Document:

a5528870ex10-4.htm

    EXHIBIT
      10.4

     

    EXECUTIVE
      EMPLOYMENT AGREEMENT

    

    THIS
      EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into as
      of   November 5, 2007 by and between COMMERCE PLANET, INC., a
      Utah corporation (the “Company”), and Anthony Roth, residing at the address set
      forth on the signature page hereto (the "Executive") and shall be effective
      upon
      signing.

     

    R
      E C I T A L S:

     

    A.           The
      Company desires to employ the Executive on the terms and conditions set forth
      in
      this Agreement and the Executive desires to accept such employment on the terms
      and conditions set forth herein.

     

    B.           The
      Executive acknowledges that his covenants and the Company’s remedies set forth
      in Sections 7 through 11 are reasonable and necessary to protect the Company’s
      business interests and goodwill.

     

    NOW,
      THEREFORE, the parties agree as follows:

    

    1.           Employment.  The
      Company hereby employs the Executive in the capacity of Chief Executive Officer
      and President, and the Executive hereby accepts the employment, on the terms
      and
      conditions hereinafter set forth.  Executive shall also serve on the
      Board of Directors of the Company for no additional compensation other than
      that
      set forth herein.

    

    2.           Duties.

     

    (a)
Primary
      Duties.  During the Term (as defined below), the Executive’s
      principal duties and responsibilities shall include, but are not limited to,
      the
      following: being responsible for the day to day operations of the Company;
      working with the board of directors to define long-term strategic initiatives;
      insuring that directives from the Board of Directors are implemented to achieve
      maximum profitability of the Company’s operations, maximize shareholder value;
      and overseeing the operations of the Company and its wholly owned subsidiaries.
      The Executive’s duties shall be similar to those customarily performed by
      comparable officers of similar companies.

    

    (b)
      Other Activities.  The Executive agrees to perform Executive’s
      duties and responsibilities and to devote his full business time, energies,
      and
      best efforts to the performance thereof, except for (i) service on boards of
      directors and advisory boards of companies that do not compete with the Company
      and that are disclosed in writing to the Company's Board of Directors (the
      "Board") (any such board positions held as of the date of this Agreement are
      set
      forth on Exhibit A to this Agreement) and (ii) any other activities, in each
      case, as the Board may consent in writing and as do not materially interfere
      with Executive's conduct of his duties under this Agreement.  This
      paragraph shall not be construed as preventing the Executive from making
      financial investments, as long as such investments do not interfere with the
      Executive’s conduct of his duties under this Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (c) Additional
      Capacities.  During the Term, the Executive shall serve in any
      additional offices or positions of the Company and/or its subsidiaries and/or
      affiliates under common control with the Company (such subsidiaries and
      affiliates which are in the same business as the Company are referred to herein
      as the "Company Related Entities"), to which he may be elected or appointed
      by
      appropriate action of the Company or any Company Related Entity.  The
      Executive shall serve in any such additional capacities without separate
      compensation for so serving, unless otherwise authorized in writing by the
      Board.

     

    3.           Location
      of Service.  During the Term, the Executive shall perform
      Executive's duties at the offices of the Company located in Goleta, California,
      or as otherwise determined by the Company.  Executive currently
      resides in Orange County, California but shall either relocate to home within
      50
      miles of Goleta, California within ten (10) months of the signing of this
      Agreement or reach a mutual agreement with the Board based upon Executive’s
      performance and required presence at the Company’s
      headquarters.  Executive acknowledges that relocation may become a
      requirement for maintaining the position, and such review will be included
      in
      the Executive’s performance measures. Executive’s failure to relocate to Goleta,
      California within the time specified in this provision shall be deemed a
      material breach of this Agreement pursuant to Section 14(a)(4)(iv)
      below.

     

    4.           Nature
      of Employment.  The Executive’s employment with the Company is "at
      will" and is for no specific period of time. As a result, either the Executive
      or the Company may terminate the employment relationship at any time for any
      reason, with or without cause.  Termination of employment will not
      affect the rights and obligations which this Agreement expressly contemplates
      will be performed following such termination.  The period commencing
      on the date of this Agreement and ending on the date of the Executive’s
      termination is the "Term."

     

    5.           Salary
      and Other Benefits.  During the Term, as compensation for the
      services to be rendered by the Executive to the Company pursuant to this
      Agreement, the Executive shall be paid the following compensation and other
      benefits:

     

    (a) Salary.  The
      Company will pay the Executive a base salary at the annual rate of $350,000,
      payable in accordance with the Company’s regular payroll
      policies.  The Executive’s base salary level will be reviewed annually
      by the Board, but shall not be adjusted downward during the term of the contract
      in excess of 10% in any twelve (12) month period without cause.

     

    (b)
Cash
      Bonus.  As
      additional compensation, Executive shall be eligible to receive a bonus equal
      to
      two and one-half percent (2.5%) of the Company’s net profits under the payment
      terms below, for the duration of Executive’s term with The Company.

     

    
      	
               

            	
              i.

            	
              Bonus
                Payment Due Date– Payment will be due upon the close of the second
                quarter of the year and upon the fourth quarter of the year for all
                bonuses earned prior to such closing period.  All payments will
                be made no later than five (5) business days after the filing of
                The
                Company’s“10Q” or “10K” of the corresponding quarter.  The
                effective start date for payment eligibility will be January 1,
                2008.

            

    

     

    
      
        
        

      

      
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              ii.

            	
              Payment
                Amount– Of the total amount due and payable upon the close of the
                second quarter, fifty percent (50%) will be held in a reserve escrow
                account.  The balance of the reserve will be released to
                Executive no later than five (5) business days after the filing of
                the 10K
                including the results of the fourth quarter, assuming that the last
                two
                quarters adjusted net profits are not twenty (20%) percent less than
                the
                first two quarters of the year.  The reserved funds will be
                returned to the Company in the event that there is a negative variation
                greater than twenty percent (20%) within the net
                profits.

            

      	 	 	 

      	 	 	In
              addition to the reserve amount being due, the bonus for the final two
              quarters of the year will be due and payable in their full amount with
              no
              funds held in reserve no later than five (5) business days after the
              filing of the 10K which includes the results of the fourth
              quarter.

      	 	 	 

    

    
    

    (c) Nonstatutory
      Stock Option.  As additional compensation, the Company hereby
      grants Executive an option expiring in 5 years to purchase two and one-half
      percent (2.5%) of restricted Rule 144 common stock (see attached Stock Option
      Agreement) of the Company’s then outstanding common stock based upon a fully
      diluted calculation as at the date of hire.  The purchase price shall
      be the price of the share on the date of execution of this
      Agreement.  The shares shall vest to Executive on a pro rata quarterly
      basis over the course of the original three year Term of this
      Agreement.  In the event Executive’s employment is severed prior to
      completion of the original term (3 years) all rights to unvested options will
      immediately be terminated. The number of shares subject to this option shall
      be
      proportionately adjusted for any change in the stock structure of the Company
      because of share dividends, recapitalizations, reorganizations, mergers, or
      otherwise.  The option is not assignable and may only be exercised by
      Executive during the Term of this Agreement or, once vested, prior to expiration
      thereof.

     

    (d)
      Market Capitalization Stock Option Bonus.  As additional
      compensation, the Company hereby grants Executive the option to purchase one
      million (1,000,000) shares of the Company’s restricted shares of Company common
      stock if and when the Company’s market capitalization reaches the following
      levels:

     

    (1) 100
      Million market capitalization - Grant of option for 250,000 shares; once
      achieved, this bonus provision is terminated.

     

    (2) 133
      Million market capitalization - Grant of option for 250,000 shares; once
      achieved, this bonus provision is terminated.

     

    (3) 167
      Million market capitalization - Grant of option for 250,000 shares; once
      achieved, this bonus provision is terminated.

     

    
      
        
        

      

      
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    (4)
      200
      Million market capitalization - Grant of option for 250,000 shares; once
      achieved, this bonus provision is terminated.

     

    Executive
      agrees and acknowledges that if and when each of the four market capitalization
      goals listed in this Section 5(d) is achieved, that particular grant is
      automatically terminated.  Executive shall exercise the option on or
      before the first anniversary of the first instance a market capitalization
      goal
      is achieved. The purchase price shall be the price of the share on the date
      of
      execution of this Agreement.

     

    (e)
      Housing Allowance.  The Company shall pay Executive a housing
      allowance of up to Three Thousand Five Hundred Dollars ($3,500) per month for
      the first ten (10) months of the Term or until Executive relocates to corporate
      head quarters, whichever occurs first.  The Company shall pay moving
      expenses submitted in advance for approval with a minimum of three qualified
      bids not to exceed $15,000.

     

    (f) Vacation
      and Sick Leave.  Executive shall be entitled to take up to three
      weeks (fifteen working days) paid vacation during the first year and four weeks
      for each subsequent year therafter. To the extent possible, vacation leave
      shall
      be scheduled at such times as will not interfere with the performance of the
      Executive’s duties under this Agreement. Accrued unused vacation shall carry
      over from year to year in accordance with the then corporate employment
      guidelines.  Executive shall be entitled to up to five (5) working
      days paid sick leave during each calendar year. Unused sick days will not accrue
      and the Company shall not be obligated to compensate Executive for any unused
      sick days at any time.

     

    (g) Expenses.  The
      Company will pay or reimburse the Executive for all reasonable business expenses
      in accordance with the Company’s policy as in effect from time to time,
      including mobile telephone, email, laptop, and other standard tools and expenses
      as needed to perform duties.

     

    6.           Definition
      of Confidential Information.

     

    (a) Definition.  For
      the purposes of this Agreement, "Confidential Information" means any
      information, whether or not reduced to writing, (i) that is not generally known
      in the Company’s trade or industry, (ii) that the Company and/or any Company
      Related Entity treats, or is obligated to treat, as confidential and (iii)
      that
      the Executive may create or have access to in connection with the Executive’s
      employment with the Company; provided, that Confidential Information does not
      include information that becomes publicly and generally known (other than
      through any unauthorized act of the Executive).

     

    (b) Duty
      to
      Inquire.  If the Executive has some question as to whether certain
      information falls within the scope of Confidential Information as defined
      herein, the Executive agrees to treat such information as Confidential
      Information until informed otherwise in writing by the Company.

     

    
      
        
        

      

      
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    7.           Obligations
      Respecting Confidential Information.

     

    (a) Non-disclosure
      and Use.  During the term of the Executive’s employment and
      thereafter, the Executive agrees (i) not to disclose the Confidential
      Information except as required in the course of the Executive’s employment, (ii)
      not to copy or use the Confidential Information except as required for the
      performance of the Executive’s duties hereunder, and (iii) to comply with any
      procedures that the Company may adopt to preserve the confidentiality of the
      Confidential Information.

     

    (b) Ownership.  The
      Executive acknowledges that the Company owns all right, title and interest
      in
      and to the Confidential Information and that the Executive acquires no right,
      title or interest in any Confidential Information by virtue of the Executive’s
      employment by the Company or access to or creation of Confidential
      Information.

     

    (c) Return.  Upon
      termination of the Executive’s employment with the Company for any reason, the
      Executive agrees to deliver to the Company all copies of any data,
      records, documents and other materials, including files stored on electronic
      or
      other media, in the Executive’s possession that contain any Confidential
      Information.  The Executive understands that he may not retain copies
      of any Confidential Information and must delete files containing any
      Confidential Information stored on any computer that the Executive
      owns.  The Executive agrees, if requested by the Company, to confirm
      in writing that the Executive has complied with the foregoing obligations and
      to
      attend a termination interview with a representative of the Company to discuss
      any questions that the Executive may have about his continuing obligations
      under
      this Agreement.

     

    8.           Inventions.

     

    (a) Inventions
      Defined.  For the purposes of this Agreement, "Inventions" mean
      any concepts, ideas, processes, designs, specifications, improvements, trade
      secrets, discoveries or other developments, whether or not reduced to practice
      or patentable, that the Executive conceives or creates, in whole or in part,
      alone or jointly with others, during his employment by the Company, whether
      during normal work hours or otherwise, which (i) directly relate to the
      Company’s business (including without limitation the Company’s present or
      contemplated products, services and research) or to tasks assigned to the
      Executive by or on behalf of the Company or (ii) are written or developed using
      any of the Company’s equipment, facilities, materials, trade secrets, labor,
      money, time or other resources.

