Document:

ex10-6.htm

    
EXHIBIT
10.6

      

       

       

      
EMPLOYMENT AGREEMENT

       

      This
EMPLOYMENT AGREEMENT (this “Agreement”) is
entered into as of this 1st day
of March, 2010 by and between Dynex Capital, Inc., a Virginia corporation (the
“Company”), and
Thomas B. Akin (“Executive”).

       

       

      W1TNESSETH:

       

      WHEREAS,
Executive commenced employment with the Company on February 4,
2008;

       

      WHEREAS,
the Company desires to continue to employ and secure the exclusive services of
Executive on the terms and conditions set forth in this Agreement;
and

       

      WHEREAS,
Executive desires to accept such employment on such terms and
conditions.

       

      NOW,
THEREFORE, in consideration of the premises and the mutual covenants and
promises contained herein and for other good and valuable consideration, the
Company and Executive hereby agree as follows:

       

      
1.           Agreement to
Employ.  Upon the terms and subject to the conditions of this
Agreement, the Company hereby agrees to continue to employ Executive, and
Executive hereby accepts such continued employment with the
Company.

       

      2.           Term; Position and
Responsibilities; Location.

       

      (a)           Term of
Employment.  Unless Executive’s employment shall sooner
terminate pursuant to Section 7, the Company shall continue to employ Executive
on the terms and subject to the conditions of this Agreement from the date first
written above through March 1, 2011 (the “Employment
Period”).

       

      (b)           Position and
Responsibilities.  During the Employment Period, Executive
shall serve as Chief Executive Officer (“CEO”) and shall have
such duties and responsibilities as are customarily assigned to individuals
serving in such position and such other duties consistent with Executive’s title
and position as the Board of Directors (or any committee thereof) of the Company
(the Board or such committee referred to as the “Board”) specifies
from time to time (it being understood by the parties that, notwithstanding the
foregoing, the Company is free, at any time and from time to time, to reorganize
its business operations, and that Executive’s duties and scope of responsibility
may change in connection with such reorganization).  Executive agrees
that during his employment with the Company, Executive shall devote as much of
his skill, knowledge, commercial efforts and business time as the Board shall
reasonably require to the conscientious and good faith performance of his duties
and responsibilities to the Company to the best of his ability.

       

      
        
          
             

          

           

        

        
           

          
            

          

        

        
           

        

      

      (c)           Location.  During
the Employment Period, Executive’s services shall be performed primarily in the
San Francisco, California metropolitan area.  However, Executive may
be required to travel in and outside of such area as the needs of the Company’s
business dictate.  Executive will also work from time-to-time out of
the Company’s office in Richmond, Virginia.

       

      3.           Base Salary.  During the
Employment Period, the Company shall pay Executive a base salary at an
annualized rate of $300,000, payable in installments on the Company’s regular
payroll dates but not less frequently than monthly.  The Board shall
review Executive’s base salary annually during the Employment Period and may
increase (but not decrease) such base salary from time to time, based on its
periodic review of Executive’s performance in accordance with the Company’s
regular policies and procedures.  The annual base salary payable to
Executive from time to time under this Section 4 shall hereinafter be referred
to as the “Base
Salary.”  Until the Company and the Executive decide otherwise,
the Base Salary shall be paid in shares of unrestricted common stock of the
Company issued under the Company’s stock incentive plan in effect at the time of
payment, provided that the portion of the Base Salary attributable to payroll
deductions and tax withholdings shall always be paid in cash.  The
number of shares of unrestricted common stock to be paid to the Executive shall
be based on the fair market value of the common stock (as defined in the
applicable stock incentive plan) on the applicable payroll
date.  Notwithstanding the above, all payments of Base Salary shall be
paid in cash on any payroll date on which (i) the Company’s stock incentive plan
does not allow for the issuance of unrestricted common stock, or (ii) the
Executive’s ownership position in the Company exceeds amounts authorized by the
Company’s Articles of Incorporation or its Bylaws, as they both may be amended
or restated from time to time, unless such ownership limits have been waived or
revised by the Board of Directors specifically for the Executive, in which case
Executive’s ownership position cannot exceed the revised limits.  All
payments of Base Salary paid after the Executive’s termination of employment
under Section 7 shall be paid in cash.

       

      4.           Annual Incentive
Compensation.  The Company has established an annual bonus
program based on the return on adjusted equity of the Company (the “ROAE
Bonus”).  For the duration of this Agreement, the Executive
will be eligible for the ROAE Bonus and will participate in any other bonus
programs for executives.  Eligibility and participation by the
Executive in the bonus programs shall be subject to the terms of the bonus
programs adopted by the Compensation Committee of the Board of
Directors.

       

      5.           Employee
Benefits.

       

      (a)           General.  During
the Employment Period, Executive will be eligible to participate in the employee
and executive benefit plans and programs maintained by the Company from time to
time in which executives of the Company at Executive’s grade level are eligible
to participate, including to the extent maintained by the Company, life,
medical, dental, accidental and disability insurance plans and retirement,
deferred compensation and savings plans, in accordance with the terms and
conditions thereof as in effect from time to time.

       

      
        
           

        

        
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      (b)           Vacation.  During
the Employment Period, Executive shall be entitled to vacation on an annualized
basis of four (4) weeks per year, without carry-over
accumulation.  Executive shall also be entitled to Company-designated
holidays.

       

      6.           Expenses.

       

      (a)           Business Travel,
Lodging.  During the Employment Period, the Company will
reimburse Executive for reasonable travel, lodging, meal and other reasonable
expenses incurred by him in connection with the performance of his duties and
responsibilities hereunder upon submission of evidence satisfactory to the
Company of the incurrence and purpose of each such expense, provided that such
expenses are permitted under the terms and conditions of the Company’s business
expense reimbursement policy.

       

      7.           Termination of
Employment.

       

      (a)           Termination for Any
Reason.  Executive’s employment may be terminated by the
Company or the Executive for any reason.  In the event that
Executive’s employment is terminated, no termination benefits shall be payable
to or in respect of Executive except as provided in Section 7(c).

       

      (b)           
Notice of Termination;
Date of Termination.

       

      (i)           Notice of
Termination.  Any termination of Executive’s employment by the
Company or by Executive (other than as a result of Executive’s death) shall be
communicated by a written Notice of Termination addressed to the other party to
this Agreement.  A “Notice of
Termination” shall mean a notice stating that Executive or the Company,
as the case may be, is electing to terminate Executive’s employment with the
Company (and thereby terminating the Employment Period), stating the proposed
effective date of such termination, indicating the specific provision of this
Section 7 under which such termination is being effected and, if applicable,
setting forth in reasonable detail the circumstances claimed to provide the
basis for such termination.

       

      (ii)           Date of
Termination.  The term “Date of Termination”
shall mean (i) if Executive’s employment is terminated by his death, the date of
his death, (ii) if Executive’s employment is terminated by Executive, a date
which is at least 30 days following the issuance of the Notice of Termination
and (iv) if Executive’s employment is terminated for any other reason, the
effective date of termination specified in such Notice of
Termination.  The Employment Period shall expire on the Date of
Termination.

       

      (c)           Payments Upon Certain
Terminations.

       

      (i)           In
the event of a termination of Executive’s employment, the Company shall pay to
Executive, within thirty (30) days of the Date of Termination, his Base Salary
through the Date of Termination, to the extent not previously paid,
reimbursement for any unreimbursed business expenses incurred by

       

      
        
           

        

        
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      Executive
prior to the Date of Termination that are subject to reimbursement pursuant to
Section 7(a) and payment for vacation time accrued as of the Date of Termination
but unused (the “Accrued
Obligations”).  In addition, in the event of any such
termination of Executive’s employment unless such termination was for Cause (as
defined in Section 7(e) below), if Executive executes and delivers to the
Company a Separation Agreement and General Release substantially in the form
approved by the Company, Executive shall be entitled to the following payments
and benefits:

       

      (A)           the
portion of the ROAE Bonus for the calendar year of the Company during which
Executive was employed that includes the Date of Termination, such portion to
equal the product (such product, the “Pro-Rata ROAE Bonus”)
of the ROAE Bonus that would have been payable to Executive for such calendar
year had Executive remained employed for the entire calendar year, determined
based on the extent to which the Company actually achieves the performance goals
for such year, multiplied by a fraction, the numerator of which is equal to the
number of days in such calendar year that precede the Date of Termination and
the denominator of which is equal to 365, such amount to be payable to Executive
at the time such bonus would otherwise have been paid under the terms of the
ROAE Bonus program if the Executive was still employed (the “Bonus Payment
Date”);

       

      (B)           to
the extent any other incentive stock awards such as stock options, stock
appreciation rights, restricted stock, or similar which were awarded to
Executive during the Employment Period and which have not vested as of the Date
of Termination, such incentive stock awards will immediately become 100% vested
and exercisable and will be payable at the times and in the forms provided in
the individual award agreements; and

       

      Executive
shall not have a duty to mitigate the costs to the Company under this Section
7(c)(i), nor shall any payments from the Company to Executive under items (A)
or  (B) of this Section 7(c)(i) be reduced, offset or canceled by any
compensation or fees earned by (whether or not paid currently) or offered to
Executive by a subsequent employer or other Person (as defined in below) for
which Executive performs services, including but not limited to consulting
services.

       

      (ii)           Except
as specifically set forth in this Section 7(c), no termination benefits shall be
payable to or in respect of Executive’s employment with the
Company.

       

      (d)           For
purposes of this Agreement, “Cause” means (i) a
material breach by Executive of any provision of this Agreement; (ii) a material
and willful violation by Executive of any of the Company Policies; (iii) the
failure by Executive to reasonably and substantially perform the duties of his
position (other than as a result of physical or mental illness or injury); (iv)
Executive’s willful misconduct or gross negligence that has caused or is
reasonably expected to result in material injury to the business, reputation or
prospects of the Company; (v) Executive’s fraud or misappropriation of funds; or
(vi) the commission by Executive of a felony or other

       

      
        
           

        

        
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      serious
crime involving moral turpitude; provided that in the case of any breach of
clauses (i), (ii) or (iii) that is curable, no termination there under shall be
effective unless the Company shall have given Executive notice of the event or
events constituting Cause and Executive shall have failed to cure such event or
events within thirty (30) business days after receipt of such
notice.

       

      8.           Code Section 409A
Compliance.

       

      (a)           The
intent of the parties is that payments and benefits under this Agreement comply
with Section 409A of the Internal Revenue Code of 1986, as amended, and
applicable guidance thereunder (“Code Section 409A”) or comply with
an exemption from the application of Code Section 409A and, accordingly, all
provisions of this Agreement shall be construed in a manner consistent with the
requirements for avoiding taxes or penalties under Code Section
409A.

       

      (b)           Neither
the Executive nor the Company shall take any action to accelerate or delay the
payment of any monies and/or provision of any benefits in any matter which would
not be in compliance with Code Section 409A.

