EXHIBIT 10.3
AdvisorShares Investments, LLC

Employment Agreement
 
THIS EMPLOYMENT AGREEMENT (this “Agreement”), dated as of October 31, 2008, is
made by and between AdvisorShares Investments, LLC, a Delaware limited liability
company (the “Company”), and Mr. Noah Hamman residing at 5604 Wilson Lane,
Bethesda, Maryland 20814 (the “Executive”).

RECITALS

WHEREAS, the Company wishes to employ the Executive as the Chief Executive
Officer of the Company; and
 
WHEREAS, the Company desires to enter into this Agreement and to accept such
employment and service, subject to the terms set forth herein;
 
WHEREAS, the Executive agrees to accept such employment by the Company on the
terms set forth herein.
 
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained, and other good and valuable consideration, the receipt and
sufficiency of which is mutually acknowledged, the Company and the Executive
hereby agree as follows:
 
SECTION 1: CERTAIN DEFINITIONS.
 
1.1. “Base Salary” shall mean $240,000.
 
1.2. “Board” shall mean the Board of Directors of the Company, and in any
references to the Board in this Agreement that are in connection with decisions
of the Board that solely affect the rights or obligations of the Executive,
“Board” shall exclude the Executive to the extent then serving as a director.
 
1.3. “Code” shall mean the Internal Revenue Code of 1986, as amended.
 
1.4. “Effective Date” shall mean the first day of Executive’s employment, which
shall be November 1, 2008.
 
1.5. “Employment Period” shall mean the period of time beginning on the
Effective Date and ending on the third anniversary of the Effective Date, unless
terminated earlier in accordance with Section 5.
 
1.6. “Milestones” shall have the meaning set forth in the Purchase and
Contribution Agreement.
 
1.7. “Purchase and Contribution Agreement” shall mean the Purchase and
Contribution Agreement, dated as of October 31, 2008, between the Company and
Fund.com, and joined by Wilson Lane Group, LLC.
 
1.8. “Specified Employee” shall mean a “specified employee” within the meaning
of Section 409A(a)(2)(B)(i) of the Code, as determined by the Compensation
Committee of the Board of Directors.
 
 
 
 

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SECTION 2: EMPLOYMENT.  Subject to the terms and conditions provided herein, the
Company hereby agrees, during the Employment Period, to employ the Executive as
its Chief Executive Officer.  The Executive hereby agrees to accept such
employment during the Employment Period.  This Agreement shall automatically
renew for a 1-year term unless either party provides 60-days written notice
prior to the end of each term.
 
SECTION 3: EMPLOYMENT DUTIES.  During the Employment Period, the Executive shall
have such duties and responsibilities as are assigned to the Executive by the
Board and consistent with the normal and customary responsibilities and duties
of a Chief Executive Officer of comparable companies.  Executive shall take
direction from and report to the Board.  During the Employment Period, the
Executive agrees to devote substantially all of his business attention and time
to the business and affairs of the Company and its subsidiaries, and to use the
Executive’s reasonable best efforts to perform faithfully the duties and
responsibilities assigned to the Executive under this Agreement.
 
SECTION 4: COMPENSATION.
 
4.1. Base Salary.  The Executive shall receive the Base Salary, payable in
accordance with the Company’s payroll practices in effect from time to time.
 
4.2. Minimum Guaranteed Bonus.  The Executive shall be entitled to receive a
minimum guaranteed bonus of $100,000 per annum (the “Initial Minimum Bonus”)
upon (a) the Company’s total assets under management reaching $500 million and
(b) the Company achieving a positive three-month rolling EBITDA, and an
additional minimum guaranteed bonus of $100,000 per annum (the “Second Minimum
Bonus” and together with the Initial Minimum Bonus, the “Aggregate Minimum
Bonus” and together with the Base Salary, the “Aggregate Cash Compensation”)
upon (x) the Company’s total assets under management reaching $1 billion and
(y) the Company achieving a positive three-month rolling EBITDA, in each case
payable in four equal quarterly installments for so long as the Executive
remains employed by the Company.
 