     

    (b) Disclosure
      and Assignment
      of Inventions.  The Executive agrees that he will promptly
      disclose to the Company all Inventions and that all Inventions shall be the
      sole
      and exclusive property of the Company.  The Executive hereby assigns
      to the Company all of his right, title and interest in all
      Inventions.

     

    (c) Patents.  During
      the
      period of his employment and at any time thereafter, the Executive shall, upon
      the Company’s request, execute U.S. and foreign copyright registrations and
      patent applications and/or any other legal documents necessary to transfer
      all
      right, title and interest in and to the Inventions to the Company and assist,
      at
      the Company’s request and expense, in any proper manner in obtaining and
      enforcing such copyrights and patents.  In the event that the Company
      is unable, after reasonable effort, to secure the Executive’s signature on any
      such registrations, application and other legal documents for any of the
      aforesaid purposes, the Executive hereby irrevocably designates and appoints
      the
      Company and its duly authorized directors, officers and agents as his agent
      and
      attorney-in-fact, to do all lawfully permitted acts (including but not limited
      to the execution, verification and filing of applicable documents) with the
      same
      legal force and effect as if performed by the Executive.

     

    
      
        
        

      

      
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    (d) Preexisting
      Inventions.  The Executive has identified on Exhibit B to this
      Agreement, by title and dates of documents describing them, all inventions
      in
      which the Executive has any right, title or interest and/or which the Executive
      conceived or created at any time prior to the start of his employment by the
      Company.  Any right, title or interest in any preexisting invention
      relating to the business of the Company that, at any time, was held by another
      entity has been properly assigned to the Company and no other entity has any
      right, title or interest in any such invention.  9.Written
      Materials.

     

    (e) Ownership.  The
      Executive acknowledges and agrees that all writings and works of authorship,
      including without limitation, analyses, memoranda, proposals, reports, speeches,
      studies, software, logic diagrams, flow charts, decision charts, drawings,
      procedural diagrams, documentation manuals of any kind produced by him related
      to or in the course of his work for the Company ("Works") are works made for
      hire and the property of the Company, including, without limitation, any
      copyrights in those Works.  To the extent any such Works may not, by
      operation of law or otherwise, be a work made for hire, the Executive hereby
      assigns to the Company the ownership of and all copyrights in and to such Works,
      whether published or unpublished, and the right to secure renewals of such
      copyrights.  The Executive further agrees upon request to execute such
      specific assignments or instruments and take any action necessary to enable
      the
      Company to secure all copyright rights in such Works and/or extensions or
      renewals thereof.

     

    (f) Moral
      Rights
      Waiver.  The Executive understands that the term "moral rights"
      means any rights of paternity or integrity, including any right to claim
      authorship of a copyrightable work, to object to a modification of such
      copyrightable work, and any similar right existing under the judicial or
      statutory law of any country in the world or under any treaty, regardless of
      whether or not such right is denominated or generally referred to as a "moral
      right," including, without limitation, the rights of attribution and integrity
      in works of visual art pursuant to 17 U.S.C. § 106A.  The Executive
      irrevocably waives and agrees never to assert any moral rights that he may
      have
      in any Works, even after any termination of his employment with the
      Company.

     

    (g) Exclusions.  Notwithstanding
      anything in this Section 9 to the contrary, "Works" as used herein shall
      not include articles authored by the Executive for publication in academic
      or
      trade journals.  No assignments in this Agreement shall extend to
      Inventions or Works, the assignment of which Executive proves would be
      prohibited by Section 2870 of the California Labor Code (a copy of which is
      attached hereto as Exhibit C).

     

    
      
        
        

      

      
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    10.           Incorporation
      of Preexisting Materials.  Unless the Company otherwise agrees in
      writing in each instance, the Executive agrees not to include or otherwise
      incorporate into any Inventions or Works any preexisting materials, except
      for
      preexisting materials owned by the Executive.  To the extent that any
      preexisting materials owned by the Executive are contained or embedded in any
      Inventions or Works or are necessary to the proper operation or use thereof
      and
      in the absence of a written agreement with the Company to the contrary, the
      Executive hereby grants to the Company an irrevocable, perpetual, worldwide,
      fully-paid, royalty-free, nonexclusive license to use such preexisting materials
      in any manner and prepare derivative works thereof in connection with the use,
      operation, modification, transfer or disposition of such Invention or
      Works.  The Executive hereby agrees to indemnify and hold the Company
      harmless from any claim that the Company’s use of any preexisting materials that
      he includes or otherwise incorporates into any Invention or Works is
      infringing.

     

    11.           Post
      Employment Restrictions.

     

    (a) Covenant
      Not-to-Solicit Customers.  During the Executive’s employment with
      the Company and for a period of one (1) year after the Date of Termination
      (as
      defined in Section 14(b)(2)), the Executive shall not directly or indirectly,
      individually or on behalf of any other person or entity, whether as principal,
      agent, stockholder, employee, consultant, representative or in any other
      capacity, contact any person or entity, which:

     

    (1) is
      a customer or client of the Company and/or any Company Related Entity as of
      the
      Date of Termination,

     

    (2) has
      been a customer or client
      of the Company and/or any Company Related Entity at any time within one (1)
      year
      prior to the Date of Termination, or

     

    (3) is
      a prospective customer or
      client that the Company and/or any Company Related Entity is actively soliciting
      as of the date the Executive’s employment terminates, for the purpose of selling
      products or services similar to any of the products and services offered for
      sale to such customers or prospective customers by the Company and/or any
      Company Related Entity as of the Date of Termination, provided such customer
      or
      client becomes an actual customer or client within three (3) months of the
      date
      of termination.

     

    (b) Covenant
      Not-to-Solicit Executives or Consultants.  During the Executive’s
      employment with the Company and for a period of one (1) year after the Date
      of
      Termination, the Executive shall not directly or indirectly, individually or
      on
      behalf of any other person or entity, whether as principal, agent, stockholder,
      employee, consultant, representative or in any other
      capacity:  recruit or solicit any person to leave the employ of the
      Company and/or any Company Related Entity.

     

    (c) Severability
      of
      Restrictions.  In the event that any of the provisions of this
      Section 11 shall be held to be invalid or unenforceable, the remaining
      provisions thereof shall nevertheless continue to be valid and enforceable
      as
      though the invalid or unenforceable parts had not been included
      therein.  In the event that any provision of this Section 11 relating
      to the time period and/or the areas of restriction and/or related aspects shall
      be declared by a court of competent jurisdiction to exceed the maximum
      restrictiveness such court deems reasonable and enforceable, the time period
      and/or areas of restriction and/or related aspects deemed reasonable and
      enforceable by the court shall become and thereafter be the maximum restriction
      in such regard, and the restriction shall remain enforceable to the fullest
      extent deemed reasonable by such court.

     

    
      
        
        

      

      
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    12.           Remedies.  The
      Executive understands and agrees that the Company and the Company Related
      Entities will suffer irreparable harm in the event that the Executive fails
      to
      comply with the Executive’s obligations under Sections 7, 8,
9, 10 and 11 of this Agreement and that monetary
      damages
      will be inadequate to compensate the Company for such breach.  The
      Executive agrees that the Company and the Company Related Entities shall, in
      addition to any other remedies available to them, be entitled to preliminary
      and
      permanent injunctive relief against any breach by the Executive of the covenants
      and agreements contained in Sections 7, 8, 9, 10 and
11 hereof without having to post bond.  The parties submit to
      the exclusive jurisdiction of the state or federal courts located in the State
      of California in connection with any dispute, controversy or claim between
      the
      parties arising out of or related to any term or condition of Sections 7,
8, 9, 10 and 11.  In addition to
      Executive's other remedies at law or under this Agreement (including enforcement
      of the Severance Payments), if the Company shall fail to timely make any
      payments due Executive hereunder, the provisions of Section 12 shall immediately
      cease to apply.

     

    13.           No
      Prior Employment Restrictions.  The Executive warrants that the
      Executive is not restricted by any restrictive covenant or confidentiality
      agreement of any type or nature from any prior employment from performing any
      of
      the duties required by this Agreement.  The Executive agrees that he
      will not improperly use or disclose confidential information or trade secrets
      of
      any prior employer or third person or bring onto the Company’s premises any
      confidential information or trade secrets belonging to any prior employer or
      third person unless the Executive has received the prior written consent of
      such
      prior employer or third party.  Should a prior employer or third party
      assert that the Executive is restricted from performing any of the duties
      required by this Agreement or has improperly used any confidential information
      or trade secrets belonging to such prior employer or third person, the Executive
      shall indemnify, defend, and hold harmless the Company from any attorneys’ fees
      and costs incurred in defending these claims, along with paying any and all
      damages that may be assessed against the Company.

     

    14.           Term
      and Termination.

     

    (a)
      Events of Termination.  The initial term (the "Term") of
      Executive's employment shall be for a period of three (3) years from the
      Effective Date unless terminated earlier pursuant to the terms
      hereof.  Employment of the Executive under this Agreement will be
      terminated:

     

    (1)
      By the
      Executive’s death.

     

    
      
        
        

      

      
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    (2) As
      a result of the
      Executive’s Total Disability.  For the purposes of this Agreement,
      "Total Disability" means that the Executive (i) has been declared legally
      incompetent (the date of such declaration being deemed to be the date on which
      the disability occurred), (ii) is unable to substantially perform the
      Executive’s duties for 180 days in any twelve-month period as a result of a
      physical or mental illness or injury, as determined by the Board, or (iii)
      has
      been found to be disabled pursuant to a Disability Determination (as defined
      herein).

     

    (3) By
      mutual agreement of the Executive and the Company.

     

    (4)
      By the Company for
      Cause.  For purposes of this Agreement "Cause" shall mean only the
      following:

     

    (i) a
      conviction of or a plea of guilty or nolo contendre by the Executive to (x)
      any
      felony, or a misdemeanor involving fraud, embezzlement, theft, moral turpitude,
      or dishonesty or other criminal conduct against the Company or any third party,
      or (y) any intentional misdemeanor involving physical harm or bodily
      injury;

     

    (ii) any
      intentional or grossly negligent act or omission by the Executive which
      reasonably could cause material harm to the Company or materially prejudice
      the
      Company's  position  in  the  business
      community;

     

    (iii) habitual
      alcohol or substance abuse;

     

    (iv)
      the
      failure of the Executive to comply with a proper directive of the Company and/or
      any Company Related Entity or to observe the policies of the Company and/or
      any
      Company Related Entity generally applicable to executives of the Company with
      respect to state or federal law relating to the workplace environment
      (including, without limitation, laws relating to sexual harassment or age,
      sex
      or other prohibited discrimination);

     

    (v) Executive's
      misappropriation  of  assets, properties, or funds of the
      Company; or

     

    (vi)
      the
      Executive materially breaches any of the covenants, agreements or obligations
      of
      this Agreement or any of the Equity Documents.

     

    (5) By
      the Company without Cause upon seven (30) days’ advance written notice to the
      Executive; provided, that the Company may provide continued base salary payments
      for all or a portion of such 30-day period in lieu of notice.

     

    (6) By
      the Executive upon thirty
      days (30) days’ advance written notice to the Company.

     

    (7) Upon
      expiration of the Term.

     

    (b) Definitions.

     

    
      
        
        

      

      
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    (1) Disability
      Determination.  For the purposes of this Agreement, a "Disability
      Determination" shall mean a good faith finding by the Board that the Executive,
      because of a medically determinable disease, injury, or other mental or physical
      disability, is unable to perform substantially all of his regular duties to
      the
      Company and that such disability is determined or reasonably expected to last
      at
      least twelve (12) months.  In conjunction with a Disability
      Determination, the Executive hereby consents to any required medical examination
      and agrees to furnish any medical information requested by any examining
      physician and to waive any applicable physician-patient privilege that may
      arise
      because of such examination.

     

    (2) Date
      of Termination.  For the purposes of this Agreement, "Date of
      Termination" shall mean the effective date of the Executive’s termination
      pursuant to Section 14(a).