       

      (c)           A
termination of employment shall not be deemed to have occurred for purposes of
any provision of this Agreement providing for the form or timing of payment of
any amounts or benefits upon or following a termination of employment unless
such termination is also a “separation from service” (within the meaning of Code
Section 409A) and, for purposes of any such provision of this Agreement under
which (and to the extent) deferred compensation subject to Code Section 409A is
paid, references to a “termination” or “termination of employment” or like
references shall mean separation from service.  If the Executive is
deemed on the date of separation from service with the Company to be a
“specified employee”, within the meaning of that term under Code Section
409A(a)(2)(B) and using the identification methodology selected by the Company
from time to time, or if none, the default methodology, then with regard to any
payment or benefit that is required to be delayed in compliance with Code
Section 409A(a)(2)(B), such payment or benefit shall not be made or provided
prior to the earlier of (i) the expiration of the six- month period measured
from the date of the Executive’s separation from service or (ii) the date of the
Executive’s death.  In the case of benefits required to be delayed
under Code Section 409A, however, the Executive may pay the cost of benefit
coverage, and thereby obtain benefits, during such six month delay period and
then be reimbursed by the Company thereafter when delayed payments are made
pursuant to the next sentence.  On the first day of the seventh month
following the date of the Executive’s separation from service or, if earlier, on
the date of the Executive’s death, all payments delayed pursuant to this Section
8(c) (whether they would have otherwise been payable in a single sum or in
installments in the absence of such delay) shall be paid or reimbursed to the
Executive in a lump sum, and any remaining payments and benefits due under this
Agreement shall be paid or provided in accordance with the normal payment dates
specified for them herein.

       

      (d)           With
regard to any provision herein that provides for reimbursement of expenses or
in-kind benefits subject to Code Section 409A, except as

       

      
        
           

        

        
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      permitted
by Code Section 409A, (i) the right to reimbursement or in-kind benefits is not
subject to liquidation or exchange for another benefit, and (ii) the amount of
expenses eligible for reimbursement, or in-kind benefits, provided during any
taxable year shall not affect the expenses eligible for reimbursement, or
in-kind benefits to be provided, in any other taxable year, provided that the
foregoing clause (ii) shall not be violated with regard to expenses reimbursed
under any arrangement covered by Code Section 105(b) solely because such
expenses are subject to a limit related to the period the arrangement is in
effect.  All reimbursements shall be reimbursed in accordance with the
Company’s reimbursement policies but in no event later than the calendar year
following the calendar year in which the related expense is
incurred.

       

      (e)           If
under this Agreement, an amount is to be paid in two or more installments, for
purposes of Code Section 409A, each installment shall be treated as a separate
payment.

       

      (f)           When,
if ever, a payment under this Agreement specifies a payment period with
reference to a number of days (e.g., “payment shall be made within ten (10) days
following the date of termination”), the actual date of payment within the
specified period shall be within the sole discretion of the
Company.

       

      (g)           Notwithstanding
any of the provisions of this Agreement, the Company shall not be liable to the
Executive if any payment or benefit which is to be provided pursuant to this
Agreement and which is considered deferred compensation subject to Code Section
409A otherwise fails to comply with, or be exempt from, the requirements of Code
Section 409A.

       

      9.           Restrictive
Covenants.  Each of the Company and Executive agrees that the
Executive will have a prominent role in the management of the business, and the
development of the goodwill, of the Company, and will establish and develop
relations and contacts with customers and counterparties of the Company, all of
which constitute valuable goodwill of, and could be used by Executive to compete
unfairly with, the Company.  In addition, Executive recognizes that he
will have access to and become familiar with or exposed to Confidential
Information (as such term is defined below), in particular, trade secrets,
proprietary information, customer lists, counterparty lists and other valuable
business information of the Company pertaining or related to the speciality
finance industry, specifically as it relates to being a mortgage real estate
investment trust (the “Business of the
Company”).  Executive agrees that Executive could cause grave
harm to the Company if he, among other things, worked for the Company’s
competitors, solicited the Company’s employees away from the Company, solicited
the Company’s customers or business counterparties upon the termination of
Executive’s employment with the Company, or misappropriated or divulged the
Company’s Confidential Information; and that as such, the Company has legitimate
business interests in protecting its goodwill and Confidential Information; and,
as such, these legitimate business interests justify the following restrictive
covenants:

       

      (a)           Confidentiality and
Non-Disclosure Covenant.

       

      
        
           

        

        
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      (i)           Executive
acknowledges and agrees that the terms of this Agreement, including all
addendums and attachments hereto, are confidential.  Except as
required by law or the requirements of any stock exchange, Executive agrees not
to disclose any information contained in this Agreement to anyone, other than to
Executive’s lawyer, financial advisor or immediate family members.  If
Executive discloses any Information contained in this Agreement to his lawyer,
financial advisor or immediate family members as permitted herein, Executive
agrees to immediately tell each such individual that he or she must abide by the
confidentiality restrictions contained herein and keep such information
confidential as well.

       

      (ii)           Executive
agrees that during his employment with the Company and thereafter, Executive
will not, directly or indirectly (A) disclose any Confidential Information to
any Person (other than, only with respect to the period that Executive is
employed by the Company, to an employee or outside advisor of the Company who
requires such information to perform his or her duties for the Company), or (B)
use any Confidential Information for Executive’s own benefit or the benefit of
any third party.  “Confidential
Information” means confidential, proprietary or commercially sensitive
information relating to (i) the Company or members of its management or boards
or (ii) any third parties who do business with the
Company.  Confidential Information includes, without limitation,
marketing plans, business plans, financial information and records, operation
methods, personnel information, drawings, designs, information regarding product
development, customer lists, or other commercial or business information and any
other information not available to the public generally.  The
foregoing obligation shall not apply to any Confidential Information that has
been previously disclosed to the public or is in the public domain (other than
by reason of a breach of Executive’s obligations to hold such Confidential
Information confidential).  If Executive is required or requested by a
court or governmental agency to disclose Confidential Information, Executive
must notify the Chief Operating Officer of the Company of such disclosure
obligation or request no later than three (3) business days after Executive
learns of such obligation or request, and permit the Company to take all lawful
steps it deems appropriate to prevent or limit the required
disclosure.

       

      (b)           Non-Competition
Covenant.  Executive agrees that during his employment with the
Company, Executive shall devote as much of his skill, knowledge, commercial
efforts and business time as the Board shall reasonably require to the
conscientious and good faith performance of his duties and responsibilities to
the Company to the best of his ability.  The Company acknowledges that
Executive is the managing general partner of Talkot Capital LLC and shall
continue to function in that regard during his employment with the
Company.  Except for Talkot Capital, Executive shall not, directly or
indirectly, be employed by, render services for, engage in business with or
serve as an agent or consultant to any Person other than the
Company.  Executive further agrees that during his employment with the
Company and for the period of one (1) year following any termination of his
employment with the Company, Executive shall not, directly or indirectly, become
employed by, render services for, engage in business with, serve as an agent or
consultant to, or become a partner, member, principal, stockholder or other
owner, or Board member of, any Person or entity that engages in the Business of
the Company, provided that
Executive shall be permitted to hold a ten

       

      
        
           

        

        
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      percent
(10%) or less interest in the equity or debt securities of any publicly traded
company.

       

      (c)           Non-Solicitation of
Employees.  During the period of Executive’s employment with
the Company and for the one (1)-year period following the termination of his
employment, Executive shall not, directly or indirectly, by himself or through
any third party, whether on Executive’s own behalf or on behalf of any other
Person or entity, (i) solicit or induce or endeavor to solicit or induce,
divert, employ or retain, (ii) interfere with the relationship of the Company
with, or (iii) attempt to establish a business relationship of a nature that is
competitive with the business of the Company with, any Person that is or was
(during the last twelve (12) months of Executive’s employment with the Company)
an employee of the Company or engaged to provide services to it.

       

      10.           Work
Product.  Executive agrees that all of Executive’s work product
(created solely or jointly with others, and including any intellectual property
or moral rights in such work product), given, disclosed, created, developed or
prepared in connection with Executive’s employment with the Company, whether
ensuing during or after Executive’s employment with the Company (“Work Product”) shall
exclusively vest in and be the sole and exclusive property of the Company and
shall constitute “work made for hire” (as that term is defined under Section 101
of the U.S. Copyright Act, 17 U.S.C. § 101) with the Company being the person
for whom the work was prepared.  In the event that any such Work
Product is deemed not to be a “work made for hire” or does not vest by operation
of law in the Company, Executive hereby irrevocably assigns, transfers and
conveys to the Company, exclusively and perpetually, all right, title and
interest which Executive may have or acquire in and to such Work Product
throughout the world, including without limitation any copyrights and patents,
and the right to secure registrations, renewals, reissues, and extensions
thereof.  The Company or its designees shall have the exclusive right
to make full and complete use of, and make changes to all Work Product without
restrictions or liabilities of any kind, and Executive shall not have the right
to use any such materials, other than within the legitimate scope and purpose of
Executive’s employment with the Company.  Executive shall promptly
disclose to the Company the creation or existence of any Work Product and shall
take whatever additional lawful action may be necessary, and sign whatever
documents the Company may require, in order to secure and vest in the Company or
its designee all right, title and interest in and to all Work Product and any
intellectual property rights therein (including full cooperation in support of
any Company applications for patents and copyright or trademark
registrations).

       

      11.           Return of Company
Property.  In the event of termination of Executive’s
employment for any reason, Executive shall return to the Company all of the
property of the Company and its Affiliates, including without limitation all
materials or documents containing or pertaining to Confidential Information, and
including without limitation, all computers (including laptops), cell phones,
keys, PDAs, Blackberries, credit cards, facsimile machines, televisions, card
access to any Company building, customer lists, computer disks, reports, files,
e-mails, work papers, Work Product, documents, memoranda, records and software,
computer access codes or disks and

       

      
        
           

        

        
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      instructional
manuals, internal policies, and other similar materials or documents which
Executive used, received or prepared, helped prepare or supervised the
preparation of in connection with Executive’s employment with the
Company.  Executive agrees not to retain any copies, duplicates,
reproductions or excerpts of such material or documents.

       

      12.           Compliance With Company
Policies.  During Executive’s employment with the Company,
Executive shall be governed by and be subject to, and Executive hereby agrees to
comply with, all Company policies, procedures, codes, rules and regulations
applicable to all employees and to executive officers of the Company, as they
may be amended from time to time in the Company’s sole discretion (collectively,
the “Policies”).

       

      13.           Injunctive Relief with
Respect to Covenants: Forum, Venue and Jurisdiction.  Executive
acknowledges and agrees that a breach by Executive of any of Section of the
Agreement is a material breach of this Agreement and that remedies at law may be
inadequate to protect the Company in the event of such breach, and, without prejudice to any
other legal or equitable rights and remedies otherwise available to the
Company, Executive agrees to the granting of injunctive relief in the
Company’s favor in connection with any such breach or violation without proof of
irreparable harm.  Executive further agrees that if the Company is
entitled to receive from Executive its attorneys’ fees and costs to enforce the
provisions of this Agreement.  Executive further acknowledges and
agrees that the Company’s obligations to pay Executive any amount or provide
Executive with any benefit or right pursuant to Section 7 is subject to
Executive’s compliance with Executive’s obligations under Sections 8 through 10
inclusive, and that in the event of a breach by Executive of any of Section 8
through 10, the Company shall immediately cease paying such benefits and
Executive shall be obligated to immediately repay to the Company all amounts
theretofore paid to Executive pursuant to Section 7.  In addition, if
not repaid, the Company shall have the right to set off from any amounts
otherwise due to Executive any amounts previously paid pursuant to Section 7(c)
(other than the Accrued Obligations).  Executive further agrees that
the foregoing is appropriate for any such breach inasmuch as actual damages
cannot be readily calculated, the amount is fair and reasonable under the
circumstances, and the Company would suffer irreparable harm if any of these
Sections were breached.

