Common use of Bonuses Clause in Contracts

Bonuses. The Company will establish a bonus plan for each fiscal year beginning after the completion of fiscal year 2004 (the “Plan”). The Board or the Compensation Committee of the Board will administer the Plan and establish performance objectives for each year in good faith based on the Company’s annual budget. During the Employment Period, the Executive will be entitled to receive an annual bonus (the “Bonus”) pursuant to the Plan based on the Company’s performance only if the Executive is employed on the last day of the applicable performance period (subject to Section 4). All such Bonuses shall become payable on a date reasonably determined by the Board or Compensation Committee thereof, after the Board or Compensation Committee finally determines (i) that the Company has achieved the applicable performance objectives and (ii) the amount of bonuses that shall be paid to each executive entitled to receive a bonus for the applicable bonus year. In respect of fiscal year 2004, the Executive shall be eligible to receive Bonuses in accordance with the Company’s bonus arrangements with the Executive as in existence prior to the Effective Date. Notwithstanding the immediately preceding sentence, in the event your employment is terminated by the Company without Cause or by you for Good Reason within 12 months of the Effective Date, the Company will pay to you an amount equal to the annual bonus you would have received for fiscal year 2004 under the Company’s Management Incentive Plan (the “MIP”) had you remained employed by the Company for the entire fiscal year, prorated for the number of days you were employed by the Company during fiscal year 2004 (the “2004 Unpaid Bonus Amounts”). Such amount would be paid at the same time that similar bonuses for fiscal year 2004 are paid to the Company’s other employees under the MIP. For purposes of Executive’s annual bonus for fiscal year 2004, the Executive’s bonus “at target” shall be the amount set forth on the signature page hereto under the label “Management Incentive (2004 Target)”.

Bonuses. The Company will establish a bonus plan for each fiscal year beginning after the completion of fiscal year 2004 (the “Plan”). The Board or the Compensation Committee of the Board will administer the Plan and establish performance objectives for each year in good faith based on the Company’s annual budget. During the Employment Period, the Executive will be entitled to receive an annual bonus (the “Bonus”) pursuant to the Plan based on the Company’s performance only if the Executive is employed on the last day of the applicable performance period (subject to Section 4). All such Bonuses shall become payable on a date reasonably determined by the Board or Compensation Committee thereof, after the Board or Compensation Committee finally determines (i) that the Company has achieved the applicable performance objectives and (ii) the amount of bonuses that shall be paid to each executive entitled to receive a bonus for the applicable bonus year. In respect of fiscal year 2004, the Executive shall be eligible to receive Bonuses in accordance with earn an annual bonus during each fiscal year (such year being referred to herein as a “Bonus Period”) that he remains an executive employee of the Company’s bonus arrangements with Company through the end of the Bonus Period. For each Bonus Period the Executive and the Chief Executive Officer shall adopt written performance goals within the Bonus Period (“Annual Goals”). If Annual Goals are met for a Bonus Period, the Executive shall earn a bonus equal to fifty percent (50%) of his then current Base Salary (for the avoidance of doubt, a delay by any Person (as defined herein) in existence prior the adoption of written performance goals shall not deny the Executive any bonus or, upon the adoption and achievement of such goals, delay in any way the payment thereof). If only certain of such Annual Goals are met, or Annual Goals are met only in part, for such Bonus Period, the Executive may earn a bonus, if any, equal to an amount to be determined by, and at the discretion of, the Chief Executive Officer and as approved by the Board of Directors of the Company (the “Board”). Annual bonuses shall be payable to the Effective DateExecutive within 45 days after the end of the applicable Bonus Period (or within 30 days of the date on which it is determined that the Annual Goals have been met, exceeded, or not met, whichever is later; provided, however that the determination must be made on or before June 30 of the year following the year of the Bonus Period). Notwithstanding Nothing in this Section 4 shall limit the immediately preceding sentenceBoard of Directors from awarding additional bonuses to the Executive based upon achievement of Company objectives, other than the Annual Goals, during the Bonus Period, in the event your employment sole discretion of the Board. Any such additional discretionary bonus shall be payable to the Executive within 30 days of the date on which the amount of such bonus, if any, is terminated by determined; provided, however, that the Company without Cause determination must be made on or by you for Good Reason within 12 months before June 30 of the year following the year of the Bonus Period. Within ninety (90) days of the Effective Date, Executive and Chief Executive Officer shall adopt the Company will pay to you an amount equal to the annual bonus you would have received for fiscal year 2004 under the Company’s Management Incentive Plan (the “MIP”) had you remained employed by the Company Annual Goals for the entire fiscal year, prorated for the number of days you were employed by the Company during fiscal year 2004 (the “2004 Unpaid initial Bonus Amounts”). Such amount would be paid at the same time that similar bonuses for fiscal year 2004 are paid to the Company’s other employees under the MIP. For purposes of Executive’s annual bonus for fiscal year 2004, the Executive’s bonus “at target” shall be the amount set forth on the signature page hereto under the label “Management Incentive (2004 Target)”Period.

Bonuses. The Company will shall establish a performance-based bonus plan (the “Plan”) to be applicable for each fiscal year beginning after of the completion of fiscal year 2004 Company (a “Fiscal Year”) ending during the Employment Period pursuant to which Executive will be eligible to receive an annual bonus (the “PlanBonus”) with respect to each Fiscal Year of the Company ending during the Employment Period (each, a “Bonus Year”). The Board or the Compensation Committee of the Board (the “Compensation Committee”) will administer the Plan and and, in consultation with Executive, shall establish performance objectives for each year in good faith based on Fiscal Year, which performance objectives shall be reasonably related to the Company’s annual budgetbusiness objectives. During In the event that, with respect to the applicable Fiscal Year of the Company ending during the Employment Period, the Company achieves the pre-established target performance goals based on actual performance, Executive shall be entitled to receive a Bonus in an amount equal to 200% of Executive’s Annual Base Salary (“Target Bonus”) (and in the event the Board or the Compensation Committee increases Executive’s Target Bonus after the Effective Date, all references to “Target Bonus” as used in this Agreement shall refer to such increased amount). Subject to Section 4, Executive will be entitled to receive an annual bonus (the “Bonus”) pursuant to the Plan based on Bonus only upon the Company’s achievement of the specified performance only objectives and if the Executive is employed on the last day of the applicable performance period (subject to Section 4)Bonus Year. All such Bonuses The Bonus shall become payable on a date reasonably determined by March 15 of the Board or Compensation Committee thereofyear following the end of the applicable Bonus Year, after provided that the Board or Compensation Committee finally determines (ix) that the Company has achieved the applicable performance objectives and (iiy) the amount of bonuses the bonus that shall be paid to each executive entitled to receive a bonus for the applicable bonus Bonus Year. If the Board or Compensation Committee has not made such final determination by March 15 of such year. In respect of fiscal year 2004, the Executive Bonus (if any) shall be eligible to receive Bonuses in accordance with the Company’s bonus arrangements with the Executive as in existence prior to the Effective Date. Notwithstanding the immediately preceding sentence, in the event your employment is terminated by the Company without Cause or by you for Good Reason within 12 months of the Effective Date, the Company will pay to you an amount equal to the annual bonus you would have received for fiscal year 2004 under the Company’s Management Incentive Plan (the “MIP”) had you remained employed by the Company for the entire fiscal year, prorated for the number of days you were employed by the Company during fiscal year 2004 (the “2004 Unpaid Bonus Amounts”). Such amount would instead be paid at the same time that similar bonuses for fiscal year 2004 are paid to the Company’s other employees under the MIP. For purposes of Executive’s annual bonus for fiscal year 2004, the Executive’s bonus “at target” shall be the amount set forth on the signature page hereto under the label “Management Incentive (2004 Target)”as soon as practicable thereafter during such year.

Bonuses. The Company will establish a (a) In addition to the Base Salary, the Executive shall participate in the Company’s current bonus plan for each fiscal year beginning after the completion of fiscal year 2004 senior corporate officers (the “Bonus Plan”). The Board or , as approved by the Compensation Committee of the Board will administer of Directors in each calendar year during the Plan term of this Agreement. The Executive’s target bonus is fifty percent (50%) of the Base Salary earned during the calendar year (the “Target Bonus”) and establish performance objectives for each year in good faith based is contingent on the Company’s annual budget. During Executive meeting certain performance criteria and the Employment PeriodCompany achieving certain financial criteria, and up to one hundred percent (100%) of the Base Salary earned during the calendar year (the “Maximum Bonus”) if the Executive will exceeds certain performance criteria and the Company exceeds certain financial criteria all as determined in the reasonable discretion of the Board of Directors and its Compensation Committee. The Executive shall be entitled to receive an annual bonus (such increases in the “Target Bonus”) pursuant ” and the “Maximum Bonus” during the term hereof as shall be determined and approved by the Compensation Committee of the Board of Directors in its sole discretion, taking account of the performance of the Company and the Executive, and other factors generally considered relevant to the Plan based on salaries of executives holding similar positions with enterprises comparable to the Company’s performance only if . Notwithstanding the foregoing, in the event that the Executive is employed on or the last day Company fail to attain their minimum respective criteria in any given year, the Board of Directors and its Compensation Committee may, in their reasonable discretion, decline to award any bonus to the Executive. (b) The bonus described in this Section 3.2 shall be payable between January 1 and March 15 (inclusive) of the applicable performance period (subject to Section 4). All such Bonuses shall become payable on a date reasonably calendar year following the calendar year for which the bonus is determined by the Board or Compensation Committee thereof, after the Board or Compensation Committee finally determines (i) that the Company has achieved the applicable performance objectives and (ii) the amount of bonuses that shall be paid to each executive entitled to receive a bonus for the applicable bonus year. In respect of fiscal year 2004, the Executive shall be eligible to receive Bonuses in accordance with the Company’s normal practices. In the event that the Executive is employed for less than the full calendar year in the year in which the Executive’s Termination Date occurs (“Termination Year”), the bonus arrangements payable to the Executive shall be subject to Sections 4 and 5 of this Agreement and calculated based on the Executive meeting certain performance criteria and the Company achieving certain year-end financial criteria, all as determined by the Compensation Committee of the Board of Directors, in its sole discretion. Such bonus shall be pro-rated for the portion of the Termination Year during which the Executive was employed by the Company. With respect to the bonus for the Termination Year, any bonus payable pursuant to this Section 3.2 shall be payable to the Executive between January 1 and March 15 (inclusive) of the calendar year following the calendar year for which the bonus is determined in accordance with the Executive Company’s normal practices. (c) For any year beginning during the twenty-four (24) month period following a Change in Control (the “Change in Control Period”), as well as for any year in existence which a Change in Control occurs if such Change in Control occurs prior to the Effective Dategrant of annual bonus opportunities for such year, to assure that Executive will have an opportunity to earn annual incentive compensation, the Executive shall be included in a bonus plan of the Company which shall satisfy the standards described above and in this Section 3(c) (such plan, the “Post-Change-in-Control Bonus Plan”). Notwithstanding Bonuses under the immediately preceding sentencePost-Change-in-Control Bonus Plan shall be payable with respect to achieving such financial or other goals reasonably related to the business of the Company as the Company shall establish (the “Goals”), in the event your employment is terminated all of which Goals shall be reasonably attainable, by the Company without Cause or by you for Good Reason within 12 months end of the Effective Dateyear of grant, with approximately the Company will pay to you an amount equal to same degree of probability as the annual bonus you would have received for fiscal year 2004 most attainable goals under the Company’s Management Incentive Plan bonus plan or plans as in effect at any time during the 180-day period immediately prior to the Change in Control and in view of the Company’s existing and projected financial and business circumstances applicable at the time. The amount of the bonus (the “MIPBonus Amount”) had you remained employed that Executive is eligible to earn under the Post-Change-in-Control Bonus Plan shall be no less than one hundred percent (100%) of the Target Bonus for which the Executive was eligible in the year prior to the Change in Control for achievement of the target Goals, and no less than one hundred percent (100%) of the Maximum Bonus for which the Executive was eligible in the year prior to the Change in Control for achievement exceeding the target Goals, and in the event the target level of Goals are not achieved, the Post-Change-in-Control Bonus Plan shall provide for a payment of a Bonus Amount equal to a portion of the Targeted Bonus reasonably related to that portion of the Goals which were achieved. Notwithstanding the foregoing, if, during a Change in Control Period, employees of the Company or the successor or acquirer in the Change in Control who are similarly situated to the Executive are eligible for greater bonus amounts than those provided by the Company foregoing sentence, then the Executive shall be eligible for a Bonus Amount no less than that offered to such similarly situated employees. In the entire fiscal yearevent that the Executive is employed for less than the full year for which a Post-Change-in-Control Bonus Plan is in effect, prorated for the number of days you were employed by the Company during fiscal year 2004 (the “2004 Unpaid Bonus Amounts”). Such amount would be paid at the same time that similar bonuses for fiscal year 2004 are paid bonus payable to the Company’s other employees under the MIP. For purposes of Executive’s annual bonus for fiscal year 2004, the Executive’s bonus “at target” Executive shall be determined as described in Section 3.2(b) except that no discretion may be applied to reduce the amount set forth on of the signature page hereto under bonus otherwise payable to the label “Management Incentive (2004 Target)”Executive and any subjective performance objectives applicable to the bonus shall be deemed satisfied.

