3. Compensation and Other Related Matters.(a) Base Salary. As compensation for services rendered hereunder, effective June 1,2011, the Executive’s salary shall increase to $250,000 annually (the “Base Salary”), whichshall accrue day to day and be paid in accordance with the Company’s then prevailing payrollpractices. The Base Salary may be increased from time to time at the discretion of the Company,but it shall not be decreased without the prior written consent of the Executive.(b) Bonus. At the sole discretion of the Company, the Executive shall be eligible toreceive a bonus for each fiscal year ending during the Term of Employment in an amount up to fiftypercent (50%) of the Executive’s Base Salary (the “Bonus”) based on the Executive and theCompany successfully achieving targeted annual performance objectives, which objectives will beestablished by the Compensation Committee of the Board in consultation with the CEO and Executive,in consultation with the Executive, within sixty (60) days following the start of each fiscal year.In the event the Company changes its fiscal year (which is currently June 30th),Executive shall be eligible to receive a pro-rated Bonus, if any, for any shortened fiscal year,the numerator of which is the number of days in such shortened fiscal year and the denominator ofwhich is 365. The Bonus for each such fiscal year (including any shortened fiscal year) will bepaid no later than two and one-half (2 1/2) months following the end of such fiscal year. Except asotherwise provided for in this Agreement, to receive such Bonus, the Executive must still beemployed with the Company on the date when the Bonus is payable and no event of Cause (as definedbelow) shall have occurred.(c) Special Bonus. The Company shall pay to the Executive a one-time payment in anamount equal to $124,462.66 (the “Special Bonus”) on the first to occur of (i) December 31,2011 and (ii) a Change of Control. If payment is made because of a Change of Control, the paymentwill be paid to the Executive in a lump-sum amount within the five (5) day period following theclosing date of the Change of Control. Except as otherwise provided for in this Agreement, toreceive the Special Bonus, the Executive must still be employed with the Company on the date whensuch Special Bonus is payable and no event of Cause shall have occurred.As used herein, “Change of Control” means the date (i) that any one person (forpurposes herein, “person” includes an individual or entity), or more than one person acting as agroup, acquires (or has acquired during the 12-month period ending on the date of the most recentacquisition by such person or persons), assets from the Company that have a total gross fair marketvalue equal to or more than forty percent (40%) of the total gross fair market value of all of theassets of the Company immediately before such acquisition or acquisitions (which, for the sake ofclarity, includes the sale of the Company’s Safety and Ecology Corporation subsidiary); (ii) thatany one person, or more than one person acting as a group, is or becomes the beneficial owner,directly or indirectly, of forty percent (40%) or more of the voting stock of the Company; or (iii)of a consummation of a merger, consolidation, share exchange or similar formof corporate reorganization (a “Business Combination”) of the Company with or into anyother entity other than a Business Combination in which the shares of the Company outstandingimmediately before such Business Combination are exchanged or converted into or constitute shareswhich represent sixty (60%) or more of the surviving entity’s voting capital stock after suchBusiness Combination. Notwithstanding the foregoing, under no circumstances shall a Change ofControl occur under this Agreement if it results from the sale of the Company’s assets to an entityin which more than fifty percent (50%) of the total voting power is owned by the Company’sshareholders (individually or in the aggregate) who own (individually or in the aggregate), morethan fifty percent (50%) of the total voting power of the Company.
