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Exhibit
10.10
RETENTION
AGREEMENT
This RETENTION AGREEMENT (the
“ Agreement ”) is entered into effective as of
December 17, 2007, by and between NovaStar Financial, Inc.
(the “ Company ”) and Todd M. Phillips (the
“ Employee ”).
WHEREAS, the Company desires
to retain the Employee’s services under the terms and
conditions of this Agreement;
WHEREAS, the Employee desires
to continue his or her employment with the Company and to qualify
for a Retention Bonus as set forth herein;
NOW THEREFORE, in
consideration of the mutual undertakings hereinafter set forth, and
for other good and valuable consideration, which each party hereby
acknowledges, it is agreed as follows:
1. Continued
Employment . Employee’s continued employment with the
Company will be subject to the terms and conditions of this
Agreement. Notwithstanding anything in this Agreement, Employee
acknowledges and agrees that this Agreement does not constitute a
contract of employment and that, except to the extent otherwise
expressly provided in a separate written contract of employment
between the Company and Employee, Employee at all times remains an
at-will employee of the Company subject to the Company’s
employment and/or personnel policies and/or practices.
2. 2007 Retention
Bonus . In addition to Employee’s current salary, any
variable compensation or other normal bonus opportunities, and
other compensation and benefits (including, without limitation,
severance benefits), Employee will receive additional compensation
in the amount of $68,400.00 (the “ 2007 Retention
Bonus ”) to be 100% vested and fully earned on
December 31, 2007. The 2007 Retention Bonus will paid on the
first regularly scheduled pay date in 2008, less all applicable
withholdings, upon and subject to all of the conditions specified
in this Agreement.
3. 2008 Retention
Bonus . In addition to Employee’s current salary, any
variable compensation or other normal bonus opportunities, and
other compensation and benefits (including, without limitation,
severance benefits), Employee will receive, upon and subject to all
of the conditions specified in this Agreement, additional
compensation in the amount of $72,500.00 (the “ 2008
Retention Bonus ”) to be fully vested and earned in four
(4) equal installments at the end of each of four
(4) calendar quarters beginning June 30, 2008, and each
such installment shall be paid on the first regularly scheduled pay
date following the end of such calendar quarter, less all
applicable withholdings.
4. Conditions and Timing
of Payment .
4.1. Entitlement to
Benefit . Subject to the other provisions of this
Agreement:
(a) Employee will be entitled
to payment of the vested portion of the 2007 Retention Bonus if
Employee remains continuously employed by the Company through
December 31, 2007. Employee will be entitled to the vested
portion of the 2008 Retention Bonus if Employee remains
continuously employed by the Company through the end of the
calendar quarter upon or prior to which such portion
vested.
(b) Notwithstanding any other
provision of this Agreement, the full amount of the 2007 Retention
Bonus and the full amount of the 2008 Retention Bonus will fully
vest and be deemed to be fully earned, and Employee will be
entitled to payment of the full amount of the 2007 Retention Bonus
and 2008 Retention Bonus, upon the date of termination of
Employee’s employment with the Company (all positions)
without Cause (as defined below).
4.2. Events of Forfeiture;
Death or Disability . In the event of any of the following, all
amounts of the 2007 Retention Bonus and 2008 Retention Bonus for
which all conditions to vesting have not yet been satisfied will be
immediately forfeited in their entirety and no prorated portion
thereof will be paid:
(a) Employee voluntarily
terminates Employee’s employment with the Company (any
position); or
(b) Employee’s
employment with the Company (any position) is terminated by the
Company for “Cause”
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