8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) June 5, 2013 (June 4, 2013)

Signature Group Holdings, Inc.

(Exact name of registrant as specified in its charter)

Nevada	001-08007	95-2815260
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

15303 Ventura Boulevard, Suite 1600, Sherman Oaks, CA	91403
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (805) 435-1255

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

x Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

On June 4, 2013, Signature Group Holdings, Inc. (the “Company”), certain of the Company’s affiliates, New Signature LLC (“Investor”) and certain of Investor’s affiliates (collectively with Investor, the “Investor Parties”) entered into a Settlement Agreement (the “Agreement”) terminating the pending proxy contest with respect to the Company’s annual meeting of stockholders to be held on July 16, 2013 (the “2013 Annual Meeting”). Pursuant to the terms of the Agreement, the parties agreed, among other things, upon a new proxy slate to be presented by the Company for election at the 2013 Annual Meeting, which will consist of the following nominees: Craig T. Bouchard, Peter C.B. Bynoe, Patrick E. Lamb, Raj Maheshwari and Philip G. Tinkler. As part of the settlement, the Investor Parties have agreed to withdraw their slate of directors and have agreed to support the settlement slate and to vote in favor of the other Company proposals included in the Company’s definitive proxy statement on Schedule 14A filed by the Company with the SEC on May 15, 2013, as such proposals shall be updated in the Company’s revised definitive proxy statement on Schedule 14A to be filed prior to the 2013 Annual Meeting.

As part of the Agreement, effective as of June 4, 2013, Christopher Colville has agreed to step down as the Company’s interim Chief Executive Officer and Chairman of the Company’s Board of Directors and Craig T. Bouchard was appointed as Chairman and Chief Executive Officer. To facilitate this settlement, effective as of June 4, 2013, the size of the Board was increased to six (6) directors and Mr. Bouchard was appointed to fill the additional Board seat. Effective as of June 5, 2013, Mr. Colville has tendered his resignation from the Board, and the size of the Board has been reduced back to five (5) directors.

The Agreement also provides that following the 2013 Annual Meeting, the Board will terminate the Governance, Nominating and Compensation Committee and will create a separate Compensation Committee and Nominating and Corporate Governance Committee. Assuming the Company slate of directors is approved by the Company’s stockholders at the 2013 Annual Meeting, the Agreement provides that the chairpersons of each of the Board’s committees shall be as follows: (a) Compensation Committee: Raj Maheshwari; (b) Nominating and Corporate Governance Committee: Philip G. Tinkler; and (c) Audit Committee: Patrick E. Lamb.

In addition, the Agreement provides for a restricted period during which the Investor Parties (and their affiliates) are restricted from taking certain actions with respect to election of directors of the Company (such as soliciting proxies or written consents, among other things). The restricted period begins on June 4, 2013 and ends immediately after the 2013 Annual Meeting. The Company has confirmed that the Agreement and the parties’ performance of this Agreement will not trigger a distribution of its right pursuant to the Company’s Rights Agreement dated October 23, 2007, as amended, between the Company and Mellon Investor Services LLC.

Finally, the Company has agreed that it will reimburse the actual out-of-pocket expenses of the Investor Parties incurred prior to the date of this Agreement in connection with the 2013 Annual Meeting and the related actions and events, up to $250,000.

The foregoing description of the Agreement is qualified in its entirety by the Agreement, a copy of which is filed as Exhibit 10.1 to this report and is incorporated into this Item 1.01 by reference. A copy of the press release issued by the Company relating to the Agreement is included as Exhibit 99.1 to this report.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

The information set forth in Item 1.01 of this Current Report, including in Exhibit 99.1, is incorporated herein by reference. Effective June 4, 2013, Mr. Colville resigned as the Company’s interim Chief Executive Officer and Chairman of the Board, and the Board appointed Mr. Bouchard to the Board of Directors and as the Company’s Chief Executive Officer and Chairman of the Board. Mr. Colville resigned from the Board effective June 5, 2013.

Mr. Bouchard (Age 59) is also Chairman of the Board and Chief Executive Officer of Cambelle-Inland, LLC, an entity created in 2013 through which Mr. Bouchard manages certain investment activities in China. Prior

to founding Cambelle-Inland, LLC, in 2010, Mr. Bouchard founded Shale-Inland, a leading master distributor of stainless steel pipe, valves and fittings, and stamped and fabricated parts to the US energy industry with revenues approaching $1 billion. Mr. Bouchard served as the Chief Executive Officer and later as the Chairman of the Board of Shale-Inland through 2012. Before founding Shale-Inland, Mr. Bouchard was President and Vice Chairman of Esmark, Inc., a publicly traded company on the NASDAQ. Mr. Bouchard co-founded Esmark, Inc. in 2004. Mr. Bouchard was named a finalist for the 2005 Ernst & Young Entrepreneur of the Year Award in Illinois. His team later crafted the first and only hostile reverse tender merger on Wall Street, successfully replacing nine directors of Wheeling Pittsburgh Corporation in 2007. In doing so, Esmark became the nation’s fifth largest steel company. During Mr. Bouchard’s tenure, Esmark’s revenues grew from $4 million to over $3 billion. The company was one of the highest appreciating stocks on the NASDAQ or the NYSE for the full year 2008. The story was told in “America for Sale,” Copyright 2009, Craig T. Bouchard and James V. Koch (ABC-CLIO). From 1998-2003, Mr. Bouchard was the President and Chief Executive Officer of New York based NumeriX, a risk management software company commanding a leading market share on Wall Street. Mr. Bouchard holds a Bachelors degree from Illinois State University, a Masters Degree in Economics from Illinois State University, and an MBA from the University of Chicago. He has been a member of the Board of Trustees of Boston University and the Foundation of the University of Montana. He is currently a member of the Board of the Department of Athletics at Duke University.

In addition and in connection with Mr. Bouchard’s appointment as the Company’s Chief Executive Officer and Chairman of the Board, Mr. Bouchard entered into an Employment Agreement with the Company on June 4, 2013, which provides Mr. Bouchard with a base salary of $225,000 and an annual cash bonus of up to $100,000 based on the performance of the Company’s common stock at the end of each calendar year. Mr. Bouchard is also eligible to participate in any executive bonus program of the Company and to receive other bonuses as determined in the discretion of the Compensation Committee.

The initial term of the Agreement is for 24 months and renews automatically thereafter but may be terminated after the initial term at any time and for any reason by either the Company or Mr. Bouchard upon 30 days prior written notice. Prior to the Company’s annual meeting of stockholders to be held in 2014, Mr. Bouchard may not be terminated without “cause” without the unanimous approval of all of the Board members then in office, excluding Mr. Bouchard. If the Company provides notice to Mr. Bouchard that it does not plan to renew his Employment Agreement, he will be entitled to salary continuation at his then current base salary for a period of six months following the termination of the Agreement. If Mr. Bouchard is terminated without “cause” (as defined in the Employment Agreement) or resigns within 90 days after a change in control (as defined in the Employment Agreement), he will be entitled to salary continuation for one year at his then current base salary, and his options and restricted stock will continue to vest despite the termination of his employment and will remain outstanding until the earlier of four years after his termination or the current term of the Agreement. Salary continuation and certain other benefits under this agreement are subject to Mr. Bouchard’s execution of a general release in a form reasonably acceptable to the Company. Mr. Bouchard’s options and restricted stock will also continue to vest in the event of his death or “permanent disability” (as defined in the Employment Agreement). The Employment Agreement also contains customary confidentiality, non-disparagement and non-solicitation provisions.

Pursuant to the Employment Agreement, Mr. Bouchard has agreed to purchase a minimum of 500,000 shares of the Company’s common stock in the open market in accordance with applicable law, which may include pursuant to a 10b5-1 trading plan. In addition, as required by the Employment Agreement, on June 5, 2013, Mr. Bouchard entered into a Restricted Stock Award Agreement with the Company, pursuant to which the Company granted to Mr. Bouchard 250,000 shares of restricted common stock under the Company’s 2006 Performance Incentive Plan (the “Plan”), which shares will vest on January 1, 2014 provided that Mr. Bouchard remains in the Company’s service as of that date. In addition, pursuant to the Employment Agreement, the Company has also entered into a Non-Qualified Stock Option with Mr. Bouchard under the Plan on June 5, 2013 (the “Award Date”), pursuant to which the Company granted to Mr. has the option to purchase up to 2,000,000 shares of the Company’s common stock, which shares will vest as follows:

(a) 500,000 shares will vest on the six (6) month anniversary of the Award Date;

(b) 500,000 shares will vest on the first anniversary of the Award Date;

(c) 500,000 shares will vest on the eighteen (18) month anniversary of the Award Date; and

(d) The remaining 500,000 shares will vest as of the second anniversary of the Award Date (the “Final Vesting Date”) if, as of the Final Vesting Date, either (i) the Company’s common stock shall have been trading above $1.25 per share and shall have closed above $1.25 per share for ten (10) of the twenty (20) trading days immediately preceding the Final Vesting Date; or (ii) the “weighted average trading price” for the ten (10) trading day period immediately preceding the last trading day immediately preceding the Final Vesting Date averages or exceeds $1.25 per share. The exercise price of the initial installment of 500,000 shares under the option is $.85 per share and the exercise price for the balance of the shares is $1.00 per share.

The foregoing descriptions of Mr. Bouchard’s Employment Agreement, Non-Qualified Stock Option Agreement and Restricted Stock Award Agreement are qualified in their entirety by the copies such agreements which are filed as Exhibit 10.2 to this report and are incorporated into this Item 5.02 by reference.

As a result of Mr. Colville’s agreement to step down as the Company’s interim Chief Executive Officer, pursuant to the Letter Agreement dated May 3, 2013 between Mr. Colville and the Company, Mr. Colville will continue to receive his $25,000 monthly cash payment until October 2013 and the 250,000 shares of restricted stock issued to Mr. Colville under the Plan will accelerate and vest in full.

In connection with the recent management change, the Company has entered into an Amendment of Employment Agreement with each of Kyle Ross, the Company’s Executive Vice President and Chief Financial Officer, and Chris Manderson, the Company’s Executive Vice President and General Counsel, pursuant to which the termination date of their respective employment agreements with the Company has been extended from December 31, 2013 to April 30, 2014. The foregoing description of the Amendments to Employment Agreement is qualified in their entirety by the copy of such Amendments filed as Exhibits 10.3 and 10.4 to this report and is incorporated into this Item 5.02 by reference.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.	Description
10.1	Settlement Agreement dated June 4, 2013
10.2	Employment Agreement dated June 4, 2013 between the Company and C. Bouchard, together with the Non-Qualified Stock Option Agreement dated June 5, 2013 between the Company and C. Bouchard and the Restricted Stock Award Agreement dated June 5, 2013 between the Company and C. Bouchard.
10.3	Amendment to Employment Agreement dated June 4, 2013 between C. Manderson and the Company
10.4	Amendment to Employment Agreement dated June 4, 2013 between Kyle Ross and the Company
99.1	Press release of the Company dated June 5, 2013

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: June 5, 2013	SIGNATURE GROUP HOLDINGS, INC.
	/S/ W. CHRISTOPHER MANDERSON
	W. Christopher Manderson
	Executive Vice President and General Counsel

EXHIBIT INDEX

Exhibit No.	Description
10.1	Settlement Agreement dated June 4, 2013
10.2	Employment Agreement dated June 4, 2013 between the Company and C. Bouchard, together with the Non-Qualified Stock Option Agreement dated June 5, 2013 between the Company and C. Bouchard and the Restricted Stock Award Agreement dated June 5, 2013 between the Company and C. Bouchard.
10.3	Amendment to Employment Agreement dated June 5, 2013 between C. Manderson and the Company
10.4	Amendment to Employment Agreement dated June 5, 2013 between Kyle Ross and the Company
99.1	Press release of the Company dated June 5, 2013

EX-10.1

Exhibit 10.1

Execution Copy

SETTLEMENT AGREEMENT

This Settlement Agreement, dated as of June 4, 2013 (this “Agreement”), is by and among Signature Group Holdings, Inc., a Nevada corporation (the “Company”), New Signature LLC, a Delaware limited liability company (the “Investor”), the Company Nominees (as defined herein), the Other Directors (as defined herein), the Investor Nominees (as defined herein) and the Other Investor Parties (as defined herein). The Investor, the Investor Nominees and the Other Investor Parties are collectively referred to herein as the “Investor Parties.”

WHEREAS, the Investor Parties beneficially own (as defined below) an aggregate of 2,143,248 shares of common stock, $0.01 par value per share, of the Company (“Common Stock”);

WHEREAS, prior to the date hereof, (i) certain of the Investor Parties submitted director nominations (the “Annual Meeting Nominations”) for the Company’s 2013 annual meeting of stockholders (including any adjournment or postponement thereof, the “2013 Annual Meeting”) on April 24, 2013, and (ii) the Investor Parties filed a definitive proxy statement on Schedule 14A with the Securities and Exchange Commission (“SEC”) on May 2, 2013 to solicit proxies for the election of the Annual Meeting Nominations and the other proposals set forth therein;

WHEREAS, prior to the date hereof, the Company filed a definitive proxy statement on Schedule 14A with the SEC on May 15, 2013 to solicit proxies for the election of directors at the 2013 Annual Meeting and the other proposals set forth therein;

WHEREAS, prior to the date hereof, the Company has announced that the 2013 Annual Meeting will be held on July 16, 2013, and the record date therefor has been fixed as May 29, 2013;

WHEREAS, the Governance, Nominating and Compensation Committee (the “GNC Committee”) of the Board of Directors of the Company (the “Board”) has reviewed the qualifications of, and has determined that each of Craig Bouchard and Raj Maheshwari (each an “Investor Nominee” and collectively, the “Investor Nominees”) is duly eligible and qualified to serve as a member of the Board in accordance with the Company’s Amended and Restated Bylaws (the “Bylaws”) and applicable governance policies and procedures;

WHEREAS, the Company and the Investor Parties have agreed that it is in their mutual interests to enter into this Agreement, which, among other things, provides for (i) the withdrawal of the Annual Meeting Nominations and (ii) the various governance and other matters set forth herein; and

WHEREAS, in connection herewith, Craig T. Bouchard is concurrently entering into an employment agreement with the Company, a copy of which is attached hereto as Exhibit A (the “Employment Agreement”), pursuant to which Mr. Bouchard will commence service as the Chief Executive Officer of the Company and Chairman of the Board, effective immediately.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1 Defined Terms. For purposes of this Agreement:

(a) The term “Affiliate” shall have the meaning set forth in Rule 12b-2 promulgated by the SEC under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

(b) The term “Associate” shall have the meaning set forth in Rule 12b-2 promulgated by the SEC under the Exchange Act.

