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consent of the Chief Executive Officer and the Corporate Governance, Nominating andCompensation Committee of the Board prior to the commencement of such service.     (c) Executive shall exercise due diligence and care in the performance of his duties for andthe fulfillment of his obligations to the Company under this Agreement.     (d) During the Period of Employment, the Company shall furnish Executive with office,secretarial and other facilities and services as are reasonably necessary or appropriate for theperformance of Executive’s duties hereunder and consistent with his position as an Executive VicePresident and Chief Financial Officer of the Company.     (e) Executive hereby represents to the Company that the execution and delivery of thisAgreement by Executive and the Company and the performance by Executive of Executive’s dutieshereunder shall not constitute a breach of, or otherwise contravene, the terms of any employment orother agreement or policy to which Executive is a party or otherwise bound.**3. PERIOD OF EMPLOYMENT**     The “**Period of Employment**” shall, unless sooner terminated as provided herein, be three (3)years commencing on August 1, 2008 (the **“Effective Date”**) and ending with the close of business onJuly 31, 2011. Notwithstanding the preceding sentence, commencing with August 1, 2010, and oneach August 1 **thereafter**(each an “**Extension Date**”), the Period of Employment shall beautomatically extended for an additional one-year period, unless the Company or Executive providesthe other party hereto sixty (60) days’ prior written notice before the next scheduled ExtensionDate that the Period of Employment shall not be so extended (the “**Non-Extension Notice**”). The term“Period of Employment” shall include any extension that becomes applicable pursuant to thepreceding sentence.**4. COMPENSATION**     (a) BASE SALARY. During the Period of Employment, the Company shall pay Executive,and Executive agrees to accept from the Company, in payment for his services, a base salary ofthree hundred thousand dollars ($300,000) per year (“**Base Salary**”), payable in accordance with theCompany’s general payroll practices in effect from time to time (but in no event less frequentlythan in monthly installments). The Board shall consider not less frequently than annually upwardadjustment to Executive’s Base Salary. The determination of whether Executive’s Base Salary willbe upwardly adjusted is within the sole and absolute discretion of the Chief Executive Officer inconsultation with the Board. The Chief Executive Officer at any time or times may, but shall haveno obligation to, supplement Executive’s salary by such bonuses and/or other special payments andbenefits as the Company in its sole and absolute discretion may determine.     (b) ANNUAL INCENTIVE COMPENSATION. During the Period of Employment, Executive shallbe entitled to participate in any annual incentive or bonus plan or plans maintained by the Companyfor global senior management executives of the Company generally, in accordance with the terms,conditions, and provisions of each such plan as the same may be changed, amended, or terminated,from time to time in the discretion of the Board.
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     (c) EQUITY COMPENSATION. During the Period of Employment, Executive shall be eligibleto receive grants of stock options, restricted stock, stock appreciation rights, or other equitycompensation on such terms and conditions as determined from time to time in the discretion of theBoard.          Upon (or as may be necessary to give effect to such acceleration, immediately prior to) aChange of Control event, as such term is defined in Section 7.3 of the Company’s 2004 PerformanceIncentive Plan, all of Executive’s then-outstanding and otherwise unvested outstanding equityawards shall be deemed immediately vested, notwithstanding any other provision of the applicableplans or award documentation to the contrary.**5. BENEFITS**     (a) HEALTH AND WELFARE. During the Period of Employment, Executive shall be entitledto participate in all health and welfare benefit plans and programs and all retirement, deferredcompensation and similar plans and programs generally available to all other global seniormanagement executives of the Company as in effect from time to time, subject to any restrictionsspecified in such plans and programs.     (b) FRINGE BENEFITS. During the Period of Employment, Executive shall be entitled toparticipate in all fringe benefit plans and programs generally available to all other global seniormanagement executives of the Company as in effect from time to time, subject to any restrictionsspecified in such plans and programs.     (c) PERSONAL TIME OFF AND OTHER LEAVE. Executive shall be entitled to such amounts ofpaid personal time off and other leave, as from time to time may be allowed to the Company’s globalsenior management executives generally or as approved by the Board specifically, with such personaltime off to be scheduled and taken in accordance with the Company’s standard policies applicable tosuch personnel.     (d) BUSINESS EXPENSES. During the Period of Employment, reasonable business expensesincurred by Executive in the performance of Executive’s duties hereunder shall be reimbursed by theCompany in accordance with the Company’s business expense reimbursement policies as in effect fromtime to time. At the latest, reimbursement shall be made on or before the last day of Executive’staxable year following the taxable year in which the expense was incurred. The amount of expenseseligible for reimbursement during any taxable year of Executive shall not affect the expenseseligible for reimbursement in any other taxable year of Executive.     (e) AUTOMOBILE. To the extent provided to other senior officers or executives of theCompany, during the Period of Employment, Executive shall be entitled to receive an automobileallowance or a leased automobile and reimbursement for expenses associated with the operation andmaintenance of such automobile. The Company will reimburse Executive upon presentation of vouchersand documentation for any such operational and maintenance expenses which are consistent with theusual accounting procedures of the Company.
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**6. DEATH OR DISABILITY**     (a) DEFINITION OF PERMANENTLY DISABLED AND PERMANENT DISABILITY. For purposes of thisAgreement, the terms “**Permanently Disabled**” and “**Permanent Disability**” shall mean Executive’sinability, because of physical or mental illness or injury, to perform substantially all of hiscustomary duties pursuant to this Agreement, even with a reasonable accommodation, and thecontinuation of such disabled condition for a period of ninety (90) continuous days, or for notless than one hundred eighty (180) days during any continuous twenty-four (24) month period.Whether Executive is Permanently Disabled shall be certified to the Company by a QualifiedPhysician (as hereinafter defined). The determination of the individual Qualified Physician shallbe binding and conclusive for all purposes. As used herein, the term “**Qualified Physician**” shallmean any medical doctor who is licensed to practice medicine in the State of Executive’s residence.Executive and the Company may in any instance, and in lieu of a determination by a QualifiedPhysician, agree between themselves that Executive is Permanently Disabled. The terms “PermanentDisability” and “Permanently Disabled” as used herein may have meanings different from those usedin any disability insurance policy or program maintained by Executive or the Company.     (b) VESTING ON DEATH OR DISABILITY. Upon any termination of the Period of Employmentand Executive’s employment hereunder by reason of Executive’s death or Permanent Disability, asdefined in Section 6(a) (“Death or Disability – Definition of Permanently Disabled and PermanentDisability”), any then-outstanding and otherwise unvested stock options, restricted stock and anyother equity or equity-based awards granted by the Company to the Executive shall thereuponautomatically be deemed vested and remain exercisable for the lesser of three years or the term ofthe award, notwithstanding any other provision of this Agreement or applicable plans.     (c) TERMINATION DUE TO DEATH OR DISABILITY. If Executive dies or becomes PermanentlyDisabled during the Period of Employment, the Period of Employment and Executive’s employment shallautomatically cease and terminate as of the date of Executive’s death or the date of PermanentDisability (which date shall be determined by the Qualified Physician or by agreement, underSection 6(a) above, and referred to as the **“Disability Date”**), as the case may be. In the event ofthe termination of the Period of Employment and Executive’s employment hereunder due to Executive’sdeath or Permanent Disability, Executive or his estate shall be entitled to receive:          (i) a lump sum cash payment, payable within ten (10) business days after termination ofExecutive’s employment, equal to the sum of (x) any accrued but unpaid Base Salary as of the dateof Executive’s termination of employment hereunder and (y) any earned but unpaid annual incentivecompensation in respect of the most recently completed fiscal year preceding Executive’stermination of employment hereunder (the “**Earned/Unpaid Annual Bonus**”); and          (ii) a pro-rated portion of the target annual incentive compensation, if any, that Executivewould have been entitled to receive pursuant to Section 4(b) in respect of the fiscal year in whichtermination of Executive’s employment occurs, based upon the percentage of such fiscal year thatshall have elapsed through the date of Executive’s termination of
