Document:

Exhibit

Exhibit 10.1
EMPLOYMENT AGREEMENT

THIS AGREEMENT is entered into as of January 1, 2021 (the “Effective Date”) between the FEDERAL HOME LOAN BANK OF CHICAGO (the “Bank”) and MICHAEL ERICSON (the “Executive”) (each a “Party” and collectively, the “Parties”).

RECITALS:

		
	A.
	The Bank and the Executive are entering into this employment agreement (“Agreement”) in a manner that closely aligns the interests of the Executive with the interests of the members of the Bank, and that provides appropriate incentives to the Executive for the successful performance of his duties; and

		
	B.
	The Bank and the Executive wish to confirm the employment of the Executive by the Bank on the terms and conditions hereinafter set forth; and

		
	C.
	The Bank recognizes the valuable services that the Executive has rendered in his prior roles as a senior executive of the Bank and desires to be assured that the Executive will continue his active participation in the business of the Bank, subject to the terms of this Agreement, and desires to assure the Executive that his employment will continue subject to the terms of this Agreement.

		
	D.
	NOW, THEREFORE, in consideration of the promises and the mutual agreements contained in this Agreement, it is agreed as follows:

1.  DEFINITIONS.

As used in this Agreement, unless the context otherwise requires a different meaning, the following terms shall have the following meanings (such meanings to be equally applicable to the singular and plural forms thereof and words in the masculine gender being deemed to be feminine as may be applicable):

Board means the Board of Directors of the Bank.  
Cause means any of the following activities by the Executive: (i) conviction of the Executive for any felony, or for a crime involving moral turpitude; (ii) commission of any act involving dishonesty, disloyalty, or fraud with respect to the Bank or any of its members; (iii) willful and continued failure to perform material duties that are reasonably directed by the Board, which are consistent with the terms of this Agreement and the position of President and CEO; (iv) gross negligence or willful misconduct with respect to the Bank or any of its members; (v) any violation of Bank policies regarding sexual harassment, discrimination, substance abuse, or the Bank’s Code of Ethics to the extent such acts would provide grounds for a termination for cause with respect to other employees; or (vi) a material breach of a material provision of this Agreement.  No act or failure to act on the part of the Executive shall be considered “willful” unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that his action or omission was in the best interests of the Bank.

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Confidential Information means:  (a) financial information, including, but not limited to, earnings, assets, debts, prices, fee structures, volumes of purchases or sales, or other financial data, whether relating to the Bank generally or to particular products or services offered by the Bank; (b) customer or member information, including, but not limited to, information concerning the products or services utilized or purchased by members, the names and addresses of members, terms of funding or loan agreements, or of particular transactions, or related information about potential members; (c) marketing information, including, but not limited to, details about ongoing or proposed marketing programs or agreements by or on behalf of the Bank, marketing forecasts, results of marketing efforts or information about impending transactions, and pricing strategies; (d) personnel information, including, but not limited to, employees' personal or medical histories, employment agreements, commission and bonus plans, compensation, or other terms of employment, actual or proposed promotions, hirings, resignations, disciplinary actions, terminations, training methods, performance, or other employee information; (e) information contained in any computer files, including, but not limited to, reports of examination issued by the Bank’s regulator, current and historical information regarding the Bank’s borrowing and other relationships with its members and other borrowers, results of the Bank’s internal ratings of its members and other borrowers, confidential information of third parties provided to the Bank under an agreement requiring the Bank to maintain the confidentiality of such information except for specified permitted uses, or other proprietary operating software systems and any associated passwords; (f) procedures manuals, policy manuals, sales training materials, brochures, funding agreements, license agreements, minutes of Board meetings, managers’ meetings, and sales meetings; and (g) contacts, including, but not limited to, any compilations of past, existing, or prospective sources of business, proposals, or agreements between members and the Bank, any sales or borrowing histories or other revenue information by member or customer, status of member or customer accounts or credit, or related information about actual or prospective members or contacts.

Determination Date means the date of termination of the Executive’s employment with the Bank, for any reason whatsoever, or any earlier date (during the Restricted Period) of an alleged breach of the Restrictive Covenants by the Executive.

Disability means that the Executive (a) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, as determined under the Bank’s short- or long-term disability program; or (b) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, as determined under the Bank’s short- or long-term disability program, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering the Bank’s employees.
Executive Team means the senior officers of the Bank responsible for the strategy and management of the Bank and appointed to the Executive Team by the President and CEO.
    
Good Reason means one or more of the following:  (a) a material reduction by the Bank of the Executive’s base salary, unless such reduction: (i) is associated with a “General Reduction” in compensation among the Bank’s Executive Team and such reduction is in response to adverse or declining economic conditions; and (ii) does not exceed 5% of the Executive’s base salary amount in effect at the time of the reduction; (b) a material reduction in the Executive’s authority, duties or responsibilities; (c) relocation of the Executive’s principal office to a location more than 50 miles from its location on the date this Agreement becomes effective; or (d) any other action or inaction by the Bank that constitutes a material breach by the Bank of the Agreement.
 

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Person means any individual or any corporation, partnership, joint venture, association, or other entity or enterprise.
Protected Employees means employees of the Bank who were employed by the Bank at any time within six (6) months prior to the Determination Date.
Restricted Period means the period of the Executive’s employment by the Bank under this Agreement plus a period extending two (2) years from the date of termination of employment.
Restrictive Covenants means the restrictive covenants contained in Section 9(b) and (c) hereof.
Retire or Retirement means the planned and voluntary termination by the Executive of his employment on or after reaching the earliest retirement age permitted by the Financial Institutions Retirement Fund.
Term of the Agreement means the period which commences on the Effective Date and, unless earlier terminated pursuant to Section 6, ends on December 31, 2024.  The “Term of the Agreement” shall also include, as applicable, each subsequent one-year renewal period following the automatic renewal of this Agreement pursuant to Section 3, to the extent such automatic renewals occur.

2.  DUTIES OF EMPLOYEE.

The Executive has been retained by the Bank as its President and Chief Executive Officer (“President and CEO”) with overall charge and responsibility for the business and affairs of the Bank.  The Executive shall report directly to the Board and shall perform such duties as the Executive shall reasonably be directed to perform by the Board.  The Executive shall devote his best efforts to the performance of the duties of his position with the Bank and shall devote substantially all of his business time and attention to the performance of his duties under this Agreement, excluding any periods of vacation and sick leave to which the Executive is entitled.  The Executive may (a) serve on civic or charitable boards or committees and (b) deliver lectures and fulfill speaking engagements, so long as such activities do not, in the view of the Board, interfere, in any substantive respect, with the Executive’s responsibilities hereunder or conflict, in any material way, with the business of the Bank or the Bank’s Code of Ethics.

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3.  TERM OF THE AGREEMENT.

Unless terminated earlier as provided in Section 6, the Executive's employment as President and CEO under this Agreement shall continue for the Term of the Agreement, as defined above; provided, however, that the Term of the Agreement shall be automatically extended by one (1) year effective January 1, 2025 and each year thereafter until such date as either the Bank or the Executive shall have terminated this automatic extension provision by giving written notice to the other party at least three (3) months prior to the end of the initial Term of the Agreement or any extension thereof.  

4.  COMPENSATION.

		
	(a)
	Salary.  The Executive’s base salary is $850,000, which base salary shall be effective as of the Effective Date and shall be payable in accordance with the Bank’s normal payroll schedule.  The Human Resources & Compensation Committee of the Board (the “HR&C Committee”) shall review the performance of the Executive at least annually.  Following its review for the 2021 calendar year, the HR&C Committee may recommend that the Board increase the Executive’s base salary.

(b)    Incentive Plans.  

		
	(i)
	The Executive is currently a participant in the Bank’s President and Executive Team Incentive Compensation Plan effective January 1, 2017 (the “Incentive Plan”) and may participate in any successor plans, however titled, which apply to the Bank’s President and CEO.  

		
	(ii)
	The Executive shall be entitled to receive all applicable incentive awards under the Incentive Plan, or any successor plan, as applicable, with respect to each fiscal year during the Term of the Agreement if he attains the performance objectives to be mutually agreed upon by the Board and the Executive for each such fiscal year for such plan.  Such incentive awards, if any, for a given year shall be paid in accordance with the terms of the respective plan or as otherwise required to comply with the short-term deferral rules of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).

5.  EXECUTIVE BENEFITS.

The Executive shall be eligible to participate in, or receive benefits that are provided to employees under, the Bank’s various employee benefit plans, excluding incentive plans, if any, except as provided in Section 4.  The terms of those plans are set forth in the respective plan documents, and are subject to change based on the terms set forth therein. 

The Bank shall provide the Executive with the following perquisites:  (a) a parking space at the Bank’s main office and (b) such airline club or other club memberships as recommended by the HR&C Committee and approved by the Board. 

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6.  TERMINATION.

The Executive’s employment under this Agreement may be terminated under the following circumstances:
		
	(a)
	Death.  Upon the Executive's death, in which case this Agreement and the Term of the Agreement shall terminate on the date of death;

		
	(b)
	Disability.  Upon the Executive’s Disability, in which case the Executive may be eligible for leave under one or more of the Bank’s medical leave and/or disability plans.  If the Executive's Disability results in the Executive's inability to perform, with or without reasonable accommodation (as defined under the Americans with Disabilities Act), the Executive's duties under this Agreement after the initial ninety- (90-) day period of Disability, the Bank may give the Executive thirty (30) days’ written notice of termination of this Agreement.  If the Executive does not return to the performance of the Executive's duties hereunder on a full-time basis by the end of the thirty- (30-) day notice period, then the Bank may terminate the Executive's employment hereunder effective on the thirty-first (31st) day following the giving by the Bank of such written notice of termination.  Although employment under this Agreement and the Term of the Agreement will end, the termination of this Agreement shall not affect the Executive’s employment and benefits under the Bank’s medical leave and/or disability plans, if applicable;

		
	(c)
	Termination by the Board for Cause.  The Board may terminate the Executive's employment at any time for Cause, such termination to be effective as of the date stated in a written notice of termination delivered to the Executive.  Before proceeding with termination under subparts (iii) through (vi) of the definition of “Cause,” above, the Board shall give the Executive written notice of the grounds for termination and thirty (30) days to cure, if curable.  If the Executive fails or is unable to cure, the Executive’s employment shall terminate on the thirty-first (31st) day following the giving by the Bank of such written notice of termination;

		
	(d)
	Resignation by the Executive for Other Than Good Reason.  The Executive may voluntarily resign his position with the Bank at any time for any reason or for no reason upon thirty (30) days’ prior written notice to the Bank.  Such resignation shall be effective as of the date stated in such written notice, unless otherwise mutually agreed by the Parties;

		
	(e)
	Retirement by the Executive.  The Executive may choose to Retire from the Bank at any time upon sixty (60) days’ prior written notice to the Bank;

		
	(f)
	Termination by the Bank Other than for Cause.  The Bank may terminate the Executive's employment for any reason or for no reason, other than under circumstances constituting Cause, upon thirty (30) days’ prior written notice to the Executive.  Such termination shall be effective as of the date stated in the written notice of termination.

