OR INDIRECT BENEFICIAL OWNERSHIP OF AT LEAST FIFTY (50%) PERCENT INTEREST
IN THE INCOME OF SUCH CORPORATION OR ENTITY, OR THE POWER TO ELECT AT LEAST
FIFTY (50%) PERCENT OF THE DIRECTORS OF SUCH CORPORATION OR ENTITY, OR SUCH
OTHER RELATIONSHIP WHICH IN FACT CONSTITUTES ACTUAL CONTROL.
4.
TERM OF AGREEMENT. THE INITIAL TERM OF HERBES' EMPLOYMENT UNDER
THIS AGREEMENT SHALL COMMENCE ON THE EFFECTIVE DATE AND END ON DECEMBER 31,
2010; PROVIDED THAT UNLESS NOTICE OF TERMINATION HAS BEEN PROVIDED IN ACCORDANCE
WITH PARAGRAPH 7(A) AT LEAST SIXTY (60) DAYS PRIOR TO THE EXPIRATION OF THE
INITIAL TERM OR ANY ADDITIONAL TWELVE (12) MONTH TERM (AS PROVIDED BELOW), OR
UNLESS THIS AGREEMENT IS OTHERWISE TERMINATED IN ACCORDANCE WITH THE TERMS OF
THIS AGREEMENT, THIS AGREEMENT SHALL AUTOMATICALLY BE EXTENDED FOR ADDITIONAL
TWELVE (12) MONTH PERIODS (THE "TERM").
5.
BASE COMPENSATION. DURING THE TERM, IN CONSIDERATION FOR THE
SERVICES AS EXECUTIVE VICE PRESIDENT OF OPERATIONS REQUIRED UNDER THIS
AGREEMENT, THE CORPORATION AGREES TO PAY HERBES AN ANNUAL BASE SALARY OF TWO
HUNDRED FIFTY THOUSAND DOLLARS ($250,000), OR SUCH HIGHER FIGURE AS MAY BE
DETERMINED AT AN ANNUAL REVIEW OF HIS PERFORMANCE AND COMPENSATION BY THE
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS.
THE ANNUAL REVIEW OF HERBES'
BASE SALARY SHALL BE CONDUCTED BY THE COMPENSATION COMMITTEE OF THE BOARD OF
DIRECTORS WITHIN A REASONABLE TIME AFTER THE END OF EACH FISCAL YEAR OF THE
CORPORATION AND ANY INCREASE SHALL BE RETROACTIVE TO JANUARY 1ST OF THE THEN
CURRENT AGREEMENT YEAR.
THE AMOUNT OF ANNUAL BASE SALARY SHALL BE PAYABLE IN
EQUAL INSTALLMENTS CONSISTENT WITH THE CORPORATION'S PAYROLL PAYMENT SCHEDULE
FOR OTHER EXECUTIVE EMPLOYEES OF THE CORPORATION. HERBES MAY CHOOSE TO SELECT A
PORTION OF HIS COMPENSATION TO BE PAID AS DEFERRED INCOME THROUGH QUALIFIED
PLANS OR OTHER PROGRAMS CONSISTENT WITH THE POLICY OF THE CORPORATION AND
SUBJECT TO ANY AND ALL APPLICABLE FEDERAL, STATE OR LOCAL LAWS, RULES OR
REGULATIONS.
6.
OTHER COMPENSATION AND BENEFITS. DURING THE TERM, IN ADDITION TO
HIS BASE SALARY, THE CORPORATION SHALL PROVIDE HERBES THE FOLLOWING:
(A)
INCENTIVE COMPENSATION. HERBES SHALL PARTICIPATE IN THE COMPANY'S
ANNUAL BONUS PLAN (THE "ANNUAL BONUS PLAN"), AS SHALL BE ADOPTED AND/OR MODIFIED
FROM TIME TO TIME BY THE BOARD OF DIRECTORS OR THE COMPENSATION COMMITTEE.
ANNUAL BONUS PLAN AWARDS ARE CALCULATED AS A PERCENTAGE OF HERBES' BASE SALARY
ON THE LAST DAY OF THE ANNUAL BONUS PLAN PERFORMANCE PERIOD.
THE PERCENTAGES OF
BASE SALARY THAT HERBES IS ELIGIBLE TO RECEIVE BASED ON PERFORMANCE RANGE FROM
0% AT "THRESHOLD" TO 35% AT "TARGET" AND TO 70% AT "MAXIMUM," AS SUCH TERMS ARE
DEFINED IN THE ANNUAL BONUS PLAN.
NOTWITHSTANDING THE FOREGOING, FOR THE
PERFORMANCE PERIOD IN WHICH THE EFFECTIVE DATE OCCURS, HERBES' BONUS UNDER THE
ANNUAL BONUS PLAN SHALL BE DETERMINED ON A PRO RATA BASIS APPLYING THE
PERCENTAGES SET FORTH ABOVE TO HIS BASE SALARY MULTIPLIED BY A FRACTION, THE
NUMERATOR OF WHICH IS THE NUMBER OF DAYS TRANSPIRED IN THE PERFORMANCE PERIOD
BEGINNING ON THE EFFECTIVE DATE AND