MANAGEMENT TRANSITION AND NEW CHIEF FINANCIAL OFFICER

9 Months Ended

Jun. 30, 2012

MANAGEMENT TRANSITION AND NEW CHIEF FINANCIAL OFFICER

MANAGEMENT TRANSITION AND NEW CHIEF FINANCIAL OFFICER

(9) MANAGEMENT TRANSITION AND NEW CHIEF FINANCIAL OFFICER

On June 25, 2012, the Company entered into an employment agreement with Ms. Kathryn M. JohnBull pursuant to which she became the Company’s Chief Financial Officer commencing on June 25, 2012.  On June 25, 2012, the Company’s employment of John E. Kahn, who had served as its Chief Financial Officer, terminated. As of the date of this report, no new compensatory or severance arrangements have been entered into in connection with Mr. Kahn’s departure.  The following is a description of the Company’s employment agreement with Ms. JohnBull, which is qualified in its entirety by reference to the full text of such agreement.

The employment agreement is for an initial term of three years from its commencement date of June 25, 2012. Under the employment agreement, Ms. JohnBull will receive a base salary of $225,000 per annum and may receive an annual bonus of up to 50% of base salary based on performance targets and other key objectives established by the Management Resources and Compensation Committee of the board of directors; however, $31,000 of the annual bonus for her initial year of employment is guaranteed.  The Company granted Ms. JohnBull options to purchase 250,000 shares of common stock under its 2006 Long Term Incentive Plan, as amended, subject to vesting. The options, to the extent vested, shall be exercisable for a period of ten years at the per share exercise price equal to the fair market value of the Company’s common stock on the commencement date of her employment.  In the event of the termination of employment by us without “cause” or by her for “good reason”, she will be entitled to a severance payment of 12 months of base salary and will be entitled to a payment equal to 12 months of base salary if her employment is terminated in connection with a change in control of the Company.