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	(g)
	Resignation by Executive for Good Reason.  Executive may resign his position with the Bank at any time for Good Reason, such termination to be effective as of the date stated in the written notice of resignation to the Bank.  Before proceeding with the resignation, the Executive shall give the Bank notice of the existence of a condition giving rise to Good Reason within 90 days of the initial existence of the condition.  Upon receipt of the notice by the Board, Executive shall provide a period of thirty days to cure.  If the Bank fails or is unable to cure, the Executive’s resignation shall become effective.

		
	(h)
	Non-Renewal of Agreement.  The Bank may exercise its right not to renew this Agreement pursuant to Section 3.  Such non-renewal shall be deemed to be a termination and will be effective as of the last day of the Term of the Agreement immediately following the Bank’s notice to the Executive that this Agreement is not being renewed.

In no event shall the termination of the Executive's employment affect the rights and obligations of the Parties set forth in this Agreement, except as expressly set forth herein.  Except to the extent provided in Section 6(b), any termination of the Executive's employment pursuant to this Section 6 shall be deemed to be a termination of all of the Executive’s positions with the Bank.

7.  TERMINATION PAYMENTS.

The Executive shall be entitled to receive the following payments upon termination of the Executive's employment hereunder:
		
	(a)
	Termination by the Board for Cause.  In the event of the termination of the Executive's employment pursuant to Section 6(c), the Bank shall pay to the Executive following such termination all accrued and unpaid salary for time worked as of the date of termination and all accrued but unutilized vacation time as of the date of termination, determined in accordance with the Bank’s employee handbook.  The Executive shall not be entitled to any other compensation, bonus, incentive, or severance pay from the Bank; provided, however, that nothing in this Section 7(a) shall affect any vested rights that the Executive has under any pension, thrift, or other benefit plan, excluding the Bank’s Employee Severance Plan dated May 1, 2007 or any successor plan (the “Severance Plan”).

		
	(b)
	Termination by Resignation Other than for Good Reason.  In the event of the termination of the Executive's employment pursuant to Section 6(d), the Executive shall be entitled to receive the following payments and benefits:

		
	(i)
	All accrued and unpaid salary for time worked as of the date of termination;

		
	(ii)
	All accrued but unutilized vacation time as of the date of termination, determined in accordance with the Bank’s employee handbook; 

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	(iii)
	A lump sum payment in an amount equal to: 

		
	(1)
	the total incentive award (both the annual and deferral component) under the Incentive Plan, or any successor plan, for the year in which termination occurs, calculated as if all performance targets for the current annual and deferral award period had been met at the target award level and pro-rated based on the number of full months the Executive was employed during the year of termination divided by 12; plus

		
	(2)
	any previously deferred award (50% of the total incentive award) under the Incentive Plan, or any successor plan, not subject to pro-ration or further adjustments based on performance target achievement during the deferral period;

determined without regard to whether the Executive’s termination  affects his eligibility to receive an incentive award under the Incentive Plan; and provided, however, that the HR&C Committee may, in its discretion, reduce or eliminate any incentive compensation amounts paid under this subsection (iii) for any of the circumstances set forth in Section 5.3(b)(1)-(3) or (5) of the Incentive Plan to the extent such circumstances existed at or before the time the Executive provided notice of resignation or any similar provision set forth in any successor plan, as applicable; 
		
	(iv)
	The Executive shall not be entitled to any other compensation, bonus, incentive, or severance pay from the Bank; provided, however, that nothing in this Section 7(b) shall affect any vested rights which the Executive has under any pension, thrift, or other benefit plan, excluding the Incentive Plan and the Severance Plan. 

		
	(v)
	All payments under Section 7(b) are contingent upon the Executive being in compliance  with Sections 9, 11, 12, and 13 of this Agreement as of the date such payment is due.  

		
	(c)
	Termination through Retirement.  In the event of the termination of the Executive's employment pursuant to Section 6(e), the Executive shall be entitled to receive the following payments and benefits:

		
	(i)
	All accrued and unpaid salary for time worked as of the date of termination;

		
	(ii)
	All accrued but unutilized vacation time as of the date of termination, determined in accordance with the Bank’s employee handbook; 

		
	(iii)
	A lump sum payment in an amount equal to the incentive compensation that the Executive would otherwise have been entitled to for: 

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	(1)
	the total incentive award (both the annual and deferral component) under the Incentive Plan, or any successor plan, for the year in which termination occurs, calculated as if all performance targets for the current annual and deferral award period had been met at the target award level and pro-rated based on the number of full months the Executive was employed during the year of termination divided by 12;

		
	(2)
	any previously deferred award (50% of the total incentive award) under the Incentive Plan, or any successor plan, not subject to pro-ration or further adjustments based on performance target achievement during the deferral period;

determined without regard to whether the Executive’s termination  affects his eligibility to receive an incentive award under the Incentive Plan; provided, however, that the HR&C Committee may, in its discretion, reduce or eliminate any incentive compensation amounts paid under this subsection (iii) for any of the circumstances set forth in Section 5.3(b)(1)-(3) or (5) of the Incentive Plan to the extent such circumstances existed at or before the time the Executive provided notice of retirement or any similar provision set forth in any successor plan, as applicable;
		
	(iv)
	participation in the Bank’s retiree health care benefit plans for the Executive and his spouse, in accordance with the terms of the Federal Home Loan Bank of Chicago Description of Retiree Medical Coverage.

		
	(v)
	The Executive shall not be entitled to any other compensation, bonus, incentive, or severance pay from the Bank; provided, however, that nothing in this Section 7(c) shall affect any vested rights which the Executive has under any pension, thrift, or other benefit plan, excluding the Incentive Plan and the Severance Plan. 

		
	(vi)
	All payments under Section 7(c) are contingent upon the Executive being in compliance  with Sections 9, 11, 12, and 13 of this Agreement as of the date such payment is due. 

 
		
	(d)
	Termination under Other Circumstances.  In the event of termination of the Executive's employment pursuant to any of the following provisions:

		
	•
	Section 6(a)            [Death]

		
	•
	Section 6(b)            [Disability]

		
	•
	Section 6(f)            [By the Bank Other Than for Cause]

		
	•
	Section 6(g)            [Resignation for Good Reason]

		
	•
	Section 6(h)            [Non-Renewal by the Bank]

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the Executive (or the Executive's estate, as the case may be) shall be entitled to receive the following payments and benefits:
		
	(i)
	all accrued and unpaid salary for time worked as of the date of termination;

		
	(ii)
	all accrued but unutilized vacation time as of the date of termination, determined in accordance with the Bank’s employee handbook;

		
	(iii)
	salary continuation (at the base salary level in effect at the time of termination) paid pursuant to the Bank’s normal payroll schedule for a period of one (1) year; 

		
	(iv)
	A lump sum payment in an amount equal to the incentive compensation that the Executive would otherwise have been entitled to for:

		
	(1)
	the total incentive award (both the annual and deferral component) under the Incentive Plan, or any successor plan, for the year in which termination occurs, calculated as if all performance targets for the current annual and deferral award period had been met at the target award level and pro-rated based on the number of full months the Executive was employed during the year of termination divided by 12;

		
	(2)
	any previously deferred award (50% of the total incentive award) under the Incentive Plan, or any successor plan, not subject to pro-ration or further adjustments based on performance target achievement during the deferral period;

determined without regard to whether the Executive’s termination  affects his eligibility to receive an incentive award under the Incentive Plan; provided, however, that the HR&C Committee may, in its discretion, reduce or eliminate any incentive compensation amounts paid under this subsection (iv) for any of the circumstances set forth in Section 5.3(b)(1)-(3) or (5) of the Incentive Plan to the extent such circumstances existed at or before the time the Executive’s Death, Disability, Termination Other than for Cause or resignation with Good Reason or any similar provision set forth in any successor plan, as applicable; 
		
	(v)
	continued participation in the Bank’s employee health care benefit plans for the Executive and his spouse, in accordance with the terms of the Severance Plan, that would be applicable to the Executive if his employment had been terminated pursuant to such plan, provided that the Bank shall continue paying the employer’s portion of the Executive’s medical and/or dental insurance premiums, if the Executive had been participating  in either or both programs, for one (1) year prior to the termination; and

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The Executive shall not be entitled to any other compensation, bonus, or severance pay from the Bank; provided, however, that nothing in this Section 7(d) shall affect any vested rights which the Executive has under any pension, thrift, or other benefit plan, excluding the Incentive Plan and the Severance Plan. 
All payments under Section 7(d) are contingent upon the Executive being in compliance with Sections 9, 11, 12, and 13 of this Agreement as of the time such payment is due.  

		
	(e)
	Timing of Payments.  Notwithstanding any provision of this Section 7, any payment to the Executive, and the timing thereof, shall be subject to prior regulatory approval or non-objection pursuant to Section 17 of this Agreement.  In addition, payments under subsections (b)(iii), (c)(iii)-(iv), and (d)(iii)-(v) of this Section 7 that become payable due to termination under Section 6(b), (d), (e),  (f) or (g) shall not commence until the Executive has signed, and not revoked within the time allotted by the Older Workers’ Benefit Protection Act or other law, a general release of all claims against the Bank in such form as the Bank shall reasonably require, such release to be signed and effective within sixty (60) days after the Executive’s date of termination.  If such sixty- (60-) day period spans two (2) calendar years, such payments shall not commence until the later of the two years.

Following the completion of each of the foregoing conditions precedent in this Section 7 (e), each payment under this Section 7 will be payable, or in the case of a series of payments will begin to be paid, on the Bank’s first payroll date that occurs at least five (5) business days following the completion of such conditions. 

Notwithstanding anything herein to the contrary, amounts payable under Section 7(d) upon a termination of Executive’s employment under Section 6(a) shall be paid in a single lump sum to the Executive’s estate.

		
	(f)
	Taxes.  The Executive shall be responsible for the payment of all federal, state, and local income and other taxes that may be due with respect to any payments made to the Executive pursuant to this Agreement. 

8.  CONFLICT OF INTEREST.

The Executive may not use his position, influence, knowledge of confidential information, or the Bank’s assets for personal gain.  A direct or indirect financial interest, including joint ventures in or with a competitor, supplier, vendor, customer, or prospective customer without disclosure and written approval from the Board is strictly prohibited and could be grounds for termination for Cause.  The Executive shall at all times comply with the Bank’s Code of Ethics.

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9.  EXECUTIVE COVENANTS.

		
	(a)
	General.  The Executive and the Bank understand and agree that the purpose of the provisions of this Section 9 is to protect the legitimate business interests of the Bank, as more fully described below, and is not intended to impair or infringe upon the Executive’s right to work, earn a living, or acquire and possess property from the fruits of his labor.  The Executive hereby acknowledges that the post-employment restrictions set forth in this Section 9 are reasonable and that they do not, and will not, unduly impair his ability to earn a living after the termination of his employment with the Bank.  Therefore, subject to the limitations of reasonableness imposed by law upon the restrictions set forth herein, the Executive shall be subject to the restrictions set forth in this Section 9.

		
	(b)
	Restriction on Disclosure and Use of Confidential Information.  The Executive understands and agrees that Confidential Information constitutes a valuable asset of the Bank and its affiliated entities, and may not be converted to the Executive’s own use.  Accordingly, the Executive hereby agrees that the Executive shall not, directly or indirectly, at any time during the Restricted Period, reveal, divulge, or disclose to any Person not expressly authorized by the Bank any Confidential Information, and the Executive shall not, directly or indirectly, at any time during the Restricted Period, use or make use of any Confidential Information in connection with any business activity other than that of the Bank.  The Parties acknowledge and agree that this Agreement is not intended to, and does not, alter either the Bank’s rights or the Executive’s obligations under any state or federal statutory or common law regarding trade secrets and unfair trade practices.

