ITEM 3

     At the Annual Meeting, stockholders are being asked to approve amendments to the 2005 Employee Stock and Incentive Plan (as herein amended, the “Plan”) to increase the number of shares of Common Stock reserved for issuance thereunder by 1.2 million shares and certain other amendments described below.

General Information

     The Company established the Plan in 1999 to promote the interests of the Company and its stockholders by using investment interests in the Company to attract, motivate and retain highly qualified key personnel, encourage equity ownership among this group, and enhance a mutuality of interest with stockholders in improving the long-term performance of the Company and the value of the Company’s Common Stock. The Plan was amended and restated effective as of June 10, 2005. Currently, the maximum number of shares of Common Stock available for future issuance under the Plan is 340,342. On April, 17, 2009, the closing price of the Company’s Common Stock was $1.32.

     The Company currently maintains the Plan under which stock options for an aggregate of approximately 1,268,238 shares of the Company’s common stock were outstanding as of April 17, 2009, with a weighted average exercise price of $5.67 per share, and approximately 340,342 shares of common stock are available for future awards. If the stockholders approve the proposed amendments to the Plan, the number of shares of common stock available for future equity grants to its employees, officers, directors and consultants will be increased by 1,200,000 to 1,540,342, provided, however, that, for purposes of computing how many shares of common stock remain available for awards under the Plan, each share of common stock that is granted in an award under the Plan in a form other than an option or a stock appreciation right (a “Full-Value Award”) will be counted against that 1,540,342 share limit as 1.14 shares (currently, the shares of common stock granted under a Full-Value Award are counted against the share limit as 1 share for each share awarded). As of April 17, 2009, approximately 800 of the Company’s employees, officers, directors and consultants, representing substantially all of the Company’s full-time employees, were eligible to participate in the Plan.

     As originally amended and restated in June 2005, the maximum number of shares of common stock that may be covered by options, stock appreciation rights, awards of restricted stock, restricted stock units, deferred stock units, performance shares or other stock-based awards under the Plan granted to any one employee during any one calendar year is 250,000, and the aggregate maximum dollar value of any performance-based cash award or other cash-based award that may be paid to any one employee during any one calendar year under the Plan is $2,500,000. Under the terms of the Plan, as the result of the 4.7 to 1 reverse stock split effected by the Company in June 2008, the 250,000 share limitation was adjusted to 53,191 shares. Under the proposed amendments to the Plan, the share limitation will be restored to 250,000 shares.

     In addition, in order to comply with published guidelines of RiskMetrics Group, the proposed amendments to the Plan include (i) a “net share counting” prohibition so that certain shares acquired by the Company may not be made available for future issuance under the Plan and (ii) an expansion of the existing repricing prohibition so that it covers both stock options and stock appreciation rights and (iii) a prohibition on the payment of dividend equivalents on unearned performance shares (although they accrue and may be paid when the performance criteria is satisfied).

     The Company’s Board of Directors has approved the amendments to the Plan which are described above, subject to stockholder approval. The Board of Directors adopted the amendments to the Plan because it believes that:

	•		Additional shares for awards under the Plan are necessary to attract and retain qualified employees and executives;
	•		Additional shares for awards under the Plan are needed to further the goal of motivating existing personnel and providing long-term equity incentives which is an integral component of the Company’s compensation policy; and
	•		The increase in the number of shares available for awards and the other proposed amendments to the Plan conform to published guidelines of RiskMetrics Group.

Description of the Plan

     A summary of the Plan, as amended by the amendments described above, is set forth below. This summary is qualified in its entirety by the full text of the Plan, which is attached to this proxy statement as Appendix A.

     Purpose. The purpose of the Plan is to focus management and employees on business performance that creates stockholder value, encourage innovative approaches to the business of the Company, reward for results, and encourage ownership of Company common stock by management and employees.

     Permissible Awards. The Plan authorizes the granting of awards in any of the following forms:

	•		market-priced options to purchase shares of common stock, which may be non-statutory stock options or incentive stock options under the Internal Revenue Code (the “Code”);
	•		stock appreciation rights, which give the holder the right to receive, in cash or stock, the difference between the fair market value per share of common stock on the date of exercise over the fair market value per share of common stock on the date of grant;