Document:

Change of Control Agreement with Mr. Daddario

 
SECOND
AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT 
 
AGREEMENT between MONY LIFE INSURANCE COMPANY, a New York corporation (the “Company”), and Richard Daddario (the “Executive”), dated as of February 4, 2003 (the “Agreement Date”). 
 
Recitals 
 

	 	A.	 	The Company and the Executive originally entered into an agreement dated April 20,1998, providing for certain terms and conditions of employment to apply in the
event of a Change in Control (the “Prior Change in Control Agreement”) (such agreement being one of two different agreements, each styled “Employment Agreement”, entered into between the Company and the Executive on that date,
the other of which is an Employment Agreement for a one-year renewable term, which remains in effect in the absence of a Change in Control (the “One-Year Employment Agreement”)). The Company and the Executive entered into an Amended and
Restated Change in Control Agreement dated as of March 12, 2001 (the “First Amended and Restated Change in Control Agreement”). 

 

	 	B.	 	The Company and the Executive wish to make certain modifications to the terms and conditions under which the Executive will remain in the employ of the Company
following a change in control. 

 

	 	C.	 	The Company wishes to assure itself and the Executive of continuity of management in the event of a Change in Control of the Company, 

	 	 
as hereinafter defined, and to provide the Executive with the severance and other benefits set forth in this Agreement in the event the
Executive’s employment with the Company terminates following such a Change in Control under the circumstances described below. 

 
NOW, THEREFORE, the Company and the Executive hereby agree as follows: 
 

	1.	 	PRIOR AGREEMENT SUPERSEDED. This Agreement supersedes the First Amended and Restated Change in Control Agreement in its entirety. In consideration of the
promises set forth below, and of the mutual releases set forth in this paragraph, each party hereto relinquishes all rights, and releases the other from all promises, liabilities and commitments that may have existed, under the First Amended and
Restated Change in Control Agreement, which shall be null and void and of no further effect. 

 

	2.	 	OPERATION AND TERM OF AGREEMENT; CHANGE IN CONTROL 

 

	 	A.	 	Term. This Agreement shall be effective as of the Agreement Date and shall continue in effect until the Expiration Date. The initial Expiration Date shall be
December 31, 2003 but, on that date and each January 1 thereafter, the Expiration Date shall automatically be extended by one additional year unless, not later than the preceding September 30, the Company shall have given written notice to the
Executive that it does not wish to extend the Expiration Date; provided, however, that if a Change in Control shall have occurred prior to the original or extended Expiration Date, the Expiration Date shall automatically be extended to the
third anniversary of the Change in Control and shall thereafter be extended for one year 

 

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on each anniversary of the Change in Control unless, not later than six months prior to such extended Expiration Date, the Company shall have
given written notice to the Executive that it does not wish to extend the Expiration Date. 

 

	 	B.	 	Effect of This Agreement. The benefits to be provided to the Executive pursuant to this Agreement shall become available upon a Change in Control. Prior to a
Change in Control, the employment of the Executive by the Company shall be governed by the One-Year Employment Agreement. 

 

	3.	 	CERTAIN DEFINITIONS 

 

	 	A.	 	Change in Control. 

 
For purposes of this Agreement, a Change in Control shall mean a change in control of the Company, which shall be deemed to have occurred
upon: 
 

	 	i.	 	an acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of shares of outstanding voting securities of The MONY Group Inc. (the “Holding Company”)
entitled to vote generally in the election of directors (the “Outstanding Voting Securities”) which, when combined with any other securities owned beneficially by the acquirer, would result in such acquirer beneficially owning twenty
percent (20%) or more of either (1) the then outstanding shares of common stock of the Holding Company or (2) the combined voting power of the then Outstanding Voting Securities; excluding, however, the following: (i) any acquisition directly from
the Holding 

 

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Company, other than an acquisition by virtue of the exercise of a conversion privilege unless the security being so converted was itself
acquired directly from the Holding Company, (ii) any acquisition by the Holding Company and (iii) any acquisition by an employee benefit plan (or related trust) sponsored or maintained by the Holding Company or any subsidiary of the Holding Company;

 

	 	ii.	 	the failure at any time following the date hereof, of those individuals who as of the date hereof constitute the Board of Directors of the Holding Company (the
“Board”) (and any new directors whose election by the Board or nomination for election by the Holding Company’s shareholders was approved by a vote of at least two-thirds ( 2/3) of the directors then still in office who either were directors as of the date hereof or whose election or nomination for election was approved), for any
reason (except for death, disability or voluntary retirement), to constitute a majority thereof; 

 

	 	iii.	 	the consummation of a transaction approved by the shareholders of the Holding Company that is a merger, consolidation, reorganization or similar corporate
transaction, whether or not the Holding Company is the surviving corporation in such transaction, other than a merger, consolidation, or reorganization that results in the Outstanding Voting Securities immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least eighty percent of the combined voting power of the voting securities of the Holding 

 

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Company (or such surviving entity) outstanding immediately after such merger, consolidation, reorganization or transaction;

 

	 	iv.	 	the consummation of a transaction approved by the shareholders of the Holding Company that is (1) the sale or other disposition of all or substantially all of the
assets (by way of reinsurance or otherwise) of the Holding Company or the Company or (2) a complete liquidation or dissolution of the Holding Company or the Company; 

 

	 	v.	 	adoption by the Board of a resolution to the effect that any Person has taken actions which, if consummated, would result in such Person acquiring effective control
of the business and affairs of the Holding Company or the Company, subject to the consummation of the transactions contemplated by such actions; 

 

	 	vi.	 	the commencement of a tender offer or proxy contest resulting in any of the transactions specified in subparagraphs i.-iv. of this section 3.A.;

 

	 	vii.	 	the making of any agreement by the Company resulting in any of the transactions specified in subparagraphs i.-iv. of this section 3.A; or 

 

	 	viii.	 	the public announcement of a transaction of the kind specified in subparagraphs i.-iv. of this section 3.A, which transaction is subsequently consummated.

 

	 	B.	 	Period of Employment. The Period of Employment shall mean the period of time commencing on the date of a Change in Control and ending on the earlier of the
Expiration Date or the Termination Date. 

 

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	 	C.	 	Contract Term. The Contract Term shall mean the period of time commencing on the date of a Change in Control and ending on the Expiration Date.

 

	 	D.	 	Termination Date. The Termination Date shall mean the date as of which the Executive’s employment with the Company shall cease or be deemed to have
ceased in the manner specified in Section 6 or Section 7. 

 

	 	E.	 	Target. The term “Target” — when used in relation to any Long-Term or Annual incentive or bonus payment — means the
pertinent target (as a percentage of base salary or otherwise) most recently established for the Executive by the Compensation Committee of the Board of Directors (or the Board of Directors as a whole or any other committee of the Board of Directors
fulfilling such function) or, if none, the target specified in the pertinent plan or contract document. 

 

	4.	 	EXECUTIVE’S RESPONSIBILITIES; LOCATION 

 

	 	A.	 	Position, Duties, Responsibilities. Commencing on the date of the Change in Control, the Executive shall serve in the position and have the duties and
responsibilities as in effect immediately prior to the date of the Change in Control. 

 

	 	B.	 	 Best Efforts. During the Period of Employment, the Executive shall devote his full time, best efforts and undivided attention during normal business hours
to the business and affairs of the Company, except reasonable for vacations, illness or incapacity. The Executive is aware that performance objectives have historically been established by the Company’s Chairman and Chief Executive Officer, in
consultation with the Company’s Board, for Company-wide performance and for performance by the Executive. The Executive agrees to work diligently 

 

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throughout the Period of Employment to achieve any such performance objectives that shall then exist. 

 

	 	C.	 	Principal Business Office. During the Period of Employment, the Executive’s principal business office shall be located in the New York City metropolitan
area. 

 

	5.	 	COMPENSATION, PERQUISITES AND EMPLOYEE BENEFITS 

 

	 	A.	 	Base Compensation. For all services rendered during the Period of Employment, the Executive shall receive annual base compensation at a rate not less than the
rate in effect immediately prior to the date of the Change in Control, which shall be increased thereafter in accordance with the Company’s regular administrative practices generally applicable to its senior executives as in effect immediately
prior to the date of the Change in Control. 

 

	 	B.	 	 Incentive Compensation. During the Period of Employment, the Executive shall continue to be a full participant in the Company’s Annual Incentive
Compensation Plan, Long Term Incentive Plan and Restricted Stock Ownership Plan, as well as any comparable successor plans (the “Incentive Plans”), as the Incentive Plans are in effect immediately prior to the date of the Change in Control
and with such improvements in the Incentive Plans or other incentive compensation plans as may from time to time be made in accordance with the practices of the Company. The Executive shall be entitled to participate in other incentive compensation
plans generally available to senior executives of the Company. If any of the Incentive Plans is terminated or discontinued, the Executive shall be entitled to participate in other incentive compensation plans 

 

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with terms at least as favorable to the Executive as the Incentive Plans in effect prior to the termination or discontinuance of the
Incentive Plans. 

 

	 	C.	 	Perquisites. During the Period of Employment, the Executive shall be entitled to perquisites and fringe benefits, in each case at least equal to those
attached to his position immediately prior to the date of the Change in Control. 

 

	 	D.	 	Employee Benefits. During the Period of Employment, the Executive shall be entitled to participate in all employee benefit plans and programs as in effect for
senior executives of the Company immediately prior to the date of the Change in Control (the “Benefit Plans”) under the terms of the Benefits Plans, with such improvements in the Plans as may from time to time be made in accordance with
the practices of the Company. The Executive shall be entitled to participate in any employee benefit plans and programs generally available to senior executives of the Company. If any of the Plans is terminated or discontinued, the Executive shall
be entitled to participate in other employee benefit plans with terms at least as favorable to the Executive as the Plans in effect prior to the termination or discontinuance of the Plans. 

 

	 	E.	 	Right to Participate in Incentive Plans and Benefit Plans, or Their Equivalent, Not Diminished by Increases in Base Compensation. Any increases in base and
incentive compensation, perquisites or employee benefits under this Agreement or otherwise shall not diminish any other obligation of the Company hereunder. 

 

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	6.	 	DEATH OR DISABILITY 

 

	 	A.	 	Death. If the Executive should die during the Period of Employment, his employment shall be deemed to have ceased on the last day of the month in which death
shall have occurred. 

 

	 	B.	 	Disability. “Disability” shall mean an illness or accident that is likely to prevent or has prevented the Executive from performing his duties under
this Agreement for a period of six consecutive months. In the event that the Executive suffers a Disability during the Period of Employment, his employment shall be deemed to have ceased on the last day of such six-month period.

 

	7.	 	TERMINATION 

 
Either the Company or the Executive may, at any time, terminate the Executive’s employment with the Company. 
 

	 	A.	 	Cause. The termination of the Executive’s employment by the Company during the Contract Term shall be deemed to be for “Cause” only if such
termination shall be the result of: 

 

	 	i.	 	an act or acts of dishonesty by the Executive resulting in conviction for a felony; 

 

	 	ii.	 	a willful, deliberate and intentional failure by the Executive during the Period of Employment (not including any failure by reason of incapacity due to illness or
accident) to comply with the provisions of this Agreement relating to the time and best efforts to be devoted by the Executive to the affairs of the Company, if such failure results in demonstrably material injury to the Company; or

 

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	 	iii.	 	the Executive’s gross misconduct, if such misconduct results in demonstrably material injury to the Company; 

 
provided that notice of such termination is given in
accordance with Section 7.C., below. 
 

