EXHIBIT 10.2
 
EMPLOYMENT AGREEMENT
 
THIS EMPLOYMENT AGREEMENT (this “Agreement”) is entered into and made effective
as of February 8, 2006 by and between MODTECH HOLDINGS, INC., a Delaware
corporation (the “Company”), and Ronald Savona (“Executive”).
 
R E C I T A L S
 
WHEREAS, Executive has been serving as the Company’s Senior Vice President of
Operations and Chief Operating Officer (COO).
 
WHEREAS, the Company desires to retain the services of Executive on the terms
and conditions provided herein, and Executive is willing to provide such
services on such terms and conditions.
 
A G R E E M E N T
 
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants of the parties contained herein, the parties agree as follows:
 
1.  Term. This Agreement shall continue in full force and effect for a period
which shall commence on February 8, 2006, and shall continue until December 31,
2006 (the “Term”), unless sooner terminated as hereinafter provided or extended
by the mutual agreement of the parties. On December 31, 2006, and on each
one-year anniversary of that date, this Agreement shall automatically be renewed
for a period of one year, unless either party shall have given the other written
notice of their intent not to renew this Agreement at least thirty (30) calendar
days prior to the expiration of the Term or any extension.
 
2.  Services and Exclusivity of Services. So long as this Agreement shall
continue in effect, Executive shall devote Executive’s full business time,
energy and ability exclusively to the business, affairs and interests of the
Company and its direct and indirect subsidiaries (“Subsidiaries), and matters
related thereto, shall use Executive’s best efforts and abilities to promote the
Company’s interests, and shall perform the services contemplated by this
Agreement in accordance with policies established by and under the direction of
the Board of Directors of the Company (the “Board”) and the Chief Executive
Officer of the Company (the “CEO”). Executive shall at all times perform
Executive’s duties and obligations faithfully and diligently and to the best of
Executive’s ability.
 
Executive may make and manage personal business investments of Executive’s
choice and serve in any capacity with any civic, educational or charitable
organization without seeking or obtaining approval by the Board or the CEO,
provided that such activities and services do not substantially interfere or
conflict with the performance of duties hereunder or create any conflict of
interest with such duties. An investment that exceeds five percent (5%) of the
equity securities or capitalization of a competitor, supplier or customer of the
Company shall be deemed to constitute such a conflict.
 

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Executive represents to the Company that Executive has no other outstanding
commitments inconsistent with any of the terms of this Agreement or the services
to be rendered hereunder.
 
3.  Duties and Responsibilities. Executive shall serve as the Senior Vice
President of Operations and COO of the Company for the duration of this
Agreement. In performance of Executive’s duties, Executive shall report directly
to the CEO and shall be subject to such limits on Executive’s authority as the
CEO or the Board may from time to time impose. Executive agrees to observe and
comply with the rules and regulations of the Company as adopted by the Board
respecting the performance of Executive’s duties and agrees to carry out and
perform directions and policies of the Company, its CEO and its Board as they
may be stated, either orally or in writing, from time to time. Executive shall
have responsibilities, duties and authority consistent with Executive’s position
as assigned by the CEO or the Board, including day to day leadership of the
operations of the company, including all regional and corporate operational
responsibilities.
 
4.  Compensation, Benefits and Vacation. As compensation for the services
provided by Executive hereunder, Executive shall be entitled to receive such
compensation, benefits and vacation as set forth in Exhibit A to this Agreement,
subject to the terms and conditions of this Agreement, and subject to all
appropriate shareholder approvals.
 
5.  Expenses. During the Term hereof, Executive shall be entitled to receive
prompt reimbursement of all reasonable expenses incurred by Executive (in
accordance with the policies and procedures from time to time adopted by the
Board for the Company’s senior officers) in performing the services contemplated
hereunder, provided that Executive properly accounts therefor in accordance with
the Company’s policies.
 
