Exhibit 10.1

Evergreen employment Agreement

This Evergreen Employment Agreement (this “Agreement”) is dated as of March __,
2015 (the “Effective Date”), by and between Signature Group Holdings, Inc., a
Delaware corporation (the “Company”), and John Miller (the “Executive”).

WITNESSETH:

WHEREAS, the Company desires to enter into this Agreement with the Executive to
(i) set forth the terms of Executive’s employment with the Company, (ii) make
provision for the payment of reasonable and proper compensation to Executive for
his services, (iii) safeguard its proprietary and confidential information, and
(iv) memorialize how the Company and Executive will proceed if and when
Executive terminates services and its relationship with the Company.

NOW, THEREFORE, in consideration of the mutual promises and covenants set forth
herein, the parties agree as follows:

AGREEMENT:

1.APPOINTMENT.  The Company hereby designates and appoints Executive to act and
perform services on behalf of the Company as its Executive Vice President of
Operations.  Executive hereby accepts such designation and
appointment.  Executive’s employment shall be at will (as set forth in Section 8
below).  Executive agrees that he will carry out the duties and responsibilities
of the foregoing appointment in a faithful, diligent and responsible manner,
subject to the direction and control of the Company’s Chief Executive
Officer.  Executive further agrees to devote his full business time and
attention to perform faithfully, diligently and to the best of his efforts the
specific duties of, and generally to provide the services normally associated
with, his position as Executive Vice President of Operations of the
Company.  Executive shall serve as an officer of any subsidiary or subsidiaries
of the Company upon request, without additional consideration.

2.COMPENSATION FOR SERVICES.  Subject to the conditions contained in this
Agreement, the Company agrees to pay to Executive, and Executive is entitled to
receive as compensation for his services under this Agreement, as follows:

a.Annual Salary.  For each year Executive is employed by the Company, Executive
shall receive a salary equal to $275,000 per year (pro-rated for the portion of
the 2015 calendar year actually served) (the “Base Salary”).  Executive’s
compensation shall be payable in accordance with the Company’s regular payroll
practice or upon other terms mutually agreed upon.  Executive’s salary shall be
reviewed for increase at least annually.

b.Annual Bonus.  In addition to the Base Salary, Executive will be eligible to
receive an annual target cash incentive bonus from the Company (the “Bonus”) in
respect of the achievement of certain milestones and objectives for the
performance of the Company and the Executive, which are expected for 2015 to be
based 80% on the Company’s achievement of its annual target EBITDA and 20% on
the Executive’s achievement of individual performance goals, each as recommended
annually by the Company’s Chief Executive Officer, determined by the
Compensation Committee (“Compensation Committee”) of the Company’s Board of
Directors (the “Board”), and approved by the Board.  The target Bonus amount
shall be seventy percent (70%) of the Executive’s then-current Base Salary (the
“Target Bonus”).  For 2015, the Target Bonus will be payable for achievement of
100% of the Company’s annual target EBITDA and full achievement of the
Executive’s individual performance milestones, as recommended by the
Compensation Committee and approved by the Board.  In the event that the 2015
annual EBITDA exceeds a threshold level of the 2015 annual target EBITDA, then
Executive shall be eligible to receive a portion of the Target Bonus as
recommended by the Compensation Committee and approved by the Board, and if the
2015 annual EBITDA exceeds the 2015 annual target EBITDA, then Executive shall
be eligible to receive a Bonus in excess of the Target Bonus up to a maximum
bonus of up to 200% of the Target Bonus, as recommended by the Compensation
Committee and approved by the Board, subject to adjustment, as described below,
for any

 

--------------------------------------------------------------------------------

 

other Company performance measure and any individual performance goal.  The
amount of the Bonus, the achievement of the underlying annual EBITDA goal, and
any other Company or individual performance milestone by Executive shall be as
recommended by the Compensation Committee and approved by the Board.  Bonus
targets and performance measures after 2015 shall be set annually by the
Compensation Committee and approved by the Board.

Payment of any Bonus under this Section 3(b) is conditioned upon Executive (i)
being employed in good standing as of September 30 of the applicable bonus year,
and (ii) remaining employed with the Company as of the date the Compensation
Committee determines and the Board approves that the target objectives have been
achieved.  The Bonus paid pursuant to this Section 3(b) in respect of any fiscal
year shall be paid on or before March 15, immediately following the close of the
Company’s fiscal year with respect to which such Bonus is received. Executive
shall be eligible for additional bonuses from time to time, as determined in the
sole discretion of the Board.

c.Restricted Stock Grants.  For fiscal year 2015, and subject to
(x) Compensation Committee recommendation and Board approval, and (y) the
available capacity of the Amended and Restated Signature Group Holdings, Inc.
2006 Performance Incentive Plan, or the successor plan thereto (the “Incentive
Plan”), Executive shall be eligible for a grant of restricted shares of common
stock of the Company to be issued pursuant to the Incentive Plan in an amount
equal to $150,000 divided by the closing price of the Company’s stock on the
grant date for such shares (“Shares”). The Shares shall be granted as of the
Effective Date and provided that Executive is an employee in good standing on
such vesting dates, such shares shall vest in three equal installments on the
anniversary of the date of grant of such shares, starting with the first
anniversary of the dates of grants.  Vesting for the Shares will be accelerated
in the event of a Change in Control (as defined below), an involuntary
termination of Executive’s employment not for Cause (as defined below) or for
Good Reason (as defined below), or upon the death or Disability (as defined
below) of Executive.  Executive shall be eligible for additional grants of
equity securities in the Company, from time to time, as determined in the sole
discretion of the Board. If the grants described in this Section 3(c) are not
completed within the second quarter of 2015 because the shares are not available
under the Incentive Plan, then the Company shall grant Executive additional
compensation in an amount or amounts equal to 150% of the amount of the grant or
grants that were not timely made. Shall additional compensation shall be paid to
the Executive in three equal installments on the dates that the applicable
restricted stock grant would have vested, provided the Executive remains
employed through such date. Such additional compensation shall be set forth in a
written agreement with Executive that complies in all respects with the
requirements of Section 409A of the Internal Revenue Code and applicable
exceptions to Section 409A, including the short-term deferral exception.