	 	B.	 	Good Reason. The termination of the Executive’s employment by the Executive during the Contract Term shall be deemed to be for “Good Reason”
only if such termination shall be the result of: 

 

	 	i.	 	a reduction during the Period of Employment in the current level of either (a) the Executive’s base salary or (b) the Executive’s target bonus or (c) the
Executive’s aggregate compensation overall, including base compensation, Annual and Long-Term Incentive awards, Benefit Plan coverages and perquisites (other than a reduction in awards or benefits that is generally applicable to participants in
a plan in accordance with the terms of the plan in effect immediately prior to the date of the Change in Control); 

 

	 	ii.	 	a diminution during the Period of Employment in the Executive’s position, powers, authority, duties or responsibilities, or the business to which those powers,
authority, duties or responsibilities apply; removal during the Period of Employment of the Executive from the office he held immediately prior to the Change in Control; or change during the Period of Employment in the Executive’s chain of
supervision as it existed immediately prior to the Change in Control; provided, however, that, without limiting the generality of the foregoing, any requirement that the Executive no longer function as a senior executive of an entity that is
a publicly traded company in which no other 

 

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entity has a controlling interest shall be conclusively deemed to constitute “Good Reason” hereunder (regardless of which entity is
technically the Executive’s employer) if the Executive has so functioned prior to the Change in Control; 
 

	 	iii.	 	any requirement that the Executive work at a principal place of business other than 1740 Broadway, New York City, if it is more than 30 miles from the
Executive’s residence at the time of the Change in Control; 

 

	 	iv.	 	a material breach of this Agreement by the Company, provided that notice of the Executive’s election to terminate his employment under this Agreement is given
in accordance with Section 7.C., below. Failure to elect to terminate with respect to one event giving rise to Good Reason does not preclude the Executive from making the election with respect to a subsequent event; or 

 

	 	v.	 	any statement by a successor to or acquiror of the Company (or acquiror of substantially all of the assets of the Company) of intention not to honor fully,
completely and within the time periods provided herein each and every term of this Agreement. 

 

	 	C.	 	Termination Procedure 

 

	 	i.	 	Notice 

 

	 	(a)	 	Notice of termination of employment under this Agreement shall be provided in writing by the Company or the Executive, as applicable, and shall specify the date as
of which the Executive’s employment shall be deemed to have ceased, which date shall in no event be earlier than 60 days from the date of such notice. 

 

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	 	(b)	 	In the event that the Company elects to terminate the Executive’s employment, the Company shall provide to the Executive the notice described in Section
7.C.i.(a), above. If termination is alleged to be for Cause, such notice shall state that the Executive has engaged in conduct set forth in Section 7.A., with the particulars thereof specified in detail. 

 

	 	(c)	 	In the event that the Executive elects to terminate employment, the Executive shall provide to the Company the notice described in Section 7.C.i.(a), above. If
termination is alleged to be for Good Reason, such notice shall specify the reason for such termination, as set forth in Section 7.B., with the particulars thereof specified in detail, and shall be given, except in the case of a continuing breach by
the Company, within three calendar months after the most recent event giving rise to Good Reason. 

 

	 	ii.	 	Cure 

 

	 	(a)	 	In the case of the Executive’s alleged breach or gross misconduct as set forth in Sections 7.A.ii. or iii., the Executive shall be given the opportunity to
remedy such alleged breach or gross misconduct within 30 days from his receipt of the notice referred to above, or take all reasonable steps to that end during such 30-day period and thereafter. 

 

	 	(b)	 	In the case of the Executive’s allegation of Good Reason, the Company shall be given the opportunity to remedy the alleged Good Reason within 30 days from its
receipt of the notice referred to above, or take all reasonable steps to that end during such 30-day period and thereafter. 

 

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	 	iii.	 	Arbitration. In the event that the Executive’s employment shall be terminated by the Company and such termination is alleged to be for Cause, the
Executive shall have the right, in addition to all other rights and remedies provided by law or equity, to invoke arbitration as described below. In the event that the Executive’s employment shall be terminated by the Executive and such
termination is alleged to be for Good Reason, the Company shall have the right, in addition to all other rights and remedies provided by law or equity, to invoke arbitration as described below. Such arbitration shall be conducted before a single
arbitrator in the County of New York, State of New York, under the commercial arbitration rules of the American Arbitration Association, by serving notice to arbitrate upon the other party no more than 60 days after such party received the notice of
termination referred to above. 

 

	8.	 	CONSEQUENCES OF TERMINATION, DEATH OR DISABILITY 

 

	 	A.	 	 Termination by the Company Other Than for Cause or by the Executive for Good Reason. The Company shall make those payments and provide those benefits
specified in this section 8.A. in the event of a termination of the Executive’s employment after a Change in Control, if such termination is either (i) by the Company (a) during the Contract Term or the term of Executive’s One-Year
Employment Agreement or (b) by giving notice under section 1.A., above, or under the Executive’s One-Year Employment Agreement, that it does not wish to extend the Expiration Date, in either case other than for Cause, or (ii) by the Executive
for Good Reason. In such circumstances, then, in lieu of all other rights, remedies, damages and relief to which the Executive might otherwise be 

 

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entitled under this Agreement, the Company shall make those payments and provide those benefits enumerated below in this section 8.A.:

 

	 	i.	 	 Severance. A lump-sum payment in an amount equal to three times the sum of the following components (a), (b), and (c): (a) the Executive’s annual
base compensation in effect on the Termination Date; (b) the Executive’s Annual Bonus in effect on the Termination Date; and (c) the Executive’s Long-Term Incentive Plan Payment. For purposes hereof, “Annual Bonus” shall mean an
amount calculated by multiplying (i) the annual rate of base compensation in effect for the Executive immediately prior to the Termination Date by (ii) the greater of (d) the average of the Executive’s annual awards under the Annual Incentive
Compensation Plan paid (or, if applicable, accrued but not yet paid) in respect of the two calendar years immediately preceding the year of the Termination Date, or during such shorter period as the Executive shall have been employed by the Company,
in either case expressed as a percentage of the annual base compensation paid to the Executive for the calendar year for which the bonus was paid (or accrued) or (e) the Executive’s target percentage incentive for the year of the Termination
Date under the Annual Incentive Compensation Plan. For purposes hereof, “Long-Term Incentive Plan Payment” shall mean the greater of (f) the average of the dollar amount of the payments made to Executive under the Long Term Incentive Plan
for each of the previous two years or, if the Executive has received only one previous award, then the amount of that award or (g) the target amount per unit under the Long Term Incentive Plan times one-third of the number of units 

 

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outstanding for the Executive’s account as of the Termination Date. The amount payable under this section 8.A.i. shall be reduced by any
severance payments made to the Executive under any other employment contract or severance arrangement with the Company. 

 

	 	ii.	 	Annual Incentive Compensation. A payment in respect of the annual incentive compensation of the Executive of the following amounts:

 

	 	(a)	 	any annual incentive compensation payments for a year prior to the year in which the Termination Date occurs but which have not yet otherwise been paid as of the
Termination Date, which amount shall not be less than the Executive’s annual base compensation for such year multiplied by item (ii) of the following section 8.A.ii.(b); and 

 

	 	(b)	 	 an amount in respect of the annual incentive compensation that would have been earned in respect of the partial year of service in which such Termination Date
occurs, in an amount calculated by multiplying (i) the rate of annual base compensation in effect for the Executive immediately prior to the Termination Date by (ii) the greater of (a) the average of the annual awards under the Annual Incentive
Compensation Plan payable in respect of the two calendar years immediately preceding the year for which payment is made, or during such shorter period as the Executive shall have been employed by the Company, with each such award expressed as a
percentage of the annual base compensation paid to the Executive for the respective calendar years for which such bonus was paid, or (b) the Executive’s target percentage incentive for the year of the 

 

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Termination Date under the Annual Incentive Compensation Plan, with the result multiplied by (iii) a fraction, the numerator of which is the
number of days in the calendar year through the Termination Date, and the denominator of which is 365. 

 

	 	iii.	 	Long-Term Incentive Plan. With respect to awards under the Company’s Long-Term Incentive Plan that are outstanding on the Termination Date, the following
payments: 

 

	 	(a)	 	All amounts payable as of the Termination Date in accordance with the terms of the Long Term Incentive Plan. Nothing in this Agreement shall affect the right of the
Executive to payment of awards under the Long Term Incentive Plan in accordance with its terms for all three-year Plan cycles completed prior to the Termination Date. 

 

	 	(b)	 	For any plan cycles that have not been completed prior to the Termination Date, a lump sum payment equal to the number of units previously awarded to the Executive
for plan cycles that have not been completed on the Termination Date times the greater of 

 

	 	(i)	 	$100, or 

 

	 	(ii)	 	 the Earned Value of each such unit. The “Earned Value” shall be determined by dividing the GAAP income for completed years in the uncompleted
three-year cycle by the income targets previously set for such completed years, and then applying the same ratio to the income target for the entire three-year cycle (it being conclusively assumed, for purposes of this calculation, that the actual
GAAP income 

 

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performance over the three-year cycle would have born the same relationship to the three-year income target as the GAAP income performance
for completed plans years actually bore to the income targets for those years); the resulting Earned Unit value shall not be adjusted for any relative performance criterion (or in any other way). 

 
If the Company shall have terminated the Long Term Incentive
Plan and established a successor plan, the Executive shall receive payments under such successor plan in a manner comparable to the foregoing. 
 

	 	iv.	 	 Stock Options and Restricted Stock. Upon termination of the Executive’s employment under the circumstances set forth in this section 8.A., any
otherwise unvested options on Company stock awarded to the Executive shall immediately become vested and exercisable, any otherwise unvested restricted stock awarded to the Executive under the Restricted Stock Option Plan shall immediately vest, and
any restrictions on restricted stock awarded to the Executive under the Restricted Stock Ownership Plan shall immediately lapse, if and only if such accelerated vesting and exercisability and such lapsing of restrictions would not violate any order,
law, regulation or other legal requirement, including but not limited to Section 7312(w) of the New York Insurance Law or the Plan of Reorganization adopted on August 14, 1998, as amended and adopted on September 9, 1998. If such accelerated vesting
and exercisability, or such lapsing of restrictions, would violate any such order, law, regulation or other legal requirement, then, upon such termination of the Executive’s employment, the Company shall pay to the Executive an amount 

 

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in cash equal to (a) the amount by which the closing price on the New York Stock Exchange, on the last trading day before the Change of
Control, exceeds the exercise price under the options, times the number of otherwise unvested options held by the Executive, and (b) an amount equal to such trading price times the number of restricted shares held by the Executive; whereupon, such,
options and shares shall immediately be canceled. 

 

	 	v.	 	Retirement Benefits. The Executive shall receive the payments specified in this Section 8.A.v. with respect to retirement benefits, in addition to payments of
benefits to which he is entitled under the Retirement Income Security Plan and the Investment Plan Supplement (or their successor) as of the Termination Date, and in lieu of all payments under the Excess Benefit Plan. 

 

	 	(a)	 	The benefits described in section 8.A.v.(b) below shall be calculated assuming: 

 

	 	(i)	 	the Company’s Excess Benefit Plan, Retirement Income Security Plan and Investment Plan Supplement (collectively, the “Retirement Plans”) had continued
during the remainder of the Contract Term without change from the date of the Change in Control; 

 

	 	(ii)	 	the Executive had continued to be employed for the remainder of the Contract Term; 

 

	 	(iii)	 	 subject to generally applicable Plan limitations, the Company’s contributions for the Executive for the remainder of the Contract Term under the Investment
Plan Supplement were to be, as Company Matching Contributions, at an annual percentage rate of compensation 

 

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equal to the average percentage contribution for the Executive for the three full calendar years preceding the Termination Date, but with no
other contributions on behalf of the Executive; 

 

	 	(iv)	 	the Executive was fully vested in all benefits under the Retirement Plans on the Termination Date; 

 

	 	(v)	 	as provided under the June 29, 1989 offer letter from Michael Roth to Richard Daddario (which shall remain in full force and in effect and in no way be superseded,
diminished, or otherwise altered or supplanted by this Agreement), the Executive had five years of service in additional to (a) his actual number of years of service and (b) the number of additional years of service assumed under Section
8.A.v.(a)(ii), above; 

 

	 	(vi)	 	the Executive’s Compensation taken into account under the Retirement Plans included (1) the Executive’s annual base compensation in effect immediately
prior to the Termination Date over the remainder of the Contract Term and (2) any amounts paid to the Executive under this Agreement in lieu of a form of compensation (other than annual base compensation) that would ordinarily be taken into account
as Compensation for purposes of the Retirement Plans if Executive had continued to be employed for the remainder of the Contract Term. 

 

	 	(b)	 	The payment shall equal the aggregate present value (calculated using the discount rate described in section 10) of the benefits described in (i), (ii),

 

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(iii) and (iv) below minus the aggregate present value (calculated using the discount rate described in section 10) of the benefits
actually payable to the Executive under the Retirement Income Security Plan and Investment Plan Supplement: 

 

	 	(i)	 	the benefit that would have been paid to the Executive under the Retirement Income Security Plan, if he had elected to commence such benefit on the earliest date
possible under such Plan subsequent to the Expiration Date; plus 

 

	 	(ii)	 	the benefit that would have been payable to the Executive under the Investment Plan Supplement; plus 

 

	 	(iii)	 	the benefit that would have been paid to the Executive under the “Excess Retirement Plan” provisions of the Excess Benefit Plan if he had elected to
commence such benefit on the earliest date possible under the Excess Benefit Plan subsequent to the Expiration Date; plus 

 

	 	(iv)	 	the benefit that would have been paid to the Executive under the “Excess Investment Plan” provisions of the Excess Benefit Plan. The hypothetical earnings
that would have been credited on the Executive’s Investment Plan Benefit shall be determined on the basis of the discount rate described in Section 10. 

