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<SEC-DOCUMENT>0001140361-07-012999.txt : 20070627
<SEC-HEADER>0001140361-07-012999.hdr.sgml : 20070627
<ACCEPTANCE-DATETIME>20070627090152
ACCESSION NUMBER:		0001140361-07-012999
CONFORMED SUBMISSION TYPE:	DEF 14A
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20070731
FILED AS OF DATE:		20070627
DATE AS OF CHANGE:		20070627
EFFECTIVENESS DATE:		20070627

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			RICKS CABARET INTERNATIONAL INC
		CENTRAL INDEX KEY:			0000935419
		STANDARD INDUSTRIAL CLASSIFICATION:	RETAIL-EATING & DRINKING PLACES [5810]
		IRS NUMBER:				760037324
		STATE OF INCORPORATION:			TX
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		DEF 14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-13992
		FILM NUMBER:		07942602

	BUSINESS ADDRESS:	
		STREET 1:		10959 CUTTEN ROAD
		CITY:			HOUSTON
		STATE:			TX
		ZIP:			77066
		BUSINESS PHONE:		2813976730

	MAIL ADDRESS:	
		STREET 1:		10959 CUTTEN ROAD
		CITY:			HOUSTON
		STATE:			TX
		ZIP:			77066
</SEC-HEADER>
<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
<FILENAME>formdef14a.htm
<DESCRIPTION>RICK'S CABARET DEF 14A 7-31-2007
<TEXT>
<html>

  <head>
    <title>formdef14a.htm</title>
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      STATES</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Times New Roman;"><strong>SECURITIES
      AND EXCHANGE COMMISSION</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman;">Washington,
      D.C. 20549</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 18pt; FONT-FAMILY: Times New Roman;"><strong>SCHEDULE
      14A</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Information
        Required in Proxy Statement</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Schedule
        14A Information</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Proxy
        Statement Pursuant to Section 14(a) of the</font></div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Securities
      Exchange Act of 1934</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Filed
      by
      the Registrant </font><font style="DISPLAY: inline; FONT-SIZE: 10pt;" face="Wingdings">x</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Filed
      by
      a Party other than the Registrant </font><font style="DISPLAY: inline; FONT-SIZE: 10pt;" face="Wingdings">o</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Check
      the
      appropriate box:</font></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="LINE-HEIGHT: 1.25;">
            <td style="WIDTH: 36pt">&#160;</td>
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt;" face="Wingdings">o</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Preliminary
                Proxy Statement</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="LINE-HEIGHT: 1.25;">
            <td style="WIDTH: 36pt">&#160;</td>
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt;" face="Wingdings">o</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Confidential,
                for Use of the Commission Only (as permitted by Rule
                14a-6(e)(2))</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="LINE-HEIGHT: 1.25;">
            <td style="WIDTH: 36pt">&#160;</td>
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt;" face="Wingdings">x</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Definitive
                Proxy Statement</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="LINE-HEIGHT: 1.25;">
            <td style="WIDTH: 36pt">&#160;</td>
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt;" face="Wingdings">o</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Definitive
                Additional Materials</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="LINE-HEIGHT: 1.25;">
            <td style="WIDTH: 36pt">&#160;</td>
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt;" face="Wingdings">o</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Soliciting
                Material Pursuant to (S)240.14a-12</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 24pt; FONT-FAMILY: Times New Roman;"><strong>RICK'S
      CABARET INTERNAIONAL, INC.</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
      <div>
        <hr style="COLOR: black" align="center" noshade size="2" width="25%">
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(Name
      of
      Registrant as Specified In Its Charter)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Payment
      of Filing Fee (Check the appropriate box):</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="LINE-HEIGHT: 1.25;">
            <td style="WIDTH: 36pt">&#160;</td>
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt;" face="Wingdings">x</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">No
                fee required.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div>&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="LINE-HEIGHT: 1.25;">
            <td style="WIDTH: 36pt">&#160;</td>
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt;" face="Wingdings">o</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Fee
                computed on table below per Exchange Act Rules 14a-6(i)(1) and
                0-11.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="LINE-HEIGHT: 1.25;">
            <td style="WIDTH: 72pt">&#160;</td>
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">1)</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Title
                of each class of securities to which transaction applies:
                </font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="LINE-HEIGHT: 1.25;">
            <td style="WIDTH: 72pt">&#160;</td>
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">2)</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Aggregate
                number of securities to which transaction applies:
                </font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="LINE-HEIGHT: 1.25;">
            <td style="WIDTH: 72pt">&#160;</td>
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">3)</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">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):
</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="LINE-HEIGHT: 1.25;">
            <td style="WIDTH: 72pt">&#160;</td>
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">4)</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Proposed
                maximum aggregate value of transaction:
</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="LINE-HEIGHT: 1.25;">
            <td style="WIDTH: 72pt">&#160;</td>
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">5)</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Total
                Fee Paid: </font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="LINE-HEIGHT: 1.25;">
            <td style="WIDTH: 36pt">&#160;</td>
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt;" face="Wingdings">o</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Fee
                paid previously with preliminary materials.
</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="LINE-HEIGHT: 1.25;">
            <td style="WIDTH: 36pt">&#160;</td>
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt;" face="Wingdings">o</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">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.
                </font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="LINE-HEIGHT: 1.25;">
            <td style="WIDTH: 72pt">&#160;</td>
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">1)</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Amount
                Previously Paid: </font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="LINE-HEIGHT: 1.25;">
            <td style="WIDTH: 72pt">&#160;</td>
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">2)</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Form,
                Schedule or Registration Statement No.:
</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="LINE-HEIGHT: 1.25;">
            <td style="WIDTH: 72pt">&#160;</td>
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">3)</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Filing
                Party: </font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="LINE-HEIGHT: 1.25;">
            <td style="WIDTH: 72pt">&#160;</td>
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">4)</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Date
                Filed: </font></div>
            </td>
          </tr>

      </table>
    </div>
    <div>&#160;</div>
    <div>
      <hr style="MARGIN-TOP: -5px; COLOR: #000000" noshade size="1">
      <hr style="MARGIN-TOP: -13px; COLOR: #000000" noshade size="4">
    </div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>RICK'S
      CABARET INTERNATIONAL, INC.</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>10959
      CUTTEN ROAD</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>HOUSTON,
      TEXAS 77066</strong></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>NOTICE
      OF ANNUAL MEETING OF STOCKHOLDERS</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>TO
      BE HELD ON JULY 31, 2007</strong></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">The
      Annual Meeting of Stockholders (the "Annual Meeting") of Rick's Cabaret
      International, Inc. (the "Company") will be held at 410 N. Sam Houston Parkway
      (Beltway 8 at Imperial Valley),&#160;&#160;Houston, Texas 77060 on July 31, 2007
      at 10:00 AM (CST) for the following purposes:</font></div>
    <div><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top">
            <td style="WIDTH: 36pt">
              <div>&#160;</div>
            </td>
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(1)</font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">To
                elect six (6) directors.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top">
            <td style="WIDTH: 36pt">
              <div>&#160;</div>
            </td>
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(2)</font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">To
                ratify the selection of Whitley Penn LLP as the Company's independent
                registered public accounting firm for the fiscal year ending September
                30,
                2007.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top">
            <td style="WIDTH: 36pt">
              <div>&#160;</div>
            </td>
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(3)</font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">To
                approve a Second Amendment to the 1999 Stock Option
                Plan.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top">
            <td style="WIDTH: 36pt">
              <div>&#160;</div>
            </td>
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(4)</font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">To
                act upon such other business as may properly come before the Annual
                Meeting.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Only
      holders of common stock of record at the close of business on June 8, 2007,
      will
      be entitled to vote at the Annual Meeting or any adjournment
      thereof.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">You
      are
      cordially invited to attend the Annual Meeting.&#160;&#160;Whether or not you
      plan to attend the Annual Meeting, please sign, date and return your proxy
      to us
      promptly.&#160;&#160;Your cooperation in signing and returning the proxy will
      help avoid further solicitation expense.</font></div>
    <div><br></div>
    <div align="left">
      <div align="left">
        <table cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td valign="top" width="40%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="justify" valign="top" width="60%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;"><strong>BY
                  ORDER OF THE BOARD OF DIRECTORS</strong></font></div>
              </td>
            </tr>
            <tr>
              <td valign="top" width="40%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td valign="top" width="60%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
            </tr>
            <tr>
              <td valign="top" width="40%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="justify" valign="top" width="60%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;"><strong>/S/
                  ERIC S. LANGAN</strong></font></div>
              </td>
            </tr>
            <tr>
              <td valign="top" width="40%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="justify" valign="top" width="60%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;"><strong>CHAIRMAN
                  OF THE BOARD AND
                  PRESIDENT</strong></font></div>
              </td>
            </tr>

        </table>
      </div>
    </div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>JUNE
      27, 2007</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>HOUSTON,
      TEXAS</strong></font></div><br>
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      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman;">1</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>RICK'S
      CABARET INTERNATIONAL, INC.</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>10959
      CUTTEN ROAD</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>HOUSTON,
      TEXAS 77066</strong></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>PROXY
      STATEMENT</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>ANNUAL
      MEETING OF STOCKHOLDERS</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>TO
      BE HELD ON JULY 31, 2007</strong></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">This
      proxy statement (the "Proxy Statement") is being furnished to stockholders
      (the
      "Stockholders") in connection with the solicitation of proxies by the Board
      of
      Directors of Rick's Cabaret International, Inc., a Texas corporation (the
      "Company") for their use at the Annual Meeting (the "Annual Meeting") of
      Stockholders of the Company to be held at 410 N. Sam Houston Parkway (Beltway
      8
      at Imperial Valley),&#160;&#160;Houston, Texas, on Friday, July 31, 2007, at
      10:00 AM, and at any adjournments thereof, for the purpose of considering and
      voting upon the matters set forth in the accompanying Notice of Annual Meeting
      of Stockholders (the "Notice").&#160;&#160;This Proxy Statement and the
      accompanying form of proxy (the "Proxy") are first being mailed to Stockholders
      on or about June 27, 2007.&#160;&#160;The cost of solicitation of proxies is
      being borne by the Company.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">The
      close
      of business on June 8, 2007, has been fixed as the record date for the
      determination of Stockholders entitled to notice of and to vote at the Annual
      Meeting and any adjournment thereof.&#160;&#160;As of the record date, there
      were 6,150,279 shares of the Company's common stock, par value $0.01 per share
      (the "Common Stock"), issued and outstanding.&#160;&#160;The presence, in person
      or by proxy, of a majority of the outstanding shares of Common Stock on the
      record date is necessary to constitute a quorum at the Annual
      Meeting.&#160;&#160;Each share is entitled to one vote on all issues requiring a
      Stockholder vote at the Annual Meeting.&#160;&#160;Each nominee for Director
      named in Proposal Number 1 must receive a majority of the votes cast in person
      or by proxy in order to be elected.&#160;&#160;Stockholders may not cumulate
      their votes for the election of Directors.&#160;&#160;The affirmative vote of a
      majority of the shares of Common Stock present or represented by proxy and
      entitled to vote at the Annual Meeting is required for the ratification of
      Proposal Number 2 and approval of Proposal Number 3 as set forth in the
      accompanying Notice.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">All
      shares represented by properly executed proxies, unless such proxies previously
      have been revoked, will be voted at the Annual Meeting in accordance with the
      directions on the proxies.&#160;&#160;If no direction is indicated, the shares
      will be voted <strong>(i) FOR THE ELECTION OF THE SIX (6) NOMINEES NAMED HEREIN,
      (ii) FOR THE RATIFICATION OF WHITLEY PENN LLP AS THE COMPANY'S INDEPENDENT
      REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING SEPTEMBER 30,
      2007,
      AND (iii) FOR THE APPROVAL OF THE SECOND AMENDMENT TO THE 1999 STOCK OPTION
      PLAN.&#160;&#160;</strong>The Board of Directors is not aware of any other
      matters to be presented for action at the Annual Meeting.&#160;&#160;However, if
      any other matter is properly presented at the Annual Meeting, it is the
      intention of the persons named in the enclosed proxy to vote in accordance
      with
      their best judgment on such matters.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">The
      enclosed Proxy, even though executed and returned, may be revoked at any time
      prior to the voting of the Proxy (a) by execution and submission of a revised
      proxy, (b) by written notice to the Secretary of the Company, or (c) by voting
      in person at the Annual Meeting.</font></div><br>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman;">2</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>___________________________________________________________________</strong></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>(1)&#160;&#160;TO
      ELECT SIX (6) DIRECTORS FOR THE ENSUING YEAR</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>___________________________________________________________________</strong></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>NOMINEES
      FOR DIRECTORS</strong></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">The
      persons named in the enclosed Proxy have been selected by the Board of Directors
      to serve as proxies (the "Proxies") and will vote the shares represented by
      valid proxies at the Annual Meeting of Stockholders and adjournments
      thereof.&#160;&#160;They have indicated that, unless otherwise specified in the
      Proxy, they intend to elect as Directors the nominees listed
      below.&#160;&#160;Each duly elected Director will hold office until his
      successor shall have been elected and qualified.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Unless
      otherwise instructed or unless authority to vote is withheld, the enclosed
      Proxy
      will be voted for the election of the nominees listed below.&#160;&#160;Although
      the Board of Directors of the Company does not contemplate that any of the
      nominees will be unable to serve, if such a situation arises prior to the Annual
      Meeting, the persons named in the enclosed Proxy will vote for the election
      of
      such other person(s) as may be nominated by the Board of Directors.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">The
      Board
      of Directors unanimously recommends a vote <strong>FOR</strong> the election of
      each of the nominees listed below.&#160;&#160;Five of the six nominees are
      presently our directors.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Eric
      S.
      Langan, age 39, has been a Director of the Company since 1998 and the
      President/Chief Executive Officer of the Company since March
      1999.&#160;&#160;Mr. Langan also previously served as our Chief Financial
      Officer from March 29, 1999 to May 29, 2007.&#160;&#160;He has been involved in
      the adult entertainment business since 1989.&#160;&#160;From January 1997
      through the present, he has held the position of President with XTC Cabaret,
      Inc.&#160;&#160;Since 1989, Mr. Langan has exercised managerial control over the
      grand openings and operations of more than twelve adult entertainment
      businesses.&#160;&#160;Through these activities, Mr. Langan has acquired the
      knowledge and skills necessary to successfully operate adult entertainment
      businesses.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Robert
      L.
      Watters, age 56, has been a Director of the Company since 1986.&#160;&#160;Mr.
      Watters also served as president and chief executive officer of the Company
      from
      1991 until March 1999.&#160;&#160;He was also a founder in 1989, and an operator
      until 1993, of the Colorado Bar &amp; Grill, an adult cabaret located in
      Houston, Texas.&#160;&#160;In 1988, Mr. Watters performed site selection,
      negotiated the property purchase and oversaw the design and permitting for
      the
      cabaret that became Cabaret Royale, in Dallas, Texas.&#160;&#160;Mr. Watters
      practiced law as a solicitor in London, England and is qualified to practice
      law
      in New York state.&#160;&#160;Mr. Watters worked in the international tax group
      of the accounting firm of Touche, Ross &amp; Co. (now succeeded by Deloitte
&amp; Touche) from 1979 to 1983 and was engaged in the private practice of law
      in Houston, Texas from 1983 to 1986, when he became involved in the full-time
      management of the Company.&#160;&#160;Mr. Watters graduated from the London
      School of Economics and Political Science, University of London, in 1973 with
      a
      Bachelor of Laws (Honours) degree and in 1975 with a Master of Laws degree
      from
      Osgoode Hall Law School, York University.&#160;&#160;Since 1999, Mr. Watters has
      operated a cabaret in New Orleans.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Alan
      Bergstrom, age 61, has been our Director since 1999.&#160;&#160;Since 1997, Mr.
      Bergstrom has been the Chief Operating Officer of Eagle Securities which is
      an
      investment consulting firm.&#160;&#160;Mr. Bergstrom is also a registered
      investment broker with Crescent Securities Group, Inc.&#160;&#160;From 1991
      until 1997, Mr. Bergstrom was a vice president--investments with Principal
      Financial Securities, Inc.&#160;&#160;Mr. Bergstrom holds a B.B.A. Degree in
      Finance (1967) from the University of Texas.</font></div><br>
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      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
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        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman;">3</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Travis
      Reese, age 37, has been a Director of the Company since 1999 and is the
      Company's Vice President/Director of Technology.&#160;&#160;Mr. Reese also
      serves as Executive Vice President/Secretary for RCI Internet Services, our
      wholly owned subsidiary.&#160;&#160;From 1997 through 1999, Mr. Reese was a
      senior network administrator at St. Vincent's Hospital in Santa Fe, New
      Mexico.&#160;&#160;During 1997, Mr. Reese was a computer systems engineer with
      Deloitte &amp; Touche.&#160;&#160;From 1995 until 1997, Mr. Reese was a
      vice-president with Digital Publishing Resources, Inc., an Internet Service
      Provider.&#160;&#160;From 1994 until 1995, Mr. Reese was a pilot with
      Continental Airlines.&#160;&#160;From 1992 until 1994, Mr. Reese was a pilot
      with Hang On, Inc., an airline company.&#160;&#160;Mr. Reese has an Associates
      Degree in Aeronautical Science from Texas State Technical College.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Steven
      L.
      Jenkins, age 50, has been a Director of the Company since 2001.&#160;&#160;Mr.
      Jenkins has been a certified public accountant with Pringle Jenkins &amp;
Associates, P.C., located in Houston, Texas.&#160;&#160;Mr. Jenkins is the
      President and owner of Pringle Jenkins &amp; Associates, P.C.&#160;&#160;Mr.
      Jenkins has a BBA Degree (1979) from Texas A&amp;M University.&#160;&#160;Mr.
      Jenkins is a member of the AICPA and the TSCPA.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Luke
      Lirot, age 51, is a nominee for Director.&#160;&#160;Mr. Lirot received his law
      degree from the University of San Francisco in 1986.&#160;&#160;After serving as
      an intern in the San Francisco Public Defender&#8217;s Office in 1986, Mr. Lirot
      returned to Florida and established a private law practice where he continues
      to
      practice and specializes in adult entertainment issues. He is a Past President
      of the First Amendment Lawyers&#8217; Association and has actively participated in
      numerous state and federal legal matters.&#160;&#160;Mr. Lirot does not
      currently own any securities of the Company.</font></div>
    <div><br></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>OUR
      DIRECTORS AND EXECUTIVE OFFICERS</strong></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Our
      Directors are elected annually and hold office until the next annual meeting
      of
      our stockholders or until their successors are elected and
      qualified.&#160;&#160;Officers are elected annually and serve at the discretion
      of the Board of Directors.&#160;&#160;There is no family relationship between or
      among any of our directors and executive officers.&#160;&#160;Our Board of
      Directors currently consists of five persons.&#160;&#160;Mr. Luke Lirot is a
      nominee for Director</font></div>
    <div><br></div>
    <div align="left">
      <div align="left">
        <table cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td valign="top" width="35%" style="BORDER-BOTTOM: black 2px solid">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;"><strong>Name</strong></font></div>
              </td>
              <td valign="top" width="10%" style="BORDER-BOTTOM: black 2px solid">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;"><strong>Age</strong></font></div>
              </td>
              <td valign="top" width="55%" style="BORDER-BOTTOM: black 2px solid">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;"><strong>Position</strong></font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="top" width="35%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Eric
                  S. Langan</font></div>
              </td>
              <td valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">39</font></div>
              </td>
              <td align="left" valign="top" width="55%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Director,
                  Chief Executive Officer/ President and Acting Chief Financial
                  Officer</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="35%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Phillip
                  Marshall</font></div>
              </td>
              <td valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">57</font></div>
              </td>
              <td align="left" valign="top" width="55%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Chief
                  Financial Officer</font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="top" width="35%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Travis
                  Reese</font></div>
              </td>
              <td valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">37</font></div>
              </td>
              <td align="left" valign="top" width="55%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Director
                  and Vice President/Director of Technology</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="35%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Robert
                  L. Watters</font></div>
              </td>
              <td valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">56</font></div>
              </td>
              <td align="left" valign="top" width="55%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Director</font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="top" width="35%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Alan
                  Bergstrom</font></div>
              </td>
              <td valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">61</font></div>
              </td>
              <td align="left" valign="top" width="55%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Director</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="35%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Steven
                  L. Jenkins</font></div>
              </td>
              <td valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">50</font></div>
              </td>
              <td align="left" valign="top" width="55%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Director</font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="top" width="35%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Luke
                  Lirot</font></div>
              </td>
              <td valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">51</font></div>
              </td>
              <td align="left" valign="top" width="55%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Director
                  Nominee</font></div>
              </td>
            </tr>