		
	(c)
	Nonsolicitation of Protected Employees.  The Executive understands and agrees that the relationship between the Bank and each of its Protected Employees constitutes a valuable asset of the Bank and may not be converted to the Executive’s own use.  Accordingly, the Executive hereby agrees that, during the Restricted Period, the Executive shall not, directly or indirectly, on the Executive’s own behalf or as a principal or representative of any Person, solicit any Protected Employee to terminate his or her employment with the Bank.

		
	(d)
	Exceptions from Disclosure Restrictions.  Anything herein to the contrary notwithstanding, the Executive shall not be restricted from disclosing or using Confidential Information that:  (i) is or becomes generally available to the public other than as a result of an unauthorized disclosure by the Executive or his agent; (ii) becomes available to the Executive in a manner that is not in contravention of applicable law from a source (other than the Bank or its affiliated entities, or one of its or their officers, employees, agents, or representatives) that is not known by the Executive to be bound by a confidential relationship with the Bank or its affiliated entities, or by a confidentiality or other similar agreement; (iii) was known to the Executive on a non-confidential basis and not in contravention of applicable law or a confidentiality or other similar agreement before its disclosure to the Executive by the Bank or its affiliated entities, or one of its or their officers, employees, agents, or representatives; or (iv) is required to be disclosed by law, court order, or legal process; provided, however, that in the event disclosure is required by law, court order, or legal process, the Executive shall provide the Bank with prompt notice of such requirement so that the Bank may seek an appropriate order prior to any such required disclosure by the Executive.

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10.  ENFORCEMENT OF RESTRICTIVE COVENANTS.

In the event the Executive breaches, or threatens to commit a breach, of any of the provisions of the Restrictive Covenants, the Bank shall have the right and remedy to enjoin, preliminarily and permanently, the Executive from violating or threatening to violate the Restrictive Covenants and to have the Restrictive Covenants specifically enforced by any court of competent jurisdiction, it being agreed that any breach or threatened breach of the Restrictive Covenants would cause irreparable injury to the Bank and that money damages would not provide an adequate remedy to the Bank.  The rights referred to in the preceding sentence shall be independent of any others and severally enforceable, and shall be in addition to, and not in lieu of, any other rights and remedies available to the Bank at law or in equity.

11.  RETURN OF PROPERTY.

The Executive agrees to deliver to the Bank upon the termination of the Executive’s employment, and at any other time upon the Bank's request:  (a) all documents and other materials, whether made or compiled by the Executive alone or with others, or made available to the Executive while employed by the Bank, pertaining to Confidential Information or other inventions and works of the Bank;  (b) all Confidential Information, other inventions, or any other property of the Bank in the Executive's possession, custody, or control, and  (c) all cellular telephones, data storage devices, and personal digital assistants paid for or issued by the Bank.  The above categories (a) through (c) include Confidential Information contained on personal digital assistants, cellular telephones, external hard drives, USB “flash” drives, other USB storage devices, FireWire storage devices, digital music players, digital tapes, floppy disks, CDs, DVDs, personal e-mail accounts (including web-based e-mail accounts such as Hotmail, Gmail, or Yahoo), memory cards, zip disks or drives, and all other similar mediums which can be used to store electronic data.

12.  FUTURE COOPERATION AND ASSISTANCE.

		
	(a)
	Cooperation in Future Matters.  The Executive hereby agrees that, for a period of two (2) years following his date of termination, he shall cooperate with the Bank’s reasonable requests relating to matters that pertain to the Executive’s employment by the Bank, including, without limitation, providing information or limited consultation as to such matters, participating in legal proceedings, investigations, or audits on behalf of the Bank, or otherwise making himself reasonably available to the Bank for other related purposes.  Any such cooperation shall be performed at times scheduled to take into consideration the Executive’s other commitments, and the Executive shall be compensated at a reasonable hourly or per diem rate to be agreed upon by the Parties to the extent such cooperation is required on more than an occasional and limited basis.  The Executive shall also be reimbursed for all reasonable out-of-pocket expenses.  The Executive shall not be required to perform such cooperation to the extent it conflicts with any requirements of exclusivity of service for another employer, or otherwise, nor in any manner that, in the good-faith belief of the Executive, would conflict with his rights under or ability to enforce this Agreement.

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	(b)
	Assistance with Claims.  The Executive agrees that, for the period beginning on the Effective Date, and continuing for a reasonable period after the Executive’s date of termination, the Executive shall assist the Bank in defense of any claims that may be made against the Bank, and shall assist the Bank in the prosecution of any claims that may be made by the Bank, to the extent that such claims may relate to services performed by the Executive for the Bank.  The Executive agrees to promptly inform the Bank if he becomes aware of any lawsuits involving such claims that may be filed against the Bank.  The Bank agrees to provide legal counsel to the Executive in connection with such assistance (to the extent legally permitted), and to reimburse the Executive for all of the Executive’s reasonable out-of-pocket expenses associated with such assistance, including travel expenses.  For periods after the Executive’s employment with the Bank terminates, the Executive shall be compensated for such assistance at a reasonable hourly or per diem rate to be agreed upon by the Parties.  The Executive also agrees to promptly inform the Bank if he is asked to assist in any investigation of the Bank (or its actions) that may relate to services performed by the Executive for the Bank, regardless of whether a lawsuit has then been filed against the Bank with respect to such investigation, unless the Executive is prohibited by law or legal process from so informing the Bank.

13.  PUBLICITY; NON-DISPARAGEMENT.

Neither Party shall issue, without consent of the other Party, any press release or make any public announcement with respect to this Agreement or the employment relationship between them.  Following the Effective Date of this Agreement, and regardless of any dispute that may arise in the future, the Executive and the Bank jointly and mutually agree that they shall not disparage, criticize, or make statements that are negative, detrimental, or injurious to the other to any individual or company, including within the Bank: provided that this paragraph shall not prohibit either Party from offering truthful testimony or evidence in any legal proceeding in which the Party is compelled to appear.

14.  FEDERAL BENEFITS RULES.

All payments and benefits provided under this Agreement are intended to be exempt from, or comply with, Section 409A of the Code, and the Agreement is to be interpreted accordingly.  Notwithstanding any other provision of this Agreement, payments provided under this Agreement may only be made upon an event and in a manner that complies with Section 409A of the Code or an applicable exemption. In no event may the Executive, directly or indirectly, designate the calendar year of any payment to be made under this Agreement that constitutes a "deferral of compensation" within the meaning of Section 409A of the Code. Any payments under this Agreement that may be excluded from Section 409A of the Code either as separation pay or as a short-term deferral will be excluded from Section 409A of the Code to the maximum extent possible.  Each installment payment or payment in a series of payments provided under this Agreement will be treated as a separate payment. A termination of Executive’s employment under the Agreement must constitute a “separation from service” under Section 409A(a)(2) to the extent required to comply with or be exempt from Section 409A of the Code. To the extent any reimbursements or in-kind benefit payments under this Agreement are subject to Section 409A of the Code, such reimbursements and in-kind benefit payments will be made in accordance with Section 1.409A-3(i)(1)(iv) of the Treasury Regulations (or any or successor provisions).
 

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If any provision of this Agreement (or any award of compensation) would cause the Executive to incur any additional tax or interest under Section 409A of the Code, or any regulations or Treasury guidance promulgated thereunder, the Bank may reform such provision, provided that it shall (i) maintain, to the maximum extent practical, the original intent of the applicable provision without violating the provisions of Section 409A of the Code and (ii) notify and consult with the Executive regarding such amendments or modifications prior to the effective date of any change.

Notwithstanding the foregoing, the Bank makes no representations that the payments and benefits provided under this Agreement comply with Section 409A of the Code and in no event will the Bank be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by the Executive on account of Section 409A of the Code.

15.  SEVERABILITY.

The Executive acknowledges and agrees that the Restrictive Covenants are reasonable and valid in all respects.  If any provision, restriction, or section in this Agreement is determined to be in violation of any law, rule, or regulation, or otherwise unenforceable, such determination shall not affect the validity of any other provision, restriction, or section of this Agreement, but such other provisions, restrictions, or sections shall remain in full force and effect.  Each provision, restriction, or section of this Agreement is severable from every other provision, restriction, or section and constitutes a separate and distinct covenant.  In the event that a court of competent jurisdiction determines that any provision of this Agreement is overly broad or unenforceable, the Bank and the Executive specifically request that such court sever it or reform such provision so that it is enforceable to the maximum extent permitted by law; provided that the Bank’s obligation to pay the Termination Payments set forth in Sections 7(b), (c), and (d) remain contingent upon the Executive complying with Sections 9, 11, 12, and 13.  If the Executive challenges the enforceability of Sections 9, 11, 12, or 13, the Executive shall not be entitled to the separation payments set forth in Sections 7(b), (c), and (d).  

16.  SUCCESSORS.

This Agreement shall be binding upon and inure to the benefit of the Bank and its successors and assigns, and the Executive, the Executive’s heirs, executors, and administrators.  

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17.  REGULATORY APPROVAL.

Notwithstanding any provision of this Agreement, the terms of this Agreement and any payment to the Executive, including the timing thereof, shall be subject to the prior approval or non-objection of the Federal Housing Finance Agency or any successor agency.

18.  ENTIRE AGREEMENT; MODIFICATION.

This Agreement constitutes the entire Agreement between the Parties.  The Parties acknowledge that they have not relied on any representations, promises, or agreements of any kind made in connection with the decision to sign this Agreement, except for those set forth in this Agreement.  This Agreement may not be altered or amended, except in writing, signed by the Executive and an authorized representative of the Bank.

19.  CHOICE OF LAW AND VENUE.

The Parties agree that this Agreement is to be governed by, and construed under, the laws of the State of Illinois, without regard to its conflicts of law provisions.  The Parties further agree that all disputes shall be resolved exclusively in the state or federal court located in Cook County, Illinois.  

20.  FEES.

The Bank agrees that it shall pay Executive a one-time payment of $5,000 for individual financial/tax counseling.  Such amount shall not be grossed up to the Executive for tax purposes.

21.  NOTICES.

Any notice required or permitted hereunder shall be in writing, and shall be deemed duly given when hand delivered, or when mailed, first class mail, postage prepaid, registered or certified, return receipt requested, to the addresses set forth below:

Bank

200 East Randolph Drive
Chicago, IL  60601
Attention:  General Counsel

Executive
        
[Address Redacted]

The foregoing addresses may be changed at any time, or from time to time, by written notice given in accordance with the provisions of this section.

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IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement as of the Effective Date.
	
			
	FEDERAL HOME LOAN BANK 
OF CHICAGO
	EXECUTIVE

	 
	 
	 

	By:  /s/ John Reinke
	 
	By:/s/ Michael Ericson

	Name: John Reinke
	 
	Name: Michael Ericson

	Title:  Chairman of the Board 
           of Directors
	 
	 

	 
	 
	 

	Dated:  September 16, 2020
	 
	Dated: September 16, 2020

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

    

                

16Exhibit 10.17

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT
(this “Agreement”) is entered into on ___________, 2020, effective as of the effective time of the Merger (as defined
below) (the “Effective Date”) by and among the Company (as defined below), Shift Platform, Inc. (f/k/a Shift Technologies,
Inc.) (“Shift”) and George Arison (the “Executive”), collectively referred to herein as the “Parties.”