 

	 	(c)	 	 Election. In lieu of the lump-sum payment provided by this section 8.A.v., the Executive may elect payment as of the Termination Date of any amounts
payable under this Section in any of the forms available under the Excess Benefit Plan provided such election is irrevocably made as of the 

 

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Agreement Date. The Executive’s election is set forth on Exhibit I hereto (which is, in all respects, incorporated into and made a part
of this Agreement). 

 

	 	vi.	 	Welfare Benefits. The Executive shall receive the amounts and arrangements specified in this Section 8.A.vi. with respect to welfare benefits.

 

	 	(a)	 	A payment equal to the aggregate present value (calculated in using the discount rate described in section 10) of the following amounts: 

 

	 	(i)	 	Medical and Dental Benefits – an amount equal to the portions of the costs that would have been incurred by the Company for the remainder of the Contract
Term for the level of medical and dental benefits (in effect for the Executive immediately prior to the Termination Date), with such costs for the calendar year in which the Termination Date occurs to be determined pursuant to the provisions of
section 4980B of the Internal Revenue Code of 1986 or any successor provisions (“COBRA”), and with such costs to be assumed to increase thereafter at an annual rate 200 basis points over the discount rate described in Section 10;

 

	 	(ii)	 	 Retiree Medical Benefits. If the Executive would have become eligible for retiree medical coverage during the Contract Term (but is not eligible for such
coverage on his Termination Date), an amount equal to the costs that would have been incurred by the Company for retiree medical benefit coverage for the life of the Executive, determined as if he retired at the end of the Contract Term and based on
the level of 

 

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retiree medical benefits that would have been available to the Executive had he been eligible for such coverage immediately prior to the
Termination Date with the Company’s assumed costs for such coverage to be determined in the manner specified in (i) above using the mortality assumption described in Section 10; 

 

	 	(iii)	 	Spouse’s/Survivors’ Income Benefits – an amount equal to the costs that would have been paid by the Company for the remainder of the Contract
Term for the level of the life insurance coverages in effect for the Executive immediately prior to the Termination Date, calculated pursuant to the uniform premium table included in Income Tax Regulation section 1.79-3T (or any successor table).

 

	 	(b)	 	Continued coverage under certain welfare benefit plans of the Company for the remainder of the Contract Term: 

 

	 	(i)	 	Disability Benefits – The Executive shall continue to be covered under the short-term and long-term disability coverage under the Company’s
Disability Benefit Plan as in effect for the Executive immediately prior to the Termination Date, or a comparable plan or plans, with the benefits under such plan to be determined on the basis of the annual base compensation in effect immediately
prior to the Termination Date plus annual incentive compensation. 

 

	 	(ii)	 	 Voluntary Group Life Insurance and Optional Survivors’ Insurance – the Executive shall continue to be eligible to participate in these plans as
in effect for the Executive immediately prior to the Termination 

 

22 

	 	 
Date, or a comparable plan or plans, by making voluntary contributions at the levels applicable under the terms of such plans.

 

	 	(iii)	 	Split-Dollar Life Insurance – the Company shall keep in effect, for the life of the Executive, the split-dollar life insurance policy maintained for the
Executive immediately prior to the Termination Date, if any and if doing so does not violate any applicable law or regulation; the Company and the Executive shall retain respective obligations to pay premiums in accordance with the terms of the
policy. 

 

	 	(c)	 	Payments under this Section 8.A.vi. shall be in addition to amounts due to the Executive under the welfare plans for periods ending on the Termination Date. The
Executive’s rights to receive payments under this Section 8.A.vi. shall not diminish, or be in substitution for, any rights he may otherwise have to participate in the Company’s welfare plans after the Termination Date, provided that the
Executive shall in no event (i) receive payments under this Section 8.A.vi. in respect of benefits under a welfare plan for any period and, in addition, (ii) actually be covered for the same period under such welfare plan at the Company’s
expense. 

 

	 	vii.	 	Outplacement Services. The Company shall provide outplacement services for up to one year for the Executive with a nationally recognized outplacement firm.

 

	 	B.	 	Disability or Death 

 

	 	i.	 	Disability. In the event of the Executive’s Disability during the Period of Employment, the Executive shall be entitled to the compensation and benefits

 

23 

	 	 
provided for in Sections 5.A., C. and D. of this Agreement for the Period of Employment. Payment shall be without prejudice to any other
payments due in respect of the Executive’s death or Disability. 

 

	 	ii.	 	Death. In the event of the death of the Executive during the period of Employment, the Executive’s representative shall be entitled to the compensation
provided in section 5.A. of this Agreement through the Period of Employment. Payment shall be without prejudice to any other payment due in respect of the Executive’s death or Disability. 

 

	 	iii.	 	Incentive Compensation. In the event of the Executive’s Disability or death during the Period of Employment, the Company shall pay the Executive or his
legal representative, in addition to the payments required by this Section 8.B.: 

 

	 	(a)	 	an award under the Annual Incentive Plan (or any successor plan), determined in accordance with Section 8.A.ii. on a pro rata basis, for the portion of the calendar
year prior to the Termination Date (or, in the case of Disability, the earlier of the Termination Date and the Expiration Date); and 

 

	 	(b)	 	an award under each incomplete cycle of the Long-Term Incentive Plan (or any successor plan), determined in accordance with Section 8.A.iii. but on a pro rata basis,
for the portion of any three-year Plan cycle completed by the Executive prior to the Termination Date (or, in the case of Disability, the earlier of the Termination Date and the Expiration Date). 

 

	 	iv.	 	Reduction of Payments. The amount of any payments due under this Section 8.B. shall be reduced by any payments to which the Executive is entitled for

 

24 

	 	 
the same period because of disability under any disability benefit plan of the Company (including but not limited to RISPE disability
benefits) providing salary continuation. 

 

	 	C.	 	Termination by the Company for Cause or by the Executive Other Than for Good Reason. In the event of a termination by the Company of the Executive’s
employment during the Contract Term for Cause or by the Executive other than for Good Reason, the Executive shall be entitled to the compensation and benefits ordinarily provided to senior executives of the Company upon termination of employment in
accordance with the plans, programs and practices of the Company applicable to senior executives as in effect on the date of the Change in Control. 

 

	 	D.	 	Time of Payment. All lump-sum payments to be made by the Company under this Section 8 shall be made within five days after the Termination Date. Annuity
payments shall commence on the first day of the calendar month following the month in which the Termination Date occurs. 

 

	9.	 	CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY 

 

	 	A.	 	Gross-Up Payment. 

 

	 	i.	 	Anything in this Agreement to the contrary notwithstanding and except as set forth below, if it shall be determined that any amount paid, distributed or treated as
paid or distributed by the Company to or for Executive’s benefit (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required
under this Section 9) (a “Payment”) would be 

	 	

 

25 

	 	 
subject the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) or any interest or
penalties are incurred by Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “Excise Tax”), then Executive shall be entitled to receive
(a) an additional payment (a “Gross-Up Payment”) in an amount such that after payment by Executive of all federal, state and local taxes (including any interest or penalties imposed with respect to such taxes), including, without
limitation, any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments; and
(b) an amount such that, after providing for all federal, state and local taxes payable by the Executive as a result of the payment provided for in this clause 9.A.i.(b) (including, without limitation, any resulting additional excise tax on Excess
Parachute Payments), the Executive retains an amount equal to the product of (i) any deductions disallowed for federal, state or local income tax purposes because of the inclusion of the Gross-Up Payment in Executive’s adjusted gross income
multiplied by (ii) the highest applicable marginal rate of federal, state or local income taxation, respectively, for the calendar year in which the Gross-Up Payment is to be made. 

 

	 	ii.	 	All determinations required to be made under this Section 9, including whether and when a Gross-Up Payment is required and the amount of such

 

26 

	 	 
Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by a nationally recognized accounting
firm as may be designated by Executive (the “Accounting Firm”) which shall provide detailed supporting calculations both to the Company and Executive within 15 business days of the receipt of notice from Executive that there has been a
Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Executive shall appoint another nationally
recognized accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne by the Company. Any Gross-Up
Payment, as determined pursuant to this Section 9, shall be paid by the Company to Executive within five days of the receipt of the Accounting Firm’s determination. Any determination by the Accounting Firm shall be binding upon the Company and
Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company
should have been made (“Underpayment”), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 9.B. and Executive thereafter is required to make a payment of
any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has 

 

27 

	 	 
occurred and any such Underpayment shall be promptly paid by the Company to the Executive or for Executive’s benefit.

 

	 	B.	 	Notification of Claims. Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the
payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable but not later than ten business days after Executive is informed in writing of such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid. Executive shall not pay such claim prior to the expiration of the 30-day period following the date on which it gives such notice to the Company (or such shorter period ending on the
date that any payment of taxes with respect to such claim is due). If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall: 

 

	 	i.	 	give the Company any information reasonably requested by the Company relating to such claim, 

 

	 	ii.	 	take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation,
accepting legal representation with respect to such claim by an attorney reasonably selected by the Company, 

 

	 	iii.	 	cooperate with the Company in good faith in order to effectively contest such claim, and 

 

	 	iv.	 	permit the Company to participate in any proceeding relating to such claim; 

 

28 

provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties)
incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, from any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on foregoing provisions of this Section 9, the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all administrative
appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and
Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, however, that if the Company directs
Executive to pay such claim and sue for a refund, the Company shall advance the amount of such payment to Executive, on an interest-free basis, and shall indemnify and hold Executive harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided that any extension of the statute of limitations relating to payment
of taxes for Executive’s taxable year with respect to which such contested amount is claimed to be due is limited solely 

 

29 

to such contested amount. Furthermore, the Company’s control of the contest shall be limited to issues with respect to which a Gross-Up
Payment would be payable hereunder and Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority. 
 

	 	C.	 	Refund of Claims. If, after Executive’s receipt of an amount advanced by the Company pursuant to Section 9.B., Executive becomes entitled to receive any
refund with respect to such claim, Executive shall (subject to the Company’s complying with the requirements of Section 9.B.) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes
applicable thereto). If, after Executive’s receipt of an amount advanced by the Company pursuant to Section 9.B., a determination is made that Executive shall not be entitled to any refund with respect to such claim and the Company does not
notify Executive in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall
offset, to the extent thereof, the amount of Gross-Up Payment required to be paid. 

 

	10.	 	INTEREST AND MORTALITY ASSUMPTIONS 

 

	 	A.	 	 Interest Assumptions. Determinations of any present values under this Agreement and of any present values relating to this Agreement shall be based upon a
discount rate equal to 120 percent of the applicable mid-term Federal rate (determined under section 1274(d) of the Code), compounded semiannually. 

 

30 

	 	 
Unless otherwise elected by the Executive on Exhibit I hereto, the Executive shall be deemed to have elected that such discount rate be
determined based on such applicable Federal rate as in effect on the Agreement Date. The Company hereby agrees to use of the discount rate that is elected or deemed to be elected by the Executive. 

 

	 	B.	 	Mortality Assumptions. For purposes of this Agreement, assumptions relating to mortality are determined using the mortality tables and assumptions in effect
under the Company’s Retirement Income Security Plan on the date as of which any such mortality assumption is made. 

 

	11.	 	WITHHOLDING 

 
All payments required to be made by the Company hereunder to the Executive shall be subject to the withholding of such amounts, if any,
relating to tax, excise tax and other payroll deductions as the Company may reasonably determine it should withhold pursuant to any applicable law or regulation. 
 

	12.	 	NONDISCLOSURE. Except as expressly provided herein, the Executive agrees that during the Period of Employment and thereafter, the Executive shall not make use
of, disclose, divulge, or make accessible, to any third party, any information of a secret or confidential nature known to the Executive in the course of his employment with the Company or any of its affiliates or subsidiaries until such information
has come into the public domain or has otherwise ceased to be secret or confidential. 