6.  Termination.
 
(a)  Death. Executive’s employment hereunder shall terminate immediately upon
the death of Executive. In the event that Executive’s employment is terminated
by reason of Executive’s death, the Company shall pay Executive’s estate or
beneficiaries, as applicable, the following amounts, after deducting any amounts
lawfully owing from Executive to the Company: (i) any Base Salary (as defined in
Exhibit A to this Agreement or bonuses earned but unpaid through the date of
termination; (ii) any vacation days accrued but unused prior to Executive’s
termination; (iii) any expense reimbursements owed to Executive prior to
Executive’s termination; and (iv) any unpaid vested amounts or benefits under
the Company’s pension, deferred compensation or other benefit plans, subject to
the terms and conditions of such plans (the items described in clauses (i)
through (iv) of this sentence shall be referred to herein collectively as the
“Standard Termination Benefits”). After such payments described in the preceding
sentence, the Company shall have no further obligation to Executive or
Executive’s estate or beneficiaries, as applicable, except to the extent that
Executive’s estate or beneficiaries, as applicable, may be entitled to exercise
any vested stock options granted to Executive as contemplated in Exhibit A to
this Agreement or otherwise (subject to the terms and conditions of applicable
option plans and/or option agreements).
 
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(b)  Disability. In the event that Executive shall be unable to perform the
services contemplated hereunder by reason of disability, illness or other
incapacity for a period of at least 90 consecutive days or an aggregate of 120
days, whether or not consecutive, during any 12 month period (“Disability”), the
Company may terminate Executive’s employment hereunder prior to the expiration
of the Term. In the event that Executive’s employment is terminated by reason of
Executive’s Disability, the Company shall pay Executive the Standard Termination
Benefits (as defined above), after deducting any amounts lawfully owing from
Executive to the Company. After such payments described in the preceding
sentence, the Company shall have no further obligation to Executive, except to
the extent that Executive may be entitled to exercise any vested stock options
granted to Executive as contemplated in Exhibit A to this Agreement or otherwise
(subject to the terms and conditions of applicable option plans and/or option
agreements).
 
(c)  By the Company, Without Cause. Executive’s employment hereunder may be
terminated by the Company at any time prior to the expiration of the Term, for
Cause (as defined below) or without Cause.
 
(d)  By the Company, For Cause. Executive’s employment hereunder may be
terminated by the Company prior to the expiration of the Term for “Cause.” For
the purposes of this Agreement, “Cause” means (i) other than as a result of
incapacity due to Executive’s Disability or Executive’s death, Executive’s
failure or refusal to perform Executive’s duties or responsibilities or to
follow the lawful directions of the CEO or the Board or Executive’s material
breach of any of Executive’s duties and responsibilities under this Agreement or
under the Company’s policies with respect to its employees or senior officers,
in each case, after the Company provides Executive with written notice of such
failure, refusal or breach and Executive fails to cure such failure, refusal or
breach within 10 calendar days from the date of delivery of such notice to
Executive; (ii) Executive’s conviction by, or entry of a plea of guilty or nolo
contendere in, a court of competent jurisdiction for a felony, or any crime
which, in the Company’s sole discretion, adversely affects the Company or its
reputation in the community, or any crime which involves moral turpitude or is
punishable by imprisonment; (iii) Executive’s commission of an act of fraud or
embezzlement with respect to the Company or any personal dishonesty by Executive
with respect the Company or Executive’s obligations to the Company;
(iv) Executive’s violation of Executive’s duty of loyalty to the Company or
Executive’s breach of Executive’s fiduciary duty to the Company; (v) Executive’s
intentional or knowing failure to comply with, or violation of, or causing the
Company to fail to comply with or violate, any laws or regulations applicable to
the Company, including, without limitation, federal or state securities laws and
regulations issued by the Internal Revenue Service; (vi) Executive becoming
barred or prohibited by the Securities and Exchange Commission or another
governmental entity or a securities exchange or quotation system upon which the
Company’s securities are traded from holding Executive’s position with the
Company; or (vii) Executive’s use of illegal drugs or other illegal substances.
 
In the event that Executive is terminated by the Company for Cause, the Company
shall pay Executive the Standard Termination Benefits (as defined above), after
deducting any amounts lawfully owing from Executive to the Company. After such
payments described in the preceding sentence, the Company shall have no further
obligation to Executive, except to the extent that Executive may be entitled to
exercise any vested stock options granted to Executive as contemplated in
Exhibit A to this Agreement or otherwise (subject to the terms and conditions of
applicable option plans and/or option agreements).
 
