WHEREAS, the Company is in the business of selling radio broadcast advertising, and
developing, producing and broadcasting radio programming and traffic, news, sports,
weather and other information reports; and
WHEREAS, Employee has extensive management and legal experience; and
WHEREAS, the Company desires to engage the services of Employee to serve as the Senior
Vice President and General Counsel of the Company on the terms and conditions herein
NOW, THEREFORE, for and in consideration of the mutual covenants and agreements herein
contained, the parties hereto agree as follows:
1. Employment. The Company hereby employs Employee, and Employee accepts such employment, and
agrees to devote Employees full time and efforts to the interests of the Company upon the terms
and conditions hereinafter set forth.
2. Term of Employment. Subject to the provisions for termination hereinafter provided,
Employees term of employment by the Company shall commence no later than October 16, 2004 (the
Effective Date) and shall continue in effect until October 15, 2006 (the Term).
Unless otherwise terminated pursuant hereto, if Employee continues to be employed by the Company
after the Term, then Employees employment shall be deemed to continue on a month-to-month basis
until such time as either party shall deliver written notice to the other party and this Agreement
shall terminate 90 days after the giving of such notice. Except as otherwise set forth herein, if
either party hereto desires to terminate this Agreement at the end of the Term or thereafter, the
same 90 days prior written notice shall apply. The period from the Effective Date through the date
90 days from the date any notice of termination referred to above is delivered is hereinafter
referred to as the Employment Period.
3. Services to be Rendered by Employee.
(a) During the Employment Period, Employee shall serve as the Senior Vice President and
General Counsel of the Company or in such other position as is determined from time to time by the
Companys Chief Executive Officer (Chief Executive Officer), President
(President), the Board of Directors (the Board of Directors) or their designee.
Subject to the direction of the Chief Executive Officer or President, Board of Directors or their
designee, Employee shall perform such duties as from time to time may be delegated to Employee by
such parties. Employee shall devote all of Employees professional time, energy and ability to the
proper and efficient conduct of the Companys business. Employee shall observe and comply with all
reasonable lawful directions and instructions by and on the part of the Chief Executive Officer or
President, the Board of Directors or their designee and endeavor to promote the interests of the
Company and not at any time do anything which may cause or tend to be likely to cause any loss or
damage to the Company in business, reputation or otherwise.
(b) The Company may from time to time call on Employee to perform services as reasonably
specified from time to time by the Chief Executive Officer, the President, the Board of Directors
or their designee. Subject to the foregoing, Employees specific responsibilities shall include
overseeing and directing all aspects of legal affairs for the Company. The Company may, in its
sole discretion, restrict, expand, change or otherwise alter the Employees duties, title or
responsibilities. Any change shall be binding on Employee for all purposes of this Agreement.
Notwithstanding the foregoing, Employee shall be employed at and report into the Companys offices
in the New York
City metropolitan area.
(c) Employee acknowledges that Employee will have and owe fiduciary duties to the Company and
its shareholders including, without limitation, the duties of care, confidentiality and loyalty.
(d) Employee acknowledges that Employee has received a copy of the Companys Sexual
Harassment Policies and Procedures, Code of Ethics and Conflicts of Interest policy, and
understands and has acknowledged such policies.
(a) Base Salary. For the services to be rendered by Employee during Employees employment by
the Company, the Company shall pay Employee, and Employee agrees to accept, a monthly base salary
(the Base Salary) of: (i) $22,916.66, and (ii) beginning on October 16, 2005, $25,000.
(b) Discretionary Bonus. Employee shall be eligible for an annual discretionary bonus valued
at up to $100,000 in the sole and absolute discretion of the Board of Directors or its Compensation
Committee or their designee. Any cash component of any bonus will be payable in accordance with
the Companys normal payroll practices. Employee shall not be eligible for any bonus for a
calendar year, pro-rated or otherwise, if the Employee is not an Employee of the Company: (i) at
the end of the applicable calendar year; (ii) at the time such bonus is to be paid, or (iii) if
Employee has breached this Agreement.
