Document:

Exhibit
10.29

 

AMNET
MORTGAGE, INC.

 

SUPPLEMENTAL
EXECUTIVE RETIREMENT PLAN

 

 

Effective
January 1, 2003

 

 

TABLE OF CONTENTS

 

	
  ARTICLE I  DEFINITIONS

  	
   

  
	
   

  	
  1.1

  	
  “Account(s)”

  	
   

  
	
   

  	
  1.2

  	
  “Benchmark Fund”

  	
   

  
	
   

  	
  1.3

  	
  “Beneficiary”

  	
   

  
	
   

  	
  1.4

  	
  “Benefit(s)”

  	
   

  
	
   

  	
  1.5

  	
  “Board of Directors” or
  “Board”

  	
   

  
	
   

  	
  1.6

  	
  “Change in Control”

  	
   

  
	
   

  	
  1.7

  	
  “Code”

  	
   

  
	
   

  	
  1.8

  	
  “Committee”

  	
   

  
	
   

  	
  1.9

  	
  “Company”

  	
   

  
	
   

  	
  1.10

  	
  “Compensation”

  	
   

  
	
   

  	
  1.11

  	
  “Disability”

  	
   

  
	
   

  	
  1.12

  	
  “Discretionary Company
  Credit”

  	
   

  
	
   

  	
  1.13

  	
  “Distribution Date”

  	
   

  
	
   

  	
  1.14

  	
  “Effective Date”

  	
   

  
	
   

  	
  1.15

  	
  “Election”

  	
   

  
	
   

  	
  1.16

  	
  “Eligible Individual”

  	
   

  
	
   

  	
  1.17

  	
  “Employer”

  	
   

  
	
   

  	
  1.18

  	
  “In-Service Distribution
  Date”

  	
   

  
	
   

  	
  1.19

  	
  “Interest”

  	
   

  
	
   

  	
  1.20

  	
  “Interest Rate”

  	
   

  
	
   

  	
  1.21

  	
  “Ownership Change Event”

  	
   

  
	
   

  	
  1.22

  	
  “Participant”

  	
   

  
	
   

  	
  1.23

  	
  “Plan”

  	
   

  
	
   

  	
  1.24

  	
  “Plan Year”

  	
   

  
	
   

  	
  1.25

  	
  “Service”

  	
   

  
	
   

  	
  1.26

  	
  “Trust”

  	
   

  
	
   

  	
  1.27

  	
  “Trust Agreement”

  	
   

  
	
   

  	
  1.28

  	
  “Trustee”

  	
   

  
	
   

  	
  1.29

  	
  “Year of Service”

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II  ELIGIBILITY

  	
   

  
	
   

  	
  2.1

  	
  Eligibility.

  	
   

  
	
   

  	
  2.2

  	
  Commencement of
  Participation.

  	
   

  
	
   

  	
  2.3

  	
  Cessation of Participation.

  	
   

  
	
   

  	
  2.4

  	
  Cessation of Eligibility.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III  DEFERRALS AND CONTRIBUTIONS

  	
   

  
	
   

  	
  3.1

  	
  Discretionary Company
  Credits.

  	
   

  
	
   

  	
  3.2

  	
  Calculation
  of Discretionary Company Credits.

  	
   

  
	
   

  	
  3.3

  	
  No Withdrawal.

  	
   

  

 

i

 

	
  ARTICLE IV  VESTING

  	
   

  
	
   

  	
  4.1

  	
  Vesting of
  Participants’ Accounts.

  	
   

  
	
   

  	
  4.2

  	
  Vesting Upon Plan
  Termination.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V  ACCOUNTS

  	
   

  
	
   

  	
  5.1

  	
  Accounts.

  	
   

  
	
   

  	
  5.2

  	
  Interest
  Credited to Accounts at Least Monthly.

  	
   

  
	
   

  	
  5.3

  	
  Determination of
  Interest Rate.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI  BENEFIT DISTRIBUTIONS AND ACCOUNT WITHDRAWALS

  	
   

  
	
   

  	
  6.1

  	
  Benefit Amount.

  	
   

  
	
   

  	
  6.2

  	
  Timing of Distributions.

  	
   

  
	
   

  	
  6.3

  	
  Distribution
  Upon Participant Termination of Service.

  	
   

  
	
   

  	
  6.4

  	
  Method of Distribution.

  	
   

  
	
   

  	
   

  	
  6.4.1

  	
  Distribution Methods.

  	
   

  
	
   

  	
   

  	
  6.4.2

  	
  Installment Amounts.

  	
   

  
	
   

  	
   

  	
  6.4.3

  	
  Minimum
  Account Balance Necessary for Installments.

  	
   

  
	
   

  	
  6.5

  	
  Election of
  In-Service Distribution Date.

  	
   

  
	
   

  	
   

  	
  6.5.1

  	
  Initial Election.

  	
   

  
	
   

  	
   

  	
  6.5.2

  	
  Revocation or
  Amendment of Election.

  	
   

  
	
   

  	
   

  	
  6.5.3

  	
  Termination
  Before the Planned Distribution Date.

  	
   

  
	
   

  	
   

  	
  6.5.4

  	
  Termination
  After Commencement of Installment In-Service Distributions.

  	
   

  
	
   

  	
   

  	
  6.5.5

  	
  Absence of
  In-Service Distribution Election.

  	
   

  
	
   

  	
  6.6

  	
  Distribution
  Upon Death of Participant.

  	
   

  
	
   

  	
  6.7

  	
  Distribution
  Upon Disability of Participant.

  	
   

  
	
   

  	
  6.8

  	
  Distribution
  Following Plan Termination.

  	
   

  
	
   

  	
  6.9

  	
  Financial Hardship
  Withdrawal.

  	
   

  
	
   

  	
  6.10

  	
  Limitation
  on Distributions to Covered Employees.

  	
   

  
	
   

  	
  6.11

  	
  Tax Withholding.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII  BENEFICIARIES

  	
   

  
	
   

  	
  7.1

  	
  Designation of Beneficiary.

  	
   

  
	
   

  	
  7.2

  	
  No Designated Beneficiary.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII  TRUST OBLIGATION TO PAY BENEFITS

  	
   

  
	
   

  	
  8.1

  	
  Deferrals
  Transferred to the Trust.

  	
   

  
	
   

  	
  8.2

  	
  Source of Benefit Payments.

  	
   

  
	
   

  	
  8.3

  	
  Investment Discretion.

  	
   

  
	
   

  	
  8.4

  	
  No Secured Interest.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX  PLAN ADMINISTRATION, AMENDMENT AND TERMINATION

  	
   

  
	
   

  	
  9.1

  	
  Committee Powers
  and Responsibilities.

  	
   

  

 

ii

 

	
   

  	
  9.2

  	
  Decisions of the Committee.

  	
   

  
	
   

  	
  9.3

  	
  Indemnification.

  	
   

  
	
   

  	
  9.4

  	
  Claims Procedure.

  	
   

  
	
   

  	
  9.5

  	
  Plan Amendment.

  	
   

  
	
   

  	
  9.6

  	
  Plan Termination.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X  MISCELLANEOUS

  	
   

  
	
   

  	
  10.1

  	
  No Assignment.

  	
   

  
	
   

  	
  10.2

  	
  No Secured Interest.

  	
   

  
	
   

  	
  10.3

  	
  Successors.

  	
   

  
	
   

  	
  10.4

  	
  No Employment Agreement.

  	
   

  
	
   

  	
  10.5

  	
  Attorneys’ Fees.

  	
   

  
	
   

  	
  10.6

  	
  Governing Law.

  	
   

  
	
   

  	
  10.7

  	
  Entire Agreement.

  	
   

  
	
   

  	
  10.8

  	
  Severability

  	
   

  

 

iii

 

AMNET
MORTGAGE, INC.

SUPPLEMENTAL
EXECUTIVE RETIREMENT PLAN

 

Effective
January 1, 2003

 

The AMNET MORTGAGE, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN (the “Plan”) is adopted effective
January 1, 2003, by AMNET MORTGAGE, INC., a Maryland corporation (the
“Company”), primarily for the purpose of providing additional retirement income
for a select group of management or highly compensated employees of the
Company.  This Plan is intended to be an
unfunded, nonqualified deferred compensation plan.  Plan participants shall have the status of unsecured creditors of
the Company with respect to the payment of Plan benefits.