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(e)  By Executive. Executive shall be entitled to terminate Executive’s
employment with the Company hereunder upon thirty (30) days prior written
notice. In the event that Executive terminates Executive’s employment, the
Company shall pay Executive the Standard Termination Benefits (as defined
above), after deducting any amounts lawfully owing from Executive to the
Company. After such payments described in the preceding sentence, the Company
shall have no further obligation to Executive, except to the extent that
Executive may be entitled to exercise any vested stock options granted to
Executive as contemplated in Exhibit A to this Agreement or otherwise (subject
to the terms and conditions of applicable option plans and/or option
agreements).
 
(f)  Form of Notice. Any termination of Executive’s employment by the Company or
by Executive shall be communicated by written Notice of Termination to the other
party hereto. For purposes of this Agreement, a “Notice of Termination” shall
mean a notice which shall indicate the specific termination provision in this
Agreement relied upon, shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Executive’s
employment under the provision so indicated, and shall set forth the date upon
which such termination is effective (“Date of Termination”).
 
7.  Compensation with respect to Terminations by Company without Cause or by
Executive for Certain Reasons following Change of Control. In the event that (i)
the Company terminates Executive’s employment without Cause (other than by
reason of Executive’s death or Disability), or (ii) the Company declines to
renew the Agreement at the expiration of the Term or any one year renewal
thereof (other than for Cause or by reason of Executive’s death or Disability),
or (iii) within one year following a Change of Control (as defined below),
Executive terminates Executive’s employment due to a significant reduction in
Executive’s duties, responsibilities and position relative to the duties,
responsibilities and position of Executive immediately prior to such reduction
(which such reduction continues without cure for a period of 30 days following
Executive providing written notice to the CEO and the Board of such significant
reduction), Executive shall be entitled to the following severance benefits
(after deducting any amounts lawfully owing from Executive to the Company) upon
execution by Executive of a general release (which must be acceptable to the
Company) of any and all claims relating to or arising from Executive’s
employment or termination of employment:
 
(a)  Severance Payment. The Company shall pay to Executive in a lump sum payment
in an amount equal to twelve (12) months of Executive’s Base Salary, less
required withholding and deductions (the “Severance Payment”). The Severance
Payment shall be made in full within thirty (30) days following the Date of
Termination. Executive is not required to mitigate the amount of the Severance
Payment by seeking other employment or otherwise, nor shall any compensation
earned by Executive in other employment or otherwise reduce the amount of the
Severance Payment.
 
(b)  Pro-Rated Bonus. The Company shall pay Executive a pro-rated bonus for the
period of time during which Executive was employed by the Company during the
applicable bonus period (based on the number of days Executive worked during
such period divided by 365). Such pro-rated bonus shall be paid at such time as
Executive would have otherwise received Executive’s bonus.
 
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(c)  Stock Options. All stock options held by Executive shall cease vesting as
of the effective date of Executive’s termination. Executive shall have the right
to exercise vested stock options in accordance with the terms and conditions of
the applicable option plan.
 
(d)  Medical Benefits. Provided that Executive timely elects continuation of
Executive’s and Executive’s eligible dependents medical and dental insurance
coverage under COBRA, and they remain eligible for the continuation of such
coverage under COBRA, the Company will cause to be continued medical and dental
coverage substantially equivalent to the coverage maintained by the Company or
its Subsidiaries for Executive and Executive’s eligible dependents prior to
Executive’s termination. The Company shall provide such coverage to Executive at
no premium cost to Executive, and it shall provide such coverage to Executive’s
eligible dependents under the same terms and conditions, including the
requirement of premium contributions, as applicable to the Company’s senior
officers in active employment status. Such coverage shall cease upon the
earliest of the following events: (i) expiration twelve (12) months from the
Date of Termination, or (ii) when Executive or Executive’s eligible dependents
cease to qualify for such extension of coverage under COBRA.
 
