Document:

Second Amendment to 2002 Stock Option Plan

 Exhibit 10.3 
 SECOND AMENDMENT TO 
 COMPUTER PROGRAMS AND SYSTEMS, INC. 
 2002 STOCK OPTION PLAN 
 This SECOND
AMENDMENT TO COMPUTER PROGRAMS AND SYSTEMS, INC. 2002 STOCK OPTION PLAN is made and adopted by Computer Programs and Systems, Inc., a Delaware corporation (the “Company”), effective as of January 1, 2009. Capitalized terms used
but not otherwise defined herein shall have the respective meanings ascribed to such terms in the Plan (as defined below). 
 WHEREAS, effective as of May 20, 2002, the Company adopted the Computer Programs and Systems, Inc. 2002 Stock Option Plan (the “Plan”); 
 WHEREAS, effective May 12, 2005, the Company adopted the First Amendment to the Plan; 
 WHEREAS, the Company’s Board of Directors (the “Board”) desires to further amend the Plan in order to ensure that the
options issued thereunder are not considered “nonqualified deferred compensation” subject to Internal Revenue Code Section 409A; 
 WHEREAS, the Board reserved the right to amend the Plan without participants’ consent pursuant to Section 15.1 of the Plan so long as the amendment does not impair the rights of any participant or the value of any
outstanding options; 
 WHEREAS, the Board further reserved the right to amend the Plan without shareholder approval pursuant
to Section 15.1 of the Plan so long as such approval is not necessary to comply with any tax or regulatory requirement; and 
 WHEREAS, the Board has determined that such amendment does not impair the rights of any participant or the value of any outstanding options nor does such amendment require shareholder approval. 
 NOW THEREFORE, in consideration of the foregoing, the Plan hereby is amended as follows: 
 1. The definition of “Fair Market Value” in Article 2 of the Plan is hereby amended and restated in its entirety to read as follows:

 “‘Fair Market Value’ means the closing price on the date of determination for a share of Stock, or if there were no sales on
such date, the most recent prior date on which there were sales, as reported by The Wall Street Journal or, if The Wall Street Journal does not report such closing price, such closing price as reported by a newspaper or trade journal
selected by the Board, as determined in a manner consistent with Internal Revenue Code Section 409A and the guidance and regulations promulgated thereunder.” 
  

 -1- 

 2. Section 10.2 of the Plan is hereby amended and restated in its entirety to read as follows:

 “Section 10.2 Restrictions. The Board may impose such restrictions on any shares of Stock acquired pursuant to Options under
this Plan as it may deem advisable, including, without limitation, restrictions under applicable federal securities law, restrictions imposed by any stock exchange upon which such shares of Stock may be listed, restrictions under any blue sky or
state securities laws applicable to such shares, and restrictions under Internal Revenue Code Section 409A.” 
 3. Article 13 of
the Plan is hereby amended by inserting the following at the end of the last sentence therein: 
 “or with respect to Options, no such
adjustment shall be authorized to the extent that such adjustment would cause an Option to be subject to Internal Revenue Code Section 409A.” 
 4. Article 14 of the Plan is hereby amended by inserting the following at the end of the last sentence therein: 
 “or would cause Options to be subject to Internal Revenue Code Section 409A.” 
 5. Section 15.4 of the Plan is
hereby amended by inserting the following at the end of the last sentence therein: 
 “provided that such alternative Option shall not be
subject to Internal Revenue Code Section 409A.” 
 6. Article 15 of the Plan is hereby amended by inserting the following
Section 15.5 as the final Section therein: 
 “15.5 Amendments and Adjustments For Compliance With Internal Revenue Code
Section 409A. Notwithstanding any provision in the Plan or an Option Agreement to the contrary, the Board (i) may not amend this Plan, any Option Agreement, or any Option or make adjustments to any Option to the extent that such
amendment or adjustment would cause an Option to be subject to Internal Revenue Code Section 409A, but (ii) may amend this Plan, any Option Agreement, or any Option to cause this Plan, any Option Agreement, or any Option to be exempt from
Internal Revenue Code Section 409A, and no consent of any Employee shall be required for such amendment.” 
  