(c) The terms “beneficial owner” and “beneficially own” have the same meanings as set forth in Rule 13d-3 promulgated by the SEC under the Exchange Act except that a person will also be deemed to beneficially own and to be the beneficial owner of all shares of capital stock of the Company which such person has the right to acquire pursuant to the exercise of any rights in connection with any securities or any agreement, regardless of when such rights may be exercised and whether they are conditional.

(d) The term “Company Directors” means Philip G. Tinkler, Peter C.B. Bynoe and Patrick E. Lamb;

(e) The terms “Person” or “Persons” mean any individual, corporation (including not-for-profit), general or limited partnership, limited liability or unlimited liability company, joint venture, estate, trust, association, organization or other entity of any kind or nature.

(f) The term “Other Directors” means G. Christopher Colville, Craig Noell and John Koral.

(g) The term “Other Investor Parties” shall mean Charlestown Capital Advisors, LLC, Charlestown Jupiter Fund, LLC, Bouchard 10S LLC, Duart Holdings LLC, Malcolm F. MacLean IV, Clifford D. Nastas, and Lee Smith.

(h) The term “Other Company Proposals” shall mean Proposals 2, 3, 4, 5 and 6 in that definitive proxy statement on Schedule 14A filed by the Company with the SEC on May 15, 2013, as such proposals may be updated by the Company after the date of this Agreement.

(i) The term “Standstill Period” shall mean the period from the date of this Agreement through the date of the 2013 Annual Meeting.

Section 1.2 Interpretation. When reference is made in this Agreement to a Section, such reference shall be to a Section of this Agreement unless otherwise indicated. Whenever the

words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” The words “hereof,” “herein,” “hereby” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The word “or” shall not be exclusive. This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting or causing any instrument to be drafted.

ARTICLE II

COVENANTS

Section 2.1 Board of Directors, Annual Meeting and Related Matters.

(a) Board Expansion. Effective on the date hereof, in accordance with the Company’s amended and restated Articles of Incorporation (the “Charter”) and Bylaws, the Board will increase the size of the Board from five to six members.

(b) Board Appointments. Effective on the date hereof, in accordance with the Charter and Bylaws, the Board shall appoint Craig T. Bouchard as a director to fill the vacancy created by the newly created directorship resulting from the expansion of the Board contemplated by clause (a) (the time of such appointment, the “Appointment Time”), for a term expiring at the 2013 Annual Meeting and to serve as Chairman of the Board of Directors.

(c) Reduction of Board Size. G. Christopher Colville shall (i) resign from his position as Chief Executive Officer and Chairman of the Board, effective immediately prior to the Appointment Time, and (ii) resign from the Board effective immediately after the Appointment Time. The Board shall reduce the size of the Board from six to five members, effective immediately after the resignation of G. Christopher Colville.

(d) Nomination of New Directors. The parties hereto agree that at the 2013 Annual Meeting, the Board will:

(1) nominate each of the Investor Nominees for election as a director of the Company at the 2013 Annual Meeting, to hold office until the next annual meeting of stockholders to be held in 2014 (the “2014 Annual Meeting”) or until his successor has been duly elected and qualified;

(2) nominate each of the Company Nominees for election as a director of the Company at the 2013 Annual Meeting, to hold office until the 2014 Annual Meeting or until his successor has been duly elected and qualified;

(3) recommend in the related proxy materials that the stockholders vote for each of the Investor Nominees and each of the Company Nominees for election;

(4) cause all proxies received by the Company to be voted in the manner specified by such proxies; and

(5) refrain from taking any action contrary to, or inconsistent with, the matters set forth in this Section 2.1(d).

(e) Proxy Solicitation Materials; Annual Meeting Timing. The Company covenants and agrees that from and after the date hereof the Company’s definitive proxy statement and proxy cards for the 2013 Annual Meeting and all other solicitation materials to be delivered to stockholders in connection with the 2013 Annual Meeting shall be prepared in accordance with, and in furtherance of, this Agreement.

(f) Committees. The Board shall take such action as is necessary in compliance with applicable law and listing standards to ensure the following, effective upon completion of the 2013 Annual Meeting until the date of the 2014 Annual Meeting:

(1) The Board shall terminate the GNC Committee and form a new Compensation Committee and Nominating and Corporate Governance Committee, so that together with the Board’s existing Audit Committee (such three committees, collectively, the “Committees”), the Committees shall be the only committees of the Board unless otherwise approved by the Board then in office.

(2) The Chairman of the Board shall be Craig T. Bouchard, for so long as he shall be a member of the Board;

(3) The Chairman of the Compensation Committee shall be Raj Maheshwari, for so long as he shall be a member of the Board and is then qualified to serve on such committee under applicable legal requirements and listing standards;

(4) The Chairman of the Nominating and Corporate Governance Committee shall be Philip G. Tinkler, for so long as he shall be a member of the Board and is then qualified to serve on such committee under applicable legal requirements and listing standards; and

(5) The Chairman of the Audit Committee shall be Patrick E. Lamb, for so long as he shall be a member of the Board and is then qualified to serve on such committee under applicable legal requirements and listing standards.

(g) Chief Executive Officer. Effective on the date hereof, Craig T. Bouchard shall commence employment as the Chief Executive Officer of the Company, pursuant to the terms and conditions of the Employment Agreement.

(h) Expenses. Contemporaneous with the execution of this Agreement, the Company shall reimburse the Investor Parties an amount equal to the Investor Parties’ actual and documented out-of-pocket expenses incurred prior to the date of this Agreement in connection with the Annual Meeting Nominations, the 2013 Annual Meeting and related actions and events, including the preparation of related filings with the SEC and the reasonable fees and disbursements of counsel, proxy solicitors and other advisors; provided, that the maximum aggregate amount of such reimbursement shall be $250,000.

Section 2.2 Additional Undertakings by the Investor. The Investor Parties hereby irrevocably withdraw the Annual Meeting Nominations and any demand for information made pursuant to Section 1600(d) of the California Corporations Code.

Section 2.3 Publicity. Promptly after the execution of this Agreement, the Company will issue the press release in the form attached hereto as Exhibit B. Without the prior written consent of the Company and the Investor, none of the Company, the Investor Parties, the Other Directors, or the Company Nominees shall (i) issue a press release in connection with this Agreement or the actions contemplated hereby or (ii) otherwise make any public statement, disclosure or announcement with respect to this Agreement or the actions contemplated hereby, except as required by law.

Section 2.4 Non-Disparagement. Each of the parties hereto agrees not to disparage the Company, any then-current member of the Board or management of the Company, any individual who was serving as a member of the Board or management of the Company as of the date of this Agreement or any Investor Party.

Section 2.5 Other Directors. The Company shall take such action as of the date hereof as the Company deems reasonably necessary to cause the vesting of all options and restricted stock of the Other Directors and Patrick E. Lamb, effective for each such director at such time as he ceases to be a member of the Board.

Section 2.6 Voting. During the Standstill Period, each of the Investor Parties, the Company Nominees, and the Other Directors, together with their respective Affiliates, will cause all shares of the Company’s common stock (the “Common Stock”) of the Company for which he or it has the right to vote as of the record date for the 2013 Annual Meeting to be present for quorum purposes and to be voted at the 2013 Annual Meeting or at any adjournments or postponements thereof: (a) in favor of the election of each of the Company Nominees and the Investor Nominees; (b) against any stockholder nominations of any director (other than the Company Nominees or the Investor Nominees); and (c) in favor of each of the Other Company Proposals.

Section 2.7 Standstill Provisions. During the Standstill Period, each of the Investor Parties, the Company Nominees, and the Other Directors agrees that, except as otherwise provided in this Agreement, during the Standstill Period, he or it will not, and he or it will cause each of his or its Affiliates and Associates, agents or other persons acting on his or its behalf not to:

(a) solicit proxies, agent designations or written consents of stockholders, or otherwise conduct any nonbinding referendum with respect to the Common Stock, or make, or in any way participate in, any “solicitation” of any “proxy” within the meaning of Rule 14a-1 promulgated by the SEC under the Exchange Act, to vote, or advise, encourage or influence any person with respect to voting, any shares of the Common Stock with respect to any matter, or become a “participant” in any contested “solicitation” for the election of directors with respect to the Company (as such terms are defined or used under the Exchange Act and the rules promulgated by the SEC thereunder), other than a “solicitation” or acting as a “participant” in support of (i) the election of all of the Company Nominees and Investor Nominees at the 2013 Annual Meeting and (ii) the Other Company Proposals;

(b) seek to call, or to request the call of, a special meeting of the stockholders of the Company, or seek to make, or make, a stockholder proposal at any meeting of the stockholders of the Company or make a request for a list of the Company’s stockholders (or otherwise induce, encourage or assist any other person to initiate or pursue such a proposal or request);

(c) effect or seek to effect (including, without limitation, by entering into any discussions, negotiations, agreements or understandings with any third person), offer or propose (whether publicly or otherwise) to effect, or cause or participate in, or in any way assist or facilitate any other person to effect or seek, offer or propose (whether publicly or otherwise) to effect or cause or participate in any tender offer or exchange offer involving the Company or its securities;

(d) publicly disclose, or cause or facilitate the public disclosure (including, without limitation, the filing of any document or report with the SEC or any other governmental agency or any disclosure to any journalist, member of the media or securities analyst) regarding any intent, purpose, plan, action or proposal with respect to the Board, the Company, its management, strategies, policies or affairs or any of its securities or assets or this Agreement that is inconsistent with the provisions of this Agreement, including any intent, purpose, plan, action or proposal that is conditioned on, or would require waiver, amendment, or consent under, any provision of this Agreement;

(e) seek election or appointment to, or representation on, or nominate or propose the nomination of any candidate to the Board; or seek the removal of any member of the Board, in each case other than as set forth in this Agreement;

(f) enter into any arrangements, understandings or agreements (whether written or oral) with, or advise, finance, assist or encourage, any other person that engages, or offers or proposes to engage, in any of the foregoing; or

(g) take or cause or induce or assist others to take any action inconsistent with any of the foregoing.

Nothing in this Section 2.7 shall be deemed to prohibit any Investor Party from engaging in any lawful act consistent with his fiduciary duties solely in his capacity as a director of the Company.

Section 2.8 Schedule 13D. Each of the Investor Parties, the Company Nominees and the Other Directors acknowledge and agree that by virtue of the provisions of this Agreement, including, but not limited to, Section 2.6 and Section 2.7, the Investor Parties, the Company Nominees and the Other Directors may collectively be deemed to be members of a “group,” for purposes of Rule 13d-5 under the Exchange Act. As soon as possible following the date of this Agreement, the Investor Parties, the Company Nominees and the Other Directors shall collectively file, or cause to be filed on their behalf, with the SEC a Schedule 13D disclosing the entry into this Agreement and the material contents of this Agreement. The Investor Parties, the Company Nominees and the Other Directors shall provide the Company and its counsel with

reasonable opportunity to review and comment upon such Schedule 13D prior to the filing thereof with the SEC, and shall consider in good faith any changes proposed by the Company or its counsel.

Section 2.9 Waiver of Application of Rights Agreement. The Board shall take such action as is necessary to indicate its determination that (i) the provisions of this Agreement and the parties performance thereunder will not trigger a distribution of rights under and pursuant to the Rights Agreement, dated as of October 23, 2007, as amended (the “Rights Agreement”), between the Company and Mellon Investor Services LLC, as rights agent and (ii) no party to this Agreement, individually or collectively, shall constitute an “Acquiring Person,” as such term is defined in the Rights Agreement, based on such party’s performance of this Agreement during the Standstill Period.

ARTICLE III

OTHER PROVISIONS

Section 3.1 Representations and Warranties.

(a) Representations and Warranties of the Company. The Company hereby represents and warrants that this Agreement and the performance by the Company of its obligations hereunder has been duly authorized, executed and delivered by it, and is a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms.

(b) Representations and Warranties of the Investor Parties. Each of the Investor Parties represents and warrants that this Agreement and the performance by such Investor Party of its obligations hereunder has been duly authorized, executed and delivered by the Investor, and is a valid and binding obligation of such Investor Party, enforceable against the Investor Party in accordance with its terms.

Section 3.2 Mutual Release.