 

	13.	 	INDEMNIFICATION AND INSURANCE; LEGAL EXPENSES 

 
The Executive shall be entitled to the following additional benefits in the event of a Change in Control: 
 

31 

 

	 	A.	 	Indemnification and Insurance. The Company will indemnify the Executive (including payment of expenses in advance of final disposition of the proceeding) to
the fullest extent permitted by the laws of the State of Delaware and the Charter and By-Laws of the Company, in each case as in effect on the date of the Change in Control or on the Termination Date, whichever affords greater protection to the
Executive; and the Executive shall be entitled to the protection of any insurance policies the Company may elect to maintain generally for the benefit of its directors and officers, against all costs, charges and expenses whatsoever incurred or
sustained by him in connection with any action, suit or proceeding to which he may be made a party by reason of his having been a director, officer or employee of the Company or any of its subsidiaries or affiliates or his serving or having served
any other enterprise as a director, officer or employee at the request of the Company. The Company shall cause to be maintained in effect for not less than six years from the Termination Date policies of directors’ and officers’ liability
insurance of at least the same coverage as those policies, if any, maintained by the Company on the date of the Change in Control and containing terms and conditions which are no less advantageous than such policies, or if such coverage is not
available, the best available coverage for equal cost to the Company. 

 

	 	B.	 	 Legal Expenses. In the event of any litigation, arbitration or other proceeding between the Company and the Executive with respect to the subject matter
of this Agreement or the enforcement of the Executive’s rights hereunder, the Company shall reimburse the Executive, regardless of the outcome, for all of his reasonable costs and expenses relating to such litigation, arbitration or other
proceeding, 

 

32 

	 	 
including without limitation, reasonable attorneys’ fees and expenses. In no event shall the Executive be required to reimburse the
Company for any of the costs or expenses relating to such litigation, arbitration or other proceeding. 

 

	14.	 	NOTICES 

 
All notices, requests, demands and other communications provided for by this Agreement shall be in writing and shall be sufficiently given
if and when mailed in the continental United States by registered or certified mail or personally delivered to the party entitled thereto at the address stated below or to such changed address as the addressee may have given by a similar notice:

 

	 To the Company:
	  	 MONY Life Insurance Company

	 	  	 1740 Broadway

	 	  	 New York, New York 10019

	 	  	 Attention: General Counsel

	 	  	 
	 To the Executive
	  	 MONY Life Insurance Company

	 	  	 1740 Broadway

	 	  	 New York, New York 10019

 
With an
additional copy to the Executive at the home address listed on Exhibit I hereto (or to such changed address as the Executive may have given by a similar notice). 
 

	15.	 	GENERAL PROVISIONS 

 

	 	A.	 	Determination of Value. Whenever, under this Agreement, it is necessary to determine whether one benefit is less than, equal to, or larger than another in
value (whether or not such benefits are provided under this Agreement), such determination shall be made using the assumptions described in Section 10. 

 

33 

 

	 	B.	 	Limitation. This Agreement shall not confer any right or impose any obligation on the Executive to continue in the employ of the Company, or limit the right
of the Company or the Executive to terminate his employment. 

 

	 	C.	 	Company Set-Off and Counterclaim; No Obligation to Mitigate. The Company shall have no right of set-off or counterclaim in respect of any claim, debt or
obligation against any payments provided for in this Agreement. The Executive shall have no obligation to mitigate any liability of the Company or any successor of the Company hereunder by seeking alternative employment or otherwise, nor shall any
amounts earned by the Executive as a result of alternative employment or otherwise mitigate any obligations of the Company or any successor hereunder. 

 

	 	D.	 	Assignment of Interest. No right to or interest in any payments shall be assignable by the Executive; provided, however, that this provision shall not
preclude him from designating one or more beneficiaries to receive any amount that may be payable after his death and shall not preclude his executor or administrator from assigning any right hereunder to the person or persons entitled thereto.

 

	 	E.	 	Amendment, Modification and Waiver. No provision of this Agreement may be amended, modified or waived unless such amendment, modification or waiver shall be
agreed to in writing signed by the Executive and by a duly authorized Company officer. 

 

	 	F.	 	 Enforceability. If this Agreement or any provision hereof shall be determined to be invalid or unenforceable by a court of competent jurisdiction, the
corresponding provision or provisions of the First Amended and Restated Change 

 

34 

	 	 
in Control Agreement shall be in full force and effect with respect to the matters described in such invalid or unenforceable provision of
this Agreement and the remaining provisions of this Agreement shall remain in full force and effect to the fullest extent permitted by law. 

 

	 	G.	 	Entirety of Agreement. This Agreement constitutes the entire agreement between the Company and the Executive relating to the subject matter hereof;
provided, however, that neither this integration clause 15.G. nor any other provision of this Agreement shall in any way supersede or diminish the enforceability of any provision of any plan or agreement (including, without limitation,
the Restricted Stock Ownership Plan, any Restricted Stock Award Agreement, any stock option plan, any Stock Option Award Agreement, and any Supplemental Executive Retirement Plan) that, by its terms, would provide for accelerated vesting,
exercisability, receipt, enjoyment or lapsing of restrictions with respect to any benefit or other item of value granted thereunder or pursuant thereto in the event of a Change in Control. Any compensation or benefits to which the Executive is
entitled under this Agreement shall be based solely on its terms, without regard to any materials used in the preparation or consideration of this Agreement, including any summary of terms of estimate of amounts relating to this Agreement.

 

	 	H.	 	 Company and Successors. This Agreement shall be binding upon and inure to the benefit of the Company and any successor of the Company including, without
limitation, any corporation acquiring directly or indirectly all or substantially all of the assets of the Company, whether by merger, consolidation, reinsurance, sale 

 

35 

	 	 
or otherwise (and such successor shall thereafter be deemed “the Company”). For the purposes of clarification, the
“Company” shall include MONY Life Insurance Company. 

 

	 	I.	 	Definition of Executive. The word “Executive” shall, wherever appropriate, include his dependents, beneficiaries and legal representatives.

 

	 	J.	 	Conflict of Law. Except as specified in Section 13.A., the validity, interpretation, performance and enforcement of this Agreement shall be governed by the
laws of the State of New York, without giving effect to the principles of conflict of laws thereof. 

 

	 	K.	 	Exhibits. The provisions of Exhibit I hereto are hereby incorporated by reference in this Agreement with the same force and effect as if fully set forth
herein. 

 

	 	L.	 	Rehabilitation. This Agreement shall be null and void and unenforceable in the event that the New York State Superintendent of Insurance is named
rehabilitator under Article 74 of the New York State Insurance Law. 

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

 

	 MONY LIFE INSURANCE COMPANY

	
	 By:
	 	 /s/    MICHAEL I.
ROTH        

	 	 	 Name: Michael I. Roth

	 	 	 Title: Chairman and Chief Executive Officer

 

	 EXECUTIVE

	
	 /s/    RICHARD
DADDARIO        

	 Name: Richard Daddario

	 Title: Executive Vice President and Chief Financial Officer

 

36 

Exhibit I to Employment Agreement 
 

	I.	 	Name and Home Address of Executive: 

 

	II.	 	Election made pursuant to Section 8.A.v.: 

 

	 	 	The Executive elects payment of the excess retirement benefits under Section 8.A.v. of the Agreement in one of the following forms: 

 

	 	 	Excess Retirement Plan Benefit 

 

	 	        	 	Lump sum at Termination Date 

 

	 	        	 	Annuity commencing at Termination Date – 

 

	 	        	 	Life 

 

	 	        	 	50% Joint and Survivor-Beneficiary 

 

	 	        	 	100% Joint and Survivor-Beneficiary 

 

	 	            	 	Other; Please
specify                                       
    

 

	 	 	Excess Investment Plan Benefit 

 

	 	        	 	Lump sum at Termination Date 

 

	 	        	 	Installment commencing at Termination Date, 

 

	 	 	 	Payable                      Annually

	 	 	 	                                   Monthly

 

	 	        	 	Installments over          years (not greater than 20) 

 

	 	        	 	Installments over life expectancy of Executive (amount redetermined annually) 

 

37 

	 	        	 	Payment in accordance with income settlement option contained in policies of life insurance being issued by the Company as of the Agreement Date; Please specify:
                                        
                                        
                            
                                        
                                        
                            
                                        
                                        
     

 

	III.	 	Election made pursuant to Section 10.A.: 

 

	 	 	For purposes of the calculations contemplated by Section 10.A., the Executive elects to utilize the applicable discount rate in effect on:

 

	 	        	 	the Agreement Date; or 

 

	 	        	 	the Termination Date. 

 

	 	 	If no election is made, the Executive will be deemed to have elected the applicable discount rate in effect on the Agreement Date. 

 

	IV.	 	Other agreements between Executive and Company that are not to be superseded by the Agreement as contemplated in Section 15.G. (in addition to rights specifically
set forth in the Agreement) include: 

 

	 	1.	 	Rights pursuant to the Company’s Deferred Compensation Plan; 

 

	 	2.	 	Employment Agreement dated as of             ,     ,
             (for periods prior to Change in Control); 

 

	 	3.	 	in accordance with Section 8.B.i. of the Agreement, rights upon Disability under this Agreement do not supersede the rights of the Executive in the event of his
eligible disability under the Company’s Disability Benefit Plan, Retirement Income Security Plan, Investment Plan Supplement, Comprehensive Medical Benefit Program and Life Insurance Program for Selected MONY Officers (or any successor plans)
(“Disability Benefits”). Any Disability Benefits for which the Executive becomes eligible shall be paid to the Executive in accordance with the terms of such plans without limitation by this Agreement. Any determination made pursuant to
Section 6.B. of this Agreement as to the existence of a Disability or as to the date as of which the Executive’s employment is deemed to have ceased shall have no effect in determining the Executive’s eligibility for Disability Benefits or
other benefits receivable during a period of disability. 

 

38<PAGE>

                                                                    EXHIBIT 10.4

                              EMPLOYMENT AGREEMENT
                              --------------------

THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as of
November 5, 2002 (the "Effective Date"), by and between FTI Consulting, Inc., a
Maryland corporation with its principal offices in Annapolis, Maryland
("Company"), and Jack B. Dunn, IV ("Executive").

                              W I T N E S S E T H:
                              - - - - - - - - - -

         WHEREAS, Executive is a member of the Board of Directors and Chairman
and Chief Executive Officer of Company; and

         WHEREAS, Company desires to insure the continued availability to
Company of Executive's services, and Executive is willing to render such
services, all upon and subject to the terms and conditions contained in this
Agreement;

         NOW, THEREFORE, in consideration of the mutual covenants set forth in
this Agreement, Company and Executive agree as follows:

         1.       Employment. Company employs Executive and Executive accepts
such employment upon the terms and conditions set forth in this Agreement.

         2.       Term of Employment.
                  ------------------

                  (a)      Employment Term. Executive's full-time employment
under this Agreement will begin as of the Effective Date and, unless otherwise
terminated as provided in SECTION 9, will continue for an initial term (the
"Initial Term") of three years through the day before the third anniversary of
the Effective Date in 2005. Effective at the close of business on the day before
the first, second and third anniversaries of the Effective Date in 2003, 2004
and 2005, the term of Executive's employment under this Agreement, if not
otherwise terminated as provided in SECTION 9, will be extended for an
additional one-year period unless either party has, before the close of business
on the day on which the additional one-year extension would otherwise become
effective, given notice to the other of his or its intention not to further
extend the term. The Initial Term, together with each additional one-year
extension that becomes effective pursuant to the preceding sentence, is referred
to in this Agreement as the "Employment Term." The period remaining from time to
time in the Employment Term will fluctuate from three years (as of, for example,
the Effective Date or, absent notice, any of the first three anniversaries
thereof) to two years (as of, for example, the day before the first anniversary
of the Effective Date in 2003, the day on which, absent notice before the close
of business on that day, the Employment Term will be extended for an additional
year) or less once no additional extensions are applicable.

                  (b)      Transition Period. Upon expiration of the Employment
Term or its earlier termination pursuant to SECTION 9 other than as a result of
Executive's death or Disability (as defined in SECTION 9(D)) or termination of
Executive's employment by the Company for Cause (as defined in SECTION 9(B)),
Executive shall continue to provide services to Company as described in SECTION
3(B), but in the capacity of a part-time employee, for a period of three years
(the "Transition Period").

                  (c)      Contract Term. The Employment Term, together with the
Transition Period, is referred to in this Agreement as the "Contract Term."

