Document:

Exhibit 10.1

 

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (“Agreement”) is effective the 1st day of January 2015 by and between DIRECT INSITE CORP., a Delaware corporation (hereinafter the “Company”), and Matthew E. Oakes, an individual residing at 1977 Gulf Shore Boulevard North, Unit 206, Naples, Florida 34102 (hereinafter referred to as “Oakes”).

W I T N E S S E T H:

WHEREAS, the Company and Oakes previously entered into an employment agreement, dated June 1, 2013, as amended.

WHEREAS, the Company desires to enter into this Agreement with Oakes; and WHEREAS, Oakes desires to enter into this Agreement with the Company;

NOW, THEREFORE, it is agreed as follows:

1.            Prior Agreements Superseded. This Agreement, as of its effective date, supersedes any employment, services, consulting or other agreements, oral or written, entered into between Oakes and the Company prior to the date of this Agreement except for stock options and restricted stock or other equity-based awards previously granted to Oakes, which stock options and awards shall continue in full force and effect, under the terms and conditions effective when they were issued.

2.            Services.

(a)          The Company hereby agrees to employ Oakes and Oakes hereby agrees to continue serving as President and Chief Executive Officer of the Company, with commensurate responsibilities. Oakes shall devote his full time and efforts to the business of the Company and will not engage, directly or indirectly, in any work or any trade or business, whether as a officer, employee, manager, partner, agent, representative or consultant, for his own account or for or on behalf of any other person, firm or corporation. Oakes may serve as a director on other company or non-profit organization boards provided that such number of directorships does not exceed three (3) such positions, and Oakes agrees to discuss each directorship with the Company’s Board of Directors (the “Board”) prior to accepting an appointment; provided that the service on such company or non-profit organization boards does not interfere with the performance of Oakes of his duties hereunder.

(b)          Oakes shall serve in similar capacities of such of the subsidiary corporations of the Company as may be selected by the Board without additional compensation. Notwithstanding the foregoing, it is understood that the duties of Oakes during the performance of services shall not be inconsistent with his position and titles as President and Chief Executive Officer of the Company.

(c)          Upon termination of Oakes employment for any reason, unless otherwise requested by the Board, Oakes shall immediately resign from all positions that he holds or has ever held with the Company and any affiliated entity, including without limitation, the Board. Oakes hereby agrees to execute any and all documentation to effectuate the resignations from such other positions upon request by the Company. However, he shall be treated for all purposes as having resigned from such other positions upon termination of his employment, regardless of when or whether he executes any such documentation.

 

3.            Term. Subject to earlier termination on the terms and conditions hereinafter provided, the term of this Agreement shall cover the period January 1, 2015 through and ending on December 31, 2017. It is the intention of the Board to communicate to Oakes its intentions with respect to continuation of Oakes’s employment with the Company following conclusion of the term of this Agreement no later than June 30, 2017.

4.            Compensation. For all services rendered by Oakes under this Agreement, compensation shall be paid to Oakes as follows:

(a)          Oakes shall receive his current (“Base Salary”) of $24,583 per month ($295,000 per year) for the term of this Agreement.

(b)         Oakes shall receive an Agreement signing bonus in the amount of $25,000 upon execution of this Agreement.

(c)          Oakes shall be entitled to receive an annual performance based bonus (“Annual Bonus”), as more fully set forth on Annex I. Any Annual Bonus shall be paid not later than the thirtieth (30th) day following the completion of the audit for the fiscal year with respect to which it is earned. Oakes may elect to receive such annual bonus in either cash or restricted common stock. In the event that Oakes elects to receive restricted common stock, Oakes will be eligible to place such restricted common stock in the deferred compensation plans in accordance such plan created for the Board of Directors of the company.

(d)          The Board, or any duly authorized committee thereof, may award Oakes a discretionary bonus (“Discretionary Bonus”) based on such factors as the Board or any such committee shall deem relevant. The Discretionary Bonus may be payable in cash or restricted stock, or any combination thereof, as the Board or any such committee shall determine.

(e)          Oakes shall be awarded stock options as follows:

  

(i)             Oakes shall continue to the receive stock options granted on January 1st, 2012 to acquire 360,000 shares of common stock (subject to customary adjustment for any stock split, reverse stock split, or stock dividend following the date of this Agreement).

(ii)            The exercise price of the stock options shall be $1.15 (subject to customary adjustment as aforesaid).

(iii)          The award of stock options shall vest over four years from the date of grant, with one-quarter of the stock options to vest on the first anniversary of the date of grant, and the remainder to vest in equal monthly installments through the fourth anniversary of the date of grant.

 

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(iv)          If there shall occur a Change of Control (as defined below) of the Company and Oakes shall be terminated without “cause” or shall resign for “good reason” within six months from the date of the Change of Control, 50% of his remaining stock options shall vest and be issued on the date of termination or resignation.

For purposes hereof:

  

“Change of Control” means a merger, stock sale, asset sale or other business combination transaction as a result of which the stockholders of the Company immediately prior to the consummation of the transaction hold less than 50% of the equity interests in the entity that is the owner of the Company’s business immediately following consummation of the transaction; provided that a “Change of Control” shall not be deemed to have occurred as a result of an equity investment in the Company, in the form of a recapitalization or otherwise for financing purposes, made with the approval of a majority of Directors.

(f)           The Company shall continue to make lease payments on the corporate apartment located in Ft. Lauderdale, Florida and utilized by Oakes through the date of termination of such lease in December 31st, 2017.

(g)         Oakes shall be entitled to fully participate in all benefit programs available to executive employees of the Company during his employment with the Company.

5.            Expenses. Oakes shall be reimbursed for all other out-of-pocket office expenses reasonably incurred by him in the performance of his duties hereunder. All expenses due hereunder shall be paid or reimbursed to Oakes by the Company following presentation of documentation therefor.

6.            Termination of Employment. Oakes’s employment with the Company and this Agreement shall terminate upon the earliest of the following events:

(i)             Oakes’s termination of employment by the Company without “cause” (as defined below);

(ii)            Oakes’s resignation from employment with the Company for “good reason” (as defined below);

(iii)          Oakes’s death;

(iv)          Oakes’s “disability” (as defined below);

(v)            Oakes’s termination of employment by the Company for “cause”;

(vi)          Oakes’s voluntary resignation from employment with the Company without “good reason”; or

(vii)         the non-renewal of this Agreement.

 

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7.            Severance Benefits.

(a)           Oakes shall be entitled to the severance benefits provided for in subsection (d) hereof in the event of his termination of employment by the Company without “cause” (as defined below) or in the event of his resignation from employment with the Company for “good reason” (as defined below). In such event, Oakes shall have no duty to mitigate damages hereunder. Oakes and the Company acknowledge that the foregoing provisions of this paragraph 7 are reasonable and are based upon the facts and circumstances of the parties at the time of entering into this Agreement, and with due regard to future expectations.

(b)          For purposes of this Agreement, the term “cause” shall mean:

(i)             Oakes’s willful and continued refusal to endeavor in good faith to substantially perform his duties under this Agreement (other than any such failure resulting from his incapacity due to physical or mental illness) after demand for substantial performance is delivered to Oakes by the Board which specifically identifies the manner in which the Board believes Oakes has not substantially performed his duties.

(ii)            Any arrest for fraud, embezzlement or theft, or any other crime constituting a felony, whether or not in connection with his duties or in the course of his performance as defined in this Agreement.

(iii)          Any willful disclosure by Oakes of any material confidential information or trade secrets of the Company or its affiliates.

(iv)          Any other willful breach by Oakes of the terms of this Agreement.

For purposes of this paragraph, no act or failure to act on Oakes’s part shall be considered “willful” unless done, or omitted to be done, by Oakes not in good faith and without reasonable belief that his action or omission was in the best interest of the Company. Further, any act or failure to act based upon authority given by the Board or the written advice of counsel to the Company shall be conclusively deemed to be done or omitted to be done by Oakes in “good faith” and in the best interest of the Company and shall not constitute “cause” for purposes of this paragraph.

Notwithstanding the foregoing, Oakes shall not be deemed to have been terminated from employment for “cause” unless and until there shall have been delivered to him a copy of a written notice of termination of employment from the Board after the Company has given reasonable written notice to Oakes detailing the specific cause events and a period of not less than thirty (30) days following receipt of such notice to cure such event and if such event is not so cured, an opportunity for Oakes with his counsel to be heard before the members of the Board finding that in the good faith opinion of such members of the Board that Oakes was guilty of the conduct set forth in clauses (i), (ii), (iii) or (iv) of this paragraph and specifying the particulars thereof in detail.

(c)          For purposes of this Agreement, Oakes shall have “good reason” to terminate his employment with the Company for the following circumstances:

 

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(i)             the Company removes Oakes from either the position of President or Chief Executive Officer;

(ii)            material diminution in compensation as defined in paragraph 4(a) of this Agreement;

(iii)            material diminution in Oakes’s authority, duties, or responsibilities;

(iv)          material breach of this Agreement by the Company; or

(v)            material change in geographic location at which Oakes is required to perform services.

provided, however, that (x) Oakes shall have provided notice to the Company of the “good reason” condition within ninety (90) days after the initial existence of the condition, and (y) the Company shall be given at least thirty (30) days to cure such “good reason” condition.

(d)          The severance benefits to be paid to Oakes in the event of his termination of employment without “cause “or his resignation from employment for “good reason” shall be paid within thirty (30) days of receipt of the signed General Release attached as Exhibit A and after the expiration of any applicable revocation period, and shall consist of the following

(i)             an amount equal to

(x)            1.0 times his annual Base Salary, if Oakes’s termination or resignation occurs during the term of this Agreement;

(y)            COBRA coverage, at Company expense, for 12 months; and

(z)            to the extent necessary, an amendment to all Oakes’s stock options that have vested as of the date of termination or resignation to provide that they shall remain exercisable for a period of sixty (60) days following such date, anything to the contrary in any applicable plan or grant agreement notwithstanding; provided that all stock options, restricted stock and other outstanding equity based awards that are unvested as of such date shall be forfeited; provided that, and as a condition to the receipt of such payments or other benefits, Oakes shall execute and deliver to the Company a General Release attached as Exhibit A; and

(ii)            All Accrued Obligations.

“Accrued Obligations,” means

(w)          Base Salary through the date of termination of employment, payable on the first payroll date coincident with or next following the date of employment termination;

(x)            any unpaid Annual Bonus or pro-rated Annual Bonus that is not for a full year with respect to any fiscal year of the Company completed prior to the date of termination of employment, payable on the first payroll date coincident with or next following the date of employment termination (except that payment of unpaid Annual Bonus shall not be made upon any termination without “cause” or resignation for “good reason” if the Company shall establish that “cause” existed prior to such termination);

 

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(y)            all accrued and vested benefits under employee pension (including 401(k)) and welfare plans in which Oakes participates, in accordance with applicable plan terms; and

(z)            unreimbursed business expenses, including those set forth in paragraph 5 of this Agreement, incurred through the termination of employment date, in accordance with the Company’s business expense reimbursement policy.