 

WHEREAS, Shift is being
merged (the “Merger”) with and into IAC Merger Sub, Inc. pursuant to that certain Merger Agreement dated as of June
29, 2020, by and between Shift Technologies, Inc., Insurance Acquisition Corp. and IAC Merger Sub, Inc. (the “Merger Agreement”),
pursuant to which Shift will be the surviving entity and will be a wholly owned subsidiary of Insurance Acquisition Corp.;

 

WHEREAS, Insurance
Acquisition Corp. is being renamed Shift Technologies, Inc. as of the effective time of the Merger (the “Company”)
and Shift is being renamed Shift Platform, Inc.;

 

WHEREAS, the Parties
desire to enter into this Agreement to reflect the Executive’s position and role in the Company’s business and to provide
for the Executive’s employment by Shift and role with the Company, upon the terms and conditions set forth herein;

 

WHEREAS, the Executive has agreed to certain
confidentiality and non-solicitation covenants contained hereunder, in consideration of the benefits provided to the Executive
under this Agreement; and

 

WHEREAS, this Agreement replaces and supersedes all previous
employment agreements or offer letters between the Executive and the Company (and any predecessor thereto).

 

NOW, THEREFORE, in
consideration of the premises and of the mutual promises and covenants contained herein, the Company and the Executive, intending
to be legally bound, hereby agree as follows:

 

1. Employment.

 

(a) Term.
This Agreement is contingent upon the consummation of the Merger and shall commence on the Effective Date and shall continue until
terminated pursuant to the terms of this Agreement (the “Term”).

 

     

     

    

 

(b) Duties.
During the Term, the Executive shall continue to be employed by Shift and shall be Shift and the Company’s Co-Chief Executive
Officer and shall serve the Company faithfully and to the best of the Executive’s ability. The Executive shall devote the
Executive’s full business time, attention, skill and efforts to the performance of the duties required by or appropriate
for the Executive’s position with the Company. The Executive shall report to the Board of Directors of the Company (the “Board”)
and shall perform such duties commensurate with the Executive’s office as contained in the bylaws of the Company or as the
Executive shall reasonably be directed by the Board, including if requested, providing services to any parent, subsidiary or affiliate
of the Company (collectively with the Company, the “Company Entities” and each a “Company Entity”). The
Executive’s primary work location shall be at the Company’s headquarters (i.e., the primary work location of the senior
management team, currently in San Francisco, California), subject to applicable work-from-home policies and mandates and any other
reasonable accommodations as may be necessary or appropriate under the totality of the facts and circumstances as are not inconsistent
with the Executive’s ability to perform the essential functions of Executive’s employment. In addition, should the
Company transition to a materially different location for its headquarters, the Executive shall be permitted, but not required,
to work remotely, provided that, (i) such remote work situation shall not materially interfere with the Executive’s ability
to perform the Executive’s duties under this Agreement, and (ii) the Executive’s working hours shall be substantially
aligned with the working hours of the Shift workforce generally. The Executive shall engage in such reasonable business travel
as may be required to perform the Executive’s duties. References to Company throughout this Agreement shall refer to the
Company Entities except where the context clearly indicates otherwise.

 

(c) Best
Efforts. Except for vacation, absences due to temporary illness and absences resulting from Disability (as defined below),
the Executive shall devote the Executive’s business time, attention and energies on a full-time basis to the performance
of the duties and responsibilities referred to in subsection (b) above. The Executive shall not during the Term be engaged in any
other business activity which, in the reasonable judgment of the Board, would conflict with the ability of the Executive to perform
the Executive’s duties under this Agreement, whether or not such activity is pursued for gain, profit or other pecuniary
advantage. Nothing in this Section shall prevent Executive from engaging in additional activities in connection with personal investments
and community affairs, including serving on corporate, civic, or charitable boards, or as a non-employee member of the boards of
directors of up to two (2) publicly traded or privately held companies and may continue to serve on any board of which the Executive
was a member as of the Effective Date; provided, however, that no such service or activities are materially inconsistent with Executive’s
duties under this Agreement.

 

2. Base
Salary. During the Term, the Company shall pay to the Executive a base salary of $490,000 annually for 2020 through 2021, and
$590,000 commencing in 2022, which thereafter shall be subject to review and, at the option of the Board (or the Compensation Committee
of the Board to the extent delegated by the Board), subject to increase (such salary, as the same may be increased from time to
time as aforesaid, being referred to herein as the “Base Salary”). The Base Salary shall be reviewed on an annual basis
for increases in accordance with the review process for senior level executives of the Company. The Base Salary shall be payable
in accordance with the Company’s normal payroll practices.

 

3. Incentive
Compensation.

 

(a) Annual
Incentive Compensation. For 2020, subject to the Executive’s continued employment with Shift through December 31, 2020,
the Executive shall be paid Seventy-Five Thousand Dollars ($75,000) between January 1, 2021 and March 15, 2021 (the “2020
Bonus”). For subsequent periods, subject to the Executive’s continued employment with Shift through December 31 of
the applicable performance year, the Executive shall be entitled to participate in an annual bonus program established by the Company
with a target annual bonus amount measured as a percentage of the Executive’s Base Salary, which shall be set at not less
than two hundred percent (200%) of Executive’s Base Salary in the performance year, subject in all respects to achievement
of performance goals to be established by the Board or a subcommittee of the Board with responsibility for remuneration of the
Company’s executives (together with the 2020 Bonus, the “Annual Bonus”). Performance goals used for purposes
of determining the Executive’s Annual Bonus shall be established by the Board or the relevant subcommittee of the Board in
consultation with the Executive. Notwithstanding the forgoing, the Annual Bonus for 2021 shall be determined as set forth in Exhibit
A attached hereto, and Exhibit A shall control in the event of any conflict. Any Annual Bonus earned by the Executive shall be
paid after the end of the fiscal year to which it relates, at the same time and under the same terms and conditions as other executives
of the Company; provided that in no event shall the Executive’s Annual Bonus be paid later than March 15 of the fiscal year
following the fiscal year for which it was earned.

 

    2

     

    

 

(b) Carve-Out
Payment. In addition, the Executive shall be eligible for a bonus equal to $1,750,000 payable in two payments (the “Carve-Out
Payment”) as follows:

 

(i) Subject
to the Executive’s continued employment with Shift through the Merger, the Company shall pay the Executive, within three
(3) Business Days of the Merger, a percentage of the Executive’s total Carve-Out Payment determined by multiplying the Executive’s
completed months of service with the Company, measured from the Executive’s date of hire through the date of the Merger by
2.0833% (but no greater than 100%); and

 

(ii) Subject
to the Executive’s continued employment with Shift through the first (1st) anniversary of the Merger, the Company
shall pay the remaining balance of the Executive’s total Carve-Out Payment, if any, without interest, on the first payroll
date following the first (1st) anniversary of the Merger.

 

(c) Long-Term
Incentive Compensation.

 

(i) The
Executive shall be eligible to participate in all equity compensation plans and programs in place at the Company and shall receive
such grants as may be provided from time to time by the Company to its officers. Any equity awards made by the Company to the Executive
shall be subject to the terms and conditions set forth in the Company’s equity compensation plan and form of grant agreement,
as may be amended from time to time. Notwithstanding the forgoing, the Executive shall be awarded an equity grant (the “2020
Equity Grant”) substantially in the form attached hereto as Exhibit B within five (5) Business Days following the date that
a Securities and Exchange Commission Registration Statement on Form S-8 (the “Form S-8”) with respect to the Company’s
2020 Omnibus Equity Compensation Plan becomes effective; provided that the Company shall use commercially reasonable best efforts
to timely file the Form S-8 as soon as practicable under applicable law. Notwithstanding the forgoing, the Company’s obligation
to grant the 2020 Equity Grant is contingent upon (i) the consummation of the Merger, (ii) approval of the Company’s 2020
Omnibus Equity Compensation Plan by the shareholders of the Company, and (iii) the Form S-8 becoming effective.

 

(ii) Subject
to Executive’s continued employment, all outstanding equity awards made pursuant to the Shift 2014 Stock Incentive Plan (including
for the avoidance of doubt, any outstanding performance portion thereof) (the “Legacy Equity Awards”), shall fully
vest as of March 31, 2021.

 

    3

     

    

 

4. Benefits.
During the Term, the Executive shall be eligible to participate in certain retirement and welfare benefit plans and programs made
available to the Company’s executives as a group, as such retirement and welfare plans may be in effect from time to time
and subject to the eligibility requirements of such plans. Except as expressly provided for herein, nothing in this Agreement shall
prevent the Company from amending or terminating any incentive, equity compensation, retirement, welfare or other employee benefit
plans, programs, policies or perquisites from time to time as the Company deems appropriate.

 

5. Paid
Time Off. During the Term, the Executive shall be entitled to paid time off (vacation, holiday, and sick leave), in accordance
with the Company’s policies; provided, however, that the Executive may take five (5) weeks of paid time off annually.

 

6. Reimbursement
of Expenses. During the Term, the Company shall reimburse the Executive, in accordance with the policies and practices of the
Company in effect from time to time, for all reasonable and necessary traveling expenses and other disbursements incurred by the
Executive for or on behalf of the Company in connection with the performance of the Executive’s duties hereunder upon presentation
by the Executive to the Company of appropriate documentation therefore.

 

7. Indemnification.
Executive, as an officer and/or director, shall be entitled to indemnification from the Company to the fullest extent permitted
by applicable Delaware law. This indemnification shall include Executive’s right to request the Company to advance to Executive
his reasonable attorneys’ fees and expenses as such fees and expenses are incurred (subject to an undertaking by Executive to repay
such advances if it is ultimately determined that Executive is not entitled to be indemnified by the Company as authorized under
applicable law). No amendment, modification or repeal of the indemnity provisions in the governing documents of the Company shall
have the effect of limiting or denying any such rights with respect to actions taken or proceedings arising prior to any amendment,
modification or repeal. The rights in this section shall not be exclusive of any other right that Executive may have or hereafter
acquire with respect to indemnification and advancement and payment of expenses.

 

8. Termination
without Cause; Resignation for Good Reason. If the Executive’s employment is terminated by the Company without Cause
(as defined below), other than due to Disability, or by the Executive for Good Reason (as defined below), the provisions of this
Section 8 shall apply.

 

(a) The
Company may terminate the Executive’s employment with Shift at any time without Cause with prior written notice to the Executive
and the Executive may resign for Good Reason (as defined below).

 

(b) Unless
the Executive complies with the Release Requirement (as defined below), no other payments or benefits shall be due under this Agreement
to the Executive, but the Executive shall be entitled to any amounts earned, accrued and owing, but not yet paid under Section
2, any benefits accrued and due in accordance with the terms of any applicable benefit plans and programs of the Company and payment
of any Carve-Out Payment not previously paid (which shall be paid at the time provided for in Section 3(b)) (the “Accrued
Obligations”).

