Spectrum Group International, Inc. – ‘8-K’ for 9/27/05 – EX-10

On:  Monday, 10/3/05, at 3:32pm ET   ·   For:  9/27/05   ·   Accession #:  922423-5-1588   ·   File #:  1-11988

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Current Report   —   Form 8-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Form 8K Current Report                                 5     23K 
 2: EX-3        Exhibit 3(I) Certificate of Ownership & Merger         3     13K 
 3: EX-10       Exhibit 10.1 Employment Agreement                     22    103K 
 4: EX-10       Exhibit 10.2 Lease                                    72    230K 
 5: EX-99       Exhibit 99.1 Press Release                             3     16K 

EX-10   —   Exhibit 10.1 Employment Agreement
Exhibit Table of Contents

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                                                                    Exhibit 10.1

EMPLOYMENT AGREEMENT

       THIS AGREEMENT (the "Agreement"), made in New York, New York as
of September 27, 2005, between Greg Manning Auctions, Inc., a Delaware          
corporation (the "Company"), and Jose Miguel Herrero ("Executive").             

         WHEREAS, the Company desires to employ Executive as its President
and Chief Executive Officer, and Executive desires to accept such employment    
on the terms and conditions hereinafter set forth;                              

    NOW, THEREFORE, IN CONSIDERATION of the mutual covenants and
agreements hereinafter set forth, the Company and Executive agree as follows:   

1. Term.                                                

          Unless earlier terminated in accordance with Section 4
hereof, the term of this Agreement shall be the period commencing as of the     
date hereof and ending on June 30, 2008 (the "Term").                           

2. Employment.                                          

             (a) Employment by the Company; Director. Executive agrees to be
employed by the Company during the Term upon the terms and subject to the       
conditions set forth in this Agreement. Executive shall serve as the President  
and Chief Executive Officer of the Company and shall report to the Board of     
Directors of the Company (the "Board of Directors"). Executive agrees to serve  
as a member of the Board of Directors, without additional remuneration (except  
as set forth in Section 3(n), if appointed or elected to such position.         

             (b) Performance of Duties. Throughout the Term, Executive shall
faithfully and diligently perform Executive's duties in conformity with the     
directions of the Company and serve the Company to the best of Executive's      
ability. Executive shall devote his full business time and best efforts to the  
business and affairs of the Company. In his capacity as the President and Chief 
Executive Officer of the Company, Executive shall have such duties and          
responsibilities as are customary for Executive's position and any other duties 
or responsibilities he may be assigned by the Board of Directors.               

       (c) Place of Performance. Executive shall be based at the
Company's offices in New York, New York. Executive recognizes that his duties   
will require, at the Company's expense, travel to domestic and international    
locations.                                                                      

 (d) Position of Chairman of the Board of Directors.

               (i) In the event the position of Chairman of the Board of
Directors becomes available during the Term, the Board of Directors may, in its 
sole discretion,                                                                

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appoint Executive to such role. If Executive is appointed to such role, he shall
(A) continue to also serve as the Company's President and Chief Executive       
Officer at the Company's offices in New York, New York, and (B) continue to     
receive the compensation and benefits provided for under Section 3 of this      
Agreement, except to the extent the terms of this Agreement are amended by the  
parties.                                                                        

                (ii) In the event the position of Chairman of the Board of
Directors is offered to Executive during or at the end of the Term, the parties 
shall negotiate in good faith to determine an appropriate compensation package  
based on, among other things, the responsibilities, scope and expected time     
commitment of the position at such time.                                        

              (iii) In the event Executive is Chairman of the Board of
Directors following the end of the Term, (A) Executive may perform the duties of
such position either in New York, New York, or Madrid, Spain, and (B) such      
position may be either full-time or part-time (each of (A) and (B), at          
Executive's option).                                                            

3. Compensation and Benefits.                           

            (a) Base Salary. The Company agrees to pay to Executive a base
salary ("Base Salary") at the annual rate of $500,000 commencing as of July 1,  
2005 and continuing through June 30, 2006. On each of July 1, 2006 and July 1,  
2007, Executive's Base Salary shall be increased by an amount equal to the Base 
Salary in effect on June 30 of the applicable year multiplied by the percentage 
increase, if any, in the CPI as of June 30 for the fiscal year then ended as    
compared to the CPI as of June 30 for the fiscal year prior to the year then    
ended. For purposes of this Section 3(a), "CPI" means the "Consumer Price Index:
New York, New York, All Items - Urban Wage Earners and Clerical Workers,"       
published by the United States Bureau of Labor Statistics of the United States  
Department of Labor. Payments of the Base Salary shall be payable in equal      
installments in accordance with the Company's standard payroll practices,       
provided that the Base Salary payments for the period between July 1, 2005 and  
the date hereof shall be included in the Base Salary payments for the initial   
payroll period of the Term.                                                     

          (b) Signing Bonus. Subject to the following sentence of this
Section 3(b), the Company shall pay a signing bonus of $690,000, payable in     
three installments as follows: (i) $200,000 shall be paid within ten days after 
the parties' execution of this Agreement, (ii) $245,000 shall be paid on June   
30, 2006, and (iii) $245,000 shall be paid on July 2, 2007 (each individual     
payment, an "Installment Signing Bonus Payment" and the date each individual    
payment is scheduled to be made, an "Installment Signing Bonus Payment Date").  
Notwithstanding the foregoing, (i) Executive must be employed by the Company on 
the Installment Signing Bonus Payment Date to be eligible to receive the        
corresponding Installment Signing Bonus Payment, and (ii) in the event          
Executive's employment terminates for any reason prior to June 30, 2008,        
Executive shall repay to the Company within thirty days following such          
termination a prorated portion of the immediately preceding Installment Signing 
Bonus Payment paid to Executive, based on the number of days Executive was      
employed between July 1 of the year such payment was made and June 30 of the    
following year, provided that Executive shall have no obligation to repay in    
whole or in part the initial Installment Signing Bonus Payment of $200,000.     

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         (c) Retention Bonus. The Company shall pay Executive a cash
retention bonus (the "Retention Bonus"), provided that Executive remains        
employed through June 30, 2008. The Retention Bonus shall be equal to (i)       
$391,500, less (ii) (A) 100,000 multiplied by (B) the Share Price Differential, 
provided that in no event shall such Retention Bonus be less than $300,000. For 
purposes of this Section 3(c), the "Share Price Differential" means the amount, 
if any, by which the closing price of the Company's common stock on July 1,     
2005, exceeds the average of closing prices of the Company's common stock as    
reported in the Wall Street Journal for the period between June 1, 2008 and June
30, 2008. Payment of the Retention Bonus, if any, shall be made on July 31,     
2008; provided, however, that if necessary to comply with Section               
409A(a)(2)(B)(i) of the Internal Revenue Code of 1986, as amended (the "Code"), 
and applicable administrative guidance and regulations, such payment shall be   
made on December 31, 2008.                                                      

               (d) Performance-Based Compensation. Executive will be eligible to
receive performance-based compensation pursuant to the Jose Miguel Herrero      
Incentive Compensation Program set forth on Annex A hereto.                     

