Exhibit 10.1
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (“Agreement”) is entered into effective as of March 8,
2011 (the “Effective Date”), by and among Streamline Health Solutions, Inc., a
Delaware corporation (the “Parent”) and Streamline Health, Inc., an Ohio
corporation (the “Company”) and Rick Leach (“Executive”).
RECITALS:
The Parent, the Company and Executive hereby agree that Executive shall serve as
Senior Vice President & Chief Marketing Officer of the Parent and of the Company
pursuant to the terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and the agreements contained
herein, and for other good and valuable consideration, the receipt and adequacy
of which the parties hereby acknowledge, the parties agree as follows:
1. EMPLOYMENT
The Parent and the Company hereby agrees to employ Executive, and Executive, in
consideration of such employment and other consideration set forth herein,
hereby accepts employment, upon the terms and conditions set forth herein.
2. POSITION AND DUTIES
During the term of this Agreement, Executive shall be employed as the Senior
Vice President & Chief Marketing Officer for the Company and will also serve as
an officer of the Parent for no additional compensation, as part of Executive’s
services to the Company hereunder. While employed hereunder, Executive shall do
all things necessary, legal and incident to the above position, and otherwise
shall perform such executive vice president-level functions, as the CEO of the
Company may establish from time to time.
3. COMPENSATION
Subject to such modifications as may be contemplated by said exhibit and
approved from time to time by the Parent’s Board of Directors or the
Compensation Committee of such Board, Executive shall receive the compensation
and benefits listed on the attached Exhibit A. Such compensation and benefits
shall be paid and provided by the Company in accordance with the Company’s
regular payroll, compensation and benefits policies.

 

 

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4. EXPENSES
The Company shall pay or reimburse Executive for all travel and out-of-pocket
expenses reasonably incurred or paid by Executive in connection with the
performance of Executive’s duties as an employee of the Company upon compliance
with the Company’s procedures for expense reimbursement, including the
presentation of expense statements or receipts or such other supporting
documentation as the Company may reasonably require.
5. PRIOR EMPLOYMENT; BINDING AGREEMENT
Executive warrants and represents to the Parent and the Company (i) that
Executive will take no action in violation of any employment agreement or
arrangement with any prior employer, (ii) that Executive has disclosed to the
Parent and the Company all such prior written agreements, (iii) that any
employment agreement or arrangement with any prior employer is null and void and
of no effect, and (iv) that Executive has the full right and authority to enter
into this Agreement and to perform all of Executive’s obligations hereunder. The
Executive agrees to indemnify and hold the Parent and the Company harmless from
and against any and all claims, liabilities or expenses incurred by the Parent
and/or the Company as a result of any claim made by any prior employer arising
out of this Agreement or the employment of Executive by the Parent and the
Company. The Parent and the Company warrant and represent to the Executive that
the Parent and the Company, acting by the officer executing this Agreement on
their behalf, has the full right and authority to enter into this Agreement and
to perform all of the Parent’s and the Company’s obligations hereunder.
6. OUTSIDE EMPLOYMENT
Executive shall devote Executive’s full time and attention to the performance of
the duties incident to Executive’s position with the Parent and the Company, and
shall not have any other employment with any other enterprise or substantial
responsibility for any enterprise which would be inconsistent with Executive’s
duty to devote Executive’s full time and attention to the Parent’s and the
Company’s matters; provided, however, that, the foregoing shall not prevent
Executive from participation in any charitable or civic organization or from
service in a non-executive capacity on the boards of directors of up to two
other companies that does not interfere with Executive’s performance of the
duties and responsibilities to be performed by Executive under this Agreement.
7. CONFIDENTIAL INFORMATION
Executive shall not, during the term of this Agreement or at any time
thereafter, disclose, or cause to be disclosed, in any way Confidential
Information, or any part thereof, to any person, firm, corporation, association,
or any other operation or entity, or use the Confidential Information on
Executive’s own behalf, for any reason or purpose. Executive further agrees
that, during the term of this Agreement or at any time thereafter, Executive
will not distribute, or cause to be distributed, Confidential Information to any
third person or permit the reproduction of Confidential Information, except on
behalf of the Parent or the Company in Executive’s capacity as an officer of the
Parent or as an employee of the Company. Executive shall take all reasonable
care to avoid unauthorized disclosure or use of the Confidential Information.
Executive hereby assumes responsibility for and shall indemnify and hold the
Parent and the Company harmless from and against any disclosure or use of the
Confidential Information in violation of this Agreement.