4.3. Incentive, Savings and Retirement Plans.  During the Employment Period the
Executive shall be eligible to participate in any bonus or incentive
compensation plans and programs established by the Board from time to time for
the benefit of senior executives of the Company.  During the Employment Period,
the Executive shall be eligible to participate in all savings and retirement
plans and programs (as the plan terms allow) maintained by the Company from time
to time on or after the Effective Date for the benefit of employees and/or
senior executives of the Company.  Nothing contained herein shall require the
establishment or continuation of any particular plan or program.
 
4.4. Health Care Plans.  During the Employment Period, the Executive and/or the
Executive’s family (as the terms allow) shall participate in all health care
benefit plans, programs or arrangements maintained by the Company from time to
time on or after the Effective Date for the benefit of employees and/or senior
executives or employees of the Company.
 
4.5. Vacation; Fringe Benefits.  During the Employment Period, the Executive
shall be entitled to three (3) weeks of vacation annually, in accordance with
Company policy.  Vacation shall be taken at times mutually convenient to the
Company and the Executive.  During the Employment Period, the Executive shall
receive such perquisites and fringe benefits as are generally provided to senior
executives of the Company.
 
4.6. Expenses.  The Executive shall be reimbursed for reasonable and necessary
business expenses incurred in connection with the performance of his duties
hereunder.  Such reimbursement shall be made within 30 days after submission of
appropriate documentation and in no case later than March 15 of the year
following the year in which such expense was incurred; provided, however, that
the Employee shall, as a condition of such reimbursement, submit verification of
the nature and amount of such expenses in accordance with the reimbursement
policies from time to time adopted by the Company.
 
 
 
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SECTION 5: TERMINATION.
 
5.1. Death.  The Employment Period shall terminate automatically upon the
Executive’s death.
 
5.2. Disability.  If, during the Employment Period, the Disability (as defined
below) of the Executive has occurred, the Company may give to the Executive
written notice of its intention to terminate the Executive’s employment due to
such Disability.  The Executive’s employment with the Company shall be
terminated by the Company on the 15th day after receipt by the Executive of such
notice (the “Disability Effective Date”), if, within such fifteen (15) day
period, the Executive shall not have returned to full-time performance of the
Executive’s duties.  For purposes of this Agreement, “Disability” means the
inability of the Executive to perform his normal duties and responsibilities
hereunder due to a physical, mental, or emotional impairment, as determined by
an independent qualified physician (selected by the Company and reasonably
acceptable to the Executive) during any consecutive one hundred and eighty day
(180) period or for an aggregate of two hundred and seventy (270) days during
any three hundred sixty-five (365) day period.  Nothing in this Section 5.2 is
intended to be inconsistent with or in any way alter the parties’
responsibilities under applicable federal or state law regarding disabilities,
if any.
 
5.3. Cause.  The Board may terminate the employment of the Executive for Cause
by written notice to the Executive.  For purposes of this Agreement, “Cause”
shall mean (a) an act or acts of material personal dishonesty (including fraud,
misappropriation or embezzlement) taken by, or committed at the request of,
Executive, at the expense of the Company, or any of its affiliates; (b) willful
violations by Executive of the material terms of this Agreement, which have not
been cured within twenty (20) business days after written notice has been given
by the Board to the Executive; (c) intentional refusal or failure to act in
accordance with any lawful and proper direction or order of the Board, or
otherwise a failure to adequately perform his assigned duties or
responsibilities, which refusal or failure is not corrected within twenty (20)
business days after written notice has been given by the Board to the Executive;
(d)  Executive’s habitual drunkenness or use of illegal substances; (e) a
material breach by Executive of the Executive’s obligations under the Protection
of Company Property Agreement (as defined below), which has not, to the extent
practicable, been cured within twenty (20) business days after written notice
has been given by the Board to the Executive; (f) the conviction of, a plea of
nolo contendre, a guilty plea or a confession by Executive to, a felony or a
crime of moral turpitude; or (g) any act of material neglect or gross misconduct
with respect to the Company’s business that the Company that the Board deems to
be injurious to the Company or it reputation.
 
5.4. Without Cause.  During the Employment Period, upon written notice given to
the Executive, the Board may terminate the Executive’s employment hereunder
other than for Cause, in the Board’s sole discretion.
 