          (e) Benefits and Perquisites. Executive shall be entitled to
participate in, to the extent Executive is otherwise eligible under the terms   
thereof, the benefit plans and programs, and receive the benefits and           
perquisites, generally provided by the Company to executives of the Company,    
including without limitation disability insurance and family medical insurance  
(subject to applicable employee contributions). Executive shall be entitled to  
receive thirty (30) days of annual paid vacation.                               

              (f) Business Expenses. The Company agrees to reimburse Executive
for all reasonable and necessary travel, business entertainment and other       
business expenses incurred by Executive in connection with the performance of   
his duties under this Agreement. Such reimbursements shall be made by the       
Company on a timely basis upon submission by Executive of vouchers in accordance
with the Company's standard procedures.                                         

              (g) Car Lease. Executive may lease an automobile in his own name
and at Company expense. Executive shall cause the vehicle to be properly insured
and maintained. During Executive's employment hereunder, the Company shall      
reimburse Executive for all reasonable costs associated with such lease,        
including lease costs, costs of insurance, routine maintenance, and service and 
repair of the vehicle, provided that the Company's obligation pursuant to this  
Section 3(g) shall not exceed $1,000 per month, plus the reasonable costs of    
parking.                                                                        

              (h) Housing. Between the date this Agreement is executed and the
date that Executive's family relocates to New York, New York (the "Family       
Relocation Date"), the Company shall make available to Executive, at the        
Company's expense, a furnished apartment in New York, New York, provided that   
such apartment shall also be available during such period for use by other      
senior executives of the Company and its affiliates when visiting New York, New 
York. Commencing on the Family Relocation Date and continuing throughout the    
period of Executive's employment hereunder, the Company shall make available to 
Executive, at the Company's expense, a furnished apartment in New York, New York
for the exclusive use of Executive and his family.                              

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              (i) Trips to Spain. During Executive's employment hereunder, the
Company will reimburse the reasonable expenses of Executive and his family for  
two trips to Spain per year. Reimbursable expenses shall include reasonable     
expenses for business class round-trip tickets, transportation-related expenses 
and car rental.                                                                 

               (j) Schools. During Executive's employment hereunder, the Company
will reimburse the reasonable tuition-related expenses of Executive's two       
children, including tuition fees at a private school in the metropolitan New    
York City area.                                                                 

         (k) Moving Expenses Following Termination of Employment. If
Executive's employment terminates for any reason other than by the Company for  
Cause or by the Executive without Good Reason (as each such term is defined     
below), the Company will reimburse the reasonable moving expenses incurred by   
Executive within three months following such termination in connection with any 
relocation to Spain.                                                            

          (l) Other Relocation Expenses. During Executive's employment
hereunder, the Company will reimburse other reasonable expenses incurred by     
Executive in connection with relocating to New York, New York after Executive's 
consultation with the Chairman of the Board of Directors.                       

            (m) Indemnification. The Company shall indemnify Executive, to
the fullest extent permitted by law, for any and all liabilities to which he may
be subject as a result of, in connection with or arising out of his employment  
by the Company hereunder, as well as the costs and expenses (including          
reasonable attorneys' fees) of any legal action brought or threatened to be     
brought against him or the Company as a result of, in connection with or arising
out of such employment. Executive shall be entitled to the full protection of   
any insurance policies which the Company may elect to maintain generally for the
benefit of its directors and officers.                                          

       (n) Director Benefits. Executive shall be entitled to the
benefits provided under the Company's Discretionary Compensation Policy for     
Employee-Directors and Certain Executive Officers.                              

      (o) Life Insurance Policy. During Executive's employment
hereunder, the Company shall pay the premiums on a term life insurance policy on
Executive's behalf in the principal amount of $1,000,000, provided that the     
Company's obligation with respect to such premiums shall not exceed $5,000 per  
annum. Executive shall be responsible for designating the beneficiary of such   
policy.                                                                         

              (p) Discretion to Award Additional Compensation and Benefits. In
the event that during the Growth Strategy development, there are any material   
changes in the size and complexity of the Company or other extraordinary        
circumstances, the Compensation Committee of the Board of Directors may         
determine in its sole discretion to award Executive a discretionary bonus or to 
increase the compensation and benefits provided for in this Agreement.          

              (q) No Other Compensation or Benefits; Payment. The compensation
and benefits specified in this Section 3 and in Section 5 of this Agreement     
shall be in lieu of any and all other compensation and benefits. Payment of all 
compensation and benefits to Executive specified in this Section 3 and in       
Section 5 of this Agreement (i) shall be made in accordance with the relevant   
Company policies in effect from time to time to the extent the same are         
consistently applied, including normal payroll practices, and (ii) shall be     
subject to all legally required and customary withholdings.                     

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             (r) Cessation of Employment. In the event Executive shall cease
to be employed by the Company for any reason, then Executive's compensation and 
benefits shall cease on the date of such event, except as otherwise specifically
provided herein or in any applicable employee benefit plan or program or as     
required by law.                                                                

          4. Termination of Employment. Executive's employment hereunder may
be terminated prior to the end of the Term under the following circumstances.   

              (a) Death. Executive's employment hereunder shall terminate upon
Executive's death.                                                              

      (b) Executive Becoming Totally Disabled. The Company may
terminate Executive's employment hereunder at any time after Executive becomes  
"Totally Disabled." For purposes of this Agreement, Executive shall be "Totally 
Disabled" in the event Executive is unable to perform the duties and            
responsibilities contemplated under this Agreement for a period of 120          
consecutive days due to physical or mental incapacity or impairment. During any 
period that Executive fails to perform Executive's duties hereunder as a result 
of incapacity due to physical or mental illness (the "Disability Period"),      
Executive shall continue to receive the compensation and benefits provided by   
Section 3 of this Agreement until Executive's employment hereunder is           
terminated; provided, however, that the amount of base compensation and benefits
received by Executive during the Disability Period shall be reduced by the      
aggregate amounts, if any, payable to Executive under any disability benefit    
plan or program provided to Executive by the Company.                           

       (c) Termination by the Company for Cause. The Company may
terminate Executive's employment hereunder for Cause at any time after providing
written notice to Executive. For purposes of this Agreement, the term "Cause"   
shall mean any of the following: (i) Executive's neglect or failure or refusal  
to perform his duties under this Agreement (other than as a result of total or  
partial incapacity due to physical or mental illness); (ii) any act by or       
omission of Executive constituting gross negligence or willful misconduct in    
connection with the performance of his duties that could reasonably be expected 
to materially injure the reputation, business or business relationships of the  
Company or any of its affiliates; (iii) Executive's conviction (including       
conviction on a nolo contendre plea) of a felony or any crime involving, in the 
good faith judgment of the Company, fraud, dishonesty or moral turpitude; (iv)  
any material violation of the Company's Code of Ethics, as may be amended from  
time to time (the "Code of Ethics"); (v) the breach of an obligation set forth  
in Section 6; or (vi) any other material breach of this Agreement; provided,    
however, that a termination by the Company under Sections 4(c)(i) or 4(c)(vi)   
for Cause shall be effective only if, within 14 days following delivery of a    
written notice by the Company to Executive that the Company is terminating his  
employment for Cause, Executive has failed to cure the circumstances giving rise
to Cause.                                                                       

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           (d) Termination by the Company Without Cause. The Company may
terminate Executive's employment hereunder at any time for any reason or no     
reason by giving Executive thirty (30) days prior written notice of the         
termination. Following any such notice, the Company may reduce or remove any and
all of Executive's duties, positions and titles with the Company.               

