Employment Agreement - Conroy






EMPLOYMENT AGREEMENT 




        This
agreement, effective as of July 1, 2003 (the “Agreement”) is made by and between
MEDICAL TECHNOLOGY SYSTEMS, INC., a Delaware corporation (the “Company”), and
MICHAEL P. CONROY, a resident of the State of Florida (the “Executive”).



BACKGROUND 



        The
Company desires to continue to obtain the benefit of services by the Executive, and the
Executive desires to continue to render services to the Company. 



        The
Compensation Committee of the Board of Directors of the Company (the “Board”)
has determined that it is in the Company’s best interest and that of its stockholders
to recognize the substantial contribution that the Executive has made and is expected to
make in the future to the Company’s business and to continue to retain his services
in the future. 



        Accordingly,
in consideration of the mutual covenants and representations contained set forth below,
the Company and the Executive agree as follows: 




TERMS 



     	1.	 	Employment 





     	 	a. 	
          The Executive agrees to accept employment with the Company or one or more of the
          Company’s subsidiary corporations to render the services specified in this
          Agreement upon the terms and conditions and for the compensation provided in
          this Agreement. All compensation paid to the Executive by the Company or any
          subsidiary of the Company, and all benefits and perquisites received by the
          Executive from the Company or any of its subsidiaries, will be aggregated in
          determining whether the Executive has received the compensation and benefits
          provided for herein. 





     	 	b.	
          Term. The term (the “Term”) of this contract shall commence on
          July 1, 2003, and shall continue without interruption until March 31, 2006. 





     	2.	 	Duties. 





     	 	a. 	
          General Duties. The Executive shall serve as Vice President and Chief
          Financial Officer of the Company and shall continue to serve in those positions,
          with duties and responsibilities that are customary for such executives. 





     	 	b. 	
          Full Time Employment. During the term of this Agreement and excluding any
          periods of vacation, family or sick leave or holidays to which the Executive is
          entitled, the Executive shall devote his full business time and energy to the
          business, affairs and interests of the Company and its subsidiaries, and matters
          related thereto, and shall use his reasonable commercial efforts and ability to
          promote the interests of the Company and its subsidiaries. The Executive will
          diligently endeavor to promote the business, affairs and interests of the
          Company and its subsidiaries and perform services contemplated by this Agreement
          in accordance with the policies established by the Board from time to time. 













     	 	c. 	
          Certain Permissible Activities. The Executive may serve as a director or
          in any other capacity of any business enterprise, including an enterprise whose
          activities may involve or relate to the business of the Company or any of its
          subsidiaries but only if such service is expressly approved by the Company in
          writing. The Executive may (i) make and manage personal business investments of
          his choice, (ii) teach at educational institutions and deliver lectures, and
          (iii) serve in any capacity with any civic, educational or charitable
          organization, or any governmental entity or trade association, in each such case
          without seeking or obtaining approval by the Company so long as such activities
          and service do not materially interfere or conflict with the performance of his
          duties hereunder. It is agreed that to the extent that the Company shall have
          approved any service of the Executive pursuant to the first sentence of this
          Section 3(c) prior to a Change in Control Date (as defined in Section 7 below),
          or to the extent that the Executive may have engaged in activities pursuant to
          the second sentence of this Section 3(c) prior to such Change in Control Date,
          the continued conduct of such activities or the conduct of activities during the
          thirty-six months subsequent to such Change in Control Date shall be permissible
          and not in violation of any provisions of this Agreement and such Company
          approval may not be revoked or limited in any material respect during the
          thirty-six months following such Change in Control Date. 





     	3.	 	
          Compensation and Expenses.





     	 	a. 	
          Base Salary. For the services of the Executive to be rendered under this
          Agreement, the Company will pay the Executive an annual base salary (the
          “Base Salary”) as follows: 





     	 	(i) 	
         For the period July 1, 2003 through March 31, 2004, the amount of $160,855;





     	 	(ii) 	
         For the period April 1, 2004 through March 31, 2005, the amount of $167,289; and





     	 	(iii) 	
          For the period April 1, 2005 through March 31, 2006, the amount of $173,981.