 

ARTICLE I

 

DEFINITIONS

 

Whenever used herein, the
masculine pronoun shall be deemed to include the feminine, and the singular to
include the plural, unless the context clearly indicates otherwise, and the
following definitions shall govern the Plan:

 

1.1                                 “Account(s)”
means the book entry account(s) established under the Plan for each Participant
to which are credited the Participant’s Discretionary Company Credits and the
Interest with respect thereto.  Account
balances shall be reduced by any distributions made to the Participant or the
Participant’s Beneficiary(ies) therefrom and any charges that may be imposed on
such Account(s) pursuant to the terms of the Plan.  Separate Subaccounts may be established to which shall be
credited a Participant’s Discretionary Company Credits, which may be made for
any Plan Year, if any, and the Interest with respect thereto.  Where Subaccounts have been established,
Account shall refer to all of the Participants’ Subaccounts, collectively, as
the context may require.

 

1.2                                 “Benchmark
Fund” shall mean one or more of the mutual funds or contracts selected by the
Committee pursuant to Article V.

 

1.3                                 “Beneficiary”
means one, some, or all (as the context shall require) of those persons, trusts
or other entities designated by a Participant to receive the undistributed
value of his or her Account following the Participant’s death.

 

1.4                                 “Benefit(s)”
means the total vested amount credited to a Participant’s Account or
Subaccount.

 

1.5                                 “Board
of Directors” or “Board” means the Board of Directors of the Company.

 

1.6                                 “Change in Control”
shall mean an Ownership Change Event or series of related Ownership Change
Events (collectively, a “Transaction”) in which the stockholders of the Company
immediately before the Transaction do not retain immediately after the
Transaction, in substantially the same proportions as their ownership of shares
of the Company’s
voting stock

 

1

 

immediately before the Transaction, direct or indirect
beneficial ownership of more than fifty percent (50%) of the total combined
voting power of the outstanding voting securities of the Company or, in the
case of an Ownership Change Event described in Section 1.21(iii), the
entity to which the assets of the Company were transferred (the “Transferee”),
as the case may be.  For purposes of the
preceding sentence, indirect beneficial ownership shall include, without
limitation, an interest resulting from ownership of the voting securities of one
or more corporations or other business entities which own the Company or the
Transferee, as the case may be, either directly or through one or more
subsidiary corporations or other business entities.  The Board shall have the right to determine whether multiple
sales or exchanges of the voting securities of the Company or multiple
Ownership Change Events are related, and its determination shall be final,
binding and conclusive.

 

1.7                                 “Code”
means the Internal Revenue Code of 1986, as amended.

 

1.8                                 “Committee”
means the Supplemental Executive Retirement Plan Committee composed of such
individuals as may be appointed by the Board which shall function as the Plan
Administrator.

 

1.9                                 “Company”
means AmNet Mortgage, Inc., a Maryland corporation, and any successor
organization thereto.

 

1.10                           “Compensation”
means a Participant’s base salary and annual bonus awarded under any Company
annual bonus plan, and shall include amounts deferred under the Company’s
401(k) plan, Section 125 cafeteria plan, or any other voluntary deferred
compensation plan.

 

1.11                           “Disability”
means the inability of the Participant, in the opinion of a qualified physician
acceptable to the Committee, to perform the major duties of the Participant’s
position with the Company because of the illness or injury of the Participant.  If the Company adopts a long-term disability
plan, then the definition of “Disability” will be redefined to be consistent
with such long-term disability plan in effect at the time of the disability.

 

1.12                           “Discretionary
Company Credit” means the amount, if any, of Company credits awarded to a
Participant pursuant to Article III.

 

1.13                           “Distribution
Date” means the date on which distribution of a Participant’s Benefits is made
or commenced pursuant to Article VI.

 

1.14                           “Effective
Date” means the date on which the Plan shall be first effective, which is
January 1, 2003.

 

1.15                           “Election”
means the form on which a Participant (i) elects a Distribution Date, and
(ii) elects the method by which his or her Benefits will be
distributed.  The Election shall be in
such form as may be prescribed by the Committee.

 

1.16                           “Eligible
Individual” means an employee of the Employer who is a member of the select
group of management and highly compensated employees as more particularly
described in Article II and who has been designated by the  Committee,
in its sole discretion, as eligible to participate in the Plan.

 

2

 

1.17                           “Employer”
means the Company or a subsidiary thereof that has adopted this Plan.

 

1.18                           “In-Service
Distribution Date”  means the date on
which distribution of a Participant’s Account is made or commenced pursuant to
Section 6.4.

 

1.19                           “Interest”
means the investment return or loss determined in accordance with
Article V which shall be credited to the Participants’ Accounts.

 

1.20                           “Interest
Rate” shall have the meaning as set forth in Section 5.3.

 

1.21                           “Ownership Change
Event” shall be deemed to have occurred if
any of the following occurs with respect to the Company:  (i) the direct or indirect sale or
exchange in a single or series of related transactions by the stockholders of
the Company of more than fifty percent (50%) of the voting stock of the
Company; (ii) a merger or consolidation in which the Company is a party;
(iii) the sale, exchange, or transfer of all or substantially all of the
assets of the Company (other than a sale, exchange or transfer to one or more
subsidiaries of the Company); or (iv) a liquidation or dissolution of the
Company.

 

1.22                           “Participant”
means an Eligible Individual for whom Discretionary Company Credits are made,
regardless of whether such Eligible Individual has executed and submitted an
Election.

 

1.23                           “Plan”
means the AmNet Mortgage, Inc. Supplemental Executive Retirement Plan,
effective January 1, 2003, as it may be amended from time to time.

 

1.24                           “Plan
Year” means the 12-month period beginning on each January 1 and ending on
the following December 31.

 

1.25                           “Service”
means the Participant’s employment or service with the Employer on a
substantially full-time basis, whether in the capacity of an employee or a
director.  A Participant’s Service shall
include periods of employment or service with any Employer regardless of
whether such Employer has adopted this Plan. 
A Participant’s Service shall not be deemed to have terminated merely
because of a change in the capacity under which the Participant renders Service
to the Company, provided there is no interruption or termination of
Participant’s Service.  A Participant’s
Service shall terminate upon an actual termination of Service, whether by
death, Disability, or otherwise. 
Subject to the foregoing, the Committee, in its discretion, shall
determine whether Participant’s Service has terminated and the effect of such
termination.

 

1.26                           “Trust”
means the legal entity, if any, created by a Trust Agreement.  The Company is under no obligation to fund
the obligation to provide Benefits under the Plan through the establishment of
a Trust, and it is anticipated that the Company will not, at least initially,
establish a Trust under the Plan.  However,
the Company may, in its sole and absolute discretion, determine at any time
that a Trust shall be established.

 

1.27                           “Trust
Agreement” means the trust agreement, if any, entered into between the Company
and any Trustee.

 

3

 

1.28                           “Trustee”
means the Trustee, if any, named in the Trust Agreement and any duly appointed
successor or successors thereto.

 

1.29                           “Year
of Service” means 12 consecutive months of Service.

 

ARTICLE II

 

ELIGIBILITY

 

2.1                                 Eligibility.  Eligibility for participation in the Plan
shall be limited to a select group of management or highly compensated
employees of the Employer, who are designated by the Committee, in its sole
discretion, as eligible to participate in the Plan.  Eligible Individuals shall be notified as to their eligibility to
participate in the Plan.

 

2.2                                 Commencement
of Participation.  An Eligible
Individual shall commence participation in the Plan when a Discretionary
Company Credit is made to the Account of such Eligible Individual pursuant to
the provisions of Section 3.

 

2.3                                 Cessation
of Participation.  Active
participation in the Plan shall end when a Participant’s Service terminates for
any reason or at such time as a Participant is notified by the Committee,
pursuant to Section 2.4, below, that he or she is no longer eligible to
participate in the Plan.  Upon
termination of Service or eligibility, a Participant shall remain an inactive
Participant in the Plan until all of the vested Benefits to which he or she is
entitled under this Plan have been paid in full.

