Document:

EX-10.9

 

Exhibit 10.9

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

OF ROCKVILLE BANK

As Amended and Restated Effective December 31, 2007

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	INTRODUCTION
	 	 	1	 
	 
	SECTION 1 - DEFINITIONS
	 	 	1	 
	 
	1.1 “Actuarial Equivalent Value”
	 	 	1	 
	 
	1.2 “Affiliated Employer”
	 	 	1	 
	 
	1.3 “Average Annual Earnings”
	 	 	1	 
	 
	1.4 “Bank”
	 	 	2	 
	 
	1.5 “Basic Plan”
	 	 	2	 
	 
	1.6 “Basic Plan Benefit”
	 	 	2	 
	 
	1.7 “Benefit Payment Date”
	 	 	2	 
	 
	1.8 “Board”
	 	 	3	 
	 
	1.9 “Cause”
	 	 	3	 
	 
	1.10 “CEO”
	 	 	3	 
	 
	1.11 “Change in Control”
	 	 	3	 
	 
	1.12 “Change in Control Agreement”
	 	 	3	 
	 
	1.13 “Code”
	 	 	3	 
	 
	1.14 “Company”
	 	 	3	 
	 
	1.15 “Compensation”
	 	 	4	 
	 
	1.16 “Deferred Vested Benefit”
	 	 	4	 
	 
	1.17 “Dependent”
	 	 	4	 
	 
	1.18 “Disability” or “Disabled”
	 	 	4	 
	 
	1.19 “Effective Date”
	 	 	4	 
	 
	1.20 “Former Member”
	 	 	4	 
	 
	1.21 “Good Reason”
	 	 	5	 
	 
	1.22 “Member”
	 	 	5	 
	 
	1.23 “Other Retirement Income”
	 	 	5	 
	 
	1.24 “Plan”
	 	 	5	 
	 
	1.25 “Plan Administrator”
	 	 	6	 
	 
	1.26 “Potential Change in Control”
	 	 	6	 
	 
	1.27 “Retirement Benefits”
	 	 	6	 

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TABLE OF CONTENTS

(continued)

	 	 	 	 	 
	 	 	Page	 
	1.28 “Service”
	 	 	6	 
	 
	1.29 “Specified Employee”
	 	 	6	 
	 
	1.30 “Supplemental Pension Benefit”
	 	 	7	 
	 
	1.31 “Surviving Spouse”
	 	 	7	 
	 
	1.32 “Surviving Spouse’s Benefits”
	 	 	7	 
	 
	1.33 “Vested Former Member”
	 	 	7	 
	 
	SECTION 2 - PARTICIPATION
	 	 	7	 
	 
	2.1 Commencement of Participation
	 	 	7	 
	 
	2.2 Termination of Participation
	 	 	8	 
	 
	SECTION 3 - AMOUNT AND FORM OF BENEFITS
	 	 	8	 
	 
	3.1 Retirement Benefits
	 	 	8	 
	 
	3.2 Deferred Vested Benefit
	 	 	9	 
	 
	3.3 Form of Payment
	 	 	11	 
	 
	3.4 Forfeiture of Benefits
	 	 	12	 
	 
	3.5 Notification of Non-Payment of Benefits
	 	 	13	 
	 
	3.6 Repayment of Benefit Paid as Lump Sum
	 	 	13	 
	 
	3.7 Change in Control
	 	 	13	 
	 
	SECTION 4 - SURVIVING SPOUSE’S BENEFITS
	 	 	14	 
	 
	4.1 Death Prior to Benefit Payment
	 	 	14	 
	 
	4.2 Death On or After Benefit Payment
	 	 	15	 
	 
	4.3 Reduction
	 	 	15	 
	 
	SECTION 5 - PLAN ADMINISTRATOR
	 	 	15	 
	 
	5.1 Duties and Authority
	 	 	15	 
	 
	5.2 Presentation of Claims
	 	 	16	 
	 
	5.3 Claims Denial Notification
	 	 	16	 
	 
	5.4 Claims Review Procedure
	 	 	17	 
	 
	5.5 Timing
	 	 	17	 
	 
	5.6 Final Decision
	 	 	18	 
	 
	5.7 Exhaustion of Remedy
	 	 	18	 

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TABLE OF CONTENTS

(continued)

	 	 	 	 	 
	 	 	Page	 
	SECTION 6- MISCELLANEOUS
	 	 	18	 
	 
	6.1 Amendment; Termination
	 	 	18	 
	 
	6.2 No Employment Rights
	 	 	19	 
	 
	6.3 Unfunded Status
	 	 	19	 
	 
	6.4 No Alienation
	 	 	20	 
	 
	6.5 Withholding
	 	 	20	 
	 
	6.6 Governing Law
	 	 	20	 
	 
	6.7 Successors
	 	 	21	 
	 
	6.8 Integration
	 	 	21	 
	 
	ADDENDUM A
	 	 	23	 

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SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

OF

ROCKVILLE BANK

As Amended and Restated Effective December 31, 2007

INTRODUCTION

The Rockville Bank Supplemental Executive Retirement Plan (the “Plan”) was established effective
May 23, 2005 to provide a means of ensuring the payment of a competitive level of retirement income
and survivor benefits, and thereby attract, retain and motivate a select group of executives of
Rockville Bank and its affiliates. This document represents a complete restatement of the Plan
effective as of December 31, 2007.

SECTION 1 — DEFINITIONS

	1.1	 	“Actuarial Equivalent or Actuarial Equivalent Value” shall mean a benefit of
equivalent value computed on the basis of the mortality table and interest rate used to
calculate accrued benefits under the Basic Plan.
	 
	1.2	 	“Affiliated Employer” shall mean an entity affiliated with the Bank.
	 
	1.3	 	“Average Annual Earnings” with respect to any Member shall mean the greater of: (a)
the Member’s average annual Compensation during the 12 consecutive calendar months

 

 

	 	 	within the
final one hundred-twenty consecutive calendar months preceding the month in which the Member’s
Benefit Payment Date occurs affording the highest such average; or (b) the sum of (i) the
Member’s base salary as in effect immediately prior to the month in which the Member’s Benefit
Payment Date occurs prior to reductions for elective contributions under Sections 401(k), 125
and 132(f)(4) of the Code and deferred compensation under any nonqualified deferred
compensation plan, and (ii) the Member’s annual incentive compensation that became payable in
cash to the Member for the latest year preceding the year in which the Member’s Benefit
Payment Date occurs based on performance actually achieved in that latest year.
	 
	1.4	 	“Bank” shall mean Rockville Bank and its subsidiaries and any successors thereto.
	 
	1.5	 	 “Basic Plan” shall mean as to any Member or Vested Former Member the defined benefit
pension plan of the Bank intended to meet the requirements of Code Section 401(a) pursuant to
which retirement benefits are payable to such Member or Vested Former Member or to the
Surviving Spouse or designated beneficiary of a deceased Member or Vested Former Member.
	 
	1.6	 	 “Basic Plan Benefit” shall mean the amount of benefits payable from the Basic Plan
to a Member or Vested Former Member.
	 
	1.7	 	“Benefit Payment Date” shall mean the date on which payment of a Member’s Retirement
Benefit or Deferred Vested Benefit is made in accordance with Section 3.3 hereof.

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	1.8	 	“Board” shall mean the Board of Directors of the Company, except that any action
authorized to be taken by the Board hereunder may also be taken by a duly authorized committee
of the Board or its duly authorized delegees.
	 
	1.9	 	“Cause”. A Member shall not be deemed to have been terminated for “Cause” under this
Plan unless such Member shall have been terminated for “Cause” under the terms of such
Member’s employment agreement or Change in Control Agreement with the Bank.
	 
	1.10	 	“CEO” shall mean the Chief Executive Officer of the Bank.
	 
	1.11	 	 “Change in Control”. If a “Change in Control” shall have occurred or shall be
deemed to have occurred under the terms of a Member’s or Vested Former Member’s employment
agreement or Change in Control Agreement , then a “Change in Control” shall be deemed to have
occurred under this Plan.
	 
	1.12	 	 “Change in Control Agreement” shall mean any written agreement in effect between any
Member or Former Member or Vested Former Member and the Bank or an Affiliated Employer pursuant to which benefits may be payable to
such Member or Former Member or Vested Former Member in connection with a Change in Control.
	 
	1.13	 	“Code" shall mean the Internal Revenue Code of 1986, as amended from time to time.
	 
	1.14	 	“Company" shall mean Rockville Financial Inc. and any successor thereto.

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	1.15	 	“Compensation" shall mean base salary and annual incentive compensation
prior to reductions for elective contributions under Sections 401(k), 125 and 132(f)(4) of the
Code and deferred compensation under any nonqualified deferred compensation plan.
Notwithstanding the foregoing, Compensation shall exclude severance pay (including, without
limitation, severance pay under an employment or Change in Control Agreement), stay-on
bonuses, long-term bonuses, retirement income, change-in-control payments, contingent
payments, amounts paid under this Plan or any other retirement plan or deferred compensation
plan, income derived from stock options, stock appreciation rights and other equity-based
compensation and other forms of special remuneration.
	 