(e)           To the extent applicable, it is intended that this Agreement comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and this Agreement shall be interpreted in a manner consistent with this intent. Notwithstanding anything else contained herein to the contrary, any payment that constitutes a “deferral of compensation” subject to Section 409A of the Code required to be made to Oakes hereunder upon his termination of employment (including any payment pursuant to this paragraph 7) shall, if Oakes is a “specified employee” within the meaning of Section 409A of the Code at the time of such termination, be made promptly on the earlier of (i) the six month anniversary of Oakes’s date of termination of employment, and (ii) his death, in each case to the extent necessary to avoid imposition on Oakes of any tax penalty imposed under Section 409A of the Code. Amounts payable under this Agreement shall be deemed not to be a “deferral of compensation” subject to Section 409A of the Code to the extent provided in the exceptions in Treasury Regulations §§1.409A-1(b)(4) (“short-term deferrals”) and (b)(9) (“separation pay plans,” including the exception under subparagraph (iii)), other applicable provisions of Treasury Regulations §1.409A-1 through A-6, and any other applicable exceptions as may be in effect from time to time under Section 409A of the Code. Solely for purposes of determining the time and form of payments due Oakes under this Agreement (including any payments due under paragraph 7 of this Agreement or otherwise in connection with his termination of employment with the Company), Oakes shall not be deemed to have incurred a termination of employment unless and until he shall incur a “separation from service” within the meaning of Section 409A of the Code. To the extent that the Company and Oakes determine that any provision of this Agreement could reasonably be expected to result in Oakes’s being subject to the payment of interest or additional tax under Section 409A, the Company and Oakes agree, to the extent reasonably possible as determined in good faith, to amend this Agreement, retroactively, if necessary, in order to avoid the imposition of any such interest or additional tax under Section 409A of the Code in a manner that preserves Oakes’s economic interests prior to such imposition. All reimbursements and in-kind benefits provided under the Agreement shall be made or provided in accordance with the requirements of Section 409A of the Code to the extent that such reimbursements or in-kind benefits are subject to Section 409A of the Code, including, where applicable, the requirements that (i) any reimbursement is for expenses incurred during Oakes’s lifetime (or during a shorter period of time specified in this Agreement), (ii) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year, (iii) the reimbursement of an eligible expense will be made on or before the last day of the calendar year following the year in which the expense is incurred and (iv) the right to reimbursement is not subject to set off or liquidation or exchange for any other benefit.

 

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8.            Death. In the event of Oakes’s termination of employment due to his death, he or his estate (as the case may be) shall be entitled to

(i)             the Accrued Obligations pursuant to paragraph 7(d)(ii) of this Agreement,

(ii)            the current year Annual Bonus, which will paid on a pro rata basis based on annualized year-to-date results. Pro rata refers to the number of days served by Mr. Oakes up to the employment termination date divided by the number of days in the year,

(iii)           a lump sum payment of six months’ Base Salary, and

All of Oakes’s Company stock options, restricted stock, and other outstanding equity based awards that are unvested upon Oakes’s employment termination by reason of death, and all unvested awards shall be forfeited. Any prorated Annual Bonus shall be paid at such time as the bonus would have been paid hereunder had Oakes’s employment continued through the Annual Bonus payment date.

9.            Disability. In the event of Oakes’s termination of employment due to his “disability” (as defined below), he shall be entitled to

(i)             the Accrued Obligations pursuant to paragraph 7(d)(ii) of this Agreement,

(ii)            the current year Annual Bonus, which will paid on a pro rata basis based on annualized year-to-date results. Pro rata refers to the number of days served by Mr. Oakes up to the employment termination date divided by the number of days in the year,

(iii)           a lump sum payment of six months’ Base Salary, and

(iv)          COBRA coverage, at Company expense, for twelve months.

All of Oakes’s Company stock options, restricted stock, and other outstanding equity based awards that are unvested upon Oakes’s employment termination by reason of “disability,” and all unvested awards shall be forfeited. For purposes of this Agreement, “disability” shall have the meaning set forth in Section 409A(a)(2)(C) of the Code. Any prorated Annual Bonus shall be paid at such time as the bonus would have been paid hereunder had Oakes’s employment continued through the Annual Bonus payment date.

10.          Termination for Cause or without Good Reason. In the event of Oakes’s termination of employment by the Company for “cause” (as defined above) or Oakes’s voluntary resignation from employment with the Company without “good reason” (as defined above), Oakes shall be entitled to receive the Accrued Obligations pursuant to paragraph 7(d)(ii)(w), 7(d)(ii)(y) and 7(d)(ii)(z) of this Agreement.

 

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11.          Non-Renewal of Agreement. In the event this Agreement terminates on December 31, 2017 and is not renewed, Oakes will be entitled to the Accrued Obligations pursuant to paragraph 7(d)(ii) of this Agreement.

12.          Non-Competition; Non-Disclosure; Return of Company Property.

(a)          Oakes agrees that during his employment with the Company and for a period of one year thereafter, he will not, without the prior written approval of the Board, directly or indirectly, through any other individual or entity become a Board member, an officer or employee of, or render any services (including consulting services) to, any competitor of the Company; provided that if (1) Oakes’s employment shall not have been terminated by the Company for cause or by Oakes without good reason and (2) Oakes shall execute and deliver to the Company a General Release attached as Exhibit A, the period during which Oakes shall be bound by the provisions of this paragraph 12(a) shall coincide with the period, if any, during which he is receiving severance benefits; provided further that the Company, at its election and in its sole discretion, may continue to pay to Oakes an amount equal to his monthly Base Salary (as provided in paragraph 4(a)) for a period of up to six (6) months following the conclusion of the term of this Agreement, and, for so long as the Company is making such payment, Oakes shall continue to be bound by the provisions of this paragraph 12(a).

Nothing contained in this paragraph 12(a) shall be construed as preventing Oakes from investing his assets in such form or manner as will not require him to become an officer, director or employee of, or render any services (including consulting services), directly or indirectly, to, any competitor of the Company; provided that such investment does not exceed five percent (5%) of the issued and outstanding equity securities of such competitor of the Company.

(b)          Oakes agrees that during his employment with the Company and for a period of twelve (12) months thereafter, he will not, without the prior written approval of the Board, directly or indirectly, through any other individual or entity,

(i)             solicit, raid, entice or induce any customer of the Company to cease purchasing goods or services from the Company or to become a customer of any competitor of the Company, and Oakes will not approach any customer for any such purpose or authorize the taking of any such actions by any other individual or entity, or

(ii)            solicit, raid, entice or induce any employee of the Company, and Oakes will not approach any such employee for any such purpose or authorize the taking of any such action by any other individual or entity.

(c)          During Oakes’s employment with the Company and at all times thereafter, Oakes shall not disclose to any person, firm or corporation other than the Company any trade secrets, trade information, techniques or other confidential information of the business of the Company, its methods of doing business or information concerning its customers learned or acquired by Oakes during Oakes’s relationship with the Company (“Confidential Information”) and shall not engage in any unfair trade practices with respect to the Company.

(d)          Upon termination of employment for any reason, Oakes will deliver to the Company (and will not keep in his possession, custody or control, or recreate or deliver to anyone else) any and all devices, records, recordings, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, materials, computer materials, equipment, other documents or property, together with all copies thereof (in whatever medium recorded), belonging to the Company, or any other physical recordation or embodiment of Confidential Information. Oakes further agrees that any property situated on the Company’s premises and owned by the Company, including computer disks and other digital, analog or hard copy storage media, drives, filing cabinets or other work areas, is subject to inspection by Company personnel at any time with or without notice.

 

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13.          Enforcement.

(a)          The necessity for protection of the Company and its subsidiaries against Oakes’s competition, as well as the nature and scope of such protection, has been carefully considered by the parties hereto in light of the uniqueness of Oakes’s talent and his importance to the Company. Accordingly, Oakes agrees that, in addition to any other relief to which the Company may be entitled, the Company shall be entitled to seek and obtain injunctive relief (without the requirement of any bond) for the purpose of restraining Oakes from any actual or threatened breach of the covenants contained in paragraph 12 of this Agreement.

(b)          If for any reason a court determines that the restrictions under paragraph 12 of this Agreement are not reasonable or that consideration therefore in adequate, the parties expressly agree and covenant that such restrictions shall be interpreted, modified or rewritten by such court to include as much of the duration and scope identified in paragraph 12 as will render the restrictions valid and enforceable.

14.          Cooperation. In connection with the Company’s participation in current or future litigation relating to events which occurred during Oakes’s employment or about which Oakes has information, Oakes agrees to cooperate fully and devote such time as may be reasonably required in the preparation, prosecution or defense of the Company’s case or cases, including, but not limited to, the execution of truthful declarations or providing information and/or documents requested by the Company. The Company shall reimburse or compensate Oakes, upon receipt of satisfactory evidence thereof, for (i) all reasonable expenses incurred by Oakes in connection with such assistance and/or cooperation with the Company with respect to such litigation and (ii) the time expended by Oakes in fulfilling his obligations under this Section 14 in excess of forty (40) hours in the aggregate, at a rate of $150 per hour.

15.          Notices. Any notice to be given to the Company or Oakes hereunder shall be deemed given if delivered personally or mailed by certified or registered mail, postage prepaid, to the other party hereto at the following addresses:

	To the Company:	Direct Insite Corp.

500 East Broward Blvd. Suite #1550

Ft. Lauderdale, Florida

Attn: Corporate Secretary

 

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	Copy to:	Kramer Levin Naftalis & Frankel LLP

1177 Avenue of the Americas

New York, NY 10036

Tel.: (212) 715-9100

Attn: Scott Rosenblum, Esq.

	To: Oakes:	Matthew E. Oakes

350 SE 2nd Street #1130

Ft. Lauderdale, FL 33301

	Copy to:	Todd Sullivan Esq.,

Graebe, Hanna & Sullivan PLLC

4350 Lassiter at North Hills Avenue, Suite 375

Raleigh, NC 27609

Either party may change the address to which notice may be given hereunder by giving notice to the other party as provided herein.

16.          Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the Company and upon Oakes, his heirs, executors, administrators and legal representatives. No party may assign this Agreement without first obtaining the written consent of the other party hereto; provided that the Company may assign this Agreement to any successor to all or substantially all of its assets.

17.          Entire Agreement. This Agreement constitutes the entire agreement between the parties except as specifically otherwise indicated herein.

18.          Jurisdiction and Venue. It is hereby irrevocably agreed that all disputes or controversies between the Company and Oakes arising out of, in connection with or relating to this Agreement shall be exclusively heard, settled and determined by arbitration to be held in the County of Broward, State of Florida, in accordance with the Commercial Arbitration Rules of the American Arbitration Association to be conducted before three arbitrators, who shall all be either attorney(s) or retired judge(s) licensed to practice law in the State of Florida. Any award made by such arbitrators shall be binding and conclusive for all-purpose thereof and may be entered as a final judgment in any court of competent jurisdiction. The parties also agree that judgment may be entered on the arbitrator’s award by any court having jurisdiction thereof and the parties consent to the jurisdiction of any court located in the County of Broward, State of Florida for this purpose. Each party hereby further agrees that service of process may be made upon it by registered or certified mail or personal service at the address provided for herein. In the event of any material breach of this Agreement by the Company, when no material breach has occurred by Oakes, actual damages would be difficult to determine, and the parties, therefore, agree that as liquidated damages Oakes shall be entitled to receive the balance of the compensation/ payments and benefits specified in paragraph 7(d) of this Agreement.

