Summary of Compensatory Arrangements with Directors and Named Executive Officers (2005)

Summary

This document outlines the compensation structure for the company's non-employee directors and named executive officers for 2005. Non-employee directors receive annual base pay, meeting fees, additional compensation for committee roles, stock options, and expense reimbursement. The Lead Director and committee chairmen receive extra compensation and options. Mr. Hardman, as Technical Advisor and consultant, receives a separate salary and stock options. Named executive officers have set base salaries and are eligible for stock options, incentive bonuses, 401(k) participation, and other benefits, with compensation based on performance and competitive benchmarks.

EX-10.77 5 ex1077k123104.txt SUMMARY OF COMPENSATORY ARRANGEMENTS Exhibit 10.77 SUMMARY OF COMPENSATORY ARRANGEMENTS WITH DIRECTORS AND NAMED EXECUTIVE OFFICERS Director Compensation. Each director who is not an employee or officer of the Company will receive the following compensation for his services as director in 2005: o annual base compensation of $18,000; o $1,500 per regularly-scheduled board meeting attended; o $5,000 per year for service as the Audit Committee chairman; o $5,000 per year for service as the Compensation Committee chairman; o $18,000 per year for service as the Lead Director; o an annual option to acquire 12,000 shares of common stock (24,000 for the Lead Director); o reimbursement of reasonable out-of-pocket expenses incurred in attending board meetings. Mr. Hardman, who is the Technical Advisor to the board of directors, is also a consultant to the Company. In this capacity, he receives $57,000 per year and is granted options to purchase an additional 65,000 shares of common stock as a consequence of his appointment to that position. Named Executive Officer Compensation. The Company's executive compensation program has several elements, all determined by individual and Company performance. Base Salary Compensation ------------------------ Base salaries for the Chief Executive Officer and the other named executive officers in 2005 have been established by reviewing a number of factors, including responsibilities, experience, demonstrated performance, potential for future contributions, and the level of salaries associated with similar positions at businesses that compete with the Company and other competitive factors. Base salary levels for named executive officers in 2005 have been determined as follows: David N. Pierce $350,000 Thomas B. Lovejoy 250,000 Andrew W. Pierce 250,000 Jerzy B. Maciolek 250,000 Scott J. Duncan 250,000 Other Compensation ------------------ In addition to his base salary, each of the named executive officers is eligible to participate in the following: o the Company's various stock option and incentive plans, under which stock options or other equity compensation may be granted from time to time as determined by the board of directors, and which may be based on factors such as the level of base pay and individual performance; o short-term incentive compensation, which is determined from time to time by the board of directors, under which cash bonuses in varying amounts may be granted based on the Company and individual achieving predetermined goals; o the Company's 401(k) profit-sharing plan and other health and benefit plans generally available to Company employees; and o other compensation arrangements as determined by the board of directors.