 
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(d) Options. As consideration for the Company entering into this Agreement, theExecutive agrees that he shall forfeit the Options and the Option Agreements will be terminated asof the Effective Date; thereafter, the Option Agreements will be of no further force and effect andthe Executive shall not have any right to exercise the Options.(e) Automobile Allowance. During the Term of Employment, the Company will pay to theExecutive a monthly automobile allowance in an amount equal to $500, which amount will be paidpursuant to the Company’s prevailing payroll schedule and pro-rated for any partial months ofemployment; provided, however, that payment of the automobile allowance will not commence untilafter such time that the Executive is no longer using the Company provided vehicle.(f) 401K Matching Contribution. The Company will make a matching contributionannually to the Executive’s 401K account based on the amount of the Executive’s elective deferrals,up to the maximum allowed under Section 401(k) of the Internal Revenue Code of 1986, as amended(the “Code”), subject to and consistent with the terms of the governing plan document.(g) Other Benefits. Executive shall be provided with health, life, dental, long termcare and disability insurance coverage and such other benefits and perquisites as are provided toother senior executives of the Company, as amended from time to time. The Executive will beentitled to six (6) weeks of vacation per year, which will accrue monthly. Any accrued but unusedvacation time in one calendar year will roll-over to the subsequent calendar year if the Agreementis renewed.(h) Expenses. The Executive will be reimbursed for all reasonable out-of-pocketexpenses actually incurred by him in the furtherance of his duties under this Agreement, includingtravel and lodging to visit the Company’s headquarters (which shall include either (i) the use ofthe corporate apartment in Washington, DC maintained by the Company as of the Effective Date or(ii) if, following the Effective Date, the Company no longer maintains the corporate apartment,payment of a monthly housing allowance in an amount that is no more than the Company’s cost ofmaintaining the corporate apartment as of the date that the Company no longer maintains theapartment) and other offices. Such expenses shall be reimbursed upon submission to the Company ofinvoices containing original receipts for all such expenditures, and upon review by the Companywith respect to the reasonable nature thereof. All expense reimbursements shall be paid as soon asadministratively practicable.
 
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(i) Attorneys’ Fees. The Company will reimburse the Executive forattorney’s fees and costs actually incurred by Executive in connection with the review of thisAgreement, up to an amount equal to $10,000, which will be paid to Executive within thirty (30)days of Executive’s submission to the Company of invoice(s) evidencing the fees and costs.4. Termination.(a) Disability. The Company may terminate the Executive’s employment for Disabilityupon ninety (90) days written notice. For purposes of this Agreement, “Disability” means adetermination by the Company in accordance with applicable law that as a result of a physical ormental injury, illness, or impairment, Executive is unable to perform the essential functions ofhis position with or without reasonable accommodation for a period of (i) ninety (90) consecutivedays, or (ii) one hundred twenty (120) days (which days need not be consecutive) in any one (1)year period.(b) Death. The Executive’s employment shall terminate immediately upon the death ofthe Executive.(c) Cause. The Company may terminate the Executive’s employment for “Cause”on contemporaneous written notice upon a resolution duly adopted by the affirmative vote of notless than a majority of the entire membership of the Board. “Cause” shall mean terminationbased upon (i) a conviction with respect to any felony involving theft, fraud, dishonesty ormisrepresentation; (ii) any misappropriation, embezzlement or conversion of the Company’s or any ofits subsidiary’s or affiliate’s property; (iii) willful misconduct by the Executive in respect ofthe Executive’s material duties or obligations under this Agreement; or (iv) the Executive’smaterial breach of this Agreement, provided that if the Executive engages in the conduct set forthin (iii) or (iv) herein, the Company shall first notify the Executive in writing and may onlyterminate the Executive for Cause if the Executive fails to cure such conditions giving rise toCause, if curable, within thirty (30) days following his receipt of the written notice.(d) Termination Without Cause. The Company shall have the right to terminate theExecutive’s employment without Cause at any time upon ninety (90) days prior written notice.(e) Good Reason. The Executive may resign his employment for “Good Reason”.“Good Reason” means that the Company (i) materially breached any of its obligations underthis Agreement; (ii) materially reduced the Executive’s Base Salary; (iii) materially reduced theExecutive’s duties or responsibilities or authority; or (iv) requires the Executive to work at alocation on a permanent basis that is more than thirty (30) miles from the location at which theExecutive provided the services as of the Effective Date; provided, however, that within ninety(90) days of the occurrence of the conditions giving rise to a resignation for Good Reason, theExecutive provides written notice to the Company setting forth in reasonable detail the conditionsgiving rise to Good Reason, the Company fails to cure the conditions within thirty (30) days ofreceipt of the notice, and the Executive resigns within ninety (90) days following the Company’sreceipt of the notice.(f) Resignation. The Executive may resign his employment without Good Reason withsixty (60) days prior written notice to the Company.