                                        1

<PAGE>

         3.       Position and Duties.
                  -------------------

                  (a)      During the Employment Term. During the Employment
Term, Executive will (i) be employed to serve as, and have the title of,
Chairman and Chief Executive Officer, with overall charge and responsibility for
Company and to perform such duties consistent with such positions as Executive
shall reasonably be directed to perform by the Board of Directors of Company
commensurate with Executive's positions or as may be specified in Company's
By-Laws, if applicable, (ii) have such authority as may be reasonably necessary
or appropriate in order to enable Executive to carry out the duties and
responsibilities of Executive's employment under this Agreement, (iii) have
Executive's principal office located at Company's offices in Annapolis,
Maryland, and (iv) be entitled to office services and support commensurate with
Executive's position, duties and responsibilities. During the Employment Term,
Executive will devote substantially all of Executive's business time, attention,
and energies to the performance of Executive's duties and responsibilities under
this Agreement, provided that Executive may engage in personal, charitable,
professional and investment activities to the extent such activities do not
conflict or materially interfere with the ability of Executive to perform said
duties and responsibilities; provided, further, that service on the board of
directors or other governing body of another for-profit business entity is
subject to the consent of the Board of Directors of Company.

                  (b)      During the Transition Period. During the Transition
Period, Executive will (i) be employed by Company as a part-time employee
providing, at the request and direction of the Board of Directors of Company,
not more than 500 hours of service per 12-month period at the Company's offices
in Annapolis, Maryland, such services to be commensurate with the general nature
of services performed by Executive or other executive-level employees of Company
during the Employment Term or of a nature that the Chief Executive Officer or
the Board of Directors of Company determines is necessary or desirable to
transition Executive's position to his successor, and (ii) have such title, or
no title, as shall be determined by the Chief Executive Officer or the Board of
Directors of Company in his or its discretion.

                  (c)      Service on Board of Directors. Executive shall serve
on Company's Board of Directors during the Employment Term, and whenever during
the Employment Term, Executive's term on Company's Board of Directors is due to
expire, Company shall include Executive as a nominee for reelection in Company's
Proxy Statement for the annual meeting of stockholders for the year in which
such expiration is to occur.

         4.       Annual Salary and Transition Payment.
                  ------------------------------------

                  (a)      During the Employment Term. During the Employment
Term, Company will pay or cause to be paid to Executive an annual base salary
("Base Salary") equal to $900,000 for each year of the Employment Term, payable
in cash on a periodic basis in accordance with Company's normal payroll
practices applicable to its executive officers, but not less often than monthly.
Executive's Base Salary will be subject to annual review by the Compensation
Committee of the Board of Directors of Company (the "Committee") and may be
adjusted upwards (but not downwards) in such amounts as the Committee may
determine in its sole discretion. The term "Base Salary" as used in this
Agreement refers to the Base Salary as so increased.

                  (b)      During the Transition Period. During the Transition
Period, in lieu of payment of a Base Salary, Company will pay or cause to be
paid to Executive in cash, in periodic installments not less frequently than
monthly, an amount equal to $500,000 (the "Transition Payment") for each year of
the Transition Period; provided, however, that Company's obligation to

                                        2

<PAGE>

pay such Transition Payment during the Transition Period shall terminate
immediately upon any breach by Executive of his duties under SECTION 3(B) or of
the restrictive covenant provisions of SECTION 12. Notwithstanding such
cessation of payment upon a breach of the restrictive covenant provisions of
SECTION 12, Company shall retain the right to fully enforce the restrictive
covenant provisions. In the event that a Change of Control occurs after the
Transition Period has commenced, the aggregate amount of the unpaid Transition
Payment payable for the period measured from the date of the Change of Control
through the end of the Transition Period will be paid to Executive by Company in
a single sum payment on the date that the Change of Control occurs, but
Executive's obligations under SECTION 3(B) shall remain intact and Company shall
retain the right to fully enforce the restrictive covenant provisions of SECTION
12. In the event that the Transition Period commences on or after a Change of
Control (as defined in SECTION 10(C)) as a result of a termination of employment
under the circumstances described in SECTION 10(C), Executive shall receive the
amounts and benefits set forth in SECTION 10(C) in lieu of the amounts set forth
in this SECTION 4(B), but Executive's obligations under SECTION 3(B) shall
remain intact and Company shall retain the right to fully enforce the
restrictive covenant provisions of SECTION 12.

         5.       Annual Incentive Bonus. With respect to each fiscal year
during the Employment Term, Executive will be entitled to participate in
Company's Incentive Compensation Plan (or any successor thereto) and any other
bonus plan(s) adopted by the Board of Directors or Committee for one or more of
the executive officers of Company and its subsidiaries, other than any such
bonus arrangement specific to another individual executive. Executive will be
eligible to receive a bonus each year in such amount, if any, as determined by
the Committee in accordance with the terms of Company's Incentive Compensation
Plan (or any successor thereto).

         6.       Employee Benefit Programs and Perquisites.
                  -----------------------------------------

                  (a)      General. During the Employment Term and the
Transition Period, Executive will be entitled to participate in such qualified
and nonqualified employee pension plans, group health, long-term disability and
group life insurance plans, and any other welfare and fringe benefit plans,
arrangements, programs and perquisites generally maintained or provided by
Company from time to time to or for the benefit of its executive employees or
employees generally ("Benefit Plans"), at a level commensurate with Executive's
position. The preceding sentence does not, however, entitle Executive to
participate in any plans specific to other individual executives or employees.
Executive's participation in any Benefit Plans will be subject to the terms of
the applicable plan documents and Company's generally applied policies and
procedures. Company in its discretion may from time to time adopt, modify,
interpret, or discontinue such plans, policies and procedures in a manner
generally applicable to Company's executives or employees. During the Employment
Term and the Transition Period, Executive will be entitled to the payment by
Company of the cost of life, health and dental benefits and long-term disability
insurance for himself and, as applicable, his dependents, at the same percentage
level of Company contribution as in effect on the Effective Date and in
accordance with Company policies and procedures. During the Employment Term,
Executive will be entitled to at least six weeks of paid vacation for each
calendar year (pro-rated for partial calendar years), subject to Company's
policies and procedures on use and retention of such vacation in effect from
time to time, but with no payment for unused vacation. During the Employment
Term and the Transition Period, Executive will be entitled to lease and use, for
business or personal purposes, an automobile of his choice at Company's expense.

                  (b)      Stock Options. In connection with this Agreement,
Company has granted Executive an option (the "Option") to purchase 90,000 shares
of Common Stock of Company under and subject to the terms of Company's 1997
Stock Option Plan. The Option vests in three equal installments, beginning on
the Effective Date and continuing on the first and second anniversaries of

                                        3

<PAGE>

the Effective Date, provided that Executive is employed with Company on each
such date, so that the Option will be fully vested on the second anniversary of
the Effective Date. The Option and all outstanding past and future stock options
and other equity-based awards granted to Executive will vest in full immediately
before the occurrence of a Change of Control (as defined in SECTION 10(C)) or
upon the termination of Executive's employment (i) by Company without Cause (as
defined in SECTION 9(B)), (ii) by Executive with Good Reason (as defined in
SECTION 9(E)), or (iii) due to Executive's death or Disability (as defined in
SECTION 9(D)). Vesting of the Option and other stock options and equity-based
awards will continue through the Transition Period.

                  (c)      Reimbursement of Business Expenses. Executive is
authorized to incur reasonable expenses in carrying out his duties and
responsibilities under this Agreement, and Company will promptly pay or
reimburse Executive for all such expenses that are so incurred upon presentation
of appropriate vouchers or receipts, subject to Company's expense reimbursement
policies and procedures in effect from time to time with respect to executives
of Company.

         7.       No Other Employment. Executive represents to Company that he
is not subject to any agreement, commitment or policy of any third party that
would prevent him from entering into or performing the duties of his employment
under this Agreement. Executive will not enter into any agreement or commitment
or agree to any policy that would prevent or hinder the performance of his
duties or obligations under this Agreement.

         8.       No Payments to Governmental Officials. Executive will not
knowingly pay or authorize payment of any remuneration to or on behalf of any
governmental official which would constitute a violation of applicable law.
Company will neither request nor require Executive to offer to make or make a
payment of any remuneration to or on behalf of any governmental official other
than those required or expressly permitted by applicable law.

         9.       Termination of Employment.
                  -------------------------

                  (a)      Resignation. Executive may voluntarily resign his
employment under this Agreement without Good Reason (as defined in SECTION 9(E))
at any time upon at least 60 days' prior written notice to Company. Company may
waive such notice or authorize a shorter notice period. Upon the effectiveness
of any such resignation, Executive's obligations under the Transition Period
shall commence pursuant to SECTION 3(B).

                  (b)      Termination by Company for Cause. Company may
terminate Executive's employment for "Cause" if, and only if, Executive:

                           (i)      commits a material breach of his obligations
or agreements under this Agreement;

                           (ii)     commits an act of gross negligence or
otherwise acts with willful disregard for the best interests of Company and its
affiliates;

                           (iii)    fails or refuses to perform any duties
delegated to him that are consistent with the duties of similarly-situated
executives or are otherwise required under this Agreement;

                           (iv)     is convicted of or pleads guilty or no
contest to a felony, or violates any federal or state securities or tax laws, or
with respect to his employment, commits either a material dishonest act or
common law fraud;

                                        4

<PAGE>

                           (v)      seizes a corporate opportunity for himself
instead of offering such opportunity to Company or its affiliates;

                           (vi)     is absent (and not traveling on business)
for a reason other than illness, vacation, or approved leave for more than 30
consecutive days; or

                           (vii)    commits a material violation of a material
Company policy.

Executive's termination for Cause will be effective immediately upon Company's
mailing or transmitting written notice of such termination. Before terminating
Executive for Cause under clause (i), (ii) or (iii) above, Company will specify
in writing to Executive the nature of the act, omission, refusal, or failure
that it deems to constitute Cause and if the action is curable, give Executive
at least 30 days from receipt of such notice to correct the situation (and thus
avoid termination for Cause). Executive agrees that Company's Board of Directors
will have the discretion, exercising good faith judgment, to determine whether
Executive's correction is sufficient.

                  (c)      Termination by Company Without Cause. Subject to the
provisions hereof, Company may terminate Executive's employment under this
Agreement before the end of the Employment Term, without Cause, upon 60 days'
prior written notice. Upon the effectiveness of any such termination without
Cause, Executive's obligations during the Transition Period shall commence
pursuant to SECTION 3(B). If, in accordance with SECTION 2, Company furnishes
Executive with a notice of non-renewal of the Employment Term, such action and
the subsequent expiration of the Employment Term will not be considered a
termination of Executive's employment without Cause.

                  (d)      Termination Due to Disability. If Executive becomes
"Disabled" (as defined below), Company may terminate Executive's employment. For
purposes of this Agreement, Executive will be deemed to be "Disabled" or to have
a "Disability" if Executive is determined to be totally and permanently disabled
under Company's long-term disability insurance plan in which he participates or
if Executive is unable to substantially perform the customary duties and
responsibilities of Executive's employment for a period of at least 120 days
within an 180-day period by reason of a physical or mental incapacity.

                  (e)      Termination by Executive for Good Reason. Executive
may resign for "Good Reason" if, without Executive's prior written consent,
Company:

                           (i)      assigns Executive duties materially and
adversely inconsistent with Executive's positions as described in this
Agreement;

                           (ii)     materially reduces Executive's target annual
bonus level for any year below the target for the preceding year, other than as
a result of a decline in Company's results of operations or other adverse event;

                           (iii)    materially breaches a material provision of
this Agreement; or

                           (iv)     changes Executive's principal place of
employment to a place more than 50 miles from Executive's principal place of
employment on the Effective Date.

         Before resigning for Good Reason, Executive must specify in writing to
Company the nature of the act or omission that Executive deems to constitute
Good Reason and, if the situation can be cured, give Company at least 30 days
after receipt of such notice to correct the situation (and thus prevent
Executive's resignation for Good Reason). Upon the effectiveness of any such

                                        5

<PAGE>

termination for Good Reason, Executive's obligations during the Transition
Period shall commence pursuant to SECTION 3(B).

                  (f)      Death. If Executive dies during the Contract Term,
the Contract Term will end as of the date of Executive's death.

