Document:

c51774_ex10-2.htm -- Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing

Exhibit 10.2

EMPLOYMENT AGREEMENT 

          This
Employment Agreement (“Agreement”)
dated as of June 26, 2004, is entered into by and between
Deerfield Capital Management LLC (“Deerfield”),
a Delaware limited liability company and wholly owned subsidiary of Deerfield & Company
LLC (“D&C”),
an Illinois limited liability company, and Luke D. Knecht (“Employee”),
and shall become  effective as of (and subject to) the consummation of the transactions
(collectively, the “Transaction”)
contemplated by the Purchase Agreement, dated as of the date  hereof, by and
among Triarc Companies, Inc., Sachs Capital Management LLC, SLA Investments,
Inc., Scott A. Roberts, Marvin Shrear, Gregory H. Sachs and any other parties
named therein (the “Purchase Agreement”)
(the date of the consummation of the Transaction being referred to herein as
the
“Effective Date”). 

W I T N E S S E
T H 

          WHEREAS, Deerfield desires to continue to employ Employee on and following the consummation of the Transaction and to have the benefit of Employee’s
services, and Employee similarly desires to continue to be employed by Deerfield, in each case pursuant to the terms and conditions hereof; and 

          WHEREAS, Deerfield and D&C wish to assure that their respective “Confidential Information” (as defined herein), which Employee obtains as a
result of Employee’s status as an employee of Deerfield, will remain confidential and that Deerfield’s and D&C’s business interests will be protected. 

          NOW, THEREFORE, in consideration of the mutual promises contained herein and for other valuable consideration, the sufficiency of which is hereby
acknowledged, IT IS AGREED AS FOLLOWS: 

          1.       Employment. Deerfield hereby continues to employ Employee as Managing Director,
and Employee hereby agrees to continue such employment and agrees to perform the duties and responsibilities hereunder in accordance with the terms and conditions hereinafter set forth. 

	          	          (a)     Term.
          The term of Employee’s employment under this Agreement shall commence
          on the Effective Date and conclude on the day preceding the third anniversary
          of the Effective Date, unless sooner terminated according to Section
          3 (the “Term”).
          Subject to Section 8(i), this Agreement shall terminate upon the expiration
          of the Term. 

                 (b)     Duties
            and Responsibilities. Employee
            shall devote Employee’s full time, business skills and attention
            to the performance of Employee’s duties, and shall be available
            during normal business hours and at such times as may otherwise be
            required. Employee shall use Employee’s best efforts, expertise
            and knowledge to preserve, develop and maintain the interests of
            Deerfield and each “Affiliate” (as defined below) of Deerfield.
            Employee’s duties shall include [overseeing, supervising, promoting
            and managing all activities in connection with Deerfield’s Dynamic
    Dureation Management Software, hiring staff and 

 

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	          	managing investment portfolios,
          funds, accounts and other products]1 and
          working with other members of Deerfield, D&C or any of their respective
          Affiliates in a professional, cooperative and efficient manner and
          such other duties as may from time to time be assigned by Deerfield;
          provided, that such duties are generally consistent with Employee’s
          skills and level of responsibility within the organization. Employee
          shall maintain all regulatory licenses and registrations necessary
          to the performance of Employee’s duties hereunder. Deerfield may
          require Employee to perform any of the duties set forth in this Section
          1(b) on behalf of Deerfield, D&C or any of their respective direct
          or indirect subsidiaries. 

                 (c)     Outside
            Activities. During the Term,
            Employee shall not engage or otherwise be involved in any other business,
            trade or profession that creates an actual, potential or perceived
            conflict with the interests of Deerfield or any Affiliate of Deerfield,
            or that otherwise conflicts with Employee’s ability to perform
            Employee’s duties and responsibilities hereunder unless approved
            by the Board of Directors of D&C (the “Board”). 

       2.        Compensation
            and Benefits. 

                 (a)     Base
            Salary. During the Term, Employee
            shall receive a base salary of no less than $250,000 per year (the “Base
            Salary”), payable in accordance
            with the payroll practices of Deerfield as in effect from time to
            time. 

                 (b)     Bonus.
          During the Term, Employee may be eligible to participate in any Deerfield
          bonus plan, program or arrangement, as determined by the Board, or
          to receive such other bonus(es) as the Board may determine in its sole
          discretion; provided, however,
          that in the event that Employee is employed with Deerfield or any of
          its Affiliates on the day preceding the third anniversary of the Effective
          Date, and if the sum of Employee’s total bonus(es) paid in respect
          of fiscal years 2004 through 2007 (including, without limitation, any
          such bonus(es) attributable to the portion of the 2004 fiscal year
          having elapsed prior to the Effective Date or that become payable only
          following the expiration of the Term) are less than $750,000, then
          Employee shall receive, within 90 days following the third anniversary
          of the Effective Date, a one-time payment equal to the excess of $750,000
          over the sum of all such bonuses paid to Employee in respect of fiscal
          years 2004 through 2007 (the “Aggregate
          Guaranteed Bonus”). 

                 (c)     Business
            Expense Reimbursement. Employee
            shall be reimbursed for Employee’s reasonable and necessary
            business expenses, including reasonable travel, lodging and entertainment
            expenses, in accordance with Deerfield’s business expense reimbursement
            policy as in effect from time to time and upon submission of appropriate
            documentation and receipts within thirty (30) days of the date on
    which the expense is incurred.

 

     1 Confirm correct description of Knecht’s duties.

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	          	          (d)     Profits
            Interest Grant. Within thirty
            (30) days following the Effective Date, Employee shall be awarded
            a profits-only membership interest in D&C representing 0.25%
            of the outstanding membership interests in D&C (the “Profits
            Interest Grant”), subject
            to the terms and conditions of a profits-only interest grant agreement
            to be entered into at the time of grant and any other agreement(s)
            required to be entered into pursuant thereto (the “Profits
            Interest Grant
            Agreement”). Subject to
            the terms of the Profits Interest Grant Agreement, the Profits Interest
            Grant shall vest on the third anniversary of the Effective Date; provided,
            that Employee remains employed by Deerfield or an Affiliate of Deerfield
            on the day prior to such third anniversary. 

                 (e)     Benefits.
          Employee will be entitled to participate in the medical, dental, life,
          long-term disability and retirement plans as may be in effect from
          time to time. 

                 (f)     Deductions.
          All salary and other payments and allowances outlined in this Agreement
          are subject to such withholding and deductions as may be required by
          law, as determined by Deerfield in its sole discretion. 

                 3.      Termination. 

                 (a)     Termination
            by Deerfield without Cause; Termination by Employee
            for Good Reason. 

                         (i)     This
          Agreement and Employee’s employment may be terminated at any time
          prior to the day preceding the third anniversary of the Effective Date
          by Deerfield without “Cause” (as defined below) (other than
          by reason of Employee’s death or “Disability” (as defined
          below)) following the delivery of a “Notice of Termination”
        (as defined below) to Employee. In addition, this Agreement and Employee’s
        employment hereunder may be terminated at any time prior to the day preceding
        the third anniversary of the Effective Date by Employee for “Good
        Reason” (as defined below) following the delivery of a Notice of
        Termination to Deerfield. 

