MANAGEMENT AGREEMENT

12 Months Ended

Mar. 31, 2011

MANAGEMENT AGREEMENT

MANAGEMENT AGREEMENT

3.     MANAGEMENT AGREEMENT

In March 2007, we entered into a management services agreement (the "Management Agreement") with ZelnickMedia Corporation ("ZelnickMedia"), whereby ZelnickMedia provides us with certain management, consulting and executive level services. Strauss Zelnick, the President of ZelnickMedia, serves as our Executive Chairman. In addition, we entered into employment agreements with Ben Feder and Karl Slatoff to serve as our Chief Executive Officer and Executive Vice President, respectively. Both Mr. Feder and Mr. Slatoff are partners of ZelnickMedia. Effective October 25, 2010, Mr. Slatoff was named to the newly created role of Chief Operating Officer. Effective January 1, 2011, Mr. Feder resigned from his position as Chief Executive Officer of the Company and Mr. Zelnick assumed the additional role of Chief Executive Officer. The Management Agreement expires in October 2012 and provides for an annual management fee of $2,500 and a maximum bonus of $2,500 per fiscal year based on the Company achieving certain performance thresholds. In consideration for ZelnickMedia's services under the Management Agreement, we recorded consulting expense (a component of general and administrative expenses) of $5,521, $3,021, $1,563, $2,500 and $3,674 for the fiscal years ended March 31, 2011 and 2010, five months ended March 31, 2010 and fiscal years ended October 31, 2009 and 2008, respectively.

Pursuant to the Management Agreement, we also issued stock-based awards to ZelnickMedia. See Note 16 for a discussion of such awards.

In May 2011, the Company entered into a new management agreement with ZelnickMedia pursuant to which ZelnickMedia will continue to provide management, consulting and executive level services to the Company through May 2015. As part of the new management agreement, Mr. Zelnick will continue to serve as Executive Chairman and Chief Executive Officer and Mr. Slatoff will continue to serve as Chief Operating Officer. The new management Agreement is subject to approval by the Company's stockholders at the Company's 2011 Annual Meeting. If the Company's stockholders do not approve the new management agreement, the new management agreement will be null and void, and the Company and ZelnickMedia will continue to operate under the terms and conditions of the existing Management Agreement, which expires in October 2012.