 

 

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For the purpose of this Agreement, “Confidential Information” shall mean any
written or unwritten information which specifically relates to and or is used in
the Parent’s and/or the Company’s business (including, without limitation, the
Parent’s and/or the Company’s services, processes, patents, systems, equipment,
creations, designs, formats, programming, discoveries, inventions, improvements,
computer programs, data kept on computer, engineering, research, development,
applications, financial information, information regarding services and products
in development, market information including test marketing or localized
marketing, other information regarding processes or plans in development, trade
secrets, training manuals, know- how of the Parent and/or the Company, and the
customers, clients, suppliers and others with whom the Parent and/or the Company
does or has in the past done, business, regardless of when and by whom such
information was developed or acquired) which the Parent or the Company deems
confidential and proprietary which is generally not known to others outside the
Parent or the Company and which gives or tends to give the Parent or the Company
a competitive advantage over persons who do not possess such information or the
secrecy of which is otherwise of value to the Parent and/or the Company in the
conduct of its business — regardless of when and by whom such information was
developed or acquired, and regardless of whether any of these are described in
writing, reduced to practice, copyrightable or considered copyrightable,
patentable or considered patentable. Provided, however, that “Confidential
Information” shall not include general industry information or information which
is publicly available or is otherwise in the public domain without breach of
this Agreement, information which Executive has lawfully acquired from a source
other than the Parent or the Company, or information which is required to be
disclosed pursuant to any law, regulation, or rule of any governmental body or
authority or court order. Executive acknowledges that Confidential Information
is novel, proprietary to and of considerable value to the Parent and the
Company.
Executive agrees that all restrictions contained in this Section 7 are
reasonable and valid under the circumstances and hereby waives all defenses to
the strict enforcement thereof by the Parent and/or the Company.
Executive agrees that, upon the request of the Parent or the Company, or
immediately on termination of his employment for whatever reason, Executive will
immediately deliver up to the requesting entity all Confidential Information in
Executive’s possession and/or control, and all notes, records, memoranda,
correspondence, files and other papers, and all copies, relating to or
containing Confidential Information. Executive does not have, nor can Executive
acquire, any property or other right in Confidential Information.
8. PROPERTY OF THE PARENT AND THE COMPANY
All ideas, inventions, discoveries, proprietary information, know-how, processes
and other developments and, more specifically improvements to existing
inventions, conceived by Executive, alone or with others, during the term of
Executive’s employment, whether or not during working hours and whether or not
while working on a specific project, that are within the scope of the Parent’s
or the Company’s business operations or that relate to any work or projects

 

 

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of the Parent or the Company, are and shall remain the exclusive property of the
Parent and the Company. Inventions, improvements and discoveries relating to the
business of the Parent or the Company conceived or made by Executive, either
alone or with others, while an officer of the Parent or while employed with the
Company are conclusively and irrefutably presumed to have been made during the
period of employment and are the sole property of the Parent and the Company.
The Executive shall promptly disclose in writing any such matters to the Parent
and the Company but to no other person without the consent of the Company.
Executive hereby assigns and agrees to assign all right, title, and interest in
and to such matters to the Company. Executive will, upon request of the Company,
execute such assignments or other instruments and assist the Parent and the
Company in the obtaining, at the Company’s sole expense, of any patents,
trademarks or similar protection, if available, in the name of the Company.
9. NON-COMPETITION AGREEMENT
(a) During the term of Executive’s employment, whether under this Agreement or
at will, and for a period of two years after the termination date of Executive’s
employment (whether such termination be with or without cause), Executive
agrees, provided he has received all the compensation specified in Sections 11
and 13 hereof to be received by him coincident with such termination, that he
will not directly or indirectly, whether as an employee, agent, consultant,
director, officer, investor, partner, shareholder, proprietor, lender or
otherwise own, operate or otherwise work for or participate in any competitive
business (including the pertinent division or subsidiary of any multi-sector
business), anywhere in the world, which designs, develops, manufactures or
markets any product or service that in any way competes with the Parent’s or the
Company’s business, products or services as conducted, or planned to be
conducted, on the date of termination (a “Competitive Business”), provided that
the foregoing shall not prohibit Executive from owning not more than 5% of the
outstanding stock of a corporation subject to the reporting requirements of the
Securities Exchange Act of 1934.
(b) During the term of Executive’s employment and for a period ending two years
from the termination of Executive’s employment with the Company, whether by
reason of the expiration of the term of this Agreement, resignation, discharge
by the Parent and the Company or otherwise, Executive hereby agrees that
Executive will not, directly or indirectly:
(i) solicit, otherwise attempt to employ or contract with any current or future
employee of the Parent or the Company for employment or otherwise in any
Competitive Business or otherwise offer any inducement to any current or future
employee of the Parent or the Company to leave the Parent’s or the Company’s
employ; or
(ii) contact or solicit any customer or client of the Parent or the Company (an
“Existing Customer”), contact or solicit any individual or business entity with
whom the Parent or the Company has directly communicated for the purpose of
rendering services prior to the effective date of such termination (a “Potential
Customer”), or otherwise provide any other products or services for any Existing
Customer or Potential Customer of the Parent or the Company, on behalf of a
Competitive Business or in a manner that is competitive to the Parent’s or the
Company’s business; or