19.          Governing Law. This Agreement shall be construed in accordance with the laws of the State of Delaware.

 

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

	
DIRECT INSITE CORP.

	 
	 	 	 	 
	
By:

	
/s/ Lowell Rush

	 	
/s/ Matthew E. Oakes

	 	 	 	
Matthew E. Oakes

 

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EXHIBIT A

GENERAL RELEASE

This GENERAL RELEASE (the “Release”) is made this __ day of __________, 20__ between Direct Insite Corp., (the “Company”) and Matthew E. Oakes (“Oakes”).

WHEREAS, Oakes and the Company entered into an Agreement effective as of January 1, 2015 (the “Agreement”);

WHEREAS, Oakes’s employment terminated as of __________, 20__ (the “Separation Date”); and

WHEREAS, Oakes and the Company desire to settle fully and finally any differences, rights and duties arising between them;

NOW, THEREFORE, in consideration of the post-separation payments described in the Agreement, which Oakes acknowledges are in excess of any benefits to which he would otherwise be entitled, the parties agree as follows:

1.            Release. Oakes, for himself and for his children, heirs, administrators, representatives, executors, successors and assigns, releases to the maximum extent permitted by law any and all claims and rights which he has or may have against the Company, and its parents, subsidiaries, affiliates, employee benefit plans, predecessors, successors and assigns; and each of their respective officers, directors, administrators, fiduciaries, trustees, employees, attorneys and agents (the “Releasees”) from the beginning of the world until the date of the execution of this Release, including, but not limited to, any and all charges, complaints, claims, liabilities, obligations, promises, agreements, controversies, damages, remedies, actions, causes of action, suits, rights, demands, costs, losses, debts and expenses (including attorneys’ fees and costs) of any nature whatsoever, whether known or unknown, whether in law or equity (collectively, “Claims”), including, but not limited to, any Claims arising out of or related to the Agreement or any prior agreement between Oakes and the Company relating to his employment, any Claims arising out of or related to Oakes’s employment with the Company and the conclusion thereof, any Claims for wrongful termination, any Claims based on contract whether express or implied, written or oral, and any Claims arising under the United States and/or State Constitutions, federal and/or common law, and/or rights arising out of alleged violations of any federal, state or other government statutes, regulations or ordinances including, without limitation, Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967, the whistleblower protection provisions of the Sarbanes-Oxley Act, the Americans with Disabilities Act of 1990, the Civil Rights Act of 1866 (42 U.S.C. § 1981), the Civil Rights Act of 1991, the Equal Pay Act, the Family and Medical Leave Act, the Occupational Safety and Health Act of 1970, the Employee Retirement Income Security Act of 1974, the Florida Civil Rights Act of 1992 and the Florida Equal Pay Act, all as amended; provided, however, that this Release does not release or relinquish any of Oakes’s rights to payment of any vested benefits under the Company’s employee benefit plans.

 

2.            No Prior Filings. Oakes has not filed against the Company or any of the Releasees, any complaints, charges, proceedings, lawsuits or arbitrations with any government agency, arbitral tribunal, self-regulatory body, or any court arising out of or related to Oakes’s employment by the Company or any other matter arising on or prior to the date hereof.

3.            Counsel; Time Period to Consider Release. Oakes is hereby advised to consult with an attorney prior to executing this Release. Oakes is further notified that he will be given twenty-one (21) days from his receipt of this Release to consider this Release.

4.            Acknowledgements. Oakes acknowledges that:

(i)             Oakes has carefully read and understands this Release;

(ii)            Oakes has been given twenty-one (21) days from his receipt of this Release to consider his rights and obligations under this Release;

(iii)           The Company advised Oakes to consult with an attorney of his choice before signing this Release;

(iv)          Oakes understands that he has received valuable consideration for this Release and that therefore this Release is legally binding and that by signing it he gives up certain rights;

(v)           Oakes has voluntarily chosen to enter into this Release and has not been forced or pressured in any way to sign it;

(vi)          Oakes knowingly and voluntarily releases the Company and the other Releasees from any and all Claims Oakes may have, known or unknown, as provided above, in exchange for the benefits Oakes has obtained by signing, and that these benefits are in addition to any benefit Oakes would have otherwise received if he did not sign this Release;

(vii)         Section 1 of this Release includes a waiver of rights and claims Oakes may have under the Age Discrimination in Employment Act of 1967 (29 U.S.C. §621 et seq.);

(viii)       Oakes has seven (7) days after he signs this Release to revoke it by notifying the Company in writing. The Company must actually receive the written notice of revocation within the seven (7) day period.

(ix)           The Release shall not become effective or enforceable, and Oakes shall not receive the post-separation payments described in the Agreement, until the Company receives a copy of this Release signed by Oakes and the seven (7) day revocation period has expired; and

(x)            Oakes does not waive any rights or claims that may arise after the date he has executed this Release.

 

IN WITNESS WHEREOF, the parties have executed this General Release as of the date first written above.

	
MATTHEW E. OAKES

	
DIRECT INSITE CORP.

	 	 	 	 
	   	 	
By:

	   
	 	 	 	 
	 	 	
Name:

	   

 

Annex #1

Annual Bonus Calculation Requirements:

The Annual Bonus Calculation shall be based upon the Management submitted and Board approved and adopted business plan for each calendar year, as such Table #1 will be updated.

The yearly Annual Target Bonus shall be of $150,000 or 50% of Oakes’s Base Salary in such fiscal year which ever is greater.

The Annual Target Bonus shall only be paid provided that the company earns an EBIT of greater than $500,000 during each year for such bonus to be paid.

Annual Bonus Calculation Table #1.

	
Year

	
Business Plan Revenue

Target

	
Target 

Bonus

	
Annual Bonus Calculation

Plan Revenue between 80-100% of 

Target (35%) Bonus Payout

	
Plan Revenue at 100% of 

Target (100%) Bonus Payment

	
Plan Revenue at 120% of

Target (150%) Bonus Payout

	
2015

	
$9,620,930.00

	
$150,000.00

	
$52,500.00

	
$150,000.00

	
$225,000.00

	
2016

	
TBD

	 	 	 	 
	
2017

	
TBDExhibit 10.3-2014.12.31

Exhibit 10.3

ANTHEM, INC.  
COMPREHENSIVE NON-QUALIFIED DEFERRED  
COMPENSATION PLAN  
(AS AMENDED AND RESTATED EFFECTIVE  
DECEMBER 2, 2014)

TABLE OF CONTENTS
	
			
	 
	 
	Page

	Article I
	HISTORY AND PURPOSE
	1

	 
	History
	1

	 
	Purpose
	2

	Article II
	DEFINITIONS   
	 

	2.01
	"Account"   
	2

	2.02
	"Administrator"   
	3

	2.03
	"Affiliate"    
	3

	2.04
	"Anthem LTIP"   
	3

	2.05
	"Anthem Plan"   
	3

	2.06
	"Anthem SERP"   
	3

	2.07
	"Anthem SERP Participant"   
	3

	2.08
	"Beneficiary"   
	3

	2.09
	"Bonus"   
	3

	2.10
	"Bonus Deferral"    
	3

	2.11
	"Code"   
	3

	2.12
	"Committee"    
	4

	2.13
	"Company" means Anthem, Inc.,    
	4

	2.14
	"Company Contribution"   
	4

	2.15
	"Compensation"   
	4

	2.16
	"Compensation Deferral"   
	4

	2.17
	"Election Form"   
	4

	2.18
	"Eligible Employee"   
	4

	2.19
	"In-Service Payout"   
	4

	2.20
	"Key Employee"   
	4

	2.21
	"Make-Up Contribution"   
	4

	2.22
	"Matching Contribution"   
	4

	2.23
	"Merged Plan"   
	5

	2.24
	"Participant"   
	5

	2.25
	"Pension Benefit"   
	5

	2.26
	"Pension Plan"   
	5

	2.27
	"Plan"   
	5

	2.28
	"Plan Year"   
	5

	2.29
	"Predecessor Plan"   
	5

	2.30
	"Predecessor Plan Account"   
	5

	2.31
	"Predecessor Plan Participant"    
	5

	2.32
	"Regulations"   
	5

	2.33
	"Savings Plan"   
	5

	2.34
	"Separation from Service"   
	5

	2.35
	"Trigon Plan"   
	6

	2.36
	"Trigon SERP"   
	6

	2.37
	"UGS Pension Plan"   
	6

	2.38
	"WellPoint Plan"   
	6

	2.39
	"WellPoint SERP Participant"   
	6

	2.40
	"2005 Anthem SERP"   
	6

i

Table of Contents (Continued)
	
			
	 
	 
	Page

	2.41
	"2005 WellPoint Plan"
	6

	2.42
	"2005 Anthem Plan"
	6

	2.43
	"2005 Trigon Plan"
	6

	2.44
	"2005 Trigon SERP"
	6

	Article III
	ELIGIBILITY AND PARTICIPATION
	6

	3.01
	Eligibility
	6

	3.02
	Participation
	7

	3.03
	Enrollment Requirements
	7

	3.04
	Cessation of Participation
	7

	Article IV
	DEFERRALS AND CONTRIBUTIONS
	8

	4.01
	Compensation
	8

	4.02
	Bonus
	8

	4.03
	Matching Contributions
	9

	4.04
	Non-Elective Contributions
	10

	Article V
	SUPPLEMENTAL PENSION PLAN CONTRIBUTIONS
	11

	5.01
	Eligibility for Supplemental Pension Contribution
	11

	5.02
	In General
	11

	5.03
	Former DeCare Dental Pension Plan Participants
	11

	5.04
	QSERP
	12

	Article VI
	EARNINGS
	13

	6.01
	Investment Funds
	13

	6.02
	Conversion of Investments from Predecessor Plans and Merged Plans
	13

	Article VII
	VESTING
	13

	7.01
	Elective Deferrals under the Plan
	13

	7.02
	Supplemental Pension Plan Contributions
	14

	7.03
	Predecessor or Merged Plans
	14

	7.04
	Company and/or Make-Up Contributions
	14

	Article VIII
	DISTRIBUTIONS
	14

	8.01
	Annual Election
	14

	8.02
	Time for Distribution
	14

	8.03
	In-Service Payout
	14

	8.04
	Separation from Service
	15

	8.05
	Subsequent Changes in Elections
	16

	8.06
	Death
	16

	8.07
	Hardship Withdrawal
	16

	8.08
	Valuation
	17

	8.09
	Tax Withholding
	17

	8.10
	Payment of Small Accounts
	17

	8.11
	Right of Offset
	17

ii

Table of Contents (Continued)

	
			
	 
	 