Bonuses. Subject to the requirements set forth below, the Company may elect to pay Employee bonuses in its sole discretion. Employee will be offered the opportunity to participate in the Company’s then-current bonus plan, and, subject to and in accordance with the terms and conditions of such plan and this paragraph, upon achievement of all target bonus objectives set by the Board of Directors and/or the Chief Executive Officer for the Company and for Employee, shall receive a cash bonus equal to 100% (“Target Bonus Percentage”) of his base salary, less standard payroll deductions and withholding as are applicable to similarly situated employees. The Company will establish shall have the sole discretion to change or eliminate bonus plans or programs at any time (provided, however, that after the bonus plan and target objectives have been established by the Board and/or the Chief Executive Officer for a given year, neither the Board nor the Chief Executive Officer shall later materially change the bonus plan or target objectives for such year to Employee’s detriment without Employee’s consent), to determine whether performance criteria set forth pursuant to the bonus plan for each fiscal a year beginning after have been achieved, and to determine (in accordance with this paragraph and such performance criteria and bonus plan) the completion amount of fiscal year 2004 (the “Plan”)any bonus earned by Employee, if any. The Board or the Compensation Committee of the Board will administer the Plan Bonuses are intended to retain valuable Company employees, and establish performance objectives if Employee is not employed, for each year in good faith based on the Company’s annual budget. During the Employment Period, the Executive will be entitled to receive an annual bonus (the “Bonus”) pursuant to the Plan based on the Company’s performance only if the Executive is employed any reason on the last day of the applicable performance period (subject bonus year, he will not have earned the bonus and, except as expressly provided herein with respect to Section 4)the Severance Bonus, no partial or pro-rata bonus will be paid. All such Bonuses shall become payable on a date reasonably determined by the Board or Compensation Committee thereof, after the Board or Compensation Committee finally determines (i) that the Company has achieved the applicable performance objectives and (ii) the amount of bonuses that Any bonus paid pursuant to this Paragraph 5 shall be paid to each executive entitled to receive net of standard payroll deductions and withholdings. The target payment date for any bonus measured on the basis of a bonus for the applicable bonus year. In respect of fiscal calendar year 2004, the Executive shall be eligible to receive Bonuses in accordance with between January 1 and March 15 of the calendar year following the end of the performance period; provided, however, that such bonus shall be paid no later than March 15 of such calendar year following the end of the performance period. The payment date for any bonus measured on the basis of a performance period other than the calendar year shall be no later than 2-1/2 months following the end of the Company’s bonus arrangements with the Executive as in existence prior to the Effective Date. Notwithstanding the immediately preceding sentence, in the event your employment is terminated by the Company without Cause or by you for Good Reason within 12 months of the Effective Date, the Company will pay to you an amount equal to the annual bonus you would have received for fiscal year 2004 under the Company’s Management Incentive Plan (the “MIP”) had you remained employed by the Company for the entire fiscal year, prorated for the number of days you were employed by the Company during fiscal year 2004 (the “2004 Unpaid Bonus Amounts”). Such amount would be paid at the same time that similar bonuses for fiscal year 2004 are paid to the Company’s other employees under the MIP. For purposes of Executive’s annual bonus for fiscal year 2004, the Executive’s bonus “at target” shall be the amount set forth on the signature page hereto under the label “Management Incentive (2004 Target)”.

Bonuses. The Company shall pay to Employee a guaranteed bonus of $150,000, less standard payroll deductions and withholdings, in respect of his performance in the 2008 bonus year, on such date as the Company would pay other executive bonuses for such period. Such bonus shall be payable in cash or unrestricted Company common stock at the Company’s sole discretion. Subject to the requirements set forth below, the Company may elect to pay Employee additional bonuses in its sole discretion. In addition, after the 2008 bonus year, Employee will establish be offered the opportunity to participate in the Company’s then-current bonus plan, and, subject to and in accordance with the terms and conditions of such plan and this paragraph, upon achievement of all Target Bonus objectives set by the Board of Directors and/or the Chief Executive Officer for the Company and for Employee, shall receive a cash bonus equal to $150,000 (“Target Bonus”), less standard payroll deductions and withholding as are applicable to similarly situated employees. The Company shall have the sole discretion to change or eliminate bonus plans or programs at any time (provided, however, that after the bonus plan and target objectives have been established by the Board and/or the Chief Executive Officer for a given year, neither the Board nor the Chief Executive Officer shall later materially change the bonus plan or target objectives for such year to Employee’s detriment without Employee’s consent), to determine whether performance criteria set forth pursuant to the bonus plan for each fiscal a year beginning after have been achieved, and to determine (in accordance with this paragraph and such performance criteria and bonus plan) the completion amount of fiscal year 2004 (the “Plan”)any bonus earned by Employee, if any. The Board or the Compensation Committee of the Board will administer the Plan Bonuses are intended to retain valuable Company employees, and establish performance objectives if Employee is not employed, for each year in good faith based on the Company’s annual budget. During the Employment Period, the Executive will be entitled to receive an annual bonus (the “Bonus”) pursuant to the Plan based on the Company’s performance only if the Executive is employed any reason on the last day of the applicable performance period (subject bonus year, he will not have earned the bonus and, except as expressly provided herein with respect to Section 4)the Severance Bonus, no partial or pro-rata bonus will be paid. All such Bonuses shall become payable on a date reasonably determined by the Board or Compensation Committee thereof, after the Board or Compensation Committee finally determines (i) that the Company has achieved the applicable performance objectives and (ii) the amount of bonuses that Any bonus paid pursuant to this Paragraph 5 shall be paid to each executive entitled to receive net of standard payroll deductions and withholdings. The target payment date for any bonus measured on the basis of a bonus for the applicable bonus year. In respect of fiscal calendar year 2004, the Executive shall be eligible to receive Bonuses in accordance with the Company’s bonus arrangements with the Executive as in existence prior to the Effective Date. Notwithstanding the immediately preceding sentence, in the event your employment is terminated by the Company without Cause or by you for Good Reason within 12 months between January 1 and March 15 of the Effective Date, calendar year following the Company will pay to you an amount equal to end of the annual performance period. The payment date for any bonus you would have received for fiscal year 2004 under the Company’s Management Incentive Plan (the “MIP”) had you remained employed by the Company for the entire fiscal year, prorated for the number of days you were employed by the Company during fiscal year 2004 (the “2004 Unpaid Bonus Amounts”). Such amount would be paid at the same time that similar bonuses for fiscal year 2004 are paid to the Company’s other employees under the MIP. For purposes of Executive’s annual bonus for fiscal year 2004, the Executive’s bonus “at target” shall be the amount set forth measured on the signature page hereto under basis of a performance period other than the label “Management Incentive (2004 Target)”calendar year.

Bonuses. The Company will establish a bonus plan for each fiscal year beginning after the completion of fiscal year 2004 (the “Plan”). The Board or the Compensation Committee of the Board will administer the Plan and establish performance objectives for each year in good faith based on the Company’s annual budget. During the Employment Period, the Executive will shall be entitled to receive an annual bonus (the “Bonus”) pursuant to the Plan based on the Company’s performance only if the Executive is employed on the last day of the applicable performance period (subject to Section 4). All such Bonuses shall become payable on a date reasonably determined by the Board or Compensation Committee thereof, after the Board or Compensation Committee finally determines bonuses as follows: (i) that The Executive shall receive a signing bonus of One Hundred Thousand Dollars ($100,000), payable on or about the Company has achieved the applicable performance objectives and Start Date of this Agreement. (ii) the amount of bonuses that shall be paid to each executive entitled to receive a bonus for the applicable bonus year. In respect of fiscal year 2004, the The Executive shall be eligible to receive Bonuses in accordance an annual cash bonus for each calendar year of employment with the Company’s Company (the "Annual Bonus") up to a maximum of Two Hundred Thousand Dollars ($200,000). Payment of Fifty Thousand Dollars ($50,000) of the Annual Bonus shall be at the discretion of the Board. Payment of One Hundred Fifty Thousand Dollars ($150,000) of the Annual Bonus shall be based on achievement of performance goals to be mutually agreed upon by the Executive and the Board. Performance goals for the Annual Bonus may have up to three tiers pursuant to which the Executive may receive specified percentages of the maximum Annual Bonus based upon partial achievement of the performance goals. (iii) The Executive shall be eligible to receive an additional annual cash bonus arrangements for each calendar year of employment with the Company (the "Stretch Bonus") up to a maximum of Two Hundred Thousand Dollars ($200,000). Payment of the Stretch Bonus shall based on achievement of stretch performance goals agreed upon by the Executive and the Board to represent achievable, but exceptional, performance. Performance goals for the Stretch Bonus may have up to two tiers pursuant to which the Executive may receive specified percentages of the maximum Stretch Bonus based upon partial achievement of the performance goals. (iv) Performance goals for the Annual Bonus and stretch performance goals for the Stretch Bonus shall be set, in writing, no later than thirty (30) days after the Start Date for calendar year 2001, and no later than thirty (30) days after the commencement of each calendar year thereafter. (v) Achievement of the performance goals and the stretch performance goals with respect to each calendar year of the Company shall be determined in good faith by the Board as soon as possible after the end of each calendar year. Any Annual Bonus and any Stretch Bonus payable with respect to such year shall be paid to the Executive within ninety (90) days after the achievement of the performance goals and the stretch performance goals has been determined. (vi) The Annual Bonus and the Stretch Bonus for the year 2001 shall be prorated to reflect the Executive's commencement of service on July 9, 2001. (vii) The amount of the Annual Bonus and the Stretch Bonus shall be eligible for annual review by the Board beginning with calendar year 2003, but in existence no event shall the maximum amount of the Annual Bonus or the Stretch Bonus increase prior to the Effective Date. Notwithstanding the immediately preceding sentence, in the event your employment is terminated by the Company without Cause or by you for Good Reason within 12 months second anniversary of the Effective Start Date, the Company will pay to you an amount equal to the annual bonus you would have received for fiscal year 2004 under the Company’s Management Incentive Plan (the “MIP”) had you remained employed by the Company for the entire fiscal year, prorated for the number of days you were employed by the Company during fiscal year 2004 (the “2004 Unpaid Bonus Amounts”). Such amount would be paid at the same time that similar bonuses for fiscal year 2004 are paid to the Company’s other employees under the MIP. For purposes of Executive’s annual bonus for fiscal year 2004, the Executive’s bonus “at target” shall be the amount set forth on the signature page hereto under the label “Management Incentive (2004 Target)”.

Bonuses. The Company (a) Employee will establish be eligible for a bonus plan for each fiscal year beginning after the completion of fiscal year 2004 (the “Plan”). The Board or the Compensation Committee of the Board will administer the Plan and establish performance objectives for each year in good faith Employee’s work through December 31, 2007, based on the Company’s annual budget. During number of days employed in 2007, divided by 365, times $112,500, and will receive such bonus if he achieves the Employment Periodgoals outlined in Exhibit A. Beginning in calendar year 2008, and thereafter while this Agreement is in effect, the Executive will be entitled to receive an annual bonus (the “Bonus”) pursuant to the Plan based on the Company’s performance only if the Executive is employed on the last day of the applicable performance period (subject to Section 4). All such Bonuses shall become payable on a date reasonably determined by the Board or Compensation Committee thereof, after the Board or Compensation Committee finally determines (i) that the Company has achieved the applicable performance objectives and (ii) the amount of bonuses that shall be paid to each executive entitled to receive a bonus for the applicable bonus year. In respect of fiscal year 2004, the Executive Employee shall be eligible to receive Bonuses a discretionary calendar year annual bonus in accordance an amount of up to fifty percent (50%) of Base Compensation. The award of the bonus shall be subject to the Employee’s satisfactory achievement of mutually agreed upon performance goals. These performance goals will be established within the first sixty (60) days of the calendar year. It shall be the Employee’s obligation to initiate the goal setting process by making a written recommendation to the CEO and Board in advance of, or within the first quarter of, each calendar year and the Board is under no obligation to consider a bonus for the Employee should he fail to do so. If the Company and the Employee are unable to agree on mutually acceptable performance goals, then the Company shall set the bonus goals after consultation with the Employee. The Company, in its sole discretion, shall determine the extent to which the performance goals upon which the annual bonus is based have been achieved; provided, however, that Employee’s bonus arrangements with the Executive as in existence prior achievement of said goals shall to the Effective Dategreatest extent possible be measured by objective, versus subjective, criteria to ensure fairness to Employee in any such determination process. Notwithstanding the immediately preceding sentence, in the event your employment is terminated by the Company Employee’s eligibility for any bonus upon termination either without Cause or by you for Good Reason within 12 months shall be as set forth in paragraph 4.2(b) of this Agreement. For any other termination, employee must remain an active employee through the end of the Effective Dateapplicable bonus year, and will not earn any bonus if employment terminates for any other reason before the end of the bonus year. (b) Employee shall be eligible to participate in any incentive compensation plans Company approves for its executive level employees and/or officers from time to time. The Employee also will pay to you an amount equal be eligible during the term of this Agreement for such other bonus payments as may be awarded to the annual bonus you would have received for fiscal year 2004 under Employee by the Company’s Management Incentive Plan (the “MIP”) had you remained employed by the Company for the entire fiscal year, prorated for the number of days you were employed by the Company during fiscal year 2004 (the “2004 Unpaid Bonus Amounts”). Such amount would be paid at the same time that similar bonuses for fiscal year 2004 are paid to the Company’s other employees under the MIP. For purposes of Executive’s annual bonus for fiscal year 2004, the Executive’s bonus “at target” shall be the amount set forth on the signature page hereto under the label “Management Incentive (2004 Target)”.

