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Proc-Type: 2001,MIC-CLEAR
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<SEC-DOCUMENT>0001072613-08-000562.txt : 20080225
<SEC-HEADER>0001072613-08-000562.hdr.sgml : 20080225
<ACCEPTANCE-DATETIME>20080225142529
ACCESSION NUMBER:		0001072613-08-000562
CONFORMED SUBMISSION TYPE:	DEFR14A
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20080225
DATE AS OF CHANGE:		20080225
EFFECTIVENESS DATE:		20080225

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			Bridgeline Software, Inc.
		CENTRAL INDEX KEY:			0001378590
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-PREPACKAGED SOFTWARE [7372]
		IRS NUMBER:				522263942
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		DEFR14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-33567
		FILM NUMBER:		08639081

	BUSINESS ADDRESS:	
		STREET 1:		10 SIXTH ROAD
		CITY:			WOBURN
		STATE:			MA
		ZIP:			01801
		BUSINESS PHONE:		781 376 5555

	MAIL ADDRESS:	
		STREET 1:		10 SIXTH ROAD
		CITY:			WOBURN
		STATE:			MA
		ZIP:			01801
</SEC-HEADER>
<DOCUMENT>
<TYPE>DEFR14A
<SEQUENCE>1
<FILENAME>def14-a_15760.htm
<DESCRIPTION>AMENDED DEFINITIVE PROXY STATEMENT
<TEXT>
<html>
  <head>
    <title>Unassociated Document</title>
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    <!--Document Created using EDGARizer 4.0.4.0-->
    <!--Copyright 1995 - 2008 EDGARfilings, Ltd., an IEC company. All rights reserved-->
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">&#160;UNITED
STATES</font></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">SECURITIES AND EXCHANGE
COMMISSION</font></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Washington, D.C.
20549</font></font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">SCHEDULE 14A</font></font></div>
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Statement Pursuant to Section 14(a) of</font></div>
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Securities Exchange Act of 1934 (Amendment
No.&#160;&#160;&#160;&#160;)</font></div>
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the Registrant <font style="DISPLAY: inline;" face="Wingdings">&#253;</font></font></div>
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a Party other than the Registrant <font style="DISPLAY: inline;" face="Wingdings">o</font></font></div>
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appropriate box:</font></div>
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Proxy Statement</font><br></div>
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for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))</font><br></div>
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Proxy Statement</font><br></div>
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Additional Materials</font><br></div>
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Material Pursuant to Rule 240.14a-12</font></div>
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INC.</font></font></div>
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of Registrant as Specified in Its Charter)</font></div>
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Person(s) Filing Proxy Statement if Other Than the Registrant)</font></div>
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of Filing Fee (Check the appropriate box):</font></div>
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      calculated and state how it was determined):</font></div>
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            <td width="95%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
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            <td width="95%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
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      box if any part of the fee is offset as provided by Exchange Act Rule
      0-11(a)(2) and identify the filing for which the offsetting fee was paid
      previously. Identify the previous filing by registration statement number,
      or the Form or Schedule and the date of its filing.</font></div>
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          <tr bgcolor="white">
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          <tr bgcolor="white">
            <td width="5%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            <td width="95%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
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      <div id="HDR">&#160;</div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font id="TAB1" style="MARGIN-LEFT: 396pt"></font><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">[Bridgeline
Letterhead]</font></font></div>
    <div><br></div>
    <div><br></div>
    <div><br></div>
    <div><br></div>
    <div><br></div>
    <div><br></div>
    <div><br></div>
    <div><br></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 252pt"></font>February 27, 2008</font></div>
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    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Dear
Bridgeline Software,&#160;Inc. Stockholder:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">I am
pleased to invite you to attend Bridgeline Software,&#160;Inc.&#8217;s Annual Meeting
of Stockholders to be held on April 18, 2008. The meeting will begin promptly at
10:00&#160;a.m. Eastern Time at the Hilton Hotel located at 2 Forbes Road,
Woburn, Massachusetts 01801.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">This
booklet includes the formal notice of the meeting and the proxy statement. The
proxy statement tells you about the agenda and procedures for the meeting. It
also describes how the board of directors operates and provides information
about our director candidates.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">I look
forward to sharing more information with you about Bridgeline Software at the
Annual Meeting. Whether or not you plan to attend, I encourage you to vote your
proxy as soon as possible so that your shares will be represented at the
meeting.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">
          <tr>
            <td valign="top" width="36%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            <td align="left" valign="top" width="2%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
            <td align="left" valign="top" width="38%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Sincerely,</font></div>
              <div>&#160;</div>
              <div>/s/ <font size="2">Thomas L. Massie</font></div>
              <div>&#160;</div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Thomas
      L. Massie</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">President
      and Chief Executive Officer</font></div>
            </td>
          </tr>
      </table>
    </div>
    <div>&#160;</div>
    <div>&#160;</div>
    <div>&#160;</div>
    <div>&#160;</div>
    <div>&#160;</div>
    <div>&#160;</div>
    <div>&#160;</div>
    <div>&#160;</div>
    <div><br>&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
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      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">BRIDGELINE SOFTWARE,
INC.</font></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">10 Sixth Road</font></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Woburn, Massachusetts
01801</font></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS</font></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">To Be Held at 10:00 A.M. on April 18,
2008</font></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">To the
Stockholders of Bridgeline Software, Inc.:</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NOTICE IS
HEREBY GIVEN that the Annual Meeting of Stockholders (the "Meeting") of
BRIDGELINE SOFTWARE, INC. (the "Company") will be held on April 18, 2008 at
10:00 A.M. at the Hilton Boston/Woburn located at 2 Forbes Road, Woburn,
Massachusetts, to consider and vote on the following matters described under the
corresponding numbers in the attached Proxy Statement:</font></div>
    <div><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
          <tr valign="top">
            <td style="WIDTH: 54pt">
              <div>&#160;</div>
            </td>
            <td style="WIDTH: 18pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1.</font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">To
      elect two directors;</font></div>
            </td>
          </tr>
      </table>
    </div>
    <div><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <tr valign="top">
            <td style="WIDTH: 54pt">
            </td>
            <td align="left" style="WIDTH: 18pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.</font></div>
            </td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">To
      amend the Bridgeline Software, Inc. Amended and Restated Stock Incentive
      Plan to increase the number of shares of Common Stock available for
      issuance upon exercise of options granted under the Plan from 1,400,000
      shares to 2,000,000 shares;</font></div>
            </td>
          </tr>
      </table>
    </div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
          <tr valign="top">
            <td style="WIDTH: 54pt">
              <div>&#160;</div>
            </td>
            <td style="WIDTH: 18pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.</font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">To
      ratify the appointment of UHY LLP as the Company's independent registered
      public accounting firm for its fiscal year ending September 30, 2008;
      and</font></div>
            </td>
          </tr>
      </table>
    </div>
    <div><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
          <tr valign="top">
            <td style="WIDTH: 54pt">
              <div>&#160;</div>
            </td>
            <td style="WIDTH: 18pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.</font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">To
      transact such other business as may properly come before the
      Meeting.</font></div>
            </td>
          </tr>
      </table>
    </div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The Board
of Directors has fixed the close of business on February 22, 2008 as the record
date for the determination of stockholders entitled to vote at the Meeting, and
only holders of shares of Common Stock of record at the close of business on
that day will be entitled to vote. The stock transfer books of the Company will
not be closed.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A
complete list of stockholders entitled to vote at the Meeting shall be available
for examination by any stockholder, for any purpose germane to the Meeting,
during ordinary business hours from March 18, 2008 until the Meeting at the
principal executive offices of the Company. The list will also be available at
the Meeting.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Whether
or not you expect to be present at the Meeting, please fill in, date, sign, and
return the enclosed Proxy, which is solicited by management. The Proxy is
revocable and will not affect your vote in person in the event you attend the
Meeting.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 270pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">By Order
of the Board of Directors</font></div>
    <div><br></div>
    <div><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;/s/ <font size="2">Gary
Cebula</font></div>
    <div>&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 270pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Gary
Cebula</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 270pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-STYLE: italic">Assistant
Secretary</font></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">February
27, 2008</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Requests for additional copies of the
proxy materials and the Company's Annual Report for its fiscal year ended
September 30, 2007 should be addressed to Shareholder Relations, Bridgeline
Software, Inc., 10 Sixth Road, Woburn, Massachusetts 01801. This material will
be furnished without charge to any stockholder requesting
it.</font></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">YOUR VOTE IS
IMPORTANT.</font></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">WHETHER OR NOT YOU PLAN TO ATTEND THE
MEETING, PLEASE SIGN THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE
ENCLOSED STAMPED ENVELOPE.</font></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold"><font size="2">BRIDGELINE SOFTWARE, INC.</font></font></div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">10 Sixth Road</font></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Woburn, Massachusetts
01801</font></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Proxy Statement</font></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Annual Meeting of
Stockholders</font></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">April 18, 2008</font></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
enclosed proxy is solicited by the management of Bridgeline Software, Inc. in
connection with the Annual Meeting of Stockholders to be held on April 18, 2008
at 10:00 A.M. at the Hilton Boston/Woburn located at 2 Forbes Road, Woburn,
Massachusetts and any adjournment thereof. The Board of Directors of the Company
(the "Board of Directors") has set the close of business on February 22, 2008 as
the record date for the determination of stockholders entitled to vote at the
Meeting. A stockholder executing and returning a proxy has the power to revoke
it at any time before it is exercised by filing a later-dated proxy with, or
other communication to, the Secretary of the Company or by attending the Meeting
and voting in person.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The proxy
will be voted in accordance with your directions to:</font></div>
    <div><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
          <tr valign="top">
            <td style="WIDTH: 36pt">
              <div>&#160;</div>
            </td>
            <td style="WIDTH: 18pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1.</font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Consider
      and act upon a motion to elect two
directors;</font></div>
            </td>
          </tr>
      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
          <tr valign="top">
            <td style="WIDTH: 36pt">
              <div>&#160;</div>
            </td>
            <td style="WIDTH: 18pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.</font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Consider
      and act upon a motion to amend the Bridgeline Software, Inc. Amended and
      Restated Stock Incentive Plan to increase the number of shares of Common
      Stock available for issuance upon exercise of options granted under the
      Plan from 1,400,000 shares to 2,000,000
shares;</font></div>
            </td>
          </tr>
      </table>
    </div>
    <div><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
          <tr valign="top">
            <td style="WIDTH: 36pt">
              <div>&#160;</div>
            </td>
            <td style="WIDTH: 18pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.</font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Consider