 -2- 

 7. Article 16 is hereby amended by inserting the following Sections 16.13 and 16.14 as the final Sections
therein: 
 “16.13 Internal Revenue Code Section 409A and Non-ISOs. With respect to all Non-ISOs granted hereunder,
(i) the Option Price per share of Stock purchased pursuant to the Non-ISO shall never be less than the Fair Market Value of one share of Stock on the date of the grant of the Non-ISO and the number of shares of Stock subject to such Non-ISO
shall be fixed on the date of the grant; (ii) the transfer or exercise of the Non-ISO shall be subject to taxation pursuant to Internal Revenue Code Section 83 and Treas. Reg. Section 1.83-7; and (iii) the Non-ISO shall not
include any feature for the deferral of compensation, other than the deferral of recognition of income until the later of (a) the exercise or disposition of the Non-ISO under Treas. Reg. Section 1.83-7, or (b) the time the Stock,
acquired pursuant to the exercise of the Non-ISO, first becomes substantially vested (as defined in Treas. Reg. Section 1.83-3(b)). 
 16.14 Internal Revenue Code Section 409A. The Options granted hereunder are not intended to be considered ‘nonqualified deferred compensation’ within the meaning of Internal Revenue Code Section 409A.
Notwithstanding any other provision in this Plan to the contrary, all of the terms and conditions of any Options granted under this Plan shall be designed to satisfy the exemption for stock options set forth in the guidance and regulations
promulgated under Internal Revenue Code Section 409A. To the extent that any Option granted hereunder is contrary to the provisions of this Section 16.14, the Option shall be deemed to be amended to comply with this Section 16.14 and
the terms of the Plan.” 
 8. This Second Amendment to the Plan shall be and is hereby incorporated in and forms a part of the Plan.

 9. This Second Amendment to the Plan shall be effective as of January 1, 2009. 
 10. Except as set forth herein, the Plan remains in full force and effect. 
  

 -3- 

 IN WITNESS WHEREOF, the Company has caused this Second Amendment to the Computer Programs
and Systems, Inc. 2002 Stock Option Plan to be signed by David A. Dye, its Chairman, and attested to by Darrell G. West, its Secretary, as of December 22, 2008. 
  

					
		 	 /s/ David A. Dye

		 	 David A. Dye
 Chairman
	 	

  

			
	 Attest:
 /s/ Darrell G. West
	 	

					
	 Darrell G. West
 Secretary
	 		 	

  

 -4-Summary of Compensation Arrangements with Named Executive Officers and Directors

 Exhibit 10.16 
 SUMMARY OF COMPENSATION ARRANGEMENTS 
 WITH NAMED EXECUTIVE OFFICERS AND DIRECTORS 

(EFFECTIVE MARCH 1, 2009) 
 Named Executive
Officers 
 The following summarizes the current cash compensation and benefits received by the Company’s Chief Executive Officer,
its Chief Financial Officer and its next three most highly compensated executive officers for the fiscal year ended December 31, 2008 (the “Named Executive Officers”). The following is intended to be a summary of existing oral, at
will arrangements, and in no way is intended to provide any additional rights to any of the Named Executive Officers. 
 None of the
Company’s executive officers has a written employment agreement with the Company. The executive officers of the Company serve at the discretion of the Board of Directors. The Compensation Committee of the Board (the “Committee”)
reviews and recommends to the Board the compensation that is paid to the Company’s executive officers, including the salaries of the Named Executive Officers. The salaries of the Named Executive Officers as of March 1, 2009 are as follows:

  

					
	 Name and Position
	  	Salary	 
	 J. Boyd Douglas
	  	$	500,000	 
	 President, CEO and Director
	  			
		
	 Darrell G. West
	  	$	300,000	 
	 Vice President – Finance and CFO
	  			
		
	 Michael S. Jones
	  	$	400,000	 
	 Executive Vice President and COO
	  			
		
	 Thomas W. Peterson
	  	$	325,000	 
	 Senior Vice President – Clinical Informatics
	  			
		
	 Victor S. Schneider
	  	$	250,000	(1)
	 Senior Vice President – Corporate and Business Development
	  			

  

	 (1)
	 In addition to this base salary, Mr. Schneider is eligible
to receive sales commissions. Such commissions are included each year as part of this individuals’ salary for purposes of determining their status as a Named Executive Officer. 

