<SEC-DOCUMENT>0001144204-12-041713.txt : 20120730
<SEC-HEADER>0001144204-12-041713.hdr.sgml : 20120730
<ACCEPTANCE-DATETIME>20120730170058
ACCESSION NUMBER:		0001144204-12-041713
CONFORMED SUBMISSION TYPE:	DEF 14A
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20120914
FILED AS OF DATE:		20120730
DATE AS OF CHANGE:		20120730
EFFECTIVENESS DATE:		20120730

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			MEDIFAST INC
		CENTRAL INDEX KEY:			0000910329
		STANDARD INDUSTRIAL CLASSIFICATION:	MISCELLANEOUS FOOD PREPARATIONS & KINDRED PRODUCTS [2090]
		IRS NUMBER:				133714405
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		DEF 14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-31573
		FILM NUMBER:		12994289

	BUSINESS ADDRESS:	
		STREET 1:		11445 CRONHILL DRIVE
		CITY:			OWINGS MILLS
		STATE:			MD
		ZIP:			21117
		BUSINESS PHONE:		7327640619

	MAIL ADDRESS:	
		STREET 1:		11445 CRONHILL DRIVE
		CITY:			OWINGS MILLS
		STATE:			MD
		ZIP:			21117

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	HEALTHRITE INC
		DATE OF NAME CHANGE:	19951120

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	XX
		DATE OF NAME CHANGE:	19950619

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	00
		DATE OF NAME CHANGE:	19950619
</SEC-HEADER>
<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
<FILENAME>v319777_def14a.htm
<DESCRIPTION>DEFINITIVE PROXY STATEMENT
<TEXT>
<HTML>
<HEAD>
     <TITLE></TITLE>
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<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>UNITED STATES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SECURITIES AND EXCHANGE COMMISSION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Washington, D.C. 20549</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SCHEDULE 14A</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Proxy Statement Pursuant to Section&nbsp;14(a)
of</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>the Securities Exchange Act of 1934
</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Filed by the Registrant<FONT STYLE="font-family: Wingdings">
&thorn;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Filed by a Party other than the Registrant<FONT STYLE="font-family: Wingdings">
o</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Check the appropriate box:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Wingdings">o</FONT> Preliminary Proxy
Statement</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Wingdings">o</FONT><B> Confidential,
for Use of the Commission Only (as permitted by Rule&nbsp;14a-6(e)(2))</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Wingdings">&thorn;</FONT> Definitive
Proxy Statement</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Wingdings">o</FONT> Definitive Additional
Materials</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Wingdings">o</FONT> Soliciting Material
Pursuant to &sect;240.14a-12</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Medifast, Inc.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Name of Registrant as Specified In Its
Charter)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Payment of Filing Fee (Check the appropriate box):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 84px; font: 10pt Wingdings">&thorn;</TD>
    <TD STYLE="font-size: 10pt">No fee required.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 84px; font: 10pt Wingdings">o</TD>
    <TD STYLE="font-size: 10pt">Fee computed on table below per Exchange Act Rules&nbsp;14a-6(i)(1) and 0-11.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 12px; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 36px; font-size: 10pt">(1)</TD>
    <TD STYLE="font-size: 10pt">Title of each class of securities to which transaction applies:</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE ALIGN="CENTER" CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 12px">&nbsp;</TD>
    <TD STYLE="width: 36px">(2)</TD>
    <TD>Aggregate number of securities to which transaction applies:</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE ALIGN="CENTER" CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 12px">&nbsp;</TD>
    <TD STYLE="width: 36px">(3)</TD>
    <TD>Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule&nbsp;0-11 (set forth the
    amount on which the filing fee is calculated and state how it was determined):</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE ALIGN="CENTER" CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 12px">&nbsp;</TD>
    <TD STYLE="width: 36px">(4)</TD>
    <TD>Proposed maximum aggregate value of transaction:</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE ALIGN="CENTER" CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 12px">&nbsp;</TD>
    <TD STYLE="width: 36px">(5)</TD>
    <TD>Total fee paid:</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE ALIGN="CENTER" CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 84px; font-family: Wingdings">o</TD>
    <TD>Fee paid previously with preliminary materials.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE ALIGN="CENTER" CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 84px; font-family: Wingdings">o</TD>
    <TD>Check box if any part of the fee is offset as provided by Exchange Act Rule&nbsp;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.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE ALIGN="CENTER" CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 12px">&nbsp;</TD>
    <TD STYLE="width: 36px">(1)</TD>
    <TD>Amount Previously Paid:</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE ALIGN="CENTER" CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 12px">&nbsp;</TD>
    <TD STYLE="width: 36px">(2)</TD>
    <TD>Form, Schedule or Registration Statement No.:</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE ALIGN="CENTER" CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 12px">&nbsp;</TD>
    <TD STYLE="width: 36px">(3)</TD>
    <TD>Filing Party:</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE ALIGN="CENTER" CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 12px">&nbsp;</TD>
    <TD STYLE="width: 36px">(4)</TD>
    <TD>Date Filed:</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Persons who are to respond to the collection of information
contained in this form are not required to respond unless the form displays a currently valid OMB control number.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Medifast, Inc.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">To our Stockholders:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">You are cordially invited to attend our
2012 Annual General Meeting of Stockholders on Friday, September 14, 2012. This meeting will be held at 8:00 a.m., Eastern Daylight
Time, at the Medifast Distribution Center, 601 Sunrise Avenue, Ridgely, MD 21660. During the meeting, we will discuss each item
of business described in the accompanying Notice of Annual General Meeting and Proxy Statement, update you on important developments
in our business and respond to any questions that you may have about us.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">Information about the matters to be acted
on at the meeting is contained in the accompanying Notice of Annual General Meeting of Stockholders and Proxy Statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">I would like to take this opportunity to
remind you that your vote is very important. Please take a moment now to cast your vote in accordance with the instructions set
forth on the enclosed proxy card. In addition, if you would like to attend the meeting in person, please see the admission instructions
set forth in the Notice of Annual General Meeting of Stockholders accompanying this letter and on the enclosed proxy card.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 60%">I look forward to seeing you at the meeting. &nbsp;</TD>
    <TD STYLE="width: 40%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Best regards,</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Michael C. MacDonald</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Chairman of the Board &amp; CEO</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Medifast Inc.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>11445 Cronhill Drive</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Owings Mills, MD 21117</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTICE OF ANNUAL GENERAL MEETING OF
STOCKHOLDERS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>To Be Held Friday, September 14, 2012</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">To the Stockholders:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 19.8pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 19.8pt">NOTICE IS HEREBY GIVEN that the 2012 Annual
General Meeting of Stockholders of Medifast Inc., a Delaware Corporation (the &ldquo;Company&rdquo;), will be held on Friday,
September 14, 2012 at 8:00 a.m., Eastern Daylight Time, at the Medifast Distribution Center, 601 Sunrise Avenue, Ridgely, MD 21660
for the following purposes:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -13.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 19.8pt"></TD><TD STYLE="width: 10pt">1.</TD><TD>To elect one Class II director for a two-year term ending in
                                                              2014, Margaret E. Sheetz, and four Class III directors for a three-year
                                                              term ending in 2015, Barry B. Bondroff, George J. Lavin, Catherine
                                                              T. Maguire, and Jeannette M. Mills;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -13.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 19.8pt"></TD><TD STYLE="width: 10pt">2.</TD><TD>To ratify the appointment of McGladrey &amp; Pullen, LLP as
                                                              the Company&rsquo;s independent registered public accountants for
                                                              the fiscal year-ending December 31, 2012;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -13.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 19.8pt"></TD><TD STYLE="width: 10pt">3.</TD><TD>To approve the 2012 Share Incentive Plan</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -13.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 19.8pt"></TD><TD STYLE="width: 10pt">4.</TD><TD>To transact such other business as may properly come before
                                                              the Annual General Meeting and any adjournment, postponement or
                                                              continuation thereof.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 19.8pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 19.8pt">The foregoing items of business are more
fully described in the Proxy Statement accompanying this Notice. Only stockholders of record at the close of business on July
23, 2012, are entitled to notice of and to vote at the meeting and any subsequent adjournment(s) or postponement(s) of the meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 19.8pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 19.8pt">All stockholders are cordially invited
to attend the meeting in person.<B> However, to assure your representation at the meeting, you are urged to mark, sign, date and
return the enclosed proxy card as promptly as possible.</B> Stockholders attending the meeting may vote in person even if they
have returned a proxy card.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 60%">&nbsp;</TD>
    <TD STYLE="width: 40%">By Order of the Board of Directors,</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Michael C. MacDonald</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Chairman of the Board</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Owings Mills, MD</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>July 29, 2012</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Table of Contents</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 95%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="width: 5%; border-bottom: windowtext 1pt solid; text-align: center">Page</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold">THE ANNUAL GENERAL MEETING OF STOCKHOLDERS</TD>
    <TD STYLE="text-align: right">&nbsp;&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">Information Concerning Solicitation and Voting</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">1</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top; font-weight: bold">PROPOSAL&nbsp;1: THE ELECTION OF DIRECTORS</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">2</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; font-weight: bold">THE BOARD OF DIRECTORS</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">9</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">Director Independence</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">9</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">Board Meetings</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">9</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">Board Leadership Structure and Risk Oversight</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">9</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; font-weight: bold"><FONT STYLE="text-transform: uppercase">Director CompensatION</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right">11</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">Stockholder Communications with the Board of Directors</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">13</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">Committees of the Board</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">14</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top; font-weight: bold">PROPOSAL&nbsp;2: THE RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED
    PUBLIC ACCOUNTANTS</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">16</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">Audit Committee Report</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">16</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">Dismissal of Friedman, LLP</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">17</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">Principal Accountant Fees and Services</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">17</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">18</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; font-weight: bold">EXECUTIVE COMPENSATION</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">19</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top">Compensation Discussion and Analysis</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">19</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">2011 Summary Compensation Table</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">21</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top; font-weight: bold">SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">25</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; font-weight: bold">PROPOSAL 3:&nbsp; APPROVAL OF 2012 SHARE INCENTIVE PLAN</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">27</TD></TR>
<TR STYLE="background-color: rgb(204,255,204)">
    <TD STYLE="vertical-align: top; font-weight: bold">OTHER MATTERS</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">30</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>THE ANNUAL GENERAL MEETING OF STOCKHOLDERS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Information Concerning Solicitation and Voting</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Place, Time and Date of Meeting.</I></B>&nbsp;&nbsp;This
Proxy Statement is being furnished to the Company&rsquo;s stockholders in connection with the solicitation of proxies on behalf
of our Board of Directors for use at the 2012 Annual General Meeting of Stockholders (the &ldquo;Meeting&rdquo;) to be held on
Friday, September 14, 2012, at 8:00&nbsp;a.m., Eastern Daylight Time, and at any subsequent adjournment(s) or postponement(s)
of the Meeting, for the purposes set forth herein and in the accompanying Notice of Annual General Meeting of Stockholders. The
Meeting will be held at the Medifast Distribution Center, 601 Sunrise Avenue, Ridgely, MD 21660. We are mailing the Notice of
Annual General Meeting, this Proxy Statement, and the form of proxy to our stockholders on or about August 3, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Record Date and Voting Securities.</I></B>&nbsp;&nbsp;Only
stockholders of record at the close of business on July 23, 2012 (the &ldquo;Record Date&rdquo;) are entitled to notice of and
to vote at the Meeting. The Company has one series, comprised of shares of common stock (the &ldquo;Common Shares&rdquo;), outstanding.
As of July 23, 2012, 15,525,955&nbsp;Common Shares were issued and outstanding and held of record by 158 registered holders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Voting</B>.&nbsp;&nbsp;Each stockholder is entitled to one
vote for each Common Share held on the Record Date on all matters submitted for consideration at the Meeting. A quorum, representing
the holders of not less than a majority of the issued and outstanding Common Shares entitled to vote at the Meeting, must be present
in person or by proxy at the Meeting for the transaction of business. Abstentions/withholding and broker non-votes are counted
for purposes of establishing a quorum, but they are not counted as votes cast for or against a proposal. Each issued and outstanding
share of common stock entitles the holder to one vote.&nbsp;&nbsp;Directors are elected by a plurality vote of shares present
at the meeting, meaning that the director nominee with the most affirmative votes for a particular slot is elected for that slot.
In an uncontested election of directors, the plurality requirement is not a factor. The holders of common stock are not entitled
to cumulate their votes in the election of directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company is not aware of any matter, other than as referred
to in this proxy statement, to be presented at the meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Revocability of Proxies.</I></B>&nbsp;&nbsp;Any proxy
given pursuant to this solicitation may be revoked by the person giving it at any time before its use by either (a)&nbsp;delivering
to the Corporate Secretary of the Company a written notice of revocation or a duly executed proxy bearing a later date or (b)&nbsp;attending
the Meeting and voting in person.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Solicitation Expenses.</I></B>&nbsp;&nbsp;This solicitation
of proxies is made by the Board of Directors and all related costs will be borne by the Company. Proxies may be solicited by certain
of our directors, officers and regular employees, without additional compensation, in person, by telephone, facsimile or electronic
mail. We do not presently intend to solicit proxies other than by mail. We will, upon request, reimburse brokerage firms and others
for their reasonable expenses in forwarding solicitation material to the beneficial owners of Common Shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">This Proxy Statement contains summaries of certain documents,
but you are urged to read the documents themselves for the complete information. The summaries are qualified in their entirety
by reference to the complete text of the document. In the event that any of the terms, conditions or other provisions of any such
document is inconsistent with or contrary to the description or terms in this Proxy Statement, such document will control. Each
of these documents, as well as those documents referenced in this Proxy Statement as being available in print upon request, are
available upon request to the Company by following the procedures described under &ldquo;Stockholder Communications with the Board
of Directors.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PROPOSAL&nbsp;1:</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>THE ELECTION OF DIRECTORS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The number of directors in each class
is determined by the Board of Directors and consists of as nearly equal a number of directors as possible.&nbsp;&nbsp;These directors
are classified as Class I, Class II and Class III.&nbsp;&nbsp;The term of Class I Directors will expire in 2013.&nbsp;&nbsp;The
term of Class II Directors will expire in 2014, and the term of Class III Directors expires at the Meeting. Each Class III Director
is up for re-election for a three-year term ending in 2015, as described below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The table below sets forth the name of each Class of director
nominated.&nbsp;&nbsp;The nominees for Class III directors are to be voted at the Meeting.&nbsp;&nbsp;The Board of Directors has
nominated Margaret E. Sheetz for election as Class II director to serve a two-year term expiring at the 2014 annual general meeting.
The Board of Directors has nominated Barry B. Bondroff, George J. Lavin, Catherine T. Maguire, and Jeannette M. Mills for election
as Class&nbsp;III directors to serve three-year terms expiring at the 2015 annual general meeting. Each nominee has consented
to be named as a nominee and, to the present knowledge of the Company, is willing to serve as a director, if elected. Should any
of the nominees not remain a nominee at the end of the Meeting (a situation which is not anticipated), solicited proxies will
be voted in favor of those who remain as nominees and may be voted for substitute nominees. Unless contrary instructions are given
on the proxy, the shares represented by a properly executed proxy will be voted &ldquo;FOR&rdquo; the election of those nominated
&ndash; Barry B. Bondroff, George J. Lavin, Catherine T. Maguire, Jeannette M. Mills, and Margaret E. Sheetz</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 9pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 9pt">The table below sets forth information about
the five nominees, the directors whose terms of office continue beyond the Meeting, and our non-director executive officer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>THE BOARD OF DIRECTORS RECOMMENDS THAT
YOU VOTE &ldquo;FOR&rdquo;:</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Barry B. Bondroff, George J. Lavin, Catherine T. Maguire, Jeannette
M. Mills, and Margaret E. Sheetz</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOMINEES</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 78%; border-bottom: windowtext 1pt solid; font-weight: bold">Name and Experience</TD>
    <TD STYLE="width: 2%; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 6%; border-bottom: windowtext 1pt solid; font-weight: bold; text-align: center">Class</TD>
    <TD STYLE="width: 1%; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 13%; border-bottom: windowtext 1pt solid; font-weight: bold; text-align: center">Director&nbsp;Since</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Barry B. Bondroff, CPA</B>,
        age 64, is an officer and director with Gorfine, Schiller &amp; Gardyn, PA, a full-service certified public accounting
        firm offering a wide range of accounting and consulting services. Previously, he was a Senior Managing Director with SMART.
        Mr. Bondroff brings over 35 years of experience providing companies of all sizes and industries with practical and cost-effective
        accounting, assurance, tax, business, technology and financial advisory services. Prior to managing SMART, Mr. Bondroff
        was the Managing Director for Grabush, Newman &amp; Co., P.A., which combined with SMART in May 2003. Mr. Bondroff began
        his career with Grabush Newman in 1970, and in 1976 became Officer and was promoted to Managing Director in 1982. He earned
        his Bachelor of Science degree in Accounting from the University of Baltimore. Additionally, Mr. Bondroff serves on the
        Board of Directors for the publicly traded First Mariner Bank of Maryland, a NASDAQ listed company. He is active with
        First Mariner serving on the Executive Committee, Loan Committee, Audit Committee and as Chairman of the Compensation
        Committee. In addition to his professional affiliations, Mr. Bondroff served on the Executive Committee for Israel Bonds
        and was a Director of Cycle Across Maryland. He has served the National Jewish Medical and Research Center, the Jewish
        Center for Business Development and has assisted the Baltimore Symphony Orchestra in its fundraising efforts. In addition,
        Mr. Bondroff was a past President and Treasurer of the Edward A. Meyerberg Northwest Senior Center, and also served as
        a Member of the Board of Directors for the Levindale Hebrew Geriatric Center and Hospital. He currently serves as Treasurer
        for Special Olympics of Maryland, as a Trustee for Stevenson University in Maryland and a member of the Audit Committee
        of the Associated.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Barry B. Bondroff was first selected
        as a Director in 2008 because of his more than 36 years experience as a CPA, and with corporate governance including serving
        on the Board of another public Company. He utilizes that experience as a financial expert and his elected position of
        Vice Chairman of the Board. His service on the Audit Committee and his availability as a local director in Baltimore provide
        for local oversight and practical consulting in the area of financial management, risk assessment and Sarbanes-Oxley regulations.
        He also provides an extensive rolodex that assists the Company&rsquo;s management team to find the best talent in the
        market to assist in our growth and development. </P></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">III</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">2008</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 78%; border-bottom: windowtext 1pt solid; font-weight: bold">Name and Experience</TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 6%; border-bottom: windowtext 1pt solid; font-weight: bold; text-align: center">&nbsp;Class</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 13%; border-bottom: windowtext 1pt solid; font-weight: bold; text-align: center">Director&nbsp;Since</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>George J. Lavin, Jr., Esq</B>.,
        age 83, was the senior founding partner of Lavin, O&rsquo;Neil, Ricci, Ceprone &amp; Disipio. Mr. Lavin is a 1951 graduate
        of Bucknell University. He attended the University of Pennsylvania School of Law, receiving an L.L.B. in 1956, and then
        served as a Special Agent, Federal Bureau of Investigation, United States Department of Justice, until 1959. Mr. Lavin
        has extensive national experience in products liability defense. He has had regional responsibilities in several automotive
        specialty areas, and was called upon to try matters throughout the county on behalf of his clients. Mr. Lavin&rsquo;s
        practice emphasized his commitment to defending the automotive industry. Mr. Lavin is admitted to practice before the
        Supreme Court of Pennsylvania, the United States Court of Appeals for the Third Circuit and the United States District
        Courts for the Eastern and Middle Districts of Pennsylvania. He is a member of the Faculty Advisory Board of the Academy
        of Advocacy, the Association of Defense Counsel, The Defense Research Institute, The American Board of Trial Advocates,
        and the Temple University Law School faculty. He has also been elected a fellow of the American College of Trial Lawyers.
        On March 1, 1994, Mr. Lavin assumed the title of Counsel to his name sake firm. Mr. Lavin has served as the General Counsel
        to the Augustinian order of Villanova, PA.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">George J. Lavin, Jr., Esq. was
        first selected as a Director in 2005 for his prestigious demonstrated legal experience on behalf of major international
        businesses, management experience in his law firm and his extensive service with the FBI. His current selection as Director
        values his experiential oversight on legal matters as well as his service on the Audit Committee and mentoring talents.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">III</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">2005</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Sr. Catherine T. Maguire, RSM</B>,
        age 62, a Sister of Mercy, has served as Associate Executive Director at SILOAM, a Body, Mind, Spirit wellness center
        for the HIV/AIDS community, from 1997-2010. Prior to this Sr. Maguire worked in AIDS Ministry within the prison system
        in Washington, DC. and served as vocation director for her religious community for 8 years. She received a BS degree in
        Education/English in 1972, a MS degree in Library Science in 1974 both from Villanova University, and a MA degree in Theology
        with an emphasis in Pastoral Ministry &amp; Spirituality in 1995 from St. Michael&rsquo;s College in Vermont. She served
        on the Board of the National Religious Vocation Conference from 1990-1992.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Sister Catherine T. Maguire, RSM
        was first selected as a Director in 2009 for her extensive executive experience with not for profit human services organizations
        and her strong background in organizational ethics and human resources and personnel management. She has multiple advanced
        degrees and will assist in developing the &ldquo;Women Executives&rdquo; of the Company. As a result of her extensive
        management and human resources background she was elected to the Nomination Committee where she will assist in screening
        and evaluating potential director candidates and insure the corporate values related to diversity are implemented in the
        Company and on the Board.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">III</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">2009</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Jeannette M. Mills</B>, age
        45, currently serves as senior vice president with the Baltimore Gas and Electric Company, a subsidiary of Constellation
        Energy. A Baltimore, MD native, Ms. Mills earned her Bachelor of Science in Electrical Engineering from Virginia Polytechnic
        Institute &amp; State University (Virginia Tech) and she currently serves on the Advisory Board of the Bradley Department
        of Electrical and Computer Engineering. In 2006, Ms. Mills earned her Masters of Business Administration from Loyola College.
