Document:

Exhibit 10.3

Execution Copy

_________________________________

CHANGE IN CONTROL AGREEMENT

 

BETWEEN

 

STEVEN H. WEXLER

 

AND

 

JOURNAL COMMUNICATIONS, INC.

_________________________________________________________________

CHANGE IN CONTROL AGREEMENT

	
1.  Certain Definitions

	
1

	
2.  Change in Control

	
1

	
3.  Employment Period

	
3

	
4.  Terms of Employment

	
3

	
(a) Position and Duties

	
3

	
(b) Compensation

	
4

	
5.  Termination of Employment

	
5

	
(a) Death or Disability

	
5

	
(b) Cause

	
6

	
(c) Good Reason

	
6

	
6.  Obligations of the Company upon Termination

	
7

	
(a) Termination by Executive for Good Reason; Termination by the Company Other Than for Cause or Disability

	
7

	
(b) Death or Disability

	
9

	
(c) Cause; Other than Good Reason

	
9

	
(d) Expiration of Employment Period

	
9

	
7.  Non-exclusivity of Rights

	
9

	
8.  Full Settlement; No Mitigation

	
10

	
9.  Costs of Enforcement

	
10

	
10.  Limitation of Benefits

	
10

	
11.  Restrictions on Conduct of Executive

	
11

	
12.  Arbitration

	
14

	
13.  Successors

	
15

	
14.  Miscellaneous

	
15

	
(a) Governing Law

	
15

	
(b) Captions

	
15

	
(c) Amendments

	
16

	
(d) Notices

	
16

	
(e) Severability

	
16

	
(f) Withholding

	
16

	
(g) Waivers

	
16

	
(h) Status Before and After Effective Date

	
16

	
15.  Code Section 409A

	
17

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CHANGE IN CONTROL AGREEMENT

AGREEMENT by and between Journal Communications, Inc., a Wisconsin corporation (the “Company”) and Steven H. Wexler (“Executive”), dated as of the 8th day of May, 2014.

The Board of Directors of the Company (the “Board”) has determined that it is in the best interests of the Company and its shareholders to assure that the Company will have the continued dedication of Executive, notwithstanding the possibility, threat or occurrence of a Change in Control (as defined below) of the Company.  The Board believes it is imperative to diminish the inevitable distraction of Executive by virtue of the personal uncertainties and risks created by a pending or threatened Change in Control and to encourage Executive’s full attention and dedication to the Company currently and in the event of any threatened or pending Change in Control, and to provide Executive with compensation and benefits arrangements upon a Change in Control which ensure that the compensation and benefits expectations of Executive will be satisfied and which are competitive with those of other corporations.  Therefore, in order to accomplish these objectives, the Board has caused the Company to enter into this Agreement.

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

		1.	Certain Definitions.

(a)            The “Effective Date” shall mean the first date during the Change in Control Period (as defined in Section l(b)) on which a Change in Control (as defined in Section 2) occurs.  Anything in this Agreement to the contrary notwithstanding, if Executive’s employment with the Company is terminated, and if it is reasonably demonstrated by Executive that such termination of employment (i) was at the request of a third party who has taken steps reasonably calculated to effect a Change in Control or (ii) otherwise arose in connection with or anticipation of a Change in Control, then for all purposes of this Agreement the “Effective Date” shall mean the date immediately prior to the date of such termination of employment.

(b)            The “Change in Control Period” shall mean the period commencing on the date hereof and ending on the second anniversary of the date hereof; provided, however, that commencing on the date one year after the date hereof, and on each annual anniversary of such date (such date and each annual anniversary thereof shall be hereinafter referred to as the “Renewal Date”), unless previously terminated, the Change in Control Period shall be automatically extended so as to terminate two years from such Renewal Date, unless at least 60 days prior to the Renewal Date the Company shall give notice to Executive that the Change in Control Period shall not be so extended.

2.                    Change in Control  For the purposes of this Agreement, a “Change in Control” shall mean the occurrence of any of the following events:

(a)            individuals who, on the date of this Agreement, constitute the Board of Directors of the Company (the “Incumbent Directors”) cease for any reason to constitute at least a majority of such Board, provided that any person becoming a director after the date of this Agreement and whose election or nomination for election was approved by a vote of at least a majority of the Incumbent Directors then on the Board shall be an Incumbent Director; provided, however, that no individual initially elected or nominated as a director of the Company as a result of an actual or threatened election contest with respect to the election or removal of directors (“Election Contest”) or other actual or threatened solicitation of proxies or consents by or on behalf of any “Person” (such term for purposes of this definition being as defined in Section 3(a)(9) of the Securities Exchange Act of 1934 (the “1934 Act”) and as used in Section 13(d)(3) and 14(d)(2) of the 1934 Act) other than the Board (“Proxy Contest”), including by reason of any agreement intended to avoid or settle any Election Contest or Proxy Contest, shall be deemed an Incumbent Director; or

 

(b)            any Person becomes a “Beneficial Owner” (such term for purposes of this definition being as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of securities of the Company representing 20% or more of the combined voting power of the Company’s then outstanding securities eligible to vote for the election of directors (the “Company Voting Securities”); provided, however, that for purposes of this subsection (b), the following acquisitions shall not constitute a Change in Control: (v) an acquisition directly from the Company, (w) an acquisition by the Company or a subsidiary of the Company (a “Subsidiary”), (x) an acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary, (y) an acquisition by a Person who as of December 31, 2006 was a Beneficial Owner, directly or indirectly, of 15% or more of the Company Voting Securities, or (z) an acquisition pursuant to a Non-Qualifying Transaction (as defined in subsection (d) below); or

(c)            any Person who as of December 31, 2006 was a Beneficial Owner, directly or indirectly, of 15% or more of the Company Voting Securities becomes a Beneficial Owner, directly or indirectly, of 40% or more of the Company Voting Securities; provided, however, that for purposes of this subsection (c), an acquisition directly from the Company shall not constitute a Change in Control; or

(d)            the consummation of a reorganization, merger, consolidation, statutory share exchange or similar form of corporate transaction involving the Company or a Subsidiary (a “Reorganization”), or the sale or other disposition of all or substantially all of the Company’s assets (a “Sale”) or the acquisition of assets or stock of another entity (an “Acquisition”), unless immediately following such Reorganization, Sale or Acquisition: (A) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the outstanding shares of common stock of the Company (“Company Common Stock”) and outstanding Company Voting Securities immediately prior to such Reorganization, Sale or Acquisition beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the entity resulting from such Reorganization, Sale or Acquisition (including, without limitation, an entity which as a result of such transaction owns the Company or all or substantially all of the Company’s assets or stock either directly or through one or more subsidiaries, the “Surviving Entity”) in substantially the same proportions as their ownership, immediately prior to such Reorganization, Sale or Acquisition, of the outstanding Company Common Stock and the outstanding Company Voting Securities, as the case may be, and (B) no Person (other than (w) any Person who as of December 31, 2006 is a Beneficial Owner, directly or indirectly, of 15% or more of the Company Voting Securities, (x) the Company or any Subsidiary of the Company, (y) the Surviving Entity or its ultimate parent, or (z) any employee benefit plan (or related trust) sponsored or maintained by any of the foregoing) is the beneficial owner, directly or indirectly, of 20% or more of the total common stock or 20% or more of the total voting power of the outstanding voting securities eligible to elect directors of the Surviving Entity, and (C) at least a majority of the members of the board of directors of the Surviving Entity were Incumbent Directors at the time of the Board’s approval of the execution of the initial agreement providing for such Reorganization, Sale or Acquisition (any Reorganization, Sale or Acquisition which satisfies all of the criteria specified in (A), (B) and (C) above shall be deemed to be a “Non-Qualifying Transaction”); or

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(e)            approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

3.                   Employment Period.  The Company hereby agrees to continue Executive in its employ, and Executive hereby agrees to remain in the employ of the Company subject to the terms and conditions of this Agreement, for the period commencing on the Effective Date and ending on the first anniversary of such date (the “Employment Period”).

		4.	Terms of Employment.

		(a)	Position and Duties.

(i)  During the Employment Period, (A) Executive’s position (including status, offices, titles and reporting requirements), authority, duties and responsibilities shall be at least commensurate in all material respects with the most significant of those held, exercised and assigned at any time during the 120-day period immediately preceding the Effective Date and (B) Executive’s services shall be performed at the location where Executive was employed immediately preceding the Effective Date or any office or location less than 35 miles from such location.

(ii)  During the Employment Period, and excluding any periods of vacation and sick leave to which Executive is entitled, Executive shall devote substantially all of his business time, attention and effort to the business and affairs of the Company and its affiliates and, to the extent necessary to discharge the responsibilities assigned to Executive under this Agreement, use Executive’s reasonable best efforts to carry out such responsibilities faithfully and efficiently. It shall not be considered a violation of the foregoing for Executive to serve on corporate, industry, civic or charitable boards or committees, so long as such activities do not significantly interfere with the performance of Executive’s responsibilities as an employee of the Company and its affiliates in accordance with this Agreement.  It is expressly understood and agreed that to the extent that any such activities have been conducted by Executive prior to the Effective Date, the continued conduct of such activities (or the conduct of activities similar in nature and scope thereto) subsequent to the Effective Date shall not thereafter be deemed to interfere with the performance of Executive’s responsibilities to the Company.

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		(b)	Compensation.

(i)            Base Salary.  During the Employment Period, Executive shall receive an annual base salary (“Annual Base Salary”) at a rate at least equal to the rate of base salary in effect on the date of this Agreement or, if greater, on the Effective Date, paid or payable (including any base salary which has been earned but deferred) to Executive by the Company and its affiliated companies.  The Annual Base Salary shall be payable in accordance with the Company’s regular payroll practice for its senior executives, as in effect from time to time.  During the Employment Period, the Annual Base Salary shall be reviewed for possible increase no more than 12 months after the last salary increase awarded to Executive prior to the Effective Date and thereafter at least annually.  Any increase in the Annual Base Salary shall not limit or reduce any other obligation of the Company under this Agreement.  The Annual Base Salary shall not be reduced after any such increase, and the term “Annual Base Salary” shall thereafter refer to the Annual Base Salary as so increased. As used in this Agreement, the term “affiliated companies” shall include any company controlled by, controlling or under common control with the Company.

(ii)            Annual Bonus.  In addition to Annual Base Salary, Executive shall be provided, for each fiscal year ending during the Employment Period, an annual bonus opportunity at least equal to Executive’s highest bonus opportunity under the Company’s Annual Management Incentive Plan, or any comparable bonus opportunity under any predecessor or successor plans, for the last full fiscal year prior to the Effective Date (annualized in the event that Executive was not employed by the Company for the whole of such fiscal year).