 
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(g) Expiration. The Executive’s employment will terminate on the Expiration Date.5. Compensation Upon Termination.(a) Disability; Death. If during the Term of Employment the Executive’s employmentshall be terminated by the Company due the Executive’s Disability pursuant to Section 4(a),or due to the Executive’s Death pursuant to Section 4(b), the Company shall pay to theExecutive (or his estate, as applicable) (i) his accrued but unpaid Base Salary and accrued butunused vacation time up to the date of termination (the “Accrued Obligations”); (ii) anamount equal to one (1) year of the Executive’s Base Salary at the rate in effect as of theeffective date of the Executive’s termination of employment (the “Termination Date”); (iii)the Bonus, if any, that the Executive would have received had he remained employed with the Companythrough the Expiration Date, multiplied by a fraction, the numerator of which is the number of daysExecutive was actually employed in the fiscal year in the year of the Termination Date and thedenominator of which is 365 (the “Pro-Rated Bonus”), provided that the Company and/or theExecutive have met the performance objectives under the applicable plan, as determined by theCompany; (iv) any unpaid Bonus from the prior fiscal year (the “Prior Year Bonus”); (v) theSpecial Bonus, if unpaid, (together with the Pro-Rated Bonus and the Prior Year Bonus referred tocollectively as the “Bonus Payments”); and (vi) in the case of a termination due toExecutive’s Disability, if Executive timely elects to continue his health and/or dental insurancecoverage pursuant to COBRA, that portion of the COBRA premium that it would pay if Executive werean active employee with the same type of coverage (the “COBRA Premiums”), for a period ofone (1) year from the Termination Date (or if earlier, the date Executive is eligible forcomparable coverage with a subsequent employer). The foregoing amounts (with the exception of theCOBRA Premiums, which shall be paid by the Company to the insurance carriers) shall be paid in alump-sum on the first regularly scheduled payroll date following the Termination Date. Thereafterthe Company shall have no further obligation to the Executive under this Agreement. Any amountspaid by the Company for the COBRA Premiums under this Agreement shall be recorded as additionalincome pursuant to Section 6041 of the Code, and shall not be entitled to any tax qualifiedtreatment.(b) For Cause; Without Good Reason. If during the Term of Employment the Companyterminates the Executive’s employment for Cause under Section 4(c) of this Agreement or theExecutive resigns without Good Reason under Section 4(f), the Company shall pay to theExecutive the Accrued Obligations, and thereafter the Company shall have no further obligation tothe Executive under this Agreement.(c) Without Cause; For Good Reason. If during the Term of Employment the Companyterminates the Executive’s employment without Cause pursuant to Section 4(d) of thisAgreement, or the Executive resigns his employment for Good Reason under Section 4(e), theCompany shall pay the Executive (i) an amount equal to one (1) year of his Base Salary at the ratein effect as of the Termination Date (without regard to any reduction in Base Salary that gave riseto Good Reason); (ii) the Base Salary that the Executive would have received had he remainedemployed through the Expiration Date (without regard to any reduction in Base Salary that gave riseto Good Reason) (together with the amount set forth in (i) the “Severance”); (iii) theBonus Payments; (iv) the COBRA Premiums for the until the date that is one (1) year following theTermination Date or if earlier, the date Executive is eligible
 
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forcomparable coverage with a subsequent employer; and (v) the Accrued Obligations. Payment of theSeverance, the Bonus Payments, and the COBRA Premiums are conditioned on the Executive executing ageneral release of claims releasing all of his claims against the Company in a form reasonablysatisfactory to the Company (but which will not require Executive to release his rights under thisAgreement that are intended to survive Executive’s termination of employment or any vested rightsunder any Company plan or arrangement) (the “Release”) and the Release becoming effectiveand irrevocable prior to the sixtieth (60th) day following the Termination Date. TheSeverance will be paid in a lump sum amount on the sixtieth (60th) day following the TerminationDate. The Bonus Payments will be paid when such bonuses would have been paid had the Executiveremained employed by the Company. The Accrued Obligations will be paid on the next regularlyscheduled payroll date following the Termination Date. Thereafter, the Executive acknowledges thatthe Company shall have no further obligation to the Executive under this Agreement.Notwithstanding the foregoing, if the Executive is at any time in breach of Sections 7 or 8of this Agreement, the Company will have no obligations under this Section 5(c).