(e)  Other Payments. Executive shall be entitled to receive (i) any vacation
days accrued but unused prior to Executive’s termination; (ii) any expense
reimbursements owed to Executive prior to Executive’s termination; and (iii) any
unpaid vested amounts or benefits under the Company’s pension, deferred
compensation or other benefit plans, subject to the terms and conditions of such
plans. After such payments described in this Section 7, the Company shall have
no further obligation to Executive, except to the extent that Executive may be
entitled to exercise any vested stock options granted to Executive as
contemplated in Exhibit A to this Agreement or otherwise (subject to the terms
and conditions of applicable option plans and/or option agreements).
 
8.  Change of Control. For purposes of this Agreement, a “Change of Control”
shall be deemed to have taken place if: (i) any person or entity or group of
affiliated persons or entities, including a group which is deemed a “person” by
Section 13(d)(3) of the Securities Exchange Action of 1934, as amended (the
“Exchange Act”), after the date hereof first acquires in one or more
transactions, at least one of which is after the date of this Agreement,
Ownership (as defined below) of fifty percent (50%) or more of the outstanding
shares of stock entitled to vote in the election of directors of the Company,
and (ii) as a result of, or in connection with, any such acquisition or any
related proxy contest, cash tender or exchange offer, merger or other business
combination, sale of all or substantially all of the assets of the Company or
any combination of the foregoing transactions, hereinafter referred to as a
“Transaction,” the persons who were directors of the Company immediately before
the Transaction shall cease to constitute three-fourths of the membership of the
Board or any successor to the Company during the period commencing with the
consummation of the Transaction and ending on the first to occur of the first
anniversary of such date or the conclusion of the next meeting of shareholders
to elect directors. For purposes of this Agreement, “Ownership” means beneficial
or record ownership, directly or indirectly, other than (i) by a person owning
such shares merely of record (such as a member of a securities exchange, a
nominee, or a securities depository system); (ii) by a person as a bona fide
pledge of shares prior to a default and determination to exercise powers as an
owner of the shares, (iii) by a person who is not required to file statements on
Schedule 13D by virtue of Rule 13d-1(b) of the Securities and Exchange
Commission under the Exchange Act, or (iv) by a person who owns or holds shares
as an underwriter acquired in connection with an underwritten offering pending
and for purposes of their public resale or planned private placement in
increments of less than such amount.
 
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9.  Indemnification. The Company shall indemnify Executive to the fullest extent
permitted by law, for all amounts, (including, without limitation, judgments,
fines, settlement payments that the Company has expressly approved in writing,
litigation expenses and attorneys’ fees), incurred or paid by Executive in
connection with any action, suit, investigation or proceeding, or threatened
action, suit, investigation or proceeding, arising out of or relating to the
performance by Executive of services for, or the acting by Executive as a
director, officer or employee of, the Company or any Subsidiary. Any fees or
other necessary expenses incurred by Executive in defending any such action,
suit, investigation or proceeding shall be paid by the Company in advance,
subject to the Company’s right to seek repayment from Executive if a
determination is made that Executive was not entitled to indemnity. During the
Term of this Agreement and for twenty four (24) months following Executive’s
Date of Termination, the Company or its successor shall maintain general
liability and directors and officers liability insurance covering Executive for
claims and other amounts set forth in this Section 9. Nothing in this Section 9
or elsewhere in this Agreement is intended to prevent the Company from
indemnifying Executive to any greater extent than is required by this Section 9.
 
10.  Proprietary Information.
 
(a)  Confidential Information. As used in this Agreement “Confidential
Information” means (i) information (A) that is not known by actual or potential
competitors of Company or is not generally known to the public, (B) that has
been created, discovered, developed, or otherwise become known to the Company,
or in which property rights have been assigned or otherwise conveyed to the
Company, and (C) that has economic value to the Company’s present or future
business and (ii) trade secrets (as defined under California Civil Code Section
3426.1) and all other discoveries, developments, designs, improvements,
inventions, formulas, methods, software programs, processes, techniques,
marketing materials, know-how, data, research, technical data, customer lists
(past and present), customer preferences, financial information, contacts, lead
sources, marketing materials, and personnel information, and any modifications
or enhancements of any of the foregoing, and all program, marketing, sales,
personnel, or other financial or business information, disclosed to Executive by
the Company, either directly or indirectly, in writing or orally or by drawings
or observation, which has actual or potential economic value to the Company, its
Subsidiaries, divisions and affiliates.
 