	1.16	 	 “Deferred Vested Benefit” shall mean the benefits described in Section 3.2(b)
hereof.
	 
	1.17	 	“Dependent” shall mean the child of a Member or Vested Former Member who is a
dependent for federal income tax purposes.
	 
	1.18	 	“Disability” or “Disabled” shall have the meaning provided in Treasury Regulations
Section 1.409A-3(i)(4).
	 
	1.19	 	“Effective Date” shall mean May 23, 2005. The Effective Date of this Amendment and
Restatement of the Plan is December 31, 2007.
	 
	1.20	 	“Former Member” shall mean (a) a Member whose employment with the Bank or an
Affiliated Employer terminates before he or she has completed five or more years of

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	 	 	Service,
or (b) a Member who was removed from participation in the Plan, in accordance with Section 2.2
hereof, before he or she has completed five or more years of Service.
	 
	1.21	 	“Good Reason” If a Member shall have terminated employment for “Good Reason” under
the terms of such Member’s employment agreement with the Bank or Change in Control Agreement,
then such Member shall be deemed to have terminated employment for “Good Reason” under this
Plan.
	 
	1.22	 	 “Member” shall mean an employee of the Bank or an Affiliated Employer who becomes a
participant in the Plan pursuant to Section 2, but excludes any Former Member or Vested Former
Member.
	 
	1.23	 	“Other Retirement Income” with respect to any Member shall mean:

	 	(a)	 	the Supplemental Pension Benefit provided to such Member under the Supplemental
Savings and Retirement Plan of the Bank, which shall be paid at the same time and in
the same form as is provided in Section 3.3 hereof for payment of such Member’s
Retirement Benefit or Deferred Vested Benefit; and
	 
	 	(b)	 	such benefit payable in respect of such Member as may be specified in Addendum
A to this Plan.

	1.24	 	“Plan” shall mean the Rockville Bank Supplemental Executive Retirement Plan, as
embodied herein, and any amendments thereto.

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	1.25	 	“Plan Administrator” shall mean the Human Resources Committee of the Board, except
that any action authorized to be taken by the Plan Administrator hereunder may also be taken
by any committee or person(s) duly authorized by the Human Resources Committee of the Board or
the duly authorized delegees of such duly authorized committee or person(s).
	 
	1.26	 	“Potential Change in Control” If a “Potential Change in Control” shall have occurred
or shall be deemed to have occurred under the terms of a Member’s employment agreement with
the Bank or Change in
Control Agreement , a “Potential Change in Control” shall be deemed to have occurred under this Plan,
	 
	1.27	 	“Retirement Benefits" shall mean the benefit described in Section 3.1(b) hereof.
	 
	1.28	 	“Service” shall mean a Member’s service defined as Vested Service in the Basic Plan,
which is taken into account for vesting purposes thereunder (including any such service prior
to the date such individual becomes a Member but not including any such service after
participation hereunder terminates).
	 
	1.29	 	“Specified Employee” shall mean an employee who satisfies the requirements for being
designated a “key employee” under Section 416(i)(1)(A)(i), (ii) or (iii) of the Code without
regard to Section 416(i)(5) of the Code at any time during a calendar year, in which case such
employee shall be considered a Specified Employee for the twelve-month period beginning on the
first day of the fourth month immediately following the end of such calendar year.

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	1.30	 	“Supplemental Pension Benefit” shall mean the Supplemental Pension Benefit provided
under the Supplemental Savings and Retirement Plan of the Bank.
	 
	1.31	 	“Surviving Spouse” shall mean the spouse of a deceased Member or Vested Former Member
to whom such Member or Vested Former Member is married under applicable state law immediately
preceding such Member or Vested Former Member’s death.
	 
	1.32	 	“Surviving Spouse’s Benefits” shall mean the benefits described in Section 5 hereof.
	 
	1.33	 	“Vested Former Member” shall mean (a) a Member whose employment with the Bank or an
Affiliated Employer terminates on or after the date on which he or she has completed five or
more years of Service, or (b) a Member who was removed from participation in the Plan, in
accordance with Section 2.2 hereof, on or after the date on which he or she has completed five
or more years of Service.

SECTION 2 — PARTICIPATION

	2.1	 	Commencement of Participation. Such key executives of the Bank and its Affiliated
Employers as are designated by the CEO in writing and, in the case of officers of the Bank or
its Affiliated Employers, approved by the Human Resources Committee of the Board, shall
participate in the Plan as of a date determined by the CEO or the Committee, as the case may
be.

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	2.2	 	Termination of Participation. A Member’s participation in the Plan shall terminate
upon termination of his or her
employment with the Bank or any Affiliated Employer. Prior to termination of employment, a
Member may be removed, upon written notice by the CEO, and, in the case of officers of the
Company or its Affiliated Employers, as approved by the Human Resources Committee of the
Board, from further participation in the Plan. As of the date of termination or removal, no
further benefits shall accrue to such individual hereunder.

SECTION 3 — AMOUNT AND FORM OF BENEFITS

	3.1	 	Retirement Benefits.

	 	(a)	 	Eligibility. Upon attainment of age 60 and completion of five years
of Service, a Member or Vested Former Member shall be entitled to the Retirement
Benefit described in Section 3.1(b) hereof, payable at the time and in the form
specified in Section 3.3.
	 
	 	(b)	 	Amount. The Retirement Benefit of a Member or Vested Former Member
shall be an annual benefit equal to the difference between (i) and the sum of (ii) and
(iii), where:

	 	(i)	 	is the percentage of his or her Average Annual Earnings
specified in Addendum A to this Plan;

- 8 -

 

	 	(ii)	 	is the Basic Plan Benefit payable to the Member or Vested
Former Member as of his or her Benefit Payment Date expressed in the form of an
annual life annuity commencing on the Benefit Payment Date, or, if the Basic
Plan Benefit becomes payable after the Member’s or Vested Former Member’s
Benefit Payment Date, the Actuarial Equivalent Value of the Basic Plan
Benefit payable in the form of an annual life annuity commencing on the
Benefit Payment Date, regardless of whether such date precedes the earliest
possible payment date under the terms of the Basic Plan; and
	 
	 	(iii)	 	is the Actuarial Equivalent Value of the Other Retirement
Income payable to the Member or Vested Former Member as of his or her Benefit
Payment Date expressed in the form of an annual life annuity commencing on the
Benefit Payment Date.

	3.2	 	Deferred Vested Benefit.

	 	(a)	 	Eligibility. Each Member and Vested Former Member who has completed
five or more years of Service and whose employment with the Bank or an Affiliated
Employer terminates prior to his or her attainment of age 60 for a reason other than
Cause or death shall be entitled to the Deferred Vested Benefit described in Section
3.2(b) hereof, payable at the time and in the form specified in Section 3.3.

- 9 -

 

	 	(b)	 	Amount. The Deferred Vested Benefit of a Member or Vested Former
Member who terminates and who meets the eligibility requirements of Section 3.2(a)
shall be an annual benefit equal to the difference between (i) and the sum of (ii) and
(iii), where:

	 	(i)	 	is the percentage of his or her Average Annual Earnings
specified in Addendum A to this Plan;
	 
	 	(ii)	 	is the Basic Plan Benefit payable to the Member or Vested
Former Member as of his or her Benefit Payment Date expressed in the form of an
annual life annuity commencing on the Benefit Payment Date, or, if the Basic
Plan Benefit becomes payable after the Member’s or Vested Former Member’s
Benefit Payment Date, the Actuarial Equivalent Value of the Basic Plan Benefit
payable in the form of an annual life annuity commencing on the Benefit Payment
Date, regardless of whether such date precedes the earliest possible payment
date under the terms of the Basic Plan; and
	 
	 	(iii)	 	is the Actuarial Equivalent Value of the Other Retirement
Income payable to the Member or Vested Former Member as of his or her Benefit
Payment Date expressed in the form of an annual life annuity commencing on the
Benefit Payment Date.

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	3.3	 	Time and Form of Payment.

	 	(a)	 	The Retirement Benefit or Deferred Vested Benefit under this Plan, as the case
may be, shall be payable in the form of an Actuarially Equivalent lump sum at the time
specified in Addendum A to this Plan, except as otherwise provided in Section 3.3(b)
hereof.
	 
	 	(b)	 	Anything in this Plan to the contrary notwithstanding, payment to any Specified
Employee upon his or her termination of employment shall not be made before the date
that is six months after the date of termination of employment (or, if earlier, the
date of death of such Specified Employee). The payment will be adjusted to reflect the
deferred payment date by multiplying the payment by the product of the six-month CMT
Treasury Bill annualized yield rate as published by the U.S. Treasury for the date on
which such payment would have been made but for the delay multiplied by a fraction, the
numerator of which is the number of days by which such payment was delayed and the
denominator of which is 365. The adjusted lump sum payment shall be made at the
beginning of the seventh month following such Specified Employee’s termination of
employment. The six-month delay in payment described herein shall not apply, however,
to any payment made under the circumstances described in Section 3.3 (c).
	 
	 	(c)	 	The provisions of Sections 3.3(a) and (b) to the contrary notwithstanding, a
payment to or on behalf of a Member or Vested Former Member shall be accelerated if
payment is required to be made to an individual other than the

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	 	 	 	Member or Vested Former Member to fulfill a domestic relations order as defined in
Section 414(p)(1)(B) of the Code.
	 