(d) Termination Following Expiration. If the Company terminates the Executive’semployment without Cause, as defined in Section 4(d), or if the Executive resigns for GoodReason, as defined in Section 4(e), following the Expiration Date, the Company shall (i)pay to the Executive an amount equal to one (1) year of his Base Salary at the rate in effect as ofthe Termination Date in a lump sum amount on the sixtieth (60th) day following the TerminationDate, provided the Release is effective and irrevocable prior such date, and (ii) pay to theExecutive the Accrued Obligations on the next regularly scheduled payroll date following theTermination Date. Thereafter, the Executive acknowledges that the Company shall have no furtherobligation to the Executive under this Agreement. Notwithstanding the foregoing, if the Executiveis at any time in breach of Sections 7 or 8 of this Agreement, the Company will have noobligations under this Section 5(d).6. Resignation from Officer Positions. Immediately upon termination of theExecutive’s employment for any reason, either by the Company or voluntarily by the Executive, theExecutive shall resign from any officer positions with the Company then held by the Executive.7. Confidentiality and Restrictive Covenants.(a) The Executive acknowledges that:(i) the Business in which the Company is engaged is intensely competitive and that hisemployment by the Company will require that he have access to and knowledge of confidentialinformation of the Company, including, but not limited to, certain/all of the Company’s products,plans for creation, prototypes, acquisition or disposition of products or publications, expansionplans, financial status and plans, marketing plans, products, improvements, formulas, designs orstyles, source code, software architecture, hardware and software configurations, method ofdistribution, customer lists, product development plans, rules and regulations, personnelinformation and trade secrets of the Company, all of which are of vital importance to the successof the Company’s business (collectively, “Confidential Information”);
 
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(ii) the direct or indirect disclosure of any Confidential Informationcould place the Company at a serious competitive disadvantage and could do serious damage,financial and otherwise, to the Company’s business;(iii) by his training, experience and expertise, the Executive’s services to the Company willbe special and unique; and(iv) if the Executive leaves the Company’s employ to work for a competitive business, in anycapacity, it could cause the Company irreparable harm.(b) Covenant Against Disclosure. The Executive therefore covenants and agrees thatall Confidential Information relating to the Business of the Company or any of its subsidiaries,affiliates or customers shall be and remain the sole property and confidential business informationof the Company, free of any rights of the Executive. The Executive shall not make any use of theConfidential Information and shall not disclose any Confidential Information to third parties,except in the performance of his duties hereunder or with the prior written consent of the Company.(c) Return of Company Documents. The Executive agrees that, upon any termination ofhis employment with the Company or upon the Company’s demand, he will return all ConfidentialInformation in his possession, directly or indirectly, that is in written or other tangible form(together with all duplicates thereof) and that he will not retain or furnish any such ConfidentialInformation to any third party, either by sample, facsimile, film, audio or video cassette,electronic data, verbal communication or any other means of communication.(d) Non-competition. The Executive agrees that, during the Term of Employment and,following the termination of the Executive’s employment for any reason, during the period that isequal to the sum of (i) one (1) year; and (ii) the period of time between the Termination Date andending on the Expiration Date (together with the Term of Employment, the “RestrictedPeriod”), the Executive shall not, directly or indirectly, own, manage, operate, control orparticipate in the ownership, management or control of, or be connected as an officer, employee,partner, director, or have any financial interest in, or aid or assist anyone else in the conductof, any entity or business which competes with the Business conducted by the Company or any of itssubsidiaries or affiliates within any area in which the Company or any of its subsidiaries oraffiliates conducts its business on the Termination Date. Notwithstanding the foregoing,Executive’s (i) ownership of securities of a public company engaged in competition with theCompany’s Business not in excess of two percent (2%) of any class of such securities; or (ii)ownership interest and/or position in any future special purpose acquisition corporations, shallnot be considered a breach of the covenants set forth in this Section 7(d).