Director Compensation

The compensation and benefits for service as a member of the Board of Directors is determined by the Nominations Committee.  Directors employed by us or one of our subsidiaries are not compensated for service on the Board or on any Committee of the Board.  Our non-employee directors currently receive $25,000 for each year of service as a director plus an additional $5,000 per year for each committee of the Board on which such non-employee directors serve.  Additionally, the chairpersons of each of the Compensation Committee and the Nominations Committee receive an additional $5,000 per year and the chairpersons of each of the Audit Committee and the Litigation Oversight Committee receive an additional $10,000 per year.  In addition, Board members are reimbursed for expenses incurred in connection with attendance at Board and committee meetings.  Non-employee directors also receive stock option awards under our stock option plans, which awards currently include an initial option to purchase 45,000 shares of common stock upon joining the Board as a director and thereafter each non-employee director who continues to serve on the Board automatically receives an annual grant of an option to acquire 15,000 shares upon his or her election at the annual meeting.

Communications with Directors

Historically, the Company has not adopted a formal process for stockholder communications with the Board.  Nevertheless, every effort has been made to ensure that the views of stockholders are heard by the Board or individual directors, as applicable, and that appropriate responses are provided to stockholders in a timely manner. We believe our responsiveness to stockholder communications to the Board has been excellent.

Recommendation of the Board of Directors

The Board of Directors unanimously recommends that the stockholders of the Company vote FOR the election of all the nominees listed above.

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