5.5. Termination by Executive for Good Reason.  During the Employment Period,
the Executive may terminate his employment hereunder by written notice for Good
Reason.  For purposes of this Agreement, “Good Reason” shall mean the occurrence
of any of the following events which is not cured by the Company within thirty
(30) days of Executive’s written notice to the Company of same: (a) the
reduction of the Executive’s Base Salary; (b) a material diminution, without his
consent, of the Executive’s title, authority, duties or responsibilities as
specified hereunder, or the assignment of duties and responsibilities that are
inconsistent with his positions as Chief Executive Officer (it being understood
that the Company is a “start-up,” Executive will be required to perform
administrative type functions (routine copying, faxing, etc.)); (c) the Company
requiring the Executive, without his consent, to be based in any office or
location outside of a 10-mile radius of Washington, D.C.; (d) any material
violation by Fund.com of its funding obligations under the Purchase and
Contribution Agreement, which has not been cured within twenty (20) business
days after written notice has been given by the Executive to Fund.com; or (e)
any other willful and intentional material violation by the Company or Fund.com
of the provisions of the Purchase and Contribution Agreement or the Amended and
Restated Limited Liability Company Agreement of the Company, which has not been
cured within twenty (20) business days after written notice has been given by
the Executive to Fund.com, and which shall render achievement of the Milestones
impossible or impracticable in the reasonable judgment of Executive.  The
Executive must give the Company notice of the event within thirty (30) days of
the date of the event and the Executive must resign effective upon no less than
fourteen (14) days and no more than thirty (30) days after the expiration of the
Company’s thirty (30) day cure period.
 
 
 
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5.6. Termination by Executive Without Good Reason.  During the Employment Period
the Executive may terminate employment hereunder upon ninety (90) day’s prior
written notice without Good Reason, and such termination shall not be deemed to
be a breach of this Agreement.
 
5.7. Date of Termination.  “Date of Termination” shall mean:
 
(a)         if the Executive’s employment is terminated by the Company, other
than for Cause or Disability, the Date of Termination shall be the date set
forth in the Company’s written notice of such termination under Section 5.4;
 
(b)         if the Executive’s employment is terminated by the Company for
Cause, the Date of Termination shall be the date upon which the applicable cure
period provided under Section 5.3 expires;
 
(c)         if the Executive’s employment is terminated by the Executive, the
date of termination shall be fifteen 15 days after the date on which the
Executive notifies the Company of such termination, or earlier if the Company
elects;
 
(d)         if the Executive’s employment is terminated by reason of death or
Disability, the Date of Termination shall be the date of death of the Executive
or the Disability Effective Date, as the case may be.
 
SECTION 6: OBLIGATIONS OF THE COMPANY UPON TERMINATION.
 
6.1. Termination.  If the Executive’s employment is terminated for any reason,
the Executive, or the Executive’s legal representative, as the case may be,
shall be entitled to receive (a) the Executive’s Base Salary through the Date of
Termination; (b) any bonus earned in the previous year and not yet paid by the
Company; and (c) a pro rata bonus for the year of termination calculated and
payable after year-end, if any, provided, however, that no such pro rata bonus
shall be paid to the Executive if his employment is terminated for Cause or
voluntarily by the Executive without Good Reason.  Such amounts specified in
clauses (a), (b) and (c) shall be paid to the Executive or to the Executive’s
estate or beneficiary, as applicable, in a lump sum in cash within thirty (30)
days after the Date of Termination.  In addition to the foregoing, the Executive
and/or his successors and assigns shall be entitled to receive the benefits
described in Sections 4.3 and 4.4 for a period of 9 months following the Date of
Termination and an additional severance payment in an amount equal to the
pro-rated portion of the Executive’s Aggregate Cash Compensation for such
nine-month period (“Executive Severance”), provided, however, that no Executive
Severance shall be paid to the Executive if his employment is terminated for
Cause or voluntarily by the Executive without Good Reason.
 
 
 
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6.2. Full Satisfaction.  The payments actually received, accepted and retained
by the Executive (or his legal representatives) under this Agreement that are
attributable to the termination of the Executive’s employment shall be in full
and complete satisfaction of any and all claims the Executive (or his legal
representatives) may have against the Company which are in any way related to
the employment relationship (including the Executive’s hiring) between the
Executive and the Company or the termination of that relationship.
 