 

    4

     

    

 

(c) Notwithstanding
the provisions of Section 8(b), upon termination under Section 8(a) above, subject to the Release Requirement, and so long as the
Executive continues to comply with the provisions of Section 16 below, in addition to the Accrued Obligations, the Executive shall
be entitled to receive the following:

 

(i) Continuation
of the Executive’s Base Salary for twelve (12) months (the “Severance Term”), at the rate in effect for the year
in which the Executive’s date of termination occurs (but no less than the amount scheduled to be in effect when a payment
is made pursuant to Section 2), which amount shall be paid in regular payroll installments over the applicable period following
the Executive’s termination date;

 

(ii) A
prorated Annual Bonus for the year in which the Executive’s termination of employment occurs, which shall be determined by
multiplying the Executive’s Annual Bonus, determined based on actual performance of Company goals, without negative discretion,
and provided that any personal goals shall be considered to be fulfilled, by a fraction, the numerator of which is the number of
days during which the Executive was employed by the Company in the year in which the termination date occurs and the denominator
of which is 365. The prorated Annual Bonus, if any, shall be paid at the same time as bonuses are paid to other employees of the
Company, but not later than March 15 of the fiscal year following the fiscal year for which it was earned;

 

(iii) Any
unpaid Carve-Out Payments, paid at the time set forth in Section 3(b);

 

(iv) The
vesting of all then-outstanding Legacy Equity Awards. For the avoidance of doubt, such vesting shall be delayed to account for
the Release Requirement and during such delay, such Legacy Equity Awards shall not be cancelled pending the fulfillment of the
Release Requirement; and

 

(d) If
the Executive timely and properly elects health continuation coverage under the Consolidated Omnibus Budget Reconciliation Act
of 1985 (“COBRA”), then continued health (including hospitalization, medical, dental, vision etc.) insurance coverage
substantially similar in all material respects as the coverage provided to the Company’s then other active senior executives
for twelve (12) months; provided that the Executive shall pay an amount equal to the amount active employees pay for such coverage
as of the date of the Executive’s termination (the “Monthly COBRA Costs”) and the period of COBRA health care
continuation coverage provided under section 4980B of the Internal Revenue Code, as amended and the regulations and guidance promulgated
thereunder (the “Code”) shall run concurrently with the period; provided further that, notwithstanding the foregoing,
the amount of any benefits provided by this Section 8(d) shall be reduced or eliminated to the extent the Executive becomes entitled
to duplicative benefits by virtue of the Executive’s subsequent or other employment. The Executive acknowledges that the
payments pursuant to this Section 8(d) are taxable and subject to applicable withholding and payroll taxes.

 

    5

     

    

 

9. Voluntary
Termination. The Executive may voluntarily terminate the Executive’s employment for any reason or no reason, with prior
written notice. In such event (other than a resignation with Good Reason), after the effective date of such termination, no payments
shall be due under this Agreement, except that the Executive shall be entitled to the Accrued Obligations, except that, to the
extent such voluntary resignation (without Good Reason) is approved in advance by action of the Board, subject to the Release Requirement,
any then-outstanding Legacy Equity Awards shall continue to vest in accordance with its schedule. For the avoidance of doubt, such
vesting shall be delayed to account for the Release Requirement and during such delay, such Legacy Equity Awards shall not be cancelled
pending the fulfillment of the Release Requirement.

 

10. [Reserved].

 

11. Death;
Disability. If the Executive’s employment is terminated by the Company by reason of death or, subject to the requirements
of applicable law, Disability (as defined below), upon the Executive’s date of termination or death, no payments shall be
due under this Agreement, except that the Executive (or in the event of the Executive’s death, the Executive’s executor,
legal representative, administrator or designated beneficiary, as applicable), shall be entitled to the Accrued Obligations, including
any unpaid Carve-Out Payments. Subject to the Release Requirement, the Executive (or the Executive’s legal representative)
shall be entitled to:

 

(i) Any
unpaid Carve-Out Payments, paid at the time set forth in Section 3(b); and

 

(ii) The
vesting of all then-outstanding Legacy Equity Awards. For the avoidance of doubt, such vesting shall be delayed to account for
the Release Requirement and during such delay, such Legacy Equity Awards shall not be cancelled pending the fulfillment of the
Release Requirement.

 

12. Cause.
The Company may terminate the Executive’s employment at any time for Cause upon written notice to the Executive, in which
event all payments under this Agreement shall cease, except for the Accrued Obligations.

 

13. Change
of Control.

 

(a) Legacy
Equity. Immediately prior to a Change of Control (as defined below), any then-outstanding Legacy Equity Awards shall vest.

 

(b) Application
of Section 280G. If any of the payments or benefits received or to be received by the Executive (including, without limitation,
any payment or benefits received in connection with a Change of Control or the Executive’s termination of employment, whether
pursuant to the terms of this Agreement or any other plan, arrangement or agreement, or otherwise) (all such payments collectively
referred to herein as the “280G Payment”) constitute “parachute payments” within the meaning of Code Section
280G and will be subject to the excise tax imposed under Code Section 4999 (the “Excise Tax”), then the 280G Payment
shall be equal to the Reduced Amount. The “Reduced Amount” shall be either (i) the largest portion of the 280G Payment
that would result in no portion of the 280G Payment being subject to the Excise Tax, or (ii) the largest portion of the 280G Payment,
up to and including the total 280G Payment, whichever amount, after taking into account all applicable federal, state and local
employment taxes, income taxes and the Excise Tax (all computed at the highest applicable marginal rate), results in the Executive’s
receipt, on an after-tax basis, of the greater amount of the 280G Payment, notwithstanding that all or some portion of the 280G
Payment may be subject to the Excise Tax. In making the determination described above, the Company, in its sole and absolute discretion,
shall make a reasonable determination of the value to be assigned to any restrictive covenants in effect for the Executive, and
the amount of the 280G Payment shall be reduced by the value of those restrictive covenants to the extent consistent with Code
Section 280G. If a reduction in payments or benefits constituting “parachute payments” is necessary so that the 280G
Payment equals the Reduced Amount, the amounts payable or benefits to be provided to the Executive shall be reduced such that the
economic loss to the Executive as a result of the “parachute payment” elimination is minimized. In applying this principle,
the reduction shall be made in a manner consistent with the requirements of Code Section 409A and where two economically equivalent
amounts are subject to reduction but payable at different times, such amounts shall be reduced on a pro rata basis but not below
zero. All determinations to be made under this Section 13 shall be made by an independent accounting firm, consulting firm or other
independent service provider selected by the Company immediately prior to the Change of Control (the “Firm”), which
shall provide its determinations and any supporting calculations both to the Company and the Executive within ten (10) days of
the Change of Control. Any such determination by the Firm shall be binding upon the Company and the Executive. All of the fees
and expenses of the Firm in performing the determinations referred to in this Section 13 shall be borne solely by the Company.

 

    6

     

    

 

14. Definitions.

 

(a) Cause.
For purposes of this Agreement, “Cause” shall mean the Executive’s action, or failure to act, during the Executive’s
employment with the Company that is determined to constitute any of the following: (i) performance of any act or failure to
perform any act in bad faith and to the detriment of any Company Entities; (ii) dishonesty, intentional misconduct or material
breach of any agreement with any Company Entity; or (iii) commission of a crime involving dishonesty, breach of trust, or physical
or emotional harm to any person. Prior to any termination for Cause pursuant to each such event listed in (i) or (ii) above, to
the extent such event(s) is capable of being cured by the Executive, the Company shall give the Executive written notice thereof
describing in reasonable detail the circumstances constituting Cause and the Executive shall have the opportunity to remedy same
within thirty (30) days after receiving written notice.

 

(b) Change
of Control. For purposes of this Agreement, a “Change of Control” shall have the same meaning ascribed to such
term under the Company’s 2020 Omnibus Equity Compensation Plan, as in effect on the date hereof and as may be amended from
time to time, or such successor plan.

 

(c) Disability.
For purposes of this Agreement, “Disability” shall mean the Executive has been unable to perform the essential functions
of the Executive’s position with the Company, either with or without a reasonable accommodation, by reason of physical or
mental incapacity for a period of six consecutive months, subject to any obligations or limitations imposed by federal, state or
local laws, including any duty to accommodate Executive under the federal Americans with Disabilities Act or applicable state law.

 

    7

     

    

 

(d) Good
Reason. For purposes of this Agreement, “Good Reason” shall mean the occurrence of one or more of the following,
without the Executive’s consent: (i) material diminution of the Executive’s authority, duties or responsibilities;
(ii) a material diminution in the Executive’s compensation as set forth in Sections 2 and 3(a) hereof; (iii) a change in
the Executive’s reporting obligations so that the Executive must report to someone other than the Board; or (v) any action
or inaction that constitutes a material breach by the Company of a material provision of this Agreement. The Executive must provide
written notice of termination for Good Reason to the Company within sixty (60) days after the event constituting Good Reason first
occurs, which notice shall state such Good Reason in reasonable detail. The Company shall have a period of thirty (30) days in
which it may correct the act or failure to act that constitutes the grounds for Good Reason as set forth in the Executive’s
notice of termination. If the Company does not correct the act or failure to act, the Executive must terminate the Executive’s
employment for Good Reason within sixty (60) days after the end of the cure period, in order for the termination to be considered
a Good Reason termination.

 

(e) Release
Requirement. Notwithstanding anything herein to the contrary, the Executive shall not be entitled to receive any payment that
is subject to the requirements of this Section 14(e) (the “Release Requirement”) unless, in each case, the Executive
(or the Executive’s legal representative) has executed and delivered to the Company a general release in the form attached hereto
as Exhibit C (subject to updates for changes in law and facts, as reasonably determined by the Company) (the “General Release”),
which General Release shall be in full force and effect (and no longer subject to revocation) within sixty (60) calendar days after
the Executive’s termination of employment (the “Release Effective Date”). To the extent that any payment subject to
the Release Requirement is deferred compensation under Section 409A that is not otherwise exempt from the application of Section
409A, and if the sixty (60) calendar day period referenced in the preceding sentence spans two calendar years, then, solely to
the extent necessary to avoid the incurrence of adverse personal tax consequences under Section 409A, the payment of such amount
will not occur until the second calendar year.

 

15. Representations,
Warranties and Covenants of the Executive.

 

(a) Restrictions.
The Executive represents and warrants to the Company that:

 

(i) There
are no restrictions, agreements or understandings whatsoever to which the Executive is a party which would prevent or make unlawful
the Executive’s execution of this Agreement or the Executive’s employment hereunder, which is or would be inconsistent
or in conflict with this Agreement or the Executive’s employment hereunder, or would prevent, limit or impair in any way
the performance by the Executive of the obligations hereunder; and

 

(ii) The
Executive has disclosed to the Company all restraints, confidentiality commitments, and other employment restrictions that the
Executive has with any other employer, person or entity.

 

(b) Obligations
to Former Employers. The Executive covenants that in connection with the Executive’s provision of services to the Company,
the Executive shall not breach any obligation (legal, statutory, contractual, or otherwise) to any former employer or other person,
including, but not limited to, obligations relating to confidentiality and proprietary rights.

 

    8

     

    

 

(c) Obligations
upon Termination. Upon and after the Executive’s termination or cessation of employment with the Company and until such
time as no obligations of the Executive to the Company hereunder exist, the Executive shall (i) provide a complete copy of this
Agreement to any person, entity or association which the Executive proposes to be employed, affiliated, engaged, associated or
to establish any business or remunerative relationship prior to the commencement of any such relationship and (ii) shall notify
the Company of the name and address of any such person, entity or association prior to the commencement of such relationship.