(c) Stock Options. Subject to the approval of and in the sole and absolute discretion of the
Board of Directors or its Compensation Committee or their designee, Company management shall
recommend that the Compensation Committee grant Employee an award of 25,000 stock options in
(d) Paydates; Customary Employee Deductions. Employees Base Salary shall be payable
semi-monthly in arrears on the fifteenth day and on the last day of each calendar month or such
other date in conformity with the Companys payroll policies in effect from time to
time. For any and all compensation or bonus paid by the Company to Employee pursuant to this
Section 4, the Company shall be entitled to deduct income tax withholdings, social security and
other customary employee deductions in conformity with the Companys payroll policies in effect
from time to time.
5. Expenses. Subject to compliance by Employee with such policies regarding expenses and
expense reimbursement as may be adopted from time to time by the Company, the Company shall
reimburse Employee, or cause Employee to be reimbursed, in cash for all reasonable expenses. The
Company currently maintains trade relationships for restaurants, hotels, automobile rentals,
courier services, promotional items, etc. which may be used from time to time to cover ordinary and
necessary expenses of Employee.
(a) Company Plans; Insurance. During the Employment Period, Employee shall be entitled to
participate in all benefit plans, programs, group insurance policies, vacation sick leave and other
benefits that may from time to time be established by the Company for its employees, provided that
Employee is eligible under the respective provisions thereof.
(b) Vacation. Employee shall be entitled each year to a vacation in accordance with the
prevailing practice of the Company in regard to vacations for its employees.
7. Termination of Employment.
(a) During the Employment Period, the Company shall have the right, if exercised in good
faith, to terminate the employment of Employee hereunder immediately by giving notice thereof to
Employee in the event of any of the following:
(i) if Employee has (A) willfully failed, refused or habitually has neglected to carry
out or to perform the reasonable duties required of Employee hereunder or otherwise
breached any provision of this Agreement (other than Sections 8, 9 and 12 hereof, which
are governed by Section 7(a)(iv) hereof); (B) willfully breached any statutory or common
law duty; or (C) breached Section 3(c) or 3(d) of this Agreement.
(ii) if Employee commits a felony or a crime involving moral turpitude or if the
Company, acting in good faith and upon reasonable grounds, determines that Employee has
willfully engaged in conduct which would injure the reputation of the Company or
otherwise adversely affect its interest if Employee were retained as an employee of the
(iii) if Employee becomes unable by reason of physical disability or other incapacity
(as may be defined in applicable disability insurance policies) to carry out or to
perform the duties required of Employee hereunder for a continuous period of ninety (90)
days; provided, however, that Employees compensation during any period
in which Employee is unable to perform the duties required of Employee hereunder shall
be reduced in accordance with the Companys policies and by any disability payments
reimbursements for medical expenses and the like) which Employee is entitled to receive
under group or other disability insurance policies of the Company during such period;
(iv) if Employee breaches any of the provisions of Section 8, 9 or 12 hereof or breaches
any of the terms or obligations of any other noncompetition and/or confidentiality
agreements entered into between Employee and the Company, or the Companys Related
Entities (as defined in Section 20 hereof), if any; or
(v) if employee steals or embezzles assets of the Company.
(b) Employees employment with the Company shall automatically terminate (without notice to
Employees estate) upon the death or loss of legal capacity of Employee.
(c) In the event of any termination of employment pursuant to this Section 7, Employee (or
Employees estate, as the case may be) shall be entitled to receive (i) the Base Salary herein
provided prorated to the date of such termination, (ii) Employees present entitlement, if any,
under the Companys employee benefit plans and programs and (iii) no other compensation.