(b)  Duty of Trust and Confidentiality. Executive’s employment with the Company
creates a duty of trust and confidentiality to the Company with respect to the
Confidential Information, or any other information: (a) related, applicable, or
useful to the business of the Company, including its anticipated research and
development; or (b) resulting from tasks assigned to Executive by the Company;
or (c) resulting from the use of equipment, supplies, or facilities owned,
leased, or contracted for by the Company; or (d) related, applicable, or useful
to the business of any of the Company’s customers, which may be made known to
Executive by the Company or by such customers, or learned by Executive during
the course of Executive’s employment. Without limiting the generality of the
foregoing, Executive agrees that while employed by the Company he will not
divert or attempt to divert any business of the Company to any other competitive
business by direct or indirect inducement or otherwise.
 
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(c)  Nondisclosure of Proprietary Information. At all times, both during
employment and after termination of employment, whether termination is voluntary
or involuntary: (a) Executive will keep in strictest confidence and trust all
Confidential Information; and (b) Executive will not disclose, use, or induce or
assist in the use or disclosure of any Confidential Information without the
Company’s prior express written consent, except as may be necessary in the
ordinary course of performing Executive’s duties for the Company. Executive will
take reasonable measures to prevent unauthorized persons or entities from having
access to, obtaining, or being furnished with any Confidential Information.
 
(d)  Confidential and Proprietary Information of Third Parties. The Company has
received and in the future will receive from third parties their confidential or
proprietary information, subject to a duty to maintain the confidentiality of
such information and to use it only for certain limited purposes. Executive
agrees to hold all such confidential or proprietary information in strictest
confidence, and will not disclose, use, or induce or assist in the use or
disclosure of any such confidential or proprietary information without the
Company’s prior express written consent, except as may be necessary in the
ordinary course of performing Executive’s job duties for the Company, consistent
with its agreement with such third party.
 
(e)  Return of Documents Upon Termination. All records, files, lists, drawings,
documents, equipment and similar items relating to the Company’s business which
Executive will prepare for or receive from the Company, during the course of
Executive’s employment hereunder, shall remain the Company’s sole and exclusive
property and Executive shall not acquire any interest therein. Upon termination
of employment, and in any event at the request of the Company at any time,
Executive shall promptly return to the Company all property of the Company in
Executive’s possession and all documents, records, diskettes, hard drives,
notebooks, work papers, and all similar material containing any Confidential
Information, whether prepared by Executive, the Company or anyone else.
 
(f)  Non-solicitation of Employees Following Termination. During the term of
this Agreement and for a period of twenty-four (24) months after the termination
of employment for any reason, whether for or without Cause, Executive shall not
directly or indirectly, either alone or in concert with others, solicit or in
any way entice any employee of or consultant to the Company to leave the Company
or work for anyone in competition with the Company.
 
(g)  Non-solicitation of Customers Following Termination. During the term of
this Agreement and for a period of twenty-four (24) months after the termination
of employment for any reason, whether for or without Cause, Executive shall not
directly or indirectly, either alone or in concert with others, (a) contact any
of the customers of the Company for the purpose of soliciting, inducing or
encouraging such customers to divert or direct their business away from the
Company, or (b) in any way attempt to disrupt the relationship between the
Company and any of its customers, vendors or suppliers.
 
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(h)  Reasonableness of Restrictions; Equitable Remedies. Executive agrees that
the periods of restriction and the geographical areas of restriction imposed by
the provisions of this Agreement are fair and reasonable and are reasonably
required for the protection of the Company. Executive agrees that irreparable
injury will result to the Company from Executive’s violation of any of the
provisions set forth in Sections 10(a) through 10(g) of this Agreement.
Executive expressly agrees that the Company will be entitled, in addition to
damages and any other remedies provided by law, to an injunction or other
equitable remedy respecting any such violation or continued violation.
 