d.Vacation.  Executive shall be entitled to twenty (20) days of paid vacation
annually pursuant to the terms of the Company’s vacation policy then in effect.

e.Other Benefits; Perquisites.  During the Term, Executive shall be eligible to
participate in all employee benefit plans, programs or arrangements, which shall
be established or maintained by the Company generally for its employees, or
generally made available to its senior executives, which currently include,
medical, dental and vision plans, subject to the terms and conditions of such
plans and programs.  Executive shall also receive those perquisites listed on
Exhibit A hereto.

f.Expenses.  During the Term, the Company shall pay the reasonable expenses
incurred by Executive in the performance of his duties hereunder, including,
without limitation, business-related travel or entertainment, or, if such
expenses are paid directly by Executive, the Company shall promptly (within
thirty (30) business days following Executive’s submission and approval of an
accounting of such expense) reimburse him for such payments, provided that
Executive properly accounts and provides supporting documentation for such
expenses in accordance with the Company’s policies.

g.Applicable Withholdings.  Executive’s compensation, and the payment of any
other amount pursuant to this Agreement, shall be subject to all withholdings,
payroll taxes and deductions required by law and shall be payable in accordance
with the Company’s and its subsidiaries’ normal periodic payroll practices.

2

--------------------------------------------------------------------------------

 

3.DEFINITIONS.

a.“Cause” shall only mean:

i.

the willful and continued failure by the Executive to attempt in good faith to
substantially perform his obligations to the Company (other than any such
failure resulting from the Executive’s incapacity due to a Disability);
provided, however, that the Company shall have provided the Executive with
written notice of Executive’s deficiencies and the Executive has been afforded
at least thirty (30) days to cure same;

ii.

the Executive’s conviction of or plea of guilty or nolo contendere to a felony
or any other crime involving moral turpitude or dishonesty;

iii.

the Executive’s willfully engaging in misconduct in the performance of his
duties for the Company (including theft, fraud, embezzlement, and securities law
violations or a violation of the Company’s Code of Conduct or other written
policies) that is injurious to the Company, monetarily or otherwise; or

iv.

the Executive’s willfully engaging in misconduct other than in the performance
of his duties for the Company (including theft, fraud, embezzlement, and
securities law violations) that is materially injurious to the Company or, in
the good faith determination of the Board, is potentially materially injurious
to the Company, monetarily or otherwise.

b.“Change in Control” shall mean the occurrence of any of the following after
the Effective Date, provided such events or circumstances also constitute a
change in ownership or effective control or a sale of substantially all of the
assets of the Company under Section 409A:

i.

any “person,” as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934 (the “Exchange Act”), other than a member of the Company
Group, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company representing
fifty percent (50%) or more of the combined voting power of the Company’s then
outstanding securities entitled to vote generally in the election of directors;

ii.

the consummation of a merger or consolidation of the Company with any other
corporation (other than a member of the Company Group (as defined below)), other
than a merger or consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity) more than fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or the stockholders
of the Company approve an agreement for the sale or disposition by the Company
of all or substantially all the Company’s assets; or

iii.

a change in the composition of the Board, as a result of which fewer than a
majority of the directors are Incumbent Directors (as defined below).

c.“Company Group” means the Company or any of its subsidiaries or affiliates,
including a Company employee benefit plan.

d.“Confidential Information” means any and all information (oral and written)
relating to the Company Group, or any of their respective activities, or of the
clients, customers, acquisition targets, investment models or business practices
of the Company Group, other than such information which (i) is generally
available to the public or within the relevant trade or industry, other than as
the result of breach of the provisions of Section 9, or

3

--------------------------------------------------------------------------------

 

(ii) Executive is required to disclose under any applicable laws, regulations or
directives of any government agency, tribunal or authority having jurisdiction
in the matter or under subpoena or other process of law.

e.“Disability” shall mean (i) Executive is unable to engage in gainful activity
as an executive by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months, and which cannot be
reasonably accommodated, or (ii) Executive is, by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or can be expected to last for a continuous period of not less than 12
months, receiving income replacement benefits for a period of not less than
three months under an accident and health plan covering employees of the
Company, and which cannot be reasonably accommodated.

f.“Intellectual Property” shall mean all patents and patent applications, all
inventions, innovations, improvements, developments, methods, designs, analyses,
drawings, reports and all similar or related information (in each case whether
or not patentable), all copyrights and copyrightable works, all trade secrets,
confidential information and know-how, and all other intellectual property
rights that are conceived, reduced to practice, developed or made by Executive
while providing services to the Company Group and that (a) relate to the
business, research and development, existing products or services or future
products and services under development of or by any of the Company Group; or
(b) relate to the business of any of the Company Group and are conceived,
reduced to practice, developed or made using any equipment, supplies,
facilities, assets or resources of the Company Group, including, without
limitation, any intellectual property rights.

g.“Good Reason” shall only mean:

i.

a reduction in Executive’s Base Salary at the rate last in effect during the
Executive’s term of service with the Company, or

ii.

a demotion in position or a material reduction in job duties and
responsibilities, or

iii.

a material breach by the Company of any of its obligations under this Agreement,
and in each of subparts (i), (ii), and (iii) of this Section 3(g), a failure by
the Company to cure such breach within thirty (30) days following receipt of
notice from Executive of such breach.

h.“Incumbent Directors” shall mean directors who either (A) are directors of the
Company as of the date of this Agreement, or (B) are elected, or nominated for
election, to the Board with the affirmative votes of at least a majority of the
Incumbent Directors at the time of such election or nomination (but shall not
include an individual whose election or nomination is in connection with an
actual or threatened proxy contest relating to the election of directors to the
Company or an individual whose election or nomination is made pursuant to any
formal or informal agreement to allow a third party to propose candidates for
election).