      and act upon a motion to ratify the appointment of UHY LLP as the
      Company's independent registered public accounting firm for its fiscal
      year ending September 30, 2008; and</font></div>
            </td>
          </tr>
      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
          <tr valign="top">
            <td style="WIDTH: 36pt">
              <div>&#160;</div>
            </td>
            <td style="WIDTH: 18pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.</font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Transact
      such other business as may properly come before the
    Meeting.</font></div>
            </td>
          </tr>
      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In the
absence of direction, the proxy will be voted in favor of management's
proposals.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
entire cost of soliciting proxies will be borne by the Company. The costs of
solicitation, which represent an amount believed to be normally expended for a
solicitation relating to an uncontested election of directors, will include the
costs of supplying necessary additional copies of the solicitation materials and
the Company's Annual Report to Stockholders for its fiscal year ended September
30, 2007 (the "Annual Report") to beneficial owners of shares held of record by
brokers, dealers, banks, trustees, and their nominees, including the reasonable
expenses of such recordholders for completing the mailing of such materials and
Annual Reports to such beneficial owners.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Only
stockholders of record of the Company's 9 , 457 , 065 shares of
Common Stock (the "Common Stock") outstanding at the close of business on
February 22, 2008 will be entitled to vote at the Meeting.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Each
share of Common Stock is entitled to one vote. A majority of the outstanding
shares of the Common Stock represented in person or by proxy at the Meeting will
constitute a quorum at the Meeting. All shares of the Common Stock represented
in person or by proxy (including shares which abstain or do</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
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    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">not vote
for any reason with respect to one or more of the matters presented for
stockholder approval) will be counted for purposes of determining whether a
quorum is present at the Meeting. Abstentions will be treated as shares that are
present and entitled to vote for purposes of determining the number of shares
present and entitled to vote with respect to any particular matter, but will not
be counted as a vote in favor of such matter. Accordingly, an abstention from
voting on a matter has the same legal effect as a vote against the matter. If a
broker or nominee holding stock in "street name" indicates on the proxy that it
does not have discretionary authority to vote as to a particular matter ("broker
non-votes"), those shares will counted for purposes of determining whether a
quorum is present at the Meeting but not be considered as present and entitled
to vote with respect to such matter. Accordingly, a broker non-vote on a matter
has no effect on the voting on such matter.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Directors will be elected by a plurality of the votes properly cast at the
Meeting.&#160;&#160;Abstentions and broker non-votes as to this election do not
count as votes for or against such election.&#160;&#160;The approval of the
proposals to amend the Company&#8217;s Amended and Restated Stock Incentive Plan and
ratify the appointment of the Company&#8217;s independent auditors will require the
affirmative vote of a majority of the shares of Common Stock properly cast at
the Meeting.&#160;&#160;Abstentions as to these proposals will count as being
present and represented at the Meeting and entitled to vote, and will be
included in calculating the number of votes cast on this proposal (and thus will
have the effect of &#8220;no&#8221; votes).&#160;&#160;Broker non-votes will not be included
in calculating the number of votes cast on this proposal.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The Proxy
Statement, the attached Notice of Meeting, the enclosed form of proxy and the
Annual Report are being mailed to stockholders on or about February 29, 2008.
The Company's principal executive offices are located at 10 Sixth Road, Woburn,
Massachusetts 01801 and its telephone number at that location is (781)
376-5555.</font></div>
    <div>&#160;</div>
    <div>&#160;</div>
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    <div><br>&#160;</div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">PROPOSAL 1</font></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">ELECTION OF
DIRECTORS</font></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Two
directors are to be elected by a plurality of the shares present in person or
represented by proxy at the Meeting and entitled to vote thereon, each to hold
office for a three year term expiring in 2011.&#160;&#160;The persons named in
the accompanying proxy have advised management that it is their intention to
vote for the election of the following nominees as directors unless authority is
withheld:</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(1)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Robert
Hegarty</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(2)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;John
Cavalier</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Management
has no reason to believe that any nominee will be unable to serve. In the event
that any nominee becomes unavailable, the proxies may be voted for the election
of such person or persons who may be designated by the Board of
Directors.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
following table sets forth certain information as to our current
directors:</font></div>
    <div><br></div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">
          <tr>
            <td align="left" valign="top" width="23%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Name</font></font></div>
            </td>
            <td valign="top" width="10%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Age</font></font></div>
            </td>
            <td align="left" valign="top" width="29%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Position with the
      Company</font></font></div>
            </td>
            <td valign="top" width="18%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Director
      Since</font></font></div>
            </td>
          </tr>
          <tr>
            <td align="left" colspan="4" valign="top" width="80%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-STYLE: italic">Nominees for Directors
      for</font></font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-STYLE: italic">Terms Expiring in
      2011</font></font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="23%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font id="TAB1" style="MARGIN-LEFT: 19pt"></font>Robert Hegarty*</font></div>
            </td>
            <td valign="top" width="10%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">45</font></div>
            </td>
            <td align="left" valign="top" width="29%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Director</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Chair
      of the Compensation Committee</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Member
      of the Nominating and Corporate Governance Committee</font></div>
            </td>
            <td valign="top" width="18%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">2006</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="23%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            <td valign="top" width="10%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            <td align="left" valign="top" width="29%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            <td valign="top" width="18%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
          </tr>
          <tr>
            <td align="left" valign="top" width="23%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font id="TAB1" style="MARGIN-LEFT: 17.75pt"></font>John Cavalier*</font></div>
            </td>
            <td valign="top" width="10%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">68</font></div>
            </td>
            <td align="left" valign="top" width="29%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Director</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Member
      of the Audit Committee, the Compensation Committee and the Nominating and
      Corporate Governance Committee</font></div>
            </td>
            <td valign="top" width="18%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">2007</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" colspan="4" valign="top" width="80%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-STYLE: italic">Director with
      Term</font></font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-STYLE: italic">Expiring in
      2010</font></font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="23%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font id="TAB1" style="MARGIN-LEFT: 19pt"></font>Kenneth Galaznik*</font></div>
            </td>
            <td valign="top" width="10%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">56</font></div>
            </td>
            <td align="left" valign="top" width="29%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Director</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Chair
      of the Audit Committee</font></div>
            </td>
            <td valign="top" width="18%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">2006</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" colspan="4" valign="top" width="80%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-STYLE: italic">Directors with
      Terms</font></font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-STYLE: italic">Expiring in
      2009</font></font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="23%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font id="TAB1" style="MARGIN-LEFT: 19pt"></font>Thomas Massie</font></div>
            </td>
            <td valign="top" width="10%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">46</font></div>
            </td>
            <td align="left" valign="top" width="29%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Chairman
      of the Board of Directors</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">President</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Chief
      Executive Officer</font></div>
            </td>
            <td valign="top" width="18%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">2000</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="23%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            <td valign="top" width="10%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            <td align="left" valign="top" width="29%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            <td valign="top" width="18%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
          </tr>
          <tr>
            <td align="left" valign="top" width="23%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font id="TAB1" style="MARGIN-LEFT: 18.4pt"></font>William
    Coldrick*</font></div>
            </td>
            <td valign="top" width="10%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">65</font></div>
            </td>
            <td align="left" valign="top" width="29%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Director</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Chair
      of the Nominating and Corporate Governance Committee Member of the Audit
      Committee and the Compensation Committee</font></div>
            </td>
            <td valign="top" width="18%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">2000</font></div>
            </td>
          </tr>
      </table>
    </div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">*Independent
director as defined under the rules of the Nasdaq Stock Market</font></div>
    <div><br></div>
    <div><br></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
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        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt">3</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Thomas Massie </font>has served as
our Chairman of the Board, President and Chief Executive Officer since our
inception.<font style="DISPLAY: inline; FONT-WEIGHT: bold">&#160;</font>Prior to
founding Bridgeline, Mr. Massie founded and took public two technology
companies. From 1991 to 2000, Mr. Massie was the founder, Chairman of the Board
and Chief Executive Officer of Focus Enhancements, a publicly held developer of
proprietary video conversion ASIC chip technology that had technology alliances
with companies such as Intel, Microsoft, Apple Computer, Thompson, Philips,
SONY, Nokia, and Zenith. Mr. Massie led Focus Enhancements from concept to a
public market capitalization of $230 million. From 1986 to 1991, Mr. Massie was
the founder and Chairman of the Board of Mass Microsystems, a publicly held
developer of proprietary multimedia products. Mr. Massie led Mass Microsystems
from inception to a public market capitalization in excess of $75 million. From
2002 to 2007, Mr. Massie was a member of the Board of Directors of MapInfo
Corporation, a publicly-held developer of location intelligence software. Mr.
Massie was the Chairman of MapInfo&#8217;s Corporate Governance Committee and a member
of its Audit and Compensation Committees. In April 2007 MapInfo was acquired by
Pitney-Bowes for $480 million. In addition, Mr. Massie is a member of the
National Association of Directors and was a non-Commissioned Officer in the
United States Army, 101st Airborne Division.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">John Cavalier </font>has been a
member of our Board of Directors since 2007.&#160;&#160;From 2001 to 2007, Mr.
Cavalier was the Chairman of the Board of MapInfo Corporation, a publicly-held
developer of location intelligence software. From 1996 to 2001, Mr. Cavalier was
the president, CEO and a director of MapInfo.&#160;&#160;During Mr. Cavalier&#8217;s
tenure at MapInfo, he successfully helped lead the growth of MapInfo from
approximately $40M in annual sales to over $160M in annual sales.&#160;&#160;In
April 2007, MapInfo was acquired by Pitney Bowes for $480M.&#160;&#160;Prior to
joining MapInfo, Mr. Cavalier held executive management positions with The
Antares Alliance Group (a joint venture between Amdahl and EDS), Amdahl, Atari,
and Apple Computer.&#160;&#160;Mr. Cavalier is an active board member of various
privately-held technology companies and is the Vice Chairman of The Center of
Economic Growth for New York State Tech Valley.&#160;&#160;In 2006, Mr. Cavalier
was inducted into New York State&#8217;s Tech Valley&#8217;s Business Hall of Fame
recognizing him for outstanding businesses leadership.&#160;&#160;In 2007, Mr.