     

    (c) Effect
      of Termination.  Notwithstanding the Term of this Agreement, in
      the event of the termination of the Executive’s employment for any reason, all
      obligations of the Executive pursuant to Section 2 hereof and of the
      Company pursuant to Section 5 hereof shall terminate, except (i) for any
      earned but unpaid base salary and any unreimbursed expenses and other unpaid
      benefits owed as of the date of termination and (ii) as set forth in Section
      15.  For purposes of clarification, notwithstanding anything to
      the contrary contained in this Agreement, the provisions of Sections
7, 8, 9, 10, 11, 12, 14,
15, 16,
17  and,
      as necessary to construe and
      enforce the foregoing provisions, 18 shall survive such
      termination.  The Executive agrees to cooperate with the Company in
      order to ensure an orderly transition of the Executive’s duties and
      responsibilities upon termination of employment.

     

    15.           Severance.

     

     

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

     

    (a)
      Without Cause.  The Executive will have a sixty (60) day
      probationary period in which he may be terminated for any reason and at
      anytime.  Executive will not be entitled to severance should his
      employment be terminated within this probationary period. Notwithstanding the
      Term of this Agreement, in the event that the Executive’s employment is
      terminated sixty (60) days subsequent to the date of this Agreement by the
      Company without Cause, the Company shall pay to the Executive continued payments
      (the "Severance Payments") of one hundred percent
      (100%) of the Executive’s then current monthly base salary
      for a length of time equal to six months (the "Severance
      Period") any rights to bonuses under this Agreement immediately cease upon
      termination.  The Company's obligation to make any applicable
      Severance Payments under this Section 15(a) is conditioned upon Executive
      entering into a general release of the Company and its officers, directors,
      employees, agents, affiliates, representatives, successors, assigns and
      shareholders in a form satisfactory to the Company (a "Release") provided,
      however that such Release shall exclude accrued and unpaid salary, accrued
      and
      unpaid other benefits, un-reimbursed expenses, severance payments and severance
      benefits, each as set forth in this Agreement and rights of indemnification
      under the Company's Certificate of Incorporation, Bylaws, this Agreement or
      any
      other written agreement between the Company and Executive (other than with
      respect to matters relating to Executive's termination of
      employment).  The Company may terminate the continued payment of the
      applicable Severance Payments in the event that Executive breaches any terms
      of
      such Release or any of his post-employment obligations to the Company set forth
      in this Agreement.  Applicable Severance Payments shall be made in
      accordance with the Company’s payroll practices as in effect on the date of
      termination.  This severance provision and the financial remuneration
      associated with it is the maximum liability that Company will be obligated
      to
      pay Executive with or without cause for termination.

     

    Upon
      a Change in Control.  If within twelve
      months following a Change of Control, as hereinafter defined, the Employee’s
      employment is modified or terminated for a reason (or no reason) other than
      for
      disability, death or for cause, the termination shall be deemed a “Change of
      Control Termination” and this Article shall determine Executive’s severance
      package to accelerate with regard to all stock option vesting..

     

     “Change
      of Control” shall be defined as follows:

    

    
      	
               

            	
              (1)

            	
              consummation
                of a merger or consolidation or sale or other disposition of all
                or
                substantially all of the assets of the Company (a "Corporate
                Transaction"); or

            

    

     

    (b) Sole
      Payment
      Obligation.  Notwithstanding the Term of this Agreement, in the
      event of termination of Executive's employment, the Company shall be required
      to
      pay to Executive only the amounts expressly set forth in the applicable
      provisions of this Section 15.  Any rights to bonuses under this
      Agreement immediately cease upon termination.  The Company's
      obligation to make any Severance Payments under this Section 15 is conditioned
      upon Executive entering into a Release.  The Company may terminate the
      continued payment of the applicable Severance Payments in the event that
      Executive breaches any terms of such Release or any of his post-employment
      obligations to the Company set forth in this Agreement.  References to
      the word Company in the second sentence of this paragraph shall include Commerce
      Planet, Inc. (or any other direct or indirect parent entity of the
      Company).

     

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

     

    16.           Arbitration.

     

    (a)
Agreement
      to
      Arbitrate.  Any controversy or claim arising out of or relating to
      the Agreement, or the breach hereof, and claims referenced in subsection (b)
      below, shall be settled by arbitration administered by the American Arbitration
      Association under its National Rules for the Resolution of Employment Disputes,
      and judgment upon the award rendered by the arbitrator(s) may be entered by
      any
      court having jurisdiction thereof.  The Executive understands that his
      assent to mandatory arbitration is a condition of employment and continued
      employment and that claims covered by this Agreement, will be settled by
      arbitration in Santa Barbara, California.  The arbitration shall be
      conducted by one neutral arbitrator selected by the parties.  The
      arbitrator shall apply the substantive and procedural laws of the State of
      California to all such arbitrations.  The Company will pay all
      expenses unique to arbitration.  The arbitrator shall have the
      authority to order such discovery, by way of deposition, interrogatory, document
      production, or otherwise, as the arbitrator considers necessary to a full and
      fair exploration of the issues in dispute, consistent with the expedited nature
      of arbitration.  The arbitrator is authorized to award any remedy or
      relief that the arbitrator deems just and equitable, including any remedy or
      relief that would have been available to the parties had the matter been heard
      in court.  The arbitrator shall have the authority to provide for the
      award of attorney's fees and costs in accordance with applicable law. The
      arbitrator may award to the prevailing party in any dispute reasonable and
      actual attorney's fees consistent with applicable law.  Executive and
      Company agree that this Agreement to arbitrate is subject to and enforceable
      under the provisions of the Federal Arbitration Act (the "FAA"), 9 U.S.C. §§ 1,
      et seq., and to the extent it does not interfere with the enforceability of
      this
      Agreement, the California Arbitration Act (the "CAA"), Cal. Code Civ. Proc.
      ("C.C.P.") §§ 1280, et seq.  The decision of the arbitrator shall be
      in writing and shall provide the reasons for the award unless the parties agree
      otherwise.  Proceedings to enforce, confirm, modify, set aside or
      vacate an award or decision rendered by the arbitrator will be controlled by
      and
      conducted in conformity with the Federal Arbitration Act, 9 U.S.C. Sec 1 et.
      seq. or applicable state law.  This Agreement shall survive the
      termination of Executive's employment with Company and shall apply to any claim,
      dispute, and/or controversy that arises during or after the termination of
      Executive's employment.  This Agreement shall be mutually binding on
      Executive and Company.

     

    (b) Covered
      Claims.  Except as otherwise provided in this Agreement, the
      Executive and the Company hereby consent to the resolution by arbitration of
      all
      claims or controversies for which a court otherwise would be authorized by
      law
      to grant relief, in any way arising out of, relating to, or associated with
      the
      Executive’s employment with the Company or its termination ("Claims") that the
      Company may have against the Executive or that the Executive may have against
      the Company or against its officers, directors, employees, or agents, in their
      capacity as such or otherwise.  The Claims covered by this Agreement
      include, but are not limited to:  claims for coercion, for
      discrimination based on race, sex, religion, national origin, age, marital
      status, handicap, disability, or medical condition; claims for benefits, except
      as excluded in the following paragraph, and claims for violation of any federal,
      state, or other governmental constitution, statute, ordinance, or regulation
      (including but not limited to claims arising under Title VII of the Civil Rights
      Act, the Americans with Disabilities Act, the Age Discrimination in Employment
      Act, the Family Medical Leave Act, the Fair Labor Standards Act, and the
      Executive Retirement Income Security Act).  Additionally, any and all
      issues of arbitrability (whether a claim is covered by this Agreement) will
      be
      decided by the arbitrator(s) and not a court.

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

     

    (c) Claims
      not
      Covered.  This agreement to arbitrate does not apply to or cover
      potential claims that may be brought by either Executive or Company under the
      Equity Documents.  This agreement to arbitrate also does not apply to
      claims that are already subject to an existing arbitration provision between
      the
      parties, or claims that may not be arbitrated under applicable law.

     

    (d) Waiver.  THE
      PARTIES HEREBY WAIVE THEIR RIGHT TO HAVE ANY DISPUTE, CLAIM OR CONTROVERSY
      DECIDED BY A JUDGE OR JURY IN A COURT.

     

    17.           Withholding
      of Taxes.  The Company may withhold from any compensation,
      benefits or other amount payable under this Agreement all federal, state, city
      and other taxes as shall be required pursuant to any law or governmental
      regulation or ruling.

     

    18.           Miscellaneous.

     

    (a) Waiver.  A
      party’s failure to insist on compliance with or enforcement of any provision of
      this Agreement, shall not affect the validity or enforceability or constitute
      a
      waiver of future enforcement of that provision or of any other provision of
      this
      Agreement by that party or any other party.

     

    (b) Governing
      Law.  This Agreement shall in all respects be subject to, and
      governed by, the laws of the State of California without regard to the
      principles of conflict of laws.

     

    (c) Severability.  The
      invalidity or unenforceability of any provision in this Agreement (including
      without limitation any provision regarding arbitration) shall not in any way
      affect the validity or enforceability of any other provision and this Agreement
      shall be construed in all respects as if such invalid or unenforceable provision
      had never been in the Agreement.

     

    (d) Notice.  Notices
      provided for herein shall be in writing and shall be deemed to have been duly
      given when delivered personally or by overnight courier with a receipt obtained
      therefore or when mailed by United States registered or certified mail, return
      receipt requested, postage prepaid, addressed, to the Company to its Board
      of
      Directors and to the Executive at the address set forth below on the signature
      page to this Agreement or such other address as he may provide the Company
      in
      accordance with the provision.

     

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

     

    (e) Amendments.  This
      Agreement may be amended at any time by mutual consent of the parties hereto,
      with any such amendment to be invalid unless in writing, signed by the Company
      and the Executive.  To the extent that this Agreement or any part
      thereof is deemed to be a nonqualified deferred compensation plan subject to
      Section 409A of the Code, then (i) this Agreement shall be interpreted in a
      manner to comply in good faith with Code Section 409A and the guidance
      promulgated thereunder; and (ii) the parties agree to amend this Agreement
      as
      soon as practicable, as may be necessary (if at all) so as to avoid application
      of any tax or interest pursuant to Code Section 409A as interpreted by proposed
      regulations issued on September 29, 2005, and such additional guidance as may
      be
      issued before December 31, 2005; and again to make any such further amendment
      as
      may be so required on or before December 31, 2007, based on such further
      guidance as may have been issued (in each case preserving to the extent feasible
      the parties' respective economic interests and legal rights and obligations
      hereunder).

     

    (f) Burden
      and
      Benefit.  This Agreement, together with any amendments hereto,
      shall be binding upon and shall inure to the benefit of the parties hereto
      and
      their respective successors, assigns, heirs and personal representatives, except
      that the rights and benefits of the Executive under this Agreement may not
      be
      assigned without the prior written consent of the Company.

     

    (g) References
      to Gender and
      Number Terms.  In construing this Agreement, feminine or number
      pronouns shall be substituted for those masculine in form and vice versa, and
      plural terms shall be substituted for singular and singular for plural in any
      place in which the context so requires.

     

    (h) Headings.  The
      various headings in this Agreement are inserted for convenience only and are
      not
      part of the Agreement.

     

    (i) Entire
      Agreement.  This Agreement and the Equity Documents contain the
      entire agreement and understanding by and between the Executive and the Company
      with respect to the employment of the Executive, supersedes any prior agreements
      and no representations, promises, agreement, or understanding, written or oral,
      relating to the employment of the Executive by the Company not contained herein
      or therein shall be of any force or effect.

     

     

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS
      WHEREOF, the parties hereto have duly executed this Agreement as of the day
      and
      year first hereinabove written.

     

     

     

    
      	 	EXECUTIVE:
	 	 
	 	 
	 	Anthony
              Roth
	 	 
	 	Address:	35
              Toulon, Laguna Nigual, CA 92677
	 	 
	 	 
	 	COMPANY:
	 	 
	 	Commerce
              Planet, Inc.
	 	 

    

    

    
      	 	By: 	/s/
              Michael Hill	 
	 	Name: 	Michael
              Hill	 
	 	Title: 	Chief
              Executive Officer	 
	 	 
	 	Address:	
              30
                South La Patera Lane, Suite 7

            	 
	 	 	Goleta,
              California 93117	 
	 	 	 	 

    

     

    

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

    

    

    EXHIBIT
      A

     

    TO

     

    EXECUTIVE
      EMPLOYMENT AGREEMENT

     

    OF

     

    ANTHONY
      ROTH

     

    The
      following is a list of board positions held by the Executive as of the date
      of
      this Agreement:

     

    Utix
      Group, Inc. – Telephonic attendance of conference calls / meetings, not to
      exceed 8 hours a month.

