1
3.
COMPENSATION AND BENEFITS.
3.1.
SALARY. DURING THE EMPLOYMENT PERIOD, THE COMPANY SHALL PAY TO
THE EMPLOYEE, AS COMPENSATION FOR THE PERFORMANCE OF HIS DUTIES AND OBLIGATIONS
UNDER THIS AGREEMENT, A BASE SALARY AT THE RATE OF $275,000 PER ANNUM (THE "BASE
SALARY"), PAYABLE IN ACCORDANCE WITH THE NORMAL PAYROLL PRACTICES OF THE
COMPANY.
THE AMOUNT OF THE BASE SALARY SHALL BE REVIEWED BY THE BOARD EACH YEAR
AND MAY BE INCREASED BUT NOT DECREASED DURING THE EMPLOYMENT PERIOD; PROVIDED,
HOWEVER, THAT, IF THE COMPANY HAD POSITIVE EBITDA FOR ANY CALENDAR YEAR DURING
THE EMPLOYMENT PERIOD, THEN THE BASE SALARY SHALL BE INCREASED BY A MINIMUM OF
SIX PERCENT (6%) FOR THE NEXT CALENDAR YEAR.
3.2.
ANNUAL BONUS. DURING THE EMPLOYMENT PERIOD, THE EMPLOYEE SHALL
BE PAID AN ANNUAL BONUS (THE "ANNUAL BONUS") IN ACCORDANCE WITH THE FOLLOWING
FORMULA:
(I)
FIVE PERCENT (5%) OF THE COMPANY'S EBITDA OF $1,000,000;
(II)
FOUR PERCENT (4%) OF THE COMPANY'S EBITDA IN EXCESS OF $1,000,000
BUT NOT TO EXCEED $2,000,000 OF EBITDA; AND
(III)
THREE PERCENT (3%) OF THE COMPANY'S EBITDA IN EXCESS OF $2,000,000
BUT NOT TO EXCEED $3,000,000 OF EBITDA.
THE CALCULATION OF THE COMPANY'S EBITDA SHALL BE DETERMINED BY THE INDEPENDENT
PUBLIC ACCOUNTANTS REGULARLY EMPLOYED BY THE COMPANY.
THE ANNUAL BONUS IS
EXPRESSLY CONDITIONED UPON EMPLOYEE'S ACTIVE STATUS AS CEO ON THE DATE SUCH
ANNUAL BONUS IS PAYABLE, UNLESS SECTION 6.1 APPLIES.
THE ANNUAL BONUS SHALL BE
PAID TO THE EMPLOYEE NO LATER THAN MARCH 15TH OF THE CALENDAR YEAR FOLLOWING THE
CALENDAR YEAR TO WHICH THE ANNUAL BONUS RELATES.
3.3.
BENEFITS.
DURING THE EMPLOYMENT PERIOD, THE EMPLOYEE SHALL BE
ENTITLED TO PARTICIPATE IN ALL OF THE EMPLOYEE BENEFIT PLANS OF THE COMPANY IN
EFFECT DURING THE EMPLOYMENT PERIOD WHICH ARE GENERALLY AVAILABLE TO EMPLOYEES
OF THE COMPANY, SUBJECT TO AND ON A BASIS CONSISTENT WITH, THE TERMS, CONDITIONS
AND OVERALL ADMINISTRATION OF SUCH PLANS.
3.4.
VACATION.
DURING THE EMPLOYMENT PERIOD, THE EXECUTIVE SHALL BE
ENTITLED TO TWENTY (20) DAYS OF PAID VACATION EACH YEAR, TO BE GRANTED IN
ACCORDANCE WITH THE COMPANY'S VACATION POLICY IN EFFECT FROM TIME TO TIME.
3.5.
KEY PERSON INSURANCE.
THE COMPANY, IN ITS DISCRETION, MAY
OBTAIN AND MAINTAIN A "KEY MAN" INSURANCE POLICY (THE "KEY MAN POLICY") ON THE
EMPLOYEE WITH A DEATH BENEFIT PAYABLE UPON THE DEATH OF THE EMPLOYEE DURING THE
EMPLOYMENT PERIOD TO THE COMPANY.
IF THE COMPANY ELECTS TO OBTAIN AND MAINTAIN
SUCH KEY MAN POLICY, THE EMPLOYEE SHALL COOPERATE IN ALL REASONABLE RESPECTS IN
ORDER TO EFFECTUATE SUCH KEY MAN POLICY AND SHALL PROVIDE SUCH CONSENTS AS MAY
BE NECESSARY TO COMPLY WITH SECTION 101(J) OF THE INTERNAL REVENUE CODE OF 1986,
AS AMENDED (THE "CODE").
UPON TERMINATION OF THE EMPLOYEE'S EMPLOYMENT WITH THE
COMPANY FOR ANY REASON WHATSOEVER OTHER THAN DEATH, THE COMPANY WILL TRANSFER
OWNERSHIP OF ANY SUCH KEY MAN POLICY TO THE EMPLOYEE OR HIS DESIGNEE, TO THE
EXTENT PERMISSIBLE BY LAW, WHO WILL ACCEPT FULL RESPONSIBILITY FOR THE PAYMENT
OF ANY PREMIUMS DUE FOLLOWING