         (e) Termination by Executive for Good Reason. Executive may
terminate his employment hereunder for Good Reason at any time after providing  
written notice to the Company. For purposes of this Agreement, the term "Good   
Reason" shall mean any of the following: (i) the Company decreases or fails to  
pay the compensation or benefits described in Section 3; (ii) Executive no      
longer holds the office of President and Chief Executive Officer or an office of
equivalent stature, or his functions and/or duties are materially diminished;   
(iii) Executive's job site is relocated to a location which is more than fifty  
(50) miles from New York, New York, unless the parties mutually agree to such   
relocation; (iv) a Change in Control (as defined below) occurs; or (v) the      
position of Chairman of the Board of Directors becomes available during the Term
and (A) Executive is not appointed to that position, or (B) the Company fails to
offer such position to Executive in accordance with Section 2(d)(ii); provided, 
however, that a termination by Executive for Good Reason shall be effective only
if, within 14 days following delivery of a written notice by Executive to the   
Company that Executive is terminating his employment for Good Reason, the       
Company has failed to cure the circumstances giving rise to Good Reason.        

             (f) Termination by Executive Without Good Reason. Executive may
terminate his employment hereunder at any time for any reason or no reason by   
giving the Company ninety (90) days prior written notice of the termination.    
Following any such notice, the Company may reduce or remove any and all of      
Executive's duties, positions and titles with the Company, and any such         
reduction or removal shall not constitute Good Reason.                          

               (g) Change in Control. For purposes of this Agreement, "Change in
Control" of the Company shall be conclusively deemed to have occurred if any of 
the following, and only if any of the following, shall have taken place:        

                  (i) any "person" (as such term is used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934, as amended ("Exchange Act")),  
other than Afinsa Bienes Tangibles, S.A. ("Afinsa") or any of Afinsa's          
affiliates, the Executive, any person with whom Executive is or was acting in   
concert, or their respective designee(s) or affiliate(s) or any combination     
thereof, is or becomes the "beneficial owner" (as defined in Rule 13d-3 under   
the Exchange Act), directly or indirectly, of securities of the Company         
representing fifty percent (50%) or more of the combined voting power of the    
Company's then outstanding securities;                                          

                  (ii) a merger or consolidation of the Company is consummated
with any other corporation, other than (i) a merger or consolidation with any of
its affiliates (including, but not limited to, Afinsa) or any of Afinsa's       
affiliates, (ii) a merger or consolidation which would result in the holders of 
voting securities of the Company outstanding immediately prior thereto          
continuing to hold more than 50% of the combined voting power of the voting     
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation, (iii) a merger or consolidation of the Company    
with any corporation 50% or more                                                

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of the combined voting power of which is held by Afinsa, any of Afinsa's        
affiliates, Executive, any person with whom Executive is or was acting in       
concert, or their respective designee(s) or affiliate(s) or any combination     
thereof, or (iv) a merger or consolidation effected to implement a              
recapitalization of the Company (or similar transaction) in which no "person"   
(as such term is used in Sections 13(d) and 14(d)(2) of the Exchange Act)       
acquires more than 50% of the combined voting power of the Company's then       
outstanding securities or a reverse takeover; or                                

                  (iii) a complete liquidation of the Company occurs or a sale
or disposition by the Company of all or substantially all of the Company's      
assets is consummated, provided that this provision shall not apply to a sale or
disposition of the Company's assets to an affiliate of the Company (including,  
without limitation, Afinsa) or any of Afinsa's affiliates, if such affiliate    
agrees to succeed to the Company's obligations under this Agreement.            

           5. Compensation Following Termination Prior to the End of the Term.
In the event that Executive's employment hereunder is terminated prior to the   
end of the Term, Executive shall be entitled only to the following compensation 
and benefits upon such termination:                                             

           (a) General. On any termination of Executive's employment, he
shall be entitled to:                                                           

             (i)     any accrued but unpaid Base Salary for services
                         rendered through the date of termination; provided,
                          however, that in the event Executive's employment is
                        terminated pursuant to Section 4(b), the amount of
                  Base Salary received by Executive during the
                         Disability Period shall be reduced by the aggregate
                     amounts, if any, payable to Executive under any
                    disability benefit plan or program provided to
Executive by the Company; 

             (ii)     any vacation accrued to the date of termination;

                (iii)    any accrued but unpaid expenses through the date of
                         termination required to be reimbursed in accordance
                       with Sections 3(f), 3(g), 3(i), 3(j), and 3(l) of
this Agreement; and       

                  (iv)     receive any benefits to which he may be entitled upon
                    termination pursuant to the plans and programs
                           referred to in Section 3(e) hereof in accordance with
                       the terms of such plans and programs or as may be
 required by applicable law.

                (v)      any amounts payable in accordance with, and subject
                        to, the Jose Miguel Herrero Incentive Compensation
Program.                  

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               (b) Termination by Reason of Death. In the event that Executive's
employment is terminated prior to the expiration of the Term by reason of       
Executive's death pursuant to Section 4(a), Executive's estate shall be entitled
only to the following:                                                          

     (i)     those items identified in Section 5(a);

                   (ii)    A lump sum payment equal to twelve months of the Base
                           Salary (as determined pursuant to Section 3(a)). Such
                   sum shall be paid on or about sixty (60) days
        following the date of termination.

               (iii)   Payment of the Retention Bonus, provided that the
                          Retention Bonus shall be equal to (A) $391,500, less
                 (B) (1) 100,000 multiplied by (2) the Early
                      Termination Share Price Differential. The "Early
                     Termination Share Price Differential" means the
                       amount, if any, by which the closing price of the
                         Company's common stock on July 1, 2005, exceeds the
                       average common stock price of the Company for the
                      period between thirty days preceding the date of
                         termination and the date of termination. Payment of
                  the Retention Bonus pursuant to this Section
                  5(b)(iii), if any, shall be made thirty days
                         following the date of termination. All stock prices
                      shall be as reported in the Wall Street Journal,
                         calculated as of the market close on the applicable
dates.                    

      (c) Termination by the Company for Cause; Termination by
Executive Without Good Reason. In the event that Executive's employment is      
terminated prior to the expiration of the Term by the Company for Cause pursuant
to Section 4(c) or by Executive without Good Reason pursuant to Section 4(f),   
Executive shall be entitled only to those items identified in Section 5(a).     