	 	(d)	 	The provisions of Sections 3.3(a) and (b) to the contrary notwithstanding, a
payment to a Member or Vested Former Member (or his or her Surviving Spouse) may be
delayed to a date after the designated Benefit Payment Date if calculation of the
amount of the payment is not administratively practicable due to events beyond the
control of the Member or Vested Former Member (or his or her Surviving Spouse) and such
delay is for reasons that are commercially reasonable, provided that payment is made as
soon as payment is administratively practicable.

	3.4	 	Forfeiture of Benefits. Anything in this Plan to the contrary notwithstanding, any
payment made pursuant to this Plan shall be subject to and conditioned upon compliance with 12
U.S.C. §1828(k) and any regulations promulgated thereunder; and any payment contemplated to be
made pursuant to this Plan shall not be payable to the extent such payment is barred or
prohibited by an action or order issued by the Connecticut Banking Commissioner or the Federal
Deposit Insurance Corporation. Moreover, no benefit shall be paid to a Member, Vested Former
Member or Surviving Spouse if the Member or Vested Former Member:

	 	(a)	 	has been determined to be in breach of any noncompetition, nondisclosure or
nondisparagement covenant in such Member’s or Vested Former Member’s employment
agreement with the Bank or Change in Control Agreement; or

- 12 -

 

	 	(b)	 	the Member or Vested Former Member has been discharged from employment with the
Bank or any Affiliated Employer for Cause as provided in the Member’s or Vested Former
Member’s employment agreement with the Bank or Change in Control Agreement.

	3.5	 	Notification of Non-Payment of Benefit. In any case described in Section 3.4, the
Member, Vested Former Member or Surviving Spouse shall be given prior written notice that no
benefit will be paid to such Member, Vested Former Member or Surviving Spouse. Such written
notice shall specify the particular act(s), or failures to act, and the basis on which the
decision not to pay his or her benefit has been made.
	 
	3.6	 	Repayment of Benefit Paid as Lump Sum. A Member or Vested Former Member shall
receive his or her lump sum payment of his or her Retirement Benefit or Deferred Vested
Benefit subject to the condition that if such Member or Vested Former Member engages in any of
the acts described in Section 3.4 (a) or (b) , then such Member or Vested Former Member shall,
within 60 days after written notice by the Bank, repay to the Bank the lump sum benefit
previously paid to such Member or Vested Former Member.
	 
	3.7	 	Change in Control. In the event of a Potential Change in Control or Change in
Control, the Bank shall, not later than 15 days thereafter, have established one or more
so-called “rabbi” trusts and shall deposit therein cash in an amount sufficient to provide for
full payment of all potential benefits payable under the Plan. Such rabbi trust(s) shall be
irrevocable and shall provide that the Bank may not, directly or
indirectly, use or recover any assets of the trust(s) until such time as all obligations which potentially could arise

- 13 -

 

	 	 	
hereunder have been settled and paid in full, subject only to the claims of creditors of the
Bank in the event of insolvency or bankruptcy of the Bank; provided, however, that if no
Change in Control has occurred within two years after such Potential Change in Control, such
rabbi trust(s) shall at the end of such two-year period become revocable and may thereafter
be revoked by the Bank.

SECTION 4 - SURVIVING SPOUSE’S BENEFITS

	4.1	 	Death Prior to Benefit Payment. Upon the death of a Member or Vested Former Member,
prior to the payment of his or her Retirement Benefit or Deferred Vested Benefit hereunder,
any such Member shall be deemed to have completed five years of Service for purposes of
Section 3.2(a) and his or her Surviving Spouse will be entitled to a Surviving Spouse’s
Benefit under this Plan equal to 100% of the Retirement or Deferred Vested Benefit that would
have been provided from the Plan had the Member or Vested Member survived; provided, however,
that in calculating the Retirement or Deferred Vested Benefit that would have been provided
from the Plan, the offset for the Basic Plan Benefit specified in Section 3.1(b)(ii) or
3.2(b)(ii), as the case may be, shall be reduced to the Basic Plan Benefit payable on behalf
of such Member to the Member’s spouse, expressed in the form of an annual life annuity.
Payment of such Surviving Spouse benefit shall be made in an Actuarially Equivalent lump sum
within 90 days after the death of the Member or Vested Former Member, determined in the sole
discretion of the Company. In the event that a Member’s or Vested Former Member’s spouse
predeceases the Member or Vested Former Member, such Surviving Spouse’s benefit shall be
paid to the Member’s Dependents in equal shares.

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	4.2	 	Death On or After Benefit Payment Date. No benefit shall be payable under this
Section 4 if a Retirement Benefit or Deferred Vested Benefit was paid to a Member or Vested
Former Member before his or her death.
	 
	4.3	 	Reduction. Notwithstanding the foregoing provisions of Section 4, the Actuarial
Equivalent Value of the lump sum benefit payable to a Surviving Spouse shall be calculated by
reducing the Retirement Benefit or Deferred Vested Benefit, as the case may be, by one
percentage point for each year (where a half year or more is treated as a full year) in excess
of ten years that the age of the Member or Vested Former Member exceeds the age of the
Surviving Spouse.

SECTION 5 - PLAN ADMINISTRATOR

	5.1	 	Duties and Authority. The Plan Administrator shall be responsible for the
administration of the Plan and may delegate to any committee, employee, director or agent its
responsibility to perform any act hereunder, including, without limitation, those matters
involving the exercise of discretion; provided, that such delegation shall be subject to
revocation at any time at the Plan Administrator’s discretion. The Plan Administrator shall
have the sole discretion to determine all questions arising in connection with the Plan, to
interpret the provisions of the Plan and to construe all of its terms, to adopt, amend, and
rescind rules and regulations for the administration of the Plan, and generally to conduct and
administer the Plan and to make all determinations in connection with the
Plan as may be necessary or advisable. All such actions of the Plan Administrator shall

- 15 -

 

	 	 	be conclusive and binding upon all Members, Former Members, Vested Former Members, Surviving
Spouses and other persons.

	5.2	 	Presentation of Claims. Claims for benefits shall be filed in writing with the Plan
Administrator. Written or electronic notice of the disposition of a claim shall be furnished
to the claimant within 90 days after the claim is filed (or within 180 days if special
circumstances require an extension of time for processing the claim and if notice of such
extension and circumstances is provided to the claimant within the initial 90-day period.)
	 
	5.3	 	Claims Denial Notification. If a claim is wholly or partially denied, the Plan
Administrator shall furnish to the claimant a written notice setting forth in a manner
calculated to be understood by the claimant:

	 	(a)	 	the specific reason(s) for denial;
	 
	 	(b)	 	specific reference(s) to pertinent Plan provisions on which any 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 of the Plan’s claims review procedures and the applicable time
limits for such procedures; and

- 16 -

 

	 	(e)	 	a statement that the claimant has a right to bring a civil action under Section
502(a) of ERISA following an adverse determination on review.

	5.4	 	Claims Review Procedure. Upon a denial, the claimant is entitled (either in person
or by his duly authorized representative) to:

	 	(a)	 	request a subsequent review of the claim by the Plan Administrator upon written
application for review made to the Plan Administrator. In the case of a denial as to
which written notice of denial has been given to the claimant, any such request for
review of the claim must be made within 60 days after receipt by the claimant of such
notice. A claimant must submit a written application for review before the claimant is
permitted to bring a civil action for benefits;
	 
	 	(b)	 	review pertinent documents relating to the denial; and
	 
	 	(c)	 	submit written comments, documents, records and other information relating to
the claim.

	5.5	 	Timing. The Plan Administrator shall make its decision and notify the claimant with
respect to a claim not later than 60 days after receipt of the request. Such 60-day period
may be extended for another period of 60 days if the Plan Administrator finds that special
circumstances require an extension of time for processing and notice of the extension and
special circumstances is provided to the claimant within the initial 60-day period.

- 17 -

 

	5.6	 	Final Decision. The claim for review shall be given a full and fair review that
takes into account all comments, documents, records and other information submitted that
relates to the claim, without regard to whether such information was submitted or considered
in the initial benefit determination. The Plan Administrator shall provide the claimant with
written or electronic notice of the decision in a manner calculated to be understood by the
claimant. The notice shall include specific reasons for the decision, specific references to
the pertinent Plan provisions on which the decision is based, a statement that the claimant
has a right to bring a civil action under Section 502(a) of ERISA, and a statement that the
claimant is entitled to receive, upon request and free of charge, reasonable access to and
copies of all documents, records and other information relevant to the claim. A document is
relevant to the claim if it was relied upon in making the determination, was submitted,
considered or generated in the course of making the determination or demonstrates that benefit
determinations are made in accordance with the Plan and that Plan provisions have been applied
consistently with respect to similarly situated claimants.
	 
	5.7	 	Exhaustion of Remedy. No claimant shall institute any action or proceeding in any
state or federal court of law or equity, or before any administrative tribunal or arbitrator,
for a claim for benefits under the Plan until he/she has first exhausted the procedures set
forth in this Section 5.