Cavalier was given the Explore, Discover, &amp; Imagine Award by New York&#8217;s
Children&#8217;s Museum of Science &amp; Technology recognizing his leadership in
promoting technology to children.&#160;&#160;Mr. Cavalier earned his
undergraduate degree from the University of Notre Dame and his MBA from Michigan
State University.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">William Coldrick</font> has been a
member of our Board of Directors since our inception. Mr. Coldrick is also the
Chairman of the Corporate Governance Committee. Since 1993, Mr. Coldrick has
served as Vice Chairman of the Board of Focus Enhancements. Since 1996 he has
been a director of Advanced Electronics Support Products. From 1996 to 1998, he
was Vice President and General Manager of Worldwide Channel Operations for the
Computer Systems Division of Unisys Corp. From 1982 to 1991, Mr. Coldrick held
several senior management positions at Apple Computer. In his last position at
Apple as Senior Vice President of U.S. Sales, he was responsible for managing
all sales, support, service, distribution and channel activities for the United
States. During Mr. Coldrick&#8217;s tenure at Apple, his sales leadership assisted in
the growth of Apple from $80 million a year to over $6 billion a year in annual
sales. Before joining Apple, Mr. Coldrick spent fourteen years with Honeywell
Information Systems, where he held several positions, including Director of
Marketing. He holds a B.A. degree from Iona College in New Rochelle, New
York.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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      </div>
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        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt">4</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Kenneth Galaznik</font> has been a
member of our Board of Directors and Chairman of the Audit Committee since 2006.
Since 2005, Mr. Galaznik has been the Senior Vice President, Chief Financial
Officer and Treasurer of American Science and Engineering, Inc., a publicly held
supplier of X-ray inspection and screening systems with a public market cap of
over $450 million. From August 2002 to February 2005, Mr. Galaznik was Vice
President of Finance of American Science and Engineering, Inc. From November
2001 to August 2002, Mr. Galaznik was self-employed as a consultant. From March
1999 to September 2001, he served as Vice President of Finance at Spectro
Analytical Instruments, Inc. and has more than 30 years of experience in
accounting and finance positions. Mr. Galaznik holds a B.B.A. degree in
accounting from The University of Houston.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Robert Hegarty</font> has been a
member of our Board of Directors and Chairman of the Compensation Committee
since 2006. Since 1999, Mr. Hegarty has been Managing Director of TowerGroup
Securities &amp; Investments Group, a capital markets and investment and wealth
management research subsidiary of MasterCard International. Before joining
TowerGroup in 1999, Mr. Hegarty was vice president of trading systems at Putnam
Investments in Boston, Massachusetts and, prior to that, was employed by
Fidelity Investments in Boston for eight years, during which he served as vice
president of technology of the institutional broker-dealer arm of Fidelity
Investments. Mr. Hegarty holds an M.B.A. degree in finance and marketing from
Babson College and a B.S. degree in computer science from North Adams State
College.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Other Executive
Officers</font></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Gary Cebula </font>has been our
Executive Vice President and Chief Financial Officer since our inception. From
1998 to 2000, Mr. Cebula was Vice President of Finance, Administration and
Treasurer of Focus Enhancements, a publicly held developer of proprietary video
conversion ASIC chip technology that had global distribution and technology
alliances with companies such as Intel, Microsoft, Apple Computer, Thompson,
Philips, SONY, Nokia, and Zenith. Mr. Cebula was a key contributor to Focus&#8217;
strategic initiatives, spurring a market capitalization growth from $45 million
to $230 million during his tenure. From 1996 to 1998, Mr. Cebula was Chief
Financial Officer of Hanold Holding Corporation, a manufacturer and distributor
of educational products and services. From 1986 to 1996 he was Corporate
Controller of Continental Resources, then a $125 million value-added reseller of
computer system and integration services. A graduate of General Electric&#8217;s
Financial Management Program, Mr. Cebula earned a B.S. degree in accounting and
an M.S. degree in taxation from Bentley College.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Brett Zucker</font> is our Executive
Vice President and Chief Technical Officer. Mr. Zucker was the Director of
Development and Delivery for Lead Dog Digital, Inc., a custom Web application
development company Bridgeline acquired in 2002, and has served as Bridgeline&#8217;s
Executive Vice President and General Manager. Prior to joining Lead Dog Digital
in September 2000, Mr. Zucker served as Senior Producer at AppNet, where he was
responsible for managing a team of project managers working on a wide range of
custom development projects. Mr. Zucker holds a B.S. degree in Electrical
Engineering from Cornell University and an M.B.A. degree from Harvard Business
School.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Timothy O&#8217;Neil </font>has been our
Vice President of Finance and Chief Accounting Officer since
2007.&#160;&#160;From 2002 to 2007, Mr. O&#8217;Neil served in a number of management
roles, most recently as Treasurer and Chief Accounting Officer, for Standex
International Corporation, a publicly held diversified
manufacturer.&#160;&#160;During that time, Mr. O&#8217;Neil was responsible for all
SEC reporting and compliance, was involved in over $200 million in acquisitions,
managed over $100 million in debt facilities and was heavily involved in their
compliance with the Sarbanes-Oxley Act.&#160;&#160;Prior to 2002, Mr. O&#8217;Neil
served as a Senior Manager with Deloitte &amp; Touche LLP.&#160;&#160;Mr. O&#8217;Neil
is a certified public accountant.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">The Board of Directors recommends a
vote FOR the approval of Proposal No. 1, the election of
directors.</font></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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      </div>
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        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt">5</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
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      </div>
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    </div>
    <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Certain Relationships and Related
Transactions</font></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>Item 404(a) of Regulation S-B requires
the Company to disclose any transaction or proposed transaction involving more
than $120,000 in which the Company is a participant and in which any related
person has or will have a direct or indirect material interest. A related person
is any executive officer, director, nominee for director, or holder of 5% or
more of the Company&#8217;s common stock, or an immediate family member of any of
those persons.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>Since October 1, 2006, the Company has
not been a participant in any transaction that is reportable under Item 404(a)
of Regulation S-B.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT</font></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 18pt"></font>The following table sets forth as of
January 16, 2008, the beneficial ownership of our common stock by (i)&#160;each
person or group of persons known to us to beneficially own more than 5% of the
outstanding shares of our common stock, (ii)&#160;each of our directors and
named executive officers and (iii)&#160;all of our executive officers and
directors as a group.&#160;&#160;At the close of business on January 16, 2008,
there were issued and outstanding 8,795,616 shares of our Common Stock entitled
to cast 8,795,616 votes.&#160; On January 16, 2008, the closing price of our
Common Stock as reported on the Nasdaq Capital Market was $2.82 per
share.&#160;</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 18pt"></font>Except as indicated in the footnotes to
the table below, each shareholder named in the table has sole voting and
investment power with respect to the shares shown as beneficially owned by such
shareholder.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 18pt"></font>Beneficial ownership is determined in
accordance with Rule&#160;13d-3 under the Securities Exchange Act of 1934, as
amended. In computing the number of shares beneficially owned by a person or a
group and the percentage ownership of that person or group, shares of our common
stock subject to options or warrants currently exercisable or exercisable within
60&#160;days after January 16, 2008 are deemed outstanding, but are not deemed
outstanding for the purpose of computing the percentage ownership of any other
person. Unless otherwise indicated, the address of each individual named below
is our address, 10 Sixth Road, Woburn, Massachusetts 01801.</font></div>
    <div><br></div>
    <div>&#160;</div>
    <div>&#160;</div>
    <div><br>&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt">6</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">This
information is based upon information received from or on behalf of the
individuals named therein.</font></div>
    <div><br></div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">
          <tr>
            <td align="left" valign="top" width="35%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Name</font></font></div>
            </td>
            <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            <td valign="top" width="16%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Number of Shares
      Owned</font></font></div>
            </td>
            <td valign="top" width="23%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Percent of Outstanding
      Shares</font></font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="35%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Thomas
      Massie</font></div>
            </td>
            <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            <td align="right" valign="top" width="16%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">931,667
      (1)</font></div>
            </td>
            <td valign="top" width="23%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">10.23%</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="35%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">John
      Cavalier</font></div>
            </td>
            <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            <td align="right" valign="top" width="16%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">93,333</font></div>
            </td>
            <td valign="top" width="23%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">1.03%</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="35%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">William
      Coldrick</font></div>
            </td>
            <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            <td align="right" valign="top" width="16%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">65,778
      (2)</font></div>
            </td>
            <td valign="top" width="23%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">*</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="35%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Kenneth
      Galaznik</font></div>
            </td>
            <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            <td align="right" valign="top" width="16%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">8,333
      (3)</font></div>
            </td>
            <td valign="top" width="23%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">*</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="35%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Robert
      Hegarty</font></div>
            </td>
            <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            <td align="right" valign="top" width="16%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">8,333
      (4)</font></div>
            </td>
            <td valign="top" width="23%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">*</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="35%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Gary
      Cebula</font></div>
            </td>
            <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            <td align="right" valign="top" width="16%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">203,333
      (5)</font></div>
            </td>
            <td valign="top" width="23%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">2.23%</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="35%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Brett
      Zucker</font></div>
            </td>
            <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            <td align="right" valign="top" width="16%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">198,120
      (6)</font></div>
            </td>
            <td valign="top" width="23%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">2.18%</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="35%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Tim
      O&#8217;Neil</font></div>
            </td>
            <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            <td align="right" valign="top" width="16%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">&#8212;</font></font></div>
            </td>
            <td valign="top" width="23%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">*</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="35%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Rob
      Seeger</font></td>
            <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            <td align="right" valign="top" width="16%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">231,854
      (9)</font></td>
            <td valign="top" width="23%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">2.52%</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="35%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Miles
      Fawcett</font></div>
            </td>
            <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            <td align="right" valign="top" width="16%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">495,834
      (7)</font></div>
            </td>
            <td valign="top" width="23%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">5.45%</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="35%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Erez
      Katz</font></div>
            </td>
            <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            <td align="right" valign="top" width="16%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">610,716</font></div>
            </td>
            <td valign="top" width="23%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">6.71%</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="35%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Steven
      Saraceno</font></td>
            <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            <td align="right" valign="top" width="16%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">238,423</font></td>
            <td valign="top" width="23%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">2.58%</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="35%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Russ
      Klitchman</font></td>
            <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            <td align="right" valign="top" width="16%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">238,423</font></td>
            <td valign="top" width="23%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">2.58%</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="35%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Michael
      Matteo</font></td>
            <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            <td align="right" valign="top" width="16%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">201,824
      (10)</font></td>
            <td valign="top" width="23%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">2.18%</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="35%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">William
      Matteson</font></td>
            <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            <td align="right" valign="top" width="16%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">126,000</font></td>
            <td valign="top" width="23%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">1.36%</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="35%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">All
      current executive officers,&#160;directors and management&#160;as a group
      (14 persons)</font></div>
            </td>
            <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            <td align="right" valign="top" width="16%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">3,156,137
      (8)</font></div>
            </td>
            <td valign="top" width="23%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">34.10</font></div>
            </td>
          </tr>
      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">
      <div>
        <hr style="COLOR: black" align="left" noshade size="2" width="10%">
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">*less
than 1%</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">
          <tr valign="top">
            <td align="right" style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-SIZE: 10pt"><font style="FONT-SIZE: 70%; VERTICAL-ALIGN: super">(1)</font></font>&#160;&#160;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-SIZE: 10pt"><font style="FONT-SIZE: 70%; VERTICAL-ALIGN: super">Includes options to purchase
      6,667 shares of common stock at an exercise price of $0.003 per share and
      33,333 shares of common stock at an exercise price of $3.00 per share.