               (d) Termination by Reason of Executive Becoming Totally Disabled;
Termination by the Company Without Cause; Termination by Executive for Good     
Reason; Failure to Appoint Executive to, or Continue Him in, the Position of    
Chairman of the Board of Directors at the End of the Term; The Company's Breach 
of Section 2(d)(ii). In the event that Executive's employment is terminated     
prior to the expiration of the Term by reason of Executive becoming Totally     
Disabled pursuant to Section 4(b), by the Company without Cause pursuant to     
Section 4(d) or by Executive for Good Reason pursuant to Section 4(e), or the   
Company fails to appoint Executive to, or continue him in, the position of      
Chairman of the Board of Directors at the end of the Term (provided that        
Executive is employed through the end of the Term) or the Company fails to offer
such position to Executive at the end of the Term in accordance with Section    
2(d)(ii) (provided that Executive is employed through the end of the Term),     
Executive shall be entitled only to the following:                              

     (i)     those items identified in Section 5(a);

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          (ii)    the continued payment of the Base Salary (as
                          determined pursuant to Section 3(a)) for the greater
                      of (A) the remainder of the Term, and (B) twelve
                          months (such sums to be paid at the times and in the
                       amounts such Base Salary would have been paid had
                           Executive's employment not been terminated), provided
                          that such period shall be for the greater of (A) the
                          remainder of the Term, and (B) twenty-four months if
                      (1) Executive terminates his employment for Good
                    Reason pursuant to Section 4(e)(v), or (2) (x)
                        Executive is employed through the end of the Term,
                           and (y) Executive is not appointed to, or the Company
                           does not continue him in, the position of Chairman of
                          the Board of Directors at the end of the Term or the
                          Company fails to offer such position to Executive at
                    the end of the Term in accordance with Section
                           2(d)(ii). Notwithstanding the foregoing, if necessary
                          to comply with Section 409A(a)(2)(B)(i) of the Code,
                and applicable administrative guidance and
                         regulations, the payment of such sums shall be made
                     as follows: (A) no payments shall be made for a
                         six-month period following the date of termination,
                      (B) an amount equal to six months of Base Salary
                          shall be paid in a lump sum six months following the
                    date of termination, and (C) during the period
                beginning six months following the date of
                      termination through the period such payments are
                           required to be made, payment of the Base Salary shall
                       be made at the times and in the amounts such Base
                 Salary would have been paid had Executive's
employment not terminated.

                   (iii)   Payment of the Retention Bonus, provided that (A) the
                          Retention Bonus shall be equal to (1) $391,500, less
                 (2) (x) 100,000 multiplied by (y) the Early
                         Termination Share Price Differential, and (B) in no
                   event shall such Retention Bonus be less than
                          $300,000. Payment of the Retention Bonus pursuant to
                          this Section 5(d)(iii), if any, shall be made thirty
                       days following the date of termination; provided,
                       however, that if necessary to comply with Section
                  409A(a)(2)(B)(i) of the Code, and applicable
                           administrative guidance and regulations, such payment
                    shall be made six months following the date of
                           termination. All stock prices shall be as reported in
                          the Wall Street Journal, calculated as of the market
    close on the applicable dates.

         (iv)    Notwithstanding the foregoing, in the event
                       Executive's employment is terminated prior to the
                   expiration of the Term by reason of Executive
becoming Totally Disabled 

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                       pursuant to Section 4(b), any amounts received by
                      Executive pursuant to this Section 5(d) shall be
                          reduced by the aggregate amounts, if any, payable to
                    Executive under any disability benefit plan or
                   program provided to Executive by the Company.

            (e) Effect of Material Breach of Section 6 on Compensation and
Benefits Following Termination of Employment Pursuant to Section 5. If, at the  
time of termination of Executive's employment for any reason prior to the       
expiration of the Term or any time thereafter, Executive is in material breach  
of any covenant contained in Section 6 hereof, Executive (or his estate, as     
applicable) shall not be entitled to any payment (or if payments have commenced,
any continued payment) under Sections 5(b)(ii), 5(b)(iii), 5(d)(ii), or         
5(d)(iii).                                                                      

             (f) No Further Liability; Release. Payment made and performance
by the Company in accordance with this Section 5 shall operate to fully         
discharge and release the Company and its directors, officers, employees,       
subsidiaries, affiliates, stockholders, successors, assigns, agents and         
representatives from any further obligation or liability with respect to        
Executive's employment and termination of employment. Other than providing the  
compensation and benefits provided for in accordance with this Section 5, the   
Company and its directors, officers, employees, subsidiaries, affiliates,       
stockholders, successors, assigns, agents and representatives shall have no     
further obligation or liability to Executive or any other person under this     
Agreement. The payment of any amounts pursuant to this Section 5 (other than    
payments required by law) is expressly conditioned upon the delivery by         
Executive to the Company of a release in form and substance reasonably          
satisfactory to the Company of any and all claims Executive may have against the
Company and its directors, officers, employees, subsidiaries, affiliates,       
stockholders, successors, assigns, agents and representatives arising out of or 
related to Executive's employment by the Company and the termination of such    
employment.                                                                     

 6. Exclusive Employment; Noncompetition; Nonsolicitation;
Nondisclosure of Proprietary Information; Surrender of Records; Inventions and  
Patents; Code of Ethics.                                                        

        6.1 No Conflict; No Other Employment. During the period of
Executive's employment with the Company, Executive shall not: (i) engage in any 
activity which conflicts or interferes with or derogates from the performance of
Executive's duties hereunder nor shall Executive engage in any other business   
activity, whether or not such business activity is pursued for gain or profit   
and including service as a director of any other company, except as approved in 
advance in writing by the Company; provided, however, that Executive shall be   
entitled to manage his personal investments and otherwise attend to personal    
affairs, including charitable, social and political activities, in a manner that
does not unreasonably interfere with his responsibilities hereunder, or (ii)    
accept or engage in any other employment, whether as an employee or consultant  
or in any other capacity, and whether or not compensated therefor.              

6.2 Noncompetition; Nonsolicitation.              

              (a) Executive acknowledges and recognizes the highly competitive
nature of the Company's business and that access to the Company's confidential  
records and                                                                     

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proprietary information renders him special and unique within the Company's     
industry. In consideration of the payment by the Company to Executive of amounts
that may hereafter be paid to Executive pursuant to this Agreement (including,  
without limitation, pursuant to Sections 3 and 5 hereof) and other obligations  
undertaken by the Company hereunder, Executive agrees that during (i) his       
employment with the Company and (ii) the length of time that Executive is       
receiving payments from the Company following the termination of his employment 
pursuant to Section 5, but in no event less than one year following the date of 
termination of his employment for any reason (the "Covered Time"), Executive    
shall not, directly or indirectly, engage (as owner, investor, partner,         
stockholder, employer, employee, consultant, advisor, director or otherwise) in 
any Competing Business, provided that the provisions of this Section 6.2(a) will
not be deemed breached merely because Executive owns less than 1% of the        
outstanding common stock of a publicly-traded company. For purposes of this     
Agreement, "Competing Business" shall mean (i) any business in which the Company
is currently engaged anywhere in the world, including but not limited to (A) the
marketing, production and sale of collectibles, including numismatic and        
philatelic material, by auction, as merchant-dealer or otherwise, and (B) the   
marketing, production and sale of third-party and owned material by auction; and
(ii) any other business which the Company engages in anywhere in the world      
during the Term.                                                                

