AMERICAN TONERSERV CORP. ATS HQ Bonus Plan, 2009 Bonus Plan Overview

Exhibit 10.1

AMERICAN TONERSERV CORP.

ATS HQ Bonus Plan, 2009

Bonus Plan Overview

• All HQ Santa Rosa employees are eligible for bonus. Specific allocations are set by the CEO of ATS.
• The bonus pool is to be based on EBITDA performance and the first dollar of bonus will not occur until the actual EBITDA for 2009 exceeds the EBITDA for the approved 2009 baseline budget by 5% before (the “five percent threshold”)
• The Baseline bonus pool accrues at 50% of every $1 of EBITDA over the five percent threshold, with a cap at $2,000,000 of total EBITDA for the 2009 year   (equates to a total bonus pool cap of $335,932).
• The Acquisition bonus pool accrues at 5% of the purchase price of each 2009 acquisition, with a maximum of $40,000 per transaction
• Payout of bonus poll earned during 2009 will be in Q1 2010, after completion of our independent audits.

Baseline Plan details

The baseline 2009 Budget 2009 (the “2009 Baseline”) is attached as Exhibit A. The 2009 Baseline plan does not include the impact of any 2009 acquisitions. A separate incentive is outlined below for successfully completing acquisitions.

Summary of the 2009 Baseline Budget

Using the five percent EBITDA threshold, the baseline EBITDA is $1,328,136 (1.05% of the total 2009 EBITDA) before any bonuses accrue in the 2009 bonus pool. The table below shows calculations under different scenarios of the bonus pool under different operating scenarios:

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EXAMPLES OF EBITDA GROWTH AND BONUS AMOUNTS

Acquisition Bonus Plan details

5% of the purchase price of each 2009 acquisition, up to a maximum of $40,000 per transaction, will be added to the bonus pool.

Allocation Details