Bonuses. The Company will establish a bonus plan for each fiscal year beginning after the completion of fiscal year 2004 (the “Plan”). The Board or the Compensation Committee of the Board will administer the Plan and establish performance objectives for each year in good faith based on the Company’s annual budget. During the Employment Period, the Executive will be entitled In addition to receive an annual bonus (the “Bonus”) pursuant to the Plan based on the Company’s performance only if the Executive is employed on the last day of the applicable performance period (subject to Section 4). All such Bonuses shall become payable on a date reasonably determined by the Board or Compensation Committee thereof, after the Board or Compensation Committee finally determines (i) that the Company has achieved the applicable performance objectives and (ii) the amount of bonuses that shall be paid to each executive entitled to receive a bonus for the applicable bonus year. In respect of fiscal year 2004Base Salary, the Executive shall be eligible paid an annual bonus not to receive Bonuses in accordance with exceed $300,000 annually (the Company’s "Maximum Bonus"), which bonus arrangements with will be established by the Compensation Committee (the "Bonus"). Promptly following the execution of this Employment Agreement, the Company and the Executive as in existence prior will meet to establish the Effective Dateperformance goals (the "Bonus Goals") upon which the award of the Bonus for the first year of employment pursuant to this Employment Agreement (the "First Bonus Period") will be determined. Notwithstanding Seventy-five percent of the immediately preceding sentence, in Bonus will be based upon an agreed-upon pre-tax income goal plus the event your employment is terminated amount expended by the Company without Cause or in such year for research and development ("Target Income"). Target Income will be adjusted each year by you for Good Reason within 12 months the mutual consent of the Effective DateCompensation Committee and the Executive. Twenty-five percent of the Bonus will be based on personal performance goals, which will be established annually by the Compensation Committee and the Executive promptly after the execution of this Employment Agreement and revised on an annual basis in each subsequent year of this Employment Agreement. During each subsequent year of employment pursuant to the terms of this Employment Agreement ("Subsequent Bonus Periods"), the Company will pay Chairman of the Board and the Executive shall meet periodically to you an amount equal discuss the Executive's progress concerning the Bonus Goals. Promptly after the end of each such Subsequent Bonus Period, the Compensation Committee shall meet to discuss the annual Executive's performance with regard the bonus you would have received for fiscal year 2004 under Goals and shall, in its discretion, determine the Company’s Management Incentive Plan (amount, if any, of the “MIP”) had you remained employed by the Company for the entire fiscal year, prorated for the number of days you were employed by the Company during fiscal year 2004 (the “2004 Unpaid Bonus Amounts”). Such amount would to be paid at the same time that similar bonuses for fiscal year 2004 are paid to the Company’s other employees under the MIPExecutive for such Subsequent Bonus Period. For purposes the purpose of Executive’s annual bonus for fiscal year 2004this determination, the Executive’s bonus “at target” goals shall be laddered so that attainment of some, but not all, goals will give rise to the amount set forth on the signature page hereto under the label “Management Incentive (2004 Target)”payment of a partial Bonus.

Bonuses. The Company will establish a (a) In addition to the Base Salary, the Executive shall participate in the Company’s current bonus plan for each fiscal year beginning after the completion of fiscal year 2004 senior corporate officers (the “Bonus Plan”). The Board or , as approved by the Compensation Committee of the Board will administer of Directors in each calendar year during the Plan term of this Agreement. The Executive’s target bonus is seventy percent (70%) of the Base Salary earned during the calendar year (the “Target Bonus”) and establish performance objectives for each year in good faith based is contingent on the Company’s annual budget. During Executive meeting certain performance criteria and the Employment PeriodCompany achieving certain financial criteria, and up to one hundred forty percent (140%) of the Base Salary earned during the calendar year (the “Maximum Bonus”) if the Executive will exceeds certain performance criteria and the Company exceeds certain financial criteria all as determined in the reasonable discretion of the Board of Directors and its Compensation Committee. The Executive shall be entitled to receive an annual bonus (such increases in the “Target Bonus”) pursuant ” and the “Maximum Bonus” during the term hereof as shall be determined and approved by the Compensation Committee of the Board of Directors in its sole discretion, taking account of the performance of the Company and the Executive, and other factors generally considered relevant to the Plan based on salaries of executives holding similar positions with enterprises comparable to the Company’s performance only if . Notwithstanding the foregoing, in the event that the Executive is employed on or the last day Company fail to attain their minimum respective criteria in any given year, the Board of Directors and its Compensation Committee may, in their reasonable discretion, decline to award any bonus to the Executive. (b) The bonus described in this Section 3.2 shall be payable between January 1 and March 15 (inclusive) of the applicable performance period (subject to Section 4). All such Bonuses shall become payable on a date reasonably calendar year following the calendar year for which the bonus is determined by the Board or Compensation Committee thereof, after the Board or Compensation Committee finally determines (i) that the Company has achieved the applicable performance objectives and (ii) the amount of bonuses that shall be paid to each executive entitled to receive a bonus for the applicable bonus year. In respect of fiscal year 2004, the Executive shall be eligible to receive Bonuses in accordance with the Company’s normal practices. In the event that the Executive is employed for less than the full calendar year in the year in which the Executive’s Termination Date occurs (“Termination Year”), the bonus arrangements payable to the Executive shall be subject to Sections 4 and 5 of this Agreement and calculated based on the Executive meeting certain performance criteria and the Company achieving certain year-end financial criteria, all as determined by the Compensation Committee of the Board of Directors, in its sole discretion. Such bonus shall be pro-rated for the portion of the Termination Year during which the Executive was employed by the Company. With respect to the bonus for the Termination Year, any bonus payable pursuant to this Section 3.2 shall be payable to the Executive between January 1 and March 15 (inclusive) of the calendar year following the calendar year for which the bonus is determined in accordance with the Executive Company’s normal practices. (c) For any year beginning during the twenty-four (24) month period following a Change in Control (the “Change in Control Period”), as well as for any year in existence which a Change in Control occurs if such Change in Control occurs prior to the Effective Dategrant of annual bonus opportunities for such year, to assure that Executive will have an opportunity to earn annual incentive compensation, the Executive shall be included in a bonus plan of the Company which shall satisfy the standards described above and in this Section 3(c) (such plan, the “Post-Change-in-Control Bonus Plan”). Notwithstanding Bonuses under the immediately preceding sentencePost-Change-in-Control Bonus Plan shall be payable with respect to achieving such financial or other goals reasonably related to the business of the Company as the Company shall establish (the “Goals”), in the event your employment is terminated all of which Goals shall be reasonably attainable, by the Company without Cause or by you for Good Reason within 12 months end of the Effective Dateyear of grant, with approximately the Company will pay to you an amount equal to same degree of probability as the annual bonus you would have received for fiscal year 2004 most attainable goals under the Company’s Management Incentive Plan bonus plan or plans as in effect at any time during the 180-day period immediately prior to the Change in Control and in view of the Company’s existing and projected financial and business circumstances applicable at the time. The amount of the bonus (the “MIPBonus Amount”) had you remained employed that Executive is eligible to earn under the Post-Change-in-Control Bonus Plan shall be no less than one hundred percent (100%) of the Target Bonus for which the Executive was eligible in the year prior to the Change in Control for achievement of the target Goals, and no less than one hundred percent (100%) of the Maximum Bonus for which the Executive was eligible in the year prior to the Change in Control for achievement exceeding the target Goals, and in the event the target level of Goals are not achieved, the Post-Change-in-Control Bonus Plan shall provide for a payment of a Bonus Amount equal to a portion of the Targeted Bonus reasonably related to that portion of the Goals which were achieved. Notwithstanding the foregoing, if, during a Change in Control Period, employees of the Company or the successor or acquirer in the Change in Control who are similarly situated to the Executive are eligible for greater bonus amounts than those provided by the Company foregoing sentence, then the Executive shall be eligible for a Bonus Amount no less than that offered to such similarly situated employees. In the entire fiscal yearevent that the Executive is employed for less than the full year for which a Post-Change-in-Control Bonus Plan is in effect, prorated for the number of days you were employed by the Company during fiscal year 2004 (the “2004 Unpaid Bonus Amounts”). Such amount would be paid at the same time that similar bonuses for fiscal year 2004 are paid bonus payable to the Company’s other employees under the MIP. For purposes of Executive’s annual bonus for fiscal year 2004, the Executive’s bonus “at target” Executive shall be determined as described in Section 3.2(b) except that no discretion may be applied to reduce the amount set forth on of the signature page hereto under bonus otherwise payable to the label “Management Incentive (2004 Target)”Executive and any subjective performance objectives applicable to the bonus shall be deemed satisfied.

Bonuses. The Company will establish a (a) In addition to the Base Salary, the Executive shall participate in the Company’s current bonus plan for each fiscal year beginning after the completion of fiscal year 2004 senior corporate officers (the “Bonus Plan”). The Board or , as approved by the Compensation Committee of the Board will administer of Directors in each calendar year during the Plan term of this Agreement. The Executive’s target bonus is percent ( %) of the Base Salary earned during the calendar year (the “Target Bonus”) and establish performance objectives for each year in good faith based is contingent on the Company’s annual budget. During Executive meeting certain performance criteria and the Employment PeriodCompany achieving certain financial criteria, and up to percent ( %) of the Base Salary earned during the calendar year (the “Maximum Bonus”) if the Executive will exceeds certain performance criteria and the Company exceeds certain financial criteria all as determined in the reasonable discretion of the Board of Directors and its Compensation Committee. The Executive shall be entitled to receive an annual bonus (such increases in the “Target Bonus”) pursuant ” and the “Maximum Bonus” during the term hereof as shall be determined and approved by the Compensation Committee of the Board of Directors in its sole discretion, taking account of the performance of the Company and the Executive, and other factors generally considered relevant to the Plan based on salaries of executives holding similar positions with enterprises comparable to the Company’s performance only if . Notwithstanding the foregoing, in the event that the Executive is employed on or the last day Company fail to attain their minimum respective criteria in any given year, the Board of Directors and its Compensation Committee may, in their reasonable discretion, decline to award any bonus to the Executive. (b) The bonus described in this Section 3.2 shall be payable between January 1 and March 15 (inclusive) of the applicable performance period (subject to Section 4). All such Bonuses shall become payable on a date reasonably calendar year following the calendar year for which the bonus is determined by the Board or Compensation Committee thereof, after the Board or Compensation Committee finally determines (i) that the Company has achieved the applicable performance objectives and (ii) the amount of bonuses that shall be paid to each executive entitled to receive a bonus for the applicable bonus year. In respect of fiscal year 2004, the Executive shall be eligible to receive Bonuses in accordance with the Company’s normal practices. In the event that the Executive is employed for less than the full calendar year in the year in which the Executive’s Termination Date occurs (“Termination Year”), the bonus arrangements payable to the Executive shall be subject to Sections 4 and 5 of this Agreement and calculated based on the Executive meeting certain performance criteria and the Company achieving certain year-end financial criteria, all as determined by the Compensation Committee of the Board of Directors, in its sole discretion. Such bonus shall be pro-rated for the portion of the Termination Year during which the Executive was employed by the Company. With respect to the bonus for the Termination Year, any bonus payable pursuant to this Section 3.2 shall be payable to the Executive between January 1 and March 15 (inclusive) of the calendar year following the calendar year for which the bonus is determined in accordance with the Executive Company’s normal practices. (c) For any year beginning during the twenty-four (24) month period following a Change in Control (the “Change in Control Period”), as well as for any year in existence which a Change in Control occurs if such Change in Control occurs prior to the Effective Dategrant of annual bonus opportunities for such year, to assure that Executive will have an opportunity to earn annual incentive compensation, the Executive shall be included in a bonus plan of the Company which shall satisfy the standards described above and in this Section 3(c) (such plan, the “Post-Change-in-Control Bonus Plan”). Notwithstanding Bonuses under the immediately preceding sentencePost-Change-in-Control Bonus Plan shall be payable with respect to achieving such financial or other goals reasonably related to the business of the Company as the Company shall establish (the “Goals”), in the event your employment is terminated all of which Goals shall be reasonably attainable, by the Company without Cause or by you for Good Reason within 12 months end of the Effective Dateyear of grant, with approximately the Company will pay to you an amount equal to same degree of probability as the annual bonus you would have received for fiscal year 2004 most attainable goals under the Company’s Management Incentive Plan bonus plan or plans as in effect at any time during the 180-day period immediately prior to the Change in Control and in view of the Company’s existing and projected financial and business circumstances applicable at the time. The amount of the bonus (the “MIPBonus Amount”) had you remained employed that Executive is eligible to earn under the Post-Change-in-Control Bonus Plan shall be no less than one hundred percent (100%) of the Target Bonus for which the Executive was eligible in the year prior to the Change in Control for achievement of the target Goals, and no less than one hundred percent (100%) of the Maximum Bonus for which the Executive was eligible in the year prior to the Change in Control for achievement exceeding the target Goals, and in the event the target level of Goals are not achieved, the Post-Change-in-Control Bonus Plan shall provide for a payment of a Bonus Amount equal to a portion of the Targeted Bonus reasonably related to that portion of the Goals which were achieved. Notwithstanding the foregoing, if, during a Change in Control Period, employees of the Company or the successor or acquirer in the Change in Control who are similarly situated to the Executive are eligible for greater bonus amounts than those provided by the Company foregoing sentence, then the Executive shall be eligible for a Bonus Amount no less than that offered to such similarly situated employees. In the entire fiscal yearevent that the Executive is employed for less than the full year for which a Post-Change-in-Control Bonus Plan is in effect, prorated for the number of days you were employed by the Company during fiscal year 2004 (the “2004 Unpaid Bonus Amounts”). Such amount would be paid at the same time that similar bonuses for fiscal year 2004 are paid bonus payable to the Company’s other employees under the MIP. For purposes of Executive’s annual bonus for fiscal year 2004, the Executive’s bonus “at target” Executive shall be determined as described in Section 3.2(b) except that no discretion may be applied to reduce the amount set forth on of the signature page hereto under bonus otherwise payable to the label “Management Incentive (2004 Target)”Executive and any subjective performance objectives applicable to the bonus shall be deemed satisfied.

