SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT

his final compensation as provided for in Section 5.5(b) of this Agreement, except that the Executive shall receive his Incentive Compensation for the then current Fiscal Year prorated through December 31, 2007.  If the Board of Directors does not negotiate in good faith or if the employment agreement offered does not include a clause providing for at least twelve (12) months’ severance and benefits continuation, this Agreement will expire on December 31, 2007, and the Executive will be paid the severance benefits provided for in Sections 5.5(a) and (e) of this Agreement.

1.3                                DUTIES

The Executive will have such duties as are assigned or delegated to the Executive in writing by the Board of Directors, and will serve as Chairman of the Board, Chief Executive Officer and President of the Employer.  The Executive’s job duties shall include those responsibilities set forth in Exhibit A.  The Executive will devote his entire business time, attention, skill, and energy to the business of the Employer, will use his best efforts to promote the success of the Employer’s business, and will cooperate fully with the Board of Directors in the advancement of the best interests of the Employer.  Nothing in this Section 1.3, however, will prevent the Executive from engaging in additional activities in connection with personal investments and community affairs that are not inconsistent with the Executive’s duties under this Agreement.  The Executive will fulfill his duties as a director of the Employer or officer of any of Employer’s affiliates without additional compensation as long as the Executive’s employment by the Employer continues under this Agreement.

2.                                       COMPENSATION

2.1                                BASIC COMPENSATION

(a)            Salary .  The Executive will be paid an annual salary of $200,000 (the “Salary”), subject to adjustment as provided below, which will be payable in equal periodic installments according to the Employer’s customary payroll practices, but no less frequently than monthly.  The Salary will be reviewed by the Board of Directors not less frequently than annually, and may be adjusted upward in the sole discretion of the Board of Directors.

(b)            Benefits .  The Executive will, during the Employment Period, be permitted to participate in such stock option, restricted stock, pension, profit sharing, bonus, life insurance, hospitalization, major medical, tuition reimbursement, medical flexible spending accounts and other employee benefit plans provided by the Employer that may be in effect from time to time, at levels made available to other similarly situated executives of the Employer, and to the extent the Executive is eligible under the terms of those plans (collectively, the “Benefits”).  The Benefits shall include life insurance on the Executive’s life in an amount not less than the Executive’s Salary.

2.2                                INCENTIVE COMPENSATION.

As additional compensation (the “Incentive Compensation”) for the services to be rendered by the Executive pursuant to this Agreement, the Employer will pay the Executive with respect to each Fiscal Year during the Employment Period (including Fiscal Year 2005), an amount not less than fifty percent (50%) of the Executive’s Salary (the “Compensation Plan”), if,

2

and only if, the Employer meets or exceeds the performance goals for the Employer established by the Board of Directors (the “Employer Performance Goal”).  The Compensation Plan and Employer Performance Goal will be established by the Board of Directors within 60 days from the beginning of each Fiscal Year and will be communicated to the Executive in writing within 30 days of being so established.  Incentive Compensation will be paid to Executive no later than 2-1/2 months following the close of the calendar year in which the Incentive Compensation was earned; provided, however, if the Board of Directors in its discretion determines that the Employer does not have sufficient available cash to pay such amount on such date, the Board of Directors may defer, without interest, payment of any or all of such amount, to not later than December 31 of the calendar year following the calendar year in which the Incentive Compensation was earned.

3.                                       FACILITIES AND EXPENSES

The Employer will furnish the Executive office space, equipment, supplies, and such other facilities and personnel as the Employer deems necessary or appropriate for the performance of the Executive’s duties under this Agreement.  The Employer will pay the Executive’s dues in such professional societies and organizations as the Board of Directors deems appropriate, and will pay on behalf of the Executive (or reimburse the Executive for) reasonable expenses incurred by the Executive at the request of, or on behalf of, the Employer in the performance of the Executive’s duties pursuant to this Agreement, and in accordance with the Employer’s employment policies, including reasonable expenses incurred by the Executive in attending conventions, seminars, and other business meetings, in appropriate business entertainment activities, and for promotional expenses.  The Executive must file expense reports with respect to such expenses in accordance with the Employer’s policies.