        Ms. Mills also works in the community, serving on the Board of Directors for Voices for Children, the Leadership (a program
        of the Greater Baltimore Committee), the Baltimore Polytechnic Institute Foundation, Inc., and the Esophageal Cancer Action
        Network (ECAN).</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Ms. Mills was first selected as
        a Director in 2008 not only for her technical background but primarily for her high level of executive experience. Her
        service as Chairperson of the Compensation Committee has effectively utilized her talents to review and assess the operations
        and metrics used to evaluate key executives in the Company. She has been instrumental in providing guidance and direction
        to ensure that all executives maintain the transparent high performance culture, and entrepreneurial philosophy of executive
        compensation balanced with appropriate risk assessment analysis.</P></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">III</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">2008</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="width: 78%; vertical-align: top; border-bottom: windowtext 1pt solid; font-weight: bold">Name and Experience</TD>
    <TD STYLE="width: 2%; vertical-align: bottom; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 6%; vertical-align: bottom; border-bottom: windowtext 1pt solid; font-weight: bold; text-align: center">Class</TD>
    <TD STYLE="width: 1%; vertical-align: bottom; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 13%; vertical-align: bottom; border-bottom: windowtext 1pt solid; font-weight: bold; text-align: center">Director&nbsp;Since</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font-weight: bold; text-align: center">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Margaret Sheetz, </B>age 35,
        is the President and Chief Operating Officer of the Company. In March 2011, Margaret also became the Chief Executive Officer
        of Take Shape for Life. Prior to joining the Company in 2000, she worked with the firm of Carrington, Coleman, Sloman
        and Blumenthal in Dallas, Texas. As the Company continues to see strong year-over-year growth, Ms. Sheetz has provided
        the operational and technical leadership that has resulted in the Company providing the proper infrastructure to support
        the growth of the Company. Her accomplishments include making dramatic productivity improvement in the Company&rsquo;s
        operational capabilities, as well as building a strong infrastructure of distribution, manufacturing, information systems
        and human resource operations necessary to support rapid business growth. Ms. Sheetz was first selected as a Management
        Director in 2008 after she had assumed the positions of President and Chief Operating Officer of the Company. Her leadership
        and oversight skills are greatly admired, and she is recognized in the Company as a detail-orientated executive who builds
        high-performance teams. The Board considers her the source person to get information pertinent to the oversight of the
        Company&rsquo;s operations. Ms. Sheetz is the niece of Michael C. MacDonald.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Ms. Sheetz supports the efforts
        of the American Diabetes Association, the American Heart Association, and Toys for Tots Foundation. She sits on the Board
        of Directors for Stevenson University, the Greater Baltimore Committee, Siloam, and is also a member of the Villanova
        President&rsquo;s Leadership Circle. In addition, she is the managing trustee of the MacDonald Family Foundation and the
        Take Shape for Life Foundation which focuses on grants to support educational programs for disadvantaged students. Ms.
        Sheetz is an active member of Vistage, an organization of top area business leaders who meet regularly to discuss business
        challenges, get peer advice, and learn how to take smart risks to move their companies confidently to the next level.
        She holds a Bachelor of Arts degree from Villanova University and received an Executive MBA from Loyola University.</P></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">II</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">2008</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CONTINUING DIRECTORS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 78%; border-bottom: windowtext 1pt solid; padding-bottom: 1.5pt; font-weight: bold">Name and Experience</TD>
    <TD STYLE="width: 2%; padding-bottom: 1.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 6%; border-bottom: windowtext 1pt solid; font-weight: bold; text-align: center">Class</TD>
    <TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 13%; border-bottom: windowtext 1pt solid; font-weight: bold; text-align: center">Director&nbsp;Since</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B>Harvey C.
        &ldquo;Barney&rdquo; Barnum, Jr</B>., age 72, was sworn in as the Deputy Assistant Secretary of the Navy for Reserve Affairs
        on&nbsp;July 23, 2001. In this capacity he was responsible for all matters regarding the Navy and Marine Corps Reserve
        including manpower, equipment, policy and budgeting. On January 20, 2009, Mr. Barnum was designated Acting Assistant Secretary
        of the Navy (Manpower and Reserve Affairs), a position he held until May 2009. Mr. Barnum was the fourth Marine to be
        awarded the nation&rsquo;s highest honor, the Medal of Honor for valor in Vietnam. He retired from the Marine Corps as
        a Colonel in August 1989 after 27 and one-half years of service. Mr. Barnum served multiple tours as an artilleryman with
        both the 3rd and 2nd Marine Divisions to include two tours in Vietnam; 2nd Marine Aircraft Wing; guard officer at Marine
        Barracks, Pearl Harbor, and operations officer, Hawaiian Armed Forces Police; weapons instructor at the Officer Basic
        School; four years at Marine Corps Recruit Depot, Parris Island, as commanding officer, Headquarters Company and the 2nd
        Recruit Training Battalion of the Training Regiment; Chief of Current Operations, US Central Command where he planned
        and executed the first U.S./Jordanian joint exercise staff as the commander of U.S. Forces and twice planned and executed
        Operation Bright Star spread over four southwest Asian countries involving 26,000 personnel. Headquarters Marine Corps
        tours included: aide to the assistant commandant as a captain and deputy director Public Affairs, Director Special Projects
        Directorate and Military Secretary to the Commandant as a colonel. Upon retirement in 1989, Mr. Barnum served as the principal
        director, Drug Enforcement Policy, Office of the Secretary of Defense. Mr. Barnum&rsquo;s personal medals and decorations
        include: the Medal of Honor; Defense Superior Service Medal; Legion of Merit; the Bronze Star Medal with Combat &ldquo;V&rdquo;
        and gold star in lieu of a second award; Purple Heart; Meritorious Service Medal; Navy Commendation Medal; Navy Achievement
        Medal with Combat &ldquo;V&rdquo;; Combat Action Ribbon; Presidential Unit Citation; Army Presidential Unit Citation;
        Joint Meritorious Unit Award; Navy Unit Citation; two awards of the Meritorious Unit Citation; the Vietnamese Cross of
        Gallantry (silver) and the Department of the Navy Distinguished Public Service Award. Mr. Barnum has attended The Basic
        School, U.S. Army Field Artillery School, Amphibious Warfare School, U.S. Army Command and General Staff College and the
        U.S. Naval War College. He is the past president of the Congressional Medal of Honor Society, Connecticut Man of the Year
        &rsquo;67, presented Honorary Legum Doctorem St. Anselm College; Rotary Paul Harris Fellow; Abe Pollin Leadership Award
        &rsquo;03, Marine Corps League &ldquo;Iron Mike&rdquo; Award, Order of the Carabao Distinguished Service Award, and Ted
        Williams Leadership Award.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Harvey C. &ldquo;Barney&rdquo;
        Barnum was first selected to be a Director in 2009 because of his extensive distinguished government service at the Department
        of the Navy Executive level and his distinguished military career which includes the Medal of Honor Award for bravery
        in Vietnam. Mr. Barnum will bring expertise to the Board in the area of public policy initiatives as it relates to his
        knowledge of the Executive and Legislative Branch of the US Government and his oversight of our Governmental Relations
        and Policy initiatives on Obesity related to the Company&rsquo;s products, protocols and clinical studies.</P></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">II</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">2009</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR>
    <TD STYLE="width: 78%; vertical-align: top"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Charles P. Connolly</B>, age
        63, is currently an independent director focusing on bank relationships, debt refinancing, merger and acquisition strategy
        and executive compensation design. Mr. Connolly spent 29 years at First Union Corp. that merged with Wachovia Bank in
        2001. He retired in 2001 as the President and CEO of First Union Corp. of Pennsylvania and Delaware. Mr. Connolly serves
        on the Boards of numerous private for-profit organizations. He holds an MBA from the University of Chicago and AB from
        Villanova University.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Charles P. Connolly was first
        selected as a Director in 2006 for his extensive executive experience and financial acumen derived from an executive banking
        resume. His current selection as Director leverages that background of reviewing the financials and performance of hundreds
        of companies in the public and private sector. He possesses a unique financial and risk assessment perspective into the
        operations and financial management of the Company. He spends an extraordinary amount of time with our executive team
        providing guidance and consultation on key metrics and performance objectives that have served the Company well in the
        past few years. As the Chairman of the Audit Committee, he has served diligently to insure that the Company maintains
        its high standards of accountability.</P></TD>
    <TD STYLE="width: 3%; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="width: 5%; vertical-align: top; text-align: center">I</TD>
    <TD STYLE="width: 1%; vertical-align: bottom; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 13%; vertical-align: top; text-align: center">2006</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 78%; border-bottom: windowtext 1pt solid; font-weight: bold">Name and Experience</TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 6%; border-bottom: windowtext 1pt solid; font-weight: bold; text-align: center">Class</TD>
    <TD STYLE="width: 1%; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 13%; border-bottom: windowtext 1pt solid; font-weight: bold; text-align: center">Director&nbsp;Since</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Jason L. Groves, Esq., </B>age
        41,<B> </B>is the Company&rsquo;s Executive Vice President (&ldquo;EVP&rdquo;) and General Counsel. Prior to joining the
        Company as EVP and General Counsel in November 2011, Mr. Groves previously spent ten years with Verizon. He was most recently
        the Assistant Vice President of Government Affairs for Verizon Maryland, since 2003. Mr. Groves is also an Army veteran.
        He was a direct commissioned Judge Advocate in the United States Army Judge Advocate General&rsquo;s Corp (&ldquo;JAG&rdquo;).
        As a JAG Officer, he practiced law and had the distinction of prosecuting criminal cases in the District Court of Maryland
        as a Special Assistant United States Attorney. Over the course of three years, he received two Army Achievement Medals,
        and one Army Commendation Medal. Mr. Groves received his Bachelor of Science degree, cum laude, in Business with a concentration
        in Hospitality Management, from Bethune-Cookman University. He also obtained his law degree from North Carolina Central
        University School of Law and is a member of the New Jersey and District of Columbia bars as well as several bar associations.
        Additionally, he sits on several non-profit boards including Anne Arundel Medical Center and the Maryland Hospital Association.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Jason L. Groves, Esq. was first selected as a Director
        in 2009 based on his military, business and legal background. In addition, he has extensive experience with government
        relations and knowledge of the healthcare and communications technology fields. He was a Federal prosecutor thus providing
        keen insight on the regulatory and legal issues the Company faces in today&rsquo;s business climate.</P></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">I</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">2009</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>Michael C. MacDonald</B>, age
        59, joined the Company&rsquo;s Executive Committee of the Board of Directors in 1998, has served as Executive Chairman
        since November 2011, and was promoted to Chairman &amp; Chief Executive Officer in February 2012. Prior to this role,
        Mr. MacDonald was Executive Vice President of OfficeMax, overseeing the Contract Division, a $3.6 billion division of
        the OfficeMax Company. Mr. MacDonald has spent an additional 33 years in sales, marketing, and general management at Xerox
        Corporation. Among his most significant roles was leading the turnaround in North America from the years 2000-2004 as
        President of the North American Solutions Group, a $6.5 billion division of Xerox. In addition, Mr. MacDonald was President
        of Global Accounts and Marketing from 2004-2007, where he led the re-branding of the Xerox Corporation. Mr. MacDonald
        also has international experience in marketing, sales, and operations with both Xerox and OfficeMax.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Mr. MacDonald received his Bachelor
        of Arts, Political Science at Rutgers University, earned 44 MBA Credits at Iona College, and attended premier executive
        education courses in leadership and management at Harvard and Columbia Universities. Mr. MacDonald is the uncle of Margaret
        Sheetz.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In addition to serving as Chairman
        and CEO of the Company, Mr. MacDonald also serves on the Jimmy V Foundation and the Archdiocese of Baltimore Catholic
        Community Foundation.</P></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">II</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">1998</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; font-weight: bold; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>John P. McDaniel</B>, age 69,
        is a seasoned healthcare executive with more than 36 years of experience as a chief executive officer, most recently at
        MedStar Health in Columbia, Maryland, one of the largest and most comprehensive healthcare delivery systems in the mid-Atlantic
        region with annual revenues exceeding $4 billion, encompassing 25,000 employees, 5,000 physicians and nine leading hospitals
        and other health related businesses. Mr. McDaniel has a degree in Business Administration from Wittenberg University,
        a MHA in Health Management and Policy from the University of Michigan, and an Honorary Doctorate of Humane Letters (LHD)
        from Wittenberg University. He is presently Chair and Partner in The Hickory Ridge Group, an advisory, development and
        Investment company that focuses on emerging healthcare and technology related entities. He is also a past member of the
        board of the Greater Baltimore Committee, a member of the Executive Committee of the Greater Washington Board of Trade,
        Wittenberg University and is Chair of the Washington Real Estate Trust, a NYSE listed company.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">John P. McDaniel was first elected
        a Director in 1996 for his extensive executive and entrepreneurial experience as well as his service on other public boards.
        His extensive management and Board knowledge concerning the health care industry and health care policy will provide seasoned
        oversight on behalf of stockholders. Because of his Board related experience and leadership experience as a member of
        the Maryland Racing Commission, Director of First Mariner Bank and former CEO of Medstar Health Systems, he is serving
        on the Executive and Audit Committees in order to bring his business acumen and organizational knowledge to the Company.</P></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">I</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">1996</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 78%; border-bottom: windowtext 1pt solid; font-weight: bold">Name and Experience</TD>
    <TD STYLE="width: 2%; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 6%; border-bottom: windowtext 1pt solid; font-weight: bold; text-align: center">Class</TD>
    <TD STYLE="width: 1%; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 13%; border-bottom: windowtext 1pt solid; font-weight: bold; text-align: center">Director&nbsp;Since</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Jerry D. Reece, </B>age 71,
        is chief executive officer of Reece &amp; Nichols: Real Estate, Mortgage, Title Insurance. The real estate arm of the
        company is the largest real estate brokerage in Greater Kansas City. With over 40 years experience in real estate, Jerry
        Reece formed J.D. Reece Realtors in early 1987. He sold the company in 2001 to Homeservices of America, Inc., a Berkshire
        Hathaway affiliate. After graduating from the University of Oregon in 1963 with a B.S. in Finance, Jerry Reece joined
        the United States Marine Corps and served in Hawaii and Vietnam as a first lieutenant. Following active duty, he continued
        his service in the Marine Corps Reserve. His various assignments included the command of a rifle battalion and service
        as a member of the Secretary of the Navy's Marine Corps Reserve Policy Board at the Pentagon. Retired with the rank of
        Colonel, he is a past member of the Board of Directors of the Marine Toys for Tots Foundation. His personal decorations
        include the Legion of Merit, The Navy Commendation Medal with Combat &ldquo;V&rdquo; and the Combat Action Ribbon.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Jerry D. Reece was first selected
        as a Director in 2009 for his executive, entrepreneurial and broad real estate expertise. He is a leader in his community
        in Kansas City and has served on many private for-profit Boards. He is a decorated Vietnam veteran who has both civil
        and military executive experience to provide oversight and be a resource for executive and real estate matters requiring
        Board and corporate governance oversight. Mr. Reece was an Advisory Board Member of Commerce Bank, K.C., from 2003-2011.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">II</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">2009</TD></TR>
<TR>
    <TD STYLE="vertical-align: top"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Donald F. Reilly, OSA</B>,
        age 64, holds a Doctorate in Ministry (Counseling) from New York Theological and an M.A. from Washington Theological Union,
        as well as a B.A. from Villanova University. Reverend Don Reilly was ordained a priest in 1974. His assignments included
        Associate Pastor, Pastor at St. Denis, Havertown, Pennsylvania, Staff at Villanova University, Personnel Director of the
        Augustinian Province of St. Thomas of Villanova, and Provincial Counselor, Co-Founder of SILOAM Ministries where he ministers
        and counsels HIV/AIDS patients and caregivers. He is currently on the Board of Directors of Villanova University. He also
        serves on the Board of Trustees of Merrimack College, MA, St. Augustine Prep, NJ, and Malvern Prep, PA. Reverend Don Reilly
        was Prior Provincial of the Augustinian Order at Villanova, PA from 2002-2010. He oversaw more than 220 Augustinian Friars
        and their service to the Church, teaching at universities and high schools, ministering to parishes, serving as chaplain
        in the Armed Forces and hospitals, ministering to AIDS victims, and serving missions in Japan, Peru, and South Africa.
        Fr. Reilly is currently the President of St. Augustine Preparatory School in Richland, New Jersey.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Very Rev. Donald F. Reilly, OSA
        was first selected as a Director in 1998 for his strong background in Personnel and Executive management with the Augustinian
        Community which serves the Catholic Church at Villanova University, Merrimack College, high schools, parishes and missions
        in Japan, South Africa and Peru. His current selection as Director utilizes his extensive knowledge of the Company serving
        as a Director and participating in the restructuring of the Company in 1999. He was also instrumental in developing the
        current business model in consultation with the Business School at Villanova University. As Chairman of the Nomination
        Committee and being a Ph.D and nationally known academic he has been an invaluable asset providing guidance to the Company
        and creating stockholder value. He also is the primary person on the Nomination Committee to identify and evaluate potential
        director candidates for character necessary for high performance, risk assessment and transparency which are desirable
        characteristics for all potential directors. This will ensure continuity in respect to the Company&rsquo;s corporate governance
        practices and philosophy.</P></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">I</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">1998</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>EXECUTIVE OFFICER</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>Name and Experience</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 78%; text-align: justify"><B>Brendan N. Connors, CPA, </B>age 34, has been the Chief Financial Officer of
    the Company since May 2010. Mr. Connors joined the Company as the Vice President of Finance in April of 2005. Prior to joining
    the Company, Mr. Connors worked as a Senior Accountant at Wolf &amp; Company P.C., a certified public accounting and consulting
    firm in Boston, MA.</TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 6%; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 13%; text-align: center">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>THE BOARD OF DIRECTORS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>ADDITIONAL INFORMATION ABOUT THE BOARD
OF DIRECTORS AND COMMITTEES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Director Independence</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of July 23, 2012, the Board consists
of 12 members, 9 of whom are non-management directors. Determination as to the qualifications of independent directors are made
under section&nbsp;303A.02 of the New York Stock Exchange (&ldquo;NYSE&rdquo;) Listed Company Manual and the Company&rsquo;s Categorical
Standards of Independence. The NYSE&rsquo;s independence guidelines and the Company&rsquo;s categorical standards include a series
of objective tests, such as the director is not an employee of the Company and has not engaged in various types of business dealings
involving the Company, which would prevent a director from being independent. The Board of Directors has affirmatively determined
that none of the Company&rsquo;s independent directors had any relationships with the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Board, in applying the above referenced
standards, has affirmatively determined the Company&rsquo;s current independent directors are: Harvey C. Barnum, Jr., Barry B.
Bondroff, Charles P. Connolly, George J. Lavin, Jr. Esq., Catherine T. Maguire, John P. McDaniel, Jeannette M. Mills, Jerry D.
Reece, and Donald F. Reilly.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Board Meetings</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the fiscal year ended December 31,
2011 (&ldquo;Fiscal 2011&rdquo;), the Board of Directors held six meetings. All Board members attended at least 75% of the aggregate
number of Board meetings and applicable committee meetings held while such individuals were serving on the Board of Directors,
or such committees. Under the Company&rsquo;s<I> Corporate Governance Guidelines</I>, which is available on the Company&rsquo;s
website at <I><U>www.choosemedifast.com</U></I> by following the link through &ldquo;Investor Relations&rdquo; to &ldquo;Corporate
Governance,&rdquo; each director is expected to dedicate sufficient time, energy and attention to ensure the diligent performance
of his or her duties, including attending meetings of the stockholders of the Company, the Board of Directors and committees of
which he or she is a member. Three directors attended the 2011 annual stockholder meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Board Leadership Structure and Risk Oversight</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company takes a comprehensive approach
to risk management. We believe risk can arise in every decision and action taken by the Company, whether strategic or operational.
The Company, therefore, seeks to include risk management principles in all of its management processes and in the responsibilities
of its employees at every level. Our comprehensive approach is reflected in the reporting processes by which our management provides
timely and comprehensive information to the Board to support the Board&rsquo;s role in oversight, approval and decision-making.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Board of Directors closely monitors
the information it receives from management and provides oversight and guidance to our management team concerning the assessment
and management of risk. The Board approves the Company&rsquo;s high level goals, strategies and policies to set the tone and direction
for appropriate risk taking within the business. The Board and its committees then emphasize this tone and direction in its oversight
of management&rsquo;s implementation of the Company&rsquo;s goals, strategies and policies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our senior executives provide the Board
and its committees with regular updates about the Company&rsquo;s strategies and objectives and the risks inherent within them
at Board and committee meetings and in regular reports. Board and committee meetings also provide a venue for directors to discuss
issues with management. The Board and committees call special meetings when necessary to address specific issues. In addition,
our directors have access to Company management at all levels to discuss any matters of interest, including those related to risk.
Those members of management most knowledgeable of the issues attend Board meetings to provide additional insight into items being
discussed, including risk exposures.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Board has delegated oversight for
matters involving certain specific areas of risk exposure to its three committees. Each committee reports to the Board of Directors
at regularly scheduled Board meetings, and more frequently if appropriate, with respect to the matters and risks for which the
committee provides oversight.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Audit Committee oversees the integrity
of our financial statements, reporting process and internal controls, the internal audit function, the independent auditors&rsquo;
qualifications, independence and performance, and the Company&rsquo;s corporate finance matters including its capital structure.