        </table>
      </div>
    </div>
    <div>&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman;">4</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Effective
      May 30, 2007, we appointed Phil Marshall (age 57) as our Chief Financial
      Officer.&#160;&#160;Mr. Marshall, a Certified Public Accountant licensed in
      Texas, will be based at the Company&#8217;s Houston headquarters and will also
      supervise financial management systems at the Company&#8217;s 14 clubs in four
      states.&#160;&#160;Mr. Marshall was previously controller of Dorado Exploration,
      Inc., an oil and gas exploration and production company, from February 2007
      to
      May 2007.&#160;&#160;He previously served as chief financial officer of CDT
      Systems, Inc., a publicly held water technology company, from July 2003 to
      January 2007.&#160; In 1972, Mr. Marshall began his public accounting career
      with the international accounting firm, KMG Main Hurdman. After its merger
      with
      Peat Marwick, Mr. Marshall served as an audit partner at KPMG for several
      years.&#160; After leaving KPMG, Mr. Marshall was partner in charge of the audit
      practice at Jackson &amp; Rhodes in Dallas from 1992 to 2003 where he
      specialized in small publicly held companies.</font></div>
    <div><br></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>RELATED
      TRANSACTIONS</strong></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Our
      Board
      of Directors has adopted a policy that our business affairs will be conducted
      in
      all respects by standards applicable to publicly held corporations and that
      we
      will not enter into any future transactions and/or loans between us and our
      officers, directors and 5% stockholders unless the terms are no less favorable
      than could be obtained from independent, third parties and will be approved
      by a
      majority of our independent and disinterested directors. In our view, all of
      the
      transactions described below meet this standard.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">In
      May
      2002, we loaned $100,000 to Eric Langan who is our Chief Executive
      Officer.&#160;&#160;The promissory note is unsecured, bears interest at 11% and
      is amortized over a period of ten years.&#160;&#160;The note contains a
      provision that in the event Mr. Langan leaves the Company for any reason, the
      note immediately becomes due and payable in full.&#160;&#160;The balance of the
      note was $63,355 as of June 8, 2007, and is included in other assets in our
      balance sheet.</font></div>
    <div>&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">On
      July
      22, 2005, we issued a Secured Convertible Debenture to Ralph McElroy, a greater
      than 10% stockholder of the Company, for the principal sum of $660,000 bearing
      interest at the rate of 12% per annum, with a maturity date of August 1,
      2008.&#160;&#160;Under the terms of the Debenture, we are required to make
      monthly interest payments beginning September 1, 2005.&#160;&#160;We have the
      right to redeem the Debenture in whole or in part at any time during the term
      of
      the Debenture.&#160;&#160;At the election of the Holder, the Holder has the
      right to require the Debenture to be repaid in thirty (30) equal monthly
      installments commencing February 2006.&#160;&#160;The Holder has the option to
      convert all or any portion of the principal amount of the Debenture into shares
      of our common stock at a rate of $3.00 per share, subject to adjustment under
      certain conditions.&#160;&#160;The Debenture provides, absent stockholder
      approval, that the number of shares of our common stock that may be issued
      by us
      or acquired by the Holder upon conversion of the Debenture shall not exceed
      19.99% of the total number of issued and outstanding shares of our common
      stock.&#160;&#160;The Debenture is secured by certain of our
      assets.&#160;&#160;Additionally, we issued Mr. McElroy a Warrant to purchase
      50,000 shares of our common stock at an exercise price of $3.00 per share until
      July 22, 2008.&#160;&#160;&#160;The shares of Common Stock underlying the
      principal amount of the Debenture and the Warrants have piggyback registration
      rights.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">On
      April
      28, 2006, we entered into convertible debentures with three stockholders, one
      of
      which is a greater than 10% stockholder, for a principal sum of
      $825,000.&#160;&#160;The term is for two years and the interest rate is 12% per
      annum.&#160;&#160;At the election of the holders, the holders have the right to
      convert (subject to certain limitations) all or any portion of the principal
      amount of the debentures into shares of our common stock at a rate of $6.55
      per
      share, which approximates the closing price of our stock on April 28,
      2006.&#160;&#160;The debentures provide, absent stockholder approval, that the
      number of shares of our common stock that may be issued by us or acquired by
      the
      holders upon conversion of the debentures shall not exceed 19.99% of the total
      number of issued and outstanding shares of our common stock.&#160;&#160;The
      shares of Common Stock underlying the principal amount of the debentures had
      piggyback registration rights and were registered with SEC in June
      2006.&#160;&#160;The proceeds of the debentures were used for the acquisition of
      Joint Ventures, Inc.</font></div><br>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman;">5</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">On
      November 9, 2006, we entered into convertible debentures with three stockholders
      for a principal sum of $600,000.&#160;&#160;The term is for two years and the
      interest rate is 12% per annum.&#160;&#160;At the election of the holders, the
      holders have the right to convert (subject to certain limitations) all or any
      portion of the principal&#160;&#160;amount of the debentures into shares of our
      common stock at a rate of $7.50 per share, which approximates the closing price
      of our stock on November 9, 2006.&#160;&#160;The debentures provide, absent
      stockholder approval, that the number of shares of our common stock that may
      be
      issued by us or acquired by the holders upon conversion of the debentures shall
      not exceed 19.99% of the total number of issued and outstanding shares of our
      common stock.&#160;&#160;The proceeds of the debentures were used for the
      acquisition of a 51% ownership interest of Playmates Gentlemen&#8217;s Club
      LLC.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>INFORMATION
      CONCERNING THE BOARD OF DIRECTORS</strong></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">The
      Board
      of Directors held six (6) meetings and acted by unanimous written consent one
      (1) time during the fiscal year ended September 30, 2006.&#160;&#160;All of our
      Directors attended at least 75% of our Board meetings.&#160;&#160;All members of
      our Audit Committee, Nominating Committee and Compensation Committee attended
      at
      least 75% of their respective meetings.&#160;&#160;There is no family
      relationship between or among any of the directors and executive officers of
      the
      Company.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>COMMITTEES
      OF THE BOARD OF DIRECTORS</strong></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">We
      have
      an Audit Committee of independent directors whose members are Robert L. Watters,
      Alan Bergstrom and Steven Jenkins.&#160;&#160;The Audit Committee held five (5)
      meetings during the fiscal year ended September 30, 2006.&#160;&#160;In May
      2000, our Board of Directors adopted a Charter for the Audit
      Committee.&#160;&#160;The Charter establishes the independence of our Audit
      Committee and sets forth the scope of our Audit Committee's
      duties.&#160;&#160;The purpose of our Audit Committee is to conduct continuing
      oversight of our financial affairs.&#160;&#160;Our Audit Committee conducts an
      ongoing review of our financial reports and other financial information prior
      to
      their being filed with the Securities and Exchange Commission, or otherwise
      provided to the public.&#160;&#160;Our Audit Committee also reviews our systems,
      methods and procedures of internal controls in the areas of: financial
      reporting, audits, treasury operations, corporate finance, managerial, financial
      and SEC accounting, compliance with law, and ethical conduct.&#160;&#160;Our
      Audit Committee is objective, and reviews and assesses the work of our
      independent registered public accounting firm.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">All
      of
      our Audit Committee members are independent Directors.&#160;&#160;The Board of
      Directors elects the members of our Audit Committee annually.&#160;&#160;The
      members serve until their successors are duly elected and
      qualified.&#160;&#160;All members of the Audit Committee are free from any
      relationship that could conflict with member's independent
      judgment.&#160;&#160;All members are able to read and understand fundamental
      financial statements, including a balance sheet, income statement, and cash
      flow
      statement.&#160;&#160;At least one member has past employment experience in
      finance or accounting, requisite professional certification in accounting,
      or
      other comparable experience or background, including a current or past position
      as a chief executive or financial officer or other senior officer with financial
      oversight responsibilities.&#160;&#160;Steven L. Jenkins serves as Chairman of
      the Audit Committee, having been elected by the members of our Audit
      Committee.&#160;&#160;Steven L. Jenkins serves as the Audit Committee&#8217;s
      Financial Expert, having been elected by a unanimous vote of the members of
      our
      Audit Committee.&#160;&#160;The Audit Committee Charter was previously filed as
      an exhibit to our Proxy Statement filed with the Securities and Exchange
      Commission on June 3, 2005, and can be found on our website at
<u>www.ricks.com</u>.</font></div><br>
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      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman;">6</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">We
      have a
      Nominating Committee composed of independent directors Robert L. Watters, Alan
      Bergstrom and Steven L. Jenkins.&#160;&#160;The Nominating Committee held one
      (1) meeting during the fiscal year ended September 30, 2006.&#160;&#160;In July
      2004, the Board unanimously adopted a Charter with regard to the process to
      be
      used for identifying and evaluating nominees for director.&#160;&#160;&#160;The
      Charter establishes the independence of our Nominating Committee and sets forth
      the scope of the Nominating Committee's duties.&#160;&#160;The Nominating
      Committee Charter can be found on our website at
<u>www.ricks.com</u>.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">We
      have a
      Compensation Committee whose members are Robert Watters, Alan Bergstrom and
      Steven L. Jenkins.&#160;&#160;The Compensation Committee held one (1) meeting
      during the fiscal year ended September 30, 2006.&#160;&#160;The primary purpose
      of the Compensation Committee is to evaluate and review the compensation of
      executive officers.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>COMPLIANCE
      WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934</strong></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Section
      16(a) of the Securities Exchange Act of 1934 requires our directors and
      executive officers, and persons who own beneficially more than ten percent
      of
      our common stock, to file reports of ownership and changes of ownership with
      the
      Securities and Exchange Commission.&#160;&#160;Based solely on the reports we
      have received and on written representations from certain reporting persons,
      we
      believe that the directors, executive officers, and greater than ten percent
      beneficial owners have complied with all applicable filing requirements, with
      the exception of one late filing for Ralph McElroy, a greater than 10%
      stockholder.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>CODE
      OF ETHICS</strong></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">We
      have
      adopted a code of ethics for our Principal Executive and Senior Financial
      Officers, a copy of which was attached&#160;&#160;as Exhibit 14.1 to our Annual
      Report on Form 10-KSB for the fiscal year ending September 30,
      2006.&#160;&#160;A copy of the 2006 Annual Report is being provided to all
      Stockholders along with this Proxy Statement.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>Stockholder
      Communications</strong></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">We
      do not
      currently have a process for security holders to send communications to the
      Board of Directors, which we believe is appropriate based on our size, the
      limited number of our stockholders and the limited number of communications
      which we receive.&#160;&#160;However, we welcome comments and questions from our
      stockholders.&#160;&#160;Stockholders can direct communications to our Chief
      Executive Officer, Eric Langan at our executive offices, 10959 Cutten Road,
      Houston, Texas&#160;&#160;77066.&#160;&#160;While we appreciate all comments
      from stockholders, we may not be able to individually respond to all
      communications.&#160;&#160;We attempt to address stockholder questions and
      concerns in our press releases and documents filed with the SEC so that all
      stockholders have access to information about the Company at the same
      time.&#160;&#160;Mr. Langan collects and evaluates all stockholder
      communications.&#160;&#160;If the communication is directed to the Board of
      Directors generally or to a specific director, Mr. Langan will disseminate
      the
      communications to the appropriate party at the next scheduled Board of Directors
      meeting.&#160;&#160;If the communication requires a more urgent response, Mr.
      Langan will direct that communication to the appropriate executive officer
      or
      director.&#160;&#160;All communications addressed to our directors and executive
      officers will be reviewed by those parties unless the communication is clearly
      frivolous.</font></div><br>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman;">7</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>EXECUTIVE
      COMPENSATION</strong></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">The
      following table reflects all forms of compensation for services to us for the
      fiscal years ended September 30, 2006 and 2005 of certain executive
      officers.<strong>&#160;</strong>No other executive officer of ours received
      compensation that exceeded $100,000 during fiscal 2006.&#160;&#160;&#160;Mr.
      Langan is Chairman of the Board, a Director, Chief Executive Officer, and
      President.&#160;&#160;&#160;Mr. Reese is Director and V.P.-Director of
      Technology.</font></div>
    <div><br></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>Summary
      Compensation Table</strong></font></div>
    <div><br></div>
    <div align="left">
      <div align="left">
        <div align="left">
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Name
                    and Principal Position</font></div>
                </td>
                <td valign="top" width="8%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Year</font></div>
                  <div>&#160;</div>
                  <div>&#160;</div>
                </td>
                <td valign="top" width="9%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Salary</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">($)</font></div>
                  <div>&#160;</div>
                </td>
                <td valign="top" width="8%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Bonus</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">($)</font></div>
                  <div>&#160;</div>
                </td>
                <td valign="top" width="8%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Stock
                    Awards</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">($)</font></div>
                </td>
                <td valign="top" width="8%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Option
                    Awards</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">($)</font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Non-Equity
                    Incentive Plan Compensation</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">($)</font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Nonqualified
                    Deferred Compensation Earnings</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">($)</font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">All
                    other compensation</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">($)</font></div>
                </td>
                <td valign="top" width="11%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Total</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">($)</font></div>
                  <div>&#160;</div>
                </td>
              </tr>
              <tr>
                <td valign="top" width="12%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">(a)</font></div>
                </td>
                <td valign="top" width="8%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">(b)</font></div>
                </td>
                <td valign="top" width="9%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">(c)</font></div>
                </td>
                <td valign="top" width="8%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">(d)</font></div>
                </td>
                <td valign="top" width="8%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">(e)</font></div>
                </td>
                <td valign="top" width="8%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">(f)</font></div>
                </td>
                <td valign="top" width="12%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">(g)</font></div>
                </td>
                <td valign="top" width="12%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">(h)</font></div>
                </td>
                <td valign="top" width="12%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">(i)</font></div>
                </td>
                <td valign="top" width="11%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">(j)</font></div>
                </td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Eric
                    S. Langan, President and CEO</font></div>
                </td>
                <td valign="top" width="8%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">2006</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">2005</font></div>
                </td>
                <td valign="top" width="9%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">395,300</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">344,100</font></div>
                </td>
                <td valign="top" width="8%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">-0-</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">-0-</font></div>
                </td>
                <td valign="top" width="8%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">-0-</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">-0-</font></div>
                </td>
                <td valign="top" width="8%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">25,833<font style="DISPLAY: inline; FONT-SIZE: 10pt;"><sup>(1)</sup></font></font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">10,952<font style="DISPLAY: inline; FONT-SIZE: 10pt;"><sup>(2)</sup></font></font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">-0-</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">-0-</font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">-0-</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">-0-</font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">9,768</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">9,620</font></div>
                </td>
                <td valign="top" width="11%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">430,901</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">364,672</font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Travis
                    Reese, Vice President and Chief Technology Officer</font></div>
                </td>
                <td valign="top" width="8%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">2006</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">2005</font></div>
                </td>
                <td valign="top" width="9%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">167,201</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">165,531</font></div>
                </td>
                <td valign="top" width="8%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">-0-</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">-0-</font></div>
                </td>
                <td valign="top" width="8%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">-0-</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">-0-</font></div>
                </td>
                <td valign="top" width="8%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">25,833<font style="DISPLAY: inline; FONT-SIZE: 10pt;"><sup>(3)</sup></font></font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">10,952<font style="DISPLAY: inline; FONT-SIZE: 10pt;"><sup>(4)</sup></font></font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">-0-</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">-0-</font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">-0-</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">-0-</font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">4,782</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">4,966</font></div>
                </td>
                <td valign="top" width="11%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">197,816</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">181,449</font></div>
                </td>
              </tr>