Bonuses. (a) Not later than 30 days after Executive's entering into this Agreement, the Company shall pay to the Executive a signing bonus in the amount of $100,000. (b) Not later than 30 days after the Effective Date, Executive shall prepare and present to the CEO written financial, operational and other objectives (the "Performance Objectives") for the Company's fiscal year ending February 3, 2004. If such Performance Objectives are approved and accepted by the CEO, Executive's target bonus for such fiscal year shall be equal to 50% of Executive's annual Base Salary for such year. For each fiscal year during the Employment Term thereafter, Executive shall prepare and submit Performance Objectives to the CEO during the normal course of the Company's planning cycle and before the commencement of the new fiscal year. If such subsequent Performance Objectives are accepted and approved by the CEO, Executive's target bonus for such fiscal years shall be based on 50% of Executive's Base Salary in effect as of the start of such fiscal year. In the event of any disagreement between the CEO and Executive concerning the acceptance and approval of Performance Objectives, the CEO and Executive shall negotiate in good faith to attempt to resolve such differences. Annual bonuses shall be reduced pro rata for any fiscal year that is not a full year (based on the actual number of days of such year included in the Employment Term). Each annual bonus shall be paid no later than 30 days after the Company's audited financial statements with respect to the year for which the annual bonus is awarded are available. If the Performance Objectives accepted by the CEO are exceeded in any year, the annual bonus shall be increased by 1% of Base Salary for each 1% of excess, up to a maximum bonus of 100% of Base Salary for the achievement of 150% of the Performance Objectives. If the Performance Objectives accepted by the CEO are not met, the Executive shall not be entitled to any bonus. (c) To the extent that the Executive's bonus and base salary in any fiscal year is in excess of $1 million, payment of an amount equal to such excess shall be automatically deferred. Amounts deferred under this Paragraph 4(c) shall be credited annually with interest at the Company's borrowing rate and shall be paid to Executive (or to his estate, in the case of death) in a single lump sum three months following his termination of employment. Amounts deferred under this Paragraph 4(c) shall represent an unfunded, unsecured obligation of the Company. The Company will establish a bonus plan for each fiscal year beginning after the completion of fiscal year 2004 (the “Plan”). The Board "rabbi trust" reasonably acceptable to Executive and will fund its deferred compensation obligation to Executive by transferring to such rabbi trust, cash or the Compensation Committee of the Board will administer the Plan and establish performance objectives for each year in good faith based on the Company’s annual budget. During the Employment Period, the Executive will be entitled other assets sufficient to receive an annual bonus (the “Bonus”) pursuant to the Plan based on the Company’s performance only if the Executive is employed on the last day of the applicable performance period (subject to Section 4). All satisfy such Bonuses shall become payable on a date reasonably determined by the Board or Compensation Committee thereof, after the Board or Compensation Committee finally determines (i) that the Company has achieved the applicable performance objectives and (ii) the amount of bonuses that shall be paid to each executive entitled to receive a bonus for the applicable bonus year. In respect of fiscal year 2004, the Executive shall be eligible to receive Bonuses in accordance with the Company’s bonus arrangements with the Executive as in existence prior to the Effective Date. Notwithstanding the immediately preceding sentence, in the event your employment is terminated by the Company without Cause or by you for Good Reason within 12 months of the Effective Date, the Company will pay to you an amount equal to the annual bonus you would have received for fiscal year 2004 under the Company’s Management Incentive Plan (the “MIP”) had you remained employed by the Company for the entire fiscal year, prorated for the number of days you were employed by the Company during fiscal year 2004 (the “2004 Unpaid Bonus Amounts”). Such amount would be paid at the same time that similar bonuses for fiscal year 2004 are paid to the Company’s other employees under the MIP. For purposes of Executive’s annual bonus for fiscal year 2004, the Executive’s bonus “at target” shall be the amount set forth on the signature page hereto under the label “Management Incentive (2004 Target)”obligation.

Bonuses. The Company will a. During the Term of Employment, for each calendar year during the Term of Employment (the "Bonus Period"), the Board shall establish a bonus plan for each fiscal year beginning after the completion of fiscal year 2004 (the “Plan”). The Board or the Compensation Committee of the Board will administer the Plan and establish performance objectives for each year in good faith based on the Company’s annual budget. During the Employment Period, the Executive will be entitled to receive an annual bonus (the “Bonus”) pursuant to the Plan based on the Company’s performance only if the Executive is employed on the last day of the applicable performance period (subject to Section 4). All such Bonuses shall become payable on a date reasonably determined by the Board or Compensation Committee thereof, after the Board or Compensation Committee finally determines (i) that the Company has achieved the applicable performance objectives and (ii) the amount of bonuses that shall be paid to each executive entitled to receive a bonus for the applicable bonus year. In respect of fiscal year 2004, pool from which the Executive shall be eligible to receive Bonuses in accordance with an annual bonus potentially equal to twenty-five percent (25%) of the Executive's Base Salary (the "Bonus Payment"), to be determined by the Executive's supervisor and based ------------- upon the satisfaction by the Executive and/or the Company of quarterly and annual goals (the "Goals"), to be established by the Company’s bonus arrangements with the Executive as in existence prior to the Effective Date. Notwithstanding ----- the immediately preceding sentenceforegoing, in the event your that the Goals are either exceeded or not fully achieved for a Bonus Period, the Executive may be eligible to receive a Bonus Payment in an amount in excess of or less than twenty-five percent (25%) of the Executive's Base Salary. In addition, the Executive is eligible to receive quarterly bonuses of up to $5,000 based upon successful completion of quarterly objectives. b. For the Bonus Period in which the Executive's employment is terminated by with the Company without Cause or by you terminates for Good Reason within 12 months of the Effective Date, the Company will pay to you an amount equal to the annual bonus you would have received for fiscal year 2004 under the Company’s Management Incentive Plan (the “MIP”) had you remained employed any reason other than by the Company for Cause under Section 6.1 hereof, provided that the entire fiscal yearExecutive has been continuously employed with the Company for a minimum of six (6) months during such Bonus Period, prorated the Company shall pay the Executive a pro rata portion (based upon the period beginning on the first day of the Bonus Period and ending on the date on which the Executive's employment with the Company terminates) of the bonus otherwise payable under Section 4.2 for the number Bonus Period in which such termination of days you were employed employment occurs; provided, however, that (i) the Bonus Period shall be deemed to end on the last day of the calendar quarter in which the Executive's employment so terminates, and (ii) the business criteria used to determine the bonus for this short Bonus Period shall be annualized and shall be determined based upon audited financial information prepared in accordance with generally accepted accounting principles, applied consistently with prior periods, and reviewed and approved by the Company during fiscal year 2004 (Compensation Committee of the “2004 Unpaid Board. The Incentive Compensation for this Bonus Amounts”)Period is sometimes hereinafter referred to as the "Termination Year Bonus". Such amount would be paid at the same time that similar bonuses for fiscal year 2004 are paid to the Company’s other employees under the MIP. For purposes of Executive’s annual bonus for fiscal year 2004, the Executive’s bonus “at target” shall be the amount set forth on the signature page hereto under the label “Management Incentive (2004 Target)”.----------------------

Bonuses. The Company will establish a bonus plan for each fiscal year beginning after the completion of fiscal year 2004 (the “Plan”). The Board or the Compensation Committee of the Board will administer the Plan and establish performance objectives for each year in good faith based on the Company’s annual budget. During the Employment Period, the Executive will be entitled to receive an annual bonus (the “Bonus”) pursuant to the Plan based on the Company’s performance only if the Executive is employed on the last day of the applicable performance period (subject to Section 4). All such Bonuses shall become payable on a date reasonably determined by the Board or Compensation Committee thereof, after the Board or Compensation Committee finally determines (i) that the Company has achieved the applicable performance objectives and (ii) the amount of bonuses that shall be paid to each executive entitled to receive a bonus for the applicable bonus year. In respect of fiscal year 2004, the Executive shall be eligible to receive Bonuses in accordance with earn an annual bonus during each fiscal year (such year being referred to herein as a “Bonus Period”) that he remains an executive employee of the Company’s bonus arrangements with Company through the end of the Bonus Period. For each Bonus Period the Executive as and the Board of Directors shall adopt written performance goals within the Bonus Period (“Annual Goals”). If Annual Goals are met for a Bonus Period, the Executive shall earn a bonus equal to 100% of his then current Base Salary (for the avoidance of doubt, a delay by any person in existence prior the adoption of written performance goals shall not deny the Executive any bonus or, upon the adoption and achievement of such goals, delay in any way the payment thereof). If only certain of such Annual Goals are met, or Annual Goals are met only in part, for such Bonus Period, the Executive may earn a bonus, if any, equal to an amount to be determined by, and at the sole discretion of, the Board of Directors. Annual bonuses shall be payable to the Effective DateExecutive within 45 days after the end of the applicable Bonus Period (or within 30 days of the date on which it is determined that the Annual Goals have been met, exceeded, or not met, whichever is later). Notwithstanding Nothing in this paragraph 4 shall limit the immediately preceding sentenceBoard of Directors from awarding additional bonuses to the Executive based upon achievement of Company objectives, other than the Annual Goals, during the Bonus Period, in the event your employment is terminated by sole discretion of the Company without Cause or by you Board. Notwithstanding anything herein to the contrary, Executive’s annual bonus for Good Reason the initial Bonus Period (and only the initial Bonus Period) shall not be less than 50% of the salary earned in 2006. Further, within 12 months ninety (90) days of the Effective Date, Executive and the Company will pay to you an amount equal to Board of Directors shall adopt the annual bonus you would have received for fiscal year 2004 under the Company’s Management Incentive Plan (the “MIP”) had you remained employed by the Company Annual Goals for the entire fiscal year, prorated for the number of days you were employed by the Company during fiscal year 2004 (the “2004 Unpaid initial Bonus Amounts”). Such amount would be paid at the same time that similar bonuses for fiscal year 2004 are paid to the Company’s other employees under the MIP. For purposes of Executive’s annual bonus for fiscal year 2004, the Executive’s bonus “at target” shall be the amount set forth on the signature page hereto under the label “Management Incentive (2004 Target)”Period.

Bonuses. During the Term, Executive will be eligible to receive an annual bonus in accordance with the Gulfport Energy Corporation 2014 Executive Annual Incentive Compensation Plan as established by the Compensation Committee or the Board from time to time (the “Annual Bonus”). The Company Annual Bonus will establish a bonus plan be determined by the Compensation Committee or the Board based upon achievement of performance goals as determined by the Compensation Committee or the Board for each fiscal year beginning of the Company. Executive will be eligible to receive a target Annual Bonus of 75% of Base Salary subject to achievement of such performance goals, up to a maximum of 200% of Base Salary. The target Annual Bonus may be increased, but not decreased below the 75% level specified in this Section, at the discretion of the Board. The Compensation Committee or the Board may establish threshold performance goals that will result in an Annual Bonus of 50% of Base Salary, but no amount of Annual Bonus will be paid for performance results below the threshold performance goals. The Annual Bonus will be paid within fifteen (15) business days after the completion of fiscal year 2004 later of: (i) the “Plan”). The Board or written certification by the Compensation Committee of the Board will administer the Plan and establish performance objectives for each year in good faith based on the Company’s annual budget. During the Employment Period, the Executive will be entitled to receive an annual bonus (the “Bonus”) pursuant to the Plan based on the Company’s performance only if the Executive is employed on the last day achievement of the applicable performance period (subject to Section 4). All such Bonuses shall become payable on a date reasonably determined by the Board or Compensation Committee thereof, after the Board or Compensation Committee finally determines (i) that the Company has achieved the applicable performance objectives goals; and (ii) completion and release of the amount of bonuses that shall be paid to each executive entitled to receive a bonus audited financial statements for the applicable bonus fiscal year. In respect ; provided, however, subject to, and except as provided in Section 6 of fiscal year 2004this Agreement, the Executive shall must still be eligible to receive Bonuses in accordance with the Company’s bonus arrangements with the Executive as in existence prior to the Effective Date. Notwithstanding the immediately preceding sentence, in the event your employment is terminated by the Company without Cause or by you for Good Reason within 12 months of the Effective Date, the Company will pay to you an amount equal to the annual bonus you would have received for fiscal year 2004 under the Company’s Management Incentive Plan (the “MIP”) had you remained employed by the Company on the payment date to receive the Annual Bonus. The Company may satisfy the Annual Bonus under this Agreement, by means of an award under the Gulfport Energy Corporation 2014 Executive Annual Incentive Compensation Plan or any annual bonus or cash incentive compensation plan it maintains or may in the future adopt for its executives and any such award may be subject to additional terms and conditions under the entire fiscal yearterms of such plan. The Company will have the right to condition the payment of any Annual Bonus amounts on Executive’s execution of a document reasonably acceptable to the Company pursuant to which Executive confirms, ratifies and agrees that this Agreement and all of its provisions are valid and binding and are enforceable against Executive in accordance with their terms. Any bonus payable with respect to the 2014 calendar year may be prorated for the number of days you were employed by the Company during fiscal Compensation Committee to reflect the partial year 2004 (the “2004 Unpaid Bonus Amounts”). Such amount would be paid at the same time that similar bonuses for fiscal year 2004 are paid to the Company’s other employees under the MIP. For purposes of Executive’s annual bonus for fiscal year 2004, the Executive’s bonus “at target” shall be the amount set forth on the signature page hereto under the label “Management Incentive (2004 Target)”performance.