The Audit Committee also provides oversight with respect to the Company&rsquo;s risk management process, including, as required
by the NYSE, discussing with management the Company&rsquo;s significant financial risk exposures, steps management has taken to
monitor, control and report such exposures and our policies with respect to risk assessment and risk management.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our Compensation Committee is responsible
primarily for the design and oversight of the Company&rsquo;s executive compensation policies, plans and practices. A key objective
of the Compensation Committee is to ensure that the Company&rsquo;s overall executive compensation program appropriately links
pay to performance and aligns the interests of the Company&rsquo;s executives with its stockholders without encouraging unnecessary
risk. In furtherance of this objective, the Compensation Committee evaluates the potential compensation payable under the Company&rsquo;s
executive compensation plans based on alternative performance scenarios. The Compensation Committee also monitors the design and
administration of the Company&rsquo;s overall incentive compensation programs to ensure that they include appropriate safeguards
to avoid encouraging unnecessary or excessive risk taking by Company employees. Elements of our executive compensation program
that mitigate excessive risk taking, such as our combination of short and long-term incentives are described below under &ldquo;Compensation
Discussion and Analysis.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Nomination Committee oversees risks
related to our corporate governance, including Board and director performance, director succession, director education and the
Company&rsquo;s Corporate Governance Guidelines and other governance documents. The Nomination Committee also oversees the Company&rsquo;s
quality and regulatory affairs operations, the Company&rsquo;s programs regarding ethics and compliance, and social and environmental
responsibility.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to the Company&rsquo;s bylaws
and governance guidelines, the rules of the NYSE, and the Chairman of the Board, the Nomination Committee, with the approval of
the Board of Directors, determines the best committee structure for the Company. The Board elects the Officers of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 19.8pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>DIRECTOR COMPENSATION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The non-employee Directors of the Company
receive an annual stock grant for their services as director. In 2011, each director received 500 shares of restricted stock,
with the exception of the Vice-Chairman of the Board, Barry Bondroff who received 600 shares. In 2011, Directors received a meeting
fee for attending either quarterly committee or Board of Director meetings. The Committee fees and Board of Director meeting fees
may be received in cash or converted to Medifast stock at a 125% premium based on each Board members election. For additional
committee meetings or board service, Directors receive $1,500 per day or a pro rata portion thereof. Employee Directors do not
receive any additional compensation for their services as director.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>2011 Director Compensation Table</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The table below summarizes the compensation
paid by the Company to non-employee directors for the fiscal year ended December&nbsp;31, 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.5in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; border-bottom: Black 1pt solid">Name</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fees Earned&nbsp;or<BR>
    Paid&nbsp;in Cash</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Stock Awards&nbsp;<BR>
    (1)</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 55%; text-align: left">Harvey C. Barnum</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">375</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">33,689</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">34,064</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Barry B. Bondroff</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">19,560</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">33,443</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">53,003</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Charles P. Connolly</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">22,560</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">51,693</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">74,253</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Jason L. Groves</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,800</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">21,190</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">33,990</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">George Lavin, Jr., Esq.</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,300</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">51,693</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">56,993</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Michael C. MacDonald (2)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,750</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">72,183</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">84,933</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Catherine T. Maguire</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,375</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">22,444</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">31,819</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">John P. McDaniel</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,875</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">36,198</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">44,073</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Jeannette M. Mills</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,970</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">41,193</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">43,163</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Jerry D. Reece</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">280</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">33,690</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">33,970</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Rev. Donald F. Reilly, OSA</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">21,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">40,980</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">62,480</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 19.8pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(1)</TD><TD STYLE="text-align: justify">Amounts are calculated based
                                                                 on the aggregate grant date fair value of these rewards computed
                                                                 in accordance with ASC Topic 718 &ldquo;Stock Compensation&rdquo;
                                                                 which excludes the effect of estimated forfeitures. The assumptions
                                                                 and methodologies used to calculate these amounts are discussed
                                                                 in Note 2 to our Consolidated Financial Statements in the Form
                                                                 10-K for the year-ended December 31, 2011. Under generally accepted
                                                                 accounting principles, compensation expense with respect to stock
                                                                 awards and option awards granted to our employees is recognized
                                                                 over the vesting periods of the applicable rewards.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(2)</TD><TD>Michael C. MacDonald&rsquo;s director compensation is for
                                                                 the period January 1, 2011 to November 3, 2011. On November 4,
                                                                 2011, the Board of Directors appointed Michael C. MacDonald as
                                                                 the Chairman of the Board. On February 8, 2012, he was appointed
                                                                 to the additional position of Chief Executive Officer.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">The table below summarizes the equity-based awards
held by the Company&rsquo;s non-employee directors as of December&nbsp;31, 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="14" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 9pt">Option&nbsp;Awards</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 9pt">Stock&nbsp;Awards</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">Name</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 9pt">Number&nbsp;of<BR> Securities<BR>
    Underlying<BR> Unexercised<BR> Options&nbsp;(#)</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 9pt">Number&nbsp;of<BR> Securities<BR>
    Underlying<BR> Unexercised<BR> Options&nbsp;(#)</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 9pt">Option<BR> Exercise</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 9pt">Option<BR> Expiration</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 9pt">Number<BR>
    Shares&nbsp;or<BR> Units&nbsp;of<BR> Stock That&nbsp;<BR> Have Not<BR> Vested</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 9pt">Market<BR> Value&nbsp;of<BR>
    Shares&nbsp;or<BR>
    Units&nbsp;of<BR> Stock&nbsp;that<BR> have&nbsp;not<BR> Vested</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 9pt">Exercisable</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 9pt">Un-Exercisable</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 9pt">Price
    ($)</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 9pt">Date</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 9pt">Vested
    (#)</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 9pt">($)(1)</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 34%; text-align: left"><FONT STYLE="font-size: 9pt">Charles P. Connolly</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="width: 8%; text-align: right"><FONT STYLE="font-size: 9pt">-</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="width: 8%; text-align: right"><FONT STYLE="font-size: 9pt">-</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="width: 8%; text-align: right"><FONT STYLE="font-size: 9pt">-</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="width: 8%; text-align: right"><FONT STYLE="font-size: 9pt">-</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="width: 8%; text-align: right"><FONT STYLE="font-size: 9pt">1,000</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="width: 8%; text-align: right"><FONT STYLE="font-size: 9pt">13,720</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">George Lavin, Jr., Esq.</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">1,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">13,720</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">Michael C. MacDonald (2)</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">2,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">27,440</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">Rev. Donald F. Reilly, OSA</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">2,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">27,440</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">(1)</TD><TD STYLE="text-align: justify">The market value of shares of stock
                                                            that have not vested is based on the closing price of our common stock
                                                            on December 30, 2011, or $13.72 per share.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">(2)</TD><TD STYLE="text-align: justify">M<FONT STYLE="font-size: 10pt">ichael
                                                            C. MacDonald&rsquo;s shares that have not yet vested relate to previous
                                                            restricted stock grants during his tenure as a Director. On November
                                                            4, 2011, the Board of Directors appointed Michael C. MacDonald as
                                                            the Chairman of the Board. On February 8, 2012, he was appointed to
                                                            the additional position of Chief Executive Officer.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company&rsquo;s Board of Directors
on July 24, 2008 approved restricted common stock grants to Board members with a 5 year vesting period, beginning on the grant
date. The grant was to tenured Board members that successfully implemented the Senior Management Succession Plan over the last
four years through advice, counsel, and mentorship. A total of 55,000 shares of restricted common stock were granted to tenured
Directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company&rsquo;s Board of Directors
on November 24, 2008 approved restricted common stock grants to key executives and Board members as a 2008 performance bonus for
exceeding internal sales and profit forecasts. Non-management Board members were each granted 5,000 shares of restricted common
stock vesting over two years, beginning on January 1, 2009.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company&rsquo;s Board of Directors
on May 7, 2009 approved restricted common stock grants to key executives and Board members with a 5 year vesting period, beginning
on the grant date. Key executives were granted 460,000 shares of restricted common stock to retain their services over the next
five years and recognize continued sales and profit growth in accordance with targets set by the Board of Directors. The Board
of Directors received a total of 71,000 shares with a two year vesting period, beginning on the grant date for their active participation
in the strategic planning process and guidance as it relates to the Company&rsquo;s strong performance and growth.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Board of Directors approved restricted
stock grants effective November 4, 2011 to Michael C. MacDonald on the date of his appointment as Chairman of the Board of Directors.
He was granted 60,000 shares as an employee inducement which will vest in three annual installments beginning on the first anniversary
of the November 4, 2011 grant date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Stockholder Communications with the Board of Directors</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Stockholders and other parties interested
in communicating directly with the Board of Directors, non-management directors as a group or individual directors, including
Barry B. Bondroff as the Vice Chairman of the Board in his capacity as the presiding director of executive sessions of non-management
directors, may do so by writing to Medifast, Inc., c/o&nbsp;Corporate Secretary, 11445 Cronhill Drive, Owings Mills, MD 21117,
indicating to whose attention the communication should be directed. Under a process approved by the Board of Directors for handling
letters received by the Company and addressed to non-management directors, the Corporate Secretary of the Company reviews all
such correspondence and forwards to members of the Audit Committee a summary and/or copies of any such correspondence that, in
the opinion of the Corporate Secretary, deal with the functions of the Board of Directors or committees thereof, or that he otherwise
determines requires their attention. Directors may at any time review a log of all correspondence received by the Company and
addressed to members of the Board of Directors and request copies of any such correspondence.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Committees of the Board</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our Board of Directors has a standing
Audit Committee, Nomination Committee, Compensation Committee, and Executive Committee.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2.15pt; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2.15pt; text-align: justify"><B><I>Audit Committee</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our Audit Committee consists of Charles
P. Connolly, Chairperson, Barry B. Bondroff, George J. Lavin, Jr. Esq., and John P. McDaniel each of whom are independent as discussed
above under &ldquo;Director Independence.&rdquo; As required by Rule&nbsp;303A.07 of the NYSE Listed Company Manual, the Board
of Directors has affirmatively determined that each Audit Committee member is financially literate, and that Mr.&nbsp;Connolly
is an &ldquo;audit committee financial expert,&rdquo; as defined in Item&nbsp;407(d)(5) of Regulation&nbsp;S-K.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The principal duties of the Audit Committee
are as follows:</P>

<P STYLE="font: 10pt Wingdings; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -22.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.2in"></TD><TD STYLE="width: 0.3in"><FONT STYLE="font-family: Wingdings">&Yuml;</FONT></TD><TD STYLE="text-align: justify">have
                                                                                                              the sole authority
                                                                                                              and responsibility
                                                                                                              to hire, evaluate
                                                                                                              and, where appropriate,
                                                                                                              replace the independent
                                                                                                              auditors;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.2in"></TD><TD STYLE="width: 0.3in"><FONT STYLE="font-family: Wingdings">&Yuml;</FONT></TD><TD STYLE="text-align: justify">meet
                                                                                                              and review with
                                                                                                              management and the
                                                                                                              independent auditors
                                                                                                              the interim financial
                                                                                                              statements and the
                                                                                                              Company&rsquo;s
                                                                                                              disclosures under
                                                                                                              Management&rsquo;s
                                                                                                              Discussion and Analysis
                                                                                                              of Financial Condition
                                                                                                              and Results of Operations
                                                                                                              prior to the filing
                                                                                                              of the Company&rsquo;s
                                                                                                              Quarterly Reports
                                                                                                              on Form&nbsp;10-Q;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.2in"></TD><TD STYLE="width: 0.3in"><FONT STYLE="font-family: Wingdings">&Yuml;</FONT></TD><TD STYLE="text-align: justify">meet
                                                                                                              and review with
                                                                                                              management and the
                                                                                                              independent auditors
                                                                                                              the financial statements
                                                                                                              to be included in
                                                                                                              the Company&rsquo;s
                                                                                                              Annual Report on
                                                                                                              Form&nbsp;10-K (or
                                                                                                              the annual report
                                                                                                              to stockholders)
                                                                                                              including (i)&nbsp;their
                                                                                                              judgment about the
                                                                                                              quality, not just
                                                                                                              acceptability, of
                                                                                                              the Company&rsquo;s
                                                                                                              accounting principles,
                                                                                                              including significant
                                                                                                              financial reporting
                                                                                                              issues and judgments
                                                                                                              made in connection
                                                                                                              with the preparation
                                                                                                              of the financial
                                                                                                              statements; (ii)&nbsp;the
                                                                                                              clarity of the disclosures
                                                                                                              in the financial
                                                                                                              statements; and
                                                                                                              (iii)&nbsp;the Company&rsquo;s
                                                                                                              disclosures under
                                                                                                              Management&rsquo;s
                                                                                                              Discussion and Analysis
                                                                                                              of Financial Condition
                                                                                                              and Results of Operations,
                                                                                                              including critical
                                                                                                              accounting policies;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.2in"></TD><TD STYLE="width: 0.3in"><FONT STYLE="font-family: Wingdings">&Yuml;</FONT></TD><TD STYLE="text-align: justify">review
                                                                                                              and discuss with
                                                                                                              management, the
                                                                                                              internal auditors
                                                                                                              and the independent
                                                                                                              auditors the Company&rsquo;s
                                                                                                              policies with respect
                                                                                                              to risk assessment
                                                                                                              and risk management;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.2in"></TD><TD STYLE="width: 0.3in"><FONT STYLE="font-family: Wingdings">&Yuml;</FONT></TD><TD STYLE="text-align: justify">review
                                                                                                              and discuss with
                                                                                                              management, the
                                                                                                              internal auditors
                                                                                                              and the independent
                                                                                                              auditors the Company&rsquo;s
                                                                                                              internal controls,
                                                                                                              the results of the
                                                                                                              internal audit program,
                                                                                                              and the Company&rsquo;s
                                                                                                              disclosure controls
                                                                                                              and procedures,
                                                                                                              and quarterly assessment
                                                                                                              of such controls
                                                                                                              and procedures;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.2in"></TD><TD STYLE="width: 0.3in"><FONT STYLE="font-family: Wingdings">&Yuml;</FONT></TD><TD STYLE="text-align: justify">establish
                                                                                                              procedures for handling
                                                                                                              complaints regarding
                                                                                                              accounting, internal
                                                                                                              accounting controls
                                                                                                              and auditing matters,
                                                                                                              including procedures
                                                                                                              for confidential,
                                                                                                              anonymous submission
                                                                                                              of concerns by employees
                                                                                                              regarding accounting
                                                                                                              and auditing matters;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.2in"></TD><TD STYLE="width: 0.3in"><FONT STYLE="font-family: Wingdings">&Yuml;</FONT></TD><TD STYLE="text-align: justify">review
                                                                                                              and discuss with
                                                                                                              management, the
                                                                                                              internal auditors
                                                                                                              and the independent
                                                                                                              auditors the overall
                                                                                                              adequacy and effectiveness
                                                                                                              of the Company&rsquo;s
                                                                                                              legal, regulatory
                                                                                                              and ethical compliance
                                                                                                              programs; and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.2in"></TD><TD STYLE="width: 0.3in"><FONT STYLE="font-family: Wingdings">&Yuml;</FONT></TD><TD STYLE="text-align: justify">serve
                                                                                                              as a communication
                                                                                                              link under Company&rsquo;s
                                                                                                              Whistle Blower Policy.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 10pt">Our Board
of Directors has adopted a written charter for the Audit Committee which is available on the Company&rsquo;s website at <I><U>www.choosemedifast.com
</U></I>by following the links through &ldquo;Investor Relations&rdquo; to &ldquo;Corporate Governance.&rdquo; In Fiscal 2011,
the Audit Committee met twelve times.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2.2pt"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2.2pt"><B><I>Nomination Committee</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Nomination Committee consists of Very
Rev. Donald F. Reilly, Chairperson, Catherine T. Maguire, and Harvey C. &ldquo;Barney&rdquo; Barnum, Jr., all of whom are independent
as discussed above under &ldquo;Director Independence.&rdquo; The Nomination Committee identifies and recommends to the Board
of Directors qualified candidates for election as Directors, recommends director committee assignments, and recommends actions
necessary for the proper governance of the Company, and for the evaluation of the performance of the Board of Directors and Chief
Executive Officer. With input from the Chairman of the Board and Chief Executive Officer, the Nomination Committee recommends
certain executive officers for annual election. The Nomination Committee reviews issues and developments related to corporate
governance practices and makes recommendations to the Board of Directors on changes in structure, rule or practice necessary for
compliance and for good corporate governance. The Nomination Committee has been tasked to assist the Chairman in selecting the
most qualified and appropriate directors to serve on the Company&rsquo;s separate Board committees.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The Company&rsquo;s
Nomination Committee Charter provides that the skills and characteristics required generally of Directors include diversity, age,
business background and experience, accomplishments, experiences in the Company&rsquo;s business and a willingness to make the
requisite commitment of time and effort. Accordingly, the Board of Directors has not set minimum standards for Director candidates.
Rather, it seeks highly qualified individuals with diverse backgrounds, business and life experiences that will enable them to
constructively review and guide management of the Company. The Company has successfully obtained diverse highly qualified candidates
for Directors without utilizing a paid outside consultant. The Nomination Committee considers and evaluates potential Director
candidates and makes its recommendations to the full Board of Directors. Any stockholder may submit a recommendation for nomination
to the Board of Directors by sending a written statement of the qualifications of the recommended individual to the Corporate
Secretary, Medifast, Inc., 11445 Cronhill Dr., Owings Mills, Maryland 21117. The Nomination Committee will utilize the same process
for evaluating all nominees, regardless of whether the nominee recommendation is submitted by a stockholder or some other source.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The Bylaws require
a stockholder to submit notice of nomination for Director in writing not less than 120 days nor more than 150 days before the
first anniversary of the date of the Company&rsquo;s proxy statement in connection with the last annual meeting of stockholders.
The notice must set forth: (i)&nbsp;the name and address of the stockholder who intends to make the nomination and of the nominee
or nominees, (ii)&nbsp;a representation that the stockholder is a holder of record of shares of the Company entitled to vote at
the meeting and that the stockholder intends to appear in person or by proxy at the meeting to nominate the person or persons
specified in the notice, (iii)&nbsp;a description of all arrangements or understanding between the stockholder and each nominee
and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made
by the stockholder, (iv)&nbsp;such other information regarding each nominee proposed by the stockholder as would have been required
to be included in a proxy statement filed pursuant to the proxy rules of the United States Securities and Exchange Commission
(&ldquo;SEC&rdquo;) and the Company Bylaws had each nominee been nominated, or intended to be nominated, by the Board of Directors,
and (v)&nbsp;the consent of each nominee to serve as a Director of the Company if so elected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our Board of Directors has adopted a written
charter for the Nomination Committee, which is available on the Company&rsquo;s website at <I><U>www.choosemedifast.com </U></I>by
following the links through &ldquo;Investor Relations&rdquo; to &ldquo;Corporate Governance&rdquo; or in print to any stockholder
who requests it as set forth under &ldquo;Additional Information&nbsp;&mdash; Annual Report, Financial and Additional Information.&rdquo;
In Fiscal 2011, the Nomination Committee met four times.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2.15pt; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2.15pt; text-align: justify"><B><I>Compensation Committee</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Compensation Committee currently consists
of Jeannette M. Mills, Chairperson, Harvey C. &ldquo;Barney&rdquo; Barnum, Jr., and Jerry D. Reece, all of whom were independent
as discussed above under &ldquo;Director Independence.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The principal duties of the Compensation Committee are as follows:</P>

<P STYLE="font: 10pt Wingdings; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -22.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.2in"></TD><TD STYLE="width: 0.3in"><FONT STYLE="font-family: Wingdings">&Yuml;</FONT></TD><TD STYLE="text-align: justify">measure
                                                                                                              the Chief Executive
                                                                                                              Officer&rsquo;s
                                                                                                              performance against
                                                                                                              his goals and objectives
                                                                                                              pursuant to the
                                                                                                              Company plans;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.2in"></TD><TD STYLE="width: 0.3in"><FONT STYLE="font-family: Wingdings">&Yuml;</FONT></TD><TD STYLE="text-align: justify">determine
                                                                                                              the compensation
                                                                                                              of the Chief Executive
                                                                                                              Officer after considering
                                                                                                              the evaluation by
                                                                                                              the Board of Directors
                                                                                                              of his performance;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.2in"></TD><TD STYLE="width: 0.3in"><FONT STYLE="font-family: Wingdings">&Yuml;</FONT></TD><TD STYLE="text-align: justify">review
                                                                                                              and approve compensation
                                                                                                              of elected officers
                                                                                                              and all senior executives
                                                                                                              based on their evaluations,
                                                                                                              taking into account
                                                                                                              the evaluation by
                                                                                                              the Chief Executive
                                                                                                              Officer;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.2in"></TD><TD STYLE="width: 0.3in"><FONT STYLE="font-family: Wingdings">&Yuml;</FONT></TD><TD STYLE="text-align: justify">review
                                                                                                              and approve any
                                                                                                              employment agreements,
                                                                                                              severance arrangements,
                                                                                                              retirement arrangements,
                                                                                                              change in control
                                                                                                              agreements/provisions,
                                                                                                              and any special
                                                                                                              or supplemental
                                                                                                              benefits for each
                                                                                                              elected officer
                                                                                                              and senior executive
                                                                                                              of the Company;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.2in"></TD><TD STYLE="width: 0.3in"><FONT STYLE="font-family: Wingdings">&Yuml;</FONT></TD><TD STYLE="text-align: justify">approve,
                                                                                                              modify or amend
                                                                                                              all non-equity plans
                                                                                                              designed and intended
                                                                                                              to provide compensation
                                                                                                              primarily for elected
                                                                                                              officers and senior
                                                                                                              executives of the
                                                                                                              Company;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.2in"></TD><TD STYLE="width: 0.3in"><FONT STYLE="font-family: Wingdings">&Yuml;</FONT></TD><TD>make recommendations
                                                                                                              to the Board regarding
                                                                                                              adoption of equity
                                                                                                              plans;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.2in"></TD><TD STYLE="width: 0.3in"><FONT STYLE="font-family: Wingdings">&Yuml;</FONT></TD><TD>modify or amend
                                                                                                              all equity plans;
                                                                                                              and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.2in"></TD><TD STYLE="width: 0.3in"><FONT STYLE="font-family: Wingdings">&Yuml;</FONT></TD><TD STYLE="text-align: justify">review
                                                                                                              the executive compensation
                                                                                                              philosophy of the
                                                                                                              Company, assess
                                                                                                              any risks which
                                                                                                              may be reasonably
                                                                                                              deemed material
                                                                                                              to the Company,
                                                                                                              and recommend to
                                                                                                              the Board any changes
                                                                                                              deemed necessary
                                                                                                              to the Company executive
                                                                                                              compensation plan
                                                                                                              or any sales channel
                                                                                                              compensation plan.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 10pt">Our Board
of Directors has adopted a written charter for the Compensation Committee, which is available on the Company&rsquo;s website at
<I><U>www.choosemedifast.com</U></I></FONT> <FONT STYLE="font-size: 10pt">by following the links through &ldquo;Investor Relations&rdquo;
to &ldquo;Corporate Governance.&rdquo; In Fiscal 2011, the Compensation Committee met four times.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Executive Committee</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Michael C. MacDonald, Chairperson, Barry
B. Bondroff, Jason L. Groves, Jeannette M. Mills, Jerry D. Reece, and Margaret E. Sheetz are members of the Executive Committee.