SECTION 6 - MISCELLANEOUS

	6.1	 	Amendment; Termination. The Committee, may, in its sole discretion, terminate,
suspend or amend this Plan at any time or from time to time, in whole or in part; provided,

- 18 -

 

	 	 	however, that no termination, suspension or amendment of the Plan may (a) adversely affect a
Member’s or Vested Former Member’s benefit under the Plan to which he or she has become
entitled hereunder, or (b) adversely affect a Vested Former Member’s right or the right of a
Surviving Spouse to receive a benefit in accordance with the Plan, such benefits or rights as
in effect on the date immediately preceding the date of such termination, suspension or
amendment, or (c) cause any payment that a Member, Vested Former Member or Surviving Spouse is
entitled to receive under this Plan to become subject to an income tax penalty under Section
409A of the Code.

	6.2	 	 No Employment Rights. Nothing contained herein will confer upon any Member, Former
Member or Vested Former Member the right to be retained in the service of the Bank or any
Affiliated Employee, nor will it interfere with the right of the Bank or any Affiliated
Employer to discharge or otherwise deal with Members, Former Members or Vested Former Members
with respect to matters of employment.
	 
	6.3	 	Unfunded Status. Members and Vested Former Members shall have the status of general
unsecured creditors of the Bank, and this Plan constitutes a mere promise by the Bank to make
benefit payments at the time or times required hereunder. It is the intention of the Bank that
this Plan be unfunded for tax purposes and for purposes of Title I of ERISA and any trust
created by the Bank and any assets held by such trust to assist the Bank in
meeting its obligations under the Plan shall meet the requirements necessary to retain such
unfunded status.

- 19 -

 

	6.4	 	No Alienation. A Member’s or Vested Former Member’s right to benefit payments under
the Plan shall not be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, attachment or garnishment by creditors of such Member or
Vested Former Member or his or her Surviving Spouse.
	 
	6.5	 	Withholding. The Company may withhold from any benefit under the Plan an amount
sufficient to satisfy its tax withholding obligations.
	 
	6.6	 	Governing Law. The Plan shall be governed by and construed in accordance with the
laws of the State of Connecticut applicable to contracts made and to be performed in such
state to the extent not preempted by federal law. Anything in this Plan to the contrary
notwithstanding, the terms of this Plan shall be interpreted and applied in a manner
consistent with the requirements of Section 409A of the Code and the Regulations thereunder
and the Company shall have no right to accelerate or make any payment under this Plan except
to the extent permitted under Section 409A of the Code. The Company shall have no obligation,
however, to reimburse any Member, Vested Former Member or Surviving Spouse for any tax penalty
or interest payable or provide a gross-up payment in connection with any tax liability of such
Member, Vested Former Member or Surviving Spouse under Section 409A of the Code except that
this provision shall not apply in the event of the Company’s negligence or willful disregard
in its interpretation of the application of Section 409A of the Code and the Regulations
thereunder to the Plan, in
which case the Company will reimburse the Member or Vested Former Member or
Surviving Spouse, as the case may be, on an after-tax basis for any such tax
penalty or interest not later than the last day of the taxable year next
following the taxable year in

- 20 -

 

	 	 	which such Member, Vested Former Member or
Surviving Spouse remits the applicable taxes and interest. The amount of
reimbursement during any one taxable year shall not affect the amount eligible
for reimbursement in any other taxable year and any right to reimbursement
shall not be subject to liquidation or exchange for another benefit.

	6.7	 	Successors. The Bank and the Company shall
require any successor (whether
direct or indirect, by purchase,
merger, consolidation or otherwise)
to all or substantially all of the
business and/or assets of the Bank
or the Company to expressly assume
and agree to perform under this Plan
in the same manner and to the same
extent that the Bank and the Company
would be required to perform if no
such succession had taken place.
As used in this Plan, “Bank “and
“Company” shall mean the Bank and
the Company respectively as
hereinbefore defined and any
successor to its or their business
and/or assets as aforesaid which
assumes and agrees to perform this
Plan by operation of law, or
otherwise and, in the case of an
acquisition of the Bank or the
Company in which the corporate
existence of the Bank or the
Company, as the case may be,
continues, the ultimate parent
company following such acquisition.
Subject to the foregoing, the Bank
and the Company may transfer and
assign this Plan and the Bank’s and
the Company’s rights and obligations
hereunder.
	 
	6.8	 	Integration. In the event of any conflict or ambiguity between this Plan and the
terms of any employment agreement between a Member and the Bank or any Change in Control
Agreement between a Member and the Bank (this Plan and any such employment agreement or
Change in Control Agreement being collectively referred to herein as the “arrangements”),
such conflict or ambiguity shall be resolved in accordance with the

- 21 -

 

	 	 	terms of that
arrangement which are most beneficial to the Member; provided, however, that no such
resolution of any such conflict or ambiguity shall operate to cause the Member to receive
duplicate payments or benefits under the arrangements.

- 22 -

 

ADDENDUM A

	 	 	 	 	 	 	 
	 	 	Percentage for	 	 	 	 
	 	 	Purposes	 	 	 	 
	 	 	of Sections	 	Other Retirement	 	Time of Payment for
	 	 	3.1(b)(i) and	 	Income for Purposes of	 	Purposes of
	Member	 	3.2(b)(i)	 	Section 1.23(b)	 	Section 3.3(a)
	William J. McGurk

	 	70%
	 	none
	 	within 90 days
after termination
of employment,
determined in the
sole discretion of
the Company, except
as otherwise
provided in Section
3.3(b)
	 
	 	 	 	 	 	 
	Joseph F. Jeamel, Jr.

	 	70%
	 	$416,086
	 	April 1, 2008

- 23 -EX-10.1

 

Exhibit 10.1

[Execution Copy]

TRANSITION AGREEMENT AND GENERAL RELEASE

     Transition Agreement and General Release (this “Agreement”) made as of December 17,
2007, by and between International Fight League, Inc., with offices located at 424 West 33rd
Street, Suite 650, New York, New York 10001 (the “Company”), and Gareb Shamus, who is
domiciled at 24 North Brae Court, Tenafly, New Jersey 07670 (“Executive”; and each of the
Company and the Executive, a “Party”, and collectively, the “Parties”).

     WHEREAS, Executive was employed by the Company as Chief Executive Officer and interim Chief
Financial Officer, and also served as the Chairman of the Board of Directors of the Company through
November 19, 2007; and

     WHEREAS, Executive and the Company had determined that Executive’s employment by the Company
and his service as a director of the Company should conclude; and

     WHEREAS, Executive resigned after the close of business on November 19, 2007 from his
employment as the Chief Executive Officer and interim Chief Financial Officer of the Company, and
from his service as the Chairman of and as a director on the Company’s Board of Directors; and

     WHEREAS, the Parties desire to set forth a mutually acceptable process for the orderly
transition of Executive’s separation from employment by and service to the Company.

     NOW, THEREFORE, IT IS AGREED THAT:

     1. Separation; Consultancy. 

          (a) At the request of the Company, Executive hereby irrevocably tenders, and the Company
hereby accepts, Executive’s resignation as an employee and officer of the Company effective at the
close of business on November 20, 2007. Effective on the date hereof, the Executive shall resign
as a director of the Company.

          (b) Effective as of the date of this Agreement, Executive shall be engaged as a consultant to
the Company from the date hereof until the close of business on May 20, 2008 (the “Separation
Date”), at which time Executive’s engagement as a consultant shall terminate. Notwithstanding
the immediately preceding sentence, upon the Company’s written request, Executive shall resign as a
consultant to the Company on any date prior to the Separation Date selected by the Company (the
“Earlier Separation Date”), effective as of the date specified in such notice, provided
that on or prior to the Earlier Separation Date, the Company shall pay Executive a lump-sum amount
equal to any and all remaining consulting fees which would have been paid through the Separation
Date under Section 1(f) below.

          (c) Until earlier requested to resign by the Company, Executive shall continue to serve as a
consultant to the Company through the Separation Date (or the Earlier Separation Date, if
applicable) unless, at his option, he elects to resign from such position.

 

 

          (d) Until the Separation Date (or the Earlier Separation Date, if applicable), Executive will
fully and faithfully discharge his duties as a consultant to the Company, as set forth in
Section 1(g) below, and shall comply with this Agreement.

          (e) Executive agrees that Executive will not be reemployed by the Company, and Executive will
not knowingly accept, apply for, or otherwise seek employment with the Company at any time without
the express written consent of the Board of Directors of the Company, or any of the Company’s
successors or assigns.

          (f) During the period beginning on the date hereof through and including the Separation Date
(subject to acceleration upon the Earlier Separation Date in accordance with the last sentence of
Section 1(b) above), the Company shall pay to Executive a consulting services fee of $20,833 per
month (which amount equals Executive’s current regular monthly gross salary), without deduction for
federal, state and local taxes and other appropriate payroll deductions, and otherwise in
accordance with prevailing Company payroll practices. These payments are in consideration of
Executive providing consulting services and agreeing to all of the terms of this agreement,
including without limitation the release, non-compete, and lock-up provisions.