        Provided, however, that such Base
Salary shall be pro rated accordingly over the time period that the Executive performs
services under this Agreement in any calendar year during which this Agreement shall
terminate before March 31st of such year. 



        The
Company shall pay the Executive his Base Salary in equal installments no less than
semi-monthly. 



               	 	b. 	
                    Base Salary Adjustment. The Base Salary may not be decreased hereunder
                    during the term of this Agreement, but may be increased upon review by and
                    within the sole discretion of the Board. 





               	 	c. 	
                    Bonus. Executive shall be entitled to receive bonus compensation in
                    accordance with Exhibits “A”, “B”, “C” and
                    “D”. Exhibit A may be amended annually in accordance with the
                    Company’s bonus program. 





     2.











               	 	d. 	
                    Expenses. In addition to any compensation received pursuant to Section 3,
                    the Company will reimburse or advance funds to the Executive for all reasonable,
                    ordinary and necessary travel, educational, seminar, trade shows, entertainment,
                    and miscellaneous expenses incurred in connection with the performance of his
                    duties under this Agreement, provided that the Executive properly accounts for
                    such expenses to the Company in accordance with the Company’s practices.
                    Such reimbursement shall include travel, lodging and food costs for
                    Executive’s immediate family to the extent they accompany Executive on
                    business related travel. 





               	 	e. 	
                    Subsidiary and Affiliate Payments. In recognition of the fact that in the
                    course of the performance of his duties hereunder the Executive may provide
                    substantial benefits to the Company’s subsidiaries or affiliated companies,
                    the Executive and the Company may at any time and from time to time agree that
                    all or any portion of the compensation due the Executive under this Agreement
                    may be paid directly to the Executive by one or more of the Company’s
                    subsidiaries or affiliated companies. 





     	4.	 	Benefits 





               	 	a. 	
                      Vacation. For each year during the Term during which the Executive is employed,
                the Executive shall be entitled to 20 vacation days (which shall accrue and vest, except set
                forth below on each April 1st) without loss of compensation or other benefits to
                which he is entitled under this Agreement. 





               	 	  	
                     If the Executive is unable to take all of his vacation days during a year for which he
                becomes vested, then the Executive, at his sole option, may elect (a) to carry over any
                unused vacation to the next calendar year to be used solely in that next year or (b) to
                receive an appropriate pro rata portion of his Base Salary corresponding to the year in
                which the vacation days vested.





               	 	  	
                    The Executive shall take his vacation at such times as the Executive may select and the
                    affairs of the Company or any of its subsidiaries or affiliates may permit.





     	 	b. 	
          Employee Benefit Programs. In addition to the compensation to which the
          Executive is entitled pursuant to the provisions of Section 3 of this Agreement,
          during the Term, the Executive will be entitled to participate in any stock
          option plan, stock purchase plan, pension or retirement plan, insurance or other
          employee benefit plan that is maintained at that time by the Company for its
          employees, including programs of life, disability, basic medical and dental,
          supplemental medical and dental insurance. 





     	 	 	
         Notwithstanding any provision of this Agreement to the contrary, the Company shall not be obligated to
         provide the Executive with any of the benefits contained in this Section 4 (b) if the
         Executive, for any reason, is or becomes uninsurable with respect to coverage relating to
         any such benefit(s).





     	 	c. 	
          Automobile Allowance. During the term of this Agreement, the Company
          shall pay Executive an additional $750.00 per month as an automobile allowance
          to be applied to any automobile expense incurred by Executive. 





     	 	d. 	
          Financial and Tax Planning. During the term of this Agreement, and as
          additional consideration hereunder, Executive shall be reimbursed for personal
          financial planning, tax preparation services and accounting and legal fees
          related to such financial and tax planning, up to a maximum of $2,000 per year. 





     3.