          </table>
        </div>
      </div>
    </div>
    <div>&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top">
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">1</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Mr.
                Langan received 5,000 options to purchase shares of our common stock
                at an
                exercise price of $6.75 as Director
                compensation.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top">
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">2</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Mr.
                Langan received 5,000 options to purchase shares of our common stock
                at an
                exercise price of $2.80 as Director
                compensation.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top">
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">3</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Mr.
                Reese received 5,000 options to purchase shares of our common stock
                at an
                exercise price of $6.75 as Director
                compensation.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top">
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">4</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Mr.
                Reese received 5,000 options to purchase shares of our common stock
                at an
                exercise price of $2.80 as Director
                compensation.</font></div>
            </td>
          </tr>

      </table>
    </div><br>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman;">8</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>Outstanding
      Equity Awards at Fiscal Year End</strong></font><br></div>
    <div align="left"><br>
      <div align="left">
        <div align="left">
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
                <td colspan="5" valign="top" width="48%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;"><strong>OPTION
                    AWARDS</strong></font></div>
                </td>
                <td colspan="4" valign="bottom" width="40%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;"><strong>STOCK
                    AWARDS</strong></font></div>
                </td>
              </tr>
              <tr>
                <td valign="middle" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Name</font></div>
                </td>
                <td valign="bottom" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Number
                    of Securities Underlying Unexercised Options (#) Exercisable</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
                  <div>&#160;</div>
                </td>
                <td valign="bottom" width="8%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Number
                    of Securities Underlying Unexercised Options (#)
                    Unexercisable</font></div>
                  <div>&#160;</div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Equity
                    Incentive Plan Awards: Number of Securities Underlying Unexercised
                    Unearned Options</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;(#)</font></div>
                </td>
                <td valign="bottom" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Option
                    Exercise Price ($)</font></div>
                  <div>&#160;</div>
                  <div>&#160;</div>
                  <div>&#160;</div>
                </td>
                <td valign="bottom" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Option
                    Expiration Date</font></div>
                  <div>&#160;</div>
                  <div>&#160;</div>
                  <div>&#160;</div>
                </td>
                <td valign="bottom" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Number
                    of Shares or Units of Stock that have not Vested (#)</font></div>
                  <div>&#160;</div>
                  <div>&#160;</div>
                </td>
                <td valign="bottom" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Market
                    Value of Shares or Units of Stock that have not Vested</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">($)</font></div>
                  <div>&#160;</div>
                </td>
                <td valign="bottom" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Equity
                    Incentive Plan Awards: Number of Unearned Shares, Units or Other
                    Rights
                    that have not Vested</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">($)</font></div>
                  <div>&#160;</div>
                </td>
                <td valign="bottom" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Equity
                    Incentive Plan Awards: Market or Payout Value of Unearned Shares,
                    Units or
                    Other Rights that have not Vested</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">($)</font></div>
                  <div>&#160;</div>
                </td>
              </tr>
              <tr>
                <td valign="top" width="12%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">(a)</font></div>
                </td>
                <td valign="top" width="10%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">(b)</font></div>
                </td>
                <td valign="top" width="8%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">(c)</font></div>
                </td>
                <td valign="top" width="10%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">(d)</font></div>
                </td>
                <td valign="top" width="10%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">(e)</font></div>
                </td>
                <td valign="top" width="10%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">(e)</font></div>
                </td>
                <td valign="top" width="10%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">(g)</font></div>
                </td>
                <td valign="top" width="10%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">(h)</font></div>
                </td>
                <td valign="top" width="10%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">(i)</font></div>
                </td>
                <td valign="top" width="10%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">(j)</font></div>
                </td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Eric
                    S. Langan</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">100,000</font></div>
                </td>
                <td valign="top" width="8%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">2.5625</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">11/16/06</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
              </tr>
              <tr>
                <td valign="top" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">5,000</font></div>
                </td>
                <td valign="top" width="8%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">1.40</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">9/10/08</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
              </tr>
              <tr bgcolor="#cceeff">
                <td valign="top" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">75,000</font></div>
                </td>
                <td valign="top" width="8%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">2.20</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">2/6/09</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
              </tr>
              <tr>
                <td valign="top" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">5,000</font></div>
                </td>
                <td valign="top" width="8%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">2.54</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">9/14/09</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
              </tr>
              <tr bgcolor="#cceeff">
                <td valign="top" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">200,000</font></div>
                </td>
                <td valign="top" width="8%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">2.49</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">9/14/09</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
              </tr>
              <tr>
                <td valign="top" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">5,000</font></div>
                </td>
                <td valign="top" width="8%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">2.80</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">7/20/10</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
              </tr>
              <tr bgcolor="#cceeff">
                <td valign="top" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="8%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">5,000</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">6.75</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">5/31/11</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">5,000</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Travis
                    Reese</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">5,000</font></div>
                </td>
                <td valign="top" width="8%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">1.40</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">09/10/08</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
              </tr>
              <tr bgcolor="#cceeff">
                <td valign="top" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">5,000</font></div>
                </td>
                <td valign="top" width="8%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">2.54</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">9/14/09</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
              </tr>
              <tr>
                <td valign="top" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">50,000</font></div>
                </td>
                <td valign="top" width="8%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">2.49</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">9/14/09</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
              </tr>
              <tr bgcolor="#cceeff">
                <td valign="top" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">5,000</font></div>
                </td>
                <td valign="top" width="8%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">2.80</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">7/20/10</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
              </tr>
              <tr>
                <td valign="top" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="8%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">5,000</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">6.75</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">5/31/11</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">5,000</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">0</font></div>
                </td>
              </tr>

          </table>
        </div>
      </div>
    </div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>Director
      Compensation</strong></font></div>
    <div><br></div>
    <div align="left">
      <div align="left">
        <div align="left">
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td valign="top" width="16%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Name</font></div>
                  <div>&#160;</div>
                  <div>&#160;</div>
                  <div>&#160;</div>
                  <div>&#160;</div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Fees
                    Earned or Paid in Cash</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">($)</font></div>
                  <div>&#160;</div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Stock
                    Awards</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">($)</font></div>
                  <div>&#160;</div>
                  <div>&#160;</div>
                  <div>&#160;</div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Option
                    Awards</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">($)</font></div>
                  <div>&#160;</div>
                  <div>&#160;</div>
                  <div>&#160;</div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Non-Equity
                    Incentive Plan Compensation</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">($)</font></div>
                  <div>&#160;</div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Nonqualified
                    Deferred Compensation Earnings</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">($)</font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">All
                    Other Compensation</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">($)</font></div>
                  <div>&#160;</div>
                  <div>&#160;</div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Total</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">($)</font></div>
                  <div>&#160;</div>
                  <div>&#160;</div>
                  <div>&#160;</div>
                </td>
              </tr>
              <tr>
                <td valign="top" width="16%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">(a)</font></div>
                </td>
                <td valign="top" width="12%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">(b)</font></div>
                </td>
                <td valign="top" width="12%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">(c)</font></div>
                </td>
                <td valign="top" width="12%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">(d)</font></div>
                </td>
                <td valign="top" width="12%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">(e)</font></div>
                </td>
                <td valign="top" width="12%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">(f)</font></div>
                </td>
                <td valign="top" width="12%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">(g)</font></div>
                </td>
                <td valign="top" width="12%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">(h)</font></div>
                </td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="top" width="16%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Eric
                    S. Langan</font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">-0-</font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">-0-</font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">25,833<font style="DISPLAY: inline; FONT-SIZE: 10pt;"><sup>(1)</sup></font></font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">-0-</font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">-0-</font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">-0-</font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">25,833</font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="16%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Travis
                    Reese</font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">-0-</font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">-0-</font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">25,833<font style="DISPLAY: inline; FONT-SIZE: 10pt;"><sup>(2)</sup></font></font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">-0-</font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">-0-</font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">-0-</font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">25,833</font></div>
                </td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="top" width="16%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Robert
                    Watters</font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">-0-</font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">-0-</font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">51,666<font style="DISPLAY: inline; FONT-SIZE: 10pt;"><sup>(3)</sup></font></font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">-0-</font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">-0-</font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">-0-</font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">51,666</font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="16%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Alan
                    Bergstrom</font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">-0-</font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">-0-</font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">51,666<font style="DISPLAY: inline; FONT-SIZE: 10pt;"><sup>(4)</sup></font></font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">-0-</font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">-0-</font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">-0-</font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">51,666</font></div>
                </td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="top" width="16%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Steve
                    Jenkins</font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">-0-</font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">-0-</font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">51,666<font style="DISPLAY: inline; FONT-SIZE: 10pt;"><sup>(5)</sup></font></font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">-0-</font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">-0-</font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">-0-</font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">51,666</font></div>
                </td>
              </tr>

          </table>
        </div>
      </div>
    </div>
    <div><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top">
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">1</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Mr.
                Langan received 5,000 options to purchase shares of our common stock
                at an
                exercise price of $6.75 as Director
                compensation.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top">
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">2</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Mr.
                Reese received 5,000 options to purchase shares of our common stock
                at an
                exercise price of $6.75 as Director
                compensation.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top">
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">3</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Mr.
                Watters received 10,000 options to purchase shares of our common
                stock at
                an exercise price of $6.75 as Director
                compensation.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top">
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">4</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Mr.
                Bergstrom received 10,000 options to purchase shares of our common
                stock
                at an exercise price of $6.75 as Director
                compensation.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top">
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">5</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Mr.
                Bergstrom received 10,000 options to purchase shares of our common
                stock
                at an exercise price of $6.75 as Director
                compensation.</font></div>
            </td>
          </tr>

      </table>
    </div><br>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman;">9</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>EMPLOYMENT
      AGREEMENTS</strong></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">We
      have a
      two-year employment agreement with Mr. Eric S. Langan (the "Langan Agreement").
      The Langan Agreement extends through April 1, 2008, and provides for an annual
      base salary of $400,000. The Langan Agreement also provides for participation
      in
      all benefit plans maintained by us for salaried employees. The Langan Agreement
      contains a confidentiality provision and an agreement by Mr. Langan not to
      compete with us upon the expiration of the Langan Agreement.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">We
      also
      have a three-year employment agreement with Mr. Travis Reese (the "Reese
      Agreement"). The Reese Agreement extends through February 1, 2010, and provides
      for an annual base salary of $192,500. The Reese Agreement also provides for
      participation in all benefit plans maintained by us for salaried employees.
      The
      Reese Agreement contains a confidentiality provision and an agreement by Mr.
      Reese not to compete with us upon the expiration of the Reese
      Agreement.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">We
      have
      not established long-term incentive plans or defined benefit or actuarial
      plans.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>EMPLOYEE
      STOCK OPTION PLANS</strong></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">While
      we
      have been successful in attracting and retaining qualified personnel, we believe
      that our future success will depend in part on our continued ability to attract
      and retain highly qualified personnel.&#160;&#160;We pay wages and salaries that
      we believe are competitive.&#160;&#160;We also believe that equity ownership is
      an important factor in our ability to attract and retain skilled
      personnel.&#160;&#160;We have adopted Stock Option Plans for employee and
      directors.&#160;&#160;The purpose of the Plans is to further our interests, our
      subsidiaries and our stockholders by providing incentives in the form of stock
      options to key employees and directors who contribute materially to our success
      and profitability.&#160;&#160;The grants recognize and reward outstanding
      individual performances and contributions and will give such persons a
      proprietary interest in the Company, thus enhancing their personal interest
      in
      our continued success and progress.&#160;&#160;The Plans also assist the Company
      and our subsidiaries in attracting and retaining key employees and
      directors.&#160;&#160;The Plans are administered by the Board of
      Directors.&#160;&#160;The Board of Directors has the exclusive power to select
      the participants in the Plans, to establish the terms of the options granted
      to
      each participant, provided that all options granted shall be granted at an
      exercise price equal to at least 85% of the fair market value of the common
      stock covered by the option on the grant date and to make all determinations
      necessary or advisable under the Plans.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">In
      1995
      we adopted the 1995 Stock Option Plan.&#160;&#160;A total of 300,000 shares may
      be granted and sold under the 1995 Plan.&#160;&#160;As of September 30, 2001, a
      total of 167,500 stock options had been granted and are outstanding under the
      Plan, none of which have been exercised.&#160;&#160;We do not plan to issue any
      additional options under the 1995 Plan.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">In
      August
      1999 we adopted the 1999 Stock Option Plan (the &#8220;1999 Plan&#8221;) with 500,000 shares
      authorized to be granted and sold under the 1999 Plan.&#160;&#160;In August
      2004, stockholders approved an Amendment to the 1999 Plan (the &#8220;Amendment&#8221;)
      which increased the total number of shares authorized to
      1,000,000.&#160;&#160;As of June 8, 2007, 493,000 of the stock options of the
      1999 Plan have been exercised.</font></div><br>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman;">10</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>EQUITY
      COMPENSATION PLAN INFORMATION</strong></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">The
      following table sets forth all equity compensation plans as of September 30,
      2006:</font></div>
    <div><br></div>
    <div align="left">
      <div align="left">
        <table cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td valign="bottom" width="25%" style="BORDER-BOTTOM: black 2px solid">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Plan
                  category</font></div>
              </td>
              <td valign="bottom" width="25%" style="BORDER-BOTTOM: black 2px solid">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Number
                  of securities to be issued upon exercise of outstanding options,
                  warrants
                  and rights</font></div>
                <div>&#160;</div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">(a)</font></div>
              </td>
              <td valign="bottom" width="25%" style="BORDER-BOTTOM: black 2px solid">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Weighted-average
                  exercise price of outstanding options, warrants and rights</font></div>
                <div>&#160;</div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">(b)</font></div>
              </td>
              <td valign="bottom" width="25%" style="BORDER-BOTTOM: black 2px solid">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Number
                  of securities remaining available for future issuance under equity
                  compensation plans (excluding securities reflected in column
                  (a))</font></div>
                <div>&#160;</div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">(c)</font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="25%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Equity
                  compensation plans approved by security holders</font></div>
              </td>
              <td align="left" valign="bottom" width="25%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;727,500</font></div>
              </td>
              <td align="left" valign="bottom" width="25%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;$2.70</font></div>
              </td>
              <td align="left" valign="bottom" width="25%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;8,000</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="bottom" width="25%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Equity
                  compensation plans not approved by security holders</font></div>
              </td>
              <td align="left" valign="bottom" width="25%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;0</font></div>
              </td>
              <td align="left" valign="bottom" width="25%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;0</font></div>
              </td>
              <td align="left" valign="bottom" width="25%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;300,000</font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td valign="bottom" width="25%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;"><strong>Total</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="25%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;727,500</font></div>
              </td>
              <td align="left" valign="bottom" width="25%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;$2.70</font></div>
              </td>
              <td align="left" valign="bottom" width="25%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;8,000</font></div>
              </td>
            </tr>