       

      14.           Assumption of
Agreement.  The Company shall require any Successor thereto, by
agreement in form and substance reasonably satisfactory to Executive, to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform it if no such
succession had taken place.  Failure of the Company to obtain such
agreement prior to the effectiveness of any such succession shall be a breach of
this Agreement and shall entitle Executive to compensation from the Company in
the same amount and on the same terms as Executive would be entitled hereunder
if the Company had terminated Executive’s employment Without Cause as described
in Section 7, except that for purposes of implementing the foregoing, the date
on which any such succession becomes effective shall be deemed the Date of
Termination.

       

      
        
           

        

        
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      15.           Indemnification.  The
Company agrees both during and after the Employment Period to indemnify
Executive to the fullest extent permitted by its Certificate of Incorporation
(including payment of expenses in advance of final disposition of a proceeding)
against actions or inactions of Executive during the Employment Period as an
officer, director or employee of the Company or any of its Subsidiaries or
Affiliates or as a fiduciary of any benefit plan of any of the
foregoing.  The Company also agrees to provide Executive with
Directors and Officers insurance coverage both during and, with regard to
matters occurring during the Employment Period, after the Employment
Period.  Such coverage shall be at a level at least equal to the level
being maintained at such time for the then current officers and directors or, if
then being maintained at a higher level with regard to any prior period
activities for officers or directors during such prior period, such higher
amount with regard to Executive’s activities during such prior
period.

       

      16.           Entire
Agreement.  This Agreement constitutes the entire agreement
among the parties hereto with respect to the subject matter
hereof.  All prior correspondence and proposals (including but not
limited to summaries of proposed terms) and all prior promises, representations,
understandings, arrangements and agreements relating to such subject matter
(including but not limited to those made to or with Executive by any other
Person and those contained in any prior employment, consulting or similar
agreement, including the Original Agreement, entered into by Executive and the
Company or any predecessor thereto or Affiliate thereof) are merged herein and
superseded hereby.

       

      17.           Survival.  The
following Sections shall survive the termination of Executive’s employment with
the Company and of this Agreement.

       

      18.           Miscellaneous.

       

      (a)           Binding Effect;
Assignment.  This Agreement shall be binding on and inure to
the benefit of the Company and its Successors and permitted
assigns.  This Agreement shall also be binding on and inure to the
benefit of Executive and his heirs, executors, administrators and legal
representatives.  This Agreement shall not be assignable by any party
hereto without the prior written consent of the other parties hereto, provided, however,
that the Company may effect such an assignment without prior written approval of
Executive upon the transfer of all or substantially all of its business and/or
assets (by whatever means), provided that the
Successor to the Company shall expressly assume and agree to perform this
Agreement in accordance with the provisions of Section 14.

       

      (b)           Choice of Forum and
Governing Law.  The parties agree that:  (i) any
litigation involving any noncompliance with or breach of the Agreement, or
regarding the interpretation, validity and/or enforceability of the Agreement,
shall be filed and conducted in the state or federal courts in Richmond,
Virginia; and (ii) the Agreement shall be interpreted in accordance with and
governed by the laws of the Commonwealth of Virginia, without regard for any
conflict of law principles.

       

      
        
           

        

        
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      (c)           Taxes.  The
Company may withhold from any payments made under this Agreement all applicable
taxes, including but not limited to income, employment and social insurance
taxes, as shall be required by law.

       

      (d)           Amendments.  No
provision of this Agreement may be modified, waived or discharged unless such
modification, waiver or discharge is approved in writing by the Board or a
Person authorized thereby and is agreed to in writing by
Executive.  No waiver by any party hereto at any time of any breach by
any other party hereto of, or compliance with, any condition or provision of
this Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.  No waiver of any provision of this Agreement shall
be implied from any course of dealing between or among the parties hereto or
from any failure by any party hereto to assert its rights hereunder on any
occasion or series of occasions.

       

      (e)           Severability.  In
the event that any one or more of the provisions of this Agreement shall be or
become invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein shall not be
affected thereby.  In the event that one or more terms or provisions
of this Agreement are deemed invalid or unenforceable by the laws of Virginia or
any other state or jurisdiction in which it is to be enforced, by reason of
being vague or unreasonable as to duration or geographic scope of activities
restricted, or for any other reason, the provision in question shall be
immediately amended or reformed to the extent necessary to make it valid and
enforceable by the court of such jurisdiction charged with interpreting and/or
enforcing such provision.  Executive agrees and acknowledges that the
provision in question, as so amended or reformed, shall be valid and enforceable
as though the invalid or unenforceable portion had never been included
herein.

       

      (f)           Notices.  Any
notice or other communication required or permitted to be delivered under this
Agreement shall be (i) in writing, (ii) delivered personally, by courier service
or by certified or registered mail, first-class postage prepaid and return
receipt requested, (iii) deemed to have been received on the date of delivery
or, if mailed, on the third business day after the mailing thereof, and (iv)
addressed as follows (or to such other address as the party entitled to notice
shall hereafter designate in accordance with the terms hereof):

       

      (A)           If
to the Company, to it at:

       

      Chief
Operating Officer

      Dynex
Capital, Inc.

      4991 Lake
Brook Drive, Suite 100

      Glen
Allen, VA 23060

       

      (B)           If
to Executive, to his residential address as currently on file with the
Company.

       

      
        
           

        

        
          11

          
            

          

        

        
           

        

      

      (g)           Voluntary
Agreement; No Conflicts.  Executive represents that he is entering
into this Agreement voluntarily and that Executive’s employment hereunder and
compliance with the terms and conditions of this Agreement will not conflict
with or result in the breach by Executive of any agreement to which he is a
party or by which he or his properties or assets may be bound.

       

      (h)           Counterparts/Facsimile.  This
Agreement may be executed in counterparts (including by facsimile), each of
which shall be deemed an original and all of which together shall constitute one
and the same instrument.

       

      (i)           Headings.  The
section and other headings contained in this Agreement are for the convenience
of the parties only and are not intended to be a part hereof or to affect the
meaning or interpretation hereof.

       

      (j)           Certain
other Definitions.

       

      “Affiliate”: with
respect to any Person, means any other Person that, directly or indirectly
through one or more intermediaries, Controls, is Controlled by, or is under
common Control with the first Person, including but not limited to a Subsidiary
of any such Person.

       

       

       “Control” (including,
with correlative meanings, the terms “Controlling”, “Controlled by” and “under
common Control with”): with respect to any Person, shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise.

       

      “Person”: any natural
person, firm, partnership, limited liability company, association, corporation,
company, trust, business trust, governmental authority or other
entity.

       

      “Subsidiary”: with
respect to any Person, each corporation or other Person in which the first
Person owns or Controls, directly or indirectly, capital stock or other
ownership interests
representing fifty percent (50%) or more of the combined voting power of the
outstanding voting stock or other ownership interests of such corporation or
other Person.

       

      “Successor”: of a
Person means a Person that succeeds to the first Person’s assets and liabilities
by merger, liquidation, dissolution or otherwise by operation of law, or a
Person to which all or substantially all the assets and/or business of the first
Person are transferred.

       

      
        
           

        

        
          12

          
            

          

        

        
           

        

      

      IN
WITNESS WHEREOF, the Company has duly executed this Agreement by its authorized
representatives, and Executive has hereunto set his hand, in each case effective
as of the date first above written.

       

       

      
 

      
        
          	 
      	
                  DYNEX CAPITAL, INC.

                	 
      
	 
      	
                   

                	 
      
	 
      	 
      By:   /s/ Barry
      Igdaloff              	 
      
	 	 	 
	 
      	 
      Its:   Chairman of the
      Compensation Committee   	 
      
	
                   

                	
                   

                	 
      
	 	 	 
	 	
                   Thomas
      B. Akin:

                	 
	 	 	 
	 
      	
                  /s/ Thomas B. Akin         

                	 
      
	 
      	 
      SIGNATURE	 
      

        

        

      

      
         

      

      

      
        
           

        

        
          13ex10_17.htm

    SENIOR EXECUTIVE
AGREEMENT

     

    THIS
SENIOR EXECUTIVE AGREEMENT (the “Agreement”)  by
and between ON ASSIGNMENT, INC., a Delaware corporation (the “Company”) and PETER T.
DAMERIS (“Executive”) is
entered into on November 4, 2009.

     

    Recitals

     

    A.    
The Company and Executive previously entered into an agreement, dated October
27, 2003, pursuant to which Executive is employed as the Chief Executive Officer
and President of the Company (as amended on December 14, 2006 and as Amended and
Restated on December 11, 2008, the “Prior
Agreement”).

     

    B.     
The Company and Executive wish to enter into a new agreement, effective January
1, 2010 (the “Effective
Date”) pursuant to which Executive will continue his employment as the
Chief Executive Officer and President of the Company under the terms and
conditions set forth herein.  The Prior Agreement shall continue to
govern all compensation paid or payable to Executive under that Prior Agreement,
including the 2006 Equity Awards (as defined in that Prior Agreement), while the
Agreement shall govern all compensation paid or payable to Executive under the
Agreement.

    

    C.         Certain
definitions are set forth in Section 4 of this
Agreement.

     

    Agreement

     

    The
parties hereto agree as follows:

     

    1.            
Employment.  The Company hereby
engages Executive to continue to serve as the Chief Executive Officer and
President of the Company, and Executive agrees to continue to serve the Company,
during the Service Term (as defined in Section 1(f) hereof)
in the capacities, and subject to the terms and conditions, set forth in this
Agreement.

     

    (a)          
Services.  During the
Service Term, Executive, as Chief Executive Officer and President of the
Company, shall have all the duties and responsibilities customarily rendered by
Chief Executive Officers and Presidents of companies of similar size and nature
and as may be reasonably assigned from time to time by the Board (as defined
below).  Executive will report directly to the
Board.  Executive will devote his best efforts and substantially all
of his business time and attention (except for vacation periods and periods of
illness or other incapacity) to the business of the Company and its
Affiliates.  Notwithstanding the foregoing, and provided that such
activities do not interfere with the fulfillment of Executive’s obligations
hereunder, Executive may (A) serve as an officer, director or trustee of
any charitable or non-profit entity; (B) own a passive investment in any private
company and own up to 5% of the outstanding voting securities of any public
company; or (C) with the prior approval of the Board, serve as a director of up
to two other companies so long as such companies do not compete with the Company
and Executive notifies the Board in advance of accepting any such
position.  Unless the Company and Executive agree to the contrary,
Executive’s place of employment shall be at the Company’s principal executive
offices in Calabasas, California; provided, however, that Executive
shall be permitted under the terms of this Agreement, upon conditions approved
by the Board, to relocate his principal residence to Texas and to perform his
duties and responsibilities under this Agreement from such location and commute from
time to time to the Company’s principal executive offices so long as such
relocation does not materially interfere with Executive’s satisfactory
performance of his duties and responsibilities under this Agreement and, provided, further, that Executive will
travel to such other locations as may be reasonably 

    
      
         

      

      
         

        
          

        

      

      
         

        
           

        

      

    

    necessary
in order to discharge his duties and responsibilities
hereunder.  Executive shall have the right to attend all meetings of
the Board of Directors of the Company and will be nominated for
election as a director for each term for which he is eligible to serve during
the Service Term.

    

    (b)          
Salary, Bonus and
Benefits.

