SECOND AMENDMENT TO EMPLOYMENT AGREEMENT

“2.             Position, Employment Duties and Responsibilities. Employee shall be employed as Employer’s President and Chief Executive Officer, subject to such reasonable duties and responsibilities granted, and restrictions imposed by Employer’s Board of Directors, and subject to Employer’s company policies and procedures. In addition, so long as Employee remains Employer’s Chief Executive Officer, Employer will nominate Employee to serve on Employer’s Board of Directors. Throughout the term of this Agreement, Employee shall devote his entire working time, energy and skill and best efforts to the performance of his duties hereunder in a manner which will faithfully and d iligently further the business and interests of Employer.”

 

“4.1             Salary. For all of the services rendered by Employee to Employer, Employer shall pay to Employee an annual base salary of (i) two hundred sixty six thousand one hundred six dollars ($266,106) for the period of June 30, 2008 through November 30, 2008, (ii) three hundred thirty thousand dollars ($330,000) for the period of December 1, 2008 through March 31, 2010, (iii) three hundred forty nine thousand eight hundred dollars ($349,800) for the period of April 1, 2010 through March 31, 2011, (iv) three hundred sixty thousand two hundred ninety five dollars ($360,295) for the period of April 1, 2011 through March 31, 2012, (v) three hundred seventy one thousand one hundred dollars ($371,100) for the period of April 1, 2012 through March 31, 2013, and (v) three hundred eighty two thousand two hundred thirty five dollars ($382,235) thereafter, payable in reasonable periodic installments in accordance with Employer’s regular payroll practices in effect from time to time. Employee’s salary may be increased (but not decreased) from time to time as the Board of Directors of Employer (the “Board”), may determine in its sole discretion, based on an annual review of Employee’s performance.

 

4.2             Bonus. During the term of this Agreement, Employee shall be eligible to receive an annual incentive cash bonus (“Annual Bonus”), targeted at fifty percent (50%) of his base salary (the “Target Bonus”), based on Employer’s achievement of annual “EBITDA” targets (the “EBITDA Target”) approved of by the Board of Directors for the payment of “full” bonuses following a financial performance presentation by management. The amount and payment of any such Annual Bonus shall be determined in accordance with Employer’s practices under its management incentive bonus program for senior executives, and subject to Employer’s performance, may be greater or less than the targeted amount. Exc ept as set forth below with respect to Employer’s fiscal year ending March 31, 2011 (“FY 2011”), in the event Employer achieves “EBITDA” in a fiscal year less than the EBITDA Target approved of by the Board of Directors, but in excess of 80% of the EBITDA Target (the “Threshold EBITDA”), Employee shall be entitled to an Annual Bonus equal to the Target Bonus multiplied by a fraction, the numerator of which shall be (i) the actual EBITDA achieved by Employer in such fiscal year, minus (ii) the Threshold EBITDA, and the denominator of which shall be (i) the EBITDA Target for such fiscal year minus (ii) the Threshold EBITDA. With respect to FY 2011, Schedule A sets forth the EBITDA Target for achieving Employee’s Target Bonus (“2011 Targeted EBITDA”), and the methodology for determining the Annual Bonus (if any) in the event EBITDA for FY 2 011 is less than 2011 Targeted EBITDA. EBITDA achieved in any fiscal year shall be determined by the Compensation Committee of the Board of Directors based on Employer’s audited financial statements.

 

2.           Life Insurance Policy. A new Section 4.7 is added to the Employment Agreement immediately following Section 4.6 thereof as follows:

 

         “4.7           Life Insurance Policy. No later than June 30, 2010, Employer shall purchase a twenty year fixed premium $1,000,000 term life insurance policy insuring the life of Employee and naming Employee’s spouse (and/or other family members designated by Employee) as the beneficiary of such policy. Employer shall thereafter maintain such policy in effect during the period of Employee’s employment pursuant to this Agreement and following any termination of employment, Employee shall be permitted to continue such policy by paying premiums directly. Notwithstanding anything to the contrary in this Section 4.7, Employer shall not be obligated to exp end more than $1,000 per year to maintain such policy.”