(iii)            Incentive, Savings and Retirement Plans.  Without limiting the foregoing, during the Employment Period, Executive shall be entitled to participate in all applicable incentive, savings and retirement plans, practices, policies and programs applicable generally to other senior executives of the Company and its affiliated companies (“Peer Executives”), but in no event shall such plans, practices, policies and programs provide Executive with incentive opportunities (measured with respect to both regular and special incentive opportunities, to the extent, if any, that such distinction is applicable), savings opportunities and retirement benefit opportunities, in each case, less favorable, in the aggregate, than the most favorable of those provided by the Company and its affiliated companies for Executive under such plans, practices, policies and programs as in effect at any time during the 120-day period immediately preceding the Effective Date or if more favorable to Executive, those provided generally at any time after the Effective Date to Peer Executives.

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(iv)            Welfare Benefit Plans.  During the Employment Period, Executive and/or Executive’s eligible dependents, as the case may be, shall be eligible for participation in and shall receive all benefits under welfare benefit plans, practices, policies and programs provided by the Company and its affiliated companies (including, without limitation, medical, prescription, dental, disability, employee life, group life, accidental death and travel accident insurance plans and programs) to the extent applicable generally to Peer Executives, but in no event shall such plans, practices, policies and programs provide Executive with benefits which are less favorable, in the aggregate, than the most favorable of such plans, practices, policies and programs in effect for Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to Executive, those provided generally at any time after the Effective Date to Peer Executives.

(v)            Expenses.  During the Employment Period, Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by Executive in accordance with the most favorable policies, practices and procedures of the Company and its affiliated companies in effect for Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to Executive, as in effect generally at any time thereafter with respect to Peer Executives.

(vi)            Fringe Benefits and Perquisites.  During the Employment Period, Executive shall be entitled to fringe benefits and perquisites in accordance with the most favorable plans, practices, programs and policies of the Company and its affiliated companies in effect for Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to Executive, as in effect generally at any time thereafter with respect to Peer Executives.

(vii)            Vacation.  During the Employment Period, Executive shall be entitled to paid vacation in accordance with the most favorable plans, policies, programs and practices of the Company and its affiliated companies as in effect for Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to Executive, as in effect generally at any time thereafter with respect to Peer Executives.

		5.	Termination of Employment.

(a)            Death or Disability.  Executive’s employment shall terminate automatically upon Executive’s death during the Employment Period.  If the Company determines in good faith that the Disability of Executive has occurred during the Employment Period (pursuant to the definition of Disability set forth below), it may give to Executive written notice of its intention to terminate Executive’s employment.  In such event, Executive’s employment with the Company shall terminate effective on the 30th day after receipt of such written notice by Executive (the “Disability Effective Date”), provided that, within the 30 days after such receipt, Executive shall not have returned to full-time performance of Executive’s duties.  For purposes of this Agreement, “Disability” shall mean the inability of Executive, as determined by the Board, to perform the essential functions of his regular duties and responsibilities, with or without reasonable accommodation, due to a medically determinable physical or mental illness which has lasted (or can reasonably be expected to last) for a period of six consecutive months.  At the request of Executive or his personal representative, the Board’s determination that the Disability of Executive has occurred shall be certified by two physicians mutually agreed upon by Executive, or his personal representative, and the Company.  If Executive requests such independent certification of the Board’s determination and either (i) the Company does not seek such independent certification, or (ii) the two physicians do not certify the Board’s determination of Executive’s Disability, then, Executive’s termination shall be deemed a termination by the Company without Cause and not a termination by reason of his Disability.

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(b)            Cause.  The Company may terminate Executive’s employment during the Employment Period for Cause or without Cause.  For purposes of this Agreement, a termination shall be considered to be for “Cause” if it occurs in conjunction with a determination by the Board that Executive has committed or engaged in either (i) any act that constitutes, on the part of Executive, fraud, dishonesty, breach of fiduciary duty, misappropriation, embezzlement or gross misfeasance of duty; (ii) willful disregard of published Company policies and procedures or codes of ethics; or (iii) conduct by Executive in his office with the Company that is grossly inappropriate and demonstrably likely to lead to material injury to the Company, as determined by the Board acting reasonably and in good faith; provided, that in the case of (ii) or (iii) above, such conduct shall not constitute “Cause” unless the Board shall have delivered to Executive notice setting forth with specificity (A) the conduct deemed to qualify as “Cause”, (B) reasonable action that would remedy such objection, and (C) a reasonable time (not less than 30 days) within which Executive may take such remedial action, and Executive shall not have taken such specified remedial action within the specified time.

(c)               Good Reason.  Executive’s employment may be terminated by Executive for Good Reason or without Good Reason.  For purposes of this Agreement, “Good Reason” shall mean:

(i)            the assignment to Executive of any duties inconsistent in any material respect with Executive’s position (including status, offices, titles and reporting requirements), authority, duties or responsibilities as contemplated by Section 4(a) of this Agreement, or any other action by the Company that results in a material diminution in Executive’s position, authority, duties or responsibilities, other than an isolated, insubstantial and inadvertent action that is not taken in bad faith and is remedied by the Company promptly after receipt of notice thereof from Executive;

 

(ii)            any material breach by the Company of Section 4(b)(i) or (ii) of this Agreement, other than an isolated, insubstantial and inadvertent failure that is not taken in bad faith and is remedied by the Company promptly after receipt of notice thereof from Executive;

 

(iii)            any failure by the Company to comply with and satisfy Section 13(c) of this Agreement; or

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(iv)            any other material breach of this Agreement by the Company that either is not taken in good faith or is not remedied by the Company promptly after receipt of notice thereof from Executive.

A termination of employment by Executive for Good Reason shall be effectuated by giving the Company written notice (“Notice of Termination for Good Reason”) of the termination within 90 days after the event constituting Good Reason, setting forth in reasonable detail the specific conduct of the Company that constitutes Good Reason and the specific provisions of this Agreement on which Executive relies.  The Company shall have 30 days from the receipt of such notice within which to correct, rescind or otherwise substantially reverse the occurrence supporting termination for Good Reason as identified by Executive.  If such event has not been cured within such 30-day period, the termination of employment by Executive for Good Reason shall be effective as of the expiration of such 30-day period.  If the event of Good Reason is cured within such 30-day period, the Notice of Termination for Good Reason shall have no effect.  Any dispute as to whether a claimed event of Good Reason has been cured within the 30-day period shall be submitted to mediation by a third party selected by Executive and the Board.  If no mediated resolution is reach within 30-days after the end of the original 30-day cure period, the Notice of Termination for Good Reason shall have no effect.  The parties intend, believe and take the position that a resignation by the Executive for Good Reason as defined above effectively constitutes an involuntary separation from service within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and Treas. Reg. Sec.1.409A-1(n)(2).

		6.	Obligations of the Company upon Termination.

(a) Termination by Executive for Good Reason; Termination by the Company Other Than for Cause or Disability.  If, during the Employment Period, the Company shall terminate Executive’s employment other than for Cause or Disability, or Executive shall terminate employment for Good Reason:

(i)  the Company shall pay to Executive in a lump sum in cash within 30 days after the date of termination (or any later date required by Section 15) the aggregate of the following amounts:

A.            Executive’s Annual Base Salary through the date of termination to the extent not theretofore paid (the “Accrued Obligations”); and

B.            a severance payment equal to 100% times the sum of (i) Executive’s Annual Base Salary as then in effect, plus (ii) Executive’s target annual incentive bonus for the year in which the date of termination occurs; and

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(ii)  the Company shall pay to Executive a pro-rata bonus for the annual incentive plan performance period (“Plan Year”) in which the date of termination occurs (the “Prorata Final Year Bonus”), the calculation and payment of which shall depend upon when the date of termination occurs, as follows:

A.            if the date of termination occurs during the same Plan Year in which the Change in Control occurs, the Prorata Final Year Bonus shall equal the product of (x) Executive’s target annual bonus for the year of termination, and (y) a fraction, the numerator of which is the number of days in the Plan Year through the date of termination, and the denominator of which is 365; and such Prorata Final Year Bonus shall be paid a single lump sum cash payment within 30 days after the date of termination (or any later date that may be required pursuant to Section 15 hereof);

B.            if the date of termination occurs after the end of the Plan Year in which the Change in Control occurs, the Prorata Final Year Bonus shall equal product of (x) the amount Executive would have earned, if any, under the annual incentive bonus plan for the year of termination based on actual financial performance (as if the sole performance metrics were the financial performance metrics) for such Plan Year, and (y) a fraction, the numerator of which is the number of days in the Plan Year through the date of termination, and the denominator of which is 365; and such Prorata Final Year Bonus shall be paid a single lump sum cash payment at the time such bonus awards are normally paid for such Plan Year (or any later date that may be required pursuant to Section 15 hereof); and

(iii)  the Company shall continue to provide, for twelve (12) months after Executive’s date of termination (the “Welfare Benefits Continuation Period”), or such longer period as may be provided by the terms of the appropriate plan, program, practice or policy, any group health benefits to which Executive and/or Executive’s eligible dependents would otherwise be entitled to continue under COBRA, or benefits substantially equivalent to those group health benefits which would have been provided to them in accordance with the Welfare Plans described in Section 4(b)(iv) of this Agreement if Executive’s employment had not been terminated, provided, however, that (A) if Executive becomes employed with another employer (including self-employment) and receives group health benefits under another employer provided plan, the Company’s obligation to provide group health benefits described herein shall cease, except as otherwise provided by law; (B) the Welfare Benefits Continuation Period shall run concurrently with any period for which Executive is eligible to elect health coverage under COBRA; (C) during the Welfare Benefits Continuation Period, the benefits provided in any one calendar year shall not affect the amount of benefits to be provided in any other calendar year; (D) the reimbursement of an eligible taxable expense shall be made on or before December 31 of the year following the year in which the expense was incurred; and (E) Executive’s rights pursuant to this Section 6(a)(iii) shall not be subject to liquidation or exchange for another benefit; and

 

(iv)  all of Executive’s equity or incentive awards outstanding on the date of termination shall be treated as follows: (A) all time-based restrictions on awards of restricted stock or unit awards shall lapse as of the date of termination, (B) each such option shall be fully vested and exercisable as of the date of termination and shall remain in effect and exercisable through the end of its original term, without regard to the termination of Executive’s employment; and (C) any performance shares or units shall be governed by the terms and conditions of the Company’s long-term incentive plan under which they were awarded; and

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(v)  to the extent not theretofore paid or provided, the Company shall timely pay or provide to Executive any other amounts or benefits required to be paid or provided or which Executive is eligible to receive under any plan, program, policy or practice or contract or agreement of the Company and its affiliated companies (such other amounts and benefits shall be hereinafter referred to as the “Other Benefits”).