     	5.	 	Termination 





     	 	a. 	
          Termination for Cause. The Company may terminate the Executive’s
          employment pursuant to this Agreement at any time for cause upon written notice.
          Such termination will become effective upon the giving of such notice. Upon any
          such termination for cause, the Executive shall have no right to compensation,
          bonus or reimbursement under Section 3 or to participate in any employee benefit
          programs or other benefits to which he may be entitled under Section 4 for any
          period subsequent to the effective date of termination. For purposes of this
          Agreement, the term “cause” shall mean: 





     	 	(i) 	
          the Executive’s conviction of a felony and all appeals with respect thereto
               have been extinguished or abandoned by the Executive; 





     	 	(ii) 	
          the Executive’s conviction of misappropriating assets or otherwise
               defrauding the Company or any of its subsidiaries or affiliates;  





     	 	(iii) 	
          a material breach by the Executive of any provision of this Agreement, after
               thirty (30) days written notice, and thirty days to materially cure such breach. 





     	 	b. 	
          Death or Disability. This Agreement and the Company’s obligations
          under this Agreement will terminate upon the death or disability of the
          Executive. For purposes of this Section 5(b), “disability” shall mean
          that for a period of six months in any twelve-month period the Executive is
          incapable of substantially fulfilling the duties set forth in this Agreement
          because of physical, mental or emotional incapacity resulting from injury,
          sickness or disease as determined by an independent physician mutually
          acceptable to the Company and the Executive. Upon any such termination upon
          death or disability, the Company will pay the Executive or his legal
          representative, as the case may be, his Base Salary (which may include any
          accrued, but unused vacation time) at such time pursuant to Section 3(a) through
          the date of such termination of employment (or, if terminated as a result of a
          disability, until the date upon which the disability policy maintained pursuant
          to Section 4 (b) (ii) begins payment of benefits) plus any other compensation
          that may be due and unpaid. In the event of death or disability of the
          Executive, any obligations that the Executive may owe the Company for repayment
          of loans or other amounts shall be forgiven. 





     	 	c. 	
          Voluntary Termination. Prior to the termination of this Agreement, the
          Executive may, on sixty days prior written notice to the Company, at any time
          terminate his employment. Upon any such termination, the Company shall pay the
          Executive his Base Salary at such time pursuant to Section 3(a) through the date
          of such termination of employment (which shall include any vested and accrued,
          but unused vacation time). 





     	 	d. 	
          Additional Severance Upon Triggering Event. Upon any event, which (a)
          causes a change of control as defined in Section 7.a.; and (b) the Executive is
          terminated without cause (i.e., any reason other than death, disability or
          termination for cause), ([a] and [b] referred to as a Triggering Event), the
          following shall occur immediately and without further notice or action by
          Executive: 





          	 	(i) 	
               All of the Company’s obligations under this Agreement to Executive shall
               accelerate and become immediately performable and due and payable except for
               salary for the balance of the term of this agreement, which shall become due and
               payable only to the extent set forth in Section (d)(ii). 





     4.











          	 	(ii) 	
               In addition to any and all other compensation to Executive under this Agreement,
               the Company shall pay to Executive an amount equal to 2.99 times the
               Executive’s base salary for the fiscal year of the Company following the
               fiscal year in which the triggering event occurs; 





          	 	(iii) 	
               At his option, notwithstanding the payment of the above items, Executive may
               terminate his obligations to the Company under this Agreement, including any
               loans payable to the Company; and 





               	 	(iv) 	
                    The Company shall immediately assign to Executive any life insurance policy
                    insuring Executive’s life. The Company shall, prior to the assignment,
                    satisfy the balance of all premiums owed on the assigned policies and shall
                    insure that the designated beneficiary is not changed. 





               	 	(v) 	
                    If any of the above benefits are deemed to violate Internal Revenue Code 280G
                    and related regulations thereunder, as amended, then any excess benefits will be
                    paid during the next tax year if permitted by applicable law. 





