Exhibit 10.1
Veramark Technologies, Inc.
3750 Monroe Avenue
Pittsford, NY 14534

 
March 29, 2007

Mr. David G. Mazzella
3750 Monroe Avenue
Pittsford, NY 14534
Dear Mr. Mazzella:
     You have announced your decision to retire as an employee of the
Corporation on December 31, 2007 and resign your position on your retirement
date and concurrent with the end of the term of your Employment Agreement dated
March 28, 2005. The Compensation Committee of the Board of Directors (the
“Committee”) of Veramark Technologies, Inc. (the “Corporation”) believes it to
be in the best interests of the Corporation and its shareholders that, from this
date and until your declared retirement date, your time and efforts be focused
on a smooth transition of leadership and, specifically, on achieving significant
improvement in the financial performance of the Corporation; and, if such
improvement as hereinafter defined is realized, to provide you with the bonus
opportunity and payment as set forth in this letter.
     This bonus arrangement is subject to the following terms and conditions:

  1.   Your bonus opportunity is $165,000 (“Bonus Award”).     2.   To receive
the Bonus Award, the Corporation must achieve (i) Total Net Sales of not less
than $13,500,000 and (ii) Operating Income of not less than $950,000 for the
calendar year ending December 31, 2007. If only one of these goals is achieved,
your bonus will equal one half of the Bonus Award. If neither of these goals is
achieved, no bonus would be earned. However, the Committee retains the
discretion in determining whether a bonus would be awarded in the event that the
minimum goal was not met but the achievement was close to the goal, and whether
more than the specified bonus would be awarded in the event that one or both of
the goals were substantially exceeded.     3.   Total Net Sales shall be defined
to mean that amount identified as “Total Net Sales” of the Corporation as set
forth in the audited financial report of the Corporation for the calendar year
ending December 31, 2007. Operating Income shall be the Operating Income of the
Corporation based on the audited financial report of the Corporation for the
calendar year ending December 31, 2007 before income taxes and before any
expense for the payment to be made under this bonus arrangement. Total Net Sales
and Operating Income, for the purpose of calculating your Bonus Award, shall be
adjusted for any extraordinary items or transactions not arising out of the
ordinary course of business.

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  4.   Your bonus arrangement will be administered by the Committee. The
Committee will have full authority and discretion to interpret the provisions of
this bonus arrangement, and any decision or determination it shall make will be
final.     5.   No payment shall be made under this bonus arrangement should you
decide to retire from the Corporation prior to your stated retirement date or
otherwise not be an employee of the Corporation on December 31, 2007.     6.  
This bonus arrangement is in addition to any bonus payment you may earn under
the Corporation’s 2007 Management Bonus Plan     7.   Any payment earned under
this bonus arrangement shall be made within thirty (30) days of the completion
of the audit for the calendar year ending December 31, 2007, less any applicable
withholdings.

     Please evidence your understanding and agreement to the terms and
conditions set forth in this letter.

            Very truly yours,

Veramark Technologies, Inc.
      By:   /s/ Charles A. Constantino         Charles A. Constantino,       
Chairman, Compensation Committee
of the Board of Directors     

Acknowledged and agreed:

     
/s/ David G. Mazzella
 
   
David G. Mazzella
   

March 29, 2007

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