Directors' Compensation

        In October 2003, the Board of Directors, upon the recommendation of the Compensation Committee, approved the modification of the compensation provided to non-employee directors of the Company (as modified, the "Director Compensation Program"). Under the Director Compensation Program, those directors who are not also employees of the Company receive an annual retainer as fixed by the Board. For service during the twelve months beginning October 1, 2004, each of the five non-employee directors of the Company (Messrs. Hickey, Lee, Lomo, Lowe and Murray) received an annual retainer of $60,000, with half of such retainer being payable in cash and the other half being payable in deferred stock units. Accordingly, on October 1, 2004, each of the five non-employee directors was paid $30,000 in cash and was granted an award of 2,661.93 deferred stock units. Such number of deferred stock units was determined by

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dividing $30,000 by $11.27 (the closing selling price per share of the Company's Class A common stock on the Nasdaq National Market on such day). The deferred stock units represent the right to receive a like number of shares of the Company's common stock on the 180 ^th day following the date the director ceases to serve as a board member (or, if such 180 ^th day is not a business day, the first business day immediately succeeding such 180 ^th day), to the extent the units have vested as of such date. If a director voluntarily leaves the Board or is removed for cause, any unvested deferred stock units will be forfeited. If a director ceases to be a Board member for any other reason, any unvested units will automatically vest in full.

        Under the Director Compensation Program, the Chairman of the Audit Committee and the Chairman of the Compensation Committee is each entitled to receive an additional annual retainer of $10,000 and $5,000, respectively, paid one half in cash and one half in deferred stock units. Accordingly, on October 1, 2004, Mr. Lomo (as Chairman of the Audit Committee as of October 1, 2004) and Mr. Lee (as Chairman of the Compensation Committee as of October 1, 2004) were paid $5,000 and $2,500 in cash, respectively, and were granted awards of 443.66 and 221.83 deferred stock units, respectively.

        Under the Director Compensation Program, an "extraordinary meeting fee" of $1,500 will be paid (in cash) to each non-employee director for each meeting in excess of eight Board meetings or eight committee meetings per year. This fee would also be paid for each in-person meeting in excess of the four regularly scheduled in-person meetings (although the fee would not also be paid for committee meetings held on the same day as such in-person meeting).

        Non-employee directors receive reimbursement of out-of-pocket expenses incurred for each Board or committee meeting attended.

Employment Agreements

        The Company has employment agreements with Vincent Young (Chairman and Chief Executive Officer), Deborah McDermott (President) and James Morgan (Executive Vice President and Chief Financial Officer). Each agreement is for a term ending on March 31, 2007, with automatic three-year renewal terms commencing upon the expiration of such term. The agreements each provide for an annual salary for each employee, with automatic annual increases of 5% (subject to additional increases at the discretion of the Board) and for participation in the bonus and incentive plans of the Company and for other employee benefits as are generally available to other senior management employees of the Company.

        Each agreement provides that either the Company or the employee may terminate the agreement on notice given before the expiration of the term or any renewal term, and upon such termination the Company shall pay the employee all amounts due for the current term plus a payment of one month of the employee's base salary for each year of service with the Company. Upon a change of control of the Company: (i) if the Company ceases to use the employee's services, he shall be paid for the remainder of the term of his current employment agreement plus a bonus equal to the greater of the amount he would have earned under the Company's bonus plan for the year in which the change of control occurs or the amount earned under the Company's bonus plan during the year preceding the change of control; or (ii) in the event the employee continues to perform services, the Company shall pay his base salary plus an annual bonus equal to the greater of the bonus he would have earned under the Company's bonus plan for the year or the bonus earned under any new incentive plan adopted by the Company; or (iii) if the Company exercises its right to terminate the agreement at the end of the then current term, the employee shall receive severance benefits equal to one month of the employee's then current annual base salary for each year of service. Upon a change of control, the employee shall become immediately entitled to exercise any outstanding options under the Company's stock option plans. Each agreement subjects the employee to a non-competition covenant in favor of the Company.

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Termination of Employment Agreement; Severance Arrangements

        Effective March 31, 2004, Ronald Kwasnick retired from his position as President of the Company. Accordingly, as of such date, Mr. Kwasnick's employment agreement with the Company, which had been in effect since 1994, was terminated. The provisions of Mr. Kwasnick's employment agreement were identical to the provisions of the employment agreements currently in effect with Mr. Vincent Young, Ms. McDermott and Mr. Morgan.

        Pursuant to the terms of his employment agreement, upon his retirement, Mr. Kwasnick is entitled to receive an aggregate severance payment of $955,041, representing one month of Mr. Kwasnick's most recent base salary for each of his eighteen (18) years of service with the Company. At the time of his retirement, Mr. Kwasnick and the Company entered into a supplemental severance agreement which provided certain severance benefits in addition to those provided for in his employment agreement. Under the terms of the supplemental severance agreement, Mr. Kwasnick is entitled to receive an aggregate payment of $318,347, representing an additional six months of Mr. Kwasnick's most recent base salary. The resulting twenty four (24) months of salary payments are payable monthly, in equal installments, over twenty four months. Under the supplemental agreement, the Company also paid Mr. Kwasnick $40,000 in connection with the purchase of a vehicle. In addition, under the supplemental agreement, the Company agreed to waive the forfeiture and termination provisions of the stock options held by Mr. Kwasnick so that they will continue to vest and become exercisable as if he continued to be an employee (such remaining stock options are as indicated above in the Fiscal Year-End Option Values table), and agreed to reimburse Mr. Kwasnick for certain COBRA payments. In addition, the supplemental agreement includes non-solicit and non-disclosure covenants by Mr. Kwasnick as well as a mutual non-disparagement provision and mutual releases.

401(k) Plan

        The Company maintains a retirement plan (the "401(k) Plan") established in conformity with Section 401(k) of the Internal Revenue Code of 1986, as amended (the "Code"), covering all of the eligible employees of the Company. Pursuant to the 401(k) Plan, employees may elect to defer up to 15% of their current pre-tax compensation and have the amount of such deferral contributed to the 401(k) Plan. The maximum elective deferral contribution was $13,000 in 2004, subject to adjustment for cost-of-living in subsequent years. Certain highly compensated employees may be subject to a lesser limit on their maximum elective deferral contribution. The 401(k) Plan permits, but does not require, matching contributions and non-matching (profit sharing) contributions to be made by the Company up to a maximum dollar amount or maximum percentage of participant contributions, as determined annually by the Company. The 401(k) Plan offers a match to employee contributions equal to .5% for each 1% of compensation an employee contributes, up to a maximum 3% Company contribution. Such contributions will be made in the form of Class A Common Stock to be contributed by the Company to the 401(k) after each calendar quarter with respect to such quarter based upon the closing price as of the last day of such quarter. The Company contributed an aggregate of 74,509 shares of Class A Common Stock to the 401(k) Plan in 2004 in respect of matching grants. The 401(k) applies a six-year vesting schedule to all shares contributed based upon the number of years employed by the Company. The 401(k) Plan is qualified under Section 401 of the Code so that contributions by employees and employer, if any, to the 401(k) Plan, and income earned on plan contributions, are not taxable to employees until withdrawn from the 401(k) Plan, and so that contributions by the Company, if any, will be deductible by the Company when made.

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