The Executive Committee has all the authority of the Board of Directors, except with respect to certain matters that by statute
may not be delegated by the Board of Directors. The Executive Committee meets periodically during the year to develop and review
strategic operational and management policies for the Company. The Executive Committee held one meeting during fiscal 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Compensation Committee Interlocks and Insider Participation</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">No member of our Compensation Committee was an employee during
Fiscal 2011, or has ever been an officer of the Company or its subsidiaries. No executive officer of the Company has served as
a director or a member of the compensation committee of another company whose executive officers are also members of the Company&rsquo;s
Board of Directors or Compensation Committee.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PROPOSAL&nbsp;2:</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>THE RATIFICATION OF THE APPOINTMENT
OF INDEPENDENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>REGISTERED PUBLIC ACCOUNTANTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Audit Committee has selected McGladrey &amp; Pullen, LLP
(&ldquo;McGladrey&rdquo;) as the Company&rsquo;s independent registered public accountants for the fiscal year-ending December&nbsp;31,
2012. Additional information regarding the Audit Committee is provided in the Report of the Audit Committee below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In the event stockholders do not ratify the appointment of
McGladrey, the appointment will be reconsidered by the Audit Committee and the Board of Directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>THE BOARD OF DIRECTORS RECOMMENDS A VOTE &ldquo;FOR&rdquo;
RATIFICATION OF THE APPOINTMENT OF MCGLADREY &amp; PULLEN, LLP</B><FONT STYLE="font-weight: normal"> </FONT><B>AS THE COMPANY&rsquo;S
INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS FOR FISCAL 2012.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Audit Committee Report</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following is the report of the Audit Committee of the Board
of Directors with respect to the Company&rsquo;s audited financial statements for Fiscal 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Audit Committee is governed by the Audit Committee Charter
adopted by the Company&rsquo;s Board of Directors. Our Board of Directors has determined that each member of the Audit Committee,
Barry B. Bondroff, Charles P. Connolly, George J. Lavin, and John P. McDaniel is an &ldquo;independent&rdquo; director based on
Rule 10A-3 of the Exchange Act, the listing standards of the NYSE and our Corporate Governance Guidelines.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Audit Committee reviews the Company&rsquo;s financial reporting
process on behalf of the Board of Directors. The Audit Committee has met, reviewed and discussed the Company&rsquo;s audited financial
statements with management, which has primary responsibility for the financial statements and the reporting process, including
the system of internal controls. In this context, the Audit Committee has held discussions with management and McGladrey, the
Company&rsquo;s independent registered public accounting firm for Fiscal 2011, regarding the fair and complete presentation of
the Company&rsquo;s financial position and results of operations in accordance with accounting principles generally accepted in
the United States of America and regulations of the SEC. The Audit Committee also has held discussions with management and McGladrey
regarding the effectiveness of the Company&rsquo;s internal control over financial reporting in accordance with the requirements
of Section&nbsp;404 of the Sarbanes-Oxley Act of 2002. The Audit Committee has discussed significant accounting policies applied
by the Company in its financial statements, as well as alternative treatments. Management has represented to the Audit Committee
that the Company&rsquo;s consolidated financial statements have been prepared in accordance with accounting principles generally
accepted in the United States of America. McGladrey is responsible for expressing an opinion on the conformity of the Company&rsquo;s
financial statements with accounting principles generally accepted in the United States of America. The Audit Committee has also
discussed with McGladrey the matters required to be discussed by Statement of Auditing Standards No.&nbsp;61, as amended (AICPA,
Professional Standards, Vol. 1 AU Section&nbsp;380) and as adopted by the Public Company Accounting Oversight Board in Rule&nbsp;3200T,
which includes, among other items, matters related to the conduct of the annual audit of the Company&rsquo;s financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In addition, the Audit Committee has received the written disclosures
and the letter from McGladrey required by the applicable requirements of the Public Company Accounting Oversight Board, regarding
the independent registered public accounting firm&rsquo;s communications with the Audit Committee concerning independence, and
has discussed with the independent registered public accounting firm its independence. The Audit Committee has also considered
whether the independent registered public accounting firm&rsquo;s provision of non-audit services to the Company is compatible
with the auditor&rsquo;s independence. The Audit Committee has concluded that McGladrey is independent from the Company and its
management. The Audit Committee has pre-approved all Fiscal 2011 audit and permissible non-audit services and the fees associated
with those services. Further, the Audit Committee has discussed with McGladrey the overall scope and plans for the audit.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Based upon the review and discussions referred to above, the
Audit Committee recommended to the Company&rsquo;s Board of Directors, and the Board of Directors approved, that the Company&rsquo;s
audited financial statements be included in the Company&rsquo;s Annual Report on Form 10-K for Fiscal 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Audit Committee has selected McGladrey as the Company&rsquo;s
independent registered public accounting firm for fiscal 2012, and the Board of Directors has approved submitting such selection
to the stockholders for ratification.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>AUDIT COMMITTEE OF&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>THE BOARD OF DIRECTORS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9pt">Charles P. Connolly,<I> Chairman</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9pt">Barry B. Bondroff, CPA</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9pt">George J. Lavin, Jr., Esq. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9pt">John P. McDaniel</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Dismissal of Friedman, LLP</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On April 14, 2010, the Audit Committee determined to dismiss
Friedman, LLP as the Company&rsquo;s independent registered public accounting firm. The Company then notified Friedman, LLP of
the dismissal on April 14, 2010.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Friedman&rsquo;s reports on the Company&rsquo;s consolidated
financial statements&nbsp;and on the effectiveness of internal control over financial reporting as of and for the year ended December
31, 2009 did not contain an adverse opinion or a disclaimer of opinion, and were not qualified or modified as to uncertainty,
audit scope, or accounting principles, except as follows:</P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>Friedman&rsquo;s
                                                                                                          report on the effectiveness
                                                                                                          of internal control
                                                                                                          over financial reporting
                                                                                                          as of December 31, 2009
                                                                                                          indicates that the Company
                                                                                                          did not maintain effective
                                                                                                          internal control over
                                                                                                          financial reporting
                                                                                                          as of December 31, 2009
                                                                                                          because of the effect
                                                                                                          of material weaknesses
                                                                                                          on the income tax provision
                                                                                                          calculation.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On January 1, 2010, Bagell, Josephs, Levine, and Company, LLP
merged with Friedman, LLP. &nbsp;The Company&rsquo;s pre-merger predecessor&nbsp;audit firm, Bagell, Josephs, Levine and Company,
LLP, reports on the Company&rsquo;s consolidated financial statements and on the effectiveness of internal control over financial
reporting as of and for the year ended December 31, 2008 did not contain an adverse opinion or a disclaimer of opinion, and were
not qualified or modified as to uncertainty, audit scope, or accounting principles.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">During the fiscal years ended December 31, 2009 and December
31, 2008 and the subsequent period through April 13, 2010, the Company did not have any disagreements (as defined in Item 304(a)(1)(iv)
of Regulation S-K and the related instructions to Item 304 of Regulation S-K) with Friedman, LLP or the pre-merger predecessor
firm, Bagell, Josephs, Levine, and Company LLP on any matter of accounting principles or practices, financial statement disclosure,
or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Friedman, LLP or Bagell, Josephs,
Levine, and Company, LLP&nbsp;would have caused it to make reference to the subject matter of the disagreements in connection
with its report. Also during that period, there were no &ldquo;reportable events&rdquo; other than what is disclosed in the bullet
point above, as that term is described in Item 304(a)(1)(v) of Regulation S-K.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On April 14, 2010, the Audit Committee, after significant deliberations
and review, announced that the Company had engaged McGladrey to perform audit and tax services for the Company.&nbsp;&nbsp;The
Audit Committee determined that McGladrey has extensive resources and experience with public companies on a national and regional
basis to better serve the Company.&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company did not engage McGladrey in any prior consultations
during the Company&rsquo;s fiscal years ended December 31, 2009 and December 31, 2008 or the subsequent period through the date
of McGladrey&rsquo;s engagement regarding either: (i) the application of accounting principles to a specified transaction, either
completed or proposed, or the type of audit opinion that might be rendered on the Company&rsquo;s consolidated financial statements,
and neither a written report nor oral advice was provided to the Company&nbsp;by&nbsp;McGladrey with such conclusions which was
an important factor considered by the Company in reaching a decision as to the accounting, auditing, or financial reporting issue;
or (ii) any matter that was the subject of either a disagreement (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related
instructions to Item 304 of Regulation S-K) or a reportable event (as defined in Item 304(a)(1)(v) of Regulation S-K).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company has provided Friedman with a copy of this disclosure.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Principal Accountant Fees and Services</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following services were provided by McGladrey, RSM McGladrey,
Inc. (an affiliate of McGladrey operating under an alternative practice structure, until it was acquired by McGladrey on December
1, 2011) and Friedman, LLP during fiscal 2011 and fiscal 2010:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 50%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.25in">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2010</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 24%; text-align: left">Audit Fees (1)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">203,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">391,716</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Audit-Related Fees (2)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">35,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">35,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Tax Fees (3)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">269,687</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,668</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">All Other Fees(4)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">25,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">29,100</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt">Total</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">532,687</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">458,484</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 19.8pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 19.8pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(1)</TD><TD>Audit fees consist of fees for professional services rendered
                                                                 for the audit of the Company&rsquo;s consolidated financial statements
                                                                 included in the Company&rsquo;s Annual Report on Form&nbsp;10-K,
                                                                 including the audit of internal controls required by Section&nbsp;404
                                                                 of the Sarbanes-Oxley Act of 2002, and the review of financial
                                                                 statements included in the Company&rsquo;s Quarterly Reports
                                                                 on Form 10-Q, and for services that are normally provided by
                                                                 the auditor in connection with statutory and regulatory filings
                                                                 or engagements.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(2)</TD><TD>Audit-Related fees are for assurance services provided to
                                                                 audit the Company&rsquo;s employee benefit plan.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(3)</TD><TD>Tax fees were billed for tax compliance services.</TD></TR>                                                                                                                                <TR STYLE="vertical-align: top">
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR>
</TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(4)</TD><TD>[Provide disclosure of the nature of services comprising
                                                                 the fee].</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Audit Committee Pre-Approval of Audit and Permissible Non-Audit
Services of Independent Auditors</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Audit Committee pre-approves all audit and permissible
non-audit services provided by the independent auditors. These services may include audit services, audit-related services, tax
services and other services. The Audit Committee has adopted a policy for the pre-approval of services provided by the independent
auditors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">Under the policy, pre-approval is generally provided
for work associated with the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&Yuml;</FONT></TD><TD STYLE="text-align: justify">registration
                                                                                                               statements under
                                                                                                               the Securities
                                                                                                               Act of 1933 (for
                                                                                                               example, comfort
                                                                                                               letters or consents);</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&Yuml;</FONT></TD><TD STYLE="text-align: justify">due
                                                                                                               diligence work
                                                                                                               for potential acquisitions
                                                                                                               or dispositions;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&Yuml;</FONT></TD><TD STYLE="text-align: justify">attest
                                                                                                               services not required
                                                                                                               by statute or regulation;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&Yuml;</FONT></TD><TD STYLE="text-align: justify">adoption
                                                                                                               of new accounting
                                                                                                               pronouncements
                                                                                                               or auditing and
                                                                                                               disclosure requirements
                                                                                                               and accounting
                                                                                                               or regulatory consultations;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&Yuml;</FONT></TD><TD STYLE="text-align: justify">internal
                                                                                                               control reviews
                                                                                                               and assistance
                                                                                                               with internal control
                                                                                                               reporting requirements;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&Yuml;</FONT></TD><TD STYLE="text-align: justify">review
                                                                                                               of information
                                                                                                               systems security
                                                                                                               and controls;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&Yuml;</FONT></TD><TD STYLE="text-align: justify">tax
                                                                                                               compliance, tax
                                                                                                               planning and related
                                                                                                               tax services, excluding
                                                                                                               any tax service
                                                                                                               prohibited by regulatory
                                                                                                               or other oversight
                                                                                                               authorities; expatriate
                                                                                                               and other individual
                                                                                                               tax&nbsp;services;
                                                                                                               and</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&Yuml;</FONT></TD><TD STYLE="text-align: justify">assistance
                                                                                                               and consultation
                                                                                                               on questions raised
                                                                                                               by regulatory agencies.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">For each proposed service, the independent auditors are required
to provide detailed back-up documentation at the time of approval to permit the Audit Committee to make a determination whether
the provision of such services would impair the independent auditors&rsquo; independence.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Audit Committee has approved in advance
certain permitted services whose scope is routine across business units, including statutory or other financial audit work for
non-U.S. subsidiaries that is not required for the 1934 Act audits.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>EXECUTIVE COMPENSATION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>COMPENSATION DISCUSSION AND ANALYSIS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Purpose and Philosophy </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The Compensation
Committee of the Board of Directors is responsible for developing and recommending to the Board of Directors the executive compensation
program for the named executive officers (referred to in this section as the &ldquo;executive officers&rdquo;). Each of these
executive officers is included in the Summary Compensation Table and the related tables beginning on page 21.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Compensation Committee is responsible
for creation and periodic review of the overall executive compensation philosophy of the Company related analysis and assessment
of any material risk to the Company related thereto, and it outlines the components of executive compensation for the executive
officers. The Company believes that strong, effective leadership is the cornerstone of its continued growth and success. To be
successful, the Company must be able to attract, retain, and motivate highly qualified executive officers with the competencies
needed to excel in a rapidly changing marketplace and to understand issues relating to a diverse group of companies in several
different industries.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Executive compensation
at the Company is focused on executive performance keyed to results. The Company provides fair and equitable compensation to its
executive officers by combining conservative base pay, annual cash incentive, and stock-based long-term incentive. The Executive
Cash Bonus Plan is designed to reward executives for the Company&rsquo;s current year financial success and recognize the responsibilities
of the executive officers for meeting the Company&rsquo;s financial performance goals. Stock-based incentives focus on long-term
performance by aligning the executive officers&rsquo; long-term financial interests with Company&rsquo;s stockholders&rsquo; interest.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Total direct compensation, which includes
base pay, annual cash incentive and stock-based long-term incentive, is measured against organizations in the general weight-loss
industry. Our ability to remain competitive depends, in significant part, on our success in recruiting and retaining executive
leadership with an attractive compensation package. The Company targets total direct compensation for each executive officer near
median for organizations in the general weight-loss industry. The mix of pay (base pay, annual cash incentive and long-term incentive)
is designed to reflect a strong bias towards pay for performance by placing a majority of target compensation at risk. The only
element of total direct compensation that is not performance based is base pay. Both annual cash incentive and long-term incentive
are performance based.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Elements of Executive Compensation
</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Base Salary </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our base salary determinations principally
reflect the skills and performance levels of individual executives, the needs of the Company, and pay practices of comparable
public companies within the general health and wellness diet industry. The Company&rsquo;s identified peers in the general health
and wellness diet industry are NutriSystem Inc., eDiets.com, Herbalife Ltd., USANA Health Sciences, and Weight Watchers International
Inc. It is not our policy to pay our executive officers at the highest base salary level. Instead, we establish executive base
salaries below the midpoint level relative to our peers. We believe this policy sets a prudent and fiscally responsible tone for
the Company&rsquo;s overall base salary compensation programs. Please refer to the discussion below under &ldquo;Peer Group&rdquo;
for a more detailed discussion of our use of peer group and general industry revenue data.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Target Bonus </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Cash bonuses principally reflect the Company&rsquo;s
financial performance and achievement of corporate objectives established by our Board prior to the fiscal year. The executive
bonus plan is designed to reward our executives for the achievement of shorter-term financial goals, predominantly revenue growth,
profitability, and cash flow. In consultation with the Chairman and Chief Executive Officer, the Compensation Committee evaluates,
adjusts and approves the amount and allocation of the bonus pool to each executive officer. In determining the cash bonus allocation
among senior executives, the Compensation Committee and the Chairman and Chief Executive Officer consider each executive&rsquo;s
a) contribution to current and long-term corporate goals, and b) value in the labor market.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The financial
targets for annual cash incentive are premised upon the executive officers delivering on their financial performance projections
to the Company as reflected in part, in the annual budget approved by the Board of Directors. In Fiscal 2011, targeted annual
incentive compensation was tied to the annual budget approved by the Board of Directors. The Compensation Committee set the target
for pre-tax profit as a percentage of sales at 10%, the target for corporate revenue at $310 million, and net increase in cash,
cash equivalents, and investments at $15.5 million, excluding treasury stock repurchases. The target performance level is set
to promote solid performance. The financial targets for annual cash incentive are divided into three components as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 2%">1.&nbsp; &nbsp;</TD>
    <TD STYLE="width: 98%; text-align: justify"><B>Pre-Tax profit as a percentage of sales.</B> Each executive officer receives
    33.33% of the total target payout if the Company achieves the targeted pre-tax profit as a percentage of sales. Each officer
    receives a portion of the total target payout if the Company achieves the targeted performance level, and additional increments
    for performance above the target. The Company was below the threshold performance level for pre-tax earnings as a percentage
    of sales in 2010 at 9.4% compared to the target of 10%.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>2.&nbsp; &nbsp;</TD>
    <TD STYLE="text-align: justify"><B>Corporate Revenue.</B> Each officer receives 33.33% of the total target payout if the Company
    achieves the targeted sales amount for the full year. Each officer receives a portion of the total target payout if the Company
    achieves the targeted performance level, and additional increments for performance above the target. For corporate sales the
    target was $310 million. The Company was below the targeted performance level for sales in Fiscal 2011 finishing at $298.2
    million, or $11.8 million below the target set by the Board.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>3.</TD>
    <TD STYLE="text-align: justify; text-indent: 1pt"><B>Net increase in cash, cash equivalents, and investments. </B>Each officer
    receives 33.33% of the total target payout if the Company achieves the targeted net cash increase for the full year. Each
    officer receives a portion of the total target payout if the Company achieves the targeted performance level, and additional
    increments for performance above the target. The net increase in cash and cash equivalents, excluding treasury stock repurchases
    target was $15.5 million. The Company exceeded the maximum performance level for the net increase in cash and cash equivalents
    in Fiscal 2011 by generating a $19.8 million net increase in cash, cash equivalents, and investments, excluding repurchases
    of treasury stock.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Equity Compensation </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Stock option
and restricted stock awards principally reflect the responsibilities to be assumed by each executive in the upcoming fiscal year,
the responsibilities of each executive in prior periods, the size of awards made to each executive in prior years relative to
the Company&rsquo;s overall performance, available stock for issuance under our Option Plan, and potential grants in future years.
The Committee believes that stock option and restricted stock grants (1)&nbsp;align the interests of executives with long-term
stockholder interests as the grants vest up to 6 years, (2)&nbsp;give executives a significant, long-term interest in the Company&rsquo;s
success, and (3)&nbsp;help retain key executives in a competitive market for executive talent. The restricted stock awards award
the continuity of service of the executive officers since the restricted stock awards vest up to 6 years and unvested, restricted
stock is forfeited upon voluntary termination. In addition, the value of shares awarded increase or decrease with the value provided
to stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Equity Ownership by Executives </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We do not currently have a formal equity
ownership requirement for our executives. However, we encourage our executives to own equity in the Company on a voluntary basis.
All of our executive officers own stock, restricted stock and vested and unvested stock options. We periodically review the vested
and unvested equity holdings of our executives and evaluate whether these holdings sufficiently align the interests of our executives
with the long-term interests of our stockholders. We may consider adopting equity ownership requirements in the future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Peer Group</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We believe that it is appropriate to offer industry competitive
cash and equity compensation to our senior executives in support of our objective to assemble and maintain a high performing management
team. Our current level of compensation for our executive officers was compared to compensation paid by an industry peer group
approved by the Committee. The criteria used to identify the peer group were: (1) industry &mdash; we compete for talent with
other healthy living and wellness companies and general weight-loss industry companies of similar and larger size; and (2) financial
scope &mdash; our management talent should be compensated similar to that of companies of a similar and larger size in terms of
revenues.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">For Fiscal 2011, the peer group was comprised of five corporations
listed above. The peer group revenue range is from $401 million to $3.5 billion with a median revenue of $1.7 billion for 2011.
The peer group revenue percent change ranged from a decline of 21.2% to an increase of 26.3%, with a median revenue increase of
13.4% in 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Advisory Vote on the Company&rsquo;s
Executive Officers&rsquo; Compensation</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">At last year's annual meeting, we provided our stockholders
with the opportunity to cast an advisory vote regarding the compensation of our named executive officers as disclosed in the proxy
statement for the 2011 Annual General Meeting of Stockholders. At our 2011&nbsp;annual&nbsp;meeting, our stockholders overwhelmingly
approved the proposal, with more than&nbsp;97% of the votes cast voting in favor of the proposal. We also asked our stockholders
to indicate if we should hold a&nbsp;&ldquo;say-on-pay&rdquo; vote every&nbsp;one, two or three years. Consistent with the recommendation
of our&nbsp;Board of&nbsp;Directors, a majority of our stockholders indicated by advisory vote their preference to hold a say-on-pay
vote every three years. After consideration of the 2011 voting results, and based upon its prior recommendation, our&nbsp;Board
of&nbsp;Directors elected to hold a stockholder&nbsp;&quot;say-on-pay&quot; vote every three years. Because the vote on the Company&rsquo;s
Executive Officers&rsquo; Compensation is advisory, it will not be binding upon the Board of Directors or Compensation Committee.