         10.      Payments on Termination of Employment.
                  -------------------------------------

                  (a)      Termination by Company for Cause or Executive's
Resignation Without Good Reason. If, during the Employment Term, Company
terminates Executive's employment for Cause or Executive resigns without Good
Reason, Company will promptly pay to Executive: (i) the unpaid amount, if any,
of Executive's Base Salary through the date of termination, (ii) the unpaid
amount, if any, of Executive's previously earned and unpaid incentive bonus,
(iii) the amount of any substantiated but previously unreimbursed business
expenses incurred through the date of termination, and (iv) any additional
vested benefits, if any, to which Executive is entitled under the terms of any
Company employee pension or welfare benefit plan in which Executive was a
participant (the amounts specified in clauses (i) through (iv), collectively,
"Accrued Compensation"). In addition, if Executive resigns without Good Reason,
Company will pay to Executive the Transition Payment provided for under, and
subject to the terms of, SECTION 4(B). Executive agrees that if he breaches the
restrictive covenants set forth in SECTION 12, Company may cease paying
Executive amounts otherwise payable under this SECTION 10(A) and will retain its
rights to enforce the restrictive covenants and to seek any other remedies
available at law.

                  (b)      Termination by Company Without Cause or by Executive
for Good Reason. If, during the Employment Term, Company terminates Executive's
employment without Cause or Executive resigns for Good Reason, Executive will be
entitled to receive the following payments and benefits:

                           (i)      any Accrued Compensation;

                           (ii)     continued payment of Base Salary (without
giving effect to any reduction in Base Salary that constitutes Good Reason) for
the remainder of the Employment Term;

                           (iii)    payment of the Transition Payment provided
for under, and subject to the terms of, SECTION 4(B);

                           (iv)     a pro rated incentive bonus for the year of
termination, determined by multiplying (A) the target annual incentive bonus for
the year or, if no target annual incentive bonus was established for the year or
the target annual incentive bonus for the year was materially reduced so as to
constitute Good Reason, the highest incentive bonus earned within the preceding
three years, by (B) a fraction, the numerator of which is the number of days
from the beginning of the calendar year through the date of termination, and the
denominator of which is 365, which amount shall be paid in a lump sum within ten
days of the date of termination;

                           (v)      an additional incentive bonus equal to
one-half of the annual incentive bonus paid to Executive on account of the
immediately preceding fiscal year, payable at the time Company would otherwise
have paid to Executive the annual incentive bonus for the year of his
termination;

                           (vi)     full and immediate vesting of the Option and
any outstanding stock options or other equity-based awards and, in the case of
the Option and such other stock options or equity-based awards, the continued
right to exercise the options (or other awards) for at least 12

                                        6

<PAGE>

months following the date of termination, but in no event beyond the expiration
of the stated term of such option (or other award); and

                           (vii)    continuing group health and group life
insurance coverage for Executive and, where applicable, Executive's spouse and
eligible dependents, at the same benefit levels in effect from time to time with
respect to active senior executives of Company ("Benefit Continuation
Coverage"), for the lifetimes of Executive and his spouse and, in the case of
Executive's eligible dependents, until such dependent's attainment of the
maximum age up to which the Company's plan, as then in effect, covers dependents
of Company employees; provided that the cost of such coverage during the
Transition Period shall be split between Company and Executive in the same ratio
as the cost-sharing in effect under the Company's policies and procedures for
Company executives at that time, and the cost of such coverage after the
expiration of the Transition Period shall be borne 100% by Executive. If and to
the extent such Benefit Continuation Coverage is not permitted by the applicable
plan or by applicable law, Executive will instead be entitled to cash payments
sufficient to reimburse Executive and/or Executive's spouse and eligible
dependents, on an after-tax basis, for a proportionate amount of the reasonable
cost of comparable individual or other replacement coverage through the end of
the Transition Period.

Executive agrees that if he breaches the restrictive covenants set forth in
SECTION 12, Company may cease paying Executive amounts otherwise payable under
this SECTION 10(B) and will retain its rights to enforce the restrictive
covenants and to seek any other remedies available at law.

                  (c)      On or After a Change of Control -- Termination by
Company Without Cause or by Executive for Good Reason. Executive will be
entitled to receive the payments and benefits set forth in this SECTION 10(C),
in lieu of the payments and benefits set forth in SECTION 10(B), if Executive's
employment is terminated during the Employment Term (1) by Executive for any or
no reason coincident with or during the 12-month period after a Change of
Control occurs, (2) by Executive for Good Reason coincident with or during the
24-month period after a Change of Control occurs, or (3) by Company without
Cause coincident with or during the 24-month period after a Change of Control
occurs:

                           (i)      any Accrued Compensation;

                           (ii)     a pro rated incentive bonus for the year of
termination, determined by multiplying (A) the target annual incentive bonus for
the year or, if no target annual incentive bonus was established for the year or
the target annual incentive bonus for the year was materially reduced so as to
constitute Good Reason, the highest incentive bonus earned within the preceding
three years, by (B) a fraction, the numerator of which is the number of days
from the beginning of the calendar year through the date of termination, and the
denominator of which is 365, which amount shall be paid in a lump sum within ten
days of the date of termination;

                           (iii)    a severance payment equal to 3 times the sum
of (A) Executive's annualized Base Salary as in effect immediately before
Executive's termination of employment (without giving effect to any reduction in
Base Salary that gave rise to Good Reason), plus (B) the greater of the target
annual incentive bonus for the year in which termination occurs or the highest
annual incentive bonus earned within the immediately prior 3 years, plus (C) the
aggregate amount of any other bonuses, including special bonuses, earned by
Executive within the immediately prior year, which severance payment shall be
paid in a lump sum within ten days of the date of termination;

                           (iv)     full and immediate vesting of the Option and
any outstanding stock options or other equity-based awards and, in the case of
the Option and such other stock options or

                                        7

<PAGE>

equity-based awards, the continued right to exercise the options (or other
awards) for at least 12 months following the date of termination, but in no
event beyond the expiration of the stated term of such option (or other award);
and

                           (v)      Benefit Continuation Coverage for the
lifetimes of Executive and his spouse and, in the case of Executive's eligible
dependents, until such dependent's attainment of the maximum age up to which the
Company's plan, as then in effect, covers dependents of Company employees;
provided that the cost of such coverage during the Transition Period shall be
split between Company and Executive in the same ratio as the cost-sharing in
effect under the Company's policies and procedures for Company executives at
that time, and the cost of such coverage after the expiration of the Transition
Period shall be borne 100% by Executive. If and to the extent such Benefit
Continuation Coverage is not permitted by the applicable plan or by applicable
law, Executive will instead be entitled to cash payments sufficient to reimburse
Executive and/or Executive's spouse and eligible dependents, on an after-tax
basis, for a proportionate amount of the reasonable cost of comparable
individual or other replacement coverage through the end of the Transition
Period.

Executive agrees that if he breaches the restrictive covenants set forth in
SECTION 12, Company may cease paying Executive amounts otherwise payable under
this SECTION 10(C) and will retain its rights to enforce the restrictive
covenants and to seek any other remedies available at law.

For purposes of this SECTION 10(C), "Change of Control" means: (i) the
acquisition, in one or more transactions, by any Person of the beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Securities
Exchange Act of 1934, as amended) of 50% or more of (A) all shares of capital
stock of the Company to be outstanding immediately following such acquisition,
or (B) the combined voting power of all shares of capital stock of the Company
to be outstanding immediately following such acquisition that are entitled to
vote generally in the election of directors (the shares described in clauses (A)
and (B), collectively "Company Voting Stock"); (ii) the closing of a sale or
other conveyance of all or substantially all of the assets of Company; or (iii)
the effective time of any merger, share exchange, consolidation, or other
business combination involving Company if immediately after such transaction,
persons who hold a majority of the outstanding voting securities entitled to
vote generally in the election of directors of the surviving entity (or the
entity owning 100% of such surviving entity) are not persons who, immediately
prior to such transaction, held Company Voting Stock. For purposes of this
SECTION 10(C), a "Person" means any individual, entity or group within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended, other than an entity controlled by Company.

                  (d)      Termination Due to Death or Disability. In the event
of the termination of Executive's employment due to death or Disability during
the Employment Term or Transition Period, Executive (or Executive's estate or
other beneficiary) will be entitled to receive the following payments and
benefits:

                           (i)      any Accrued Compensation;

                           (ii)     only if such death or Disability occurs
during the Employment Term, a pro rated incentive bonus for the year of
termination, determined by multiplying (A) the target annual incentive bonus for
the year, or if no target annual incentive bonus was established for the year,
the highest incentive bonus earned within the preceding three years, by (B) a
fraction, the numerator of which is the number of days from the beginning of the
calendar year through the date of termination,

                                        8

<PAGE>

and the denominator of which is 365, which amount shall be paid in a lump sum
within ten days of the date of termination;

                           (iii)    full and immediate vesting of the Option and
any outstanding stock options or other equity-based awards and, in the case of
the Option and such other stock options or equity-based awards, the continued
right to exercise the options (or other awards) for at least 12 months following
the date of termination, but in no event beyond the expiration of the stated
term of such option (or other award); and

                           (iv)     Benefit Continuation Coverage, where
applicable, for Executive and/or Executive's spouse for their lifetimes and, in
the case of Executive's eligible dependents, until such dependent's attainment
of the maximum age up to which the Company's plan, as then in effect, covers
dependents of Company employees; provided that the cost of such coverage during
the then remaining balance of the Contract Term shall be split between Company
and Executive, or as applicable his spouse and/or dependents, in the same ratio
as the cost-sharing in effect under the Company's policies and procedures for
Company executives at that time, and the cost of such coverage after the
expiration of the Contract Term shall be borne 100% by Executive, or as
applicable his spouse and/or dependents. If and to the extent such Benefit
Continuation Coverage is not permitted by the applicable plan or by applicable
law, Executive, or as applicable his spouse and/or dependents, will instead be
entitled to cash payments sufficient to reimburse Executive and/or Executive's
spouse and eligible dependents, on an after-tax basis, for a proportionate
amount of the reasonable cost of comparable individual or other replacement
coverage through the end of the Contract Term.

                  (e)      Termination Due to Expiration of the Employment Term.
In the event of the termination of Executive's employment due to expiration of
the Employment Term, whether or not as a result of a notice of non-renewal by
either party, Executive will be entitled to receive the following payments and
benefits:

                           (i)      any Accrued Compensation;

                           (ii)     payment of the Transition Payment provided
for under, and subject to the terms of, SECTION 4(B);

                           (iii)    a pro rated incentive bonus for the year of
termination, determined by multiplying (A) the target annual incentive bonus for
the year, or if no target annual incentive bonus was established for the year,
the highest incentive bonus earned within the preceding three years, by (B) a
fraction, the numerator of which is the number of days from the beginning of the
calendar year through the date of termination, and the denominator of which is
365, which amount shall be paid in a lump sum at the same time as such bonus
would otherwise have been paid for such year; and

                           (iv)     Benefit Continuation Coverage for Executive
and/or Executive's spouse for their lifetimes and, in the case of Executive's
eligible dependents, until such dependent's attainment of the maximum age up to
which the Company's plan, as then in effect, covers dependents of Company
employees; provided that the cost of such coverage during the Transition Period
shall be split between Company and Executive in the same ratio as the
cost-sharing in effect under the Company's policies and procedures for Company
executives at that time, and the cost of such coverage after the expiration of
the Transition Period shall be borne 100% by Executive. If and to the extent
such Benefit Continuation Coverage is not permitted by the applicable plan or by
applicable law, Executive will instead be entitled to cash payments sufficient
to reimburse Executive and/or Executive's spouse and eligible dependents, on an
after-tax basis, for a proportionate amount

                                        9

<PAGE>

of the reasonable cost of comparable individual or other replacement coverage
through the end of the Transition Period.

Executive agrees that if he breaches the restrictive covenants set forth in
SECTION 12, Company may cease paying Executive amounts otherwise payable under
this SECTION 10(E) and will retain its rights to enforce the restrictive
covenants and to seek any other remedies available at law.

                  (f)      Termination Due to Expiration of the Transition
Period. Upon the expiration of the Transition Period, Executive will be entitled
to receive:

                           (i)      the amount of any substantiated but
previously unreimbursed business expenses incurred;

                           (ii)     any additional vested benefits to which
Executive is entitled under the terms of any Company employee pension or welfare
benefit plan in which Executive was a participant; and

                           (iii)    Benefit Continuation Coverage for Executive
and/or Executive's spouse for their lifetimes and, in the case of Executive's
eligible dependents, until such dependent's attainment of the maximum age up to
which the Company's plan, as then in effect, covers dependents of Company
employees; provided that the cost of such coverage shall be borne 100% by
Executive.

