Director Compensation

In 2010, we paid our non-employee directors a cash retainer and granted stock options. In 2011, the Board of Directors will consider stock options or other appropriate equity incentive grants to the outside directors. We reimburse directors for out-of-pocket expenses they incur when attending meetings of the Board. Salaried executives who serve as directors are not paid for their services as directors and accordingly, Christopher Spencer is not included in the director compensation table below.

The following table sets forth the compensation we paid our non-employee directors in 2010. Unless otherwise noted, the amounts shown represent what was earned in fiscal 2010.

DIRECTOR COMPENSATION TABLE – FISCAL 2010  

All outside directors are entitled to base annual cash compensation of $24,000, which we pay monthly.  Currently, the outside directors also receive options for the purchase of common stock which normally vest at the rate of 24,000 shares each year, through December 31, 2010. The outside directors were granted 144,000 stock options on January 22, 2010, with a fair value of $50,400 on that date.  As of December 31, 2010, there were 144,000 stock options outstanding that were granted to the outside directors.