Reason” means, without the Grantee’s
express written consent, the occurrence of any of the following events:



 









 






     (i) any material change in the duties or responsibilities (including reporting
responsibilities) of the Grantee that is inconsistent in any material and adverse respect
with the Grantee’s position, duties, responsibilities or status with the Company (including
any material and adverse diminution of such duties or responsibilities);




     (ii) a material and adverse change in the Grantee’s titles or offices (including, if
applicable, membership on the Board with the Company;




     (iii) a reduction by the Company in the Grantee’s rate of annual base salary or an
adverse change in the value or reasonableness of the Grantee’s annual bonus opportunity as a
percentage of his base salary, provided, however, that the Grantee’s rate of annual base
salary may be reduced without being considered Good Reason if such reduction is implemented
by the Company as part of an overall general salary reduction affecting substantially 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;




     (iv) any requirement of the Company that the Grantee be based anywhere more than 35
miles from the office where the Grantee is based on the Date of Grant under this Agreement,
or, if the Grantee subsequently agrees to a change in such location, 35 miles from such new
office location; or




     (v) the failure of any purchaser or successor to all or substantially all of the
Company’s assets to assume the obligations of the Company contained in this Agreement,
either in writing or as a matter of law.



               The Grantee must notify the Company of any event purporting to constitute Good Reason within
45 days following the Grantee’s knowledge of its existence, and the Company shall have 20 days in
which to correct or remove such Good Reason, or such event shall constitute Good Reason.



               “Change in Control” has the meaning set forth in the Grantee’s employment agreement with the
Company in effect at the time of Grantee’s termination of employment. If no such employment
agreement is in effect at the time of Grantee’s termination of employment or if such employment
agreement does not contain a definition of the term “Change in Control,” “Change in Control” means
the occurrence of any of the following events:



               (i) An acquisition in one or more transactions (other than directly from the Company) of any
voting securities of the Company by any Person (as defined below) immediately after which such
Person has Beneficial Ownership (as defined below) of fifty percent or more of the combined voting
power of the Company’s then outstanding voting securities; provided, however, in determining
whether a Change in Control has occurred, voting securities which are acquired in a “Non-Control
Acquisition” (as hereinafter defined) shall not constitute an acquisition which would cause a
Change in Control. A “Non-Control Acquisition” shall mean an acquisition by (A) an employee
benefit plan (or a trust forming a part thereof) maintained by (I) the Company or (II) any
corporation or other Person of which a majority of its voting power or its voting equity securities
or equity interest is owned, directly or indirectly, by the Company (for purposes of this
definition, a “Subsidiary”), (B) the Company or its Subsidiaries, or (C) any Person in connection
with a “Non-Control Transaction” (as hereinafter defined);



               (ii) The individuals who, as of July 27, 2005, were members of the Board (the “Incumbent
Board”), cease for any reason to constitute at least a majority of the members of the Board or,
following a Merger (as defined below), the board of directors of the ultimate Parent Corporation
(as defined below); provided, however, that if the election, or nomination for election by the
Company’s common stockholders, of any new director was approved by a vote of at least a majority of
the Incumbent Board (or, with respect to the directors who are not “interested persons” as defined
in the 1940 Act, by a majority of the directors who are not “interested persons” serving on the
Incumbent Board), such new director shall, for purposes of this Agreement, be considered as a
member of the Incumbent Board; provided further, however, that no individual shall be considered a
member of the Incumbent Board if such individual initially assumed office as a result of an actual
or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board
(a “Proxy Contest”) including by reason of any agreement intended to avoid or settle any Proxy
Contest; or



               (iii) The consummation of:




     (A) A merger, consolidation or reorganization involving the Company (a “Merger”) or an
indirect or direct Subsidiary of the Company, provided that only entities whose accounts are
consolidated with those of the Company for financial reporting purposes shall be deemed to
be a Subsidiary of the Company for this purpose, or to which securities of the Company are
issued, unless:




          (I) the stockholders of the Company, immediately before a Merger, own, directly
or indirectly immediately following the Merger, more than fifty percent of the
combined voting power of the outstanding voting securities of (1) the corporation
resulting from the Merger (the “Surviving



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Corporation”) if fifty percent or more of the combined voting power of the then
outstanding voting securities of the Surviving Corporation is not Beneficially Owned,
directly or indirectly, by another Person or group of related Persons (a “Parent
Corporation”), or (2) if there is one or more Parent Corporations, the ultimate
Parent Corporation,




            (II) the individuals who were members of the Incumbent Board immediately prior
to the execution of the agreement providing for a Merger constitute at least a
majority of the members of the board of directors of (1) the Surviving Corporation or
(2) the ultimate Parent Corporation, if the ultimate Parent Corporation, directly or
indirectly, owns fifty percent or more of the combined voting power of the then
outstanding voting securities of the Surviving Corporation, and




             (III) no Person other than (1) the Company, (2) any Subsidiary, (3) any employee
benefit plan (or any trust forming a part thereof) maintained by the Company, the
Surviving Corporation, any Subsidiary, or the ultimate Parent Corporation, or (4) any
Person who, together with its Affiliates, immediately prior to a Merger had
Beneficial Ownership of fifty percent or more of the then outstanding voting
securities, owns, together with its Affiliates, Beneficial Ownership of fifty percent
or more of the combined voting power of the then outstanding voting securities of (1)
the Surviving Corporation or (2) the ultimate Parent Corporation.