 

2.4                                 Cessation
of Eligibility.  The Committee may
at any time, in its sole discretion, notify any Participant that he or she is
not eligible to participate in the Plan, or is not eligible for Discretionary
Company Credits in any Plan Year.

 

ARTICLE III

 

CONTRIBUTIONS

 

3.1                                 Discretionary
Company Credits.  A Participant’s
Subaccount shall be credited with Discretionary Company Credits, in such
amounts and at such times as the Company may, in its sole discretion, determine
and communicate to the Participant.  The
Company shall have the right, but not the obligation, to provide a prorated
Discretionary Company Credit in the year of (i) a Change in Control or (ii) any
Participant’s death or Disability, in such amount as the Board may deem
appropriate to reflect the prorated year in which (i) the Change in Control
occurs or (ii) the Participant’s death or Disability occurred.

 

3.2                                 Calculation
of Discretionary Company Credits. 
The Company shall establish, in its sole and absolute discretion, the
performance criteria and/or formula for determining any Participant’s
Discretionary Company Credits.  Such
contributions shall be based upon the profitability of the Company, the
performance of the Participant, the Compensation paid to the Participant, the
Company’s earnings per share, in tandem with any other Company annual incentive
plan, or such other factors as the Company shall consider appropriate.  The Company

 

4

 

shall be under no obligation to continue to make
Discretionary Company Credits and may discontinue or change the amount or
method of calculating the amount of such Discretionary Company Credits at any
time.

 

3.3                                 No
Withdrawal.  Except as otherwise
provided in Article XI, amounts credited to a Participant’s Account may
not be withdrawn by a Participant and shall be paid only in accordance with the
provisions of this Plan.

 

ARTICLE IV

 

VESTING

 

4.1                                 Vesting
of Participants’ Accounts. 

 

4.1.1                        A
Participant shall vest in Discretionary Company Credits, if any, and the
Interest credited thereon in accordance with the schedule specified by the
Company, in its sole discretion, at the time of any Discretionary Company
Credits are awarded.  Unless otherwise
determined by the Company at the time any Discretionary Company Credit is made,
the amounts credited to a Participant’s Discretionary Company Credit Subaccount
shall be 100% vested upon the earliest of:

 

4.1.1.1               the Participant’s
completion of five (5) Years of Service;

 

4.1.1.2               the Participant’s
death;

 

4.1.1.3               the Participant’s
Disability;

 

4.1.1.4               as of the date ten
(10) days prior to the date of the Change in Control; or

 

4.1.1.5               the Participant’s
involuntary termination by the Company for any reason other than Cause.

 

4.1.1.6               any other date, as
determined solely in the discretion of the Board.

 

4.2                                 Vesting
Upon Plan Termination. 
Notwithstanding any other provision in the Plan to the contrary, a
Participant’s Account shall be 100% vested upon the termination of the
Plan.  However, the cessation of
contributions under the Plan shall not be deemed a termination of the
Plan unless otherwise determined by the Company in its sole and absolute
discretion.

 

ARTICLE V

 

ACCOUNTS

 

5.1                                 Accounts.  Separate Subaccounts shall be established and
maintained for each Participant.  Each
Participant’s applicable Subaccounts shall be credited with the Participant’s
Discretionary Company Credits, if any, made for such Participant.  Participants’ Accounts shall

 

5

 

be credited (debited) with the applicable Interest, as
set forth in this Article V. 
Participants’ Accounts shall be reduced by distributions therefrom and
any charges which may be imposed on the Accounts pursuant to the terms of the
Plan.

 

5.2                                 Interest
Credited to Accounts at Least Monthly. 
Each Subaccount shall be credited (debited) monthly, or more frequently
as the Committee may specify, in an amount equal to the Subaccount balance on
the first day of the prior month multiplied by the Interest Rate applicable to
such Subaccount.

 

5.3                                 Determination
of Interest Rate.

 

5.3.1                        The
Committee shall designate the particular funds or contracts which shall
constitute the Benchmark Funds, and may, in its sole discretion, change or add
to the Benchmark Funds; provided, however, that (i) the initial Benchmark Funds
offered under the Plan shall only be those investment funds offered by the
Company under the Company’s 401(k) plan, and (ii) the Committee shall notify
Participants of any such change prior to the effective date thereof.

 

5.3.2                        Each
Participant may select among the Benchmark Funds and specify the manner in
which each of his or her Subaccounts shall be deemed to be invested, solely for
purposes of determining the Participant’s Interest Rate.  The Committee shall establish and
communicate the rules, procedures and deadlines for making and changing
Benchmark Fund selections.  The Company
shall have no obligation to acquire investments corresponding to the Participant’s
Benchmark Fund selections.

 

5.3.3                        The
Interest Rate is based on the asset unit value, net of administrative fees and
investment management fees and other applicable fees or charges, of the
Benchmark Fund(s) designated by the Board and other applicable fees or charges.  The Interest Rate may be negative if the
applicable Benchmark Fund(s) sustain a loss.

 

ARTICLE VI

 

BENEFIT DISTRIBUTIONS AND ACCOUNT WITHDRAWALS

 

6.1                                 Benefit
Amount.  The value of the
Participant’s Benefit shall be equal to the vested value of the Participant’s
Subaccount(s) on the last day of the calendar quarter prior to the Distribution
Date, or such other date as the Committee may specify, adjusted for
Discretionary Company Credits, and/or withdrawals which have been subsequently
credited thereto or made therefrom prior to the Distribution Date.

 

6.2                                 Timing
of Distributions.  Benefits shall be
paid (or, payments shall commence) as soon as practicable after the earlier
of:

 

6.2.1                        The first
day of the month following the end of the quarter in which a Participant’s
employment with the Employer terminates; or

 

6.2.2                        The day
prior to the closing of a Change in Control; or

 

6

 

6.2.3                        The
In-Service Distribution Date designated by the Participant; or

 

6.2.4                        The date
Committee is notified that a Participant has died or after the Committee has
determined that a Participant has incurred a Disability; or

 

6.2.5                        The first
day of the month following the end of the quarter in which the Plan is
terminated in accordance with Section 9.4.

 

6.3                                 Distribution
Upon Participant Termination of Service. 
Notwithstanding any other Election the Participant may have made, once
the Participant’s Service has terminated, the Company shall distribute, in the
form of a single lump sum payment, the Participant’s vested Account balance.

 

6.4                                 Method
of In-Service Distribution.  

 

6.4.1                        Distribution
Methods.  If a Participant elects an
In-Service Distribution, such Participant’s Benefits shall be paid in one of
the following methods, as specified in his or her most recent effective
Election:

 

6.4.1.1               A single lump sum
payment;

 

6.4.1.2               In quarterly
installment payments of substantially equal amounts over a period not exceeding
five (5) years.

 

6.4.1.3               A Participant may
amend his or her Election as to the method of distribution by filing an amended
Election provided, however, no such amended Election shall be effective unless
it is filed at least twelve (12) months prior to the date on which the
distribution is made or commenced.

 

6.4.2                        Installment
Amounts.  For purposes of this
Section 6.4, installment distributions shall be paid in substantially
equal quarterly payments under an installment methodology established by the
Committee.

 

6.4.3                        Minimum
Account Balance Necessary for Installments.  Notwithstanding anything to the contrary in Section 6.5, if
a Participant’s Account balance is less than $25,000 at the time elected to
begin installment distributions, the Participant’s Benefit will automatically
be distributed in a single lump sum.

 

6.5                                 Election
of In-Service Distribution Date.

 

6.5.1                        Initial
Election.  Upon receipt of notice of
a Discretionary Company Credit, a Participant may specify an In-Service
Distribution Date for the Subaccount to which such Discretionary Company Credit
is credited, subject to the following:

 

6.5.1.1               A Participant may
elect an In-Service Distribution Date for all of the Benefits credited to such
Subaccount.

 

7

 

6.5.1.2               The In-Service
Distribution Date for any Subaccount must be at least two (2) years after the
end of the Plan Year for which such Discretionary Company Credit to such
Subaccount are made.