4.TERMINATION OF EMPLOYMENT.

a.Events of Termination.  Executive’s employment under this Agreement may be
terminated in the event of Executive’s death or Disability, Executive’s
voluntary termination for Good Reason, Executive’s resignation other than for
Good Reason, termination by the Company for Cause and termination by the Company
without Cause.

b.Notice of Termination; Effectiveness.  Any termination of Executive’s
employment by the Company or by Executive (other than termination by reason of
Executive’s death, Disability or termination for Cause) shall be communicated by
written notice of termination to the other parties to this Agreement.  In the
event of a termination by the Executive for Good Reason, the Notice of
Termination shall include Executive’s cause for Good Reason.  The Company may,
in its sole discretion, make any termination of employment effective earlier
than the date set forth in the Notice of Termination by providing payment in
lieu of notice, which payment, if applicable, shall be in addition to any other
compensation upon termination under this Agreement.

4

--------------------------------------------------------------------------------

 

c.Date of Termination.  The “Date of Termination” shall mean (a) the date of
Executive’s death (if the Agreement is terminated by Executive’s death); (b) if
Executive’s employment is terminated pursuant to Disability or by Company
without Cause, the date the Notice of Termination is given; (c) if Executive’s
employment is terminated pursuant to Good Reason or Cause, the date specified in
the Notice of Termination after the expiration of any applicable cure periods;
(d) if Executive’s employment is terminated by Executive without Good Reason,
the date specified in the Notice of Termination, which shall be at least thirty
(30) days, as applicable, after Notice of Termination is delivered, or such
earlier date as the Company shall determine, in its sole discretion, provided
the Company makes payment in lieu of notice in the event of an earlier
termination. [the remaining language inapplicable to “evergreen” contract]  

5.Severance Payment.  The Executive will be eligible for the Severance Payment
(the “Payment”) under this Agreement only if the conditions specified in Section
6 of this Agreement are met.  The amount of the Payment under this Agreement
will be one year’s Base Salary at the rate in effect at the Date of Termination,
paid in equal installments on the Company’s normal payroll dates for a period of
one (1) year from the Date of Termination in accordance with the usual payroll
practices of the Company, with each such payment deemed to be a separate payment
for the purposes of Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”), and the regulations issued thereunder (“Section
409A”).  The Company’s obligation to make the Payment or any installment thereof
shall be subject to following conditions, without limitation: (i) the
Executive’s services for the Company have terminated, (ii) the Executive
otherwise qualifies for the Payment under this Agreement (iii) the Executive has
executed a Release and Waiver as specified in Section 17 below; provided,
however, that pursuant to Section 4(d) of the Release and Waiver, the applicable
consideration period has expired or been waived and Executive has not revoked
his execution of the Release and Waiver; and (iv) the Executive’s continued
compliance with the obligations and covenants of this Employment Agreement,
including without limitation Sections 9, 10, 11 and 12.

6.Conditions for Severance Payment.

a.Termination or Resignation for Good Reason or without Cause.  If, after the
Effective Date and during the term of this Agreement, the Executive (i) is
involuntarily terminated for any reason by the Company other than for Cause or
(ii) resigns for Good Reason, the Executive will be eligible for the Payment
under this Agreement.

b.Death or Disability of Executive.  If the Executive’s services to the Company
are terminated by reason of a Disability or upon the Executive’s death, the
Executive will be eligible for the Payment under this Agreement. In the event of
the Executive’s death, the Payment shall be provided to the Executive’s estate.

c.Involuntary Termination Upon Change in Control.  If the Company (i) undergoes
a Change in Control and (ii) the Executive is involuntarily terminated for any
reason by the Company other than for Cause or if the Executive resigns for Good
Reason following the occurrence of the Change in Control, the Executive will be
eligible for the Payment under this Agreement.

7.Resignation or Termination For Cause.  If the Executive resigns for other than
Good Reason, or is discharged for Cause during the term of this Agreement, the
Executive will not be eligible for the Payment under this Agreement, and this
Agreement will be terminated immediately.

8.No Contract of Employment / EMPLOYMENT AT WILL. Executive may be terminated at
any time, with or without notice, or with or without Cause (subject to the other
terms and conditions in this Agreement).  Likewise, Executive may terminate his
employment at any time, without or without notice, and with or without Good
Reason.  

9.CONFIDENTIAL INFORMATION; ASSIGNMENT OF INVENTIONS; RETURN OF COMPANY
PROPERTY.  Executive acknowledges and agrees that (i) the services to be
performed by Executive under this Agreement are unique and extraordinary and, as
a result of such employment, Executive shall be in possession of Confidential
Information relating to the business practices of the Company Group and (ii)
that the trade secrets and Intellectual Property of the Company Group is very
valuable. Executive agrees to be bound by the policies of the Company Group with
respect to the confidentiality, ownership and assignment of employee rights with
respect to trade secrets, Intellectual Property and other information of the
Company Group.