     

    Genutec
      Business Solutions, Inc. – To exit position by end of the year.

     

    Roth
      Financial Group, Inc. – Personal management of existing family assets and wealth
      estimates.

     

    

     

    

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

    

 

     

    EXHIBIT
      B

     

    TO

     

    EXECUTIVE
      EMPLOYMENT AGREEMENT

     

    OF

     

    ANTHONY
      ROTH

     

    The
      following is a list of Inventions and inventions conceived or created by the
      Executive prior to the start of employment.  If there are no
      Inventions or inventions conceived or created by the Executive prior to the
      start of employment, insert "None" and sign below.

     

    U.S.
      Patents # 7066383 & #7156294 regarding Systems for Marketing Prepaid Leisure
      and Entertainment Experiences as a variable rate redemption process in the
      electronic payment networks.

     

    

     

    
      	 	 	 	 
	Anthony
              Roth	Date
	 	 
	 	 	 	 
	Acknowledgment
              of the Company	Date

    

     

     

    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

    
EXHIBIT
      C

     

    TO

     

    EXECUTIVE
      EMPLOYMENT AGREEMENT

     

    OF

     

    ANTHONY
      ROTH

    

    California
      Labor Code

    

    Section
      2870.  Application of provision providing that employee shall assign
      or offer to assign rights in invention to employer.

    

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

    

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

    

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

    

    (b)
      To the extent a provision in an
      employment agreement purports to require an employee to assign an invention
      otherwise excluded from being required to be assigned under subdivision (a),
      the
      provision is against the public policy of this state and is
      unenforceable.

     

     

     

    -18-As amended through and

Exhibit 10.1

 

 

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL RETIREMENT

PLAN FOR EMPLOYEES OF

WEBSTER BANK

As Amended and Restated on October 22, 2007

Effective as of January 1, 2005

TABLE OF CONTENTS

 

General

ARTICLE IDefinitions

ARTICLE IIEligibility

ARTICLE IIISupplemental Retirement Income

ARTICLE IVBenefit Claims Procedure

ARTICLE VFunding

ARTICLE VIAmendment and Termination

ARTICLE VIIMiscellaneous

ANNEX ISpecial Provisions for Certain Former Participants in the Eagle Financial Corporation Benefit Equalization Plan

ANNEX IISpecial Provisions Relating to Supplemental Matching Contributions Attributable to the Period On and After January 1, 2005 and Prior to July 1, 2006

ANNEX IIICertain Change in Control Payments Prior to January 1, 2008

 

 

 

 

SUPPLEMENTAL RETIREMENT PLAN FOR EMPLOYEES

OF WEBSTER BANK

General

This Plan is a non-qualified supplemental retirement plan for certain employees of Webster Bank (the "Bank") and its affiliates who also have an accrued benefit under the Webster Bank Pension Plan (the "Pension Plan").

The Plan was established for the purpose of providing deferred compensation for a select group of management or highly compensated employees.  Only certain employees of the Bank and its affiliates who were members of a select group of management or highly compensated employees (as determined by the board of directors of the Bank) are eligible to receive a benefit under the Plan.

The Plan provides a supplemental retirement income equal to the following:

(a) with respect to all Participants other than the Chairman and Chief Executive Officer of the Bank and the President of the Bank who were in office on January 1, 2004, the excess of:  (i) a retirement benefit payable in accordance with the terms of the Pension Plan, but determined:  (A) without regard to the limitations of Section 415 of the Internal Revenue Code of 1986, as amended (the "Code"); (B) without regard to the limitations of Code Section 401(a)(17); and (C) based on the definition of compensation set forth in the Pension Plan that is applicable to the period on and after September 1, 2004, but applying such definition to the Participant's entire period of employment; over (ii) the retirement benefit actually provided by the Pension Plan; and

(b)with respect to the Chairman and Chief Executive Officer of the Bank and the President of the Bank who were in office on January 1, 2004, the excess of:  (i) a retirement benefit equal to 60% of his high five year average compensation, pro rated for separation from service prior to age 65 and determined:  (A) without regard to the limitations of Code Section 415; (B) without regard to the limitations of Code Section 401(a)(17); and (C) based on the definition of compensation set forth in the Pension Plan that is applicable to the period on and after September 1, 2004, but applying such definition to the Participant's entire period of employment; over (ii) the sum of: (A) the retirement benefit actually provided by the Pension Plan; (B) projected Social Security retirement benefits commencing at age 65; and (C) with respect to the President of the Bank who was in office on January 1, 2004, the retirement benefits payable under his prior employer's qualified and nonqualified defined benefit pension plans.

Effective as of January 1, 2007, benefit accruals under the Pension Plan were frozen with respect to all employees who are first hired or are rehired on or after January 1, 2007.  In addition, effective as of the close of business on December 31, 2007, benefit accruals under the Pension Plan were frozen for all other employees.  Therefore:  (a) all employees who are first hired on or after January 1, 2007 will receive no supplemental retirement income under the Plan; (b) all employees who are rehired on or after January 1, 2007 and who were participants in the Plan at the time of their prior separation from service will receive no additional accrual of supplemental retirement income on or after January 1, 2007, and the amount of their supplemental retirement income will not exceed the amount of their supplemental retirement income determined as of the date of their prior separation from service; and (c) all other participants will accrue no additional supplemental retirement income after the close of business on December 31, 2007, and the amount of their supplemental retirement income will not exceed the amount of their supplemental retirement income determined as of the close of business on December 31, 2007.

The Plan is completely separate from the Pension Plan, is unfunded, and is not qualified for special tax treatment under the Code.

The Plan was adopted effective as of January 1, 1990.  This amendment and restatement of the Plan is effective as of January 1, 2005.

Prior to July 1, 2006, the Plan also provided the supplemental matching contributions described in Annex II.  However, effective as of July 1, 2006, all liabilities relating to the supplemental matching contributions were transferred to, and assumed by, the Webster Bank Deferred Compensation Plan for Directors and Officers.

 

ARTICLE I

Definitions

 

1.1"Affiliate" means any corporation or other entity which is under common control with the Bank and the Corporation within the meaning of Section 414(b) or Section 414(c) of the Code.  A "Participating Affiliate" is an Affiliate which has assumed the obligations of the Plan with the consent of the Board.  A "Nonparticipating Affiliate" is an Affiliate which has not assumed the obligations of the Plan with the consent of the Board.

1.2"Bank" means Webster Bank, National Association and any successor corporation which hereafter assumes its obligations hereunder.

1.3"Beneficiary" means the person designated by a Participant to receive benefits payable under the Plan in the event of the Participant's death.  If a Participant has not designated a Beneficiary, or if the Beneficiary does not survive the Participant, the Participant's Beneficiary will be his or her surviving spouse or, if none, his or her estate.

1.4"Board" means the board of directors of the Bank.

1.5"Change in Control" means the occurrence of any of the following events: 

(a)  Any person becomes the beneficial owner of twenty-five percent (25%) or more of the total number of voting shares of the Corporation;

(b)Any person becomes the beneficial owner of ten percent (10%) or more, but less than twenty-five percent (25%), of the total number of voting shares of the Corporation, unless the Federal Reserve Board (the "FRB") has approved a rebuttal agreement filed by such person or such person has filed a certification with the FRB;

(c)Any person (other than the persons named as proxies solicited on behalf of the board of directors of the Corporation) holds revocable or irrevocable proxies, as to the election or removal of two or more directors of the Corporation, for twenty-five percent (25%) or more of the total number of voting shares of the Corporation;

(d)Any person has received the approval of the FRB under the Bank Holding Company Act, as amended (the "Holding Company Act"), or regulations issued thereunder, to acquire control of the Corporation;

(e)Any person has received approval of the FRB under the Federal Deposit Insurance Act, as amended (the "Control Act"), or regulations issued thereunder, to acquire control of the Corporation;

(f)Any person has commenced a tender or exchange offer, or entered into an agreement or received an option, to acquire beneficial ownership of twenty-five percent (25%) or more of the total number of voting shares of the Corporation, whether or not the requisite approval for such acquisition has been received under the Holding Company Act, the Control Act, or the respective regulations issued thereunder; 

(g)As a result of, or in connection with, any cash tender offer or exchange offer, merger, or other business combination, sale of assets or contested election, or any combination of the foregoing transactions, the persons who were directors of the Corporation before such transaction shall cease to constitute at least two-thirds of the board of directors of the Corporation or any successor corporation; or

(h)The Corporation's beneficial ownership of the total number of voting shares of the Bank is reduced to less than fifty percent (50%).

Notwithstanding the foregoing, a Change in Control will not be deemed to have occurred under Section 1.5(b), Section 1.5(c), Section 1.5(d), Section 1.5(e) or Section 1.5(f) if, within thirty (30) days of such action, the board of directors of the Corporation (by a two-thirds affirmative vote of the directors in office before such action occurred) makes a determination that such action does not and is not likely to constitute a Change in Control of the Corporation.  For purposes of this Section 1.5, a "person" includes an individual, corporation, partnership, trust, association, joint venture, pool, syndicate, unincorporated organization, joint-stock company or similar organization or group acting in concert.  A person for these purposes shall be deemed to be a beneficial owner as that term is used in Rule 13d-3 under the Securities Exchange Act of 1934.

1.6"Code" means the Internal Revenue Code of 1986, as amended.

1.7"Committee" means any committee authorized by the Board to administer the Plan.

1.8"Corporation" means Webster Financial Corporation and any successor corporation which hereafter assumes its obligations.

1.9"Employee" means an individual who is an employee of either the Bank, the Corporation or a Participating Affiliate.

1.10"Participant" means an individual who satisfied the eligibility requirements of Article II and who is entitled to receive a Supplemental Retirement Income under Article III.

1.11"Pension Plan" means the Webster Bank Pension Plan and any subsequent amendments thereto.

1.12"Plan" means the Supplemental Retirement Plan for Employees of Webster Bank, as set forth herein, including any amendments, rules and regulations adopted pursuant hereto.

1.13"Section 409A Change in Control" means a change in ownership of the Corporation, a change in effective control of the Corporation, or a change in the ownership of a substantial portion of the assets of the Corporation.

(a)A change in ownership of the Corporation occurs when any person (or two or more persons acting as a group) acquires ownership of stock of the Corporation which, together with stock held by such person or group, constitutes more than fifty percent (50%) of the stock of the Corporation. However, if any person or group of persons is considered to own more than fifty percent (50%) of the stock of the Corporation, the acquisition of additional stock by the same person or group of persons is not considered to result in a change in ownership of the Corporation.

(b)A change in effective control of the Corporation occurs either:  (i) when any person (or two or more persons acting as a group) acquires (or has acquired during the preceding twelve month period) ownership of stock of the Corporation possessing thirty percent (30%) or more of the stock of the Corporation; or (ii) a majority of the board of directors of the Corporation is replaced during a twelve month period by persons who are not endorsed by a majority of the board of directors of the Corporation in office prior to such change.  However, if any person or group of persons is considered to have acquired effective control of the Corporation pursuant to this Section 1.13(b), the acquisition of additional control of the Corporation by the same person or group of persons is not considered to result in a change in effective control of the Corporation.

(c)A change in ownership of a substantial portion of the assets of the Corporation occurs on the date that any one person (or two or more persons acting as a group) acquires (or has acquired during the preceding twelve month period) assets from the Corporation that have a total gross fair market value equal to or greater than forty percent (40%) of the total gross fair market value of all of the assets of the Corporation immediately prior to such acquisition or acquisitions. Gross fair market value means the value of the assets of the Corporation, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.

1.14"Separation from Service" means an individual's termination of service with the Bank, the Corporation and all Affiliates, as defined for purposes of Section 409A of the Code.

1.15"Spouse" means the person who is legally married to a Participant on the earlier of such Participant's date of death and the date on which his or her Supplemental Retirement Income commences.

1.16 "Supplemental Retirement Income" means the monthly amount of retirement income payable on behalf of a Participant under Article III of the Plan.