However, the Board of Directors or Compensation Committee will take the outcome of the vote into account when considering future
executive compensation arrangements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Compensation Committee Report</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have reviewed and discussed with management
certain Compensation Discussion and Analysis provisions to be included in the Form 10-K for the year-ended December 31, 2011 and
in this Proxy Statement. Based on the review and discussions referred to above, we recommended to the Board of Directors that
the Compensation Discussion and Analysis referred to above be included in the Form 10-K for the year-ended December 31, 2011 and
in this Proxy Statement. Based upon the Compensation Committee risk assessment, the Board of Directors does not believe the Executive
Compensation Plan or any distribution channel compensation Plan presents a material risk to the Company as structured.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Jeannette M. Mills, Chairman</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Harvey C. Barnum, Jr.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Jerry D. Reece</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>2011 Summary Compensation Table</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following table sets forth the annual and long-term compensation
for the last three fiscal years of the Company&rsquo;s Chairman of the Board, Chief Executive Officer, President, Chief Financial
Officer and the other most highly compensated executive officers. These individuals are collectively referred to as the Named
Executive Officers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 7pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">Salary</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">Stock<BR> Awards</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">Option<BR> Awards</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">Bonus</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">Nonqualified<BR> Deferred<BR> Compensation<BR> Earnings</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">All&nbsp;Other<BR> Compensation</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">Total</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold">Name&nbsp;and&nbsp;Pricipal&nbsp;Position</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Year</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">($)</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">($)(1)</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">($)(1)</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">($)(2)</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">($)</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">($)(3)</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">($)</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 20%; text-align: left">Bradley T. MacDonald (4)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; text-align: right">2011</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; text-align: right">250,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; text-align: right">270,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; text-align: right">468,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; text-align: right">&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; text-align: right">3,700</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; text-align: right">991,700</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Chairman of the Board</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2010</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">225,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">331,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">755,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,400</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,314,400</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2009</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">225,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">331,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">235,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,600</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">794,600</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Michael S. McDevitt</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2011</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">250,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">532,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">560,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,349,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Chief Executive Officer</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2010</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">185,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">639,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">826,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,550</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,655,550</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2009</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">185,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">639,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">410,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,800</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,239,800</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Margaret Sheetz</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2011</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">225,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">450,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">477,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,800</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,158,800</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Chief Operating Officer, President</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2010</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">155,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">531,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">755,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,650</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,445,650</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2009</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">155,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">531,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">350,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,900</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,040,900</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Brendan N. Connors</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2011</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">185,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">151,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">167,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,550</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">508,550</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Chief Financial Officer</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2010</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">125,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">167,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">270,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,750</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">565,750</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2009</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">125,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">167,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">117,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,900</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">412,900</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Michael C. MacDonald</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2011</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">35,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">35,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Chairman of the Board</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2010</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Chief Executive Officer</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2009</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 4%; text-align: center">(1)</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 95%">Amounts shown represent the aggregate grant date fair value of the stock awards in the year indicated.
    For a discussion of the assumptions made in the valuation reflected in these columns, see Note 2 of Notes to Consolidated
    Financial Statements in Form 10-K. The actual value that may be realized from an award is contingent upon the satisfaction
    of the conditions to vesting in that award on the date the award is vested. Thus, there is no assurance that the value, if
    any, eventually realized will correspond to the amount shown.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Bonus amounts determined as more specifically discussed above under &ldquo;&mdash;Compensation Discussion and Analysis&rdquo;.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">(3)</TD>
    <TD>&nbsp;</TD>
    <TD>The amounts represent the Company&rsquo;s matching contributions under the 401(K) plan.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">(4)</TD>
    <TD>&nbsp;</TD>
    <TD>On October 31, 2011, due to health issues, Bradley T. MacDonald resigned as the Executive Chairman of the Board.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company&rsquo;s Board of Directors
approved restricted stock grants effective November 4, 2011 to Michael C. MacDonald on the date of his appointment as Chairman
of the Board of Directors. He was granted 60,000 shares as an employee inducement which will vest in three annual installments
beginning on the first anniversary of the November 4, 2011 grant date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company&rsquo;s Board of Directors
on May 7, 2009 approved restricted common stock grants to key executives and Board members with a 5 year vesting period, beginning
on the grant date. Key executives were granted 460,000 shares of restricted common stock to retain their services over the next
five years and recognize continued sales and profit growth in accordance with targets set by the Board of Directors. The Board
of Directors received a total of 71,000 shares with a two year vesting period, beginning on the grant date for their active participation
in the strategic planning process and guidance as it relates to the Company&rsquo;s strong performance and growth.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company&rsquo;s Board of Directors
on November 24, 2008 approved restricted common stock grants to key executives as a 2008 performance bonus for exceeding internal
sales and profit forecasts. Key executives were granted 150,000 shares of restricted common stock over a five year vesting period,
beginning on January 1, 2009.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company&rsquo;s Board of Directors
on July 24, 2008 approved restricted common stock grants to the Named Executives Officers with a 5 year vesting period, beginning
on the grant date. Named Executive Officers were granted 425,000 shares of restricted common stock to retain their services over
the next five years, reward their efforts in the participation of the successful succession and transition of the Company operations
to the new senior management team, and incentivize continued sales and profit growth in accordance with targets set by the Board
of Directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On January 25, 2008, the Board of Directors
modified Bradley T. MacDonald&rsquo;s compensation package for his role in the succession plan and business development initiatives
as outlined in the Form 10-K for the year-ended December 31,2006. The Board cancelled the 100,000 options granted to Mr. MacDonald
on February 8, 2006 and replaced them with a restricted stock grant of 42,000 shares. The restricted shares vested over a period
of 3 years beginning on January 25, 2009.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Outstanding Equity Awards at 2011 Fiscal Year-End Table</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="10" STYLE="border-bottom: black 1pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt">Option&nbsp;Awards</FONT></TD>
    <TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="14" STYLE="border-bottom: black 1pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt">Stock&nbsp;Awards</FONT></TD>
    <TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 7pt"><B>Name</B></FONT></TD>
    <TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 7pt"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt"><B>Number&nbsp;of<BR> Securities<BR>
    Underlying<BR> Unexercised<BR> Options&nbsp;(#)</B></FONT></TD>
    <TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 7pt"><B>&nbsp;</B></FONT></TD>
    <TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 7pt"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt"><B>Number&nbsp;of<BR> Securities<BR>
    Underlying<BR> Unexercised<BR> Options&nbsp;(#)</B></FONT></TD>
    <TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 7pt"><B>&nbsp;</B></FONT></TD>
    <TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 7pt"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt"><B>Option<BR> Exercise</B></FONT></TD>
    <TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 7pt"><B>&nbsp;</B></FONT></TD>
    <TD NOWRAP><FONT STYLE="font-size: 7pt"><B>&nbsp;</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 7pt"><B>Option<BR>
    Expiration&nbsp;</B></FONT></TD>
    <TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 7pt"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt"><B>Number&nbsp;of<BR>
    Shares&nbsp;or Units&nbsp;<BR>
    of Stock&nbsp;That<BR> Have&nbsp;Not<BR> Vested</B></FONT></TD>
    <TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 7pt"><B>&nbsp;</B></FONT></TD>
    <TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 7pt"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt"><B>Market Value&nbsp;<BR>
    of Shares&nbsp;or<BR> Units&nbsp;of Stock&nbsp;<BR>
    that have&nbsp;not<BR> Vested</B></FONT></TD>
    <TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 7pt"><B>&nbsp;</B></FONT></TD>
    <TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 7pt"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt"><B>Equity incentive<BR>
    Plan&nbsp;Awards:&nbsp;<BR> Number&nbsp;of<BR> Unearned<BR> Shares,&nbsp;Units or&nbsp;<BR>
    Other rights&nbsp;that<BR> have&nbsp;not Vested</B></FONT></TD>
    <TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 7pt"><B>&nbsp;</B></FONT></TD>
    <TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 7pt"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt"><B>Equity&nbsp;Incentive<BR>
    Plan&nbsp;Awards:<BR>
    Market&nbsp;or<BR> Payout&nbsp;Value&nbsp;of<BR> Unearned<BR> Shares,&nbsp;Units&nbsp;or<BR> Other&nbsp;rights<BR> That&nbsp;Have&nbsp;Not<BR>
    Vested</B></FONT></TD>
    <TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 7pt"><B>&nbsp;</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt"><B>&nbsp;</B></FONT></TD>
    <TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 7pt"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt"><B>Exercisable</B></FONT></TD>
    <TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 7pt"><B>&nbsp;</B></FONT></TD>
    <TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 7pt"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt"><B>Un-Exercisable</B></FONT></TD>
    <TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 7pt"><B>&nbsp;</B></FONT></TD>
    <TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 7pt"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt"><B>Price&nbsp;($)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 7pt"><B>&nbsp;</B></FONT></TD>
    <TD NOWRAP STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 7pt"><B>&nbsp;</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt"><B>Date</B></FONT></TD>
    <TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 7pt"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt"><B>(#)(1)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 7pt"><B>&nbsp;</B></FONT></TD>
    <TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 7pt"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt"><B>($)(2)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 7pt"><B>&nbsp;</B></FONT></TD>
    <TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 7pt"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt"><B>(#)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 7pt"><B>&nbsp;</B></FONT></TD>
    <TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 7pt"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-size: 7pt"><B>($)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 7pt"><B>&nbsp;</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCFFCC">
    <TD><FONT STYLE="font-size: 7pt">Bradley T. MacDonald</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCFFCC">
    <TD STYLE="width: 17%; padding-left: 9pt"><FONT STYLE="font-size: 7pt">Executive Chairman of the Board</FONT></TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 8%; text-align: right"><FONT STYLE="font-size: 7pt">-</FONT></TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 8%; text-align: right"><FONT STYLE="font-size: 7pt">-</FONT></TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 6%; text-align: right"><FONT STYLE="font-size: 7pt">-</FONT></TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 7%"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 8%; text-align: right"><FONT STYLE="font-size: 7pt">74,000</FONT></TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 8%; text-align: right"><FONT STYLE="font-size: 7pt">1,015,280</FONT></TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 8%; text-align: right"><FONT STYLE="font-size: 7pt">-</FONT></TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 8%; text-align: right"><FONT STYLE="font-size: 7pt">-</FONT></TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
<TR>
    <TD><FONT STYLE="font-size: 7pt">Michael S. McDevitt</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
<TR>
    <TD STYLE="padding-left: 9pt"><FONT STYLE="font-size: 7pt">Chief Executive Officer</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">-</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">-</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">-</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">87,000</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">1,193,640</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">-</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">-</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCFFCC">
    <TD><FONT STYLE="font-size: 7pt">Margaret&nbsp; Sheetz</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCFFCC">
    <TD STYLE="padding-left: 9pt"><FONT STYLE="font-size: 7pt">Chief Operating Officer, President</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">-</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">-</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">-</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">73,000</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">1,001,560</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">-</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">-</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
<TR>
    <TD><FONT STYLE="font-size: 7pt">Brendan N. Connors</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
<TR>
    <TD STYLE="padding-left: 9pt"><FONT STYLE="font-size: 7pt">Chief Financial Officer</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">-</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">-</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">-</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">30,000</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">411,600</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">-</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">-</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCFFCC">
    <TD><FONT STYLE="font-size: 7pt">Michael C. MacDonald</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCFFCC">
    <TD STYLE="padding-left: 9pt"><FONT STYLE="font-size: 7pt">Chairman of the Board</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">-</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">-</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">-</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">60,000</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">823,200</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">-</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">-</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCFFCC">
    <TD STYLE="padding-left: 9pt"><FONT STYLE="font-size: 7pt">Chief Executive Officer</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 4%; text-align: center">(1)</TD>
    <TD STYLE="width: 96%">The restricted stock grants vest over five and six years of service as described below under &ldquo;Narrative
    Disclosure to Summary Compensation Table and Grants of Plan-Based Awards&rdquo;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">(2)</TD>
    <TD>The market value of shares of stock that have not vested is based on the closing price of our common stock on December
    30, 2011, or $13.72 per share.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<!-- Field: Page; Sequence: 26 -->
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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>2011 Option Exercises and Stock Vested Table</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following table sets forth information regarding option
exercises and stock vesting for the Named Executive Officers during Fiscal 2011 and the resulting value realized.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 96%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.25in">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Option&nbsp;Awards</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Stock&nbsp;Awards</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Number&nbsp;of<BR> Shares<BR> Acquired<BR> on&nbsp;Exercise</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Value&nbsp;Realized<BR> on&nbsp;Exercise</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Number&nbsp;of<BR> Shares<BR> Acquired&nbsp;on<BR> Vesting</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Value<BR> Realized&nbsp;on<BR> Vesting</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid">Name</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">(#)</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">($)(1)</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">(#)</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">($)(2)</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Bradley T. MacDonald</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 40%; text-align: left; padding-left: 9pt">Executive Chairman of the Board</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">20,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">403,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">20,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">409,800</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">124,650</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Michael S. McDevitt</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Chief Executive Officer</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">33,333</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">812,992</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">30,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">614,700</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">24,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">483,600</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">124,650</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Margaret Sheetz</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Chief Operating Officer, President</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">609,750</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">512,250</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">20,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">403,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">110,800</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Brendan N. Connors</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Chief Financial Officer</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">121,950</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">204,900</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">161,200</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">55,400</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Michael C. MacDonald</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Chairman of the Board</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Chief Executive Officer</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 22.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(1)</TD><TD>Represents the difference between the exercise price and
                                                                 the fair market value of the common stock on the date of exercise,
                                                                 multiplied by the number of options exercised.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(2)</TD><TD>Represents the number of restricted shares vested, and the
                                                                 number of shares vested multiplied by the fair market value of
                                                                 the common stock on the vesting date.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 40.3pt; text-indent: -0.25in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Narrative Disclosure to Summary Compensation Table and
Grants of Plan-Based Awards</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have entered into employment agreements
with certain Named Executive Officers, certain terms of which are summarized below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Bradley T. MacDonald</B>. Mr. MacDonald
entered into a five year employment agreement effective February 8, 2006. The employment agreement expired in 2011 and was not
renewed. Mr. MacDonald was granted 100,000 options over a five year vesting period beginning on February 8, 2007 in consideration
for his five year commitment and to align his interests with the interests of long-term stockholders. On January 25, 2008, the
Board of Directors modified Mr. MacDonald&rsquo;s compensation package for his role in the succession plan and business development
initiatives as outlined in the Form 10-K for the year-ended December 31,2006. The Board cancelled the 100,000 options granted
to Mr. MacDonald on February 8, 2006 and replaced them with a restricted stock grant of 42,000 shares. The restricted shares will
vest over a period of 3 years beginning on January 25, 2009. Upon termination of Mr. MacDonald&rsquo;s employment by the Company
without cause, or upon his resignation for good reason, he would be entitled to receive an amount equal to one and a half times
the sum of his highest annualized salary payable in equal monthly installments 30 days after his termination of employment for
a period of one year.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Michael S. McDevitt. </B> Mr. McDevitt
entered into a six year employment agreement effective February 8, 2006. The employment agreement expired in February 2012 and
was not renewed. Mr. McDevitt was granted 200,000 shares of the Company&rsquo;s restricted common stock over a six year vesting
period beginning on February 8, 2006 in consideration for his six year commitment and to align his interests with the interests
of long-term stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Margaret Sheetz. </B>Ms. Sheetz entered
into a six year employment agreement effective February 8, 2006. The employment agreement expired in February 2012 and was not
renewed. Ms. Sheetz is presently an at will employee. Ms. Sheetz was granted 150,000 shares of the Company&rsquo;s restricted
common stock over a six year vesting period beginning on February 8, 2006 in consideration for her six year commitment and to
align her interests with the interests of long-term stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Brendan N. Connors. </B> Mr. Connors
entered into a six year employment agreement effective February 8, 2006. The employment agreement expired in February 2012 and
was not renewed. Mr. Connors is presently an at will employee. Mr. Connors was granted 30,000 shares of the Company&rsquo;s restricted
common stock over a six year vesting period beginning on February 8, 2006 in consideration for his six year commitment and to
align his interests with the interests of long-term stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Potential Payments upon Termination or Change in Control
</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of December&nbsp;31, 2011, the Company
had previously, as above noted, entered into employment agreements with [each?] of the Named Executive Officers. As described
in more detail above under &ldquo;Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards.&rdquo; The
employment agreements with the Named Executive Officers generally provided for the payment of benefits if the executive&rsquo;s
employment with the Company is terminated either by the Company without cause or by the executive for good reason. The employment
agreements with the Named Executive Officers did not provide for any additional payments or benefits upon a termination of employment
by the Company for cause, upon the executive&rsquo;s resignation other than for good reason, as applicable, or upon the executive&rsquo;s
death or disability. Upon termination by the Company without cause, or upon his or her resignation for good reason, all of the
Named Executive officers were entitled to receive an amount equal to one and a half times his or her highest annualized base salary
payable in equal monthly installments 30 days after his or her termination of employment. The employment agreements with the Named
Executive Officers expired on February 8, 2011 and February 8, 2012. If an executive had been terminated without cause or the
executive officer resigned with good reason prior to the expiration of their employment agreements they would have received the
following amounts as of December 31, 2011:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 50%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.5in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: justify">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">Severance ($) (1)</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 35%; text-align: justify">Bradley T. MacDonald</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">375,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR>
    <TD STYLE="text-align: justify">Michael S. McDevitt</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">375,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify">Margaret Sheetz</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">337,500</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR>
    <TD STYLE="text-align: justify">Brendan N. Connors</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">277,500</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(1) Based on 2011
salary</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">If there were a change in control, which is defined as a sale
of the majority of the assets of the Company or a change of control of the Board of Directors as a result of a third party stockholder
acquiring or holding over 10% of the common stock and attempting to nominate a majority of the Board of Directors in favor of
his/her stockholder block, the executives would have received the following amounts as of December 31, 2011:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 85%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Severance<BR> ($)(1)</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Accelerated<BR>
    Vesting&nbsp;of<BR> Stock Awards<BR> ($)(2)</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total($)</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 55%; text-align: left">Bradley T. MacDonald</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">375,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">1,015,280</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">1,390,280</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: transparent">
    <TD STYLE="text-align: left">Michael S. McDevitt</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">375,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,193,640</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,568,640</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Margaret Sheetz</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">337,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,001,560</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,339,060</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: transparent">
    <TD STYLE="text-align: left">Brendan N. Connors</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">277,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">411,600</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">689,100</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.2in">(1)</TD><TD>ased on 2011 salary.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.2in">(2)</TD><TD>ccelerated vesting of stock awards were based on NYSE close price
                                                           of the Common Shares on December 30, 2011 of $13.72 per share.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Compensation Policies and Risk</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">The Company does not believe that
its compensation policies and practices create risks that are reasonably likely to have a material adverse effect on the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following table shows as of December 31, 2011, the amount
and percentage of our outstanding common stock beneficially owned by each person who is known by us to beneficially own more than
5% of our outstanding common stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 95%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.25in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; border-bottom: Black 1pt solid">Name and Address of <BR>5% Beneficial Owner</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Shares<BR> Beneficially<BR>
    Owned&nbsp;(1)</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Percent of<BR> Outstanding<BR>
    Common&nbsp;Stock</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 70%; text-align: left">Thompson, Siegel &amp;Walmsley, LLC (1) <BR>6806 Paragon Place Suite 300 <BR>Richmond,
    VA 23230</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">1,191,793</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">8.5</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: transparent">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">BlackRock Inc. (2)</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">40
                                                                                                                           East
                                                                                                                           52<SUP>nd
                                                                                                                           </SUP>Street</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">New
                                                                                                                                                                                                                                 York,
                                                                                                                                                                                                                                 NY
                                                                                                                                                                                                                                 10022</P></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,141,346</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8.1</TD><TD STYLE="text-align: left">%</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">(1)</TD><TD STYLE="text-align: justify">Based solely on information reported
                                                            on Schedule 13G filed by Thompson, Siegel &amp; Walmsley, LLC on February
                                                            10, 2012. As reported in such filing, Thompson, Siegel &amp;Walmsley,
                                                            LLC has sole voting power with respect to 901,393 shares, shared voting
                                                            power with respect to 290,400 shares of the Company&rsquo;s common
                                                            stock, and sole dispositive power with respect to 1,191,793 shares
                                                            of the Company&rsquo;s common stock.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">(2)</TD><TD STYLE="text-align: justify">Based solely on information reported
                                                            on an amended Schedule 13G filed by BlackRock, Inc. on February 10,
                                                            2012. As reported in such filing, BlackRock, Inc. has sole voting
                                                            and dispositive power with respect to 1,141,346 shares of the Company&rsquo;s
                                                            common stock.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 13.5pt; text-align: justify; text-indent: -13.5pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following table shows as of March 14, 2012 the amount and
percentage of our outstanding common stock beneficially owned (unless otherwise indicated) by each of our (i) directors and nominees
for directors, (ii) Named Executive Officers and (iii) our directors, nominees for director and executive officers as a group.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 95%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.25in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; border-bottom: Black 1pt solid">Name&nbsp;of&nbsp;Beneficial&nbsp;Owner</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Shares Beneficially<BR>
    Owned&nbsp;(1)(2)</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Shares<BR> Acquirable<BR>
    Within&nbsp;60 days</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Percent&nbsp;of<BR> Outstanding<BR>
    Common&nbsp;Stock<BR> (%)</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 55%; text-align: left">Bradley T. MacDonald</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">684,148</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">4.87</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: transparent">
    <TD STYLE="text-align: left">Michael S. McDevitt</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">421,346</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3.00</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Margaret Sheetz</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">326,692</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.32</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: transparent">
    <TD STYLE="text-align: left">Brendan N. Connors, CPA</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">115,484</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">*</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Donald F. Reilly</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">84,049</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">*</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: transparent">
    <TD STYLE="text-align: left">Michael C. MacDonald</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">73,156</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">*</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Charles P. Connolly</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">40,534</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">*</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: transparent">
    <TD STYLE="text-align: left">John P. McDaniel</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">29,682</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">*</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Catherine T. Maguire</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,785</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">*</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: transparent">
    <TD STYLE="text-align: left">Leo V. Williams</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">*</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">George J. Lavin, Jr., Esq.</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">23,959</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">*</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: transparent">
    <TD STYLE="text-align: left">Barry B. Bondroff, CPA</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">18,059</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">*</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Jeannette M. Mills</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,905</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">*</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: transparent">
    <TD STYLE="text-align: left">Harvey C. Barnum</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,070</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">*</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Jerry D. Reece</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,070</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: transparent">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Jason L. Groves</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,229</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">*</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: transparent">
    <TD STYLE="text-align: left">All directors, nominees for directors and executive officers as a group:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,861,168</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13.25</TD><TD STYLE="text-align: left">%</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 4%">*</TD>
    <TD STYLE="width: 96%">Less than 1%.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>(1)</TD>
    <TD STYLE="text-align: justify">Beneficial ownership is determined in accordance with the rules of the Securities and Exchange
    Commission. Under those rules and for purposes of the table above (a)&nbsp;if a person has decision making power over either
    the voting or the disposition of any shares, that person is generally deemed to be a beneficial owner of those shares; (b)&nbsp;if
    two or more persons have decision making power over either the voting or the disposition of any shares, they will be deemed
    to share beneficial ownership of those shares, in which case the same shares will be included in share ownership totals for
    each of those persons; and (c)&nbsp;if a person held options to purchase shares that were exercisable on, or became exercisable
    within 60 days of, March 30, 2012that person will be deemed to be the beneficial owner of those shares and those shares (but
    not shares that are subject to options held by any other stockholder) will be deemed to be outstanding for purposes of computing
    the percentage of the outstanding shares that are beneficially owned by that person. Information supplied by officers and
    directors.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>(2)</TD>
    <TD STYLE="text-align: justify">Unless otherwise noted, reflects the number of shares that could be purchased by exercise
    of options available at March 14, 2012, or within 60 days thereafter under our stock option plans.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27pt"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PROPOSAL&nbsp;3:</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>APPROVAL OF 2012 SHARE INCENTIVE PLAN</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">At the Meeting, you will be asked to approve the Company&rsquo;s
2012 Share Incentive Plan (the &ldquo;2012 Plan&rdquo;). The Board of Directors approved the 2012 Plan on July 20, 2012, subject
to stockholder approval. No awards have been made under the 2012 Plan, and no awards will be made under the 2012 Plan unless the
2012 Plan is approved by the stockholders. The 2012 Plan is being submitted for your approval in accordance with NYSE listing
standards, to qualify certain awards as performance-based awards under section 162(m) of the Internal Revenue Code of 1986, as
amended (the &ldquo;Code&rdquo;) and to obtain favorable federal income tax treatment for incentive stock options under section
422 of the Code. The 2012 Plan is attached as Appendix A to this Proxy Statement. The following description of the 2012 Plan is
intended merely as a summary of its principal features and is qualified in its entirety by reference to the provisions of the
2012 Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">With the 2012 Plan, we seek to attract, retain and reward grantees
for the long-term growth and profitability of the Company, and to align their interests with the interests of our stockholders
through the granting of equity and non-equity incentive awards. The 2012 Plan is designed to enable the grantees to acquire or
increase their ownership of Company common stock and to compensate such individuals for the creation of stockholder value. The
2012 Plan provides long-term compensation to employees and directors that is consistent with the philosophy adopted by the Company
as set out in the Compensation Discussion and Analysis beginning on pg. 48 of our Annual Report on Form 10-K for the fiscal year
ended December 31, 2011. The Board of Directors views the 2012 Plan as a means of further aligning the goals of the grantees with
those of the Company&rsquo;s stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>General</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Common Stock Subject to the 2012 Plan.</I> The Company has
reserved 1,000,000 shares of common stock for issuance under the 2012 Plan. During any twelve-month period, no individual may
be granted options, including incentive stock options, and stock appreciation rights covering, in each case, more than 75,000
shares of common stock, or restricted shares, deferred shares and shares of common stock covering, in each case, more than 50,000
shares of common stock. Each of these limits is subject to adjustment for certain changes in the Company&rsquo;s capitalization,
such as stock splits, extraordinary dividends, combinations or similar events. If an award terminates, is forfeited or is settled
for cash rather than common stock, the shares of common stock issued under that award will again become available for grant under
the 2012 Plan. No awards have been granted under the 2012 Plan, and as a result, no benefit or amounts that would have been received
or allocated under the 2012 Plan are determinable at this time.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Administration.</I> The 2012 Plan may be administered by
the Compensation Committee of the Board of Directors or any other committee appointed by the Board of Directors to administer
the 2012 Plan. The 2012 Plan administrator, whether the Compensation Committee or other committee (the &ldquo;Committee&rdquo;),
has the authority in accordance with the terms of the 2012 Plan to adopt, amend, suspend, waive and rescind the rules and regulations
relating to the 2012 Plan, select the individuals to whom awards may be granted, grant the awards, determine the amount and types
of awards granted, establish the form, terms, and conditions of any agreement by which any award is made and determine whether
any award will be settled in cash rather than shares of common stock. The Committee will consist solely of two or more individuals
each of whom will be a &ldquo;non-employee&rdquo; director within the meaning of Rule 16b-3 under the Securities Exchange Act
of 1934 and an &ldquo;outside director&rdquo; within the meaning of section 162(m) of the Code.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Eligible Grantees</I>. Under the terms of the 2012 Plan,
all awards, except for incentive stock options, may be granted to executive officers, directors, key employees and key independent
contractors. Incentive stock options may be granted only to executive officers and other key employees of the Company and its
&ldquo;subsidiary corporations&rdquo; within the meaning of Section 424(f) of the Code</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Stock Options</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Committee may grant non-qualified stock options to executive
officers, directors, key employees and key independent contractors and incentive stock options to executive officers and other
key employees. The Committee determines the terms of the options, the exercise price and when the option becomes exercisable.