 

 

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(iii) Use or divulge to anyone any information about the identity of the
Parent’s or the Company’s customers or suppliers (including without limitation,
mental or written customer lists and customer prospect lists), or information
about customer requirements, transactions, work orders, pricing policies, plans,
or any other Confidential Information.
(c) For the purpose of this Agreement, Competitive Business shall mean any
business operation (including a sole proprietorship) anywhere in the world which
designs, develops, manufactures or markets any product or service that in any
way competes with the Parent’s or the Company’s healthcare document management
software and document workflow software business, products or services as
conducted, or contemplated to be conducted, on the date of termination.
10. TERM
Unless earlier terminated pursuant to Section 11 hereof, the term of this
Agreement (the “Term”) shall be for the time period beginning on the Effective
Date, and continuing through March 8, 2012 (the “Expiration Date”). On the
Expiration Date, and on each annual Expiration Date thereafter (each such date
being hereinafter referred to as the “Renewal Date”), absent notice to the
contrary from either party hereto to the other received at least 60 days prior
to commencement of the Renewal Term, the term of employment hereunder shall
automatically renew for an additional one (1) year period. Unless waived in
writing by the Company, the requirements of Sections 7 (Confidential Agreement),
8 (Property of the Parent and the Company) and 9 (Non-Competition Agreement)
shall survive the expiration or termination of this Agreement for any reason.
11. TERMINATION.
(a) Death. This Agreement and Executive’s employment hereunder shall be
terminated on the death of Executive, effective as of the date of Executive’s
death.
(b) Continued Disability. This Agreement and Executive’s employment hereunder
may be terminated, at the option of the Company, upon a Continued Disability of
Executive, effective as of the date of the determination of Continued Disability
as that term is hereinafter defined. For the purposes of this Agreement,
“Continued Disability” shall be defined as the inability or incapacity (either
mental or physical) of Executive to continue to perform Executive’s duties
hereunder for a continuous period of one hundred twenty (120) working days, or
if, during any calendar year of the Term hereof because of disability, Executive
shall have been unable to perform Executive’s duties hereunder for a total
period of one hundred eighty (180) working days regardless of whether or not
such days are consecutive. The determination as to whether Executive is unable
to perform the essential functions of Executive’s job shall be made by the CEO
in his reasonable discretion; provided, however, that if Executive is not
satisfied with the decision of the CEO, Executive will submit to examination by
three competent physicians who practice in the metropolitan area in which the
Company then resides, one of whom shall be selected by the Company, another of
whom shall be selected by Executive, with the third to be selected by the
physicians so selected. The determination of a majority of the physicians so
selected shall supersede the determination of the Board and shall be final and
conclusive.

 

 

