Common use of Compensation Related Matters Clause in Contracts

Compensation Related Matters. 3.1 The Employee shall be compensated for his services hereunder as follows: (a) Upon execution of this Employment Agreement, the Employee shall receive, under the Company's 1996 Stock Option Plan, five year options to purchase 750,000 shares of the Company's common stock, par value $.001 per share (the "Common Stock"), which options shall vest as to 150,000 upon the date of grant and as to 150,000 on each of the next four anniversary dates hereof. The option exercise price per share shall be the fair market value of the Common Stock on the date hereof. Said options shall be deemed "incentive" stock options to the maximum extent permitted by the Internal Revenue Code of 1986, as amended. (b) A base salary at the rate of $125,000 per annum payable in accordance with the Company's normal payroll procedures for executive employees; provided, however, that on December 1 of each year during an Additional Term, commencing December 1, 1997, the base salary shall be adjusted for a cost of living increase based on the Consumer Price Index for New York City for the twelve month period immediately preceding such December 1 date. The Employee shall also be entitled to additional increases in base salary as may be determined from time to time by the Board of Directors or any compensation committee appointed by the Board of Directors. (i) A bonus equal to a percentage of the Pre-tax Profits of the Company, for each one year period constituting the Term and each Additional Term during which Employee is employed by the Company under this Agreement, as follows: Pre-Tax Profits Bonus --------------- ----- $150,000-$500,000 6% $500,001-$1,000,000 12% $1,000,001-$6,000,000 15% over $6,000,000 18% (ii) Such bonus shall be paid no later than four months after the end of the applicable Term or Additional Term. At the option of the Employee, and subject to compliance with relevant securities and other laws, the bonus payable in Section 3.1(c)(i) above shall be paid in restricted shares of the Common Stock, based upon the fair market value of the Common Stock on the last day of the applicable Term or Additional Term.

Compensation Related Matters. 3.1 The Employee shall be compensated for his services hereunder as follows: (a) Upon execution of this Employment Agreement, the Employee shall receive, under the Company's 1996 Stock Option Plan, five year options to purchase 750,000 shares of the Company's common stock, par value $.001 per share (the "Common Stock"), which options shall vest as to 150,000 upon From the date of grant and as to 150,000 on each of the next four anniversary dates hereof. The option exercise price per share shall be the fair market value of the Common Stock on the date hereof. Said options shall be deemed "incentive" stock options to the maximum extent permitted by the Internal Revenue Code of 1986hereof through December 31, as amended. (b) A 2005, a base salary at the rate of $125,000 273,000 per annum payable in accordance with the Company's normal payroll procedures for executive employees; provided, however, that on December January 1 of each year during an Additional the Term, commencing December January 1, 19972003, the base salary shall be adjusted for a cost of living increase based on the Consumer Price Index for New York City for the twelve month period immediately preceding such December January 1 date. The Employee shall also be entitled to additional increases in base salary as may be determined from time to time by the Board of Directors or any compensation committee appointed by the Board of Directors; (b) A discretionary annual bonus in such amount as may be determined by the Chief Executive Officer, Board of Directors or any compensation committee appointed by the Board of Directors. (i) A bonus equal to a percentage of 3.2 The Company shall reimburse the Pre-tax Profits Employee for all reasonable expenses incurred by him in connection with the business of the Company, provided Employee shall submit proper supporting documentation for each one such expenses. 3.3 Employee shall be eligible, to the extent he qualifies, for participation in any health or other group insurance plan of the Company and shall also be entitled to participate in any employee benefit programs of the Company for its key employees or for its employees generally. The Company shall provide the Employee and his immediate family members with Blue Cross/Blue Shield or equivalent and major medical coverage. 3.4 Employee shall be entitled to a five (5) week paid vacation per year during the Term, to be taken at such times as are consistent with the needs of the Company and the convenience of the Employee. Such vacation period constituting may be extended beyond five weeks if consistent with Company policy. 