(a) Each of the Investor Parties hereby agrees for the benefit of the Company and each of its current and former directors, officers, stockholders, agents, Affiliates, Associates. employees, partners, attorneys, heirs, assigns, executors, administrators, predecessors and successors, past and present, including each of the Company Nominees and the Other Directors (the Company and each such person, a “Company Released Person”) as follows:

(1) Each of the Investor Parties, for themselves and for their respective members, managers, Affiliates, Associates, officers, directors, assigns, attorneys, agents and successors, past and present, hereby agree and confirm that, effective from and after the date of this Agreement, he or it hereby acknowledges full and complete satisfaction of, and covenants not to sue, and forever fully releases and discharges each Company Released Person of, and hold each Company Released Person harmless from, any and all rights, claims, warranties, demands, debts, obligations, liabilities, costs, attorneys’ fees, expenses, suits, losses and causes of action (“Claims”) of any nature whatsoever, whether known or unknown, suspected or unsuspected, derivative or direct, arising in respect of or in connection with any and all actions taken or omitted from being taken with respect to

the events giving rise to this Agreement, including but not limited to actions relating to the nomination and election of directors at the 2013 Annual Meeting, occurring any time or period of time on or prior to the date of this Agreement (including the future effects of such transactions, occurrences, conditions, acts or omissions). Notwithstanding the foregoing, this waiver and release and covenant not to sue shall not include any Claims arising from the breach of this Agreement by a Company Party (as defined below) or any knowing criminal act by a Company Party.

(2) Each of the Investor Parties understands and agrees that the Claims released by him or it include not only those Claims presently known but also include all unknown or unanticipated claims, rights, demands, actions, obligations, liabilities, and causes of action of every kind and character that would otherwise come within the scope of the Claims as described above. Each Investor Party understands that he or it may hereafter discover facts different from or in addition to what they now believe to be true, which if known, could have materially affected this release of Claims, but they nevertheless waive any claims or rights based on different or additional facts.

(b) Each of the Company, the Other Directors and the Company Nominees (collectively, the “Company Parties”) hereby agrees for the benefit of the Investor Parties and their respective current directors, officers, stockholders, agents, Affiliates, Associates, employees, partners, members, managers, attorneys, heirs, assigns, executors, administrators, predecessors and successors, past and present (the Investor Parties and each such person, an “Investor Released Person”) as follows:

(1) Each of the Company Parties, for himself or itself and for his or its respective stockholders, Affiliates, Associates, officers, directors, assigns, agents and successors, past and present, hereby agrees and confirms that, effective from and after the date of this Agreement, her or it hereby acknowledges full and complete satisfaction of, and covenants not to sue, and forever fully releases and discharges each Investor Released Person of, and holds each Investor Released Person harmless from, any and all Claims of any nature whatsoever, whether known or unknown, suspected or unsuspected, derivative or direct, arising in respect of or in connection with any and all actions taken or omitted from being taken with respect to the events giving rise to this settlement, including actions relating to the nomination and election of directors at the 2013 Annual Meeting, occurring any time or period of time on or prior to the date of this Agreement (including the future effects of such transactions, occurrences, conditions, acts or omissions). Notwithstanding the foregoing, this waiver and release and covenant not to sue shall not include any Claims arising from the breach of this Agreement by an Investor Party or any knowing criminal act by an Investor Party.

(2) Each of the Company Parties understand and agree that the Claims released by him or it include not only those Claims presently known but also include all unknown or unanticipated claims, rights, demands, actions, obligations, liabilities, and causes of action of every kind and character that would otherwise come within the scope of the Claims as described above. Each of the Company Parties understands that he or it may hereafter discover facts different from or in addition to what he or it now believes to be true, which if known, could have materially affected this release of Claims, but he or it nevertheless waives any claims or rights based on different or additional facts.

(c) Section 1542 Release. Each of the Company Parties and the Investor Parties knowingly and voluntarily waives any and all rights or benefits that it or he may now have, or in the future may have, under the terms of Section 1542 of the California Civil Code, which provides as follows: “A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.”

Section 3.3 Remedies.

(a) Each party hereto hereby acknowledges and agrees that irreparable harm would occur in the event any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties will be entitled to specific relief hereunder, including an injunction or injunctions to prevent and enjoin breaches of the provisions of this Agreement and to enforce specifically the terms and provisions hereof in any state or federal court in the State of California, in addition to any other remedy to which they may be entitled at law or in equity. Any requirements for the securing or posting of any bond with such remedy are hereby waived.

(b) Each party hereto agrees, on behalf of itself and its Affiliates, that any actions, suits or proceedings arising out of or relating to this Agreement or the transactions contemplated hereby will be brought solely and exclusively in any state or federal court in the State of California (and the parties agree not to commence any action, suit or proceeding relating thereto except in such courts), and further agrees that service of any process, summons, notice or document by U.S. registered mail to the respective addresses set forth in Section 3.5 will be effective service of process for any such action, suit or proceeding brought against any party in any such court. Each party, on behalf of itself and its Affiliates, irrevocably and unconditionally waives any objection to personal jurisdiction and the laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby, in the state or federal courts in the State of California, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an improper or inconvenient forum.

Section 3.4 Entire Agreement. This Agreement contains the entire understanding of the parties with respect to the subject matter hereof and may be amended only by an agreement in writing executed by the parties hereto.

Section 3.5 Confidentiality.

(a) Each of the Investor Parties hereby acknowledges that such Investor Party is aware that the United States securities laws prohibit any person who has material, non-public information with respect to the Company from transacting in the securities of the Company or from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to transact in such securities. Each of the

Investor Parties agrees to comply with such laws and recognizes that the Company would be damaged by its non-compliance. In addition, each of the Investor Parties agrees to keep confidential and not to disclose any Company Confidential Information (as defined below) received by such Investor Party from the Company or its representatives during the settlement discussions with the Company or the negotiation and documentation of this Agreement. The term “Company Confidential Information” shall mean any information that is confidential to the Company; provided that Company Confidential Information will not include information which (i) becomes lawfully available to the public other than as a result of a disclosure by an Investor Party or its representatives, (ii) lawfully becomes available to an Investor Party on a non-confidential basis from a source other than the Company or the Company’s representatives or agents, provided that such source is not bound by a confidentiality agreement with the Company.

(b) Each of the Company Parties agrees to keep confidential and not to disclose any Investor Confidential Information (as defined below) received by such Company Party from the Investor Parties or their representatives during the settlement discussions with the Company or the negotiation and documentation of this Agreement. The term “Investor Confidential Information” shall mean any information that is confidential to the Investor Parties; provided that Investor Confidential Information will not include information which (i) becomes lawfully available to the public other than as a result of a disclosure by a Company Party or its representatives, (ii) lawfully becomes available to a Company Party on a non-confidential basis from a source other than the Investor Parties or their representatives or agents, provided that such source is not bound by a confidentiality agreement with any Investor Party.

Section 3.6 Notices. All notices, consents, requests, instructions, approvals and other communications provided for herein and all legal process in regard hereto shall be in writing and shall be deemed validly given, made or served, if (a) given by facsimile, when such facsimile is transmitted to the facsimile number set forth below and the appropriate confirmation is received or (b) if given by any other means, when actually received during normal business hours at the address specified in this subsection:

if to the Company:	Signature Group Holdings, Inc. 15303 Ventura Boulevard, Suite 1600 Sherman Oaks, California 91403 Facsimile: (805) 823-1737 Attention: General Counsel
with a copy to:	Morgan, Lewis & Bockius LLP 5 Park Place, Suite 1750 Irvine, CA 92614 Facsimile: (949) 399-7100 Attention: Ellen S. Bancroft
	and Patton Boggs LLP 2550 M Street, N W Washington DC 20037 Facsimile: (202) 457-6315 Attention: Norman B. Antin

if to an Other Director or Company Nominee:	The addresses of such party set forth on the signature pages hereto
with a copy to:	Morgan, Lewis & Bockius LLP 5 Park Place, Suite 1750 Irvine, CA 92614 Facsimile: (949) 399-7100 Attention: Ellen S. Bancroft and Patton Boggs LLP 2550 M Street, NW Washington DC 20037 Facsimile: (202) 457-6315 Attention: Norman B. Antin
if to an Investor Party:	The addresses of such party set forth on the signature pages hereto
with a copy to:	Crowell & Moring LLP 275 Battery Street, 23rd Floor San Francisco, California 94111 Facsimile: (415) 986-2827 Attention: Murray A. Indick

Section 3.6 Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Nevada, without regard to the conflicts of law provisions thereof.

Section 3.7 Amendment; Waiver. Subject to compliance with applicable law, this Agreement may be amended by the parties hereto and any provision of this Agreement may be waived, in each case by a written instrument authorized and executed on behalf of the parties hereto.

Section 3.8 Further Assurances. Each party to this Agreement agrees to take or cause to be taken such further actions, and to execute, deliver and file or cause to be executed, delivered and filed such further documents and instruments, and to obtain such consents, as may be reasonably required or requested by the other party in order to effectuate fully the purposes, terms and conditions of this Agreement.

Section 3.9 Third-Party Beneficiaries. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and assigns, and nothing in this Agreement is intended to confer on any person other than the parties hereto or their respective successors and assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement, except that the provisions of Section 2.4, Section 2.5 and Section 3.2 are intended to

be for the benefit of, and shall be enforceable by, the persons protected from disparagement (in the case of Section 2.4), the Other Directors (in the case of Section 2.5), and the releases (in the case of Section 3.2).

Section 3.10 Effectiveness. This Agreement shall become effective upon the execution and delivery of this Agreement by each of the parties hereto.

Section 3.11 Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated. It is hereby stipulated and declared to be the intention of the parties hereto that the parties hereto would have executed the remaining terms, provisions, covenants and restrictions without including any of such which may be hereafter declared invalid, void or unenforceable. In addition, the parties hereto agree to use their best efforts to agree upon and substitute a valid and enforceable term, provision, covenant or restriction for any of such that is held invalid, void or enforceable by a court of competent jurisdiction.

Section 3.12 Proceedings. The act of entering into or carrying out the Agreement and any negotiations or proceedings related thereto shall not be used, offered or received into evidence in any action or proceeding in any court, administrative agency or other tribunal for any purpose whatsoever other than to enforce the provisions of the Agreement.

Section 3.13 Counterparts. This Agreement may be executed in one or more counterparts (including by facsimile thereof or other electronic signature), each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

[Remainder of Page Left Blank Intentionally]

IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement, or caused the same to be executed by its duly authorized representative as of the date first above written.

SIGNATURE GROUP HOLDINGS, INC.
By:	/S/ CHRIS MANDERSON
Name:	Chris Manderson,
	Executive Vice President and General Counsel

COMPANY NOMINEES

/S/ PHILIP G. TINKLER

Philip G. Tinkler

/S/ PETER C.B. BYNOE

Peter C.B. Bynoe

/S/ PATRICK E. LAMB

Patrick E. Lamb

OTHER DIRECTORS

/S/ G. CHRISTOPHER COLVILLE

G. Christopher Colville

/S/ JOHN KORAL

John Koral

INVESTOR
NEW SIGNATURE, LLC
By:	/S/ CRAIG T. BOUCHARD
Name:	Craig T. Bouchard

INVESTOR NOMINEES

/S/ CRAIG T. BOUCHARD

Craig T. Bouchard

/S/ RAJ MAHESHWARI

Raj Maheshwari

OTHER INVESTOR PARTIES
CHARLESTOWN CAPITAL ADVISORS LLC
By:	/S/ RAJ MAHESHWARI
Name:	Raj Maheshwari
CHARLESTOWN JUPITER FUND LLC
By:	/S/ RAJ MAHESHWARI
Name:	Raj Maheshwari
BOUCHARD 10S LLC
By:	/S/ CRAIG T. BOUCHARD
Name:	Craig T. Bouchard
/S/ CLIFFORD D. NASTAS
Clifford D. Nastas
/S/ LEE SMITH
Lee Smith
/S/ MALCOLM F. MACLEAN IV
Malcolm F. MacLean IV
DUART HOLDINGS LLC
By:	/S/ MALCOLM F. MACLEAN IV
Name:	Malcolm F. MacLean IV

EX-10.2

Exhibit 10.2

Execution Copy

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into as of this 4th day of June 2013 by and between Signature Group Holdings, Inc., a Nevada corporation (the “Company”), and Craig T. Bouchard (the “Executive”).

W I T N E S S E T H:

WHEREAS, the Company desires to employ the Executive and to enter into this Agreement embodying the terms of such employment, and the Executive desires to enter into this Agreement and to accept such employment, subject to the terms and provisions of this Agreement.

NOW, THEREFORE, in consideration of the promises and mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are mutually acknowledged, the Company and the Executive hereby agree as follows:

1. EMPLOYMENT AND DUTIES

1.1. Term of Employment. The “Initial Term” pursuant to this Agreement shall commence on June 5, 2013 (the “Effective Date”), and, unless terminated earlier pursuant to Section 4 hereof, shall run for a period of twenty-four (24) months from the Effective Date. Following the Initial Term, this Agreement shall automatically renew and be terminable for any or no reason by either the Company or the Executive with thirty (30) days advance written notice (“Notice of Nonrenewal”). The entire term of this Agreement shall be the “Term.”

1.2. Engagement of Executive; Duties.

1.2.1. During the Term and subject to the terms of this Agreement, the Executive will serve as the Chief Executive Officer of the Company and will report directly to the Company’s Board of Directors (the “Board”). The Executive will have such duties and responsibilities that are commensurate with such position, including the implementation of the policies developed by the Board, as well as such other duties and responsibilities as are from time to time assigned to Executive by the Board (or a committee thereof). Executive’s duties and responsibilities will include, without limitation, the authority to hire and fire employees (other than any executive chairman of the Board); provided however, that the consent of the Compensation Committee shall be required to hire or fire any officer of the Company at the level of Senior Vice President or higher.