8. No Conflict of Interest; Proper Conduct; Restricted Activities.
(a) The Company and Employee acknowledge and agree that the Company has divulged and expects
to divulge to Employee certain confidential information and trade secrets relating to the Companys
business, provide information relating to the Companys customer base and otherwise provide
Employee with the ability to injure the Companys goodwill unless certain reasonable restrictions
are imposed upon Employee which are contained in this Section. Employee agrees that such
restrictions are reasonable and necessary to protect the goodwill, confidential information and
other legitimate business interests of the Company and such restrictions are entered into freely by
Employee. Employee acknowledges that the Companys business and Employees responsibilities are
nationwide. The confidential information and trade secrets expected to be divulged to Employee
shall include information and trade secrets regarding the Companys business and operations
(b) While employed by the Company, Employee will not compete with the Company, directly or
indirectly, either for Employee or as a member of any association, partnership, joint venture,
limited liability partnership or limited liability company or other entity, or as a stockholder
(except as a stockholder of less than one percent (1%) of the issued and outstanding stock of a
publicly-held corporation whose gross assets exceed $100,000,000), investor, officer or director of
a corporation, or as an employee, agent, trustee, associate or consultant of any person,
association, trust, partnership, joint venture, registered limited liability partnership or limited
liability company, corporation or other entity, in any business in competition with that carried
on by the Company or its Related Entities. Employee shall not, without the Companys prior written
consent, engage in any activity during Employees employment that would conflict with, interfere
with, impede or hamper the performance of Employees duties for the Company or would otherwise be
prejudicial to the Companys business interests. Employee shall not commit any act or become
involved in any situation or occurrence that, in the Companys reasonable judgment, could tend to
bring Employee or the Company into public disrepute, contempt, scandal or ridicule, could provoke,
insult or offend the community or any group or class thereof, or could reflect unfavorably
upon the Company or any of its Sponsors or Affiliates. Employee shall comply with all applicable
laws and regulations governing the Company and its business, including without limitation,
regulations promulgated by the Federal Communications Commission or any other regulatory agency.
(c) Employee further agrees that, for a period of one (1) year from and after Employees last
day of employment under this Agreement (the Restricted Period), regardless of cause,
Employee will not engage in or carry on, directly or indirectly, either for Employee or as a member
of an association, trust, partnership, joint venture, limited liability partnership or limited
liability company or other entity, or as a stockholder (other than as a stockholder of less than
one percent (1%) of the issued and outstanding stock of a publicly-held corporation, whose gross
assets exceed $100,000,000), or as an investor, officer or director of a corporation, or as an
employee, agent, trustee, associate or consultant of any person, association, trust, partnership,
corporation, joint venture, registered limited liability partnership or limited liability company,
or other entity, any Restricted Activity. Restricted Activities shall consist of: (i) providing
services to a traffic, news, sports, weather or other information report gathering or broadcast
service or to a radio network or syndicator, or any direct or indirect competitor of Westwood or
its Related Entities; (ii) soliciting Sponsors and dealing with accounts with respect thereto;
(iii) soliciting Affiliates to enter into any contract or arrangement with any person or
organization to provide traffic, news, weather, sports or other information report gathering or
broadcast services or national or regional radio network or syndicated programming; or (v) forming
or providing operational assistance to any business or a division of any business engaged in the
(d) Employee further covenants and agrees that during the Restricted Period, Employee will not
either individually, or on behalf of any other person, association, trust, partnership, joint
venture, limited liability partnership or limited company or other entity as an owner, member,
partner, agent, trustee, shareholder, joint venturer or otherwise, directly or indirectly, solicit
any customer and/or Sponsor of the Company or its Related Entities in competition with the Company.
(e) Employee further agrees that during the Restricted Period, Employee will neither employ
nor offer to employ nor solicit employment of any employee or consultant of the Company or its
(f) Employee further agrees not to solicit, divert or attempt to divert any business,
patronage or customer of the Company or its Related Entities to Employee or a competitor or rival
of the Company or its Related Entities during the Restricted Period.
(g) Employee agrees that the limitations set forth herein on Employees rights are reasonable
and necessary for the protection of the Company and its Related Entities. In this regard, Employee
specifically agrees that the limitations as to period of time and geographic area, as well as all
other restrictions on Employees activities specified herein, are reasonable and necessary for the
protection of the Company and its Related Entities.
