Page 15 - Proxy-2017
P. 15

Employment Agreements-Change of Control Payments

               On October 31, 2016, Howard Hill was appointed as interim President and Chief Executive Officer of the Company.  Mr.
            Hill agreed to serve as the interim President and Chief Executive Officer without any compensation.  Mr. Hill, who lives in
            the Los Angeles metropolitan area, was entitled to be reimbursed for his travel expenses to the Company’s headquarters in
            San Diego, California, and for his lodging while in San Diego as the interim President and Chief Executive Officer. Mr. Hill
            continues to serve on the Company’s Board of Directors while serving as the unpaid interim President and Chief Executive
            Officer and will continue to be compensated for his services on the Board of Directors as a non-employee director.

               During 2016, the Company employed Mark Turfler as the Company’s Chief Financial Officer under a one-year written
            employment agreement that expired on December 31, 2016.  Under the foregoing employment agreement, Mr. Turfler was
            paid an annual base salary of $170,000 and was entitled to participate in the Company’s pension, retirement, disability,
            insurance, medical service, or other employee benefit plan that were generally available to all employees of the Company.  In
            addition, Mr. Turfler had the right to earn an annual bonus of up to 40% of his base salary, subject to meeting certain quantita-
            tive and qualitative targets. Although the employment agreement has not been renewed, Mr. Turfler continues to serve as the
            Company’s Chief Financial Officer, on an at-will basis, on the same financial terms as were included in the expired written
            employment agreement.

               The Company has no change of control payment agreements in effect except for Mr. Dawson. A change of control
            payment agreement was included in Mr. Dawson’s employment letter upon his assumption as President and Chief Executive
            Officer on July 17, 2017. In the event of a Change of Control (as defined in his employment letter), Mr. Dawson is entitled to
            receive cash payment in an amount equal to twelve (12) months’ salary (based on his base salary at the time of such termina-
            tion).

              Compensation of Directors

               Under the compensation policies adopted by the Compensation Committee, directors who also are officers and/or
            employees of the Company do not receive any compensation for serving on the Board. For the year ended October 31, 2016,
            non-employee directors received $30,000, which amount was paid one-half in cash, and one-half through the grant of stock
            options to purchase shares of the Company’s common stock.



                                      DIRECTOR COMPENSATION FOR FISCAL YEAR 2016


                                  Fees Earned or                Option Awards      All Other
                Name               Paid in Cash  Stock Awards       (1)(2)       Compensation       Total
                Joseph Benoit       $          15,000       -      $          15,000  $                    -  $       30,000
                Darren Clark (3)    $                    -  -      $                    -  $                    -  $                 -
                Marvin H. Fink      $          15,000       -      $          15,000  $                    -  $       30,000
                Howard F. Hill      $            8,750      -      $            8,750  $                    -  $       17,500
                William Reynolds    $          15,000       -      $          15,000  $                    -  $       30,000

            (1)      This column represents the aggregate grant date fair value of option awards computed in accordance with FASB ASC
                   Topic 718, excluding the effect of estimated forfeitures related to service-based vesting conditions. These amounts do
                   not correspond to the actual value that will be recognized by the named directors from these awards.
            (2)      On December 16, 2015, the Company granted five-year non-qualified options to purchase 17,064 shares of the
                   Company’s common stock to each of Mr. Marvin Fink (Chairman), Mr. William Reynolds and Joseph Benoit
                   (Independent Directors) for their services as directors for the fiscal year ended October 31, 2016.  The options are
                   fully vested and have an exercise price of $4.42 per share, the market price of our common stock on the date of grant.
                   On April 7, 2016, we granted five-year non-qualified options to purchase 33,744 shares of the Company’s common
                   stock to Mr. Hill for his services as a director for April 7, 2016 through October 31, 2016.
            (3)      Mr. Clark’s term as a director expired on September 8, 2016, and he therefore no longer serves on the Board of
                   Directors.  Since Mr. Clark was, and is, the President of Cables Unlimited, Inc., he was not entitled to receive any
                   compensation for serving on the Board.

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