 

16. Restrictive
Covenants.

 

(a) Non-Solicitation.
In consideration of the promises contained herein and the consideration to be received by the Executive hereunder (including, without
limitation, the potential compensation described in Sections 8, 9, 11 and 13, if any), without the prior written consent of the
Company, during the Term (and except for the benefit of the Company Entities) and for a period of twelve (12) months immediately
following the Executive’s separation from the Company, however caused, the Executive shall not, directly or indirectly, either
for or on behalf of himself or any other person or entity, solicit or induce or attempt to solicit or induce any employee, consultant
or independent contractor of any Company Entity, to discontinue employment or engagement with such Company Entity; or otherwise
interfere or attempt to interfere with the relationships between the any Company Entity, and their employees, consultants, or independent
contractors. This provision does not apply to any employee or contractor who responds to a general advertisement not targeted at
any specific employees or contractors of any Company Entity or to any employee or contractor who independently seeks employment
with the Executive’s subsequent employer through no solicitation or contact by the Executive.

 

(b) Non-Disparagement.
The Executive shall not disparage the Company Entities or their respective officers, directors, investors, employees, and affiliates
or make any public statement reflecting negatively on the Company Entities or their respective officers, directors, investors,
employees, and affiliates, including (without limitation) any matters relating to the operation or management of the Company Entities,
irrespective of the truthfulness or falsity of such statement. The Company shall instruct and take all reasonable steps to cause
its officers and members of the Board not to disparage the Executive on any matters relating to the Executive’s services
to the Company Entities, business, professional or personal reputation or standing in the Company’s industry, irrespective
of the truthfulness or falsity of such statement. Nothing in the section shall prohibit the Parties from testifying truthfully
in any forum or to any governmental agency.

 

(c) Proprietary
Information. At all times the Executive shall hold in strictest confidence and will not disclose, use, lecture upon or publish
any Proprietary Information (defined below) of the Company Entities, except as such disclosure, use or publication may be required
in connection with the Executive’s work for the Company Entities, or unless the Company expressly authorizes such disclosure
in writing or it is required by law or in a judicial or administrative proceeding in which event the Executive shall promptly notify
the Company of the required disclosure and assist the Company if a determination is made to resist the disclosure. For purposes
of this Section 16(c), “Proprietary Information” shall mean any and all confidential and/or proprietary knowledge,
data or information of the Company or its respective affiliated entities, including (without limitation) any information relating
to financial matters, investments, budgets, business plans, marketing plans, personnel matters, business contacts, products, processes,
know-how, designs, methods, improvements, discoveries, inventions, ideas, data, programs, and other works of authorship; provided,
that it shall not include any information that is known to the Company to be publicly available.

 

    9

     

    

 

(d) Invention
Assignment.

 

(i) Company
Ownership. Executive acknowledges and agrees that the Company owns, and has all rights, title and interests in and to, the
Company Property (as defined below). To the extent that any Company Property is capable of protection by copyright as a work made
for hire, such Company Property is a work made for hire, as defined in the United States Copyright Act (17 U.S.C. Section 101),
and ownership of all copyrights worldwide (including all renewals and extensions) therein vests in the Company from the time of
creation. To the extent not already vested in or assigned to the Company, Executive agrees to and does hereby irrevocably assign,
transfer and grant to the Company, its successors and assigns, all rights, title and interests in and to any and all Company Property,
free and clear of all liens and encumbrances, and without further consideration. The Company, and its successors and assigns, accept
all such rights, title and interests. To the extent Executive retains any Moral Rights (as defined below), Executive hereby irrevocably
waives, to the extent permitted by applicable law, such Moral Rights (and any claims for such rights) as may have existed in the
past, exist now or come into existence in the future.

 

(ii) “Work
Product” means any and all discoveries, inventions, concepts, formulas, ideas, confidential or proprietary information,
know-how, trade secrets, techniques, technologies, research, development, prototypes, designs, engineering and manufacturing information,
processes, products, services, methods, systems, improvements, modifications, derivative works, specifications, requirements, data,
parameters, drawings, reports, hardware, algorithms, flow charts, software (including all programs, code, firmware, source code,
object code, executable code and related documentation), works of authorship, proposals, customer, sales, marketing, and purchasing
information, other information and materials, and any and all tangible embodiments of any of the foregoing (in each case whether
or not technical, business or financial, and whether or not patentable, copyrightable or registerable) that may be, are, have been,
or were created, conceived, reduced to practice, prepared, contributed, developed or learned by Executive, either alone or jointly
with others, resulting from or in the course of employment with the Company Entities. For purposes of clarity and avoidance of
doubt, Work Product shall not include any of the above to the extent developed in the course of the Executive’s provision
of services as a member of the board of directors of another company as permitted pursuant to Section 1(c).

 

(iii) “Company
Property” means any and all Work Product as well as any and all trade secrets, trademarks, service marks, associated
goodwill, patents (including utility models, utility patents and design patents), copyrights, design rights, economic rights, mask
works, database rights, the right of priority, publicity rights, privacy rights, shop rights, and all other intellectual property
or proprietary rights in and to the Work Product, in any jurisdictions throughout the worldwide, whether registered or unregistered,
whether published or not published, including all applications, including all registrations, certificates, governmental grants,
and renewals for any of the foregoing, and including all rights to claim priority, file applications, and obtain grants, renewals
and extensions in connection with any of the foregoing, all rights to assert, defend and recover title in connection with any of
the foregoing, and all rights to sue and recover for any past, present and future infringement, misappropriation, violation, injunctive
relief, damages, lost profits, royalties, and payments in connection with any of the foregoing, in each case, as may have existed
in the past, exist now, or come into existence in the future throughout the world. To the fullest extent allowed by law, the Company
Property includes any and all rights of paternity, integrity, disclosure and withdrawal and any other rights that may be known
as or referred to as “moral rights,” “artist’s rights,” “droit moral,” or the like in
and to the Work Product (the “Moral Rights”).

 

    10

     

    

 

(iv) Prior
Materials. If the Executive utilizes or incorporates any Prior Materials (as defined below) in connection with or into any
Company Property or any business, operation, products or services of any of the Company or the Company Entities, (i) the Executive
shall inform the Company of such utilization or incorporation, in writing, in advance of such utilization or incorporation, and
(ii) whether or not the Executive complies with the foregoing provision, to the maximum extent permitted by applicable law, the
Company and the Company Entities are hereby granted a nonexclusive, fully-paid up, royalty-free, perpetual, irrevocable, worldwide
license (including the right to sublicense for multiple tiers) under the Prior Materials and all intellectual property rights therein
to use, execute, reproduce, transmit, display, perform, prepare derivative works based upon and distribute (internally and externally)
copies of any and all Prior Materials and derivative works thereof, to use, make, sell, offer to sell, import and export any and
all products, methods and services, and to perform any and all activities that may constitute direct or indirect infringement of
any of the intellectual property rights in the Prior Materials. “Prior Materials” means any and all inventions,
improvements, developments, formulas, procedures, methods, processes, techniques, concepts, discoveries, works of authorship and
other information and materials owned by the Executive or in which the Executive has an interest, including listed on Exhibit D.
Executive shall provide Exhibit D, to be attached to this Agreement no later than November 30, 2020.

 

(v) Further
Assistance. The Executive will deliver promptly to the Company or its designee (without charge to the Company but at the expense
of the Company) such written instruments and do such other acts as may be necessary to preserve the property rights, to obtain,
maintain and enforce applications and registrations, and to effect or perfect the rights and ownership of the Company, its successors,
and assigns in connection with any Company Property, including (i) executing assignments, declarations, powers of attorney and
other documents related to any Company Property, (ii) rendering assistance in making, filing, prosecuting, maintaining and registering
applications related to any Company Property, and (iii) rendering assistance in connection with defending and enforcing any Company
Property. The Executive hereby irrevocably designates and appoints the Company, its successors and assigns and their designees,
as Executive’s agent and attorney-in-fact, with full power of substitution and revocation, to act for and on behalf of the
Executive, to execute, verify and file any such document and to do all other lawfully permitted acts to further the purposes of
Section, with the same force and effect as if the Executive had signed the documents or taken those actions itself.

 

(vi) Records.
The Executive agrees to keep accurate, complete and timely records of all Work Product. The Executive agrees to promptly and fully
disclose and describe all Company Property in writing to the Company.

 

    11

     

    

 

(vii) Exclusions.
The Executive understands and acknowledges that the Executive has been advised, pursuant to Section 2872 of the California Labor
Code, that the provisions of this Agreement requiring the assignment of inventions do not apply to any invention that qualifies
fully under Section 2870 of the California Labor Code, which provides:

 

		“(a)	Any provision in an employment agreement which provides that an employee
shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention
that the employee developed entirely on his or her own time without using the employer’s equipment, supplies, facilities,
or trade secret information except for those inventions that either:

 

		(1)	Relate at the time of conception or reduction to practice of the invention
to the employer’s business, or actual or demonstrably anticipated research or development of the employer; or

 

		(2)	Result from any work performed by the employee for the employer.”

 

(e) Return
of Property. Upon termination of the Executive’s employment with the Company
for any reason, voluntarily or involuntarily, and at any earlier time the Company requests, the Executive will deliver to the person
designated by the Company all originals and copies of all documents and property of the Company in the Executive’s possession,
under the Executive’s control or to which the Executive may have access. The Executive will not reproduce or appropriate
for the Executive’s own use, or for the use of others, any property, Proprietary Information or Work Product.

 

(f) Permitted
Conduct. Notwithstanding the foregoing restrictions, nothing in this Agreement shall (i) prohibit the Executive from owning
a five (5%) percent or smaller interest in any corporation required to file period reports with the United States Securities and
Exchange Commission, so long as the Executive performs no services or lends any assistance to such corporation during the Term;
(ii) deny the Executive the right to disclose information about unlawful acts in the workplace, including, but not limited to,
sexual harassment; (iii) prohibit the Executive from providing information to, or testifying or otherwise assisting in any investigation
or proceeding brought by, any federal or state regulatory or law enforcement agency or legislative body, or any self-regulatory
organization or filing, testifying, participating in, or otherwise assisting in a proceeding relating to an alleged violation of
any federal, state, or municipal law relating to fraud, whistleblowing or any rule or regulation of the Securities and Exchange
Commission or other self-regulatory organization; (iv) prohibit the Executive from filing an administrative charge with the Equal
Employment Opportunity Commission (“EEOC”) and/or participating in an investigation by the EEOC; (v) prohibit the Executive
from making any disclosure of information required by process of law; or (vi) pursuant to the Defend Trade Secrets Act of 2016,
prevent the Executive from disclosing trade secrets where the disclosure is made: (x) in confidence to a federal, state, or local
government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating
a suspected violation of law; (y) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made
under seal; or (z) to an attorney for use in a court proceeding in connection with a lawsuit against the employer for retaliation
for reporting a suspected violation of law if the information is filed under seal and not disclosed except pursuant to court order.1

 

 

		1	18 U.S.C. § 1833(b)(1)-(2).

 

    12

     

    

 

17. Miscellaneous
Provisions.

 

(a) Entire
Agreement; Amendments.

 

(i) This
Agreement and the other agreements referred to herein contain the entire agreement between the Parties hereto and supersede any
and all prior agreements and understandings concerning the Executive’s employment by the Company.