 

6.5.1.3               The In-Service
Distribution Date must be a date when the Discretionary Company Credit is 100%
vested.

 

6.5.2                        Revocation
or Amendment of Election.  A
Participant who has elected an In-Service Distribution Date may revoke and/or
amend the In-Service Distribution Date Election by filing a revocation or an
amended Election at least twelve (12) months in advance of the In-Service
Distribution Date specified in the Election being revoked or amended.  The amended In-Service Distribution Date
must be in a Plan Year after the In-Service Distribution Date specified in the
prior Election.  If a Participant
revokes an In-Service Distribution Date Election and does not provide another
In-Service Distribution Date, the Participant shall be deemed to have elected
to have the Benefit distributed at termination of employment.  An In-Service Distribution Date Election for
any Deferral Subaccount may be amended only twice.

 

6.5.3                        Termination
Before the Planned Distribution Date. 
Notwithstanding any prior Election, if the Participant terminates
employment with the Employer before his In-Service Distribution Date,
distribution of the Participant’s Account shall be made or commenced as soon as
administratively feasible after the first day of the month following the end of
the quarter in which the employment termination occurs and in the form elected
for distributions at termination of employment.

 

6.5.4                        Termination
After Commencement of Installment In-Service Distributions.  Notwithstanding any prior Election, if the
Participant terminates employment with the Employer while receiving installment
In-Service Distributions, the remaining installments shall be immediately
distributed in a single lump sum as soon as administratively feasible after the
first day of the month following the end of the quarter in which the employment
termination occurs.

 

6.5.5                        Absence
of In-Service Distribution Election. 
If a Participant does not elect an In-Service Distribution Date in his
or her Initial Election, or if the Participant revokes an In-Service
Distribution Date Election, the Participant will be deemed to have elected to
have the Benefits credited to the relevant Subaccount distributed upon his or
her termination of employment, and such a deemed election shall be irrevocable.

 

6.6                                 Distribution
Upon Death of Participant. If a Participant dies before his or her Benefit
payments have commenced, then such Participant’s Benefits shall be paid to his
or her designated Beneficiary in a single lump sum cash distribution as soon as
administratively feasible after the Committee is notified of the Participant’s
death and receives evidence satisfactory to it thereof.  If a Participant dies after his or her
Benefit distribution has commenced, his or her remaining Benefits shall be paid
to the deceased Participant’s Beneficiary in a single lump sum cash
distribution as soon as administratively feasible after the Committee is
notified of the Participant’s death and receives evidence satisfactory to it
thereof.

 

8

 

6.7                                 Distribution
Upon Disability of Participant.  If
a Participant suffers a Disability before his or her Benefit payments have commenced,
then such Participant’s Benefits shall be paid in a single lump sum cash
distribution as soon as administratively feasible after the Committee is
notified of the Participant’s Disability and receives evidence satisfactory to
it thereof.

 

6.8                                 Distribution
Following Plan Termination.  All
Benefits (including installments remaining on Benefits for which payment has
commenced) shall be paid in a single lump sum cash distribution as soon as
administratively feasible following termination of the Plan.

 

6.9                                 Financial
Hardship Withdrawal. A Participant may withdraw up to one hundred percent
(100%) of the vested Benefits credited to his or her Subaccount(s) as may be
required to meet a sudden unforeseeable financial emergency of the
Participant.  Such hardship distribution
shall be subject to the following provisions:

 

6.9.1                        The
hardship withdrawal must be necessary to satisfy the unforeseeable emergency
and no more may be withdrawn than is required to relieve the financial need
after taking into account other resources that are reasonably available to the
Participant for this purpose.

 

6.9.2                        The
Participant must certify that the financial need cannot be relieved:  (i) through reimbursement or
compensation by insurance or otherwise; (ii) by reasonable liquidation of
the Participant’s assets, to the extent such liquidation would not itself cause
an immediate and heavy financial need; or (iii) by borrowing from
commercial sources on reasonable commercial terms.

 

6.9.3                        An
unforeseeable financial emergency is a severe financial hardship to Participant
resulting from a sudden and unexpected illness or accident of Participant or of
a dependent of Participant (as defined in section 152(a) of the Code),
loss of Participant’s property due to casualty, or other similar extraordinary
and unforeseeable circumstances arising as a result of events beyond the
control of Participant.  Neither the
need to pay tuition expenses on behalf of the Participant or the Participant’s
spouse or children nor the desire to purchase a home shall be considered an
unforeseeable emergency.

 

6.9.4                        The
Committee, in its sole discretion, shall determine if there is an unforeseeable
financial emergency, if the Participant has other resources to satisfy such
emergency and the amount of the hardship withdrawal that is required to
alleviate the Participant’s financial hardship.

 

6.9.5                        Upon
receiving a financial hardship withdrawal, the Participant’s Deferrals will be
discontinued for the remainder of the Plan Year in which a financial hardship
withdrawal occurs.  Such Participants
will, however, be eligible for any Discretionary Company Credits which may be
made to the Plan on their behalf.

 

6.10                           Limitation
on Distributions to Covered Employees. Notwithstanding any other provision
of this Article VI, in the event that the Participant is a “covered
employee” as that term is defined in section 162(m)(3) of the Code, or
would be a covered employee if Benefits were

 

9

 

distributed solely in accordance with his or her
Election or early withdrawal request, the Committee may determine, in its sole
and absolute discretion, that the maximum amount which may be distributed from
the Participant’s Account in any Plan Year shall not exceed one million dollars
($1,000,000) less the amount of compensation paid to the Participant in such
Plan Year which is not “performance-based” (as defined in Code
section 162(m)(4)(C)), which amount shall be reasonably determined by the
Committee at the time of the proposed distribution.  Any amount which is not distributed to the Participant in a Plan
Year as a result of this limitation shall be distributed to the Participant in
the next Plan Year, subject to compliance with the foregoing limitations set
forth in this Section 6.10.  This Section 6.10
shall not apply and not restrict any distribution to any Participant if such
distributions are made on account of either the termination of the Plan or a
Change in Control.

 

6.11                           Tax
Withholding. Distribution and withdrawal payments under this Article VI
shall be subject to all applicable withholding requirements for state and
federal income taxes and to any other federal, state or local taxes that may be
applicable to such payments.

 

ARTICLE VII

 

BENEFICIARIES

 

7.1                                 Designation
of Beneficiary.  The Participant
shall have the right to designate on such form as may be prescribed by the
Committee, one or more Beneficiaries to receive any Benefits due under the Plan
which may remain unpaid on the date of the Participant’s death.  The Participant shall have the right at any
time to revoke such designation and to substitute one or more other
Beneficiaries.

 

7.2                                 No
Designated Beneficiary.  If, upon
the death of the Participant, there is no valid Beneficiary designation, the
Beneficiary shall be the Participant’s surviving spouse.  In the event there is no surviving spouse,
then the Participant’s Beneficiary shall be the Participant’s estate.

 

ARTICLE VIII

 

OBLIGATION TO PAY BENEFITS

 

8.1                                 Contributions
in Trust.  The Employer may, in its
sole and absolute discretion, transfer Discretionary Company Credits, if any,
made by or on behalf of a Participant to a Trustee to be held pursuant to the
terms of a Trust Agreement.

 

8.2                                 Source
of Benefit Payments.  All benefits
payable to a Participant hereunder shall be paid by the Employer to the extent
no assets have been transferred to a Trust, and by the Trustee, to the extent
any assets are held in a Trust by the Trustee.

 

8.3                                 Investment
Discretion.  The Benchmark Funds
established pursuant to Section 5.3 shall be for the sole purpose of
determining the Interest Rate to be used for determining the Interest credited
to the Participant’s Account.  Neither a
Trustee nor the Committee shall have any obligation to invest the Participants’
Account in accordance with his deemed investment directions or in any other
investment.

 

10

 

8.4                                 No
Secured Interest.  Except as
otherwise provided by a Trust Agreement, the assets of any Trust or other
account which may be established by the Company to reflect Plan Benefits, shall
be subject to the claims of creditors of the Employer.  Except as provided in a Trust Agreement, the
Participant (or the Participant’s Beneficiary) shall be a general unsecured
creditor of the Employer with respect to the payment of Benefits under this
Plan.