     

    (i)           
Salary
and Bonus.During the Service Term,
effective from and after January 1, 2010, the Company will pay Executive a base
salary (the “Annual
Base Salary”)
as the Board may designate from time to time, at the rate of not less than
$635,250 per annum; provided,
however, that
the Annual Base Salary shall be subject to review by the Board for upward
increases annually during the first quarter of each calendar year of the Service
Term, with any such upward increases having retroactive effect to January 1 of
the year to which such increases apply.  With respect to
calendar year 2010 and thereafter during the Service Term, Executive will be
eligible to receive an annual bonus in an amount of up to 120% of Executive’s
Annual Base Salary for each fiscal year, as determined by the Compensation
Committee of the Board of Directors (the “Compensation Committee”) based
upon the Company’s achievement of budgetary and other objectives set by the
Compensation Committee after review of a financial performance plan that is
prepared by Executive and recommended to the Compensation
Committee.  Such annual bonus opportunity shall be comprised of (A) a
60% bonus opportunity applicable to achievement of plan targets that are a
combination of targets for revenue and EBITDA (“Component A”), and (B) an
additional 60% bonus opportunity (thereby making the total annual bonus
opportunity 120% of Executive’s Annual Base Salary) for performance exceeding
plan targets based upon revenue and EBITDA performance (“Component B” and, together
with Component A, the “Annual
Bonus”).  The performance targets for Component A and Component
B may be revised in future years by the Compensation Committee after
consultation with Executive.  Within 90 days of the beginning of each
calendar year during the Service Term, the Compensation Committee will
determine, after consultation with Executive, the targets applicable to the
Annual Bonuses based on the Company’s performance plan.  All
performance plan targets will be defined in terms that exclude the effects of
any nonrecurring charges, including without limitation, charges related to
goodwill write-offs, acquisitions, dispositions or changes in accounting
treatment.  The annual bonus, if any, shall be due and payable to
Executive, in cash, on or prior to March 15 of the year immediately following
that in which such annual bonus is earned (for the avoidance of doubt, this
deadline is intended to comply with the “short-term deferral” exemption from the
application of Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”)).

     

    (ii)          
Benefits.  During the Service
Term, Executive shall be entitled to participate in and shall receive all
benefits under pension benefit plans provided by the Company (including without
limitation participation in any Company incentive, savings and retirement plans,
practices, policies and programs) to the extent applicable generally to other
peer executives of the Company.  In addition, during the Service Term,
Executive and/or Executive’s family shall be entitled to participate and shall
receive all benefits under welfare plans provided by the Company (including
without limitation medical prescriptions, dental, disability, employee life,
group life, accidental life and travel accident insurance plans and plans) to
the extent and on the same basis applicable generally to other peer executives
of the Company.  Executive shall be reimbursed for customary travel and
other expenses, subject to standard and reasonable documentation
requirements.  In addition, Executive will receive a stipend of $450 per
month for lease of an automobile and other related expenses during the Service
Term, payable in equal monthly increments during the Service Term. 
Executive shall also be eligible to receive four weeks paid vacation 

      
        
           

        

        
           

          
            

          

        

        
           

          
             

          

        

      

    per
annum.  Any unused vacation time during each fiscal year shall be
“rolled-over” to the following fiscal year to the extent permitted by the
Company’s policies for other senior executives of the Company.

     

    (iii)        
Long-Term
Incentive Awards.   The Company
shall grant the awards identified in this Section 1(b)(iii) (the “LTIP Awards”) to Executive at
the times and subject to the terms and conditions set forth below, pursuant to
either (1) the Company’s Restated 1987 Stock Option Plan, as amended from time
to time (the “Existing
Plan”), or (2) an incentive plan adopted by the Company and approved by
its shareholders subsequent to the Effective Date that provides for the grant of
awards constituting “qualified performance-based compensation” (within the
meaning of Code Section 162(m)) based on the attainment of the performance
criteria identified below in this Section 1(b)(iii)  (in any case, the
applicable incentive plan pursuant to which any LTIP Award is granted, the
“Plan”).  Each
LTIP Award shall be set forth in an award agreement between Executive and the
Company that is consistent with the terms and conditions contained in comparable
award agreements provided to other key executives of the
Company  (each such agreement, an “Award Agreement”).

    

    (A)                  Positive EBITDA
Awards.  During the first ninety days of each of calendar years
2010, 2011 and 2012, subject to Section 1(b)(iii)(D)
and Section
1(b)(iii)(F)(3) below, the Company shall grant to Executive under a Plan
a number of restricted stock units (“RSUs”) or restricted shares
(as determined by the Company at the time of grant) determined by dividing
$800,000 by the Fair Market Value (as defined in the applicable Plan) (“Fair Market Value”) of a share
of the Company’s common stock as of January 2 of the calendar year in which such
award is granted (or, if January 2 is not a Business Day (as defined below), the
first Business Day thereafter) (such awards, the “PEA Grants”), subject to
Executive’s continued employment with the Company through the applicable grant
date.   Each PEA Grant shall vest, subject to Sections 1(b)(iii)(E) and
(F) below, on February 1 of the calendar year immediately following the
year in which such PEA Grant is made (any date on which a PEA Grant vests, a
“PEA Vesting Date”),
subject to  (i) the Company attaining positive EBITDA (as defined
below), as determined by the Compensation Committee, during the thirteen-month
period beginning on January 1 of the year of grant, and (ii) Executive’s
continued employment with the Company through the applicable February 1 vesting
date.   If PEA Grants are made in the form of RSUs, any such PEA
Grants that vest in accordance herewith shall be settled in whole shares of
Company common stock as soon as practicable after the applicable PEA Vesting
Date, but in no event later than the March 15 immediately following the
applicable PEA Vesting Date, with the actual settlement or payment date
determined in the Company’s sole discretion.

    

    (B)                  EBITDA Target
Awards.  During the first ninety days of each of calendar years
2010, 2011 and 2012, subject to Section 1(b)(iii)(D)
and Section
1(b)(iii)(F)(3) below, the Company shall grant to Executive under a Plan
a number of RSUs or restricted shares (as determined by the Company at the time
of grant) determined by dividing $500,000 by the Fair Market Value of a share of
the Company’s common stock as of January 2 of the calendar year in which such
award is granted (or, if January 2 is not a Business Day, the first Business Day
thereafter) (the “ETA
Grants”), subject to Executive’s continued employment with the Company
through the applicable grant date.  The Compensation Committee shall
establish in writing an EBITDA target applicable to each ETA Grant during the
first ninety days of the calendar year in which such ETA Grant is made (and, in
any event, upon or prior to making such grant).   The ETA Grants
shall vest, subject to Sections 1(b)(iii)(E) and
(F) below, as to 50% of the ETA Grant multiplied by the applicable ETA
Performance Percentage (as defined below) on February 1 of each of the first two
calendar years immediately following the year of grant, subject, in each case,
to Executive’s continued employment through such date (any date on
which

    
      
         

      

      
         

        
          

        

      

      
         

        
           

        

      

    

    an ETA
Grant vests, an “ETA Vesting
Date”).  The “ETA Performance Percentage” with
respect to each ETA Grant shall mean (i) zero if the applicable EBITDA target is
attained at less than 80%, (ii) 50% if the applicable EBITDA target is attained
at 80%, (iii) 100% if the applicable EBITDA target is attained at 100% or
greater, and (iv) a linear pro ration between 50 – 100% if the applicable EBITDA
target is attained between 80% - 100%  (for example, the ETA
Performance Percentage will equal 87.5% upon attainment of 95% of the applicable
EBITDA target).  If ETA Grants are made in the form of RSUs, any such
ETA Grants that vest in accordance herewith shall be settled in whole shares of
Company common stock as soon as practicable after the applicable ETA Vesting
Date, but in no event later than the March 15 immediately following the
applicable ETA Vesting Date, with the actual settlement date determined in the
Company’s sole discretion.

    

    (C)                  Additional Performance
Awards.  Subject to Executive’s continued employment with the
Company through  each such grant date and further subject Section 1(b)(iii)(D)
and Section
1(b)(iii)(F)(3) below, the Company shall make the following grants of
additional performance awards under a Plan to Executive (the “Additional
Grants”):

     

    
      	
              ·  

            	
              2010
      Grant.  During the first ninety days of calendar year
      2010, the Company shall grant to Executive an Additional Grant that
      provides the opportunity to earn up to $500,000, payable as soon as
      practicable after February 1, 2013, but in no event later than March
      15,
      2013.

            

    

     

    
      	
              ·  

            	
              2011
      Grants.  During the first ninety days of calendar year
      2011, the Company shall grant to Executive two Additional Grants, each
      providing the opportunity to earn up to $500,000, payable as soon as
      practicable after February 1, 2013 and February 1, 2014, respectively, but
      in no event later than March 15, 2013 and March 15, 2014,
      respectively.

            

    

     

    
      	
              ·  

            	
              2012
      Grants.  During the first ninety days of calendar year
      2012, the Company shall grant to Executive three Additional Grants, each
      providing the opportunity to earn up to $500,000, payable as soon as
      practicable after February 1, 2013, February 1, 2014 and February 1, 2015,
      respectively, but in no event later than March 15, 2013, March 15, 2014
      and March 15, 2015, respectively.

            

    

     

    
      	
              ·  

            	
              2013
      Grants.  During the first ninety days of calendar year
      2013, the Company shall grant to Executive two Additional Grants, each
      providing the opportunity to earn up to $500,000, payable as soon as
      practicable after February 1, 2014 and February 1, 2015, respectively, but
      in no event later than March 15, 2014 and March 15, 2015,
      respectively.

            

    

     

    
      	
              ·  

            	
              2014
      Grant.  During the first ninety days of calendar year
      2014, the Company shall grant to Executive an Additional Grant that
      provides the opportunity to earn up to $500,000, payable as soon as
      practicable after February 1, 2015, but in no event later than March 15,
      2015.

            

    

     

    Notwithstanding
the foregoing, payment or settlement  of Additional Grants, if
applicable, may be accelerated as provided in Section 1(b)(iii)(E) and
(F) below.  Subject to the foregoing requirements, Additional
Grants shall be made under a Plan and shall be paid at the time of settlement,
to the extent earned, in either (i) fully vested, freely transferable shares of
Company common stock (subject to limitations on transfer imposed under
applicable law) or (ii) if insufficient shares remain under the applicable Plan
at the time of settlement to pay any earned portion of an Additional Grant in
shares of Company common stock, then such portion of the Additional Grant shall
instead be paid in cash.   During the first ninety days of the
calendar year

    
      
         

      

      
         

        
          

        

      

      
         

        
           

        

      

    

    in which
such Additional Grant is made (and, in any event, upon or prior to making the
applicable grant), the Company and Executive shall determine by mutual agreement
the performance criteria applicable to the vesting of Additional Grants
(selected from performance criteria enumerated in a Plan) and the Compensation
Committee shall, in consultation with Executive, establish in writing
performance goals applicable to each Additional Grant based on such performance
criteria and determined by reference to the thirteen-month performance period
beginning on January 1 of the year of grant.  Each Additional Grant
shall vest, subject to Sections 1(b)(iii)(E) and
(F) below, on February 1 of the year immediately following the year in
which such Additional Grant is made, subject to Executive’s continued employment
through such February 1, in each case, as to (i) no portion of the award if the
applicable performance goals are attained at less than 90% of target, (ii) 80%
of the award if the applicable performance goals are attained at 90% of target,
(iii) 100% of the award if the applicable performance goals are attained at or
above 110% of target, and (iv) a linear pro ration between 80% – 100% of the
award if the applicable performance goals are attained between 90% – 110% of
target  (for example, an Additional Grant shall vest as to 95% of the
award upon attainment of 105% of the applicable target).

