The Registrant's director compensation program implemented in 2005 provided for each of the Registrant's non-employee directors to receive $25,000 in annual cash compensation, with additional cash fees paid for committee service, payable in equal quarterly installments. Based on current committee membership, the 2009 board and committee fees are estimated to be $235,000. For purposes of preserving the Registrant's cash, in April 2009, the Registrant's board of directors adopted a change to the director compensation program to provide for non-employee director compensation for 2009 to be paid in non-qualified stock options instead of cash.

Accordingly, on May 15, 2009, the Registrant granted non-qualified stock options under the Registrant's 2000 Stock Plan to each of its seven non-employee directors as payment in lieu of 2009 cash compensation. The stock options expire seven years following the grant date, vest in four equal installments on May 15, 2009, June 30, 2009, September 30, 2009 and December 31, 2009 and have an exercise price of $2.99 per share, the closing price of the Registrant's common stock on May 15, 2009. Such awards were made on May 15, 2009 which represents the Registrant's first pre-set grant date following approval in accordance with the Registrant's equity award practices.

An aggregate of 157,200 non-qualified stock options were awarded with a breakdown by non-employee director as follows:

      Director           Committee Membership      Stock Options
                                                      Awarded

John Metcalf         Audit Committee Chair,                28,400
                     Nominating & Corporate
                     Governance Committee Member

Nam Suh              Compensation Committee Chair          23,600

William Sammons      Audit Committee Member,               25,000
                     Compensation Committee Member

Papken der Torossian Audit Committee Member,               25,000
                     Compensation Committee Member

Robert Sterne        Nominating & Corporate                20,000
                     Governance Committee Chair

William Hightower    Nominating & Corporate                18,400
                     Governance Committee Member

Todd Parker          n/a                                   16,800

The value of these options will be calculated using the Black-Scholes option pricing model and will be recorded to expense over their vesting term.