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Preliminary
Proxy Statement
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Soliciting
Material Pursuant to
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Confidential,
For Use of the
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SS.240.14a-11(c)
or SS.240.14a-12
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Commission
Only (as permitted
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by
Rule 14a-6(e)(2))
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Definitive
Proxy Statement
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Definitive
Additional Materials
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(Name
of Registrant as Specified In Its
Charter)
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No
fee required.
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
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1)
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Title
of each class of securities to which transaction
applies:
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2)
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Aggregate
number of securities to which transaction applies:
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3)
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Per
unit price or other underlying value of
transaction computed pursuant to Exchange Act
Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
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4)
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Proposed
maximum aggregate value of transaction:
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5)
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Total
fee paid:
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Fee
paid previously with preliminary materials:
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Check
box if any part of the fee is offset as provided by Exchange Act
Rule
0-11(a)(2) and identify the filing for which the offsetting fee was
paid
previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its
filing.
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1)
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Amount
previously paid:
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2)
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Form,
Schedule or Registration Statement No.:
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3)
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Filing
Party:
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4)
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Date
Filed:
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1.
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Election
of six directors.
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2.
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Amendment
of the 2007 Stock Compensation Plan of the Company to increase the
number
of shares of Common Stock reserved for issuance thereunder from 750,000
to
1,500,000.
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3.
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Such
other business as may properly come before the meeting or any adjournment
or adjournments thereof.
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BY
ORDER OF THE BOARD OF DIRECTORS
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Janna
R. Severance
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Secretary
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Page
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1
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2
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2
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3
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4
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11
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11
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18
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18
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20
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PROXY
STATEMENT
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FOR
ANNUAL MEETING OF
SHAREHOLDERS
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February
27,
2008
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SOLICITATION
AND REVOCATION OF
PROXIES
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o
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By
signing and returning the enclosed proxy card, you will be giving
your
proxy to our Board of Directors and authorizing them to vote your
shares.
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o
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Unless
revoked, all properly executed proxies will be voted as specified.
Proxies
that are signed but that lack any specification will, subject to
the
following, be voted as follows, in accordance with the recommendations
of
the Board: FOR all nominees for director and FOR the amendment to
the
Stock Compensation Plan. If any other matters properly come before
the
Annual Meeting, or if any of the persons named to serve as directors
should decline or be unable to serve, the persons named in the Proxy
will
vote in accordance with their discretion.
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o
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You
have the power to revoke your proxy at any time before the convening
of
the Annual Meeting. Revocations of proxy will be honored if received
by
us, at the Company, addressed to the attention of Bruce Blackey,
Chief
Financial Officer, before the meeting on February 27, 2008. In addition,
on the day of the meeting, prior to the convening thereof, revocations
may
be delivered to the tellers who will be seated at the door of the
meeting
room.
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o
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If
you abstain from voting as to any matter, your shares shall be deemed
present at the meeting for purposes of determining a quorum and for
purposes of calculating the vote with respect to such matter, but
shall
not be deemed to have been voted in favor of such matter. Abstentions,
therefore, as to any proposal will have the same effect as votes
against
such proposal.
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o
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If
a broker turns in a “non-vote” proxy, indicating a lack of voting
instruction by the beneficial holder of the shares and a lack of
discretionary authority on the part of the broker to vote on a particular
matter, then the shares covered by such non-vote proxy will be considered
present at the meeting for purposes of determining a quorum but will
not
be considered to be represented at the meeting for purposes of calculating
the vote required for approval of such matter.
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o
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We
will pay all expenses in connection with the solicitation of proxies.
Proxies are being solicited primarily by mail, but officers, directors,
and other employees of the Company may also solicit proxies by telephone,
telegraph, or personal calls. No extra compensation will be paid
by us for
such solicitation. We may reimburse brokers, banks, and other nominees
holding shares for others for the cost of forwarding proxy materials
to,
and obtaining proxies from, their principals.