1.2.2. The Executive shall devote substantially all of his business time, attention, knowledge and skills faithfully, diligently and to the best of his ability, in furtherance of the business and activities of the Company; provided, however, that nothing in this Agreement shall preclude the Executive from devoting reasonable periods of time required for:

(i) serving as a director of up to two (2) organizations or corporations that do not, in the good faith determination of the Board, compete with the Company or otherwise create, or could create, in the good faith determination of the Board, a conflict of interest with the business of the Company;

(ii) managing those business activities identified on Exhibit A attached hereto;

(iii) delivering lectures, fulfilling speaking engagements, and any writing or publication relating to his area of expertise;

(iv) engaging in professional organization and program activities;

(v) managing his personal passive investments and affairs;

(vi) participating in charitable or community affairs; and

(vii) such other activities as may be approved in writing by the Board;

provided that such activities do not materially, individually or in the aggregate, interfere with or detract Executive from the due performance of his duties and responsibilities under this Agreement or create a conflict of interest with the business of the Company, as determined in good faith by the Board. Notwithstanding the foregoing, during his employment with the Company, the Executive shall not engage in any other employment or activity that might interfere with or be in competition with the interests of the Company.

1.3. Service as Director. As of the Effective Date, the Board will appoint the Executive as a member of the Board to serve as Chairman of the Board. Executive’s failure to be re-elected to the Board or to be re-appointed Chairman, in and of themselves, shall not constitute a termination of this Agreement, nor shall any such event entitle the Executive to any severance benefits. Pursuant to the Company’s policies, for the duration of this Agreement, the Executive will fulfill his duties as a director to the Company and as an officer or director to the any affiliate thereof without additional compensation. This Agreement shall not in any way be construed or interpreted so as to affect adversely or otherwise impair the right of the Company or the stockholders to remove the Executive from the Board at any time in accordance with the provisions of applicable law.

1.4. Place of Performance. In connection with his employment by the Company, except as otherwise agreed in writing with the Executive, the Executive shall be based out of the Company’s principal office in Sherman Oaks, California; provided, however, that nothing in this Agreement shall preclude the Executive from maintaining his principal place of residence in any other location.

2. COMPENSATION AND BENEFITS

2.1. Base Salary. During the Term, the Executive shall receive a base salary at a rate of two-hundred twenty-five thousand dollars ($225,000.00) per annum, which base salary shall be payable in accordance with the regular payroll practices of the Company, with such increases as may be determined by the Compensation Committee from time to time in its sole discretion (as increased from time to time, the “Base Salary”). Upon completion of a significant acquisition by the Company, the Compensation Committee shall in good faith reassess Executive’s Base Salary and consider increasing the Base Salary at that time.

2.2. Annual Bonuses. Executive shall be entitled to participate in any executive bonus program of the Company then in effect and to receive any bonus compensation in the discretion of the Board or a committee thereof. Further, during the Initial Term, Executive shall be entitled to a cash bonus in the amount of $100,000 for each calendar year (pro rated for the first calendar year based on the number of days employed during that year), provided that the Executive remains employed in good standing as of the last trading day of such calendar year and the following targets are met for the applicable year:

(a) for the calendar year ended December 31, 2013, (i) the Company’s common stock shall have been trading above $1.00 per share and shall have closed above $1.00 per share for ten (10) of the twenty (20) trading days immediately preceding the last trading day of the calendar year; or (ii) the “weighted average trading price” for the ten (10) trading day period immediately preceding the last trading day of the calendar year averages or exceeds $1.00,

(b) for the calendar year ended December 31, 2014, (i) the Company’s common stock shall have been trading above $1.25 per share and shall have closed above $1.25 per share for ten (10) of the twenty (20) trading days immediately preceding the last trading day of the calendar year; or (ii) the “weighted average trading price” for the ten (10) trading day period immediately preceding the last trading day of the calendar year averages or exceeds $1.25.

For purposes of this Agreement, the “weighted average trading price” is equal to the greater of: (1) the sum of the product of the number of shares traded each day in the period multiplied by the purchase price of such shares, with such sum divided by the total number of shares traded during such period; or (2) the amount determined under Bloomberg’s “VWSP” Calculation function. After the Initial Term, the Compensation Committee and Executive shall mutually agree on the appropriate milestone components and thresholds for Executive’s annual cash bonus.

2.3. Stock Options. On the Effective Date, Executive shall be granted 2,000,000 options to purchase shares of the Company’s common stock as an inducement to accept employment with the Company, subject to terms and conditions set forth in the Stock Option Award Agreement between the Executive and the Company attached hereto as Exhibit B (the “Option Agreement”). The exercise price of the first twenty-five percent (25%) of such options to vest shall be equal to $0.85 per share, and the exercise price of the remaining seventy-five percent (75%) of such options shall be equal to $1.00 per share.

2.4. Restricted Stock. On the Effective Date, Executive shall be granted a restricted stock award of 250,000 shares of the Company’s common stock as an inducement to accept employment with the Company, subject to terms and conditions set forth in the Restricted Stock Agreement between the Executive and the Company attached hereto as Exhibit C (the “Restricted Stock Agreement”).

2.5. Reimbursement of Expenses. During the Term, the Company shall pay the reasonable expenses incurred by the Executive in the performance of his duties hereunder, including, without limitation, those incurred in connection with temporary housing and leased or rented automobile in Sherman Oaks, California and other business-related travel or entertainment, or, if such expenses are paid directly by the Executive, the Company shall promptly (within thirty (30) business days following the Executive’s submission of an accounting of such expense) reimburse him for such payments, provided that the Executive properly accounts for such expenses in accordance with the Company’s business expense reimbursement policy. To the extent any such reimbursements (and any other reimbursements of costs and expenses provided for herein) are includable in the Executive’s gross income for Federal income tax purposes, (i) all such reimbursements shall be made no later than March 15^th of the calendar year next following the calendar year in which the expenses to be reimbursed are incurred, (ii) no reimbursement of any expense shall affect the Executive’s right to reimbursement of any other such expense in any other taxable year; and (iii) the right to reimbursement shall not be subject to liquidation or exchange for any other benefit.

2.6. Benefit Plans. During the Term, the Executive shall be eligible to participate in all employee benefit plans, programs or arrangements, which shall be established or maintained by the Company generally for its employees, or generally made available to its senior executives, which currently include, medical, dental and vision plans.

2.7. Vacation. The Executive shall be entitled to four (4) weeks of paid vacation pursuant to the terms of the Company’s vacation policy then in effect. Such vacation may be taken in the Executive’s discretion, and at such time or times as are not inconsistent with the reasonable business needs of the Company. To the extent the Company’s vacation policy includes a cap on the maximum amount of vacation that employees may accrue, Executive shall be subject to such cap then in effect.

3. PURCHASE OF SHARES. In connection with his employment by the Company, within six (6) months of the Effective Date, Executive commits to purchase a minimum of 500,000 shares of the Company’s common stock in the open market, as permitted by and in the manner prescribed by applicable law, including, but not limited to, pursuant to a Rule 10b5-1 trading plan.

4. TERMINATION OF EMPLOYMENT

4.1. General. The Executive’s employment under this Agreement may be terminated and the Term shall end without any breach of this Agreement only on the following circumstances:

4.1.1. Death. The Executive’s employment under this Agreement shall terminate and the Term shall end upon Executive’s death.

4.1.2. Disability. If the Executive suffers a Disability (as defined below), the Company may terminate the Executive’s employment under this Agreement and the Term shall end upon thirty (30) days’ prior written notice provided that the Executive has not returned to full time performance of his duties during such thirty (30) day notice period. For purposes hereof, “Disability” shall mean the Executive’s incurring a disability under the Company’s long term disability plan then in effect, if any, and if there is no such Company long term disability plan then in effect, the Executive’s inability to perform his essential job duties and responsibilities hereunder, with or without reasonable accommodation, due to any physical or mental illness or incapacity, which condition either (i) has continued for a period of an aggregate of one hundred eighty (180) days (including weekends and whether or not consecutive, or (ii) is projected by the Board in good faith after consulting with a doctor selected by the Company and consented to by the Executive (or, in the event of the Executive’s incapacity, his legal representative), such consent not to be unreasonably withheld, that the condition is likely to continue for a period of at least six (6) consecutive months from its commencement.

4.1.3. By Executive. The Executive may voluntarily terminate his employment under this Agreement and the Term shall end upon the effective date contained in a written Notice of Termination by the Executive to the Company, which effective date shall be at least thirty (30) days after the delivery of such Notice. The Company may, in either case and in its sole discretion, make such termination of employment and end of the Term effective earlier than the date set forth in the Notice of Termination (as defined below)).

4.1.4. By Company For Cause. The Company may terminate the Executive’s employment under this Agreement and the Term shall end at any time for Cause. Termination for “Cause” shall mean termination of the Executive’s employment because of the occurrence of any of the following as determined by the Board:

(i) the willful failure by the Executive to attempt in good faith to substantially perform his obligations under this Agreement (other than any such failure resulting from the Executive’s incapacity due to a Disability); provided, however, that the Company shall have provided the Executive with written Notice of Termination that such actions are occurring and the Executive has been afforded at least ten (10) days to cure same;

(ii) Executive’s willfully engaging in fraud or other financial dishonesty, including, without limitation, theft or misappropriation of funds or property of the Company, insider trading or any attempt by Executive to secure any personal profit related to the business or business opportunities of the Company without the informed, written consent of the Board;

(iii) any other material breach or violation by the Executive of this Agreement, the Company’s written code of conduct, written code of ethics or other written policy; provided, however, that the Company shall have provided the Executive with written Notice of Termination that such actions are occurring and the Executive has been afforded at least ten (10) days to cure, provided, however, that (A) this cure provision shall not apply to violations of the Company’s code of conduct, written code of ethics or prohibition against unlawful harassment, and (B) such cure period shall only apply to breaches or violations that in the Board’s sole judgment are capable of or amenable to such cure;

(iv) the Executive’s conviction of or plea of guilty or nolo contendere to, a felony or any other crime involving moral turpitude or dishonesty; or

(v) the Executive’s other willful misconduct, gross negligence or knowing violation of securities laws that, in the good faith judgment of the Board, may have or has had a material adverse impact on the Company (either economically or on its reputation).

4.1.5. By Company Without Cause. The Company may terminate the Executive’s employment under this Agreement and the Term shall end without Cause immediately upon written Notice of Termination by the Company to the Executive, other than for death or Disability. Any such termination of Executive’s employment prior to the annual meeting of the Company’s stockholders held in 2014 shall require the unanimous approval of all Board members then in office, excluding Executive.

4.1.6. By Executive Following Change in Control. The Executive may voluntarily terminate his employment under this Agreement within the 90-day period beginning on a Change in Control. The Executive’s termination of employment shall become effective and the Term shall end upon the effective date contained in a written Notice of Termination by the Executive to the Company, which effective date shall be no later than the 90^th day following the Change in Control.

4.1.7. By Expiration of Term. Unless terminated earlier pursuant to Subsections 4.1.1 through 4.1.6, Executive’s employment will terminate upon non-renewal of the Term pursuant to a Notice of Nonrenewal given by the Company or the Executive pursuant to Section 1.1.

4.2. Notice of Termination. Any termination of the Executive’s employment by the Company or by the Executive (other than termination by reason of the Executive’s death) shall be communicated by written Notice of Termination to the other parties to this Agreement. For purposes of this Agreement, a “Notice of Termination” shall mean a written notice which shall indicate the specific termination provision in this Agreement relied upon and, except in the event of a termination by the Company without Cause or pursuant to Section 1.1 of this Agreement, such Notice shall set forth in the principal facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated.

4.3. Date of Termination. The “Date of Termination” shall mean (a) if the Executive’s employment is terminated, pursuant to Subsection 4.1.1, the date of Executive’s death, (b) if the Executive’s employment is terminated pursuant to Subsection 4.1.2, the date the Notice of Termination is given, (c) if the Executive’s employment is terminated pursuant to subsections 4.1.4, the date specified in the Notice of Termination after the expiration of any applicable cure periods specified in subsection 4.1.4, (d) if the Executive’s employment is terminated pursuant to Subsection 4.1.3, the date specified in the Notice of Termination, which shall be at least thirty (30) days, as applicable, after Notice of Termination is delivered, or such earlier date as the Company shall determine, in its sole discretion, (e) if the Executive’s employment is terminated pursuant to Subsection 4.1.5, the date specified in the Notice of Termination, (f) if the Executive’s employment is terminated pursuant to Subsection 4.1.6, the date specified in the Notice of Termination which shall be no later than the 90^th day following the Change in Control, or such earlier date as the Company shall determine in its sole discretion, and (g) if the Executive’s employment is terminated pursuant to Subsection 4.1.7, as applicable: (i) the last day of the Initial Term, (i) the date specified in the Notice of Nonrenewal delivered by the Company, which shall be at least thirty (30) days after Notice of Nonrenewal is delivered, or (iii) the date specified in the Notice of Termination delivered by the Executive, which shall be at least thirty (30) days, as applicable, after Notice of Termination is delivered, or such earlier date as the Company shall determine, in its sole discretion.

4.4. Compensation upon Termination.

4.4.1. Termination by Reason of Death, Disability, Cause or By Executive Other Than After Change in Control. If the Executive’s employment terminates under Subsection 4.1.1 (death), Subsection 4.1.2 (permanent disability), Subsection 4.1.3 (by Executive not in connection with a Change in Control) or Subsection 4.1.4 (by Company for Cause), Executive shall receive from the Company: (a) any earned but unpaid Base Salary through the Date of Termination, paid in accordance with the Company’s standard payroll practices; (b) reimbursement for any unreimbursed expenses properly incurred and paid in accordance with Section 2.5 through the Date of Termination; (c) payment for any accrued but unused vacation time through the Date of Termination in accordance with Company policy; and (d) such vested accrued benefits, and other benefits and/or payments, if any, as to which the Executive (and his eligible dependents) may be entitled under, and in accordance with the terms and conditions of, the employee benefit arrangements, plans and programs of the Company as of the Date of Termination (including, for example, the presentment of the right to continue health benefit coverage under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”), as applicable) other than any severance pay plan ((a) though (d), the “Amounts and Benefits”), and the Company shall not have any further obligation with respect to this Agreement other than as provided in Sections 6 and 7 of this Agreement.