                         (ii)                If
        Employee’s employment is terminated by Deerfield without Cause
          (other than by reason of Employee’s death or Disability) or by
          Employee for Good Reason, (A) Employee shall continue to receive the
          Base Salary Employee would have received until the third anniversary
          of the Effective Date in accordance with the normal payroll practices
          of Deerfield and (B) Deerfield shall pay to Employee the Aggregate
          Guaranteed Bonus within 90 days following the third anniversary of
          the Effective Date. Except as set forth above, Employee shall have
          no further rights to any compensation (including any Base Salary or
          bonus) or any other benefits under this Agreement. All other benefits,
          if any, due Employee following a termination pursuant to this Section
          3(a) shall be determined in accordance with the plans, policies and
          practices of Deerfield; provided, however, that Employee shall not
    participate in any severance plan, policy or program of Deerfield. 

 

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	          	                  (iii)    For
          purposes of this Agreement, “Good
          Reason” shall mean, without
          Employee’s consent, the occurrence of any of the following events:
          (A) a reduction by Deerfield in Employee’s Base Salary; (B) any
          material adverse change in Employee’s title or responsibility;
          (C) any requirement of Deerfield that Employee be based anywhere more
          than fifty (50) miles outside the city limits of Chicago, IL; or (D)
          a failure by Deerfield to pay Employee’s Base Salary when due
          pursuant to this Agreement. Notwithstanding the foregoing, “Good
          Reason” shall not exist with respect to the matters set forth
          in clauses (A), (B), (C) or (D) above if, after written notice from
          Employee to the Board specifying the circumstances giving rise to Good
          Reason under such clause, Deerfield shall have cured the circumstances
          giving rise to Good Reason to the reasonable satisfaction of Employee
          within ten (10) business days after such notice. 

      
          (b)     Termination
            for Cause. 

                        (i)                 This
        Agreement and Employee’s employment may be terminated by Deerfield
          at any time for Cause following delivery of a Notice of Termination
          to Employee. 

                        (ii)     For
          purposes of this Agreement “Cause” shall
          mean: (A) the breach by Employee of any material provision of this
          Agreement, including, but not limited to, Sections 5, 6 and 7, or the
          Profits Interest Grant Agreement; (B) Employee’s commission of
          a felony or violation of any law involving moral turpitude, dishonesty,
          disloyalty or fraud; (C) any failure by Employee to substantially comply
          with any written rule, regulation, policy or procedure of Deerfield
          or any Affiliate of Deerfield applicable to Employee, which noncompliance
          could reasonably be expected to have a material adverse effect on the
          business of Deerfield or any such Affiliate; (D) any failure by Employee
          to comply with Deerfield’s, or any Affiliate of Deerfield’s,
          policies with respect to insider trading applicable to Employee; (E)
          a willful material misrepresentation at any time by Employee to any
          member of the Board or any director or superior executive officer of
          Deerfield or any of its Affiliates; (F) Employee’s willful failure
          or refusal to comply with any of Employee’s material obligations
          hereunder or a reasonable and lawful instruction of the Board or the
          person to whom Employee reports; or (G) commission by Employee of any
          act of fraud or gross negligence in the course of Employee’s employment
          hereunder or any other action by Employee, in either case that is determined
          to be detrimental to Deerfield or any of its Affiliates (which determination,
          in the case of gross negligence or such other action, shall be made
          by the Board in its reasonable discretion); provided,
          however, that, except for any willful or grossly negligent acts or
          omissions, the commission of any act or omission described in clause
          (A) or (C) that is capable of being cured shall not constitute Cause
          hereunder unless and until Employee, after written notice from Deerfield
          to Employee specifying the circumstances giving rise to Cause under
          such clause, shall have failed to cure such act or omission to the
          reasonable satisfaction of the Board within ten (10) business days
    after such notice. 

 

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	          	                  (iii)     In
          the event Employee’s employment is terminated pursuant to this
          Section 3(b), Employee shall be entitled to receive Employee’s
          Base Salary through the date of termination and any earned but unpaid
          bonus for any calendar year preceding the year in which the termination
          occurs. Employee shall have no further rights to any compensation (including
          any Base Salary or bonus) or any other benefits under this Agreement.
          All other benefits, if any, due Employee following a termination pursuant
          to this Section 3(b) shall be determined in accordance with the plans,
          policies and practices of Deerfield; provided, however,
          that Employee shall not participate in any severance plan, policy or
          program of Deerfield. 

                 (c)     Termination
            due to Death or Disability.
            This Agreement and Employee’s employment shall terminate immediately
            upon Employee’s death or, following delivery of a Notice of
            Termination by Deerfield to Employee, due to Employee’s Disability.
            In the event Employee’s employment is terminated pursuant to
            this Section 3(c), Employee (or Employee’s estate, as the case
            may be) shall be entitled to receive Employee’s Base Salary
            through the date of termination and any earned but unpaid bonus for
            any calendar year preceding the year in which the termination occurs.
            Employee (or Employee’s estate, as the case may be) shall have
            no further rights to any compensation (including any Base Salary
            or bonus) or any other benefits under this Agreement. All other benefits,
            if any, due Employee (or Employee’s estate, as the case may
            be) following a termination pursuant to this Section 3(c) shall be
            determined in accordance with the plans, policies and practices of
            Deerfield; provided, however,
            that Employee (or Employee’s estate, as the case may be) shall
            not participate in any severance plan, policy or program of Deerfield.
            For purposes of this Agreement, “Disability” shall
            mean: Employee’s physical or mental incapacity as a result of
            which Employee is unable for a period of ninety (90) days during
            any one hundred eighty (180) day period to perform Employee’s
            duties with substantially the same level of quality as immediately
            prior to such incapacity. 

                 (d)     Notice
            of Termination. Any termination
            of this Agreement and Employee’s employment by Deerfield (other
            than the immediate and automatic termination of this Agreement and
            Employee’s employment upon Employee’s death) shall be communicated
            by a written Notice of Termination to Employee or, in the case of
            a termination by Employee for Good Reason, to Deerfield, delivered
            in accordance with Section 8(m). For purposes of this Agreement,
            a “Notice of Termination” shall
            mean a notice that indicates the specific termination provision in
            this Agreement relied upon and the date of termination, as determined
            by Deerfield or, in the case of a termination by Employee for Good
            Reason, the circumstances alleged to give rise to Good Reason, and
            which date of termination shall be at least five (5) business days
            following the date on which Employee gives the Notice of Termination
            to Deerfield. 

