EXHIBIT 10.2
 
Execution Copy
 
THIS EMPLOYMENT AGREEMENT (the “Agreement”), originally dated as of January 11,
2012 and amended as of February 11, 2014 (the “Revision Date”) is entered into
by and between Harbinger Group Inc., a Delaware corporation (the “Company”), and
David M. Maura (“Executive”).
 
WHEREAS, Executive has offered to serve the Company, and the Company desires to
employ Executive, subject to the terms and conditions set forth herein, as
amended effective as of the Revision Date.
 
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained herein, and intending to be legally bound hereby, the
parties hereto agree as set forth below:
 
1.             Term; Effectiveness.
 
(a)           The term of Executive’s employment under this Agreement shall
commence as of October 1, 2011 (the “Effective Date”) and shall continue until
the first anniversary of the Effective Date (such period, the “Initial Term”);
provided, however, that such service period hereunder shall renew for an
additional period of one (1) year on the first anniversary of the Effective Date
and each anniversary thereafter (each anniversary of the Effective Date, an
“Expiration Date,” and each one (1) year period following an Expiration Date, a
“Renewal Term”), unless either the Company or Executive has provided to the
other a notice of termination of this Agreement at least ninety (90) days in
advance of the first anniversary of the Effective Date or such applicable
Expiration Date, stating that the Company or Executive, as applicable, does not
intend to renew this Agreement; provided, that Executive’s employment under this
Agreement and this Agreement may be terminated at any earlier time solely
pursuant to the provisions of Section 5 hereof. The period of time from the
Effective Date through the earlier of the expiration or termination of this
Agreement is herein referred to as the “Term.”
 
(b)           Executive agrees and acknowledges that the Company has no
obligation to extend the Initial Term or any Renewal Term, or to continue
Executive’s employment hereunder following the expiration of the Initial Term or
any Renewal Term. Executive also agrees and acknowledges that, should Executive
and the Company mutually agree to continue Executive’s employment for any period
of time following an Expiration Date notwithstanding the expiration or
termination of this Agreement in accordance with its terms and without entering
into a new written employment agreement, Executive’s employment with the Company
shall be “at will,” such that the Company may terminate Executive’s employment
at any time, with or without reason and with or without notice, and Executive
may resign at any time, with or without reason and with or without notice. If
the Term of this Agreement is not extended (or further extended), but
Executive’s employment with the Company continues after the expiration of the
then current Renewal Term, then such continued employment shall be on an “at
will” basis upon such terms as the Company may prescribe; and if such “at will”
employment is terminated by the Company, Executive’s right to severance shall be
determined and be payable in accordance with the Company’s policy in effect at
such time, if any.
 
2.           Definitions. For purposes of this Agreement, the following terms,
as used herein, shall have the definitions set forth below.
 
 
 
 

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(a)           “Affiliate” means, with respect to any specified Person, any other
Person that directly or indirectly, through one or more intermediaries,
Controls, is Controlled by, or is under common Control with, such specified
Person, provided that, in any event, any business in which the Company has a
direct or indirect ownership interest of more than twenty (20) percent shall be
treated as an Affiliate of the Company.
 
(b)           “Control” means the possession, direct or indirect, of the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
 
(c)           “Person” means any individual, corporation, partnership, limited
liability company, firm, joint venture, association, joint-stock company, trust,
unincorporated organization, governmental or regulatory body or other entity.
 
(d)           “Subsidiary” means, with respect to any Person, (i) any
corporation of which at least a majority of the voting power with respect to the
capital stock is owned, directly or indirectly, by such Person, any of its other
Subsidiaries or any combination thereof or (ii) any Person other than a
corporation in which such Person, any of its other Subsidiaries or any
combination thereof has, directly or indirectly, at least a majority of the
total equity or other ownership interest therein.
 
3.             Duties and Responsibilities.
 
(a)           Executive agrees to be employed by the Company and be actively
engaged on a full-time basis in the business and activities of the Company and
its Affiliates for the entirety of the Term, and, subject to Section 3(c), to
devote substantially all of Executive’s working time and attention to the
Company and its Affiliates and the promotion of its business and interests and
the performance of Executive’s duties and responsibilities hereunder. Executive
shall be employed hereunder as Executive Vice President and Managing Director of
the Company with such duties and responsibilities as directed from time to time
by the Chief Executive Officer (“CEO”) or President of the Company (“President”)
or the Board of Directors of the Company (the “Board”) or are consistent with
such position, including, without limitation, the duty to use his reasonable
best efforts to ensure that the business and activities of the Company and its
Subsidiaries are conducted in compliance with all applicable laws, rules and
regulations in all material respects. Executive shall report directly to the CEO
or President. Executive agrees to cooperate with reasonable requests of the
Company, which will generally be communicated through the Board or President or
CEO, to provide services to Affiliates of the Company (including Harbinger
Capital Partners LLC) with approval from the Compensation Committee or the
Board, from time to time.
 
(b)           During the Term, Executive will carry out his duties as Executive
Vice President and Managing Director in the Company’s headquarters in New York
City, or any future headquarters of the Company, subject to normal travel
requirements in connection with the performance of his duties.
 
(c)           During the Term, Executive shall use Executive’s reasonable best
efforts to faithfully and diligently serve the Company and shall not act in any
capacity that is in conflict with Executive’s duties and responsibilities
hereunder. For the avoidance of doubt, during the Term,
 
 
 
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Executive shall not be permitted to become employed by, engaged in or to render
services for any Person other than the Company and its Affiliates, shall not be
permitted to be a member of the board of directors of any Person (other than
charitable or nonprofit organizations), in any case without the consent of the
Board, and shall not be directly or indirectly materially engaged or interested
in any business activity, trade or occupation (other than employment with the
Company and its Affiliates as contemplated by the Agreement); provided that
nothing herein shall preclude Executive from engaging in charitable or community
affairs and managing his personal investments to the extent that such other
activities do not, subject to Section 7, conflict in any material way with the
performance of Executive’s duties hereunder.
 
4.             Compensation and Related Matters.
 
(a)           Base Compensation. During the Term, for all services rendered
under this Agreement, Executive shall receive aggregate annual base salary
(“Base Salary”) at a rate of $500,000 per annum, payable in accordance with the
Company’s applicable payroll practices.
 
(b)           Annual Bonus. During the Term, for each fiscal year, Executive
shall have the opportunity to earn an annual bonus (“Annual Bonus”), in an
amount to be tied to the achievement of performance measures in accordance with
the Company’s annual bonus plan applicable to Executive (the “Bonus Plan”). The
performance measures for each year will be determined by the Board, as advised
by the Compensation Committee of the Board, in its sole discretion, after
consultation with Executive. The determination whether Executive has achieved
the performance measures for a fiscal year, and the amount of the Annual Bonus
to be awarded for such year, will be determined by the Compensation Committee,
in its sole discretion. Any Annual Bonus will, with respect to the undeferred
cash component, be paid within seventy-four (74) days following the end of the
fiscal year for which it is awarded, and, with respect to the equity component
(if any), be granted as soon as practicable after the Company has filed its
annual report with respect to such fiscal year end (or such earlier time after
the end of such fiscal year end, as determined in the discretion of the Board),
in each case except as set forth in the Bonus Plan. Executive must be employed
by the Company as of the last business day of the fiscal year to be eligible for
an Annual Bonus for such year, except as provided otherwise in Section 5.
 