           (b) In further consideration of the payment by the Company to
Executive of amounts that may hereafter be paid to Executive pursuant to this   
Agreement (including, without limitation, pursuant to Sections 3 and 5 hereof)  
and other obligations undertaken by the Company hereunder, Executive agrees that
during his employment and the Covered Time, he shall not, directly or           
indirectly, (i) solicit, encourage or attempt to solicit or encourage any of the
employees, agents, consultants or representatives of the Company or any of its  
affiliates to terminate his, her, or its relationship with the Company or such  
affiliate; (ii) solicit, encourage or attempt to solicit or encourage any of the
employees, agents, consultants or representatives of the Company or any of its  
affiliates to become employees, agents, representatives or consultants of any   
other person or entity; (iii) solicit or attempt to solicit any customer, vendor
or distributor of the Company or any of its affiliates with respect to any      
product or service being furnished, made, sold or leased by the Company or such 
affiliate; or (iv) persuade or seek to persuade any customer of the Company or  
any affiliate to cease to do business or to reduce the amount of business which 
any customer has customarily done or contemplates doing with the Company or such
affiliate, whether or not the relationship between the Company or its affiliate 
and such customer was originally established in whole or in part through        
Executive's efforts. For purposes of this Section 6.2(b) only, the terms        
"customer," "vendor" and "distributor" shall mean a customer, vendor or         
distributor who has done business with the Company or any of its affiliates     
within twelve months preceding the termination of Executive's employment.       

               (c) During Executive's employment with the Company and during the
Covered Time, Executive agrees that upon the earlier of Executive's (i)         
negotiating with any Competitor (as defined below) concerning the possible      
employment of Executive by the Competitor, (ii) receiving an offer of employment
from a Competitor, or (iii) becoming employed by a Competitor, Executive will   
(A) immediately provide notice to the Company of such circumstances and (B)     
provide copies of Section 6 of this Agreement to the Competitor. Executive      
further agrees that the Company may provide notice to a Competitor of           
Executive's obligations under this Agreement, including without limitation      
Executive's obligations pursuant                                                

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to Section 6 hereof. For purposes of this Agreement, "Competitor" shall mean any
entity (other than the Company or any of its affiliates) that engages, directly 
or indirectly, in any Competing Business.                                       

               (d) Executive understands that the provisions of this Section 6.2
may limit his ability to earn a livelihood in a business similar to the business
of the Company or its affiliates but nevertheless agrees and hereby acknowledges
that the consideration provided under this Agreement, including any amounts or  
benefits provided under Sections 3 and 5 hereof and other obligations undertaken
by the Company hereunder, is sufficient to justify the restrictions contained in
such provisions. In consideration thereof and in light of Executive's education,
skills and abilities, Executive agrees that he will not assert in any forum that
such provisions prevent him from earning a living or otherwise are void or      
unenforceable or should be held void or unenforceable.                          

             6.3 Proprietary Information. Executive acknowledges that during
the course of his employment with the Company he will necessarily have access to
and make use of proprietary information and confidential records of the Company 
and its affiliates. Executive covenants that he shall not during the Term or at 
any time thereafter, directly or indirectly, use for his own purpose or for the 
benefit of any person or entity other than the Company, nor otherwise disclose, 
any proprietary information to any individual or entity, unless such disclosure 
has been authorized in writing by the Company or is otherwise required by law.  
Executive acknowledges and understands that the term "proprietary information"  
includes, but is not limited to: (a) the software products, programs,           
applications, and processes utilized by the Company or any of its affiliates;   
(b) the name and/or address of any customer or vendor of the Company or any of  
its affiliates or any information concerning the transactions or relations of   
any customer or vendor of the Company or any of its affiliates with the Company 
or such affiliate or any of its or their partners, principals, directors,       
officers or agents; (c) any information concerning any product, technology, or  
procedure employed by the Company or any of its affiliates but not generally    
known to its or their customers, vendors or competitors, or under development by
or being tested by the Company or any of its affiliates but not at the time     
offered generally to customers or vendors; (d) any information relating to the  
computer software, computer systems, pricing or marketing methods, sales        
margins, cost of goods, cost of material, capital structure, operating results, 
borrowing arrangements or business plans of the Company or any of its           
affiliates; (e) any information which is generally regarded as confidential or  
proprietary in any line of business engaged in by the Company or any of its     
affiliates; (f) any business plans, budgets, advertising or marketing plans; (g)
any information contained in any of the written or oral policies and procedures 
or manuals of the Company or any of its affiliates; (h) any information         
belonging to customers or vendors of the Company or any of its affiliates or any
other person or entity which the Company or any of its affiliates has agreed to 
hold in confidence; (i) any inventions, innovations or improvements covered by  
this Agreement; and (j) all written, graphic and other material relating to any 
of the foregoing. Executive acknowledges and understands that information that  
is not novel or copyrighted or patented may nonetheless be proprietary          
information. The term "proprietary information" shall not include information   
generally available to and known by the public or information that is or becomes
available to Executive on a non-confidential basis from a source other than the 
Company, any of its affiliates, or the directors, officers, employees, partners,
principals or agents of the Company or any of its affiliates (other than as a   
result of a breach of any obligation of confidentiality).                       

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               6.4 Confidentiality and Surrender of Records. Executive shall not
during the Term or at any time thereafter (irrespective of the circumstances    
under which Executive's employment by the Company terminates), except as        
required by law, directly or indirectly publish, make known or in any fashion   
disclose any confidential records to, or permit any inspection or copying of    
confidential records by, any individual or entity other than in the course of   
such individual's or entity's employment or retention by the Company. Upon      
termination of employment for any reason or upon request by the Company,        
Executive shall deliver promptly to the Company all property and records of the 
Company or any of its affiliates, including, without limitation, all            
confidential records. For purposes hereof, "confidential records" means all     
correspondence, reports, memoranda, files, manuals, books, lists, financial,    
operating or marketing records, magnetic tape, or electronic or other media or  
equipment of any kind which may be in Executive's possession or under his       
control or accessible to him which contain any proprietary information. All     
property and records of the Company and any of its affiliates (including,       
without limitation, all confidential records) shall be and remain the sole      
property of the Company or such affiliate during the Term and thereafter.       