5

--------------------------------------------------------------------------------

 

10.NONSOLICITATION.  Executive shall not, except in the good faith performance
of Executive’s duties hereunder or as specifically authorized by the Board in
writing, directly or indirectly, individually or on behalf of any other person,
firm, corporation or other entity, during Executive’s employment with or service
to the Company or any member of the Company Group and for a period of one (1)
year following the termination of employment (the “Restriction Period”),

a.solicit or induce any employee, representative, agent or consultant of the
Company Group to leave such employment or retention or to accept employment with
or render services to or with any other person or entity other than the Company
or a member of the Company Group (a “Person”), take any action to materially
assist or aid any other Person in identifying,  or soliciting any such employee,
representative or agent; provided, however, that the foregoing provision will
not prevent Executive from hiring any such individual whom he does not solicit
in violation of this paragraph;  

b.solicit, contact, aid or induce any customer of the Company, any prospective
customer of the Company, or any person or entity who has been a customer or
prospective customer of the Company at any time during the last two years of
Employee’s employment, in the Territory (i) to purchase goods or services that
have been sold or provided by the Company during the Restriction Period from
another person, firm, corporation or other entity (or attempt to do any of the
foregoing) or engage in other Competitive Activity, (ii) to terminate, curtail
or otherwise limit its business relationship with the Company, (iii) to
interfere otherwise with any part of the Company’s business, or (iv) to attempt
to do any of the foregoing; or

c.solicit, contact, aid or induce any entity or person who was a supplier of
goods, services or property (including Intellectual Property) to the Company, or
any licensor or licensee of the Company, during the Restriction Period to not do
business with, to discontinue doing business with, or to materially reduce all
or any part of their business with the Company.

11.NONDISPARAGEMENT.  At no time during the Restricted Period shall Executive,
directly or indirectly, disparage the Company Group or any of the Company
Group’s past or present employees, directors, products or services.  At no time
during the Restricted Period shall any executive officers of the Company Group,
directly or indirectly, disparage the Executive.  Notwithstanding the foregoing,
nothing in this Section 11 shall prevent Executive from making any truthful
statement to the extent (i) necessary to rebut any untrue public statements made
about him; (ii) necessary with respect to any litigation, arbitration or
mediation involving this Agreement, including, but not limited to, the
enforcement of this Agreement; or (iii) required by law or by any court,
arbitrator, mediator or administrative, investigative, or legislative body
(including any committee thereof) with jurisdiction over such person.

12.ENFORCEMENT.

a.Executive agrees and acknowledges that (i) the potential harm to the Company
of the non-enforcement of Sections 9, 10 or 11 outweighs any harm to Executive
of its enforcement by injunction or otherwise and (ii) he has carefully read
this Agreement and has given careful consideration to the restraints imposed by
this Agreement, and is in full accord as to the necessity of such restraints for
the reasonable and proper protection of the trade secrets and other Confidential
Information of the Company.

b.In the event of any breach or threatened breach of this Agreement, either
Party shall be entitled to seek an injunction, without bond, restraining such
breach, but nothing herein shall be construed as prohibiting such Party from
pursuing other remedies available to it for such breach or threatened breach.

13.COOPERATION.  Upon reasonable notice from the Company or its counsel, while
employed by the Company and thereafter, Executive agrees to respond and provide
information with regard to matters of which Executive has knowledge as a result
of his employment with the Company, and will provide reasonable assistance to
the Company Group and their respective representatives in defense of any claims
that may be made against the Company Group (or any member thereof), and will
provide reasonable assistance to the Company Group in the prosecution of any
claims that may be made by the Company Group (or any member thereof), to the
extent that such claims may relate to matters related to Executive’s period of
employment with the Company (or any predecessors). Executive also agrees to
promptly inform the Company (to the extent Executive is legally permitted to do
so) if

6

--------------------------------------------------------------------------------

 

Executive is asked to assist in any investigation of the Company Group (or any
member thereof) or their actions, regardless of whether a lawsuit or other
proceeding has then been filed with respect to such investigation.  If Executive
is required to provide any services pursuant to this Section 13 following the
termination of his employment, upon presentation of appropriate documentation,
then the Company: (i) shall promptly compensate Executive for all time incurred
in these activities at an hourly rate of pay equal to the most recent annual
Base Salary divided by 2080 hours; and (ii) shall promptly reimburse Executive
for reasonable out-of-pocket travel or business expenses incurred in connection
with the performance of such services and in accordance with the Company’s
expense policy, and for legal fees to the extent the Board in good faith
reasonably believes that separate representation is warranted.  In any such case
Executive shall be entitled to select his own counsel. Executive’s entitlement
to reimbursement of such costs and expenses, including legal fees, pursuant to
this Section 13, shall in no way affect Executive’s rights, if any, to be
indemnified and/or advanced expenses in accordance with the Company’s (or any of
its subsidiaries’) corporate or other organizational documents, any applicable
insurance policy, and/or in accordance with this Agreement.

14.INSURANCE; INDEMNIFICATION.  The Company shall purchase directors’ and
officers’ liability insurance coverage for the Executive covering him in all
capacities in which he shall serve the Company and/or any member of the Company
Group (including but not limited to his capacity as employee, officer, director,
trustee, or agent), at such cost and with such policy limits as are made
available to other senior executives of the Company Group. In addition tot he
corporate indemnifications available to Executive under the Company’s Bylaws and
Certificate of Incorporation of the Company as in effect on the date of this
Agreement, the Company hereby agrees to indemnify, defend and hold Executive
harmless from and against any threatened, pending, or completed action, suit, or
proceeding, whether civil, criminal, administrative, or investigative, including
all appeals by reason of the fact that Executive is or was a director, office,
employee, or agent of the Company, or is or was serving at the request of the
Company as a director, trustee, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise, including
any member of the Company Group, and/or any third party claim arising out of any
action taken by the Company or executive related to the execution and delivery
of this Agreement and the Executive’s services pursuant hereto. Such
indemnification shall include all related expenses, including attorneys’ fees,
judgment, fines, and amounts paid in settlement actually and reasonably incurred
by Executive in connection with the action, suit, or proceeding; provided,
however, that Executive shall only be entitled to indemnification under this
Agreement, Company policy or applicable law if such indemnification is permitted
by lass and if Employee acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interest of the Company and, with
respect to any criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful. The Company’s indemnification obligations under this
Section 14 shall remain in effect following Executive’s termination of
employment with the Company.

15.NOTICES. Any notice to be given under the terms of this Agreement shall be
deemed sufficient if in writing, send by certified mail, return receipt
requested, via overnight courier, or hand delivered to the Company at its
principal office to the attention of the Secretary, and to Executive at the
address last reflected on the Company’s payroll records, or such other address
as either party may hereafter designate in writing to the other.