4.                                       VACATIONS AND HOLIDAYS

The Executive will be entitled to four weeks’ paid vacation each calendar year in accordance with the vacation policies of the Employer in effect for its executive officers from time to time.  The Executive agrees to arrange his vacation time with due regard for the circumstances and needs of the Employer and to minimize disturbance of the Employer’s operations.  The Executive will also be entitled to the paid holidays set forth in the Employer’s policies. Any unused vacation days may be carried over to the subsequent calendar year.

5.                                       TERMINATION

5.1                                EVENTS OF TERMINATION

(a)            Termination .  The Employment Period, the Executive’s Basic Compensation and Incentive Compensation, and any and all other rights of the Executive under this Agreement or otherwise as an employee of the Employer will terminate (except as otherwise provided in this Section 5 or in the Change of Control Agreement):

(i)             upon the death of the Executive;

3

(ii)            upon the disability of the Executive (as defined in Section 5.2) for 120 consecutive days, or 180 days during any twelve-month period, immediately upon notice from either party to the other;

(iii)           for cause (as defined in Section 5.3), immediately upon notice from the Employer to the Executive, or at such later time as such notice may specify;

(iv)           for Good Reason (as defined in Section 5.4) upon not less than thirty days’ prior notice from the Executive to the Employer;

(v)            without cause immediately upon notice from either party to the other; or

(vi)           upon the expiration of the Employment Period as provided in Section 1.2.

(b)            Notice of Termination .  Any termination of the Executive’s employment by the Employer (or its successor) or by the Executive (other than termination based on the Executive’s death), pursuant to this Agreement, shall be communicated by the terminating party in a written notice to the other party hereto.  Such written notice shall (i) set forth the specific termination provision in this Agreement relied upon, if applicable, (ii) set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated, and (iii) set forth the date the Executive’s employment with the Employer shall terminate.

5.2                                DEFINITION OF DISABILITY

The Executive will be deemed to have a “disability” if, for physical or mental reasons, the Executive is unable to perform the essential functions of the Executive’s duties under this Agreement, with or without reasonable accommodation.  The Executive shall be provided with short term and long term disability benefits in accordance with the terms of the Employer’s plans then in effect.

5.3                                DEFINITION OF “CAUSE”

“Cause” means: (a) an intentional act which materially injures the Employer; (b) an intentional refusal or failure to follow lawful and reasonable directions of the Board of Directors or an individual to whom the Executive reports (as appropriate); (c) a willful or habitual neglect of duties; or (d) the conviction of, or the entering of a guilty plea or plea of no contest by the Executive with respect to, a felony involving an act of moral turpitude.

5.4                                DEFINITION OF “GOOD REASON”

“Good Reason” means any of the following: (a) the Employer’s material breach of this Agreement or any other agreement between Executive and Employer concerning Executive’s employment with the Employer; provided, however, that the Employer shall have ten (10) days to remedy the breach after receipt of written notice from the Executive that the breach has occurred if the breach is susceptible of cure; (b) the assignment of the Executive without his express and voluntary written consent to a title, status, overall position, responsibilities, duties, reporting relationship, or general working environment of a materially lesser status or degree of