 

ARTICLE II

Eligibility

 

2.1.   Eligibility.  An Employee who has an accrued benefit under the Pension Plan as of the close of business on December 31, 2007 will be eligible to receive a Supplemental Retirement Income under the Plan, provided that the following conditions are met:

(a)the Employee was hired prior to January 1, 2007; and

(b)prior to January 1, 2008, the Employee was a member of a select group of management or highly compensated employees (as determined by the Board) and was an executive vice president or above of the Bank, the Corporation or a Participating Affiliate.  

Notwithstanding the above, however, the Chief Financial Officer of the Bank who was in office on January 1, 2007 will not be eligible to participate in the Plan and will receive no Supplemental Retirement Income under the Plan, even though he may have an accrued benefit under the Pension Plan as of the close of business on December 31, 2007.

If an Employee transfers employment from the Bank, the Corporation or a Participating Affiliate to a Nonparticipating Affiliate, the amount of the Employee's Supplemental Retirement Income shall not exceed the amount of the Supplemental Retirement Income which the Employee had accrued as of the date of such transfer of employment.

 

ARTICLE III

Supplemental Retirement Income

 

3.1  Supplemental Retirement Income.

(a)  This Section 3.1(a) applies to all Participants other than the Chairman and Chief Executive Officer of the Bank and the President of the Bank who were in office on January 1, 2004:

(i)The monthly amount of Supplemental Retirement Income payable to such a Participant will be the excess, if any, of:  (A) the Participant's adjusted monthly retirement income, as determined under Section 3.1(a)(ii); over (B) the Participant's actual monthly retirement income under the Pension Plan.

(ii)For purposes of Section 3.1(a)(i)(A), a Participant's adjusted monthly retirement income shall be computed by using the applicable formula set forth in the Pension Plan, provided that:  

(A) the applicable formula set forth in the Pension Plan shall be applied without regard to the limitations on benefits of Section 415 of the Code; 

(B)the applicable formula set forth in the Pension Plan shall be applied without regard to the limitations on compensation of Section 401(a)(17) of the Code; and

(C)the applicable formula set forth in the Pension Plan shall be applied by reference to the definition of compensation set forth in Section 3.1(c).

The adjustments to the applicable formula set forth in the Pension Plan which are described in this Section 3.1(a)(ii) shall apply to all of the Participant's years of service, including any years of service performed prior to the effective date of the Plan or any amendment thereof.

(iii)Notwithstanding the above, pursuant to the terms of Section 3(f), the Supplemental Retirement Income of a Participant shall not exceed the amount of his or her Supplemental Retirement Income determined as of the close of business on December 31, 2007.

(b)  This Section 3.1(b) applies to the Participants who were the Chairman and Chief Executive Officer of the Bank and the President of the Bank in office on January 1, 2004:

(i)  The monthly amount of Supplemental Retirement Income payable to such a Participant will be the excess, if any, of:  (A) the Participant's targeted monthly retirement income (as determined under Section 3.1(b)(ii)); over (B) the sum of: (1) the Participant's actual monthly retirement income under the Pension Plan; (2) the Participant's projected monthly Social Security retirement benefits commencing at age 65; and (3) with respect to the Participant who was the President of the Bank in office on January 1, 2004, $6,037.45 per month prior to November 1, 2007 and $4,448.62 per month on and after November 1, 2007 (representing the monthly retirement benefits payable under the qualified and nonqualified defined benefit pension plans maintained or previously maintained by the prior employer of such Participant).

(ii)  For purposes of Section 3.1(b)(i)(A), a Participant's targeted monthly retirement income is a monthly benefit commencing on the Participant's normal retirement date and payable as a single life annuity equal to: (A) 60%, multiplied by (B) the ratio (but not greater than one) of the number of the Participant's years of vesting service as of the date of his Separation from Service to the number of years of vesting service that the Participant would have had if his Separation from Service had occurred on his normal retirement date; and multiplied further by (C) the Participant's high five year average monthly compensation (as determined under Section 3.1(b)(iii)).  For purposes of this Section 3.1(b)(ii), years of vesting service and normal retirement date shall be determined under the terms of the Pension Plan as in effect on January 1, 2005.

(iii)For purposes of Section 3.1(b)(ii)(C), a Participant's high five year average monthly compensation equals one-twelfth of the average of the Participant's annual compensation (as determined under Section 3.1(c)) for the five consecutive calendar years which produce the highest such average.

(iv)For purposes of Section 3.1(b)(ii), a Participant's targeted monthly retirement income shall be computed without regard to the limitations on benefits of Section 415 of the Code and without regard to the limitations on compensation of Section 401(a)(17) of the Code.

(v)Notwithstanding the above, pursuant to the terms of Section 3(f), the Supplemental Retirement Income of a Participant shall not exceed the amount of his or her Supplemental Retirement Income determined as of the close of business on December 31, 2007.

(c)In computing a Participant's adjusted monthly retirement income under Section 3.1(a) and a Participant's targeted monthly retirement income under Section 3.1(b), the Participant's compensation shall be based on the definition of compensation set forth in the Pension Plan that is applicable to the period on and after September 1, 2004, but applying such definition to the Participant's entire period of employment.

(d)  For purposes of calculating the monthly amount of a Participant's Supplemental Retirement Income pursuant to Section 3.1(a), a Participant's adjusted monthly retirement income as determined under Section 3.1(a)(ii) and actual monthly retirement income under the Pension Plan shall each be based upon the actuarially equivalent single life annuity form of payment commencing at normal retirement date.

For purposes of calculating the monthly amount of a Participant's Supplemental Retirement Income pursuant to Section 3.1(b), a Participant's targeted monthly retirement income as determined under Section 3.1(b)(ii) and actual monthly retirement income under the Pension Plan shall each be based upon the actuarially equivalent single life annuity form of payment commencing at normal retirement date.  

For purposes of this Section 3.1(d):  (i) actuarial equivalence shall be determined by applying the actuarial factors set forth in the Pension Plan; and (ii) normal retirement date shall be determined under the terms of the Pension Plan as in effect on January 1, 2005.

(e)  If a Participant (or the survivor of a Participant) commences to receive a Supplemental Retirement Income prior to the Participant's normal retirement date, the Supplemental Retirement Income shall be actuarially reduced to reflect the early commencement of the benefit; provided, however, that in adjusting the Supplemental Retirement Income payable under Section 3.1(b) to reflect the early commencement of the benefit: 

(i) calculate the excess, if any, of:  (A) the Participant's targeted monthly retirement income (as determined under Section 3.1(b)(ii)); over (B) the sum of: (1) the Participant's actual monthly retirement income under the Pension Plan and (2) the Participant's projected monthly Social Security retirement benefits commencing at age 65;

(ii) actuarially adjust the amount in subsection (i) in order to reflect the early commencement of the benefit; and 

(iii) with respect to the Participant who was the President of the Bank in office on January 1, 2004, offset the result in subsection (ii), on a dollar for dollar basis, by the amount set forth in Section 3.1(b)(i)(B)(3) (representing the monthly retirement benefits payable under the qualified and nonqualified defined benefit pension plans maintained or previously maintained by the prior employer of such Participant).

(f)Effective as of January 1, 2007, benefit accruals under the Pension Plan ceased for all Employees who were first hired or were rehired on or after January 1, 2007.  Effective as of the close of business on December 31, 2007, benefit accruals under the Pension Plan ceased for all other Employees (including but not limited to the Chairman and Chief Executive Officer of the Bank and the President of the Bank who were in office on January 1, 2004).  Therefore, notwithstanding anything else in this Article III to the contrary:  

(i) all Employees who were first hired on or after January 1, 2007 will receive no Supplemental Retirement Income under the Plan; 

(ii)all Employees who were rehired on or after January 1, 2007 and who were Participants in the Plan at the time of their prior Separation from Service will receive no additional accrual of Supplemental Retirement Income on or after January 1, 2007, and the amount of their Supplemental Retirement Income will not exceed the amount of their Supplemental Retirement Income determined as of the date of their prior Separation from Service; and 

(iii)all other Participants (including but not limited to the Chairman and Chief Executive Officer of the Bank and the President of the Bank who were in office on January 1, 2004) will accrue no additional Supplemental Retirement Income after the close of business on December 31, 2007, and the amount of their Supplemental Retirement Income will not exceed the amount of their Supplemental Retirement Income determined as of the close of business on December 31, 2007.

In addition, because the Chief Financial Officer of the Bank who was in office on January 1, 2007 is not eligible to participate in the Plan, he will receive no Supplemental Retirement Income under the Plan, even though he may have an accrued benefit under the Pension Plan as of the close of business on December 31, 2007.

3.2Vesting of Supplemental Retirement Income.  

(a)A Participant becomes vested and has a nonforfeitable right to receive a Supplemental Retirement Income under the Plan in the same manner and to the same extent as provided under the Pension Plan.  

(b)Notwithstanding the above, however, if the Committee determines, after a hearing, that a Participant who is eligible to receive or is receiving a Supplemental Retirement Income under the Plan has engaged in any activities which, in the opinion of the Committee, are detrimental to the interests of, or are in competition with, the Bank, the Corporation or any Affiliates, then all benefits payable under the Plan shall thereupon be terminated and forfeited.

3.3  Time of Payment of Supplemental Retirement Income.  A Participant shall commence to receive a Supplemental Retirement Income described in Section 3.1(a) or Section 3.1(b) on the first day of the month coinciding with or next following the later of:  (a) the date that is six months after his or her Separation from Service with the Bank, the Corporation and all Affiliates; or (b) the date on which he or she has reached age fifty-five (55).  

If a Participant's Supplemental Retirement Income will commence on the first day of the month coinciding with or next following the date that is six months after his or her Separation from Service, the amount of his or her Supplemental Retirement Income shall be determined as if it had commenced on the first day of the month coinciding with or next following his or her Separation from Service.  The payments to which the Participant would otherwise have been entitled during the first six months following his or her Separation from Service shall then be accumulated (together with interest at the long term applicable federal rate (as defined in Section 1274(d) of the Code) for the month preceding the Participant's Separation from Service), and shall be paid on the first day of the month coinciding with or next following the date that is six months after his or her Separation from Service.

For the period prior to January 1, 2008, a Participant commenced to receive his or her Supplemental Retirement Income on the date he or she commenced to receive his or her retirement benefits under the Pension Plan (as permitted by Notice 2006-79, Section 3.03).

3.4Form of Payment of Supplemental Retirement Income.

(a)The normal form of payment of a Participant's Supplemental Retirement Income shall be a single life annuity payable in substantially equal monthly installments for the lifetime of the Participant.  

(b)Notwithstanding the provisions of Section 3.4(a), a Participant may elect, prior to the commencement date of his or her Supplemental Retirement Income, to have his or her Supplemental Retirement Income paid in substantially equal monthly installments in the form of any actuarially equivalent annuity that is offered as an optional form of benefit under the Pension Plan.  In calculating the amount of such annuity, the actuarial factors set forth in the Pension Plan will be used.

(c)Effective as of the date of adoption of the amendment and restatement of this Plan, notwithstanding the provisions of Section 3.4(a) and Section 3.4(b), a Participant may elect, prior to the commencement date of his or her Supplemental Retirement Income, to have his or her Supplemental Retirement Income paid in a lump sum distribution equal to the actuarially equivalent present value of such Supplemental Retirement Income (calculated by reference to the interest rate and mortality table that are used to calculate the Pension Plan's liabilities in accordance with Statement of Financial Accounting Standards No. 87 and that are disclosed in the financial statements of Webster Financial Corporation).  In addition, a Participant who has elected to have his or her Supplemental Retirement Income paid in a lump sum distribution may make a subsequent election, prior to the commencement date of his or her Supplemental Retirement Income, to have his or her Supplemental Retirement Income paid as an annuity pursuant to Section 3.4(a) and Section 3.4(b).  Any election pursuant to this Section 3.4(c) shall be subject to the following requirements:

(i)The election:  (i) must be made at least twelve months prior to the date on which the Supplemental Retirement Income would otherwise have commenced; (ii) cannot become effective until at least twelve months after the date on which the election is made; and (iii) must delay the date of payment of the lump sum distribution for at least five years from the date the Supplemental Retirement Income would otherwise have commenced.

(ii)In no event can an election made pursuant to this Section 3.4(c) constitute an acceleration for purposes of Code Section 409A.