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Name
and Address of
Beneficial Owner
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Number
of Shares Beneficially
Owned
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Percentage
of Outstanding
Shares
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Anil
K. Jain
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1,670,502
(l)
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14.1
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Cheryl
Beranek Podzimek
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49,100
(2)
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*
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Bruce
G. Blackey
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-0-
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*
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Herman
Lee
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777,150
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6.5
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John
G. Reddan
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28,500
(3)
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*
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Ronald
G. Roth
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536,056
(3,6)
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4.5
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Stephen
L. Zuckerman, M.D.
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40,500
(3)
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*
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Donald
R. Hayward
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2,500(4)
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*
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All
current directors and executive officers as a group
(7 persons)
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2,327,158
(5)
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19.4
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*
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Less
than 1%.
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(1)
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Includes
5,250 shares held by Dr. Jain as custodian for minor relatives. Dr.
Jain
disclaims beneficial ownership of such shares.
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(2)
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Includes
29,100 shares that may be acquired upon exercise of options that
are or
will become exercisable within sixty days of the record date.
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(3)
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Includes
27,500 shares that may be acquired upon exercise of options that
are or
will become exercisable within sixty days of the record date.
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(4)
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Includes
2,500 shares that may be acquired upon exercise of options that are
or
will become exercisable within sixty days of the record date.
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(5)
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Includes
114,100 shares that may be acquired upon exercise of options that
are or
will become exercisable within sixty days of the record
date.
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(6)
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Includes
156,760 shares owned by spouse. Mr. Roth disclaims beneficial
ownership of
such shares.
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Name
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Age
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Director
Since
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Anil
K. Jain
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61
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1979
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Ronald
G. Roth
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62
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2002
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Stephen
L. Zuckerman, M.D.
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67
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2002
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John
G. (Jack) Reddan
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76
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2002
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Cheryl
Beranek Podzimek
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45
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2007
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Donald
R. Hayward
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50
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2007
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Audit
Committee
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Compensation
Committee
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Nominating
Committee
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Ronald
Roth
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Ronald
Roth, Chairman
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Ronald
Roth, Chairman
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Stephen
Zuckerman
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Stephen
Zuckerman
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Stephen
Zuckerman
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Jack
Reddan, Chairman
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Jack
Reddan
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Jack
Reddan
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Name
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Fees
Earned or Paid in Cash
($)
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Stock
Awards
($)(1)
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Option
Awards
($)
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Non-Equity
Incentive Plan Compensation
($)
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Change
in Pension Value and Nonqualified Deferred Compensation
Earnings
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All
other Compensation
($)
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Total
($)
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Ronald
G. Rot
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$ |
5,000
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-
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$ |
1,558
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-
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-
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-
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$ |
6,558
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John
G. Reddan
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$ |
5,000
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-
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$ |
1,558
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-
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-
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-
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$ |
6,558
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Stephen
L. Zuckerman
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$ |
5,000
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-
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$ |
1,558
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-
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-
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-
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$ |
6,558
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Don
Hayward
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-
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-
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$ |
129
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-
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-
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-
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$ |
129
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(1)
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On
August 23, 2007, each board member was granted a six year option
to
purchase 2,500 shares of the Company’s Common Stock at an exercise price
of $1.28 per share with a one year vesting period. This
represents the amount recognized for financial statement reporting
purposes for the fiscal year ended September 30, 2007, in accordance
with
FAS 123(R). The assumptions used to determine the valuation of
the awards are discussed in Management’s Discussion and Analysis of
Financial Condition and Results of Operations and Note N to our
consolidated financial statements, each included in the Company’s Annual
Report on Form 10-KSB filed with the Securities and Exchange Commission
on
December 21, 2007. Each of the option awards, computed in
accordance with FAS 123(R), is the same as the amount recognized
for
financial statement reporting purposes as reflected in this
column. The full grant date fair value of all the awards to
these directors, computed in accordance with FAS 123(R), is $11,206.