16.No Assignment.  No benefit payable under this Agreement may be assigned,
transferred, pledged, or otherwise encumbered, or subjected to any legal process
for the payment of any claim against the Executive.

17.Governing Law.  This Agreement shall be governed in all respects by and in
accordance with the laws of California without regard to its conflict of law
provisions.

18.Release and Waiver.  The Executive will receive Payment under this Agreement
if the Executive executes a Release and Waiver in a form attached hereto as
Exhibit B.  Such Release and Waiver will not apply to benefits the Executive may
have under the Company’s benefit plans (such as the pension, 401(k) or medical
plans), any rights to benefits under applicable workers’ compensation statutes
or government-provided unemployment benefits, any claims arising under federal
or state securities laws that the Executive may have as a shareholder of the
Company, any rights to enforce this Release and Waiver, or any claims relating
to the validity of this Release and Waiver under the Age Discrimination in
Employment Act, as amended.

19.COMPLIANCE WITH Code Section 409A. Notwithstanding anything herein to the
contrary, (i) if at the time of Executive’s termination of services with the
Company Executive is a “specified employee” as defined in

7

--------------------------------------------------------------------------------

 

Section 409A of the Internal Revenue Code (the “Code”), and the deferral of the
commencement of any payments or benefits otherwise payable hereunder as a result
of such termination of employment is necessary in order to prevent any
accelerated or additional tax under Section 409A of the Code, then the Company
will defer the commencement of the payment of any such payments or benefits
hereunder (without any reduction in such payments or benefits ultimately paid or
provided to Executive) until the first business day to occur following the date
that is six (6) months following Executive’s termination of employment with the
Company (or the earliest date as is permitted under Section 409A of the Code);
and (ii) if any other payments of money or other benefits due to Executive
hereunder could cause the application of an accelerated or additional tax under
Section 409A of the Code, such payments or other benefits shall be deferred if
deferral will make such payment or other benefits compliant under Section 409A
of the Code, or otherwise such payment or other benefits shall be restructured,
to the extent possible, in a manner, determined by the Board, that does not
cause such an accelerated or additional tax.  In the event that payments under
this Agreement are deferred pursuant to this Section 18 in order to prevent any
accelerated tax or additional tax under Section 409A of the Code, then such
payments shall be paid at the time specified under this Section 10 without any
interest thereon.  The Company shall consult with Executive in good faith
regarding the implementation of this Section 18; provided that neither the
Company nor any of its employees or representatives shall have any liability to
Executive with respect thereto.  Notwithstanding anything to the contrary
herein, a termination of employment shall not be deemed to have occurred for
purposes of any provision of this Agreement providing for the payment of amounts
or benefits upon or following a termination of employment unless such
termination is also a “separation from service” within the meaning of Section
409A of the Code and, for purposes of any such provision of this Agreement,
references to a “resignation,” “termination,” “termination of employment” or
like terms shall mean separation from service.  For purposes of Section 409A of
the Code, each payment made under this Agreement shall be designated as a
“separate payment” within the meaning of the Section 409A of the Code.

20.SECTION 280G.  In the event that it is determined by the Company in its sole
discretion that any payment or benefit to Executive under this Agreement or
otherwise, either cash or non-cash, that Executive has the right to receive from
the Company, including, but not limited to, accelerated vesting or payment of
any deferred compensation, equity grants or any benefits payable to Executive
under any plan for the benefit of employees, would constitute an “excess
parachute payment” (as defined in Section 280G of the Code), then,
notwithstanding any contrary provisions in any plan, program or policy of the
Company, the Company shall reduce Executive’s payments and benefits payable
under this Agreement to the extent necessary so that no portion thereof shall be
subject to the excise tax imposed by Code Section 4999, but only if, by reason
of such reduction, the Net After-Tax Benefit to the Executive shall exceed the
Net After-Tax Benefit if such reduction were not made.  “Net After-Tax Benefit”
for these purposes shall mean the sum of (i) the total amount payable to
Executive under this Agreement, plus (ii) all other payments and benefits which
Executive receives or is then entitled to receive from the Company that, alone
or in combination with the payments and benefits payable under this Agreement,
would constitute a “parachute payment” within the meaning of Code Section 280G,
less (iii) the amount of federal income taxes payable with respect to the
foregoing calculated at the maximum marginal income tax rate for each year in
which the foregoing shall be paid to Executive (based upon the rate in effect
for such year as set forth in the Code at the time of the payment under this
Agreement), less (iv) the amount of excise taxes imposed with respect to the
payments and benefits described in (i) and (ii) above by Code Section 4999.  The
parachute payments reduced shall be those that provide Executive the best
economic benefit and to the extent any parachute payments are economically
equivalent with each other, each shall be reduced pro rata; provided, however,
that Executive may elect to have the noncash payments and benefits due to
Executive reduced (or eliminated) prior to any reduction of the cash payments
due under this Agreement.  All determinations required to be made under this
Section shall be made by tax counsel reasonably acceptable to Executive and the
Company or any other third party acceptable to the Executive and the Company
(“Tax Counsel”).  Tax Counsel shall provide detailed supporting calculations
both to the Company and Employee.  All fees and expenses of Tax Counsel shall be
borne solely by the Company.  Absent manifest error, any determination by Tax
Counsel shall be binding upon the Company and Employee.  For purposes of
determining whether and the extent to which any payments would constitute a
“parachute payment” (i) no portion of any payments or benefits that Executive
shall have waived at such time and in such manner as not to constitute a
"payment" within the meaning of Code Section 280G(b) shall be taken into
account, (ii) no portion of the payments shall be taken into account which, in
the opinion of Tax Counsel, does not constitute a “parachute payment” within the
meaning of Code Section 280G(b)(2) (including by reason of Code Section
280G(b)(4)(A)) and, in calculating the excise tax, no portion of such payments
shall be taken into account which, in the opinion of Tax Counsel, constitutes
reasonable compensation for services actually rendered, within the meaning of
Code Section 280G(b)(4)(B), in excess of the “base amount” (within the meaning
set forth in Code Section 280G(b)(3)) allocable

8

--------------------------------------------------------------------------------

 

to such reasonable compensation, and (iii) the value of any noncash benefit or
any deferred payment or benefit included in the payments shall be determined by
Tax Counsel in accordance with the principles of Code Sections 280G(d)(3) and
(4).