(d)In Notice 2005-1, Question 19(c), as modified by the preamble to the proposed regulations under Code Section 409A, Notice 2006-79, and the preamble to the final regulations under Code Section 409A (the "Election Guidance"), the Internal Revenue Service stated that, with respect to deferred compensation subject to Code Section 409A, a nonqualified deferred compensation arrangement may be amended to allow a participant to make a new payment election with respect to the form of payment of his or her deferred compensation, and such election will not be treated as a change in the form of payment of the deferred compensation under Code Section 409A(a)(4) or an acceleration of a payment under Code Section 409A(a)(3), provided that:  (i) the amendment is adopted and effective on or before December 31, 2007; (ii) the employee makes an election regarding the form of payment of his or her deferred compensation on or before December 31, 2007; (iii) the election applies only to amounts that would not otherwise be payable in 2007 and does not cause an amount to be paid in 2007 that would not otherwise be  payable in 2007; and (iv) the election otherwise satisfies the constructive receipt rule and other provisions of the Code and common law doctrines.

Pursuant to the Election Guidance, a Participant may elect on or after the date of adoption of the amendment and restatement of this Plan and on or before December 31, 2007 to have his or her Supplemental Retirement Income paid in a lump sum distribution equal to the actuarial equivalent present value of such Supplemental Retirement Income without being subject to the requirements of Section 3.4(c); provided, however, that the actuarial equivalent present value of such Supplemental Retirement Income shall be calculated by reference to the interest rate and mortality table described in Section 3.4(c); and provided further, that the effective date of such an election shall be delayed to the extent required by the constructive receipt rule or other provisions of the Code or common law doctrines.

(e)A Participant may make any election described in this Section 3.4 by submitting an election form to the Committee.

3.5.  Death Benefits.

(a)  If a Participant dies after commencing to receive his or her Supplemental Retirement Income under Section 3.1(a) or Section 3.1(b) and the Participant was receiving a single life annuity, or if the Participant elected to receive his or her Supplemental Retirement Income under Section 3.1(a) or Section 3.1(b) in the form of an actuarially equivalent lump sum distribution, then no survivor's benefit will be paid under the Plan following the death of the Participant.

If a Participant dies after commencing to receive his or her Supplemental Retirement Income under Section 3.1(a) or Section 3.1(b) and the Participant was receiving an actuarially equivalent annuity that is an optional form of benefit offered under the Pension Plan, then the Participant's joint annuitant or Beneficiary (who may be the Participant's Spouse) will receive a survivor's benefit in accordance with the terms of the annuity selected pursuant to Section 3.4(b).

(b)If a Participant dies prior to commencing to receive a Supplemental Retirement Income described in Section 3.1(a) or Section 3.1(b) and the Participant is married on his or her date of death, then the surviving Spouse of the Participant shall be entitled to receive an annuity for the lifetime of the surviving Spouse.  The amount of the survivor's benefit shall equal the benefit that the surviving Spouse would have received if the Participant had survived until the later of the Participant's date of death or the date on which the Participant would have reached age fifty-five (55), the Participant had commenced to receive on such date his or her Supplemental Retirement Income in the form of a 100/50 joint and survivor annuity with his or her Spouse as the joint annuitant, and the Participant had died immediately thereafter.

 If a Participant dies prior to commencing to receive a Supplemental Retirement Income described in Section 3.1(a) or Section 3.1(b), the Participant is married on his or her date of death, the Participant dies while in the service of the Bank, the Corporation or an Affiliate, and the Participant completed ten or more years of vesting service (as defined under the terms of the Pension Plan in effect on January 1, 2005) by his or her date of death, then the surviving Spouse of the Participant shall be entitled to receive an annuity for the lifetime of the surviving Spouse.  The amount of the survivor's benefit shall equal the benefit that the surviving Spouse would have received if the Participant had survived until the later of the Participant's date of death or the date on which the Participant would have reached age fifty-five (55), the Participant had commenced to receive on such date his or her Supplemental Retirement Income in the form of a 100/50 joint and survivor annuity with his or her Spouse as the joint annuitant, and the Participant had died immediately thereafter.  The survivor's benefit shall be payable for the lifetime of the surviving Spouse; provided, however, if the surviving Spouse dies prior to the receipt of one-hundred twenty (120) monthly payments, the remainder of the one hundred twenty (120) monthly payments shall be paid to the beneficiaries designated by the surviving Spouse (or, if the surviving Spouse fails to designate a beneficiary or no such beneficiary survives the Spouse, to the Participant's estate).  If the surviving Spouse dies after the Participant but before commencing to receive the survivor's benefit, the survivor's benefit will be deemed to have commenced immediately prior to the Spouse's death.  In determining the amount of the survivor's benefit, the amount of the 100/50 joint and survivor annuity will not be actuarially adjusted to reflect the one hundred twenty (120) month minimum payment period.

If a Participant dies prior to commencing to receive a Supplemental Retirement Income described in Section 3.1(a) or Section 3.1(b), the Participant is not married on his or her date of death, the Participant dies while in the service of the Bank, the Corporation or an Affiliate, the Participant has reached age fifty-five (55) by his or her date of death, and the Participant has completed five years of vesting service (as defined under the terms of the Pension Plan in effect on January 1, 2005) by his or her date of death, then the Beneficiary of the Participant shall be entitled to receive a survivor's benefit payable for one hundred twenty (120) months.  The amount of the survivor's benefit shall equal the benefit that a surviving spouse of the Participant would have received if the Participant had been married on his or her date of death to a spouse who was the same age as the Participant, the Participant had commenced to receive on his or her date of death his or her Supplemental Retirement Income in the form of a 100/50 joint and survivor annuity with such spouse as the joint annuitant, and the Participant had died immediately thereafter.

The monthly amount of a survivor's benefit payable under this Section 3.5(b) shall be calculated in the same manner and by applying the same actuarial factors as the corresponding survivor's benefit is calculated under the Pension Plan.

 (c)If a Participant dies after commencing to receive a Supplemental Retirement Income described in Section 3.1(a) or Section 3.1(b), the survivor's benefit (if any) payable to the Participant's surviving Spouse or Beneficiary shall commence on the first day of the month coinciding with or next following the date of the Participant's death, and shall cease on the date required by the terms of the annuity.  A survivor's benefit shall in no event be payable after the death of a Participant who was receiving his or her Supplemental Retirement Income in the form of a single life annuity or who received a lump sum distribution of the actuarial equivalent present value of his or her Supplemental Retirement Income.

If a Participant dies prior to commencing to receive a Supplemental Retirement Income described in Section 3.1(a) or Section 3.1(b), the Participant is married on his or her date of death, and a survivor's benefit is payable under Section 3.5(b) to the surviving Spouse of the Participant, then such survivor's benefit shall commence on the first day of the month coinciding with or next following the later of the date of the Participant's death or the date on which the Participant would have reached age fifty-five (55).  The survivor's benefit shall cease on the date of the surviving Spouse's death (unless the survivor's benefit is payable for at least one hundred twenty (120) months and the surviving Spouse dies prior to the receipt of one hundred twenty (120) monthly payments).

If a Participant dies prior to commencing to receive a Supplemental Retirement Income described in Section 3.1(a) or Section 3.1(b), the Participant is not married on his or her date of death, and a survivor's benefit is payable under Section 3.5(b) to the Beneficiary of the Participant, then such survivor's benefit shall commence on the first day of the month coinciding with or next following the Participant's death.  The survivor's benefit shall cease after the Beneficiary's receipt of one hundred twenty (120) monthly payments.

 

 

ARTICLE IV

Benefit Claims Procedure

4.1Claims for Benefits.  Any claim for benefits under the Plan shall be made in writing to the Committee.  The Committee shall promptly process each claim for benefits received by it and shall notify the claimant in writing of the action taken regarding the claim for benefits within a reasonable period of time following its receipt, but not later than ninety (90) days.  This period may be extended by the Committee for up to ninety (90) days, provided that the notice of the extension of time is furnished to the claimant prior to the beginning of the extension period.  In the event of a denial of benefits, the Committee shall furnish the claimant with a written notification which shall include:  (a) the reasons for the denial; (b) specific references to the Plan provisions on which the denial is based; (c) a description of any additional material or information necessary for the claimant to perfect the claim for benefits, including an explanation of why such material or information is necessary; and (d) an explanation of the review procedure set forth in Section 4.2.  

4.2Appeal Procedure.  

(a)A claimant who has received a written denial of a claim for benefits may appeal by filing with the Committee a written request for review.  Such request must be made within sixty (60) days following the receipt of the written denial.  In connection with any request for review, the claimant may at any time review all documents, records, and other information relevant to the claim free of charge, and request a review that takes into account all comments, documents, records and other information submitted (without regard to whether such information was submitted or considered in the initial benefit determination).  

(b)The Committee shall notify the claimant of its determination on review within sixty (60) days following receipt of the request for review.  This period may be extended by the Committee for up to sixty (60) days, provided that the Committee determines that special circumstances (such as the need to hold a hearing) require an extension of time for processing the claim.  Written notice of the extension shall be furnished to the claimant prior to the beginning of the extension period.  The extension notice must indicate the special circumstances requiring the extension and the date as of which the Committee expects to render a decision.

 

ARTICLE V

Funding

5.1  Funding.  It is the intention of the Bank, the Corporation, the Participating Affiliates, the Participants and their survivors and Beneficiaries, and each other party to the Plan that the arrangements hereunder be unfunded for tax purposes and for purposes of Title I of the Employee Retirement Income Security Act of 1974, as amended.  The rights of Participants and their survivors and Beneficiaries shall be solely those of a general unsecured creditor of the Bank, the Corporation or a Participating Affiliate (as applicable).  The Plan constitutes a mere promise by the Bank, the Corporation or a Participating Affiliate (as applicable) to make benefit payments in the future.  

The obligation of the Bank, the Corporation or a Participating Affiliate (as applicable) to pay benefits under the Plan shall be interpreted as a contractual obligation to pay only those amounts described in the Plan in the manner and under the conditions prescribed by the Plan.  Any assets set aside to fund deferred compensation shall be subject to the claims of general creditors, and no person other than the Bank, the Corporation or a Participating Affiliate (as applicable) shall, by virtue of the provisions of the Plan, have any interest in such funds.

Prior to the occurrence of a Change in Control, neither the Bank, the Corporation nor any Participating Affiliate shall have any obligation to fund the benefits payable under the Plan.  If the Bank, the Corporation or a Participating Affiliate determines, prior to a Change in Control, that deferred compensation under the Plan should be funded, it may utilize, singly or in combination, any method of funding it may deem appropriate, including, but not limited to, terminal funding, annuity contracts, life insurance contracts, or a group or individual trust (including a trust the terms of which conform with the language of the model trust agreement set forth in Revenue Procedure 92-64 issued by the Internal Revenue Service (or any successor thereto) relating to trusts established in connection with unfunded deferred compensation arrangements (a "Rabbi Trust")).

Upon the occurrence of a Change in Control, the Bank, the Corporation and each Participating Affiliate shall (unless their liabilities under the Plan have been fully discharged) adopt and fully fund a Rabbi Trust (or, if Rabbi Trusts are no longer available for use in connection with unfunded deferred compensation arrangements, any other instrument which is designed to provide a similar level of security and to have the same tax results as a Rabbi Trust).  All of the assets of the Rabbi Trust shall be located, and shall remain located, within the United States, whether or not such assets are available to satisfy the claims of general creditors.  In addition, the Rabbi Trust shall not contain any provision which states that the assets of the Rabbi Trust will be restricted to the provision of benefits under the Plan in the event of a change in the financial health of the Bank, the Corporation, or an Affiliate (or any successor thereof), whether or not such assets are available to satisfy the claims of general creditors.

 

ARTICLE VI

Amendment and Termination

 

6.1Right to Amend.  At any time, and from time to time, the Board of the Bank, by resolutions adopted by it, may amend the Plan or change the designation of Participants under the Plan.