      Includes a warrant to purchase 10,000 shares of common stock at an
      exercise price of $.001 per
share.</font></font></font></div>
            </td>
          </tr>
      </table>
    </div>
    <div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">
          <tr valign="top">
            <td align="right" style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-SIZE: 10pt"><font style="FONT-SIZE: 70%; VERTICAL-ALIGN: super">(2)</font></font>&#160;&#160;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-SIZE: 10pt"><font style="FONT-SIZE: 70%; VERTICAL-ALIGN: super">Includes an option to
      purchase 11,111 shares of common stock at an exercise price of $3.75 per
      share.</font></font></font></div>
            </td>
          </tr>
      </table>
    </div>
    <div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">
          <tr valign="top">
            <td align="right" style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-SIZE: 10pt"><font style="FONT-SIZE: 70%; VERTICAL-ALIGN: super">(3)</font></font>&#160;&#160;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-SIZE: 10pt"><font style="FONT-SIZE: 70%; VERTICAL-ALIGN: super">Includes an option to
      purchase 8,333 shares of common stock at an exercise price of $3.75 per
      share.</font></font></font></div>
            </td>
          </tr>
      </table>
    </div>
    <div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">
          <tr valign="top">
            <td align="right" style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-SIZE: 10pt"><font style="FONT-SIZE: 70%; VERTICAL-ALIGN: super">(4)</font></font>&#160;&#160;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-SIZE: 10pt"><font style="FONT-SIZE: 70%; VERTICAL-ALIGN: super">Includes an option to
      purchase 8,333 shares of common stock at an exercise price of $3.75 per
      share.</font></font></font></div>
            </td>
          </tr>
      </table>
    </div>
    <div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">
          <tr valign="top">
            <td align="right" style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-SIZE: 10pt"><font style="FONT-SIZE: 70%; VERTICAL-ALIGN: super">(5)</font></font>&#160;&#160;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-SIZE: 10pt"><font style="FONT-SIZE: 70%; VERTICAL-ALIGN: super">Includes options to purchase
      25,000 shares of common stock at an exercise price of $3.00 per share and
      66,667 shares of common stock at an exercise price of $3.75 per
      share.</font></font></font></div>
            </td>
          </tr>
      </table>
    </div>
    <div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">
          <tr valign="top">
            <td align="right" style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-SIZE: 10pt"><font style="FONT-SIZE: 70%; VERTICAL-ALIGN: super">(6)</font></font>&#160;&#160;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-SIZE: 10pt"><font style="FONT-SIZE: 70%; VERTICAL-ALIGN: super">Includes options to purchase
      1,820 shares of common stock at an exercise price of $0.3573 per share,
      16,797 shares of common stock at an exercise price of $1.0716 per share,
      8,333 shares of common stock at an exercise price of $3.00 per share,
      25,000 shares of common stock at an exercise price of $3.00, and 66,667
      shares of common stock at an exercise price of $3.75 per
      share.</font></font></font></div>
            </td>
          </tr>
      </table>
    </div>
    <div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">
          <tr valign="top">
            <td align="right" style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-SIZE: 10pt"><font style="FONT-SIZE: 70%; VERTICAL-ALIGN: super">(7)</font></font>&#160;&#160;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-SIZE: 10pt"><font style="FONT-SIZE: 70%; VERTICAL-ALIGN: super">Includes options to purchase
      19,167 shares of common stock at an exercise price of $3.75 per
      share.</font></font></font></div>
            </td>
          </tr>
      </table>
    </div>
    <div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">
          <tr valign="top">
            <td align="right" style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-SIZE: 10pt"><font style="FONT-SIZE: 70%; VERTICAL-ALIGN: super">(8)</font></font>&#160;&#160;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-SIZE: 10pt"><font style="FONT-SIZE: 70%; VERTICAL-ALIGN: super">Includes options and
      warrants to purchase 417,893 shares of common
      stock.</font></font></font></div>
            </td>
          </tr>
      </table>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">
          <tr valign="top">
            <td align="right" style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-SIZE: 10pt"><font style="FONT-SIZE: 70%; VERTICAL-ALIGN: super">(9)</font></font>&#160;&#160;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-SIZE: 10pt"><font style="FONT-SIZE: 70%; VERTICAL-ALIGN: super">Includes options to purchase
      33,333 and 33,333&#160;shares of common stock at an exercise price of
      $3.00 and $3.75 per share,
  respectively.</font></font></font></div>
            </td>
          </tr>
      </table>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">
          <tr valign="top">
            <td align="right" style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-SIZE: 10pt"><font style="FONT-SIZE: 70%; VERTICAL-ALIGN: super">(10)</font></font>&#160;&#160;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-SIZE: 10pt"><font style="FONT-SIZE: 70%; VERTICAL-ALIGN: super">Includes options to purchase
      52,055 and 11,111&#160;shares of common stock at an exercise price of
      $3.00 and $3.75 per share,
  respectively.</font></font></font></div>
            </td>
          </tr>
      </table>
    </div>
    <div>&#160;</div>
    <div>&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt">7</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">EXECUTIVE
COMPENSATION</font></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-SIZE: 10pt">&#160;</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">Summary Compensation
Table</font></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
following Summary Compensation Table sets forth the total compensation paid or
accrued for the fiscal years ended September 30, 2007 and September 30, 2006 for
our principal executive officer and our other two most highly compensated
executive officers who were serving as executive officers on September 30,
2007.&#160;&#160;We refer to these officers as our named executive
officers.</font></div>
    <div><br></div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">
          <tr>
            <td valign="top" width="14%" style="BORDER-TOP: black 0.5pt solid; BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Name and Principal
      Position</font></font></div>
            </td>
            <td valign="top" width="6%" style="BORDER-TOP: black 0.5pt solid; BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Year</font></font></div>
            </td>
            <td valign="top" width="10%" style="BORDER-TOP: black 0.5pt solid; BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Salary</font></font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">($)</font></font></div>
            </td>
            <td valign="top" width="11%" style="BORDER-TOP: black 0.5pt solid; BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Bonus</font></font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">($)</font></font></div>
            </td>
            <td valign="top" width="12%" style="BORDER-TOP: black 0.5pt solid; BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Option
      Awards</font></font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">($)(2)</font></font></div>
            </td>
            <td valign="top" width="13%" style="BORDER-TOP: black 0.5pt solid; BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">All Other Compensation
      ($)</font></font></div>
            </td>
            <td valign="top" width="13%" style="BORDER-RIGHT: black 0.5pt solid; BORDER-TOP: black 0.5pt solid; BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 0.5pt solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Total ($) <font style="DISPLAY: inline; FONT-SIZE: 10pt"><font style="FONT-SIZE: 70%; VERTICAL-ALIGN: super">(2)</font></font></font></font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="14%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Thomas
      Massie</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Chief
      Executive Officer and Director</font></div>
            </td>
            <td align="left" valign="top" width="6%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">2007</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">2006</font></div>
              <div>&#160;</div>
            </td>
            <td align="left" valign="top" width="10%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">150,000</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">150,000</font></div>
            </td>
            <td align="left" valign="top" width="11%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">55,000</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">50,000</font></div>
            </td>
            <td align="left" valign="top" width="12%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">&#8212;</font></font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#8212;</font></div>
            </td>
            <td align="left" valign="top" width="13%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">24,242
      <font style="DISPLAY: inline; FONT-SIZE: 10pt"><font style="FONT-SIZE: 70%; VERTICAL-ALIGN: super">(1)</font></font></font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">20,272
      <font style="DISPLAY: inline; FONT-SIZE: 10pt"><font style="FONT-SIZE: 70%; VERTICAL-ALIGN: super">(1)</font></font></font></div>
            </td>
            <td align="left" valign="top" width="13%" style="BORDER-RIGHT: black 0.5pt solid; BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">229,242</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">220,272</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="14%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Gary
      Cebula</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Chief
      Financial Officer</font></div>
            </td>
            <td align="left" valign="top" width="6%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">2007</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">2006</font></div>
              <div>&#160;</div>
            </td>
            <td align="left" valign="top" width="10%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">141,250</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">122,083</font></div>
            </td>
            <td align="left" valign="top" width="11%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">57,500</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">45,000</font></div>
            </td>
            <td align="left" valign="top" width="12%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">52,000</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#8212;</font></div>
            </td>
            <td valign="top" width="13%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            <td align="left" valign="top" width="13%" style="BORDER-RIGHT: black 0.5pt solid; BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">250,750</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">167,083</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="14%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Robert
      Seeger</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Senior
      Vice President of Business Development</font></div>
            </td>
            <td align="left" valign="top" width="6%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">2007</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">2006</font></div>
              <div>&#160;</div>
            </td>
            <td align="left" valign="top" width="10%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">120,000</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">119,375</font></div>
            </td>
            <td align="left" valign="top" width="11%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">229,286</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">254,085</font></div>
            </td>
            <td align="left" valign="top" width="12%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#8212;</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#8212;</font></div>
            </td>
            <td valign="top" width="13%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            <td align="left" valign="top" width="13%" style="BORDER-RIGHT: black 0.5pt solid; BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">349,286</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">373,460</font></div>
            </td>
          </tr>
      </table>
    </div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <tr valign="top">
            <td align="left" style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(1)</font></div>
            </td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Represents
      life insurance premiums.</font></div>
            </td>
          </tr>
      </table>
    </div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
          <tr valign="top">
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(2)</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Amounts
      shown do not reflect compensation actually received by the named executive
      officer. The amounts in the Option Awards column reflect the dollar amount
      recognized as compensation cost for financial statement reporting purposes
      for the fiscal year ended September 30, 2007, in accordance with SFAS
      123(R) for all stock options granted in the fiscal year ended September
      30, 2007. The calculation in the table above excludes all assumptions with
      respect to forfeitures. There can be no assurance that the amounts set
      forth in the Option Awards column will ever be realized. A forfeiture rate
      was used in the expense calculation in the financial
      statements.</font></div>
            </td>
          </tr>
      </table>
    </div>
    <div><br></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Employment
Agreements</font></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-STYLE: italic">Thomas Massie</font></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We have
entered into an employment agreement with Thomas Massie, our Chief Executive
Officer, to provide executive management services. The agreement had an initial
term of three years commencing on October 1, 2001 and was renewed in 2004 for
another three-year term. The term of the agreement is automatically extended so
that it always has an effective period of three years. For all services rendered
to us, Mr. Massie is compensated in the form of initial base salary in the
amount of $225,000 and an annual contingent bonus of at least $50,000, payable
based upon goals mutually agreed upon by Mr. Massie and our Board of Directors.
