CONTINUE TO PAY THE EXECUTIVE A BASE SALARY AT THE
ANNUALIZED RATE OF $545,000 ("BASE SALARY").
THE BASE SALARY SHALL BE SUBJECT
TO ANNUAL REVIEW BY THE BOARD BUT SHALL NOT BE REDUCED BELOW $545,000 PER
ANNUM.
SUCH SALARY SHALL BE PAYABLE TO EXECUTIVE IN BI-WEEKLY INSTALLMENTS AND
IN ACCORDANCE WITH THE COMPANY'S NORMAL PAYROLL PROCEDURES.
3.2
BONUS.
THE EXECUTIVE SHALL BE ELIGIBLE FOR
A PERFORMANCE-BASED ANNUAL BONUS FOR EACH FISCAL YEAR OF THE TERM (THE "ANNUAL
BONUS"). THE ANNUAL BONUS SHALL BE BASED
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UPON ANNUAL QUANTITATIVE AND QUALITATIVE PERFORMANCE TARGETS AS ESTABLISHED BY
THE BOARD IN ITS SOLE DISCRETION IN ACCORDANCE WITH THE COMPANY'S BONUS PLAN;
PROVIDED, THAT THE EXECUTIVE'S ANNUAL BONUS LEVEL TARGET SHALL BE SET AT FIFTY
PERCENT (50%) OR MORE OF BASE SALARY.
THE ANNUAL BONUS IS NOT EARNED UNTIL THE
CLOSE OF BUSINESS ON THE LAST BUSINESS DAY OF THE COMPANY'S FISCAL YEAR.
ANY
ANNUAL BONUS PAYABLE HEREUNDER SHALL BE PAYABLE, IF AT ALL, AFTER THE DATE OF
THE DELIVERY OF THE AUDITED FINANCIAL STATEMENTS FOR THE APPLICABLE FISCAL YEAR.
3.3
BENEFITS.
THE EXECUTIVE SHALL BE ENTITLED
TO PARTICIPATE IN ALL BONUS AND BENEFIT PROGRAMS THAT THE COMPANY ESTABLISHES
AND MAKES AVAILABLE TO ITS EMPLOYEES, TO THE EXTENT THAT THE EXECUTIVE IS
ELIGIBLE UNDER (AND SUBJECT TO THE PROVISIONS OF) THE PLAN DOCUMENTS GOVERNING
THOSE PROGRAMS.
THE EXECUTIVE SHALL BE ENTITLED TO NO LESS THAN FOUR WEEKS PAID
VACATION PER YEAR, SUBJECT TO THE OTHER TERMS OF THE COMPANY'S STANDARD VACATION
POLICY (SCHEDULE A).
3.4
REIMBURSEMENT OF EXPENSES.
THE COMPANY
SHALL REIMBURSE THE EXECUTIVE FOR ALL REASONABLE TRAVEL (WHICH SHALL BE DEEMED
TO INCLUDE FIRST CLASS AIRFARE), ENTERTAINMENT AND OTHER EXPENSES INCURRED OR
PAID BY THE EXECUTIVE IN CONNECTION WITH, OR RELATED TO, THE PERFORMANCE OF HIS
DUTIES, RESPONSIBILITIES OR SERVICES UNDER THIS AGREEMENT, UPON PRESENTATION BY
THE EXECUTIVE OF DOCUMENTATION, EXPENSE STATEMENTS, VOUCHERS AND/OR SUCH OTHER
SUPPORTING INFORMATION AS THE COMPANY MAY REQUEST.
3.5
AUTOMOBILE.
THE COMPANY AGREES TO PROVIDE
THE EXECUTIVE WITH AN AUTOMOBILE ALLOWANCE OR A LEASED AUTOMOBILE WITH A RETAIL
VALUE OF UP TO $60,000, WHICH PAYMENTS SHALL BE MADE ON A FULLY TAX GROSSED-UP
BASIS.
IN ADDITION, THE COMPANY AGREES TO PAY ALL INSURANCE, MAINTENANCE, FUEL
AND OTHER CUSTOMARY COSTS ASSOCIATED WITH OPERATING THE AUTOMOBILE.
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3.6
WITHHOLDING.
ALL SALARY, BONUS AND OTHER
COMPENSATION PAYABLE TO THE EXECUTIVE SHALL BE SUBJECT TO APPLICABLE WITHHOLDING
TAXES.
4.
EMPLOYMENT TERMINATION.
THE EMPLOYMENT
OF THE EXECUTIVE UNDER THIS AGREEMENT SHALL TERMINATE UPON THE OCCURRENCE OF ANY
OF THE FOLLOWING:
4.1
ON THE EXPIRATION DATE OF THE EMPLOYMENT
PERIOD.
4.2
AT THE ELECTION OF THE COMPANY, FOR CAUSE
(AS DEFINED BELOW), IMMEDIATELY UPON WRITTEN NOTICE BY THE COMPANY TO THE
EXECUTIVE, WHICH NOTICE SHALL IDENTIFY THE CAUSE UPON WHICH TERMINATION IS
BASED.
FOR THE PURPOSES OF THIS SECTION 4.2, CAUSE FOR TERMINATION SHALL MEAN:
(A) THE EXECUTIVE'S WILLFUL AND CONTINUED FAILURE TO SUBSTANTIALLY PERFORM HIS
REASONABLE ASSIGNED DUTIES (OTHER THAN ANY SUCH FAILURE RESULTING FROM
INCAPACITY DUE TO PHYSICAL OR MENTAL