6.3. Other Payments.  Notwithstanding anything to the contrary contained herein
(including without limitation Section 6.2), any compensation or benefits, if
any, which are vested in the Executive or which the Executive is otherwise
entitled to receive under any plan, program or arrangement of the Company
before, at or subsequent to the Date of Termination shall be payable in
accordance with the terms and provisions of such plan, program or arrangement.
 
SECTION 7: TAXES.  The Company may withhold from any amounts payable under this
Agreement such federal, state or local taxes or other withholdings as shall be
required or permitted to be withheld pursuant to any applicable law or
regulation, the operation of any incentive, savings, retirement, or welfare or
fringe benefit plan, or by written agreement with the Executive.
 
SECTION 8: CONFIDENTIAL INFORMATION AND NON-COMPETITION.  The Executive shall
execute and deliver to the Company on or prior to the Effective Date an
Employee’s Proprietary Information and Inventions and Non-Competition Agreement
(“Protection of Company Property Agreement”) in the form attached hereto, the
terms of which are incorporated herein by reference; provided, however, that to
the extent that a term or provision of this Agreement conflicts with any term or
provision of the Protection of Company Property Agreement, such term or
provision of this Agreement shall prevail over such term or provision of the
Protection of Company Property Agreement.
 
SECTION 9: SURVIVAL.  The Executive agrees that Section 8 of this Agreement
shall survive the termination of (a) this Agreement, (b) the Employment Period
and/or (c) the Executive’s employment with the Company.
 
SECTION 10: SUCCESSORS.  This Agreement is personal to the Executive and may not
be assigned by the Executive.  This Agreement shall inure to the benefit of, and
be enforceable by, the Executive and the Executive’s legal representatives, as
applicable.  This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.  The Company will require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company to assume expressly and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it
if no such succession had taken place.
 
SECTION 11: NOTICES.  All notices and other communications hereunder shall be in
writing and shall be given by facsimile transmission, hand delivery to the other
party or by registered or certified mail, return receipt requested, postage
prepaid, to the addresses set forth below:
 
If to the Company:
AdvisorShares Investments, LLC
 
5604 Wilson Lane
 
Bethesda, MD 20814
 
Attn:  Chief Executive Officer
   

 
 
 
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With copies to:
Fund.com
     
14 Wall Street, 20th Floor
     
New York, NY 10005
     
Attn:  Gregory Webster
             
Pillsbury Winthrop Shaw Pittman LLP
 
1540 Broadway
 
New York, NY 10036
 
Attn:  Ronald Fleming
   
and
Morgan, Lewis & Bockius LLP
 
1111 Pennsylvania Avenue, N.W.
 
Washington, D.C. 20004
 
Attn:  W. John McGuire

If to the Executive, to Executive’s then current address on file with the
Company.  In the event of an address change, to either party at such other
address as either party shall have furnished to the other in writing in
accordance herewith.  Any such notice and communications shall be effective when
actually received by the addressee.
 
SECTION 12: MISCELLANEOUS.
 
12.1. Governing Law.  This Agreement shall be governed by and construed in
accordance with the laws of the state of Maryland, without reference to
principles of conflict of laws thereunder.
 
12.2. ARBITRATION.  DISPUTES REGARDING THE EXECUTIVE’S EMPLOYMENT WITH THE
COMPANY, INCLUDING, WITHOUT LIMITATION, ANY DISPUTE UNDER THIS AGREEMENT, WHICH
CANNOT BE RESOLVED BY NEGOTIATIONS, SHALL BE SUBMITTED TO, AND SOLELY DETERMINED
BY, FINAL AND BINDING ARBITRATIONS CONDUCTED PURSUANT TO THE NEW YORK STOCK
EXCHANGE, INC.’S ARBITRATION RULE AND THE PARTIES AGREE TO BE BOUND BY THE FINAL
AWARD OF THE ARBITRATORS IN ANY SUCH PROCEEDING.  THE ARBITRATORS SHALL APPLY
THE LAWS OF THE STATE OF NEW YORK WITH RESPECT TO THE INTERPRETATION OR
ENFORCEMENT OF ANY MATTER RELATING TO THIS AGREEMENT.  ANY ARBITRATION HEREUNDER
SHALL BE HELD IN NEW YORK CITY, NY, OR SUCH OTHER PLACE AS THE PARTIES HERETO
MAY MUTUALLY AGREE.  THE PREVAILING PARTY IN ANY SUCH ARBITRATION SHALL BE
ENTITLED TO RECOVER ITS OR HIS FULL REASONABLE COSTS AND REASONABLE ATTORNEYS’
FEES INCURRED DURING OR IN CONNECTION WITH THE ARBITRATION.  JUDGMENT UPON THE
AWARD BY THE ARBITRATORS MAY BE ENTERED IN ANY COURT IN THE STATE OF NEW YORK
HAVING JURISDICTION THEREOF.
 