Both the annual salary and bonus are subject to periodic review and adjustment
by our Board.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt">8</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">This
agreement may be terminated by (i) us, in the event of Mr. Massie&#8217;s death,
resignation, retirement or disability, or for or without cause, or (ii) Mr.
Massie for good reason. In the event that Mr. Massie is terminated by us without
cause or Mr. Massie resigns for good reason, he is entitled to receive severance
payments equal to the greater of: (a) three years&#8217; total compensation, including
bonus amounts, or (b) $1 million.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-STYLE: italic">Named Executive
Officers</font></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We have
entered into an employment agreement with each of our named executive officers,
each for an initial term of one year. The term of each agreement automatically
renews for successive periods of one year each unless terminated under the
agreement. Each agreement sets forth the officer&#8217;s initial base salary and
annual contingent bonus.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Each
agreement may be terminated by (i) us, in the event of the officer&#8217;s death,
resignation, retirement, or disability, or for or without cause, or (ii) by the
officer for good reason. In the event that the officer is terminated by us
without cause or if the officer terminates his employment for good reason, he is
entitled to receive severance payments equal to six months&#8217; salary plus the
quarterly bonus paid to him for the two quarters immediately prior to the
termination.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Each of
these employment agreements also contains non-competition, confidentiality,
indemnification and other terms and provisions customary for agreements of this
nature.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Outstanding Equity Awards at Fiscal
Year-End</font></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>The following table sets forth
information concerning outstanding stock options for each named executive
officer as of September 30, 2007.</font></div>
    <div>&#160;</div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">
          <tr>
            <td colspan="5" valign="top" width="65%" style="BORDER-RIGHT: black 0.75pt solid; BORDER-TOP: black 0.75pt solid; BORDER-LEFT: black 0.75pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Option
      Awards</font></font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="11%" style="BORDER-LEFT: black 0.75pt solid; BORDER-BOTTOM: black 0.75pt solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Name</font></font></div>
            </td>
            <td valign="top" width="13%" style="BORDER-LEFT: black 0.75pt solid; BORDER-BOTTOM: black 0.75pt solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Number of </font></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Securities Underlying
      Unexercised Options </font></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(#) </font></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Exercisable</font></font></div>
            </td>
            <td valign="top" width="14%" style="BORDER-LEFT: black 0.75pt solid; BORDER-BOTTOM: black 0.75pt solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Number of Securities Underlying
      Unexercised Options </font></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(#) </font></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Unexercisable</font></font></div>
            </td>
            <td valign="top" width="13%" style="BORDER-LEFT: black 0.75pt solid; BORDER-BOTTOM: black 0.75pt solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Option Exercise
      Price</font></font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">($)</font></font></div>
            </td>
            <td valign="top" width="13%" style="BORDER-RIGHT: black 0.75pt solid; BORDER-LEFT: black 0.75pt solid; BORDER-BOTTOM: black 0.75pt solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Option Expiration
      Date</font></font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="11%" style="BORDER-LEFT: black 0.75pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Thomas
      Massie</font></div>
              <div>&#160;</div>
            </td>
            <td align="left" valign="top" width="13%" style="BORDER-LEFT: black 0.75pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">33,333
      <font style="DISPLAY: inline; FONT-SIZE: 10pt"><font style="FONT-SIZE: 70%; VERTICAL-ALIGN: super">(1)</font></font></font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">6,667&#160;&#160;&#160;
      </font></div>
            </td>
            <td align="left" valign="top" width="14%" style="BORDER-LEFT: black 0.75pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">&#8212;&#160;&#160;&#160;&#160;
      </font></font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#8212;&#160;&#160;&#160;&#160;
      </font></div>
            </td>
            <td align="left" valign="top" width="13%" style="BORDER-LEFT: black 0.75pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">3.000</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">0.003</font></div>
            </td>
            <td align="left" valign="top" width="13%" style="BORDER-RIGHT: black 0.75pt solid; BORDER-LEFT: black 0.75pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">09/03/2012</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">09/30/2012</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="11%" style="BORDER-LEFT: black 0.75pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Gary
      Cebula</font></div>
              <div>&#160;</div>
              <div>&#160;</div>
              <div>&#160;</div>
            </td>
            <td align="left" valign="top" width="13%" style="BORDER-LEFT: black 0.75pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">25,000
      <font style="DISPLAY: inline; FONT-SIZE: 10pt"><font style="FONT-SIZE: 70%; VERTICAL-ALIGN: super">(2)</font></font></font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">66,666&#160;&#160;&#160;&#160;&#160;
      </font></div>
            </td>
            <td align="left" valign="top" width="14%" style="BORDER-LEFT: black 0.75pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#8212;
      <font style="DISPLAY: inline; FONT-SIZE: 10pt"><font style="FONT-SIZE: 70%; VERTICAL-ALIGN: super">(2)</font></font></font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">33,334&#160;&#160;&#160;&#160;
      </font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">25,000&#160;&#160;&#160;
      </font></div>
              <div>&#160;</div>
            </td>
            <td align="left" valign="top" width="13%" style="BORDER-LEFT: black 0.75pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">3.000</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">3.750</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">3.750</font></div>
            </td>
            <td align="left" valign="top" width="13%" style="BORDER-RIGHT: black 0.75pt solid; BORDER-LEFT: black 0.75pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">06/01/2013</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">06/01/2015</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">04/23/2017</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="11%" style="BORDER-LEFT: black 0.75pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Robert
      Seeger</font></div>
            </td>
            <td align="left" valign="top" width="13%" style="BORDER-LEFT: black 0.75pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">8,333
      <font style="DISPLAY: inline; FONT-SIZE: 10pt"><font style="FONT-SIZE: 70%; VERTICAL-ALIGN: super">(3)</font></font></font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">25,000&#160;&#160;&#160;&#160;&#160;&#160;&#160;
      </font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">33,333&#160;&#160;&#160;&#160;&#160;&#160;&#160;
      </font></div>
            </td>
            <td align="left" valign="top" width="14%" style="BORDER-LEFT: black 0.75pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#8212;
      <font style="DISPLAY: inline; FONT-SIZE: 10pt"><font style="FONT-SIZE: 70%; VERTICAL-ALIGN: super">(3)</font></font></font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#8212;&#160;&#160;&#160;&#160;
      </font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">16,667&#160;&#160;&#160;&#160;
      </font></div>
            </td>
            <td align="left" valign="top" width="13%" style="BORDER-LEFT: black 0.75pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">3.000</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">3.000</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">3.750</font></div>
            </td>
            <td align="left" valign="top" width="13%" style="BORDER-RIGHT: black 0.75pt solid; BORDER-LEFT: black 0.75pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">02/27/2012</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">06/01/2013</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">06/01/2015</font></div>
            </td>
          </tr>
      </table>
    </div>
    <div><br></div>
    <div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">
          <tr valign="top">
            <td align="right" style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(1)&#160;&#160;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Grants
      dated 9/03/2002 and 9/30/2002 for 33,333 and 6,667 shares,
      respectively.</font></div>
            </td>
          </tr>
      </table>
    </div>
    <div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">
          <tr valign="top">
            <td align="right" style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(2)&#160;&#160;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Grants
      dated 6/01/2003, 06/01/2005 and 04/23/2007 for 25,000, 100,000 and 25,000
      shares, respectively.</font></div>
            </td>
          </tr>
      </table>
    </div>
    <div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">
          <tr valign="top">
            <td align="right" style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(3)&#160;&#160;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Grants
      dated 2/27/2002, 6/1/2003 and 6/1/2005 for 8,333, 25,000 and 50,000,
      respectively.</font></div>
            </td>
          </tr>
      </table>
    </div>
    <div>&#160;</div>
    <div>&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt">9</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">COMPENSATION OF
DIRECTORS</font></font><br></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Director
Compensation</font></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>The following table sets forth
information concerning the compensation of our Directors who are not named
executive officers for the fiscal year ended September 30, 2007.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div><br></div>
    </div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">
          <tr>
            <td valign="top" width="11%" style="BORDER-TOP: black 0.75pt solid; BORDER-LEFT: black 0.75pt solid; BORDER-BOTTOM: black 0.75pt solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Name</font></font></div>
            </td>
            <td valign="top" width="10%" style="BORDER-TOP: black 0.75pt solid; BORDER-LEFT: black 0.75pt solid; BORDER-BOTTOM: black 0.75pt solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Fees Earned or Paid
      in</font></font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Cash</font></font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">($)</font></font></div>
            </td>
            <td valign="top" width="11%" style="BORDER-TOP: black 0.75pt solid; BORDER-LEFT: black 0.75pt solid; BORDER-BOTTOM: black 0.75pt solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Option</font></font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Awards</font></font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">($)</font></font></div>
            </td>
            <td valign="top" width="11%" style="BORDER-TOP: black 0.75pt solid; BORDER-LEFT: black 0.75pt solid; BORDER-BOTTOM: black 0.75pt solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">All Other</font></font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Compensation</font></font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">($)</font></font></div>