    

    (D)                 Stockholder
Approval.  If and to the extent that a sufficient number of
shares do not remain available for issuance under a Plan to grant any LTIP
Award(s), the Company agrees to adopt and submit for stockholder approval at the
next regularly scheduled Company annual stockholders’ meeting either (i) an
amendment to the Existing Plan, or (ii) a  new equity incentive plan
that includes as performance-vesting criteria (without limitation) the
performance-vesting criteria identified in the Existing Plan, in either case,
authorizing the issuance of additional shares under such plan sufficient to
grant such LTIP Award(s).  All affected LTIP Awards shall be granted
as soon as reasonably practicable after stockholder approval is
obtained.   If stockholder approval is not timely obtained, the
Company and Executive shall mutually agree to either delay the grant, issuance
and vesting of the affected LTIP Award(s) until the Company’s stockholders
approve a new equity plan or additional shares under the Existing Plan, or the
Company shall grant to Executive the LTIP Award(s) as cash-settled awards under
a Plan, pursuant to all other terms and conditions contemplated
above.

    

    (E)                           Corporate
Events.  Immediately prior to the earliest to occur of a
Corporate Transaction (as defined in the Existing Plan or any comparable
definition in a new equity plan approved by the Company’s stockholders) (and
notwithstanding Section 18.3 of the Existing Plan), or a Change of Control (as
defined in the Amended and Restated Executive Change of Control Agreement
between the Company and Executive, dated December 11, 2008) (together, “Corporate Events”), in any
case, occurring during the Service Term, any outstanding and unvested LTIP
Awards shall vest fully as if all applicable performance targets were fully
attained and all service requirements satisfied, and the LTIP Awards shall be
settled or paid, if applicable, immediately prior to, upon or within fifteen
days after the occurrence of such Corporate Event, provided, that to the extent
that any LTIP Awards constitute “nonqualified deferred compensation” (within the
meaning of Code Section 409A), including without limitation, any Additional
Grants, such LTIP Awards shall only be paid or settled in connection with the
Corporate Event if the Corporate Event constitutes a “change in control event”
within the meaning of Code Section 409A, and shall otherwise be paid or settled
upon the earliest to occur of (i) the Date of Termination, (ii) Executive’s
death or Disability, or (iii) the date specified in Sections 1(b)(iii)(A) – (C)
above, as applicable, subject to Section 1(g)
below.

    

    (F)                 Termination of
Employment.   The following provisions shall govern the
LTIP Awards in the event of Executive’s termination of employment:

    

    (1)           Termination Without Cause, for
Good

    
      
         

      

      
         

        
          

        

      

      
         

        
           

        

      

    

    Reason or Due to Death or
Disability.   If Executive’s employment with the Company
terminates due to his death or Disability or due to a termination by the Company
without Cause or by Executive for Good Reason (each as defined below and each, a
“Qualifying
Termination”), subject to Section 1(g) below,
the following provisions shall govern the LTIP Awards:

    

     (a)           PEA Grants.  PEA
Grants that have vested but have not been settled or paid as of the date of a
Qualifying Termination shall be settled or paid (if applicable) as soon as
practicable after the Date of Termination, but in no event later than the March
15 immediately following such Date of Termination.  PEA Grants that
have not vested as of the Date of Termination shall remain outstanding and
eligible to vest (without the requirement of continued employment beyond such
termination) on a pro-rated basis upon the February 1 immediately following the
Date of Termination.  PEA Grants shall vest upon and, in the case of
RSUs, be settled, as soon as practicable after, such February 1 (but in no event
later than the March 15 immediately following the Date of Termination), if
EBITDA during the thirteen-month period beginning on January 1 of the year of
grant of the PEA Grant was positive, in an amount determined by multiplying
amounts subject to the PEA Grant by a fraction, the numerator of which equals
the number of days Executive was employed by the Company from January 1 of the
applicable year of grant through the Date of Termination, and the denominator of
which equals 396.

     

     (b)           ETA Grants.  ETA
Grants that have vested but have not been settled or paid as of the date of a
Qualifying Termination shall be settled or paid (if applicable) as soon as
practicable after the Date of Termination, but in no event later than the March
15 immediately following such Date of Termination.  If the performance
period applicable to an ETA Grant is ongoing as of the Date of Termination, such
ETA Grant shall remain outstanding and eligible to vest (without the requirement
of continued employment beyond such termination) on a pro-rated basis upon the
February 1 immediately following the Date of Termination and shall vest upon
and, in the case of RSUs, be settled, as soon as practicable after, such
February 1 (but in no event later than the March 15 immediately following such
Date of Termination), in a manner determined by multiplying amounts that would
be earned under such ETA Grant on such February 1 based solely on attainment of
EBITDA by a fraction, the numerator of which equals the number of days Executive
was employed by the Company from January 1 of the applicable year of grant
through the Date of Termination, and the denominator of which equals
396.  If the performance period applicable to an ETA Grant has
terminated as of the Date of Termination but the vesting of a portion of the ETA
Grant remains subject to continued employment, any earned component of such ETA
Grant that would otherwise vest on the second February 1 following the year of
grant of such ETA Grant based on continued employment shall instead vest in full
upon the Qualifying Termination and be paid as soon as practicable following the
Date of Termination, but in no event later than the March 15 immediately
following such Date of Termination.

     

    (c)           Additional
Grants.  Additional Grants that have vested but have not been
settled or paid as of the date of a Qualifying Termination shall be settled or
paid as soon as practicable after the February 1 immediately following the Date
of Termination, but in no event later than the March 15 immediately following
such Date of Termination.   Additional Grants that have not
vested as of the Date of Termination shall remain outstanding and eligible to
vest upon the February 1 immediately following the Date of Termination (without
the requirement of continued employment beyond such termination) and shall vest
on a pro-rated basis upon and be paid as soon as practicable after such February
1 (but in no event later than the March 15 immediately following such Date of
Termination), in a manner determined by multiplying amounts that would be earned
under such Additional Grant based solely on attainment of the applicable
performance objectives by a fraction, the numerator of which
equals the number of days Executive was employed by the Company from January 1
of the applicable year of grant through the Date of Termination, and the
denominator of which equals 396.

       

    

     

    
      
         

      

      
         

        
          

        

      

      
         

        
           

        

      

    

     (2)           Termination for Cause; Resignation
Other Than for Good Reason.  If Executive’s employment is
terminated by the Company for Cause or due to Executive’s resignation other than
for Good Reason, (a) all LTIP Awards that have not vested as of the Date of
Termination shall terminate, (b) all LTIP Awards other than Additional Grants
that have vested prior to the Date of Termination, but have not been settled or
paid as of the Date of Termination (if applicable) shall, subject to Section 1(g) below,
be settled or paid as soon as practicable after the Date of Termination, but in
no event later than the March 15 immediately following such Date of Termination
and (c) all LTIP Awards that are Additional Grants and have vested prior to the
Date of Termination, but have not been settled or paid as of the Date of
Termination (if applicable), subject to Section 1(g) below,
shall be settled or paid as soon as practicable after the February 1 immediately
following the Date of Termination, but in no event later than the March 15
immediately following the Date of Termination.

     

    (3)           Termination of Employment Prior to
Grant.  If, during the first ninety days of any calendar year
in which Executive is entitled to receive one or more LTIP Awards in accordance
with Section
1(c)(iii)(A) – (C) above, Executive experiences a Qualifying Termination
occurring  prior to the date in such calendar year on which any such
LTIP Awards would otherwise be granted, the LTIP Award grants to which Executive
is entitled for such calendar year shall instead be granted to Executive as of
no later than immediately prior to such Qualifying Termination and shall be
administered in accordance 1(c)(iii)(F)(1) above.  Except as expressly
provided in the immediately preceding sentence, any LTIP Awards that have not
been granted as of the Date of Termination shall be forfeited and Executive
shall have no further rights or interests in respect of such un-granted LTIP
Awards.

     

     (4)           Forfeiture of
Awards.  All LTIP Awards that have not vested (a) in the case
of a termination of Executive’s employment for Cause or due to Executive’s
resignation other than for Good Reason, as of the Date of Termination, shall
terminate as of the Date of Termination, and (b) in the case of a Qualifying
Termination in which the LTIP Awards remain unvested as of the February 1
following the Date of Termination (after taking into consideration any vesting
that may occur upon or following the Date of Termination as provided above or
under any other agreement between Executive and Company), shall terminate as of
such February 1, and, in all cases, shall be canceled without payment of
consideration therefor.  Following settlement or payment of any vested
LTIP Awards, if applicable, such awards shall terminate and Executive shall have
no further rights or interests in respect of such awards.

     

    

    (G)           Employment
Taxes.  Notwithstanding anything contained herein to the
contrary, to the extent that any compensation payable hereunder, including
without limitation, under any of the LTIP Awards, constitutes “nonqualified
deferred compensation” within the meaning of Code Section 409A, the payment of
any such compensation may be accelerated to the greatest extent permitted under
Treasury Regulation 1.409A-3(j)(4)(vi) to pay any taxes imposed under the
Federal Insurance Contribution Act (“FICA”) on such compensation or
under Code Section 3401 or corresponding withholding provisions of applicable
state, local or foreign tax laws as income tax obligations arising in connection
with any such acceleration, including any additional taxes attributable to
pyramiding wages and taxes, provided, that the total of
any such accelerated payment shall not exceed the applicable FICA and income tax
obligations to which such accelerated payments relate.

    
      
         

      

      
         

        
          

        

      

      
         

        
           

        

      

    

    

    (H)           Payment
Dates.  With respect to any payment under an LTIP Award that
may be made by its terms over a range of dates, the Company shall determine the
exact date of payment in its sole discretion and the Executive shall not be able
to directly or indirectly designate the calendar year of such
payment.

     

    (c)          
Termination.

    
      	
               
      

            	
               

            

    

    (i)           Events of
Termination.  Executive’s employment
with the Company shall cease upon:

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (A)

            	
              Executive’s
      death.

            

    

    
      	
               
      

            	
               

            

    

    
      	
               
      

            	
              (B)

            	
              Executive’s
      voluntary retirement.

            

    

     

    (C)          Executive’s
“Disability” which means
Executive has become disabled within the meaning of Code Section
409A.

     

    (D)         
Termination by the Company by the delivery to Executive of a written notice from
the Board or the CEO that Executive has been terminated (“Notice of Termination”) with
or without Cause.   “Cause” shall
mean:

    
      	
               
      

            	
               

            

    

    (1)          
Executive’s (aa) conviction of a felony; (bb) Executive’s commission of any
other material act or omission involving dishonesty or fraud with respect to the
Company or any of its Affiliates or any of the customers, vendors or suppliers
of the Company or its Subsidiaries; (cc) Executive’s misappropriation of
material funds or assets of the Company for personal use; or (dd) Executive’s
engagement in unlawful harassment or other discrimination with respect to the
employees of the Company or its Subsidiaries;

     

    (2)          
Executive’s continued substantial and repeated neglect of his duties, after
written notice thereof from the Board, and such neglect has not been cured
within 30 days after Executive receives notice thereof from the
Board;

     

    (3)          
Executive’s gross negligence or willful misconduct in the performance of his
duties hereunder that is materially and demonstrably injurious to the
Company;

     

    (4)          
Executive’s engaging in conduct constituting a breach of Sections
2  or  3  hereof
that is not cured in full within 15 days, and is materially and demonstrably
injurious to the Company, after  notice of default thereof, from the
Company, as determined by a court of law.