                 (e)     Obligations
            Following Notice. If this Agreement
            and Employee’s employment are terminated, Employee shall, prior
            to the effective date of such termination or as may otherwise be
    agreed by Deerfield and Employee, (i) meet

 

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	          	with Employee’s supervisors
          as requested by Deerfield for the purpose of winding up any pending
          work and providing an orderly transfer of the duties, accounts, customers
          and/or clients for which Employee has been responsible, identifying
          key Confidential Information likely to be in Employee’s possession,
          and discussing Employee’s future plans for employment in light
          of Employee’s obligations under this Agreement and the Profits
          Interest Grant Agreement; (ii) promptly deliver to Deerfield all property
          belonging to Deerfield and any of its Affiliates, including any and
          all Confidential Information, equipment (including, without limitation,
          any cell phones, computers, printers, fax machines, pagers, Personal
          Digital Assistants, Bloomberg terminals or Travellers, and Reuters
          terminals), automobiles and other property of Deerfield or any of its
          Affiliates that may be in Employee’s possession or under Employee’s
          control, whether at Deerfield’s offices, Employee’s home
          or elsewhere, including all such papers, work papers, notes, documents
          and equipment in the possession of Employee or Employee’s counsel
          and any copies or duplicates thereof, and all originals and copies
          of papers, notes and documents (in any medium, including computer disks),
          whether property of Deerfield or any of its Affiliates or not, prepared,
          received or obtained by Employee or Employee’s counsel during
          the course of Employee’s employment with Deerfield or any of its
          Affiliates; and (iii) devote Employee’s full time and attention
          to these obligations and Employee’s other responsibilities as
          directed by Deerfield. Moreover, if Employee’s employment is terminated
          pursuant to Section 3(a) by Deerfield without Cause (other than by
          reason of Employee’s death or Disability), by Employee for Good
          Reason, or by Deerfield pursuant to Section 3(c) due to Employee’s
          Disability, the continued payment of Base Salary, and the right to
          receive payment in respect of vested profits-only membership interests
          granted pursuant to the Profits Interest Grant Agreement, as applicable,
          shall be subject to Employee’s execution of a release, in substantially
          the form attached hereto as Exhibit A, subject to revision to reflect
          changes in applicable law. 

   
	 	 
	          4.       Definitions.
        For purposes of Sections 5, 6 and 7 of this Agreement (and otherwise
        where used in this Agreement), the following terms shall have the meanings
    set forth herein: 
	 	 
	 	         (a)     “Affiliate” shall
          mean, with respect to any Person, any other Person that directly or
          indirectly controls, is controlled by, or is under common control with
          that first Person. For purposes of this definition, “control” of
          a Person shall mean the power, direct or indirect, to direct or cause
          the direction of the management and policies of such Person, whether
          through the ownership of Voting Stock, by contract, or otherwise. When
          referencing an “Affiliate” of Deerfield or D&C in this
          Agreement, the parties specifically acknowledge that such term includes
          Triarc and its Affiliates and shall include any Affiliate that may
          be organized in the future. 

                 (b)     “Client” shall
          mean all Past Clients, Present Clients and Potential Clients, subject
          to the following general rules: (i) with respect to each such Client,
    the term shall also include any Persons that, to the Knowledge of 

 

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	          	Employee, are Affiliates of
          such Client, directors, officers or employees of such Client or any
          such Affiliates thereof, or Persons who are members of the Immediate
          Family of any of the foregoing Persons or Affiliates of any of them;
          (ii) with respect to any such Client that is a collective investment
          vehicle (provided that, for the avoidance of doubt, a 401(k) retirement
          plan shall not itself be considered a “collective investment vehicle” except
          to the extent Employee has actual knowledge of the identities of investors
          therein), the term shall also include any investor or participant in
          such Client (provided that, in the case of any collective investment
          vehicle that is a registered investment company, an investor or participant
          therein shall not be deemed a “Client” hereunder unless such
          investor or participant has in the aggregate at least $500,000 under
          management by Deerfield and its Affiliates (whether through investments
          in registered investment companies or otherwise)); and (iii) with respect
          to any such Client that is a trust or similar entity, the term shall
          include the settler and each of the beneficiaries of such Client and
          the Affiliates and Immediate Family members of any such Persons. 

      
          (c)     “Confidential
            Information” shall mean
            all proprietary information or data relating to the business of Deerfield
            or any of its Affiliates to which Employee has access and/or learns
            prior to or during the Term, including, but not limited to: business
            and financial information; new product development; formulas, identities
            of and information concerning Clients, vendors and suppliers; development,
            expansion and business strategies, plans and techniques; computer
            programs, devices, methods, techniques, processes and inventions;
            research and development activities; compilations and other materials
            developed by or on behalf of Deerfield, D&C or any of their respective
            Affiliates (whether in written, graphic, audio-visual, electronic
            or other media, including computer software). Confidential Information
            also includes information of any third party doing business with
            Deerfield or any of its Affiliates that such third party identifies
            as being confidential or that is subject to a confidentiality agreement
            with such third party. Confidential Information shall not include
            any information that is in the public domain or otherwise publicly
            available (other than as a result of a wrongful act of Employee or
            an agent or other employee of Deerfield or any of its Affiliates,
            including a breach of Section 5(b) below). 

                 (d)     “Immediate
            Family” shall mean, with
            respect to any individual, such individual’s spouse; the descendants
            (natural or adoptive, of the whole or half blood) of such individual
            or such individual’s spouse; the parents and grandparents (natural
            or adoptive) of such individual or such individual’s spouse;
            and the descendants of the parents (natural or adoptive) of such
            individual or such individual’s spouse. 

                 (e)     “Investment
            Management Services”
        shall mean any services (including sub-advisory services) that involve
        (a) the management of an investment account or fund (or portions thereof),
        or a group of investment accounts or funds, of any Person for compensation
        or (b) the rendering of advice with respect to the investment and reinvestment
    of assets or funds (or any group 

 

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	          	of assets or funds) of any
          Person for compensation (but excluding the rendering of such advice
          to any subsequent employer of Employee that is not in the business
          of managing investment accounts or funds or rendering advice to or
          for the benefit of third parties with respect to investment or reinvestment
          of assets or funds, where such advice is rendered solely for such employer’s
          own proprietary use and the only compensation received by Employee
          is in the form of salary, wages or bonus paid by such employer), and,
          in the case of both (a) and (b), performing activities related or incidental
          thereto. 

                 (f)     “Knowledge
            of Employee” shall mean
            Employee’s actual knowledge or the knowledge Employee should
            have obtained after making due inquiry. 

                 (g)     “Past
            Client” shall mean any
            Person who, to the Knowledge of Employee, had been an advisee or
            investment advisory customer of, or was otherwise a recipient of
            Investment Management Services from, Deerfield or any of its Affiliates
            at any time during the one (1) year period immediately preceding
            the date of termination of Employee’s employment, but at such
            date is not an advisee or investment advisory customer or client
            of, or recipient of Investment Management Services from, Deerfield
            or any of its Affiliates. 

                 (h)     “Person” or “Persons” means
          any individual, corporation, partnership, joint venture, association,
          joint-stock company, business trust, limited liability company, trust,
          unincorporated organization or government or a political subdivision,
          agency or instrumentality thereof or other entity or organization of
          any kind. 

                 (i)     “Potential
            Client” shall mean any
            Person to whom Employee or, to the Knowledge of Employee, Deerfield
            or any of its Affiliates, or any owner, part owner, shareholder,
            partner, member, director, officer, trustee, employee, agent or consultant
            (or Person acting in a similar capacity) of any such Person (acting
            on their behalf), has, within the one (1) year period prior to the
            date of termination of Employee’s employment, offered (whether
            by means of a personal meeting or by telephone call, letter, written
            proposal or otherwise) to provide Investment Management Services,
            but who is not on the date of termination of Employee’s employment
            an advisee or investment advisory customer of, or otherwise a recipient
            of Investment Management Services from, Deerfield or any of its Affiliates
            (directly or indirectly). The preceding sentence is meant to exclude
            (i) advertising, if any, through mass media in which the offer, if
            any, is available to the general public, such as magazines, newspapers
            and sponsorships of public events and (ii) “cold calls” and
            mass-mailing form letters, in each case to the extent not directed
            towards any particular Person and not resulting in an indication
            of interest or a request for further information. 