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employment, payable when such annual incentive would otherwise have been payable hadExecutive’s employment not terminated.     Notwithstanding any other provision of this Agreement, following such termination ofExecutive’s employment due to Executive’s death or Permanent Disability, except as set forth inSections 6(b) and 6(c), and except for Executive’s rights (if any) under the plans, arrangementsand programs referenced in Sections 4(b), 4(c) and 5, Executive shall have no further rights to anycompensation or other benefits under this Agreement.     In the event Executive’s employment is terminated on account of Executive’s PermanentDisability, he shall, so long as his Permanent Disability continues, remain eligible for allbenefits provided under any long-term disability programs of the Company in effect at the time ofsuch termination, subject to the terms and conditions of any such programs, as the same may bechanged, modified, or terminated for or with respect to all senior management personnel of theCompany.**7. TERMINATION BY THE COMPANY**     (a) TERMINATION FOR CAUSE. The Company may, by providing written notice to Executive,terminate the Period of Employment and Executive’s employment hereunder for Cause at any time. Theterm “**Cause**” for purpose of this Agreement shall mean: (i) Executive’s conviction of or entrance of a plea of guilty ornolo contendere to a felony; or  (ii) Executive is engaging or has engaged in material fraud,material dishonesty, or other acts of willful and continued misconduct inconnection with the business affairs of the Company; or  (iii) Conviction of criminal theft, embezzlement, or other criminalmisappropriation of funds by Executive from the Company; or  (iv) Executive’s continued and substantial failure to perform theduties hereunder (other than as a result of total or partial incapacity due tophysical illness), which failure is not cured within thirty (30) days followingwritten notice by the Company to Executive of such failure; provided, however,that (A) it shall not be Cause if Executive is making good faith efforts toperform duties and (B) this provision shall not apply to any qualitativedissatisfaction by the Company with Executive’s performance of his dutieshereunder; or  (v) Executive’s continued breach of the provisions of Sections 14and/or 15 of this Agreement, which breach is not cured within thirty (30) daysfollowing written notice by the Company to Executive of such breach.     If Executive’s employment is terminated for Cause, the termination shall take effect on theeffective date (pursuant to Section 27 (“Notices”)) of written notice of such termination toExecutive. A determination by the Board that Cause exists shall be effective only if approved at
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a Board meeting (in person or telephonic) by at least a majority of the Board (not countingthe Executive if he is then a member of the Board). The Executive is entitled to be present (withcounsel) at such meeting and respond to any basis that may be asserted as constituting Cause (asummary of which shall be supplied to the Executive in writing at least ten (10) days before anysuch meeting).     In the event of the termination of the Period of Employment and Executive’s employmenthereunder due to a termination by the Company for Cause, then Executive shall be entitled toreceive: (i) a lump sum cash payment, payable within ten (10) business days after termination ofExecutive’s employment equal to the sum of (A) accrued but unpaid Base Salary as of the date oftermination of Executive’s employment hereunder (including any accrued but unpaid personal timeoff) and (B) any Earned/Unpaid Annual Bonus in respect of the most recently completed fiscal yearpreceding termination of Executive’s employment hereunder.     Notwithstanding any other provision of this Agreement, following such termination ofExecutive’s employment due to termination by the Company for Cause, except as set forth in thisSection 7(a), Executive shall have no further rights to any compensation or other benefits underthis Agreement.     If the Company attempts to terminate Executive’s employment pursuant to this Section 7(a) andit is ultimately determined that the Company lacked Cause, in addition to any other non-contractualremedies Executive may have, the provisions of Section 7(b) (“Termination by theCompany-Termination Without Cause”) shall apply and Executive shall be entitled to receive thepayments called for by Section 7(b) (“Termination by the Company-Termination Without Cause”).     (b) TERMINATION WITHOUT CAUSE. The Company may, with or without reason, terminate thePeriod of Employment and Executive’s employment hereunder without Cause at any time, by providingExecutive written notice of such termination. In the event of the termination of the Period ofEmployment and Executive’s employment hereunder due to a termination by the Company without Cause(other than due to Executive’s death or Permanent Disability), then Executive shall be entitled toreceive:          (i) a lump sum cash payment, payable within ten (10) business days after termination ofExecutive’s employment equal to the sum of (A) any accrued but unpaid Base Salary as of the date ofExecutive’s termination of employment hereunder (including any accrued but unpaid personal timeoff), (B) the Earned/Unpaid Annual Bonus, if any, and (C) an amount equal to three and a half timesthe then current Base Salary.          (ii) any remaining unvested stock options or restricted stock shall thereupon automatically bedeemed vested and remain exercisable for the duration of the term of such award, notwithstandingany other provision of this Agreement or applicable plans; and          (iii) continued participation in the Company’s group health insurance plans at the Company’sexpense until the earlier of (A) the expiration of the two (2) years from the effective date oftermination or (B) Executive’s eligibility for participation in the group health plan of asubsequent employer or entity for which Executive provides consulting services;
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provided, however, that the amount otherwise payable to Executive pursuant to Section 7(b)(i)(C)shall be reduced by the amount of any cash severance or termination benefits paid to Executiveunder any other severance plan, severance program or severance arrangement of the Company and itsaffiliates (but not reduced by any other payment to Executive whatsoever, including (withoutlimitation) any payment by the Company or any affiliate of the Company in consideration of stock orany other property).     Notwithstanding any other provision of this Agreement, following such termination ofExecutive’s employment due to termination by the Company without Cause, except as set forth in thisSection 7(b), Executive shall have no further rights to any compensation or other benefits underthis Agreement.     As a condition precedent to any Company obligation to the Executive pursuant to this Section7(b), the Executive shall, upon or promptly following his last day of employment with the Company,provide the Company with a valid, executed, written release of claims (in the form attached heretoas Exhibit A or such other form as modified by the Company for senior executives) and such releaseshall have not been revoked by the Executive pursuant to any revocation rights afforded byapplicable law. The Company shall have no obligation to make any payment to the Executive pursuantto Section 7(b) unless and until the release contemplated by this Section 7(b) becomes irrevocableby the Executive in accordance with all applicable laws, rules and regulations.**8. TERMINATION BY EXECUTIVE**     (a) TERMINATION WITHOUT GOOD REASON. Executive shall have the right to terminate thePeriod of Employment and Executive’s employment hereunder at any time without Good Reason (asdefined below) upon thirty (30) days prior written notice of such termination to the Company. Anysuch termination by the Executive without Good Reason shall be treated for all purposes of thisAgreement as a termination by the Company for Cause and the provisions of Section 7(a) shall apply.     (b) TERMINATION WITH GOOD REASON. The Executive may terminate the Period ofEmployment and resign from employment hereunder for “**Good Reason**”: (i) if the Company requires Executive to relocate his principaloffice to a location outside of Orange County, California, without Executive’sconsent; or  (ii) if the Company fails to provide Executive with the compensationand benefits called for by this Agreement; or  (iii) if the Company materially diminishes Executive’s authority,duties, responsibilities, or  (iv) if the Company materially breaches any provision of thisAgreement;provided, however, that none of the events described in Subsection 8(b)(ii), 8(b)(iii) or 8(b)(iv)shall constitute Good Reason unless Executive shall have notified the Company in writing