(c)           Benefits and Perquisites. During the Term, Executive shall be
entitled to participate in the benefit plans and programs commensurate with
Executive’s position that are provided by the Company from time to time for its
senior executives generally, subject to the terms and conditions of such plans.
The Company may alter, modify, add to or delete its employee benefit plans at
any time as it, in its sole judgment, determines to be appropriate, without
recourse by Executive, except that no such action shall adversely affect any
previously vested rights of Executive under such plans.
 
(d)           Business Expense Reimbursements. During the Term, the Company
shall reimburse Executive for reasonable and properly documented business
expenses in accordance with the Company’s then-prevailing policies and
procedures for expense reimbursement.
 
(e)           Vacation. During the Term, Executive shall be entitled to annual
paid vacation of no less than four (4) weeks and to reasonable sick leave as
determined by the Board.
 
 
 
 
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(f)           Initial Equity Grant. Executive received a one-time equity award
of options to acquire stock of the Company (“Options”) and restricted stock or
restricted stock units (the “Restricted Stock”) in connection with the initial
execution of this Agreement. The Options and Restricted Stock are subject to the
terms of the underlying award agreements and the Company’s equity plan in effect
from time to time. Notwithstanding the foregoing, if Executive’s employment is
terminated by the Company without Cause (defined below) or by Executive for Good
Reason (defined below), or by reason of death or Disability (defined below),
then Executive’s then unvested Options and Restricted Stock granted pursuant to
this Section 4(f) shall vest (and the restrictions on such Restricted Stock
shall lapse) on the date such unvested Options and Restricted Stock would
otherwise vest (and the restrictions on such Restricted Stock would lapse) had
Executive remained an employee of the Company on such dates, provided that the
Release Condition (defined below) is satisfied (and any unvested Options and
Restricted Stock granted pursuant to this Section 4(f) shall not expire or be
forfeited before satisfaction of the Release Condition but shall expire or be
forfeited promptly if and when the Release Condition is not satisfied), and
provided further that Executive will be responsible for satisfying any tax
withholding obligations that may arise at the time they arise but may elect to
cause the Company to withhold or repurchase shares (to the statutory minimum tax
withholding levels and subject to any limitations that the Board or Compensation
Committee may impose in order for the Company to remain in compliance with any
debt or indenture covenants or similar undertakings (the “Debt Limitations”)).
With respect to any Options that vest pursuant to this Section 4(f), Executive
shall have six (6) months after the date of the vesting of such Options within
which to exercise any such Options, but in no event shall such exercise period
be longer than the 10th anniversary of the date of grant of such Option (or such
earlier date as provided under Sections 12 or 13 of the Harbinger Group Inc.
2011 Omnibus Equity Award Plan (the “2011 Equity Plan”)).
 
5.             Termination of the Term.
 
(a)           Executive’s employment may be terminated by either party at any
time and for any reason; provided, however, that Executive shall be required to
give the Company at least 30 days advance written notice of any resignation of
Executive’s employment hereunder. Notwithstanding the foregoing, Executive’s
employment shall automatically terminate upon Executive’s death.
 
(b)           Following any termination of Executive’s employment,
notwithstanding any provision to the contrary in this Agreement, the obligations
of the Company to pay or provide Executive with compensation and benefits under
Section 4 shall cease, except as otherwise provided herein, and the Company
shall have no further obligations to provide compensation or benefits to
Executive hereunder except (i) for payment of any accrued but unpaid Base Salary
and vacation time and for payment of any accrued obligations and unreimbursed
expenses under Section 4(d) accrued or incurred through the date of termination
of employment, (ii) for the non-deferred cash portion of any Annual Bonus earned
in respect of the fiscal year prior to the fiscal year in which termination of
employment occurs but unpaid as of the date of termination of employment (paid
when such non-deferred cash portion of the Annual Bonus would otherwise be
payable), (iii) for the COBRA Payments (as defined below), (iv) as set forth in
any other benefit plans, programs or arrangements applicable to terminated
employees in which Executive participates, other than severance plans or
policies and (v) as otherwise expressly required by applicable statute. For the
avoidance of doubt, the date of termination shall mean the last date of
 
 
 
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actual and active employment, whether such day is selected by mutual agreement
with Executive or unilaterally by the Company and whether with or without
advance notice. Notwithstanding the above, if Executive’s employment is
terminated for Cause or if he resigns his employment without Good Reason,
Executive shall not be entitled to receive any previously unpaid portion of the
current or prior year’s Annual Bonus or COBRA Payments.
 
(c)           (i)           If, prior to the expiration of the then current
Renewal Term, Executive’s employment is terminated by the Company without Cause
(and not due to death or Disability) or by Executive for Good Reason (defined
below), then Executive shall be entitled (subject to the times payments will be
made and other conditions set forth in Sections 5(c)(iii) and 20(d)) to:
 
 
(A)
Severance pay equal to Executive’s then monthly Base Salary for a period equal
to twelve (12) months, payable during the period immediately following such
termination in substantially equal monthly installments consistent with the
Company’s payroll practices;

 
 
(B)
Vesting of the Initial Equity Grant as provided in Section 4(f);

 
 
(C)
Vesting on the date the Release Condition is satisfied of 100% of the unpaid
deferred cash portion of Annual Bonuses awarded for fiscal years prior to the
fiscal year in which termination occurs and payment thereof on their scheduled
payment dates, i.e., no acceleration of payment except to the extent Section
409A of the Internal Revenue Code of 1986, as amended (“Section 409A”) may
require acceleration of up to 50% of amounts deferred before September 30,
2013), and vesting of 100% of the unvested equity portion of such Annual
Bonuses, such that 100% of Executive’s unvested Options and Restricted Stock
shall vest and the restrictions on 100% of Executive’s Restricted Stock shall
lapse, on the date such unvested Options and Restricted Stock would otherwise
vest (and the restrictions on such Restricted Stock would lapse) had Executive
remained an employee of the Company on such dates, provided that the Release
Condition (defined below) is satisfied (and any unvested Options and Restricted
Stock vested pursuant to this Section 5(c)(i)(C) shall not expire or be
forfeited before satisfaction of the Release Condition but shall expire or be
forfeited promptly if and when the Release Condition is not satisfied), and
provided further that Executive will be responsible for satisfying any tax
withholding obligations that may arise at the time they arise (which may
include, for Restricted Stock, taxation when employment ends) but may elect to
cause the Company to withhold or repurchase shares (to the statutory minimum tax
withholding levels and subject to the Debt Limitations). With respect to any
Options that vest pursuant to this Section 5(c)(i)(C) Executive shall have six
(6) months after the date of the vesting of such Options

 
 
 
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within which to exercise such Options, but in no event shall such exercise
period be longer than the 10th anniversary of the date of grant of such Option
(or such earlier date as provided under Sections 12 or 13 of the 2011 Equity
Plan or comparable provisions in a subsequent governing equity compensation
plan). For the avoidance of doubt, any deferred cash shall remain subject to any
reduction provisions applicable to members of senior management with respect to
their deferred amounts from such prior years; provided that such deferral period
shall not be longer than four fiscal years after the date such deferred cash was
first granted;
 
 
(D)
An Annual Bonus for the fiscal year in which such termination occurs, which,
assuming performance is achieved, shall be determined on the same terms and at
the same time as annual bonuses are determined for other executives and prorated
for the portion of the fiscal year for which Executive was employed, with
payment of each installment to be made in cash and/or vested shares of Company
common stock in the same proportions as annual bonuses are paid for such year to
other executives in the form of cash and equity awards. One-half of such amount
shall be paid to Executive in a lump sum payment within seventy-four (74) days
following the end of the fiscal year for which it is awarded and the other
one-half shall be paid to Executive in a lump sum payment in the calendar year
in which the one-year anniversary of the first payment occurs but in no event
later than such one-year anniversary (in each case, notwithstanding any
provision of Section 5(c)(iii) providing for earlier payment); and