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Name
and Principal Positions
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Fiscal
Year
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Salary
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Bonus
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Stock
Awards
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Option
Awards
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Non-equity
Incentive Plan Compensation
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Change
in Pension Value and Nonqualified Deferred Compensation Earnings
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All
Other
Compensation
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Total
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Anil
K. Jain
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2007
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$ | 105,055 | (1) | 0 | $ |
--
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$ |
--
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$ |
--
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$ |
--
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$ | 71,225 |
(2)
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$ | 176,280 | ||||||||||||||||
President,
former Chief Executive Officer and Chief Financial Officer
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Cheryl
Beranek Podzimek
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2007
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$ | 73,846 | $ | 30,800 | (3) | $ |
--
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$ |
--
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$ |
--
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$ |
--
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$ | 5,491 | (4) | $ | 110,137 | |||||||||||||||
President
and Chief Executive Officer
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(1)
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Consists
of salary for the period from April 1, 2007, through June 21, 2007,
and
separation payments for the period from June 22, 2007, through September
30, 2007.
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(2)
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Consists
of taxable fringe benefits and Company contribution on Mr. Jain’s behalf
to 401(k) plan and accumulated vacation of $67,562.
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(3)
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Consists
of bonus award to Ms. Podzimek in the amount of $30,800 related to
fiscal
year 2007.
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(4)
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Consists
of Company contribution on Ms. Podzimek’s behalf to 401(k) plan.
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Option
Awards
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Name
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#
of Securities Underlying Unexercised Options (#)
Exercisable
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#
of Securities Underlying Unexercised Options (#)
Unexercisable
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Equity
incentive Plan Awards: # of Securities underlying Unexercised
Unearned Options
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Option
Exercise Price
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Option
Expiration Date
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Anil
K. Jain
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-- | -- | -- | -- | -- | |||||||||||||||
Cheryl
Beranek Podzimek
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18,000 | 17,000 | -- | $ | 2.55 |
10/30/2009
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-- | 10,000 | -- | $ | 1.30 |
8/18/2011
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Number
of Shares
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Cheryl
Beranek Podzimek, Named Executive Officer
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195,000 | |||
All
current executive officers, as a group (2 persons)
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195,000 | |||
All
employees (excluding executive officers) as a group
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164,700 |
Plan
Category
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(a)
Number
of securities to be issued upon exercise of outstanding options,
warrants
and rights
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(b)
Weighted-average
exercise price of outstanding options, warrants and rights
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(c)
Number
of securities remaining available for future issuance under equity
compensation plans (excluding securities reflected in column
(a))
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Equity
compensation plans approved by shareholders
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236,830
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$1.72
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713,170
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Equity
compensation plans not approved by shareholders
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350,000
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$3.00
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Not
applicable*
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Total
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586,830
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$2.48
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713,170
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Ronald
G. Roth
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John
G. Reddan
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Stephen
L. Zuckerman, M.D.
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Year
Ended
September 30,
2007
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March 31,
2007
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Audit
fees (1)
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$ | 99,696 | $ | 95,836 | ||||
Audit-related
fees (2)
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12,820 | 12,350 | ||||||
Tax
fees
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Tax
compliance fees
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15,629 | 20,250 | ||||||
Other
tax (3)
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2,588 | 2,742 | ||||||
130,733 | 131,178 |
(1)
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Audit
fees include fees billed expected to be billed for transition period
ended
September 30, 2007 and fees billed and expected to be billed for
professional services rendered for the audit of our annual financial
statements for that period, the review of our financial statements
included in our reports on Form 10-QSB, services in connection with
registration statements filed with the SEC, and accounting consultations
necessary for the rendering of an opinion on our financial statements.
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(2)
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Audit-related
services include audit expenses of our 401(k) plan, consultations
related
to Sarbanes-Oxley Section 404 and adoption of our 2007 Stock Compensation
Plan.
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(3)
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Other
tax services include tax planning, state tax planning and other tax
consultation.
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By
Order of the Board of Directors
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Janna
R. Severance
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Secretary
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1.
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ELECTION
OF DIRECTORS:
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FOR
all nominees listed
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WITHHOLD
AUTHORITY to vote for
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below
(except as marked to
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all
nominees listed below o
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the
contrary below) o
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2.
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INCREASE
IN SHARES RESERVED FOR 2007 STOCK COMPENSATION PLAN
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o FOR
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o AGAINST
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o ABSTAIN
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3.
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UPON
SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE
MEETING.
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o GRANTED
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o WITHHELD
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Dated
and Signed ________________, 2008
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Signature
of Shareholder(s)
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Signature
of Shareholder(s)
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