 

ARTICLE IX

 

PLAN ADMINISTRATION, AMENDMENT AND TERMINATION

 

9.1                                 Committee
Powers and Responsibilities.  The
Committee shall have complete control of the administration of the Plan herein
set forth with all powers necessary to enable it properly to carry out its
duties in that respect.  Not in
limitation, but in amplification of the foregoing, the Committee shall have the
power and authority to:

 

9.1.1                        Construe
the Plan and any Trust Agreement to determine all questions that shall arise as
to interpretations of the Plan’s provisions including determination of which
individuals are Eligible Individuals and the determination of the amounts
credited to a Participant’s Account, and the appropriate timing and method of
Benefit payments;

 

9.1.2                        Establish
reasonable rules and procedures which shall be applied in a uniform and
nondiscriminatory manner with respect to Elections, the establishment of
Accounts and Subaccounts, and all other discretionary provisions of the Plan;

 

9.1.3                        Establish
the rules and procedures by which the Plan will operate that are consistent
with the terms of the Plan documents;

 

9.1.4                        Establish
the rules and procedures by which the Plan shall determine and pay installment
distributions and in-service distributions;

 

9.1.5                        Compile
and maintain all records it determines to be necessary, appropriate or
convenient in connection with the administration of the Plan;

 

9.1.6                        Adopt
amendments to the Plan document which are deemed necessary or desirable to facilitate
administration of the Plan and/or to bring these documents into compliance with
all applicable laws and regulations, provided that the Committee shall not have
the authority to adopt any Plan amendment that will result in substantially
increased costs to the Company unless such amendment is contingent upon
ratification by the Board before becoming effective;

 

9.1.7                        Employ
such persons or organizations to render service or perform services with
respect to the administrative responsibilities of the Committee under the Plan
as the Committee determines to be necessary and appropriate, including but not
limited to attorneys, accountants, and benefit, financial and administrative
consultants;

 

9.1.8                        Select,
review and retain or change the Benchmark Funds which are used for determining
the Interest Rate under the Plan;

 

9.1.9                        Direct the
investment of the assets of any Trust;

 

11

 

9.1.10                  Review the
performance of any Trustee with respect to such Trustee’s duties,
responsibilities and obligations under the Plan and any Trust Agreement;

 

9.1.11                  Take such other
action as may be necessary or appropriate to the management and investment of
the Plan assets.

 

9.2                                 Decisions
of the Committee.  Decisions of the
Committee made in good faith upon any matter within the scope of its authority
shall be final, conclusive and binding upon all persons, including Participants
and their legal representatives or Beneficiaries.  Any discretion granted to the Committee shall be exercised in
accordance with rules and policies established by the Committee.

 

9.3                                 Indemnification.  To the extent permitted by law, the Company
shall indemnify each member of the Committee, and any other Employee or member
of the Board with duties under the Plan, against losses and expenses (including
any amount paid in settlement) reasonably incurred by such person in connection
with any claims against such person by reason of such person’s conduct in the
performance of duties under the Plan, except in relation to matters as to which
such person has acted fraudulently or in bad faith in the performance of
duties.  Notwithstanding the foregoing,
the Company shall not indemnify any person for any expense incurred through any
settlement or compromise of any action unless the Company consents in writing
to the settlement or compromise.

 

9.4                                 Claims
Procedure.  Benefits shall be
provided from this Plan through procedures initiated by the Committee, and the
Participant need not file a claim. 
However, if a Participant or Beneficiary believes he or she is entitled
to a Benefit different from the one received, then the Participant or
Beneficiary may file a claim for the Benefit by writing a letter to the
Committee.

 

9.4.1                        If any
claim for Benefits under the Plan is wholly or partially denied, the claimant
shall be given notice in writing of such denial within 90 days of the date the
letter claiming benefits is received by the Committee.  If special circumstances require an
extension of time, written notice of the extension shall be furnished to the
claimant within the initial 90-day period.

 

9.4.2                        Notice of
the denial shall set forth the following information: (a) the specific reason
or reasons for the denial; (b) specific reference to pertinent Plan provisions
on which denial is based; (c) a description of any additional material or
information necessary for the claimant to perfect the claim and an explanation
of why such material or information is necessary; (d) an explanation that a
full review by the Committee of the decision denying the claim may be requested
by the claimant or his or her authorized representative by filing with the
company, within 60 days after such notice has been received, a written request
for such review; and (e) if such request is so filed, the claimant or his or
her authorized representative may review pertinent documents and submit issues
and comments in writing within the same 60 day period specified in the
preceding subparagraph.

 

9.4.3                        The
decision of the Committee upon review shall be made promptly, and not later
than 60 days after the Committee’s receipt of the request for review, unless
special circumstances require an extension of time for processing, in which
case the claimant shall be so

 

12

 

notified and a decision shall be rendered as soon as
possible, but not later than 120 days after receipt of the request for
review.  If the claim is denied, wholly
or in part, the claimant shall be promptly given a copy of the decision.  The decision shall be in writing and shall
include specific reasons for the denial, specific references to the pertinent
Plan provisions on which the denial is based and shall be written in a manner
calculated to be understood by the claimant. 
No further legal action may be initiated claiming benefits under this
Plan until the claims procedure set forth in this Article IX is completed.

 

9.5                                 Plan
Amendment.  This Plan may be amended
by the Company at any time in its sole discretion.  Additionally, the Plan may be amended upon an action of the
members of the Committee subject to the provisions in Section 9.1.  However, no amendment may be made that
alters the nature of an Election or Benefit Distribution Election or which
would reduce the amount credited to a Participant’s Account on the date of such
amendment, unless such amendment is made pursuant to Section 10.8 of the
Plan to comply with changes in applicable law.

 

9.6                                 Plan
Termination.  The Company reserves
the right to terminate the Plan in its entirety by an action of the Board at
any time upon fifteen (15) days notice to the Participants.  The termination of the Plan shall
automatically revoke all outstanding Benefit Distribution Elections and all
elections to have Benefits paid in installments.  If the Plan is terminated, all benefits shall be paid as set
forth in Section 6.8.  Any amounts
remaining in a Trust after all benefits have been paid shall revert to the
Company.

 

ARTICLE X

 

MISCELLANEOUS

 

10.1                           No
Assignment.  The right of any
Participant, any Beneficiary or any other person to the payment of any benefits
under this Plan shall not be assigned, transferred, pledged or encumbered.

 

10.2                           No
Secured Interest.  The obligation of
the Company to Participants under this Plan shall not be funded or otherwise
secured, and shall be paid out of the general assets of the Company.  Participants are general unsecured creditors
of the Company with respect to the obligations hereunder and shall have no
legal or equitable interest in the assets of the Company, including any assets
as the Company may set aside or reserve against its obligations under this
Plan.

 

10.3                           Successors.  This Plan shall be binding upon and inure to
the benefit of the Employee, its successors and assigns and the Participant and
his or her heirs, executors, administrators and legal representatives.

 

10.4                           No
Employment Agreement.  Nothing
contained herein shall be construed as conferring upon any Participant the
right to continue in the employ of the Employer as an employee.

 

13

 

10.5                           Attorneys’
Fees.  If the Employer, the
Participant, any Beneficiary, any beneficiary under an insurance policy
purchased pursuant to Section 6.12, and/or a successor in interest to any
of the foregoing, brings legal action to enforce any of the provisions of this
Plan, the prevailing party in such legal action shall be reimbursed by the
other party, the prevailing party’s costs of such legal action including,
without limitation, reasonable fees of attorneys, accountants and similar advisors
and expert witnesses.

 

10.6                           Governing
Law.  This Plan shall be construed
in accordance with and governed by the laws of the State of California.

 

10.7                           Entire
Agreement.  This Plan constitutes
the entire understanding and agreement with respect to the subject matter
contained herein, and there are no agreements, understandings, restrictions,
representations or warranties among any Participant and the Employer other than
those as set forth or provided for herein.