 
 
(E)
If Executive elects health insurance continuation coverage under the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”),
then the Company will reimburse Executive for the cost of COBRA premiums in
excess of the cost of such benefits that active employees of the Company are
required to pay for a period of twelve (12) months or until Executive obtains
individual or family coverage through another employer, whichever comes first
(the “COBRA Period”), subject to the conditions that: (I) Executive is
responsible for immediately notifying the Company if Executive obtains
alternative insurance coverage, (II) Executive will be responsible for the
entire COBRA premium amount, if any, with respect to periods after the end of
the COBRA Period; and (III) if Executive declines COBRA coverage or the Company
is unable to make the payments consistent with applicable nondiscrimination
rules, then the Company will not make any alternative payment to Executive in
lieu of paying for COBRA premiums (such COBRA reimbursement payments, the “COBRA
Payments”).

 
(ii)           Notwithstanding any provision of Section 4(f) or Section 5(c)(i),
if, in the
 
 
 
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period that begins sixty (60) days prior to the occurrence of a Change in
Control (as defined in the 2011 Equity Plan) (or, if earlier, upon the signing
of a definitive agreement to enter into a Change in Control that actually
results in a Change in Control) and ends upon the first anniversary of such
Change in Control, Executive’s employment is terminated by the Company without
Cause (and not due to death or Disability) or by Executive for Good Reason, then
Executive shall be entitled (subject to the times payments will be made and
other conditions set forth in Sections 5(c)(iii) and 20(d), and in lieu of the
entitlements set forth in Section 5(c)(i)(A), (B), (C) and (D)) to:
 
 
(A)
Severance pay equal to two times the sum of (a) Executive’s then annual Base
Salary plus (b) the greater of $2,500,000 and Executive’s Target Variable
Compensation (as defined in the Bonus Plan) in respect of the fiscal year in
which the termination of employment occurs, the sum of which shall be paid in
substantially equal monthly installments over a period of twenty four (24)
months after such termination consistent with the Company’s payroll practices;

 
 
(B)
Vesting of the Initial Equity Grant as provided in Section 4(f);

 
 
(C)
Vesting of 100% of any unvested equity portion of any Annual Bonuses awarded for
fiscal years prior to the year in which termination occurs, such that all
unvested Options and Restricted Stock shall vest and the restrictions on all
Restricted Stock shall lapse on the date the Release Condition is satisfied (and
any such unvested Options and Restricted Stock that vest as a result of this
Section 5(c)(ii)(C) shall not expire or be forfeited before satisfaction of the
Release Condition (and any pre-closing period related to a Change in Control)
but shall expire or be forfeited promptly if and when the Release Condition is
not satisfied or the Change in Control does not occur);

 
 
(D)
100% of the unpaid deferred cash portion of Annual Bonuses awarded for fiscal
years prior to the fiscal year in which the termination occurs shall be paid
within seventy-four (74) days following the later of the Change in Control or
the effective date of cessation of employment (except to the extent Section 409A
requires payment on the original timing);

 
 
(E)
An Annual Bonus for the fiscal year in which such termination occurs, which,
assuming performance is achieved, shall be determined on the same terms and at
the same time as annual bonuses are determined for other executives and prorated
for the portion of the fiscal year for which Executive was employed. One-half of
such amount shall be paid to Executive in a lump sum payment (in cash) within
seventy-four (74) days following the end of the fiscal year for which it is
awarded and the other one-half shall

 
 
 
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be paid to Executive in a lump sum payment (in cash) in the calendar year in
which the one-year anniversary of the first payment occurs but in no event later
than such one-year anniversary (in each case, notwithstanding any provision of
Section 5(c)(iii) providing for earlier payment);
 
 
(F)
Outplacement services in accordance with Company policies in effect as of
Executive’s last day of employment, provided, however, if Executive declines
such services, then the Company will not make any alternative payment to
Executive in lieu of paying for such services; and

 
 
(G)
COBRA Payments as described in Section 5(c)(i)(E) for a maximum of eighteen (18)
months rather than twelve (12) months.

 
Notwithstanding the foregoing, where required to avoid additional taxation under
Section 409A, the Change in Control that occurs must also be a “change in the
ownership or effective control of a corporation, or a change in the ownership of
a substantial portion of the assets of a corporation” as defined in Treas. Reg.
§ 1.409A-3(i)(5). In addition, any increase in compensation or benefits under
this Section 5(c)(ii) in respect of a termination without Cause or resignation
for Good Reason during the period in advance of a Change in Control provided
above shall not occur unless and until the closing of the Change in Control.
 
(iii)           Any severance payments or benefits under Section 5(b)(iii)
and 5(c)(i) or (c)(ii) shall be (A) conditioned upon Executive’s having provided
an irrevocable waiver and general release of claims in favor of the Company and
its respective Affiliates, their respective predecessors and successors, and all
of the respective current or former directors, officers, employees,
shareholders, partners, members, agents or representatives of any of the
foregoing (collectively, the “Released Parties”), in the Company’s customary
form (subject to modification by the Company to comply with changes in
applicable laws) that has become effective and irrevocable in accordance with
its terms within fifty-five (55) days after such termination of employment (the
“Release Condition”) and (B) subject to Executive’s continued compliance with
the terms of the restrictive covenants in Sections 7, 8, 9, 10 and 11 of this
Agreement. Payments and benefits which do not constitute nonqualified deferred
compensation and are not subject to Section 409A (as defined below) shall
commence five (5) days after the Release Condition is satisfied and payments and
benefits which are subject to Section 409A shall commence on the sixtieth (60th)
day after termination of employment (subject to further delay, if required
pursuant to Section 20(d) below) provided that the Release Condition is
satisfied.
 
(iv)           For purposes of this Agreement, “Cause” means: (A) Executive’s
willful misconduct in the performance of his duties for the Company which causes
material injury to the Company, (B) Executive’s willfully engaging in illegal
conduct which is injurious to the Company, (C) Executive’s material breach of
this Agreement, (D) Executive’s willful violation of the Company’s written
policies in a manner that is detrimental to the best interests of the Company;
(E) Executive’s fraud or misappropriation,
 
 
 
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embezzlement or misuse of funds or property belonging to the Company; (F)
Executive’s act of personal dishonesty which results in personal profit in
connection with Executive’s employment with the Company; (G) Executive’s breach
of fiduciary duty owed to the Company; or (H) Executive’s negligent actions
which result in the loss of a material amount of capital of the Company or its
Affiliates (the Company shall make the determination of materiality and shall
promptly communicate such determination to Executive); provided, however, that
Executive shall be provided a ten (10) day period to cure any of the events or
occurrences described in the immediately preceding clauses (C) or (D) hereof, to
the extent curable. For purposes hereof, no act, or failure to act, on the part
of Executive shall be considered “willful” unless it is done, or omitted to be
done, by Executive in bad faith or without reasonable belief that Executive’s
action or omission was in the best interests of the Company. An act, or failure
to act, based on specific authority given pursuant to a resolution duly adopted
by the Board or based upon the written advice of outside counsel for the Company
shall be presumed to be done, or omitted to be done, by Executive in good faith
and in the best interests of the Company.
 