(h) Employee agrees that the remedy at law for any breach by Employee of this Section 8 will
be inadequate and that the Company shall be entitled to injunctive relief (without bond or other
(i) Employee and Company agree that to the extent a court of competent jurisdiction or
appropriate arbitral tribunal finds any of the foregoing covenants to be overly broad based on
applicable law, then the parties agree that the court shall reform the covenants to the extent
necessary to cause such covenants to be reasonable and enforce such covenants as reformed against
9. Confidential Information and the Results of Services. Employee acknowledges that the
Company has established a valuable and extensive trade in the services it provides, which has been
developed at considerable expense to the Company. Employee agrees that, by virtue of the special
knowledge that Employee has received or will receive from the Company, and the relationship of
trust and confidence between Employee and the Company, Employee has or will have certain
information and knowledge of the operations of the Company that are confidential and proprietary in
nature, including, without limitation, information about Affiliates and Sponsors. Employee agrees
that during the term hereof and at any time thereafter Employee will not make use of or disclose,
without the prior consent of the Company, Confidential Information (as hereinafter defined)
relating to the Company and any of its Related Entities (including, without limitation, its Sponsor
lists, its Affiliates, its technical systems, its contracts, its methods of operation, its business
plans and opportunities, its strategic plans and its trade secrets), and further, that Employee
will return to the Company all written materials in Employees possession embodying such
Confidential Information. For purposes of this Agreement, Confidential Information means
information obtained by Employee during Employees employment relationship with the Company which
concerns the affairs of the Company or its Related Entities and which the Company has requested be
held in confidence or could reasonably be expected to desire to be held in confidence, or the
disclosure of which would likely be embarrassing, detrimental or disadvantageous to the Company or
its Related Entities. Confidential Information shall also include the terms of this Agreement
(except with respect to Employees legal and tax advisors, and immediate family). Confidential
Information, however, shall not include information which Employee can show by written document to
(a) Information that is at the time of receipt by Employee in the public domain or is
otherwise generally known in the industry or subsequently enters the public domain or
becomes generally known in the industry through no fault of Employee;
(b) Information that at any time is received in good faith by Employee from a third
party which was lawfully in possession of the same and had the right to disclose the
The parties hereto agree that the remedy at law for any breach of Employees obligations under this
Section 9 of this Agreement would be inadequate and that any enforcing party shall be entitled to
injunctive or other equitable relief (without bond or undertaking) in any proceeding which may be
brought to enforce any provisions of this Section.
10. Advertising and Publicity. Employee hereby grants the Company the royalty-free right to
use and license others to use Employees name, nickname, recorded voice, biographical
material, portraits, pictures, and likenesses for advertising purposes and purposes of trade,
promotion and publicity in connection with the institutions, services and products for the Company,
its Related Entities, Sponsors and Affiliates, such uses to be at such times, in such manner and
through such media as the Company may in its sole discretion determine. Such right shall last for
so long as Employee is employed by the Company and, in connection with the use or exploitation of
any material in which Employee has been involved during Employees employment, perpetually
thereafter. Employee shall not authorize or release any advertising or promotional matter or
publicity in any form with reference to Employees services hereunder, or to the Companys or its
Related Entities programs, Sponsors or Affiliates, without the Companys prior written consent.
11. Work for Hire. Employee agrees that any ideas, concepts, techniques, or computer programs
relating to the business or operations of the Company and its Related Entities which are developed
by Employee during Employees employment hereunder, including each program and announcement
prepared for broadcast, and the titles, content, format, idea, theme, script, characteristics, and
other attributes thereof, shall be deemed to have been made within the scope of Employees
employment and therefore constitute works for hire and shall automatically upon their creation
become the exclusive property of the Company. To the extent such items are not works for hire
under applicable law, Employee assigns them and any and all intangible proprietary rights relating
thereto to the Company in their entirety and agrees to execute any and all documents necessary or
desired by the Company to reflect the Companys ownership thereof.