            </td>
            <td valign="top" width="11%" style="BORDER-RIGHT: black 0.75pt solid; BORDER-TOP: black 0.75pt solid; BORDER-LEFT: black 0.75pt solid; BORDER-BOTTOM: black 0.75pt solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Total</font></font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">($)</font></font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="11%" style="BORDER-LEFT: black 0.75pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">William
      Coldrick</font></div>
            </td>
            <td align="left" valign="top" width="10%" style="BORDER-LEFT: black 0.75pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">4,500</font></div>
            </td>
            <td align="left" valign="top" width="11%" style="BORDER-LEFT: black 0.75pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">&#8212;</font></font></div>
              </div>
            </td>
            <td align="left" valign="top" width="11%" style="BORDER-LEFT: black 0.75pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">&#8212;</font></font></div>
            </td>
            <td align="left" valign="top" width="11%" style="BORDER-RIGHT: black 0.75pt solid; BORDER-LEFT: black 0.75pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">4,500</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="11%" style="BORDER-LEFT: black 0.75pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Kenneth
      Galaznik</font></div>
            </td>
            <td align="left" valign="top" width="10%" style="BORDER-LEFT: black 0.75pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">4,500</font></div>
            </td>
            <td align="left" valign="top" width="11%" style="BORDER-LEFT: black 0.75pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">&#8212;</font></font><font style="DISPLAY: inline; FONT-SIZE: 10pt"><font style="FONT-SIZE: 70%; VERTICAL-ALIGN: super">(1)</font></font></div>
              </div>
            </td>
            <td align="left" valign="top" width="11%" style="BORDER-LEFT: black 0.75pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">&#8212;</font></font></div>
              </div>
            </td>
            <td align="left" valign="top" width="11%" style="BORDER-RIGHT: black 0.75pt solid; BORDER-LEFT: black 0.75pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">4,500</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="11%" style="BORDER-LEFT: black 0.75pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Robert
      Hegarty</font></div>
            </td>
            <td align="left" valign="top" width="10%" style="BORDER-LEFT: black 0.75pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">4,500</font></div>
            </td>
            <td align="left" valign="top" width="11%" style="BORDER-LEFT: black 0.75pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">&#8212;</font></font><font style="DISPLAY: inline; FONT-SIZE: 10pt"><font style="FONT-SIZE: 70%; VERTICAL-ALIGN: super">(2)</font></font></div>
              </div>
            </td>
            <td align="left" valign="top" width="11%" style="BORDER-LEFT: black 0.75pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">&#8212;</font></font></div>
              </div>
            </td>
            <td align="left" valign="top" width="11%" style="BORDER-RIGHT: black 0.75pt solid; BORDER-LEFT: black 0.75pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">4,500</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="11%" style="BORDER-LEFT: black 0.75pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">John
      Cavalier</font></div>
            </td>
            <td align="left" valign="top" width="10%" style="BORDER-LEFT: black 0.75pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">1,500</font></div>
            </td>
            <td align="left" valign="top" width="11%" style="BORDER-LEFT: black 0.75pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">&#8212;</font></font></div>
              </div>
            </td>
            <td align="left" valign="top" width="11%" style="BORDER-LEFT: black 0.75pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">&#8212;</font></font></div>
              </div>
            </td>
            <td align="left" valign="top" width="11%" style="BORDER-RIGHT: black 0.75pt solid; BORDER-LEFT: black 0.75pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">1,500</font></div>
            </td>
          </tr>
      </table>
    </div>
    <div><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
          <tr valign="top">
            <td style="WIDTH: 18pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(1)&#160;&#160;</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
      of September 30, 2007 the aggregate number of stock options outstanding
      for Mr. Galaznik was 25,000 shares with an aggregate grant date fair value
      of $37,250.&#160;&#160;As of September 30, 2007, 8,333 shares are
      exercisable.</font></div>
            </td>
          </tr>
      </table>
    </div>
    <div><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
          <tr valign="top">
            <td style="WIDTH: 18pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(2)&#160;&#160;</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
      of September 30, 2007 the aggregate number of stock options outstanding
      for Mr. Hegarty was 25,000 shares with an aggregate grant date fair value
      of $37,250. As of September 30, 2007, 8,333 shares are
      exercisable.</font></div>
            </td>
          </tr>
      </table>
    </div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
non-employee members of the Company&#8217;s Board of Directors are compensated as
follows:</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-STYLE: italic">Stock Grants</font>. Outside
directors each receive annual grants of options to purchase 10,000 shares of our
common stock at an exercise price equal to the fair market value of the shares
on the date of grant. The options shall vest over three years in equal
installments on the anniversary of grant. New directors receive options to
purchase 25,000 shares of our common stock at the then current fair market value
upon election to the Board.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-STYLE: italic">Cash Compensation</font>. Each
outside director receives an annual retainer of $12,000 and is compensated
$1,500 for each meeting such director attends in person.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-STYLE: italic">Committee Chair Bonus</font>. The
Chair of our Audit Committee receives an additional annual fee of $8,000. The
Chairs of our Compensation Committee and Nominating and Corporate Governance
Committee each receive an additional annual fee of $5,000. These fees are
payable in lump sums in advance. Other directors who serve on our standing
committees do not receive additional compensation for their committee
services.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-STYLE: italic">Travel Expenses</font>. All
directors are reimbursed for their reasonable out of pocket expenses associated
with attending meetings. For domestic travel, only coach airfare will be
reimbursed; for international travel we reimburse for business
class.</font></div>
    <div><br></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt">10</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">OTHER INFORMATION CONCERNING THE
COMPANY AND THE BOARD OF DIRECTORS</font></font></div>
    <div>&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Meetings of the Board of
Directors</font></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>During the Company's fiscal year ended
September 30, 2007 ("Fiscal 2007"), the Board of Directors held five (5)
meetings and acted nine (9) times by unanimous written consent. During Fiscal
2007, each director attended each meeting.&#160;&#160;The Company expects that
all of the Board members will attend the Annual Meeting.</font></div>
    <div><br></div>
    <div><br></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">COMMITTEES OF THE BOARD OF
DIRECTORS</font></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Company has an Audit Committee, a Compensation Committee and a Nominating and
Corporate Governance Committee.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Audit Committee</font></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The Audit
Committee assists the Board in the oversight of the audit of our consolidated
financial statements and the quality and integrity of our accounting, auditing
and financial reporting processes. The Audit Committee is responsible for making
recommendations to the Board concerning the selection and engagement of
independent registered public accountants and for reviewing the scope of the
annual audit, audit fees, results of the audit and auditor independence. The
Audit Committee also reviews and discusses with management and the Board such
matters as accounting policies, internal accounting controls and procedures for
preparation of financial statements. Our Audit Committee is comprised of Messrs.
Galaznik (Chair), Cavalier and Coldrick. Our Board has determined that each of
the members of the Audit Committee meets the criteria for independence under the
standards provided by the Nasdaq Stock Market. The Board of Directors has
adopted a written charter for the Audit Committee. A copy of such charter is
available on the Company's website, <font style="DISPLAY: inline; TEXT-DECORATION: underline">www.bridgelinesw.com</font>.&#160;&#160;The
Company&#8217;s website is not part of this proxy statement.&#160;&#160;During Fiscal
2007, the Audit Committee met five (5) times and each member of the Audit
Committee attended each such meeting.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-STYLE: italic">Audit Committee Financial
Expert.</font> Our Board has also determined that each of Mr.&#160;Galaznik and
Mr. Cavalier qualifies as an &#8220;audit committee financial expert&#8221; as defined under
Item&#160;407(d)(5) of Regulation&#160;S-B.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Compensation
Committee</font></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Compensation Committee evaluates the performance of our senior executives,
considers the design and competitiveness of our compensation plans, reviews and
approves senior executive compensation and administers our equity compensation
plans. In addition, the Committee also conducts reviews of executive
compensation to ensure compliance with Section&#160;162(m) of the Internal
Revenue Code of 1986, as amended. Our Compensation Committee is comprised of
Messrs. Hegarty (Chair), Cavalier and Coldrick, all of whom are independent
directors. The Board of Directors has adopted a written charter for the
Compensation Committee. A copy of such charter is available on the Company's
website, <font style="DISPLAY: inline; TEXT-DECORATION: underline">www.bridgelinesw.com</font>.&#160;&#160;During
Fiscal 2007, the Compensation Committee did not hold a formal
meeting.</font></div>
    <div><br></div>
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        </div>
      </div>
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        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Nominating and Corporate Governance
Committee</font></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>The Nominating and Governance Committee
identifies candidates for future Board membership and proposes criteria for
Board candidates and candidates to fill Board vacancies, as well as a slate of
directors for election by the shareholders at each annual meeting. The
Nominating and Governance Committee also annually assesses and reports to the
Board on Board and Board Committee performance and effectiveness and reviews and
makes recommendations to the Board concerning the composition, size and
structure of the Board and its committees. Messrs. Coldrick (Chair), Cavalier
and Hegarty, all of whom are independent directors, are the members of the
Nominating and Governance Committee.<font style="DISPLAY: inline; FONT-WEIGHT: bold"><font style="DISPLAY: inline; FONT-STYLE: italic">&#160;</font></font></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Nominating and Corporate Governance Committee may consider candidates
recommended by stockholders as well as from other sources such as other
directors or officers, third party search firms or other appropriate sources.