Bonuses. The Employee shall have the right to participate in the Company’s then-current bonus plan. Subject to and in accordance with the terms and conditions of such plan and this paragraph, and subject to the approval of the Board of Directors in its discretion, upon achievement of all bonus-related goals and objectives set by the Board of Directors and/or the Chief Executive Officer for the Company will establish a bonus plan and for each fiscal year beginning after the completion of fiscal year 2004 Employee (the “PlanBonus Objectives”), Employee shall receive a cash bonus equal to $250,000 (“Target Bonus”), less standard payroll deductions and withholding as are applicable to similarly situated employees. The Board or Employee’s Target Bonus shall be subject to annual review and may, at the Compensation Committee discretion of the Board will administer the Plan and establish performance objectives for each year in good faith based on the Company’s annual budgetBoard of Directors, be increased from time to time. During The Company shall have the Employment Periodsole discretion to (i) change or eliminate bonus plans or programs at any time (provided, however, that after the bonus plan and Target Bonus objectives have been established by the Board and/or the Chief Executive Officer for a given year, neither the Board nor the Chief Executive Officer shall later materially change the bonus plan or Bonus Objectives for such year to Employee’s detriment without Employee’s consent), (ii) determine whether the Bonus Objectives for a given year have been achieved, and (iii) determine (in accordance with this Section and such Bonus Objectives and bonus plan) the amount of bonus earned by Employee, if any. Notwithstanding the foregoing, the Executive will be entitled bonus payable to receive an annual bonus (Employee in each of 2012 and 2013, subject to his continued employment by the “Bonus”) pursuant to the Plan based on Company but irrespective of his or the Company’s performance only in respect of the Bonus Objectives, shall not be less than $125,000. Bonuses are intended to retain valuable Company employees, and if the Executive Employee is not employed for any reason on the last day of the applicable performance period (subject bonus year, he will not have earned the bonus and, except as expressly provided herein with respect to the Severance Bonus, no partial or pro-rata bonus will be paid. Any bonus paid pursuant to this Section 4). All such Bonuses shall become payable on a date reasonably determined by the Board or Compensation Committee thereof, after the Board or Compensation Committee finally determines (i) that the Company has achieved the applicable performance objectives and (ii) the amount of bonuses that 4 shall be paid to each executive entitled to receive net of standard payroll deductions and withholdings. The target payment date for any bonus measured on the basis of a bonus for the applicable bonus year. In respect of fiscal calendar year 2004, the Executive shall be eligible to receive Bonuses in accordance with the Company’s bonus arrangements with the Executive as in existence prior to the Effective Date. Notwithstanding the immediately preceding sentence, in the event your employment is terminated by the Company without Cause or by you for Good Reason within 12 months between January 1 and April 15 of the Effective Datecalendar year following the end of the performance period; provided, the Company will pay to you an amount equal to the annual however, that such bonus you would have received for fiscal year 2004 under the Company’s Management Incentive Plan (the “MIP”) had you remained employed by the Company for the entire fiscal year, prorated for the number of days you were employed by the Company during fiscal year 2004 (the “2004 Unpaid Bonus Amounts”). Such amount would shall be paid at no later than April 15 of such calendar year following the same time that similar bonuses for fiscal year 2004 are paid to end of the Company’s other employees under the MIP. For purposes of Executive’s annual bonus for fiscal year 2004, the Executive’s bonus “at target” shall be the amount set forth on the signature page hereto under the label “Management Incentive (2004 Target)”performance period.

Bonuses. The Company will establish a bonus plan for each fiscal year beginning after 6.1. By no later than 2 months following the completion of the fiscal year 2004 of the Company, the Company’s Board of Directors shall establish targets for such fiscal year (the “PlanBonus Targets”) linked to the Company’s work plan and budget, that if the Company together with the Parent Company achieve, will entitle the Employee to receive a bonus payment. The bonus payment to the Employee for the fiscal year in case the Bonus Targets are fully achieved shall be 6 times the monthly Salary of Employee or a higher payment determined by the Company’s Board of Directors, in their sole discretion (the “Target Bonus Amount”). The Board or the Compensation Committee targets may be comprised of sub-targets and portions of the Board will administer bonus may be allocated to each such target or sub-target, as applicable, in any proportion and whether such payments are linear to the Plan and establish performance objectives for each year in good faith based on partial achievement of a target, all as determined by the Company’s Board of Directors, in their sole discretion. 6.2. By no later than 30 days following the public filing of the audited annual budget. During consolidated financial statements of the Employment PeriodParent Company, other than the audited annual consolidated financial statements of the Parent Company for the year 2007, the Executive Company’s Board of Directors shall determine whether the Employee achieved the Bonus Targets and the bonus to which the Employee is entitled to receive as a result thereof (the “Entitled Bonus Amount”). The Company shall pay to the Employee the Entitled Bonus Amount within 3 business days following such determination. 6.3. Notwithstanding the above, for the period commencing on the Effective Date and concluding on December 31, 2008, the Target Bonus Amount shall be 7.5 times the monthly Salary of Employee. In addition, notwithstanding the above, for the period commencing on the Effective Date and concluding on December 31, 2008, notwithstanding the actual results of the Company and Parent Company but subject to Section 6.4 below, the Employee shall receive a bonus for such period equal to at least 4.5 Salaries (the “Initial Bonus”). Within 30 days following the public filing of the audited annual consolidated financial statements of the Parent Company for the year 2007, Employee will be entitled to receive an annual bonus receive, as advance on the account of the Initial Bonus, one time payment in the amount of 1.125 Salaries (the “BonusAdvance”) pursuant ). 6.4. Notwithstanding anything to the Plan based on contrary herein, in the event the Employee’s employment with the Company is terminated prior to the conclusion of the fiscal year for any reason whatsoever, the Company’s performance only if Board of Directors shall determine whether the Executive is employed on Employee achieved the last day Bonus Targets until the termination of the applicable performance period (subject Employee’s employment, and if and to Section 4). All the extent the Company’s Board of Directors determines that certain Bonus Targets were fully achieved prior to such Bonuses date, Employee shall become payable on a date reasonably determined by the Board or Compensation Committee thereofbe entitled to receive, within 30 days after the Board termination of his Employment, the bonus to which the Employee is entitled to receive as a result thereof. For the avoidance of doubt, the Employee shall not be entitled to receive any other bonus or Compensation Committee finally determines any portion thereof for such fiscal year. Notwithstanding the above: (i) that in the event the Company has achieved terminates Employee’s employment with the applicable performance objectives Company for any reason other than Termination for Cause prior to December 31, 2008, Employee shall be entitled to the respective portion of the Initial Bonus (to be calculated as the pro rata portion of the period of employment until termination of employment from the entire period from the Effective Date and until September 30, 2008), minus the Advance, if any and (ii) the amount of bonuses that shall be paid to each executive entitled to receive a bonus for the applicable bonus year. In respect of fiscal year 2004, the Executive shall be eligible to receive Bonuses in accordance with the Company’s bonus arrangements with the Executive as in existence prior to the Effective Date. Notwithstanding the immediately preceding sentence, in the event your employment is terminated by the Company without terminates Employee’s employment with the Company Termination for Cause or by you for Good Reason within 12 months of the Effective Date, Employee terminates his employment with the Company will pay prior to you an amount equal December 31, 2008, Employee shall not be entitled to the annual bonus you would have received for fiscal year 2004 under the Company’s Management Incentive Plan (the “MIP”) had you remained employed by the Company for the entire fiscal year, prorated for the number of days you were employed by the Company during fiscal year 2004 (the “2004 Unpaid Bonus Amounts”)any bonus. Such amount would be paid at the same time that similar bonuses for fiscal year 2004 are paid to the Company’s other employees under the MIP. For purposes of Executive’s annual bonus for fiscal year 2004, the Executive’s bonus “at target” shall be the amount set forth on the signature page hereto under the label “Management Incentive (2004 Target)”.

Bonuses. The Company Upon execution of this Agreement, Executive will establish be entitled to receive a signing bonus plan for each fiscal year beginning after equal to $262,500, such payment to be made in a cash lump sum on the completion first payroll date following the execution of fiscal year 2004 this Agreement. During the Employment Period, Executive shall be entitled to an annual bonus (the “PlanAnnual Bonus”). The Board or ) based on criteria adopted by the Compensation Committee of the Board will administer of Directors (the Plan and establish performance objectives “Compensation Committee”) for each year in good faith based on earning Bonuses which shall be adopted by the Compensation Committee annually for its senior executives. Bonuses shall be paid by the Company to Executive promptly after determination that the relevant targets have been met, it being understood that the attainment of any financial targets associated with any bonus shall not be determined until following the completion of the Company’s annual budgetaudit and public announcement of such results and shall be paid promptly following the Company’s announcement of earnings. During Notwithstanding any provision herein to the Employment Periodcontrary, Executive shall be paid an amount equal to $87,500 as his Annual Bonus for the calendar year 2011. The annual “Target Bonus” for Executive will for each calendar year after 2011 shall be 100% of the associated Base Salary for such year based upon achievement of 100% of the criteria for Executive established by the Compensation Committee. Any annual Target Bonus earned by Executive shall be paid no later than March 15 of the year following the year to which the Target Bonus relates. With respect to each Target Bonus, in the event that Executive does not achieve 100% of the established criteria or exceeds the established criteria, then Executive shall receive a pro rata portion of the Target Bonus based on the percentage of the criteria achieved by Executive. For illustrative purposes only, if Executive achieved 95% of the established criteria for the Annual Bonus, then Executive would receive an Annual Bonus equal to 95% of the Target Bonus, and if Executive achieved 110% of the established criteria, then Executive would receive an Annual Bonus equal to 110% of the Target Bonus. Notwithstanding the foregoing (but expressly excluding the calendar year 2011), if Executive does not achieve at least 75% of the established criteria for an Annual Bonus, then Executive shall not receive an Annual Bonus for such year. For the avoidance of doubt, if Executive is employed upon expiration of the term of this Agreement, he shall be entitled to receive an annual bonus (the “Bonus”) pursuant Annual Bonus for such last year on a pro-rata basis through the last date of employment, even if he is not employed by the Company on the date the Annual Bonus is paid for such last year. Notwithstanding anything to the Plan based on contrary in this Section 5, in the Company’s performance only if the Executive is employed on the last day event of the applicable performance period (subject to Section 4). All such Bonuses shall become payable on a date reasonably determined by the Board or Compensation Committee thereofChange of Control, after the Board or Compensation Committee finally determines (i) that the Company has achieved the applicable performance objectives and (ii) the amount of bonuses that shall be paid to each executive entitled to receive a bonus for the applicable bonus year. In respect of fiscal year 2004, the Executive shall be eligible to receive Bonuses for an Annual Bonus in accordance with the Company’s bonus arrangements with the Executive as in existence prior to the Effective Date. Notwithstanding the immediately preceding sentence, in the event your employment is terminated policies and programs provided by the Company without Cause or by you for Good Reason within 12 months of acquiring corporation and/or the Effective Date, the Company will pay to you an amount equal to the annual bonus you would have received for fiscal year 2004 under the Company’s Management Incentive Plan (the “MIP”) had you remained employed by the Company for the entire fiscal year, prorated for the number of days you were employed by the Company during fiscal year 2004 (the “2004 Unpaid Bonus Amounts”). Such amount would be paid at the same time that similar bonuses for fiscal year 2004 are paid successor to the Company’s other employees under the MIP. For purposes of Executive’s annual bonus for fiscal year 2004, the Executive’s bonus “at target” shall be the amount set forth on the signature page hereto under the label “Management Incentive (2004 Target)”as applicable.