        </table>
      </div>
    </div>
    <div><br></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>SECURITY
      OWNERSHIP OF</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>CERTAIN
      BENEFICIAL OWNERS AND MANAGEMENT</strong></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">The
      following table sets forth certain information at June 8, 2007, with respect
      to
      the beneficial ownership of shares of Common Stock by (i) each person known
      to
      us who owns beneficially more than 5% of the outstanding shares of Common Stock,
      (ii) each of our directors, (iii) our nominee for director, (iv) each of our
      executive officers and (v) all of our executive officers,&#160;&#160;directors
      and nominees as a group. Unless otherwise indicated, each stockholder has sole
      voting and investment power with respect to the shares
      shown.&#160;&#160;&#160;As of June 8, 2007, there were 6,150,279 shares of
      common stock outstanding.</font></div>
    <div><br></div>
    <div align="left">
      <div align="left">
        <table cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td valign="top" width="30%" style="BORDER-BOTTOM: black 2px solid">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;"><strong>Name/Address</strong></font></div>
              </td>
              <td valign="top" width="23%" style="BORDER-BOTTOM: black 2px solid">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;"><strong>Number
                  of shares</strong></font></div>
              </td>
              <td valign="top" width="23%" style="BORDER-BOTTOM: black 2px solid">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;"><strong>Title
                  of class</strong></font></div>
              </td>
              <td valign="top" width="24%" style="BORDER-BOTTOM: black 2px solid">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;"><strong>Percent
                  of Class <font style="DISPLAY: inline; FONT-SIZE: 10pt;"><sup>(9)</sup></font></strong></font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="top" width="30%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Eric
                  S. Langan</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">CEO/President/Director</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">10959
                  Cutten Road</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Houston,
                  Texas 77066</font></div>
              </td>
              <td align="left" valign="top" width="23%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">1,194,865
                  <font style="DISPLAY: inline; FONT-SIZE: 10pt;"><sup>(1)</sup></font></font></div>
                <div>&#160;</div>
              </td>
              <td valign="top" width="23%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Common
                  stock</font></div>
              </td>
              <td valign="top" width="24%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">18.54%</font></div>
                <div>&#160;</div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="30%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Travis
                  Reese</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Vice
                  President/Director</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">10959
                  Cutten Road</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Houston,
                  Texas 77066</font></div>
              </td>
              <td valign="top" width="23%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">79,775
                  <font style="DISPLAY: inline; FONT-SIZE: 10pt;"><sup>(2)</sup></font></font></div>
              </td>
              <td valign="top" width="23%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Common
                  stock</font></div>
              </td>
              <td valign="top" width="24%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">1.28%</font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="top" width="30%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Phillip
                  Marshall</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Chief
                  Financial Officer</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">10959
                  Cutten Road</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Houston,
                  Texas&#160;&#160;77066</font></div>
              </td>
              <td valign="top" width="23%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">-0-</font></div>
              </td>
              <td valign="top" width="23%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">N/A</font></div>
              </td>
              <td valign="top" width="24%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">-0-</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="30%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Robert
                  L. Watters</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Director</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">315
                  Bourbon Street</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">New
                  Orleans, Louisiana 70130</font></div>
              </td>
              <td valign="top" width="23%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">45,000
                  <font style="DISPLAY: inline; FONT-SIZE: 10pt;"><sup>(</sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt;"><sup>3)</sup></font></font></div>
              </td>
              <td valign="top" width="23%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Common
                  stock</font></div>
              </td>
              <td valign="top" width="24%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&lt;1%</font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="top" width="30%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Steven
                  L. Jenkins</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Director</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">16815
                  Royal Crest Drive</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Suite
                  160</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Houston,
                  Texas 77058</font></div>
              </td>
              <td valign="top" width="23%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">10,000
                  <font style="DISPLAY: inline; FONT-SIZE: 10pt;"><sup>(4)</sup></font></font></div>
              </td>
              <td valign="top" width="23%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Common
                  stock</font></div>
              </td>
              <td valign="top" width="24%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&lt;1%</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="30%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Alan
                  Bergstrom</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Director</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">904
                  West Ave.-Suite 100</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Austin,
                  Texas 78701</font></div>
              </td>
              <td valign="top" width="23%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;25,000
                  <font style="DISPLAY: inline; FONT-SIZE: 10pt;"><sup>(5)</sup></font></font></div>
              </td>
              <td valign="top" width="23%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Common
                  stock</font></div>
              </td>
              <td valign="top" width="24%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&lt;1%</font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="top" width="30%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Luke
                  Lirot</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Director
                  Nominee</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">2240
                  Belleair Road, #190</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Clearwater,
                  Florida 33764</font></div>
              </td>
              <td valign="top" width="23%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">-0-</font></div>
              </td>
              <td valign="top" width="23%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Common
                  stock</font></div>
              </td>
              <td valign="top" width="24%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">-0-</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="30%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">All
                  of our Directors, Director Nominee and Officers as a</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Group
                  of six (6) persons</font></div>
              </td>
              <td valign="top" width="23%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">1,354,640
                  <font style="DISPLAY: inline; FONT-SIZE: 10pt;"><sup>(6)</sup></font></font></div>
              </td>
              <td valign="top" width="23%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Common
                  stock</font></div>
              </td>
              <td valign="top" width="24%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">20.57%</font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="top" width="30%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;"><strong>&gt;5%
                  STOCKHOLDERS</strong></font></div>
              </td>
              <td valign="top" width="23%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td valign="top" width="23%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td valign="top" width="24%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
            </tr>
            <tr>
              <td align="left" valign="top" width="30%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">E.
                  S. Langan. L.P.</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">10959
                  Cutten Road</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Houston,
                  Texas 77066</font></div>
              </td>
              <td valign="top" width="23%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">578,632
                  <font style="DISPLAY: inline; FONT-SIZE: 10pt;"><sup>(1)</sup></font></font></div>
              </td>
              <td valign="top" width="23%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Common
                  stock</font></div>
              </td>
              <td valign="top" width="24%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">9.41%</font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="top" width="30%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Ralph
                  McElroy</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">1211
                  Choquette</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Austin,
                  Texas, 78757</font></div>
              </td>
              <td valign="top" width="23%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;728,913
                  <font style="DISPLAY: inline; FONT-SIZE: 10pt;"><sup>(7)</sup></font></font></div>
              </td>
              <td valign="top" width="23%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Common
                  stock</font></div>
              </td>
              <td valign="top" width="24%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">11.76%</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="30%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Blair
                  Sanford</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">One
                  Market Street Suite 3750</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">San
                  Francisco, California&#160;&#160;94104</font></div>
              </td>
              <td valign="top" width="23%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">494,557
                  <font style="DISPLAY: inline; FONT-SIZE: 10pt;"><sup>(</sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt;"><sup>8)</sup></font></font></div>
              </td>
              <td valign="top" width="23%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Common
                  stock</font></div>
              </td>
              <td valign="top" width="24%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">8.04%</font></div>
              </td>
            </tr>

        </table>
      </div>
    </div>
    <div>&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman;">11</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div><br>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top">
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(1)</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Mr.
                Langan has sole voting and investment power for 321,233 shares that
                he
                owns directly.&#160;&#160;Mr. Langan has shared voting and investment
                power for 578,632 shares that he owns indirectly through E. S. Langan,
                L.P.&#160;&#160;Mr. Langan is the general partner of E. S. Langan,
                L.P.&#160;&#160;This amount also includes options to purchase up to
                295,000 shares of common stock that are presently
                exercisable.&#160;&#160;This number specifically excludes 15,050 shares of
                common stock held by his wife which is separate
                property.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top">
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(2)</font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Includes
                9,775 shares of common stock and options to purchase up to 70,000
                shares
                of common stock that are presently
                exercisable.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top">
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(3)</font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Includes
                5,000 shares of common stock and options to purchase up to 40,000
                shares
                of common stock that are presently
                exercisable.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top">
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(4)</font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Includes
                options to purchase up to 10,000 shares of common stock that are
                presently
                exercisable..</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top">
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(5)</font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Includes
                5,000 shares of common stock and options to purchase up to 20,000
                shares
                of common stock that are presently
                exercisable.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top">
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(6)</font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Includes
                options to purchase up to 435,000 shares of common stock that are
                presently exercisable.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top">
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(7)</font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Includes
                678,913 shares of common stock held by Mr. McElroy, and 50,000 shares
                of
                common stock issuable upon exercise of warrants held by Mr.
                McElroy.&#160;&#160;This number specifically excludes 220,000 shares of
                common stock that are issuable upon the conversion of a convertible
                debenture in the amount of $660,000 held by Mr. McElroy.&#160;&#160;Under
                the terms of the debenture, Mr. McElroy has the option to convert
                all or
                any portion of the principal amount into shares of our common stock
                at the
                rate of $3.00 per share, subject to adjustment under certain
                conditions.&#160;&#160;The debenture further provides, absent stockholder
                approval, that the number of shares of our common stock that may
                be issued
                to or acquired by Mr. McElroy upon conversion of the debenture shall
                not
                exceed 19.99% of the total number of issued and outstanding shares
                of our
                common stock.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top">
            <td align="left" style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(8)</font></div>
            </td>
            <td align="left">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Includes
                298,686 shares of common stock held by Burlingame Equity Investors,
                LP,
                40,540 shares of common stock held by Burlingame Equity Investors
                II, LP,
                and 155,331 shares of common stock held by Burlingame Equity Investors
                (Offshore) Ltd. Mr. Blair Sanford is the managing member of Burlingame
                Asset Management LLC, which is the general partner of Burlingame
                Equity
                Investors, LP, Burlingame Equity Investors II, LP, and Burlingame
                Equity
                Investors (Offshore) Ltd.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top">
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(9)</font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">These
                percentages exclude treasury shares in the calculation of percentage
                of
                class.</font></div>
            </td>
          </tr>

      </table>
    </div><br>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman;">12</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">We
      are
      not aware of any arrangements that could result in a change of
      control.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>________________________________________________________________________</strong></font></div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>(2)
      TO RATIFY THE SELECTION OF WHITLEY PENN LLP</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>AS
      THE COMPANY'S INDEPENDENT REGISTERED</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>PUBLIC
      ACCOUNTING FIRM</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>FOR
      THE FISCAL YEAR ENDING</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>SEPTEMBER
      30, 2007</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>________________________________________________________________________</strong></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">The
      Board
      of Directors has selected Whitley Penn LLP as the Company's independent
      registered public accounting firm for the current fiscal
      year.&#160;&#160;Although not required by law or otherwise, the selection is
      being submitted to the Stockholders of the Company as a matter of corporate
      policy for their approval.&#160;&#160;The Board of Directors wishes to obtain
      from the Stockholders a ratification of their action in appointing their
      existing independent registered public accounting firm, Whitley Penn LLP, for
      the fiscal year ending September 30, 2007.&#160;&#160;Such ratification requires
      the affirmative vote of a majority of the shares of Common Stock present or
      represented by proxy and entitled to vote at the Annual Meeting.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">In
      the
      event the appointment of Whitley Penn LLP as the Company&#8217;s independent
      registered public accounting firm is not ratified by the Stockholders, the
      adverse vote will be considered as a direction to the Board of Directors and
      the
      Audit Committee to select another independent registered public accounting
      firm
      for the fiscal year ending September 30, 2007.&#160;&#160;A representative of
      Whitley Penn LLP is expected to be present at the Annual Meeting with the
      opportunity to make a statement if he so desires and to respond to appropriate
      questions.&#160;&#160;The Board of Directors unanimously recommends a vote
<strong>FOR</strong> the ratification of Whitley Penn LLP as independent
      registered public accounting firm for the fiscal year ending September 30,
      2007.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">The
      following table sets forth the aggregate fees paid or accrued for professional
      services rendered by Whitley Penn LLP for the audit of our annual financial
      statements for fiscal year 2006 and fiscal year 2005 and the aggregate fees
      paid
      or accrued for audit-related services and all other services rendered by Whitley
      Penn LLP for fiscal year 2006 and fiscal year 2005.</font></div>
    <div><br></div>
    <div align="center">
      <div align="left">
        <table cellpadding="0" cellspacing="0" width="80%">

            <tr>
              <td valign="bottom" width="76%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 2px solid">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">2006</font></div>
              </td>
              <td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td colspan="2" valign="bottom" width="10%" style="BORDER-BOTTOM: black 2px solid">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">2005</font></div>
              </td>
              <td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
            </tr>
            <tr>
              <td valign="bottom" width="76%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td colspan="2" valign="bottom" width="10%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td colspan="2" valign="bottom" width="10%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="76%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Audit
                  fees</font></div>
              </td>
              <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">$</font></td>
              <td align="right" valign="bottom" width="9%">
                <div style="DISPLAY: block; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">97,768</font></div>
              </td>
              <td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">$</font></td>
              <td align="right" valign="bottom" width="9%">
                <div style="DISPLAY: block; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">137,529</font></div>
              </td>
              <td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
            </tr>
            <tr>
              <td align="left" valign="bottom" width="76%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Audit-related
                  fees</font></div>
              </td>
              <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="right" valign="bottom" width="9%">
                <div style="DISPLAY: block; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">16,210</font></div>
              </td>
              <td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="right" valign="bottom" width="9%">
                <div style="DISPLAY: block; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">8,106</font></div>
              </td>
              <td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="76%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Tax
                  fees</font></div>
              </td>
              <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="right" valign="bottom" width="9%">
                <div style="DISPLAY: block; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">3,850</font></div>
              </td>
              <td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="right" valign="bottom" width="9%">
                <div style="DISPLAY: block; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">12,550</font></div>
              </td>
              <td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
            </tr>
            <tr>
              <td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">All
                  other fees</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid">
                <div style="DISPLAY: block; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">-</font></div>
              </td>
              <td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid">
                <div style="DISPLAY: block; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">-</font></div>
              </td>
              <td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
            </tr>
            <tr bgcolor="#cceeff">
              <td valign="bottom" width="76%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="right" valign="bottom" width="9%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="left" nowrap valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
            </tr>
            <tr>
              <td align="left" valign="bottom" width="76%" style="PADDING-BOTTOM: 2px">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Total</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">$</font></td>
              <td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid">
                <div style="DISPLAY: block; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">117,828</font></div>
              </td>
              <td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="left" valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">$</font></td>
              <td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid">
                <div style="DISPLAY: block; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">158,185</font></div>
              </td>
              <td align="left" nowrap valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
            </tr>