     	6.	 	Restrictive Covenants 





               	 	a. 	
                    Competition with the Companies. The Executive covenants and agrees that,
                    during the Term of this Agreement, the Executive will not, without the prior
                    written consent of Company, directly or indirectly (whether as a sole
                    proprietor, partner, stockholder, director, officer, employee or in any other
                    capacity as principal or agent) , compete with the Company. Notwithstanding this
                    restriction, Executive shall be entitled to invest in stock of other competing
                    public companies so long as his ownership is less than 5% of such company’s
                    outstanding shares. 





               	 	b. 	
                    Disclosure of Confidential Information. The Executive acknowledges that
                    during his employment he will gain and have access to confidential information
                    regarding the Company and its subsidiaries and affiliates. The Executive
                    acknowledges that such confidential information as acquired and used by the
                    Company or any of its subsidiaries or affiliates constitutes a special, valuable
                    and unique asset in which the Company or any of its subsidiaries or affiliates,
                    as the case may be, hold a legitimate business interest. All records, files,
                    materials and confidential informant (the “Trade Secrets”) obtained by
                    the Executive in the course of his employment with the Company shall be hereby
                    deemed confidential and proprietary and shall remain the exclusive property of
                    the Company or any of its subsidiaries or affiliates, as the case may be. The
                    Executive will not, except in connection with and as required by his performance
                    of his duties under this Agreement, for any reason use for his own benefit or
                    the benefit of any person or entity with which he may be associated, disclose
                    any Trade Secrets to any person, firm, corporation, association or other entity
                    for any reason or purpose whatsoever without the prior written consent of the
                    Board of Directors of the Companies, unless such information previously shall
                    have become public knowledge through no action by or omission of the Executive. 





               	 	c. 	
                    Subversion, Disruption or Interference. At no time during the term hereof
                    shall Executive, directly or indirectly, interfere, induce, influence, combine
                    or conspire with, or attempt to induce, influence, combine or conspire with, any
                    of the employees or sponsors of, or consultants to, the Company to terminate
                    their relationship with or compete or ally against the Company or any of its
                    subsidiaries or affiliates of the Company in the business in which the Company
                    or any one of its subsidiaries or affiliates is presently engaged. 





     5.











               	 	d. 	
                    Enforcement of Restrictions. The parties hereby agree that any violation
                    by Executive of the covenants contained in this Section 6 will cause irreparable
                    damage to the Company or any of its subsidiaries and affiliates and may, as a
                    matter of course, be restrained by process issued out of a court of competent
                    jurisdiction, in addition to any other remedies provided by law. 





     	7.	 	Change of Control 





               	 	a. 	
                    For the purposes of this Agreement, a “Change of Control” shall be
                    deemed to have taken place if any person, other than the JADE Partnership or the
                    Siegel Family Revocable Trust, including a “group” as defined in
                    Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, becomes the
                    owner or beneficial owner of the Company’s securities, after the date of
                    this Agreement, having more than 50% of the combined voting power of the then
                    outstanding securities of the Company that may be cast for the election of
                    directors of the Company (other than as a result of an issuance of securities
                    specifically approved by the Company and specifically excluded from the
                    provisions of this Section 7 by subsequent written agreement of the Executive);
                    provided, however, that a Change of Control shall not be deemed to have occurred
                    if the person who becomes the owner of more than 50% of the combined voting
                    power of the Company is Todd E. Siegel or an entity (or entities) controlled by
                    Todd E. Siegel. 





               	 	b. 	
                    The Company and Executive agree that, if Executive is in the employ of the
                    Company on the date on which a Change of Control occurs (the “Change of
                    Control Date”) , the Company will continue to employ the Executive and the
                    Executive will remain in the employ of the Company for the period commencing on
                    the Change of Control Date and ending on the expiration of the Term, to exercise
                    such authority and perform such executive duties as are commensurate with the
                    authority being exercised and duties being performed by the Executive
                    immediately prior to the Change of Control Date. If after a Change of Control,
                    the Executive is requested, and, in his sole and absolute discretion, consents
                    to change his principal business location outside of Pinellas or Hillsborough
                    Counties, Florida, the Company will reimburse the Executive for his relocation
                    expenses, including without limitation, moving expenses, temporary living and
                    travel expenses for a time while arranging to move his residence to the changed
                    location, closing costs, if any, associated with the sale of his existing
                    residence and the purchase of a replacement residence at the changed location,
                    plus an additional amount representing a gross-up of any state or federal taxes
                    payable by Executive as a result of any such reimbursements. If the Executive
                    shall not consent to change his business location, the Executive may continue to
                    provide the services required of him under this Agreement in Pinellas County,
                    Florida and the Company shall continue to maintain an office for the Executive
                    at that location similar to the Company’s office prior to the Change of
                    Control Date. 