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(c) Termination For Good Cause. Notwithstanding any other provision of this
Agreement, the Company may at any time immediately terminate this Agreement and
Executive’s employment thereunder for Good Cause. For this purpose, “Good Cause”
shall include the following: the current use of illegal drugs; conviction of any
crime which involves moral turpitude, fraud or misrepresentation; commission of
any act which would constitute a felony and which adversely impacts the business
or reputation of the Company; fraud; misappropriation or embezzlement of Parent
or Company funds or property; willful misconduct or grossly negligent or
reckless conduct which is materially injurious to the reputation, business or
business relationships of the Parent or the Company; material violation or
default on any of the provisions of this Agreement; or material and continuous
failure to meet reasonable performance criteria or reasonable standards of
conduct as established from time to time by the CEO, which failure continues for
at least 30 days after written notice from the Company to Executive. Any alleged
cause for termination shall be delivered in writing to Executive stating the
full basis for such cause along with any notice of such termination.
(d) Termination Without Good Cause. The Company may terminate Executive’s
employment and all other positions prior to the Expiration Date at any time,
whether or not for Good Cause (as “Good Cause” is defined in Section 11(c)
above). In the event the Company terminates Executive prior to the Expiration
Date, for reasons other than Good Cause, Executive’s Death, or Executive’s
Disability, the Company will pay Executive a lump sum amount equal to fifty
(50) percent of Executive’s annual base salary as in effect as of the date of
such separation from employment, plus an amount equal to fifty (50) percent of
the higher of the bonus and commissions paid to Executive during that prior
fiscal year or earned in the then current fiscal year to date (provided that if
Executive is terminated without Good Cause during the first twelve months of
employment with the Company, the bonus and commission component of the
separation payment will be equal to fifty (50) percent of the Target Bonus and
Commission specified in Exhibit A for the period), which shall be paid as soon
as practicable following Executive’s execution (and non-revocation) of a form of
general release of claims as is acceptable to the Board. In any event, the
Company shall provide such release to Executive in a timely manner so that after
the longest available review and revocation period, the lump sum severance shall
be paid no later than the 90th day following Executive’s separation from
service.
12. ADVICE TO PROSPECTIVE EMPLOYERS
If Executive seeks or is offered employment by any other company, firm or
person, he will notify the prospective employer of the existence and terms of
the non-competition and confidentiality agreements set forth in Sections 7 and 9
of this Agreement.
13. CHANGE IN CONTROL; ACCELERATED VESTING SCHEDULES
(a) In the event that, within twelve months of a change in control of the
Parent, Executive’s employment by the Company is terminated prior to the end of
the then current Term or Executive terminates his employment due to a material
reduction in his duties or compensation (“Good Reason”), all stock options and
restricted stock granted to Executive shall immediately vest in full, and the
Company will pay Executive a lump sum amount in accordance with Section 11(d),
above. In the event Executive seeks to terminate his employment for Good Reason,
such termination shall not be treated for purposes of this Section 13 as a
resignation for

 

 

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Good Reason unless Executive provides the Company with notice of the existence
of the condition claimed to constitute Good Reason within 90 days of the initial
existence of such condition and the Company fails to remedy such condition
within 30 days following the Company’s receipt of such notice.
(b) For purposes of this Agreement, “change in control” means any of the
following events:
(i) A change in control of the direction and administration of the Parent’s
business of a nature that would be required to be reported in response to Item
6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange
Act of 1934, as amended (the “1934 Act”), as in effect on the date hereof and
any successor provision of the regulations under the 1934 Act, whether or not
the Parent is then subject to such reporting requirements; or
(ii) Any “person” (as such term is used in section 13(d) and section 14(d)(2) of
the 1934 Act but excluding any employee benefit plan of the Parent) is or
becomes the “beneficial owner” (as defined in Rule 13d-3 under the 1934 Act),
directly or indirectly, of securities of the Parent representing more than one
half of the combined voting power of the Parent’s outstanding securities then
entitled to vote for the election of directors; or
(iii) The Parent shall sell all or substantially all of the assets of the
Parent; or
(iv) The Parent shall participate in a merger, reorganization, consolidation or
similar business combination that constitutes a change in control as defined in
the Parent’s 2005 Incentive Compensation Plan and/or results in the occurrence
of any event described in Sections 13(b) (i), (ii) or (iii) above.
(c) Notwithstanding anything to the contrary contained in this Agreement, in the
event any amounts payable hereunder would be considered to be excess parachute
payments for purposes of the amount payable following the occurrence of a Change
of Control that is treated as a “change in the ownership or effective control”
of the Parent or “in the ownership of a substantial portion of the assets” of
the Parent for purposes of Sections 280G and 4999 of the Internal Revenue Code
of 1986, as amended (the “Code”), those payments that are treated for purposes
of Code Section 280G as being contingent on a “change in the ownership or
effective control” (as that phrase is used for purposes of Code Section 280G) of
the Parent shall be reduced, if and to the extent necessary, so that no payments
under this Agreement are treated as excess parachute payments.
14. ACKNOWLEDGEMENTS
The Parent, the Company and Executive each hereby acknowledge and agree as
follows:
(a) The covenants, restrictions, agreements and obligations set forth herein are
founded upon valuable consideration, and, with respect to the covenants,
restrictions, agreements and obligations set forth in Sections 7, 8 and 9
hereof, are reasonable in duration and geographic scope;