21.Dispute Resolution and Waiver of Jury Trial.

a.In the event of a dispute, Executive and a senior executive of the Company
shall meet for the purpose of endeavoring to resolve the dispute.  Any
resolution agreed to by such parties shall be final and binding on the
parties.  The parties shall meet to attempt in good faith to resolve the dispute
within thirty (30) calendar days after the disputed matter is referred to
them.  If the parties are unable to resolve the dispute during the period set
forth in the previous sentence, the dispute shall be settled by arbitration
under the JAMS Comprehensive Arbitration Rules and Procedures (“JAMS”) in force
at the time such arbitration is commenced; provided, that, if at the end of such
thirty (30) calendar day period the parties are engaged in good faith
negotiations regarding such dispute, the time for submitting the dispute to JAMS
arbitration shall be extended for an additional thirty (30) calendar days, and
the extension of such time shall again apply (subject to such good faith
negotiations continuing) at the end of such succeeding thirty (30) calendar day
period and thereafter in the same manner at the end of each thirty (30) calendar
day period thereafter.

b.The arbitration shall be in accordance with the then-current JAMS employment
arbitration rules.  The arbitrators shall be either retired judges, or attorneys
licensed to practice law in the state in which the arbitration is convened (the
“Arbitrators” and each an “Arbitrator”).  The arbitration tribunal (the
“Tribunal”) shall consist of three (3) Arbitrators.  The petitioning party (the
“Petitioning Party”), on the one side, and the party defending the arbitration
(the “Defending Party”), on the other side, shall each nominate one Arbitrator
within fourteen (14) calendar days after delivery of the demand for
arbitration.  If the Petitioning Party or the Defending Party, as the case may
be, fails to nominate an Arbitrator pursuant to this Section 20(b) upon request
of any other party to the arbitration, such Arbitrator shall instead be
appointed by JAMS within seven (7) calendar days of receiving such request.  The
first two appointed Arbitrators shall nominate the third Arbitrator within
thirty (30) calendar days of their appointment.  If the first two appointed
Arbitrators fail to nominate a third Arbitrator, then, upon request of any party
to the arbitration, the third Arbitrator shall be appointed by JAMS within seven
(7) calendar days of receiving such request.  The third Arbitrator, however
appointed, shall serve as the chairman of the Tribunal.

c.The Arbitrators shall have jurisdiction to hear and rule on pre-hearing
disputes and are authorized to hold pre-hearing conferences by telephone or in
person, as the Arbitrators deems necessary.  The Arbitrators shall have the
authority to entertain a motion to dismiss, demurrer, and/or a motion for
summary judgment by any party and shall apply the standards governing such
motions under the applicable rules of civil procedure.  The parties hereto
understand and agree that, in any arbitration arising from this Agreement, the
Company and Executive will be entitled to discovery in accordance with the
provisions of California Code of Civil Procedure § 1283(a).  The Arbitrators
shall render a written award and opinion which reveals, however briefly, the
essential findings and conclusions on which the award is based.  The arbitration
shall be final and binding upon the parties, except as otherwise provided by the
law applicable to review of arbitration decisions/awards.  Either party may
bring an action in any court of competent jurisdiction to compel arbitration
under this Agreement and/or to enforce an arbitration award.  The Company will
pay the Arbitrators’ fees and any other fees, costs, or expenses unique to
arbitration, including the filing fee, the fees and costs of the Arbitrators,
and rental of a room to hold the arbitration hearing; provided, that if
Executive is the party initiating the claim, Executive shall be responsible for
contributing an amount equal to the filing fee to initiate a claim in the court
of general jurisdiction in the state which Executive is (or was last) employed
by the Company.  Each party shall pay for its, his or her, own costs and
attorneys’ fees, if any. However, if any party prevails on a statutory claim
which entitles the prevailing party to attorneys’ fees and/or costs, or if there
is a written agreement providing for fees and/or costs, the Arbitrators may
award reasonable fees and/or costs to the prevailing party in accordance with
such fee-shifting statute or agreement.  In addition, notwithstanding the
foregoing, nothing herein shall prevent a party from seeking interim remedies in
aid of arbitration.

d.All disputes concerning or relating to arbitrability of disputes under this
Agreement or the jurisdiction of the Arbitrators shall be resolved by the
Arbitrators, and the site of arbitration shall be Los Angeles, California.

9

--------------------------------------------------------------------------------

 

e.Notwithstanding anything to the contrary herein, the arbitration provisions
specified herein, and any arbitration conducted hereunder, shall be governed
exclusively by the Federal Arbitration Act, Title 9 United States Code, to the
exclusion of any state or municipal law of arbitration.

f.THE PARTIES HERETO HEREBY AGREE TO MUTUALLY ARBITRATE ALL CLAIMS THEY MIGHT
HAVE AGAINST EACH OTHER.  IN THIS REGARD, THE PARTIES HERETO IRREVOCABLY WAIVE
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER
BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THE ACTIONS OF EITHER PARTY
IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT OF THIS
AGREEMENT.

 

 

 

[Signature page follows]

10

--------------------------------------------------------------------------------

 

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

 

 

 

SIGNATURE GROUP HOLDINGS, INC.