(v)           For purposes of this Agreement, “Disability” means Executive’s
incapacity, due to mental, physical or emotional injury or illness, such that
Executive is substantially unable to perform his duties hereunder for a
continuous period of ninety calendar days, or for more than a total of 120
calendar days during any 12 month period, subject to reasonable accommodation
provisions of applicable laws. Executive’s employment shall immediately
terminate upon death or Disability.
 
(vi)           For purposes of this Agreement, “Good Reason” means the
occurrence, without Executive’s express written consent, of any of the following
events: (A) a material diminution in Executive’s authority, duties,
responsibilities or title; (B) a diminution of Base Salary; (C) a change in the
geographic location of Executive’s principal place of performance of his
services hereunder to a location more than thirty (30) miles outside of New York
City that is also more than thirty (30) miles from his primary residence at the
time of such change, except for travel consistent with the terms of this
Agreement; (D) the Company gives notice pursuant to Section 1 above that the
Term is not to be extended beyond the next scheduled Expiration Date following
delivery of such notice so long as Executive continues to perform his duties for
the Company through such Expiration Date and separates from the Company on such
Expiration Date; (E) a material breach by the Company of this Agreement; (F) the
failure by the Company to provide for Executive's participation in an annual
bonus arrangement (whether paid annually or over a period not to exceed four
fiscal years); and (G) the Company’s material reduction in the target amount or
maximum bonus opportunity that may be earned under the Company's bonus
arrangement if the performance criteria are satisfied. For the avoidance of
doubt, (x) nothing herein shall limit the good faith exercise by the Company of
negative discretion in accordance with the Company’s bonus plan and (y)
Executive’s providing notice pursuant to Section 1 above that the then current
Renewal Term is not to be extended does not constitute Good Reason. If Executive
does not give Company a written notice (specifying in detail the event or
circumstances claimed to give rise to Good Reason) within ninety (90) days after
Executive has knowledge that an event constituting Good Reason has occurred, or
is deemed to have occurred, the event will no longer constitute Good Reason;
provided, however, that (I) the foregoing shall not apply with respect to (A)
above if such notice is
 
 
 
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provided within ninety (90) days of the most recent event constituting a
material diminution in authority, duties or responsibilities and (II) no such
notice by Executive shall be required in the case of a Good Reason event set
forth in (D) above. In addition, Executive must give the Company notice and
thirty (30) days to cure, and if not cured, Executive must, except as set forth
in (D), actually terminate his employment within thirty (30) days following the
expiration of such cure period; otherwise, that event will no longer constitute
Good Reason; provided, however, that no such notice by Executive shall be
required in the case of a Good Reason event set forth in (D) above.
 
(d)           Upon termination of Executive’s employment for any reason, and
regardless of whether Executive continues as a consultant to the Company, upon
the Company’s request Executive agrees to resign, as of the date of such
termination of employment or such other date requested, from the Board and any
committees thereof (and, if applicable, from the board of directors (and any
committees thereof) of any Affiliate of the Company) to the extent Executive is
then serving thereon.
 
(e)           The payment of any amounts accrued under any benefit plan, program
or arrangement in which Executive participates shall be subject to the terms of
the applicable plan, program or arrangement, and any elections Executive has
made thereunder. Subject to Section 20, the Company may offset any amounts due
and payable by Executive to the Company or its Subsidiaries against any amounts
the Company owes Executive hereunder.
 
6.             Acknowledgments.
 
(a)           Executive acknowledges that the Company has expended and shall
continue to expend substantial amounts of time, money and effort to develop
business strategies, employee and customer relationships and goodwill and build
an effective organization. Executive acknowledges that Executive is and shall
become familiar with the Company’s Confidential Information (as defined below),
including trade secrets, and that Executive’s services are of special, unique
and extraordinary value to the Company, its Subsidiaries and Affiliates.
Executive acknowledges that the Company has a legitimate business interest and
right in protecting its Confidential Information, business strategies, employee
and customer relationships and goodwill, and that the Company would be seriously
damaged by the disclosure of Confidential Information and the loss or
deterioration of its business strategies, employee and customer relationships
and goodwill.
 
(b)           Executive acknowledges (i) that the business of the Company and
its Affiliates is global in scope, without geographical limitation, and capable
of being performed from anywhere in the world, and (ii) notwithstanding the
jurisdiction of formation or principal office of the Company, or the location of
any of their respective executives or employees (including, without limitation,
Executive), it is expected that the Company and its Affiliates will have
business activities and have valuable business relationships within their
respective industries throughout the world.
 
(c)           Executive acknowledges that Executive has carefully read this
Agreement and has given careful consideration to the restraints imposed upon
Executive by this Agreement, and is in full accord as to the necessity of such
restraints for the reasonable and proper protection of
 
 
 
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the Confidential Information, business strategies, employee and customer
relationships and goodwill of the Company and its Affiliates now existing or to
be developed in the future. Executive expressly acknowledges and agrees that
each and every commitment and restraint imposed by this Agreement is reasonable
with respect to subject matter, time period and geographical area, in light of
(i) the scope of the business of the Company and its Affiliates, (ii) the
importance of Executive to the business of the Company and its Affiliates, (iii)
Executive’s status as an officer of the Company business, (iv) Executive’s
knowledge of the business of the Company and its Affiliates and (v) Executive’s
relationships with the Company’s investors, clients or customers. Accordingly,
Executive agrees (x) to be bound by the provisions of Sections 7, 8, 9, 10 and
11, it being the intent and spirit that such provisions be valid and enforceable
in all respects and (y) acknowledges and agrees that Executive shall not object
to the Company, (or any other intended third-party beneficiary of this
Agreement) or any of their respective successors in interest enforcing Sections
7, 8, 9, 10 and 11 of this Agreement. Executive further acknowledges that
although Executive’s compliance with the covenants contained in Sections 7, 8,
9, 10, and 11 may prevent Executive from earning a livelihood in a business
similar to the business of the Company, Executive’s experience and capabilities
are such that Executive has other opportunities to earn a livelihood and
adequate means of support for Executive and Executive’s dependents.
 
7.             Noncompetition and Nonsolicitation.
 
(a)           Executive agrees that Executive shall not, directly or indirectly,
whether by Executive, through an Affiliate or in partnership or conjunction
with, or as an employee, officer, director, manager, member, owner, consultant
or agent of, any other Person:
 
(i)           while an employee of the Company and during the period ending on
the six (6) month anniversary of Executive’s date of termination of employment,
engage, directly or indirectly, in activities or businesses (including without
limitation by owning any interest in, managing, controlling, participating in,
consulting with, advising, rendering services for, or in any manner engaging in
the business of owning, operating or managing any business) within the United
States (including its territories or possessions), and/or other territories (in
which the Company, its Affiliates or Subsidiaries conduct business or are
actively planning to conduct business as of Executive’s date of termination of
employment) that competes or will compete in the United States and/or such other
territories with the Company, its Subsidiaries or Affiliates (“Competitive
Activities”) or any business that acquires all or substantially all of the
assets of, or is otherwise a successor to, the Company (an “Other Employing
Entity”);
 
(ii)           while an employee of the Company and during the period ending on
the eighteen (18) month anniversary of Executive’s date of termination of
employment, solicit, entice, encourage or intentionally influence, or attempt to
solicit, entice, encourage or influence, any employee of, or other Person who
performs services for the Company, any Other Employing Entity or any of their
respective Affiliates or Subsidiaries to resign or leave the employ or
engagement of the Company or any of their respective Affiliates or otherwise
hire, employ, engage or contract any such employee or Person, or any other
Person who provided services to the Company or any of their respective
Affiliates during the six (6) months prior to such hiring, employment,
engagement or contracting, to perform services other than for the benefit of the
Company, any Other Employing Entity or any of
 