(e) Further Covenant. During the Restricted Period, the Executive shall not, directlyor indirectly, take any of the following actions, and, to the extent the Executive owns, manages,operates, controls, is employed by or participates in the ownership, management, operation orcontrol of any business, the Executive will use his best efforts to ensure that such business doesnot take any of the following actions:(i) persuade or attempt to persuade any customer of the Company or any of its subsidiaries oraffiliates to cease doing business with the Company or any of itssubsidiaries or affiliates, or to reduce the amount of business any customer does with theCompany or any of its subsidiaries or affiliates;
 
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(ii) solicit for himself or on behalf of an entity that competes with the Business of theCompany, the business of a customer of the Company or any of its subsidiaries or affiliates, orsolicit any such entity that was a customer of the Company or any of its subsidiaries or affiliateswithin one (1) year prior to the termination of the Executive’s employment; and(iii) persuade or attempt to persuade any employee of the Company or any of its subsidiariesor affiliates to leave the employ of the Company or any of its subsidiaries or affiliates, or hireor engage, directly or indirectly, any individual who was an employee of the Company or any of itssubsidiaries or affiliates during the one (1) year prior to the Executive’s termination ofemployment.8. Intellectual Property.(a) Assignment. The Executive assigns, to the Company, without additionalcompensation, all right, title and interest in all creations, inventions, ideas, designs,copyrightable materials, trademarks, and other technology and rights (and any related improvementsor modifications), whether or not subject to patent or copyright protection (collectively,“Inventions”), relating to any activities of the Company that are conceived or developed bythe Executive in the course of his employment, whether alone or with others and whether or notconceived or developed during regular business hours, and if based on Confidential Informationafter the termination of this Agreement for any reason. Such Inventions shall be the sole propertyof the Company and, to the maximum extent permitted by applicable law, shall be deemed “works madefor hire” as the term is used in the United States Copyright Act.(b) Disclosure. The Executive will promptly inform the Company of any suchInventions. The Executive will (whether while employed by the Company or after the termination ofthis Agreement), at the Company’s sole expense, execute such written instruments and do other suchacts as may be necessary in the reasonable opinion of the Company or its counsel to secure theCompany’s rights in the Inventions, including obtaining a patent, registering a copyright, orotherwise (and the Executive irrevocably appoints the Company and any of its officers as yourattorney in fact to undertake such acts in his name). The Executive’s obligation to executewritten instruments and otherwise assist the Company in securing its rights in the Inventions willcontinue after the termination of this Agreement for any reason.(c) Sub-License. To the extent, if any, that the Executive retains any right, titleor interest with respect to any Inventions that he develops during his employment with the Company,the Executive grants to the Company an irrevocable, paid-up, transferable, sub-licensable,worldwide right and license (i) to modify all or any portion of such Inventions, including, withoutlimitation, the making of additions to or deletions from such Inventions, regardless of the medium(now or hereafter known) into which such Inventions may be modified and regardless of the effect ofsuch modifications on the integrity of such Inventions, and (ii) to identify the Executive, or notto identify the Executive, as one or more authors of or contributors to such Inventions or anyportion thereof, whether or not such Inventions or any portion thereof have been modified. TheExecutive further waives any “moral” rights, or other rights withrespect to attribution of authorship or integrity of such Inventions that he may have underany applicable law, whether under copyright, trademark, unfair competition, defamation, right ofprivacy, contract, tort or other legal theory.