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describing the event(s) which constitute Good Reason within sixty (60) days of the initialexistence of such event(s) and then only if the Company shall have failed to cure such event withinthirty (30) days after the Company’s receipt of such written notice; and provided, further, that inall events the termination of the Executive’s employment with the Corporation shall not constitutea termination for Good Reason unless such termination occurs not more than one (1) year followingthe initial existence of the event(s) claimed to constitute Good Reason.     Any such termination by Executive for Good Reason shall be treated for all purposes of thisAgreement as a termination by the Company without Cause and the provisions of Section 7(b) shallapply; provided, however, that if Executive attempts to resign for Good Reason pursuant to thisSection 8(b) and it is ultimately determined that Good Reason did not exist, Executive shall bedeemed to have resigned from employment without Good Reason and the provisions of Section 8(a)(“Termination Without Good Reason”) and, by reference therein, the provisions of Section 7(a)(“Termination For Cause”), shall apply.**9. EXCLUSIVE REMEDY**     Executive agrees that the payments contemplated by this Agreement shall constitute theexclusive and sole contract remedy for any termination of his employment and Executive covenantsnot to assert or pursue any other contractual remedies, at law or in equity, with respect to anytermination of employment.**10. EXPIRATION OF PERIOD OF EMPLOYMENT**     (a) ELECTION NOT TO EXTEND PERIOD OF EMPLOYMENT. If either party elects not to extendthe Period of Employment pursuant to Section 3, unless Executive’s employment is earlier terminatedpursuant to Sections 6, 7 or 8, termination of Executive’s employment hereunder shall be deemed tooccur on the close of business on the day immediately preceding the anniversary of the nextExtension Date following the delivery of the Non-Extension Notice pursuant to Section 3. If theCompany elects not to extend the Period of Employment, Executive’s termination will be treated forall purposes under this Agreement as a termination by the Company without Cause under Section 7(b);provided, however, that the applicable lump sum payment due pursuant to a non-renewal shall be twotimes Executive’s then current Base Salary only. If Executive elects not to extend the Period ofEmployment, Executive’s termination will be treated for all purposes under this Agreement as atermination by Executive without Good Reason under Section 8(a).     (b) CONTINUED EMPLOYMENT BEYOND EXPIRATION OF PERIOD OF EMPLOYMENT. If either partyelects not to extend the Period of Employment pursuant to Section 3, but the parties want tocontinue Executive’s employment without a written contract, such continued employment will be atwill and shall not be deemed to extend any of the provisions of this Agreement. At such time,Executive’s employment may thereafter be terminated at will by either Executive or the Company;provided, however, that the provisions of Sections 14, 15 and 16 shall survive any termination ofthis Agreement or Executive’s termination of employment hereunder.
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**11. GROSS-UP**     Notwithstanding any other provision of this Agreement, if and to the extent any payment madeunder this Agreement, either alone or in conjunction with other payments Executive has the right toreceive either directly or indirectly from the Company, would constitute an “excess parachutepayment” under Section 280G of the Internal Revenue Code of 1986, as amended, then Executive shallbe entitled to receive an excise tax gross-up payment in accordance with Appendix A.**12. CONSISTENT TREATMENT**     If compensation or benefits plans, programs or arrangements are offered to other seniorexecutives of the Company, the Executive shall have the right to participate in such plans,programs and arrangement on a basis not less favorable to the Executive than the terms andconditions of such plans, programs and arrangements generally applicable to the other seniorexecutives of the Company.**13. MEANS AND EFFECT OF TERMINATION**     Any termination of Executive’s employment under this Agreement shall be communicated bywritten notice of termination from the terminating party to the other party. The notice oftermination shall indicate the specific provision(s) of this Agreement relied upon in effecting thetermination and shall set forth in reasonable detail the facts and circumstances alleged to providea basis for termination, if any such basis is required by the applicable provision(s) of thisAgreement.