    

    In order
for the termination to be effective: Executive must be notified in writing
(which writing shall specify the cause in reasonable detail) of any termination
of his employment for Cause.  Executive will then have the right, within
ten days of receipt of such notice, to file a written request for review by the
Company.  In such case, Executive will be given the opportunity to be
heard, personally or by counsel, by the Board and a majority of the Directors
must thereafter confirm that such termination is for Cause.  If the
Directors do not provide such confirmation, the termination shall be treated as
other than for Cause.  Notwithstanding anything to the contrary contained
in this paragraph, Executive shall have the right after termination has occurred
to appeal any determination by the Board that such termination was for “Cause”
in accordance with the provisions of  Section
8(f)  hereof.

    
      
         

      

      
         

        
          

        

      

      
         

        
           

        

      

    

     

    The
delivery by the Company of notice to Executive that it does not intend to renew
this Agreement as provided in  Section
1(f)  shall constitute a termination by the Company without
Cause if, at the time of such notice, Executive is willing and able to renew the
Agreement and continue providing services on terms and conditions substantially
similar to those contained in this Agreement, provided, that in no event
shall notice which fulfills the requirements of  Section 1(c)(i)(D)(1)
, (2) , (3) or (4)  above
constitute a termination by the Company without Cause.

    

    (E)          
Executive’s voluntary resignation by the delivery to the Company and the Board
of at least 30 days written notice from Executive that Executive has resigned
with or without Good Reason.   “Good Reason”
shall mean Executive’s resignation from employment with the Company after the
occurrence of any one of the following:

     

    (1)          
the failure of the Company to pay an amount owing to Executive in breach of this
Agreement; or

     

    (2)          
without Executive’s consent, a relocation of Executive’s principal work location
from the Calabasas, California metropolitan area  that constitutes a
material change in the geographic location at which he must perform services
under this Agreement (within the meaning of Code Section 409A);

    

    provided, that Executive’s
resignation shall only constitute a resignation for “Good Reason” hereunder if
(I) Executive provides the Company with written notice setting forth in
reasonable detail the facts or circumstances constituting Good Reason within
thirty days after Executive becomes reasonably aware of the existence of such
facts and circumstances, (or reasonably aware that there is a controversy
between the Company’s interpretation of any payment obligation or principal work
location requirement of this Agreement and the Executive’s interpretation of
same), (II) the Company has failed to cure such facts or circumstances within
thirty days after receipt of such written notice, and (III) the date of
Executive’s “separation from service” (within the meaning of Code Section
409A(a)(2)(A)(i) of the Code, and Treasury Regulation Section 1.409A-1(h))
(“Separation from
Service”) occurs no later than thirty-five days after Executive gives
notice of the event constituting Good Reason.

    
      	
               
      

            	
               

            

    

    The
delivery by Executive of notice to the Company that he does not intend to renew
this Agreement as provided in  Section
1(f)  shall constitute a resignation by Executive without Good
Reason unless such notice fulfills the requirements of  Section 1(c)(i)(E)(1)
or  (2)  above.

    

    For the
avoidance of doubt, in no event shall Executive’s ceasing to serve as the
President of the Company, whether voluntarily or involuntarily, constitute Good
Reason.

     

    (ii)          
Date of
Termination.  “Date of Termination” means the date on which
Executive experiences a Separation from Service.

     

    (iii)        
Rights on
Termination.

     

    (A)            In
the event that termination is by the Company without Cause (including by
operation of the last paragraph of Section 1(c)(i)(D) above) or by Executive
with Good Reason and Executive experiences a Separation from Service as a result
of such termination, subject to Section 1(g) below:

    
      
         

      

      
         

        
          

        

      

      
         

        
           

        

      

    

    

    (1)      The
Company will pay Executive (i) an amount equal to 150% of the Annual Base
Salary, payable over a period of eighteen (18) months commencing on the Date of
Termination (the “Severance
Period”) in substantially equal installments in accordance with Company
payroll procedures applicable to senior executives of the Company, as in effect
from time to time (but no less often than monthly), provided, that payment of the
amounts described in this Section  shall not commence until the
Company’s first payroll date occurring on or after the 30th day
following the Date of Termination (the “First Payroll Date”) and any
amounts that would otherwise have been paid prior to the First Payroll Date
shall instead be paid on the First Payroll Date, and (ii) a cash amount equal to
the aggregate premiums that the Company would have paid for basic life
insurance, accidental death and dismemberment insurance and long- and short-term
disability insurance, each as in effect on the Date of Termination, had
Executive remained employed by the Company during the Severance Period
(together, “Insurance
Benefits”).  In addition, during the Severance Period, subject
to Executive’s proper election to continue healthcare coverage under the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company will pay
Executive’s COBRA premiums in respect of COBRA benefits to be provided through
third-party insurance maintained by the Company under the Company’s benefit
plans in a manner that causes such COBRA benefits to be exempt from the
application of Code Section 409A under Treasury Regulation Section
1.409A-1(a)(5), provided, that if during the
period of continuation coverage, any plan pursuant to which such benefits are to
be provided ceases to be exempt from the application of Code Section 409A under
Treasury Regulation Section 1.409A-1(a)(5), then an amount equal to each such
remaining premium shall thereafter be paid to Executive as currently taxable
compensation in substantially equal monthly installments over the remainder of
the continuation coverage period; and

    

    (2)                  All
LTIP Awards shall be treated as provided in Section 1(b)(iii)(F)(1)
above.

    

    For
purposes of paragraph (e) below, payments of Annual Base Salary, amounts in lieu
of Insurance Benefits, COBRA premiums and any vesting of LTIP Awards following
the Date of Termination, in each case, as described in this Agreement, are
collectively referred to as “Severance Payments.” In addition, the Company
will pay to Executive in a lump-sum the value of any accrued but unused vacation
time.  No Severance Payments or benefits shall be paid or provided
unless Executive has executed and not revoked a release in a form mutually
acceptable to both the Company and Executive that is subject
to  paragraph (e) below.  In addition, the Company agrees
that concurrently with Executive’s execution of such release, the Company shall
execute a contingent mutual release in a form that is mutually acceptable to
both the Company and Executive that is subject to paragraph (e)
below.  Each payment under Section 1(c)(iii)(A) above shall be treated
as a separate payment for purposes of Code Section 409A.

     

    (B)          
If the Company terminates Executive’s employment for Cause, or if Executive
resigns without Good Reason (including by operation of the last paragraph of
Section
1(c)(i)(E)), the Company’s obligations to pay any compensation or
benefits under this Agreement (other than accrued but unused vacation time which
shall be paid to Executive in a lump sum payment) and all vesting under all
equity awards held by Executive will cease effective as of the date of
termination, provided,
that LTIP Awards which have vested prior to such Date of Termination shall be
treated in accordance with Section 1(b)(iii)(F)(2) above.  Executive’s
right to receive any other health or other benefits, if any, will be determined
under the provisions of applicable plans, programs or other
coverages.

    
      	
               
      

            	
               

            

    

    
      
         

      

      
         

        
          

        

      

      
         

        
           

        

      

    

    

    (C)          
If Executive’s employment terminates because of  Executive’s death or
Disability,  then Executive or his estate shall be entitled to any
disability income or life insurance payments from any insurance policies (other
than any  “key man” life insurance policy) maintained by the Company. 
In addition, in the event of such a termination, for a period of six (6) months
commencing on the Date of Termination, Executive or his estate shall be entitled
to payment of an amount equal to 50% of the Annual Base Salary, payable over six
months from Executive’s death or Disability in approximately equal installments
on regular salary payment dates.  LTIP Awards shall be treated in
accordance with Section 1(b)(iii)(F)(1) above.

     

    Notwithstanding
the foregoing, the Company’s obligation to Executive for Severance Payments
shall cease if Executive is found by a court of law to be in material violation
of the provisions of  Sections 2 or
3  hereof. 

     

    (d)          
Mitigation. The Company’s obligation to
continue to provide Executive with the Severance Payments pursuant
to  Section
1(c)(iii)(A) above and the benefits pursuant to the second sentence
of  Section
1(c)(iii)(C)  above shall cease if Executive becomes employed
as a senior executive by a third party.

     

    (e)          
Liquidated
Damages. The
parties acknowledge and agree that damages which will result to Executive for
termination by the Company without Cause shall be extremely difficult or
impossible to establish or prove, and agree that the Severance Payments shall
constitute liquidated damages for any breach of this Agreement by the Company
through the Date of Termination.  Executive agrees that, except for such
other payments and benefits to which Executive may be entitled as expressly
provided by the terms of this Agreement or any applicable Benefit Plan, such
liquidated damages shall be in lieu of all other claims that Executive may make
by reason of termination of his employment or any such breach of this Agreement
and that, as a condition to receiving the Severance Payments, Executive will
execute a contingent mutual release of claims in a form reasonably satisfactory
to both the Company and Executive.

    

    (f)           
Term of
Employment.  Unless
Executive’s employment under this Agreement is sooner terminated as a result of
Executive’s termination in accordance with the provisions of Section 1(c) above,
Executive’s employment under this Agreement shall continue through January 31,
2013 (the “Service
Term”); provided,
however, that Executive’s employment under this Agreement, and the
Service Term, shall be automatically renewed for additional one-year periods
commencing on February 1, 2013 and, thereafter, on each successive anniversary
of such date unless either the Company or Executive notify the other party in
writing within ninety (90) days prior to any such anniversary that it or he
desires not to renew Executive’s employment under this Agreement.  All
references herein to “Service
Term” shall include any renewals thereof after February 1,
2013.

    

    (g)         Potential
Six-Month Delay.  Notwithstanding anything to the contrary in
this Agreement,  no compensation or benefits, including without
limitation any Severance  Payments or payments in respect of any LTIP
Awards in connection with a Separation from Service, shall be paid to Executive
during the 6-month period following his Separation from Service to the extent
that the Company reasonably determines that Executive is a “specified employee”
(within the meaning of Code Section 409A) at the time of such Separation from
Service and that paying such amounts at the time or times indicated in this
Agreement would be a prohibited distribution under Code Section 409A(a)(2)(b)(i)
of the Code.  If the payment of any such amounts is delayed as a
result of the previous sentence, then on the first business day following the
end of such 6-month period (or such 

    
      
         

      

      
         

        
          

        

      

      
         

        
           

        

      

    

     

    earlier date upon which such amount can be paid under Code Section 409A
without being subject to such additional taxes, including as a
result of Executive’s death), the Company shall pay to Executive a lump-sum
amount equal to the cumulative amount that would have otherwise been payable to
Executive during such 6-month period, without interest thereon.

     

    2.            
Confidential
Information; Proprietary Information, etc.

     

    (a)          
Obligation
to Maintain Confidentiality. Executive acknowledges that any Proprietary
Information disclosed or made available to Executive or obtained, observed or
known by Executive as a direct or indirect consequence of his employment with or
performance of services for the Company or any of its Affiliates during the
course of his performance of services for, or employment with, any of the
foregoing Persons (whether or not compensated for such services) and during the
period in which Executive is receiving Severance Payments, are the property of
the Company and its Affiliates.  Therefore, Executive agrees that he will
not at any time (whether during or after Executive’s term of employment)
disclose or permit to be disclosed to any Person or, directly or indirectly,
utilize for his own account or permit to be utilized by any Person any
Proprietary Information or Records for any reason whatsoever without the Board’s
consent, unless and to the extent that (except as otherwise provided in the
definition of Proprietary Information) the aforementioned matters become
generally known to and available for use by the public other than as a direct or
indirect result of Executive’s acts or omissions to act. Executive agrees to
deliver to the Company at the termination of his employment, as a condition to
receipt of the next or final payment of compensation, or at any other time the
Company may request in writing (whether during or after Executive’s term of
employment), all Records which he may then possess or have under his control.
Executive further agrees that any property situated on the Company’s or its
Affiliates’ premises and owned by the Company or its Affiliates, including disks
and other storage media, filing cabinets or other work areas, is subject to
inspection by Company or its Affiliates and their personnel at any time with or
without notice.  Nothing in this Section  shall be construed to
prevent Executive from using his general knowledge and experience in future
employment so long as Executive complies with this Section  and
the other restrictions contained in this Agreement.