 
 
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their respective Affiliates or Subsidiaries, in each case other than in the
fulfillment of Executive’s duties as Executive Vice President and Managing
Director of the Company;
 
(iii)           while an employee of the Company and during the period ending on
the eighteen (18) month anniversary of Executive’s date of termination of
employment, solicit, entice, encourage, influence, accept payment from, or
provide services to, or attempt to solicit, entice, encourage, influence or
accept payment from, or assist any other Person, firm or corporation, directly
or indirectly, in the solicitation of or providing services to, any Client (as
defined below) or any Prospective Client (as defined below), or to alter, reduce
or terminate its business relationship with the Company or any of their
respective Affiliates for the direct or indirect benefit of any competitor of
the Company, any Other Employing Entity or any of their respective Affiliates or
Subsidiaries, in each case other than in the fulfillment of Executive’s duties
as Executive Vice President and Managing Director of the Company;
 
(iv)           while an employee of the Company and during the period ending on
the eighteen (18) month anniversary of Executive’s date of termination of
employment, directly or indirectly request or advise any Client or Prospective
Client to alter, reduce, terminate, withdraw, curtail, or cancel the Client’s or
Prospective Client’s business with the Company, any Other Employing Entity or
any of their respective Affiliates or Subsidiaries, in each case other than in
the fulfillment of Executive’s duties as Executive Vice President and Managing
Director of the Company; or
 
(v)           while an employee of the Company and during the period ending on
the eighteen (18) month anniversary of Executive’s date of termination of
employment, solicit any agents, advisors, independent contractors or consultants
of the Company, any Other Employing Entity or any of their respective Affiliates
or Subsidiaries who are under contract or doing business with the Company, any
Other Employing Entity or any of their respective Affiliates or Subsidiaries to
terminate, reduce or divert business with or from the Company, any Other
Employing Entity or any of their respective Affiliates or Subsidiaries, in each
case other than in the fulfillment of Executive’s duties as Executive Vice
President and Managing Director of the Company.
 
(vi)           For purposes of this Agreement, “Client” means a Person to whom
the Company, its Subsidiaries or Affiliates sold goods or provided services, and
with whom Executive had contacts, dealings or client relationship
responsibilities (either directly or indirectly through supervising other
employees who had such responsibilities or otherwise in the course of performing
the duties and responsibilities associated with his position) on behalf of the
Company, any Other Employing Entity or any of their respective Affiliates or
Subsidiaries, at any time while Executive is employed by the Company (the “Look
Back Period”) (but if Executive is not employed by the Company at the time of
any activity described in Section 7(a)(iii) and 7(a)(iv), then the Look Back
Period will not be longer than one (1) year prior to Executive’s last day of
employment, and “Prospective Client” shall mean those Persons (A) that the
Company is actively soliciting or is planning to solicit; or (B) with whom
Executive has met or with respect to which Executive has obtained Confidential
Information in the course of or as a result of his performance of his duties to
the Company.
 
 
 
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(b)           Notwithstanding Section 7(a), it shall not constitute a violation
of Section 7(a) for Executive to hold not more than two percent (2%) of the
outstanding securities of any class of any publicly-traded securities of a
company that is engaged in Competitive Activities.
 
(c)           The restrictive periods set forth in the Section 7(a) shall be
deemed automatically extended by any period in which Executive is in violation
of any of the provisions of Section 7(a), to the extent permitted by law.
 
(d)           If a final and non-appealable judicial determination is made by a
court of competent jurisdiction that any of the provisions of this Section 7
constitutes an unreasonable or otherwise unenforceable restriction against
Executive, the provisions of this Section 7 will not be rendered void but will
be deemed to be modified to the minimum extent necessary to remain in force and
effect for the longest period and largest geographic area that would not
constitute such an unreasonable or unenforceable restriction (and such court
shall have the power to reduce the duration or restrict or redefine the
geographic scope of such provision and to enforce such provision as so reduced,
restricted or redefined).
 
(e)           Moreover, and without limiting the generality of Section 13,
notwithstanding the fact that any provision of this Section 7 is determined not
to be specifically enforceable, the Company will nevertheless be entitled to
recover monetary damages as a result of Executive’s breach of any such
provision.
 
8.             Nondisclosure of Confidential Information.
 
(a)           Executive acknowledges that the Confidential Information obtained
by Executive while employed hereunder by the Company and its Affiliates is the
property of the Company or its Affiliates, as applicable. Therefore, Executive
agrees that Executive shall not, whether during or after the Term, disclose,
share, transfer or provide access to any unauthorized Person or use for
Executive’s own purposes or any unauthorized Person any Confidential Information
without the prior written consent of the Company, unless and to the extent that
the aforementioned matters become generally known to and available for use by
the public other than as a result of Executive’s acts or omissions in violation
of this Agreement; provided, however, that if Executive receives a request to
disclose Confidential Information pursuant to a deposition, interrogatories,
request for information or documents in legal proceedings, subpoena, civil
investigative demand, governmental or regulatory process or similar process, (A)
Executive shall, unless prohibited by law, promptly notify in writing the
Company, and consult with and assist the Company in seeking a protective order
or request for other appropriate remedy, (B) in the event that such protective
order or remedy is not obtained, or if the Company waives compliance with the
terms hereof, Executive shall disclose only that portion of the Confidential
Information which is legally required to be disclosed and shall exercise
reasonable efforts to provide that the receiving Person shall agree to treat
such Confidential Information as confidential to the extent possible (and
permitted under applicable law) in respect of the applicable proceeding or
process, and (C) the Company shall be given an opportunity to review the
Confidential Information prior to disclosure thereof.
 
(b)           For purposes of this Agreement, “Confidential Information” means
information, observations and data concerning the business or affairs of the
Company and its
 
 
 
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Affiliates, or any funds or accounts managed by the foregoing, including,
without limitation, all business information (whether or not in written form)
which relates to the Company, its Affiliates, or any funds or accounts managed
by the foregoing, or their investors, customers, suppliers or contractors or any
other third parties in respect of which the Company or any of its Affiliates has
a business relationship or owes a duty of confidentiality, or their respective
businesses or products, and which is not known to the public generally other
than as a result of Executive’s breach of this Agreement, including but not
limited to: investment methodologies, investment advisory contracts, fees and
fee schedules; the record of investment performance of the accounts or funds
managed by the Company or its respective Affiliates (“Track Records”); technical
information or reports; brand names, trademarks, formulas; trade secrets;
unwritten knowledge and “know-how”; operating instructions; training manuals;
customer or investor lists; customer buying records and habits; product sales
records and documents, and product development, marketing and sales strategies;
market surveys; marketing plans; profitability analyses; product cost;
long-range plans or any analyses or plans relating to the acquisition,
disposition or development of businesses, securities or assets of the Company or
its Affiliates; information relating to pricing, competitive strategies and new
product development; information relating to any forms of compensation or other
personnel-related information; contracts and supplier lists. Without limiting
the foregoing, Executive agrees to keep confidential the existence of, and any
information concerning, any dispute between Executive and the Company or their
respective Subsidiaries and Affiliates, except that Executive may disclose
information concerning such dispute to the court or arbitrator that is
considering such dispute or to their respective legal counsel (provided that
such counsel agrees not to disclose any such information other than as necessary
to the prosecution or defense of such dispute). Executive acknowledges and
agrees that the Track Records were the work of teams of individuals and not any
one individual and are the exclusive property of the Company and its Affiliates,
and agrees that he shall in no event claim the Track Records as his own
following termination of his employment for the Company.
 