**14. RESTRICTIVE COVENANTS**     Executive acknowledges and recognizes the highly competitive nature of the businesses of theCompany and its affiliates and accordingly agrees as follows:     (a) During the period of Executive’s employment by the Company, Executive will not, directlyor indirectly, (i) engage in any business for Executive’s own account that competes with thebusiness of the Company or its affiliates (including, without limitation, businesses which theCompany or its affiliates have specific plans to conduct in the future and as to which Executive isaware of such planning), (ii) enter the employ of, or render any services to, any person engaged inany business that competes with the business of the Company or its affiliates, (iii) acquire afinancial interest in any person engaged in any business that competes with the business of theCompany or its affiliates, directly or indirectly, as an individual, partner, shareholder, officer,director, principal, agent, trustee or consultant. During the period of Executive’s employment bythe Company and for a period of two years thereafter (the “**Restricted Period**”), Executive will not,directly or indirectly, interfere with business relationships (whether formed before or after thedate of this Agreement) between the Company or any of its affiliates and customers, suppliers,partners, members or investors of the Company or its affiliates.     (b) Notwithstanding anything to the contrary in this Agreement, Executive may, directly orindirectly, own, solely as an investment, securities of any person engaged in the
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business of the Company or its affiliates which are publicly traded on a national or regionalstock exchange or on an over-the-counter market if Executive (i) is not a controlling person of, ora member of a group which controls, such person and (ii) does not, directly or indirectly, own fivepercent (5%) or more of any class of securities of such person.     (c) During the Restricted Period, Executive will not, directly or indirectly, (i) solicit orencourage any employee of the Company or its affiliates to leave the employment of the Company orits affiliates.     (d) During the Restricted Period, Executive will not, directly or indirectly, solicit orencourage to cease to work with the Company or its affiliates any consultant then under contractwith the Company or its affiliates.     (e) It is expressly understood and agreed that although Executive and the Company consider therestrictions contained in this Section 14 to be reasonable, if a final determination is made by anarbitrator or court of competent jurisdiction that the time or territory or any other restrictioncontained in this Agreement is an unenforceable restriction against Executive, the provisions ofthis Agreement shall not be rendered void but shall be deemed amended to apply as to such maximumtime and territory and to such maximum extent as such court may judicially determine or indicate tobe enforceable. Alternatively, if any arbitrator or court of competent jurisdiction finds that anyrestriction contained in this Agreement is unenforceable, and such restriction cannot be amended soas to make it enforceable, such finding shall not affect the enforceability of any of the otherrestrictions contained herein.**15. CONFIDENTIALITY**.     Executive will not at any time (whether during or after his employment with the Company),unless compelled by lawful process, disclose or use for his own benefit or purposes or the benefitor purposes of any other person, firm, partnership, joint venture, association, corporation orother business organization, entity or enterprise other than the Company and any of itssubsidiaries or affiliates, any trade secrets, or other confidential data or information relatingto customers, development programs, costs, marketing, trading, investment, sales activities,promotion, credit and financial data, manufacturing processes, financing methods, plans, or thebusiness and affairs of the Company generally, or of any subsidiary or affiliate of the Company;provided that the foregoing shall not apply to information which is not unique to theCompany or which is generally known to the industry or the public other than as a result ofExecutive’s breach of this covenant. Executive agrees that upon termination of his employment withthe Company for any reason, he will return to the Company immediately all memoranda, books, papers,plans, information, letters and other data, and all copies thereof or therefrom, in any wayrelating to the business of the Company and its affiliates, except that he may retain personalnotes, notebooks and diaries that do not contain confidential information of the type described inthe preceding sentence. Executive further agrees that he will not retain or use for his account atany time any trade names, trademark or other proprietary business designation used or owned inconnection with the business of the Company or its affiliates.