 

 

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(b) In the event of a breach or threatened breach by Executive of any of the
covenants, restrictions, agreements and obligations set forth in Section 7, 8
and/or 9, monetary damages or the other remedies at law that may be available to
the Parent and/or the Company for such breach or threatened breach will be
inadequate and, without prejudice to the Parent’s or the Company’s right to
pursue any other remedies at law or in equity available to it for such breach or
threatened breach, including, without limitation, the recovery of damages from
Executive, the Parent and/or the Company will be entitled to injunctive relief
from a court of competent jurisdiction; and
(c) The time period and geographical area set forth in Section 9 hereof are each
divisible and separable, and, in the event that the covenants not to compete
contained therein are judicially held invalid or unenforceable as to such time
period and/or geographical area, they will be valid and enforceable in such
geographical area(s) and for such time period(s) which the court determines to
be reasonable and enforceable. Executive agrees that in the event any court of
competent jurisdiction determines that the above covenants are invalid or
unenforceable to join with the Parent and the Company in requesting that court
to construe the applicable provision by limiting or reducing it so as to be
enforceable to the extent compatible with the then applicable law. Furthermore,
any period of restriction or covenant herein stated shall not include any period
of violation or period of time required for litigation to enforce such
restriction or covenant.
15. NOTICES
Any notice or communication required or permitted hereunder shall be given in
writing and shall be sufficiently given if delivered personally or sent by
telecopy to such party addressed as follows:
(a) In the case of the Parent or the Company, if addressed to it as follows:
Streamline Health, Inc.
10200 Alliance Road, Suite 200
Cincinnati, Ohio 45242-4716
Attn: Chief Financial Officer
(b) In the case of Executive, if addressed to Executive at the most recent
address on file with the Company.
Any such notice delivered personally or by telecopy shall be deemed to have been
received on the date of such delivery. Any address for the giving of notice
hereunder may be changed by notice in writing.

 

 

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16. ASSIGNMENT, SUCCESSORS AND ASSIGNS
This Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective legal representatives, successors and assigns. The
Parent and the Company may assign or otherwise transfer its rights under this
Agreement to any successor or affiliated business or corporation (whether by
sale of stock, merger, consolidation, sale of assets or otherwise), but this
Agreement may not be assigned, nor may the duties hereunder be delegated by
Executive. In the event that the Parent and the Company assign or otherwise
transfer their rights under this Agreement to any successor or affiliated
business or corporation (whether by sale of stock, merger, consolidation, sale
of assets or otherwise), for all purposes of this Agreement, the “Parent” and
the “Company” shall then be deemed to include the successor or affiliated
business or corporation to which the Parent and the Company, respectively,
assigned or otherwise transferred their rights hereunder.
17. MODIFICATION
This Agreement may not be released, discharged, abandoned, changed, or modified
in any manner, except by an instrument in writing signed by each of the parties
hereto.
18. SEVERABILITY
The invalidity or unenforceability of any particular provision of this Agreement
shall not affect any other provisions hereof and the parties shall use their
best efforts to substitute a valid, legal and enforceable provision, which,
insofar as practical, implements the purpose of this Agreement. Any failure to
enforce any provision of this Agreement shall not constitute a waiver thereof or
of any other provision hereof.
19. COUNTERPARTS
This Agreement may be signed in counterparts (and delivered via facsimile
transmission), and each of such counterparts shall constitute an original
document and such counterparts, taken together, shall constitute one in the same
instrument.
20. ENTIRE AGREEMENT
This constitutes the entire agreement among the parties with respect to the
subject matter of this Agreement and supersedes all prior and contemporaneous
agreements, understandings, and negotiations, whether written or oral, with
respect to such subject matter.
21. DISPUTE RESOLUTION
Except as set forth in Section 14 above, any and all disputes arising out of or
in connection with the execution, interpretation, performance, or
non-performance of this Agreement or any agreement or other instrument between,
involving or affecting the parties (including the validity, scope and
enforceability of this arbitration clause), shall be submitted to and resolved
by arbitration. The arbitration shall be conducted pursuant to the terms of the
Federal Arbitration Act and the Employment Arbitration Rules and Mediation
Procedures of the American Arbitration Association. Either party may notify the
other party at any time of the existence of an arbitrable controversy by
certified mail and the parties shall attempt in good faith to resolve their
differences within fifteen (15) days after the receipt of such notice. If the
dispute cannot be resolved within the fifteen-day period, either party may file
a written demand for arbitration with the American Arbitration Association. The
place of arbitration shall be Cincinnati, Ohio.