(c)           Except as set forth otherwise in this Agreement, Executive agrees
that Executive shall not disclose the terms of this Agreement, except to
Executive’s immediate family and Executive’s financial and legal advisors, or if
previously disclosed by the Company in any public filing, or as may be required
by law or ordered by a court or applicable under Section 12 of this Agreement.
Executive further agrees that any disclosure to Executive’s financial and legal
advisors will only be made after such advisors acknowledge and agree to maintain
the confidentiality of this Agreement and its terms.
 
(d)           Executive further agrees that Executive will not improperly use or
disclose any confidential information or trade secrets, if any, of any former
employers or any other Person to whom Executive has an obligation of
confidentiality, and will not bring onto the premises of the Company or its
Affiliates any unpublished documents or any property belonging to any former
employer or any other Person to whom Executive has an obligation of
confidentiality unless consented to in writing by the former employer or other
Person.
 
9.             Return of Property.     Executive acknowledges that all notes,
memoranda, specifications, devices, formulas, records, files, lists, drawings,
documents, models, equipment, property, computer, software or intellectual
property relating to the businesses of the Company and its Subsidiaries and
Affiliates, in whatever form (including electronic), and all copies thereof,
that are received or created by Executive while employed hereunder by the
Company or its
 
 
 
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Subsidiaries or Affiliates (including but not limited to Confidential
Information and Inventions (as defined below)) are and shall remain the property
of the Company and its Subsidiaries and Affiliates, and Executive shall
immediately return such property to the Company upon the termination of
Executive’s employment hereunder and, in any event, at the Company’s request.
Executive further agrees that any property situated on the premises of, and
owned by, the Company or its Subsidiaries or Affiliates, including disks and
other storage media, filing cabinets or other work areas, is subject to
inspection by Company’s personnel at any time with or without notice.
 
10.           Intellectual Property Rights.
 
(a)           Executive agrees that the results and proceeds of Executive’s
employment by the Company or its Subsidiaries or Affiliates (including, but not
limited to, any trade secrets, products, services, processes, know-how, track
record, designs, developments, innovations, analyses, drawings, reports,
techniques, formulas, methods, developmental or experimental work, improvements,
discoveries, inventions, ideas, source and object codes, programs, matters of a
literary, musical, dramatic or otherwise creative nature, writings and other
works of authorship) resulting from services performed while employed hereunder
by the Company and any works in progress, whether or not patentable or
registrable under copyright or similar statutes, that were made, developed,
conceived or reduced to practice or learned by Executive, either alone or
jointly with others (collectively, “Inventions”), shall be works-made-for-hire
and the Company (or, if applicable or as directed by the Board, any of its
Subsidiaries or Affiliates) shall be deemed the sole owner throughout the
universe of any and all trade secret, patent, copyright and other intellectual
property rights (collectively, “Proprietary Rights”) of whatsoever nature
therein, whether or not now or hereafter known, existing, contemplated,
recognized or developed, with the right to use the same in perpetuity in any
manner the Board determines in its sole discretion, without any further payment
to Executive whatsoever. If, for any reason, any of such results and proceeds
shall not legally be a work-made-for-hire and/or there are any Proprietary
Rights which do not accrue to the Company (or, as the case may be, any of its
Subsidiaries or Affiliates) under the immediately preceding sentence, then
Executive hereby irrevocably assigns and agrees to assign any and all of
Executive’s right, title and interest thereto, including any and all Proprietary
Rights of whatsoever nature therein, whether or not now or hereafter known,
existing, contemplated, recognized or developed, to the Company (or, if
applicable or as directed by the Board, any of its Subsidiaries or Affiliates),
and the Company or such Subsidiaries or Affiliates shall have the right to use
the same in perpetuity throughout the universe in any manner determined by the
Board or such Subsidiaries or Affiliates without any further payment to
Executive whatsoever. As to any Invention that Executive is required to assign,
Executive shall promptly and fully disclose to the Company all information known
to Executive concerning such Invention.
 
(b)           Executive agrees that, from time to time, as may be requested by
the Board and at the Company’s sole cost and expense, Executive shall do any and
all reasonable and lawful things that the Board may reasonably deem useful or
desirable to establish or document the Company’s exclusive ownership throughout
the United States of America or any other country of any and all Proprietary
Rights in any such Inventions, including the execution of appropriate copyright
and/or patent applications or assignments. To the extent Executive has any
Proprietary Rights in the Inventions that cannot be assigned in the manner
described above, Executive
 
 
 
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unconditionally and irrevocably waives the enforcement of such Proprietary
Rights. This Section 10(b) is subject to and shall not be deemed to limit,
restrict or constitute any waiver by the Company of any Proprietary Rights of
ownership to which the Company may be entitled by operation of law by virtue of
Executive’s employment by the Company. Executive further agrees that, from time
to time, as may be requested by the Board and at the Company’s sole cost and
expense, Executive shall assist the Company in every reasonable, proper and
lawful way to obtain and from time to time enforce Proprietary Rights relating
to Inventions in any and all countries. To this end, Executive shall execute,
verify and deliver such documents and perform such other acts (including
appearances as a witness) as the Company may reasonably request for use in
applying for, obtaining, perfecting, evidencing, sustaining, and enforcing such
Proprietary Rights and the assignment thereof. In addition, Executive shall
execute, verify, and deliver assignments of such Proprietary Rights to the
Company or its designees. Executive’s obligation to provide reasonable
assistance to the Company with respect to Proprietary Rights relating to such
Inventions in any and all countries shall continue beyond the termination of the
Term.
 
(c)           Executive hereby waives and quitclaims to the Company any and all
claims, of any nature whatsoever, that Executive now or may hereafter have for
infringement of any Proprietary Rights assigned hereunder to the Company.
 
11.           Nondisparagement.
 
(a)           During Executive’s employment with the Company and thereafter,
Executive agrees not to make, publish or communicate at any time to any
individual or entity, including, but not limited to, customers, clients and
investors of the Company, its Affiliates, or any entity affiliated with Philip
A. Falcone or any of his family members, any Disparaging (defined below)
remarks, comments or statements concerning the Company, its Affiliates, any
entity affiliated with Philip A. Falcone or any of his family members, or any of
their respective present and former members, partners, directors, officers,
employees or agents.
 
(b)           During Executive’s employment with the Company and thereafter, the
Company agrees that the CEO, President and Board shall not make, publish, or
communicate, or authorize any Person to make, publish or communicate at any time
to any individual or entity any Disparaging (defined below) remarks, comments or
statements concerning Executive, except nothing herein shall prevent the Company
from making truthful statements regarding Executive’s termination in the
Company’s public filings as required by law or regulation.
 
(c)           For the purposes of this Section 11, “Disparaging” remarks,
comments or statements are those that impugn the character, honesty, integrity,
morality, business acumen or abilities of the individual or entity being
disparaged.
 
(d)           Notwithstanding the foregoing, this Section 11 does not apply to
(i) any truthful testimony, pleading, or sworn statements in any legal
proceeding; (ii) attorney-client communications; or (iii) any communications
with a government or regulatory agency, and further, it shall not be construed
to prevent Executive from filing a charge with the Equal Employment Opportunity
Commission or a comparable state or local agency.
 