(b)            Death or Disability.  If Executive’s employment is terminated by reason of Executive’s death or Disability during the Employment Period, this Agreement shall terminate without further obligations to Executive or Executive’s legal representatives under this Agreement, other than for payment of Accrued Obligations and the Prorata Final Year Bonus (calculated as described in Section 6(a)(ii)(A), regardless of when the date of termination occurs) and the timely payment or provision of Other Benefits.  Accrued Obligations and the Prorata Final Year Bonus shall be paid to Executive or Executive’s estate or beneficiary, as applicable, in a lump sum in cash within 30 days of the date of termination (or any later date required by Section 15).  With respect to the provision of Other Benefits, the term Other Benefits as used in this Section 6(b) shall include without limitation, and Executive or Executive’s estate and/or beneficiaries shall be entitled to receive, benefits under such plans, programs, practices and policies relating to death or disability benefits, if any, as are applicable to Executive on the date of termination.

(c)            Cause; Other than for Good Reason.  If Executive’s employment shall be terminated for Cause, or if Executive voluntarily terminates employment other than for Good Reason, during the Employment Period, this Agreement shall terminate without further obligations to Executive other than for payment of Accrued Obligations and the timely payment or provision of Other Benefits.

(d)            Expiration of Employment Period.  If Executive’s employment shall be terminated due to the normal expiration of the Employment Period, this Agreement shall terminate without further obligations to Executive, other than for payment of Accrued Obligations and the timely payment or provision of Other Benefits.

7.            Non-exclusivity of Rights.  Nothing in this Agreement shall prevent or limit Executive’s continuing or future participation in any employee benefit plan, program, policy or practice provided by Parent or its affiliated companies and for which Executive may qualify, except as specifically provided herein.  Amounts that are vested benefits or which Executive is otherwise entitled to receive under any plan, policy, practice or program of the Company or any of its affiliated companies at or subsequent to the date of termination shall be payable in accordance with such plan, policy, practice or program except as explicitly modified by this Agreement.

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8.            Full Settlement; No Mitigation.  The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against Executive or others.  In no event shall Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not Executive obtains other employment.

9.            Costs of Enforcement.  The Company shall reimburse Executive, on a current basis, up to $50,000 per year (not to exceed two years) for reasonable legal fees and related expenses incurred by Executive in connection with this Agreement, including without limitation, (i) such fees and expenses, if any, incurred by Executive in connection with any tax audit or proceeding to the extent attributable to the application of Section 4999 of the Code to any payment or benefit hereunder, or (ii) such fees and expenses, if any, incurred by Executive in contesting or disputing any termination of Executive’s employment, or Executive’s seeking to obtain or enforce any right or benefit provided by this Agreement, in each case, regardless of whether or not Executive’s claim is upheld by an arbitral panel or a court of competent jurisdiction; provided, however, Executive shall be required to repay to the Company any such amounts to the extent that an arbitral panel or a court issues a final and non-appealable order, judgment, decree or award setting forth the determination that the position taken by Executive was frivolous or advanced by Executive in bad faith.  The amount reimbursable by the Company under this Section 9 in any one calendar year shall not affect the amount reimbursable in any other calendar year, and the reimbursement of an eligible expense shall be made within five business days after delivery of Executive’s respective written requests for payment accompanied with such evidence of fees and expenses incurred as the Company reasonably may require, but in any event no later than December 31 of the year after the year in which the expense was incurred.  Executive’s rights pursuant to this Section 9 shall expire at the end of five years after the date of termination and shall not be subject to liquidation or exchange for another benefit.

		10.	Limitation of Benefits.

(a)            Notwithstanding anything in this Agreement to the contrary, in the event it shall be determined that any benefit, payment or distribution by the Company to or for the benefit of Executive (whether payable or distributable pursuant to the terms of this Agreement or otherwise) (such benefits, payments or distributions are hereinafter referred to as “Payments”) would, if paid, be subject to the excise tax (the “Excise Tax”) imposed by Section 4999 of the Code, then the aggregate present value of the Payments shall be reduced (but not below zero) to an amount expressed in present value that maximizes the aggregate present value of the Payments without causing the Payments or any part thereof to be subject to the Excise Tax and therefore nondeductible by the Company because of Section 280G of the Code (the “Reduced Amount”).  The reduction of the Payments due hereunder, if applicable, shall be made by first reducing cash Payments and then, to the extent necessary, reducing those Payments having the next highest ratio of Parachute Value to actual present value of such Payments as of the date of the change of control.  For purposes of this Section 10, present value shall be determined in accordance with Section 280G(d)(4) of the Code.  For purposes of this Section 10, the “Parachute Value” of a Payment means the present value as of the date of the change of control of the portion of such Payment that constitutes a “parachute payment” under Section 280G(b)(2) of the Code.

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(b)            All determinations required to be made under this Section 10, including whether an Excise Tax would otherwise be imposed, whether the Payments shall be reduced, the amount of the Reduced Amount, and the assumptions to be utilized in arriving at such determinations, shall be made by an independent, nationally recognized accounting firm or compensation consulting firm mutually acceptable to the Company and Executive (the “Determination 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 a Payment is due to be made, or such earlier time as is requested by the Company.  All fees and expenses of the Determination Firm shall be borne solely by the Company.  Any determination by the Determination 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 Determination Firm hereunder, it is possible that Payments hereunder will have been unnecessarily limited by this Section 10 (“Underpayment”), consistent with the calculations required to be made hereunder.  The Determination Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive together with interest at the applicable Federal rate provided for in Section 7872(f)(2) of the Code, but no later than March 15 of the year after the year in which the Underpayment is determined to exist.

(c)            In the event that the provisions of Code Section 280G and 4999 or any successor provisions are repealed without succession, this Section 10 shall be of no further force or effect.

		11.	Restrictions on Conduct of Executive.

		(a)	For purposes of this Section 11, the following definitions apply:

(i)            “Company” means the Company and/or any one or more of its affiliates that were within Executive’s management responsibility, including the responsibility of personnel reporting to Executive, at any time within two (2) years prior to Executive’s termination.

(ii)            “Competitive Business” means any corporation, partnership, association or other person or entity which directly competes or is planning to directly compete with the Company with respect to the operations of the Company that were within Executive’s management responsibility, including the responsibility of personnel reporting to Executive, at any time within two (2) years prior to Executive’s termination.

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(iii)            “Confidential Information” means information of the Company that meets one or more of the following three conditions: (i) it has not been made available generally to the public or to the trade or industry by the Company or by another with the Company’s consent; (ii) it is related to, and useful or valuable in, the current or anticipated business of the Company and its value could be diminished by unauthorized disclosure or use; or (iii) it either has been identified as confidential to Executive by the Company (orally or in writing) or it has been maintained as confidential from outside parties or is recognized as intended for internal disclosure only.  Confidential Information includes but is not limited to strategic and other business plans and budgets, non-public financial data and forecasts, know-how, research and development programs, personnel information (including information about the identity, responsibilities, competence, compensation and satisfaction of the Company’s employees), information about planned or pending acquisitions or divestitures, sales methods, customer lists, customer usages and requirements, customer purchase histories, marketing programs, computer programs and other confidential technical or business information or data.

 

(iv)            “Trade Secret” means information of the Company, including a formula, pattern, compilation, program, device, method, technique or process, that derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and that is the subject of efforts to maintain its secrecy that are reasonable under the circumstances.

 

(b)            During employment with the Company, including employment prior to the Effective Date, Executive shall preserve and protect Confidential Information from unauthorized use or disclosure, and for a period of one (1) year after termination of such employment, Executive shall not use or disclose any Confidential Information in connection with or to benefit any person, company or other enterprise (including Executive) which is engaged in or is planning to become engaged in direct competition with the Company in any state of the United States of America where, at the time this Agreement is to be enforced, the Company is engaged, or has demonstrable plans to engage that were known to Executive during employment, in substantial business activities.

 

(c)            During employment with the Company, including employment prior to the Effective Date, Executive shall preserve and protect Trade Secrets from unauthorized use or disclosure, and after termination of such employment, Executive shall not use or disclose any Trade Secret indefinitely, or for so long as that Trade Secret remains a Trade Secret under applicable law.

 

(d)            The provisions of this Section 11(d) shall not apply: (i) if a Change in Control has not occurred, or (ii) if within 30 days after having received notice from the Company that a Change in Control has occurred, Executive shall have irrevocably waived his right to payments and benefits under Sections 6(a)(i)(B), 6(a)(ii), 6(a)(iii) and 6(a)(iv) of this Agreement (but not his rights to receive Accrued Obligations or Other Benefits, as defined in Sections 6(a)(i)(A) and 6(a)(v)).  If this Section 11(d) applies, Executive agrees that, at all times during the Employment Period, and for a period ending one (1) year following the date of termination of his employment for any reason, Executive will not directly or indirectly, participate in or assist in, the organization, planning, preparation, ownership, financing, management, operation or control, nor have any beneficial interest in more than 5% of the equity, of a Competitive Business, if:

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(i)  said Competitive Business would utilize Executive’s services for the benefit of any broadcast, cable, print or other mass communications media operations serving any Metropolitan Statistical Area, as that term is defined by the United States Government, within the State of Wisconsin where, during two (2) years preceding Executive’s termination and at the time this Agreement is to be enforced, the Company is engaged, or has demonstrable plans to engage that were known to Executive during employment, in broadcast, cable, print or other mass communications media operations; and

(ii)  Confidential Information acquired by Executive during the two (2) years preceding Executive’s termination would reasonably be expected to be useful to the performance of Executive’s duties in such employment.

 

(e)            Executive acknowledges that a duty of loyalty to the Company and a duty to protect the Company’s confidential information are imposed upon Executive by law, including section 134.90 of the Wisconsin Statutes.

 

(f)            Regardless of whether the Effective Date shall have occurred, for a period of one (1) year following the date of termination of his employment, Executive agrees not to solicit or induce, or to assist anyone else in soliciting or inducing, directly or indirectly, any employee of the Company who was supervised by Executive, or about whom Executive obtained any Confidential Information, during the last two (2) years of Executive’s employment by the Company, to terminate their employment with the Company or to accept employment with a Competitive Business.  This provision is not intended to restrict the employment opportunities of any employees of the Company who seek employment with a Competitive Business without any solicitation or inducement by Executive.