12.3. Compliance with Section 409A of the Code.  To the fullest extent
applicable, amounts and benefits payable under this Agreement are intended to be
exempt from the definition of “nonqualified deferred compensation” under Section
409A of the Code in accordance with one or more of the exemptions available
under the final Treasury regulations promulgated under Code Section 409A and, to
the extent that any such amount or benefit is or becomes subject to Code Section
409A due to a failure to qualify for an exemption from the definition of
nonqualified deferred compensation in accordance with such final Treasury
regulations, this Agreement is intended to comply with the applicable
requirements of Section 409A of the Code with respect to such amounts or
benefits and will be interpreted and administered to the extent possible in a
manner consistent with the foregoing statement of intent.  Notwithstanding
anything herein to the contrary, (i) if on the date the Employee “separates from
service” within the meaning of Treasury Regulation section 1.409A-1(h), (A) the
Company is publicly traded, (B) the Employee is a Specified Employee, and (C)
the Company reasonably determines that (x) a payment or benefit payable
hereunder as a result of the Employee’s termination of employment constitutes
nonqualified deferred compensation that is subject to the requirements of
Section 409A of the Code and (y) the deferral of the commencement of such
payments or benefits is necessary in order to prevent any accelerated or
additional tax under Section 409A of the Code, then the Company will withhold
and accumulate such payments or benefits hereunder (without any reduction in
such payments or benefits ultimately paid or provided to Employee) until the
date that is six months following Employee’s separation from service date (or
the earliest date as is permitted under Section 409A of the Code), at which time
the withheld and accumulated payments shall be paid to the Employee in a single
lump sum payment and (ii) if any other payments of money or other benefits due
to Employee 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
Company, that does not cause such an accelerated or additional tax.
 
 
 
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12.4. Captions.  The captions of this Agreement are not part of the provisions
hereof and shall not have any force or effect.
 
12.5. Amendment.  This Agreement may not be amended or modified otherwise than
by a written agreement executed by the parties hereto or their respective
successors, assigns and legal representatives.
 
12.6. Entire Agreement.  This Agreement contains the entire understanding of the
Company and the Executive with respect to the subject matter hereof and
supersedes any prior oral or written agreement between the Company and the
Executive.
 
12.7. Counterparts.  This Agreement may be executed in or counterparts, each of
which will be deemed to be an original thereof, but all of which together will
constitute one and the same instrument.
 
12.8. Waiver of Breach.  No waiver by the Company of any breach of this
Agreement will be a waiver of any preceding or subsequent breach.  No waiver by
the Company of any right under this Agreement will be construed as a waiver of
any other right.
 
12.9. Enforceability.  If any provision of this Agreement is held invalid or
unenforceable, either in its entirety or by virtue of its scope of application
to given circumstances, such provision will thereupon be deemed modified only to
the extent necessary to render same valid, or not applicable to given
circumstances, or excised from this Agreement, as the situation may require, and
this Agreement will be construed and enforced as if such provision had been
included herein as so modified in scope or application, or had not been included
herein, as the case may be.
 

 
[Signature page follows]
 

 
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IN WITNESS WHEREOF, the Executive has signed this Agreement and, the Company has
caused this Agreement to be signed in its name and on its behalf, all as of the
day and year first above written.
 
AdvisorShares Investments, LLC
 
By: /ss/ Gregory Webster
 
Name: Gregory Webster

 
Title:   Director

Noah Hamman
 
/ss/ Noah
Webster                                                                
Noah Hamman