	Page

	8.12
	Bona Fide Dispute
	18

	8.13
	Income Inclusion Under Code Section 409A
	18

	8.14
	Effect of Rehire
	18

	Article IX
	EFFECT ON PREDECESSOR AND MERGED PLANS
	18

	9.01
	Coordination With Predecessor Plans
	18

	9.02
	Predecessor Plan Accounts
	18

	9.03
	Merged Plans
	18

	Article X
	CLAIMS PROCEDURES
	19

	10.01
	Presentation of Claim
	19

	10.02
	Decision on Initial Claim
	19

	10.03
	Right to Review
	20

	10.04
	Decision on Review
	20

	10.05
	Form of Notice and Decision
	21

	10.06
	Legal Action
	21

	Article XI
	ADMINISTRATION
	21

	11.01
	Plan Administration
	21

	11.02
	Powers, Duties and Procedures
	21

	11.03
	Agents
	21

	11.04
	Binding Effect of Decisions
	22

	11.05
	Information
	22

	11.06
	Coordination with Other Benefits
	22

	Article XII
	MISCELLANEOUS
	22

	12.01
	Limitation of Rights
	22

	12.02
	Additional Restrictions
	22

	12.03
	Indemnification
	22

	12.04
	Assignment
	23

	12.05
	Inability to Locate Recipient
	23

	12.06
	Amendment and Termination
	23

	12.07
	Applicable Law
	23

	12.08
	No Funding
	23

	12.09
	Trust
	23

iii

ANTHEM, INC.  
COMPREHENSIVE NON-QUALIFIED DEFERRED  
COMPENSATION PLAN  
(AS AMENDED AND RESTATED EFFECTIVE  
DECEMBER 2, 2014)

ARTICLE I
HISTORY AND PURPOSE
1.01 History. Anthem, Inc. (filch WellPoint, Inc.) (the "Company") established the WellPoint, Inc. 2005 Comprehensive Executive Non-Qualified Retirement Plan, originally effective January 1, 2005 ("WellPoint Plan"), as a new plan for certain types of deferred compensation subject to Section 409A of the Internal Revenue Code of 1986, as amended (the "Code"), which governs nonqualified deferred compensation arrangements. The Company amended and restated the WellPoint Plan effective January 1, 2006, and renamed it the WellPoint, Inc. Comprehensive Non-Qualified Deferred Compensation Plan (the "Plan"). The Company amended and restated the Plan effective as of November 1, 2006, then restated it again effective as of January 1, 2009 for compliance with the final regulations issued under Code Section 409A. The Company subsequently amended and restated the Plan effective January 1, 2011, and again effective as of January 1, 2014. The Company hereby amends and restates the Plan effective as of December 2, 2014 to reflect a change in the Company's name from WellPoint, Inc. to Anthem, Inc. and to rename the Plan the "Anthem, Inc. Comprehensive Non-Qualified Deferred Compensation Plan."
(a)    Merged Plans. In addition, effective January 1, 2005, the Company, one
of its predecessors or entities related to the Company or a predecessor also established the following nonqualified deferred compensation plans applicable to amounts subject to Code Section 409A.
		
	(i)
	the 2005 Anthem Supplemental Executive Retirement Plan;

		
	(ii)
	the 2005 Anthem Deferred Compensation Plan;

		
	(iii)
	the 2005 Trigon Insurance Company 401(k) Restoration Plan; and

		
	(iv)
	the 2005 Supplemental Retirement Plan for Certain Employees of Trigon Insurance Company.

Each of the foregoing plans were separately maintained for the 2005 calendar year and cover deferred compensation that related solely to the 2005 calendar year. The Company subsequently ceased accruals and merged each of the plans into the Anthem Plan effective as of December 31, 2005 and are referred to herein as the Merged Plans (either alone or collectively).
(b)    Predecessor Plans. The Company or one of its predecessors separately maintained the following nonqualified deferred compensation plans, which cover

amounts earned and vested as of December 31, 2004 (including vested bonuses earned in 2004 and paid in 2005):
		
	(i)
	each pre-2005 Anthem Long-Term Incentive Plan;

		
	(ii)
	the WellPoint Health Networks Inc. Comprehensive Executive Non-Qualified Retirement Plan;

		
	(iii)
	the Anthem Supplemental Executive Retirement Plan;

		
	(iv)
	the Anthem Deferred Compensation Plan;

		
	(v)
	the Trigon Insurance Company 401(k) Restoration Plan; and

		
	(vi)
	the Supplemental Retirement Plan for Certain Employees of Trigon Insurance Company.

Each of the foregoing plans are referred to as a "Predecessor Plan(s)." Benefits ceased to accrue under the Predecessor Plans effective December 31, 2004 and, as such, are grandfathered for purposes of Code Section 409A. Solely for administrative purposes, Predecessor Plan Account balances, determined as of December 31, 2005, became accounted for under the 2005 WellPoint Plan effective as of January 1, 2006. In all other respects, each Predecessor Plan Account remains subject exclusively to the terms of the Predecessor Plan to which it relates.
1.02 Purpose. Except as otherwise provided herein, the Plan applies only to Participants to whose Account contributions are credited under Article IV and Article V. The purpose of the Plan is for certain management and highly compensated employees to (1) restore certain benefits that cannot be provided under the tax-qualified plans maintained by the Company and its affiliates and (2) provide additional opportunities to defer one or more items of their compensation.
The Plan is intended to comply with Code Section 409A and shall be interpreted, administered and operated as necessary to comply with the requirements of Code Section 409A and applicable Treasury Regulations. The Plan is further intended to be a plan that is unfunded and maintained by Anthem, Inc. primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees within the meaning of the Employee Retirement Income Security Act of 1974 ("ERISA").
ARTICLE II  
DEFINITIONS
In this Plan, the following terms have the meanings indicated below:
2.01 "Account" means the account maintained under the Plan for each Participant which is credited with amounts under Article IV and Article V of the Plan and adjusted periodically for investment performance under Article VI of the Plan and distributions or withdrawals in accordance with Article VIII. The Account of each Participant who is also a
2

Predecessor Plan Participant shall also include the Predecessor Plan Account maintained on behalf of that Predecessor Plan Participant, as adjusted periodically for investment performance under Article VI of the Plan and distributions or withdrawals in accordance with the terms of the Predecessor Plan to which it relates. Each Participant's Account shall be divided into a series of Plan Year subaccounts, one for each Plan Year for which the Participant defers any Compensation under the Plan. To the extent it considers necessary or appropriate, the Administrator may further divide each such Plan Year subaccount into a series of separate subaccounts so that each category of deferred Compensation may be credited to its own separate subcategories within that particular Plan Year subaccount.
2.02 "Administrator" means the Executive Vice President and Chief Human Resources Officer of the Company and, if the context requires, the Human Resources Department of the Company, in charge of the day-to-day administration of the Plan.
2.03 "Affiliate" means an entity other than the Company whose employees participate in the tax-qualified retirement plans of ATH Holding Company, LLC or National Government Services, Inc. or whose employees are authorized to participate in the Plan by the Committee.
2.04 "Anthem LTIP" means each pre-2005 Anthem Long-Term Incentive Plan. 
2.05 "Anthem Plan" means the Anthem Deferred Compensation Plan.
2.06 "Anthem SERP" means the Anthem Supplemental Executive Retirement Plan.
2.07 "Anthem SERP Participant" means an individual who is eligible on or after January 1, 2006 to earn a benefit under the 2005 Anthem SERP.
2.08 "Beneficiary" means the person or persons, trust or estate designated in writing, to receive a Participant's vested Account if the Participant dies before distribution of the entire vested balance credited to that Account. A Participant may designate one or more primary Beneficiaries and one or more secondary Beneficiaries. A Participant's Beneficiary designation must be made in writing pursuant to such procedures as the Administrator may establish and delivered to the Administrator before the Participant's death. The Participant may revoke or change this designation at any time before his or her death by following such procedures as the Administrator will establish. If the Administrator has not received a Participant's Beneficiary designation before the Participant's death or if the Participant does not otherwise have an effective Beneficiary designation on file when he or she dies, the vested balance of such Participant's Account will be distributed to his or her estate.
2.09 "Bonus" means an amount awarded to an Eligible Employee under an annual incentive plan maintained by the Company as determined by the Administrator.
2.10 "Bonus Deferral" means an election by a Participant to defer the receipt of a Bonus in accordance with the requirements of Article IV.
2.11 "Code" means the Internal Revenue Code of 1986, as amended from time to time.
3

2.12 "Committee" means the Compensation Committee of the Company's Board of Directors or a subcommittee of two or more members thereof. The Committee shall have full discretionary authority to administer and interpret the Plan, to determine eligibility for Plan benefits, to select employees for Plan participation, to determine the benefit entitlement of each Participant and Beneficiary hereunder and to correct errors. The Committee may delegate any of its duties and responsibilities not otherwise delegated hereunder to the Executive Vice President and Chief Human Resources Officer as Administrator, and unless the Committee expressly provides to the contrary, any such delegation will carry with it the Committee's full discretionary authority with respect to the delegated duties and responsibilities. In no event, however, shall the Committee delegate its authority to amend or terminate the Plan pursuant to the provisions of Section 12.06. Decisions of the Committee or its delegate will be final and binding on all persons.

2.13 "Company" means Anthem, Inc., an Indiana corporation.
2.14 "Company Contribution" means, for any one Plan Year, the amount determined in accordance with Section 4.04.
2.15 "Compensation" means the respective definitions of compensation as set forth in the Savings Plan for elective deferrals and matching contributions, as constituted from time to time and as the context requires. In either case, the respective definition of compensation as set forth in the Savings Plan is determined without regard to the application of the limitation under Code Section 401(a)(17).
2.16 "Compensation Deferral" means an election by a Participant to defer the receipt of the portion of his or her Compensation in accordance with the requirements of Article IV.
2.17 "Election Form" means the form or forms established from time to time by the Administrator that a Participant completes, signs and returns to the Administrator to make a deferral election, make or change a payment election, and/or make or change an investment election. To the extent authorized by the Administrator, such form may be electronic or set forth in some other media or format.
2.18 "Eligible Employee" means each employee of the Company or an Affiliate whose Compensation is equal to or in excess of the Code Section 401(a)(17) compensation limit in effect at the time the employee's eligibility is determined in accordance with Section 3.01.
2.19 "In-Service Payout" means a complete distribution of a Participant's vested Plan Year subaccount (including the related Matching Contribution) as of a specified date elected by a Participant.
2.20 "Key Employee" means for the period January 1 through December 31 each individual identified by the Administrator as of the immediately preceding September 30 as a "key employee," as defined under Code Section 416(i), disregarding Code Section 416(i)(5).
2.21 "Make-Up Contribution" means the contribution described under Section 4.04. 
2.22 "Matching Contribution" means a matching contribution pursuant to Section 4.03.
4