12. Communications Act of 1934. Employee represents and warrants that neither Employee nor,
to the best of Employees knowledge, information and belief, any other person, has accepted or
agreed to accept, or has paid or provided or agreed to pay or provide, any money, service or any
other valuable consideration, as defined in Section 507 of the Communications Act of 1934, as
amended, for the broadcast of any matter contained in programs. Employee further represents and
warrants that, during Employees employment, Employee shall comply with all legal requirements.
13. Merger or Reorganization. In the event of any merger, consolidation, dissolution or
reorganization of the Company (including but not limited to any reorganization where the Company is
not the surviving or resulting entity), or any transfer of all or substantially all of the assets
of the Company, the provisions of this Agreement shall inure to the benefit of and shall be binding
upon the surviving or resulting partnership or the corporation (or other entity) or person(s) to
which such assets shall be transferred.
14. Remedies. Except as it may elect otherwise, the Company shall have all rights, powers or
remedies provided by law or equity for breach of this Agreement available to it, it being
understood and agreed that no one of them shall be considered as exclusive of the others or as
exclusive of any other rights, powers and remedies allowed by law. The exercise or partial
exercise of any right, power or remedy shall neither constitute the election thereof nor the waiver
of any other right, power or remedy. Without limiting the generality of the foregoing, Employee
agrees that, in addition to all other rights and remedies available at law or in equity, the
Company shall be entitled to enforcement of this Agreement in accordance with the principles of
equity (without bond or
undertaking), the remedy at law being hereby agreed and acknowledged by
Employee to be inadequate.
15. Waiver of Breach of Agreement. If either party waives a breach of this Agreement by the
other party, that waiver will not operate or be construed as a waiver of any subsequent breaches.
16. Assignment. The rights of the Company hereunder may, without the consent of Employee, be
assigned by the Company to any Related Entity or successor of the Company or any entity which
acquires all or substantially all of the Companys assets. Except as provided in the preceding
sentence or in Section 13 hereof, the Company may not assign all or any of its rights, duties or
obligations hereunder without the prior written consent of Employee. This Agreement is not
assignable by Employee. Any attempt by Employee to assign this Agreement, or any portion thereof,
shall be deemed null and void and of no force and effect.
17. Notices. All notices, requests, demands and other communications permitted or required
hereunder shall be in writing and shall be deemed to have been duly given if personally delivered
or if deposited in the United States mail, first class, postage prepaid, registered or certified,
addressed as follows:
(a) If to Employee, addressed to Employee at the address set forth below Employees name on
the execution page hereof.
(b) If to the Company, addressed to:
or to such other address as either party hereto may request by written notice as herein provided.
18. Severability. Any provision hereof prohibited by or unenforceable under any applicable
law of any jurisdiction shall as to such jurisdiction be deemed ineffective and deleted herefrom
without affecting any other provision of this Agreement. It is the desire of the parties hereto
that this Agreement be enforced to the maximum extent permitted by law, and should any provision
contained herein be held unenforceable, the parties hereby agree and consent that such provision
shall be reformed to make it a valid and enforceable provision to the maximum extent permitted by
19. Title and Headings; Exhibits. Titles and headings to Sections hereof are for the purpose
of reference only and shall in no way limit, define or otherwise affect the provisions hereof. Any
and all exhibits referred to herein are, by such reference, incorporated herein and made a part
20. Certain Definitions. As used in this Agreement, the following capitalized terms shall
have the meanings indicated:
(a) Affiliates. Any organization, entity or person with whom the Company or any of the
Companys Related Entities has or had a contract or other arrangement to provide traffic, news,
weather, sports, entertainment or other information or national or regional radio network or
syndicated programming, whether by broadcast, computer or any other means.
(b) Sponsor(s). Any and all client advertisers of the Company or its Related Entities
including without limitation advertisers whose commercial material is to be, is or was incorporated
in any one or more of the Companys programs or announcements, live or recorded, broadcast over the
facilities of the Company, by the Company, or pursuant to an arrangement with a Affiliate.
(c) Related Entity or Related Entities.