 The Named Executive Officers are eligible to receive discretionary bonuses. The Named Executive Officers are also eligible to participate in the
Company’s the 2002 Stock Option Plan and the 2005 Restricted Stock Plan, as well as the Company’s regular benefit plans and programs. All executive benefit plans and forms of agreements are filed as exhibits to the Company’s Exchange
Act filings. Information regarding these plans and agreements, as well as compensation earned by the Named Executive Officers during fiscal 2008, will be included in the Company’s 2009 Proxy Statement. 
 Directors 
 Current director compensation arrangements
provide that non-employee directors, other than members of the Audit Committee, will receive an annual retainer of $10,000. Each director who is a member of the Audit Committee receives an annual retainer of $15,000. Each non-employee director also
receives an attendance fee of $2,000 for each regular quarterly meeting of the Board of Directors. Directors are also reimbursed for their expenses incurred in attending any meeting of directors.Amendment to Commercial Loan Agreement and Loan Documents

 Exhibit 10.1 
 AMENDMENT 
 TO 
 COMMERCIAL LOAN AGREEMENT AND LOAN DOCUMENTS 
 THIS AMENDMENT TO COMMERCIAL LOAN AGREEMENT AND LOAN
DOCUMENTS (this “Amendment”), made effective as of March 5, 2009 (the “Effective Date”), is by and among RBS CITIZENS NATIONAL ASSOCIATION, a national banking association and successor by merger to Citizens Bank New
Hampshire with a place of business at 875 Elm Street, Manchester, New Hampshire 03101 (the “Bank”); MICRONETICS, INC., a Delaware corporation with an executive office at 26 Hampshire Drive, Hudson, New Hampshire 03051 (the
“Borrower”); MICROWAVE & VIDEO SYSTEMS, INC., a Connecticut corporation with an executive office at 160B Shelton Road, Monroe, Connecticut 06468, MICROWAVE CONCEPTS, INC., and STEALTH MICROWAVE, INC., each a Delaware corporation,
and all with an executive office at 26 Hampshire Drive, Hudson, New Hampshire 03051; and MICA MICROWAVE CORPORATION, a Delaware corporation with an executive office at 1096 Mellon Avenue, Manteca, California 95337 and formerly known as “Del
Merger Subsidiary, Inc.” (individually, a “Guarantor”, and collectively, the “Guarantors”). 
 R E
C I T A L S: 
 WHEREAS, the Bank has extended to the Borrower certain credit facilities consisting
of a revolving line of credit loan in the principal amount of up to Five Million Dollars ($5,000,000.00) (the “Revolving Line of Credit Loan”), and a term loan in the original principal amount of Six Million Five Hundred Thousand Dollars
($6,500,000.00) (the “Term Loan”), all pursuant to a certain Commercial Loan Agreement dated March 30, 2007 by and among the Bank, the Borrower and the Guarantors, as amended to date (the “Loan Agreement”) and the Loan
Documents as defined therein; 
 WHEREAS, the Borrower is in the process of charging off approximately $9,300,000.00 in goodwill and
intangible assets which will continue through the Fiscal Quarter ending December 31, 2009 (the “Intangible Charge Offs”); 
 WHEREAS, the Borrower has requested, and the Bank has agreed, to expressly exclude the amounts of the Intangible Charge Off in the calculation of Net Income and EBITDA for the Fiscal Quarters ending December 31, 2008 through September,
2009 and the Fiscal Years ending March 30, 2009 and March 30, 2010, all pursuant to the terms of this Amendment; 
 WHEREAS, the
Bank, pursuant to a letter to the Borrower dated November 5, 2008 (the “Consent Letter”), consented to a common stock repurchase plan whereby the Borrower is able to repurchase by May 5, 2009 up to 500,000 shares of the
Borrower’s common stock at a price per share up to $4.00 for a maximum aggregate purchase price of $2,000,000.00 (the “Common Stock Repurchase Plan”); 
 WHEREAS, as of the Effective Date, the Borrower has repurchased shares of its common stock for total consideration of approximately $1,250,000.00; and 

 WHEREAS, the Borrower has requested, and the Bank has agreed, to amend the Bank’s consent for the
Common Stock Repurchase Plan so that the 500,000 share limitation is no longer required, all in accordance with the terms of this Amendment. Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Loan
Agreement. 
 NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants, agreements and promises contained herein,
and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: 
  

	 	1.	Amendments to Loan Agreement. 

 (a) The second
sentence of Section III.A.2 of the Loan Agreement shall be, and hereby is, deleted in its entirety and replaced with the following new second sentence: 
 “The Applicable Margin will be adjusted (up or down) on a quarterly basis as determined by Borrower’s Total Funded Debt to EBITDA ratio. Adjustments in the Applicable Margin will be determined by reference
to the following grid: 
  

				
	 If Total Funded Debt to EBITDA Ratio is:
	  	Then
Applicable
Margin is:	 
	 Greater than or equal to 1.75
	  	2.50	%
	 Greater than 1.0 but less than 1.75
	  	1.80	%
	 Less than or equal to 1.0
	  	1.50	%