               	 	c. 	
                    During the remaining Term after the Change of Control Date, the Company will (i)
                    continue to honor the terms of this Agreement, including as to Base Salary and
                    other compensation set forth in Section 3, and (ii) continue employee benefits
                    as set forth in Section 4 at levels in effect on the Change of Control Date (but
                    subject to such reductions as may be required to maintain such plans in
                    compliance with applicable federal law regulating employee benefits). 






     6.











               	 	d. 	
                    If during the remaining Term on or after the Change of Control Date (i) the
                    Executive’s employment is terminated by the Company other than for cause
                    (as defined in Section 5), or (ii) there shall have occurred a material
                    reduction in Executive’s compensation or employment related benefits, or a
                    material change in Executive’s status, working conditions or management
                    responsibilities, or a material change in the business objectives or policies of
                    the Company and the Executive voluntarily terminates employment within sixty
                    days of any such occurrence, or the last in a series of occurrences, then the
                    Executive shall be entitled to receive, subject to the provisions of
                    subparagraphs (e) and (f) below, a lump-sum payment equal to 299% of
                    Executive’s current Base Salary in addition to any other compensation that
                    may be due and owing to the Executive under Section 3 and Section 4. 





               	 	e. 	
                    The amounts payable to the Executive under any other compensation arrangement
                    maintained by the Company which became payable, after payment of the lump-sum
                    provided for in paragraph (d), upon or as a result of the exercise by Executive
                    of rights which are contingent on a Change of Control (and would be considered a
                    “parachute payment” under Internal Revenue Code 280G and regulations
                    thereunder), shall be reduced to the extent necessary so that such amounts, when
                    added to such lump-sum, do not exceed 299% of the Executive’s Base Salary
                    (as computed in accordance with provisions of the Internal Revenue Code of 1986,
                    as amended and any regulations promulgated thereunder) for determining whether
                    the Executive has received an excess parachute payment. Any such excess amount
                    shall be deferred and paid in the next tax year. 





               	 	f. 	
                    In the event of a proposed Change in Control, the Company will allow the
                    Executive to participate in all meetings and related negotiations related. 





     	8.	 	 Assignability. The rights and
                    obligations of the Company under this
                    Agreement shall inure to the benefit of and be binding upon the successors and
                    assigns of the Company, provided that such successor or assign shall acquire all
                    or substantially all of the assets and business of the Company. The
                    Executive’s rights and obligations under this Agreement may not be assigned
                    or alienated and any attempt to do so by the Executive will be void and
                    constitute a material breach hereunder. 





     	9.	 	 Indemnification.
                    The Company and the Executive acknowledge that the
                    Executive’s service as an officer of the Company exposes the Executive to
                    risks of personal liability arising from, and pertaining to, the
                    Executive’s participation in the management of the Company. The Company
                    shall defend, indemnify and hold harmless the Executive from any actual cost,
                    loss, damages, attorneys fees, or liability suffered or incurred by the
                    Executive arising out of, or connected to, the Executive’s service as an
                    officer of the Company or any of its current, former, or future subsidiaries to
                    the fullest extent allowed by law. The Company will not have any obligation to
                    the Executive under this section for any loss suffered if the Executive
                    voluntarily pays, settles, compromises, confesses judgment for, or admits
                    liability with respect to without the approval of the Company. Within thirty
                    days after the Executive receives notice of any claim or action which may give
                    rise to the application of this section, the Executive shall notify the Company
                    in writing of the claim or action. The Executive’s failure to timely notify
                    the Company of the claim or action will relieve the Company from any obligation
                    to the Executive under this section.  






     6.