          (g) The Company covenants and agrees that it shall use commercially reasonable efforts to
cause any and all Licenses (as defined below, which include but are not limited to state promoter
licenses), bonds (including but not limited to state bonds for which Executive signed a personal
guarantee), leases (including but not limited to the Company’s New York City office space) and/or
other Company filings (other than filings with the U.S. Securities and Exchange Commission
(“SEC”)) to be amended so as to remove Executive’s name from such License, bond, lease or
filing. Executive hereby acknowledges, confirms and agrees that his duties as a consultant to the
Company as provided in Section 1(b) above are on an as needed or requested basis, and shall
include, in addition to his obligations under Section 4 below, the obligation for him upon
reasonable request by the Company, to (x) as and when requested, assist the Company with respect to
the renewal, obtainment, preservation or extension of any licenses, permits or other regulatory
certifications, instruments or documentation (collectively, “Licenses”) relating to the
Company, any of its subsidiaries, or any events to be held by the Company or any of its
subsidiaries, for which the Executive’s name appears in such License or application therefor
whether in his personal or official capacity; (y) as and when requested, advise the Company with
respect to the renewal, obtainment, preservation or extension of any Licenses; and (z) provide such
further advice relating to duties previously performed by Executive in his capacity as an executive
officer of the Company as the Board of the Directors or the Chief Executive Officer of the Company,
on the one hand, and Executive, on the other hand, acting in good faith, shall mutually agree upon.
Executive further acknowledges, confirms and agrees that he shall not have power or authority to
make or give any promise, to execute any contract or otherwise create, or assume any liability or
obligation in the name of or on behalf of the Company unless specifically granted such power or
authority by the Board of Directors or the Chief Executive Officer of the Company in writing, and
shall take no such actions without the prior written consent of the Board of Directors or the Chief
Executive Officer of the Company. The obligations of Executive under this Section 1(g) and
Section 4 below shall not require Executive to perform any services or be present at the offices of
the Company except as may be reasonably requested by the Company upon reasonable notice.

 -2- 

 

          (h) Executive acknowledges that while employed by the Company or any of its subsidiaries,
Executive may have made Contributions and Inventions of value to the Company and its subsidiaries
and affiliates. The terms “Contributions” and “Inventions” include all designs,
logos, trademarks, trade names, service marks and works of authorship (including without
limitation, team names and event names), in each case, that are directly related to the Company’s
mixed martial arts business, any of its subsidiaries or the mixed martial arts events business of
the Company or any of its subsidiaries, regardless of (i) whether or not they are patentable or
copyrightable or subject to analogous protection (such as under trademark laws), (ii) their form or
state of development, (iii) whether or not Executive made them alone or with others, (iv) whether
they were conceived or made by Executive, alone or with others, while employed by the Company or
any of its subsidiaries, and (v) whether they were conceived or made during regular working hours
or the location where they were conceived or made.

          With respect to Contributions or Inventions covered by this Section, Executive agrees that:

          (i) Executive will disclose them promptly to the Company and will not disclose
them to anyone other than authorized Company personnel;

          (ii) They will belong solely to the Company (or the applicable subsidiary
thereof) from conception as “works made for hire” (as that terms is used under U.S.
copyright law) or otherwise. To the extent that title to any such Contributions or
Inventions does not, by operation of law, vest in the Company (or the applicable
subsidiary thereof), Executive hereby irrevocably assigns to the Company (or the
applicable subsidiary thereof) all right, title and interest, including, without
limitation, tangible and intangible rights such as patent rights, trademarks, trade
names, service marks and copyrights, that Executive may have acquired in and to all
such Contributions and Inventions, and all benefits and/or rights resulting
therefrom, and agrees to promptly execute any further specific assignments related
to such Contributions or Inventions, benefits and/or rights at the request of the
Company (or the applicable subsidiary thereof).

          (iii) Executive will, upon reasonable request, assist the Company and any of
its subsidiaries in obtaining and maintaining patent, copyright, trademark and other
appropriate protection for them in all countries, at the Company’s or such
subsidiary’s expense. In the event that the Company or any of its subsidiaries is
unable to secure Executive’s signature after reasonable effort in connection with
any patent, trademark, copyright, or other similar protection relating to a
Contribution or an Invention, Executive hereby irrevocably designates and appoints
the Company and its duly authorized officers and agents as his agent and attorney-in
fact, to act for and on his behalf and stead to execute and file any such
application and to do all other lawfully permitted acts to further the prosecution
and issuance of patents, trademarks, copyrights, mask works or other similar
protection thereon with the same legal force and effect as if executed by Executive.

 -3- 

 

          (i) The Company shall reimburse Executive, consistent with past practice, for all reasonable
business-related expenses incurred by Executive in connection with the performance of his duties as
an officer or director of the Company prior to the effective time of his resignation at the close
of business on November 19, 2007, to the extent that Executive submits expense statements and other
supporting documentation therefor to the Company as promptly as practicable; provided that the
amount of such reimbursement shall not exceed $200 in the aggregate.

     2. Exclusive Payments. Executive acknowledges and agrees that the Company has paid to
Executive all of Executive’s wages, commissions, bonuses, and accrued vacation pay, and that the
Company and its subsidiaries owe Executive no other wages, commissions, bonuses, vacation pay,
employee benefits, equity-based compensation, or other compensation or payments of any kind or
nature, other than as provided in this Agreement.

     3. Certain Representations, Warranties and Covenants.

          (a) Executive covenants and agrees that he will promptly return to the Company any and all
documents, software, equipment (including, but not limited to, computers and computer-related
items), Company credit cards, and all other materials or other things in Executive’s possession,
custody, or control which are the property of the Company, including, but not limited to, any
Company identification, keys, and the like, wherever such items may have been located; as well as
all copies (in whatever form thereof) of all materials relating to Executive’s employment, or
obtained or created in the course of his employment, with the Company. Notwithstanding the
foregoing, the Company agrees that Executive shall be permitted to retain (1) his laptop computers
— Dell Latitude and Apple MacBook, and related computer accessories currently in Executive’s
possession, for use by Executive through the Separation Date, and thereafter for his own personal
use at no or nominal cost to Executive, provided that (i) Executive shall promptly deliver the
laptop computers to the Company in order that the Company may remove all of the data relating to
the Company, its subsidiaries and the business of the Company or any of its subsidiaries, and
(ii) Executive shall be responsible for paying any service or other recurring costs or expenses
relating to any of the foregoing; (2) his cellular phone and existing cellular phone number,
provided that Executive uses his best efforts to promptly have the account changed from being in
the name of the Company or in his capacity as an officer of the Company or billed to the account of
the Company, to being in the name of Executive and billed to his own account; (3) copies of
documents and information relating to Executive’s investments and ownership interests in the
Company; (4) copies of documents and information relating to the actions captioned Zuffa, LLC
v. International Fight League, Inc. et al., and International Fight League, Inc. v. Zuffa,
LLC and Dana White, Eight Judicial District Court, Clark County, Nevada, Case No. A516841; and
(5) any promotional materials or items or mementos of a historic, personal, sentimental or similar
nature, including but not limited to Executive’s IFL ring, belt, or any IFL-related clothing or
apparel; provided that this clause (5) shall not include any promotional materials or items that
are necessary or desirable for the Company’s or any of its subsidiaries’ ongoing or future events
(such as any planned merchandising or memorabilia related events) to the extent such materials or
items have not been personalized with respect to Executive.

 -4- 

 

          (b) Executive hereby represents and warrants that, other than those materials Executive will
return to the Company pursuant to Section 3(a) above, Executive has not copied or caused to be
copied, and has not printed-out or caused to be printed-out, any software, computer disks, or other
documents other than those documents generally available to the public, or retained any other
materials originating with or belonging to the Company, and that Executive will not do so.
Executive further represents that Executive has not retained and will not retain in his possession
any software, documents or other materials in machine or other readable form, which are the
property of the Company, originated with the Company, were obtained or created in the course of
Executive’s employment, or relate to employment with the Company, other than copies of documents or
materials relied on by him in the discharge of his duties as Chief Executive Officer of the Company
in support of the public filings made by the Company under his certification, which copies
Executive shall be permitted to retain and shall be deemed “Confidential Information” and be
subject to the requirements of Section 11 below.

          (c) Executive represents, warrants and acknowledges that he is aware of his obligations under
applicable federal and state securities laws by virtue of his current office and directorship of
the Company, and that he shall comply with all such obligations, including without limitation, his
use, awareness and possession of material non-public information and the Company’s Insider Trading
Policy, as in effect on the date hereof and the Separation Date (or, the Earlier Separation Date,
if applicable).

     4. Transition. Executive covenants and agrees that, to the extent requested by the
Company, he will use his reasonable best efforts to cooperate with the Company to achieve from the
date hereof through and including the Separation Date (or the Earlier Separation Date, if
applicable), an effective and orderly transition of his duties and responsibilities to such
employee(s) or person(s) as the Company in its sole discretion may designate, including, but not
limited to, by promptly and fully responding to all inquiries, following all reasonable
instructions of the Board of Directors or the Chief Executive Officer of the Company concerning any
matters involving the Company and within the purview of his employment responsibilities. From and
after the date hereof through and including the Separation Date (or the Earlier Separation Date, if
applicable), Executive agrees, upon request reasonably made by the Board of Directors or the Chief
Executive Officer of the Company, to execute all such accurate and truthful documents and take all
such actions and steps as the Company reasonably deems necessary, advisable or required in order to
further the intent and purposes of this Agreement, including the Executive’s resignations and
transitions contemplated hereby, and the execution of such accurate and truthful filings by the
Company with the SEC as the Company represents and warrants are legally proper and permissible and
as may be required by law.