6.2Right to Terminate.  The Plan can be terminated by action of the Board of the Bank only if:  (a) the termination of the Plan does not occur proximate to a downturn in the financial health of the Bank, the Corporation or an Affiliate; (b) all nonqualified deferred compensation arrangements of the same type (i.e., all nonaccount balance plans) maintained by the Bank, the Corporation and all Affiliates are terminated with respect to all employees; (c) no payments are made within twelve months after the termination of the Plan (other than payments that would have been payable under the terms of the Plan if the termination had not occurred); (d) all payments are made within twenty-four (24) months after the termination of the Plan; and (e) neither the Bank, the Corporation nor any Affiliate adopts a nonqualified deferred compensation arrangement of the same type (i.e., a nonccount balance plan) for a period of three years with respect to any employee following the date of the termination of the Plan.  If the Plan is terminated, the actuarial equivalent present value of each Participant's Supplemental Retirement Income (as calculated by reference to the interest rate and mortality table described in Section 3.4(c)) will be paid to the Participant in a lump sum on the first day of the month coinciding with or next following the first anniversary of the termination of the Plan.

If the Board of the Bank takes irrevocable action to terminate the Plan and all nonqualified deferred compensation arrangements of the same type (i.e., all nonccount balance plans) sponsored by the Bank, the Corporation and all Affiliates within thirty (30) days preceding or within twelve months following a Section 409A Change in Control, then the actuarial equivalent present value of each Participant's Supplemental Retirement Income (as calculated by reference to the interest rate and mortality table described in Section 3.4(c)) will be distributed in a lump sum within twelve (12) months following the date of such irrevocable action.

If the Board of the Bank terminates the Plan within twelve months following a corporate dissolution that is taxable under Code Section 331 or within twelve months following the bankruptcy court's approval of the termination of the Plan, then the actuarial equivalent present value of each Participant's Supplemental Retirement Income (as calculated by reference to the interest rate and mortality table described in Section 3.4(c)) will be distributed in the calendar year in which the Plan is terminated, the first calendar year in which the Supplemental Retirement Income is no longer subject to a substantial risk of forfeiture, or the first calendar year in which the distribution is administratively practicable (whichever is latest).

6.3Limitations.  Notwithstanding the preceding provisions of this Article VI:  (a) no modification, amendment, discontinuance or termination of the Plan may permit any distribution of a Participant's Supplemental Retirement Income other than in accordance with the provisions of Section 409A of the Code; (b) no modification, amendment, discontinuance or termination of the Plan shall adversely affect the rights of any former Employee (or the survivor of any former Employee) then receiving benefits; and (c) the vested benefits which any Participant had accrued immediately prior to the effective date of any modification, amendment, discontinuance or termination of the Plan shall not be reduced.  Notice of every such modification, amendment, discontinuance or termination shall be given in writing to each Participant.

ARTICLE VII

Miscellaneous

 

7.1Plan Administrator.  In its discretion, the Board of the Bank may appoint a Committee consisting of at least one (1) but not more than five (5) persons.  If appointed, the Committee shall be deemed to be the plan administrator of the Plan.  If the Board has not appointed a Committee to administer the Plan, the Board will act as the Committee.  

The Committee shall interpret and construe the provisions of the Plan, shall decide any disputes which may arise relative to the rights of Participants (and their survivors and Beneficiaries) under the terms of the Plan, and shall, in general, direct the administration of the Plan embodied herein.  The Committee may adopt such rules as it deems necessary for the proper administration of the Plan.  The decision of the Committee in all matters involving the interpretation and application of the Plan shall be final, binding and conclusive (unless the Committee has acted in an arbitrary or capricious manner).

7.2Nonassignability.  Except to the extent required by law, the right of any Participant or his or her survivors or Beneficiaries to any benefit or payment under the Plan:  (a) shall not be subject to voluntary or involuntary anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors of the Participant or his or her survivors or Beneficiaries; (b) shall not be considered an asset of the Participant or his or her survivors or Beneficiaries in the event of any divorce, insolvency or bankruptcy; and (c) shall not be subject to attachment, execution, garnishment, sequestration or other legal or equitable process.  In the event that a Participant or any survivors or Beneficiaries who are receiving or are entitled to receive benefits under the Plan attempt to assign, transfer or dispose of such right, or if an attempt is made to subject said right to such process, such assignment, transfer, disposition or process shall, unless required by law, be null and void.

7.3Code Section 409A.  Any provision of the Plan that is susceptible to more than one interpretation shall be interpreted in a manner that is consistent with the Plan satisfying the requirements of Code Section 409A.

7.4Governing Law.  Except to the extent preempted by applicable federal laws, the provisions of the Plan shall be interpreted, construed and administered in accordance with the laws of the State of Connecticut, other than its choice of law principles.

7.5No Employment Contract.  The adoption and maintenance of the Plan shall not be deemed to constitute a contract between the Bank, the Corporation or an Affiliate and its employees or to be consideration for, or an inducement or condition of, the employment of any person.  Nothing herein contained shall be deemed:  (a) to give to any Employee the right to be retained in the employ of the Bank, the Corporation or an Affiliate; (b) to affect the right of the Bank, the Corporation or an Affiliate to discipline or discharge any Employee at any time; (c) to give the Bank, the Corporation or an Affiliate the right to require any Employee to remain in its employ; or (d) to affect any Employee's right to terminate his or her employment at any time.

7.6Withholding.  The Corporation, the Bank or an Affiliate shall have the right to deduct from any distribution any taxes required by law to be withheld from a Participant with respect to such award.

7.7Rights of Survivors and Beneficiaries.  Whenever the rights of a Participant are stated or limited in the Plan, his or her survivors and Beneficiaries shall be bound thereby.

7.8Masculine, Feminine, Singular and Plural.  The masculine shall be read in the feminine, the singular in the plural, and vice versa, whenever the context shall so require.

7.9Titles.  The titles to Articles and Sections in this Plan are placed herein for convenience of reference only, and the Plan is not to be construed by reference thereto.

7.10Other Plans.  Nothing in this Plan shall be construed to affect the rights of a Participant, his or her survivors or Beneficiaries, or his or her estate to receive any retirement or death benefit under any tax qualified pension plan, another nonqualified deferred compensation arrangement, insurance agreement, tax-deferred annuity, or other retirement plan of the Corporation, the Bank or an Affiliate.

 

 

 

Dated this              day of                           , 20         .

 
Witness:WEBSTER BANK, NATIONAL ASSOCIATION

 

 

By

    Its

ANNEX I

 

Special Provisions for Certain Former Participants

in the Eagle Financial Corporation Benefit Equalization Plan

Effective as of April 15, 1998 (the "Eagle Acquisition Date"), Eagle Financial Corporation ("Eagle") was merged with and into Webster Financial Corporation.  Effective as of the Eagle Acquisition Date, all of the obligations of Eagle under the Eagle Financial Corporation Benefit Equalization Plan (the "Eagle SERP") were transferred to, and assumed by, Webster Financial Corporation.  Webster Financial Corporation has, in turn, transferred all of such obligations to Webster Bank, National Association, a wholly-owned subsidiary of Webster Financial Corporation.  Therefore, effective as of the Eagle Acquisition Date, all of the obligations of Eagle under the Eagle SERP have been transferred to, and assumed by, Webster Bank.

Effective as of April 15, 1998, the Eagle SERP was merged with and into the Plan.

Effective as of July 1, 1998, certain of the assets and liabilities of the Financial Institutions Retirement Plan as Adopted by Eagle Financial Corporation (the "Eagle Pension Plan") were transferred to and assumed by the Webster Bank Pension Plan (the "Webster Pension Plan").

Effective as of the first day with respect to which the processing of the payroll for the former employees of Eagle was performed in conjunction with the processing of the payroll for the employees of Webster Bank (the "Eagle Payroll Merger Date"), the former employees of Eagle became eligible to participate in the Webster Bank Retirement Savings Plan (formerly known as the Webster Bank Employee Investment Plan) (the "Webster 401(k) Plan").  In addition, effective as of July 1, 1998, certain of the assets and liabilities of the Financial Institutions Thrift Plan as Adopted by Eagle Financial Corporation (the "Eagle 401(k) Plan") were transferred to and assumed by the Webster 401(k) Plan.

Prior to July 1, 2006, the Plan provided the supplemental matching contributions described in Annex II.  Effective as of July 1, 2006, all liabilities relating to the supplemental matching contributions were transferred to, and assumed by, the Webster Bank Deferred Compensation Plan for Directors and Officers.

(1)If an Employee was a participant in the Eagle SERP, the Employee will not receive any additional Supplemental Retirement Income under this Plan unless he or she otherwise satisfies the eligibility requirements of Section 2.1.  If he or she does not satisfy such eligibility requirements, no Supplemental Retirement Income will be payable to him or her under the Plan other than the supplemental retirement income which he or she accrued under the Eagle SERP prior to April 15, 1998.

(2)If an Employee was a participant in the Eagle Pension Plan on June 30, 1998 and he or she becomes a Participant under the Plan, the amount of such a Participant's Supplemental Retirement Income under Section 3.1 shall be determined as follows:

(a) the Participant's adjusted monthly retirement income shall be calculated by reference to the applicable formula set forth in the Eagle Pension Plan with respect to compensation earned and service performed prior to July 1, 1998, and by reference to the applicable formula set forth in the Webster Pension Plan with respect to compensation earned and service performed on and after July 1, 1998 and prior to January 1, 2008;

(b) the Participant's actual monthly retirement income shall equal the sum of the Employee's accrued benefit under the Eagle Pension Plan as of June 30, 1998 (whether or not such benefit was transferred to and assumed by the Webster Pension Plan) and the Employee's Webster Benefit (as defined in the applicable annex of the Webster Pension Plan); and 

(c)the Participant's adjusted monthly retirement income and actual monthly retirement income shall each be actuarially adjusted to the equivalent single life annuity form of payment.

(3)If an Employee was a participant in the Eagle SERP, no Supplemental Matching Contributions were credited under the provisions of Annex II of the Plan unless he or she otherwise satisfied the eligibility requirements of Annex II.  If he or she did not satisfy such eligibility requirements, no Supplemental Matching Contributions were payable to him or her under the Plan other than the supplemental matching contributions which he or she accrued under the Eagle SERP prior to April 15, 1998.  In addition, no Supplemental Matching Contributions will be credited to such an Employee under the Plan with respect to the period on and after July 1, 2006.

(4)Except as otherwise provided in this Annex I, all of the provisions of the Plan shall apply to each Participant who was an employee of Eagle prior to April 15, 1998.

 

ANNEX II

Special Provisions Relating to Supplemental Matching Contributions

Attributable to the Period On and After January 1, 2005 and Prior to July 1, 2006

 

Prior to July 1, 2006, the Plan provided for the crediting of Supplemental Matching Contributions to the Supplemental Matching Contributions Accounts of a select group of management or highly compensated employees.  Only those employees of the Bank and its affiliates who were members of a select group of management or highly compensated employees (as determined by the board of directors of the Bank) were eligible to receive Supplemental Matching Contributions under the Plan.  

Effective as of July 1, 2006, all liabilities relating to Supplemental Matching Contributions were transferred to, and assumed by, the Webster Bank Deferred Compensation Plan for Directors and Officers.  Therefore, effective as of July 1, 2006, the Plan no longer provides for the crediting of Supplemental Matching Contributions.

The Supplemental Matching Contributions payable under the Plan were based on the amount of matching contributions which an employee would have been allocated under the 401(k) Plan, but determined:  (a) without regard to the limitations on annual elective deferrals imposed by Section 401(k) and Section 402(g) of the Code; (b) without regard to the limitations on matching contributions imposed by Section 401(m) of the Code; (c) without regard to the limitations of Section 415 of the Code; (d) without regard to the limitations of Code Section 401(a)(17); and (e) based on the definition of compensation set forth in the 401(k) Plan that was applicable to the period on and after September 1, 2004.

The payment of Supplemental Matching Contributions under the Plan was completely separate from the 401(k) Plan, was unfunded, and was not qualified for special tax treatment under the Code.

The following provisions were applicable during the period on and after January 1, 2005 and prior to July 1, 2006:

(1)For purposes of this Annex II, the following terms shall have the following meanings:

(a)"401(k) Plan" means the Webster Bank Retirement Savings Plan (formerly known as the Webster Bank Employee Investment Plan), including any amendments, rules or regulations adopted pursuant thereto.

(b)"Matching Percentage" means the percentage of a Participant's elective deferrals to the 401(k) Plan (to the extent such elective deferrals were not in excess of the Minimum Percentage of the Participant's compensation) which the Bank, the Corporation or a Participating Affiliate had agreed to contribute to the 401(k) Plan on behalf of the Participant as matching contributions.