4.4.2. Termination without Cause or Termination following a Change in Control. If the Company terminates the Executive’s employment under Subsection 4.1.5 (other than a termination by reason of death or Disability or pursuant to a Notice of Nonrenewal), or the Executive terminates his employment under Subsection 4.1.6, then the Company shall pay or provide the Executive the Amounts and Benefits and, subject to Subsection 4.4.6 and Section 7.7, an amount equal to one (1) times the Base Salary in effect as of the Date of Termination, paid in equal installments on the Company’s normal payroll dates for a period of one (1) year

from the Date of Termination in accordance with the usual payroll practices of the Company, with each such payment deemed to be a separate payment for the purposes of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the regulations issued thereunder (“Section 409A”). In addition, in the event that the Executive properly elects to continue health benefit coverage under COBRA, the Executive shall only be responsible to pay the active employee rate for such coverage (the “Subsidized Rate”) for so long as Executive remains eligible to receive COBRA continuation coverage and for so long as the Subsidized Rate is permissible by law and/or would not result in a penalty. In the event the Subsidized Rate is not permissible by law and/or would result in penalty, the Executive shall be responsible to pay the entire cost of COBRA continuation coverage. The term “Change in Control” shall have the meaning provided in the Option Agreement and the Restricted Stock Agreement.

4.4.3. Termination In Connection With or Following Change in Control. The Executive’s benefits under Subsection 4.4.2 shall be reduced as provided in Section 7.8.

4.4.4. Termination by Company pursuant to Notice of Nonrenewal. If the Company terminates the Executive’s employment under Section 4.1.7 pursuant to a Notice of Nonrenewal), then the Company shall pay or provide the Executive the Amounts and Benefits and, subject to Subsection 4.4.6 and Section 7.7, an amount in the aggregate equal to one half (1/2) of the Executive’s Base Salary in effect as of the Date of Termination, paid in equal installments on the Company’s normal payroll dates for a period of six (6) months from the Date of Termination, with each such payment deemed to be a separate payment for the purposes of Section 409A. In addition, in the event that the Executive properly elects to continue health benefit coverage under COBRA, the Executive shall only be responsible to pay the Subsidized Rate for so long as Executive remains eligible to receive COBRA continuation coverage and for so long as the Subsidized Rate is permissible by law and/or would not result in a penalty. In the event the Subsidized Rate is not permissible by law and/or would result in penalty, the Executive shall be responsible to pay the entire cost of COBRA continuation coverage.

4.4.5. No Mitigation or Offset. The Executive shall not be required to mitigate the amount of any payment provided for in this Section 4.4 by seeking other employment or otherwise, nor shall the amount of any payment provided for in this Section 4.4 be reduced by any compensation earned by the Executive as the result of employment by another employer or business or by profits earned by the Executive from any other source at any time before and after the Date of Termination. The Company’s obligation to make any payment pursuant to, and otherwise to perform its obligations under, this Agreement shall not be affected by any offset, counterclaim or other right that the Company may have against the Executive for any reason.

4.4.6. Release. Notwithstanding any provision to the contrary in this Agreement, the Company’s obligation to pay or provide the Executive (or his estate, as applicable) with the payments and benefits under Subsections 4.4.2, 4.4.3 and 4.4.4 (other than the Amounts and Benefits), as applicable, shall be conditioned on the Executive’s (or his estate’s, as applicable) executing and not revoking a waiver and general release in a form acceptable to the Company in its sole discretion (the “Release”). The Company shall provide the Release to the Executive (or his estate, as applicable) within seven (7) days following the applicable Date of Termination. In order to receive the payments and benefits under Subsections 4.4.2 and 4.4.4 (other than the Amounts and Benefits), the Executive (or his estate, as applicable) will be required to sign the Release within twenty-one (21) or forty-five (45) days after the

date it is provided to him (or his estate, as applicable), whichever is applicable under applicable law, and not revoke it within the seven (7) day period following the date on which it is signed by him (or his estate, as applicable). Notwithstanding anything to the contrary contained herein, all payments delayed pursuant to this Subsection, except to the extent delayed pursuant to Subsection 7.7.2, shall be paid to the Executive in a lump sum on the first Company payroll date on or following the sixtieth (60th) day after the Date of Termination.

5. CONFIDENTIALITY; NON-SOLICITATION; NON-DISPARAGEMENT; COOPERATION

5.1. Confidentiality. The Company and the Executive acknowledge that the services to be performed by the Executive under this Agreement are unique and extraordinary and, as a result of such employment, the Executive shall be in possession of Confidential Information relating to the business practices of the Company and its subsidiaries and affiliates (collectively, the “Company Group”). The term “Confidential Information” shall mean any and all information (oral and written) relating to the Company Group, or any of their respective activities, or of the clients, customers, acquisition targets, investment models or business practices of the Company Group, other than such information which (i) is generally available to the public or within the relevant trade or industry, other than as the result of breach of the provisions of this Section 5.1, or (ii) the Executive is required to disclose under any applicable laws, regulations or directives of any government agency, tribunal or authority having jurisdiction in the matter or under subpoena or other process of law. The Executive shall not, during the Term nor at any time thereafter, except as may be required in the course of the performance of his duties hereunder (including without limitation, pursuant to Section 5.5 below) and except with respect to any litigation or arbitration involving this Agreement, including the enforcement hereof, directly or indirectly, use, communicate, disclose or disseminate to any person, firm or corporation any Confidential Information regarding the Company Group nor of the clients, customers, acquisition targets or business practices of the Company Group acquired by the Executive during, or as a result of, his employment with the Company, without the prior written consent of the Company. Without limiting the foregoing, the Executive understands that the Executive shall be prohibited from misappropriating any trade secret of the Company Group or of the clients or customers of the Company Group acquired by the Executive during, or as a result of, his employment with the Company, at any time during or after the Term.

5.2. Return of Company Property. Upon the termination of the Executive’s employment for any reason whatsoever all Company Group property that is in the possession of the Executive shall be promptly returned to the Company, including, without limitation, all documents, records, notebooks, equipment, price lists, specifications, programs, customer and prospective customer lists and other materials that contain Confidential Information which are in the possession of the Executive, including all copies thereof. Anything to the contrary notwithstanding, the Executive shall be entitled to retain (i) papers and other materials of a personal nature, including, but not limited to, photographs, correspondence, personal diaries, calendars and rolodexes, personal files and phone books, (ii) information showing his compensation or relating to reimbursement of expenses, (iii) information that he reasonably believes may be needed for tax purposes and (iv) copies of plans, programs and agreements relating to his employment, or termination thereof, with the Company.

5.3. Non-Solicitation. The Executive shall not, except in the furtherance of the Executive’s duties hereunder, directly or indirectly, individually or on behalf of any other person, firm, corporation or other entity, (i) during the Term (except in the good faith performance of his duties) and for a period of one (1) year thereafter, solicit, aid or induce any employee, representative or agent of

the Company Group to leave such employment or retention or to accept employment with or render services to or with any other person, firm, corporation or other entity unaffiliated with the Company Group or hire or retain any such employee, representative or agent, or take any action to materially assist or aid any other person, firm, corporation or other entity in identifying, hiring or soliciting any such employee, representative or agent, or (ii) during the Term (except in the good faith performance of his duties) and for a period of one (1) year thereafter, use the Company Group’s Confidential Information to solicit, contact, aid or induce to purchase goods or services then sold by the Company Group from another person, firm, corporation or other entity (or attempt to do any of the foregoing), directly or indirectly, for the purpose or effect of interfering with any part of the Company Group’s business: (1) any customer of the Company Group in any location in which the Company Group operates or sells its products (the “Territory”); (2) any customer of the Company Group that Executive contacted or solicited, or in any way supported or dealt with at any time during the last two years of Executive’s employment; (3) any prospective customer of the Company Group that Executive contacted or who received or requested a proposal or offer the Executive on behalf of the Company Group at any time during the last two years of Executive’s employment; or (4) any customer of the Company Group for which Executive had any direct or indirect responsibility at any time during the last two years of his employment.

5.4. Non-Disparagement. At no time during or within two (2) years after the Term shall the Executive, directly or indirectly, disparage the Company Group or any of the Company Group’s past or present employees, directors, products or services. Notwithstanding the foregoing, nothing in this Section 5.4 shall prevent the Executive from making any truthful statement to the extent (i) necessary to rebut any untrue public statements made about him; (ii) necessary with respect to any litigation, arbitration or mediation involving this Agreement, including, but not limited to, the enforcement of this Agreement; (iii) required by law or by any court, arbitrator, mediator or administrative or legislative body (including any committee thereof) with jurisdiction over such person; or (iv) made as good faith competitive statements in the ordinary course of business.

5.5. Cooperation. Upon the receipt of reasonable notice from the Company (including the Company’s outside counsel), the Executive agrees that while employed by the Company and thereafter, the Executive will respond and provide information with regard to matters of which the Executive has knowledge as a result of the Executive’s employment with the Company, and will provide reasonable assistance to the Company Group and their respective representatives in defense of any claims that may be made against the Company Group (or any member thereof), and will provide reasonable assistance to the Company Group in the prosecution of any claims that may be made by the Company Group (or any member thereof), to the extent that such claims may relate to matters related to the Executive’s period of employment with the Company (or any predecessors). Any request for such cooperation shall take into account the Executive’s other personal and business commitments. The Executive also agrees to promptly inform the Company (to the extent the Executive is legally permitted to do so) if the Executive is asked to assist in any investigation of the Company Group (or any member thereof) or their actions, regardless of whether a lawsuit or other proceeding has then been filed with respect to such investigation and shall not do so unless legally required. If the Executive is required to provide any services pursuant to this Section 5.5 following the Term, upon presentation of appropriate documentation, then the Company: (i) shall promptly compensate the Executive for all time incurred in these activities at an hourly rate of pay equal to the Executive’s most recent annual Base Salary divided by 2080 hours; and (ii) shall promptly reimburse the Executive for reasonable out-of-pocket travel, lodging, communication and duplication expenses incurred in connection with the performance of such services and in accordance with the Company’s expense policy for its

senior officers, and for legal fees to the extent the Board in good faith reasonably believes that separate representation is warranted. The Executive’s entitlement to reimbursement of such costs and expenses, including legal fees, pursuant to this Section 5.5, shall in no way affect the Executive’s rights, if any, to be indemnified and/or advanced expenses in accordance with the Company’s (or any of its subsidiaries’) corporate or other organizational documents, any applicable insurance policy, and/or in accordance with this Agreement.

5.6. Without intending to limit the remedies available to the Company, the Executive acknowledges that a breach of any of the covenants contained in this Section 5 may result in the material and irreparable injury to the Company, or their respective affiliates or subsidiaries, for which there is no adequate remedy at law, that it will not be possible to measure damages for such injuries precisely and that, in the event of such breach or threat: (i) the Company shall be entitled to a temporary restraining order and/or a preliminary or permanent injunction restraining the Executive from engaging in activities prohibited by this Section 5; and (ii) any remaining payments due the Executive under Subsection 4.4.2 shall be forfeited. If for any reason it is held that the restrictions under this Section 5 are not reasonable or that consideration therefor is inadequate, such restrictions shall be interpreted or modified to include as much of the duration or scope of identified in this Section as will render such restrictions valid and enforceable.

5.7. In the event of any violation of the provisions of this Section 5, the Executive acknowledges and agrees that the post-termination restrictions contained in this Section 5 shall be extended by a period of time equal to the period of such violation, it being the intention of the parties hereto that the running of the applicable post-termination restriction period shall be tolled during any period of such violation.

6. INDEMNIFICATION/ DIRECTORS AND OFFICERS LIABILITY INSURANCE

The Company shall defend (with counsel selected by Executive and subject to the consent of the Company, with such consent not to be unreasonably withheld), indemnify and hold harmless the Executive against any and all expenses reasonably incurred by him in connection with or arising out of (a) the defense of any action, suit or proceeding in which he is a party, or (b) any claim asserted or threatened against him, in either case by reason of or relating to his being or having been an employee, officer or director of the Company, whether or not he continues to be such an employee, officer or director at the time of incurring such expenses, except insofar as such indemnification is prohibited by law. Such expenses shall include, without limitation, the fees and disbursements of attorneys, amounts of judgments and amounts of any settlements, provided that such expenses are agreed to in advance by the Company. The foregoing indemnification obligation is independent of any similar obligation provided in the Company’s Certificate of Incorporation, Bylaws, or applicable State law, and shall apply with respect to any matters attributable to periods prior to the date of this Agreement, and to matters attributable to Executive’s employment hereunder, without regard to when asserted.

7. MISCELLANEOUS

7.1. Notices. Any notice to be given under the terms of this Agreement shall be in writing and addressed to the Company at its principal office to the attention of the Secretary, and to the Executive at the address last reflected on the Company’s payroll records, or such other address as either party may hereafter designate in writing to the other. Any such notice shall be delivered in person or shall be enclosed in a properly sealed envelope addressed as aforesaid, registered or certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government. Any such notice shall be given only when received, but if the Executive is no longer employed by or providing services to the corporation or a Subsidiary shall be deemed to have been duly given five business days after the date mailed in accordance with the foregoing provisions of this Section 7.1.