     5. Cooperation. Executive covenants and agrees that, as reasonably requested by the
Company, he will promptly and fully respond to all inquiries from the Company and its
representatives concerning any financial, legal, or administrative matters concerning the Company.
Executive further agrees that he will promptly and fully comply with any reasonable request by the
Company or its representatives asking for Executive’s testimony or other evidence in any legal or
administrative proceeding, or in connection with any claims or demands, concerning the Company.
The Company shall reimburse Executive for any reasonable pre-approved out-of-pocket expenses
incurred in connection with any cooperation provided under this Section 5.

 -5- 

 

     6. Non-Compete.

          (a) Executive acknowledges and agrees that the business engaged in by the Company, and the
relationships with promoters, athletes, management of venues, licensing boards and consultants of
the Company, are not limited to any particular geographic area, but encompass all 50 states of the
United States of America. Executive also agrees and acknowledges that, by virtue of Executive’s
employment and position with the Company and its subsidiaries, Executive has had access to and
maintained an intimate knowledge of the Company’s and its subsidiaries’ activities and affairs,
including trade secrets and other valuable proprietary and confidential information of the Company,
including without limitation, financial reports, marketing strategies, merchandising, event, team
and league promotions and developments and strategic plans.

          (b) As a material inducement for the Company to enter into this Agreement, and as additional
consideration for the Company’s promises set forth herein, Executive agrees, warrants, represents,
and acknowledges that during the period beginning on the date of this Agreement and ending on May
20, 2008, Executive shall not, directly or indirectly, as employee, agent, consultant, equity
holder, director, promoter, match-maker, co-partner or in any other individual or representative
capacity, own, operate, manage, control, engage in, invest in or participate in any manner in, act
as a consultant or advisor to, render services for (alone or in association with any person or
entity), or otherwise assist any person or entity that engages in or owns, invests in, operates,
manages or controls any venture or enterprise that engages or proposes to engage in, anywhere in
the Territory (as defined below), the promoting or organizing of mixed martial arts events, whether
live, televised or otherwise. Notwithstanding the foregoing, nothing in this Section shall
prohibit Executive from becoming employed by, or engaged as consultant or advisor to, any sports,
media, entertainment or toy conglomerate or any affiliate thereof, so long as Executive is not
involved with, or otherwise provide support, services, advice or assistance relating to, the
production, broadcast, promotion or organization of mixed martial arts events. “Territory”
means North America or in any jurisdiction in which the Company or any of its subsidiaries is then
licensed to do business or in which Executive is aware the Company or any of its subsidiaries has a
plan or proposal to do business.

          (c) As a result of Executive’s access and knowledge, as detailed in Section 6(a) of this
Agreement, and because of the special, unique, and extraordinary services that Executive is capable
of performing for the Company’s competitors, Executive acknowledges that the promises set forth by
Executive in this Section 6 are of a character giving them a peculiar value, the loss of which
cannot adequately or reasonably be compensated by money damages. Consequently, Executive agrees
that any breach or threatened breach by Executive of Executive’s obligations under this Section 6,
or of Section 11 of this Agreement, would cause irreparable injury to the Company, and that the
Company will be entitled to (i) preliminary and permanent injunctions enjoining Executive from
violating such provisions and (ii) money damages in the amount of fees, compensation, benefits,
profits or other remuneration earned by Executive or any competitor as a result of any such breach,
together with interest, and costs and attorneys’ fees expended to collect such damages or secure
such injunctions. Nothing in this Agreement, however, shall be construed to prohibit the Company
from pursuing any other remedy, the Company and Executive having agreed that all such remedies
shall be cumulative.

 -6- 

 

          (d) In the event any provision of this Agreement, or any portion thereof, is determined by any
court of competent jurisdiction to be unenforceable as written, such provision or portion thereof
is to be interpreted so as to be enforceable. Without limitation, if any court of competent
jurisdiction holds any of the restrictions set forth in this Section 6 to be unreasonable as to
time, geographical area, or otherwise, said restrictions will be deemed reduced to the extent
necessary in the opinion of such court to make their application reasonable. In the event any
provision of this Agreement, or any portion thereof, is determined by any court of competent
jurisdiction to be void, the remaining provisions of this Agreement will nevertheless be binding
upon the Company and Executive with the same effect as though the void provision or portion thereof
had been severed and deleted.

          (e) Executive represents, warrants, and agrees that the obligations imposed upon him by this
Section 6 will not prevent him from earning a livelihood after Executive leaves the Company’s
employ, but merely prevent unfair competition against the Company for a limited period, and are
reasonable in scope and duration.

     7. Lock-Up of Company Securities. During the period beginning on the date of this
Agreement and ending on May 20, 2008, Executive shall not (a) offer, trade, pledge, sell or
contract to sell, any options, rights or contracts to sell, purchase any options, rights or
contracts to sell, lend or otherwise transfer or dispose of, directly or indirectly, any shares of
common stock of the Company or any securities exercisable or exchangeable for or convertible into
shares of common stock of the Company or (b) enter into any swap or other arrangement that
transfers to another person, in whole or in part, any of the economic consequences of the ownership
of common stock of the Company, whether any transaction described in clause (a) or (b) above is to
be settled in shares of common stock, cash, other securities or otherwise. Executive also agrees
to and consents to the entry of stop transfer instructions with the Company’s transfer agent
against the transfer of Executive’s shares of the Company’s common stock. Executive may transfer
shares of common stock of the Company to a trust for the benefit of Executive’s spouse or children
pursuant to a court-approved marital decree, provided the shares so transferred shall remain
subject to the provisions of this Section. This Section shall include, without limitation, all
shares of common stock of the Company beneficially owned by Executive, including without limitation
shares owned by GSE, Inc. Subject to the Company’s policy on insider trading, nothing is this
Agreement shall restrict Executive from purchasing shares of the Company’s common stock on the open
market. Executive’s rights with respect to restrictions on selling securities under this Section
shall be no less favorable than the rights of holders of at least five percent (5%) of the
Company’s common stock in the event of a change of control, a recapitalization or a refinancing of
the Company.

     8. Special Benefits.

          (a) During the period beginning on the Separation Date and ending on the six-month anniversary
of the Separation Date (the “Special Benefits End Date”), the Company, in full and final
settlement of any and all claims set forth in this Agreement, and as additional consideration for
this Agreement, will provide Executive with the payments and benefits set forth in Sections 8(b)
and 8(c), which payments and benefits Executive acknowledges and agrees exceeds any payment or
benefit to which Executive might otherwise be entitled.

 -7- 

 

          (b) Executive shall be entitled to any rights guaranteed by the Consolidated Omnibus Budget
Reconciliation Act of 1985 (“COBRA”). In the event Executive elects to receive health
insurance coverage in accordance with COBRA with respect to individual and family coverage for
himself, his spouse and his eligible dependent children. the Company shall pay, on behalf of
Executive, any and all required premiums for such coverage, for any period in which Executive
remains eligible for such COBRA benefits, through the earlier of (i) the Special Benefits End Date
and (ii) the date at which Executive becomes covered (or eligible for coverage to the extent his
employer or other third person agrees to pay for such coverage) for group health insurance though
any employer or professional affiliation other than the Company. Premium and other payments
required for any further continued health insurance coverage, in accordance with COBRA, shall be
the sole responsibility of Executive.

          (c) From the date hereof through the Separation Date, the Company shall use commercially
reasonable efforts to communicate Executive’s contact information to individuals who e-mail or call
the Company and request such contact information for Executive, to the extent such contact
information has been made available by Executive to the Company.

     9. Release.

          (a) Executive, in consideration of the monies and other consideration paid to him pursuant to
this Agreement, releases and forever discharges the Company and the
Company’s current, former, and future controlling shareholders, subsidiaries, affiliates, related
companies, divisions, directors, trustees, officers, employees, agents, attorneys, successors, and
assigns (and the current, former and future controlling shareholders, directors, trustees,
officers, employees, agents, and attorneys of such controlling shareholders, subsidiaries,
affiliates, related companies and divisions), and all persons acting by, through, under, or in
concert with any of them (the Company, and the foregoing other persons and entities are hereinafter
defined separately and collectively as the “Releasees”), from all actions, causes of
action, claims, and demands whatsoever, whether known or unknown,
in law or equity, whether statutory or common law, whether federal, state, local, or otherwise,
including, but not limited to, any claims related to, or arising out of any aspect of Executive’s
employment with the Company, any agreement concerning such employment, or the termination of such
employment, including, but not limited to, any and all claims of wrongful discharge or breach of
contract, any and all claims for equitable estoppel, any and all claims for employee benefits,
including, but not limited to, any and all claims under the Employee Retirement Income Security Act
of 1974, as amended, the Family and Medical Leave Act of 1993, and any and all claims of employment
discrimination on any basis or of unlawful retaliation, including, but not limited to, any and all
claims under Title VII of the Civil Rights Act of 1964, as amended, under the Age Discrimination in
Employment Act of 1967, as amended, under the Civil Rights Act of 1866, 42 U.S.C. § 1981, as
amended, under the Americans With Disabilities Act of 1990, under the Civil Rights Act of 1991,
under the Sarbanes-Oxley Act of 2002, under the Immigration Reform and Control Act of 1986, as
amended, under the New York State Labor Law, as amended, under the New York State Human Rights Law,
as amended, and under the New York City Human Rights Law, as amended; and any claim for attorneys’
fees, experts’ fees, disbursements or costs; which against the Releasees, Executive, Executive’s
heirs, executors, administrators, or assigns ever had, now have, or hereafter may have, by reason
of any matter, cause, or thing whatsoever from the beginning of the world to the date of
Executive’s execution of this Agreement.