Any entity (or entities) that directly or indirectly
controls, is controlled by, or is under common control with the Company (or its successor or
assign), including but not limited to Westwood One
Radio Networks, Inc., Westwood One
Metro Networks Communications, Inc. and Metro Networks Communications, Limited Partnership. The
term entity as used in this Section 20(c) means an individual, corporation, partnership, joint
venture, limited liability partnership or limited liability company, trust, unincorporated
organization, association or other entity. As used in this Section 20(c), the term control means
the possession, directly or indirectly, of the power to direct or cause the direction of the
management and policies of a person or entity, whether through the ownership of voting securities,
by contract or otherwise.
21. Choice of Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES RELATING TO
THE SUBJECT MATTER OF THIS AGREEMENT, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
The parties hereby agree that any and all claims or controversies relating to
Employees employment with the Company, or termination thereof, including but not limited to claims
for breach of contract, tort, unlawful discrimination or harassment (as well as any claims arising
under Title VII, the Americans with Disabilities Act, and the Age Discrimination in Employment
Act), and any violation of any state or federal law (Arbitrable Claims), except for equitable
relief sought by a party in aid of arbitration, shall be resolved by arbitration in accordance with
the then applicable JAMS Employment Arbitration Rules And Procedures. However, claims under
applicable workers compensation laws or the National Labor Relations Act shall not be subject to
arbitration. Arbitration under this Agreement shall be the exclusive remedy for all Arbitrable
Claims and shall be final and binding on all parties. Unless the parties mutually agree otherwise,
the Arbitrator shall be selected from a panel provided by JAMS and the arbitration shall be held in
County, New York
. Any court having jurisdiction thereof may enter judgment on the award
rendered by the arbitrator(s). THE PARTIES HEREBY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY
JURY OF ANY MATTERS SUBJECT TO ARBITRATION UNDER THIS AGREEMENT.
23. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the
parties hereto, their respective heirs, executors, successors and permitted assigns.
24. Entire Agreement and Amendment. This Agreement supersedes all prior understandings and
agreements between the parties (including the Companys Related Entities) with respect to the
subject matter hereof. This Agreement contains the entire agreement of the parties with respect to
the subject matter covered hereby and may be amended, waived or terminated only by an instrument in
writing executed by both parties hereto.
25. Execution by Company. Submission of this Agreement to Employee, or Employees agents or
attorneys, for examination or signature does not constitute or imply an offer of employment, and
this Agreement shall have no binding effect until execution hereof by both the Company and
26. No Inference Against Author. No provision of this Agreement shall be interpreted against
any party because such party or its legal representative drafted such provision.
IN WITNESS WHEREOF, this Agreement is EXECUTED as of the 21st day of October 2004 to be
EFFECTIVE FOR ALL PURPOSES as of the Effective Date.
The following, upon execution by the parties hereto shall constitute an amendment to the Employment
entered into by and between Westwood One
, Inc. (the Company
) and David Hillman
), with an effective date of October 16, 2004 (the Agreement
1. The Agreement shall be amended by deleting all references to Senior Vice President and General
Counsel and replacing such references with Executive Vice President, Business Affairs and General
2. Section 2 (Term of Employment) of the Agreement shall be amended by deleting the first sentence of
such Section and replacing it with the following:
Subject to the provisions for termination hereinafter provided, Employees term of employment by
the Company shall commence January 1, 2006 (the Effective Date) and shall continue in
effect until December 31, 2008 (the Term).
3. Section 4 of the Agreement shall be deleted in its entirety and restated as follows:
(a) Base Salary. For the services to be rendered by Employee during Employees employment
by the Company, the Company shall pay Employee, and Employee agrees to accept, a monthly base
salary (the Base Salary) of: (i) $25,000; (ii) beginning on April 1, 2006,
$27,083.33, (ii) beginning on January 1, 2007, $29,166.66 and (ii) beginning on January 1, 2008,
(b) Discretionary Bonus. Employee shall be eligible for an annual discretionary bonus
(Discretionary Bonus) valued at up to (i) $125,000 for calendar year 2006, (ii) $135,000 for
calendar year 2007 and (iii) $150,000 for calendar year 2008, each in the sole and absolute
discretion of the Board of Directors or its Compensation Committee or their designee. Any cash
component of any bonus will be payable in accordance with the Companys normal payroll practices.