     

    (b)          
Ownership
of Property.
Executive acknowledges that all inventions, innovations, improvements,
developments, methods, processes, programs, designs, analyses, drawings, reports
and all similar or related information  (whether or not patentable) that
relate to the Company’s or any of its Affiliates’ actual or anticipated
business, research and development, or existing or future products or services
and that are conceived, developed, contributed to, made, or reduced to practice
by Executive (either solely or jointly with others) while employed by the
Company or any of its Affiliates (including any of the foregoing that
constitutes any Proprietary Information or Records) (“Work Product”) belong to the
Company or such Affiliate and Executive hereby assigns, and agrees to assign,
all of the above Work Product to the Company or such Affiliate.  Any
copyrightable work prepared in whole or in part by Executive in the course of
his work for any of the foregoing entities shall be deemed a “work made for
hire” under the copyright laws, and the Company or such Affiliate shall own all
rights therein. To the extent that any such copyrightable work is not a “work
made for hire,” Executive hereby assigns and agrees to assign to Company or such
Affiliate all right, title and interest, including without limitation, copyright
in and to such copyrightable work.  Executive shall promptly disclose such
Work Product and copyrightable work to the Board and perform all actions
reasonably requested by the Board (whether during or after Executive’s term of
employment) to establish and confirm the Company’s or its Affiliate’s ownership
(including, without limitation, execution of assignments, consents, powers of
attorney and other instruments).  Notwithstanding anything

    
      
         

      

      
         

        
          

        

      

      
         

        
           

        

      

    

    contained
in this  Section to the contrary, the Company’s ownership of Work
Product does not apply to any invention that Executive develops entirely on his
own time without using the equipment, supplies or facilities of the Company or
its Affiliates or Subsidiaries or any Proprietary Information (including trade
secrets), except that the Company’s ownership of Work Product does include those
inventions that:  (i) relate to the business of the Company or its
Affiliates or Subsidiaries or to the actual or demonstrably anticipated research
or development relating to the Company’s business; or (ii) result from any work
that Executive performs for the Company or its Affiliates or
Subsidiaries.

     

    (c)          
Third
Party Information. Executive understands that
the Company and its Affiliates will receive from third parties confidential or
proprietary information (“Third
Party Information”) subject to a duty on the Company’s and its
Affiliates’ part to maintain the confidentiality of such information and to use
it only for certain limited purposes.  During the term of Executive’s
employment and thereafter, and without in any way limiting the provisions
of  Sections 2(a)  and  2(b)  above,
Executive shall hold Third Party Information in the strictest confidence and
shall not disclose to anyone (other than personnel of the Company or its
Affiliates who need to know such information in connection with their work for
the Company or its Affiliates) or use, except in connection with his work for
the Company or its Affiliates, Third Party Information unless expressly
authorized by a member of the Board in writing.

     

    (d)          
Use of
Information of Prior Employers, etc. Executive will abide by any
enforceable obligations contained in any agreements that Executive has entered
into with his prior employers or other parties to whom Executive has an
obligation of confidentiality.

     

    (e)          
Compelled
Disclosure. If
Executive is required by law or governmental regulation or by subpoena or other
valid legal process to disclose any Proprietary Information or Third Party
Information to any Person, Executive will immediately provide the Company with
written notice of the applicable law, regulation or process so that the Company
may seek a protective order or other appropriate remedy.  Executive will
cooperate fully with the Company and the Company’s Representatives in any
attempt by the Company to obtain any such protective order or other
remedy.  If the Company elects not to seek, or is unsuccessful in
obtaining, any such protective order or other remedy in connection with any
requirement that Executive disclose Proprietary Information or Third Party
Information, and if Executive furnishes the Company with a written opinion of
reputable legal counsel acceptable to the Company confirming that the disclosure
of such Proprietary Information or Third Party Information is legally required,
then Executive may disclose such Proprietary Information or Third Party
Information to the extent legally required;  provided,
however,  that Executive will use his reasonable best efforts
to ensure that such Proprietary Information is treated confidentially by each
Person to whom it is disclosed.

     

    3.            
Nonsolicitation.

     

    (a)          
Nonsolicitation. As long as Executive is an
employee of the Company or any Affiliate thereof, and for eighteen (18) months
thereafter, Executive shall not directly or indirectly through another entity:
(i) induce or attempt to induce any employee of the Company or any Affiliate to
leave the employ of the Company or such Affiliate, or in any way interfere with
the relationship between the Company or any Affiliate and any employee thereof;
(ii) hire or employ any person who was an employee of the Company or any
Affiliate at any time during the nine (9) month period immediately preceding the
date of such Executive’s termination; (iii) induce or attempt to induce any
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    licensee
or other business relation of the Company or any Affiliate to cease doing
business with the Company or such Affiliate, or in any way interfere with the
relationship between any such customer, client, supplier, licensee or business
relation and the Company or any Affiliate; (iv) call on, solicit or service any
Person who was a customer or client of the Company or any Affiliate or (v) call
on, solicit or service any Person who was Prospective Client for any purpose
which directly or indirectly competes with the business of the Company. 
For purposes hereof, a  “Prospective
Client”  means any Person whom the Company or any of its
Affiliates has entertained discussions with to become a client or customer at
any time during the twelve (12) month period immediately preceding the date of
such Executive’s termination.

     

    (b)          
Acknowledgment. Executive acknowledges that
in the course of his employment with the Company and its Affiliates, he has and
will become familiar with the trade secrets and other Proprietary Information of
the Company and its Affiliates. It is specifically recognized by Executive that
his services to the Company and its Subsidiaries are special, unique and of
extraordinary value, that the Company has a protectable interest in prohibiting
Executive as provided in this  Section 3 , that money damages are
insufficient to protect such interests, that there is adequate consideration
being provided to Executive hereunder, that such prohibitions are necessary and
appropriate without regard to payments being made to Executive hereunder and
that the Company would not enter this Agreement with Executive without the
restriction of this  Section 3. Executive further acknowledges that
the restrictions contained in this Section 3 do not impose an undue hardship on
him and, since he has general business skills which may be used in industries
other than that in which the Company and its Subsidiaries conduct their
business, do not deprive Executive of his livelihood.  Executive further
acknowledges that the provisions of this Section 3 are separate and independent
of the other sections of this Agreement.

     

    (c)          
Enforcement,
etc.  If, at
the time of enforcement of Section 2 or 3 of this Agreement, a court holds that
the restrictions stated herein are unreasonable under circumstances then
existing, the parties hereto agree that the maximum duration, scope or
geographical area reasonable under such circumstances as determined by the court
shall be substituted for the stated period, scope or area.  Because
Executive’s services are unique, because Executive has access to Proprietary
Information and for the other reasons set forth herein, the parties hereto agree
that money damages would be an inadequate remedy for any breach of this
Agreement.  Therefore, without limiting the generality of Section 8(g), in
the event of a breach or threatened breach of this Agreement, the Company or its
successors or assigns may, in addition to other rights and remedies existing in
their favor, apply to any court of competent jurisdiction for specific
performance and/or injunctive or other relief in order to enforce, or prevent
any violations of, the provisions hereof.

     

    (d)          
Submission to Jurisdiction.  The parties hereby:
(i) submit to the jurisdiction of any state or federal court sitting in
California in any action or proceeding arising out of or relating to Section 2
and/or 3 of this Agreement; (ii) agree that all claims in respect of such action
or proceeding may be heard or determined in any such court; and (iii) agree not
to bring any action or proceeding arising out of or relating to Section 2 and/or
3 of this Agreement in any other court.  The parties hereby waive any
defense of inconvenient forum to the maintenance of any action or proceeding so
brought and waives any bond, surety or other security that might be required of
any other party with respect thereto. The parties hereby agree that a final
judgment in any action or proceeding so brought shall be conclusive and may be
enforced by suit on the judgment or in any other manner provided by
law.

     

    
      
         

      

      
         

        
          

        

      

      
         

        
           

        

      

    

     

    GENERAL
PROVISIONS

    

    4.            
Definitions.

     

    “Affiliate” of any Person
means any other Person which directly or indirectly controls, is controlled by
or is under common control with such Person.

     

    “Board” means the Company’s
board of directors or the board of directors or similar management body of any
successor of the Company.

    

    “EBITDA” shall mean
earnings before interest, taxes, depreciation and amortization, but excluding
gains, losses or expenses associated with all Unusual Items.

     

    “Proprietary Information”
means any and all data and information concerning the business affairs of the
Company or any of its Affiliates and not generally known in the industry in
which the Company or any of its Affiliates is or may become engaged, and any
other information concerning any matters affecting or relating to the Company’s
or its Affiliates businesses, but in any event Proprietary Information shall
include, any of the Company’s and its Affiliates’ past, present or prospective
business opportunities, including information concerning acquisition
opportunities in or reasonably related to the Company’s or its Affiliates
businesses or industries, customers, customer lists, clients, client lists, the
prices the Company and its Affiliates obtain or have obtained from the sale of,
or at which they sell or have sold, their products, unit volume of sales to past
or present customers and clients, or any other information concerning the
business of the Company and its Affiliates, their manner of operation, their
plans, processes, figures, sales figures, projections, estimates, tax records,
personnel history, accounting procedures, promotions, supply sources, contracts,
know-how, trade secrets, information relating to research, development,
inventions, technology, manufacture, purchasing, engineering, marketing,
merchandising or selling, or other data without regard to whether all of the
foregoing matters will be deemed confidential, material or important. 
Proprietary Information does not include any information which Executive has
obtained from a Person other than an employee of the Company, which was
disclosed to him without a breach of a duty of confidentiality.

     

    “Person” means an individual,
a partnership, a limited liability company, a corporation, an association, a
joint stock company, a trust, a joint venture, an unincorporated organization
and a governmental entity or any department, agency or political subdivision
thereof.

     
 

    “Records” means (i) any and
all procedure manuals, books, records and accounts; (ii) all property of the
Company and its Affiliates, including papers, note books, tapes and similar
repositories containing Proprietary Information; (iii) all invoices and
commission reports; (iv) customer lists — partial and/or complete; (v) data
layouts, magnetic tape layouts, diskette layouts, etc.; (vi) samples; (vii)
promotional letters, brochures and advertising materials; (viii) displays and
display materials; (ix) correspondence and old or current proposals to any
former, present or prospective customer of the Company and its Affiliates; (x)
information concerning revenues and profitability and any other financial
conditions of the Company and its Affiliates; (xi) information concerning the
Company and its Affiliates which was input by Executive or at his direction,
under his supervision or with his knowledge, including on any floppy disk,
diskette, cassette or similar device used in, or in connection with, any
computer, recording devices or typewriter; (xii) data, account information or
other matters furnished by customers of the Company and its Affiliates; and
(xiii) all copies of any of the foregoing data, documents or devices whether in
the form of carbon copies, photo copies, copies of floppy disks, diskettes,
tapes or in any other manner whatsoever. 

    
      
         

      

      
         

        
          

        

      

      
         

        
           

        

      

    

    

    “Subsidiary” means any
corporation of which the Company owns securities having a majority of the
ordinary voting power in electing the board of directors directly or through one
or more subsidiaries.