        6.5 Inventions and Patents. All inventions, innovations or
improvements (including policies, procedures, products, improvements, software, 
ideas and discoveries, whether patent, copyright, trademark, service mark, or   
otherwise) conceived or made by Executive, either alone or jointly with others, 
in the course of his employment by the Company, belong to the Company. Executive
will promptly disclose in writing such inventions, innovations or improvements  
to the Company and perform all actions reasonably requested by the Company to   
establish and confirm such ownership by the Company, including, but not limited 
to, cooperating with and assisting the Company in obtaining patents, copyrights,
trademarks, or service marks for the Company in the United States and in foreign
countries.                                                                      

         6.6 Enforcement. Executive acknowledges and agrees that, by
virtue of his position, his services and access to and use of confidential      
records and proprietary information, any violation by him of any of the         
undertakings contained in this Section 6 would cause the Company and/or its     
affiliates immediate, substantial and irreparable injury for which it or they   
have no adequate remedy at law. Accordingly, Executive agrees and consents to   
the entry of an injunction or other equitable relief by a court of competent    
jurisdiction restraining any violation or threatened violation of any           
undertaking contained in this Section 6. Executive waives posting by the Company
or its affiliates of any bond otherwise necessary to secure such injunction or  
other equitable relief. Rights and remedies provided for in this Section 6 are  
cumulative and shall be in addition to rights and remedies otherwise available  
to the parties hereunder or under any other agreement or applicable law.        

          6.7 Code of Ethics. Nothing in this Section 6 is intended to
limit, modify or reduce Executive's obligations under the Code of Ethics.       
Executive's obligations under this Section 6 are in addition to, and not in lieu
of, Executive's obligations under the Code of Ethics. To the extent there is any
inconsistency between this Section 6 and the Code of Ethics which would permit  
Executive to take any action or engage in any activity pursuant to this Section 
6 which he would be barred from taking or engaging in under the Code of Ethics, 
the Code of Ethics shall control.                                               

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            7. Key Man Insurance. Executive recognizes and acknowledges that the
Company or its affiliates may seek and purchase one or more policies providing  
key man life insurance with respect to Executive, the proceeds of which would be
payable to the Company or such affiliate. Executive hereby consents to the      
Company or its affiliates seeking and purchasing such insurance and will provide
such information, undergo such medical examinations (at the Company's expense), 
execute such documents, and otherwise take any and all actions reasonably       
necessary or desirable in order for the Company or its affiliates to seek,      
purchase, and maintain in full force and effect such policy or policies.        

8. Assignment and Transfer.                             

              (a) Company. This Agreement shall inure to the benefit of and be
enforceable by, and may be assigned by the Company without Executive's consent  
to, any purchaser of all or substantially all of the Company's business or      
assets, or to any successor to the Company or any assignee thereof (whether     
direct or indirect, by purchase, merger, consolidation or otherwise).           

       (b) Executive. The parties hereto agree that Executive is
obligated under this Agreement to render personal services during the Term of a 
special, unique, unusual, extraordinary and intellectual character, thereby     
giving this Agreement special value. Executive's rights and obligations under   
this Agreement shall not be transferable by Executive by assignment or          
otherwise, and any purported assignment, transfer or delegation thereof shall be
void; provided, however, that if Executive shall die, all amounts then payable  
to Executive hereunder shall be paid in accordance with the terms of this       
Agreement to Executive's estate.                                                

9. Miscellaneous.                                       

           (a) Other Obligations. Executive represents and warrants that
neither Executive's employment with the Company nor Executive's performance of  
Executive's obligations hereunder will conflict with or violate or otherwise are
inconsistent with any other obligations, legal or otherwise, which Executive may
have. Executive covenants that he shall perform his duties hereunder in a       
professional manner and not in conflict or violation, or otherwise inconsistent 
with other obligations legal or otherwise, which Executive may have.            

             (b) Nondisclosure; Other Employers. Executive will not disclose
to the Company, use, or induce the Company to use, any proprietary information, 
trade secrets or confidential business information of others. Executive         
represents and warrants that Executive does not possess any property,           
proprietary information, trade secrets and confidential business information    
belonging to any prior employers.                                               

           (c) Cooperation. Following termination of employment with the
Company for any reason, Executive shall cooperate with the Company, as requested
by the Company, to effect a transition of Executive's responsibilities and to   
ensure that the Company is aware of all matters being handled by Executive.     

         (d) Mitigation. Executive shall not be required to mitigate
damages or the amount of any payment provided to him under Section 5 of this    
Agreement by seeking other employment or otherwise, nor shall the amount of any 
payments provided to Executive under                                            

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Section 5 be reduced by any compensation earned by Executive as the result of   
employment by another employer after the termination of Executive's employment  
or otherwise, except as otherwise provided in Section 5(d)(iv).                 

           (e) Protection of Reputation. During the Term and thereafter,
Executive agrees that he will take no action which is intended, or would        
reasonably be expected, to harm the Company or any of its affiliates or its or  
their reputation or which would reasonably be expected to lead to unwanted or   
unfavorable publicity to the Company or its affiliates.                         

        (f) Governing Law. This Agreement shall be governed by and
construed (both as to validity and performance) and enforced in accordance with 
the internal laws of the State of New York applicable to agreements made and to 
be performed wholly within such jurisdiction, without regard to the principles  
of conflicts of law or where the parties are located at the time a dispute      
arises.                                                                         

(g) Arbitration.                                  

            (i)   General. Executive and the Company specifically,
                      knowingly, and voluntarily agree that they shall use
                      final and binding arbitration to resolve any dispute
                         (an "Arbitrable Dispute") between Executive, on the one
                hand, and the Company (or any affiliate of the
                         Company), on the other hand. This arbitration agreement
                       applies to all matters relating to this Agreement and
                   Executive's employment with and/or termination of
                employment from the Company, including without
                         limitation disputes about the validity, interpretation,
                       or effect of this Agreement, or alleged violations of
                       it, any payments due hereunder and all claims arising
                  out of any alleged discrimination, harassment or
                   retaliation, including, but not limited to, those
                       covered by Title VII of the Civil Rights Act of 1964,
                         as amended, the Age Discrimination in Employment Act of
                       1967, as amended, and the Americans With Disabilities
                       Act or any other federal, state or local law relating
  to discrimination in employment.

              (ii)  Injunctive Relief. Notwithstanding anything to the
                contrary contained herein, the Company and any
                         affiliate of the Company (if applicable) shall have the
                         right to seek injunctive or other equitable relief from
                        a court of competent jurisdiction to enforce Section 6
                        of this Agreement. For purposes of seeking enforcement
                        of Section 6, the Company and Executive hereby consent
                   to the jurisdiction of any state or federal court
                    sitting in the City, County and State of New York.

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             (iii) The Arbitration. Any arbitration pursuant to this
                     Section 9(g) will take place in New York, New York,
                under the auspices of the American Arbitration
                        Association, in accordance with the National Rules for
                       the Resolution of Employment Disputes of the American
                      Arbitration Association then in effect, and before a
                        panel of three arbitrators selected in accordance with
                     such rules. Judgment upon the award rendered by the
                    arbitrators may be entered in any state or federal
                    court sitting in the City, County and State of New
York.                         

                  (iv)  Fees and Expenses. In any arbitration pursuant to this
                       Section 9(g), each party shall be responsible for the
                       fees and expenses of its own attorneys and witnesses,
                       and the fees and expenses of the arbitrators shall be
                       divided equally between the Company, on the one hand,
   and Executive, on the other hand.