(g)            Executive acknowledges that the Company has disclosed that the Company is now, and may be in the future, subject to duties to third parties to maintain information in confidence and secrecy.  By executing this Agreement, Executive consents to be bound by any such duty owed by the Company to any third party.

 

(h)            At the date of termination, Executive shall deliver to the Company the original and all copies of all documents, records and property of any nature whatsoever which are in Executive’s possession or control and which are the property of the Company or which relate to the business activities, facilities or customers of the Company, including any records, documents or property created by Executive in said capacity.  Executive agrees to attend an exit interview upon termination of employment to ensure that the terms of this Agreement are complied with.

-13-

(i)            For the period of one (1) year immediately following the date of termination, Executive will inform each new employer, prior to accepting employment, of the existence of this Section 11 and provide that employer with a copy of it.  In addition, Executive hereby authorizes the Company to forward a copy of this Section 11 to any actual or prospective new employer.

 

		12.	Arbitration.

 

(a)            The Company and Executive agree that any dispute in connection with this Agreement shall be settled by binding arbitration conducted pursuant to the National Rules for the Resolution of Employment Disputes of the American Arbitration Association (the “AAA”).  Notwithstanding the foregoing, (i) the assessment of legal fees and related costs of such arbitration incurred by Executive shall be governed by the provisions of Section 9 of this Agreement; (ii) the arbitration shall be determined by a single arbitrator, not a panel; (iii) both the Company and Executive shall be permitted to seek summary disposition prior to hearing; and (iv) the decision rendered by the arbitrator shall be in writing and set forth findings of fact and conclusions of law.

 

(b)            Executive agrees that his agreement to submit legal disputes through binding arbitration, includes any claim for any liability or obligation in any way related to this Agreement, for any expense, damage, or losses he might claim based on, among other things, the following: (i) any discipline, demotion, denied promotion, or discharge; (ii) any Company policy, practice, contract or agreement; (iii) any tort or personal injury; (iv) any policies, practices, laws or agreements governing the payment of wages, commissions or other compensation; (v) any laws governing employment discrimination including, but not limited to, Sections 1981, 1983 and Title VII of the Civil Rights Act, the Age Discrimination in Employment Act, the Employee Retirement Income Security Act, the Americans with Disabilities Act, any state laws or statutes (including, but not limited to, the Wisconsin Fair Employment Act), and any ordinance or local authority; (vi) any laws or agreements that provide for punitive, exemplary or statutory damages; (vii) any laws or agreements that provide for payment of attorney fees, costs or expenses; and (viii) any claim contesting or seeking declaratory relief regarding the validity or enforceability of this Agreement or any of its provisions.

 

(c)            The Company agrees that it too shall submit all legal disputes that it may have against Executive in any way related to this Agreement for exclusive resolution through binding arbitration, and that the resolution of Executive’s legal dispute(s) through arbitration shall be binding upon it.

 

(d)            The Company and Executive acknowledge and agree that the agreement to arbitrate contained in this Section 12 does not apply to the following: (i) claims under any state worker’s compensation law; (ii) claims under any state unemployment compensation law; (iii) claims for injunctive relief that may otherwise be available for the violation of any state trade secrets act or unfair competition law; (iv) any claim that by law may not be required to be resolved by binding arbitration; or (v) any request to a court for a temporary restraining order or temporary or preliminary injunction to enforce this Agreement pending submission of the merits of the parties’ dispute to arbitration.

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(e)            The Company and Executive acknowledge and agree that damages awarded, if any, in any arbitration shall be limited to those damages that are otherwise available at law.

 

(f)            The Company and Executive acknowledge and agree that by signing this Agreement, they release and waive any right either may have to resolve their legal disputes (including employment disputes and claims of discrimination or unlawful discharge) by filing a lawsuit in court, and to have the potential opportunity of having their claim heard by a jury, and agree instead that the disputes will be resolved exclusively through binding arbitration.  The Company and Executive acknowledge that although Executive agrees to resolve Executive’s legal dispute(s) exclusively through binding arbitration, nothing in this Agreement shall be interpreted as prohibiting Executive from filing a charge of discrimination with an appropriate administrative agency or participating in the investigation or prosecution of such a charge by an appropriate administrative agency; however, this Agreement does prohibit Executive from seeking and recovering an award on his own behalf through any administrative process.

		13.	Successors.

(a)            This Agreement is personal to Executive and without the prior written consent of the Company shall not be assignable by Executive.  This Agreement shall inure to the benefit of and be enforceable by Executive’s legal representatives.

(b)            This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.

(c)            The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.  In the event of any such succession and assumption of this Agreement by the successor, the term “the Company” as used in this Agreement shall thereafter include such successor.

		14.	Miscellaneous.

(a)            Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Wisconsin, without reference to principles of conflict of laws.

(b)            Captions. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect.

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(c)            Amendments.  This Agreement may not be amended or modified otherwise than-by a written agreement executed by the parties hereto or their respective successors and legal representatives.

(d)            Notices.  All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

		If to Executive:	Steven H. Wexler

Adress on file with the Company

		If to the Company:	Journal Communications, Inc.

333 West State Street

Milwaukee, Wisconsin 53203

Attention: Corporate Secretary

or to such other address as either party shall have furnished to the other in writing in accordance herewith.  Notice and communications shall be effective when actually received by the addressee.

(e)            Severability.  The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.

(f)            Withholding.  The Company may withhold from any amounts payable under this Agreement such Federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation.

(g)            Waivers.  Executive’s or the Company’s failure to insist upon strict compliance with any provision of this Agreement or the failure to assert any right Executive or the Company may have hereunder, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement.

(h)            Status Before and After Effective Date.  Executive and the Company acknowledge that, except as may otherwise be provided under any other written agreement between Executive and the Company, the employment of Executive by the Company is “at will” and, subject to Section 1(a) hereof, Executive’s employment and/or this Agreement may be terminated by either Executive or the Company at any time prior to the Effective Date, in which case Executive shall have no further rights under this Agreement and no further obligations other than the applicable covenants in Section 11.  From and after the Effective Date this Agreement shall supersede any other agreement between the parties with respect to the subject matter hereof.

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		15.	Code Section 409A.

(a)            General.  This Agreement shall be interpreted and administered in a manner so that any amount or benefit payable hereunder shall be paid or provided in a manner that is either exempt from or compliant with the requirements Section 409A of the Code and applicable Internal Revenue Service guidance and Treasury Regulations issued thereunder (and any applicable transition relief under Section 409A of the Code). Nevertheless, the tax treatment of the benefits provided under the Agreement is not warranted or guaranteed.  Neither the Company nor its directors, officers, employees or advisers shall be held liable for any taxes, interest, penalties or other monetary amounts owed by Executive as a result of the application of Section 409A of the Code.

(b)            Definitional Restrictions.  Notwithstanding anything in this Agreement to the contrary, to the extent that any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code would otherwise be payable or distributable hereunder by reason of Executive’s termination of employment, such amount or benefit will not be payable or distributable to Executive by reason of such circumstance unless (i) the circumstances giving rise to such termination of employment meet any description or definition of “separation from service” in Section 409A of the Code and applicable regulations (without giving effect to any elective provisions that may be available under such definition), or (ii) the payment or distribution of such amount or benefit would be exempt from the application of Section 409A of the Code by reason of the short-term deferral exemption or otherwise.  This provision does not prohibit the vesting of any amount upon a termination of employment, however defined.  If this provision prevents the payment or distribution of any amount or benefit, such payment or distribution shall be made on the date, if any, on which an event occurs that constitutes a Section 409A-compliant “separation from service” or such later date as may be required by Subsection 15(c) below.

(c)            Six-Month Delay in Certain Circumstances.  Notwithstanding anything in this Agreement to the contrary, if any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code would otherwise be payable or distributable under this Agreement by reason of Executive’s Separation from Service during a period in which he is a Specified Employee (as defined below), then, subject to any permissible acceleration of payment by the Company under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of employment taxes):

(i)            if the payment or distribution is payable in a lump sum, Executive’s right to receive payment or distribution of such non-exempt deferred compensation will be delayed until the earlier of Executive’s death or the first day of the seventh month following Executive’s Separation from Service; and

(ii)            if the payment or distribution is payable over time, the amount of such non-exempt deferred compensation that would otherwise be payable during the six-month period immediately following Executive’s Separation from Service will be accumulated and Executive’s right to receive payment or distribution of such accumulated amount will be delayed until the earlier of Executive’s death or the first day of the seventh month following Executive’s Separation from Service, whereupon the accumulated amount will be paid or distributed to Executive and the normal payment or distribution schedule for any remaining payments or distributions will resume.

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For purposes of this Agreement, the term “Specified Employee” has the meaning given such term in Code Section 409A and the final regulations thereunder (“Final 409A Regulations”), provided, however, that, as permitted in the Final 409A Regulations, the Company’s Specified Employees and its application of the six-month delay rule of Code Section 409A(a)(2)(B)(i) shall be determined in accordance with rules adopted by the Board of Directors or a committee thereof, which shall be applied consistently with respect to all nonqualified deferred compensation arrangements of the Company, including this Agreement.

(signatures on following page)

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IN WITNESS WHEREOF, Executive has hereunto set Executive’s hand and, pursuant to the authorization from its Board of Directors, the Company has caused these presents to be executed in its name on its behalf.

	
 

	
/s/ Steven H. Wexler

	
 

	
 

	
Steven H. Wexler

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
JOURNAL COMMUNICATIONS, INC.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
By:

	
/s/ Steven J. Smith

	
 

	
 

	
 

	
Steven J. Smith

	
 

	
 

	
 

	
Chief Executive Officer

	
 

 

 

 

-19-Exhibit 10.1

 

EMPLOYMENT AGREEMENT

(Alex Dunn)

 

EMPLOYMENT AGREEMENT (the “Agreement”)
dated August 7, 2014 by and between APX Group, Inc., a Delaware corporation (the “Company”) and Alex Dunn (“Executive”).