        </table>
      </div>
    </div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">The
      category of &#8220;Audit fees&#8221; includes fees for our annual audit, quarterly reviews
      and services rendered in connection with regulatory filings with the SEC, such
      as the issuance of comfort letters and consents.</font></div><br>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman;">13</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">The
      category of &#8220;Audit-related fees&#8221; includes employee benefit plan audits, internal
      control reviews and accounting consultation.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">The
      category of &#8220;Tax fees&#8221; includes consultation related to corporate development
      activities.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">All
      above
      audit services, audit-related services and tax services were pre-approved by
      the
      Audit Committee, which concluded that the provision of such services by Whitley
      Penn LLP was compatible with the maintenance of that firm&#8217;s independence in the
      conduct of its auditing functions. The Audit Committee&#8217;s outside auditor
      independence policy provides for pre-approval of all services performed by
      the
      outside auditors.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>AUDITOR
      INDEPENDENCE</strong></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Our
      Audit
      Committee considered that the work done for us in fiscal 2006 by Whitley Penn
      LLP was compatible with maintaining Whitley Penn LLP's
      independence.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>AUDITOR'S
      TIME ON TASK</strong></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">All
      of
      the work expended by Whitley Penn LLP on our fiscal 2006 audit was attributed
      to
      work performed by Whitley Penn LLP's full-time, permanent
      employees.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>___________________________________________________________________</strong></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>(3)</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>APPROVAL
      OF SECOND AMENDMENT TO 1999 STOCK OPTION PLAN</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>___________________________________________________________________</strong></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">The
      Board
      of Directors unanimously recommends a vote <strong>FOR</strong> the approval of
      the Second Amendment to the 1999 Stock Option Plan (the &#8220;Second Amendment&#8221;). The
      Second Amendment provides for the increase in the number of shares that may
      be
      optioned and sold under the Plan from 1,000,000 to 1,500,000.&#160;&#160;This
      increase in the number of shares is the only proposed change to the Plan; all
      other terms of the Plan remain unchanged.&#160;&#160;The Second Amendment will
      become effective upon stockholder approval.&#160;&#160;The affirmative vote of a
      majority of the shares of Common Stock present or represented by proxy and
      entitled to vote at the Annual Meeting is required for the approval of Proposal
      3.&#160;&#160;Stockholder approval will make the Plan a tax-qualified
      plan.&#160;&#160;The Second Amendment is attached hereto as Attachment
&#8220;A.&#8221;</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><em>SECOND
      AMENDMENT TO 1999 STOCK OPTION PLAN</em></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Pursuant
      to Section 16 of the Plan, the Board of Directors adopted the Second Amendment
      for eligible employees and non-employee consultants of the Company and its
      subsidiaries to increase the number of shares that may be optioned and sold
      under the Plan from 1,000,000 to 1,500,000 on June 7, 2007. The purpose of
      the
      Plan is to further our interests, our subsidiaries and our stockholders by
      providing incentives in the form of stock options to key employees and
      non-employee consultants who contribute materially to our success and
      profitability.&#160;&#160;The grants recognize and reward outstanding individual
      performances and contributions and will give such persons a proprietary interest
      in us, thus enhancing their personal interest in our continued success and
      progress.&#160;&#160;The Second Amendment also assists us and our subsidiaries
      in attracting and retaining key employees and non-employee
      consultants.</font></div><br>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman;">14</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">The
      following sets forth certain terms and conditions of the Plan.</font></div>
    <div><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top">
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">1.</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong><u>Administration</u></strong><strong>.</strong></font></div>
            </td>
          </tr>

      </table>
    </div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;This
      Plan will be administered by the Committee (as defined in the Plan). A majority
      of the full Committee constitutes a quorum for purposes of administering the
      Plan, and all determinations of the Committee shall be made by a majority of
      the
      members present at a meeting at which a quorum is present or by the unanimous
      written consent of the Committee.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;If
      no Committee has been appointed, members of the Board may vote on any matters
      affecting the administration of the Plan or the grant of any Option pursuant
      to
      the Plan, except that no such member shall act on the granting of an Option
      to
      himself, but such member may be counted in determining the existence of a quorum
      at any meeting of the Board during which action is taken with respect to the
      granting of Options to him.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><font id="TAB1" style="MARGIN-LEFT: 36pt;"></font>Subject
      to the terms of this Plan, the
      Committee has the sole and exclusive power to:</font></div>
    <div><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top">
            <td style="WIDTH: 72pt">
              <div>&#160;</div>
            </td>
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(i)</font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">select
                the participants in this Plan;</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top">
            <td style="WIDTH: 72pt">
              <div>&#160;</div>
            </td>
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(ii)</font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">establish
                the terms of the Options granted to each participant which may not
                be the
                same in each case;</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top">
            <td style="WIDTH: 72pt">
              <div>&#160;</div>
            </td>
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(iii)</font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">determine
                the total number of options to grant to an Optionee, which may not
                be the
                same in each case;</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top">
            <td style="WIDTH: 72pt">
              <div>&#160;</div>
            </td>
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(iv)</font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">fix
                the Option period for any Option granted which may not be the same
                in each
                case;</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top">
            <td style="WIDTH: 72pt">
              <div>&#160;</div>
            </td>
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(v)</font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">make
                all other determinations necessary or advisable under the
                Plan;</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top">
            <td style="WIDTH: 72pt">
              <div>&#160;</div>
            </td>
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(vi)</font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">determine
                the minimum number of shares with respect to which Options may be
                exercised in part at any time.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(c)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;The
      Committee has the sole and absolute discretion to determine whether the
      performance of an eligible Employee warrants an award under this Plan, and
      to
      determine the amount of the award.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(d)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;The
      Committee has full and exclusive power to construe and interpret this Plan,
      to
      prescribe and rescind rules and regulations relating to this Plan, and take
      all
      actions necessary or advisable for the Plan's administration. Any such
      determination made by the Committee will be final and binding on all
      persons.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">A
      member
      of the Committee will not be liable for performing any act or making any
      determination in good faith.</font></div>
    <div><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top">
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">2.</font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong><u>Shares
                Subject to Option.</u></strong> Subject to the provisions of Paragraph 11
                of the Plan, the maximum aggregate number of Shares that may be optioned
                and sold under the Plan shall be increased from 1,000,000 to 1,500,000
                upon stockholder approval.&#160;&#160;Such shares may be authorized but
                unissued, or may be treasury shares. If an Option shall expire or
                become
                unexercisable for any reason without having been exercised in full,
                the
                unpurchased Shares that were subject to the Option shall, unless
                the Plan
                has then terminated, be available for other Options under the
                Plan.</font></div>
            </td>
          </tr>

      </table>
    </div><br>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman;">15</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div><br>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top">
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>3.</strong></font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong><u>Nonqualified
                and Incentive Stock Options</u></strong>. Any Option not intended to
                qualify as an Incentive Stock Option shall be a Nonqualified Stock
                Option.&#160;&#160;Nonqualified Stock Options shall satisfy each of the
                requirements of the Plan.&#160;&#160;An Option intended to qualify as an
                Incentive Stock Option, but which does not meet all the requirements
                of an
                Incentive Stock Option shall be treated as a Nonqualified Stock
                Option.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>__________________________________________________________________</strong></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>(4)</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>OTHER
      MATTERS</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>___________________________________________________________________</strong></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">The
      Board
      of Directors is not aware of any other matters to be presented for action at
      the
      Annual Meeting.&#160;&#160;However, if any other matter is properly presented at
      the Annual Meeting, it is the intention of the persons named in the enclosed
      proxy to vote in accordance with their best judgment on such
      matters.</font></div>
    <div>&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>FUTURE
      PROPOSALS OF STOCKHOLDERS</strong></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">The
      deadline for stockholders to submit proposals to the Board of Directors to
      be
      considered for inclusion in the Proxy Statement for the 2008 Annual Meeting
      of
      Stockholders is February 15, 2008.</font></div>
    <div><br></div>
    <div align="left">
      <div align="left">
        <table cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td valign="top" width="40%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="left" valign="top" width="60%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;"><strong>BY
                  ORDER OF THE BOARD OF DIRECTORS</strong></font></div>
              </td>
            </tr>
            <tr>
              <td valign="top" width="40%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td valign="top" width="60%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
            </tr>
            <tr>
              <td valign="top" width="40%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="left" valign="top" width="60%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;"><strong><u>/S/
                  ERIC S. LANGAN</u></strong></font></div>
              </td>
            </tr>
            <tr>
              <td valign="top" width="40%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
              <td align="left" valign="top" width="60%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;"><strong>CHAIRMAN
                  OF THE BOARD AND
                  PRESIDENT</strong></font></div>
              </td>
            </tr>