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**16. SPECIFIC PERFORMANCE**     Executive acknowledges and agrees that the Company’s remedies at law for a breach orthreatened breach of any of the provisions of Section 14 or Section 15 would be inadequate and, inrecognition of this fact, Executive agrees that, in the event of such a breach or threatenedbreach, in addition to any remedies at law, the Company, without posting any bond, shall beentitled to obtain equitable relief in the form of specific performance, temporary restrainingorder, temporary or permanent injunction or any other equitable remedy which may then be available.**17. ASSIGNMENT**     This Agreement is personal in its nature and neither of the parties hereto shall, without theconsent of the other, assign or transfer this Agreement or any rights or obligations hereunder;provided, however, that, in the event of a merger, consolidation, or transfer or sale of all orsubstantially all of the assets of the Company with or to any other individual(s) or entity, thisAgreement shall, subject to the provisions hereof, be binding upon and inure to the benefit of suchsuccessor and such successor shall discharge and perform all the promises, covenants, duties, andobligations of the Company hereunder.**18. GOVERNING LAW**     This Agreement and the legal relations hereby created between the parties hereto shall begoverned by and construed under and in accordance with the internal laws of the State ofCalifornia, without regard to conflicts of laws principles thereof.**19. ENTIRE AGREEMENT**     This Agreement embodies the entire agreement of the parties hereto respecting the matterswithin its scope. This Agreement supersedes all prior agreements of the parties hereto on thesubject matter hereof. Any prior negotiations, correspondence, agreements, proposals, orunderstandings relating to the subject matter hereof shall be deemed to be merged into thisAgreement and to the extent inconsistent herewith, such negotiations, correspondence, agreements,proposals, or understandings shall be deemed to be of no force or effect. There are norepresentations, warranties, or agreements, whether express or implied, or oral or written, withrespect to the subject matter hereof, except as set forth herein. Notwithstanding the foregoing,this Agreement is not intended to modify or extinguish any rights or obligations contained in (i)any stock option, restricted stock or other equity or equity-based award agreement betweenExecutive and the Company that was executed prior to the date hereof or (ii) any indemnificationagreement between Executive and the Company prior to the date hereof.
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**20. POST-TERMINATION COOPERATION**     Executive agrees that following the termination of his employment for any reason, he shallreasonably cooperate at mutually convenient times in the Company’s defense against any threatenedor pending litigation or in any investigation or proceeding by any governmental agency or body thatrelates to any events or actions which occurred during the term of Executive’s employment with theCompany. The Company shall reimburse Executive for reasonable expenses incurred by Executive inconnection with such cooperation. Executive shall be compensated for his time at a mutually agreedupon rate for any services other than the provision of information to the Company or its counseland/or testifying as a witness, which he shall undertake without any compensation.**21. MODIFICATIONS**     This Agreement shall not be modified by any oral agreement, either express or implied, and allmodifications hereof shall be in writing and signed by the parties hereto.**22. WAIVER**     Failure to insist upon strict compliance with any of the terms, covenants, or conditionshereof shall not be deemed a waiver of such term, covenant, or condition, nor shall any waiver orrelinquishment of, or failure to insist upon strict compliance with, any right or power hereunderat any one or more times be deemed a waiver or relinquishment of such right or power at any othertime or times.**23. NUMBER AND GENDER**     Where the context requires, the singular shall include the plural, the plural shall includethe singular, and any gender shall include all other genders.**24. SECTION HEADINGS**     The section headings in this Agreement are for the purpose of convenience only and shall notlimit or otherwise affect any of the terms hereof.