 

(ii) This
Agreement shall not be altered or otherwise amended, except pursuant to an instrument in writing signed by each of the Parties
hereto.

 

(b) Descriptive
Headings. Descriptive headings are for convenience only and shall not control or affect the meaning or construction of any
provisions of this Agreement. When the context admits or requires, words used in the masculine gender shall be construed to include
the feminine, the plural shall include the singular, and the singular shall include the plural.

 

(c) Notices.
All notices or other communications pursuant to this Agreement shall be in writing and shall be deemed to be sufficient if delivered
personally, telecopied, sent by nationally-recognized, overnight courier or mailed by registered or certified mail (return receipt
requested), postage prepaid, to the Parties at the following addresses (or at such other address for a party as shall be specified
by like notice):

 

	
        

        (i)
	if to the Company, to:
	 	General Counsel
	 	Shift Technologies, Inc.
	 	2525 16th Street, Suite 316, San Francisco, CA 94103
	 	(650) 246-9966
	 	amandab@shift.com
	 	 
	 	with a copy to:
	 	Matthew J. Renaud
	 	Jenner & Block LLP
	 	353 N. Clark Street, Chicago, IL 60654
	 	(312) 923-2958
	 	MRenaud@jenner.com

 

    13

     

    

 

(ii) if
to the Executive, to the address in the Company’s personnel records.

 

All such notices and
other communications shall be deemed to have been delivered and received (A) in the case of personal delivery, on the date of such
delivery, (B) in the case of delivery by telecopy, on the date of such delivery, (C) in the case of delivery by nationally-recognized,
overnight courier, on the Business Day following dispatch, and (D) in the case of mailing, on the third Business Day following
such mailing. As used herein, “Business Day” shall mean any day that is not a Saturday, Sunday or a day on which banking
institutions in the state of California are not required to be open.

 

(d) Counterparts.
This Agreement may be executed in any number of counterparts, and each such counterpart shall be deemed to be an original instrument,
but all such counterparts together shall constitute but one agreement. This Agreement may be executed and delivered by facsimile.

 

(e) Governing
Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the state of California
applicable to contracts made and performed wholly therein without regard to rules governing conflicts of law, provided that, the
parties agree that the definition of a Change of Control shall be governed by Delaware law.

 

(f) Non-Exclusivity
of Rights; Resignation from Boards; Clawback.

 

(i) Nothing
in this Agreement shall prevent or limit the Executive’s continuing or future participation in or rights under any benefit,
bonus, incentive or other plan or program provided by the Company and for which the Executive may qualify; provided, however, the
Executive hereby waives the Executive’s right to receive payments under any severance plan or similar program applicable
to employees of the Company.

 

(ii) Except
as otherwise determined by the Board, if the Executive’s employment with the Company terminates for any reason, the Executive
shall immediately resign from all boards of directors of the Company Entities, and any other entities for which the Executive serves
as a representative of the Company and any committees thereof, provided that, prior to Executive’s termination of employment,
the Executive may petition the Board in writing for the Board to waive Executive’s required resignation from the Board following
Executive’s termination. The Board will take formal action on such petition within 10 Business Days of its receipt thereof.

 

(iii) The
Executive agrees that the Executive will be subject to any compensation clawback, recoupment and anti-hedging policies that may
be applicable to the Executive as an executive of the Company, as in effect from time to time and as approved by the Board or a
duly authorized committee thereof.

 

    14

     

    

 

(g) Benefits
of Agreement; Assignment. All of the terms and provisions of this Agreement shall be binding upon and inure to the benefit
of and be enforceable by the respective heirs, executors, administrators, legal representatives, successors and assigns of the
Parties hereto, except that the duties and responsibilities of the Executive under this Agreement are of a personal nature and
shall not be assignable or delegable in whole or in part by the Executive. The Company shall require any successor (whether direct
or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all of the business or assets
of the Company, within fifteen (15) days of such succession, expressly to assume and agree to perform this Agreement in the same
manner and to the same extent as the Company would be required to perform if no such succession had taken place and the Executive
acknowledges that in such event the obligations of the Executive hereunder, including but not limited to those under Sections 15
or 16, will continue to apply in favor of the successor. Without limitation, the Company may move the Executive’s employment
from Shift to the Company, or another Company Entity at which other officers of the Company are employed.

 

(h) Waiver
of Breach. No delay or omission by a party in exercising any right, remedy or power under this Agreement or existing at law
or in equity shall be construed as a waiver thereof, and any such right, remedy or power may be exercised by such party from time
to time and as often as may be deemed expedient or necessary by such party in its sole discretion.

 

(i) Severability.
In the event that any provision of this Agreement is determined to be partially or wholly invalid, illegal or unenforceable in
any jurisdiction, then such provision shall, as to such jurisdiction, be modified or restricted to the extent necessary to make
such provision valid, binding and enforceable, or if such provision cannot be modified or restricted, then such provision shall,
as to such jurisdiction, be deemed to be excised from this Agreement; provided, however, that the binding effect and enforceability
of the remaining provisions of this Agreement, to the extent the economic benefits conferred upon the Parties by virtue of this
Agreement remain substantially unimpaired, shall not be affected or impaired in any manner, and any such invalidity, illegality
or unenforceability with respect to such provisions shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

(j) Remedies.
All remedies hereunder are cumulative, are in addition to any other remedies provided for by law and may, to the extent permitted
by law, be exercised concurrently or separately, and the exercise of any one remedy shall not be deemed to be an election of such
remedy or to preclude the exercise of any other remedy. The Executive acknowledges that in the event of a breach of any of the
Executive’s covenants contained in Sections 15 or 16, the Company shall be entitled to immediate relief enjoining such violations
in any court or before any judicial body having jurisdiction over such a claim.

 

(k) Survival.
The respective rights and obligations of the Parties hereunder shall survive the termination of this Agreement to the extent necessary
to the intended preservation of such rights and obligations.

 

(l) Jurisdiction.
Each of the Parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction
of any California state court or federal court of the United States of America sitting in the state of California, and any appellate
court from any thereof, in any action or proceeding arising out of or relating to this Agreement or any related agreement or for
recognition or enforcement of any judgment. Each of the Parties hereto hereby irrevocably and unconditionally agrees that jurisdiction
and venue in such courts would be proper, and hereby waive any objection that such courts are an improper or inconvenient forum.
Each of the Parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced
in other jurisdictions by suit on the judgment or in any other manner provided by law. Each of the Parties hereto irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do so, any objection that it may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any related agreement
in any California state or federal court. Each of the Parties hereto irrevocably waives, to the fullest extent permitted by law,
the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

 

    15

     

    

 

(m) Withholding.
All payments under this Agreement shall be made subject to applicable tax withholding, and the Company shall withhold from any
payments under this Agreement all federal, state and local taxes as the Company is required to withhold pursuant to any law or
governmental rule or regulation. The Executive shall bear all expense of, and be solely responsible for, all federal, state and
local taxes due with respect to any payment received under this Agreement.

 

(n) Compliance
with Section 409A of the Code.

 

(i) This
Agreement is intended to comply with Section 409A of the Code and its corresponding regulations, to the extent applicable. Severance
benefits under the Agreement are intended to be exempt from Section 409A of the Code under the “short term deferral”
exemption, to the maximum extent applicable, and then under the “separation pay” exemption, to the maximum extent applicable.
Notwithstanding anything in this Agreement to the contrary, payments may only be made under this Agreement upon an event and in
a manner permitted by Section 409A of the Code, to the extent applicable. As used in the Agreement, the term “termination
of employment” shall mean the Executive’s separation from service with the Company within the meaning of Section 409A
of the Code and the regulations promulgated thereunder. In no event may the Executive, directly or indirectly, designate the calendar
year of a payment. For purposes of Section 409A of the Code, each payment hereunder shall be treated as a separate payment and
the right to a series of payments shall be treated as the right to a series of separate payments. All reimbursements and in-kind
benefits provided under the Agreement shall be made or provided in accordance with the requirements of Section 409A of the Code.
Notwithstanding any provision of this Agreement to the contrary, in no event shall the timing of the Executive’s execution
of the Release, directly or indirectly, result in the Executive designating the calendar year of payment, and if a payment that
is subject to execution of the Release could be made in more than one taxable year, payment shall be made in the later taxable
year.

 

(ii) Notwithstanding
anything herein to the contrary, if, at the time of the Executive’s termination of employment with the Company, the Company
has securities which are publicly traded on an established securities market and the Executive is a “specified employee”
(as such term is defined in section 409A of the Code) and it is necessary to postpone the commencement of any payments or benefits
otherwise payable under this Agreement as a result of such termination of employment to prevent any accelerated or additional tax
under section 409A of the Code, then the Company will postpone the commencement of the payment of any such payments or benefits
hereunder (without any reduction in such payments or benefits ultimately paid or provided to the Executive) that are not otherwise
paid within the ’short-term deferral exception’ under Treas. Reg. §1.409A-1(b)(4), and the ’separation pay
exception’ under Treas. Reg. §1.409A-1(b)(9)(iii), until the first payroll date that occurs after the date that is six
months following the Executive’s “separation of service” (as such term is defined under code section 409A of
the Code) with the Company. If any payments are postponed due to such requirements, such postponed amounts will be paid in a lump
sum to the Executive on the first payroll date that occurs after the date that is six months following Executive’s separation
of service with the Company. If the Executive dies during the postponement period prior to the payment of postponed amount, the
amounts withheld on account of section 409A of the Code shall be paid to the personal representative of the Executive’s estate
within sixty (60) days after the date of the Executive’s death.

 

(o) Attorneys’
Fees. The Company shall reimburse Executive for his reasonable legal fees incurred in connection with review of and revisions
to this Agreement, in an amount not to exceed Seven Thousand Five Hundred dollars ($7,500).

 

[Signature page follows]

 

    16

     

    

 

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

 

	
        

         
	SHIFT TECHNOLOGIES, INC.
	 	 
	 	By:	                             
	 	Name:  	 
	 	Title:	 
	 	 	 
	 	SHIFT PLATFORM, INC.
	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	 	 
	 	EXECUTIVE
	 	 
	 	By:	 
	 	Name:	George Arison

 

    17

     

    

 

Exhibit A

 

2021 Annual Bonus Program

 

The following terms and conditions shall
govern the Annual Bonus of the Executive for the performance year of 2021, which Annual Bonus will be paid in accordance with Section
3(a) of the Employment Agreement in 2022.

 

Subject to the Executive’s continued
employment with Shift through the date the 2021 Annual Bonus is paid, the Executive shall be eligible for an Annual Bonus of:

 

		●	200% of the Executive’s 2021 Annual Salary if
the Company (on a consolidated basis) meets the performance goals for 2021 to be established by the Company’s Compensation
Committee for senior executives of the Company, based on the Company’s 2021 budget as approved by the Board. The Compensation
Committee shall determine such performance goals no later than December 31, 2020 following consultation with the Co-CEOs.

 

		●	An additional 100% of Executive’s 2021 Annual
Salary if the Company (on a consolidated basis) meets the performance goals for 2021 to be established by the Company’s
Compensation Committee, based on stretch goals when compared to the Company’s 2021 annual budget as approved by the Board.
The Compensation Committee shall determine such performance goals no later than December 31, 2020 following consultation with
the Co-CEOs.