Bonuses. The Company will establish a. During the Term of Employment, the Executive shall be eligible for an annual cash bonus from 0% to 60% of the Base Salary in effect as of the beginning of each Bonus Period (as defined in Section 3.2(e) below) with a minimum bonus plan for each fiscal year achieving minimum expectations of the Compensation Committee of 15% of the Base Salary in effect as of the beginning after the completion of fiscal year 2004 that Bonus Period (the “PlanCash Bonus”). The Board Compensation Committee will establish its minimum expectations and annual objectives for the Executive for each Bonus Period and communicate those expectations and objectives to the Executive in an executive session of the Committee. b. The Executive shall be eligible for an annual long-term incentive Bonus of up to 150% of the Base Salary in effect as of the beginning of the Bonus Period (as defined in Section 3.2(e), below) reduced by the amount of the Cash Bonus payable with respect to the same Bonus Period, if any (the “Long-Term Bonus”), which may be paid in cash or may be awarded and paid pursuant to such plan or arrangement as the Company may from time to time establish. The Long-Term Bonus awards may be made subject to a vesting schedule and subject to the satisfaction of certain long-term performance criteria which the Compensation Committee may establish (and adjust) from time to time and communicate to the Executive. The Compensation Committee shall have the discretion to settle the Long-Term Bonus awards that become payable to the Executive in cash or equity interests of the Board will administer Company. c. For the Plan and establish performance objectives Bonus Period (as defined in Section 3.1(e) below) in which the Executive’s employment with the Company terminates for each year in good faith any reason other than by the Company for Cause under Section 5.1 hereof, the Company shall pay the Executive a pro rata portion (based upon the period ending on the Companydate on which the Executive’s annual budgetemployment with the Company terminates) of the Cash Bonus otherwise payable under Section 3.2(a) and the Long-Term Bonus otherwise payable under Section 3.2(b) for the Bonus Period in which such termination of employment occurs. During the Employment Period, the Executive will The Bonus Period shall be entitled deemed to receive an annual bonus (the “Bonus”) pursuant to the Plan based on the Company’s performance only if the Executive is employed end on the last day of the applicable performance fiscal quarter of the Company in which the Executive’s employment so terminates, and the business criteria for this short Bonus Period shall be annualized and shall be determined based upon unaudited financial information prepared in accordance with generally accepted accounting principles, applied consistently with prior periods, and reviewed and approved by the Compensation Committee of the Board. The Incentive Compensation described in this Section 3.2(c) is sometimes hereinafter referred to as the “Termination Year Bonus.” d. The Executive may receive such additional compensation, if any, as the Board may in its sole and absolute discretion determine. e. Any bonuses payable pursuant to this Section 3.2 are sometimes hereinafter referred to as “Incentive Compensation.” Each period (subject for which Incentive Compensation is payable is sometimes hereinafter referred to Section 4). All such Bonuses shall become payable on as a date reasonably determined “Bonus Period.” Unless otherwise specified by the Board or as provided in Section 3.2(c), the Bonus Period with respect to each Cash Bonus and each Long-Term Bonus shall be the calendar year. f. Any Incentive Compensation Committee thereof, after the Board or Compensation Committee finally determines (i) that the Company has achieved the applicable performance objectives and (ii) the amount of bonuses that payable pursuant to this Section 3.2 shall be paid to each executive entitled to receive a bonus for the applicable bonus year. In respect of fiscal year 2004, the Executive shall be eligible to receive Bonuses in accordance with the Company’s bonus arrangements with the Executive as in existence prior to the Effective Date. Notwithstanding the immediately preceding sentence, in the event your employment is terminated or awarded by the Company without Cause or by you for Good Reason to the Executive within 12 2 1/2 months after the end of the Effective Date, the Company will pay to you an amount equal to the annual bonus you would have received Bonus Period for fiscal year 2004 under the Company’s Management Incentive Plan (the “MIP”) had you remained employed by the Company for the entire fiscal year, prorated for the number of days you were employed by the Company during fiscal year 2004 (the “2004 Unpaid Bonus Amounts”). Such amount would be paid at the same time that similar bonuses for fiscal year 2004 are paid to the Company’s other employees under the MIP. For purposes of Executive’s annual bonus for fiscal year 2004, the Executive’s bonus “at target” shall be the amount set forth on the signature page hereto under the label “Management Incentive (2004 Target)”which it is payable.

Bonuses. (a) The Company will establish agrees to pay Executive a one-time cash sign-on bonus plan for each fiscal year beginning after the completion of fiscal year 2004 $150,000 (the “PlanSign-On Bonus”), to be paid within thirty (30) days following the Effective Date. The Board If Executive’s employment with the Company is terminated by the Company with Cause at any time during the Term or if Executive resigns without Good Reason less than twelve (12) full months after the Effective Date, Executive agrees to repay the full amount of the Sign-On Bonus. Executive further agrees that Executive will repay the Sign-On Bonus by no later than the effective date of the employment termination, and that any outstanding balance on such repayment obligation is delinquent and immediately collectable the day following the effective date of termination. (b) During the Initial Term, Executive shall be eligible to receive two (2) cash performance bonuses, each worth a target value of $75,000 (individually, an “Initial Term Performance Bonus” and collectively, the “Initial Term Performance Bonuses”), if the Company and Executive meet or exceed certain performance targets to be adopted by the Compensation Committee of the Board will administer (the Plan and establish “Compensation Committee”). Executive shall be responsible for proposing the relevant performance objectives targets for each year of the Initial Term Performance Bonuses to the Compensation Committee, but only those performance targets actually adopted by the Compensation Committee, in good faith its discretion, shall apply to the Initial Term Performance Bonuses. The Compensation Committee shall solely determine whether the Company and Executive have satisfied the relevant performance targets. The first Initial Term Performance Bonus shall be evaluated based on the Company’s annual budget. During the Employment Period, the Executive will be entitled to receive an annual bonus (the “Bonus”) pursuant to the Plan based on the CompanyCompany and Executive’s performance only if from the Effective Date through the end of the second quarter of calendar year 2020. If Executive is employed on by the Company as of the last day of the applicable performance period (subject to Section 4). All such Bonuses shall become payable on a date reasonably determined by second quarter of calendar year 2020 and if the Board or Compensation Committee thereofCommittee, after the Board or Compensation Committee finally in its sole discretion, determines (i) that the Company first Initial Term Performance Bonus has achieved been earned based on the applicable satisfaction of the relevant performance objectives and (ii) the amount of bonuses that targets, Executive shall be paid to each executive entitled to receive a bonus within thirty (30) days after the Company’s 2020 second quarter financial statements are approved by the Audit Committee of the Board (the “Audit Committee”) for inclusion in the Company’s Quarterly Report on Form 10-Q for the applicable bonus quarter ended June 30, 2020, but, in any event, any payment shall be made no later than March 15, 2021. The second Initial Term Performance Bonus shall be evaluated based on the Company and Executive’s performance throughout all of calendar year 2020. If Executive is employed by the Company as of January 1, 2021 and if the Compensation Committee, in its sole discretion, determines that the second Initial Term Performance Bonus has been earned based on the satisfaction of the relevant performance targets, Executive shall be paid within thirty (30) days after the Company’s 2020 year. In respect of fiscal -end financial statements are approved by the Audit Committee for inclusion in the Company’s Annual Report on Form 10-K for the year 2004ended December 31, 2020, but, in any event, any payment shall be made no later than March 15, 2022. (c) During the Subsequent Term, Executive shall be eligible to receive two (2) performance bonuses, each worth a target value of $125,000 (individually, a “Subsequent Term Performance Bonus” and collectively, the “Subsequent Term Performance Bonuses”), if the Company and Executive meet or exceed certain performance targets to be adopted by the Compensation Committee. Executive shall be responsible for proposing the relevant performance targets for each of the Subsequent Term Performance Bonuses in accordance with the Company’s bonus arrangements with the Executive as in existence prior to the Effective Date. Notwithstanding Compensation Committee, but only those performance targets actually adopted by the immediately preceding sentenceCompensation Committee, in its discretion, shall apply to the event your employment is terminated by Subsequent Term Performance Bonuses. The Compensation Committee shall solely determine whether the Company without Cause or by you for Good Reason within 12 months of and Executive have satisfied the Effective Date, relevant performance targets. The first Subsequent Term Performance Bonus shall be evaluated based on the Company will pay to you an amount equal to and Executive’s performance during the annual bonus you would have received for fiscal first and second quarters of calendar year 2004 under the Company’s Management Incentive Plan (the “MIP”) had you remained 2021. If Executive is employed by the Company as of the last day of the second quarter of calendar year 2021 and if the Compensation Committee, in its sole discretion, determines that the first Subsequent Term Performance Bonus has been earned, Executive shall be paid within thirty (30) days after the Company’s 2021 second quarter financial statements are approved by the Audit Committee for inclusion in the Company’s Quarterly Report on Form 10-Q for the entire fiscal yearquarter ended June 30, prorated for 2021, but, in any event, any payment shall be made no later than March 15, 2022. The second Subsequent Term Performance Bonus shall be evaluated based on the number Company and Executive’s performance throughout all of days you were calendar year 2021. If Executive is employed by the Company during fiscal as of January 1, 2022 and if the Compensation Committee, in its sole discretion, determines that the second Subsequent Term Performance Bonus has been earned, Executive shall be paid within thirty (30) days after the Company’s 2021 year-end financial statements are approved by the Audit Committee for inclusion in the Company’s Annual Report on Form 10-K for the year 2004 ended December 31, 2021, but, in any event, any payment shall be made no later than March 15, 2023. The Subsequent Term Performance Bonuses will be paid in a combination of cash and Restricted Stock Units (“RSUs”) of the Company, with such combination to be determined by the Compensation Committee taking into consideration the mix requested by Executive. (d) During each Additional Term, Executive shall be eligible to receive one performance bonus per year worth a target value of $250,000 (the “2004 Unpaid Additional Term Performance Bonus”), if the Company and Executive meet or exceed certain performance targets to be adopted by the Compensation Committee. Executive shall be responsible for proposing the relevant performance targets for the Additional Term Performance Bonus Amountsto the Compensation Committee, but only those performance targets actually adopted by the Compensation Committee, in its discretion, shall apply to the Additional Term Performance Bonus. The Compensation Committee shall solely determine whether the Company and Executive have satisfied the relevant performance targets. The Additional Term Performance Bonus shall be evaluated based on the Company and Executive’s performance throughout the entire calendar year with which the Additional Term Performance Bonus corresponds (“Additional Term Performance Bonus Year”). Such amount would If Executive is employed by the Company as of January 1 of the year immediately following the Additional Term Performance Bonus Year and if the Compensation Committee, in its sole discretion, determines that the Additional Term Performance Bonus has been earned, Executive shall be paid at the same time that similar bonuses for fiscal year 2004 are paid to within thirty (30) days after the Company’s other employees under year-end financial statements for the MIP. For purposes Additional Term Performance Bonus Year are approved by the Audit Committee for inclusion in the Company’s Annual Report on Form 10-K for the year ended December 31 of Executive’s annual bonus for fiscal year 2004the Additional Term Performance Bonus Year, the Executive’s bonus “at target” but, in any event, any payment shall be made no later than March 15 of the amount set forth on year that is two (2) years immediately following the signature page hereto under Additional Term Performance Bonus Year. The Additional Term Performance Bonus will be paid in a combination of cash and RSUs of the label “Management Incentive (2004 Target)”Company, with such combination to be determined by the Compensation Committee taking into consideration the mix requested by Executive.

Bonuses. The Company will establish a (a) In addition to the Base Salary, the Executive shall participate in the Company’s current bonus plan for each fiscal year beginning after the completion of fiscal year 2004 senior corporate officers (the “Bonus Plan”). The Board or , as approved by the Compensation Committee of the Board will administer of Directors in each calendar year during the Plan term of this Agreement. The Executive’s target bonus is one hundred twenty percent (120%) of the Base Salary earned during the calendar year (the “Target Bonus”) and establish performance objectives for each year in good faith based is contingent on the Company’s annual budget. During Executive meeting certain performance criteria and the Employment PeriodCompany achieving certain financial criteria, and up to two hundred forty percent (240%) of the Base Salary earned during the calendar year (the “Maximum Bonus”) if the Executive will exceeds certain performance criteria and the Company exceeds certain financial criteria all as determined in the reasonable discretion of the Board of Directors and its Compensation Committee. The Executive shall be entitled to receive an annual bonus (such increases in the “Target Bonus”) pursuant ” and the “Maximum Bonus” during the term hereof as shall be determined and approved by the Compensation Committee of the Board of Directors in its sole discretion, taking account of the performance of the Company and the Executive, and other factors generally considered relevant to the Plan based on salaries of executives holding similar positions with enterprises comparable to the Company’s performance only if . Notwithstanding the foregoing, in the event that the Executive is employed on or the last day Company fail to attain their minimum respective criteria in any given year, the Board of Directors and its Compensation Committee may, in their reasonable discretion, decline to award any bonus to the Executive. (b) The bonus described in this Section 3.2 shall be payable between January 1 and March 15 (inclusive) of the applicable performance period (subject to Section 4). All such Bonuses shall become payable on a date reasonably calendar year following the calendar year for which the bonus is determined by the Board or Compensation Committee thereof, after the Board or Compensation Committee finally determines (i) that the Company has achieved the applicable performance objectives and (ii) the amount of bonuses that shall be paid to each executive entitled to receive a bonus for the applicable bonus year. In respect of fiscal year 2004, the Executive shall be eligible to receive Bonuses in accordance with the Company’s normal practices. In the event that the Executive is employed for less than the full calendar year in the year in which the Executive’s Termination Date occurs (“Termination Year”), the bonus arrangements payable to the Executive shall be subject to Sections 4 and 5 of this Agreement and calculated based on the Executive meeting certain performance criteria and the Company achieving certain year-end financial criteria, all as determined by the Compensation Committee of the Board of Directors, in its sole discretion. Such bonus shall be pro-rated for the portion of the Termination Year during which the Executive was employed by the Company. With respect to the bonus for the Termination Year, any bonus payable pursuant to this Section 3.2 shall be payable to the Executive between January 1 and March 15 (inclusive) of the calendar year following the calendar year for which the bonus is determined in accordance with the Executive Company’s normal practices. (c) For any year beginning during the twenty-four (24) month period following a Change in Control (the “Change in Control Period”), as well as for any year in existence which a Change in Control occurs if such Change in Control occurs prior to the Effective Dategrant of annual bonus opportunities for such year, to assure that Executive will have an opportunity to earn annual incentive compensation, the Executive shall be included in a bonus plan of the Company which shall satisfy the standards described above and in this Section 3(c) (such plan, the “Post-Change-in-Control Bonus Plan”). Notwithstanding Bonuses under the immediately preceding sentencePost-Change-in-Control Bonus Plan shall be payable with respect to achieving such financial or other goals reasonably related to the business of the Company as the Company shall establish (the “Goals”), in the event your employment is terminated all of which Goals shall be reasonably attainable, by the Company without Cause or by you for Good Reason within 12 months end of the Effective Dateyear of grant, with approximately the Company will pay to you an amount equal to same degree of probability as the annual bonus you would have received for fiscal year 2004 most attainable goals under the Company’s Management Incentive Plan bonus plan or plans as in effect at any time during the 180-day period immediately prior to the Change in Control and in view of the Company’s existing and projected financial and business circumstances applicable at the time. The amount of the bonus (the “MIPBonus Amount”) had you remained employed that Executive is eligible to earn under the Post-Change-in-Control Bonus Plan shall be no less than one hundred percent (100%) of the Target Bonus for which the Executive was eligible in the year prior to the Change in Control for achievement of the target Goals, and no less than one hundred percent (100%) of the Maximum Bonus for which the Executive was eligible in the year prior to the Change in Control for achievement exceeding the target Goals, and in the event the target level of Goals are not achieved, the Post-Change-in-Control Bonus Plan shall provide for a payment of a Bonus Amount equal to a portion of the Targeted Bonus reasonably related to that portion of the Goals which were achieved. Notwithstanding the foregoing, if, during a Change in Control Period, employees of the Company or the successor or acquirer in the Change in Control who are similarly situated to the Executive are eligible for greater bonus amounts than those provided by the Company foregoing sentence, then the Executive shall be eligible for a Bonus Amount no less than that offered to such similarly situated employees. In the entire fiscal yearevent that the Executive is employed for less than the full year for which a Post-Change-in-Control Bonus Plan is in effect, prorated for the number of days you were employed by the Company during fiscal year 2004 (the “2004 Unpaid Bonus Amounts”). Such amount would be paid at the same time that similar bonuses for fiscal year 2004 are paid bonus payable to the Company’s other employees under the MIP. For purposes of Executive’s annual bonus for fiscal year 2004, the Executive’s bonus “at target” Executive shall be determined as described in Section 3.2(b) except that no discretion may be applied to reduce the amount set forth on of the signature page hereto under bonus otherwise payable to the label “Management Incentive (2004 Target)”Executive and any subjective performance objectives applicable to the bonus shall be deemed satisfied.