For all potential candidates, the Nominating and Corporate Governance Committee
may consider all factors it deems relevant, such as a candidate's personal
integrity and sound judgment, business and professional skills and experience,
independence, possible conflicts of interest, diversity, the extent to which the
candidate would fill a present need on the Board, and concern for the long-term
interests of the stockholders.&#160;&#160;The Nominating and Corporate
Governance Committee does not assign specific weights to particular criteria and
no particular criterion is a prerequisite for each prospective nominee. The
Nominating and Corporate Governance Committee believes that the backgrounds and
qualifications of its directors, considered as a group, should provide a
composite mix of experience, knowledge and abilities that will allow the Board
of Directors to fulfill its responsibilities.&#160;&#160;In general, persons
recommended by stockholders will be considered on the same basis as candidates
from other sources. If a stockholder wishes to recommend a candidate for
director for election at the 2009 Annual Meeting of Stockholders, it must follow
the procedures described in &#8220;Stockholder Proposals and Recommendations for
Director.&#8221;</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>The Board of Directors has adopted a
written charter for the Nominating and Corporate Governance Committee. A copy of
such charter is available on the Company's website, <font style="DISPLAY: inline; TEXT-DECORATION: underline">www.bridgelinesw.com</font>.&#160;&#160;During
Fiscal 2007, the Nominating and Corporate Governance Committee did not hold a
formal meeting.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Communications with the Board of
Directors</font></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Company encourages stockholder communications with the Board of Directors.
Interested persons may directly contact any individual member of the Board of
Directors by contacting Shareholder Relations, Bridgeline Software, Inc., 10
Sixth Road, Woburn, Massachusetts 01801.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Audit Committee
Report</font></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The Audit
Committee consists of three independent directors, all of whom are &#8220;independent
directors&#8221; within the meaning of the applicable rules of the Commission and the
Nasdaq Stock Market, Inc.&#160; The Audit Committee's responsibilities are as
described in a written charter adopted by the Board, a copy of which is
available on the Company&#8217;s website at <font style="DISPLAY: inline; TEXT-DECORATION: underline">www.bridgelinesw.com</font>.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The Audit
Committee has reviewed and discussed the Company's audited financial statements
for Fiscal 2007 with management and with the Company's independent registered
public accounting firm, UHY LLP. The Audit Committee has discussed with UHY LLP
the matters required to be discussed by the Statement on Auditing Standards No.
61, as amended, relating to the conduct of the audit. The Audit Committee has
received the written disclosures and the letter from UHY LLP required by
Independence Standards Board Standard No. 1, Independence Discussions with Audit
Committees, and has discussed with UHY LLP its independence.</font></div>
    <div><br></div>
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        </div>
      </div>
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        <div style="WIDTH: 100%; TEXT-ALIGN: center">
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        </div>
      </div>
      <div id="HDR">
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        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Based on
the Audit Committee's review of the audited financial statements and the review
and discussions described in the foregoing paragraph, the Audit Committee
recommended to the Board that the audited financial statements for Fiscal 2007
be included in the Company's Annual Report on Form 10-KSB for Fiscal 2007 for
filing with the Commission.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 216pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Submitted
by the members of the Audit Committee:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 216pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Kenneth
Galaznik, Chairman</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 216pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;John
Cavalier</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 216pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;William
Coldrick</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Audit Fees</font></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Audit
fees billed to the Company during Fiscal 2007 to audit the Company's annual
financial statements, to review those financial statements included in the
Company's quarterly report on Form 10-QSB, to audit the financial statements of
certain acquired businesses&#160;and to review and consent to the financial
statements included in the Company&#8217;s registration statement on Form SB-2 totaled
$669,527.30. &#160;Additionally, the Company paid UHY LLP $3,000 for assistance
with certain tax compliance matters. The Company did not seek advice from its
independent registered public accounting firm regarding financial information
systems design and implementation during Fiscal 2007. The Company did not engage
its independent registered public accounting firm during Fiscal 2007 for any
other non-audit services.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
following table shows the aggregate fees that the Company paid or accrued for
the audit and other services provided by UHY LLP for Fiscal 2007 and Fiscal
2006.</font></div>
    <div><br></div>
    <div align="center">
      <table cellpadding="0" cellspacing="0" width="80%">
          <tr>
            <td align="left" rowspan="2" valign="top" width="24%" style="BORDER-TOP: black 0.5pt solid; BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 2px solid">
              <div>&#160;</div>
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Type of
      Service</font></font></div>
            </td>
            <td colspan="2" valign="top" width="40%" style="BORDER-RIGHT: black 0.5pt solid; BORDER-TOP: black 0.5pt solid; BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Amount of Fee
      for</font></font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="24%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Fiscal
    2007</font></font></div>
            </td>
            <td valign="top" width="18%" style="BORDER-RIGHT: black 0.5pt solid; BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Fiscal
    2006</font></font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="24%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Audit
      Fees</font></div>
            </td>
            <td align="right" valign="top" width="18%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">$
      666,527.30&#160; </font></div>
            </td>
            <td align="right" valign="top" width="22%" style="BORDER-RIGHT: black 0.5pt solid; BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">$
      305,135&#160; </font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="24%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Audit-Related
      Fees</font></div>
            </td>
            <td align="right" valign="top" width="18%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">&#8212;&#160;
      </font></font></div>
            </td>
            <td align="right" valign="top" width="22%" style="BORDER-RIGHT: black 0.5pt solid; BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">&#8212;&#160;
      </font></font></div>
              </div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="24%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Tax
      Fees</font></div>
            </td>
            <td align="right" valign="top" width="18%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;3,000&#160;
      </font></div>
            </td>
            <td align="right" valign="top" width="22%" style="BORDER-RIGHT: black 0.5pt solid; BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">&#8212;&#160;
      </font></font></div>
              </div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="24%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Total</font></div>
            </td>
            <td align="right" valign="top" width="18%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">$
      669,527.30&#160; </font></div>
            </td>
            <td align="right" valign="top" width="22%" style="BORDER-RIGHT: black 0.5pt solid; BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">$
      305,135&#160; </font></div>
            </td>
          </tr>
      </table>
    </div>
    <div><br></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-STYLE: italic">Audit Fees</font>. This category
includes fees for the audits of the Company's annual financial statements,
review of financial statements included in the Company's Form 10-QSB Quarterly
Reports and services that are normally provided by the independent auditors in
connection with statutory and regulatory filings or engagements for the relevant
fiscal years.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-STYLE: italic">Audit-Related Fees</font>. This
category consists of due diligence in connection with acquisitions, various
accounting consultations, and benefit plan audits.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-STYLE: italic">Tax Fees</font>. This category
consists of professional services rendered for tax compliance, tax planning and
tax advice. The services for the fees disclosed under this category include tax
return preparation, research and technical tax advice.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">There
were no other fees paid or accrued to UHY LLP in Fiscal 2007 or Fiscal
2006.</font></div>
    <div>&#160;</div>
    <div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The firm
of UHY LLP acts as our principal independent registered public accounting firm.
Through September 30, 2007, UHY LLP had a continuing relationship with UHY
Advisors, Inc. (&#8220;Advisors&#8221;) from which it leased auditing staff who were full
time, permanent employees of Advisors and through which UHY LLP&#8217;s partners
provide non-audit services. None of the audit services performed were provided
by permanent full-time employees of UHY LLP. UHY LLP manages and supervises the
audit services and audit staff, and is exclusively responsible for the opinion
rendered in connection with its examination.</font></div>
    </div>
    <div>&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt">13</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Audit Committee Pre-Approval Policies
and Procedures.</font></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Before an
independent public accounting firm is engaged by the Company to render audit or
non-audit services, the engagement is approved by the Audit
Committee.&#160;&#160;Our Audit Committee has the sole authority to approve the
scope of the audit and any audit-related services as well as all audit fees and
terms. Our Audit Committee must pre-approve any audit and non-audit related
services by our independent registered public accounting firm.&#160;&#160;During
our fiscal year ended September 30, 2007, no services were provided to us by our
independent registered public accounting firm other than in accordance with the
pre-approval procedures described herein.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Code of Conduct and
Ethics</font></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Company&#8217;s Board of Directors has adopted a Code of Ethics within the meaning of
Item 406(b) of Regulation S-B of the Securities Act that applies to all of the
Company&#8217;s officers and employees, including its principal executive officer,
principal financial officer, principal accounting officer or controller, or
persons performing similar functions. The Code of Ethics codifies the business
and ethical principles that govern the Company&#8217;s business. A copy of the Code of
Ethics is available on the Company&#8217;s website <font style="DISPLAY: inline; TEXT-DECORATION: underline">www.bridgelinesw.com</font>.&#160;&#160;The
Company intends to post amendments to or waivers from its Code of Ethics (to the
extent applicable to its principal executive officer, principal financial
officer or principal accounting officer) on its website. The Company&#8217;s website
is not part of this proxy statement.</font></div>
    <div>&#160;</div>
    <div>&#160;</div>
    <div>&#160;</div>
    <div>&#160;</div>
    <div>&#160;</div>
    <div>&#160;</div>
    <div>&#160;</div>
    <div><br>&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt">14</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold"><a name="CompensationCommitteeInterlocksAn_011447">PROPOSAL NO.