             Each transaction described in clauses (I) through (III) above shall herein be
referred to as a “Non-Control Transaction.”




               (B) A complete liquidation or dissolution of the Company (other than where assets of
the Company are transferred to or remain with a Subsidiary or Subsidiaries of the Company).




               (C) The direct or indirect sale or other disposition of all or substantially all of the
assets of the Company to any Person (other than (1) a transfer to a Subsidiary, (2) under
conditions that would constitute a Non-Control Transaction with the disposition of assets
being regarded as a Merger for this purpose, or (3) the distribution to the Company’s
stockholders of the stock of a Subsidiary or any other assets).




               (D) The effectiveness of an agreement pursuant to which a person or entity serves or
acts as the investment adviser (as such term is defined in Section 2(a)(20) of the 1940 Act)
of the Company.



               Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely because
any Person (the “Subject Person”) acquired Beneficial Ownership of more than the permitted amount
of the then outstanding voting securities as a result of the acquisition of voting securities by
the Company which, by reducing the number of voting securities then outstanding, increases the
proportional number of shares Beneficially Owned by the Subject Persons, provided that if a Change
in Control would occur (but for the operation of this sentence) as a result of the acquisition of
voting securities by the Company, and after such share acquisition by the Company, the Subject
Person becomes the Beneficial Owner of any additional voting securities which increases the
percentage of the then outstanding voting securities Beneficially Owned by the Subject Person, then
a Change in Control shall occur.



               “Affiliate” means, with respect to any Person, any other Person that, directly or indirectly
through one or more intermediaries, controls, or is controlled by, or is under common control with,
such Person.



               “Beneficial Ownership” means ownership within the meaning of Rule 13d-3 promulgated under
Securities Exchange Act of 1934 (the “Exchange Act”).



               “Person” means “person” as such term is used for purposes of Section 13(d) or 14(d) of the
Exchange Act, including without limitation, any individual, corporation, limited liability company,
partnership, trust, unincorporated organization, government or any agency or political subdivision
thereof or any other entity or any group of Persons.



     3. Forfeiture. Upon the Grantee’s termination of employment (other than by the
Company without Cause or by the Grantee for Good Reason), any unvested portion of the Restricted
Stock granted under this Agreement will be forfeited.



     4. Dividends and Voting Rights. During the period before the restrictions set forth
in Sections 2 and 3 of this Agreement lapse on the Restricted Stock, the Grantee will have the same
rights to vote the Restricted Stock and to receive distributions with respect to the Restricted
Stock as does any other holder of Shares.



     5. Transferability. Restricted Stock with respect to which the restrictions have not
lapsed in accordance with Sections 2 and 3 shall not be assignable or transferable. Any attempt to
assign, pledge, transfer, hypothecate, or otherwise



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dispose of Restricted Stock and any levy of execution, attachment, or similar process on the
Restricted Stock shall be null and void.



               6. No Right to Employment. Nothing contained in this Agreement shall confer upon any
Grantee any right to the continuation of his employment, agency, service as a director, or other
relationship with the Company or any Affiliate or interfere in any way with the right of the
Company or any Affiliate, subject to the terms of any separate employment or other agreement to the
contrary, at any time to terminate such employment, service or agreement or to increase or decrease
the compensation of the individual from the rate in effect at the Date of Grant of the Restricted
Stock.



               7. Withholding. The Company shall have the right to require the Grantee to remit to
the Company an amount sufficient to satisfy any federal, state, and local withholding tax
requirements. To the extent permitted by the 1940 Act and in the Board’s sole discretion and in
the manner and amount determined by the Board, the Grantee may elect to satisfy any withholding
obligation, in whole or in part, by electing to have the Company withhold Restricted Stock with a
fair market value equal to the amount required to be withheld. The Grantee acknowledges that, as
of the Date of Grant, the Company has been advised by its legal counsel that the 1940 Act prohibits
the Company from withholding Restricted Stock in the manner provided for in the immediately
preceding sentence.



               8. Administration and Interpretation. In consideration of the grant, the Grantee
agrees that the Board shall have the exclusive power and discretion to interpret the Plan and this
Agreement and to adopt such rules for the administration, interpretation, and application of the
Plan and Agreement as are consistent therewith and to interpret or revoke any such rules. All
actions taken and all interpretations and determinations made by the Board shall be final,
conclusive, and binding upon the Grantee, the Company, and all other interested persons. No member
of the Board shall be personally liable for any action, determination, or interpretation made in
good faith with respect to the Plan or this Agreement. The Board may delegate its interpretive
authority to an officer or officers of the Company.



               9. Incorporation of Terms of Plan. By his or her signature below, Grantee
acknowledges that he or she has read the terms of the Plan and agrees to be bound by all provisions
thereof. The Grantee further acknowledges that he or she has been advised that he or she may
consult with counsel of his or her choosing in considering this Agreement, that he or she has had
an adequate opportunity to do so, and that he or she is entering into this Agreement voluntarily.



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     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by an appropriate
officer and the Grantee has executed this Agreement, both as of the date of grant shown above.



	 	 	 	 	 	 	 
	 	 	PATRIOT CAPITAL FUNDING, INC.	 	 
	 
	 

	 	By:
	 	 

	 	 
	 
	 

	 	Dated:
	 	 

	 	 






	 	 	 	 	 
	Grantee:

	 	 

	 	 
	 
	Dated:

	 	 

	 	 






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