3.5 Employee shall be guaranteed access to a car which is owned or leased by the Term Company and each Additional Term to continuation of such other perquisites and benefits as may be presently provided by the Company. (a) In the event the Employee's employment by the Company is terminated for "cause" pursuant to Section 2.1(c) hereof, or by virtue of Section 2.1(d) hereof because the Employee voluntarily leaves the employ of the Company (other than for the reasons set forth in Section 3.6(b) below), the Employee shall be entitled to (i) the compensation provided for by Section 3. 1 (a) only up until the date of termination of his employment. (b) Notwithstanding anything to the contrary contained in Section 3.6(a) above, if the Employee voluntarily leaves the employ of the Company on account of a material diminution of title, role or responsibilities as provided for in section 1.1 hereof or on account of the Company being acquired and its principal office being moved to a location which is greater than 50 miles from New York City, or if the Employee voluntarily leaves the employ of the Company on account of a Change in Control (as defined in Section 4 hereof), then the Employee shall be entitled to receive the compensation and benefits (but only to the extent legally allowable) provided for in Sections 3.1, 3.2 and 3.5 hereof for the balance of the Term; provided, however, that if such termination pursuant to subdivision (i) or (ii) herein occurs at a time when there is less than two years left in the Term, the compensation and benefits provided for in Sections 3. 1, 3.2 and 3.5 shall continue for a period of two (2) years from the date of termination on the same basis that the Employee received compensation during which the last year of the Term. The Employee shall have no obligation to mitigate damages and shall be entitled to the compensation and benefits (but only to the extent legally allowable) provided for herein even if Employee is employed by elsewhere. (c) In the event that the Company under this Agreementterminates the Employee's employment for "cause," and a court of law or other tribunal ultimately determines that such termination was without cause, as follows: Pre-Tax Profits Bonus --------------- ----- $150,000-$500,000 6% $500,001-$1,000,000 12% $1,000,001-$6,000,000 15% over $6,000,000 18% (ii) Such bonus the Employee shall be paid no later than four months after entitled to receive double the amount of compensation provided for in Section 3. 1 hereof from the date of termination until the end of the applicable Term Term. (d) In the event the Employee's employment by the Company is terminated for reason other than cause or Additional Term. At the option Employee voluntarily leaving the employ of the EmployeeCompany, the Employee (or his estate in the event such termination is due to the death of the Employee or the Employee dies subsequent to such termination) shall be entitled to receive the compensation provided for in Section 3.1 hereof for the balance of the Term, the medical insurance-benefits provided for in Section 3.3 hereof for the balance of the Term (but only to the extent legally allowable), shall have no obligation to mitigate damages, and subject shall be entitled to compliance with relevant securities and other lawsthe compensation provided for herein even if Employee is employed elsewhere; provided, however, that if such termination occurs at a time when there is less than one year left in the Term, the bonus payable compensation provided for in Section 3.1(c)(i3.1 shall continue for a period of one year from the date of termination on the same basis that the Employee received compensation during the last year of the Term. (e) above shall In the event the Employee's employment is terminated by the Company without "cause" then the Company may, at its option, determine to pay an amount no greater than two times the Employee's base salary at the time of termination in shares of common stock of the Company; provided, however, that (i) such shares are fully registered for resale by the Employee immediately after issuance; (ii) the average closing bid price of the common stock for the ten business days prior to issuance "(Trading Period") is at least $2.00 (such price referred to as the "Average Price"); (iii) the average daily trading volume during the Trading Period is at least 15,000 shares; (iv) the receipt of such shares and subsequent sale of such shares within six months by Employee will not subject the Employee to liability under Section 16 of the Securities Exchange Act of 1934; and (v) the entire amount owed and to be owed to the Employee under Section 3.6(d) is paid in restricted shares a lump sum within 60 days of the Common Stock, based upon the fair market value of the Common Stock on the last day of the applicable Term or Additional Termtermination.