 -8- 

 

          (b) Notwithstanding anything to the contrary set forth in subsection (a) of this Section 9,
the Company and Executive agree that, by entering into this Agreement: (i) Executive does not
waive rights or claims that may arise after the date this Agreement is executed; (ii) Executive
does not waive or release the Company from claims that may arise under this Agreement; (iii) except
as provided in Section 7 above, nothing contained in this Agreement shall impair Executive’s
ownership interest in the Company or affect any of the rights Executive has as a shareholder of the
Company, including, without limitation, the right of Executive solely in his capacity as a
shareholder of the Company, to commence, file or join any suit against the Company or any Releasee;
and (iv) nothing contained in this Agreement shall impair any rights Executive has to
indemnification pursuant to the Company’s Certificate of Incorporation or Bylaws, any policy of
insurance maintained by the Company and/or otherwise in accordance with applicable law.

     10. Covenants Against Suit, Claims, etc.

          (a) Executive represents and warrants that as of the date of this Agreement, he has never
commenced or filed any claims or actions against the Releasees or any of them, and except as
otherwise provided in Sections 9(b), 10(b) and 14 of this Agreement, Executive covenants and agrees
never to commence, file, aid, or in any way prosecute or cause to be commenced or prosecuted, any
claims or actions against the Releasees or any of them. The Company represents and warrants that
as of the date of this Agreement, neither it nor any of its subsidiaries has ever commenced or
filed any claims or actions against Executive.

          (b) Executive further acknowledges, represents, and warrants that Executive has not reported
any purported improper, unethical or illegal conduct or activities to any supervisor, manager,
agent or other representative of the Company or to any member of the Company’s legal or compliance
personnel. Notwithstanding the foregoing, nothing in this Agreement shall prohibit or restrict
Executive from (i) making any disclosure of information required by law; (ii) providing information
to, or testifying or otherwise assisting in, any investigation or proceeding brought by any
federal, state or local regulatory or law enforcement agency or legislative body, any
self-regulatory organization, or the Company’s legal or compliance personnel or to legal advisers
and consultants retained by Executive for such purposes; or (iii) testifying, participating in or
otherwise assisting in a proceeding relating to an alleged violation of the Sarbanes-Oxley Act of
2002, or any federal, state or municipal law relating to fraud or any rule or regulation of the
Securities and Exchange Commission, or any self-regulatory organization.

          (c) Each of the Parties covenants and agrees that, at any time after the date of this
Agreement, neither will knowingly or intentionally disparage the reputation of the other or, in the
case of the Company, its or its subsidiaries’ directors, officers or employees, directly or
indirectly, through verbal or written communications or innuendo.

     11. Confidential Information.

          (a) Executive shall keep confidential, and shall not hereafter, directly or indirectly,
appropriate for his own use, or disclose, furnish or make available to any person, firm,
corporation, governmental agency, or other entity, any trade secret, proprietary information, or

 -9- 

 

confidential information of the Company, including, but not limited to, information relating
to trade secrets, processes, methods, pricing strategies, customer lists, customer contacts,
marketing and sales plans, promotion and sponsorship plans, licensing plans and agreements,
programming content, broadcast materials, coach and athlete arrangements, costs and pricing data,
financial reports, strategic plans, and other confidential business matters (collectively,
“Confidential Information”). Executive shall keep the terms and amount of this Agreement
confidential, and shall not hereafter disclose any information concerning this Agreement to any
person, firm, corporation, governmental agency, or other entity, without the prior written consent
of the Company; provided, however, the Executive may disclose such information (x) to any of his
immediate family members, provided that such each such person to whom any such information is
disclosed agrees to keep all such information confidential, (y) to Executive’s financial, tax and
legal advisors to the extent that (i) such information is needed by each such advisor to properly
perform such advisor’s duties to Executive and (ii) each such advisor has agreed to keep all such
information confidential, and (z) to the extent required by applicable law or for the purposes of
complying with this Agreement; provided that Executive will promptly give notice to the Company of
any legal requirement to disclose any Confidential Information, and, to the extent practicable and
reasonable, will not make any such disclosure without the prior consultation of the Company and, at
the sole cost and expense of the Company, request confidential treatment of all or a portion of
such information as the Company may reasonably request.

          (b) Notwithstanding anything to the contrary set forth in this Agreement, the term
“Confidential Information” as used in this Agreement shall not include any information that is or
was: (i) already known to Executive prior to his affiliation with the Company (or any of its
predecessors); (ii) publicly available or that is or may become available in the public domain
through no fault or wrongful act of Executive or any of his representatives or family members; or
(iii) approved for public release by express written authorization of the Company. Moreover,
notwithstanding anything to the contrary set forth in this Agreement, nothing shall prevent
Executive from utilizing any knowledge, information, business techniques and/or methods that
Executive knew prior to his affiliation with the Company (or any of its predecessors) that are or
may become generally known and used by persons with training and experience comparable to that of
Executive, that are common knowledge in the industry, or that Executive learned as part of his
duties at the Company and retains by memory (and not by any documents or other materials of the
Company) generally related to the industry in which the Company operates, provided in each case
that such knowledge, information, business techniques and/or methods do not relate to any specific
confidential or proprietary information about the Company, its subsidiaries or their respective
businesses.

          (c) Notwithstanding anything to the contrary set forth in this Agreement, Executive shall be
entitled to disclose Confidential Information to the extent required by any applicable law, rule or
regulation or governmental, regulatory or supervisory agency, body or authority; provided, however,
that the Executive shall have given the Company prior written notice of any such request or
requirement (including the terms of, and circumstances surrounding, such request) so that the
Company may seek (at its own expense) an appropriate protective order or other appropriate remedy
and/or waive compliance with the provisions of this Section 11. If such order or other remedy is
not obtained, or the Company waives in writing compliance with the provisions of this Section 11 in
that specific instance, the Executive will disclose only that portion of the Confidential
Information which he is legally required to

 -10- 

 

disclose, and will exercise reasonable efforts to obtain reliable assurance that confidential
treatment will be accorded such Confidential Information.

     12. Indemnification.

          (a) Executive agrees to indemnify and hold harmless each and all of the Releasees from and
against any and all loss, cost, damage, or expense, including, but not limited to, attorneys’ fees,
incurred by the Releasees, or any of them, arising out of any breach by Executive of this
Agreement, the fact that any representation made by Executive in this Agreement was false when
made, Executive’s failure to pay any applicable taxes timely and fully, and any liability assessed
against the Company by any governmental entity due to this Agreement’s characterization of the
Company’s payments to Executive.

          (b) The Company expressly covenants and agrees that Executive shall be entitled to
indemnification and advancement of expenses as and to the extent provided in the Certificate of
Incorporation and Bylaws of the Company, each as amended from time to time, but in no case shall
Executive receive less than the level of indemnification and advancement of expenses accorded to
officers and directors under the Delaware General Corporation Law. In furtherance but not in
limitation of the foregoing entitlement, the Company represents and warrants that the Company has
in effect one or more director and officer liability insurance policies. The Company shall not
take any action to expressly exclude the Executive from coverage under any such policies.

     13. No Admissions. This Agreement shall not in any way be construed as an admission
by the Company or Executive of any liability, or of any wrongful acts whatsoever against each other
or any other person.

     14. Statutory Provisions. Notwithstanding any other provision of this Agreement to
the contrary:

          (a) The Company and Executive agree that this Agreement shall not affect the rights and
responsibilities of the U.S. Equal Employment Opportunity Commission (the “EEOC”) to
enforce any laws, and further agree that this Agreement shall not be used to justify interfering
with Executive’s protected right to file a charge or participate in an investigation or proceeding
conducted by the EEOC. The Company and Executive further agree that Executive knowingly and
voluntarily waives all rights or claims (that arose prior to Executive’s execution of this
Agreement) Executive may have against the Releasees, or any of them, to receive any benefit or
remedial relief (including, but not limited to, reinstatement, back pay, front pay, damages, and
attorneys’ fees) as a consequence of any charge filed with the EEOC, and of any litigation
concerning any facts alleged in any such charge.