 

 

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22. SECTION 409A
If Executive is a “specified employee” under Section 409A of the Internal
Revenue Code of 1986, as amended (“Code”), amounts that are deferred
compensation are not payable to the Executive until six months after his date of
termination. If Section 409A applies, then notwithstanding the preceding
sentence and as an exception to the six-month delay otherwise required by
Section 409A of the Code, amounts due under Section 11(D) will be payable in
regular installments in accordance with the Company’s general payroll practices
for salaried employees until the March 15th of the year following the year of
termination with the regular installment payment that immediately precedes
March 15 to include any installment amounts that would otherwise be delayed
because of the six-month delay. After the expiration of the six-month delay
period following the date of termination, any and all remaining amounts due to
Executive will then be paid to Executive in a lump sum.
Executive’s termination of employment occurs on or prior to the March 15th of
the year following the year of the change in control, the lump sum due to
Executive pursuant to Section 13 will be paid immediately (but not later than
the applicable March 15th) following the date of termination. But if Executive
is a “specified employee” under Section 409A of the Code and Executive’s
termination of employment occurs later than the March 15th of the year following
the year of the change in control, the lump sum will be immediately payable
after the expiration of six months after the date of such termination of
employment.
If any tax is imposed on Executive under Section 409A of the Code with respect
to any payment made by the Company to Executive pursuant to Section 11(D) or
Section 13, Executive will be responsible for payment of such tax, penalty,
interest and any related audit costs incurred by Executive.
23. GOVERNING LAW
The provisions of this Agreement shall be governed by and interpreted in
accordance with the laws of the State of Ohio and the laws of the United States
applicable therein. The Executive acknowledges and agrees that Executive is
subject to personal jurisdiction in state and federal courts in Hamilton County,
Ohio.
IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto
effective as of the date first above written.

            STREAMLINE HEALTH SOLUTIONS, INC.
      By:   /s/ ROBERT E. WATSON         Robert E. Watson        CEO   

 

 

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            STREAMLINE HEALTH, INC.
      By:   /s/ ROBERT E. WATSON         Robert E. Watson        CEO       
EXECUTIVE
      /s/ R. D. Leach       Rick Leach         

 

 

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EXHIBIT A — COMPENSATION AND BENEFITS

1.   Start Date. Executive’s start date shall be March 14, 2011.   2.   Base
Salary. Base Salary shall be paid at an annualized rate of $180,000, which shall
be subject to periodic review and adjustment by Compensation Committee (the
“Committee”) of the Board of the Parent.   2.   Bonus & Commissions. Target
Bonus and Commissions and target goals shall be set by the CEO annually, subject
to approval by the Committee. Initial target Bonus and Commission (for FY
commencing 2/1/11) will be $50,000 and $70,000 respectively. Bonus and
Commissions will be paid pursuant to such terms and conditions as are
established by the CEO, subject to approval by the Committee, and, to the extent
payable under a Bonus and Commission Plan, subject to such terms and conditions
as may be set out in such plans. The annual Bonus and/or Commission shall, if
payable, be paid no later than during the second quarter of the fiscal year
following the fiscal year for which such Bonus and Commissions are paid, unless
otherwise provided in the applicable Bonus and Commission Plans or written
action taken by the CEO.   3.   Benefits. Executive shall participate in the
Parent’s benefit plans on the same terms and conditions as provided for other
Parent executives, and subject to all terms and conditions of such plans.   4.  
Stock Grant. As of the Effective Date, Executive shall be issued 10,000 newly
issued shares of common stock of the Parent for $100 in cash (i.e., par value)
as an inducement to Executive to enter into this Agreement. Such shares shall be
“restricted” securities within the meaning of Rule 144 promulgated under the
Securities Act of 1933 and shall not otherwise be restricted.   5.   Stock
Option Grants. A grant of incentive stock options, for 200,000 shares of common
stock, shall be made on the Effective Date, with an option exercise price equal
to the greater of $2.00 per share or the fair market value of a share,
determined as of the date of grant, and subject to vesting in thirty six
substantially equal monthly installments during the first three years of
employment. The stock options will be granted under an inducement grant with
terms as nearly as practicable identical to the terms and conditions of the
Parent’s 2005 Incentive Compensation Plan.