WITH THE SAME LEGAL FORCE AND EFFECT AS IF EXECUTED BY EXECUTIVE.
3
(F)
EXCEPTION TO ASSIGNMENTS.
EXECUTIVE UNDERSTANDS THAT THE
PROVISIONS OF THIS AGREEMENT REQUIRING ASSIGNMENT OF INVENTIONS TO THE COMPANY
DO NOT APPLY TO ANY INVENTION WHICH QUALIFIES FULLY UNDER THE PROVISIONS OF
CALIFORNIA LABOR CODE SECTION 2870 (ATTACHED HERETO AS EXHIBIT A).
EXECUTIVE
WILL ADVISE THE COMPANY PROMPTLY IN WRITING OF ANY INVENTIONS THAT EXECUTIVE
BELIEVES MEET THE CRITERIA IN CALIFORNIA LABOR CODE SECTION 2870.
5.
COMPENSATION AND FRINGE BENEFITS.
(A)
BASE SALARY.
FOR ALL SERVICES RENDERED BY THE EXECUTIVE PURSUANT
TO THIS AGREEMENT, THE COMPANY SHALL PAY EXECUTIVE A BASE SALARY (THE "BASE
SALARY") AT THE ANNUAL RATE OF NOT LESS THAN FIVE HUNDRED AND SIXTY FIVE
THOUSAND DOLLARS ($565,000).
THE BASE SALARY SHALL BE PAID IN PERIODIC
INSTALLMENTS IN ACCORDANCE WITH THE COMPANY'S REGULAR PAYROLL PRACTICES.
EXECUTIVE'S ANNUAL SALARY SHALL BE ADJUSTED ON THE ONE-YEAR ANNIVERSARY OF THE
DATE OF THIS AGREEMENT TO COMPENSATE FOR CHANGES IN THE COST OF LIVING.
THE
AMOUNT OF EACH ANNUAL COST OF LIVING INCREASE SHALL BE TWICE THE RATE DETERMINED
FOR SUCH ANNUAL PERIOD BY THE "CONSUMER PRICE INDEX FOR URBAN WAGE EARNERS AND
CLERICAL WORKERS (ALL ITEMS) PUBLISHED BY THE BUREAU OF LABOR STATISTICS, U.S.
DEPARTMENT OF LABOR (1967 EQUALS 100)."
(B)
BONUSES.
THE EXECUTIVE SHALL BE ENTITLED TO A GUARANTEED BONUS
PAYMENT OF TWO HUNDRED AND FIFTY THOUSAND DOLLARS ($250,000) ON DECEMBER 31,
2002, PROVIDED THAT HE IS AN EMPLOYEE OF THE COMPANY ON SUCH DATE (THE
"GUARANTEED BONUS").
EXECUTIVE SHALL ALSO BE ELIGIBLE TO RECEIVE A
PERFORMANCE-BASED BONUS OF TWO HUNDRED AND FIFTY THOUSAND DOLLARS ($250,000)
BASED UPON CERTAIN CRITERIA TO BE SPECIFIED BY THE AS THE COMPENSATION COMMITTEE
OF THE BOARD (THE "COMPENSATION COMMITTEE") INCLUDING REVENUE AND PROFITABILITY
TARGETS AND/OR OTHER ORGANIZATIONAL AND STRATEGIC MILESTONES (THE "PERFORMANCE
BONUS"; AND TOGETHER WITH THE GUARANTEED BONUS, THE "BONUSES").
EXECUTIVE SHALL
ALSO BE ELIGIBLE TO RECEIVE SUCH ADDITIONAL SALARY OR OTHER INCENTIVE
COMPENSATIONS AS THE COMPENSATION COMMITTEE MAY, IN ITS SOLE DISCRETION,
DETERMINE FROM TIME TO TIME.
ANY BONUSES OR OTHER COMPENSATION PAYABLE
HEREUNDER SHALL BE PAID IN ACCORDANCE WITH THE COMPANY'S NORMAL PAYROLL
PRACTICES AND POLICIES.
(C)
OTHER BENEFITS.
EXECUTIVE SHALL BE ENTITLED TO PARTICIPATE IN
SUCH GROUP LIFE, PENSION, DISABILITY, ACCIDENT, HOSPITAL AND MEDICAL INSURANCE
PLANS, AND SUCH OTHER PLAN OR PLANS WHICH MAY BE INSTITUTED BY THE COMPANY FOR
THE BENEFIT OF ITS EXECUTIVE EMPLOYEES GENERALLY, UPON SUCH TERMS AS MAY BE
THEREIN PROVIDED OF GENERAL APPLICATION TO ALL EXECUTIVE EMPLOYEES OF THE
COMPANY AND SUCH OTHER BENEFITS AS ARE MUTUALLY DEEMED APPROPRIATE TO THE
POSITION HELD BY EXECUTIVE AND TO THE DISCHARGE OF EXECUTIVE'S DUTIES.
EXECUTIVE SHALL BE ENTITLED TO NOT LESS THAN TWENTY (20) BUSINESS DAYS' VACATION
PER YEAR, WITH REMUNERATION, WHICH SHALL BE COORDINATED WITH THE VACATION
PERIODS OF OTHER OFFICERS OF THE COMPANY IN A MANNER THAT WILL MINIMIZE
DISRUPTION OF THE COMPANY'S MANAGEMENT EFFORTS.
(D)
LIFE INSURANCE.
DURING THE TERM OF THE AGREEMENT THE COMPANY WILL
CONTINUE TO PAY