 

    18

     

    

 

Exhibit B

 

Form of Award pursuant to the 

 

Company’s 2020 Omnibus Equity
Compensation Plan

 

[Attached]

 

    19

     

    

 

Exhibit C

 

Form of Release

 

[Attached]

 

    20

     

    

 

Release Agreement

 

This Release Agreement (the “Agreement”),
by and between Shift Technologies, Inc. (the “Company”) and George Arison (“You” or “Your”)
(the Company and You collectively referred to as the “Parties”) is entered into and effective as of _____________ (the
“Effective Date”). You and the Company previously entered into that certain Employment Agreement, dated as of _________________,
as amended from time to time (the “Employment Agreement”).

 

1. Separation
Date; Accrued Obligations. The Parties acknowledge and agree that Your employment with the Company terminated effective as
of ________________ (the “Separation Date”). The Company will pay You all Accrued Obligations (as defined in the Employment
Agreement), as provided in Section 8(b) of the Employment Agreement.

 

2. Separation
Payments. Provided that You satisfy the conditions of this Agreement, including the return of all Company property, and do
not revoke this Agreement, the Company shall pay [DESCRIBE APPLICABLE BENEFITS] in accordance with Section [__] of the Employment
Agreement, which together with Sections [15(c), 16, and 17] of the Employment Agreement, are incorporated herein (the “Separation
Payments”). Notwithstanding the foregoing, in the event of a material, uncured breach of this Agreement, You acknowledge
and agree that: (a) the Company shall have the right, upon five (5) days’ notice to You, to file a lawsuit against You to
recover ninety-five percent (95%) of the Separation Payments, as such amount is not deemed earned absent Your compliance with this
Agreement; and (b) the remaining five percent (5%) of the Separation Payments shall constitute full and complete consideration
sufficient to support enforcement of this Agreement against You, including, but not limited to, enforcement of Your release of
claims set forth below.

 

3. Employee
Benefits; Equity Awards. Because You are no longer employed, Your rights to any particular employee benefit shall be governed
by applicable law and the terms and provisions of the Company’s various employee benefit plans and arrangements. You agree
that the treatment of any equity-based compensation awards granted to You by Company under an equity agreement will be governed
by the terms of such awards and such equity agreement. Following the Separation Date, the Company will not grant You any equity-based
compensation awards.

 

    21

     

    

 

4. Release.
In exchange for the Separation Payments, You release and discharge the Company2
from any and all claims, charges, or lawsuits of any kind or nature (and will not cause any action or claim to be commenced) based
upon facts, transactions, or omissions that occurred on or before the date You sign this Agreement, arising out of Your employment
or the cessation of Your employment, claims arising out of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C.
§§ 1001-1461, claims to stock options, claims to the vesting of stock options, claims arising out of or relating to equity
or other ownership interest in the Company, claims for breach of contract, claims for tort, negligent hiring, negligent retention,
negligent supervision, negligent training, employment discrimination, retaliation, or harassment, as well as any other statutory
or common law claims, at law or in equity, recognized under any federal, state, or local law. You also release any claims for unpaid
back pay, sick pay, vacation pay, expenses, bonuses, claims arising out of or relating to equity or other ownership interest in
the Company, claims to commissions, attorneys’ fees, or any other compensation. You agree that You are not entitled to any
additional payment or benefits from the Company, except as set forth in this Agreement or under an Equity Agreement. You further
agree that You have suffered no harassment, retaliation, employment discrimination, or work-related injury or illness and that
You do not believe that this Agreement is a subterfuge to avoid disclosure of sexual harassment or gender discrimination allegations
or to waive such claims. You acknowledge and represent that You (i) have been fully paid (including, but not limited to, any overtime
to which You are entitled, if any) for hours You worked for the Company, and (ii) do not claim that the Company violated or denied
Your rights under the Fair Labor Standards Act. Notwithstanding the foregoing, the release of claims set forth in this Section
does not waive (x) Your right to receive benefits under the Company’s 401(k) or other employee benefit plan, if any, that
either (a) have accrued or vested prior to the Effective Date, or (b) are intended, under the terms of such plans, to survive Your
separation from the Company, (y) Your rights to be indemnified under applicable law or Your indemnity agreement or any other indemnification
arrangement or D&O insurance policy applicable to You or (z) Your rights to enforce this Agreement.

 

5. ADEA/OWBPA
Waiver. By agreeing to this provision, You release and waive any right or claim against the Company1 arising out
of Your employment or the termination of Your employment with the Company under the Age Discrimination in Employment Act, as amended,
29 U.S.C. § 621 et seq. (“ADEA”), and the Older Workers Benefit Protection Act, 29 U.S.C. § 621 et seq. (“OWBPA”)
(such release and waiver referred to as the “Waiver”). You understand and agree that, (i) this Agreement is written
in a manner that You understand; (ii) You do not release or waive rights or claims that may arise after You sign this Agreement;
(iii) You waive rights and claims You may have had under the OWBPA and the ADEA, but only in exchange for payments and/or benefits
in addition to anything of value to which You are already entitled; (iv) You are advised to consult with an attorney before signing
this Agreement; (v) You have [twenty-one (21)]/[forty-five (45)] calendar days from receipt of this Agreement to consider whether
to sign it (the “Offer Period”). The Parties agree that the Company may revoke this offer at any time. However, if
You sign before the end of the Offer Period, You acknowledge that Your decision to do so was knowing, voluntary, and not induced
by fraud, misrepresentation, or a threat to withdraw, alter, or provide different terms prior to the expiration of the Offer Period.
You agree that changes or revisions to this Agreement, whether material or immaterial, do not restart the running of the Offer
Period; (vi) You have seven (7) calendar days after signing this Agreement to revoke this Agreement (the “Revocation Period”).
If You revoke, the Agreement shall not be effective or enforceable and You shall not be entitled to the consideration set forth
in this Agreement. To be effective, the revocation must be in writing and received by [TBD], prior to expiration of the Revocation
Period; and (vii) this Waiver shall not become effective or enforceable until the Revocation Period has expired.

 

 

2
For purposes of Sections 4, 5 and 6 of this Agreement, the term “Company” includes the Company, the Company’s
parents, subsidiaries, affiliates, and all related companies, as well as each of their respective current and former officers,
directors, shareholders, members, managers, employees, agents, and any other representatives, any employee benefits plan of the
Company, and any fiduciary of those plans, in each case, in their capacity as such.

 

    22

     

    

 

6. Unknown
Claims and Section 1542 Waiver. You expressly waive any and all rights that You may have under any state or local statute,
executive order, regulation, common law and/or public policy related to unknown claims, including but not limited to California
Civil Code Section 1542, which provides:

 

A general release
does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time
of executing the release, and that, if known by him or her, would have materially affected his or her settlement with the debtor
or released party.

 

7. No
Admission of Liability. This Agreement is not an admission of liability by the Company.1
The Company denies any liability whatsoever. The Company enters into this Agreement to reach a mutual agreement concerning Your
separation from the Company.

 

8. Restrictive
Covenants and Dispute Resolution. You acknowledge and agree that You continue to be subject to the provisions of Sections 15(c),
16 and 17 of the Employment Agreement, the terms of which survive Your separation from the Company and are incorporated herein
mutatis mutandis.

 

9. Return
of Company Property. You shall immediately return to the Company all of the Company’s property, including, but not limited
to, computers, computer equipment, office equipment, mobile phone, keys, passcards, credit cards, confidential or proprietary lists
(including, but not limited to, customer, supplier, licensor, and client lists), tapes, laptop computer, electronic storage device,
software, computer files, marketing and sales materials, and any other property, record, document, or piece of equipment belonging
to the Company. You shall not (a) retain any copies of the Company’s property, including any copies existing in electronic
form, which are in Your possession, custody, or control, or (b) destroy, delete, or alter any Company property, including, but
not limited to, any files stored electronically, without the Company’s prior written consent. The obligations contained in
this Section shall also apply to any property which belongs to a third party, including, but not limited to, (i) any entity which
is affiliated or related to the Company, or (ii) the Company’s customers, licensors, or suppliers.

 

10. Prohibited
Post-Employment Activities. You acknowledge and agree that, effective as of the Separation Date: (a) You removed any reference
to the Company as Your current employer from any source You control, either directly or indirectly, including, but not limited
to, any Social Media such as LinkedIn, Facebook, Google+, Twitter and/or Instagram, and (b) You are not permitted to represent
Yourself as currently being employed by the Company to any person or entity, including, but not limited to, on any Social Media.
For purposes of this Section, “Social Media” means any form of electronic communication (such as Web sites for social
networking and micro blogging) through which users create online communities to share information, ideas, personal messages and
other content, such as videos.

 

11. Entire
Agreement. This Agreement, together with the provisions of the Employment Agreement incorporated herein, constitutes the entire
agreement between the Parties. This Agreement supersedes any prior communications, agreements, or understandings, whether oral
or written, between the Parties arising out of or relating to Your employment and the termination of that employment. Other than
the terms of this Agreement, no other representation, promise, or agreement has been made with You to cause You to sign this Agreement.

 

    23

     

    

 

12. Non-Interference.
Notwithstanding anything to the contrary set forth in this Agreement or in any other agreement between You and the Company, nothing
in this Agreement or in any other agreement shall limit Your ability, or otherwise interfere with Your rights, to (a) file a charge
or complaint with the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and
Health Administration, the Securities and Exchange Commission, or any other federal, state, or local governmental agency or commission
(each a “Government Agency”), (b) communicate with any Government Agency or otherwise participate in any investigation
or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice
to the Company, (c) receive an award for information provided to any Government Agency, or (d) engage in activity specifically
protected by Section 7 of the National Labor Relations Act, or any other federal or state statute or regulation.

 

13. Voluntary
Agreement. You acknowledge the validity of this Agreement and represent that You have the legal capacity to enter into this
Agreement. You acknowledge and agree You have carefully read the Agreement, know and understand the terms and conditions, including
its final and binding effect, and sign it voluntarily.

 

14. Execution.
This Agreement may be executed in one or more counterparts, including, but not limited to, facsimiles and scanned images, and it
shall not be necessary that the signatures of all Parties hereto be contained on any one counterpart. Each counterpart shall for
all purposes be deemed to be an original, and each counterpart shall constitute this Agreement.

 

14. Governing
Law. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA WITHOUT REFERENCE
TO PRINCIPLES OF CONFLICTS OF LAWS OF CALIFORNIA OR ANY OTHER JURISDICTION, AND, WHERE APPLICABLE, THE LAWS OF THE UNITED STATES.

 

If the terms set forth in this Agreement
are acceptable, please initial each page, sign below and return the signed original to the [TBD], on or before the [21st][45th]
day after You receive this Agreement. If the Company does not receive a signed original on or before the [21st][45th]
day after You receive this Agreement, then this offer is revoked, and You shall not be entitled to the consideration set forth
in this Agreement.

 

IN WITNESS WHEREOF, the Parties hereto
have executed this Agreement to be effective as of the Effective Date.

 

	Shift Technologies, Inc.	 	George Arison
	 	 	 
	By:	             	 	 	 
	 	 	 	 	 
	Its:	 	 	Date:	 
	 	 	 	 	 
	Date:  	 	 	 	 

 

    24

     

    

 

Exhibit D

 

Prior Materials

 

		☐	No Prior Materials

 

		☐	Prior Materials include:____________________________________

 

 

25

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