        </table>
      </div>
    </div>
    <div><br></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>JUNE
      27, 2007</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>HOUSTON,
      TEXAS</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><br>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman;">16</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>EXHIBIT
        &#8220;A&#8221;</strong></font></div>
      <div><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>SECOND
        AMENDMENT TO</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>RICKS
        CABARET INTERNATIONAL, INC.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>1999
        STOCK OPTION PLAN</strong></font></div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">1.</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong><u>Purpose</u></strong>.&#160;&#160;The
                  purpose of the Ricks Cabaret International, Inc. 1999 Stock Option
                  Plan
                  ("the Plan") is to promote the financial interests of the Company,
                  its
                  subsidiaries and its shareholders by providing incentives in the
                  form of
                  stock options to key employees and directors who contribute materially
                  to
                  the success and profitability of the Company. The grants will recognize
                  and reward outstanding individual performances and contributions
                  and will
                  give such persons a proprietary interest in the Company, thus enhancing
                  their personal interest in the Company's continued success and
                  progress.
                  This Plan will also assist the Company and its subsidiaries in
                  attracting,
                  retaining and motivating key employees and directors. The options
                  granted
                  under this Plan may be either Incentive Stock Options, as that
                  term is
                  defined in Section 422 of the Internal Revenue Code of 1986, as
                  amended,
                  or Nonqualified options taxed under Section 83 of the Internal
                  Revenue
                  Code of 1986, as amended.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong><u>Rule
        16b-3 Plan</u></strong>.&#160;&#160;The Company is subject to the
        reporting&#160;&#160;requirements of the Securities Exchange Act of 1934, as
        amended (the "Exchange&#160;&#160;Act"), and therefore the Plan is intended to
        comply with all applicable&#160;&#160;conditions of Rule 16b-3 (and all
        subsequent revisions thereof) promulgated&#160;&#160;under the Exchange
        Act.&#160;&#160;To the extent any provision of the Plan or action by the
        Committee or the Board of Directors or Committee fails to so comply, it shall
        be
        deemed null and void, to the extent permitted by law and deemed advisable
        by the
        Committee.&#160;&#160;In addition, the Committee or the Board of Directors may
        amend the Plan from time to time as it deems necessary in order to meet the
        requirements of any amendments to Rule 16b-3 without the consent of the
        shareholders of the Company.</font></div>
      <div><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong><u>Effective
        Date of Plan.</u></strong><strong>&#160;</strong>The effective date of this
        Second Amendment shall be July __, 2007 (the <font style="DISPLAY: inline;" face="WP TypographicSymbols, Courier New">A</font>Effective
        Date<font style="DISPLAY: inline;" face="WP TypographicSymbols, Courier New">@</font>)
        upon shareholder approval.&#160;&#160;The Board of Directors shall, within one
        year of the Effective Date, submit the Amendment to the shareholders of the
        Company for approval.&#160;&#160;The Second Amendment shall be approved by at
        least a majority of shareholders voting in person or by proxy at a duly held
        shareholders' meeting, or if the provisions of the corporate charter, by-laws
        or
        applicable state law prescribes a greater degree of shareholder approval
        for
        this action, the approval by the holders of that percentage, at a duly held
        meeting of shareholders.&#160;&#160;No Incentive Option or Nonqualified Stock
        Option shall be granted pursuant to the Plan ten years after the Effective
        Date.&#160;&#160;In the event that the Amendment is not approved by the
        shareholders of the Company, the Amendment shall be deemed to be a non-qualified
        stock option plan.</font></div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">2.</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong><u>Definitions</u></strong>.
                  The following definitions shall apply to this
                  Plan:</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(a)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">"Affiliate"
                  means any parent corporation and any subsidiary corporation. The
                  term
                  "parent corporation" means any corporation (other than the Company)
                  in an
                  unbroken chain of corporations ending with the Company if, at the
                  time of
                  the action or transaction, each of the corporations other than
                  the Company
                  owns stock possessing 50% or more of the total combined voting
                  power of
                  all classes of stock in one of the other corporations in the chain.
                  The
                  term "subsidiary corporation" means any corporation (other than
                  the
                  Company) in an unbroken chain of corporations beginning with the
                  Company
                  if, at the time of the action or transaction, each of the corporations
                  other than the last corporation in the unbroken chain owns stock
                  possessing 50% or more of the total combined voting power of all
                  classes
                  of stock in one of the other corporations in the
                  chain.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div>&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
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          </div>
        </div>
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          <div style="WIDTH: 100%; TEXT-ALIGN: center">
          </div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div><br>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(b)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">&#8220;Agreement"
                  means, individually or collectively, any agreement entered into
                  pursuant
                  to the Plan pursuant to which Options are granted to a
                  participant.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(c)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">"Award"
                  means each of the following granted under this Plan: Incentive
                  Stock
                  Options or Non-qualified Stock
                  Options.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(d)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">"Board"
                  means the board of directors of the
                  Company.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(e)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">"Cause"
                  shall mean, for purposes of whether and when a participant has
                  incurred a
                  Termination of Employment for Cause: (i)&#160;&#160;any act or omission
                  which permits the Company to terminate the written agreement or
                  arrangement between the participant and the Company or a Subsidiary
                  or
                  Parent for Cause as defined in such agreement or arrangement; or
                  (ii) in
                  the event there is no such agreement or arrangement or the agreement
                  or
                  arrangement does not define the term "cause," then Cause shall
                  mean an act
                  or acts of dishonesty by the participant resulting or intending
                  to result
                  directly or indirectly in gain to or personal enrichment of the
                  participant at the Company's expense and/or gross negligence or
                  willful
                  misconduct on the part of the
                  participant.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(f)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">"Change
                  in Control" means, for purposes of this
                  Plan:</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 72pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">i.</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">there
                  shall be consummated (i) any consolidation or merger of the Company
                  in
                  which the Company is not the continuing or surviving corporation
                  or
                  pursuant to which shares of the Company's common stock would be
                  converted
                  into cash, securities or other property, other than a merger of
                  the
                  Company in which the holders of the Company's common stock immediately
                  prior to the merger have substantially the same proportionate ownership
                  of
                  common stock of the surviving corporation immedi&#173;ately after the
                  merger; or (ii) any sale, lease, exchange or other transfer (in
                  one
                  transaction or a series of related transactions) of all or substantially
                  all of the assets of the Company;
                  or</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 72pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">ii.</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">the
                  shareholders of the Company shall approve any plan or proposal
                  for the
                  liquidation or dissolution of the Company;
                  or</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(g)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">"Code"
                  means the Internal Revenue Code of 1986, as amended, final Treasury
                  Regulations thereunder and any subsequent Internal Revenue
                  Code.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Second
        Amendment to 1999 Stock Option Plan &#8211; Page 2</font></div><br>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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          </div>
        </div>
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        </div>
      </div><br>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(h)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">&#8220;Committee&#8221;
                  means the Compensation Committee of the Board of Directors or such
                  other
                  committee designated by the Board of Directors.&#160;&#160;The Committee
                  shall be comprised solely of at least two members who are both
                  Disinterested Persons and Outside
                  Directors.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(i)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">"Common
                  Stock" means the Common Stock, par value per share of the Company
                  whether
                  presently or hereafter issued, or such other class of shares or
                  securities
                  as to which the Plan may be applicable, pursuant to Section 11
                  herein.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(j)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">"Company"
                  means Ricks Cabaret International, Inc., a Texas Corporation and
                  includes
                  any successor or assignee company corporations into which the Company
                  may
                  be merged, changed or consolidated; any company for whose securities
                  the
                  securities of the Company shall be exchanged; and any assignee
                  of or
                  successor to substantially all of the assets of the
                  Company.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(k)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">"Continuous
                  Service" means the absence of any interruption or termination of
                  employment with or service to the Company or any Parent or Subsidiary
                  of
                  the Company that now exists or hereafter is organized or acquired
                  by or
                  acquires the Company. Continuous Service shall not be considered
                  interrupted in the case of sick leave, military leave, or any other
                  bona
                  fide leave of absence of less than ninety (90) days (unless the
                  participants right to reemployment is guaranteed by statute or
                  by
                  contract) or in the case of transfers between locations of the
                  Company or
                  between the Company, its Parent, its Subsidiaries or its
                  successors</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(l)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">&#8220;Date
                  of Grant&#8221; means the date on which the Committee grants an
                  Option.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(m)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">"Director"<font style="DISPLAY: inline; FONT-SIZE: 10pt;"><sup>&#160;</sup></font>means
                  any
                  member of the Board of Directors of the Company or any Parent or
                  subsidiary of the Company that now exists or hereafter is organized
                  or
                  acquired by or acquires the
                  Company.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(n)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">&#8220;Non
                  Employee Director&#8221; means a <font style="DISPLAY: inline;" face="WP TypographicSymbols, Courier New">A</font>Non
                  Employee Director<font style="DISPLAY: inline;" face="WP TypographicSymbols, Courier New">@</font>
                  as that term is defined in Rule 16b-3 under the Exchange
                  Act.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(o)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">"Eligible
                  Persons" shall mean, with respect to the Plan, those persons who,
                  at the
                  time that an Award is granted, are (i) officers, directors or employees
                  of
                  the Company or Affiliate or (ii) consultants or subcontractors
                  of the
                  Company or affiliate.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(p)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">"Employee"
                  means any person employed on an hourly or salaried basis by the
                  Company or
                  any Parent or Subsidiary of the Company that now exists or hereafter
                  is
                  organized or acquired by or acquires the
                  Company.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(q)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">"Exchange
                  Act"<font style="DISPLAY: inline; FONT-SIZE: 10pt;"><sup>&#160;</sup></font>means
                  the
                  Securities Exchange Act of 1934, as amended and the rules and regulations
                  promulgated thereunder.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Second
        Amendment to 1999 Stock Option Plan &#8211; Page 3</font><br></div><br>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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          </div>
        </div>
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      </div><br>
      <div>
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            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(r)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">"Fair
                  Market Value" means (i) if the Common Stock is not listed or admitted
                  to
                  trade on a national securities exchange and if bid and ask prices
                  for the
                  Common Stock are not furnished through NASDAQ or a similar organization,
                  the value established by the Committee, in its sole discretion,
                  for
                  purposes of the Plan; (ii) if the Common Stock is listed or admitted
                  to
                  trade on a national securities exchange or a national market system,
                  the
                  closing price of the Common Stock, as published in the <u>Wall Street
                  Journal</u>, so listed or admitted to trade on such date or, if there
                  is
                  no trading of the Common Stock on such date, then the closing price
                  of the
                  Common Stock on the next preceding day on which there was trading
                  in such
                  shares; or (iii) if the Common Stock is not listed or admitted
                  to trade on
                  a national securities exchange or a national market system, the
                  mean
                  between the bid and ask price for the Common Stock on such date,
                  as
                  furnished by the National Association of Securities Dealers, Inc.
                  through
                  NASDAQ or a similar organization if NASDAQ is no longer reporting
                  such
                  information. If trading in the stock or a price quotation does not occur
                  on the Date of Grant, the next preceding date on which the stock
                  was
                  traded or a price was quoted will determine the fair market
                  value.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(s)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">"Incentive
                  Stock Option" means a stock option, granted pursuant to either
                  this Plan
                  or any other plan of the Company, that satisfies the requirements
                  of
                  Section 422 of the Code and that entitles the Optionee to purchase
                  stock
                  of the Company or in a corporation that at the time of grant of
                  the option
                  was a Parent or subsidiary of the Company or a predecessor company
                  of any
                  such company.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(t)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">"Nonqualified
                  Stock Option" means an Option to purchase Common Stock in the Company
                  granted under the Plan other than an Incentive Stock Option within
                  the
                  meaning of Section 422 of the Code.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(u)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">"Option"
                  means a stock option granted pursuant to the
                  Plan.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(v)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">"Option
                  Period" means the period beginning on the Date of Grant and ending
                  on the
                  day prior to the tenth anniversary of the Date of Grant or such
                  shorter
                  termination date as set by the
                  Committee.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(w)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">"Optionee"
                  means an Employee (or Director or subcontractor) who receives an
                  Option.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(x)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">"Parent"
                  means any corporation which owns 50% or more of the voting securities
                  of
                  the Company.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(y)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">&#8220;Plan"
                  means this Stock Option Plan as may be amended from time to
                  time.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(z)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">&#8220;Share"
                  means the Common Stock, as adjusted in accordance with Paragraph
                  11 of the
                  Plan.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Second
        Amendment to 1999 Stock Option Plan &#8211; Page 4</font><br></div><br>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
          </div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div><br>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(aa)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">"Ten
                  Percent Shareholder" means an individual who, at the time the Option
                  is
                  granted, owns Stock possessing more than 10% of the total combined
                  voting
                  power of all classes of stock of the Company or of any
                  Affiliate.&#160;&#160;An individual shall be considered as owning the
                  Stock owned, directly or indirectly, by or for his brothers and
                  sisters
                  (whether by the whole or half blood), spouse, ancestors, and lineal
                  descendants; and Stock owned, directly or indirectly, by or for
                  a
                  corporation, partnership, estate, or trust, shall be considered
                  as being
                  owned proportionately by or for its shareholders, partners, or
                  beneficiaries.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(bb)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">&#8220;Termination&#8221;
                  or &#8220;Termination of Employment&#8221; means the occurrence of any act or event
                  whether pursuant to an employment agreement or otherwise that actually
                  or
                  effectively causes or results in the person's ceasing, for whatever
                  reason, to be an officer or employee of the Company or of any Subsidiary
                  or Parent including, without limitation, death, disability, dismissal,
                  severance at the election of the participant, retirement, or severance
                  as
                  a result of the discontinuance, liquidation, sale or transfer by
                  the
                  Company or its Subsidiaries or Parent of all businesses owned or
                  operated
                  by the Company or its Subsidiaries. A Termination of Employment
                  shall
                  occur to an employee who is employed by a Subsidiary if the Subsidiary
                  shall cease to be a Subsidiary and the participant shall not immediately
                  thereafter become an employee of the Company or a
                  Subsidiary.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(cc)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">&#8220;Subsidiary&#8221;
                  means any corporation 50% or more of the voting securities of which
                  are
                  owned directly or indirectly by the Company at any time during
                  the
                  existence of this Plan.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">In
        addition, certain other terms used in this Plan shall have the definitions
        given
        to them in the first place in which they are used.</font></div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">3.</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong><u>Administration</u></strong><strong>.</strong></font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(a)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">This
                  Plan will be administered by the Committee. A majority of the full
                  Committee constitutes a quorum for purposes of administering the
                  Plan, and
                  all determinations of the Committee shall be made by a majority
                  of the
                  members present at a meeting at which a quorum is present or by
                  the
                  unanimous written consent of the
                  Committee.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(b)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">If
                  no Committee has been appointed, members of the Board may vote
                  on any
                  matters affecting the administration of the Plan or the grant of
                  any
                  Option pursuant to the Plan, except that no such member shall act
                  on the
                  granting of an Option to himself, but such member may be counted
                  in
                  determining the existence of a quorum at any meeting of the Board
                  during
                  which action is taken with respect to the granting of Options to
                  him.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(c)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Subject
                  to the terms of this Plan, the Committee has the sole and exclusive
                  power
                  to:</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 72pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">i.</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">select
                  the participants in this Plan;</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Second
        Amendment to 1999 Stock Option Plan &#8211; Page 5</font><br></div><br>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
          </div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div><br>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 72pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">ii.</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">establish
                  the terms of the Options granted to each participant which may
                  not be the
                  same in each case;</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 72pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">iii.</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">determine
                  the total number of options to grant to an Optionee, which may
                  not be the
                  same in each case;</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 72pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">iv.</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">fix
                  the Option period for any Option granted which may not be the same
                  in each
                  case; and</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 72pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">v.</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">make
                  all other determinations necessary or advisable under the
                  Plan.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 72pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">vi.</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">determine
                  the minimum number of shares with respect to which Options may
                  be
                  exercised in part at any time.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 72pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">vii.</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">The
                  Committee has the sole and absolute discretion to determine whether
                  the
                  performance of an eligible Employee warrants an award under this
                  Plan, and
                  to determine the amount of the
                  award.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 72pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">viii.</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">The
                  Committee has full and exclusive power to construe and interpret
                  this
                  Plan, to prescribe and rescind rules and regulations relating to
                  this
                  Plan, and take all actions necessary or advisable for the Plan's
                  administration. Any such determination made by the Committee will
                  be final
                  and binding on all persons.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(d)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">A
                  member of the Committee will not be liable for performing any act
                  or
                  making any determination in good
                  faith.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">4.</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong><u>Shares
                  Subject to Option.</u></strong> Subject to the provisions of Paragraph 11
                  of the Plan, the maximum aggregate number of Shares that may be
                  optioned
                  and sold under the Plan shall be 1,500,000.&#160;&#160;Such shares may be
                  authorized but unissued, or may be treasury shares. If an Option
                  shall
                  expire or become unexercisable for any reason without having been
                  exercised in full, the unpurchased Shares that were subject to
                  the Option
                  shall, unless the Plan has then terminated, be available for other
                  Options
                  under the Plan.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(a)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><u>Eligible
                  Persons</u>. Every Eligible Person, as the Committee in its sole
                  discretion designates, is eligible to participate in this
                  Plan.&#160;&#160;Directors who are not employees of the Company or any
                  subsidiary or Parent shall only be eligible to receive Incentive
                  Stock
                  Options if and as permitted be applicable law and
                  regulations.&#160;&#160;The Committee's award of an Option to a
                  participant in any year does not require the Committee to award
                  an Option
                  to that participant in any other year. Furthermore, the Committee
                  may
                  award different Options to different participants. The Committee
                  may
                  consider such factors as it deems pertinent in selecting participants
                  and
                  in determining the amount of their Option, including, without
                  limitation;</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Second
        Amendment to 1999 Stock Option Plan &#8211; Page 6</font><br></div><br>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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      </div><br>
      <div>
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            <tr valign="top">
              <td style="WIDTH: 72pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(i)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">the
                  financial condition of the Company or its
                  Subsidiaries;</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 72pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(ii)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">expected
                  profits for the current or future
                  years;</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 72pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(iii)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">the
                  contributions of a prospective participant to the profitability
                  and
                  success of the Company or its Subsidiaries;
                  and</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 72pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(iv)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">the
                  adequacy of the prospective participant's other
                  compensation.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Participants
        may include persons to whom stock, stock options, or other benefits previously
        were granted under this or another plan of the Company or any Subsidiary,
        whether or not the previously granted benefits have been fully
        exercised.</font></div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(b)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><u>No
                  Right of Employment</u>. An Optionee's right, if any, to continue to serve
                  the Company and its Subsidiaries as an Employee will not be enlarged
                  or
                  otherwise affected by his designation as a participant under this
                  Plan,
                  and such designation will not in any way restrict the right of
                  the Company
                  or any Subsidiary, as the case may be, to terminate at any time
                  the
                  employment of any Employee.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">5.</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong><u>Requirements
                  of Option Grants</u></strong>.&#160;&#160;Each Option granted under this
                  Plan shall satisfy the following
                  requirements.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(a)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><u>Written
                  Option</u>. An Option shall be evidenced by a written Agreement specifying
                  (i) the number of Shares that may be purchased by its exercise,
                  (ii) the
                  intent of the Committee as to whether the Option is be an Incentive
                  Stock
                  Option or a Non-qualified Stock Option, (iii) the Option period
                  for any
                  Option granted and (iv) such terms and conditions consistent with
                  the Plan
                  as the Committee shall determine, all of which may differ between
                  various
                  Optionees and various Agreements.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(b)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><u>Duration
                  of</u><u>Option</u>. Each Option may be exercised only during the Option
                  Period designated for the Option by the Committee. At the end of
                  the
                  Option Period the Option shall
                  expire.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(c)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><u>Option
                  Exercisability</u>. The Committee, on the grant of an Option, each Option
                  shall be exercisable only in accordance with its
                  terms.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(d)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><u>Acceleration
                  of Vesting</u>. Subject to the provisions of Section 5(b), the Committee
                  may, it its sole discretion, provide for the exercise of Options
                  either as
                  to an increased percentage of shares per year or as to all remaining
                  shares. Such acceleration of vesting may be declared by the Committee
                  at
                  any time before the end of the Option Period, including, if applicable,
                  after termination of the Optionee's Continuous Service by reason
                  of death,
                  disability, retirement or termination of
                  employment.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(e)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><u>Option
                  Price</u>. Except as provided in Section 6(a) the Option price of each
                  Share subject to the Option shall equal the Fair Market Value of
                  the Share
                  on the Option's Date of Grant.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Second
        Amendment to 1999 Stock Option Plan &#8211; Page 7</font><br></div><br>
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          </div>
        </div>
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      </div><br>
      <div>
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            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(f)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><u>Termination
                  of Employment</u>&#160;&#160;&#160;Any Option which has not vested at the
                  time the Optionee ceases Continuous Service for any reason other
                  than
                  death, disability or retirement shall terminate upon the last day
                  that the
                  Optionee is employed by the Company. Incentive Stock&#160;&#160;Options
                  must be exercised within three months of cessation of Continuous
                  Service
                  for reasons other death, disability or retirement in order to qualify
                  for
                  Incentive Stock Option tax treatment.&#160;&#160;Nonqualified Options may
                  be exercised any time during the Option Period regardless of employment
                  status.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(g)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><u>Death</u>.
                  In the case of death of the Optionee, the beneficiaries designated
                  by the
                  Optionee shall have one year from the Optionee's demise or to the
                  end of
                  the Option Period, whichever is earlier, to exercise the Option,
                  provided,
                  however, the Option may be exercised only for the number of Shares
                  for
                  which it could have been exercised at the time the Optionee died,
                  subject
                  to any adjustment under Sections 5(d) and
                  11.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(h)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><u>Retirement</u>.
                  Any Option which has not vested at the time the Optionee ceases
                  Continuous
                  Service due to retirement shall terminate upon the last day that
                  the
                  Optionee is employed by the Company. Upon retirement Incentive
                  Stock
                  Options must be exercised within three months of cessation of Continuous
                  Service in order to qualify for Incentive Stock Option tax
                  treatment.&#160;&#160;Nonqualified Options may be exercised any time
                  during the Option Period regardless of employment
                  status.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(i)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><u>Disability</u>.
                  In the event of termination of Continuous Service due to total
                  and
                  permanent disability (within the meaning of Section 422 of the
                  Code), the
                  Option shall lapse at the earlier of the end of the Option Period
                  or
                  twelve months after the date of such termination, provided, however,
                  the
                  Option can be exercised at the time the Optionee became disabled,
                  subject
                  to any adjustment under Sections 5(d) and
                  11.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">6.</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong><u>Incentive
                  Stock Options</u></strong><strong>.</strong>&#160;&#160;Any Options
                  intended to qualify as an Incentive Stock Option shall satisfy
                  the
                  following requirements in addition to the other requirements of
                  the
                  Plan:</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(a)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><u>Ten
                  Percent Shareholders</u>. An Option intended to qualify as an Incentive
                  Stock Option granted to an individual who, on the Date of Grant,
                  owns
                  stock possessing more than ten (10) percent of the total combined
                  voting
                  power of all classes of stock of either the Company or any Parent
                  or
                  Subsidiary, shall be granted at a price of 110 percent of Fair
                  Market
                  Value on the Date of Grant and shall be exercised only during the
                  five-year period immediately following the Date of Grant. In calculating
                  stock ownership of any person, the attribution rules of Section
                  425(d) of
                  the Code will apply. Furthermore, in calculating stock ownership,
                  any
                  stock that the individual may purchase under outstanding options
                  will not
                  be considered.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(b)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><u>Limitation
                  on Incentive Stock Options.</u>&#160;&#160;The aggregate Fair Market
                  Value, determined on the date of Grant, of stock in the Company
                  exercisable for the first time by any Optionee during any calendar
                  year,
                  under the Plan and all other plans of the Company or its Parent
                  or
                  Subsidiaries (within the meaning of Subsection (d) of Section 422
                  of the
                  Code) in any calendar year shall not exceed
                  $100,000.00.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Second
        Amendment to 1999 Stock Option Plan &#8211; Page 8</font><br></div><br>
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          </div>
        </div>
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      </div><br>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div>&#160;</div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(c)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><u>Exercise
                  of Incentive Stock Options</u>. No disposition of the shares underlying an
                  Incentive Stock Option may be made within two years from the Date
                  of Grant
                  nor within one year after the exercise of such incentive Stock
                  Option.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(d)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<u>Approval
        of Amendment.</u>&#160;&#160;No Option shall qualify as an Incentive Stock
        Option unless this Amendment is approved by the shareholders within one year
        of
        the Plan<font style="DISPLAY: inline;" face="WP TypographicSymbols, Courier New">=</font>s
        adoption by the Board.</font></div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">7.</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong><u>Nonqualified
                  and Incentive Stock Options</u></strong>. Any Option not intended to
                  qualify as an Incentive Stock Option shall be a Nonqualified Stock
                  Option.
                  Nonqualified Stock Options shall satisfy each of the requirements
                  of
                  Section 5 of the Plan.&#160;&#160;An Option intended to qualify as an
                  Incentive Stock Option, but which does not meet all the requirements
                  of an
                  Incentive Stock Option shall be treated as a Nonqualified Stock
                  Option.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">8.</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong><u>Method
                  of Exercise</u></strong><strong>.</strong>&#160;&#160;An Option granted
                  under this Plan shall be deemed exercised when the person entitled
                  to
                  exercise the Option (i) delivers written notice to the President
                  of the
                  Company of the decision to exercise, (ii) concurrently tenders
                  to the
                  Company full payment for the Shares to be purchased pursuant to
                  the
                  exercise, and (iii) complies with such other reasonable requirements
                  as
                  the Committee establishes pursuant to Section 3 of the Plan. During
                  the
                  lifetime of the Employee to whom an Option is granted, such Option
                  may be
                  exercised only by him. Payment for Shares with respect to which
                  an Option
                  is exercised may be in cash, or by certified check, or wholly or
                  partially
                  in the form of Common Stock of the Company having a fair market
                  value
                  equal to the Option Price. No person will have the rights of a
                  shareholder
                  with respect to Shares subject to an Option granted under this
                  Plan until
                  a certificate or certificates for the Shares have been delivered
                  to
                  him.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">An
        Option
        granted under this Plan may be exercised in increments of not less than 10%
        of
        the full number of Shares as to which it can be exercised. A partial exercise
        of
        an Option will not affect the holder's right to exercise the Option from
        time to
        time in accordance with this Plan as to the remaining Shares subject to the
        Option.</font></div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">9.</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong><u>Taxes.
                  Compliance with Law: Approval
                  of</u></strong><strong>&#160;</strong><strong><u>Regulatory
                  Bodies</u></strong><strong>.</strong> The Company, if necessary or
                  desirable, may pay or withhold the amount of any tax attributable
                  to any
                  Shares deliverable or amounts payable under this Plan, and the
                  Company may
                  defer making delivery or payment until it is indemnified to its
                  satisfaction for the tax. Options are exercisable, and Shares can
                  be
                  delivered and payments made under this Plan, only in compliance
                  with all
                  applicable federal and state laws and regulations, including, without
                  limitation, state and federal securities laws, and the rules of
                  all stock
                  exchanges on which the Company's stock is listed at any time. An
                  Option is
                  exercisable only if either (i) a registration statement pertaining
                  to the
                  Shares to be issued upon exercise of the Option has been flied
                  with and
                  declared effective by the Securities and Exchange Commission and
                  remains
                  effective on the date of exercise, or (ii) an exemption from the
                  registration requirements of applicable securities laws is available.
                  This
                  plan does not require the Company, however, to file such registration
                  statement or to assure the availability of such exemptions. Any
                  certificate issued to evidence Shares issued under the Plan may
                  bear such
                  legends and statements, and shall be subject to such transfer
                  restrictions, as the Committee deems advisable to assure compliance
                  with
                  federal and state laws and regulations and with the requirements
                  of this
                  Section 9 of the Plan. No Option may be exercised, and no Shares
                  may be
                  issued under this Plan, until the Company has obtained the consent
                  or
                  approval of every regulatory body, federal or state, having jurisdiction
                  over such matter as the Committee deems
                  advisable.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Second
        Amendment to 1999 Stock Option Plan &#8211; Page 9</font><br></div><br>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
          </div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Each
        Person who acquires the right to exercise an Option by bequest or inheritance
        may be required by the Committee to furnish reasonable evidence of ownership
        of
        the Option as a condition to his exercise of the Option. In addition, the
        Committee may require such consents and release of taxing authorities as
        the
        Committee deems advisable.</font></div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">10.</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong><u>Assignability</u></strong><strong>.</strong>&#160;&#160;An
                  Option granted under this Plan is not transferable except by will
                  or the
                  laws of descent and distribution.&#160;&#160;The Option may be exercised
                  only by the Optionee during the life of the Optionee.&#160;&#160;More
                  particularly, but without limitation of the foregoing, the Option
                  may be
                  not be assigned or transferred except as provided above and shall
                  not be
                  assignable by operation of law and shall not be subject to execution,
                  attachment or similar process.&#160;&#160;Any attempted assignment,
                  transfer or distribution contrary to the provisions hereof shall
                  be null
                  and void and without effect.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">11.</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong><u>Adjustment
                  Upon Change of Shares</u></strong><strong>.</strong> If a reorganization,
                  merger, consolidation, reclassification, recapitalization, combination
                  or
                  exchange of shares, stock split, stock dividend, rights offering,
                  or other
                  expansion or contraction of the Common Stock of the Company occurs,
                  the
                  number and class of Shares for which Options are authorized to
                  be granted
                  under this Plan, the number and class of Shares then subject to
                  Options
                  previously granted under this Plan, and the price per Share payable
                  upon
                  exercise of each Option outstanding under this Plan shall be equitably
                  adjusted by the Committee to reflect such changes. To the extent
                  deemed
                  equitable and appropriate by the Committee or the Board, subject
                  to any
                  required action by shareholders, in any merger, consolidation,
                  reorganization, liquidation or dissolution, any Option granted
                  under the
                  Plan shall pertain to the securities and other property to which
                  a holder
                  of the number of Shares of stock covered by the Option would have
                  been
                  entitled to receive in connection with such
                  event.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">12.</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong><u>Accelerations
                  of Options Upon Change in
                  Control</u></strong><strong>.</strong>&#160;&#160;In the event that a
                  Change of Control has occurred with respect to the Company, any
                  and all
                  Options will become fully vested and immediately exercisable with
                  such
                  acceleration to occur without the requirement of any further act
                  by either
                  the Company or the participant, subject to Section 9
                  hereof.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">13.</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong><u>Liability
                  of the Company</u></strong><strong>.</strong> The Company, its Parent and
                  any Subsidiary that is in existence or hereafter comes into existence
                  shall not be liable to any person for any tax consequences expected
                  but
                  not realized by an Optionee or other person due to the exercise
                  of an
                  Option.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Second
        Amendment to 1999 Stock Option Plan &#8211; Page 10</font><br></div><br>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
          </div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div><br>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">14.</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong><u>Expenses
                  of Plan</u></strong>. The Company shall bear the expenses of administering
                  the Plan.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">15.</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong><u>Duration
                  of Plan</u></strong><strong>.</strong> Options may be granted under this
                  Plan only within 10 years from the original effective date of the
                  Plan.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">16.</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong><u>Amendment,
                  Suspension or Termination of
                  Plan</u></strong><strong>.</strong>&#160;&#160;The Board of Directors of
                  the Company may amend, terminate or suspend this Plan at any time,
                  in its
                  sole and absolute discretion; provided, however, that to the extent
                  required to qualify this Plan under Rule 16b-3 promulgated under
                  Section
                  16 of the Exchange Act, no amendment that would (a) materially
                  increase
                  the number of shares of Stock that may be issued under this Plan, (b)
                  materially modify the requirements as to eligibility for participation
                  in
                  this Plan, or (c) otherwise materially increase the benefits accruing
                  to
                  participants under this Plan, shall be made without the approval
                  of the
                  Company's shareholders; provided further, however, that to the
                  extent
                  required to maintain the status of any Incentive Option under the
                  Code, no
                  amendment that would (a) change the aggregate number of shares
                  of Stock
                  which may be issued under Incentive Options, (b) change the class
                  of
                  employees eligible to receive Incentive Options, or (c) decrease
                  the
                  Option price for Incentive Options below the Fair Market Value
                  of the
                  Stock at the time it is granted, shall be made without the approval
                  of the
                  Company's shareholders. Subject to the preceding sentence, the
                  Board of
                  Directors shall have the power to make any changes in the Plan
                  and in the
                  regulations and administrative provisions under it or in any outstanding
                  Incentive Option as in the opinion of counsel for the Company may
                  be
                  necessary or appropriate from time to time to enable any Incentive
                  Option
                  granted under this Plan to continue to qualify as an incentive
                  stock
                  option or such other stock option as may be defined under the Code
                  so as
                  to receive preferential federal income tax
                  treatment.&#160;&#160;Notwithstanding the foregoing, no amendment,
                  suspension or termination of the Plan shall act to impair or extinguish
                  rights in Options already granted at the date of such amendment,
                  suspension or termination.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">17.</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong><u>Forfeiture</u></strong>.&#160;&#160;Notwithstanding
                  any other provisions of this Plan, if the Committee finds by a
                  majority
                  vote after full consideration of the facts that an Eligible Person,
                  before
                  or after termination of his employment with the Company or an Affiliate
                  for any reason (a) committed or engaged in fraud, embezzlement,
                  theft,
                  commission of a felony, or proven dishonesty in the course of his
                  employment by the Company or an Affiliate, which conduct damaged
                  the
                  Company or Affiliate, or disclosed trade secrets of the Company
                  or an
                  Affiliate, or (b) participated, engaged in or had a material, financial
                  or
                  other interest, whether as an employee, officer, director, consultant,
                  contractor, shareholder, owner, or otherwise, in any commercial
                  endeavor
                  anywhere which is competitive with the business of the Company
                  or an
                  Affiliate without the written consent of the Company or Affiliate,
                  the
                  Eligible Person shall forfeit all outstanding Options, including
                  all
                  exercised Options and other situations pursuant to which the Company
                  has
                  not yet delivered a stock certificate.&#160;&#160;Clause (b) shall not be
                  deemed to have been violated solely by reason of the Eligible Person<font style="DISPLAY: inline;" face="WP TypographicSymbols, Courier New">=</font>s
                  ownership of stock or securities of any publicly owned corporation,
                  if
                  that ownership does not result in effective control of the
                  corporation.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Second
        Amendment to 1999 Stock Option Plan &#8211; Page 11</font><br></div><br>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
          </div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">The
        decision of the Committee as to the cause of an Employee's discharge, the
        damage
        done to the Company or an Affiliate, and the extent of an Eligible Person<font style="DISPLAY: inline;" face="WP TypographicSymbols, Courier New">=</font>s
        competitive activity shall be final.&#160;&#160;No decision of the Committee,
        however, shall affect the finality of the discharge of the Employee by the
        Company or an Affiliate in any manner.</font></div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">18.</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong><u>Indemnification
                  of the Committee and the Board of Directors</u></strong>. With respect to
                  administration of this Plan, the Company shall indemnify each present
                  and
                  future member of the Committee and the Board of Directors against,
                  and
                  each member of the Committee and the Board of Directors shall be
                  entitled
                  without further act on his part to indemnity from the Company for,
                  all
                  expenses (including attorney's fees, the amount of judgments and
                  the
                  amount of approved settlements made with a view to the curtailment
                  of
                  costs of litigation, other than amounts paid to the Company itself)
                  reasonably incurred by him in connection with or arising out of
                  any
                  action, suit, or proceeding in which he may be involved by reason
                  of his
                  being or having been a member of the Committee and/or the Board
                  of
                  Directors, whether or not he continues to be a member of the Committee
                  and/or the Board of Directors at the time of incurring the expenses,
                  including, without limitation, matters as to which he shall be
                  finally
                  adjudged in any action, suit or proceeding to have been found to
                  have been
                  negligent in the performance of his duty as a member of the Committee
                  or
                  the Board of Directors.&#160;&#160;However, this indemnity shall not
                  include any expenses incurred by any member of the Committee and/or
                  the
                  Board of Directors in respect of matters as to which he shall be
                  finally
                  adjudged in any action, suit or proceeding to have been guilty
                  of gross
                  negligence or willful misconduct in the performance of his duty
                  as a
                  member of the Committee and the Board of Directors.&#160;&#160;In
                  addition, no right of indemnification under this Plan shall be
                  available
                  to or enforceable by any member of the Committee and the Board
                  of
                  Directors unless, within 60 days after institution of any action,
                  suit or
                  proceeding, he shall have offered the Company the opportunity to
                  handle
                  and defend same at its own expense.&#160;&#160;The failure to notify the
                  Company within 60 days shall only affect a Director or committee
                  member<font style="DISPLAY: inline;" face="WP TypographicSymbols, Courier New">=</font>s
                  right to indemnification if said failure to notify results in an
                  impairment of the&#160;&#160;Company<font style="DISPLAY: inline;" face="WP TypographicSymbols, Courier New">=</font>s
                  rights or is detrimental to the Company.&#160;&#160;This right of
                  indemnification shall inure to the benefit of the heirs, executors
                  or
                  administrators of each member of the Committee and the Board of
                  Directors
                  and shall be in addition to all other rights to which a member
                  of the
                  Committee and the Board of Directors may be entitled as a matter
                  of law,
                  contract, or otherwise.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">19.</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong><u>Gender</u></strong>.&#160;&#160;If
                  the context requires, words of one gender when used in this Plan
                  shall
                  include the others and words used in the singular or plural shall
                  include
                  the other.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top">
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">20.</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong><u>Headings</u></strong>.&#160;&#160;Headings
                  of Articles and Sections are included for convenience of reference
                  only
                  and do not constitute part of the Plan and shall not be used in
                  construing
                  the terms of the Plan.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
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                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">21.</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong><u>Other
                  Compensation Plans</u></strong>.&#160;&#160;The adoption of this Plan or
                  any Amendments shall not affect any other stock option, incentive
                  or other
                  compensation or benefit plans in effect for the Company or any
                  Affiliate,
                  nor shall the Plan preclude the Company from establishing any other
                  forms
                  of incentive or other compensation for employees of the Company
                  or any
                  Affiliate.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div>&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Second
        Amendment to 1999 Stock Option Plan &#8211; Page 12</font></div><br>
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                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">22.</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong><u>Other
                  Options or Awards</u></strong>.&#160;&#160;The grant of an Option or
                  Awards shall not confer upon the Eligible Person the right to receive
                  any
                  future or other Options or Awards under this Plan, whether or not
                  Options
                  or Awards may be granted to similarly situated Eligible Persons,
                  or the
                  right to receive future Options or Awards upon the same terms or
                  conditions as previously granted.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div>
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                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">23</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong><u>Governing
                  Law.</u></strong> The provisions of this Plan shall be construed,
                  administered, and governed under the laws of the State of
                  Texas.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div><br></div>
      <div><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Second
        Amendment to 1999 Stock Option Plan &#8211; Page 13</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>TO
        OUR SHAREHOLDERS:</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">
        <div><br></div>
        <div><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Fiscal
          2006 was a breakout year for Rick&#8217;s Cabaret International, Inc. I am happy to
          report that our momentum has continued into 2007.</font></div>
        <div><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Here
          are
          some of the highlights of our performance for the fiscal year ending September
          30, 2006:</font></div>
        <div><br></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