(c)"Minimum Percentage" means the lowest percentage of compensation which a Participant had to elect to have contributed to the 401(k) Plan as elective deferrals in order to receive the maximum amount of matching contributions available under the terms of the 401(k) Plan.

(d)"Supplemental Matching Contributions" mean the amounts of deferred compensation credited to the Supplemental Matching Contributions Account of a Participant under Section 3 of Annex II of the Plan.

(e)"Supplemental Matching Contributions Account" means the two bookkeeping accounts maintained for each Participant.  One bookkeeping account is credited with the Supplemental Matching  Contributions (and the earnings and losses allocable thereto) that the Participant elected to be paid in installments pursuant to Section 4 of this Annex II (the "Installment Subaccount").  The other bookkeeping account is credited with the Supplemental Matching Contributions (and the earnings and losses allocable thereto) that will be paid in a single lump sum pursuant to Section 4 of this Annex II (the "Lump Sum Subaccount").

(2)An Employee who was a participant in the 401(k) Plan was eligible to have Supplemental Matching Contributions credited to his or her Supplemental Matching Contributions Account, provided that the following conditions were met:

(a)the Employee was a member of a select group of management or highly compensated employees (as determined by the Board) and was an executive vice president or above of the Bank, the Corporation or a Participating Affiliate;

(b)if the Employee had made the maximum elective deferrals permitted by the terms of the 401(k) Plan for a calendar year, the matching contributions which would have been allocated to the account of the Employee under the 401(k) Plan for the calendar year would have been limited due to the Employee's inability to make elective contributions equal to at least the Minimum Percentage of his or her compensation as a result of the applicability of the limitations on elective deferrals under Section 402(g) of the Code, the limitations on contributions under Section 415 of the Code, or the limitations on compensation under Section 401(a)(17) of the Code; and

(c)such Employee either: (i) separated from service with the Bank, the Corporation and all Affiliates; or (ii) died while in the service of the Bank, the Corporation or an Affiliate.

For purposes of Section 2(c)(i) of this Annex II, an Employee was not deemed to have separated from service as the result of a transfer of employment between the Bank, the Corporation or an Affiliate.  However, if an Employee transferred employment from the Bank, the Corporation or a Participating Affiliate to a Nonparticipating Affiliate, the Employee was not credited with any Supplemental Matching Contributions with respect to compensation earned after the date of such transfer of employment.

(3)The amount of Supplemental Matching Contributions allocated to a Participant was determined as follows:

(a)As of the last day of each calendar year, the amount of a Participant's Supplemental Matching Contributions was determined.  The amount of such Supplemental Matching Contributions for a calendar year equaled the excess, if any, of: (i) the Participant's adjusted matching contributions, as determined under Section 3(b) of this Annex II, for such calendar year; over (ii) the maximum amount of matching contributions which would have been allocated for the benefit of the Participant under the 401(k) Plan for such calendar year if he or she had actually made the maximum elective deferrals permitted by the terms of the 401(k) Plan (determined in accordance with the limitations set forth in the 401(k) Plan and in Code Sections 401(k), 401(m), 402(g), 415 and 401(a)(17)).

(b)For purposes of Section 3(a)(i) of this Annex II, a Participant's adjusted matching contributions equaled the Matching Percentage of the Participant's elective deferrals under the 401(k) Plan to the extent they did not exceed the Minimum Percentage of the Participant's compensation, except that:

(i) it was assumed that the Participant elected to contribute at least the Minimum Percentage of his or her compensation as elective deferrals under the 401(k) Plan; 

(ii)adjusted matching contributions were determined without regard to the limitations on elective deferrals under Section 401(k) and Section 402(g) of the Code;

(iii)adjusted matching contributions were determined without regard to the limitations on matching contributions under Section 401(m) of the Code;

(iv)adjusted matching contributions were determined without regard to the limitations on contributions under Section 415 of the Code;

(v)adjusted matching contributions were determined without regard to the limitations on compensation under Section 401(a)(17) of the Code; and

(vi)adjusted matching contributions were determined by reference to the definition of compensation set forth in Section 3(c) of this Annex II.

The adjustments for determining adjusted matching contributions which are described in Section 3(b) of this Annex II applied to all calendar years in which the Participant was eligible to participate in the Plan, including any calendar years prior to the effective date of any amendment to the Plan.

(c)In computing a Participant's adjusted matching contributions under Section 3(b) of this Annex II, the Participant's compensation was based on the definition of compensation set forth in the 401(k) Plan that was applicable to the period on and after September 1, 2004.  Pursuant to such definition, the Participant's compensation: (i) included all of the Participant's regular salary, overtime, commissions, bonuses, and pre-tax contributions made to the 401(k) Plan, to an employee benefit plan under an arrangement described in Section 125 of the Code or to a qualified transportation fringe benefit plan described in Section 132(f)(4) of the Code; but (ii) excluded taxable car benefits, taxable reimbursements (such as moving expenses), taxable fringe benefits (such as the cost of excess group term life insurance), and any taxable income realized in connection with the exercise of a nonqualified stock option, the disqualifying disposition of stock received under an incentive stock option, or the grant or vesting of restricted property.  In addition, if a Participant elected to defer all or any portion of his or her compensation, such deferred compensation was included in the Participant's compensation during the calendar year in which it would have been paid to the Participant but for the deferral election.

(4)Prior to the first day of each calendar year, a Participant could elect that any amounts to be credited to his or her Supplemental Matching Contributions Account during the calendar year would be credited either to his or her Supplemental Matching Contributions Account - Lump Sum Subaccount or to his or her Supplemental Matching Contributions Account - Installment Subaccount.  If the Participant did not make an election, the Participant was deemed to have elected that all amounts to be credited to his or her Supplemental Matching Contributions Account for the calendar year would be credited to the Supplemental Matching Contributions Account - Lump Sum Subaccount.

(5)Supplemental Matching Contributions were accounted as follows:

(a)A Participant's Supplemental Matching Contributions were credited by the Corporation, the Bank or an Affiliate (as applicable) to the Supplemental Matching Contributions Account maintained for the Participant.  Supplemental Matching Contributions were credited to the Participant's Supplemental Matching Contributions Account as of the end of the calendar year with respect to which the Supplemental Matching Contributions were made.  A payment to a Participant or Beneficiary was charged to the appropriate Supplemental Matching Contributions Account as of the time the payment was made.  

(b)Interest, compounded monthly, was credited on the balance in a Participant's Supplemental Matching Contributions Account from time to time:  (i) as of the last day of each calendar year during the period beginning when the Supplemental Matching Contributions were first so credited, and ending on the last day of the calendar year preceding the date described in Section 5(b)(ii) of this Annex II; and (ii) as of the date of distribution of a final installment payment (pursuant to Section 8(b) of this Annex II) or a single sum distribution (pursuant to Section 8(a) of this Annex II) of the amounts credited to the Participant's Supplemental Matching Contributions Account.  The rate of interest was the interest rate on one year United States Treasury obligations (as reported from time to time in The Wall Street Journal) plus fifty (50) basis points, adjusted monthly.

(6)Supplemental Matching Contributions were vested as follows:

(a)A Participant became vested and had a nonforfeitable right to receive the amount credited to his or her Supplemental Matching Contributions Account under the Plan in the same manner and to the same extent as the amount credited to the Participant's matching contributions account under the 401(k) Plan.

(b)Notwithstanding the above, however, if the Committee determined, after a hearing, that a Participant who was eligible to receive or was receiving Supplemental Matching Contributions under the Plan had engaged in any activities which, in the opinion of the Committee, were detrimental to the interests of, or were in competition with, the Bank, the Corporation or any Affiliates, then all amounts credited to his or her Supplemental Matching Contributions Account that were payable under the Plan were thereupon terminated and forfeited.

(7)Supplemental Matching Contributions were distributed, or were commenced to be distributed, at the time set forth below:

(a)On the first day of the month coinciding with or next following the date that was six months after the Participant's Separation from Service with the Corporation, the Bank and all Affiliates.

(b)On the first day of the month coinciding with or next following the date that was sixty (60) days after the Participant's death.

(8)A Participant's Supplemental Matching Contributions were distributed, or were commenced to be distributed, in the form of distribution elected, or deemed elected, by the Participant pursuant to Section 4 of this Annex II, depending on whether such Supplemental Matching Contributions were credited to his or her Supplemental Matching Contributions Account - Lump Sum Subaccount or his or her Supplemental Matching Contributions - Installment Subaccount:

(a)Amounts credited to the Participant's Supplemental Matching Contributions Account - Lump Sum Subaccount were paid to such Participant in a single lump sum at the time determined pursuant to Section 7 of this Annex II.

(b)Amounts credited to the Participant's Supplemental Matching Contributions Account - Installment Subaccount were distributed in ten substantially equal, annual installments.  Each installment was equal to the balance credited to the Supplemental Matching Contributions Account - Installment Subaccount multiplied by a fraction, the numerator of which was one and the denominator of which was ten minus the number of annual installments previously paid to the Participant (so that the first installment was 1/10th of the account, the second installment was 1/9th of the account, and so on).  

If a Participant was entitled to receive installment payments due to a Separation from Service, the installment payment to which the Participant would otherwise have been entitled if installment payments had commenced on the first day of the month coinciding with or next following the date of his or her Separation from Service was segregated as of such date, credited with interest, and paid on the first day of the month coinciding with or next following the date that was six months after his or her Separation from Service.  The remainder of the installments were paid to the Participant annually on each subsequent anniversary of the first day of the month coinciding with or next following the date of his or her Separation from Service until the ten installments had been paid.

If a Participant's Beneficiary was entitled to receive installment payments due to the death of the Participant, the first installment was paid to the Beneficiary on the first day of the month coinciding with or next following the date that was sixty (60) days after the Participant's death.  Subsequent installments were paid to the Beneficiary annually on each subsequent anniversary of such date until the ten installments had been paid.  

If a Participant began to receive installment payments but he or she died before his or her entire Supplemental Matching Contributions Account - Installment Subaccount had been distributed, the remaining installment payments were made to the Participant's Beneficiary.

 

 

ANNEX III

Certain Change in Control Payments Prior to January 1, 2008

 

The provisions of this Annex III shall apply to the Participants who were the Chairman and Chief Executive Officer of the Bank and the President of the Bank in office on January 1, 2004.

For the period prior to the close of business on December 31, 2007, notwithstanding the provisions of Section 3.1(b) and Section 3.4 of the Plan, if such a Participant was entitled to receive a Supplemental Retirement Income under Section 3.1(b) and the Participant's employment was involuntarily terminated following a change in control (as defined for purposes of any change in control or employment agreement entered into between the Participant and the Bank or any Affiliate of the Bank), then:

(a)the Participant's targeted monthly retirement income (as determined under Section 3.1(b)(ii)) was calculated by taking into account the service which the Participant would have performed, and the compensation which the Participant would have received, if he had remained actively employed during the period of time in which he was entitled to receive severance benefits under the terms of such change in control or employment agreement;

(b)the ratio in Section 3.1(b)(ii)(B) was deemed to equal one if the Participant had more than twenty-five (25) years of vesting service as of the date of his separation from service; and

(c)the excess of the Supplemental Retirement Income that the Participant would be entitled to receive by applying the provisions of subsection (a) and subsection (b) of this Annex III over the Supplemental Retirement Income that the Participant would be entitled to receive without regard to the provisions of subsection (a) and subsection (b) of this Annex III would be paid to the Participant in an actuarially equivalent single lump sum on the date that was six months after the date of the Participant's Separation from Service.  The Supplemental Retirement Income that the Participant would be entitled to receive without regard to the provisions of subsection (a) and subsection (b) of this Annex III would be paid to the Participant in accordance with the provisions of Article III.  For purposes of this Annex III, actuarial equivalence was determined by applying the actuarial factors set forth in the Pension Plan.

The Pension Plan has been frozen effective as of the close of business on December 31, 2007 with respect to the Participants who were the Chairman and Chief Executive Officer of the Bank and the President of the Bank in office on January 1, 2004.  Therefore, no lump sum benefit shall be paid to such Participants pursuant to the terms of this Annex III with respect to a change in control that occurs on or after the close of business on December 31, 2007.

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