                 (j)     “Present
            Client” shall mean, at
            any particular time, any Person who, to the Knowledge of Employee,
            at the time of Employee’s employment or thereafter is an advisee
    or investment advisory customer of, or otherwise a 

 

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	          	recipient of Investment Management
          Services from, Deerfield or any of its Affiliates (directly or indirectly). 

                 (k)     “Prohibited
            Competition Activity”
        shall mean any of the following activities: 

                          (i)     directly
          or indirectly, whether as owner, part owner, partner, shareholder,
          member, director, officer, trustee, employee, agent or consultant (or
          Person acting in a similar capacity) for or on behalf of any Person
          other than Deerfield or any of its Affiliates: (A) diverting or taking
          away any funds or investment accounts with respect to which Deerfield
          or any of its Affiliates is performing Investment Management Services
          (other than funds of which Employee and/or members of Employee’s
          Immediate Family are the sole beneficial owners, subject to any applicable
          restrictions relating thereto set forth in any agreement to which Employee
          or any of Employee’s Affiliates is a party); or (B) soliciting
          any Person to divert or take away any such funds or investment accounts
          (other than funds of which Employee and/or members of Employee’s
          Immediate Family are the sole beneficial owners, subject to any applicable
          restrictions relating thereto set forth in any agreement to which Employee
          or any of Employee’s Affiliates is a party); or 

                         (ii)     directly
          or indirectly, whether as owner, part owner, partner, shareholder,
          member, director, officer, trustee, employee, agent or consultant (or
          Person acting in a similar capacity) for or on behalf of any Person
          other than Deerfield or any of its Affiliates, performing any Investment
          Management Services (provided that if Employee directly performs Investment
          Management Services for Employee’s own account or a member of
          Employee’s Immediate Family without a fee or other remuneration,
          Employee shall not be considered to have engaged in a Prohibited Competition
          Activity solely due to the performance of such Investment Management
          Services). 

                 (l)     “Triarc” shall
          mean Triarc Companies, Inc. and any entity to which it has assigned
          its rights, interest and obligations under the Purchase Agreement,
          together with its successors and assigns. 

                 (m)     “Voting
            Stock” means, with respect
            to any Person, the capital stock or other equity or profits interests
            of any class or kind ordinarily having the power to vote for the
            election of directors, managers or other voting members of the governing
    body of such Person. 

	 	 
	          5.       All
          Business to be the Property of Deerfield; Assignment of Intellectual  Property;
    Confidentiality. 
	 	 
	 	
                 (a)     Employee
          agrees that any and all presently existing investment advisory businesses
          of D&C, Deerfield and their respective Affiliates (including businesses
          of any of their predecessors), and all businesses developed by D&C,
          Deerfield, any of their respective Affiliates or any predecessor thereto,
    including 

 

 

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	          	by Employee or any other employee
          of D&C, Deerfield, any of their respective Affiliates or any predecessor
          thereto, including, without limitation, all investment methodologies,
          all investment advisory contracts, fees and fee schedules, commissions,
          records, data, client lists, agreements, trade secrets, and any other
          incident of any business developed by D&C, Deerfield, any of their
          respective Affiliates or any predecessor thereto, or earned or carried
          on by Employee for D&C, Deerfield, any of their respective Affiliates
          or any predecessor thereto, and all trade names, service marks and
          logos under which D&C, Deerfield, any of their respective Affiliates
          or any predecessor thereto, do or have done business, and any combinations
          or variations thereof and all related logos, are and shall be the exclusive
          property of D&C, Deerfield or such Affiliate, as applicable, for
          its or their sole use, and (where applicable) shall be payable directly
          to D&C, Deerfield or such Affiliate (as applicable). In addition,
          Employee acknowledges and agrees that the investment performance of
          the accounts or funds managed by D&C, Deerfield or any of their
          respective Affiliates, or any predecessor thereto, was attributable
          to the efforts of the team of professionals at D&C, Deerfield,
          such Affiliate or such predecessor thereto, and not to the efforts
          of any single individual or subset of such team of professionals, and
          that therefore, the performance records of the accounts or funds managed
          by D&C, Deerfield or any of their respective Affiliates, or any
          predecessor thereto, are and shall be the exclusive property of D&C,
          Deerfield or such Affiliate, as applicable (and not of any other Person
          or Persons), and may not be used by Employee except with the prior
          written consent of the Board. 

                 (b)     Employee
          acknowledges that, in the course of performing services hereunder and
          otherwise (including, without limitation, for Deerfield’s predecessors),
          Employee has had, and will from time to time have, access to Confidential
          Information, including without limitation, confidential or proprietary
          investment methodologies, trade secrets, proprietary or confidential
          plans, client identities and information, client lists, service providers,
          business operations or techniques, records and data (“Intellectual
          Property”) owned or used
          in the course of business by D&C, Deerfield or any of their respective
          Affiliates. Employee agrees always to keep secret and not ever publish,
          divulge, furnish, use or make accessible to anyone (otherwise than
          in the regular business of D&C, Deerfield and their respective
          Affiliates or as required by court order or by law (after consultation
          with outside counsel)) any Confidential Information of D&C, Deerfield
          or any of their respective Affiliates. At the termination of Employee’s
          services to Deerfield or any of its Affiliates for any reason, all
          data, memoranda, client lists, notes, programs and other papers, items
          and tangible media, and reproductions thereof relating to the foregoing
          matters in Employee’s possession or control, shall be returned
          to Deerfield or the applicable Affiliate and remain in its possession. 

                 (c)     In
          accordance with Section 3 of the Illinois Employee Patent Act, Illinois
          Public Act 83-493, Employee is hereby advised that, notwithstanding
          any other provision of this Section 5 to the contrary, Employee shall
          not be required to assign to D&C, Deerfield or any of their respective
    subsidiaries, any invention, 

 

11 

	          	discovery or improvement conceived
          or made by Employee for which no equipment, supplies, facility or Confidential
          Information of D&C, Deerfield or any of their respective subsidiaries
          was used and that was developed exclusively and entirely on Employee’s
          own time unless such invention, discovery or improvement (i) relates
          to the business or the demonstrably anticipated research or development
          of D&C, Deerfield or any of their respective subsidiaries or (ii)
          results from or relates to any work performed by Employee for D&C,
          Deerfield or any of their respective subsidiaries. 