 

10.8                           Severability.  If any provision of this Plan is held to be
invalid, illegal or unenforceable, such invalidity, illegality, or
unenforceability shall not affect any other provision of this Plan, and the
Plan shall be construed and enforced as if such provision had not been
included.  In addition, if such
provision is invalid, illegal or unenforceable due to changes in applicable
law, the Company may amend the Plan, without the consent and without providing
any advance notice to any Participant, as may be necessary or desirable to
comply with changes in the applicable law or financial accounting of deferred
compensation plans.

 

IN WITNESS WHEREOF, this
Plan has been adopted by the Company effective as of the Effective Date.

 

	
   

  	
  AMNET MORTGAGE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated: August 10,
  2004

  	
  By:

  	
   

  

 

14EXHIBIT
10.1

 

EMPLOYMENT
AGREEMENT

 

This Employment Agreement (this “Agreement”) is made and entered into
as of the 7th day of June 2004, by and between Apogee Technology, Inc., a
Delaware corporation with its principal office at 129 Morgan Drive, Norwood,
Massachusetts 02062 (the “Company”), and Herbert M. Stein (the “Executive”).

 

WITNESSETH:

 

WHEREAS, the Company desires to engage the full-time services of the
Executive;

 

WHEREAS, the Executive desires to be so employed by the Company; and

 

WHEREAS, the Company desires to be assured that the unique and expert
services of the Executive will be available solely to the Company on such
full-time basis, and that the Executive is willing and able to render such
services on the terms and conditions hereinafter set forth.

 

NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements set forth below, the parties hereto agree as follows:

 

1.               Employment and Term. 
The Company hereby agrees to employ the Executive, and the Executive
hereby agrees to accept such employment, on the terms and conditions set forth
herein, for the three-year period commencing on June 2, 2004 (the “Effective
Date”), unless such employment is earlier terminated in accordance with the
terms and provisions of this Agreement. 
This Agreement shall automatically renew for successive periods of two
years (each a “Renewal Term”) unless either party notifies the other of its
intention not to renew this Agreement within one hundred twenty (120) days
prior to expiration of the Initial Term or Renewal Term, as appropriate
(collectively, the Initial Term and Renewal Term(s) are the “Term”).

 

2.               Duties and Restrictions.

 

(a)                                  Duties as Executive of
the Company. The Executive shall, subject to the direction and
supervision of the Company’s Board of Directors, serve as the Chief Executive
Officer and President of the Company. 
The Executive shall also serve as Chairman of the Company’s Board of
Directors, subject to the rights of the Company’s shareholders to elect the
Company’s directors.  In his capacity as
President and Chief Executive Officer, the Executive’s rights, duties and
responsibilities shall be as prescribed from time to time by the Board of
Directors of the Company, provided such duties are customary for a president
and chief executive officer.  The
Executive shall devote his entire working time, attention and energy to the
affairs of the Company during the Term of his employment pursuant to this
Agreement.  The Executive shall perform
his duties to the best of his ability, pursuant to the policies and regulations
of the Company, and shall use his best efforts to promote the success of the
present and future businesses of the Company. 
The Executive, as Chief Executive Officer and President of the Company,
shall have primary responsibility for managing the business and financial
affairs of the Company.  Notwithstanding
anything to the contrary, the Executive shall require Board approval to hire or
fire Senior Management Employees.  For
purposes hereof, the term “Senior Management Employees” shall mean employees
who are, or shall be, compensated with an annual base salary equal to or

 

1

 

greater than $150,000 or such other amount as approved by
the Compensation Committee of the Board of Directors.

 

(b)                                 Confidentiality.  The Executive shall not, directly or
indirectly, during the Term and at any time during or following the termination
of his employment with the Company, reveal, divulge, or make known to any
person or entity, or use for the Executive’s personal benefit (including,
without limitation, for the purpose of soliciting business competitive with any
business of the Company or any of its subsidiaries or affiliates), any
information acquired during the course of employment hereunder with regard to
the financial, technical, business or other affairs of the Company or any of
its subsidiaries or affiliates (including, without limitation, any list or
record of persons or entities with which the Company or any of its subsidiaries
or affiliates has any dealings), other than (1) material already in the public
domain, (2) information of a type not considered confidential by persons
engaged in the same business or a similar business to that conducted by the
Company, (3) material known by the recipients through disclosure by a third
party who has a bona fide right to make such disclosure, or (4) material that
the Executive is required to disclose under the following circumstances: (A) in
the performance by the Executive of his duties and responsibilities hereunder,
which disclosure is reasonably necessary or appropriate, to another executive
of the Company or to representatives or agents of the Company (such as
independent public accountants and legal counsel); (B) at the express direction
of any authorized governmental entity; (C) pursuant to a subpoena or other
court process; or (D) as otherwise required by laws or the rules, regulations,
or orders of any applicable regulatory body. 
The Executive shall, at any time requested by the Company (either during
or after his employment with the Company), promptly deliver to the Company all
memoranda, notes, reports, lists, and other documents (and all copies thereof)
relating to the business of the Company or any of its subsidiaries or
affiliates which he may then possess or have under his control.

 

(c)                                  Non-Solicitation. During the Term and
Non-Solicitation Period (as defined below), the Executive will not (i) solicit,
or attempt to solicit, any officer, director, consultant, executive or employee
of the Company or any of its subsidiaries or affiliates (each an “Employee”) to
leave their employment, affiliation, or engagement with the Company or such
subsidiary or affiliate, (ii) call upon, solicit, divert or attempt to solicit
or divert from the Company or any of its affiliates or subsidiaries any of
their customers or suppliers, or potential customers or suppliers, of whose
names he was aware during the term of his employment with the Company; or (iii)
interfere with the business relationship or advantage between the Company and
any customer, supplier, or account of the Company, of whose name he was aware
during the term of his employment with the Company.

 

(d)                                 For purposes of this
Agreement, the “Non-Solicitation Period” shall mean a period of one year
following the termination of the Executive’s employment for any reason; provided,
however, that under no circumstances may the Executive make any
solicitations hereunder with respect to any former Employee until six months
has expired since such Employee’s employment, affiliation or engagement with
the Company has terminated.

 

3.               Compensation and Benefits.

 

(a)                                  Base Salary.  During each Company Fiscal Year, the
Executive shall receive a base salary (as adjusted, the “Base Salary”), payable
in accordance with the Company’s payroll policies as in effect from time to
time.  In addition, the Company’s Board
of Directors shall annually consider granting increases in the Base Salary
based on such factors as the Executive’s performance and the financial
performance of the Company, but the Company shall have no obligation to grant
such increases in compensation.  The
first such review shall take place on or around the first scheduled Board
meeting in 2005.  The Executive’s
initial Base Salary shall be Two Hundred Ninety-Five Thousand Dollars
($295,000.00).  The term “Company Fiscal
Year” shall mean each one-year period ending on December 31.

 

(b)                                 Bonus.  Beginning with the Company Fiscal Year
ending December 31, 2004, and for each successive Company Fiscal Year during
the Term, the Executive shall be eligible to receive a bonus (“Bonus”) at such
time and in such amount as shall be determined by the Company’s Board of
Directors in its

 

2

 

absolute and sole discretion.   This bonus may be paid in cash, stock, or stock options or any
mixture of the three as determined by the Board of Directors.

 

(c)                                  Expenses.  During the Term, the Executive shall be
entitled to receive prompt reimbursement for all reasonable business expenses
incurred by him (in accordance with the policies and procedures established
from time to time by the Company) in performing services hereunder, provided
that the Executive properly accounts therefor in accordance with Company policy.

 

(d)                                 Benefits.  During the Term and subject to any
contribution generally required of employees of the Company, the Executive
shall be entitled to participate in any and all employee benefit plans from
time to time in effect for employees of the Company generally.  Such participation shall be subject to (i)
the terms of the applicable plan documents and (ii) generally applicable
Company policies. The Company may alter, modify or terminate its employee
benefit plans at any time as it, in its sole discretion, determines to be
appropriate.