           (v)   Exclusive Forum. Except as permitted by Section
                         9(g)(ii) hereof, arbitration in the manner described in
                        this Section 9(g) shall be the exclusive forum for any
                    Arbitrable Dispute. Except as permitted by Section
                      9(g)(ii), should Executive or the Company attempt to
                        resolve an Arbitrable Dispute by any method other than
                arbitration pursuant to this Section 9(g), the
                        responding party shall be entitled to recover from the
                        initiating party all damages, expenses, and attorneys'
           fees incurred as a result of that breach.

      (h) Entire Agreement. This Agreement contains the entire
agreement and understanding between the parties hereto in respect of Executive's
employment and supersedes, cancels and annuls any prior or contemporaneous      
written or oral agreements, understandings, commitments and practices between   
them respecting Executive's employment, including all prior employment          
agreements between the Company and Executive, which agreement(s) hereby are     
terminated and shall be of no further force or effect.                          

            (i) Amendment. This Agreement may be amended only by a writing
which makes express reference to this Agreement as the subject of such amendment
and which is signed by Executive and, on behalf of the Company, by its duly     
authorized officer.                                                             

         (j) Severability. If any provision of this Agreement or the
application of any such provision to any party or circumstances shall be        
determined by any court of competent jurisdiction or arbitration panel to be    
invalid or unenforceable to any extent, the remainder of this Agreement, or the 
application of such provision to such person or circumstances other than those  
to which it is so determined to be invalid or unenforceable, shall not be       
affected thereby, and each provision hereof shall be enforced to the fullest    
extent permitted by law. If any provision of this Agreement, or any part        
thereof, is held to be invalid or unenforceable because of the scope or duration
of or the area covered by such provision, the                                   

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parties hereto agree that the court or arbitration panel making such            
determination shall reduce the scope, duration and/or area of such provision    
(and shall substitute appropriate provisions for any such invalid or            
unenforceable provisions) in order to make such provision enforceable to the    
fullest extent permitted by law and/or shall delete specific words and phrases, 
and such modified provision shall then be enforceable and shall be enforced. The
parties hereto recognize that if, in any judicial or arbitral proceeding, a     
court or arbitration panel shall refuse to enforce any of the separate covenants
contained in this Agreement, then that invalid or unenforceable covenant        
contained in this Agreement shall be deemed eliminated from these provisions to 
the extent necessary to permit the remaining separate covenants to be enforced. 
In the event that any court or arbitration panel determines that the time period
or the area, or both, are unreasonable and that any of the covenants is to that 
extent invalid or unenforceable, the parties hereto agree that such covenants   
will remain in full force and effect, first, for the greatest time period, and  
second, in the greatest geographical area that would not render them            
unenforceable.                                                                  

               (k) Construction. The headings and captions of this Agreement are
provided for convenience only and are intended to have no effect in construing  
or interpreting this Agreement. The language in all parts of this Agreement     
shall be in all cases construed according to its fair meaning and not strictly  
for or against the Company or Executive. As used herein, the words "day" or     
"days" shall mean a calendar day or days.                                       

             (l) Nonwaiver. Neither any course of dealing nor any failure or
neglect of either party hereto in any instance to exercise any right, power or  
privilege hereunder or under law shall constitute a waiver of any other right,  
power or privilege or of the same right, power or privilege in any other        
instance. All waivers by either party hereto must be contained in a written     
instrument signed by the party to be charged and, in the case of the Company, by
its duly authorized officer.                                                    

              (m) Notices. Any notice required or permitted hereunder shall be
in writing and shall be sufficiently given if personally delivered or if sent by
registered or certified mail, postage prepaid, with return receipt requested,   
addressed: (i) in the case of the Company, to Greg Manning Auctions, Inc., 775  
Passaic Avenue, West Caldwell, New Jersey 07006, attn.: General Counsel, with a 
copy to Kramer Levin Naftalis & Frankel LLP, 1177 Avenue of the Americas, New   
York, New York 10036, attn.: Scott S. Rosenblum, Esq.; and (ii) in the case of  
Executive, to Executive's last known address as reflected in the Company's      
records, or to such other address as Executive shall designate by written notice
to the Company. Any notice given hereunder shall be deemed to have been given at
the time of receipt thereof by the person to whom such notice is given if       
personally delivered or at the time of mailing if sent by registered or         
certified mail.                                                                 

          (n) Assistance in Proceedings, Etc. Executive shall, without
additional compensation, during and after the Term, upon reasonable notice,     
furnish such information and proper assistance to the Company as may reasonably 
be required by the Company in connection with any legal or quasi-legal          
proceeding, including any external or internal investigation, involving the     
Company or any of its affiliates.                                               

              (o) Survival. Cessation or termination of Executive's employment
with the Company shall not result in termination of this Agreement. The         
respective obligations                                                          

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of Executive and the Company as provided in Sections 3(b) (second sentence      
only), 3(k), 5, 6, 8 and 9 of this Agreement shall survive cessation or         
termination of Executive's employment hereunder.                                

           (p) Section 409A of the Code. Executive and the Company agree
that in the event the Company reasonably determines that the terms hereof would 
result in Executive being subject to tax under Section 409A of the Code,        
Executive and the Company shall negotiate in good faith to amend this Agreement 
to the extent necessary to prevent the assessment of any such tax, including by 
delaying the payment dates of any amounts hereunder.                            

       IN WITNESS WHEREOF, the Company has caused this Agreement to be
duly executed on its behalf by an individual thereunto duly authorized and      
Executive has duly executed this Agreement, all as of the date and year first   
written above.                                                                  

GREG MANNING AUCTIONS, INC.                  EXECUTIVE:                         

By: /s/ Larry Crawford                       /s/ Jose Miguel Herrero            
----------------------------------       -------------------------------  
Name: Larry Crawford                     Jose Miguel Herrero              
Title: Chief Financial Officer and                                        
Executive Vice President                                                  

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 ANNEX A

Jose Miguel Herrero Incentive Compensation Program

1. Introduction                                         

    This Jose Miguel Herrero Incentive Compensation Program (the
"Program") is established by Greg Manning Auctions, Inc. (the "Company") to     
provide Jose Miguel Herrero ("Executive") with "performance-based               
compensation" within the meaning of Section 162(m)(4) of the Internal Revenue   
Code of 1986, as amended (the "Code").  The Program has been approved by a      
committee of the Company's Board of Directors comprised solely of at least      
two independent directors (the "Committee") and is subject to approval by the   
shareholders of the Company.  Prior to any payment under the Program, the       
Committee shall certify the amount of the Performance Bonus (as defined         
below) and/or the Long-Term Incentive Award (as defined below) to which         
Executive is entitled.                                                          

    This Program is an Annex to the employment agreement between
Executive and the Company, dated as of September 27, 2005 (the "Employment      
Agreement"), and the provisions of the Employment Agreement, including without  
limitation, with respect to arbitration of disputes, shall apply to this Program
to the extent not inconsistent with the terms of the Program.                   