       6.        Non-Competition
            and Other Covenants. 

                 (a)     During
          the Term and (i) in the event of the termination of Employee’s
          employment with Deerfield and its Affiliates by Deerfield without Cause
          or by Employee for Good Reason prior to the day preceding the third
          anniversary of the Effective Date, for the period commencing on the
          date of Employee’s termination hereunder and ending on the third
          anniversary of the Effective Date, (ii) in the event of the termination
          of Employee’s employment with Deerfield and its Affiliates for
          any reason other than by Deerfield without Cause or by Employee for
          Good Reason prior to the day preceding the third anniversary of the
          Effective Date, for the period commencing on the date of Employee’s
          termination hereunder and ending on the later of (x) the third anniversary
          of the Effective Date or (y) the first anniversary of such date of
          termination or (iii) in the event of Employee’s termination of
          Employee’s employment with Deerfield and its Affiliates for any
          reason on or after the day preceding the third anniversary of the Effective
          Date, for the period commencing on the date of Employee’s termination
          and ending on the first anniversary of such date of termination, Employee
          shall not, directly or indirectly, engage in any Prohibited Competition
          Activity without the prior written consent of the Board, which consent
          may (or may not) be provided at the sole discretion of the Board. 

                 (b)     In
          addition to, and not in limitation of, the provisions of Section 6(a),
          Employee agrees, for the benefit of Deerfield and its Affiliates, that
          during the term of Employee’s employment with Deerfield and any
          of its Affiliates and for the period commencing on the date of Employee’s
          termination and ending on the third anniversary of such date of termination,
          Employee shall not, directly or indirectly, whether as owner, part
          owner, shareholder, partner, member, director, officer, trustee, employee,
          agent or consultant, or in any other capacity, on behalf of Employee
          or any Person other than Deerfield or its Affiliates, without the prior
          written consent of the Board, which consent may (or may not) be provided
          at the sole discretion of the Board: 

                         (i)     provide
          Investment Management Services to any Person that is a Past Client,
          Present Client or Potential Client; provided, however, that this clause
          (i) shall not be applicable to Clients (including Potential Clients)
    who are also members of the Immediate Family of Employee; 

 

12 

	          	                  (ii)     solicit
          or induce, whether directly or indirectly, any Person for the purpose
          (which need not be the sole or primary purpose) of (A) causing any
          funds (other than funds of which Employee and/or members of Employee’s
          Immediate Family are the sole beneficial owners) with respect to which
          Deerfield or any of its Affiliates provides Investment Management Services
          to be withdrawn from such management, or (B) causing any Client (including
          any Potential Client) not to engage Deerfield or any of its Affiliates
          to provide Investment Management Services for any additional funds; provided, however,
          that this clause (ii)(B) shall not be applicable to Clients (including
          Potential Clients) who are also members of the Immediate Family of
          Employee; 

                        (iii)     contact
          or communicate with, whether directly or indirectly, any Past, Present
          or Potential Clients in connection with Investment Management Services; provided, however,
          that this clause (iii) shall not be applicable to Clients (including
          Potential Clients) who are also members of the Immediate Family of
          Employee; or 

                        (iv)     (A)
          solicit or induce, or attempt to solicit or induce, directly or indirectly,
          any employee or agent of, or consultant to, Deerfield or any of its
          Affiliates to terminate its, his or her relationship therewith, (B)
          hire or engage any employee, external researcher or similar agent or
          consultant, or former employee, external researcher or similar agent
          or consultant of Deerfield or any of its Affiliates who was employed
          by or acted as an external researcher or similar agent or consultant
          of Deerfield or any of its Affiliates at any time during the eighteen
          (18) month period preceding such hiring or engagement of such Person;
          or 

                         (v)     work
          in any enterprise, or any division of an enterprise, the business of
          which enterprise or division, as the case may be, primarily involves
          the provision of Investment Management Services, with any employee,
          external researcher or similar agent or former employee, external researcher
          or similar agent of Deerfield or any of its Affiliates who, to the
          Knowledge of Employee, was employed by or acted as an agent to Deerfield
          or any of its Affiliates at any time during the twelve (12) month period
          preceding the termination of Employee’s employment (excluding
          for all purposes of this sentence, secretaries and persons holding
          other similar positions). 

       Notwithstanding the provisions
          of Sections 6(a) and (b), Employee may make passive personal investments
          in an enterprise that is competitive with Deerfield or any of its Affiliates,
          the shares or other equity interests of which are publicly traded; provided that,
          Employee’s holdings therein, together with any holdings of Employee’s
          Affiliates and members of Employee’s Immediate Family, are less
          than five percent (5%) of the outstanding shares or comparable interests
          in such entity. 

                 (c)     Employee
          and Deerfield agree that the periods of time and the unlimited geographic
    area applicable to the covenants of this Section 6 are 

 

13 

	          	reasonable in view of (i) Employee’s
          receipt of the Profits Interest Grant (and Employee’s resulting
          status as a member of D&C from and after the date all or a portion
          of such Profits Interest Grant vests), (ii) Employee’s receipt
          of the payments specified in Sections 2 and (if applicable) 3 above,
          (iii) the geographic scope and nature of the business in which Deerfield
          and its Affiliates are engaged (including Deerfield’s predecessors),
          including the geographic location of its Clients, (iv) Employee’s
          knowledge of Deerfield’s and its Affiliates’ businesses,
          (v) Employee’s relationships with Deerfield’s and its Affiliates’ investment
          advisory clients and (vi) Employee’s continued employment with
          Deerfield and Employee’s receipt of other payments and benefits
          pursuant to this Agreement. However, if such period or such area nonetheless
          should be adjudged unreasonable in any judicial proceeding, then the
          period of time shall be reduced by such number of months or such area
          shall be reduced by elimination of such portion of such area, or both,
          as are deemed unreasonable, so that this covenant may be enforced in
          such maximum area and during such maximum period of time as are adjudged
          to be reasonable. 

                 (d)     Employee
          agrees (on behalf of Employee and Employee’s Affiliates) not to
          make any communication to any third party (including, by way of example
          and not of limitation, any Client (including Potential Clients) or
          employee of Deerfield or any of its Affiliates) that would, or is reasonably
          likely to, disparage, create a negative impression of, or in any way
          be harmful to the business or business reputation of Deerfield or any
          of its Affiliates or their respective successors and assigns, and the
          then current and former officers, directors, shareholders, partners,
          members, employees, agents and consultants (or Person acting in a similar
          capacity) of each of the foregoing. 

       7.        Remedies
            upon Breach; No Effect on Similar Covenants Elsewhere. 

                 (a)     In
          the event that Employee breaches any of the covenants or agreements
          set forth in Sections 5 or 6 of this Agreement or materially breaches
          any other covenant or agreement set forth in any other Section of this
          Agreement, whether during the Term or following the termination of
          Employee’s employment with Deerfield for any reason, then in any
          such case (i) Employee shall forfeit Employee’s and Employee’s
          Affiliates’ rights to any equity, and D&C (and any of its
          assignees thereunder) shall have no further obligations, under any
          agreement related to the grant, award, issuance or sale of equity interests
          in D&C entered into between D&C and Employee (or any Affiliate
          thereof), including this Agreement and the Profits Interest Grant Agreement,
          and (ii) Deerfield, D&C and any of their respective Affiliates
          shall be entitled to withhold any other payments to which Employee
          (or any Affiliate thereof) would otherwise be entitled hereunder, under
          the Profits Interest Grant Agreement or otherwise, to offset damages
          resulting from such breach. 

