accordance with the existing vesting schedule, unless such executive officer’s employment is terminated by the Company (or its successor) within the first year following a change of control of the Company, in which case all remaining unvested options or equity incentives shall vest. A summary of the principal terms of this policy is attached hereto as Exhibit 10.5 and is incorporated herein by reference.

Employment Agreements

On February 7, 2006, the Company entered into a three-year employment agreement with Jerome Goldstein, the Chairman and Chief Executive Officer of the Company. Under the terms of the employment agreement, Mr. Goldstein will receive an initial annual salary of $345,560 and one year of severance pay in the event his employment is terminated for any reason within one year following a “change of control” as defined in the employment agreement. A copy of the employment agreement is attached hereto as Exhibit 10.6 and is incorporated herein by reference.

On February 7, 2006, the Company entered into a three-year employment agreement with Joseph L. Farmer, the General Counsel and Vice President of Legal Affairs of the Company. Under the terms of the employment agreement, Mr. Farmer will receive an initial annual salary of $178,000 and one year of severance pay in the event his employment is terminated for any reason within one year following a “change of control” as defined in the employment agreement. In addition, the agreement provides that Mr. Farmer will receive a one-time cash bonus of $100,000 upon the consummation of an acquisition if the definitive agreement relating to such change of control is entered into during calendar 2006. A copy of the employment agreement is attached hereto as Exhibit 10.7 and is incorporated herein by reference.

Director Compensation  

On February 7, 2006, the Company’s Board of Directors voted to increase the cash and equity compensation paid to the Company’s non-employee directors. Effective February 7, 2006, each non-employee director will receive a quarterly retainer of $4,000. A non-employee Director must attend at least 3 of 4 regularly scheduled meetings during the prior fiscal year to earn the full $4,000 quarterly fee.  If a non-employee Director attends less than 3 of the 4 regularly scheduled meetings in the prior fiscal year, this fee will be reduced for the current fiscal year by $1,000 for each missed meeting after the first missed meeting.  In addition, members of the Company’s Compensation Committee and the Company’s Audit Committee will be paid an additional fee of $1,000 per meeting of such committees. The Chairperson of each of the Compensation Committee and the Audit Committee, currently Mark Skaletsky and Sheldon L. Bloch, respectively, will receive an additional annual retainer fee of $2,000. A summary of the principal terms of the Company’s Director compensation is attached hereto as Exhibit 10.8 and is incorporated herein by reference.

On February 7, 2006, the Compensation Committee of the Board of Directors also granted options to purchase 2,000 shares of common stock to each non-employee director under the Company’s Amended and Restated 2000 Stock Plan. These options were fully vested upon grant and had an exercise price of $19.98, the fair market value of a share of common stock on the date of grant. In addition, the option grant to be made to non-employee directors in

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