     	10.	 	
                    Severability. If any provision of this Agreement otherwise is deemed to
                    be invalid or unenforceable or is prohibited by the laws of the state or
                    jurisdiction where it is to be performed, this Agreement shall be considered
                    divisible as to such provision and such provision shall be inoperative in such
                    state or jurisdiction and shall not be part of the consideration moving from
                    either of the parties to the other. The remaining provisions of this Agreement
                    shall be valid and binding and of like effect as though such provision were not
                    included. 







     	11.	 	
                    Prior Employment Agreements. The Executive represents that he has not
                    executed any agreement with any previous Company which may impose restrictions
                    on his employment with the Company. 





     	12.	 	
                    Notice. Notices given pursuant to the provisions of this Agreement shall
                    be sent by certified mail, postage prepaid, or by overnight courier, or
                    telecopier to the following addresses: 





     		 	
                     If to the Company: 





     		 	
                    Medical Technology Systems, Inc.
12920-M Automobile Blvd.
Clearwater, FL  34622





     		 	
                     If to the Executive: 





     		 	
                   Michael P. Conroy
20 Stanton Circle
Oldsmar, FL  34677





        Either
party may, from time to time, designate any other address to which any such notice to it
or him shall be sent. Any such notice shall be deemed to have been delivered upon the
earlier of actual receipt or four days after deposit in the mail, if by certified mail. 




     	13.	 	
                   Miscellaneous. 





     	 	a. 	
          Governing Law. This Agreement shall be governed by and construed and
          enforced in accordance with the laws Florida without giving effect to the
          conflict of laws rules thereof. 





     	 	b. 	
          Waiver/Amendment. The waiver by any party to this Agreement of a breach
          of any provision hereof by any other party shall not be construed as a waiver of
          any subsequent breach by any party. No provision of this Agreement may be
          terminated, amended, supplemented, waived or modified other than by an
          instrument in writing signed by the party against whom the enforcement of the
          termination, amendment, supplement, waiver or modification is sought. 





     	 	c. 	
          Attorney’s Fees. In the event any action is commenced to enforce any
          provision of this agreement, the prevailing party shall be entitled to
          reasonable attorneys fees, costs and expenses. 






     8.











     	 	d. 	
          Entire Agreement. This Agreement, and the attached Exhibits A and B,
          comprise the entire agreement between the Executive and the Company. This
          Agreement supersedes all prior agreements and understandings between the parties
          with respect to the subject matter hereof and may not be modified or terminated
          orally. No modification, termination, or attempted waiver shall be valid unless
          it is in writing and is executed by each of the parties. 





     	 	e. 	
          Counterparts. This Agreement may be executed in counterparts, all of
          which shall constitute one and the same instrument. 






        IN
WITNESS WHEREOF, the Company and the Executive have executed this Agreement as of the day
and year first above written. 




						
	 	WITNESSES:	 	 	EXECUTIVE	 
	 	 	 	 	 	 
	 	
	
	 	
	 
	 	 	 	 	MICHAEL P. CONROY	 
	 	Print Name:	
	 	 	 
	 	 	 	 	 	 
	 	
	
	 	 	 
	 	 	 	 	 	 
	 	Print Name:	
	 	 	 






	 	 	 	 	COMPANY	 
	 	 	 	 	 	 	 
	 	 	 	 	MEDICAL TECHNOLOGY SYSTEMS, INC.,	 
	 	
	
	 	a Delaware corporation	 
	 	 	 	 	 	 	 
	 	Print Name:	
	 	By:	
	 
	 	 	 	 	 	 	 
	 	
	
	 	Print Name:	
	 
	 	 	 	 	 	 	 
	 	Print Name:	
	 	As:	
	 




     9.











EXHIBIT A 




Annual Bonus 



The executive shall receive an annual
bonus determined as follows: 



     	1.	
          Annual base salary times 50% (“Bonus Base”). 





     	2.	
          Bonus Base times  * % of Bonus Base as provide below. 





     	 	•	
          The bonus compensation schedule shall be adjusted for each fiscal year no later
          than the first day of the new fiscal year. 





     	 	•	
          The annual bonus shall be payable no later than June 30th following
          the fiscal year ending March 31, 2003. The Company may at it option, elect to
          make payments prior to June 30 of any year. 