12.           Notification of Employment or Service Provider Relationship.
Executive hereby
 
 
 
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agrees that prior to accepting employment with, or agreeing to provide services
to, any other Person during any period during which Executive remains subject to
any of the covenants set forth in Section 7, Executive shall provide such
prospective employer with written notice of such provisions of this Agreement,
with a copy of such notice delivered to the Board not later than seven (7) days
prior to the date on which Executive is scheduled to commence such employment or
engagement.
 
13.           Remedies and Injunctive Relief. Executive acknowledges that a
violation by Executive of any of the covenants contained in Section 7, 8, 9, 10
or 11 would cause irreparable damage to the Company in an amount that would be
material but not readily ascertainable, and that any remedy at law (including
the payment of damages) would be inadequate. Accordingly, Executive agrees that,
notwithstanding any provision of this Agreement to the contrary, the Company may
be entitled (without the necessity of showing economic loss or other actual
damage and without the requirement to post a bond) to injunctive relief
(including temporary restraining orders, preliminary injunctions and/or
permanent injunctions) in any court of competent jurisdiction for any actual or
threatened breach of any of the covenants set forth in Section 7, 8, 9, 10 or 11
in addition to any other legal or equitable remedies it may have. The preceding
sentence shall not be construed as a waiver of the rights that the Company may
have for damages under this Agreement or otherwise, and all of the Company’s
rights shall be unrestricted.
 
14.           Representations of Executive; Advice of Counsel.
 
(a)           Executive represents, warrants and covenants that as of the date
hereof: (i) Executive has the full right, authority and capacity to enter into
this Agreement and perform Executive’s obligations hereunder, (ii) Executive is
not bound by any agreement that conflicts with or prevents or restricts the full
performance of Executive’s duties and obligations to the Company hereunder
during or after the Term and (iii) the execution and delivery of this Agreement
shall not result in any breach or violation of, or a default under, any existing
obligation, commitment or agreement to which Executive is subject.
 
(b)           Prior to execution of this Agreement, Executive was advised by the
Company of Executive’s right to seek independent advice from an attorney of
Executive’s own selection regarding this Agreement. Executive acknowledges that
Executive has entered into this Agreement knowingly and voluntarily and with
full knowledge and understanding of the provisions of this Agreement after being
given the opportunity to consult with counsel. Executive further represents that
in entering into this Agreement, Executive is not relying on any statements or
representations made by any of the Company’s directors, officers, employees or
agents which are not expressly set forth herein, and that Executive is relying
only upon Executive’s own judgment and any advice provided by Executive’s
attorney.
 
15.           Cooperation. Executive agrees that, for the four-year period
following the end of Executive’s employment with the Company, upon reasonable
notice and without the necessity of the Company obtaining a subpoena or court
order, Executive shall provide reasonable cooperation in connection with any
suit, action or proceeding (or any appeal from any suit, action or proceeding),
or the decision to commence on behalf of the Company any suit, action or
proceeding, and any investigation and/or defense of any claims asserted against
any of the Company’s or its Affiliates’ current or former directors, officers,
employees, shareholders, partners, members,
 
 
 
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agents or representatives of any of the foregoing, which relates to events
occurring during Executive’s employment hereunder by the Company as to which
Executive may have relevant information (including but not limited to furnishing
relevant information and materials to the Company or its designee and/or
providing testimony at depositions and at trial), provided that with respect to
such cooperation, the Company shall reimburse Executive for expenses, including
legal fees, reasonably incurred in connection therewith and shall schedule such
cooperation to the extent reasonably practicable so as not to unreasonably
interfere with Executive’s business or personal affairs. Notwithstanding
anything to the contrary, in the event the Company requests cooperation from
Executive during such four-year period, Executive shall not be required to
devote more than forty (40) hours of his time per year with respect to this
Section 15, except that Executive shall testify at a deposition or trial or be
interviewed by any administrative or regulatory agency even if it would exceed
such forty (40) hour cap.
 
16.           Withholding; Taxes. The Company may deduct and withhold from any
amounts payable under this Agreement such Federal, state, local, non-U.S. or
other taxes as are required or permitted to be withheld pursuant to any
applicable law or regulation.
 
17.           Assignment.
 
(a)           This Agreement is personal to Executive and without the prior
written consent of the Board shall not be assignable by Executive, and any
assignment in violation of this Agreement shall be void.
 
(b)           This Agreement shall be binding on, and shall inure to the benefit
of, the parties to it and their respective heirs, legal representatives,
successors and permitted assigns (including, without limitation, successors by
merger, consolidation, sale or similar transaction and in the event of
Executive’s death, Executive’s estate and heirs in the case of any payments due
to Executive hereunder).
 
(c)           Executive acknowledges and agrees that all of Executive’s
covenants and obligations to the Company, as well as the rights of the Company
hereunder, shall run in favor of and shall be enforceable by the Company and any
successor or assign to all or substantially all of the Company’s business or
assets.
 
18.           Arbitration. Any controversy, claim or dispute between the parties
relating to Executive’s employment or termination of employment, whether or not
the controversy, claim or dispute arises under this Agreement (other than any
controversy or claim arising under Section 7 or Section 8), shall be resolved by
arbitration in accordance with the Employment Arbitration Rules and Mediation
Procedures (“Rules”) of the American Arbitration Association through a single
arbitrator selected in accordance with the Rules. The decision of the arbitrator
shall be rendered within thirty (30) days of the close of the arbitration
hearing and shall include written findings of fact and conclusions of law
reflecting the appropriate substantive law. Judgment upon the award rendered by
the arbitrator may be entered in any court having jurisdiction thereof in the
State of New York. In reaching his or her decision, the arbitrator shall have no
authority (a) to authorize or require the parties to engage in discovery
(provided, however, that the arbitrator may schedule the time by which the
parties must exchange copies of the exhibits that, and the names of the
witnesses whom, the parties intend to present at the hearing), (b) to interpret
or enforce Section 7 or Section
 
 
 
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8 of the Agreement (for which Section 19 shall provide the sole and exclusive
venue), (c) to change or modify any provision of this Agreement, (d) to base any
part of his or her decision on the common law principle of constructive
termination, or (e) to award punitive damages or any other damages not measured
by the prevailing party’s actual damages and may not make any ruling, finding or
award that does not conform to this Agreement. Each party shall bear all of his
or its own legal fees, costs and expenses of arbitration and one-half (1/2) of
the costs of the arbitrator.
 
19.           Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York, without reference to its
conflict of law provisions. Furthermore, as to Section 7 and Section 8,
Executive and the Company each agrees and consents to submit to personal
jurisdiction in the state of New York in any state or federal court of competent
subject matter jurisdiction situated in New York County, New York. The Executive
and the Company further agree that the sole and exclusive venue for any suit
arising out of, or seeking to enforce, the terms of Section 7 and Section 8 of
this Agreement shall be in a state or federal court of competent subject matter
jurisdiction situated in New York County, New York. In addition, Executive and
the Company waive any right to challenge in another court any judgment entered
by such New York County court or to assert that any action instituted by the
Company in any such court is in the improper venue or should be transferred to a
more convenient forum. Further, Executive and the Company waive any right he or
it may otherwise have to a trial by jury in any action to enforce the terms of
this Agreement. The parties hereto irrevocably consent to the service of any and
all process in any suit, action or proceeding arising out of or relating to this
Agreement by the mailing of copies of such process to such party at such party’s
address specified in Section 27, or such other updated address as has been
provided to the other party from time to time in accordance with Section 27.
Each party shall bear its own costs and expenses (including reasonable
attorneys’ fees and expenses) incurred in connection with any dispute arising
out of or relating to this Agreement.
 