              <tr valign="top">
                <td style="WIDTH: 18pt">
                  <div>&#160;</div>
                </td>
                <td style="WIDTH: 18pt">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><font style="DISPLAY: inline; FONT-SIZE: 10pt;" face="Wingdings">n</font></font></div>
                </td>
                <td>
                  <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">We
                    had record revenues of $24.5 million in fiscal 2006, a 65 percent
                    increase
                    over the previous year&#8217;s total of $14.8
                    million.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

              <tr valign="top">
                <td style="WIDTH: 18pt">
                  <div>&#160;</div>
                </td>
                <td style="WIDTH: 18pt">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><font style="DISPLAY: inline; FONT-SIZE: 10pt;" face="Wingdings">n</font></font></div>
                </td>
                <td>
                  <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">We
                    had net income from operations of $1.8 million compared with
                    a loss of $
                    .2 million the prior year.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

              <tr valign="top">
                <td style="WIDTH: 18pt">
                  <div>&#160;</div>
                </td>
                <td style="WIDTH: 18pt">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><font style="DISPLAY: inline; FONT-SIZE: 10pt;" face="Wingdings">n</font></font></div>
                </td>
                <td>
                  <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">We
                    earned 38 cents per basic share, compared with a loss of five
                    cents per
                    basic share in fiscal 2005.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

              <tr valign="top">
                <td style="WIDTH: 18pt">
                  <div>&#160;</div>
                </td>
                <td style="WIDTH: 18pt">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><font style="DISPLAY: inline; FONT-SIZE: 10pt;" face="Wingdings">n</font></font></div>
                </td>
                <td>
                  <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Our
                    flagship cabaret in New York City continued its steady
                    growth.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

              <tr valign="top">
                <td style="WIDTH: 18pt">
                  <div>&#160;</div>
                </td>
                <td style="WIDTH: 18pt">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><font style="DISPLAY: inline; FONT-SIZE: 10pt;" face="Wingdings">n</font></font></div>
                </td>
                <td>
                  <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">We
                    made four acquisitions that are expected to add over $5 million
                    in revenue
                    on an annualized basis.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

              <tr valign="top">
                <td style="WIDTH: 18pt">
                  <div>&#160;</div>
                </td>
                <td style="WIDTH: 18pt">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><font style="DISPLAY: inline; FONT-SIZE: 10pt;" face="Wingdings">n</font></font></div>
                </td>
                <td>
                  <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Our
                    newest cabaret concept, Club Onyx, is creating strong brand name
                    awareness
                    in the African-American communities of Houston and
                    Charlotte.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