2.23 "Merged Plan" means the 2005 Anthem SERP, the 2005 Anthem Plan, the 2005 Trigon Plan or the 2005 Trigon SERP.
2.24 "Participant" means a current or former Eligible Employee for whom an Account (including one or more Plan Year subaccounts) is maintained. A Participant shall also include a Predecessor Plan Participant for the limited purposes set forth in the Plan.
2.25 "Pension Benefit" means the benefit payable to an individual under the Pension Plan or the UGS Pension Plan, as the context requires.
2.26 "Pension Plan" means the qualified pension plan maintained by ATH Holding Company, LLC or its predecessors under which a Participant is actively accruing a benefit, which may include the WellPoint Cash Balance Pension Plan B, as amended from time to time or renamed, and/or such other qualified pension plan maintained by ATH Holding Company, LLC.
2.27 "Plan" means this Anthem, Inc. Comprehensive Non-Qualified Deferred Compensation Plan, as amended from time to time.
2.28 "Plan Year" means the calendar year.
2.29 "Predecessor Plan" means any of the WellPoint Plan, the Anthem SERP, the Anthem Plan, the various Anthem LTIPs, the Trigon Plan or the Trigon SERP, each of which cover grandfathered benefits not subject to Code Section 409A.
2.30 "Predecessor Plan Account" means a hypothetical or bookkeeping account reflecting a grandfathered benefit under a Predecessor Plan, the amount of which was transferred to the Plan on December 31, 2005. Such account is credited with additional earnings pursuant to Article VI.
2.31 "Predecessor Plan Participant" means an individual who was eligible to participate in one or more of the Predecessor Plans and who, as of December 31, 2005 (the date Predecessor Plan Accounts were transferred to the Plan), has a Predecessor Plan Account.
2.32 "Regulations" mean Treasury Regulations issued under the Code.
2.33 "Savings Plan" means the WellPoint 401(k) Retirement Savings Plan, as amended from time to time or renamed.
2.34 "Separation from Service" means termination of the Participant's employment relationship (within the meaning of Code Section 409A and Regulations issued thereunder) with the Company and its affiliates and any other service relationship defined in such applicable Regulations, other than by reason of death. For purposes of the foregoing, whether an entity is affiliated with the Company shall be determined pursuant to the controlled group rules of Code Section 414, as modified by Code Section 409A. However, the Participant's employment relationship with the Employer shall be treated as continuing intact while the individual is on a military leave, sick leave or other bona fide leave of absence if the period of such leave does not exceed six months (or longer, if required by statute or contract). If the period of the leave
5

exceeds six months and the Participant's right to reemployment is not provided either by statute or contract, the employment relationship is deemed to terminate on the first date immediately following such six-month period for purposes of Code Section 409A only.
2.35 "Trigon Plan" means the Trigon Insurance Company 401(k) Restoration Plan.
2.36 "Trigon SERP" means the Supplemental Retirement Plan for Certain Employees of Trigon Insurance Company.
2.37 "UGS Pension Plan" means the UGS Pension Plan, as amended from time to time, and any predecessor qualified pension plan maintained by National Government Services, Inc.
2.38 "WellPoint Plan" means the WellPoint Health Networks Inc. Comprehensive Executive Non-Qualified Retirement Plan.
2.39 "WellPoint SERP Participant" means an individual who is eligible on or after January 1, 2006 to earn a benefit under Section 4.01 of the 2005 WellPoint Plan.
2.40 "2005 Anthem SERP" means the 2005 Anthem Supplemental Executive Retirement Plan.
2.41 "2005 WellPoint Plan" means the WellPoint, Inc. 2005 Comprehensive Executive Non-Qualified Retirement Plan, as in effect on December 31, 2005.
2.42 "2005 Anthem Plan" means the 2005 Anthem Deferred Compensation Plan.
2.43 "2005 Trigon Plan" means the 2005 Trigon Insurance Company 401(k) Restoration Plan.
2.44 "2005 Trigon SERP" means the 2005 Supplemental Retirement Plan for Certain Employees of Trigon Insurance Company.
ARTICLE III
ELIGIBILITY AND PARTICIPATION

3.01 Eligibility. Determination of an individual as an Eligible Employee is made on a Plan Year by Plan Year basis. The Administrator may determine the individual is an Eligible Employee for the immediately following Plan Year pursuant to any such rules and requirements regarding the criteria for, and manner in, which individuals are determined to be an Eligible Employee. Such rules and requirements do not need to be consistent from Plan Year to Plan Year or among individuals. An individual who is determined to be an Eligible Employee shall be permitted to make a Compensation Deferral and Bonus Deferral election effective for the Plan Year that begins immediately following the Administrator's determination of the individual as an Eligible Employee in accordance with the rules set forth in Article IV. An individual who is determined to be an Eligible Employee shall not be permitted to make a Compensation Deferral with respect to Compensation earned or a Bonus Deferral with respect to the Bonus paid in the Plan Year in which he or she is determined to be an Eligible Employee. Such an individual may make a Bonus Deferral for the Bonus earned in such Plan Year pursuant to the rules set forth in

6

Article IV provided the individual becomes an Eligible Employee before or during the enrollment period established for such Plan Year.
Notwithstanding any Plan provision to the contrary, the Committee may, in its sole discretion, place further requirements and/or limitations on an Eligible Employee's participation in any portion of the Plan.
3.02 Participation. To begin participation in the Plan, an Eligible Employee shall properly complete and timely submit an Election Form to the Administrator in accordance with the Administrator's rules. An Eligible Employee shall become a Participant on the first day on which a deferral of an elected amount or contribution is first credited to his or her Account. The Administrator may establish from time to time such other enrollment requirements as it determines in its sole discretion are necessary.
3.03 Enrollment Requirements. Election Forms shall be completed and filed with the Administrator by the time periods set forth in Article IV for the particular type of compensation to be deferred or during such other enrollment period as the Administrator determines in accordance with such Article. Subject to Section 8.05, a Participant may change or revoke a deferral or distribution election any time before such election becomes irrevocable, which shall occur as of the applicable deadline specified in Article IV unless the Administrator establishes an earlier deadline. Unless the Administrator determines otherwise, a new Election Form shall be required for each Plan Year in which an Eligible Employee wants to defer his or her Compensation or Bonus. A Participant's Election Form shall specify the form of payment, which shall be paid at the times specified in Article VIII. Unless otherwise specified herein or determined by the Administrator, the election made by the Participant for each Plan Year shall apply to all amounts credited to the Participant's Plan Year subaccount for such Plan Year.
3.04 Cessation of Participation.
(a)Loss of Eligibility. An individual who qualifies as an Eligible Employee for a particular Plan Year will continue to be an Eligible Employee until such time as the Administrator determines otherwise, including that the Eligible Employee no longer satisfies the Plan's eligibility requirements or is not a member of a select group of management or highly compensated employees. Any determination of ineligibility shall be effective for an immediately following Plan Year. Any individual who ceases to be an Eligible Employee shall continue to be a Participant with respect to amounts credited to his or her Account until such amounts are completely distributed to him or her in accordance with the Plan.
(b)Committee Discretion. Notwithstanding any Plan provision to the contrary, the Committee shall have the sole discretionary authority to exclude a Participant from making further deferrals under the Plan with such exclusion becoming effective as of the first day of the next succeeding Plan Year. Such Participant shall remain a Participant in the Plan until his Account balance is paid in full.
(c)Hardship Withdrawals. Elective or deemed deferrals made by a Participant who receives a hardship withdrawal shall be canceled pursuant to
7

Section 8.07. The Participant shall remain a Participant in the Plan until his Account balance is paid in full.
(d)    Separation from Service or Death. Notwithstanding anything in the Plan
to the contrary, upon a Participant's Separation from Service or death, if earlier, any outstanding distribution election shall be given effect to the extent any amounts covered by such election are paid after such event.
ARTICLE IV
DEFERRALS AND CONTRIBUTIONS
4.01 Compensation.
(a)Elections. Subject to Article III, an Eligible Employee may make a Compensation Deferral by filing an Election Form with the Administrator before the beginning of the Plan Year in which the Compensation is earned. All deferrals shall be made on a pre-tax basis. The Administrator may prescribe such rules and requirements regarding Compensation Deferral elections as it deems appropriate. An Eligible Employee's Savings Plan election cannot be changed during the Plan Year to which the Compensation Deferral election relates.
(b)Amount. For each Plan Year, an Eligible Employee may elect to make a Compensation Deferral for each payroll period in a percentage (not to exceed 60%) of his or her Compensation net of any required taxes, Savings Plan deferrals and salary reduction amounts described in Code Section 125. Deferrals to the Plan shall begin after the Eligible Employee has made the maximum salary deferrals permitted under the Savings Plan for the Plan Year under Code Section 402(g). For purposes of the preceding sentence, for any given Plan Year and for all Eligible Employees, the Administrator may determine whether such maximum salary deferral includes catch-up contributions (within the meaning of Code Section 402(g)).
(c)No Changes. Subject to Section 3.03, a Compensation Deferral election shall be irrevocable as of the first day of the Plan Year to which the Election Form relates.
(d)Crediting. Compensation Deferrals made by a Participant will be credited to his or her applicable Plan Year subaccount as soon as practical after the date that the Compensation amount to which those Compensation Deferrals relate would have otherwise been paid.
4.02 Bonus.
(a)    Elections. The Administrator may prescribe such rules and requirements
regarding Bonus Deferral elections.
(i)    Generally. Subject to Article III, an Eligible Employee may make a Bonus Deferral by filing an Election Form with the
8

Administrator before the beginning of the Plan Year in which the Bonus is earned. All deferrals shall be made on a pre-tax basis.
(ii)    Performance-Based Compensation. Notwithstanding anything in
the Plan to the contrary, to the extent the Committee determines that a Bonus constitutes "performance-based compensation" (within the meaning of Code Section 409A and Regulations issued thereunder), the Committee may permit an Eligible Employee to file an Election Form with the Administrator on or before a date that occurs no later than six months before the end of the performance period provided that (A) the Eligible Employee performs services continuously from the later of the beginning of the performance period or the date the criteria are established through the date the Election Form is submitted and (B) the compensation is not readily ascertainable (within the meaning of Code Section 409A and Regulations issued thereunder) as of the date the Election Form is filed. If a Bonus Deferral election is made pursuant to this paragraph after the beginning of the Plan Year in which the Bonus is earned, such election shall be void if the Bonus becomes payable as a result of the Eligible Employee's death before the satisfaction of the performance criteria.
(b)Amount. For each Plan Year, an Eligible Employee may elect to make a Bonus Deferral with respect to any amount of his or her Bonus net of any required taxes and salary reduction amounts described in Code Section 125. Further, the amount deferred will be equal to the percentage elected for his or her Bonus Deferral plus the percentage elected for his Compensation Deferral. The total amount of Compensation Deferrals and Bonus Deferrals for a given Plan Year cannot exceed 80% of his or her Compensation.
(c)No Changes. Subject to Section 3.03, such Bonus Deferral election shall be irrevocable as of the first day of the Plan Year to which the Election Form relates or the deadline established by the Administrator for performance-based compensation, as the case may be.
(d)Crediting. Bonus Deferrals made by the Participant will be credited to his or her applicable Plan Year subaccount as soon as practical after the date that the Bonus amount to which those Bonus Deferrals relate would have otherwise been paid.
4.03 Matching Contributions.
(a)Eligibility. Participants shall be entitled to a Matching Contribution under the Plan only to the extent he or she has satisfied the eligibility requirements for an employer matching contribution under the Savings Plan.
(b)Amount. The amount of the Matching Contribution to which a Participant is entitled will be a percentage of Compensation that he or she elects to defer under the
9

Plan applied to the matching contribution formula then in effect under the Savings Plan less the amount of matching contribution made, if any, under the Savings Plan.
(c)    Crediting. The Matching Contributions to which the Participant is entitled  
will be credited to his or her applicable Plan Year subaccount at such time and in such manner as determined by the Administrator and as applied uniformly to all Participants.
4.04 Non-Elective Contributions.
(a)Eligibility. For each Plan Year, the Company or an Affiliate, in its sole discretion, may, but is not required to, credit any amount it desires as a Company Contribution and/or Make-Up Contribution to the Plan Year subaccount of one or more Participants, on such terms as it determines, which need not be the same for each Participant.
(b)Company Contribution.
(i)    Form of Payment. A Participant who receives a Company
Contribution may make a separate election as to the form of payment for such Amount. Any Election Form pursuant to which a Participant selects a form of payment must be filed with the Administrator either:
		
	(A)
	During a period of at least 30 days, or as otherwise specified by the Administrator in its discretion, that occurs before the beginning of the Plan Year in which the Company Contribution is earned or begins to be earned, as the case may be, or

		
	(B)
	Within 30 days after the Company Contribution is awarded, provided the Company Contribution is subject to a vesting schedule of at least 12 months from the date the completed Election Form is filed with the Administrator (taking into account any automatic vesting provisions that may be provided upon certain terminations from employment that may occur before such 12 month period).