2. Performance Bonus.                                   

        The Company shall pay Executive an annual performance cash bonus
(the "Performance Bonus") for each fiscal year during the Term equal to (1)     
the lesser of 1% of the Company Pre-Tax Income (as defined below) and           
$400,000 (the "Base Bonus Amount"), (2) as adjusted by the Performance Bonus    
Adjustment (as defined below), if any.                                          

                 (a) The term "Company Pre-Tax Income" shall mean the net income
of the Company before taxes and deductions for any bonus paid under the Program,
determined by the Company in accordance with its standard accounting practices. 

               (b) The term "Performance Bonus Adjustment" shall mean (1) if
the Average Closing Price (as defined below) for the Company's common stock for 
the thirty-day period ending on the last day of the fiscal year is at least 15% 
greater than the Average Closing Price for the thirty-day period ending on the  
first day of the fiscal year, then the Base Bonus Amount shall be increased by  
15%; (2) if the Average Closing Price for the thirty-day period ending on the   
last day of the fiscal year is less than 15% greater than the Average Closing   
Price for the thirty-day period ending on the first day of the fiscal year (but 
has increased over such period), then the Base Bonus Amount shall not be        
adjusted; and (3) if the Average Closing Price for the thirty-day period ending 
on the last day of the fiscal year is less than the Average Closing Price for   
the thirty-day period ending on the first day of the fiscal year, then the Base 
Bonus Amount shall be decreased by 15%.                                         

            (c) The Performance Bonus shall be paid within thirty days
following the issuance of financial statements for the fiscal year in respect of
which such bonus is payable,                                                    

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provided that in no event shall the Performance Bonus be paid later than the    
March 14 next occurring following the end of such fiscal year.                  

                 (d) Except as provided below, Executive must be employed by the
Company on the last day of the fiscal year to be eligible for the Performance   
Bonus.                                                                          

3. Long-Term Incentive Award.                           

        (a) The Company will pay to Executive in shares of the
Company's common stock (the "Long-Term Incentive Award") an amount equal to the 
greater of:                                                                     

                      (i) (A) the product of (1) 1/2, multiplied by (2) 200,000,
multiplied by (3) the appreciation in stock price, if any, between (x) the      
closing price of the common stock of the Company on July 1, 2005, and (y) the   
Average Closing Price for the period between June 1, 2008 and June 30, 2008,    
minus (B) $300,000; and                                                         

(ii) the sum of                     

                       (A) the product of (1) 1/2, multiplied by (2)
                           200,000, multiplied by (3) 1/3, multiplied by (4)
                          the appreciation in stock price, if any, between
                          (x) the closing price of the common stock of the
                      Company on July 1, 2005, and (y) the Average
                           Closing Price for the period between June 1, 2006
 and June 30, 2006, plus

                       (B) the product of (1) 1/2, multiplied by (2)
                           200,000, multiplied by (3) 1/3, multiplied by (4)
                          the appreciation in stock price, if any, between
                          (x) the closing price of the common stock of the
                      Company on July 1, 2005, and (y) the Average
                           Closing Price for the period between June 1, 2007
 and June 29, 2007, plus

                       (C) the product of (1) 1/2, multiplied by (2)
                           200,000, multiplied by (3) 1/3, multiplied by (4)
                          the appreciation in stock price, if any, between
                          (x) the closing price of the common stock of the
                      Company on July 1, 2005, and (y) the Average
                           Closing Price for the period between June 1, 2008
and June 30, 2008,    

minus $300,000.                       

                  (b) Payment of the Long-Term Incentive Award, if any, shall be
made on July 31, 2008; provided, however, that if necessary to comply with      
Section 409A(a)(2)(B)(i) of the Code, and applicable administrative guidance and
regulations, such payment shall be made                                         

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on December 31, 2008. The number of shares payable to Executive shall be based  
on the closing price of the Company's common stock on June 30, 2008.            

               (c) Except as provided below, Executive must be employed by
the Company on June 30, 2008 to be eligible for the Long-Term Incentive Award.  

4. Termination of Employment.                           

               (a) Subject to Sections 4(c) and 4(d) below, if Executive's
employment terminates for any reason other than by the Company for Cause or by  
the Executive without Good Reason (as each such term is defined in the          
Employment Agreement), Executive shall be entitled to:                          

                      (i) any Performance Bonus not yet paid for any fiscal year
ending prior to the date of Executive's termination of employment (payable as   
and when such bonus would have been paid had Executive's employment continued); 

                    (ii) a prorated portion of the Performance Bonus for the
fiscal year in which Executive's employment terminated, based on the number of  
days Executive was employed by the Company in such fiscal year (the Performance 
Bonus to be otherwise calculated and paid in accordance with, and subject to,   
the Program); and                                                               

             (iii) payment of the Long-Term Incentive Award in
accordance with, and subject to, Section 3 of the Program, provided that in such
a case the Company will pay to Executive in shares of the Company's common stock
an amount equal to (A) the product of (1) 1/2, multiplied by (2) 200,000,       
multiplied by (3) the appreciation in stock price, if any, between (x) the      
closing price of the common stock of the Company on July 1, 2005, and (y) the   
Average Closing Price for the 30-day period preceding the date of termination,  
minus (B) $300,000. Payment of the Long-Term Incentive Award, if any, shall be  
made thirty days following the date of termination; provided, however, if       
necessary to comply with Section 409A(a)(2)(B)(i) of the Code, and applicable   
administrative guidance and regulations, such payment shall be made six months  
following the date of termination.                                              

                  (b) If Executive's employment is terminated by the Company for
Cause or by Executive without Good Reason, Executive shall be entitled only to  
any Performance Bonus not yet paid for any fiscal year ending prior to the date 
of Executive's termination of employment (payable as and when such bonus would  
have been paid had Executive's employment continued).                           

                (c) The payment of any amounts pursuant to Sections 4(a)(ii)
and (iii) hereof is expressly conditioned upon the delivery by Executive to the 
Company of a release in form and substance reasonably satisfactory to the       
Company of any and all claims Executive may have against the Company and its    
directors, officers, employees, subsidiaries, affiliates, stockholders,         
successors, assigns, agents and representatives arising out of or related to    
Executive's employment by the Company and the termination of such employment.   

                (d) If, at the time of termination of Executive's employment
for any reason or any time thereafter, Executive is in material breach of any   
covenant contained in                                                           

3 

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Section 6 of the Employment Agreement, Executive (or his estate, as applicable) 
shall not be entitled to any payment (or if payments have commenced, any        
continued payment) under Sections 4(a)(ii) and (iii) hereof.                    

5. Average Closing Price.                               

            For purposes of the Program, "Average Closing Price" with respect to
a specified period of time shall mean the average of closing prices of the      
Company's common stock as reported in the Wall Street Journal for those dates   
during the specified period on which the national stock exchanges are open for  
business.                                                                       

4 

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘8-K’ Filing		Date		First		Last			Other Filings
		12/31/08		3		21			10-Q
		7/31/08		3		20
		6/30/08		1		21
		6/1/08		3		20
		7/2/07		2
		7/1/07		2
		6/29/07		20
		6/1/07		20
		7/1/06		2
		6/30/06		2		20			NT 10-K
		6/1/06		20
Filed on:		10/3/05
For Period End:		9/27/05		1		19
		7/1/05		2		21
									List all Filings