7.2. Severability. Each provision of this Agreement shall 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 prohibited by or invalid under applicable law, such provision will be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

7.3. Binding Effect; Benefits. The Executive may not delegate his duties or assign his rights hereunder. No rights or obligations of the Company under this Agreement may be assigned or transferred by the Company other than pursuant to a merger or consolidation in which the Company is not the continuing entity, or a sale, liquidation or other disposition of all or substantially all of the assets of the Company, provided that the assignee or transferee is the successor to all or substantially all of the assets or businesses of the Company and assumes the liabilities, obligations and duties of the Company under this Agreement, either contractually or by operation of law. The Company further agrees that, in the event of any disposition of its business and assets described in the preceding sentence, it shall use its best efforts to cause such assignee or transferee expressly to assume the liabilities, obligations and duties of the Company hereunder. For the purposes of this Agreement, the term “Company” shall include the Company and, subject to the foregoing, any of its successors and assigns. This Agreement shall inure to the benefit of, and be binding upon, the parties hereto and their respective heirs, legal representatives, successors and permitted assigns.

7.4. Entire Agreement. This Agreement, including the Exhibits hereto, represent the entire agreement of the parties with respect to the subject matter hereof and shall supersede any and all previous contracts, arrangements or understandings between the Company and the Executive. This Agreement (including any of the Exhibits hereto) may be amended at any time by mutual written agreement of the parties hereto. In the case of any conflict between any express term of this Agreement and any statement contained in any plan, program, arrangement, employment manual, memo or rule of general applicability of the Company, this Agreement shall control.

7.5. Withholding. The payment of any amount pursuant to this Agreement shall be subject to applicable withholding and payroll taxes, and such other deductions as may be required by applicable law.

7.6. Governing Law and Jurisdiction. This Agreement and the performance of the parties hereunder shall be governed by the internal laws (and not the law of conflicts) of the State of California. The Company and Executive unconditionally consent to submit to the exclusive jurisdiction of any court, Federal or State, within the State of California having subject matter jurisdiction over any actions, suits or proceedings arising out of or relating to this Agreement and the transactions contemplated hereby (and agree not to commence any action, suit or proceeding relating thereto except in such courts), and further agree that service of any process, summons, notice or document by registered mail to the address set forth below shall be effective service of process for any action, suit or proceeding brought against the Company or the Executive, as the case may be, in any such court.

7.7. Section 409A.

7.7.1. It is intended that the provisions of this Agreement comply with Section 409A and all provisions of this Agreement shall be construed in a manner consistent with the requirements for avoiding taxes or penalties under Section 409A. If any provision of this

Agreement (or of any award of compensation, including equity compensation or benefits) would cause the Executive to incur any additional tax or interest under Section 409A, the Company shall, upon the specific request of the Executive, use its reasonable business efforts to in good faith reform such provision to comply with Section 409A; provided, that to the maximum extent practicable, the original intent and economic benefit to the Executive and the Company of the applicable provision shall be maintained, but the Company shall have no obligation to make any changes that could create any additional economic cost or loss of benefit to the Company. The Company shall timely use its reasonable business efforts to amend any plan or program in which the Executive participates to bring it in compliance with Section 409A. Notwithstanding the foregoing, the Company shall not have any liability with regard to any failure of this Agreement to comply with Section 409A so long as it has acted in good faith with regard to compliance therewith.

7.7.2. Notwithstanding anything herein to the contrary, the payment (or commencement of a series of payments) hereunder of any nonqualified deferred compensation (within the meaning of Section 409A) upon a termination of employment shall be delayed until such time as the Executive has also undergone a “separation from service” as defined in Treas. Reg. 1.409A-1(h), at which time such nonqualified deferred compensation (calculated as of the date of the Executive’s termination of employment hereunder) shall be paid (or commence to be paid) to the Executive on the schedule set forth in Section 4.4 above as if the Executive had undergone such termination of employment (under the same circumstances) on the date of his ultimate “separation from service.” Any payment otherwise required to be made hereunder to the Executive at any date as a result of the termination of Executive’s employment shall be delayed for such period of time as may be necessary to meet the requirements of Section 409A(a)(2)(B)(i) of the Code (the “Delay Period”) and it is expressly agreed that the payments under Subsection 4.4.2 and Subsection 4.4.2(ii) shall be subject to the Delay Period if the Executive is deemed on the Date of Termination of employment to be a “specified employee,” within the meaning of that term under Section 409A(a)(2)(B) of the Code, using the identification methodology selected by the Company from time to time, or, if none, the default methodology. On the first business day following the expiration of the Delay Period, the Executive shall be paid, in a single cash lump sum, an amount equal to the aggregate amount of all payments delayed pursuant to the preceding sentence, and any remaining payments not so delayed shall continue to be paid pursuant to the payment schedule set forth herein.

With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Section 409A, (i) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, (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 Section 105(b) of the Code solely because such expenses are subject to a limit related to the period the arrangement is in effect and (iii) such payments shall be made on or before the last day of the Executive’s taxable year following the taxable year in which the expense was incurred.

7.8. Section 280G of the Code. In the event that it is determined by the Company in its sole discretion that any payment or benefit to the Executive under this Agreement, the Option Agreement, the Restricted Stock Agreement, or otherwise, either cash or non-cash, that the Executive has the right to receive from the Company, including, but not limited to, accelerated

vesting or payment of any deferred compensation, options, restricted stock or any benefits payable to Executive under any plan for the benefit of employees, would constitute an “excess parachute payment” (as defined in Section 280G of the Code), then such payments or other benefits shall be reduced, in a form and manner agreed to by the Company and Executive, to the largest amount that will not result in receipt by the Executive of an excess parachute payment. Section 7.7 of the Signature Group Holdings, Inc. 2006 Performance Incentive Plan shall not apply to the extent it is inconsistent with this Section 7.8.

7.9. Survivorship. Except as otherwise expressly set forth in this Agreement, upon the termination of the Term, the respective rights and obligations of the parties shall survive such termination to the extent necessary to carry out the intentions of the parties as embodied in this Agreement. This Agreement shall continue in effect until there are no further rights or obligations of the parties outstanding hereunder and shall not be terminated by either party without the express prior written consent of both parties, except as otherwise expressly set forth in this Agreement.

7.10. Counterparts. This Agreement may be executed in counterparts (including by fax or pdf) which, when taken together, shall constitute one and the same agreement of the parties.

7.11. Company Representations. The Company represents and warrants to the Executive that (i) the execution, delivery and performance of this Agreement (and the agreements referred to herein) by the Company have been fully and validly authorized by all necessary corporate action, (ii) the officer signing this Agreement on behalf of the Company is duly authorized to do so, (iii) the execution, delivery and performance of this Agreement do not violate any applicable law, regulation, order, judgment or decree or any agreement, plan or corporate governance document to which the Company is a party or by which it is bound and (iv) upon execution and delivery of this Agreement by the Executive and the Company, it shall be a valid and binding obligation of the Company enforceable against such entity in accordance with its terms, except to the extent that enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally.

[End of Text - Signature page follows]

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above written.

SIGNATURE GROUP HOLDINGS INC.
By:	/S/ CHRIS MANDERSON
	Name:	Chris Manderson
	Title:	Executive Vice President & General Counsel
EXECUTIVE
/S/ CRAIG T. BOUCHARD
Craig T. Bouchard

[Signature Page to Employment Agreement]

EXHIBIT A

• Chairman and Chief Executive Officer of Cambelle-Inland, LLC, an entity created in 2013 through which Mr. Bouchard manages certain investment activities in China

• Leadership Board of the Department of Athletics, Duke University

EXHIBIT B

SIGNATURE GROUP HOLDINGS, INC.

2006 PERFORMANCE INCENTIVE PLAN

NON-QUALIFIED STOCK OPTION AGREEMENT

THIS NON-QUALIFIED STOCK OPTION AGREEMENT (this “Option Agreement”) dated as of June 5, 2013 by and between Signature Group Holdings, Inc., a Nevada Corporation (the “Corporation”), and Craig T. Bouchard (the “Grantee”) evidences the non-qualified stock option (the “Option”) granted by the Corporation to the Grantee as to the number of shares of the Corporation’s Common Stock first set forth below.

Number of Shares of Common Stock: ¹ 2,000,000

Award Date: June 5, 2013

Exercise Price per Share: ¹

• $0.85 for the twenty-five percent (25%) of the total number of the shares of Common Stock subject to the Option which vest on the six (6) month anniversary of the Award Date

• $1.00 for the seventy-five percent (75%) of the total number of the shares of Common Stock subject to the Option which vest after the six (6) month anniversary of the Award Date

Expiration Date: ^{1, 2} Ten years from grant

Vesting: ^1,2,3 Twenty-five percent (25%) of the total number of shares of Common Stock subject to the Option shall vest on each of:

• the six (6) month anniversary of the Award Date;

• the first anniversary of the Award Date;

• the eighteen (18) month anniversary of the Award Date; and

The remaining twenty-five percent (25%) of the total number of shares of Common Stock subject to the Option shall vest as of the second anniversary of the Award Date (the “Final Vesting Date”) if, as of the Final Vesting Date, either (i) the Company’s common stock shall have been trading above $1.25 per share and shall have closed above $1.25 per share for ten (10) of the twenty (20) trading days immediately preceding the Final Vesting Date; or (ii) the “weighted average trading price” for the ten (10) trading day period immediately preceding the last trading day immediately preceding the Final Vesting Date averages or exceeds $1.25.

The Option is granted under the Signature Group Holdings, Inc. 2006 Performance Incentive Plan (the “Plan”), a copy of which has been provided to the Grantee, and is subject to the Terms and Conditions of Non-Qualified Stock Option (the “Terms”) attached to this Option Agreement (incorporated herein by this reference) and to the Plan. The Option Agreement is also subject to the terms of the Employment Agreement between the Corporation and the Grantee dated as of June 4, 2013 (the “Employment Agreement”). Section 7.3 and 7.7 of the Plan (the extent Section 7.7 of the Plan is inconsistent with Section 7.8 of the Employment Agreement) shall not apply to this Award.

The parties agree to the terms of the Option set forth herein. The Grantee acknowledges receipt of a copy of the Terms, the Plan and the Prospectus for the Plan.

GRANTEE	SIGNATURE GROUP HOLDINGS, INC. A Nevada corporation
/S/ CRAIG T. BOUCHARD	By:	/S/ CHRIS MANDERSON
Signature	Print Name: Chris Manderson
Craig Bouchard	Title: Executive Vice President & General Counsel
Print Name

¹  Subject to adjustment under Section 7.1 of the Plan.

²  Subject to early termination under Section 4 of the Terms and Section 7.4 of the Plan.

³  Subject to the conditions set forth in Section 2 of the Terms, including continuation of employment under certain circumstances.

CONSENT OF SPOUSE

In consideration of the Corporation’s execution of this Option Agreement, the undersigned spouse of the Grantee agrees to be bound by all of the terms and provisions hereof and of the Plan.

/S/ MELISSA BOUCHARD
Signature of Spouse	Date
Melissa Bouchard
Print Name

TERMS AND CONDITIONS OF NON-QUALIFIED STOCK OPTION

1. Vesting; Limits on Exercise; Incentive Stock Option Status.

The Option shall vest and become exercisable in percentage installments of the aggregate number of shares subject to the Option as set forth on the cover page of this Option Agreement. The Option may be exercised only to the extent the Option is vested and exercisable.

• Cumulative Exercisability. To the extent that the Option is vested and exercisable, the Grantee has the right to exercise the Option (to the extent not previously exercised), and such right shall continue, until the expiration or earlier termination of the Option.

• No Fractional Shares. Fractional share interest shall be disregarded, but may be cumulated.

• Minimum Exercise. No fewer than 1001 shares of Common Stock may be purchased at any one time, unless the number purchased is the total number at the time exercisable under the Option.

• Non-Qualified Stock Option. The Option is a non-qualified stock option and is not, and shall not be, an incentive stock option within the meaning of Section 422 of the code.

2. Continuance of Employment/Service Required; No Employment/ Service Commitment.

The vesting schedule requires continued employment or service through each applicable vesting date as a condition to the vesting of the applicable installment of the Option and the rights and benefits under this Option Agreement, unless the Grantee’s employment is terminated by the Corporation under Sections 4.1.1, 4.1.2 or 4.1.5 of the Grantee’s Employment Agreement, in which case such Options shall continue to vest pursuant to the vesting schedule, notwithstanding anything to the contrary herein. Employment or service for only a portion of the vesting period, even if a substantial portion, will not entitle the Grantee to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services as provided in Section 4 below or under the Plan.

Nothing contained in this Option Agreement or the Plan constitutes a continued employment or service commitment by the Corporation of any of its Subsidiaries, affects the Grantee’s status, if her or she is an employee, as an employee at will who is subject to termination without cause, confers upon the Grantee any tight to remain employed by or in service to the Corporation of any Subsidiary, interferes in any way with the right of the Corporation or any Subsidiary at any time to terminate such employment or service, or affects the right of the Corporation or any Subsidiary to increase or decrease the Grantee’s other compensation.

3. Method of Exercise of Option.

The Option shall be exercisable by the delivery to the Secretary of the Corporation (or such person as the Administrator may require pursuant to such administrative exercise procedures as the Administrator may implement from time to time) of:

• A written notice stating the number of shares of Common Stock to be purchased pursuant to the Option or by the completion of such other administrative exercise procedures as the Administrator may require from time to time;

• Payment in full for the Exercise Price of the shares to be purchased in cash, check or by electronic funds transfer to the Corporation, or (subject to compliance with all applicable laws, rules, regulations and listing requirements and further subject to such rules as the Administrator may adopt as to any non-cash payment) in shares of Common Stock already owned by the Grantee, valued at their fair market value on the exercise date, provided, however, that any shares initially acquired upon exercise of a stock option or otherwise from the Corporation must have been owned by the Grantee for at least six (6) months before the date of such exercise;

• Any written statements or agreements required pursuant to Section 8.1 of the Plan; and

• Satisfaction of the tax withholding provisions of Section 8.5 of the Plan.