11.  Parachute Payments. Notwithstanding anything to the contrary in this
Agreement, if any payment or benefit Executive would receive from the Company
pursuant to this Agreement or otherwise (“Payment”) would (i) constitute a
“parachute payment” within the meaning of Section 280G of the Internal Revenue
Code of 1986, as amended (the “Code”), and (ii) but for this sentence, be
subject to the excise tax imposed by Section 4999 of the Code (the “Excise
Tax”), then such Payment shall be equal to the Reduced Amount. The “Reduced
Amount” shall be either (1) the largest portion of the Payment that would result
in no portion of the Payment being subject to the Excise Tax or (2) the Payment
or a portion thereof after payment of the applicable Excise Tax, whichever
amount after taking into account all applicable federal, state and local
employment taxes, income taxes and the Excise Tax (all computed at the highest
applicable marginal rate), results in Executive’s receipt, on an after-tax
basis, of the greatest amount of the Payment. If a reduction in payments or
benefits constituting “parachute payments” is necessary so that the Payment
equals the Reduced Amount, reduction shall occur in the order of payments
Executive elects in writing, provided, however, that such election shall be
subject to Company approval if made on or after the date on which the event that
triggers the Payment occurs. The Company’s principal outside accounting firm
will make all determinations hereunder and shall provide its calculations,
together with detailed supporting documentation, to the Company and Executive
within fifteen (15) calendar days after the date on which Executive’s right to a
Payment is triggered (if requested at that time by the Company or Executive) or
such other time as requested by the Company or Executive. If the accounting firm
determines that no Excise Tax is payable with respect to a Payment, either
before or after the application of the Reduced Amount, it shall furnish the
Company and Executive with an opinion reasonably acceptable to Executive that no
Excise Tax will be imposed with respect to such Payment. The Company shall be
entitled to rely upon the accounting firm’s determinations, which shall be final
and binding on all persons.
 
12.  Taxes and Deductions. Executive agrees and acknowledges that any and all
payments and compensation (in any form) that Company makes or pays to Executive
pursuant to this Agreement shall be subject to withholding taxes, employment
taxes and such other deductions as the Company determines to be required by
applicable law.
 
13.  General Provisions.
 
(a)  Any notice, request, demand or other communication required or permitted
hereunder shall be deemed to be properly given when personally served in
writing, when deposited in the United States mail, postage prepaid, addressed to
the Company or Executive at their respective last known address, or when hand
delivered to the intended recipient. Either party may change its address by
written notice given in accordance with this subparagraph.
 
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(b)  This Agreement shall inure to the benefit of and shall be binding upon the
parties hereto and their respective executors, administrators, successors and
assigns; provided, however, that Executive may not assign any or all of
Executive’s rights or duties hereunder without the prior written consent of the
Company.
 
(c)  This Agreement is made and entered into, is to be performed primarily
within, and shall be governed by and construed in all respects in accordance
with the laws of the State of California.
 
(d)  Captions and Section headings used herein are for convenience only and are
not a part of this Agreement and shall not be used in interpreting or construing
it.
 
(e)  Should any provision of this Agreement for any reason be declared invalid,
void, or unenforceable by a court of competent jurisdiction, the validity and
binding effect of any remaining portions shall not be affected, and the
remaining portions of this Agreement shall remain in full force and effect as if
this Agreement had been executed with said provision eliminated.
 
(f)  This Agreement contains the entire agreement of the parties, and supersedes
any and all other agreements, either oral or in writing, between the parties
hereto with respect to the employment of Executive by the Company. Each party to
this Agreement acknowledges that no representations, inducements, promises or
agreements, oral or otherwise, have been made by any party, or anyone acting on
behalf of any parry, which are not embodied herein, and that no other agreement,
statement or promise not contained herein shall be relied upon or be valid or
binding. This Agreement may not be modified or amended by oral agreements, but
only by an agreement in writing signed by the Company, on the one hand, and by
Executive, on the other hand.
 