 
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9. Disputes.(a)  Arbitration. The Executive and the Company will arbitrate any and allcontroversies, claims or disputes arising out of or relating to this Agreement or the Executive’semployment with the Company (“Claims”) before the American Arbitration Association(“AAA”) in accordance with the AAA’s National Rules for the Resolution of EmploymentDisputes. The Executive waives any right to a trial by jury in any controversy, claim or disputewith the Company, including those that arise under any federal, state or local law, includingwithout limitation, claims of harassment, discrimination or wrongful termination under common lawor under Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Americanswith Disabilities Act, the Age Discrimination in Employment Act, the Older Workers’ BenefitProtection Act. This Section 9(a) shall not apply to claims by the Executive under Section806 of the Corporate and Criminal Fraud Accountability Act of 2002, Title VIII of theSarbanes-Oxley Act of 2002, 18 U.S.C. § 1514A, as amended.(b) Administrative Claims. While this Agreement precludes the Executive from filing acourt action for any Claim against the Company, this Agreement does not prohibit the Executive fromfiling an administrative charge with a local, state or federal administrative body.(c) Injunctive Relief. Notwithstanding the agreement to arbitrate, a breach by theExecutive of his obligations under Section 7 or 8 of this Agreement would cause the Companyirreparable harm and no adequate remedy at law would be available in respect thereof. Accordingly,if any dispute arises between the parties under Section 7 or 8, the parties shall not berequired to arbitrate such Claim under Section 9(a), but shall have the right to institutejudicial proceedings in any court of competent jurisdiction with respect to such dispute or claimand may be entitled to relief enjoining such acts without the need to post a bond. If suchjudicial proceedings are instituted, such proceedings shall not be stayed or delayed pending theoutcome of any arbitration proceeding under Section 9(a) of this Agreement. The Executiveand the Company consent to the exclusive jurisdiction of the United States District Court for theEastern District of Virginia (or if such court cannot exercise jurisdiction for any reason, to thejurisdiction of the Virginia state courts encompassing Arlington County) for this purpose.Further, the Executive and the Company waive any objections to the jurisdiction of such courtsbased on improper or inconvenient forum.(d) Attorneys’ Fees. In the event that either party commences a litigation,arbitration or an administrative action against the other to enforce such party’s rights hereunder,the prevailing party shall be entitled to recover from the non-prevailing party all reasonablecosts, expenses and fees, including reasonable attorneys’ fees, through all appeals, incurred inprosecuting or defending such action.
 
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10. Market Standoff Agreement. The Executive agrees that if so requested by theCompany or by any representative of any underwriters in connection with any registration of theoffering of any securities of the Company under the Securities Act, the Executive shall not sell orotherwise transfer any securities of the Company during the ninety (90) day period followingthe effective date of a registration statement of the Company filed under the Securities Act of1933, as amended.11. Director’s and Officer’s Liability Insurance. During the Term of Employment andthereafter, until such time as all applicable statutes of limitations have expired, the Company, orany successor to the Company resulting from a Change of Control, shall keep in place a director’sand officer’s liability insurance policy (or policies) providing coverage in an amount up to atleast $5,000,000.12. Indemnification. The Executive shall be indemnified and held harmless by theCompany against all liabilities, damages, claims, lawsuits, judgments, settlements, fines, costsand expenses, including reasonable attorneys fees (the attorney to be selected by Executive), andother amounts actually and reasonably incurred by Executive in connection with any proceeding orclaim (or threatened proceeding or claim) arising by reason of Executive’s employment with theCompany, whether before, during or after the Term of Employment, in accordance with theindemnification provisions of the Company’s Certificate of Incorporation and/or Bylaws as in effecton the Effective Date, and otherwise to the fullest extent to permissible under the laws of thestate of incorporation, as may be amended from time to time.13. Non-Disparagement. Executive agrees that he will not, whether during hisemployment or thereafter, directly or indirectly, make or ratify any statement, public or private,oral or written, to any person that disparages, either professionally or personally, the Company orany of its subsidiaries or affiliates, past and present, and each of them, as well as its and theirtrustees, directors, officers, members, managers, partners, agents, attorneys, insurers, employees,stockholders, representatives, assigns, and successors, past and present, and each of them. TheCompany agrees that during Executive’s employment and thereafter, it will not and will cause itstrustees, directors, officers, members, managers, partners, assigns and successors, past andpresent, and each of them, not to, directly or indirectly, make or ratify any statement, public orprivate, oral or written, to any person that disparages, either professionally or personally.Notwithstanding the foregoing, nothing in this Agreement shall prohibit the Company or Executivefrom making truthful statements when required by law.14. Section 409A.