SAID CALCULATION ARE TAKEN FROM THE COMPANY'S AUDITED
FINANCIAL STATEMENTS FOR 2008.
EBITDA Percentage
Target Amount
Less than 10%
$60,000
At least 10% but less than 11%
40% of base salary
At least 11% but less than 12%
50% of base salary
At least 12% but less than 13%
60% of base salary
At least 13% but less than 14%
70% of base salary
At least 14% but less than 15%
80% of base salary
At least 15% but less than 16%
90% of base salary
16% or more
100% of base salary
THE PERFORMANCE BONUS SHALL BE DETERMINED BY THE BOARD, AND MAY VARY FROM THE
"TARGET AMOUNT" SET FORTH ABOVE, BASED ON EXECUTIVE'S SUCCESS AT ACHIEVING OTHER
PERFORMANCE OBJECTIVES AS MAY BE ESTABLISHED BY THE BOARD AND EXECUTIVE FOR THE
2008 CALENDAR YEAR.
IT IS UNDERSTOOD THAT EXECUTIVE AND THE BOARD WILL SEEK TO
ESTABLISH SUCH OTHER PERFORMANCE OBJECTIVES WITHIN THE FIRST SIXTY (60) DAYS OF
THE CALENDAR YEAR.
THE DETERMINATION OF WHETHER AND TO WHAT EXTENT THE AGREED
PERFORMANCE OBJECTIVES FOR 2008 HAVE BEEN ACHIEVED AND THE ACTUAL AMOUNT OF THE
PERFORMANCE BONUS TO BE PAID SHALL BE DETERMINED BY THE BOARD IN IT SOLE
DISCRETION.
THE BOARD SHALL CONSIDER EXECUTIVE FOR A DISCRETIONARY ADVANCE ON
THE 2008 PERFORMANCE BONUS, PAYABLE IN JUNE 2008 OF UP TO $20,000 AGAINST HIS
POTENTIAL PERFORMANCE BONUS FOR 2008.
THE 2008 PERFORMANCE BONUS SHALL BE PAID
WITHIN THIRTY (30) DAYS AFTER RELEASE OF THE COMPANY'S AUDITED FINANCIAL
STATEMENTS FOR CALENDAR YEAR 2008.
THE PAYMENT OF ANY PERFORMANCE BONUS SHALL
BE CONDITIONED UPON EXECUTIVE REMAINING IN THE COMPANY'S EMPLOY THROUGH THE DATE
ON WHICH THE PERFORMANCE BONUS IS PAID.
(C)
IT IS INTENDED THAT THE COMPENSATION COMMITTEE OF THE BOARD AND
EXECUTIVE SHALL WORK TOGETHER TO CREATE AND IMPLEMENT PERFORMANCE BONUS
STANDARDS FOR FUTURE YEARS OF EXECUTIVE'S EMPLOYMENT HEREUNDER.
(D)
THE COMPANY SHALL GRANT EXECUTIVE AN OPTION (THE "OPTION") TO
PURCHASE 300,000 SHARES OF THE COMPANY'S COMMON STOCK.
THE GRANT SHALL BE
EFFECTIVE, AND THE EXERCISE PRICE OF THE OPTION SHALL BE ESTABLISHED AS OF THE
CLOSE OF TRADING, ON THE EXECUTIVE'S FIRST DAY OF EMPLOYMENT HEREUNDER (THE
"GRANT DATE").
IF THE TRADING MARKETS FOR THE COMPANY'S COMMON STOCK ARE NOT IN
SESSION ON THE GRANT DATE, THE EXERCISE PRICE SHALL BE ESTABLISHED AS OF THE
CLOSE OF TRADING ON THE NEXT TRADING DAY THEREAFTER.
THE OPTION SHALL BE
GRANTED PURSUANT TO, AND SUBJECT TO ALL OF THE TERMS AND CONDITIONS OF, THE MFIC
CORPORATION 2006 STOCK PLAN (THE "PLAN").
2
IF A CHANGE OF CONTROL (AS DEFINED BELOW) OCCURS DURING THE EMPLOYMENT PERIOD,
THE OPTION SHALL IMMEDIATELY BECOME VESTED AS TO ALL 300,000 SHARES.
NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, ALL VESTING SHALL CEASE
IMMEDIATELY UPON THE END OF THE EMPLOYMENT PERIOD.
(E)
EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, EXECUTIVE SHALL BE
ELIGIBLE TO PARTICIPATE IN THE COMPANY'S EMPLOYEE BENEFITS AS THEY MAY EXIST
FROM TIME TO TIME INCLUDING ITS HEALTH INSURANCE, LIFE INSURANCE, 401K AND STOCK
PURCHASE PLANS