20.           Amendment; No Waiver; 409A.
 
(a)           No provisions of this Agreement may be amended, modified, waived
or discharged except by a written document signed by Executive and a duly
authorized officer of the Company (other than Executive).
 
(b)           The failure of a party to insist upon strict adherence to any term
of this Agreement on any occasion shall not be considered a waiver of such
party’s rights or deprive such party of the right thereafter to insist upon
strict adherence to that term or any other term of this Agreement. No failure or
delay by either party in exercising any right or power hereunder will operate as
a waiver thereof, nor will any single or partial exercise of any such right or
power, or any abandonment of any steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power.
 
(c)           It is the intention of the Company and Executive that this
Agreement comply with the requirements of Section 409A, and this Agreement will
be interpreted in a manner intended to comply with or be exempt from Section
409A. The Company and Executive agree to negotiate in good faith to make
amendments to this Agreement as the parties mutually agree are necessary or
desirable to avoid the imposition of taxes or penalties under Section 409A.
Notwithstanding the foregoing, Executive shall be solely responsible and liable
for the satisfaction
 
 
 
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of all taxes and penalties that may be imposed on or for the account of
Executive in connection with this Agreement (including any taxes and penalties
under Section 409A), and neither the Company nor any Affiliate shall have any
obligation to indemnify or otherwise hold Executive (or any beneficiary)
harmless from any or all of such taxes or penalties.
 
(d)           Notwithstanding anything in this Agreement to the contrary, in the
event that Executive is deemed to be a “specified employee” within the meaning
of Section 409A(a)(2)(B)(i), no payments hereunder that are “deferred
compensation” subject to Section 409A that are due in connection with
Executive’s “separation from service” (as defined in Section 409A) shall be made
to Executive prior to the date that is six (6) months after the date of
Executive’s “separation from service” or, if earlier, Executive’s date of death.
Following any applicable six (6) month delay, all such delayed payments will be
paid in a single lump sum on the earliest permissible payment date. For purposes
of Section 409A, each of the payments that may be made under this Agreement are
designated as separate payments.
 
(e)           For purposes of this Agreement, with respect to payments of any
amounts that are considered to be “deferred compensation” subject to Section
409A, references to “termination of employment” (and substantially similar
phrases) shall be interpreted and applied in a manner that is consistent with
the requirements of Section 409A relating to “separation from service.”
 
(f)           To the extent that any reimbursements pursuant to Section 4(d) or
15 are taxable to Executive, any such reimbursement payment due to Executive
shall be paid to Executive as promptly as practicable, and in all events on or
before the last day of Executive’s taxable year following the taxable year in
which the related expense was incurred. The reimbursements pursuant to Sections
4(d) and 15 are not subject to liquidation or exchange for another benefit and
the amount of such benefits and reimbursements that Executive receives in one
taxable year shall not affect the amount of such benefits or reimbursements that
Executive receives in any other taxable year.
 
21.           Indemnification. To the extent permitted by law and the Company’s
governing documents and applicable insurance agreements, Company shall indemnify
Executive, hold Executive harmless, and make advances for expenses (including
attorneys and costs) to Executive (subject to Executive’s providing an
undertaking to repay Company that is acceptable to Company) with respect to any
and all losses, claims, demands, liabilities, costs, damages, expenses
(including, without limitation, reasonable attorneys’ fees and expenses) and
causes of action imposed on, incurred by, asserted against or to which Executive
may otherwise become subject by reason of or in connection with any act or
omission of Executive, including any negligent act or omission, for and on
behalf of Company that occurs during Executive’s employment with the Company or
in connection with Executive providing cooperation to the Company as set forth
in Section 15, that Executive reasonably and in good faith believes is in
furtherance of the interest of Company, unless such act or omission constitutes
gross negligence or intentional misconduct or is outside of the scope of
Executive’s authority, provided, however, that this Section 21 shall not be
construed to grant Executive a right to be indemnified by Company for actions or
proceedings brought by Company for breach or anticipated breach of this
Agreement by Executive.
 
22.           Severability. If any provision or any part thereof of this
Agreement, including
 
 
 
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Sections 7, 8, 9, 10 and 11 hereof, as applied to either party or to any
circumstances, shall be adjudged by a court of competent jurisdiction to be
invalid or unenforceable, the same shall in no way affect any other provision or
remaining part thereof of this Agreement, which shall be given full effect
without regard to the invalid or unenforceable provision or part thereof, or the
validity or enforceability of this Agreement. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in a mutually
acceptable manner in order that the transactions contemplated hereby be
consummated as originally contemplated to the fullest extent possible.
 
23.           Entire Agreement. This Agreement constitutes the entire agreement
and understanding between the Company and Executive with respect to the subject
matter hereof and supersedes all prior agreements and understandings (whether
written or oral), between Executive and the Company, relating to such subject
matter. None of the parties shall be liable or bound to any other party in any
manner by any representations and warranties or covenants relating to such
subject matter except as specifically set forth herein.
 
24.           Survival. The rights and obligations of the parties under the
provisions of this Agreement (including without limitation, Sections 7 through
13 and Section 15) shall survive, and remain binding and enforceable,
notwithstanding the expiration of the Term, the termination of this Agreement,
the termination of Executive’s employment hereunder or any settlement of the
financial rights and obligations arising from Executive’s employment hereunder,
to the extent necessary to preserve the intended benefits of such provisions.
 
25.           No Construction against Drafter. No provision of this Agreement or
any related document will be construed against or interpreted to the
disadvantage of any party hereto by any court or other governmental or judicial
authority by reason of such party having or being deemed to have structured or
drafted such provision.
 
26.           Clawback. The Executive acknowledges that to the extent required
by applicable law or written company policy adopted to implement the
requirements of such law (including without limitation Section 304 of the
Sarbanes Oxley Act and Section 954 of the Dodd Frank Act), the Annual Bonus,
signing bonus (if any) and other incentive compensation (including equity
compensation) shall be subject to any required clawback, forfeiture, recoupment
or similar requirement.
 
27.           Notices. All notices or other communications required or permitted
to be given hereunder shall be in writing and shall be delivered by hand or sent
by facsimile or sent, postage prepaid, by registered, certified or express mail
or overnight courier service and shall be deemed given when so delivered by hand
or facsimile, or if mailed, three days after mailing (one business day in the
case of express mail or overnight courier service) to the Company at its
principal headquarters, addressed to the Company’s General Counsel, and at
Executive’s primary residence (as reflected on the records of the Company) (or
at such other address for a party as shall be specified by like notice).
 
28.           Headings and References. The headings of this Agreement are
inserted for convenience only and neither constitute a part of this Agreement
nor affect in any way the meaning
 
 
 
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 or interpretation of this Agreement. When a reference in this Agreement is made
to a Section, such reference shall be to a Section of this Agreement unless
otherwise indicated.
 
29.           Counterparts. This Agreement may be executed in one or more
counterparts (including via facsimile and electronic image scan (PDF), each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument and shall become effective when one or
more counterparts have been signed by each of the parties and delivered to the
other parties.
 
 
 
 
 
 
 
 
 
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IN WITNESS WHEREOF, this Agreement has been duly executed by the parties as of
the Revision Date.
 
HARBINGER GROUP INC.
                 
By:
/s/ Philip Falcone    
Name:
Philip Falcone
   
Title:
Chief Executive Officer
                 
DAVID M. MAURA
          /s/ David M. Maura  

 

 
 
 
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