The administrator also may, but is not required to, authorize a non-cash payment alternative by notice and third party payment in such manner as may be authorized by the Administrator.

4. Early Termination of Option.

4.1 Change in Control. Notwithstanding any provisions in the Plan or this Option Agreement to the contrary, in the event of a Change in Control (as defined herein), any remaining restrictions relating to any portion of the Option that has not fully vested shall immediately lapse. Sections 7.3 and 7.7 of the Plan (to the extent Section 7.7 of the Plan is inconsistent with Section 7.8 of the Employment Agreement) shall not apply to this Option. Section 7.8 of the Employment Agreement shall apply to this Option.

For Purposes of this Option, a “Change in Control” shall be deemed to occur upon a majority of members of the Corporation’s Board of Directors being replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Corporation’s Board of Directors prior to the date of the appointment or election.

4.2 Termination of Option upon a Termination of Grantee’s Employment or Services. To the extent the Option is vested as of Grantee’s termination of employment, the Option shall remain outstanding until the earlier of the Expiration Date of the Option or the fourth anniversary of the Grantee’s termination of employment. To the extent the Option is not vested as of Grantee’s termination of employment, and may not become vested thereafter pursuant to Section 2, above, the Option shall be forfeited as of Grantee’s termination of employment. To the extent the option is not vested as of Grantee’s termination of employment and may become vested thereafter pursuant to Section 2, above, the Option shall remain outstanding until (1) if it becomes vested pursuant to Section 2, above, the earlier of the Expiration Date of the Option or the fourth anniversary of the Grantee’s termination of employment, and (2) if it is determined that the Option may never become vested, the date of such determination, at which time the unvested portion of the Option shall be forfeited. Notwithstanding the foregoing, the Option, to the extent it has not been exercised, shall be forfeited in its entirety upon the termination of Grantee’s employment for Cause under Section 4.1.4 of the Employment Agreement.

5. Non-Transferability.

The Option and any other rights of the Grantee under this Option Agreement or the Plan are nontransferable and exercisable only by the Grantee, except as set forth in Section 5.5 of the Plan.

6. Notices.

Any notice to be given under the terms of this Option Agreement shall be in writing and addressed to the Corporation at its principal office to the attention of the Secretary, and to the Grantee at the address last reflected on the Corporation’s payroll records, or such other address as either party may hereafter designate in writing to the other. Any such notice shall be delivered in person or shall be enclosed in a properly sealed envelope addressed as aforesaid, registered or certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government. Any such notice shall be given only when received, but if the Grantee is no longer employed by or providing services to the corporation or a Subsidiary shall be deemed to have been duly given five business days after the date mailed in accordance with the foregoing provisions of this Section 6.

7. Plan.

The Option and all rights of the Grantee under this Option Agreement are subject to terms and agreements of the Plan, incorporated herein by this reference. The Grantee agrees to be bound by the terms of this Plan and Option Agreement (including these Terms). The Grantee acknowledges reading and understanding The Plan, the Prospectus of the Plan and this Option Agreement. In the event of a conflict or inconsistency between the terms and Conditions of this Option Agreement and of the Plan, the terms and conditions of the Plan shall govern. Unless otherwise expressly provided in other sections of this Option Agreement, provisions of the Plan that confer discretionary authority on the Board or the Administrator do not and shall not be deemed to create any rights in the Grantee unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Board or the Administrator so conferred by appropriate action of the Board or the Administrator so conferred by appropriate action of the Board or the Administrator under the Plan after the date hereof.

8. Entire Agreement.

This Option Agreement (including these Terms), the Employment Agreement, and the Plan together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof. The Plan and this Option Agreement may be amended pursuant to Section 8.6 of the Plan. Such amendment must be in writing and signed by the Corporation. The Corporation may, however, unilaterally waive any provision hereof In writing to the extent such waiver does not adversely affect the interests of the Grantee hereunder, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof.

9. Governing Law.

This Option Agreement Shall be governed by and construed and enforced in accordance with the laws of the State of Nevada without regard to conflict of law principles thereunder.

10. Effect of this Agreement.

Subject to the Corporation’s right to terminate the Option pursuant to Section 7.4 of the Plan, this Option Agreement shall be assumed by, be binding upon and inure to the benefit of any successor or successors to the Corporation.

11. Counterparts.

This Option Agreement may be executed simultaneously in any number of counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

12. Section Headings.

The section headings of this Option Agreement are for convenience of reference only and shall not be deemed to alter or affect any provision thereof.

EXHIBIT C

SIGNATURE GROUP HOLDINGS, INC.

2006 PERFORMANCE INCENTIVE PLAN

RESTRICTED STOCK AWARD AGREEMENT

THIS RESTRICTED STOCK AWARD AGREEMENT (this “Award Agreement”) is dated as of June     , 2013 (the “Award Date”) by and between Signature Group Holdings, Inc., a Nevada corporation (the “Corporation”), and Craig T. Bouchard (the “Grantee”).

W I T N E S S E T H

WHEREAS, pursuant to the Signature Group Holdings, Inc. 2006 Performance Incentive Plan (the “Plan”), as amended, the Corporation hereby grants to the Grantee, effective as of the date hereof, a restricted stock award (the “Award”), upon the terms and conditions set forth herein and in the Plan; and

WHEREAS, the Company and the Grantee have entered into an Employment Agreement dated as of June     , 2013 (the “Employment Agreement”).

NOW THEREFORE, in consideration of services rendered and to be rendered by the Grantee, and the mutual promises made herein and the mutual benefits to be derived therefrom, the parties agree as follows:

1. Defined Terms. Capitalized terms used herein and not otherwise defined herein shall have the meaning given to such terms in the Plan. For purposes of this Award Agreement, a “Change in Control” shall be deemed to occur upon a majority of members of the Corporation’s Board of Directors being replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Corporation’s Board of Directors prior to the date of the appointment or election.

2. Grant. Subject to the terms of this Award Agreement, the Corporation hereby grants to the Grantee an Award with respect to an aggregate of 250,000 restricted shares of Common Stock of the Corporation (the “Restricted Stock”).

3. Vesting. Subject to Section 9 below, the Award shall vest, and restrictions (other than those set forth in Section 8.1 of the Plan) shall lapse on January 1, 2014.

4. Change in Control. Notwithstanding any provisions in the Plan or this Award Agreement to the contrary, in the event of a Change in Control (as defined herein), any remaining restrictions relating to any portion of the Award that has not fully vested shall immediately lapse. Sections 7.3 and 7.7 of the Plan shall not apply to this Award. Section 7.8 of the Employment Agreement shall apply to this Award.

5. Continuance of Employment or Service. The vesting schedule requires continued employment or service through each applicable vesting date as a condition to the vesting of the applicable installment of the Award and the rights and benefits under this Award Agreement, unless the Grantee’s employment is terminated by the Company under Sections 4.1.1, 4.1.2 or 4.1.5 of the Grantee’s Employment Agreement, in which case the Restricted Stock shall continue to vest pursuant to the vesting schedule, notwithstanding anything to the contrary herein. Employment or service for only a portion of the vesting period, even if a substantial portion, will not entitle the Grantee to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services as provided in Section 9 below or under the Plan.

Nothing contained in this Award Agreement or the Plan constitutes an employment or service commitment by the Corporation or any of its Subsidiaries, affects the Grantee’s status, if he or she is an employee, as an employee at will who is subject to termination without cause, confers upon the Grantee any right to remain employed by or in service to the Corporation or any of its Subsidiaries, interferes in any way with the right of the Corporation or any of its Subsidiaries at any time to terminate such employment or services, or affects the right of the Corporation or any of its Subsidiaries to increase or decrease the Grantee’s other compensation or benefits. Nothing in this paragraph, however, is intended to adversely affect any independent contractual right of the Grantee under any written employment agreement or other agreement with the Corporation.

6. Dividend and Voting Rights. After the Award Date, the Grantee shall be entitled to cash dividends and voting rights with respect to the shares of Restricted Stock subject to the Award even though such shares are not vested, provided that such rights shall terminate immediately as to any shares of Restricted Stock that are forfeited pursuant to Section 9 hereof.

7. Restrictions on Transfer. Prior to the time that they have become vested pursuant to Section 3 hereof, the Change in Control Agreement, or Section 7 of the Plan, neither the Restricted Stock, nor any interest therein, amount payable in respect thereof, or Restricted Property (as defined in Section 10 hereof) may be sold, assigned, transferred, pledged or otherwise disposed of, alienated or encumbered, either voluntarily or involuntarily. The transfer restrictions in the preceding sentence shall not apply to (a) transfers to the Corporation or (b) transfers by will or the laws of descent and distribution.

8. Stock Certificates.

(a) Book Entry Form. The Corporation shall, in its discretion, issue the shares of Restricted Stock subject to the Award either (i) in certificate form as provided in Section 8(b) below or (ii) in book entry form, registered in the name of the Grantee with notations regarding the applicable restrictions on transfer imposed under this Award Agreement.

(b) Certificates to be Held by Corporation; Legend. Any certificates representing shares of Restricted Stock that may be delivered to the Grantee by the Corporation prior to vesting shall be immediately redelivered by the Grantee to the Corporation to be held by the Corporation until the restrictions on such shares shall have lapsed and the shares shall thereby have become vested or the shares represented thereby have been forfeited hereunder. Such certificates shall bear the following legend and any other legends the Corporation may determine to be necessary or advisable to comply with all applicable laws, rules, and regulations:

“The ownership of this certificate and the shares of stock evidenced hereby and any interest therein is subject to substantial restrictions on transfer under an Agreement entered into between the registered owner and Signature Group Holdings, Inc. A copy of such Agreement is on file in the office of the Secretary of Signature Group Holdings, Inc.”

(c) Delivery of Certificates upon Vesting. Promptly after the vesting of any shares of Restricted Stock pursuant to Section 3 hereof, the Change in Control Agreement, or Section 7 of the Plan and the satisfaction of any and all related tax withholding obligations pursuant to Section 11 hereof, the Corporation shall, as applicable, either remove the notations on any shares of Restricted Stock issued in book entry form that have vested or deliver to the Grantee a certificate or certificates evidencing the number of shares of Restricted Stock that have vested (or, in either case, such lesser number of shares as may be permitted pursuant to Section 8.5 of the Plan). The Grantee (or the beneficiary or personal representative of the Grantee in the event of the Grantee’s death or disability, as the case may be) shall deliver to the Corporation any written statements or agreements required pursuant to Section 8.1 of the Plan. The shares so delivered shall no longer be restricted shares hereunder.

(d) Stock Power; Power of Attorney. Concurrent with the execution and delivery of this Award Agreement, the Grantee shall deliver to the Corporation an executed stock power in the form attached hereto as Attachment A, in blank, with respect to the Restricted Stock. The Grantee, by acceptance of the Award, shall be deemed to appoint, and does so appoint by execution of this Award Agreement, the Corporation and each of its authorized representatives as the Grantee’s attorney(s)-in-fact to effect any transfer of unvested forfeited shares (or shares otherwise reacquired by the Corporation hereunder) to the Corporation as may be required pursuant to the Plan or this Award Agreement and to execute such documents as the Corporation or such representatives deem necessary or advisable in connection with any such transfer.

9. Effect of Termination of Employment or Services. If the Grantee ceases to be employed by or ceases to provide services to the Corporation or a Subsidiary (the date of such termination of employment or service is referred to as the Grantee’s “Severance Date”), the Grantee’s shares of Restricted Stock (and related Restricted Property as defined in Section 9 hereof) shall be forfeited to the Corporation to the extent such shares have not become vested pursuant to Section 3 hereof or Section 7.2 of the Plan upon the Severance Date, unless such shares may become vested thereafter pursuant to Section 5 hereof. Upon the occurrence of any forfeiture of shares of Restricted Stock hereunder, such unvested, forfeited shares and related Restricted Property shall be automatically transferred to the Corporation as of the Severance Date, without any other action by the Grantee (or the Grantee’s beneficiary or personal representative in the event of the Grantee’s death or disability, as applicable). No consideration shall be paid by the Corporation with respect to such transfer. The Corporation may exercise its powers under Section 8(d) hereof and take any other action necessary or advisable to evidence such transfer. The Grantee (or the Grantee’s beneficiary or personal representative in the event of the Grantee’s death or disability, as applicable) shall deliver any additional documents of transfer that the Corporation may request to confirm the transfer of such unvested, forfeited shares and related Restricted Property to the Corporation.

10. Adjustments upon Specified Events. Upon the occurrence of certain events relating to the Corporation’s stock contemplated by Section 7.1 of the Plan, the Administrator will make adjustments if appropriate in the number and kind of securities that may become vested under the Award. If any such adjustment is made under Section 7.1 of the Plan and the shares of Restricted Stock are not fully vested upon such event or prior thereto, the restrictions applicable to such shares of Restricted Stock shall continue in effect with respect to any consideration, property or other securities (the “Restricted Property” and, for the purposes of this Award Agreement, “Restricted Stock” shall include “Restricted Property,” unless the context otherwise requires) received in respect of such Restricted Stock. Such Restricted Property shall vest at such times and in such proportion as the shares of Restricted Stock to which the Restricted Property is attributable vest, or would have vested pursuant to the terms hereof if such shares of Restricted Stock had remained outstanding. To the extent that the Restricted Property includes any cash (other than regular cash dividends provided for in Section 6 hereof), such cash shall be invested, pursuant to policies established by the Administrator, in interest bearing, FDIC-insured (subject to applicable insurance limits) deposits of a depository institution selected by the Administrator, the earnings on which shall be added to and become a part of the Restricted Property.