          (b) The Company and Executive agree that, for a period of seven (7) days following the
execution of this Agreement, Executive has the right to revoke this Agreement by written notice to
Michael C. Keefe, General Counsel, at the Company’s address above. The Company and Executive
further agree that this Agreement shall not become effective or enforceable until the eighth (8th)
day after the execution of this Agreement; and that in the event Executive revokes this Agreement
prior to the eighth (8th) day after the execution of this

 -11- 

 

Agreement, this Agreement, and the promises contained in this Agreement, shall automatically
be deemed null and void.

          (c) The Company hereby advises and urges Executive in writing to consult with an attorney
prior to executing this Agreement. Executive represents and warrants that the Company gave
Executive a period of twenty-one (21) days in which to consider this Agreement before executing
this Agreement and that Executive was represented by an attorney. Executive has knowingly,
voluntarily and intentionally waived his entitlement to a period of twenty-one (21) days in which
to consider this Agreement before execution of this Agreement.

          (d) Executive’s acceptance of the monies paid by the Company as provided in this Agreement, at
any time more than seven (7) days after the execution of this Agreement shall constitute an
admission by Executive that Executive did not revoke this Agreement during the revocation period of
seven (7) days; and shall further constitute an admission by Executive that this Agreement has
become effective and enforceable.

          (e) If Executive executed this Agreement at any time prior to the end of the twenty-one (21)
day period that the Company gave Executive in which to consider this Agreement, such early
execution was a knowing and voluntary waiver of Executive’s right to consider this Agreement for
twenty-one (21) days, and was due to Executive’s belief that Executive had ample time in which to
consider and understand this Agreement, and in which to review this Agreement with an attorney.

     15. Jurisdiction; Venue. Executive and the Company agree that any suit, action, or
proceeding relating to or arising out of this Agreement, the breach of this Agreement, or
Executive’s rendering of services to the Company, shall be brought in the United States District
Court for the Southern District of New York or in a state court having jurisdiction located in the
State of New York, County of New York, and not in or before any other court, agency or other
tribunal. Each Party hereby irrevocably consents to the exercise of personal jurisdiction over
such Party by the respective foregoing forum courts, agrees that venue shall be proper in such
forum courts, and irrevocably waives and releases any and all defenses based on lack of personal
jurisdiction, improper venue and/or forum non conveniens. Executive and the Company respectively
waive any right each may have to a jury trial in any suit, action or proceeding relating to or
arising out of this Agreement, the breach of this Agreement, or Executive’s rendering of services
to the Company after his execution of this Agreement. This Agreement shall be deemed to have been
made at New York, New York and shall be interpreted, construed, and enforced pursuant to the laws
of the State of New York, without regard to conflicts of law principles.

     16. KNOWING AND VOLUNTARILY EXECUTION. EXECUTIVE EXPRESSLY ACKNOWLEDGES, REPRESENTS,
AND WARRANTS THAT HE HAS CAREFULLY READ THIS AGREEMENT AND GENERAL RELEASE; THAT HE FULLY
UNDERSTANDS THE TERMS, CONDITIONS, AND SIGNIFICANCE OF THIS AGREEMENT AND GENERAL RELEASE; THAT HE
HAS HAD AMPLE TIME TO CONSIDER AND NEGOTIATE THIS AGREEMENT AND GENERAL RELEASE; THAT THE COMPANY
HAS ADVISED AND URGED EXECUTIVE TO CONSULT WITH, AND EXECUTIVE IN FACT HAS CONSULTED WITH AND
RECEIVED ADVICE FROM, AN

 -12- 

 

ATTORNEY CONCERNING THIS AGREEMENT AND GENERAL RELEASE; THAT EXECUTIVE HAS HAD A FULL
OPPORTUNITY TO REVIEW THIS AGREEMENT AND GENERAL RELEASE WITH AN ATTORNEY; AND THAT EXECUTIVE HAS
EXECUTED THIS AGREEMENT AND GENERAL RELEASE VOLUNTARILY, KNOWINGLY, AND WITH THE ADVICE OF HIS
ATTORNEYS, THE LAW FIRM OF KASOWITZ, BENSON, TORRES & FRIEDMAN LLP.

     17. Miscellaneous Provisions.

          (a) Within seven (7) business days after the execution of this Agreement, the Board of
Directors and Executive shall negotiate in good faith to prepare a form of a written joint
announcement to be delivered to all manager-level employees and higher, disclosing the transition
status of Executive pursuant to this Agreement and identifying the General Counsel of the Company
as the member of executive management to whom questions from employees shall be solely directed.
The failure to agree upon a form of announcement within the prescribed period of time shall not (i)
be a breach of this Agreement, (ii) entitle any Party to terminate this Agreement or revoke or
rescind any provisions hereof, (iii) give rise to any damages, or (iv) entitle any Party to refuse
to perform any of such Party’s obligations hereunder.

          (b) Should any provision of this Agreement be declared or determined by a court to be illegal
or invalid, the validity of the remaining provisions shall not be affected thereby and said illegal
or invalid provision shall be deemed not to be a part of this Agreement.

          (c) This Agreement sets forth the entire agreement between the Parties hereto, and fully
supersedes any and all prior agreements or understandings between the Parties hereto pertaining to
the subject matter hereof. This Agreement may not be changed or modified except by an instrument
in writing, signed by both (i) the Chief Executive Officer or the General Counsel of the Company
and (ii) Executive.

          (d) This Agreement shall inure to the benefit of the Company, its affiliates and subsidiaries
and its and their respective successors and assigns (including, without limitation, the purchaser
of all or substantially all of any such entity’s assets) and shall be binding upon the Company and
its successors and assigns. This Agreement also shall inure to the benefit of and be binding upon
Executive and Executive’s heirs, administrators, executors and assigns. Executive may not assign
or delegate Executive’s duties under this Agreement without the prior written consent of the
Company.

          (e) Any notice or other communication required or permitted hereunder shall be in writing and
shall be delivered personally, faxed, e-mailed or sent by nationally recognized overnight courier
service (with next business day delivery requested). Any such notice or communication shall be
deemed given and effective, in the case of personal delivery, upon receipt by the other Party, in
the case of faxed or e-mailed notice, upon transmission of the fax or e-mail (provided evidence of
such transmission is retained), and in the case of a courier service, upon the next business day
after dispatch of the notice or communication. Such notices, instruments, or communications shall
be addressed as follows:

 -13- 

 

(i) If to the Company:

International Fight League, Inc.

424 West 33rd Street, Suite 650

New York, New York 10001

Attn: General Counsel

Fax: 212.564.6546

With a copy to:

Lowenstein Sandler PC

1251 Avenue of the Americas

New York, New York 10020

Attn: Steven E. Siesser, Esq.

Fax: 973.597.2507

(ii) If to Executive:

Gareb Shamus

24 North Brae Court

Tenafly, New Jersey 07670

With a copy to:

Kasowitz, Benson, Torres & Friedman LLP

1633 Broadway

New York, New York 10019

(212) 506-1700

Attn: Eric J. Wallach, Esq. and Brian S. Kaplan, Esq.

Fax: 212.506.1800

Service of process in connection with any suit, action or proceeding may be served on each Party
hereto anywhere in the world by the same methods as are specified for the giving of notices under
this Agreement. Any of the above addresses may be changed, from time to time, by the applicable
addressee giving written notice of such change to each of the other addressees set forth above, and
such change(s) shall not be considered an amendment of this Agreement requiring execution as
provided in Section 17(c).

          (f) The waiver by either Party of a breach of any provision of this Agreement shall not
operate or be construed as a continuing waiver or as a consent to or waiver of any subsequent
breach hereof.

          (g) The Section headings in this Agreement are for the convenience of reference only and do
not constitute a part of this Agreement and shall not be deemed to limit or affect any provision
hereof.

 -14- 

 

          (h) This Agreement may be executed in one more counterparts, each of which shall be deemed to
be an original but all of which together will constitute one and the same instrument. Facsimile
signatures shall be acceptable as evidence of the original execution by each Party or its duly
authorized representative.

          (i) From the date of this Agreement and for a period of two (2) years thereafter, Executive
shall be entitled to and, upon request, shall be given, free of charge, eight (8) VIP-level tickets
and passes for use by Executive, his family and/or friends to any and all mixed martial arts events
sponsored by the Company in the New York, New Jersey, Connecticut metropolitan areas, or Las Vegas;
provided that such request is given within a reasonable time prior to the applicable event.

          (j) Executive shall be entitled to receive credits on any IFL-related broadcast for any event
produced prior to the date hereof in the same point size, font and form as a producer/ executive
producer in television, internet and any other media where credits are assigned and the names of
specific individuals are listed to the same extent events produced and broadcasted prior to the
date hereof by the Company assigned such credits and listed Executive as producer, executive
producer and/or creator, to the extent applicable.

          (k) The Company shall reimburse Executive for his reasonable legal fees incurred in connection
with the negotiation of this Agreement and related matters, in an amount not to exceed $10,000.

[Signatures on Next Page]

 -15- 

 

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

INTERNATIONAL FIGHT LEAGUE, INC.

	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	 

	 	 

Name: Michael C. Keefe
	 	 

GAREB SHAMUS
	 	 
	 

	 	Title: Executive Vice President	 	 	 	 

Signature Page to Agreement and General Release

between International Fight League, Inc. and Gareb Shamus

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