 

WHEREAS, the Company is an indirect, wholly
owned subsidiary of 313 Acquisition, LLC, a Delaware limited liability company (“Parent”);

 

WHEREAS, the Executive and Parent entered
into an Employment Agreement dated as of November 16, 2012 (the “Prior Agreement”), pursuant to which the Executive
serves as an employee of the Company and/or one or more of its subsidiaries;

 

WHEREAS, the Company desires to assume all
existing obligations of Parent under the Prior Agreement, and for one or more of its subsidiaries to continue to employ Executive
and Executive desires to continue to be employed in such capacities, on the terms set forth in this Agreement as of the date hereof;
and

 

WHEREAS, Parent, the Company and Executive
desire to enter into this Agreement embodying the terms of such employment which shall, effective as of the date hereof, replace
and supersede the Prior Agreement;

 

NOW, THEREFORE, in consideration of the premises
and mutual covenants herein and for other good and valuable consideration, the parties agree as follows:

 

1.            Term
of Employment. Subject to the provisions of Section 5 of this Agreement, Executive shall continue to be employed by the
Company and/or one or more of its subsidiaries through on November 16, 2017 (the “Employment Term”) on the
terms and subject to the conditions set forth in this Agreement; provided, however, the Employment Term shall be
automatically extended for an additional one-year period commencing on November 16, 2017 and, thereafter, on each such successive
anniversary thereafter (each an “Extension Date”), unless the Company or Executive provides the other party
hereto at least 90 days prior written notice before the next Extension Date that the Employment Term shall not be so extended.
Parent hereby assigns to the Company, and the Company hereby assumes, all existing obligations of Parent under the Prior Agreement.

 

2.            Position,
Duties and Authority.

 

(a)          During
the Employment Term, Executive shall serve as the Company’s President. In such position, Executive shall have such duties,
functions, responsibilities and authority as shall be determined from time to time by the Chief Executive Officer of the Company
(the “CEO”) and be consistent with the duties, functions, responsibilities and authority of an individual in
Executive’s position at a portfolio company of a private equity firm. Executive shall report directly to the CEO. If requested
by the Board of Directors of the Company (the “Board”), Executive shall also serve as a member of the Board
without additional compensation.

 

    	 

    	 

    

 

(b)          Executive
will devote substantially all of Executive’s business time and reasonable best efforts to the operation and oversight of
the Company’s businesses and performance of Executive’s duties hereunder (excluding periods of vacation and sick leave)
and will not engage in any other business activities that could conflict with his duties or services to the Company; provided
that nothing herein shall preclude Executive, subject to obtaining consent of the Board (not to be unreasonably withheld), from
(i) accepting appointment to or continuing to serve on any board of directors or trustees of any business corporation, and (ii)
serving as an officer or director or otherwise participating in non-profit educational, welfare, social, religious and civil organizations.
The parties agree that consent shall be deemed obtained with respect to Executive’s service on the board of governors of
Salt Lake Chamber, and the boards of directors of the Utah Valley Chamber and OneGreatFamily.com.

 

3.            Compensation.

 

(a)          Base
Salary. During the Employment Term, the Company shall pay Executive a base salary (“Base Salary”) at the
annual rate of $500,000, payable in regular installments in accordance with the Company’s usual payment practices. Executive’s
Base Salary shall be subject to annual review and subject to increase, if any, as may be determined from time to time in the sole
discretion of the Board, but in no event shall the Company be entitled to reduce Executive’s Base Salary.

 

(b)          Annual
Bonus. During the Employment Term, Executive shall be eligible to earn an annual bonus award (an “Annual Bonus”)
with a target amount equal to 100% of Executive’s Base Salary at the end of the performance period (the “Annual
Target Bonus”). Each Annual Bonus shall be determined based on the achievement of performance objectives and targets
(including the level of achievement required for Executive to earn the threshold, target and high performance objectives) established
by the Board for the applicable year, as set forth below.

 

 

	
        % Attainment of

        Performance Targets
	 	Multiple of Base Salary
	Less than 90%	 	0
	90%	 	0.5x
	100%	 	1.0x
	110%	 	2.0x
	130% or greater	 	2.5x

 

To the extent actual performance falls between
the levels of attainment set forth above, the actual Annual Bonus shall be calculated using straight line interpolation between
such levels. For the avoidance of doubt, in no event will the actual Annual Bonus payable in respect of any performance period
be greater than 2.5x the Base Salary at the end of the applicable performance period. The Annual Bonus, if any, shall be paid to
Executive within two and one-half months after the end of the applicable fiscal year. Except as provided in Section 5, no Annual
Bonus shall be payable in respect of any fiscal year in which Executive’s employment is terminated.

 

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4.            Benefits.

 

(a)          General.
During the Employment Term, Executive shall be entitled to participate in the Company’s employee benefit, fringe and perquisite
plans, practices, policies and arrangements as in effect from time to time (collectively, “Employee Benefits”),
on generally the same terms and conditions as each of the Employee Benefits are made available to other senior executives of the
Company (other than with respect to annual bonuses, incentive plans and severance plans (as well as any other terms and conditions
specifically determined under this Agreement), the benefits for each which shall be determined instead in accordance with this
Agreement); provided that Executive shall be entitled to no less than four (4) weeks’ vacation per calendar year.

 

(b)          Reimbursement
of Business Expenses. During the Employment Term, the Company shall reimburse Executive for reasonable and necessary business
expenses incurred by Executive in the performance of Executive’s duties hereunder in accordance with its then prevailing
policy for senior executives (which shall include appropriate itemization and substantiation of expenses incurred).

 

(c)          Fringe
Benefits. Executive shall be entitled to reasonable access, for personal use, to the Company’s airplane. All personal
use shall be subject to reimbursement by Executive of amounts determined under a reasonable cost allocation methodology consistent
with IRS guidelines to avoid imputed income to Executive, and the Company shall pay Executive $300,000 per year in monthly installments
in arrears, subject to all applicable taxes and withholdings, for the purpose of reimbursing the Company for the costs to Executive
of any such personal use. The Company shall engage a financial advisor to provide customary financial advice to Executive and to
manage Executive’s personal investments, provided that the annual compensation to such advisor to provide such services to
Executive and the Company’s Chief Executive Officer, in the aggregate, shall not exceed $250,000 annually.

 

5.            Termination.

 

(a)          The
Employment Term and Executive’s employment hereunder may be terminated by either party at any time and for any reason, subject
to the notice and cure provisions set forth below. Notwithstanding any other provision of this Agreement, the provisions of this
Section 5 shall exclusively govern Executive’s rights upon termination of employment with the Company and its affiliates.

 

(b)          By
the Company for Cause or by Executive other than as a result of Good Reason.

 

(i)          The
Employment Term and Executive’s employment hereunder may be terminated by the Company for Cause and shall terminate automatically
upon the effective date of Executive’s resignation other than as a result of Good Reason (as defined in Section 5(d)(i)).

 

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(ii)          Definition
of Cause. For purposes of this Agreement, “Cause” shall mean (A) Executive’s continued failure substantially
to perform Executive’s employment duties (other than as a result of total or partial incapacity due to physical or mental
illness) for a period of 10 days following written notice by the Company to Executive of such failure, (B) dishonesty in the performance
of Executive’s employment duties that is materially injurious to the Company, (C) an act or acts on Executive’s part
constituting (x) a felony charge under the laws of the United States or any state thereof or (y) a misdemeanor charge involving
moral turpitude, (D) Executive’s willful malfeasance or willful misconduct in connection with Executive’s employment
duties which causes substantial injury to the financial condition or business reputation of the Company or any of its subsidiaries
or affiliates or (E) the Executive’s material breach of any of the covenants set forth in Section 6 (other than any action
taken in good faith and in a manner not opposed to the best interests of the Company, and which is promptly remedied by Executive
upon notice by the Board); provided that none of the foregoing events shall constitute Cause unless Executive fails to cure
such event and remedy any adverse or injurious consequences arising from such events within 30 days after receipt from the Company
of written notice of the event which constitutes Cause (except that no cure or remedy period shall be provided if the event or
such consequences are not capable of being cured and remedied).

 

(iii)         If
Executive’s employment is terminated by the Company for Cause, Executive shall be entitled to receive:

 

(A)         no
later than 10 days following the date of termination, the Base Salary through the date of termination;

 

(B)         any
Annual Bonus earned, but unpaid, as of the date of termination for the immediately preceding fiscal year, paid in accordance with
Section 3(b) (except to the extent payment is otherwise deferred pursuant to any applicable deferred compensation arrangement with
the Company, in which case such payment shall be made in accordance with the terms and conditions of such deferred compensation
arrangement);

 

(C)         reimbursement,
within 60 days following receipt by the Company of Executive’s claim for such reimbursement (including appropriate supporting
documentation), for any unreimbursed business expenses properly incurred by Executive in accordance with Company policy prior to
Executive’s termination; provided that such claims for such reimbursement are submitted to the Company within 90 days following
the date of Executive’s termination of employment; and

 

(D)         such
Employee Benefits, if any, as to which Executive may be entitled under the tax qualified employee benefit plans of the Company,
payable in accordance with the terms and conditions of such tax qualified employee benefit plans (the amounts described in clauses
(A) through (D) hereof being referred to as the “Accrued Rights”).

 

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For the avoidance of doubt, in any legal proceeding to determine
whether grounds for Cause existed on any date that the Company took action on the basis of the existence of Cause, the Company
shall bear the burden of demonstrating grounds for Cause existed on such date.

Following such termination of Executive’s
employment by the Company for Cause, except as set forth in this Section 5(b)(iii), Executive shall have no further rights to any
compensation or any other benefits under this Agreement.

 

(iv)        If
Executive resigns other than as a result of Good Reason, provided that Executive will be required to give the Company at least
60 days advance written notice of any resignation of Executive’s employment (other than as a result of Good Reason), Executive
shall be entitled to receive the Accrued Rights. Following such resignation by Executive other than as a result of Good Reason,
except as set forth in this Section 5(b)(iv), Executive shall have no further rights to any compensation or any other benefits
under this Agreement.

 

(c)          Disability
or Death.

 

(i)          Disability.
During any period that Executive fails to perform his duties hereunder as a result of incapacity due to physical or mental
illness or injury (the “Disability Period”), Executive shall continue to receive his full Base Salary set forth
in Section 3(a) until his employment is terminated pursuant to Section 5(a). For purposes of this Agreement, “Disability”
shall mean Executive’s inability to perform, with or without reasonable accommodation, Executive’s duties under this
Agreement due to a physical or mental illness or injury for a period of six consecutive months or for an aggregate of 12 months
in any consecutive 24-month period. Any question as to the existence of the Disability of Executive as to which Executive and the
Company cannot agree shall be determined in writing by a qualified independent physician mutually acceptable to Executive and the
Company. If Executive and the Company cannot agree as to a qualified independent physician, each shall appoint such a physician
and those two physicians shall select a third physician who shall make such determination in writing. The determination of Disability
made in writing to the Company and Executive shall be final and conclusive for all purposes of this Agreement.