 

(e)                                  Vacations.  The Executive shall be entitled to twenty
(20) paid vacation days per Company Fiscal Year.  Vacation days shall accrue at the rate of 1.67 days per month in
each fiscal year.  If the Executive does
not fully utilize his vacation in any given year, he may roll any unused
portion forward into future years except that at no time can the total accrued
and unused vacation time exceed forty (40) days.

 

(f)                                    Proration.  Any payments or benefits payable to the
Executive hereunder in respect of any calendar year or any fiscal year during
which the Executive is employed by the Company for less than the entire year,
unless otherwise provided in the applicable plan or arrangement, shall be
prorated in accordance with the number of days in such calendar year or fiscal
year during which he is so employed.

 

(g)                                 Equity Compensation.

 

(i)                                     Grant.  The Company shall grant the Executive
options to purchase 200,000 shares fully vested for the first year of the
employment term at $8.92 per share, it being acknowledged that such exercise
price represents the fair market value of the Company’s common stock as of June
7, 2004.

 

(ii)                                  General Terms;
Forfeiture & Vesting.   The
options shall be subject to a stock option agreement (the “Option Agreement”)
and evidenced by each party’s execution of a stock option agreement. The Option
Agreement shall incorporate each of the following terms and concepts:  (i) the options shall be “non-qualified”
stock options (i.e. the options will not be incentive stock options under
Section 422 of the Internal Revenue Code of 1996, as amended); (ii) the options
shall be of not less than ten (10) years duration; (iii) upon the Executive’s
termination of service with the Company in all capacities (including as an
employee, director or consultant) for other than Cause, death or disability,
the Executive may exercise vested options for a period not to exceed one
hundred eighty (180) days following such termination of service.

 

4.               Termination. The Executive’s employment hereunder
may be terminated by the Company or the Executive, as applicable, without any
breach of this Agreement by the terminating party, under the following
circumstances:

 

(a)                                  Death.  The Executive’s employment hereunder shall
terminate upon his death.  During the
term of the Executive’s employment, the company will pay for a term life
insurance policy in the amount of $600,000 that will be payable to the
Executive’s estate.   This payment shall
be made within a year of the Executive’s death.

 

3

 

(b)                                 Disability.  If, as a result of the Executive’s
incapacity due to physical or mental illness (as determined in good faith by
the Company’s Board of Directors), the Executive shall have been unable, with
reasonable accommodation, to perform the essential functions of his duties and
responsibilities hereunder on a full-time basis for one hundred and eighty
(180) calendar days within any three hundred and sixty (360) consecutive days.

 

(c)                                  Cause.  The Company may terminate the Executive’s
employment hereunder for Cause. For purposes of this Agreement, the Company
shall have “Cause” to terminate the Executive’s employment hereunder upon:

 

(i)                                     The Executive having been convicted of,
or having pleaded guilty or nolo  contendere to, any felony or any
crime involving moral turpitude;

 

(ii)                                  The Executive’s willful or intentional
failure to perform the Executive’s duties and responsibilities hereunder or
failure to follow a lawful written directive of the Board of Directors (other
than any such failure resulting from the Executive’s incapacity due to physical
or mental illness), upon thirty (30) days notice and opportunity to cure;

 

(iii)                               The commission by the Executive of any
fraud, embezzlement or misappropriation of funds; or

 

(iv)                              The breach by the Executive of any of the
Executive’s material obligations under Sections 2(b), 2(c) or 7 of this
Agreement.

 

(d)                                 Termination by the
Company Without Cause. The Company may terminate the Executive’s
employment at any time without Cause effective upon at least sixty (60) days
prior written notice.

 

5.                                       Compensation Upon Termination or Failure
to Renew.   Upon any termination of this Agreement, all
payments, salary and other benefits shall cease, except as specifically
provided for in this Section 5:

 

(a)                                  Death.  If the Executive’s employment shall be
terminated by reason of his death, the Company shall pay to such person as
shall have been designated in a notice filed with the Company prior to the
Executive’s death, or, if no such person shall be designated, to his estate, as
a death benefit, any payments which the Executive’s spouse, beneficiaries, or
estate may be entitled to receive pursuant to any insurance or executive
benefit plan or other arrangement or life insurance policy maintained by the
Company, the Executive’s Base Salary accrued through the Date of Termination at
the rate in effect at the time of death and any Bonus which the Board of
Directors determines is appropriate under Section 3(b).

 

(b)                                 Disability.  During any period that the Executive fails
to perform his duties and responsibilities hereunder as a result of incapacity
due to physical or mental illness, the Executive shall continue to receive his
Base Salary until the Executive’s employment is terminated pursuant to Section
4(b) hereof and thereafter the Executive shall receive the Executive’s Base
Salary accrued through the Date of Termination at the rate in effect at the
time Notice of Termination is given and any Bonus which the Board of Directors
determines is appropriate under Section 3(b) and any disability insurance
benefits the Executive is entitled to receive.

 

(c)                                  Cause or Voluntary
Termination.  If the
Executive’s employment shall be terminated by the Company for Cause, the
Company’s sole obligation shall be to pay the Executive his Base Salary through
the Date of Termination at the rate in effect at the time Notice of Termination
is given.  If the Executive’s employment
shall be terminated voluntarily by the Executive, the Company shall pay the
Executive (i) his Base Salary through the Date of Termination at the rate in
effect at the time Notice of Termination is given; and (ii) an amount equal to
the highest Bonus previously received by the Executive, to be paid at the time
such bonuses are customarily paid, and pro-rated in accordance with Section
3(f).

 

4

 

(d)                                 Without Cause. If the Company shall
terminate the Executive’s employment without Cause, then the Company shall pay
the Executive:

 

(i)                                     his Base Salary accrued through the Date
of Termination at the rate in effect at the time Notice of Termination is
given;

 

(ii)                                  in lieu of any further salary payments to
the Executive for periods subsequent to the Date of Termination and as
severance pay to the Executive, following the Date of Termination, Base Salary
for a period equal to the greater of twenty-four (24) months or the remaining
period in the Term, at the rate in effect at the time the Notice of Termination
is given and payable in accordance with the Company’s then-current payroll
policies;

 

(iii)                               amounts necessary to continue the
Executive’s coverage under any medical plans in effect as of the Date of
Termination for a period of twenty-four (24) months commencing on the Date of
Termination; and

 

(iv)                              an amount equal to the highest twelve
month Bonus previously received by the Executive, to be paid at the time such
bonuses are customarily paid.

 

(e)                                  Failure to Renew. Notwithstanding
anything contained in this Agreement, the Executive shall not be entitled to
any compensation in the event that the Term of this Agreement is allowed to
expire at its scheduled expiration date.

 

(f)                                    Any payments paid to
the Executive by the Company under this Section 5 shall (i) be conditioned on
the Executive’s compliance with his post-employment covenants, including
without limitation, sections 2(b), 2(c) and 7; (ii) upon request, be
conditioned on the delivery of a release satisfactory to the Company and (iii)
be deemed liquidated damages.

 

6.                                       Other Provisions Relating to Termination.

 

(a)                                  Notice of Termination.  Any termination of the Executive’s
employment by the Company or by the Executive (other than termination because
of the death of the Executive) during the Term shall be communicated by written
Notice of Termination to the other party hereto. For purposes of this
Agreement, a “Notice of Termination” shall mean a notice which shall indicate
the specific termination provision in this Agreement relied upon and shall set
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive’s employment under the provision so
indicated.

 

(b)                                 Date of Termination.  For purposes of this Agreement, “Date of
Termination” shall mean: (1) if the Executive’s employment is terminated by his
death, the date of his death; (2) if the Executive’s employment is terminated
because of a disability pursuant to Section 4(b), then immediately after Notice
of Termination is given; (3) if the Executive’s employment is terminated by the
Company for Cause then, immediately after a Notice of Termination is given; and
(4) if the Executive’s employment is terminated by the Company without Cause,
then upon such date as is specified in the Notice of Termination.

