Securities distributed byVP Distributors, Inc.

100 Pearl Street,

Hartford, CT 06103

You will be eligible to participate in the Virtus incentive plans available to other senior executives. You will be eligible to participate in the Annual Incentive Plan (AIP) and for 2014 you will be guaranteed a minimum award of $1,800,000 or the actual award as approved by the Compensation Committee of the Board of Directors, whichever is greater. 2014 AIP awards are anticipated to be paid on or about March 15, 2015. You must be actively employed and in good standing at the time of payout in order to receive any of the Annual Incentive Awards referenced in this letter. Notwithstanding the foregoing, you will receive the 2014 Annual Incentive Award, and the balance of your first year’s salary, if you are involuntarily terminated prior to March 16, 2015, other than for the following reasons: (a) your death or disability (in the event of your death or disability, as defined in Virtus’ Annual Incentive Plan documents, you will be paid in accordance with that Plan); or (b) any conduct by you that is materially detrimental to Virtus’ interests, including but not limited to: (i) your conviction or plea or nolo contendere to a felony or to a lesser crime involving fraud or moral turpitude; (ii) an act of misconduct (including, without limitation, a violation of the Code of Conduct or comparable document of which you have notice of Virtus or of any affiliate): (iii) your unsatisfactory performance, after reasonable notice and opportunity to cure; (iv) your failure to obtain or maintain any license or other authority to enable you legally to perform your job; (v) your becoming subject, permanently or temporarily, to any of the restrictions set forth in Section 9(a) or Section 9(b) of the Investment Company Act of 1940 as amended (the “1940 Act”) or (vi) your failure or refusal to perform legal directives of the Chief Executive Officer of Virtus. The determination of whether or not your termination was for any such reason will be determined in the sole reasonable discretion of Virtus.

Beginning in 2015, you will also be eligible to participate in the Long-Term Incentive Plan (LTIP) with a target award of $400,000 issued in performance share units (PSUs). Following the end of the performance periods, the results are certified and the PSU’s are adjusted by a plan performance factor of 50% at threshold and 200% at maximum, and then converted to RSU’s with cliff vesting which will occur on March 15, 2018.

100 Pearl Street,

Hartford, CT 06103

Within 30 days of your start date, you will receive an initial sign on cash bonus of $100,000. You will be required to repay the award if you voluntarily terminate your employment or are involuntarily terminated for the reasons specified above in clause (b) of the Annual Incentives paragraph within twelve months of employment. Within 30 days following the date of your one year anniversary, you will receive an additional sign-on cash bonus of $100,000. Bonus awards are paid less required withholdings. You must be actively employed and in good standing at the time of payout to receive each of these Sign On Awards.

On the first eligible grant date after your hire in 2014, you will receive a sign-on equity grant of $500,000. The grant will be awarded as Restricted Stock Units with three year cliff vesting. In addition, we will recommend to the Board of Directors that you be awarded a second grant of $400,000 on the first eligible grant date after your one year anniversary. This grant will be awarded as Restricted Stock Units with ratable vesting over a three year period, with one-third of the Grant vesting on each of the first three anniversaries of the grant date, subject to the terms of the applicable documents.

100 Pearl Street,

Hartford, CT 06103

/s/ Barry M. Mandinach