The option term may not exceed ten years and the exercise price may not be less than the fair market value at the time of grant.
Upon exercise, the grantee may pay for the shares of common stock with cash, other shares of common stock or other methods approved
by the Committee. .</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Stock Appreciation Rights</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Committee may grant stock appreciation rights (&ldquo;SARs&rdquo;)
to executive officers, directors, key employees and key independent contractors. A SAR entitles the grantee to receive an amount
equal to the excess of the fair market value of the shares of common stock on the date of exercise over the fair market value
on the date of grant. The Committee determines when the SAR becomes exercisable, the method of exercise and the form of settlement
of the SARs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Restricted Shares</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Committee may grant restricted shares to executive officers,
directors, key employees and key independent contractors. The Committee determines the length of the restriction period and the
conditions that must be met for the restriction to lapse. Subject to the terms and conditions of the award agreement, a grantee
holding restricted shares will have the right to receive dividends on the shares during the restriction period, to vote the restricted
shares and enjoy all other stockholder rights with respect to such shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">For performance restricted shares, the restrictions lapse only
to the extent performance goals established by the Committee are met, unless a change of control (as defined in the 2012 Plan)
occurs or the Committee waives the performance goal in the case of death or disability. The Committee may select one or more business
criteria for each performance restricted share award from the following list: (i) earnings before or after interest, taxes, depreciation
and amortization, (ii) earnings before or after interest, taxes, depreciation and amortization expressed as a percentage of net
sales, (iii) earnings per share, (iv) operating cash flow, (v) return on invested capital, (vi) return on stockholders&rsquo;
equity, (vii) market price per share, measured either in absolute terms or as compared to a peer group, (viii) net sales or revenue,
(ix) return on net sales, (x) profit margin, gross or net, (xi) operating margin, (xii) productivity, (xiii) working capital efficiency,
and (xiv) expense control. The business criteria may be applied to the individual, a division, a component of the Company&rsquo;s
business, the Company and/or one or more subsidiaries of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Deferred Shares</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Committee may grant deferred shares to executive officers,
directors, key employees and key independent contractors. Each deferred share represents the right to receive a share of common
stock or cash equal to the fair market value of a share of common stock, when the deferred share vests. The Committee determines
the conditions that must be met for deferred shares to vest. Deferred shares subject to performance goals vest only to the extent
performance goals established by the Committee are met, unless a change of control (as defined in the 2012 Plan) occurs or the
Committee waives the performance goals in the case of death or disability. The Committee may select performance goals from the
list described above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Bonus Shares and Other Stock-Based Awards</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Committee may grant shares of common stock as a bonus and/or
other stock-based awards.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Miscellaneous</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Term</I></B>. The 2012 Plan has a term of ten years.
The Board of Directors can amend or terminate the 2012 Plan at any time. An amendment or termination cannot materially impair
any rights under an outstanding grant without the grantee&rsquo;s consent.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Transferability</I></B>. Awards generally are not transferable,
except by will or under the laws of descent and distribution.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Change in Capitalization/Certain Corporate Transactions</I></B>.
If there is a change in the Company&rsquo;s capitalization that affects its outstanding common stock, the Committee will adjust
the kind and aggregate number of shares of common stock subject to awards, together with the option exercise price and amount
over which appreciation of stock appreciation rights is measured. The 2012 Plan also provides that, in the event of a merger,
consolidation or other specified corporate transaction, the Committee may terminate outstanding awards, after giving advance notice.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Amendment/Termination</I></B>. The Committee may amend
outstanding awards, and the Board of Directors may amend or suspend the 2012 Plan. Stockholder approval is also required for (1)
any material amendment to the 2012 Plan (as defined under applicable NYSE Listing Standards), (2) an amendment to &ldquo;reprice&rdquo;
an outstanding option or stock appreciation right, and (3) certain amendments of which the 2012 Plan requires stockholder approval,
such as an increase in the number of shares of common stock authorized for issuance of incentive stock options and a change in
the class of employees who may receive incentive stock options under the 2012 Plan. Requisite stockholder approval is also required
for any amendment that would require stockholder approval under Section 162(m) of the Code, to the extent compliance with this
section is desired. In addition, no performance stock, performance shares or performance deferred shares with performance goals
beginning after the 2017 annual meeting of stockholder, may be granted unless stockholder approval is obtained at that meeting
or an earlier meeting, as required by Section 162(m) of the Code. The Board of Directors may terminate the 2012 Plan at any time
and for any reason.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Clawback</I></B>. A grantee&rsquo;s right to receive
an award, to retain amounts payable under the award, and to retain any profit or gain associated with a non-cash award are all
subject to any recoupment or &ldquo;clawback&rdquo; policy adopted by the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>U.S. Federal Income Tax Consequences of Options</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The grant of an option does not result
in Federal income tax consequences for the optionee or a deduction for the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">When an option is exercised, the Federal income tax consequences
depend on whether the option is an incentive stock option or a non-qualified stock option. A grantee exercising a non-qualified
stock option will recognize ordinary income equal to the difference between the fair market value of the common stock (on the
date of exercise) and the exercise price. A grantee will not recognize taxable income as a result of acquiring stock by exercising
an incentive stock option. The difference between the fair market value of the stock acquired on the date of exercise and the
exercise price will, however, generally be treated as an item of adjustment for purposes of alternative minimum taxable income.
If the grantee holds the stock he receives on exercise of an incentive stock option for a required period of time, the grantee
will have capital gain (or loss) when the stock is later disposed of. If the grantee does not hold the stock for the required
period of time, the grantee will generally have ordinary income when the stock is disposed of.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">When a grantee recognizes ordinary income on the exercise of
a non-qualified stock option or the sale of stock acquired on exercise of an incentive stock option, the Company is generally
entitled to a deduction in the same amount. Certain requirements, such as reporting the income to the IRS, must be met for the
deduction to be allowable. Also, for the Chief Executive Officer and the three other highest compensated officers, the Company&rsquo;s
deduction may be contingent on certain factors such as the grant being made by a committee of outside directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The affirmative vote of a majority of votes cast by Company&rsquo;s
stockholders at the Meeting is required for approval of this Proposal 3. Broker non-votes will not be counted as votes cast.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27pt"><B>THE BOARD UNANIMOUSLY
RECOMMENDS THAT YOU VOTE FOR PROPOSAL 3</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>OTHER MATTERS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Other Matters</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The management of the Company knows of no other business to
be presented at the Meeting. If, however, other matters properly come before the Meeting, it is intended that the persons named
in the accompanying proxy will vote thereon in accordance with their best judgment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Section&nbsp;16(a) Beneficial Ownership Reporting Compliance</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Section&nbsp;16(a) of the Exchange Act
requires the Company&rsquo;s directors and executive officers and persons who beneficially own more than ten percent of a registered
class of the Company&rsquo;s equity securities to file with the SEC and the NYSE initial reports of ownership and reports of changes
in ownership of equity securities of the Company. Directors, officers and greater-than-ten-percent beneficial owners are required
by SEC regulations to furnish the Company with copies of all Section&nbsp;16(a) forms filed by them. In 2011, with one exception
noted below, to the Company&rsquo;s knowledge, based solely on a review of the copies of such filings on file with the Company
and written representations from the Company&rsquo;s directors and executive officers, we believe all Section&nbsp;16(a) filing
requirements have been made by the Company&rsquo;s directors, executive officers and greater-than-ten-percent beneficial owners
in Fiscal 2011. For Fiscal 2011, we have identified one late filing. Due to an administrative error, the required Form 4 for the
sale of Company shares in November 2011 by Mr. Lavin was inadvertently late.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Certain Relationships and Related
Transactions </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Board of Directors of the Company
has established a policy and certain procedures that must be followed prior to any transaction, arrangement or relationship or
series of similar transactions, arrangements or relationships, including any indebtedness or guarantee of indebtedness, with a
related party. Under this policy, the Nomination Committee monitors and reviews issues involving potential conflicts of interest
involving officers and directors of the Company, including reviewing all related party transactions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Stockholder Proposals for the 2013 Annual General Meeting</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Stockholders interested in submitting a proposal for inclusion
in the proxy statement and form of proxy for the 2013 annual general meeting of stockholders may do so as long as the proposal
complies with the applicable SEC rules and regulations and is received by the Company&rsquo;s Corporate Secretary prior to March
31, 2013. Proposals should be sent to Corporate Secretary, Medifast, Inc., 11445 Cronhill Dr., Owings Mills, MD&nbsp;&nbsp;21117.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Codes of Conduct and Business Ethics and Corporate Governance
Guidelines</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our Board of Directors has adopted a corporate Code of Conduct
and Business Ethics applicable to our directors, officers, including our principal executive officer, principal financial officer
and principal accounting officer, and employees, as well as Corporate Governance Guidelines, in accordance with applicable rules
and regulations of the SEC and the NYSE. Each of our Code of Conduct and Business Ethics and Corporate Governance Guidelines are
available on our website at<I> <U>www.choosemedifast.com</U></I> by following the links through &ldquo;Investor Relations&rdquo;
to &ldquo;Corporate Governance.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Any amendment to, or waiver from, a provision
of the Company&rsquo;s Code of Conduct and Business Ethics with respect to the Company&rsquo;s principal executive officer, principal
financial officer, principal accounting officer or controller will be posted on the Company&rsquo;s website,<I> <U>www.choosemedifast.com</U>.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Householding</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Some banks, brokers and other nominee
record holders may be participating in the practice of &ldquo;householding&rdquo; proxy statements and annual reports. This means
that only one copy of the Proxy Statement or annual report may have been sent to multiple stockholders in your household. We will
promptly deliver a separate copy of either document to you if you request one by writing to the Corporate Secretary, Medifast,
Inc., 11445 Cronhill Dr., Owings Mills, Maryland 21117. If you want to receive separate copies of the annual report and proxy
statement in the future, or if you are receiving multiple copies and would like to receive only one copy for your household, you
should contact your bank, broker or other nominee record holder, or you may contact us at the above address.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Annual Report, Financial and Additional Information.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Annual Financial Statements and Review of Operations of
the Company for Fiscal 2011 can be found in the Company&rsquo;s Annual Report on Form&nbsp;10-K for the year ended December&nbsp;31,
2011. A copy of the Company&rsquo;s Annual Report on Form&nbsp;10-K is available concurrently with this Proxy Statement to each
stockholder of record on the Record Date by way of notice and access.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company&rsquo;s filings with the SEC are all accessible
by following the links to &ldquo;Investor Relations&rdquo; on the Company&rsquo;s website at<I>&nbsp;<U>www.choosemedifast.com</U>.</I>&nbsp;&nbsp;The
Company will furnish without charge a copy of the Company&rsquo;s Annual Report on Form&nbsp;10-K, including the financial statements
and schedules thereto, to any person requesting in writing and stating that he or she is the beneficial owner of Common Shares
of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Requests and inquiries should be addressed to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Investor Relations</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Medifast, Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">11445 Cronhill Dr.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Owings Mills, MD&nbsp;&nbsp;21117</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"><B>PROXY FOR ANNUAL
GENERAL MEETING OF STOCKHOLDERS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"><B>TO BE HELD SEPTEMBER
14, 2012</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>THIS PROXY IS
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&#9;The undersigned hereby appoints Michael C. MacDonald
with full power of substitution, as attorneys for and in the name, place and stead of the undersigned, to vote all the shares
of the common stock of MEDIFAST, INC., owned or entitled to be voted by the undersigned as of the record date, at the Annual General
Meeting of Stockholders of said Company scheduled to be held at the Medifast Distribution Center, 601 Sunrise Avenue, Ridgely,
MD 21660, on Friday, September 14, 2012 at 8:00 A.M., Eastern Daylight Time, and at any adjournment, postponement or continuation
thereof, as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">1. Elect one Class II director for a two-year term ending in
2014, and four Class III directors for a three-year term ending in 2015.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 13.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 13.5pt">Class II Director: Margaret E. Sheetz</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 13.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 13.5pt">Class III Directors: Barry B. Bondroff, George J.
Lavin, Catherine T. Maguire, and Jeannette M. Mills</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 13.5pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="width: 60%; font-family: Wingdings">&uml;&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif">FOR
    All nominees (except as marked to the contrary below)</FONT></TD>
    <TD STYLE="width: 40%; font-family: Wingdings"><FONT STYLE="font-family: Wingdings 2">&#163;</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif">WITHHOLD</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt"><B>INSTRUCTION:</B> To withhold authority
to vote for any individual nominee, write that nominee's name in the space provided below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">2. To approve the appointment of McGladrey &amp; Pullen, LLP,
as the Company's independent registered public accountants for the fiscal year ending December 31, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 70%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 33%; font-family: Wingdings">&uml;&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif">FOR</FONT></TD>
    <TD STYLE="width: 34%; font-family: Wingdings">&uml;&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif">AGAINST</FONT></TD>
    <TD STYLE="width: 33%; font-family: Wingdings">&uml;&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif">ABSTAIN</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">3. To approve the 2012 Share Incentive Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 70%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 33%; font-family: Wingdings">&uml;&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif">FOR</FONT></TD>
    <TD STYLE="width: 34%; font-family: Wingdings">&uml;&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif">AGAINST</FONT></TD>
    <TD STYLE="width: 33%; font-family: Wingdings">&uml;&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif">ABSTAIN</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">4. To transact such other business as may properly come before
the Annual General Meeting or any adjournment, postponement or continuation thereof. (Please date and sign on reverse side).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">This proxy, if properly executed and returned
will be voted in accordance with the directions specified hereof. If no directions are specified, this proxy will be voted FOR
the election of the directors named above or their substitutes as designated by the Board of Directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>This proxy will be voted as specified. If a choice is not
specified, the shares represented by this proxy will be voted &ldquo;FOR&rdquo; each director nominee, &ldquo;FOR&rdquo; Proposal
2, and &ldquo;FOR&rdquo; Proposal 3.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">This proxy should be dated, signed by the stockholder(s), and
returned promptly to us in the enclosed envelope. Persons signing in a fiduciary capacity should so indicate.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 40%; border-bottom: windowtext 1pt solid">&nbsp;</TD>
    <TD STYLE="width: 60%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>SIGNATURE</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">DATE: ________________, 2012</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>MEDIFAST, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>2012 SHARE INCENTIVE PLAN</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="text-transform: uppercase">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="text-transform: uppercase">1</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Purpose</U>.
The purpose of this 2012 Share Incentive Plan (the &ldquo;<U>Plan</U>&rdquo;) of Medifast, Inc., a Delaware corporation (the &ldquo;<U>Company</U>&rdquo;),
is to advance the interests of the Company and its shareholders by providing a means to attract, retain, and reward executive
officers and other key individuals of the Company and/or its subsidiaries, to link compensation to measures of the Company&rsquo;s
performance in order to provide additional share-based incentives to such individuals for the creation of shareholder value, and
to promote ownership of a greater proprietary interest in the Company, thereby aligning such individuals&rsquo; interests more
closely with the interests of shareholders of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="text-transform: uppercase">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="text-transform: uppercase">2</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Definitions</U>.