 

7.                                       Non-Competition.

 

(a)                                  Executive hereby acknowledges
that the Company has developed and will develop substantial and valuable
goodwill with its past, present and future customers as a result of substantial
investments of time, effort and capital. 
Executive further acknowledges that he has acquired, and will continue
to acquire, a high level of skill and expertise in the Company’s field(s) of
business (the “Business”) as a direct result of Executive’s employment by the
Company, and that the Company will likely suffer serious competitive damage if
Executive were to utilize that skill and expertise for the benefit of a
competitor of the Company.  Accordingly,
Executive hereby covenants and agrees that, during the Term or any extension
thereof and for a

 

5

 

period of eighteen (18) months after termination of his
employment with the Company, for any reason or from the date of any final
judgment upholding the provisions of this Section 7, whichever is later,
Executive shall not, anywhere in the world, directly or indirectly engage or
invest in, own, manage, operate, control or participate in the ownership,
management, operation or control of, lend Executive’s name or any similar name
to, or render services similar to those provided by Executive to the Business
and/or the Company, or render advice to, any person, entity or business then
engaged in a business that is competitive with any of the lines of business
conducted by the Company either at the date hereof or at the date of
termination of Executive’s employment; provided, however, that Executive may
purchase or otherwise acquire five percent (5%) or less of the capital stock of
a competitive, publicly traded company.

 

(b)                                 Executive acknowledges
that the Business is multinational in scope and that the duration and
geographic scope of the non-competition provisions set forth in this Section 7
are therefore reasonable.  In the event
that any court determines that the duration or the geographic scope, or both,
are unreasonable and that either such provision is to that extent
unenforceable, the parties hereto agree that the provision shall remain in full
force and effect for the greatest time period and in the greatest area that
would not render it unenforceable. 
Executive expressly grants to the Company for a period of up to eighteen
(18) months, as the case may be, following the termination of this Agreement
the right to notify any person at any time of the terms of this restrictive
covenant.

 

(c)                                  EXECUTIVE
REPRESENTS AND WARRANTS THAT THE KNOWLEDGE, SKILLS AND ABILITIES HE POSSESSES
ARE SUFFICIENT TO PERMIT HIM, IN THE EVENT OF TERMINATION OF HIS EMPLOYMENT
HEREUNDER FOR ANY REASON, TO EARN, FOR A PERIOD OF UP TO EIGHTEEN (18) MONTHS
FROM SUCH TERMINATION, A LIVELIHOOD SATISFACTORY TO EXECUTIVE WITHOUT VIOLATING
ANY PROVISIONS OF THIS SECTION.

 

8.               Assignment.  Neither the
Company nor the Executive may make any assignment of this Agreement, or any
interest in it, by operation of law or otherwise, without the prior written
consent of the other; provided, however, that the Company may assign its rights
and obligations under this Agreement without the consent of the Executive in
the event that the Company shall effect a reorganization, consolidate with, or
merge into, any other person or transfer all or substantially all of its
properties or assets to any other person. This Agreement shall inure to the
benefit of and be binding upon the Company and the Executive, their respective
successors, executors, administrators, heirs and permitted assigns.

 

9.               Enforcement of Covenants. 
The Executive acknowledges that the Executive has carefully read and
considered all the terms and conditions of this Agreement, including the
restraints imposed upon the Executive pursuant to Sections 2(b), 2(c) and 7.
The Executive agrees that said restraints are necessary for the reasonable and
proper protection of the Company and its affiliates and that each and every one
of the restraints is reasonable in respect to subject matter, length of time
and geographic area. The Executive further acknowledges that, were the
Executive to breach any of the covenants contained in Section 2(b), 2(c) or 7,
the damage to the Company would be irreparable. The Executive therefore agrees
that the Company, in addition to any other remedies available to it, shall be
entitled to preliminary and permanent injunctive relief against any breach or
threatened breach by the Executive of any of said covenants, without having to
post bond.

 

10.         Conflicting Agreements. 
The Executive hereby represents and warrants that the execution of this
Agreement and the performance of the Executive’s obligations hereunder will not
breach or be in conflict with any other agreement to which the Executive is a
party or is bound and that the Executive is not now subject to any covenants
against competition or similar covenants that would affect the performance of
the Executive’s obligations under this Agreement. The Executive will not
disclose to or use on behalf of the Company any proprietary information of a
third party without such party’s consent.

 

11.         Notice.  For purposes
of this Agreement, all notices and all other communications provided for in
this Agreement shall be in writing and shall be deemed to have been duly given
when (a) delivered personally, (b) sent by facsimile or similar electronic
device and confirmed, (c) delivered by overnight express, or (d) if

 

6

 

sent by any other means, upon receipt. 
Notices and all other communications provided for in this Agreement
shall be

 

If to the Executive:

 

Herbert M. Stein

 

 

If to the Company:

 

Apogee Technology, Inc.

129 Morgan Drive

Norwood, MA  02062

Attn:   Chairman of the Compensation Committee, Alan Tuck                                                              

 

With a copy to:   Apogee’s designated legal counsel

 

 

or to such other address as either party may
have furnished to the other in writing in accordance herewith.

 

12.         Miscellaneous. No provision of this Agreement may be
modified, waived, or discharged unless such waiver, modification, or discharge
is agreed to in a written instrument signed by the Executive and the Company.
No waiver by either party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at
any prior or subsequent time. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof have
been made by either party which are not set forth expressly in this Agreement.

 

13.         Validity.  The
invalidity or unenforceability of any provision or provisions of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.

 

14.         Counterparts. This Agreement may be executed in
several counterparts, each of which shall be deemed to be an original, but all
of which together will constitute one and the same agreement.

 

15.         Entire Agreement: Effectiveness. 
This Agreement constitutes the entire agreement between the parties with
respect to the subject matter hereof and supersedes any and all prior
employment agreements and/or severance protection letters, agreements, or
arrangements between the Executive, on the one hand, and the Company, or any
other predecessor in interest thereto or any of their respective subsidiaries,
on the other hand.

 

16.         GOVERNING LAW. 
THIS AGREEMENT, INCLUDING THE VALIDITY HEREOF AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER, SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAW OF THE COMMONWEALTH OF MASSACHUSETTS APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED ENTIRELY IN SUCH STATE (WITHOUT GIVING
EFFECT TO THE CONFLICTS OF LAWS PROVISIONS THEREOF). EACH OF THE PARTIES HERETO
AGREES THAT ANY ACTION OR PROCEEDING BROUGHT TO ENFORCE THE RIGHTS OR
OBLIGATIONS OF ANY PARTY HERETO UNDER THIS AGREEMENT

 

7

 

 MAY BE COMMENCED AND MAINTAINED
IN ANY COURT OF COMPETENT JURISDICTION LOCATED IN THE COMMONWEALTH OF
MASSACHUSETTS, AND THAT THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF
MASSACHUSETTS SHALL HAVE NON-EXCLUSIVE JURISDICTION OVER ANY SUCH ACTION, SUIT
OR PROCEEDING BROUGHT BY ANY OF THE PARTIES HERETO. EACH OF THE PARTIES HERETO
FURTHER AGREES THAT PROCESS MAY BE SERVED UPON IT BY CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, ADDRESSED AS MORE GENERALLY PROVIDED IN SECTION 11 HEREOF,
AND CONSENTS TO THE EXERCISE OF JURISDICTION OVER IT AND ITS PROPERTIES WITH
RESPECT TO ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR IN CONNECTION WITH
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THE ENFORCEMENT OF
ANY RIGHTS UNDER THIS AGREEMENT.

 

17.         Arbitration. Any dispute, controversy or claim
arising out of, in connection with, or in relation to this Agreement (except for
matters relating to Sections 2(b), 2(c) or 7 of this Agreement) or any breach
thereof shall be finally settled by arbitration in Boston, Massachusetts,
pursuant to the rules then in effect of the American Arbitration Association.
Any award shall be final, binding and conclusive upon the parties and a
judgment upon the award rendered thereon may be entered in any court having
jurisdiction thereof.

 

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

 

	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
  APOGEE TECHNOLOGY, INC.

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Alan Tuck

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Alan Tuck

  
	
   

  	
   

  	
  Title:

  	
  Director and Chairman of the Compensation
  Committee

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Arthur Reynolds

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Arthur Reynolds

  
	
   

  	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Herbert M. Stein

  	
   

  
	
   

  	
  Herbert M. Stein

  
						

 

8

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