Bonuses. The Company will establish a bonus plan for each fiscal year beginning after the completion of fiscal year 2004 (the “Plan”). The Board or the Compensation Committee of the Board will administer the Plan and establish performance objectives for each year in good faith based on the Company’s annual budget. During the Employment Period, the Executive will be entitled to receive an annual bonus (the “Bonus”a) pursuant In addition to the Plan based on the Company’s performance only if the Executive is employed on the last day of the applicable performance period (subject to Base Salary provided for in Section 4). All such Bonuses shall become payable on a date reasonably determined by the Board or Compensation Committee thereof, after the Board or Compensation Committee finally determines (i) that the Company has achieved the applicable performance objectives and (ii) the amount of bonuses that shall be paid to each executive entitled to receive a bonus for the applicable bonus year. In respect of fiscal year 2004above, the Executive shall be eligible for an annual cash bonus under the Company’s Annual Incentive Compensation Plan as in effect from time to receive Bonuses time. Any annual bonus shall be paid in cash in a lump sum no later than March 15 following the year for which the annual bonus is paid, unless timely deferred at the Executive’s option in accordance with the provisions of any applicable deferred compensation plan of the Company or it subsidiaries in effect from time to time and in accordance with Section 409A of the Code. Nothing in this Section 5 shall confer upon the Executive any right to a minimum annual bonus. Executive also shall be eligible to participate in the Company’s bonus arrangements long term incentive award plan commencing with the year 2007 in accordance with the terms of that plan. The Executive may be awarded such annual bonuses and long-term incentive awards thereunder as may be approved by the Compensation Committee in existence its discretion based on corporate, individual and business unit performance measures, as appropriate, established or approved from time to time, by the Compensation Committee. (b) Further, on December 19, 2007 Executive was awarded a grant of 100,000 options (the “Options”) to vest ratably over three years, vesting to occur at the rate of 33.33% each year on the anniversary of the grant date. In addition, Executive has been awarded a grant of 50,000 restricted shares (the “Restricted Shares”) to vest ratably over four years, vesting to occur at the rate of 25% each year on the anniversary of the grant date. Such Options and Restricted Shares shall vest in full on the earlier of a Change in Control (as defined in Exhibit A) or on the Stay Date (as defined below) so long as the Executive has not had a Disqualifying Termination prior to such vesting date. (c) In recognition of the efforts of the Executive with respect to the negotiation, execution and consummation of the transactions contemplated by the Master Transaction Agreement, dated July 28, 2008, among the Company and several of its subsidiaries, XL Capital Ltd and certain of its affiliates and certain financial institutions, the Company shall pay the Executive, within three business days after the Effective Date. Notwithstanding , a lump sum cash payment of US$1,500,000 (the immediately preceding sentence“Transaction Bonus”). (d) Because the Company views the Executive’s services through at least October 31, 2008 (the “Stay Date”) as critical to its restructuring process, the Company shall pay the Executive within three business days after the Effective Date, a lump sum cash payment of US$550,000 (the “Stay Bonus”). (e) In addition, in consideration of the event your employment is terminated by Executive’s agreement to the Company without Cause or by you for Good Reason Release and Non-Compete provisions set forth herein and waiver of certain rights, the Executive shall be entitled to an additional payment (the “Amendment Payment”) in the amount of US$1,250,000, payable in a lump sum cash payment within 12 months of three business days after the Effective Date, the Company will pay to you an amount equal Executive agrees that upon receipt of such payment, he shall irrevocably waive and forfeit any further right or entitlement to the annual bonus you would have received following amounts: (i) any payments pursuant to the Company’s Offer to Exchange, dated November 13, 2006, (ii) any retention payments not previously paid or indefeasibly earned, except to the extent provided herein, (iii) any other severance payments previously agreed to by the Company under the Prior Agreement, (iv) any vested or unvested options to purchase Company common stock other than the Options, and (iv) any housing benefit payable from and after the Effective Date. (f) Notwithstanding any other provision in this Agreement, in the event the Executive’s employment with the Company is terminated before the Stay Date (i) by the Company by reason of the conviction of the Executive of a felony involving moral turpitude, dishonesty, or violation of laws to which the Company or its Affiliates are subject in connection with the conduct of its or their business or (ii) by the Executive other than for fiscal year 2004 Good Reason (as defined in Exhibit B) (each, a “Disqualifying Termination”), then the Executive agrees to repay the Stay Bonus and the Amendment Payment to the Company within three days after the effective date of such Disqualifying Termination. For avoidance of doubt, a termination of the Executive’s employment by reason of the Executive’s death or disability (as defined in the long-term disability plan of the Company) will not be deemed a Disqualifying Termination. (g) The Executive further agrees simultaneously with entering into this Agreement (but with the effectiveness thereof to be conditioned on the receipt of the payments mentioned in Subsections (c), (d) and (e), above), to execute and deliver the General Release and Consent Not to Sxx (the “Release”) attached as Exhibit C. For avoidance of doubt, the Parties acknowledge and agree that the Release does not waive or release (a) any rights under this Agreement, (b) any right to any vested or accrued benefits (except as set forth in this Agreement) or to claim benefits under employee benefit plans (including welfare benefit, retirement and, except as set forth in the Agreement, equity-related plans), (c) any right of indemnification (including, without limitation, indemnification, legal defense and related rights under the Company’s Management Incentive Plan certificate of incorporation, by-laws or other such organic documents), and (the “MIP”d) had you remained employed by the Company for the entire fiscal year, prorated for the number of days you were employed by the Company during fiscal year 2004 (the “2004 Unpaid Bonus Amounts”). Such amount would be paid at the same time that similar bonuses for fiscal year 2004 are paid to the Company’s other employees any rights under the MIP. For purposes of Executive’s annual bonus for fiscal year 2004, the Executive’s bonus “at target” shall be the amount set forth on the signature page hereto under the label “Management Incentive (2004 Target)”directors and officers’ liability insurance policies.

Bonuses. The Company will establish a (a) In addition to the Base Salary, the Executive shall participate in the Company’s current bonus plan for each fiscal year beginning after the completion of fiscal year 2004 senior corporate officers (the “Bonus Plan”). The Board or , as approved by the Compensation Committee of the Board will administer of Directors in each calendar year during the Plan term of this Agreement. The Executive’s target bonus is sixty percent (60%) of the Base Salary earned during the calendar year (the “Target Bonus”) and establish performance objectives for each year in good faith based is contingent on the Company’s annual budget. During Executive meeting certain performance criteria and the Employment PeriodCompany achieving certain financial criteria, and up to one hundred twenty percent (120%) of the Base Salary earned during the calendar year (the “Maximum Bonus”) if the Executive will exceeds certain performance criteria and the Company exceeds certain financial criteria all as determined in the reasonable discretion of the Board of Directors and its Compensation Committee. The Executive shall be entitled to receive an annual bonus (such increases in the “Target Bonus”) pursuant ” and the “Maximum Bonus” during the term hereof as shall be determined and approved by the Compensation Committee of the Board of Directors in its sole discretion, taking account of the performance of the Company and the Executive, and other factors generally considered relevant to the Plan based on salaries of executives holding similar positions with enterprises comparable to the Company’s performance only if . Notwithstanding the foregoing, in the event that the Executive is employed on or the last day Company fail to attain their minimum respective criteria in any given year, the Board of Directors and its Compensation Committee may, in their reasonable discretion, decline to award any bonus to the Executive. (b) The bonus described in this Section 3.2 shall be payable between January 1 and March 15 (inclusive) of the applicable performance period (subject to Section 4). All such Bonuses shall become payable on a date reasonably calendar year following the calendar year for which the bonus is determined by the Board or Compensation Committee thereof, after the Board or Compensation Committee finally determines (i) that the Company has achieved the applicable performance objectives and (ii) the amount of bonuses that shall be paid to each executive entitled to receive a bonus for the applicable bonus year. In respect of fiscal year 2004, the Executive shall be eligible to receive Bonuses in accordance with the Company’s normal practices. In the event that the Executive is employed for less than the full calendar year in the year in which the Executive’s Termination Date occurs (“Termination Year”), the bonus arrangements payable to the Executive shall be subject to Sections 4 and 5 of this Agreement and calculated based on the Executive meeting certain performance criteria and the Company achieving certain year-end financial criteria, all as determined by the Compensation Committee of the Board of Directors, in its sole discretion. Such bonus shall be pro-rated for the portion of the Termination Year during which the Executive was employed by the Company. With respect to the bonus for the Termination Year, any bonus payable pursuant to this Section 3.2 shall be payable to the Executive between January 1 and March 15 (inclusive) of the calendar year following the calendar year for which the bonus is determined in accordance with the Executive Company’s normal practices. (c) For any year beginning during the twenty-four (24) month period following a Change in Control (the “Change in Control Period”), as well as for any year in existence which a Change in Control occurs if such Change in Control occurs prior to the Effective Dategrant of annual bonus opportunities for such year, to assure that Executive will have an opportunity to earn annual incentive compensation, the Executive shall be included in a bonus plan of the Company which shall satisfy the standards described above and in this Section 3(c) (such plan, the “Post-Change-in-Control Bonus Plan”). Notwithstanding Bonuses under the immediately preceding sentencePost-Change-in-Control Bonus Plan shall be payable with respect to achieving such financial or other goals reasonably related to the business of the Company as the Company shall establish (the “Goals”), in the event your employment is terminated all of which Goals shall be reasonably attainable, by the Company without Cause or by you for Good Reason within 12 months end of the Effective Dateyear of grant, with approximately the Company will pay to you an amount equal to same degree of probability as the annual bonus you would have received for fiscal year 2004 most attainable goals under the Company’s Management Incentive Plan bonus plan or plans as in effect at any time during the 180-day period immediately prior to the Change in Control and in view of the Company’s existing and projected financial and business circumstances applicable at the time. The amount of the bonus (the “MIPBonus Amount”) had you remained employed that Executive is eligible to earn under the Post-Change-in-Control Bonus Plan shall be no less than one hundred percent (100%) of the Target Bonus for which the Executive was eligible in the year prior to the Change in Control for achievement of the target Goals, and no less than one hundred percent (100%) of the Maximum Bonus for which the Executive was eligible in the year prior to the Change in Control for achievement exceeding the target Goals, and in the event the target level of Goals are not achieved, the Post-Change-in-Control Bonus Plan shall provide for a payment of a Bonus Amount equal to a portion of the Targeted Bonus reasonably related to that portion of the Goals which were achieved. Notwithstanding the foregoing, if, during a Change in Control Period, employees of the Company or the successor or acquirer in the Change in Control who are similarly situated to the Executive are eligible for greater bonus amounts than those provided by the Company foregoing sentence, then the Executive shall be eligible for a Bonus Amount no less than that offered to such similarly situated employees. In the entire fiscal yearevent that the Executive is employed for less than the full year for which a Post-Change-in-Control Bonus Plan is in effect, prorated for the number of days you were employed by the Company during fiscal year 2004 (the “2004 Unpaid Bonus Amounts”). Such amount would be paid at the same time that similar bonuses for fiscal year 2004 are paid bonus payable to the Company’s other employees under the MIP. For purposes of Executive’s annual bonus for fiscal year 2004, the Executive’s bonus “at target” Executive shall be determined as described in Section 3.2(b) except that no discretion may be applied to reduce the amount set forth on of the signature page hereto under bonus otherwise payable to the label “Management Incentive (2004 Target)”Executive and any subjective performance objectives applicable to the bonus shall be deemed satisfied.