The definitions of awards under the Plan, including Options, SARs (including Limited SARs), Restricted Shares, Deferred Shares,
and Shares granted as a bonus or in lieu of other awards are set forth in Section 6 of the Plan. Such awards, together with any
other right or interest granted to a Participant under the Plan, are termed &ldquo;Awards.&rdquo; The definitions of terms relating
to a Change in Control of the Company are set forth in <U>Section&nbsp;8</U> of the Plan. In addition to such terms and the terms
defined in Section 1, the following are defined terms under the Plan:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;<U>Award
Agreement</U>&rdquo; means any written agreement, contract, notice to a Participant, or other instrument or document evidencing
an Award.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;<U>Beneficiary</U>&rdquo;
means the person, persons, trust, or trusts which have been designated by a Participant in his or her most recent written beneficiary
designation filed with the Committee to receive the benefits specified under this Plan upon such Participant&rsquo;s death. If,
upon a Participant&rsquo;s death, there is no designated Beneficiary or surviving designated Beneficiary, then the term Beneficiary
means the Participant&rsquo;s estate.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;<U>Board</U>&rdquo;
means the Board of Directors of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;<U>Code</U>&rdquo;
means the Internal Revenue Code of 1986, as amended from time to time. References to any provision of the Code include regulations
thereunder and successor provisions and regulations thereto.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;<U>Committee</U>&rdquo;
means the Compensation Committee of the Board, and/ or such other Board committee as may be designated by the Board to administer
the Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;<U>Covered
Employee</U>&rdquo; means each person who is either the chief executive officer of the Company or whose total compensation is
required to be reported to shareholders of the Company under the Exchange Act by reason of being among the three highest compensated
officers (other than the chief executive officer or the chief financial officer) of the Company. The intent of this definition
is to identify those persons who are &ldquo;covered employees&rdquo; for purposes of the applicable provisions of Section 162(m)
of the Code and this definition is to be interpreted consistent with this intent. The provisions of the Plan that specifically
apply only to Covered Employees shall apply to a Participant if he or she is reasonably expected to be a Covered Employee with
respect to the taxable year in which the Performance Period begins, or the taxable year in which the Performance Award is to be
paid.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;<U>Exchange
Act</U>&rdquo; means the Securities Exchange Act of 1934, as amended from time to time. References to any provision of the Exchange
Act include the rules promulgated thereunder and successor provisions and rules thereto.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;<U>Fair
Market Value</U>&rdquo; of a Share means, as of any given date, the closing sales price of a Share on the New York Stock Exchange
for such date or, if such day was not a trading day, the closing sales price for the most recent trading day prior to such date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;<U>Participant</U>&rdquo;
means a person who, as an executive officer, director, key employee or key independent contractor of the Company or a subsidiary,
has been granted an Award under the Plan which remains outstanding.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(j)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;<U>Performance
Goals</U>&rdquo; means the objective goal or goals applicable to a Participant&rsquo;s Awards that are deemed by the Committee
to be important to the success of the Company or any subsidiaries of the Company. The Committee shall establish the specific objective
measures for each applicable goal for a performance period, which need not be uniform with respect to each Participant. In creating
these measures, the Committee shall use one or more of the following business criteria: (i) earnings before or after interest,
taxes, depreciation and amortization, (ii) earnings before or after interest, taxes, depreciation and amortization expressed as
a percentage of net sales, (iii) earnings per share, (iv) operating cash flow, (v) return on invested capital, (vi) return on
stockholders' equity, (vii) market price per share, measured either in absolute terms or as compared to a peer group, (viii) net
sales or net revenue, (ix) return on net sales, (x) profit margin, gross or net, (xi) operating margin, (xii) productivity, (xiii)
working capital efficiency, and (xiv) expense control. The business criteria may apply to the individual, a division, a component
of the Company&rsquo;s business, or to the Company and/or one or more subsidiaries of the Company and may be weighted and expressed
in absolute terms or relative to the performance of other individuals or companies or an index. The Committee shall determine
the performance period and the Performance Goals and measures (and weighting thereof) applicable to such period not later than
the earlier of 90 days after the commencement of the performance period, or the expiration of 25% of the performance period.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(k)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;<U>Rule
16b-3</U>&rdquo; means Exchange Act Rule 16b-3 as from time to time in effect and applicable to the Plan and Participants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(l)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;<U>Share</U>&rdquo;
means a Common Share of the Company and such other securities as may be substituted for such Share or such other securities pursuant
to <U>Section&nbsp;8</U>; <U>provided</U>, <U>however</U>, that to the extent any class of common shares are readily tradable
on an established securities market, such common shares shall be designated as the Shares for purposes of this Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(m)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;<U>Termination
of Service</U>&rdquo; means: (i)&nbsp;with respect to an Award granted to an employee, the termination of the employment relationship
between the employee and the Company and all Company subsidiaries, (ii) with respect to an Award granted to an independent contractor,
the termination of the service arrangement between the independent contractor and the Company and all Company subsidiaries, and
(iii) with respect to an Award granted to a non-employee director, the cessation of the provision of services as a director of
the Company and all Company subsidiaries; <U>provided</U>, <U>however</U>, that if the Participant&rsquo;s status changes from
employee, independent contractor, or non-employee director to any other status eligible to receive Awards under the Plan, the
Committee may provide that no Termination of Service occurs for purposes of the Plan until the Participant&rsquo;s new status
with the Company and all Company subsidiaries terminates. For purposes of this subsection, if a Participant&rsquo;s relationship
is with a Company subsidiary, and not the Company (i.e., the Participant is an employee, independent contractor, or non-employee
director of a Company subsidiary and not the Company), the Participant shall incur a Termination of Service when such entity ceases
to be a Company subsidiary, unless the Committee determines otherwise.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="text-transform: uppercase">3</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Administration</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Composition
of Committee</U>. The Committee shall consist solely of two or more individuals each of whom shall be a &ldquo;nonemployee director&rdquo;
as defined in Rule l6b-3 and qualifies as an &ldquo;outside director&rdquo; (as that term is used for purposes of Section 162(m)
of the Code). If the Committee cannot or does not act, the Board shall have the rights and responsibilities of the Committee hereunder
and under the Award Agreements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Authority
of the Committee</U>. The Plan shall be administered by the Committee. The Committee shall have full and final authority to take
the following actions, in each case subject to and consistent with the provisions of the Plan:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to
select Participants to whom Awards may be granted;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to
determine the type or types of Awards to be granted to each Participant;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to
determine the number of Awards to be granted, the number of Shares to which an Award will relate, the terms and conditions of
any Award granted under the Plan (including, but not limited to, the exercise price, grant price, or purchase price, any restriction
or condition, any schedule or performance conditions for the lapse of restrictions or conditions relating to transferability,
forfeiture before or after grant, exercisability, or settlement of an Award, and waivers, accelerations, or modifications thereof,
based in each case on such considerations as the Committee shall determine), and all other matters to be determined in connection
with an Award;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to
determine whether, to what extent, and under what circumstances an Award may be settled, or the exercise price of an Award may
be paid, in cash, Shares, other Awards, or other property, or an Award may be canceled, forfeited, or surrendered;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to
prescribe the form of each Award Agreement, which need not be identical for each Participant;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">(vi)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to
adopt, amend, suspend, waive, and rescind such rules and regulations and appoint such agents as the Committee may deem necessary
or advisable to administer the Plan;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">(vii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to
correct any defect or supply appropriate text for any omission or reconcile any inconsistency in the Plan and to construe and
interpret the Plan and any Award, rules and regulations, Award Agreement, or other instrument hereunder, with such constructions
and interpretations to be conclusive and binding on all persons and otherwise accorded the maximum deference permitted by law;
<U>provided</U><I> </I>that, the Committee&rsquo;s construction and interpretation shall not be entitled to deference on and after
a Change in Control except to the extent that such constructions and interpretations are made exclusively by members of the Committee
who are individuals who served as Committee members before the Change in Control;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">(viii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to
make all other decisions and determinations as may be required under the terms of the Plan or as the Committee may deem necessary
or advisable for the administration of the Plan; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">(ix)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
the event of any dispute or disagreement as to the interpretation of the Plan or of any rule, regulation or procedure, or as to
any question, right or obligation arising from or related to the Plan, the decision of the Committee, except as provided in clause
(vii), shall be final and binding upon all persons. Unless otherwise expressly provided hereunder, the Committee, with respect
to any grant, may exercise its discretion hereunder at the time of the Award or thereafter.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Manner
of Exercise of Committee Authority</U>. Unless authority is specifically reserved to the Board under the terms of the Plan, the
Company&rsquo;s bylaws, or applicable law, the Committee shall have discretion to exercise authority under the Plan. Any action
of the Committee with respect to the Plan shall be final, conclusive, and binding on all persons, including the Company, subsidiaries
of the Company, Participants, any person claiming any rights under the Plan from or through any Participant, and Shareholders.
The express grant of any specific power to the Committee, and the taking of any action by the Committee, shall not be construed
as limiting any power or authority of the Committee. To the extent permitted by applicable law, the Committee may delegate to
officers or employees of the Company or any subsidiary the authority, subject to such terms as the Committee shall determine,
(i) to perform administrative functions, (ii) with respect to Participants not subject to Section 16 of the Exchange Act, to perform
such other functions of the Committee as the Committee may determine, and (iii) with respect to Participants subject to Section
16, to perform such other functions of the Committee as the Committee may determine to the extent performance of such functions
will not result in the loss of an exemption under Rule 16b-3 otherwise available for transactions by such persons. If and to the
extent applicable, no member of the Committee may act as to matters under the Plan specifically relating to such member. If no
Committee is designated by the Board to act for these purposes, the Board shall have the rights and responsibilities of the Committee
hereunder and under the Award Agreements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Limitation
of Liability</U>. Each member of the Committee shall be entitled to in good faith, rely or act upon any report or other information
furnished to him by any officer or other employee of the Company or any subsidiary, the Company&rsquo;s independent certified
public accountants, or any executive compensation consultant, legal counsel, or other professional retained by the Company to
assist in the administration of the Plan. No member of the Committee, nor any officer or employee of the Company acting on behalf
of the Committee, shall be personally liable for any action, determination, or interpretation taken or made in good faith with
respect to the Plan, and all members of the Committee and any officer or employee of the Company acting on behalf of the Committee
or members thereof shall, to the extent permitted by law or charter, be fully indemnified, held harmless and protected by the
Company with respect to any such action, determination, or interpretation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="text-transform: uppercase">4</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Shares
Available Under Plan; Individual Award Limitations; Adjustments</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares
Reserved for Awards. Subject to adjustment as hereinafter provided, the total number of Shares reserved and available for issuance
to Participants in connection with Awards (including with respect to ISOs) under the Plan shall be 1,000,000 Shares; <U>provided</U>,
<U>however</U>, that the number of Shares with respect to which (i) Awards of Options (including ISOs) and SARs may be granted
to any Participant shall in each case not exceed 75,000 during any twelve month period and (ii) Awards of Restricted Shares, Deferred
Shares and Shares may be granted to any Participant shall in each case not exceed 50,000 during any twelve-month period. If all
or any portion of an Award is forfeited, settled in cash, or terminated without issuance of Shares to the Participant, the Shares
to which such Award or portion thereof related shall again be available for future Awards under the Plan. The Committee may adopt
procedures for the counting of Shares relating to any Award to ensure appropriate counting and avoid double counting (in the case
of tandem or substitute awards). Any Shares issued pursuant to an Award may consist, in whole or in part, of authorized and unissued
Shares, treasury Shares, or Shares acquired in the market for the account of the Participant (which treasury Shares or acquired
Shares will be deemed to have been &ldquo;issued&rdquo; pursuant to such Award).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Adjustments</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
the event that the Committee shall determine that any recapitalization, reorganization, merger, consolidation, spin-off, combination,
repurchase, exchange of Shares or other securities of the Company, stock split or reverse split, extraordinary dividend (whether
in the form of cash, Shares, or other property), liquidation, dissolution, or other similar corporate transaction or event affects
the Shares such that an adjustment is appropriate in order to prevent dilution or enlargement of each Participant&rsquo;s rights
under the Plan, then the Committee shall, in such manner as it may deem equitable, adjust any or all of (i)&nbsp;the number and
kind of Shares remaining reserved and available for issuance under <U>Section&nbsp;4(a)</U>, (ii) the number and kind of outstanding
Restricted Shares or Restricted Shares relating to any other outstanding Award in connection with which Restricted Shares may
be issued, (iii)&nbsp;the number and kind of Shares that may be issued in respect of other outstanding Awards, and/or (iv)&nbsp;the
exercise price or grant price relating to any Award (or, if deemed appropriate, the Committee may make provision for a cash payment
with respect to any outstanding Award). In addition, the Committee is authorized to make adjustments in the terms and conditions
of, and the criteria included in, Awards in recognition of unusual or nonrecurring events (including, without limitation, events
described in the preceding sentence) affecting the Company or any subsidiary or the financial statements of the Company or any
subsidiary, or in response to changes in applicable laws, regulations, or accounting principles; or in the event the Committee
determines that such adjustments are appropriate in order to prevent dilution or enlargement of benefits or potential benefits
intended to be made available under the Plan. Notwithstanding the foregoing, the Committee shall not make any adjustments pursuant
to this Section that would prevent an Award to a Covered Employee (that was otherwise intended to qualify for the &ldquo;performance-based
exception&rdquo; pursuant to Section 162(m) of the Code) from qualifying for such exception. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
the Company shall be consolidated or merged with another corporation or other entity, each Participant who has received Restricted
Shares that are then subject to restrictions imposed by Section 6(d) may be required to deposit with the successor corporation
the certificates for the stock or securities or the other property that the Participant is entitled to receive by reason of ownership
of Restricted Shares in a manner consistent with <U>Section&nbsp;6(d)(iv)</U>, and such stock, securities or other property shall
become subject to the restrictions and requirements imposed by <U>Section&nbsp;6(d)</U>, and the certificates therefor or other
evidence thereof shall bear a legend similar in form and substance to the legend referred to in <U>Section&nbsp;6(d)(iv)</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
judgment of the Committee with respect to any matter referred to in this sub-section (b) shall be conclusive and binding upon
each Participant without the need for any amendment to the Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="text-transform: uppercase">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="text-transform: uppercase">5</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Eligibility</U>.
Except as provided in the following sentence, Executive officers, other key employees and other key independent contractors of
the Company and its subsidiaries, including any director and any director who is also an executive officer or employee, are eligible
to be granted Awards under the Plan. Notwithstanding the preceding sentence, only Executive officers and other key employees of
the Company and its &ldquo;subsidiary corporation&rdquo; (as such term is defined in Section 424(f) of the Code) are eligible
to be granted ISOs under the Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="text-transform: uppercase">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="text-transform: uppercase">6</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Specific
Terms of Awards</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>General.
</U>Awards may be granted on the terms and conditions set forth in this Section 6. In addition, the Committee may impose on any
Award or the exercise thereof, at the date of grant or thereafter (subject to <U>Section 10(f)</U>), such additional terms and
conditions, not inconsistent with the provisions of the Plan, as the Committee shall determine, including terms requiring forfeiture
of Awards in the event of Termination of Service by the Participant or upon the occurrence of other events. In addition, the Committee
shall require, as the condition of the issuance of Shares in connection with any Award, that consideration be received by the
Company which meets the requirements of the Delaware General Corporation Law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Options</U>.
An Option entitles a Participant to purchase a Share on the exercise thereof. Options include ISOs and NQSOs. An ISO is an Option
that is intended to meet the requirements of Section 422 of the Code. An NQSO is an Option that is not an ISO. The Committee is
authorized to grant Options to Participants on the following terms and conditions:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Exercise
Price</U>. The exercise price per Share purchasable under an Option shall be determined by the Committee at the time of grant
but shall be not less than 100% (110% in the case of an ISO granted to a more-than-ten-percent shareholder, as provided in clause
(vi) below) of Fair Market Value on the date of grant of the Option.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Term</U>.
The term of each Option shall be determined by the Committee and shall not exceed ten years (five years in the case of an ISO
granted to a more-than-ten-percent shareholder (as provided in clause (vi) below)).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Time
and Method of Exercise</U>. The Committee shall determine the time or times at which an Option may be exercised in whole or in
part, the methods by which such exercise price may be paid or deemed to be paid, the form of such payment, including, without
limitation, cash, Shares, cashless exercise and/or a broker-assisted exercise, and the methods by which Shares will be delivered
or deemed to be delivered to Participants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Forfeiture</U>.
Except as otherwise determined by the Committee, upon Termination of Service during the applicable term of the Options, unexercised
Options shall be forfeited and again be available for Award by the Company. The Committee may provide, by rule or regulation or
in any Award Agreement, or may determine in any individual case, that forfeiture conditions relating to the Options will be waived
in whole or in part in the event of terminations resulting from specified causes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>ISO
Annual Limit</U>. The aggregate Fair Market Value (determined as of the date the ISO is granted) of the Shares with respect to
which the ISOs are exercisable for the first time by a Participant during any calendar year (counting ISOs under this Plan and
under any stock option plan of the Company or a parent or subsidiary corporation of the Company (as defined in Sections 424(e)
and (f) of the Code) shall not exceed $100,000. If an Option intended as an ISO is granted to a Participant and the Option may
not be treated in whole or in part as an ISO pursuant to the $100,000 limit, the Option shall be treated as an ISO to the extent
it may be so treated under the limit and as an NQSO as to the remainder. For purposes of determining whether an ISO would cause
the limitation to be exceeded, ISOs shall be taken into account in the order granted.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">(vi)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>More-Than
Ten-Percent Shareholder</U>. If, after applying the attribution rules of Section 424(d) of the Code, the Participant owns stock
possessing more than ten percent of the total combined voting power of all classes of stock of the Company or of a parent or subsidiary
corporation of the Company (as defined in Sections 424(e) and (f) of the Code) immediately before an ISO is granted to him or
her, the exercise price for the ISO shall be not less than 110 percent of the Fair Market Value of the optioned Shares on the
date the ISO is granted, and such ISO, by its terms, shall not be exercisable after the expiration of five years from the date
the ISO is granted. The conditions set forth in this clause shall not apply to NQSOs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Share
Appreciation Rights</U>. The Committee is authorized to grant SARs to Participants on the following terms and conditions:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Right
to Payment</U>. A SAR shall confer on the Participant to whom it is granted a right to receive, upon exercise thereof, the excess
of (A) the Fair Market Value of one Share on the date of exercise, over (B) the Fair Market Value of one Share on the date of
grant of the SAR.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Other
Terms</U>. The Committee shall determine the time or times at which a SAR may be exercised in whole or in part, the method of
exercise, method of settlement, form of consideration payable in settlement, method by which Shares will be delivered or deemed
to be delivered to Participants, whether or not a SAR shall be in tandem with any other Award, and any other terms and conditions
of any SAR. Limited SARs that may only be exercised upon the occurrence of a Change in Control (as such term is defined in <U>Section&nbsp;8(b)
</U>or as otherwise defined by the Committee) may be granted on such terms, not inconsistent with this <U>Section&nbsp;6(c)</U>,
as the Committee may determine. Such Limited SARs may be either freestanding or in tandem with other Awards.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Forfeiture</U>.
Except as otherwise determined by the Committee, upon Termination of Service during the applicable term of the SARs, unexercised
SARs shall be forfeited and again be available for Award by the Company. The Committee may provide, by rule or regulation or in
any Award Agreement, or may determine in any individual case, that forfeiture conditions relating to the SARs will be waived in
whole or in part in the event of terminations resulting from specified causes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Restricted
Shares</U>. The Committee is authorized to grant Restricted Shares to Participants on the following terms and conditions:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Grant</U>.
The Committee may provide a specified purchase price for the Restricted Shares (whether or not any State law applicable to the
Company requires the payment of a purchase price). Except to the extent restricted under the terms of the Plan and any Award Agreement
relating to the Restricted Shares, a Participant granted Restricted Shares shall have all of the rights of a shareholder including,
without limitation, the right to vote Restricted Shares and the right to receive dividends thereon (as described below). Restricted
Shares include Performance Shares. Performance Shares are Restricted Shares that provide for a lapse of restrictions upon the
attainment of certain Performance Goals.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Lapse
of Restrictions.</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 2in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 2in">(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>In
General</U>. Upon the lapse of all restrictions in accordance with this subsection (d) or Section 8, Shares shall cease to be
Restricted Shares for purposes of the Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 2in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 2in">(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Restricted
Shares Other Than Performance Shares</U>. With respect to Restricted Shares that are not Performance Shares, the applicable restrictions
shall lapse at such time or times, and on such conditions (such as performance-based requirements), as the Administrator may specify
in the Award Agreement. The Administrator may at any time accelerate the time at which the restrictions on all or any part of
the shares of Restricted Shares (other than Performance Shares) will lapse.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 2in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 2in">(3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Performance
Shares</U>. With respect to Performance Shares, the applicable restrictions shall lapse at the end of the applicable performance
period if and to the extent the Performance Goals have been achieved for such period. The Committee shall certify the extent to
which the Performance Goals are achieved and shall have the discretion to decrease (but not increase) the extent to which such
restrictions lapse on account of such achievement. The restrictions shall also lapse (A) as provided in Section 8, or (B) if and
to the extent determined by the Committee, in the case of the Participant&rsquo;s death or disability (as determined by the Committee).
If the Participant&rsquo;s Termination of Service occurs for any reason prior to the end of the performance period, the Participant
shall forfeit all Performance Shares granted with respect to such performance period except (i) as provided in Section 14, (ii)
as determined by the Committee in the case of the Participant&rsquo;s death or disability (as determined by the Committee), or
(iii) the Committee may provide that restrictions lapse with respect to a pro-rata portion of the number of shares of Performance
Shares for which the restrictions would have lapsed had the Participant been employed on the last day of the performance period,
under such circumstances as the Committee, in its sole discretion, determines.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 2in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 2in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Forfeiture</U>.