(a) To the extent that the payments and benefits to which the Executive is entitled inconnection with a termination of his employment (the “Separation Benefits”) constitutenon-qualified deferred compensation subject to Section 409A of the Code, the following rules shallapply to the Separation Benefits: (i) Any termination of the Executive’s employment triggeringpayment of the Separation Benefits must constitute a “separation from service” under Section409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h) before distribution of such benefits cancommence. To the extent that the termination of the Executive’s employment does not constitute aseparation of service under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h) (asthe result of further services that are reasonably anticipated to be provided by the Executive tothe Company at the time the Executive’s employment terminates), any part of the Separation Benefitsthat constitute non-qualified deferred compensation under Section 409A shall be delayed until afterthe date of a subsequent event constituting a separation of service under Section 409A(a)(2)(A)(i)of the Code
 
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and Treas. Reg. §1.409A-1(h). For purposes of clarification, this Section 14(a) shallnot cause any forfeiture of benefits on the Executive’s part, but shall only act as a delay untilsuch time as a “separation from service” occurs; (ii) if the Executive is a “specified employee”(as that term is used in Section 409A and regulations and other guidance issued thereunder) on thedate his separation from service becomes effective, any part of the Separation Benefits thatconstitutes non-qualified deferred compensation subject to Section 409A shall be delayed until theearlier of (A) the business day following the six-month anniversary of the date his separation fromservice becomes effective, and (B) the date of the Executive’s death, but only to the extentnecessary to avoid the adverse tax consequences and penalties under Section 409A. On the earlierof (A) the business day following the six-month anniversary of the date his separation from servicebecomes effective, and (B) the Executive’s death, the Company shall pay the Executive in a lump sumthe aggregate value of the non-qualified deferred compensation that the Company otherwise wouldhave paid the Executive prior to that date under this Agreement but for this Section; (iii)it is intended that each installment of the payments and benefits provided in this Agreement inconnection with a termination of the Executive’s employment shall be treated as a “separatepayment” for purposes of Section 409A; and (iv) neither the Company nor the Executive shall havethe right to accelerate or defer the delivery of any such payments or benefits except to the extentspecifically permitted or required by Section 409A.In the event any of Executive’s non-qualified deferred compensation is subject to a six-monthdelay pursuant to this Section 14(a), the Company shall place immediately negotiable fundsinto a “rabbi” trust in an amount equal to the cash payments that may be due (or will be due) toExecutive as a result of Executive’s termination of employment. Such trust shall be maintainedpursuant to a standard rabbi trust arrangement among the Company, Executive and an independenttrustee (reasonably acceptable to Executive) providing for the timely payment to Executive of theamounts held in such trust in the event Executive becomes entitled thereto under the applicableprovisions of this Agreement (the (“Trust Agreement”). The Trust Agreement shall bemaintained until the payment to Executive of all sums held in the trust. This provision is subjectto the limitations imposed by Section 409A(b) of the Code. In addition, this provision will benull and void if the establishment or maintenance of such a trust would result in the imposition ofa tax or penalty under Section 409A.(b) If any of the reimbursements or in-kind benefits provided for under this Agreement aresubject to Section 409A and the rules and regulations thereunder, the following rules shall apply:(i) in no event shall any such reimbursement be paid after the last day of the taxable yearfollowing the taxable year in which the expense was incurred; (ii) the amount of such reimbursableexpenses incurred, or the provision of in-kind benefits, in one tax year shall not affect theexpenses eligible for reimbursement or the provision of in-kind benefits in any other tax year; and(iii) the right to such reimbursement for expenses or provision of in-kind benefits is not subjectto liquidation or exchange for any other benefit.(c) Notwithstanding any other provision of this Agreement to the contrary, in the event of anyambiguity in the terms of this Agreement, such term(s) shall be interpreted and at all timesadministered in a manner that avoids the inclusion of compensation in income under Section 409A, orthe payment of increased taxes, excise taxes or other penalties under Section 409A.(d) The parties intend this Agreement to be in compliance with or otherwiseexempt from Section 409A. Executive acknowledges and agrees that Company does not guaranteethe tax treatment or tax consequences associated with any payment or benefit arising under thisAgreement, including but not limited to consequences related to Section 409A.