 

(ii)         Upon
termination of Executive’s employment hereunder for either Disability or death, Executive or Executive’s estate, survivors
or beneficiaries (as the case may be) shall be entitled to receive:

 

(A)         the
Accrued Rights;

 

(B)         no
later than 10 days following the date of termination, a pro rata portion of the Annual Target Bonus payable for the fiscal year
in which such termination occurs, based on a fraction, the numerator of which is the number of days during the fiscal year up to
and including the date of termination of Executive’s employment and the denominator of which is the number of days in such
fiscal year (the “Pro-Rated Bonus”);

 

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(C)         a
cash payment representing the COBRA costs of providing health and welfare benefits for Executive and Executive’s dependents
under the plans in which Executive was participating on the date of the applicable “COBRA qualifying event” for two
years (the “COBRA Payment”); and

 

(D)         death
or disability benefits under any applicable plans and programs of the Company in accordance with the terms and provisions of such
plans and programs.

 

(d)          By
the Company Without Cause or Resignation by Executive as a Result of Good Reason.

 

(i)          “Good
Reason” shall be deemed to exist upon the occurrence of (A) a material reduction in Executive’s base salary; (B)
a material diminution in Executive’s title or Executive’s duties, authority and responsibilities measured in the aggregate;
(C) the relocation of Executive’s primary office location to a location that is more than 75 miles from Executive’s
primary office location, in each case without Executive’s prior written consent; or (D) the Company’s material breach
of any of the provisions of this Agreement; provided that none of the foregoing events shall constitute Good Reason unless
the Company fails to cure such event within 30 days after receipt from Executive of written notice of the event which constitutes
Good Reason; and provided, further, that “Good Reason” shall cease to exist for an event on the 60th
day following the later of its occurrence or Executive’s knowledge thereof, unless Executive has given the Company written
notice thereof prior to such date.

 

(ii)          If
Executive’s employment is terminated by the Company without Cause (other than by reason of death or Disability) or Executive
resigns as a result of Good Reason, Executive shall be entitled to receive:

 

(A)         the
Accrued Rights;

 

(B)         the
Pro-Rated Bonus;

 

(C)         subject
to Executive’s continued compliance with Section 6 and material compliance with Section 7 hereof, and the execution and non-revocation
of the Release (as defined below), a lump-sum cash payment within 55 days after such termination and effectiveness of the Release
equal to the sum of (x) 200% of Executive’s Base Salary as of the date immediately prior to Executive’s termination
of employment and (y) 200% of the actual Annual Bonus paid in respect of the immediately preceding fiscal year (or, if such termination
occurs prior to the first date on which an Annual Bonus would have been paid had any payment been due, the Target Annual Bonus
for the immediately preceding fiscal year), and (z) the COBRA Payment.

 

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(e)          Release.
Amounts payable to Executive under Sections 5(d)(ii)(B) and 5(d)(ii)(C) (collectively, the “Conditioned Benefits”)
are subject to (i) Executive’s execution and non-revocation of a release of claims, substantially in the form attached hereto
as Exhibit I (the “Release”), within 60 days of the date of termination and (ii) the expiration of any revocation
period contained in such Release. Further, to the extent that any of the Conditioned Benefits constitutes “nonqualified deferred
compensation” for purposes of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”),
any payment of any amount or provision of any benefit otherwise scheduled to occur prior to the sixtieth (60th) day
following the date of Executive’s termination of employment hereunder, but for the condition on executing the Release as
set forth herein, shall not be made until the first regularly scheduled payroll date following such sixtieth (60th)
day, after which any remaining Conditioned Benefits shall thereafter be provided to Executive according to the applicable schedule
set forth herein.

 

(f)          Expiration
of Employment Term. Unless the parties otherwise agree in writing, continuation of Executive’s employment with the Company
following the expiration of the Employment Term shall be deemed an employment at-will and shall not be deemed to extend any of
the provisions of this Agreement and Executive’s employment may thereafter be terminated at will by either Executive or the
Company; provided that the provisions of Sections 6, 7 and 8 of this Agreement shall survive any termination of this Agreement
or Executive’s termination of employment hereunder.

 

(g)          Notice
of Termination; Board/Committee Resignation. Any purported termination of employment by the Company or by Executive (other
than due to Executive’s death) pursuant to Section 5 of this Agreement shall be communicated by written Notice of Termination
to the other party hereto. For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall
indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of employment under the provision so indicated. Upon termination of Executive’s
employment for any reason, Executive agrees to resign, as of the date of such termination and to the extent applicable, from the
Board (and any committees thereof) and the Board of Directors (and any committees thereof) of any of the Company’s affiliates
(except to the extent Executive is otherwise entitled pursuant to a separate contractual arrangement to continue to serve as a
member of the Board).

 

6.            Non-Competition;
Non-Solicitation.  Executive acknowledges and recognizes the highly competitive nature of the businesses of the Company and
its affiliates and accordingly agrees as follows:

 

(a)          Non-Competition.

 

(i)          During
Executive’s employment hereunder and, for a period of two years following the date Executive ceases to be employed by the
Company (the “Restricted Period”), Executive will not, whether on Executive’s own behalf or on behalf
of or in conjunction with any person, firm, partnership, joint venture, association, corporation or other business organization,
entity or enterprise whatsoever (“Person”), directly or indirectly, solicit or assist in soliciting in competition
with the Restricted Group in the Business, the business of any then current or prospective client or customer with whom Executive
(or Executive’s direct reports) had personal contact or dealings on behalf of the Company during the one-year period preceding
Executive’s termination of employment.

 

    	7

    	 

    

 

(ii)          During
the Restricted Period, Executive will not directly or indirectly:

 

(A)         engage
in the Business anywhere in the United States, or in any geographical area that is within 100 miles of any geographical area where
the Restricted Group engages in the Business, including, for the avoidance of doubt, by entering into the employment of or rending
any services to a Core Competitor, except where such employment or services do not relate in any manner to the Business;

 

(B)         acquire
a financial interest in, or otherwise become actively involved with, any Person engaged in the Business, directly or indirectly,
as an individual, partner, shareholder, officer, director, principal, agent, trustee or consultant; or

 

(C)         intentionally
and adversely interfere with, or attempt to adversely interfere with, business relationships between the members of the Restricted
Group and any of their clients, customers, suppliers, partners, members or investors.

 

(iii)         Notwithstanding
anything to the contrary in this Agreement, Executive may, directly or indirectly own, solely as an investment, securities of any
Person engaged in a Business (including, without limitation, a Core Competitor) which are publicly traded on a national or regional
stock exchange or on the over-the-counter market if Executive (i) is not a controlling person of, or a member of a group which
controls, such person and (ii) does not, directly or indirectly, own 2% or more of any class of securities of such Person.

 

(b)          Non-Solicitation.
During Executive’s employment hereunder and the Restricted Period, Executive will not, whether on Executive’s own behalf
or on behalf of or in conjunction with any Person, directly or indirectly:

 

(i)            solicit
or encourage any employee of the Restricted Group to leave the employment of the Restricted Group;

 

(ii)           hire
any executive-level employee who was employed by the Restricted Group as of the date of Executive’s termination of employment
with the Company or who left the employment of the Restricted Group coincident with, or within one year prior to or one year after,
the date of Executive’s termination of employment with the Company; or

 

(iii)          encourage
any material consultant of the Restricted Group to cease working with the Restricted Group.

 

(iv)          For
purposes of this Agreement:

 

(A)         “Restricted
Group” shall mean, collectively, Parent, the Company and their respective subsidiaries and, to the extent engaged in the
Business, their respective Affiliates (including The Blackstone Group L.P. and its Affiliates).

 

    	8

    	 

    

  

(B)         “Business”
shall mean (1) origination, installation, or monitoring services related to residential or commercial security, life-safety, energy
management or home automation services, (2) installation or servicing of residential or commercial solar panels or sale of electricity
generated by solar panels, (3) design, engineering or manufacturing of technology or products related to residential or commercial
security, life-safety, energy management or home automation services and/or (4) provision of wireless voice or data services, including
internet, into the home.

 

(C)         “Core
Competitor” shall mean ADT Home Security/Broadview Security, Protection 1, Inc., Protect America, Inc., Stanley Security
Solutions, Inc., Vector Security, Inc., Slomins, Inc., Monitronics International, Inc., Life Alert, Comcast Corporation, Time Warner
Inc., AT&T Inc., Verizon Communications, Inc., DISH Network Corp., DIRECTV, Pinnacle and each of their respective Affiliates,
and Sungevity, Inc., RPS, Sunrun Inc., Solar City, Clean Power Finance, SunPower Corporation, Corbin Solar Solutions LLC, Galkos
Construction, Inc., and any of their respective current or future dealers.

 

(c)          During
the Restricted Period, Executive agrees not to make, or cause any other person to make, any communication that is intended to criticize
or disparage, or has the effect of criticizing or disparaging, Parent or any of its affiliates, agents or advisors (or any of its
or their respective employees, officers or directors (it being understood that comments made in Executive’s good faith performance
of his duties hereunder shall not be deemed disparaging or defamatory for purposes of this Agreement). During the Restricted Period,
the Company shall instruct its executive officers and directors to refrain from intentionally making any public communication outside
the ordinary course of such person’s business that is intended to criticize or disparage, or has the effect of criticizing
or disparaging, Executive. Nothing set forth herein shall be interpreted to prohibit either party from responding truthfully to
incorrect public statements, making truthful statements when required by law, subpoena or court order and/or from responding to
any inquiry by any regulatory or investigatory organization.

 

(d)          It
is expressly understood and agreed that although Executive and the Company consider the restrictions contained in this Section
6 to be reasonable, if a final judicial determination is made by a court of competent jurisdiction that the time or territory or
any other restriction contained in this Section 6 is an unenforceable restriction against Executive, the provisions of this Agreement
shall not be rendered void but shall be deemed amended to apply as to such maximum time and territory and to such maximum extent
as such court may judicially determine or indicate to be enforceable. Alternatively, if any court of competent jurisdiction finds
that any restriction contained in this Section 6 is unenforceable, and such restriction cannot be amended so as to make it enforceable,
such finding shall not affect the enforceability of any of the other restrictions contained herein

 

    	9

    	 

    

 

(e)          The
period of time during which the provisions of this Section 6 shall be in effect shall be extended by the length of time during
which Executive is in breach of the terms hereof as determined by any court of competent jurisdiction on the Company’s application
for injunctive relief.

 

(f)          The
provisions of this Section 6 shall survive the termination of Executive’s employment for any reason, including but not limited
to, any termination other than for Cause.

 

7.            Confidentiality;
Intellectual Property.

 

(a)          Confidentiality.