4

responsibility than his title, status, overall position, responsibilities, duties, reporting relationship, and general working environment at the Effective Date; (c) the requirement by the Employer that the Executive relocate the Executive’s personal residence outside the metropolitan Orange County, California area; (d) the relocation by the Employer of the Executive’s office more than 50 miles from its location as of the Effective Date; (e) any failure by the Employer to obtain the assumption of any material written agreement between the Executive and the Employer concerning Executive’s employment by any successor of the Employer or assignee of substantially all of the business of the Employer; or (f) any material change by the Employer in the Benefits or Incentive Compensation offered to the Executive from those in which the Executive is participating on the Effective Date, or the taking of any action by the Employer which would materially and adversely affect the Executive’s participation in or reduce the Executive’s benefits under any of the Benefits or Incentive Compensation plans or deprive the Executive of any fringe benefit then enjoyed by the Executive; provided, however, that nothing contained in this subparagraph (f) shall be deemed to permit termination by the Executive for Good Reason if the Employer offers a range of benefit plans and programs to the Executive which, taken as a whole, are at least comparable to the Benefits and Incentive Compensation in which the Executive is participating on the Effective Date.

5.5                                TERMINATION PAY

Effective upon the termination of the Executive’s employment, the Employer will be obligated to pay the Executive (or, in the event of his death, his designated beneficiary as defined below) only such compensation as is provided in this Section 5.5, or, if applicable, as provided in the Change of Control Agreement, and in lieu of all other amounts and in settlement and complete release of all claims the Executive may have against the Employer.  If the Executive receives payments under the Change of Control Agreement, then he will not also receive payments under this Agreement.  The Employer may, as a condition to the Executive receiving any unvested pay or benefits under this Section 5.5, require the Executive to execute a release of all claims the Executive may have against the Employer or its affiliates arising from the Executive’s employment with the Employer or the termination thereof in a form reasonably satisfactory to the Employer.  Except as set forth herein, all amounts to be paid under this Section 5.5 shall be paid in equal periodic installments according to the Employer’s customary payroll practices, including without limitation any payments of Incentive Compensation; provided, however that Executive’s Salary and vacation accrued through the date termination is effective shall be paid in accordance with California law.

For purposes of this Section 5.5, the Executive’s designated beneficiary will be such individual beneficiary or trust, located at such address, as the Executive may designate by notice to the Employer from time to time or, if the Executive fails to give notice to the Employer of such a beneficiary, the Executive’s estate.  Notwithstanding the preceding sentence, the Employer will have no duty, in any circumstances, to attempt to open an estate on behalf of the Executive, to determine whether any beneficiary designated by the Executive is alive or to ascertain the address of any such beneficiary, to determine the existence of any trust, to determine whether any person or entity purporting to act as the Executive’s personal representative (or the trustee of a trust established by the Executive) is duly authorized to act in that capacity, or to locate or attempt to locate any beneficiary, personal representative, or trustee.

5

(a)            Termination Without Cause or By the Executive for Good Reason .  If Employer terminates the Executive’s employment without cause or the Executive terminates his employment for Good Reason, the Employer will pay the Executive (i) the Executive’s Salary for the remainder, if any, of the calendar month in which such termination is effective, and for an additional 12-month period, (ii) 100% of the Executive’s Incentive Compensation for the Fiscal Year during which the termination is effective and calculated assuming that 100% of the targets under such bonus plans are achieved, (iii) accrued vacation through the date of termination, and (iv) Incentive Compensation accrued and unpaid from the previous Fiscal Year, if any.  If Executive is terminated without cause, in no event will payments under (i), (ii) and (iv), above extend beyond 2-1/2 months following the close of the calendar year in which termination under this paragraph occurs, and payments will be accelerated, if necessary, to prevent such 2-1/2 month period to be exceeded.  If Executive terminates his employment for Good Reason, in no event will payments under (i), (ii) and (iv) above commence prior to six months following such separation.

(b)            Termination by the Employer for Cause or Voluntarily by the Executive .  If the Employer terminates the Executive’s employment for cause, or the Executive voluntarily terminates his employment other than for Good Reason or disability, the Employer will pay the Executive (i) his Salary and accrued vacation through the date such termination is effective, and (ii) accrued and unpaid Incentive Compensation, if any, from the previous Fiscal Year and the then-current Fiscal Year, but the Executive will only be entitled to Incentive Compensation for the Fiscal Year during which such termination occurs to the extent it has been earned ( i.e. targets have been achieved) prior to such employment termination.  Payments of under (ii) above shall be made no later than 2-1/2 months following the close of the calendar year in which the Incentive Compensation was earned, and payments will be accelerated, if necessary, to prevent such 2-1/2 month period to be exceeded.