              <tr valign="top">
                <td style="WIDTH: 18pt">
                  <div>&#160;</div>
                </td>
                <td style="WIDTH: 18pt">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><font style="DISPLAY: inline; FONT-SIZE: 10pt;" face="Wingdings">n</font></font></div>
                </td>
                <td>
                  <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">We
                    streamlined our club management system by instituting a network
                    of highly
                    experienced regional managers, each of whom is responsible for
                    operations
                    and growth strategies at several
                    clubs.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">We
          continue to look at additional acquisitions that fit our business model
          and will
          be quickly accretive. In April 2007 we completed the purchase of New Orleans
          Nights, a popular Ft. Worth nightspot that fits this model. Our goal is
          to add
          $15 million in annualized revenue during the course of calendar 2007. We
          also
          signed our first international licensing agreement and Rick&#8217;s Cabaret-Buenos
          Aires is expected to open later in 2007. We will receive 10% of gross revenues
          after value added tax.</font></div>
        <div><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Of
          equal
          importance to our growth through acquisitions is our continuing ability
          to
          improve on our existing club performance. During the year under review,
          income
          from continuing operations for our nightclubs for the same-location-same-period
          increased by 51.26 percent year over year, due to revenue growth as well
          as more
          effective cash management and liquor inventory controls. Same club revenues
          increased by 25.12 percent over the previous year. This figure includes
          the New
          York City club, which we opened in September 2005.</font></div>
        <div><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">The
          consolidation in the gentlemen&#8217;s club industry that we predicted several years
          ago is now underway. Single-club owners are looking seriously at selling
          their
          locations and multi-club owners are now merging and forming partnerships.
          As our
          operating performance has improved, and as the investment community has
          become
          comfortable with our industry, we have begun to attract more institutional
          investment. We now find it easier to use our equity as an acquisition tool.
          Sellers are more comfortable viewing our stock as a method of monetizing
          their
          assets with a potential upside. By example, we acquired our New York City
          location in early 2005 using stock conversion prices ranging from $4 to
          $7.50
          per share; the Austin transaction that we closed in November 2006 included
          stock
          valued at $8; a private placement of our stock in April 2007 was at $9.40
          per
          share.</font></div>
        <div><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Our
          mid-term goal continues to be to expand into 30 markets as we make acquisitions
          by using a combination of cash, stock and debt.&#160;&#160;As noted, we have
          begun to extend our presence overseas through a carefully managed
          brand-licensing program.</font></div><br>
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          </div>
        </div><br>
        <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">I
          believe
          that we have the top brands in our industry right now and we will continue
          to
          build upon them in the years ahead. When our customers come to Rick&#8217;s Cabaret,
          Club Onyx or XTC Cabaret they know they will enjoy a high quality entertainment
          experience at any of our locations.</font></div>
        <div><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">As
          always, we invite our shareholders to visit our clubs to conduct personal
          due
          diligence.&#160;&#160;We are sure you will enjoy the experience.&#160;&#160;And,
          please, don&#8217;t hesitate to contact me through <u>ir@ricks.com</u> with any
          questions or suggestions.</font></div>
        <div><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Sincerely,</font></div>
        <div><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">/s/
          Eric
          Langan</font></div>
        <div><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Eric
          Langan</font></div>
        <div><br></div>
        <div><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>About
          Rick&#8217;s Cabaret</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Rick&#8217;s
          Cabaret International, Inc. (NASDAQ: RICK) operates upscale adult nightclubs
          serving primarily businessmen and professionals that offer live adult
          entertainment, restaurant and bar operations. The company owns and operates
          or
          licenses adult nightclubs in New York City, New Orleans, Charlotte, Houston,
          Minneapolis, Ft. Worth, Austin and San Antonio under the names "Rick's
          Cabaret,"
          "XTC" and &#8220;Club Onyx.&#8221;&#160;No sexual contact is permitted at any of these
          locations. Rick&#8217;s Cabaret also owns the adult Internet membership Web site,
<u>www.couplestouch.com</u>, and a network of online adult auction sites under
          the flagship URL <u>www.naughtybids.com</u>. Rick&#8217;s Cabaret common stock is
          traded on NASDAQ under the symbol RICK.&#160;&#160;For further information
          contact <u>ir@ricks.com</u>.</font></div>
        <div><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>Forward-looking
          Statements:</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">This
          document contains forward-looking statements that involve a number of risks
          and
          uncertainties that could cause the company&#8217;s actual results to differ materially
          from those indicated in this document, including&#160;the risks and
          uncertainties associated with operating and managing&#160;an adult business, the
          business climates in New York City and elsewhere, the success or lack thereof
          in
          launching and building the company&#8217;s businesses in New York City and elsewhere,
          risks and uncertainties related to the operational and financial results
          of our
          Web sites, conditions relevant to real estate transactions, and numerous
          other
          factors such as laws governing the operation of adult entertainment businesses,
          competition and dependence on key personnel. Rick's has no obligation to
          update
          or revise the forward-looking statements to reflect the occurrence of future
          events or circumstances. For further information go to
<u>www.ricks.com</u>.</font></div>
        <div><br>
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        </div>
        <div>&#160;</div>
        <div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>PROXY</strong></font></div>
          <div><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>RICK'S
            CABARET INTERNATIONAL, INC.</strong></font></div>
          <div><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>THIS
            PROXY IS SOLICITED ON BEHALF OF THE</strong></font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>BOARD
            OF DIRECTORS FOR THE</strong></font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>ANNUAL
            MEETING OF STOCKHOLDERS</strong></font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>&#160;TO
            BE HELD ON JULY 31, 2007</strong></font></div>
          <div><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">The
            undersigned hereby appoints Eric S. Langan and Travis Reese, and each
            of them as
            the true and lawful attorneys, agents and proxies of the undersigned,
            with full
            power of substitution, to represent and to vote all shares of Common
            Stock of
            Rick's Cabaret International, Inc. held of record by the undersigned
            on June 8,
            2007, at the Annual Meeting of Stockholders to be held on July 31, 2007,
            at
            10:00 AM (CST) at 410 N. Sam Houston Parkway (Beltway 8 at Imperial Valley),
            Houston, Texas&#160;&#160;77060, and at any adjournments thereof.&#160;&#160;Any
            and all proxies heretofore given are hereby revoked.</font></div>
          <div><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>WHEN
            PROPERLY EXECUTED, THIS PROXY WILL BE VOTED AS DESIGNATED BY THE
            UNDERSIGNED.&#160;&#160;IF NO CHOICE IS SPECIFIED, THE PROXY WILL BE VOTED
<u>FOR</u> THE NOMINEES LISTED IN NUMBER 1, <u>FOR</u> THE RATIFICATION IN
            NUMBER 2, AND <u>FOR</u> THE APPROVAL IN NUMBER 3.</strong></font></div>
          <div><br></div>
          <div><br></div>
          <div>
            <table cellpadding="0" cellspacing="0" id="list" width="100%">

                <tr valign="top">
                  <td align="right" style="WIDTH: 36pt">
                    <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">1.
                      &#160;&#160;</font></div>
                  </td>
                  <td>
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">ELECTION
                      OF DIRECTORS OF THE COMPANY.&#160;&#160;(INSTRUCTION:&#160;&#160;TO
                      WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE
                      A LINE
                      THROUGH, OR OTHERWISE STRIKE, THAT NOMINEE'S NAME IN THE LIST
                      BELOW.)</font></div>
                  </td>
                </tr>

            </table>
          </div>
          <div>&#160;</div>
          <div align="center">
            <table bgcolor="white" cellpadding="0" cellspacing="0" width="100%">

                <tr bgcolor="white">
                  <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
                  <td width="5%">
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;"><font style="DISPLAY: inline; FONT-FAMILY: wingdings 2, serif;">&#163;</font></font></div>
                  </td>
                  <td width="25%">
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">FOR
                      all nominees listed</font></div>
                  </td>
                  <td width="5%">
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;"><font style="DISPLAY: inline; FONT-FAMILY: wingdings 2, serif;">&#163;</font></font></div>
                  </td>
                  <td width="60%">
                    <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">WITHHOLD
                      authority to</font></div>
                  </td>
                </tr>
                <tr bgcolor="white">
                  <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
                  <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
                  <td width="25%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">below
                    except as marked</font></font></td>
                  <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
                  <td width="60%">
                    <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">vote
                      for all nominees</font></div>
                  </td>
                </tr>
                <tr bgcolor="white">
                  <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
                  <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
                  <td width="25%">
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">to
                      the contrary.</font></div>
                  </td>
                  <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
                  <td width="60%">
                    <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">below.</font></div>
                  </td>
                </tr>

            </table>
          </div>
          <div align="center">&#160;</div>
          <div align="left">
            <table cellpadding="0" cellspacing="0" width="100%">

                <tr>
                  <td valign="top" width="30%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
                  <td align="left" valign="top" width="70%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Eric
                      S. Langan</font></div>
                  </td>
                </tr>
                <tr>
                  <td valign="top" width="30%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
                  <td align="left" valign="top" width="70%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Robert
                      L. Watters</font></div>
                  </td>
                </tr>
                <tr>
                  <td valign="top" width="30%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
                  <td align="left" valign="top" width="70%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Steven
                      L. Jenkins</font></div>
                  </td>
                </tr>
                <tr>
                  <td valign="top" width="30%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
                  <td align="left" valign="top" width="70%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Alan
                      Bergstrom</font></div>
                  </td>
                </tr>
                <tr>
                  <td valign="top" width="30%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
                  <td align="left" valign="top" width="70%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Travis
                      Reese</font></div>
                  </td>
                </tr>
                <tr>
                  <td valign="top" width="30%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
                  <td align="left" valign="top" width="70%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Luke
                      Lirot</font></div>
                  </td>
                </tr>

            </table>
          </div>
          <div><br></div>
          <div><br></div>
          <div>
            <table cellpadding="0" cellspacing="0" id="list" width="100%">

                <tr valign="top">
                  <td align="right" style="WIDTH: 36pt">
                    <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">2.&#160;
                      &#160;</font></div>
                  </td>
                  <td>
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">PROPOSAL
                      TO RATIFY THE SELECTION OF WHITLEY PENN LLP AS THE COMPANY'S
                      INDEPENDENT
                      AUDITOR FOR THE FISCAL YEAR ENDING SEPTEMBER 30,
                      2007.</font></div>
                  </td>
                </tr>

            </table>
          </div>
          <div><br></div>
          <div>
            <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

                <tr valign="top">
                  <td style="WIDTH: 36pt">
                    <div>&#160;</div>
                  </td>
                  <td style="WIDTH: 108pt">
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><font style="DISPLAY: inline;" face="Wingdings 2, serif">&#163;</font>&#160;&#160;FOR</font></div>
                  </td>
                  <td style="WIDTH: 135pt">
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><font style="DISPLAY: inline;" face="Wingdings 2, serif">&#163;</font>&#160;&#160;&#160;AGAINST</font></div>
                  </td>
                  <td>
                    <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><font style="DISPLAY: inline;" face="Wingdings 2, serif">&#163;</font>&#160;&#160;&#160;ABSTAIN</font></div>
                  </td>
                </tr>

            </table>
          </div><br>
          <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
            <div id="FTR">
              <div id="GLFTR" style="WIDTH: 100%" align="left">
              </div>
            </div>
            <div id="PN" style="PAGE-BREAK-AFTER: always">
              <div style="WIDTH: 100%; TEXT-ALIGN: center">
              </div>
              <div style="WIDTH: 100%; TEXT-ALIGN: center">
                <hr style="COLOR: black" noshade size="2">
              </div>
            </div>
            <div id="HDR">
              <div id="GLHDR" style="WIDTH: 100%" align="right">
              </div>
            </div>
          </div>
          <div>&#160;</div>
          <div>
            <table cellpadding="0" cellspacing="0" id="list" width="100%">

                <tr valign="top">
                  <td align="right" style="WIDTH: 36pt">
                    <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">3.
                      &#160;&#160;</font></div>
                  </td>
                  <td>
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">PROPOSAL
                      TO APPROVE A SECOND AMENDMENT TO THE 1999 STOCK OPTION
                      PLAN.</font></div>
                  </td>
                </tr>

            </table>
          </div>
          <div><br></div>
          <div>
            <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

                <tr valign="top">
                  <td style="WIDTH: 36pt">
                    <div>&#160;</div>
                  </td>
                  <td style="WIDTH: 108pt">
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><font style="DISPLAY: inline;" face="Wingdings 2, serif">&#163;</font>&#160;&#160;&#160;FOR</font></div>
                  </td>
                  <td style="WIDTH: 135pt">
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><font style="DISPLAY: inline;" face="Wingdings 2, serif">&#163;</font>&#160;&#160;&#160;AGAINST</font></div>
                  </td>
                  <td>
                    <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><font style="DISPLAY: inline;" face="Wingdings 2, serif">&#163;</font>&#160;&#160;&#160;ABSTAIN</font></div>
                  </td>
                </tr>

            </table>
          </div>
          <div><br></div>
          <div><br></div>
          <div>
            <table cellpadding="0" cellspacing="0" id="list" width="100%">

                <tr valign="top">
                  <td align="right" style="WIDTH: 36pt">
                    <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">4.&#160;
                      &#160;</font></div>
                  </td>
                  <td>
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">IN
                      THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH
                      OTHER
                      BUSINESS THAT MAY PROPERLY COME BEFORE THE ANNUAL
                      MEETING.</font></div>
                  </td>
                </tr>

            </table>
          </div>
          <div><br></div>
          <div>
            <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

                <tr valign="top">
                  <td style="WIDTH: 36pt">
                    <div>&#160;</div>
                  </td>
                  <td style="WIDTH: 108pt">
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><font style="DISPLAY: inline;" face="Wingdings 2, serif">&#163;</font>&#160;&#160;&#160;FOR</font></div>
                  </td>
                  <td style="WIDTH: 135pt">
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><font style="DISPLAY: inline;" face="Wingdings 2, serif">&#163;</font>&#160;&#160;&#160;AGAINST</font></div>
                  </td>
                  <td>
                    <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><font style="DISPLAY: inline;" face="Wingdings 2, serif">&#163;</font>&#160;&#160;ABSTAIN</font></div>
                  </td>
                </tr>

            </table>
          </div>
          <div><br></div>
          <div><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Please
            sign exactly as name appears below.&#160;&#160;When shares are held by joint
            tenants, both should sign.&#160;&#160;When signing as attorney, as executor,
            administrator, trustee or guardian, please give full title as
            such.&#160;&#160;If a corporation, please sign in full corporate name by
            President or other authorized officer.&#160;&#160;If a partnership, please sign
            in partnership name by authorized person.</font></div>
          <div><br></div>
          <div><br></div>
          <div><br></div>
          <div align="left">
            <table cellpadding="0" cellspacing="0" width="100%">

                <tr>
                  <td align="justify" valign="top" width="40%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">NUMBER
                      OF</font></div>
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">SHARES
                      OWNED</font></div>
                  </td>
                  <td valign="top" width="10%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
                  <td valign="top" width="10%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
                  <td valign="top" width="40%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
                </tr>
                <tr>
                  <td valign="top" width="40%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
                  <td valign="top" width="10%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
                  <td valign="top" width="10%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
                  <td valign="top" width="40%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
                </tr>
                <tr>
                  <td valign="top" width="40%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
                  <td valign="top" width="10%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
                  <td valign="top" width="10%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
                  <td valign="top" width="40%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
                </tr>
                <tr>
                  <td valign="top" width="40%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
                  <td valign="top" width="10%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
                  <td align="justify" valign="top" width="10%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">[NAME]</font></div>
                  </td>
                  <td valign="top" width="40%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
                </tr>
                <tr>
                  <td valign="top" width="40%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
                  <td valign="top" width="10%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
                  <td valign="top" width="10%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
                  <td valign="top" width="40%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
                </tr>
                <tr>
                  <td valign="top" width="40%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
                  <td valign="top" width="10%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
                  <td align="justify" valign="top" width="10%" style="PADDING-BOTTOM: 2px">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">DATED:</font></div>
                  </td>
                  <td valign="top" width="40%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
                </tr>

            </table>
          </div>
          <div><br></div>
          <div><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>THIS
            PROXY MAY BE REVOKED AT ANY TIME BEFORE IT IS VOTED AT THE MEETING. PLEASE
            MARK,
            SIGN, DATE AND RETURN THIS PROXY PROMPTLY.</strong></font></div>
          <div>&#160;</div>
        </div>
      </div>
    </div>
    <div>&#160;</div>
    <div>
      <div>
        <hr style="COLOR: black" align="left" noshade size="2" width="100%">
      </div>
    </div>
  </body>
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</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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