                 (b)     Employee
          agrees that any breach of any of the covenants contained in this Agreement
          by Employee could cause irreparable damage to Deerfield and its Affiliates,
          and that Deerfield and/or any of its Affiliates (or the successors
    or 

 

14 

	          	assigns of any of them) shall
          have the right to specific performance and/or an injunction or other
          equitable relief (in addition to other legal remedies) to enforce or
          prevent any violation of Employee’s obligations hereunder. Nothing
          in this Agreement shall be construed as limiting Deerfield’s,
          any of its Affiliates’ or their successors’ or assigns’ protections
          and remedies under any applicable statute or common law cause of action. 

                 (c)     The
          covenants of Employee contained in Sections 5 and 6 of this Agreement
          are in addition to, and not in lieu of, any similar covenants contained
          in the Profits Interest Grant Agreement or in any other document. 

       8.        Miscellaneous. 

                 (a)     Severability.
          Whenever possible, each section, portion and provision of this Agreement
          will be interpreted in such manner as to be effective and valid under
          applicable law. If any section, portion or provision of this Agreement,
          however, is held to be invalid, illegal or unenforceable in any respect
          under any applicable law or rule in any jurisdiction, and a court of
          competent jurisdiction or an arbitrator cannot modify such section,
          portion or provision or enforce the modified section, portion or provision,
          such invalidity, illegality or unenforceability will not affect any
          other section, portion or provision, but this Agreement will be reformed,
          construed and enforced in such jurisdiction as if such invalid, illegal
          or unenforceable section, portion or provision had never been contained
          herein. 

                 (b)     Governing
            Law; Jurisdiction and Venue; Jury Trial Waiver.
            Notwithstanding principles of conflicts of law of any jurisdiction
            to the contrary, all terms and provisions of this Agreement are to
            be construed and governed by the internal laws of the State of Illinois.
            Any and all proceedings relating to Section 4, Section 5, Section
            6, and, solely as it relates to Section 4, Section 5 or Section 6,
            Section 7 hereof shall, at the sole option of Deerfield, be maintained
            in either the courts of the State of Illinois or the federal District
            Courts sitting in Cook County, Illinois or the courts of the state
            of New York or the federal District Courts sitting in Manhattan,
            New York and Employee hereby agrees to submit to the personal jurisdiction
            of such court and not to argue that such court is forum
            non conveniens. THE
            PARTIES EXPRESSLY AND KNOWINGLY WAIVE ANY RIGHT TO A JURY TRIAL IN
            THE EVENT ANY ACTION ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT
            IS LITIGATED OR HEARD IN ANY COURT. 

                 (c)     Post-Termination
            Covenant. Following the termination
            of Employee’s employment for any reason, Employee agrees to
            cooperate, at the expense of Deerfield, with D&C, Deerfield and
            any of their respective Affiliates with respect to any litigation,
            administrative proceedings or investigation relating to the activities
            of D&C, Deerfield or any of their respective Affiliates during
            the period of Employee’s employment with Deerfield including,
            without limitation, being available for depositions and to be a witness
    at any trial or proceedings, 

 

15 

	          	help in preparation of any
          legal documentation and providing affidavits and any advice or support
          that D&C, Deerfield or any Affiliate thereof may request of Employee
          in connection with such litigation, proceeding or investigation. 

                 (d)     Dispute
            Resolution. Except to the extent
            contemplated by Section 8(b) of this Agreement, all disputes arising
            in connection with Employee’s employment hereunder or any rights
            arising pursuant to this Agreement shall be resolved by binding arbitration
            in accordance with the applicable rules of the American Arbitration
            Association. The arbitration shall be held in Cook County, Illinois
            before a single arbitrator selected in accordance with Section 11
            of the American Arbitration Association Commercial Arbitration Rules
            who shall have (i) substantial business experience in the investment
            advisory industry, and shall otherwise be conducted in accordance
            with the American Arbitration Association Commercial Arbitration
            Rules and (ii) the right to award to any party any right or remedy
            that is available under applicable law. The award of the arbitrator
            shall be final and binding and may be entered and enforced in any
            court of competent jurisdiction. The language of arbitration shall
            be English. 

                 (e)     Employee’s
            Representations and Warranties. 

                         (i)     Employee
          represents and warrants that, except as may be provided by law, Employee
          is not covered by any employment agreement, covenant not to compete,
          confidentiality agreement or any other contractual or other obligation
          that would preclude Employee from entering into this Agreement or from
          using Employee’s best efforts to perform Employee’s duties
          and responsibilities under this Agreement. 

                         (ii)     Employee
          represents and warrants that Employee has had an opportunity to be
          represented by legal counsel in connection with this Agreement. 

                 (f)     Effect
            of Waiver or Consent. A waiver
            or consent, express or implied, of or to any breach or default by
            Employee in the performance by Employee of Employee’s obligations
            to Deerfield or any of its Affiliates under this Agreement is not
            a waiver or consent of or to any other breach or default in the performance
            by Employee of the same or any other obligations of Employee with
            respect to Deerfield or any of its Affiliates. No failure or delay
            on the part of any party hereto in the exercise of any right hereunder
            shall impair such right or be construed to be a waiver of, or acquiescence
            in, any breach of any representation, warranty or agreement herein,
            nor shall any single or partial exercise of any such right preclude
            any other or further exercise thereof or of any other right. 

                 (g)     Entire
            Agreement. This Agreement constitutes
            the entire agreement between the parties as of the Effective Date
            and supersedes all previous agreements and understandings between
            the parties with respect to the subject matter hereof, including
    Employee’s employment agreement with 

 

16 

	          	Deerfield dated April 11, 2002
          (the “Prior Employment Agreement”).
          Employee hereby acknowledges and agrees that the Prior Employment Agreement
          shall terminate as of immediately prior to the Effective Date, Employee
          shall have no further rights thereunder and Deerfield and its Affiliates
          shall have no further obligations thereunder. 

                 (h)     Further
            Assurances. The parties hereto
            agree to execute and deliver to each other such other documents and
            to do such other acts and things that the other party may reasonably
            request for the purpose of carrying out the intent of this Agreement
            and the documents referred to in this Agreement. 

                 (i)     Survival.
          Sections 3, 4, 5, 6, 7 and 8 shall survive and continue in full force
          and effect in accordance with their terms notwithstanding the termination
          of this Agreement and Employee’s employment for any reason. 

                 (j)     Third
            Party Beneficiaries; Assignability.
            Triarc, its Affiliates and each of the other Affiliates of Deerfield
            are intended third-party beneficiaries of the provisions of this
            Agreement. This Agreement may be assigned by Deerfield without the
            consent of Employee. This Agreement and all of the provisions hereof
            shall inure to the benefit of and be binding upon Deerfield and its
            successors and assigns and, to the extent relevant, to Deerfield’s
            Affiliates and their respective successors and assigns. This Agreement
            shall inure to the benefit of and be binding upon Employee’s
            heirs, executives, administrators and legal personal representatives,
            but Employee may not assign Employee’s rights or obligations
            hereunder without the prior written consent of Deerfield. 

                 (k)     Effectiveness
            of This Agreement. Notwithstanding
            anything to contrary herein, this Agreement shall not become effective
            until the Effective Date, i.e.,
            if and only if the Transaction is consummated. If the Purchase Agreement
            is terminated in accordance with its terms, or if the Transaction
            is not otherwise consummated, then this Agreement shall be of no
            force or effect, and the Prior Employment Agreement shall remain
            in effect in accordance with its terms. 