(c)            Termination upon Disability .  Upon the disability of the Executive for 120 consecutive days, or 180 days during any twelve month period, the Executive’s employment may be terminated by either party, and upon such termination the Employer will pay the Executive (i) that part of the Executive’s Incentive Compensation, if any, for the Fiscal Year during which the disability occurs, prorated through the end of the calendar month during which the disability is deemed to have occurred under Section 5.2, as described in Section 5.5(f), (ii) accrued vacation through the date of termination, (iii) accrued and unpaid Incentive Compensation, if any, from the previous Fiscal Year, and (iv) his Salary through the date such termination is effective, subject to an offset for any Salary payments made or disability insurance benefits received pursuant to Section 6.1.  Payments under (i) and (iii) above will be made no later than 2-1/2 months following the close of the calendar year in which termination under this paragraph occurs, and payments will be accelerated, if necessary, to prevent such 2-1/2 month period to be exceeded.

(d)            Termination upon Death .  If  Executive’s employment is terminated because of the Executive’s death, the Employer will pay the Executive’s designated beneficiary (i) the Executive’s Salary through the end of the calendar month in which his death occurs, (ii) accrued vacation through the date of termination, (iii) accrued and unpaid Incentive Compensation, if any, from the previous Fiscal Year, and (iv) that part of the Executive’s Incentive Compensation, if any, for the Fiscal Year during which his death occurs, prorated through the end of the

6

calendar month during which his death occurs, as described in Section 5.5(f), and calculated assuming that 100% of the targets under such bonus plans are achieved.

(e)            Benefits.

(i)             If the Executive’s employment hereunder is terminated by the Employer without cause or by the Executive for Good Reason, then the Employer will provide and pay for continued medical, dental, life, and disability insurance coverage for the Executive and the Executive’s dependents on the same terms as in effect at the time of termination of the Executive’s employment, including general premium increases, for the period from the date of termination until the Executive obtains replacement coverage through other employment, or for a period of 12 months after such employment termination, whichever is less.

(ii)            If the Executive’s employment hereunder is terminated by death or disability, then the Employer will provide and pay for continued medical and dental coverage for the Executive, if applicable, and the Executive’s dependents, on the same terms as in effect at the time of termination of the Executive’s employment, including general premium increases, for a period of 90 days after the effective date of termination. If such coverage is pursuant to COBRA, the Employer’s obligations hereunder will be contingent upon the Executive or his dependents, as applicable, executing all documents required to obtain such coverage.

(iii)           Except as set forth in this Section 5.5(e), the Executive’s accrual of, or participation in plans providing for, the Benefits will cease at the effective date of the termination of  his employment, and the Executive will be entitled to accrued Benefits pursuant to such plans only as provided in such plans.

(f)             Incentive Compensation .  That portion of the Executive’s Incentive Compensation to be paid pursuant to subsections (c)(i) or (d)(iv) above shall be paid only if the Employer Performance Goal is met for the Fiscal Year during which the termination is effective.  If such Employer Performance Goal is met during such Fiscal Year, then the amount due shall be paid no later than March 15 of the following Fiscal Year.  Notwithstanding the foregoing, if the Board of Directors in its discretion determines that the Employer does not have sufficient available cash to pay such amount on such date, the Board of Directors may defer, without interest, payment of any or all of such amount, to not later than December 31 of the Fiscal Year following the Fiscal Year in which the Incentive Compensation was earned; provided , however , that payments to the Executive may only be deferred if and to the extent that payments to continuing employees of the Employer entitled to such payments are def