Employee shall not be eligible for any bonus for a calendar year, pro-rated or otherwise, if the
Employee is not an Employee of the Company: (i) at the end of the applicable calendar year, (ii) at
the time such bonus is to be paid, or (iii) if Employee has breached this Agreement.
(c) Stock Options. Subject to the approval of and in the sole and absolute discretion of
the Board of Directors or its Compensation Committee or their designee, Company management shall
recommend that the Compensation Committee grant Employee an award of equity compensation equivalent
to: (i) 85,000 stock options on the first date that the Compensation Committee generally grants
stock options to senior executives of the Company in 2006; and (ii) 75,000 stock options on the
first date that the Compensation Committee generally grants stock options to senior executives of
the Company in 2007.
(d) Retention Bonus. For the services to be rendered by Employee during the Term, Employee
shall receive as a retention bonus (Retention Bonus) a cash payment of $100,000 payable
in accordance with the Companys normal payroll practices and no later than February 28,
2006. The Retention Bonus shall be earned pro-rata on a monthly basis ($2,777.78 per month) during
the Term. If Employee breaches this Agreement, in addition to any other remedies the Company may
have, Employee shall immediately repay to the Company any unearned portion of the Retention Bonus
and authorizes the Company to deduct such unearned portion of the Retention Bonus from any and all
payments owed to Employee by the Company before, at or after the date of breach by Employee. In
the event that Employer terminates this Agreement pursuant to Section 7(d) (Termination without
Cause), Employee shall have no obligation to repay any unearned portion of the Retention Bonus.
(e) Paydates; Customary Employee Deductions. Employees Base Salary shall be payable
bi-weekly in arrears or otherwise in conformity with the Companys payroll policies in effect from
time to time. For any and all compensation or bonus paid by the Company to Employee pursuant to
this Section 4, the Company shall be entitled to deduct income tax withholdings, social security
and other customary employee deductions in conformity with the Companys payroll policies in effect
from time to time.
(f) Compensation. Employee agrees and acknowledges by his signature hereto that the
compensation set forth in this Section 4 constitutes all of the compensation payable to Employee
for his services hereunder and that no other compensation shall be due to Employee hereunder,
including, without limitation, any sales commission or other sales-based compensation not expressly
described herein, except that Employee shall be reimbursed for his reasonable expenses as set forth
in Section 5 hereof.
4. Section 7 (Termination of Employment) of the Agreement shall be amended by deleting Section 7(c)
and replacing it with the following as Sections 7(c) and 7(d):
(c) In the event of any termination of employment pursuant to Section 7(a) or 7(b), Employee (or
Employees estate, as the case may be) shall be entitled to receive (i) the Base Salary herein
provided prorated to the date of such termination, (ii) Employees present entitlement, if any,
under the Companys employee benefit plans and programs and (iii) no other compensation.
(d) Termination without Cause. The Company may terminate Employees employment hereunder
during the Term effective at any time upon prior written notice to Employee. In the event that the
Company terminates Employees employment other than pursuant to Section 7(a) or Section 7(b)
hereunder, Employee shall receive (i) Employees Base Salary until the end of the Term, paid in
equal payments over the remainder of the term on a schedule that mirrors the Companys then
effective payroll practices and (ii) any Discretionary Bonus earned by Employee but not yet paid by
the Company as of the date of termination. The parties further agree that in the event the Company
terminates this Agreement without cause, the Restricted Period defined in Section 8(c) hereof
shall be modified to extend for a period of one (1) year from and after Employees termination of
5. Except as expressly modified in this amendment, for good and valuable consideration provided
herein, all other terms and conditions of the Agreement are hereby ratified and reaffirmed and will
remain in full force and effect.
6. The effective date of this Amendment shall be February 1, 2006.
IN WITNESS WHEREOF, this Amendment is EXECUTED as of the ___day of February, 2006.