 
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15. No Mitigation or Off-Set. The Executive shall be under no obligation to seekother employment after his termination of employment with the Company and the obligations of theCompany that arise upon the termination of his employment shall not be subject to mitigation oroff-set.16. Section 280G.(a) Excise Tax.(i) In the event a Change in Control occurs and the Executive becomes entitled to any benefitsor payments in the nature of compensation (within the meaning of Section 280G(b)(2) of the Code)under this Agreement, or any other plan, arrangement, or agreement with the Company (the “TotalPayments”), and the Total Payments will be subject to the tax (the “Excise Tax”)imposed by Section 4999 of the Code (or any similar tax that may hereafter be imposed), theaggregate present value of the Payments (as defined below) under this Agreement shall be reduced(but not below zero) to the Reduced Amount (as defined below) if reducing the Payments will providethe Executive with a greater net after-tax amount than would be the case if no reduction was made.The term “Payment” means any benefit or payment in the nature of compensation (within themeaning of Section 280G(b)(2) of the Code) under this Agreement. The “Reduced Amount”shall be an amount expressed in present value which maximizes the aggregate present value ofPayments under this Agreement without causing any Payment under this Agreement to be subject to theExcise Tax, determined in accordance with Section 280G(d)(4) of the Code. The Company shall reducethe Payments under this Agreement by first reducing Payments that are not payable in cash and thenby reducing cash Payments.(b) Computation. In determining the potential impact of the Excise Tax, the Companymay rely on any advice it deems appropriate, including, but not limited to, the counsel of itsindependent accounting firm. For purposes of determining whether any of the Total Payments will besubject to the Excise Tax and the amount of such Excise Tax:(i) The amount of the Total Payments which shall be treated as subject to the Excise Tax shallbe equal to the amount of excess parachute payments within the meaning of Section 280G(b)(1) of theCode, as determined by the Company’s independent accounting firm;(ii) The value of any non-cash benefits or any deferred or accumulated payment or benefitshall be determined by the Company’s independent accounting firm in accordance with the principlesof Sections 280G(d)(3) and (4) of the Code; and(iii) The value of the non-competition covenants contained in this Agreement shall be takeninto account to reduce “parachute payments” to the maximum extent allowable under Section 280G ofthe Code.(iv) For purposes of the determinations under this Section 16, the Executive shall bedeemed to pay federal income taxes at the highest marginal rate of federalincome taxation in the calendar year in which the applicable payment is to be made, and state andlocal income taxes at the highest marginal rate of taxation in the state and locality of theExecutive’s residence, net of the maximum reduction in federal income taxes which could be obtainedfrom deduction of such state and local taxes.
 
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17. Miscellaneous.(a) Successors; Binding Agreement. This Agreement and the obligations of the Companyhereunder and all rights of the Executive hereunder shall inure to the benefit of the partieshereto and their respective heirs, personal representatives, successors and assigns, provided,however, that the duties of the Executive hereunder are personal to the Executive and may not bedelegated or assigned by him.(b) Notice. All notices of termination and other communications provided for in thisAgreement shall be in writing and shall be deemed to have been duly given when delivered by hand,facsimile, overnight carrier, or mailed by United States registered mail, return receipt requested,addressed as follows:*If to the Company*:Homeland Security Capital Corporation