 

 

 

 

 

 

 

 

 

 

By:

/s/ CRAIG T. BOUCHARD

 

 

Name: 

Craig T. Bouchard

 

 

Title: 

Chairman and Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EMPLOYEE

 

 

 

 

 

 

 

 

/s/ JOHN MILLER

 

 

John Miller

 

 

 

--------------------------------------------------------------------------------

 

EXHIBIT A

 

PERQUISITES

 

 

Annual Physical (with tax gross-up)

Financial Planning Services (with tax gross-up)

Parking

401(k) Match Contribution

Reimbursement of reasonable Gym Membership Fees

Supplemental Insurance consistent with that offered to key executives of the
Company

 

 

A-1

--------------------------------------------------------------------------------

 

EXHIBIT B

 

RELEASE AND WAIVER AGREEMENT

 

This Release and Waiver Agreement (“Release”), dated as of [__________], is
entered into between Signature Group Holdings, Inc., a Delaware corporation (the
“Company”) and John Miller (the “Executive”).

WITNESSETH:

WHEREAS, in order to provide an orderly and amicable arrangement with respect to
Executive’s separation from the Company, the Company desires to provide
Executive with severance in the form of a lump sum payment;

WHEREAS, in order to be eligible to receive severance and other consideration as
described in this Release, Executive must execute a release and waiver of all
claims and causes of action against the Company, and all of its affiliates and
related entities; and

WHEREAS, Executive acknowledges that the consideration received by Executive
under the terms of this Release for the release and waiver contained herein is
in addition to any consideration the Company is otherwise required to provide.

NOW, THEREFORE, in consideration for the promises and the mutual covenants and
agreements set forth below, the parties hereby acknowledge and agree as follows:

AGREEMENT:

 

1.Separation Date.  Executive’s separation from employment with the Company will
be effective immediately [__________] (“Separation Date”).  Effective as of the
Separation Date, the Executive and the Company hereby acknowledge and agree that
the Evergreen Employment Agreement, dated March [  ], 2015 (“Evergreen
Agreement”), by and between the Executive and the Company, as well as any other
prior agreements or understandings, are hereby terminated and of no further
force or effect.

 

2.Final Compensation.  The Company will pay Executive’s final compensation
earned through and including the Separation Date.  In addition, the Company will
offer Executive the right to continue to participate in its group health plan
pursuant to COBRA.  Except as specifically provided in this Release, Executive
understands that Executive will not be entitled to any other payment, benefits
or other consideration from the Company related to Executive’s employment with
the Company or Executive’s separation from the Company.

 

3.Severance and Other Consideration.  In consideration for the promises made
herein by Executive, the Company will pay Executive severance in equal
installments on the Company’s normal payroll dates for a period of one (1) year
from the Date of Termination in accordance with the usual payroll practices of
the Company, with each such payment deemed to be a separate payment for the
purposes of Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”), and the regulations issued thereunder (“Section 409A”), pursuant to
Section 4, the termination of the Executive, and execution and return of this
Release by the Executive, and Executive’s continuing compliance with the
applicable continuing obligations and covenants of the Evergreen Agreement.

 

4.Releases and Waiver.

 

a)Executive (on behalf of his or herself and his or her heirs, executors, legal
representation, administrators and assigns) hereby voluntarily, knowingly and
willingly releases and forever discharges the Company, its subsidiaries,
affiliates, and parents, together with each of those entities’ former and
current officers, directors, shareholders, managers, employees, agents,
fiduciaries, and administrators (collectively, the “Company Releasees”) from any
and all liabilities, agreements, compensation, demands, damages, claims, and
causes of action of any nature whatsoever that they may have had or now have,
known and unknown, against any of the Company Releasees including, but not
limited to, those that are by reason of or in any manner whatsoever connected
with the Company’s hiring of Executive, Executive’s employment relationship with
the Company, or the termination of the

B-1

--------------------------------------------------------------------------------

 

Executive’s employment with the Company, including, but not limited to, under
any public policy, contract, or tort, or under common law; wrongful discharge;
retaliation; breach of contract; infliction of emotional distress; or
defamation; or arising under any policies, practices, or procedures of the
Company and including, specifically, all alleged discriminatory events, acts,
patterns or practices based on age, religion, creed, sex, sexual orientation,
national origin, ancestry, disability, handicap, marital status, gender
identity, race or color, arising under any statute or law including, without
limitation, the Americans with Disabilities Act of 1990, the Age Discrimination
in Employment Act of 1967, 29 U.S.C. § 621 et. seq., the Older Workers’ Benefit
Protection Act, the Rehabilitation Act of 1973 (including Section 504 thereof),
Title VII of the 1964 Civil Rights Act, the Civil Rights Act of 1866 (42 U.S.C.
§ 1981), the Civil Rights Act of 1991, the Equal Pay Act, the National Labor
Relations Act, the Worker Adjustment and Retraining Notification Act, the Family
and Medical Leave Act, and the Employee Retirement Income Security Act of 1974,
all as amended, and any other federal, state, or local law, regulation, or
ordinance; or any claim for costs, fees, or other expenses, including attorneys’
fees, incurred in these matters, except for claims to the payments due under
this Agreement.  It is further and expressly agreed that, except as otherwise
provided in Section 4(b) below, to the fullest extent permitted by law,
Executive will not commence, maintain, prosecute or participate in any action or
proceeding of any kind against the Company based on any of the claims waived
herein occurring up to and including the date of Executive’s
signature.  Executive represents and warrants that Executive has not done so as
of the effective date of this Release.

b)By signing this Release Executive expressly does not release or waive any
right to file or maintain a charge or participate in any investigation or
proceeding conducted by the Equal Employment Opportunity Commission (“EEOC”) or
any other applicable federal, state or local administrative agency.  However,
Executive does waive rights to any monetary or equitable recovery should the
EEOC, or any such federal, state, or local agency pursue any claims on
Executive’s behalf arising out of or relating to Executive’s employment with
and/or separation from employment with the Company and Executive hereby promises
not to seek or accept any award, settlement or other monetary or equitable
relief from any source or proceeding brought by any person or applicable
federal, state or local administrative agency on Executive’s behalf or on behalf
of any class of which Executive is a member with respect to any of the claims
Executive has waived.