         11.      Certain Additional Payments.
                  ---------------------------

                  (a)      Notwithstanding anything in this Agreement to the
contrary, in the event it shall be determined that any payment or distribution
by Company or its affiliate to or for the benefit of Executive, whether paid,
payable, distributed or distributable pursuant to this Agreement or otherwise (a
"Payment") would be subject to the excise tax imposed by Section 4999 of the
Internal Revenue Code of 1986 (the "Code") (or any successor provision) or any
interest or penalties with respect to such excise tax (such excise tax, together
with any such interest and penalties, are collectively referred to in this
Agreement as the "Excise Tax"), then Executive shall be entitled to receive an
additional payment (a "Gross-Up Payment") in an amount such that after the
payment by Executive of all taxes (including any interest or penalties imposed
with respect to such taxes), including any Excise Tax, imposed upon the Gross-Up
Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise
Tax imposed upon the Payment.

                  (b)      Subject to the provisions of SECTION 11(C), all
determinations required to be made under this SECTION 11, including whether and
when a Gross-Up Payment is required and the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at such determination, shall be made
by Company's then independent auditors (the "Accounting Firm"), which shall
provide detailed supporting calculations to both Company and Executive within 15
business days of receipt of written notice from Executive that there has been a
Payment giving rise to a Gross-Up Payment, or such earlier time as is requested
by Company. Any Gross-Up Payment, as determined pursuant to this SECTION 11,
shall be paid by Company to Executive within five days of receipt of the
Accounting Firm's determination. All fees and expenses of the Accounting Firm
shall be borne solely by Company. Any determination by the Accounting Firm shall
be binding upon Company and Executive. As a result of the possible uncertainty
in application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that Gross-Up
Payments will not have been made by Company that should have been made
("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that

                                       10

<PAGE>

Company exhausts its remedies pursuant to SECTION 11(C) and Executive thereafter
is required to make a payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred, and any such
Underpayment shall be promptly paid by Company to or for the benefit of
Executive.

                  (c)      Executive shall notify Company in writing of any
claim by the Internal Revenue Service that, if successful, would require the
payment by Company of the Gross-Up Payment. Such notification shall be given as
soon as practicable but no later than ten business days after Executive is
informed in writing of such claim and shall apprise Company of the nature of
such claim and the date on which such claim is to be paid. Executive shall not
pay such claim prior to the expiration of the 30-day period following the date
on which Executive gives such notice to Company (or such shorter period ending
on the date that any payment of taxes with respect to such claim is due). If
Company notifies Executive in writing prior to the expiration of such period
that it desires to contest such claim, Executive shall:

                           (i)      give Company any information reasonably
requested by Company relating to such claim,

                           (ii)     take such action in connection with
contesting such claim as Company shall reasonably request in writing from time
to time, including, without limitation, accepting legal representation with
respect to such claim by an attorney selected by Company and reasonably
acceptable to Executive,

                           (iii)    cooperate with Company in good faith in
order effectively to contest such claim, and

                           (iv)     permit Company to participate in any
proceedings relating to such claim; provided, however, that Company shall bear
and pay directly all costs and expenses (including additional interest and
penalties) incurred in connection with such contest and shall indemnify and hold
Executive harmless, on an after-tax basis, for any Excise Tax or income tax
(including interest and penalties with respect thereto) imposed as a result of
such representation and payment of costs and expenses. Without limitation on the
foregoing provisions of this Section, Company shall control all proceedings
taken in connection with such contest and, at its sole option, may pursue or
forgo any and all administrative appeals, proceedings, hearings and conferences
with the taxing authority in respect of such claim and may, at its sole option,
either direct Executive to pay the tax claimed and sue for a refund or contest
the claim in any permissible manner, and Executive agrees to prosecute such
contest to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as Company shall
determine; provided, however, that if Company directs Executive to pay such
claim and sue for a refund, Company shall advance the amount of such payment to
Executive, on an interest-free basis and shall indemnify and hold Executive
harmless, on an after-tax basis, from any Excise Tax or income tax (including
interest or penalties with respect thereto) imposed with respect to such advance
or with respect to any imputed income with respect to such advance; and further
provided that any extension of the statute of limitations relating to payment of
taxes for the taxable year of Executive with respect to which such contested
amount is claimed to be due is limited solely to such contested amount.
Furthermore, Company's control of the contest shall be limited to issues with
respect to which a Gross-Up Payment would be payable hereunder, and Executive
shall be entitled in his sole discretion to settle or contest, as the case may
be, any other issue raised by the Internal Revenue Service or any other taxing
authority.

                                       11

<PAGE>

                  (d)      If, after receipt by Executive of an amount advanced
by Company pursuant to SECTION 11(C), Executive becomes entitled to receive any
refund with respect to such claim, Executive shall (subject to Company's
complying with the requirements of such Section) promptly pay to Company the
amount of such refund (together with any interest paid or credited thereon after
taxes applicable thereto). If, after receipt by Executive of an amount advanced
by Company pursuant to SECTION 11(C), a determination is made that Executive
shall not be entitled to any refund with respect to such claim and Company does
not notify Executive in writing of its intent to contest such denial of refund
prior to the expiration of 30 days after such determination, then such advance
shall be forgiven and shall not be required to be repaid, and the amount of such
advance shall offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid.

         12.      Restrictive Covenants; Company Inventions.
                  -----------------------------------------

                  (a)      Restrictive Covenants.
                           ---------------------

                           (i)      Non-Competition. In consideration for
Executive's employment and continued employment by the Company, the salary and
benefits under this Agreement, including the promise of post-termination
compensation under certain circumstances, and other good and valuable
consideration provided herein, Executive acknowledges and agrees that, while the
Company employs Executive and through the end of the Restricted Period (as
defined below), Executive will not, directly or indirectly, singly or jointly,
on Executive's own behalf or on behalf of any third party, establish, create, be
employed by, serve as an officer, director, advisor or consultant to, lend money
to, invest in, provide advice to, or engage or otherwise participate in any way
in any Competitive Business (as defined below) within any Market Areas (as
defined below). Executive may own up to 5% of any class of stock that is
registered under the Securities Exchange Act of 1934 and listed or traded on a
national securities exchange or the Nasdaq National Market without violating
this covenant. The parties further agree that the foregoing shall not prevent
Executive from working for or performing services on behalf of any individual or
entity that is engaged in a Competitive Business if such individual or entity is
also engaged in other lines of business and if Executive's employment or
services are restricted to such other lines of business, and Executive will not
be providing support, advice, instruction, direction or other guidance to lines
of business that constitute the Competitive Business.

                                    (1)      For purposes of this Agreement, the
term "Competitive Business" shall mean any consulting practice in the areas of
financial restructuring, litigation consulting and engineering and scientific
investigation or any other line of business that competes with the Company or
its successors, assigns, predecessors, affiliates or subsidiaries (collectively,
the "Company Group"), but only to the extent that the Company Group either
engaged in such areas or lines of business during the Contract Term or Executive
had knowledge before termination of his employment with the Company Group that
the Company Group intended to or contemplated entering such areas or lines of
business.

                                    (2)      For purposes of this Agreement, the
term "Market Area" shall be defined as each location in which any member of the
Company Group has an office, manufactures products, sells products or services,
or provides services to customers or clients during the Restricted Period (as
defined below). If the location where one or more of the relevant companies has
or is engaged in business is within a "metropolitan area" as defined by the
United States Office of Management and Budget from time to time, the term
"Market Area" means that metropolitan area. In all other cases, the term "Market
Area" shall encompass an area within a thirty-five (35) mile radius of the
location where any member of the Company Group has or had an office,
manufactures

                                       12

<PAGE>

or manufactured products, sells or sold products or services, or provides or
provided services to customers or clients.

                                    (3)      For purposes of this Agreement, the
term "Restricted Period" shall mean the time period running from the beginning
of Executive's employment with the Company Group through the third anniversary
of the date that Executive's employment (including the Transition Period, if
applicable) with the Company Group terminates for any reason.

                           (ii)     Non-Interference with Clients or Vendors.
During the Restricted Period, Executive agrees that he will not intentionally:

                                    (1)      seek to reduce the amount of
business performed or engaged in by the Company or any member of the Company
Group with any person or entity who is or has been, within the Restricted
Period, a customer, client, supplier or vendor of any member of the Company
Group;

                                    (2)      solicit any person or entity who is
or has been, within the Restricted Period, a customer, client, supplier or
vendor of the Company or any member of the Company Group, to terminate their
relationship with any member of the Company Group.

                           (iii)    Non-Solicitation of Company Group Employees
or Contractors. During the Restricted Period, Executive agrees that he will not,
directly or indirectly, whether for himself or for any other individual or
entity (other than any entity belonging to the Company Group), hire, solicit, or
endeavor to hire away or solicit away from the Company Group, or otherwise
induce to terminate their relationship with the Company Group, any person whom
the Company Group employs or otherwise engages to perform services, or has
employed or engaged for services within the 12-month period immediately prior to
the date Executive's termination of employment became effective, including, but
not limited to, any independent consultant, engineer, sales representative,
contractor, subcontractor, supplier or vendor. Executive further agrees that he
will not otherwise interfere with or disrupt the Company Group's relationship
with any of its employees, contractors, subcontractors, suppliers or vendors.

                  (b)      Confidentiality.
                           ---------------

                           (i)      Confidentiality Obligation. In connection
with Executive's employment with the Company Group, Executive has been and will
continue to be given access to confidential and proprietary information and
trade secrets concerning the business, plans, operations and prospects of the
Company Group and other information not generally known outside of the Company
Group that may be of value to the Company Group. Furthermore, in connection with
Executive's employment with the Company Group, Executive has been and will in
the future be given confidential and proprietary information and trade secrets
that have been given to the Company or the Company Group in confidence by third
parties (the confidential and proprietary information and trade secrets of the
Company Group and third parties, as further defined below, shall be referred to
herein as "Confidential Information"). Executive understands that employment by
the Company creates a relationship of confidence and trust with respect to any
such Confidential Information that has been or may be disclosed to Executive and
that the Company has a protectable business interest in its Confidential
Information. Executive acknowledges and agrees that using, disclosing or
publishing any Confidential Information in an unauthorized or improper manner
could cause the Company or Company Group substantial loss and damages that could
not be readily calculated and for which no remedy at law would be adequate.
Accordingly, Executive acknowledges and agrees that Executive shall not at any
time, except in performing Executive's employment duties to the

                                       13

<PAGE>

Company Group under this Agreement (except with the prior written consent of the
Company's Board of Directors), directly or indirectly, use, disclose or publish
any Confidential Information that Executive may learn or become aware of, or
have learned or become aware of because of Executive's prior or continuing
employment, ownership or association with the Company Group or any of their
predecessors, or use any such information in a manner detrimental to the
interests of the Company or the Company Group. Executive understands and agrees
that the rights and obligations set forth in this Section will continue
indefinitely and will survive termination of this Agreement and Executive's
employment with the Company Group.

                           (ii)     Confidential Information. "Confidential
Information" includes, without limitation, information not previously disclosed
to the public or to the trade by the Company or the Company Group with respect
to the Company's or any member of the Company Group's present or future
business, operations, services, products, research, inventions, discoveries,
drawings, designs, plans, processes, models, technical information, facilities,
methods, trade secrets, copyrights, software, source code, systems, patents,
procedures, manuals, specifications, any other intellectual property,
confidential reports, price lists, pricing formulas, customer lists, financial
information (including the revenues, costs, or profits associated with any of
the Company's or the Company Group's products or services), business plans,
lease structure, projections, prospects, or opportunities or strategies,
acquisitions or mergers, advertising or promotions, personnel matters, legal
matters, any other confidential and proprietary information and any other
information not generally known outside the Company or the Company Group that
may be of value to the Company or the Company Group, but excludes any
information already properly in the public domain. "Confidential Information"
also includes confidential and proprietary information and trade secrets that
third parties entrust to the Company or the Company Group in confidence.

         Confidential Information shall not include any information that (i) has
been properly published in a form generally available to the public prior to the
date Executive proposes to disclose or use such information or otherwise is or
becomes public knowledge through legal means without fault by Executive, (ii) is
already public knowledge prior to the signing of this Agreement, (iii) was
available to Executive on a non-confidential basis prior to its disclosure by
the Company, (iv) was disclosed by Executive in the proper performance of
Executive's duties hereunder, or (v) must be disclosed pursuant to applicable
law or court order. Information shall not be deemed to have been published
merely because individual portions of the information have been separately
published, but only if all material features comprising such information have
been published in combination.