                 (l)     Captions.
          The captions used in this Agreement are for convenience of reference
          only and do not constitute a part of this Agreement and will not be
          deemed to limit, characterize or in any way affect any provision of
          this Agreement, and all provisions of this Agreement will be enforced
    and construed as if no captions had been used in this Agreement. 

 

17 

	          	          (m)     Notices.
          All notices, requests, demands and other communications required or
          permitted to be given hereunder shall be deemed given upon receipt,
          and may be given by personal delivery, certified mail (return receipt
          requested), facsimile or nationally recognized overnight courier service. 

       If to Employee: 

          

          Luke D. Knecht 

          [285 W. Westminster Road

          Lake Forest, Illinois 60062] 

          

          If to Deerfield:

          

          Deerfield Capital Management LLC

          8700 West Bryn Mawr Ave., 12 Floor

          Chicago, Illinois 60631 

          

          Attention: General Counsel 

          Fax No.: (773) 380-1695 

          

          with a copy to: 

          

          Triarc Companies, Inc.

          280 Park Avenue 

          New York, New York 10017

          Attention: General Counsel

          Fax No.: (212) 451-3216 

                 (n)     Legal
            Indemnification. If the Board
            makes a determination in good faith that it is proper and appropriate
            under the specific circumstances, then Deerfield shall indemnify
            and hold harmless Employee from and against, and reimburse Employee’s
            expenses incurred in connection with, any losses, damages, fines,
            penalties, liabilities, costs and expenses (including attorneys’ fees
            and court costs) to which Employee may become subject that arise
            out of the actions or omissions of Employee in connection with Employee’s
            activities or alleged activities taken in good faith by Employee
            in Employee’s capacity as an employee of Deerfield (“Losses”); provided that
            (i) Employee is in full compliance with all terms, conditions, representations
            and warranties set forth in this Agreement; (ii) Employee promptly
            notifies Deerfield of any claim made or litigation filed against
            Employee; (iii) Employee does not settle or compromise the claim
            or litigation as to Employee without Deerfield’s prior written
            consent; and (iv) Deerfield’s own legal counsel shall defend
            Employee in connection with any such Losses unless otherwise agreed
            between the parties. In no event shall Deerfield indemnify and hold
            harmless Employee or reimburse Employee under this Section 8(n) beyond
            the maximum extent permitted by the law of the state of incorporation
            of Deerfield or for any actions or omissions constituting gross negligence,
    willful misconduct, fraud, misrepresentation, bad faith, criminal 

 

18 

	          	conduct or a basis for termination for Cause
        of Employee’s employment hereunder. To the extent that Deerfield
        advances Employee any amounts with respect to such Losses, Employee shall
        repay Deerfield the amount of such advance if it is ultimately determined
        that Employee is not entitled to be indemnified against such Losses pursuant
    to this Section 8(n). 

 

19 

          IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above. 

	
EMPLOYEE		 		
DEERFIELD CAPITAL MANAGEMENT	
	 		 		
LLC			
	 	
	 	
	
                        /s/
 Luke D. Knecht		    	
By: 		/s/
    Marvin Shrear
	
Luke D. Knecht		 		
Name:		Marvin Shrear
	 		 		
Title:  CFO 

EXHIBIT A 

GENERAL RELEASE 

AND COVENANT NOT TO SUE 

          TO ALL WHOM THESE PRESENTS SHALL COME OR MAY CONCERN, KNOW that: 

          _______
(“Employee”), on Employee’s own behalf and on behalf of Employee’s
descendants, dependents, heirs, executors and administrators and permitted assigns,
past and present, in consideration for the amounts payable and benefits to be
provided to Employee under that Employment Agreement dated as of ____________,
2004 (the
“Employment Agreement”) by and between Employee and Deerfield Capital Management LLC, a Delaware limited liability company (the “Company”) and wholly-owned subsidiary of Deerfield & Company LLC, an Illinois limited liability company (“D&C”) does hereby covenant not to sue or pursue any litigation (or file any charge or otherwise correspond with any Federal, state or local administrative agency) against, and waives, releases and discharges the Company, D&C,
Triarc Companies, Inc. and their respective assigns, affiliates, subsidiaries, parents, predecessors and successors, and the past and present shareholders, employees, officers, directors, representatives and agents or any of them (collectively, the
“Company Group”), from any and all claims, demands, rights, judgments, defenses, actions, charges or causes of action whatsoever, of any and every kind and
description, whether known or unknown, accrued or not accrued, that Employee ever had, now has or shall or may have or assert as of the date of this General Release and Covenant Not to Sue against the Company Group, including, without limiting the
generality of the foregoing, any claims, demands, rights, judgments, defenses, actions, charges or causes of action related to employment or termination of employment or that arise out of or relate in any way to the Age Discrimination in Employment
Act of 1967 (“ADEA,” a law that prohibits discrimination on the basis of age), the National Labor Relations Act, the Civil Rights Act of 1991, the Americans With Disabilities Act of 1990, Title VII of the Civil Rights Act of 1964, the
Employee Retirement Income Security Act of 1974, the Family and Medical Leave Act, the Sarbanes-Oxley Act of 2002, all as amended, and other Federal, state and local laws relating to discrimination on the basis of age, sex or other protected class,
all claims under Federal, state or local laws for express or implied breach of contract, wrongful discharge, defamation, intentional infliction of emotional distress, and any related claims for attorneys’ fees and costs; provided, however, that nothing herein shall release any member of the Company Group from any of its obligations to Employee
under the Employment Agreement or any rights Employee may have to indemnification under any charter or by-laws (or similar documents) of any member of the Company Group. In addition, nothing herein shall release any rights Employee may have pursuant
to the D&C LLC Agreement (as that term is defined in the Employment Agreement). Employee further agrees that this General Release and Covenant Not to Sue may be pleaded as a full defense to any action, suit or other proceeding covered by the
terms hereof that is or may be initiated, prosecuted or maintained by Employee, Employee’s heirs or assigns. Notwithstanding the foregoing, Employee understands and confirms that Employee is executing this General Release and Covenant Not to
Sue voluntarily and knowingly, and this General Release and Covenant Not to Sue shall not affect Employee’s right to claim otherwise under ADEA. In addition, Employee shall not be precluded by this General Release and Covenant Not to Sue from
filing a charge with any relevant Federal, State or local administrative agency, but 

Employee agrees not to participate in any such administrative proceeding (other than any proceeding brought by the Equal Employment Opportunity Commission), and agrees to waive Employee’s rights with respect to any
monetary or other financial relief arising from any such administrative proceeding. 

          In furtherance of the agreements set forth above, Employee hereby expressly waives and relinquishes any and all rights under any applicable statute, doctrine or principle of law restricting the
right of any person to release claims that such person does not know or suspect to exist at the time of executing a release, which claims, if known, may have materially affected such person’s decision to give such a release. In connection with
such waiver and relinquishment, Employee acknowledges that Employee is aware that Employee may hereafter discover claims presently unknown or unsuspected, or facts in addition to or different from those that Employee now knows or believes to be
true, with respect to the matters released herein. Nevertheless, it is the intention of Employee to fully, finally and forever release all such matters, and all claims relating thereto, that now exist, may exist or theretofore have existed, as
specifically provided herein. The parties hereto acknowledge and agree that this waiver shall be an essential and material term of the release contained above. Nothing in this paragraph is intended to expand the scope of the release as specified
herein. 