*As provided on attached schedule. 












EXHIBIT A 



Annual Bonus 




 FISCAL YEAR 2004 - BONUS COMPENSATION SCHEUDLE



	 	EBITDA $	 	% OF EBITDA	 	% OF BONUS BASE
	 	
	 	
		

				
	 	 	$7,381,352	 	120% and above	 	140%	 
	 	 	$7,073,796	 	115% - 119.9%	 	130%	 
	 	 	$6,766,240	 	110% - 114.9%	 	120%	 
	 	 	$6,458,683	 	105% - 109.9%	 	110%	 
	Budget EBITDA	 	$6,151,127	 	100% - 104.9%	 	100%	*
	 	 	$6,089,616	 	99% - 99.9%	 	98%	 
	 	 	$6,028,104	 	98%	 	95%	 
	 	 	$5,966,593	 	97%	 	80%	 
	 	 	$5,905,082	 	96%	 	70%	 
	 	 	$5,843,571	 	95%	 	60%	 
	 	 	$5,782,059	 	94%	 	50%	 
	 	 	$5,720,548	 	93%	 	40%	 
	 	 	$5,659,037	 	92%	 	30%	 
	 	 	$5,600,000	 	91%	 	25%	 















EXHIBIT B 



Long-Term Incentive
Bonus 



     	1.	
          Each executive will earn a long-term incentive bonus based upon the average
          return on capital achieved by the company over a three-year time period. 





     	2.	
          Return on capital is the percentage derived by dividing the net income available
          to common shareholders for each fiscal year by the total long-term capital
          invested in the company at the end of each fiscal year. 





     	3.	
          Long-term capital is the sum of (1) stockholders equity; and (2) total long-term
          debt, minus the amount borrowed on the revolving line of credit. 





     	4.	
          The amount of the long-term incentive bonus is determined based upon the
          following formula. 






     	 	
          (Annual Salary x 30%) x Percentage of Bonus Earned 






     	5.	
          Percentage of Bonus Earned is determined based upon the average return on
          capital achieved as follows: 




			
	Average ROC Achieved 	 	Percentage of Bonue Earned 
	
	 	

	16.0%-20.0%     
                        	 	25.0%
	21.0%	 	50.0%
	21.6%	 	55.0%
	22.2%	 	60.0%
	22.8%	 	65.0%
	23.4%	 	70.0%
	24.0%	 	75.0%
	24.6%	 	80.0%
	25.2%	 	85.0%
	25.8%	 	90.0%
	26.4%	 	95.0%
	
	 	

	27.0%	 	100.0% 
	 	 	 
	If 3-Year Average ROC Exceeds Target ROC  
	 	 	 
	27.6%	 	105.0%
	28.2%	  	110.0%
	28.8%	 	115.0%
	29.4%	 	120.0%
	30.0%	 	125.0%
	30.6%	 	130.0%
	31.2%	 	135.0%
	31.8%	 	140.0%
	32.4%	 	145.0%
	33.0%	 	150.0%






     	6.	
          The average ROC is determined at the end of each fiscal year and paid to the
          executive as follows: 






          	 	a. 	
               In the year ending March 31, 2004, one-third (1/3) of the LTIB earned shall be
               paid no later than June 30, 2004; one-third (1/3) no later than June 30, 2005;
               and one-third (1/3) no later than June 30, 2006. 





          	 	b. 	
               In the fiscal year ending March 31, 2005, one-half (1/2) on June 30, 2005 and
               one-half on June 30, 2006. 





          	 	c. 	
               In the fiscal year ending March 31, 2006, on hundred per cent (100%) on June 30,
               2006. 














EXHIBIT C 



One-Time Bonus 



        The
executive shall receive a one-time payment of sixty-five thousand dollars ($65,000) upon
the signing of the Agreement. 













EXHIBIT D 



Common Stock Bonus 



        The
executive shall receive fifty thousand (50,000) shares of unregistered common stock of the
Company on June 30, 2006 provided the executive has remained an employee of the Company up
to and including June 30, 2006.