If no such Election Form is filed, then the form of payment shall be a lump sum at Separation from Service.
(ii)    No Changes. Subject to Section 3.03, a Participant's Election
Form shall be irrevocable as of the first day of the Plan Year to which the Election Form relates.
(iii)    Amount. The Company Contribution credited to a Participant shall
be determined by the Committee or the Administrator, in their discretion. Such contribution may be smaller or larger than the amount credited to any other Participant, and the amount credited

10

to any Participant for a Plan Year may be zero, even though one or more other Participants receive a Company Contribution for that Plan Year. Crediting of a Company Contribution for one Plan Year does not guarantee a Company Contribution for subsequent Plan Years.
(c)    Make-Up Contribution.
		
	(i)
	Form of Payment. If a Participant is credited with a Make-Up Contribution, such contribution shall be paid in a lump sum at the earlier of the Participant's Separation from Service or death.

		
	(ii)
	Amount. The Make-Up Contribution credited to a Participant shall be determined by the Committee or the Administrator, in their discretion.

(d)    Crediting. Company and Make-Up Contributions will be credited to a
Participant's applicable Plan Year subaccount as soon as practical after the date that the Company or Affiliate determines such contributions shall be made.
ARTICLE V
SUPPLEMENTAL PENSION PLAN CONTRIBUTIONS
5.01 Eligibility for Supplemental Pension Contribution. A Participant whose benefit under the Pension Plan or UGS Pension Plan, as the case may be, is limited as a result of Code Section 401(a)(17) or Code Section 415, shall be credited with a Supplemental Pension Contribution as described in this Article.
5.02 In General. Except as otherwise provided in this Article, the Supplemental Pension Contribution shall be equal to the difference between the amount which was actually credited to his account under the Pension Plan or the UGS Pension Plan, as the case may be, and the amount which would have been credited to his account had the amount not been limited as a result of Code Section 401(a)(17) or Code Section 415. The Supplemental Pension Contribution to which the Participant is entitled will be credited to his applicable Plan Year subaccount as of the date that the Pension Benefit to which such Supplemental Pension Contribution relates would otherwise have been credited under the Pension Plan.
5.03 Former DeCare Dental Pension Plan Participants. An individual who was a named participant in the DeCare Dental Deferred Compensation Plan and/or the DeCare Dental Restoration Plan as of such plans' termination on or about April 9, 2009, became a Participant under this Article as of April 9, 2009. Such Participant shall be eligible for a Supplemental Pension Contribution if he previously participated in the DeCare Dental Pension Plan, met the Rule of 65 (as defined under the Pension Plan) as of December 31, 2009 and became a Participant in the Pension Plan on January 1, 2010. In such circumstance, the Supplemental Pension Contribution will be equal to the "Supplemental Part A Benefit," the "Supplemental A* Benefit," if any, plus the "Supplemental Part B Benefit," if any, each as further described below.
(a)    The Supplemental Part A Benefit will be equal to:
11

		
	(i)
	the Part A Benefit (as determined under and set forth in the Pension Plan) that would have been payable to the Participant without regard to Code Section 401(a)(17) or Code Section 415, as of December 31, 2014 (or such earlier Separation from Service) less the Part A Benefit actually payable to the Participant under the Pension Plan and determined in an annuity, less

		
	(ii)
	an annuity equivalent of any lump sum amount received by the Participant from (i) the DeCare Dental Deferred Compensation Plan and the DeCare Dental Restoration Plan upon the respective plans' termination, and (ii) if applicable, the non-qualified plans sponsored by BCBSM, Inc. (d/b/a Blue Cross Blue Shield of Minnesota) that provided benefits in excess of the benefits provided under such entity's qualified plans.

The Part A Benefit formula uses a Participant's actual "Salary" (as defined in Exhibit S of the Pension Plan), to determine the Part A Benefit. In the event a Participant has an individual agreement that provides for certain assumptions to apply in the determination of Salary, the terms of the agreement shall be given effect.
The Supplemental Part A Benefit will be credited to a Plan Year subaccount as soon as administratively feasible after December 31, 2014, or Separation from Service, as the case may be.
(b)If the Participant continues to be eligible to participate in the Pension Plan after December 31, 2014, the Supplemental Part A* Benefit will be equal to the Benefit Transition Adjustment (as determined and defined under the Pension Plan) without regard to Code Section 401(a)(17) less the actual Benefit Transition Adjustment payable to the Participant under the Pension Plan. Such Benefit Transition Adjustment will be determined each Plan Year. The Supplemental Part A* Benefit to which the Participant is entitled will be credited to his applicable Plan Year subaccount as of the date that the Benefit Transition Adjustment to which such Supplemental Part A* Benefit relates would otherwise have been credited under the Pension Plan.
(c)If the Participant continues to be eligible to participate in the Pension Plan after December 31, 2014, the Supplemental Part B Benefit will be determined under, and credited pursuant to, Section 5.02 of this Article.
5.04  QSERP. Notwithstanding anything in this Article to the contrary and subject to Section 12.06, the Company reserves the discretion to credit some or all of a Participant's Supplemental Pension Contributions including earnings on such amounts, on a prospective or retroactive basis, to the Pension Plan or the UGS Pension Plan, as the case may be. Any such credit shall only be made if it is consistent with applicable rules governing the Pension Plan and/or the UGS Pension Plan and Code Section 409A and Regulations issued thereunder.
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ARTICLE VI  
EARNINGS
6.01 Investment Funds. Amounts credited to a Participant's Account under the Plan shall be credited with earnings, at periodic intervals determined by the Administrator, at a rate equal to the actual rate of return for such period on the investment fund or funds or index or indices or vehicle or vehicles selected by that Participant. The investment options shall be comparable to those offered under the Savings Plan, from time to time, except for the option to invest in Anthem common stock or the Vanguard brokerage option (or other self-managed account option that may be offered under the Savings Plan). The Committee may offer other investment options in its discretion. The rate of return on such investment vehicles shall be tracked solely for the purpose of determining the phantom investment gain, earnings and losses to be credited to the Participant's Account during the deferral period. Neither the Company nor any of its affiliates shall be obligated to make any actual investment.
6.02 Conversion of Investments from Predecessor Plans and Merged Plans. Before January 1, 2006, amounts representing Predecessor Plan Account balances and account balances from Merged Plans were credited with earnings based on investment options available under the Predecessor Plan or Merged Plan to which they related. Effective as of January 1, 2006, those Predecessor Plan Accounts (or accounts from Merged Plans) shall be credited with earnings in accordance with Section 6.01. Before January 1, 2006, the Committee shall prescribe rules (that may vary among classes of Participants) that provide each Predecessor Plan Participant (and Participant with a Merged Plan account balance) an opportunity to select the investment fund or funds or index or indices to be used as the basis for crediting his or her Predecessor Plan Account (or Merged Plan account) with earnings as of January 1, 2006. To the extent the Committee has not received investment direction from a Participant before December 15, 2005 with respect to his or her Predecessor Plan Account or Merged Plan account, such Predecessor Plan Account or Merged Plan account shall be credited with earnings based upon a default investment option under the Savings Plan designated as such by the Committee or in accordance with such other rules as may be adopted by the Committee and applied on a consistent, uniform basis.
ARTICLE VII  
VESTING
7.01 Elective Deferrals under the Plan.
(a)Each Participant will be 100% vested in that portion of his or her Account attributable to Compensation Deferrals and Bonus Deferrals made on or after January 1, 2006. For periods on or after January 1, 2006 and before January 1, 2014, this provision also applied to Salary Deferrals made pursuant to the Plan terms then in effect.
(b)Deferrals made under the Plan are 100% vested except as follows::
(i)    To the extent any item of Compensation deferred under the Plan
before January 1, 2006 would have been subject to additional vesting requirements if not deferred, then the portion of the
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Participant's Plan Year subaccount attributable to that item shall be subject to those additional vesting requirements.
(ii)       Each Participant will vest in the portion of each Plan Year
subaccount attributable to "Supplemental Special Deferred Compensation Arrangements" (as those terms were defined in the Plan before January 1, 2006) in the manner described in the "Supplemental Special Deferred Compensation Arrangement.".
7.02 Supplemental Pension Plan Contributions. All Supplemental Pension Plan Contributions as determined in accordance with Article V of the Plan shall be 100% vested.
7.03 Predecessor or Merged Plans. Vesting of a Participant's Account attributable to deferrals made and accruals earned before January 1, 2006 under a Predecessor Plan or Merged Plan were governed by the terms of the Predecessor Plan or Merged Plan to which they relate.
7.04 Company and/or Make-Up Contributions.    Vesting of any Company Contributions and Make-Up Contributions shall be determined by the Company or Affiliate, in its sole discretion, and need not be the same for all Participants.
ARTICLE VIII  
DISTRIBUTIONS
8.01 Annual Election. Participants must indicate on an Election Form which of the distribution options described below will govern payment of the Plan Year subaccount to which deferred amounts are credited before the beginning of the Plan Year in which the compensation is earned or such earlier or later time as may be specified by the Administrator pursuant to Article III or Article IV. Unless otherwise specified in the Plan or permitted by the Administrator, such distribution election applies to all amounts credited to the Plan Year subaccount, including, but not limited to, Matching Contributions and Supplemental Pension Contributions.
8.02 Time for Distribution. Except as otherwise provided in Section 8.07, distribution of a Participant's Account shall be made on the earliest to occur of:
(a)The date elected by a Participant under Section 8.03 with respect to an In-Service Payout;
(b)The date set forth in Section 8.04 with respect to the Participant's Separation from Service; or
(c)The date set forth in Section 8.06 with respect to the Participant's death.
8.03 In-Service Payout. A Participant may irrevocably select, on his or her Election Form, a specified date to receive a lump sum In-Service Payout of all vested amounts credited to a Plan Year subaccount. Payment shall be made as soon as administratively feasible following the specified date and before the later of (i) December 31 of the calendar year containing the specified date, or (ii) the 15th day of the third month following the specified date. If any amounts
18397365 v.2                14

are unvested at the time of the elected In-Service Payout date, but later become vested, such remaining amounts shall be paid at the earlier of the Participant's Separation from Service or Death.

