NOTE I - EMPLOYMENT ARRANGEMENTS AND OTHER AGREEMENTS

On March 22, 2022, the Company entered into an employment agreement with its Chairman and Chief Executive Officer for a four-year term (“Term”), which among other things, included an annual base salary of $535,000 which was increased by 3% per annum during the Term, a discretionary annual bonus, an equity grant and certain incentive compensation. The Company’s Compensation Committee and the Chairman and Chief Executive Officer are currently discussing the terms of a new employment agreement while the Chairman and Chief Executive Officer continues to serve in such capacity.

Under the surviving terms of the prior employment agreement, so long as our Chairman and Chief Executive Officer continues to serve as an executive officer of the Company, whether pursuant to the Agreement or otherwise, he shall also receive incentive compensation in an amount equal to 5% of our gross royalties or other payments from Licensing Activities (as defined) (without deduction of legal fees or any other expenses) with respect to our Remote Power Patent and a 10% net interest (gross royalties and other payments after deduction of all legal fees and litigation expenses related to licensing, enforcement and sale activities, but in no event shall he receive less than 6.25% of the gross recovery) of our royalties and other payments relating to Licensing Activities with respect to patents other than our Remote Power Patent (including all of our existing patent portfolios and our investment in ILiAD).

In the event of a merger or sale of substantially all of our assets, we have the option to extinguish the right of our Chairman and Chief Executive Officer to receive future Incentive Compensation by payment to him of a lump sum payment, in an amount equal to the fair market value of such future interest as determined by an independent third party expert if the parties do not reach agreement as to such value.