          This General Release and Covenant Not to Sue shall be governed by and construed in accordance with the laws of the State of Illinois, applicable to agreements made and to be performed entirely
within such State. 

          To the extent that Employee is forty (40) years of age or older, this paragraph shall apply. Employee acknowledges that Employee has been offered a period of time of at least twenty-one (21)
days to consider whether to sign this General Release and Covenant Not to Sue, which Employee has waived, and the Company agrees that Employee may cancel this General Release and Covenant Not to Sue at any time during the seven (7) days following
the date on which this General Release and Covenant Not to Sue has been signed by all parties to this General Release and Covenant Not to Sue. In order to cancel or revoke this General Release and Covenant Not to Sue, Employee must deliver to the
General Counsel of the Company written notice stating that Employee is canceling or revoking this General Release and Covenant Not to Sue. If this General Release and Covenant Not to Sue is timely cancelled or revoked, none of the provisions of this
General Release and Covenant Not to Sue shall be effective or enforceable and the Company shall not be obligated to make the payments to Employee or to provide Employee with the other benefits described in the Employment Agreement and all contracts
and provisions modified, relinquished or rescinded hereunder shall be reinstated to the extent in effect immediately prior hereto. 

          Employee acknowledges and agrees that Employee has entered into this General Release and Covenant Not to Sue knowingly and willingly and has had ample opportunity to consider the terms and
provisions of this General Release and Covenant Not to Sue. 

          IN
WITNESS WHEREOF, the parties hereto have caused this General Release and Covenant
Not to Sue to be executed on this ____ day of ____________
, ____. 

	 	  

	 	
[Employee]	
	 	 	
	 	 	
	 	
DEERFIELD CAPITAL MANAGEMENT LLC	
	 	 	
	 	 	
	 	
By:		  

	 	
        Name:	
	 	
        Title:c51774_ex10-3.htm -- Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing

Exhibit 10.3

Amendment No. 1 to Employment Agreement 

          This Amendment No. ] to the Employment Agreement dated June 26, 2004 (the “Agreement”) between Deerfield
Capital Management LLC (“DCM”) and Luke Knecht (“Employee”) is dated August 18,
2006. Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Agreement. 

          In consideration of DCM’s continued employment of Employee and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, DCM and Employee
hereby agree to amend the Agreement as follows: 

          1. Term. 

	          	          (a)
          The introductory language of Section I and the first sentence of Section
          1 (a) of the Agreement are deleted in their entirety and replaced with
          the following: 

                 “1. Employment. Deerfield
          hereby continues to employ Employee as Senior Managing Director, Chief
          Operating Officer, and Chief Risk Officer. Employee hereby agrees to
          continue such employment and agrees to perform the duties and responsibilities
          hereunder in accordance with the terms and conditions hereinafter set
          forth. 

                 (a) Term.
          The term of Employee’s employment under this Agreement began on
          July 22, 2004 and shall conclude on July 22, 2009, unless sooner terminated
          according to Section 3 (the “Term”).” 

                 (b)
          The brackets and the footnote in Section 1 (b) of the agreement are
    deleted in their entirety. 

	 	 
	          2. Base
          Salary. Section 2(a) of the Agreement
    is deleted in its entirety and replaced with the following: 
	 	 
	 	          “(a) Base
          Salary. From and after August
          5, 2005, Employee shall receive a base salary of no less than $400,000
          per year (the “Base  Salary”),
          payable in accordance with the payroll practices of Deerfield as in
    effect from time to time.” 
	 	 
	          3. Bonus.
        The text of Section 2(b) of the Agreement beginning with “; provided, however” is
    deleted in its entirety and replaced with the following: 
	 	 
	 	          “.
        Notwithstanding the foregoing, with respect to each fiscal year completed
        during the Term, commencing with the 2006 fiscal year, Employee’s
        total bonus(es) for each such year shall be no less than $375,000 (the “Guaranteed
        Bonus”). If this Agreement
        is not renewed or otherwise extended after July 22,2009, Employee shall
    receive a pro-rated Guaranteed Bonus for 2009, in the amount of $208,561.” 

 

	          	4. Termination. 

                 (a)
          Section 3(a)(i) of the Agreement is amended to replace both occurrences
          of the phrase “the day preceding the third anniversary of the
          Effective Date” with “July 21, 2009”. 

                 (b)
          Section 3(a)(ii)(A) of the Agreement is amended to replace the phrase “the
          third anniversary of the Effective Date” with “July 22, 2009” and
          Section 3(a)(ii)(B) is deleted in its entirely and replaced with the
          following: “Deerfield shall pay to Employee the Guaranteed Bonus
          in accordance with the normal payroll and bonus payment practices of
          Deerfield, but in no event later than 90 days
          following the end of the relevant fiscal period.” Section 3(a)(ii)
          is also amended by adding the following sentence after the end of the
          first sentence: “(For the avoidance of doubt, if such termination
          occurs in 2009, Employee shall receive a pro-rated portion of the Guaranteed
          Bonus.)” 

                 (c)
          Section 3(b)(ii)(B) of the Agreement is amended to change “commission” to “admission
          to or conviction”. 

                 (d)
          Section 3(b)(ii)(C) of the Agreement is amended to add “and known
          to Employee” after the phrase “applicable to Employee”. 

                 (e)
          Section 3(b)(ii)(D) of the Agreement is amended to add “provided
          such policies are known to employee” after the phrase “applicable
          to Employee”. 

                 (f)
          Section 3(b)(ii)(G) of the Agreement is amended to add “materially” after
          the phrase “determined to be” and to change “discretion” to “judgment”. 

                 (g)
          Section 3(c) of the Agreement is amended to add the following at the
          end of the second sentence: “,and the pro-rated portion of the
          Guaranteed Bonus specified in Section 2(b) for the year in which the
          termination occurs.” 

       5. Non-Competition. 

                 (a) Section 6(a) of the Agreement
    is amended: 

	 	 
	 	          	          (i)
          to replace all three occurrences of the phrase “the day preceding
          the third anniversary of the Effective Date” with “July 21,
          2009”; and 

                 (ii)
          to replace each occurrence of the phrase “the third anniversary
          of the Effective Date” other than the three occurrences referenced
    in Section 6(a) above with “July 22, 2009”. 

	 	 
	 	          (b)
        Section 6(b)(v) of the Agreement is amended to add the following to the
    beginning of said section: “if Employee is terminated with Cause,”. 

 

 

 

          6. Except as expressly amended herein, all terms and provisions of the Agreement shall remain in full force and effect. 

          The parties have executed this Amendment No. 1 to Employment Agreement as of the date set forth above. 

	 		 		
     /s/ Luke Knecht                                    
	 		 		
Luke Knecht	
	 

	
	
Deerfield Capital Management LLC		 		 	
	 

	
	 

	
	
By:      /s/
Gregory Sachs                      	 		 	
	
Name:     Gregory
Sachs                       		 		 	
	
Title:     CEO

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