 

(i)          Executive
will not at any time (whether during or after Executive’s employment with the Company), (x) retain or use for the benefit,
purposes or account of Executive or any other Person; or (y) disclose, divulge, reveal, communicate, share, transfer or provide
access to any Person outside the Company (other than Executive’s professional advisers who are bound by confidentiality obligations
or otherwise in performance of Executive’s duties under Executive’s employment and pursuant to customary industry practice),
any non-public, proprietary or confidential information – including, without limitation, trade secrets, know-how, research
and development, software, databases, inventions, processes, formulae, technology, designs and other intellectual property, information
concerning finances, investments, profits, pricing, costs, products, services, vendors, customers, clients, partners, investors,
personnel, compensation, recruiting, training, advertising, sales, marketing, promotions, government and regulatory activities
and approvals – concerning the past, current or future business, activities and operations of Parent, its subsidiaries or
Affiliates and/or any third party that has disclosed or provided any of same to Parent, its subsidiaries, or Affiliates on a confidential
basis (“Confidential Information”) without the prior written authorization of the Board.

 

(ii)         “Confidential
Information” shall not include any information that is (a) generally known to the industry or the public other than as a
result of Executive’s breach of this covenant; (b) made legitimately available to Executive by a third party without breach
of any confidentiality obligation of which Executive has knowledge; or (c) required by law to be disclosed; provided that with
respect to subsection (c) Executive shall give prompt written notice to the Company of such requirement, disclose no more information
than is so required, and reasonably cooperate with any attempts by the Company to obtain a protective order or similar treatment.

 

    	10

    	 

    

 

(iii)        Except
as required by law, Executive will not disclose to anyone, other than Executive’s family (it being understood that, in this
Agreement, the term “family” refers to Executive, Executive’s spouse, children, parents and spouse’s parents)
and advisors, the existence or contents of this Agreement; provided that Executive may disclose to any prospective future
employer the provisions of Sections 6 and 7 of this Agreement. This Section 7(a)(iii) shall terminate if the Company publicly discloses
a copy of this Agreement (or, if the Company publicly discloses summaries or excerpts of this Agreement, to the extent so disclosed).

 

(iv)        Upon
termination of Executive’s employment with the Company for any reason, Executive shall (A) cease and not thereafter commence
use of any Confidential Information or intellectual property (including without limitation, any patent, invention, copyright, trade
secret, trademark, trade name, logo, domain name or other source indicator) owned or used by the Company, its subsidiaries or affiliates;
and (B) immediately destroy, delete, or return to the Company, at the Company’s option, all originals and copies in any form
or medium (including memoranda, books, papers, plans, computer files, letters and other data) in Executive’s possession or
control (including any of the foregoing stored or located in Executive’s office, home, laptop or other computer, whether
or not Company property) that contain Confidential Information, except that Executive may retain only those portions of any personal
notes, notebooks and diaries that do not contain any Confidential Information.

 

(b)          Intellectual
Property.

 

(i)          If
Executive creates, invents, designs, develops, contributes to or improves any works of authorship, inventions, intellectual property,
materials, documents or other work product (including without limitation, research, reports, software, databases, systems, applications,
presentations, textual works, content, or audiovisual materials) (“Works”), either alone or with third parties,
at any time during Executive’s employment by Parent or the Company and within the scope of such employment and/or with the
use of any of Parent’s or the Company’s resources (“Company Works”), Executive shall promptly and
fully disclose same to the Company and hereby irrevocably assigns, transfers and conveys, to the maximum extent permitted by applicable
law, all of Executive’s right, title, and interest therein (including rights under patent, industrial property, copyright,
trademark, trade secret, unfair competition, other intellectual property laws, and related laws) to the Company to the extent ownership
of any such rights does not vest originally in the Company. If Executive creates any written records (in the form of notes, sketches,
drawings, or any other tangible form or media) of any Company Works, Executive will keep and maintain same. The records will be
available to and remain the sole property and intellectual property of the Company at all times.

 

(ii)         Executive
shall take all requested actions and execute all requested documents (including any licenses or assignments required by a government
contract) at the Company’s expense (but without further remuneration) to assist the Company in validating, maintaining, protecting,
enforcing, perfecting, recording, patenting or registering any of the Company’s rights in the Company Works.

 

(iii)        Executive
shall not improperly use for the benefit of, bring to any premises of, divulge, disclose, communicate, reveal, transfer or provide
access to, or share with the Company any confidential, proprietary or non-public information or intellectual property relating
to a former employer or other third party without the prior written permission of such third party. Executive shall comply with
all relevant policies and guidelines of the Company that are from time to time previously disclosed to Executive, including regarding
the protection of Confidential Information and intellectual property and potential conflicts of interest.

 

    	11

    	 

    

  

(iv)        The
provisions of Section 7 hereof shall survive the termination of Executive’s employment for any reason (except as otherwise
set forth in Section 7(a)(iv) hereof).

 

8.            Specific
Performance.   Executive acknowledges and agrees that the Company’s remedies
at law for a breach or threatened breach of any of the provisions of Section 6 and Section 7 of this Agreement would be inadequate
and the Company would suffer irreparable damages as a result of such breach or threatened breach. In recognition of this fact,
Executive agrees that, in the event of such a breach or threatened breach, in addition to any remedies at law, the Company, without
posting any bond, shall be entitled, in addition to any other remedy available at law or equity, to cease making any payments
or providing any benefit otherwise required by this Agreement and obtain equitable relief in the form of specific performance,
temporary restraining order, temporary or permanent injunction or any other equitable remedy which may then be available. In addition,
upon any breach of Section 6 or any material breach of Section 7 of this Agreement, Executive shall promptly return to the Company
upon request all cash payments made to Executive pursuant to Section 5 (if any), less any amounts paid by Executive as taxes in
respect of such payments (unless such taxes are actually recovered by Executive from the relevant governmental authority, in which
case such tax amounts also shall be returned to the Company). Any determination under this Section 8 of whether Executive is in
compliance with Section 6 hereof and material compliance with Section 7 hereof shall be determined based solely on the contractual
provisions provided therein and the facts and circumstances of Executive's actions without regard to whether the Company could
obtain an injunction or other relief under the law of any particular jurisdiction.

 

9.            Miscellaneous.

 

(a) Indemnification; Directors’ and
Officers’ Insurance. The Company shall indemnify and hold Executive harmless for all acts and omissions occurring during
his employment with the Company or service as a member of the Board to the extent provided under the Company’s charter, by-laws
and applicable law, and shall promptly advance to Executive or Executive’s heirs or representatives all damages, costs, liabilities,
losses and expenses (including reasonable attorneys’ fees and expenses) (collectively, “Expenses”) as
a result of any claim, demand, request, investigation, dispute, controversy, threat, discovery request or request for testimony
or information (collectively, a “Claim”) or any proceeding (whether civil, criminal, administrative or investigative),
or any threatened Claim or proceeding (whether civil, criminal, administrative or investigative), against Executive that arises
out of or relates to Executive’s service as an officer, director or employee, as the case may be, of the Company, or Executive’s
service in any such capacity or similar capacity with an affiliate of the Company or other entity at the request of the Company,
upon receipt by the Company of a written request with appropriate documentation of such Expenses, and an undertaking by Executive
to repay the amount advanced if it shall ultimately be determined that Executive is not entitled to be indemnified by the Company
against such Expenses. During the Employment Term and for a term of six years thereafter, the Company, or any successor to the
Company, shall purchase and maintain, at its own expense, directors and officers liability insurance providing coverage for Executive
in the same amount as for members of the Board.

 

    	12

    	 

    

 

(b)   Governing Law. This Agreement shall
be governed by and construed in accordance with the laws of the State of New York, without regard to conflicts of laws principles
thereof.

 

(c)   Jurisdiction; Venue. Except as
otherwise provided in Section 8 in connection with equitable remedies, each of the parties hereto hereby irrevocably submits to
the exclusive jurisdiction of any federal court sitting in the Southern District of New York or any state court in the First Judicial
Department over any suit, action or proceeding arising out of or relating to this Agreement and each of the parties agrees that
any action relating in any way to this Agreement must be commenced only in the courts of the State of New York, federal or state.
Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted or not prohibited by law, any objection which
it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in such a court and any
claim that any such suit, action or proceeding brought in such a court has been brought in an inconvenient forum. Each of the parties
hereto hereby irrevocably consents to the service of process in any suit, action or proceeding by sending the same by certified
mail, return receipt requested, or by recognized overnight courier service, to the address of such party set forth in Section 9(j).

 

(d)   Entire Agreement; Amendments. This
Agreement (including, without limitation, the schedules and exhibits attached hereto) contains the entire understanding of the
parties with respect to the employment of Executive by the Company, and supersedes all prior agreements and understandings (including
verbal agreements) between Executive and the Company and/or its current or former affiliates regarding the terms and conditions
of Executive’s employment with the Company and/or its current or former affiliates, including, without limitation, the Prior
Agreement. There are no restrictions, agreements, promises, warranties, covenants or undertakings between the parties with respect
to the subject matter herein other than those expressly set forth herein. This Agreement (including, without limitation, the schedules
and exhibits attached hereto) may not be altered, modified, or amended except by written instrument signed by the parties hereto.

 

(e)   No Waiver. The failure of a party
to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver of such party’s
rights or deprive such party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.

 

(f)   Severability. In the event that
any one or more of the provisions of this Agreement shall be or become invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions of this Agreement shall not be affected thereby.

 

    	13

    	 

    

 

(g)   Assignment. This Agreement, and
all of Executive’s rights and duties hereunder, shall not be assignable or delegable by Executive. Any purported assignment
or delegation by Executive in violation of the foregoing shall be null and void ab initio and of no force and effect. This
Agreement shall be assigned by the Company to a person or entity which is a successor in interest (“Successor”)
to substantially all of the business operations of the Company. Upon such assignment, the rights and obligations of the Company
hereunder shall become the rights and obligations of such affiliate or successor person or entity.

 

(h)   Set Off; No Mitigation. Executive
shall not be required to mitigate the amount of any payment provided for pursuant to this Agreement by seeking other employment,
and such payments shall not be reduced by any compensation or benefits received from any subsequent employer or other endeavor.
Any amounts due under Section 5 of this Agreement are considered reasonable by the Company and are not in the nature of a penalty.

 

(i)   Compliance with Code Section 409A.

 

(i)          The
intent of the parties is that payments and benefits under this Agreement comply with or be exempt from Code Section 409A and, accordingly,
to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith.  If any provision of this
Agreement (or of any award of compensation, including equity compensation or benefits) would cause Executive to incur any additional
tax or interest under Code Section 409A, the Company shall, after consulting with and receiving the approval of Executive, reform
such provision in a manner intended to avoid the incurrence by Executive of any such additional tax or interest.