 ” 
 (b) The definition of “EBITDA” in Schedule A of the Loan Agreement is hereby deleted in its entirety and replaced with the following new definition: 
 ““EBITDA” shall mean an amount equal to (a) consolidated Net Income of the Borrower and Guarantors for the twelve
(12) month period ending on the date of determination, plus (b) the sum of (i) income taxes, (ii) Interest Expense, and (iii) the amount of non-cash charges (including depreciation and amortization) for such period,
in each case to the extent included in the calculation of consolidated Net Income of Borrower and Guarantors for such period in accordance with GAAP, but without duplication. For purposes of the calculation of consolidated Net Income of Borrower and
Guarantors for such period, income, gain, or loss from extraordinary items for such period shall be excluded from the calculation. For the avoidance of doubt, any non-cash charges associated with charging off of goodwill and intangible assets shall
be excluded from the calculation of Net Income and EBITDA for the Fiscal Quarters ending December 31, 2008 through September 30, 2009 and the Fiscal Years ending March 30, 2009 and March 30, 2010.” 
  

 2 

 2. Reaffirmation of Representations and Warranties. The Borrower and the Guarantors hereby
confirm, reassert, and restate all of their respective representations and warranties under the Loan Agreement and the Loan Documents as of the date hereof. 
 3. Reaffirmation of Affirmative Covenants. The Borrower and the Guarantors hereby confirm, reassert, and restate all of their respective affirmative covenants as set forth in the Loan Agreement and the Loan
Documents as of the date hereof. 
 4. Reaffirmation of Negative Covenants. The Borrower and the Guarantors hereby confirm, reassert,
and restate all of their respective negative covenants as set forth in the Loan Agreement and the Loan Documents as of the date hereof. 
 5.
No Other Modifications. Except as specifically modified or amended herein or hereby, all of the terms and conditions of each of the Loans, the Loan Agreement, and the Loan Documents, remain otherwise unchanged, and in full force and effect,
all of which are hereby confirmed and ratified by the parties hereto. 
 6. Amendment to Consent of Common Stock Repurchase Plan. The
Consent Letter is hereby amended to exclude and delete the 500,000 share limitation. Except as specifically modified or amended herein or hereby, all of the terms and conditions of the Consent Letter remain otherwise unchanged, and in full force and
effect, all of which are hereby confirmed and ratified by the parties hereto. 
 7. Bank Fee. For and in consideration of the Bank
entering into this Amendment, the Borrower shall pay to the Bank a fee in the amount of $10,000.00, due, payable in full, and earned in full on the Effective Date. The Borrower consents to the Bank charging Borrower's Revolving Line of Credit Loan
account for such fee. 
 8. Costs and Expenses of Bank. The Borrower agrees to reimburse the Bank for all reasonable costs, expenses,
and fees, including attorneys' fees, associated with the documentation of this Amendment. The Borrower consents to the Bank charging the Borrower's Revolving Line of Credit Loan account for any such costs, expenses and fees. 
 9. Counterparts. This Amendment may be executed in several counterpart copies. Each such counterpart copy shall be deemed an original, but all of
such copies together shall constitute one and the same agreement. 
 [SIGNATURE PAGE FOLLOWS] 
  

 3 

 IN WITNESS WHEREOF, the parties have executed and delivered this Amendment effective as of the date first
set forth above. 
  

							
		 		 	BANK:
		 		 	RBS CITIZENS NATIONAL ASSOCIATION
				
	 /s/ Patricia S. Bonner
	 		 	By:	 	 /s/ Timothy J. Whitaker

	Witness	 		 		 	Timothy J. Whitaker, Senior Vice President
			
		 		 	BORROWER:
		 		 	MICRONETICS, INC.
				
	 /s/ Carl L. Lueders
	 		 	By:	 	 /s/ David Robbins

	Witness	 		 		 	David Robbins, Chief Executive Officer
			
		 		 	GUARANTORS:
		 		 	MICA MICROWAVE CORPORATION
		 		 	MICROWAVE & VIDEO SYSTEMS, INC.
		 		 	MICROWAVE CONCEPTS, INC.
				
	 /s/ Carl L. Lueders
	 		 	By:	 	 /s/ David Robbins

	Witness	 		 		 	David Robbins, President
			
		 		 	STEALTH MICROWAVE, INC.
				
	 /s/ Carl L. Lueders
	 		 	By:	 	 /s/ David Robbins

	Witness	 		 		 	David Robbins, Vice President

 Amendment to Commercial Loan Agreement and Loan Documents Signature Page

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