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**25. ATTORNEYS’ FEES**     Executive and the Company agree that in any action arising out of this Agreement, each sideshall bear its own attorneys’ fees and costs incurred by it or him in connection with such action.**26. SEVERABILITY**     In the event that an arbitrator or court of competent jurisdiction determines that any portionof this Agreement is in violation of any statute or public policy, then only the portions of thisAgreement which violate such statute or public policy shall be stricken, and all portions of thisAgreement which do not violate any statute or public policy shall continue in full force andeffect. Furthermore, any order striking any portion of this Agreement shall modify the strickenterms as narrowly as possible to give as much effect as possible to the intentions of the partiesunder this Agreement.**27. NOTICES**     All notices under this Agreement shall be in writing and shall be either personally deliveredor mailed postage prepaid, by certified mail, return receipt requested:       (a) if to the Company:     Attn: Kate W. Duchene, Esq.     With copies to:     David A. Krinsky, Esq.  O’Melveny & Myers LLP  610 Newport Center Drive, Suite 1700  Newport Beach, California 92660     (b)     if to Executive, to the Executive at the Executive’s last address reflected in theCompany’s payroll records.Notice shall be effective when personally delivered, or five (5) business days after being somailed. Any party may alter the address to which communications or copies are to be sent by givingnotice of such change of address in conformity with the provisions of this Section 27 for thegiving of notice.
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**28. COUNTERPARTS**     This Agreement may be executed in any number of counterparts, each of which shall be deemed anoriginal and all of which together shall constitute one and the same instrument. This Agreementshall become binding when one or more counterparts hereof, individually or taken together, shallbear the signatures of all of the parties hereto reflected hereon as the signatories. Photographiccopies of such signed counterparts may be used in lieu of the originals for any purpose.**29. WITHHOLDING TAXES**     The Company may withhold from any amounts payable under this Agreement such federal, state andlocal taxes as may be required to be withheld pursuant to any applicable law or regulation.**30. SECTION 409A**     (a) If the Executive is a “specified employee” within the meaning of Treasury RegulationSection 1, 409A-1(i) as of the date of the Executive’s separation from service, the Executive shallnot be entitled to any payment or benefit pursuant to Section 6, 7 or 8, as applicable, until theearlier of (i) the date which is six (6) months after the Executive’s separation from service forany reason other than death, or (ii) the date of the Executive’s death. The provision of thisSection 30 shall only apply if, and to the extent, required to avoid the imputation of any tax,penalty or interest pursuant to Section 409A of the U.S. Internal Revenue Code of 1986, as amended(the “Code”). Any amounts otherwise payable to the Executive upon or in the six (6) month periodfollowing the Executive’s separation from service that are not so paid by reason of this Section 30shall be paid (without interest) as soon as practicable (and in all events within thirty (30) days)after the date that is six (6) months after the Executive’s separation from service (or, ifearlier, as soon as practicable, and in all events within thirty (30) days, after the date of theExecutive’s death).     (b) To the extent that any reimbursements pursuant to Section 5 are taxable to the Executive,any reimbursement payment due to the Executive pursuant to any such provision shall be paid to theExecutive on or before the last day of the Executive’s taxable year following the taxable year inwhich the related expenses were incurred. The provision of benefits pursuant to Section 7(b)(iii)and reimbursements pursuant to Section 5 are not subject to liquidation or exchange for anotherbenefits and the amount of such benefits and reimbursements that the Executive receives in onetaxable year shall not affect the amount of such benefits or reimbursements that the Executivereceives in any other taxable year.
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**31. LEGAL COUNSEL; MUTUAL DRAFTING**     Each party recognizes that this is a legally binding contract and acknowledges and agrees thatthey had had the opportunity to consult with legal counsel of their choice. Each party hascooperated in the drafting, negotiation and preparation of this Agreement. Hence, in anyconstruction to be made of this Agreement, the same shall not be construed against either party onthe basis of that party being the drafter of such language. Executive agrees and acknowledges thathe has read and understands this Agreement, is entering into it freely and voluntarily and has beenadvised to seek counsel prior to entering into this Agreement and has had ample opportunity to doso.[Remainder of Page Intentionally Left Blank]
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     IN WITNESS WHEREOF, the Company and Executive have executed this Employment Agreement as ofthe date first above written.       **THE COMPANY:**       By:         Name: Thomas D. Christopoul  Title: Chief Executive Officer       **EXECUTIVE:**          Nathan W. Franke
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**APPENDIX A**