Except as otherwise determined by the Committee, upon Termination of Service during the applicable restriction period, Restricted
Shares that are at that time subject to restrictions shall be forfeited and reacquired by the Company; <U>provided</U>, <U>however</U>,
that the Committee may provide, by rule or regulation or in any Award Agreement, or may determine in any individual case, that
restrictions or forfeiture conditions relating to Restricted Shares (other than with respect to Restricted Shares that are subject
to Performance Goals and are granted to Covered Employees) will be waived in whole or in part in the event of terminations resulting
from specified causes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Certificates
for Shares</U>. Restricted Shares granted under the Plan may be evidenced in such manner as the Committee shall determine. If
certificates representing Restricted Shares are registered in the name of the Participant, such certificates shall bear an appropriate
legend referring to the terms, conditions, and restrictions applicable to such Restricted Shares, the Company may retain physical
possession of the certificate, and the Participant shall have delivered a stock power to the Company, endorsed in blank, relating
to the Restricted Shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Dividends
and Distributions</U>. Dividends paid on Restricted Shares shall be either paid at the dividend payment date in the form the dividends
are paid to other shareholders, in cash, or in unrestricted Shares having a Fair Market Value equal to the amount of such dividends,
or subject to the terms of Section 409A of the Code, the payment of such dividends shall be deferred and/or the amount or value
thereof automatically reinvested in additional Restricted Shares; other Awards, or other investment vehicles, as the Committee
shall determine or permit the Participant to elect. Shares distributed in connection with a Share split or Share dividend, and
other property distributed as a dividend, shall be subject to restrictions and a risk of forfeiture to the same extent as the
Restricted Shares with respect to which such Shares or other property are distributed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">(vi)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Nature
of Restricted Shares</U>.<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>Restricted Shares granted under the Plan
are not intended to provide for the deferral of compensation subject to Section 409A of the Code.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Deferred
Shares</U>. The Committee is authorized to grant Deferred Shares to Participants, subject to the following terms and conditions:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Award
and Restrictions</U>. A Deferred Share shall entitle a Participant to a Share (or its cash equivalent) on the date of vesting.
Deferred Shares shall be subject to such vesting conditions as the Committee may impose, if any, which may include vesting at
the expiration of the deferral period, at earlier specified times, or upon the achievement of certain Performance Goals, separately
or in combination, under such circumstances, in such installments, or otherwise as the Committee may determine.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Issuance
of Shares</U>. Upon meeting the vesting condition specified for an Award of Deferred Shares, the Company shall issue the Shares
to which the Participant is entitled under the Award. In no event shall such issuance occur more than two and one-half months
after the close of the calendar year in which the Participant&rsquo;s rights to such shares vest. In the event the Award of Deferred
Shares provides for partial vesting over multiple years, shares that vest during a calendar year shall be issued to the Participant
within two and one-half months after the close of the calendar year in which the Shares vest.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Vesting</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 2in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 2in">(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Deferred
Shares Other Than Deferred Shares That Are Subject to Performance Goals</U>.<B> </B>With respect to Deferred Shares that are not
subject to Performance Goals, the Committee shall determine when such Deferred Shares shall vest and any conditions (such as continued
employment) that must be met in order for such Deferred Shares to vest at the end of the applicable vesting period. The Committee
may at any time accelerate the time at which such Deferred Shares shall vest.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 2in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 2in">(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Deferred
Shares Subject to Performance Goals</U>. Deferred Shares that are subject to Performance Goals shall vest at the end of the applicable
performance period if and to the extent the Performance Goals have been achieved for such period. The Committee shall certify
the extent to which the Performance Goals are achieved and shall the have the discretion to decrease (but not increase) the extent
to which such Deferred Shares vest on account of such achievement. Such Deferred Shares shall also vest (A) as provided in Section
8, or (B) if and to the extent determined by the Committee in the case of the Participant&rsquo;s death or disability (as determined
by the Committee). If the Participant&rsquo;s Termination of Service occurs for any reason prior to the end of the performance
period, the Participant shall forfeit all such Deferred Shares granted with respect to such performance period, except (i) as
provided in Section 8, (ii) as determined by the Committee in the case of the Participant&rsquo;s death or disability (as determined
by the Committee), or (iii) the Committee may provide for vesting of a pro-rata portion of such Deferred Shares that would have
vested had the Participant been employed on the last day of the performance period, under such circumstances as the Committee,
in its sole discretion, determines.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Forfeiture</U>.
Except as otherwise determined by the Committee, upon Termination of Service during the applicable deferral period or portion
thereof to which forfeiture conditions apply (as provided in the Award Agreement evidencing the Deferred Shares), all Deferred
Shares that are at that time subject to such risk of forfeiture shall be forfeited; <U>provided</U><I>, </I><U>however</U>, that
the Committee may provide, by rule or regulation or in any Award Agreement, or may determine in any individual case, that restrictions
or forfeiture conditions relating to Deferred Shares (other than with respect to Deferred Shares that are subject to Performance
Goals and that have been granted to a Covered Employee) will be waived in whole or in part in the event of terminations resulting
from specified causes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Dividend
Equivalents</U>. The Committee may provide that payments in the form of dividend equivalents will be credited in respect of Deferred
Shares, which amounts may be paid or distributed when accrued or deemed reinvested in additional Deferred Shares. Any dividend
equivalents credited with respect to Deferred Shares shall be subject to restrictions and a risk of forfeiture to the same extent
as the Deferred Shares and amounts credited shall be distributed in accordance with the provisions of <U>Section&nbsp;6(e)(ii)
</U>above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">(vi)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Compliance
with Section 409A</U>. Notwithstanding anything herein to the contrary, all distributions of Deferred Shares shall be made within
the applicable &ldquo;short-term deferral period&rdquo; within the meaning of Section 409A of the Code.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Bonus
Shares and Awards in Lieu of Cash Obligations.</U> The Committee is authorized to grant Shares as a bonus, or to grant Shares
or other Awards in lieu of Company obligations to pay cash under other plans or compensatory arrangements; <U>provided</U><I>,
</I><U>however</U>, that, in the case of Participants subject to Section 16 of the Exchange Act, the amount of such Shares or
Awards shall be determined by the Committee in a manner conforming to then-applicable requirements of Rule 16b-3. Shares or Awards
granted hereunder shall be subject to such other terms as shall be determined by the Committee.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Other
Stock-Based Awards</U>. The Committee shall have the right to grant other Awards based upon the Shares having such terms and conditions
as the Committee may determine, including the grant of shares based upon certain conditions, the grant of securities convertible
into Shares and the grant of phantom shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="text-transform: uppercase">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="text-transform: uppercase">7&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><U>Certain
Provisions Applicable to Awards</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Stand-Alone,
Additional, Tandem and Substitute Awards</U>. Awards granted under the Plan may, in the discretion of the Committee, be granted
either alone or in addition to, in tandem with, or in substitution for, any other Award granted under the Plan or any award granted
under any other plan of the Company, any subsidiary, or any business entity to be acquired by the Company or a subsidiary, or
any other right of a Participant to receive payment from the Company or any subsidiary. Awards granted in addition to or in tandem
with other Awards or awards may be granted either as of the same time as or a different time from the grant of such other Awards
or awards. The per Share exercise price of any Option, grant price of any SAR, or purchase price of any other Award conferring
a right to purchase Shares granted in substitution for an outstanding Award or award may be adjusted to reflect the in-the-money
value of the surrendered Award or award, <U>provided</U> such adjustment does not cause the Award to be treated as deferred compensation
subject to Section 409A of the Code.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Term
of Awards</U>. The term of each Award shall be for such period as may be determined by the Committee up to a maximum term of ten
years.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Form
of Payment Under Awards</U>. Subject to the terms of the Plan and any applicable Award Agreement, payments to be made by the Company
or a subsidiary upon the grant or exercise of an Award may be made in such forms as the Committee shall determine, including,
without limitation, cash, Shares, other Awards.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Rule
16b-3 Compliance</U>. It is the intent of the Company that this Plan comply in all respects with applicable provisions of Rule
16b-3 in connection with any grant of Awards to or other transaction by a Participant who is subject to Section 16 of the Exchange
Act (except for transactions exempted under alternative Exchange Act Rules or acknowledged in writing to be non-exempt by such
Participant). Accordingly, if, at such time, any provision of this Plan or any Award Agreement relating to an Award does not comply
with the requirements of Rule 16b-3 as then applicable to any such transaction, such provision will be construed or deemed amended
to the extent necessary to conform to the applicable requirements of Rule 16b-3 so that such Participant shall avoid liability
under Section 16(b).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="text-transform: uppercase">8</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Change
in Control Provisions</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
the event of a &ldquo;<U>Change in Control</U>,&rdquo; as defined in this Section:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Committee as constituted immediately before the Change in Control may make such adjustments as it, in its discretion, determines
are necessary or appropriate in light of the Change in Control (including, without limitation, the substitution of stock other
than stock of the Company as the stock optioned hereunder, cash payment or other equitable consideration and the acceleration
of vesting or exercisability of Awards under the Plan), <U>provided</U> that the Committee determines that such adjustments do
not have a substantial adverse economic impact on the Participants as determined at the time of the adjustments.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)
Any Award carrying a right to exercise that was not previously exercisable and vested shall become fully exercisable and vested,
subject only to the restrictions set forth in <U>Sections&nbsp;7(d)</U> and <U>9(a)</U>; and (B) the restrictions, deferral of
settlement, and forfeiture conditions applicable to any other Award granted under the Plan shall lapse and such Award shall be
deemed fully vested, and any performance conditions imposed with respect to any Award shall be deemed to be fully achieved, subject
to the restrictions set forth in <U>Sections&nbsp;7(d)</U> and <U>9(a)</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
purposes of the Plan, a &ldquo;Change in Control&rdquo; shall have occurred if.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
&ldquo;Person,&rdquo; as such term is used in Sections 13(d) and 14(d) of the Exchange Act (other than the Company, any entity
controlling, controlled by or under common control with the Company, any trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any corporation owned, directly or indirectly, by the shareholders of the Company in substantially
the same proportions as their ownership of shares of the Company), is or becomes the &ldquo;beneficial owner&rdquo; (as defined
in Rule l3d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of either
the combined voting power of the Company&rsquo;s then outstanding voting securities or the then outstanding Shares (in either
case, other than as a result of an acquisition of securities directly from the Company);</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;during
any period of two consecutive years, individuals who at the beginning of such period constitute the Board, and any new director
(other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described
in clause (i), (iii), or (iv) of this <U>Section&nbsp;8(b)</U>) whose election by the Board or nomination for election by the
Company&rsquo;s shareholders was approved by a vote of at least two-thirds of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any
reason to constitute at least a majority of the Board;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
shareholders of the Company approve a merger, consolidation, recapitalization, or reorganization of the Company, or a reverse
share split of any class of voting securities of the Company, or the consummation of any such transaction if shareholder approval
is not obtained, other than any such transaction which would result in at least 75% of the total voting power represented by the
voting securities of the Company or the surviving entity outstanding immediately after such transaction being beneficially owned
by persons who together beneficially owned of least 75% of the combined voting power of the voting securities of the Company outstanding
immediately prior to such transaction, with the relative voting power of each such continuing holder compared to the voting power
of each such continuing holder not substantially altered as a result of the transaction; <U>provided</U><I> </I>that,<B> </B>for
purposes of this paragraph (iii), such continuity of ownership (and preservation of relative voting power) shall be deemed to
be satisfied if the failure to meet such 75% threshold (or to substantially preserve such relative voting power) is due solely
to the acquisition of voting securities by an employee benefit plan of the Company or such surviving entity or of any subsidiary
of the Company or such surviving entity; or</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
shareholders of the Company approve a plan of complete liquidation or dissolution of the Company or an agreement for the sale
or disposition by the Company of all or substantially all of the Company&rsquo;s assets (or any transaction having a similar effect).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">Notwithstanding the foregoing, no event or
condition shall constitute a Change of Control to the extent that, if it were, a 20% tax would be imposed upon or with respect
to an award under Section 409A of the Code; <U>provided</U> that, in such case, the event or condition shall continue to constitute
a Change in control to the maximum extent possible (e.g., if applicable, in respect of vesting without an acceleration of distribution)
without causing the imposition of such 20% tax.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="text-transform: uppercase">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="text-transform: uppercase">9</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Certain
Corporate Transactions</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">In the event of a corporate transaction (such
as, for example, a merger, consolidation, acquisition of property or stock, separation, reorganization, or liquidation), the surviving
or successor corporation shall assume each outstanding Award or substitute a new award of the same type for each outstanding Award;
<U>provided</U>, <U>however</U>, that, in the event of a proposed corporate transaction, the Committee may terminate all or a
portion of the outstanding Awards, effective upon the closing of the corporate transaction, if it determines that such termination
is in the best interests of the Company. If the Committee decides so to terminate outstanding Options and SARs, the Committee
shall give each Participant holding an Option or SAR to be terminated not fewer than seven days&rsquo; notice prior to any such
termination, and any Option or SAR which is to be so terminated may be exercised (if and only to the extent that it is then exercisable
under the terms of the Award Agreement and Section 8) at any time prior to such termination. Further, except as otherwise provided
in the Plan, the Administrator may, in its discretion accelerate, in whole or in part, the date on which any or all Awards become
exercisable or vested (to the extent such Award is not fully exercisable or vested pursuant to the Award Agreement or Section
8).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">The Committee also may, in its discretion,
change the terms of any outstanding Award to reflect any such corporate transaction, <U>provided</U> that (i) in the case of ISOs,
such change would not constitute a &ldquo;modification&rdquo; under Section 424(h) of the Code, unless the Participant consents
to the change, and (ii) no such adjustment shall be made to an outstanding Option or SAR if such adjustment would cause the Option
or SAR to be subject to Section 409A of the Code.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="text-transform: uppercase">10</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General
Provisions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Compliance
With Laws and Obligations</U>. The Company will not be obligated to issue or deliver Shares in connection with any Award or take
any other action under the Plan in a transaction subject to the registration requirements of the Securities Act of 1933, as amended,
or any other federal or state securities law, any requirement under any listing agreement between the Company and any stock exchange
or automated quotation system, or any other law, regulation, or contractual obligation of the Company, until the Company is satisfied
that such laws, regulations, and other obligations of the Company have been complied with in full. Certificates representing Shares
issued under the Plan will be subject to such stop-transfer orders and other restrictions as may be applicable under such laws,
regulations, and other obligations of the Company, including any requirement that a legend or legends be placed thereon.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Limitations
on Transferability</U>. Awards and other rights under the Plan will not be transferable by a Participant except by will or the
laws of descent and distribution (or to a designated Beneficiary in the event of the Participant&rsquo;s death), and, if exercisable,
shall be exercisable during the lifetime of a Participant only by such Participant or his or her guardian or legal representative;
<U>provided</U><I>, </I><U>however</U>, that such Awards and other rights may be transferred to one or more transferees during
the lifetime of the Participant in connection with the Participant&rsquo;s estate or tax planning, and such transferees may exercise
rights thereunder in accordance with the terms thereof, but only if and to the extent consistent with the registration of the
offer and sale of Shares on Form S-8, Form S-3, or such other registration form of the Securities and Exchange Commission as may
then be filed and effective with respect to the Plan and permitted by the Committee. The Company may rely upon the beneficiary
designation last filed in accordance with this <U>Section 10(b)</U>. Awards and other rights under the Plan may not be pledged,
mortgaged, hypothecated, or otherwise encumbered by a Participant and shall not be subject to the claims of a Participant&rsquo;s
creditors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Taxes</U>.
The Company and any subsidiary is authorized to withhold from any Award granted or to be settled, any delivery of Shares in connection
with an Award, any other payment relating to an Award, or any payroll or other payment to a Participant amounts of withholding
and other taxes due or potentially payable in connection with any income recognition event involving an Award (including, for
example, an election under section 83(b) of the Code), and to take such other action as the Committee may deem advisable to enable
the Company and Participants to satisfy obligations for the payment of withholding taxes and other tax obligations relating to
any Award. This authority shall include authority to withhold or receive Shares or other property and to make cash payments in
respect thereof in satisfaction of a Participant&rsquo;s tax obligations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>No
Right to Continued Employment; Leaves of Absence</U>. Neither the Plan, any Award Agreement, or any action taken hereunder shall
be construed as giving any Participant the right to be retained in the employ or contract of the Company or any of its subsidiaries,
nor shall it interfere in any way with the right of the Company or any of its subsidiaries to terminate any Participant&rsquo;s
employment or contract at any time. Unless otherwise specified in the applicable Award Agreement, an approved leave of absence
shall not be considered a Termination of Service for purposes of an Award under the Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>No
Rights to Awards; No Shareholder Rights</U>. No Participant or employee or independent contractor shall have any claim to be granted
any Award under the Plan, and there is no obligation for uniformity of treatment of Participants, employees or independent contractors.
No Award shall confer on any Participant any of the rights of a shareholder of the Company unless and until Shares are duly issued
or transferred and delivered to the Participant in accordance with the terms of the Award or, in the case of an Option, the Option
is duly exercised.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Changes
to the Plan and Awards</U>. The Board may amend, alter, suspend, discontinue, or terminate the Plan or the Committee&rsquo;s authority
to grant Awards under the Plan without the consent of shareholders or Participants, except that any material amendment or alteration
will be subject to the approval of the Company&rsquo;s shareholders at or before the next annual meeting of shareholders for which
the record date is after the date of such Board action if such shareholder approval is required by any applicable federal or state
law or regulation or the rules of any stock exchange or automated quotation system on which Company securities may then be listed
or quoted, and the Board may otherwise determine to submit other such amendments or alterations to shareholders for approval;
<U>provided</U><I>, </I><U>however</U>, that, without the consent of an affected Participant, no such action may materially impair
the rights of such Participant with respect to any Award theretofore granted to him. The Committee may waive any conditions or
rights under, or amend, alter, suspend, discontinue, or terminate, any Award theretofore granted and any Award Agreement relating
thereto; <U>provided</U><I>, </I><U>however</U>, that, without the consent of an affected Participant, no such action may materially
impair the rights of such Participant under such Award; and <U>provided</U> <U>further</U> that no such amendment, discontinuance
or termination of the Plan shall accelerate the time for payment of any Deferred Shares or other amounts subject to Section 409A
of the Code (except to the extent permitted by Section 409A of the Code).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">Except as permitted under Section 4(b),
if the Fair Market Value of Shares subject to an Option or SAR has declined since the Award was granted, the Committee shall not,
without shareholder approval, (i) cancel any or all such Options or SARs in exchange for cash or the grant of a new Award, or
(ii) reduce the exercise price of any or all such Options or reduce the amount over which appreciation of a SAR is measured; <U>provided</U>,
<U>however</U>, that such reduced amount shall not be less than the Fair Market Value on the date such reduction is made.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>No
Fiduciary Relationship</U>. Nothing contained in the Plan and no action taken pursuant to the provisions of the Plan, shall create
or shall be construed to create a trust of any kind, or a fiduciary relationship between the Company or its subsidiaries, or their
officers or the Committee, on the one hand, and the Participant, the Company, its subsidiaries or any other person or entity,
on the other.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Notices</U>.
All notices under the Plan shall be in writing, and if to the Company, shall be delivered to the Board or mailed to its principal
office, addressed to the attention of the Board; and if to the Participant, shall be delivered personally, sent by facsimile transmission
or mailed to the Participant at the address appearing in the records of the Company. Such addresses may be changed at any time
by written notice to the other party given in accordance with this <U>Section 10(h)</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Unfunded
Status of Awards; Creation of Trusts.</U> The Plan is intended to constitute an &ldquo;unfunded&rdquo; plan for incentive and
deferred compensation. With respect to any payments not yet made to a Participant pursuant to an Award, nothing contained in the
Plan or any Award shall give any such Participant any rights that are greater than those of a general creditor of the Company;
<U>provided</U><I>, </I><U>however</U>, that the Committee may authorize the creation of trusts or make other arrangements to
meet the Company&rsquo;s obligations under the Plan to deliver cash, Shares, other Awards, or other property pursuant to any Award,
which trusts or other arrangements shall be consistent with the &ldquo;unfunded&rdquo; status of the Plan unless the Committee
otherwise determines with the consent of each affected Participant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(j)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Nonexclusivity
of the Plan</U>. Neither the adoption of the Plan by the Board nor its submission to the shareholders of the Company for approval
shall be construed as creating any limitations on the power of the Board to adopt such other compensatory arrangements as it may
deem desirable, including the granting of awards otherwise than under the Plan, and such arrangements may be either applicable
generally or only in specific cases.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(k)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Non-Deferred
Compensation Plan</U>. The Plan is intended to constitute an equity or equity-based compensation plan that does not provide for
the deferral of compensation subject to Section 409A of the Code and, if any provision of the Plan is subject to more than one
interpretation or construction, such ambiguity shall be resolved in favor of that interpretation or construction which is consistent
with the Plan not being subject to the provisions of Section 409A. Notwithstanding the forgoing, if, at any time, any provision
of this Plan or any Award Agreement relating to an Award does not comply with the requirements of Section 409A of the Code, such
provision will be construed or deemed amended to the extent necessary to conform to the applicable requirements of Section 409A
of the Code so that such Participant shall avoid liability under Section 409A. Deferred Shares are intended to meet the &ldquo;short-term
deferral exception&rdquo; under Section 409A of the Code.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(l)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>No
Fractional Shares.</U> No fractional Shares shall be issued or delivered pursuant to the Plan or any Award. The Committee shall
determine whether cash, other Awards, or other property shall be issued or paid in lieu of such fractional Shares or whether such
fractional Shares or any rights thereto shall be forfeited or otherwise eliminated.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(m)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Captions.
</U>The use of captions in this Plan is for convenience. The captions are not intended to provide substantive rights.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(n)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Governing
Law</U>. The validity, construction, and effect of the Plan, any rules and regulations under the Plan, and any Award Agreement
will be determined in accordance with the Delaware General Corporation Law and other laws (including those governing contracts)
of the State of Delaware, without giving effect to principles of conflicts of laws, and applicable federal law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(o)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Recoupment
Policy</U>. Notwithstanding any provision of this Plan to the contrary, a Participant&rsquo;s right to receive or retain an Award,
to retain any amount received pursuant to an Award (in cash or Shares) and, in the case of Shares received pursuant to an Award,
to retain any profit or gain the Participant realized in connection with such an Award, shall be subject to any recoupment or
&ldquo;clawback&rdquo; policy adopted by the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="text-transform: uppercase">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="text-transform: uppercase">11</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Effective
Date and Plan Termination</U>. The Plan will be effective upon approval of the Board, subject to its approval by the shareholders
of the Company if such shareholder approval is required by any applicable federal or state law or regulation or the rules of any
stock exchange or automated quotation system as then in effect. Unless earlier terminated by action of the Board, the Plan will
remain in effect until such time as no Shares remain available for issuance under the Plan and the Company or, if earlier, until
the day before the tenth anniversary of the effective date of the Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">As adopted by the
Board of Directors: &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; _______ __, 2012</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

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