11. Tax Withholding. The Corporation (or any of its Subsidiaries last employing the Grantee) shall be entitled to require a cash payment by or on behalf of the Grantee and/or to deduct from other compensation payable to the Participant any sums required by federal, state or local tax law to be withheld with respect to the vesting of any Restricted Stock. Alternatively, the Grantee or other person in whom the Restricted Stock vests may irrevocably elect, in such manner and at such time or times prior to any applicable tax date as may be permitted or required under Section 8.5 of the Plan and rules established by the Administrator, to have the Corporation withhold and reacquire shares of Restricted Stock at their fair market value at the time of vesting to satisfy any withholding obligations of the Corporation or its Subsidiaries with respect to such vesting. Any election to have shares so held back and reacquired shall be subject to such rules and procedures, which may include prior approval of the Administrator, as the Administrator may impose, and shall not be available if the Participant makes or has made an election pursuant to Section 83(b) of the Code with respect to such Award.

12. Notices. Any notice to be given under the terms of this Award Agreement shall be in writing and addressed to the Corporation at its principal office to the attention of the Secretary, and to the Grantee at the Grantee’s last address reflected on the Corporation’s payroll records, or at such other address as either party may hereafter designate in writing to the other. Any notice shall be delivered in person or shall be enclosed in a properly sealed envelope, addressed as aforesaid, registered or certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government. Any such notice shall be given only when received, but if the Grantee is no longer employed by or ceases to provide services to the Corporation or a Subsidiary, shall be deemed to have been duly given five business days after the date mailed in accordance with the foregoing provisions of this Section 12.

13. Plan. The Award and all rights of the Grantee under this Award Agreement are subject to all of the terms and conditions of the provisions of the Plan, incorporated herein by this reference. The Grantee agrees to be bound by the terms of the Plan and this Award Agreement. The Grantee acknowledges reading and understanding the Plan, the Prospectus for the Plan, and this Award Agreement. In the event of a conflict or inconsistency between the terms and condition of this Award Agreement and of the Plan, the terms and conditions of the Plan shall govern. Unless otherwise expressly provided in other sections of this Award Agreement, provisions of the Plan that confer discretionary authority on the Board or the Administrator do not (and shall not be deemed to) create any rights in the Grantee unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Board or the Administrator so conferred by appropriate action of the Board or the Administrator under the Plan after the date hereof.

14. Entire Agreement. This Award Agreement, the Plan, and the Employment Agreement, together constitute the entire agreement with respect to the subject matter hereof and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof. The Plan may be amended pursuant to Section 8.6 of the Plan. This Award Agreement may be amended by the Board from time to time. Any such amendment must be in writing and signed by the Corporation. Any such amendment that materially and adversely affects the Grantee’s rights under this Agreement requires the consent of the Grantee in order to be

effective with respect to the Award. The Corporation may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely affect the interests of the Grantee hereunder, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof.

15. Counterparts. This Award Agreement may be executed simultaneously in any number of counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

16. Section Headings. The section headings of this Award Agreement are for convenience of reference only and shall not be deemed to alter or affect any provision hereof.

17. Governing Law. This Award Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Nevada without regard to conflict of law principles thereunder.

[Signature Page Follows]

IN WITNESS WHEREOF, the Corporation has caused this Award Agreement to be executed on its behalf by a duly authorized officer and the Grantee has hereunto set his or her hand as of the date and year first above written.

SIGNATURE GROUP HOLDINGS, INC., a Nevada corporation
By:	/S/ CHRIS MANDERSON
Print Name: Chris Manderson
Its:	Executive Vice President and General Counsel
GRANTEE
/S/ CRAIG T. BOUCHARD
Signature
Craig T. Bouchard
Print Name: Craig Bouchard

CONSENT OF SPOUSE

In consideration of the execution of the foregoing Restricted Stock Award Agreement by Signature Group Holdings Inc., I, Melissa Bouchard, the spouse of the Grantee therein named, do hereby join with my spouse in executing the foregoing Restricted Stock Award Agreement and do hereby agree to be bound by all of the terms and provisions thereof and of the Plan.

Dated:                ,         

/S/ MELISSA BOUCHARD

Signature of Spouse

Melissa Bouchard

Print Name

ATTACHMENT A

STOCK POWER

FOR VALUE RECEIVED and pursuant to that certain Restricted Stock Award Agreement between Signature Group Holdings, Inc., a Nevada corporation (the “Corporation”), and the individual named below (the “Individual”) dated as of                     , the Individual, hereby sells, assigns and transfers to the Corporation, an aggregate                      shares of Common Stock of the Corporation, standing in the Individual’s name on the books of the Corporation and represented by stock certificate number(s)                      to which this instrument is attached, or in book entry form to which this instrument pertains, and hereby irrevocably constitutes and appoints Signature Group Holdings, Inc. as his or her attorney in fact and agent to transfer such shares on the books of the Corporation, with full power of substitution in the premises.

Dated:             ,            

/S/ CRAIG T. BOUCHARD

Signature

Craig T. Bouchard

Print Name:

(Instruction: Please do not fill in any blanks other than the signature line and printed name. The purpose of the assignment is to enable the Corporation to exercise its sale/purchase option set forth in the Restricted Stock Award Agreement without requiring additional signatures on the part of the Individual.)

EX-10.3

EXHIBIT 10.3

AMENDMENT TO EMPLOYMENT AGREEMENT

This AMENDMENT TO EMPLOYMENT AGREEMENT (the “Amendment”), is made and entered into June 5, 2013, by and among Signature Group Holdings, Inc., a Nevada corporation (the “Company”) and W. Christopher Manderson (“Executive”).

WHEREAS, the parties desire to amend that certain Employment Agreement dated November 5, 2012 by and between the Company and Executive (the “Agreement”) to extend the Term of Agreement by four months.

NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements contained in this Agreement and other good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

1. Amendments. Notwithstanding anything to the contrary in the Agreement, Section 1.1 of the Agreement shall be amended in its entirety to provide as follows:

“1.1 Term of Employment. The “Term” pursuant to this Agreement shall commence on November 1, 2012 and, unless terminated earlier pursuant to Section 4 hereto, shall terminate on April 30, 2014.”

2. Effect of Amendment. Except as expressly amended hereby, the Agreement shall remain unchanged and in full force and effect. This Amendment shall be deemed part of and is hereby incorporated into the Agreement. To the extent that any term or condition of the Agreement shall contradict or be in conflict with any term or condition of this Amendment, the terms and conditions of this Amendment shall control. This Amendment may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement, and it is understood that all parties need not sign the same counterpart. In the event that any signature is delivered by facsimile or electronic transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) same with the same force and effect as if such signature were an original thereof. This Amendment cannot be altered, amended, changed or modified in any respect or particular except by an instrument in writing signed by all of the parties hereto.

IN WITNESS WHEREOF, this Amendment has been signed by the parties hereto effective as of the date set forth above.

SIGNATURE GROUP HOLDINGS, INC.
By:
	Kyle Ross,
	Executive Vice President and
	Chief Financial Officer

W. CHRISTOPHER MANDERSON

EX-10.4

Exhibit 10.4

AMENDMENT TO EMPLOYMENT AGREEMENT

This AMENDMENT TO EMPLOYMENT AGREEMENT (the “Amendment”), is made and entered into June 5, 2013, by and among Signature Group Holdings, Inc., a Nevada corporation (the “Company”) and Kyle Ross (“Executive”).

WHEREAS, the parties desire to amend that certain Employment Agreement dated August 2, 2011 by and between the Company and Executive (the “Agreement”) to extend the Term of Agreement by four months.

NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements contained in this Agreement and other good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

1. Amendments. Notwithstanding anything to the contrary in the Agreement, Section 1.1 of the Agreement shall be amended in its entirety to provide as follows:

“1.1 Term of Employment. The “Term” pursuant to this Agreement shall commence on July 1, 2011 and, unless terminated earlier pursuant to Section 4 hereto, shall terminate on April 30, 2014.”

2. Effect of Amendment. Except as expressly amended hereby, the Agreement shall remain unchanged and in full force and effect. This Amendment shall be deemed part of and is hereby incorporated into the Agreement. To the extent that any term or condition of the Agreement shall contradict or be in conflict with any term or condition of this Amendment, the terms and conditions of this Amendment shall control. This Amendment may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement, and it is understood that all parties need not sign the same counterpart. In the event that any signature is delivered by facsimile or electronic transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) same with the same force and effect as if such signature were an original thereof. This Amendment cannot be altered, amended, changed or modified in any respect or particular except by an instrument in writing signed by all of the parties hereto.

IN WITNESS WHEREOF, this Amendment has been signed by the parties hereto effective as of the date set forth above.

SIGNATURE GROUP HOLDINGS, INC.
By:	/S/ W. CHRISTOPHER MANDERSON
	W. Christopher Manderson, Executive Vice President and General Counsel

/S/ KYLE ROSS

KYLE ROSS

EX-99.1

Exhibit 99.1

Signature Group Holdings Announces Settlement Agreement

with New Signature LLC

New Proxy Slate to be Presented at 2013 Annual Shareholders Meeting

Craig T. Bouchard Named Chairman and Chief Executive Officer

Sherman Oaks, CA June 5, 2013 — Signature Group Holdings, Inc. (OTCQX: SGGH) today announced that it has entered into a settlement agreement with New Signature LLC and certain of its affiliates for a new company proxy slate to be presented for election at the 2013 Annual Shareholders Meeting on July 16, 2013. As part of the settlement, New Signature LLC will withdraw its slate and support the company’s slate.

In conjunction with the settlement, Craig T. Bouchard has been appointed as Chairman and Chief Executive Officer. “I look forward to working closely with Craig and the team in pursuing new strategic growth opportunities for Signature as the company enters the next phase in its evolution,” said director Phil Tinkler. “Given the hard work of the team since the company’s emergence from bankruptcy, we are now in a position to utilize pro-rata rights offerings to procure the capital for large acquisitions. We believe our investors have an appetite to invest more capital into Signature and our goal with Craig is to find and execute those opportunities.” To facilitate these rights offerings, the settlement agreement supports the company’s proposal to increase its authorized shares of common stock.

Under the terms of the settlement agreement, the slate will consist of Craig Bouchard, Peter Bynoe, Ed Lamb, Raj Maheshwari and Phil Tinkler. As part of the settlement agreement, Christopher Colville stepped down as interim Chief Executive Officer and Chairman of the Board of Directors as of June 4, 2013.

“I have a history of building businesses and am looking forward to this opportunity of working with the board and the excellent management team at the company to build shareholder value,” stated Mr. Bouchard.

The company anticipates filing an updated proxy statement by the end of the week.

About Signature Group Holdings, Inc.

Signature Group Holdings, Inc. is a diversified enterprise with current principal activities in industrial supply and special situations finance. Signature has significant capital resources and will actively seek additional acquisitions as well as growth opportunities for its existing businesses. Signature has federal net operating loss tax carry forwards of approximately $886.9 million. For more information about Signature, visit its corporate website at www.signaturegroupholdings.com.

Cautionary Statement Regarding Forward-Looking Statements

This news release may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based upon current expectations and beliefs of the Signature. Signature does not undertake to update or revise forward-looking statements in this news release to reflect the impact of circumstances or events that arise after the date the forward-looking statements are made, except as required under applicable securities laws. Signature’s Annual Report on Form 10-K for the year ended December 31, 2012, subsequent Quarterly Reports on Form 10-Q, recent Current Reports on Form 8-K, and other Securities and Exchange Commission (“SEC”) filings, discuss important risk factors that could contribute to such changes in the forward-looking statements or otherwise affect Signature’s business, results of operations and financial condition. No stock exchange or regulatory authority has approved or disapproved of the information contained herein.

Additional Information and Where to Find It

This document may be deemed to be solicitation material in respect of the solicitation of proxies from stockholders for Signature’s 2013 Annual Meeting of Stockholders (the “2013 Annual Meeting”). Signature has filed a definitive proxy statement and other documents regarding the 2013 Annual Meeting with the SEC and will provide an amended definitive proxy statement and a WHITE proxy card to the stockholders of record entitled to vote at the 2013 Annual Meeting reflecting the changes discussed in this press release. BEFORE MAKING ANY VOTING DECISION, SIGNATURE’S STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) CAREFULLY AND IN ITS ENTIRETY BECAUSE IT CONTAINS IMPORTANT INFORMATION ABOUT THE PROPOSALS AND CERTAIN OTHER MATTERS TO BE CONSIDERED AT THE 2013 ANNUAL MEETING.

Investors are able to obtain the definitive proxy statement, the amended definitive proxy statement, when it becomes available, and other relevant materials free of charge at the SEC’s website (http://www.sec.gov). In addition, documents filed with the SEC by Signature, including the proxy statement and Signature’s Annual Report on Form 10-K for the year ended December 31, 2012, as amended, are available free of charge from Signature, at Signature’s website (http://www.signaturegroupholdings.com) or upon written request directed to: Signature Group Holdings, Inc., Attn: Investor Relations, 15303 Ventura Blvd., Suite 1600, Sherman Oaks, CA 91403.

Participants in the Solicitation

Signature and its directors, nominees, and executive officers may be deemed to be participants in the solicitation of proxies from Signature’s stockholders with respect to the matters to be considered at the 2013 Annual Meeting. Information regarding the names, affiliations, and direct or indirect interests (by security holdings or otherwise) of these persons are described in Signature’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012, as filed

by Signature with the SEC on April 1, 2013, and as amended on April 30, 2013, and will be described in Signature’s definitive proxy statement to be filed with the SEC relating to its 2013 Annual Meeting.

Media Contact:

Randi Rosenbloom

Ogilvy Public Relations

212-880-5302