Bonuses. The Company will establish a bonus plan for each fiscal year beginning after the completion of fiscal year 2004 (the “Plan”). The Board or the Compensation Committee of the Board will administer the Plan and establish performance objectives for each year in good faith based on the Company’s annual budget. During the Employment Period, the Executive will shall be entitled to receive an annual bonus (the “Annual Bonus”) pursuant if the Company meets or exceeds criteria adopted by the Compensation Committee of the Board (the “Compensation Committee”) for earning bonuses which shall be adopted by the Compensation Committee annually. The Annual Bonus shall be paid by the Company to the Plan based on Executive promptly after determination that the relevant targets have been met, it being understood that the attainment of any financial targets associated with any bonus shall not be determined until following the completion of the Company’s performance only if annual audit and public announcement of such results and shall be paid promptly following the Company’s announcement of earnings. For each year that Executive is employed by the Company, the Annual Bonus shall be 100% of Base Salary upon substantially meeting the budgeted revenues and the budgeted net income or such other criteria established by the Company’s Compensation Committee, and shall be paid pro-rata for performance in excess of such benchmarks, up to a maximum of 300% of Base Salary. For the avoidance of doubt, if Executive is employed immediately prior to the expiration of the term of this Agreement, he shall be entitled to the Annual Bonus for such last year on a pro-rata basis through the last date of employment, even if he is not employed by the Company on the date the Annual Bonus is paid for such last day year. In addition to the foregoing, additional bonuses may be awarded by the Compensation Committee. Any such bonus shall be paid by the Company to the Executive promptly after determination that if any targets relate to fiscal period performance having been met, it being understood that the attainment of any financial targets associated with any bonus shall not be determined until following the completion of the applicable performance period (subject to Section 4). All Company’s annual audit and public announcement of such Bonuses shall become payable on a date reasonably determined by the Board or Compensation Committee thereof, after the Board or Compensation Committee finally determines (i) that the Company has achieved the applicable performance objectives results and (ii) the amount of bonuses that shall be paid to each executive Executive promptly following the Company’s announcement of earnings. In the event that the Compensation Committee is unable to act or if there shall be no such Compensation Committee, then all references herein to the Compensation Committee (except in the proviso to this sentence) shall be deemed to be references to the Board. Further, Executive shall be entitled to receive a Signing Bonus in the amount of $50,000, which shall be payable on the Effective Date. Additionally, Executive shall be entitled to an annual bonus for the applicable of $50,000 per annum payable on each of January 31, 2024, January 31, 2025 and January 31, 2026. All bonus year. In respect of fiscal year 2004, or other incentive-based or equity-based compensation provided to the Executive shall be eligible to receive Bonuses in accordance with the Company’s bonus arrangements with the Executive as in existence prior to the Effective Date. Notwithstanding the immediately preceding sentence, in the event your employment is terminated by the Company without Cause or by you for Good Reason within 12 months of the Effective Date, the Company will pay to you an amount equal to the annual bonus you would have received for fiscal year 2004 under the Company’s Management Incentive Plan (the “MIP”) had you remained employed by the Company for the entire fiscal year, prorated for the number of days you were employed by the Company during fiscal year 2004 (the “2004 Unpaid Bonus Amounts”). Such amount would be paid at the same time that similar bonuses for fiscal year 2004 are paid subject to the Company’s other employees under the MIP. For purposes of Executive’s annual bonus Clawback Policy for fiscal year 2004Restatements, the Executive’s bonus “at target” shall be the amount set forth on the signature page which is appended hereto under the label “Management Incentive (2004 Target)”.as Annex A.

Bonuses. The Company shall pay to Employee a one-time cash bonus of $85,000 as of the one-year anniversary of Employee’s official hire date, provided that Employee remains actively employed by the Company as of that date. In addition, Employee will establish be offered the opportunity to participate in the Company’s then-current bonus plan and subject to and in accordance with the terms and conditions of such plan and this paragraph, upon achievement of all Target Bonus objectives set by the Board of Directors and/or the Chief Executive Officer for the Company and for Employee, shall receive a cash bonus equal to $120,000 (“Target Bonus”), less standard payroll deductions and withholding as are applicable to similarly situated employees. The Company shall have the sole discretion to change or eliminate bonus plans or programs at any time (provided, however, that after the bonus plan and target objectives have been established by the Board and/or the Chief Executive Officer for a given year, neither the Board nor the Chief Executive Officer shall later materially change the bonus plan or target objectives for such year to Employee’s detriment without Employee’s consent), to determine whether performance criteria set forth pursuant to the bonus plan for each fiscal a year beginning after have been achieved, and to determine (in accordance with this paragraph and such performance criteria and bonus plan) the completion amount of fiscal year 2004 (the “Plan”)any bonus earned by Employee, if any. The Board or the Compensation Committee of the Board will administer the Plan Bonuses are intended to retain valuable Company employees, and establish performance objectives if Employee is not employed, for each year in good faith based on the Company’s annual budget. During the Employment Period, the Executive will be entitled to receive an annual bonus (the “Bonus”) pursuant to the Plan based on the Company’s performance only if the Executive is employed any reason on the last day of the applicable performance period (subject bonus year, he will not have earned the bonus and, except as expressly provided herein with respect to Section 4)the Severance Bonus, no partial or pro-rata bonus will be paid. All such Bonuses shall become payable on a date reasonably determined by the Board or Compensation Committee thereof, after the Board or Compensation Committee finally determines (i) that the Company has achieved the applicable performance objectives and (ii) the amount of bonuses that Any bonus paid pursuant to this Paragraph 5 shall be paid to each executive entitled to receive net of standard payroll deductions and withholdings. The target payment date for any bonus measured on the basis of a bonus for the applicable bonus year. In respect of fiscal calendar year 2004, the Executive shall be eligible to receive Bonuses in accordance with between January 1 and March 15 of the calendar year following the end of the performance period; provided, however, that such bonus shall be paid no later than March 15 of such calendar year following the end of the performance period. The payment date for any bonus measured on the basis of a performance period other than the calendar year shall be no later than 2-1/2 months following the end of the Company’s bonus arrangements with the Executive as in existence prior to the Effective Date. Notwithstanding the immediately preceding sentence, in the event your employment is terminated by the Company without Cause or by you for Good Reason within 12 months of the Effective Date, the Company will pay to you an amount equal to the annual bonus you would have received for fiscal year 2004 under the Company’s Management Incentive Plan (the “MIP”) had you remained employed by the Company for the entire fiscal year, prorated for the number of days you were employed by the Company during fiscal year 2004 (the “2004 Unpaid Bonus Amounts”). Such amount would be paid at the same time that similar bonuses for fiscal year 2004 are paid to the Company’s other employees under the MIP. For purposes of Executive’s annual bonus for fiscal year 2004, the Executive’s bonus “at target” shall be the amount set forth on the signature page hereto under the label “Management Incentive (2004 Target)”.

Bonuses. The Company will establish a bonus plan for each fiscal year beginning after the completion of fiscal year 2004 (the “Plan”). The Board or the Compensation Committee of the Board will administer the Plan and establish performance objectives for each year in good faith based on the Company’s annual budget. During the Employment Period, the Executive will be entitled In addition to receive an annual bonus (the “Bonus”) pursuant to the Plan based on the Company’s performance only if the Executive is employed on the last day of the applicable performance period (subject to Section 4). All such Bonuses shall become payable on a date reasonably determined by the Board or Compensation Committee thereof, after the Board or Compensation Committee finally determines (i) that the Company has achieved the applicable performance objectives and (ii) the amount of bonuses that shall be paid to each executive entitled to receive a bonus for the applicable bonus year. In respect of fiscal year 2004Base Salary, the Executive shall be eligible paid an annual bonus not to receive Bonuses in accordance with exceed $300,000 annually (the Company’s "Maximum Bonus"), which bonus arrangements with will be established by the Compensation Committee (the "Bonus"). Promptly following the execution of this Employment Agreement, the Company and the Executive as in existence prior will meet to establish the Effective Dateperformance goals (the "Bonus Goals") upon which the award of the Bonus for the first year of employment pursuant to this Employment Agreement (the "First Bonus Period") will be determined. Notwithstanding Seventy-five percent of the immediately preceding sentence, in Bonus will be based upon an agreed-upon pre-tax income goal plus the event your employment is terminated amount expended by the Company without Cause or in such year for research and development ("Target Income"). Target Income will be adjusted each year by you for Good Reason within 12 months the mutual consent of the Effective DateCompensation Committee and the Executive. Twenty-five percent of the Bonus will be based on personal performance goals which will be established annually by the Compensation Committee and the Executive promptly after the execution of this Employment Agreement and revised on an annual basis in each subsequent year of this Employment Agreement. During each subsequent year of employment pursuant to the terms of this Employment Agreement ("Subsequent Bonus Periods"), the Company will pay Chairman of the Board and the Executive shall meet periodically to you an amount equal discuss the Executive's progress concerning the Bonus Goals. Promptly after the end of each such Subequent Bonus Period, the Compensation Committee shall meet to discuss the annual Executive's performance with regard the bonus you would have received for fiscal year 2004 under Goals and shall, in its discretion, determine the Company’s Management Incentive Plan (amount, if any, of the “MIP”) had you remained employed by the Company for the entire fiscal year, prorated for the number of days you were employed by the Company during fiscal year 2004 (the “2004 Unpaid Bonus Amounts”). Such amount would to be paid at the same time that similar bonuses for fiscal year 2004 are paid to the Company’s other employees under the MIPExecutive for such Subsequent Bonus Period. For purposes the purpose of Executive’s annual bonus for fiscal year 2004this determination, the Executive’s bonus “at target” goals shall be laddered so that attainment of some, but not all, goals will give rise to the amount set forth on the signature page hereto under the label “Management Incentive (2004 Target)”payment of a partial Bonus.

Bonuses. The Company will establish a (a) In addition to the Base Salary, the Executive shall participate in Hanger’s current bonus plan for each fiscal year beginning after the completion of fiscal year 2004 senior corporate officers (the “Bonus Plan”). The Board or , as approved by the Compensation Committee of the Board will administer of Directors in each calendar year during the Plan term of this Agreement. The Executive’s target bonus is sixty percent (60%) of the Base Salary (the “Target Bonus”) and establish performance objectives for each year in good faith based is contingent on the Company’s annual budget. During Executive meeting certain performance criteria and Hanger and the Employment PeriodCompany achieving certain year-end financial criteria, and up to one hundred twenty percent (120%) of the Base Salary (the “Maximum Bonus”) if the Executive will exceeds certain performance criteria and Hanger and the Company exceed certain year-end financial criteria all as determined in the reasonable discretion of the Board of Directors and its Compensation Committee. The Executive shall be entitled to receive an annual bonus (such increases in the “Target Bonus”) pursuant ” and the “Maximum Bonus” during the term hereof as shall be determined and approved by the Compensation Committee of the Board of Directors in its sole discretion, taking account of the performance of Hanger, the Company and the Executive, and other factors generally considered relevant to the Plan based on the Company’s performance only if the Executive is employed on the last day salaries of the applicable performance period (subject executives holding similar positions with enterprises comparable to Section 4). All such Bonuses shall become payable on a date reasonably determined by the Board or Compensation Committee thereof, after the Board or Compensation Committee finally determines (i) that the Company has achieved the applicable performance objectives and (ii) the amount of bonuses that shall be paid to each executive entitled to receive a bonus for the applicable bonus year. In respect of fiscal year 2004, the Executive shall be eligible to receive Bonuses in accordance with the Company’s bonus arrangements with the Executive as in existence prior to the Effective DateHanger. Notwithstanding the immediately preceding sentenceforegoing, in the event your employment is terminated by that the Executive, Hanger or the Company without Cause or by you for Good Reason within 12 months of the Effective Datefail to attain their minimum respective criteria in any given year, the Company will pay Board of Directors and its Compensation Committee may, in their reasonable discretion, decline to you an amount equal award any bonus to the annual Executive. For the avoidance of doubt, (I) so long as the Executive remains continuously employed with the Company from the Commencement Date through December 31, 2014, the Executive’s bonus you would have received for fiscal year 2004 under will be calculated as if the Company’s Management Incentive Plan (the “MIP”) Executive had you remained been employed by the Company for the entire fiscal yearcalendar year of 2014, prorated and (II) the performance criteria for the number part of 2014 following the Commencement Date shall be established within sixty (60) days you were employed by following the Company during fiscal Commencement Date. (b) The bonus described in Section 3.2(a) shall be payable between January 1 and March 15 (inclusive) of the calendar year 2004 (following the “2004 Unpaid Bonus Amounts”). Such amount would be paid at calendar year for which the same time that similar bonuses for fiscal year 2004 are paid to bonus is determined in accordance with the Company’s other employees under the MIPnormal practices. For purposes of Executive’s annual bonus for fiscal calendar year 20042014, so long as the Executive is employed with the Company through December 31, 2014, the Executive’s bonus “at target” shall be calculated as if the amount Executive had been employed with the Company for all of 2014. In the event that the Executive is employed for less than the full calendar year in the year in which his Termination Date occurs (“Termination Year”), the bonus payable to the Executive shall be subject to Sections 4 and 5 of this Agreement and calculated based on the Executive meeting certain performance criteria and Hanger achieving certain year-end financial criteria, all as determined by the Compensation Committee of the Board of Directors, in its sole discretion. Such bonus shall be pro-rated for the portion of the Termination Year during which the Executive was employed by the Company. With respect to the bonus for the Termination Year, any bonus payable pursuant to this Section 3.2(b) shall be payable to the Executive between January 1 and March 15 (inclusive) of the calendar year following the calendar year for which the bonus is determined in accordance with the Company’s normal practices. (c) The Company has paid to the Executive, and the Executive acknowledges receipt of, a one-time bonus in the form of a lump sum cash payment of Twenty Thousand Dollars ($20,000.00), less all applicable payroll taxes and other normal deductions (“Sign-On Bonus”), upon the terms and conditions set forth on in the signature page Promissory Note executed by the Executive as maker and in favor of the Company as holder, in the form attached hereto under as Exhibit A-1, pursuant to which the label “Management Incentive (2004 Target)”Executive shall be obligated to repay the Sign-On Bonus to the Company immediately upon the termination of the Executive’s employment with the Company pursuant to Section 4.3 or Section 4.5 prior to May 1, 2015.