    

    “Unusual Items” shall mean: (i)
restructurings, discontinued operations, extraordinary items or events, and
other unusual or non-recurring charges as described in Accounting Principles
Board Opinion No. 30 and/or management’s discussion and analysis of
financial condition and results of operations appearing or incorporated by
reference in the Company’s Form 10-K for the applicable year; (ii) a force
majeure or other event either not directly related to the operations of the
Company or not within the reasonable control of the Company’s management; (iii)
litigation (including attorneys’ fees and other litigation expenses), judgments,
settlements, except to the extent that any such litigation, judgments, and/or
settlements result from the willful or intentional misconduct of Executive; (iv)
changes in tax laws or accounting standards required by generally accepted
accounting principles or changes in other such laws or provisions affecting
reported results; (v) expenses resulting from severance arrangements with
terminated employees; (vi) equity-based compensation expenses; (vii) one-time
gains or losses from the disposal or sale of assets; and (viii) impairments of
goodwill or other intangible assets.

     

    5.            
Notices. Any notice provided for in
this Agreement must be in writing and must be either personally delivered,
mailed by first class United States mail (postage prepaid, return receipt
requested) or sent by reputable overnight courier service (charges prepaid) or
by facsimile to the recipient at the address below indicated:

     

    
      	 
      	
              If to Executive:

            	 
      	 
      
	 
      
	 
      	 
      	
              Peter
      T. Dameris

            
	 
      	 
      	
              26651
      West Agoura Road

            
	 
      	 
      	
              Calabasas,
      California 91302

            
	 
      	 
      	
              Tel
      No.:

            	
              (818)
      878-7900

            
	 
      
	 
      	
              If to the Company:

            	 
      	 
      
	 
      
	 
      	 
      	
              26651
      West Agoura Road

            
	 
      	 
      	
              Calabasas,
      California 91302

            
	 
      	 
      	
              Attention:

            	
              General
      Counsel

            
	 
      	 
      	
              Tel
      No.:

            	
              (818)
      871-3300

            
	 
      	 
      	
              Fax
      No.:

            	
              (818)
      880-0056

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      

    

     

     

     

    or such
other address or to the attention of such other person as the recipient party
shall have specified by prior written notice to the sending party.

     

    6.            
Executive’s
Representations and Warranties.  Executive represents
and warrants that he has full authority to enter into this Agreement and fully
to perform his obligations hereunder, that he is not subject to any
non-competition agreement, and that his past, present and anticipated future
activities have not and will not infringe on the proprietary rights of others,
including, but not limited to, proprietary information rights or interfere with
any agreements he has with any prior employee.  Executive further
represents 

    
      
         

      

      
         

        
          

        

      

      
         

        
           

        

      

    

    and
warrants that he is not obligated under any contract (including licenses,
covenants or commitments of any nature) or other agreement, or subject to any
judgment, decree or order of any court or administrative agency, which would
conflict with or result in a breach of this Agreement or which would in any
manner interfere with the performance of his duties for the
Company.

     

    7.        Code
Section 409A.

    

    (a)           General.  The
payments and benefits provided hereunder are intended to be exempt from or
compliant with the requirements of Code Section 409A.  Notwithstanding
any provision of this Agreement to the contrary, in the event that following the
Effective Date, the Company reasonably determines that any payments or benefits
hereunder are not either exempt from or compliant with the requirements of Code
Section 409A, the Company and Executive shall work together to adopt such
amendments to this Agreement or adopt such other policies and procedures
(including amendments, policies and procedures with retroactive effect), or take
any other actions, that are necessary or appropriate (i) to preserve the
intended tax treatment of the payments and benefits provided hereunder, to
preserve the economic benefits with respect to such payments and benefits,
and/or (ii) to exempt such payments and benefits from Code Section 409A or to
comply with the requirements of Code Section 409A and thereby avoid the
application of penalty taxes thereunder, provided ̧ that the Company
shall have no obligation to take any action described in this Section 7(a) or to
indemnify Executive for any failure to take any such action.

    

    (b)           Certain
Reimbursements.  To the extent that any reimbursements
hereunder constitute taxable compensation to Executive, such reimbursements
shall be reimbursable to Executive only during his lifetime and shall be made to
Executive promptly, but in no event after December 31st of
the year following the year in which the expense was incurred, the amount of any
such amounts reimbursed in one year shall not affect the amount eligible for
reimbursement in any subsequent year, and Executive’s right to reimbursement of
any such expenses shall not be subject to liquidation or exchange for any other
benefit.

        

    8.         General
Provisions.

     

    (a)          
Expenses. Each party shall bear his or
its own expenses in connection with the negotiation and execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement.

     

    (b)          
Severability.  Whenever possible,
each provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Agreement
is held to be invalid, illegal or unenforceable in any respect under any
applicable law or rule in any jurisdiction, such invalidity, illegality or
unenforceability will not affect any other provision or any other jurisdiction,
but this Agreement will be reformed, construed and enforced in such jurisdiction
as if such invalid, illegal or unenforceable provision had never been contained
herein.

     

    (c)          
Complete
Agreement. This
Agreement and those documents expressly referred to herein embody the complete
agreement and understanding among the parties and supersede and preempt any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way,
including without limitation, the Prior Agreement (as
amended).  Notwithstanding the foregoing, the Prior Agreement shall
continue to govern the terms and conditions of all compensation and benefits
paid, provided or payable thereunder, including without limitation, the 2006
Equity Awards.

    
      
         

      

      
         

        
          

        

      

      
         

        
           

        

      

    

     

    (d)          
Counterparts;
Facsimile Transmission. This Agreement may be
executed in separate counterparts, each of which is deemed to be an original and
all of which taken together constitute one and the same agreement. Each party to
this Agreement agrees that it will be bound by its own telecopied signature and
that it accepts the telecopied signature of each other party to this
Agreement.

     

    (e)          
Successors
and Assigns.
Except as otherwise provided herein, this Agreement shall bind and inure to the
benefit of and be enforceable by Executive, the Company and their respective
successors and assigns;
provided that the rights and obligations of Executive under this
Agreement shall not be assignable and, provided further that, the
rights and obligations of the Company may be assigned to any Affiliate of the
Company.

     

    (f)           
Choice of
Law; Jurisdiction. All questions concerning the
construction, validity and interpretation of this Agreement and the exhibits
hereto will be governed by and construed in accordance with the internal laws of
the State of Delaware, without giving effect to any choice of law or conflict of
law provision or rule (whether of the State of Delaware or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Delaware.  The parties hereby: (i) submit to the
jurisdiction of any state or federal court sitting in California in any action
or proceeding arising out of or relating to Agreement; (ii) agree that all
claims in respect of such action or proceeding may be heard or determined in any
such court; and (iii) agree not to bring any action or proceeding arising out of
or relating to this Agreement in any other court. Executive hereby waives any
defense of inconvenient forum to the maintenance of any action or proceeding so
brought and waives any bond, surety or other security that might be required of
any other party with respect thereto. The parties hereby agree that a final
judgment in any action or proceeding so brought shall be conclusive and may be
enforced by suit on the judgment or in any other manner provided by
law.

     

    (g)          
Remedies. Each of the parties to this
Agreement will be entitled to enforce its rights under this Agreement
specifically, to recover damages and costs (including attorney’s fees) caused by
any breach of any provision of this Agreement and to exercise all other rights
existing in its favor. The parties hereto agree and acknowledge that money
damages may not be an adequate remedy for any breach of the provisions of this
Agreement and that any party may in its sole discretion apply to any court of
law or equity of competent jurisdiction (without posting any bond or deposit)
for specific performance and/or other injunctive relief in order to enforce or
prevent any violations of the provisions of this Agreement.

     

    (h)          
Amendment
and Waiver. The
provisions of this Agreement may be amended or waived only with the prior
written consent of the Company and Executive.

     

    (i)           
Business
Days. If any time
period for giving notice or taking action hereunder expires on a day which is a
Saturday, Sunday or holiday in the state in which the Company’s chief executive
office is located, the time period shall be automatically extended to the
business day immediately following, such Saturday, Sunday or
holiday.

     

    (j)           
Termination. This Agreement shall survive
the termination of Executive’s employment with the Company and shall remain in
full force and effect after such termination.

    
      
         

      

      
         

        
          

        

      

      
         

        
           

        

      

    

     

    (k)          
No
Waiver. A waiver
by any party hereto of any right or remedy hereunder on any one occasion shall
not be construed as a bar to any right or remedy which such party would
otherwise have on any future occasion.  No failure to exercise nor any
delay in exercising on the part of any party hereto, any right, power or
privilege hereunder shall preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.  The rights and remedies
herein provided are cumulative and may be exercised singly or concurrently, and
are not exclusive of any rights or remedies provided by law.

     

    (l)           
Insurance.  The Company, at its
discretion, may apply for and procure in its own name for its own benefit life
and/or disability insurance on Executive in any amount or amounts considered
available. Executive agrees to cooperate in any medical or other examination,
supply any information, and to execute and deliver any applications or other
instruments in writing as may be reasonably necessary to obtain and constitute
such insurance. Executive hereby represents that he has no reason to believe
that his life is not insurable at rates now prevailing for healthy men of his
age.

     

    (m)         
Offset.  Whenever the Company
or any of its Subsidiaries is obligated to pay any sum to Executive or any
Affiliate or related person thereof pursuant to this Agreement, any bona fide
debts that Executive or such Affiliate or related person owes to the Company or
any of its Subsidiaries may be deducted from that sum before payment, to the
greatest extent permitted under applicable law.

    

     (n)          
Indemnification
and Reimbursement of Payments on Behalf of Executive.  The Company and its
Subsidiaries shall be entitled to deduct or withhold from any amounts owing from
the Company or any of its Subsidiaries to Executive any federal, state,
provincial, local or foreign withholding taxes, excise taxes, or employment
taxes ( “Taxes” )
imposed with respect to Executive’s compensation or other payments from the
Company or any of its Subsidiaries or Executive’s ownership interest in the
Company, including, but not limited to, wages, bonuses, dividends, the receipt
or exercise of stock options and/or the receipt or vesting of restricted
stock.

     

    (o)          
Insurance
and Indemnification.  For the period from the date of this Agreement
through at least the tenth anniversary of Executive’s termination of employment
from the Company, the Company shall maintain Executive as an insured party on
all directors’ and officers’ insurance maintained by the Company for the benefit
of its directors and officers on at least the same basis as all other covered
individuals and provide Executive with at least the same corporate
indemnification as it provides to the peer executives of the
Company.

    

    (p)                   Clawback.  To the extent
permitted under applicable law, Executive agrees to reimburse the Company for
amounts determined by final judicial process to be due to the Company pursuant
to Section 304 of the Sarbanes-Oxley Act of 2002.

     

     

    [THIS
SPACE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]

     

    

     

    
      
         

      

      
         

        
          

        

      

      
         

        
           

        

      

    

    IN WITNESS WHEREOF, the
parties hereto have executed this Agreement on the date first written
above.

     

    
      	 
      	
              ON
      ASSIGNMENT, INC.

            
	 
      	 
      
	 
      	 
      
	 
      	
              By:

            	 /s/Jeremy
      Jones	 
      
	 
      	
              Name:

            	
              Jeremy
      Jones

            
	 
      	
              Title:

            	
              Chairman
      of the Board of Directors

            
	 
      	 
      
	 
      	 
      
	 
      	 /s/Peter
      T. Dameris	 
      
	 
      	
              PETER
      T. DAMERIS

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