8.04 Separation from Service. Upon a Participant's Separation from Service for any reason other than death, a Participant's vested Plan Year subaccount shall be paid or begin to be paid as soon as administratively feasible following Separation from Service and before the later of (i) December 31 of the calendar year in which the Participant's Separation from Service occurs, or (ii) the 15111 day of the third month following the Participant's Separation from Service. Notwithstanding the foregoing, distributions made to a Key Employee upon such separation shall be paid or begin to be paid no earlier than the first day following the six month anniversary of the Participant's Separation from Service unless the Participant dies before or during such six-month period, in which case, such six-month delay shall not apply and payment shall be made pursuant to Section 8.06. Subsequent installment payments shall be made thereafter on or about the anniversary of the first installment payment.
Payment shall be made to the Participant in such form as determined below in subsection (a), (b), or (c).
(a)    Lump Sum. A Participant's Plan Year subaccount balance shall be paid in
a lump sum if:
(I)    timely elected by the Participant pursuant to the Plan; or
(ii)    no valid payment election is in effect when distribution is to be
made.
(b)    Annual Installments. A Participant may elect to receive payment of his or
her Plan Year subaccount balance in either:
		
	(i)
	five annual installments; or

		
	(ii)
	ten annual installments.

(c)    Exceptions. Notwithstanding the foregoing provisions, the following shall
apply:
		
	(i)
	If a Participant's Account balance constituting contributions (other than Company and Make-Up Contributions) for all Plan Years at Separation from Service or death, whichever is earlier, is equal to or less than the limit then in effect under Code Section 402(g)(1)(B), such balance shall be paid in a lump sum in lieu of any election to receive installments.

		
	(ii)
	A Participant who is entitled to receive a Supplemental Part A Benefit, as provided under Article V, shall receive such benefit in a lump sum. Payment of the Supplemental Part A* Benefit, if any,

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and Supplemental Part B Benefit, if any, shall be made as otherwise specified in the Plan.
8.05 Subsequent Changes in Elections.
(a)Participants who previously elected to receive an In-Service Payout pursuant to Section 8.03 shall be permitted to change his or her election to delay the time for payment until the fifth anniversary of the date the lump sum distribution would otherwise have been made. However, no such change of election under this Section shall have any force or effect or become effective until the expiration of the 12-month period measured from the filing date of such election. In addition, each such change of election with respect to an original election to receive an In-Service Payout shall be valid only if such election is made at least 12 months before the date of the scheduled distribution. In no event, however, may any change to the time for payment in effect for the Plan Year subaccount result in any acceleration of the distribution of that subaccount. Notwithstanding anything in this Section to the contrary, in the event of the Participant's Separation from Service or death after a subsequent election is made but before the end of the five-year delay described above, payment shall instead be made upon such Separation from Service or death, as the case may be.
(b)Notwithstanding any provision in the Plan to the contrary, on or before December 31, 2008, Participants may make changes to distribution elections previously filed with respect to amounts deferred under the Plan that relate to Plan Years 2005 through 2008 consistent with transition relief provided by the Department of the Treasury in Notice 2006-79, Notice 2007-86 and proposed regulations promulgated under Code Section 409A.
8.06 Death. If a Participant dies with a vested balance credited to one or more of his or her Plan Year subaccounts, whether or not the Participant was receiving payouts from those subaccounts at the time of his or her death, then the Participant's Beneficiary will receive the vested balance of each of those Plan Year subaccounts in a lump sum. If a Participant has any unvested Matching Contributions or Supplemental Pension Contributions credited to the Participant's Account as of death, such amounts will become fully vested, nonforfeitable and distributed pursuant to this Section.
8.07 Hardship Withdrawal. This Section shall only apply to amounts credited to a Participant's Account that are subject to Code Section 409A. Any hardship withdrawal right with respect to grandfathered amounts (within the meaning of Code Section 409A) shall be subject to rules, if any, of the Predecessor Plans. If a Participant (A) incurs a severe financial hardship as a result of (i) an illness or accident involving the Participant, his or her spouse, Beneficiary or any dependent (as determined pursuant to Code Section 152(a)), (ii) a casualty loss involving the Participant's property or (iii) other similar extraordinary and unforeseeable event beyond the Participant's control and (B) does not have any other resources available, whether through reimbursement or compensation (by insurance or otherwise) or liquidation of existing assets (to the extent such liquidation would not itself result in financial hardship), to satisfy such financial emergency, then the Participant may apply to the Administrator for an immediate distribution from the vested portion of his or her Account (but not the Predecessor
16

Plan Account) in an amount necessary to satisfy such financial hardship and the tax liability attributable to such distribution. The Administrator shall have complete discretion to accept or reject the request and shall in no event authorize a distribution in an amount in excess of that reasonably required to meet such financial hardship and the tax liability attributable to that distribution.
Any hardship withdrawal shall be made only to the extent permitted in accordance with Regulation Section 1.409A-3(i)(3). As a condition of the Administrator's acceptance of a request for a hardship withdrawal under this Section, the Participant's election to make Compensation Deferrals and/or Bonus Deferrals shall be terminated for the remainder of the Plan Year in which the hardship withdrawal is taken. In addition, such Participant shall be suspended from making Compensation Deferrals and Bonus Deferrals for the Plan Year immediately after the Plan Year in which the hardship withdrawal is taken. Such Participant, if then an Eligible Employee, may make a deferral election that relates to the second Plan Year following the Plan Year in which the hardship withdrawal was made in accordance with Article III and Article IV.
8.08 Valuation. The amount to be distributed from any Plan Year subaccount pursuant to this Article VIII shall be determined on the basis of the vested balance credited to that subaccount as of the most recent practicable date (as determined by the Administrator or its delegate) preceding the date of the actual distribution.
8.09 Tax Withholding. Income taxes and other taxes payable with respect to an Account shall be deducted from amounts payable under the Plan. All federal, state or local taxes that the Administrator determines are required to be withheld from any payments made pursuant to this Article VIII shall be withheld.
8.10 Payment of Small Accounts. The Administrator may, in its sole discretion which shall be evidenced in writing no later than the date of payment, elect to pay the value of the Participant's Account in a single lump sum if the balance of such Account is not greater than the applicable dollar amount under Code Section 402(g)(1)(B), provided the payment represents the complete liquidation of the Participant's interest in the Plan and all other account balance plans as determined pursuant to Regulation Section 1.409A-1(c)(2).
8.11 Right of Offset. The Company or an Affiliate shall have the right to offset any amounts payable to a Participant under the Plan to reimburse the Company or an Affiliate for liabilities or obligations of the Participant to the Company or Affiliate if the following conditions are met:
(a)the liabilities or obligations of the Participant to the Company or Affiliate were incurred in the ordinary course of the service relationship between the Participant and the Company or Affiliate;
(b)the entire amount to be offset does not exceed $5,000 in any taxable year of the Participant; and
(c)the offset is made at the same time and in the same amount as the liabilities or obligations otherwise would have been due and collected from the Participant.
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8.12 Bona Fide Dispute. The Committee or the Administrator shall have the discretion to accelerate the time or schedule of payment under the Plan pursuant to Regulation Section 1.409A-3(j)(4)(xiv) where such payment occurs as part of an arm's length settlement of a bona fide dispute between the Company or an Affiliate and a Participant as to the Participant's right to the deferred amount.
8.13 Income Inclusion Under Code Section 409A.  The Committee or the Administrator shall have the discretion to accelerate the time or schedule of payment under the Plan if the Plan fails to meet the requirements of Code Section 409A and Regulations issued thereunder, provided that any such payment does not exceed the amount required to be included in income as a result of such failure.
8.14 Effect of Rehire. In the event a Participant experiences a Separation from Service, begins receiving payment of his or her Account and is subsequently rehired by the Company or an Affiliate, distributions shall continue as regularly scheduled.
ARTICLE IX
EFFECT ON PREDECESSOR AND MERGED PLANS
9.01 Coordination With Predecessor Plans. Solely for ease of administration, the Predecessor Plans may be attached as exhibits to the Plan and are incorporated by reference herein. Except as otherwise specifically provided in the Plan, eligibility for and entitlement to benefits under the Predecessor Plans are governed solely by the terms of those Predecessor Plans. Effective January 1, 2005 (or such earlier date as may be provided in a Predecessor Plan), Participants ceased to accrue further benefits under the Predecessor Plans; however, Predecessor Plan benefits continue to accrue earnings per the Predecessor Plan terms before January 1, 2006 and pursuant to the Plan effective as of January 1, 2006.
9.02 Predecessor Plan Accounts. Although benefits accrued under Predecessor Plans are grandfathered for purposes of Code Section 409A to the extent such amounts were earned and vested as of December 31, 2004, for administrative purposes, the December 31, 2005 Predecessor Plan Account balance of any Predecessor Plan Participant became accounted for under the Plan as of January 1, 2006 and shall be subject to Article VI. In all other respects, each Predecessor Plan Account shall remain subject exclusively to the terms of the Predecessor Plan to which it relates, including without limitation the existing distribution election (commencement date and form of distribution) applicable to the Predecessor Participant's Predecessor Plan Account. Any change in that distribution election must be made in compliance with the applicable provisions of the applicable Predecessor Plan.
9.03 Merged Plans. The 2005 Anthem Plan, the 2005 Anthem SERP, the 2005 Trigon Plan and the 2005 Trigon SERP were merged into the Plan effective as of December 31, 2005. All benefits accrued under such merged plans are subject to Code Section 409A. In conjunction with the merger, on and after January 1, 2006, benefits ceased to accrue under the 2005 Anthem Plan, the 2005 Anthem SERP, the 2005 Trigon Plan, and the 2005 Trigon SERP except as otherwise provided in the Plan. The rights and obligations of participants in the Merged Plans before their effective dates of merger shall be governed solely by the terms of the Merged Plans; provided, however, that to the extent minimally necessary to comply with the requirements of
18

Section 409A of the Code, the requirements and restrictions of Sections 5.01(a)-(c) and 8.01(a)-(d) of the 2005 WellPoint Plan shall apply, effective as of January 1, 2005, to the portion of the Participant's Account attributable to the 2005 Anthem Plan. Distributions of amounts attributable to Merged Plan benefits are made pursuant to a Participant's election in effect under the applicable Merged Plan. If no such election is on file, amounts shall be distributed in a single lump sum payment.
ARTICLE X
CLAIMS PROCEDURES
10.01 Presentation of Claim. No application is required for the commencement of benefits under the Plan. However, if a Participant or Beneficiary ("Claimant") believes that he or she is entitled to a greater benefit under the Plan, the Claimant may submit a signed, written application to the Committee for such a greater benefit. If such a claim relates to the contents of a notice received by the Claimant, the claim must be made within 90 days after such notice was received by the Claimant. All other claims shall be made within 180 days of the date on which the event that caused the claim to arise occurred. The claim shall state with particularity the determination desired by the Claimant. A claim shall be considered to have been made when a written communication made by the Claimant or the Claimant's representative is received by the Committee or its authorized delegate. References to the Committee in this Article includes references to the Executive Vice President and Chief Human Resources Officer and, if applicable, such officer's delegate. The Executive Vice President and Chief Human Resources Officer may further delegate, orally or in writing, authority to decide certain claims under this Article.
10.02 Decision on Initial Claim. The Committee shall consider a Claimant's claim and provide written notice to the Claimant of any denial within a reasonable time, but no later than 90 days after receipt of the claim. If an extension of time beyond the initial 90-day period for processing is required, written notice of the extension shall be provided to the Claimant before the initial 90-day period expires indicating the special circumstances requiring an extension of time and the date by which the Committee expects to render a final decision. In no event shall the period, as extended, exceed 180 days. If the Committee denies, in whole or in part, the claim, the notice shall set forth in a manner calculated to be understood by the Claimant:
(a)The specific reasons for the denial of the claim, or any part thereof;
(b)Specific references to pertinent Plan provisions upon which such denial was 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; and
(d)An explanation of the claim review procedure, which explanation shall also include a statement of the Claimant's right to bring a civil action under ERISA Section 502(a) following a denial of the claim upon review.
19