                           (iii)    Preserving Third Party's Confidences.
Executive agrees not to use in working for the Company Group and not to disclose
to the Company Group any Confidential Information Executive does not have the
right to use or disclose and that the Company Group is not free to use without
liability of any kind. Executive agrees to promptly inform the Company in
writing of any patents, copyrights, trademarks or other proprietary rights known
to Executive that the Company or the Company Group might violate because of
information Executive provides.

                  (c)      Exclusive Property. Executive confirms that all
Confidential Information is and must remain the exclusive property of the
relevant member of the Company Group. All business records, business papers and
business documents Executive keeps or makes in the course of Executive's
employment by the Company must be and remain the property of the relevant member
of the Company Group. Upon the termination of this Agreement with the Company or
upon the Company's or the Company Group's request at any time, Executive shall
promptly deliver to the Company or relevant member of the Company Group any
Confidential Information or other materials (written or otherwise) not available
to the public or made available to the public in a manner Executive knows or
should reasonably recognize the Company or the Company Group did

                                       14

<PAGE>

not authorize, and any copies, excerpts, summaries, compilations, records and
documents Executive made or that came into Executive's possession during
Executive's employment. Executive agrees that Executive will not, without the
Company's consent, retain copies, excerpts, summaries or compilations of the
foregoing information and materials. Executive understands and agrees that the
rights and obligations set forth in this Section will continue indefinitely and
will survive termination of this Agreement and Executive's employment with the
Company Group.

                  (d)      Intellectual Property. Executive agrees that all
records, documents, papers, inventions, notebooks, drawings, designs, technical
information, source or object code, processes, methods, ideas, discoveries,
improvements or other copyrightable or otherwise protectable works, whether
patentable or not, in any media, Executive conceives, creates, invents or
discovers, that relates to or results from any work Executive performs or
performed for the Company or any member of the Company Group or that arises from
the use of the facilities, materials, personnel or Confidential Information of
the Company or any member of the Company Group in the course of Executive's
employment (whether or not during working hours), whether conceived, created,
discovered, or invented individually or jointly with others ("Company
Inventions"), will, together with all worldwide patent, copyright, trademark,
trade secret, mask works or other intellectual property rights in such works,
including reissues thereof, as well as the right to prosecute or sue for
infringements or other violations of these intellectual property rights
(collectively "Intellectual Property Rights"), be and remain absolutely the
property of the Company and/or the relevant member of the Company Group.
Executive irrevocably and unconditionally waives all rights that vest in
Executive (whether before, on, or after the date of this Agreement) in
connection with Executive's authorship of any copyrightable works in the course
of Executive's employment with the Company and/or the Company Group, wherever in
the world enforceable. Executive recognizes any such works are "works for hire"
of which the Company is the author. If, for any reason, any such Company
Inventions shall not legally be a "work-for-hire" or there are rights which do
not accrue to the Company under the preceding provisions, then Executive hereby
irrevocably assigns to the Company and agrees to quitclaim any and all of
Executive's right, title and interest thereto, including, without limitation,
all Intellectual Property Rights or other rights of whatsoever nature therein,
whether now or hereafter known, existing, contemplated, recognized or developed,
and the Company shall have the right to use the same in perpetuity throughout
the universe in any manner the Company determines, all without any further
payment to Executive. Without limitation, Executive waives the right to be
identified as the author of any such works and the right not to have any such
works subjected to derogatory treatment, and irrevocably transfers and assigns
to the Company any and all moral rights that Executive may have in any Company
Invention and authorizes the Company to make any desired changes to any part of
any Company Invention and combine it with other materials in any manner desired.

         Executive will promptly disclose, grant and assign ownership to the
Company and/or the relevant member of the Company Group for its sole use and
benefit any and all Company Inventions that Executive develops, acquires,
conceives or reduces to practice while the Company and/or the Company Group
employs Executive and will take all steps necessary to assist the Company in
obtaining and/or protecting its ownership rights therein. Executive will
promptly disclose and hereby grants and assigns ownership to the Company of all
Company Inventions, Intellectual Property Rights and any foreign equivalents
thereof that may at any time be filed or granted for or upon any such Company
Invention.

                  (e)      Maximum Limits. If any provision of this SECTION 12
is ever deemed to exceed the time, geographic area or activity limitations the
law permits, Executive and the Company agree to reduce such limitations to the
maximum permissible limitation, and Executive and the Company authorize a court
or arbitrator having jurisdiction to reform each such provision to the

                                       15

<PAGE>

maximum time, geographic area or activity limitations the law permits, provided,
however, that such reductions shall apply only with respect to the operation of
such provision in the particular jurisdiction in which such adjudication is
made.

                  (f)      Injunctive Relief. Without limiting the remedies
available to the Company and/or the Company Group, Executive acknowledges that a
breach of any of the covenants regarding non-competition, non-interference,
non-solicitation, confidentiality or intellectual property rights contained in
this Agreement may result in material irreparable injury to the Company Group
for which there is no adequate remedy at law and that it will not be possible to
accurately measure damages for such injuries. Executive agrees that, if there is
a breach or threatened breach of this Agreement, the Company and/or the Company
Group will be entitled to obtain a temporary restraining order and/or a
preliminary or permanent injunction restraining Executive from engaging in
activities prohibited by any provision of SECTION 12 of this Agreement, or such
other relief as may be required to specifically enforce any of the covenants
contained in SECTION 12 of this Agreement. Executive agrees that all remedies
expressly provided for in this Agreement are cumulative of any and all other
remedies now existing at law or in equity. The Company or any Company Group
member will, in addition to the remedies provided in this Agreement, be entitled
to avail itself of all such other remedies as may now or hereafter exist at law
or in equity for compensation and for the specific enforcement of the covenants
contained in this Agreement. Resort to any remedy provided for in this Section
or provided for by law will not prevent the concurrent or subsequent employment
of any other appropriate remedy or remedies, or preclude the Company or the
Company Group's recovery of monetary damages and compensation. Executive also
agrees that the Restricted Period or such longer period during which the
covenants hereunder by their terms survive will extend for any and all periods
for which a court with personal jurisdiction over Executive finds that Executive
violated the covenants contained herein.

         13.      Assignment and Successors. This Agreement is personal to
Executive and, shall not be assignable by Executive, except that Executive's
rights to receive any compensation or benefits under this Agreement may be
transferred or disposed of pursuant to testamentary disposition or intestate
succession. This Agreement shall inure to the benefit of and be enforceable by
the Executive's heirs, beneficiaries and/or legal representatives. This
Agreement shall inure to the benefit of and be binding upon Company and its
successors and assigns. Company shall require any successor to all or
substantially all of the business and/or assets of Company, whether direct or
indirect, by purchase, merger, consolidation, acquisition of stock, or
otherwise, by an agreement in form and substance satisfactory to Executive,
expressly to assume and agree to perform this Agreement in the same manner and
to the same extent as Company would be required to perform if no such succession
had taken place.

         14.      Severability. If the final determination of an arbitrator or a
court of competent jurisdiction declares, after the expiration of the time
within which judicial review (if permitted) of such determination may be
perfected, that any term or provision of this Agreement is invalid or
unenforceable, the remaining terms and provisions will be unimpaired, and the
invalid or unenforceable term or provision will be deemed replaced by a term or
provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision. Any prohibition or
finding of unenforceability as to any provision of this Agreement in any one
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

         15.      Amendment; Waiver. Neither Executive nor Company may modify,
amend, or waive the terms of this Agreement other than by a written instrument
signed by Executive and Company. Either party's waiver of the other party's
compliance with any provision of this Agreement shall not

                                       16

<PAGE>

be deemed a waiver of any other provision of this Agreement or of any subsequent
breach by such party of a provision of this Agreement. No delay on the part of
any party in exercising any right, power or privilege hereunder shall operate as
a waiver thereof.

         16.      Withholding. Company will reduce its compensatory payments to
Executive hereunder for withholding and FICA and Medicare taxes and any other
withholdings and contributions required by law.

         17.      Governing Law. The laws of the State of Maryland (other than
its conflict of laws provisions) govern this Agreement.

         18.      Notices. Notices may be given in writing by personal delivery,
by certified mail, return receipt requested, by telecopy or by overnight
delivery. Executive should send or deliver notices to the office of the
Secretary of Company at 900 Bestgate Road, Annapolis, Maryland 21401, fax
number: (410) 224-2809. Company will send or deliver any notice given to
Executive at Executive's address as reflected on Company's personnel records.
Executive and Company may change their addresses for notice by like notice to
the other. Executive and Company agree that notice is deemed received on the
date it is personally delivered, the date it is received by certified mail, the
date of guaranteed delivery by overnight service, or the date the fax machine
confirms receipt.

         19.      Superseding Effect. This agreement supersedes all prior or
contemporaneous negotiations, commitments, agreements and writings between
Executive and Company or any of its affiliates with respect to the subject
matter. All such other negotiations, commitments, agreements and writings will
have no further force or effect, and the parties to any such other negotiation,
commitment, agreement or writing will have no further rights or obligations
thereunder.

         20.      Arbitration.
                  -----------

                  (a)      Any dispute or controversy arising under or in
connection with this Agreement or Executive's employment relationship with
Company, irrespective of whether this Agreement or Executive's employment
relationship with Company has terminated, will be settled exclusively by binding
arbitration to be held in the metropolitan area in which Executive is then
employed and conducted in accordance with the National Rules for the Resolution
of Employment Disputes of the American Arbitration Association ("AAA"), or the
corresponding rules of such other entity as may be mutually agreed upon by the
parties, as then in effect.

                  (b)      After either party submits a request for arbitration,
AAA or such other entity mutually agreed upon by the parties (either,
hereinafter referred to as the "ADR Entity"), the ADR Entity will be requested
to appoint a single, neutral arbitrator from a panel of former or retired
judges, within ten business days after such request, to preside over the
arbitration and resolve the dispute. The parties agree to raise any objections
to such appointment within ten business days after it is made and to limit those
objections to the arbitrator's actual conflict of interest. The ADR Entity, in
its sole discretion, will determine within ten business days the validity of any
objection to the appointment of the arbitrator based on the arbitrator's actual
conflict of interest. The arbitrator will be directed to render a full decision
on all issues properly before the arbitrator within 60 days after being
appointed to serve as arbitrator, unless the parties otherwise agree in writing
or the arbitrator makes a finding that a party has carried the burden of showing
good cause for a longer period.

                  (c)      The parties will use their best efforts to cooperate
with each other in causing the arbitration to be held in as efficient and
expeditious a manner as practicable, including but not limited to, providing
such documents and making available such of their personnel and agents as the

                                       17

<PAGE>

arbitrator may request. The parties direct the arbitrator to take into account
their stated goal of expedited proceedings in determining whether to authorize
discovery and, if so, the scope of permissible discovery and other hearing and
pre-hearing procedures.

                  (d)      The arbitrator will not have the authority to add to,
detract from or modify any provision of this Agreement or to award punitive
damages to any injured party. Judgment may be entered on the arbitrator's award
in any court having jurisdiction. Company will bear all expenses of any such
arbitration proceeding, except that each party will bear its own counsel fees
unless the arbitrator decides to award counsel fees to one of the parties.

                  (e)      Notwithstanding the foregoing, each party shall be
entitled to seek injunctive or other equitable relief, as contemplated by
SECTION 12(F) above, from any court of competent jurisdiction, without the need
to resort to arbitration.

         21.      Indemnification and Liability Insurance. Company shall
indemnify Executive to the fullest extent permitted by applicable law and
Company's by-laws with regard to Executive's actions (or inactions) on behalf of
Company in his capacity as an officer and/or director, with advancement of legal
fees and other expenses on a current basis to the fullest extent permitted by
law. Company shall cover Executive under professional and other appropriate
liability insurance policies both during and, while any potential liability
exists, after the Contract Term; provided that the amount and extent of such
coverage shall be at least as great and extensive as such coverage on Company's
other senior executives and directors.

IN WITNESS WHEREOF, the undersigned have signed this Agreement on the date first
above written.

                                    FTI CONSULTING, INC.

                                    By:    /s/ Stewart J. Kahn
                                           -------------------------------------
                                    Name:  Stewart J. Kahn
                                    Title: President and Chief Operating Officer

                                    EXECUTIVE

                                    /s/ Jack B. Dunn, IV
                                    --------------------------------------------
                                    Jack B. Dunn, IV

                                       18

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