c)Notwithstanding the foregoing promises and rights, if Executive violates this
Section 4, Executive agrees to indemnify and hold harmless the Company from and
against any and all costs, attorneys’ fees and other expenses authorized by law
which result from, or are incident to, such violation.  

d)If Executive is at least forty (40) years of age, in compliance with the
aforementioned Age Discrimination in Employment Act of 1967, 29 U.S.C. § 621 et.
seq. and the Older Workers’ Benefit Protection Act, the Executive is shall be
afforded at least twenty-one (21) days to consider waiving age-related
discrimination claims by executing this Release, and has the right to revoke his
signature within seven (7) days after his execution of it.  Executive
understands that this Agreement will not become effective and enforceable unless
the seven day revocation period passes and Executive does not revoke the
Agreement in writing.  Executive understands that this Agreement may not be
revoked after the seven day revocation period has passed. The Executive hereby
acknowledges that Executive (i) has read this Release and understands its legal
effect and binding nature; (ii) has been advised to consult with an attorney
prior to executing this Release and that Executive has had the opportunity to do
so; (iii) is acting voluntarily and of Executive’s own free will in executing
this Release; (iv) has been informed that Executive has at least twenty-one (21)
days to consider such execution; (v) has seven (7) days following execution to
revoke this Release; and (vi) unless revoked during the seven (7) day period,
this Release shall remain in full force and effect.

Non-Disclosure.  Except as required by law or as specified in this Section,
Executive agrees that he will not disclose any of the terms and conditions of
this Release to any person or entity who is not a party to this Release, with
the sole exceptions of Executive’s current or any future attorneys and financial
advisors.  In addition, Executive will instruct Executive’s current or any
future attorneys and financial advisors who have acquired knowledge of the
matters discussed herein to treat such information as privileged and
confidential and not to disclose such information except as consistent with this
Release and required by law.

 

Non-Disparagement.  The Executive shall not, at any time following the
Separation Date, directly or indirectly, disparage the Company or the business
or properties or assets of the Company.  The Company’s Chief Executive Officer
or any other executive officers of the Company Group shall not, at any time
following the Separation Date, directly or indirectly, disparage the
Executive.  Notwithstanding the foregoing, nothing in this Section 6 shall
preclude the Executive or the executive officers of the

B-2

--------------------------------------------------------------------------------

 

Company Group from making truthful statements or disclosures that are required
by applicable law or legal process.

 

7.  Proprietary Information.  Executive agrees that all information, whether or
not in writing, concerning the Company’s business, technology, business
relationships or financial affairs which the Company has not released to the
general public (collectively, “Proprietary Information”) is and will be the
exclusive property of the Company.  By way of illustration, Proprietary
Information may include information or material which has not been made
generally available to the public, such as: (a) corporate information, including
plans, strategies, methods, policies, resolutions, negotiations or litigation;
(b) marketing information, including strategies, methods, customer identities or
other information about customers, prospect identities or other information
about prospects, or market analyses or projections; (c) financial information,
including cost and performance data, debt arrangements, equity structure,
investors and holdings, purchasing and sales data and price lists; and (d)
operational and technological information, including plans, specifications,
manuals, forms, templates, software, designs, methods, procedures, formulas,
discoveries, inventions, improvements, concepts and ideas; and (e) personnel
information, including personnel lists, reporting or organizational structure,
resumes, personnel data, compensation structure, performance evaluations and
termination arrangements or documents.  Proprietary Information also includes
information received in confidence by the Company from its customers or
suppliers or other third parties.  Executive agrees not to use or disclose any
Proprietary Information.

 

8.Unemployment Compensation.  The Company agrees to not protest any claim for
unemployment insurance compensation that Executive may make; provided, however,
that the Company may offset any unemployment compensation payments paid to
Executive against any severance Payments payable to Executive.

 

9.Return of Property.  Executive acknowledges and agrees that he has conducted a
reasonable search for any Company property in his possession, custody, or
control, including for electronic information, and has returned all Company
property that he has located.

 

10.Acknowledgements.  Executive acknowledges (a) that he has at least twenty-one
(21) days from receipt of this document to consider whether to accept or reject
this Release pursuant to Section 4(d).  Executive may accept this Agreement by
executing it and returning it by no later than [__________] to Craig Bouchard,
Chief Executive Officer of the Company; (b) that Executive may at Executive’s
option, sign this Release prior to the end of such period but is not required to
do so; (c) that Executive is voluntarily and knowingly entering into this
Release; and (d) that Executive understands the legal and binding effect of this
Release.

 

11.Governing Law.  This Release shall be construed in accordance with the
substantive laws of the State of California, without regard to its conflict of
laws principles.

 

12.Counterparts.   This Release may be executed by each of the parties hereto in
separate counterparts (including electronic counterparts) and have the same
force and effect as if the Company and Executive had executed it as a single
document.

 

13.Successors and Assigns.   The rights and obligations of the parties under
this Release shall be binding upon and shall inure to the benefit of the
Company’s successors and assigns.  This Release shall not be assignable by
Executive.

 

14.Entire Agreement.  This Release expresses the entire agreement and
understanding of the parties with respect to the subject matter hereof, and
supersedes any prior agreements or understandings, written or oral, with respect
to such subject matter.

 

 

[Signature page follows]

 

 

 

B-3

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties have executed this Release as of the date
written above.

 

JOHN MILLER

 

Signature Group Holdings, Inc.

 

 

 

 

Name:  Craig Bouchard

 

 

Title:   Chief Executive Officer

 

 

Date:

 

 

[Signature Page Release and Waiver Agreement – Signature Group Holdings, Inc.]4
= 1