10.03 Right to Review. A Claimant is entitled to appeal any claim that has been denied in whole or in part. To do so, the Claimant must submit a signed, written request for review with the Committee within 60 days after receiving a notice from the Committee that a claim has been denied, in whole or in part. Absent receipt by the Committee of a written request for review within such 60-day period, the claim shall be deemed to be conclusively denied. The Claimant (or the Claimant's duly authorized representative) may:
(a)Review and/or receive copies of, upon request and free of charge, all documents, records, and other information relevant to the Claimant's claim; and/or
(b)Submit written comments, documents, records or other information relating to her claim, which the Committee shall take into account in considering the claim on review, without regard to whether such information was submitted or considered in the initial review of the claim.
If a Claimant requests to review and/or receive copies of relevant information pursuant to subsection (a) above before filing a written request for review, the 60-day period for submitting the written request for review will be tolled during the period beginning on the date the Claimant makes such request and ending on the date the Claimant reviews or receives such relevant information.
10.04 Decision on Review. The Committee shall render its decision on review promptly, and not later than 60 days after it receives a written request for review of the denial, unless other special circumstances require additional time. In such case, the Committee will notify the Claimant, before the expiration of the initial 60-day period and in writing, of the need for additional time, the reason the additional time is necessary, and the date (no later than 60 days after expiration of the initial 60-day period) by which the Committee expects to render its decision on review. Notwithstanding the foregoing, if the Committee determines that an extension of the initial 60-day period is required due to the Claimant's failure to submit information necessary for the Committee to decide the claim, the time period by which the Committee must make its determination on review shall be tolled from the date on which the notification of the extension is sent to the Claimant until the date on which the Claimant responds to the request for additional information. The decision on review shall be written in a manner calculated to be understood by the Claimant, and shall contain:
(a)Specific reasons for the decision;
(b)Specific references to the pertinent Plan provisions upon which the decision was based;
(c)A statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records or other information relevant (within the meaning of Department of Labor Regulation Section 2560.503-1(m)(8)) to the Claimant's claim;
(d)A statement of the Claimant's right to bring a civil action under ERISA Section 502(a) following a wholly or partially denied claim for benefits; and
20

(e)    Such other matters as the Committee deems relevant.
10.05 Form of Notice and Decision. Any notice or decision by the Committee under this Article may be furnished electronically in accordance with Department of Labor Regulation Section 2520.104b-(1)(c)(i), (iii) and (iv).
10.06 Legal Action. Any final decision by the Committee shall be binding on all parties. A Claimant's compliance with the foregoing provisions of this Article is a mandatory prerequisite to a Claimant's right to commence any legal action with respect to any claim for benefits under the Plan. Any such legal action must be initiated no later than 180 days after the Committee renders its final decision. If a final determination of the Committee is challenged in court, such determination shall not be subject to de novo review and shall not be overturned unless proven to be arbitrary and capricious based on the evidence considered by the Committee at the time of such determination.
ARTICLE XI
ADMINISTRATION
11.01 Plan Administration. The Committee has overall responsibility for the Plan, but the Administrator shall have responsibility for the day-to-day administration of the Plan, as specified herein and as otherwise delegated by the Committee. The Administrator and members of the Committee may be Participants under this Plan. Any individual serving on the Committee who is a Participant shall not vote or act on any matter relating solely to himself or herself. The Chief Executive Officer, Executive Vice President and Chief Human Resources Officer or any other individual charged with administrative authority may not act on any matter involving such individual's own participation in the Plan.
11.02 Powers, Duties and Procedures. The Committee shall have full and complete discretionary authority to (i) make, amend, interpret and enforce all appropriate rules and regulations for the administration of the Plan, including any rules relating to trading restrictions as it determines necessary, and (ii) decide or resolve any and all questions including interpretations of the Plan, as may arise in connection with the claims procedures set forth in Article X or otherwise with regard to the Plan. The Committee shall have complete control and authority to determine the rights and benefits of all claims, demands and actions arising out of the provisions of the Plan of any Participant or Beneficiary or other person having or claiming to have any interest under the Plan. When making a determination or calculation, the Committee may rely on information furnished by a Participant or the Company, an Affiliate or other related entity. Benefits under the Plan shall be paid only if the Committee decides in its sole discretion that the Participant or Beneficiary is entitled to them. The Committee may delegate such powers and duties as it determines for the efficient administration of the Plan.
11.03 Agents. In the administration of this Plan, the Committee or the Administrator may, from time to time, employ agents and delegate to them such administrative duties as it sees fit (including acting through a duly appointed representative) and may from time to time consult with counsel who may be counsel to the Company, an Affiliate or other related entity.
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11.04 Binding Effect of Decisions. Notwithstanding any other provision of the Plan to the contrary, the Committee or its delegate shall have complete discretion to interpret the Plan and to decide all matters under the Plan. Any such interpretation shall be final, conclusive and binding on all Participants, Beneficiaries and any person claiming under or through any Participant, in the absence of clear and convincing evidence that the Committee or its delegate acted arbitrarily and capriciously.
11.05 Information. To enable the Committee and the Administrator to perform its functions, the Company, an Affiliate or other related entity shall supply full and timely information to the Committee or the Administrator, as the case may be, on all matters relating to the compensation of its Participants, the dates of the death or Separation from Service and such other pertinent information as the Committee or Administrator may reasonably require.
11.06 Coordination with Other Benefits. The benefits provided to a Participant and the Beneficiary under the Plan are in addition to any other benefits available to such Participant under any other plan or program for employees of the Company, an Affiliate or other related entity. The Plan shall supplement and shall not supersede, modify or amend any other such plan or program except as may otherwise be expressly provided.
ARTICLE XII
MISCELLANEOUS
12.01 Limitation of Rights. Participation in the Plan does not give any individual the right to be retained in the service of the Company, any Affiliate or other related entity, or to interfere with the right of the Company, any Affiliate or other related entity to discipline or discharge the individual at any time, with or without cause, or to modify the Salary, Compensation or Bonus of such individual at any time.
12.02 Additional Restrictions.  If the Administrator determines that additional
restrictions or limitations must be placed on the investment vehicles utilized for measuring the return on the amounts credited to Participant Accounts, the right of Participants to make investment elections with respect to their Accounts, their ability to make or change distribution elections, their ability to defer distributions or to change the commencement date for the distribution of their benefits or the method of such distribution or their rights or status as creditors under the Plan in order to avoid current income taxation of amounts deferred under the Plan, the Administrator may, in its sole discretion, amend the Plan to impose such restrictions or limitations, cease deferrals under the Plan and/or defer distribution dates under the Plan.
12.03 Indemnification. The Company will indemnify and hold harmless the Directors, the members of the Committee and any delegate of the Committee, and employees of the Company and its Affiliates, from and against any and all liabilities, claims, costs and expenses, including attorneys' fees, arising out of an alleged breach in the performance of their fiduciary duties under the Plan, other than such liabilities, claims, costs and expenses as may result from the gross negligence or willful misconduct of such persons. The Company shall have the right, but not the obligation, to conduct the defense of such persons in any proceeding to which this Section applies.
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12.04 Assignment. To the fullest extent permitted by law, benefits under the Plan and rights thereto are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors of a Participant or a Beneficiary.
12.05 Inability to Locate Recipient. If a benefit under the Plan remains unpaid for two (2) years from the date it becomes payable, solely by reason of the inability of the Administrator to locate the Participant or Beneficiary entitled to the payment, the benefit shall be treated as forfeited. Any amount forfeited in this manner shall be restored without interest upon presentation of an authenticated written claim by the person entitled to the benefit.
12.06 Amendment and Termination.
(a)The Committee may, at any time, amend or terminate the Plan. Any amendment must be made in writing; no oral amendment will be effective. Except to the limited extent authorized pursuant to Section 12.02, no amendment may, without the consent of an affected Participant (or, if the Participant is deceased, the Participant's Beneficiary), adversely affect the Participant's or the Beneficiary's rights and obligations under the Plan with respect to amounts already credited to a Participant's Account, and all amounts deferred under the Plan before the date of any such amendment or termination of the Plan shall continue to become due and payable in accordance with the distribution provisions of Article VIII as in effect immediately before such amendment or termination.
(b)Notwithstanding subsection (a), if the Company exercises its discretion under Article V and determines an amendment is necessary to the Plan, participant consent shall only be required if the amendment impacts Supplemental Contributions and earnings credited through December 31, 2008.
(c)Upon termination of the Plan, the Committee reserves the discretion to accelerate distribution of the Accounts of Participants in accordance with regulations promulgated by the Department of Treasury under Code Section 409A.
12.07 Applicable Law. To the extent not governed by Federal law, the laws of the State of Indiana shall govern the Plan. If any provision of the Plan is held to be invalid or unenforceable, the remaining provisions of the Plan will continue to be fully effective.
12.08 No Funding. The obligation to pay the vested balance of each Participant's Account shall at all times be an unfunded and unsecured obligation of the Company or its Affiliates, as the case may be, and Participants and Beneficiaries shall have the status of general unsecured creditors of the Company or applicable Affiliate. Except to the extent provided below in Section 12.09, Plan benefits will be paid from the general assets of the Company, and nothing in the Plan will be construed to give any Participant or any other person rights to any specific assets of the Company or its Affiliates. In all events, it is the intention of the Company and its Affiliates and all Participants that the Plan be treated as unfunded for tax purposes and for purposes of Title I of ERISA.
12.09 Trust. The benefits under the Plan will be paid from the assets of a grantor trust (the "Trust") established by the Company to assist it and its Affiliates in meeting their
18397365v.2                     23

obligations hereunder and, to the extent that such assets are not sufficient, by the Company or the applicable Affiliate out of their general assets. The Trust shall conform to the terms of the Internal Revenue Service Model Trust in Internal Revenue Service Procedure 92-64 (or any successor procedure).

*     *     *
IN WITNESS WHEREOF, Anthem, Inc. has caused the Plan to be executed by its duly authorized representative as of the date indicated above.
ANTHEM, INC.

By: /s/ Joseph R. Swedish                    
Joseph R. Swedish
President & Chief Executive Officer
24

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