 

(ii)         A
termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the
payment of any amounts or benefits that are considered nonqualified deferred compensation under Code Section 409A upon or following
a termination of employment unless such termination is also a “separation from service” within the meaning of Code
Section 409A, and, for purposes of any such provision of this Agreement, references to a “termination,” “termination
of employment” or like terms shall mean “separation from service.” The determination of whether and when a separation
from service has occurred for proposes of this Agreement shall be made in accordance with the presumptions set forth in Section
1.409A-1(h) of the Treasury Regulations.

 

(iii)        Any
provision of this Agreement to the contrary notwithstanding, if at the time of Executive’s separation from service, the Company
determines that Executive is a “specified employee,” within the meaning of Code Section 409A, then to the extent any
payment or benefit that Executive becomes entitled to under this Agreement on account of such separation from service would be
considered nonqualified deferred compensation under Code Section 409A, such payment or benefit shall be paid or provided at the
date which is the earlier of (i) six (6) months and one day after such separation from service and (ii) the date of Executive’s
death (the “Delay Period”). Upon the expiration of the Delay Period, all payments and benefits delayed pursuant
to this Section 9(i) (whether they would have otherwise been payable in a single sum or in installments in the absence of such
delay) shall be paid or provided to Executive in a lump-sum, and any remaining payments and benefits due under this Agreement shall
be paid or provided in accordance with the normal payment dates specified for them herein.

 

    	14

    	 

    

 

(iv)        Any
reimbursements and in-kind benefits provided under this Agreement that constitute deferred compensation within the meaning of Code
Section 409A shall be made or provided in accordance with the requirements of Code Section 409A, including that (A) in no event
shall any fees, expenses or other amounts eligible to be reimbursed by the Company under this Agreement be paid later than the
last day of the calendar year next following the calendar year in which the applicable fees, expenses or other amounts were incurred;
(B) the amount of expenses eligible for reimbursement, or in-kind benefits that the Company is obligated to pay or provide, in
any given calendar year shall not affect the expenses that the Company is obligated to reimburse, or the in-kind benefits that
the Company is obligated to pay or provide, in any other calendar year, provided that the foregoing clause (B) shall not be violated
with regard to expenses reimbursed under any arrangement covered by Section 105(b) of the Code solely because such expenses are
subject to a limit related to the period the arrangement is in effect; and (C) Executive’s right to have the Company pay
or provide such reimbursements and in-kind benefits may not be liquidated or exchanged for any other benefit.

 

(v)         For
purposes of Code Section 409A, Executive’s right to receive any installment payments shall be treated as a right to receive
a series of separate and distinct payments.  Whenever a payment under this Agreement specifies a payment period with reference
to a number of days (for example, “payment shall be made within thirty (30) days following the date of termination”),
the actual date of payment within the specified period shall be within the sole discretion of the Company. In no event may Executive,
directly or indirectly, designate the calendar year of any payment to be made under this Agreement, to the extent such payment
is subject to Code Section 409A.

 

(j)   Notice. For the purpose of this
Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been
duly given when delivered by hand or overnight courier or three days after it has been mailed by United States registered mail,
return receipt requested, postage prepaid, addressed to the respective addresses set forth below in this Agreement, or to such
other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of
address shall be effective only upon receipt.

 

If to the Company:

c/o APX Group, Inc.

4931 North 300 West

Provo, Utah 84604

Attention: General Counsel

 

with a copy (which shall not constitute notice) to:

 

The Blackstone Group

345 Park Avenue

New York, New York 10154

Attention: Peter Wallace

 

    	15

    	 

    

 

and

 

Simpson Thacher & Bartlett LLP

425 Lexington Avenue,

New York, New York 10017

Attention: Gregory T. Grogan

 

If to Executive:

 

To the most recent address of Executive
set forth in the personnel records of the Company.

 

(k)   Executive Representation. Executive
hereby represents to the Company that the execution and delivery of this Agreement by Executive and the Company and the performance
by Executive of Executive’s duties hereunder shall not constitute a breach of the terms of any employment agreement or other
agreement or written policy to which Executive is a party or otherwise bound. Executive hereby further represents that he is not
subject to any restrictions on his ability to solicit, hire or engage any employee or other service-provider. Executive agrees
that the Company is relying on the foregoing representations in entering into this Agreement and related equity-based award agreements.

 

(l)   Withholding Taxes. The Company
may withhold from any amounts payable under this Agreement such Federal, state and local taxes as may be required to be withheld
pursuant to any applicable law or regulation.

 

(m)   Counterparts. This
Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.

 

    	16

    	 

    

 

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

 

	 	APX GROUP, INC.
	 	 
	 	/s/ Patrick Kelliher
	 	By: Patrick Kelliher
	 	Title: Chief Accounting Officer
	 	 
	 	EXECUTIVE
	 	 
	 	/s/ Alex Dunn
	 	Alex Dunn

 

Solely for the purposes of Section 1 of the Agreement:

 

	 	313 ACQUISITION LLC
	 	 
	 	/s/ Dale Gerard
	 	By: Dale Gerard
	 	Title: Vice President of Finance and Treasurer

 

    	 

    	 

    

 

Exhibit I

 

RELEASE AND WAIVER OF CLAIMS

 

This Release and Waiver of Claims (“Release”)
is entered into and delivered to 313 Acquisition LLC (the “Company”) as of this [●] day of _________,
201[_], by Alex Dunn (the “Executive”). The Executive agrees as follows:

 

1.          The
employment relationship between the Executive and the Company and its subsidiaries and affiliates, as applicable, terminated on
the [●] day of _______, 201[_] (the “Termination Date”) pursuant to Section [__] of the Employment Agreement
between the Company and Executive dated August 7, 2014 (“Employment Agreement”).

 

2.          In
consideration of the payments, rights and benefits provided for in Sections 5(d)(ii)(B) and 5(d)(ii)(C) of the Employment Agreement
(collectively, as applicable, the “Separation Terms”) and this Release, the sufficiency of which the Executive
hereby acknowledges, the Executive, on behalf of himself and his agents, representatives, attorneys, administrators, heirs, executors
and assigns (collectively, the “Employee Releasing Parties”), hereby releases and forever discharges the Company
Released Parties (as defined below), from all claims, charges, causes of action, obligations, expenses, damages of any kind (including
attorneys fees and costs actually incurred) or demands, in law or in equity, whether known or unknown, which may have existed or
which may now exist from the beginning of time to the date of this Release, arising from or relating to Executive’s employment
or termination from employment with the Company or otherwise, including a release of any rights or claims the Executive may have
under Title VII of the Civil Rights Act of 1964; the Civil Rights Act of 1991; the Age Discrimination in Employment Act of 1967,
as amended (“ADEA”); the Older Workers Benefit Protection Act; the Americans with Disabilities Act of 1990;
the Rehabilitation Act of 1973; the Family and Medical Leave Act of 1993; Section 1981 of the Civil Rights Act of 1866; Section
1985(3) of the Civil Rights Act of 1871; the Employee Retirement Income Security Act of 1974; the Fair Labor Standards Act; any
other federal, state or local laws against discrimination; or any other federal, state, or local statute, regulation or common
law relating to employment, wages, hours, or any other terms and conditions of employment. This includes a release by the Executive
of any and all claims or rights arising under contract (whether written or oral, express or implied), covenant, public policy,
tort or otherwise. For purposes hereof, “Company Released Parties” shall mean the Company and any of its past or present
employees, agents, insurers, attorneys, administrators, officials, directors, shareholders, divisions, parents, members, subsidiaries,
affiliates, predecessors, successors, employee benefit plans, and the sponsors, fiduciaries, or administrators of the Company’s
employee benefit plans.

 

    	 

    	 

    

 

3.          The
Executive acknowledges that the Executive is waiving and releasing rights that the Executive may have under the ADEA and other
federal, state and local statutes contract and the common law and that this Release is knowing and voluntary. The Executive and
the Company agree that this Release does not apply to any rights or claims that may arise after the date of execution by Executive
of this Release. The Executive acknowledges that the consideration given for this Release is in addition to anything of value to
which the Executive is already entitled. The Executive further acknowledges that the Executive has been advised by this writing
that: (i) the Executive should consult with an attorney prior to executing
this Release; (ii) the Executive has up to twenty-one (21) days within which to consider this Release, although the Executive may,
at the Executive’s discretion, sign and return this Release at an earlier time, in which case the Executive waives all rights
to the balance of this twenty-one (21) day review period; and (iii) for a period of 7 days following the execution of this Release
in duplicate originals, the Executive may revoke this Release in a writing delivered to the Chairman of the Board of Directors
of the Company, and this Release shall not become effective or enforceable until the revocation period has expired.

 

4.          This
Release does not release the Company Released Parties from (i) any obligations due to the Executive under the Separation Terms,
(ii) any rights Executive has to indemnification by the Company and to directors and officers liability insurance coverage, (iii)
any vested rights the Executive has under the Company’s employee pension benefit and group healthcare benefit plans as a
result of Executive’s actual service with the Company, (iv) any fully vested and nonforfeitable rights of the Executive as
a shareholder or member of the Company or its affiliates, (v) any rights of the Executive pursuant to any equity or incentive award
agreement with the Company, or (vi) any rights which cannot be waived by an employee under applicable law.

 

5.          The
Executive represents and warrants that he has not filed any action,
complaint, charge, grievance, arbitration or similar proceeding against the Company Released Parties.

 

6.          This
Release is not an admission by the Company Released Parties or the Employee Releasing Parties of any wrongdoing, liability or violation
of law.

 

7.          The
Executive shall continue to be bound by the restrictive covenants contained in the Employment Agreement.

 

8.          This
Release shall be governed by and construed in accordance with the laws of the State of New York, without reference
to the principles of conflict of laws.

 

9.          Each
of the sections contained in this Release shall be enforceable independently of every other section in this Release, and the invalidity
or unenforceability of any section shall not invalidate or render unenforceable any other section contained in this Release.

 

10.         The
Executive acknowledges that the Executive has carefully read and understands this Release, that the Executive has the right to
consult an attorney with respect to its provisions and that this Release has been entered into knowingly and voluntarily. The Executive
acknowledges that no representation, statement, promise, inducement, threat or suggestion has been made by any of the Company Released
Parties to influence the Executive to sign this Release except such statements as are expressly set forth herein or in the Employment
Agreement.

 

    	2

    	 

    

 

Executive has executed this
Release as of the day and year first written above.

 

	 	EXECUTIVE
	 	 
	 	Alex Dunn

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