(g)  If any legally actionable controversy, claim or dispute arises, which
cannot be resolved by mutual discussion between Executive and the Company, each
agrees to resolve that dispute through binding arbitration before an arbitrator
experienced in employment law. The arbitration shall be conducted by a single
arbitrator, in Riverside County, California, administered by the American
Arbitration Association under its employment arbitration rules. The Company and
Executive further agree that this agreement includes any disputes that the
Company may have against Executive, or that Executive may have against the
Company and/or its related entities and/or employees, arising out of or relating
to Executive’s employment or termination of employment or this Agreement or the
breach, termination, enforcement, interpretation or validity thereof, including
determination of the scope or applicability of this agreement to arbitrate. This
agreement to arbitrate includes all common law and statutory claims that may
arise from the Agreement or termination of the Agreement, including but not
limited to, claims for breach of contract, breach of an implied covenant of good
faith and fair dealing, wrongful termination, failure to pay wages or other
compensation, and harassment, discrimination or retaliation in alleges violation
of state and/or federal discrimination statutes. The Company and Executive
further agree that this is the exclusive and binding remedy for all such
disputes and will be used instead of any court action, which is hereby expressly
waived, except for any request by either party for temporary or preliminary
injunctive relief pending arbitration in accordance with applicable law or an
administrative claim with an administrative agency. Judgment on the award
rendered by the arbitrator may be entered in any court having competent
jurisdiction.
 
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(h)  This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original for all purposes. This Agreement may be executed by
a party’s signature transmitted by facsimile (“fax”), and copies of this
Agreement executed and delivered by means of faxed signatures shall have the
same force and effect as copies hereof executed and delivered with original
signatures. All parties hereto agree that a faxed signature page may be
introduced into evidence in any proceeding arising out of or related to this
Agreement as if it were an original signature page.
 
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered as of the date first above written.
 
By:  /s/ David M. Buckley

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David M. Buckley
Chief Executive Officer, Modtech Holdings, Inc.
 
 
By:  /s/ Ronald Savona

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Ronald Savona
Senior Vice President Operations and
Chief Operating Officer, Modtech Holdings, Inc.
 
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EXHIBIT A
 
COMPENSATION, BENEFITS AND VACATION

Base Salary. During the Term, the Company shall pay Executive a base salary at
the annual rate of not less than $230,000. Base salary shall be payable in
accordance with the usual payroll practices of the Company. Executive's base
salary shall be subject to annual review by the Board or the Company's
Compensation Committee ("Compensation Committee) during the Term and may be
increased, but not decreased, from time to time by the Board or the Compensation
Committee. The base salary as determined as aforesaid from time to time shall
constitute "Base Salary" for purposes of this Agreement.

Incentive Compensation.

(a) Bonus. Executive shall be eligible to participate in any annual bonus plans,
including incentive, performance and discretionary, the Company may implement at
any time during the Term for senior executives at a level commensurate with his
position.

(b) Equity Compensation. Subject to any required stockholder approval and in
accordance with the Company's 2002 Stock Option Plan, as amended, Executive
shall be entitled to a grant of 35,550 shares of restricted stock which will
vest on July 1, 2008, a grant of 35,550 shares of restricted stock which will
vest on July 1, 2009 and a grant of 35,550 shares of restricted stock which will
vest on July 1, 2010. There shall be no partial vesting of the shares in any of
the three grants prior to their vesting dates. Executive shall have no rights of
ownership in any of the shares in any grant prior to the vesting date for such
grant and Executive shall forfeit all rights to the shares in any grant if
Executive's employment with the Company terminates for any reason, with or
without cause, prior to the vesting date for such grant.

Executive shall be eligible to participate at a level commensurate with his
position in such other equity compensation programs including, without
limitation, stock option grants or additional grants of restricted stock as the
Board or Compensation Committee may determine.

(c) Long Term Compensation. For each fiscal year or portion thereof during the
Term, Executive shall be eligible to participate in any long-term incentive
compensation plan generally made available to senior executives of the Company
at a level commensurate with his position in accordance with and subject to the
terms of such plan.

(d) Other Compensation. The Company may, upon recommendation of the Compensation
Committee, award to the Executive such other bonuses and compensation as it
deems appropriate and reasonable.

Employee Benefits and Vacation. 

(a) During the Term, Executive shall be entitled to participate in all benefit
plans and arrangements and fringe benefits and perquisite programs generally
provided to comparable senior executives of the Company.

(b) During the Term, Executive shall be entitled to vacation each year in
accordance with the Company's policies in effect from time to time, but in no
event less than four (4) weeks paid vacation per calendar year. The Executive
shall also be entitled to such periods of sick leave as is customarily provided
by the Company for its senior executive employees.
 
A-1

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