2</a></font></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">AMENDMENT OF THE BRIDGELINE SOFTWARE,
INC.</font></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">AMENDED AND RESTATED STOCK INCENTIVE
PLAN</font></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The Board
of Directors believes that the future success of Bridgeline Software depends, in
large part, upon the ability of the Company to attract, retain and motivate key
employees and that the granting of stock options serves as an important factor
in retaining key employees. In addition, the Board of Directors believes it is
important to have a pool of options available for issuance as the Company
considers potential acquisitions. On January 21, 2008, Bridgeline&#8217;s Board of
Directors approved, subject to stockholder approval, an amendment to the
Bridgeline Software, Inc. Amended and Restated Stock Incentive Plan, as amended
(the &#8220;Stock Incentive Plan&#8221;), to increase the number of shares reserved for
issuance under the Stock Incentive Plan from 1,400,000 to 2,000,000 shares. As
of January 21, 2008, there were 3,060 shares remaining available for issuance
under the Stock Incentive Plan.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The Board
of Directors believes that the increase in the number of shares available for
issuance under the Stock Incentive Plan is in the best interests of the Company
and recommends a vote for this proposal.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Purpose of Stock Incentive
Plan</font></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
purpose of the Stock Incentive Plan is to advance the interests of Bridgeline by
encouraging equity participation in Bridgeline by directors, officers and
employees of Bridgeline through the acquisition of shares of Common Stock upon
the exercise of options granted under the Stock Incentive Plan.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">General
Provisions</font></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>The following summary of the Stock
Incentive Plan is qualified in its entirety by reference to the Stock Incentive
Plan, as proposed to be amended, a copy of which is attached as <font style="DISPLAY: inline; FONT-STYLE: italic">Appendix B</font> to this Proxy
Statement.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Our Stock
Incentive Plan, originally adopted in 2000 and amended and restated in August
2006, allows us to grant options and other forms of stock-based compensation to
our officers, directors, employees and outside consultants and advisors. We have
developed this Stock Incentive Plan to align the interests of (i) employees,
(ii) non-employee Board members, and (iii) consultants and key advisors with the
interests of our shareholders and to provide incentives for these persons to
exert maximum efforts for our success and to encourage them to contribute
materially to our growth.&#160;&#160;As of January 21, 2008, there were
approximately 150 persons eligible to participate in the Stock Incentive
Plan.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The Stock
Incentive Plan is not subject to the provisions of the Employment Retirement
Income Security Act, as amended (&#8220;ERISA&#8221;), and is not a &#8220;qualified plan&#8221; within
the meaning of Section 401 of the Internal Revenue Code, as amended (the
&#8220;Code&#8221;). The Stock Incentive Plan is administered by our Compensation Committee
which has discretion to select the participants who will receive awards under
the Stock Incentive Plan and to determine the type, size and terms of each
award.&#160;&#160;The Compensation Committee has delegated limited authority to
grant a limited number of stock options to a committee comprised of the
Company&#8217;s Chief Executive Officer and other executive officers of the
Company.</font></div>
    <div><br></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt">15</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-STYLE: italic">Shares Subject to the Stock
Incentive Plan</font>. Currently, we may issue up to 1,400,000 shares under the
Stock Incentive Plan, subject to adjustment to prevent dilution from stock
dividends, stock splits, recapitalization or similar
transactions.&#160;&#160;There are currently 3,060 shares available to be issued
under the Stock Incentive Plan.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-STYLE: italic">Administration of the Stock
Incentive Plan</font>. The Stock Incentive Plan is administered by the
Compensation Committee. Except for certain non-discretionary option grants to
certain of our directors described below, the Compensation Committee selects the
individuals to whom options and awards are granted and determines the option
exercise price and other terms of each award, subject to the provisions of the
Stock Incentive Plan.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-STYLE: italic">Awards under the Stock Incentive
Plan</font>. Under the Stock Incentive Plan, the Compensation Committee may
grant awards in the form of incentive stock options, as defined in Section 422
of the Code, options which do not so qualify, stock awards, performance share
awards and stock appreciation rights.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-STYLE: italic">Options</font>. The duration of any
option shall be within the sole discretion of the Compensation Committee;
provided, however, that any incentive stock option granted to a 10% or less
stockholder or any nonqualified stock option shall, by its terms, be exercised
within 10 years after the date the option is granted and any incentive stock
option granted to a greater than 10% stockholder shall, by its terms, be
exercised within five years after the date the option is granted. The exercise
price of all options will be determined by the Compensation Committee; provided,
however, that the exercise price of an option (including incentive stock options
or nonqualified stock options) will be equal to, or greater than, the fair
market value of a share of our stock on the date the option is granted and
further provided that incentive stock options may not be granted to an employee
who, at the time of grant, owns stock possessing more than 10% of the total
combined voting power of all classes of our stock or any parent or subsidiary,
as defined in section 424 of the Code, unless the price per share is not less
than 110% of the fair market value of our stock on the date of
grant.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The Stock
Incentive Plan provides that each director who is not an employee of Bridgeline,
on the date of each annual meeting or special meeting in lieu thereof, shall
automatically receive a grant of a non-statutory option for the purchase of
10,000 shares of Common Stock. Such option shall vest over three years on the
anniversary of the date of grant at a rate of 33.33% per year until fully
vested.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-STYLE: italic">Termination of Employment</font>.
Unless the Compensation Committee provides otherwise in the terms of an option
agreement, if the employment or service of a participant is terminated, options
granted to such participant prior to August 18, 2006 will immediately cease to
be exercisable and any options granted after that date will cease to be
exercisable (i) immediately if the participant&#8217;s employment or service is
terminated for cause or (ii) up to three (3) months after the participant&#8217;s
employment or service is terminated without cause.</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-STYLE: italic">Termination or Amendment of the
Stock Incentive Plan</font>. Our Board of Directors may at any time terminate
the Stock Incentive Plan or make such amendments thereto as it deems advisable,
without action on the part of our shareholders unless their approval is required
under the law. However, no termination or amendment will, without the consent of
the individual to whom any option has been granted, affect or impair the rights
of such individual. Under Section 422(b)(2) of the Code, no incentive stock
option may be granted under the Stock Incentive Plan more than ten years from
the date the Stock Incentive Plan was amended and restated or the date such
amendment and restatement was approved by our shareholders, whichever is
earlier.</font></div>
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    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">New Plan Benefits</font></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We are
unable to determine the dollar value and number of stock awards that may be
received by or allocated to (i)&#160;any of our named executive officers,
(ii)&#160;our current executive officers, as a group, (iii)&#160;our employees
who are not executive officers, as a group, and (iv) our non-executive
directors, as a group as a result of the approval of the amendment to the Stock
Incentive Plan because at this time we are unable to determine whether any of
the current non-executive directors will meet the requirements to receive any
automatic grants of options under the Stock Incentive Plan and all other stock
awards granted to such persons are granted by the Compensation Committee on a
discretionary basis.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Federal Tax Consequences of the Stock
Incentive Plan</font></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
following general discussion of the federal income tax consequences of the
issuance and exercise of options granted under the Stock Incentive Plan is based
upon the provisions of the Internal Revenue Code as in effect on the date
hereof, current, promulgated and proposed regulations thereunder, existing
administrative rulings and pronouncements of the Internal Revenue Service, and
judicial decisions, all of which are subject to change (perhaps with retroactive
effect). This discussion is not intended to be a complete discussion of all of
the federal income tax consequences of the Stock Incentive Plan or of all of the
requirements that must be met in order to qualify for the tax treatment
described herein. In addition, because tax consequences may vary, and certain
exceptions to the general rules discussed herein may be applicable, depending
upon the personal circumstances of individual holders of securities, each option
holder should consider his personal situation and consult with his own tax
advisor with respect to the specific tax consequences applicable to him. No
information is provided as to state tax laws. The Stock Incentive Plan is not
qualified under Section 401 of the Code, nor is it subject to the provisions of
the Employee Retirement Income Security Act of 1974, as amended.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
recipient of a stock option under the Stock Incentive Plan will not recognize
any taxable income upon the grant of an option under the Stock Incentive Plan.
Generally, an option holder recognizes ordinary taxable income at the time an
option is exercised in an amount equal to the excess of the fair market value of
the shares of Common Stock on the date of exercise over the exercise price.
However, participants in the Stock Incentive Plan, may be subject to Section
16(b) of the Securities Exchange Act of 1934 (&#8220;Section 16(b)&#8221;) upon the sale of
their shares of Common Stock. Different tax rules apply with respect to option
holders who are subject to Section 16(b) when they acquire Common Stock in a
transaction deemed to be a nonexempt purchase under that statute and this may
affect their tax liability.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">An option
holder who pays the exercise price, in whole or in part, by delivering shares of
Common Stock already owned by him will recognize no gain or loss for federal
income tax purposes on the shares surrendered, but otherwise will be taxed
according to the rules described above. To the extent the shares acquired upon
exercise are equal in number to the shares surrendered, the basis of the shares
received will be equal to the basis of the shares surrendered. The basis of
shares received in excess of the shares surrendered upon exercise will be equal
to the fair market value of the shares on the date of exercise, and the holding
period for the shares received will commence on that date.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Company will generally be entitled to a compensation deduction for federal
income tax purposes in an amount equal to the taxable income recognized by the
option holder, provided it reports the income on a W-2 or Form 1099, whichever
is applicable, that is timely provided to the option holder and filed with the
IRS.</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">When an
option holder subsequently disposes of the shares of Common Stock received upon
exercise of an option, he will recognize capital gain or loss equal to the
difference between the amount realized and the fair market value on the date on
which the option holder recognized ordinary taxable income as a result of the
exercise of the option. Any such capital gain or loss would be long term if the
holding period for the shares is more than one year. The holding period for the
shares generally would begin on the date the shares were acquired and would not
include the period of time during which the option was held.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">The Board of Directors recommends a
vote FOR the approval of Proposal No. 2, the amendment to the Bridgeline
Software, Inc. Stock Incentive Plan.</font></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">PROPOSAL 3</font></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">RAFTIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC </font></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">ACCOUNTING FIRM</font></font></div>
    <div><br></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Upon the
recommendation of the Audit Committee, the Board of Directors has reappointed
UHY LLP to audit the consolidated financial statements of the Company for Fiscal
2008. UHY LLP has served as the Company's independent registered public
accounting firm since prior to the Company&#8217;s initial public offering. A
representative from UHY LLP is expected to be present at the meeting with the
opportunity to make a statement if he or she desires to do so and to be
available to respond to appropriate questions.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Although
stockholder ratification of the appointment is not required by law, the Company
desires to solicit such ratification. If the appointment of UHY LLP is not
approved by a majority of the shares represented at the Meeting, the Company
will consider the appointment of other independent registered public accounting
firms for Fiscal 2008.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">The Board recommends a vote FOR the
approval Proposal No. 3, the ratification of the appointment of UHY LLP as the
Company's independent auditors for Fiscal 2008.</font></font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Other Matters</font></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The Board
of Directors has no knowledge of any other matters which may come before the
Meeting and does not intend to present any other matters. However, if any other
matters shall properly come before the Meeting or any adjournment thereof, the
persons named as proxies will have discretionary authority to vote the shares of
Common Stock represented by the accompanying proxy in accordance with their best
judgment.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 16(a) Beneficial Ownership
Reporting Compliance</font></font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Section
16(a) of Securities Exchange Act of 1934 requires the Company's executive
officers, directors, and persons who own more than ten percent of a registered
class of the Company's equity securities to file reports of ownership and
changes in ownership with the Securities and Exchange Commission (the
"Commission"). Based solely on its review of the copies of such forms and
amendments thereto received by it, the Company believes that during Fiscal 2007
all executive officers, directors and owners of ten percent of the outstanding
shares of Common Stock complied with all applicable filing requirements except
that Mr. William Coldrick failed to file one Form 4 on a timely basis to report
a gift transaction and Mr. O&#8217;Neil failed to file a Form 3 and one Form 4 on a
timely basis to report a single transaction.</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Stockholder Proposals and
Recommendations for Director</font></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Any
stockholder of the Company who wishes to present a proposal to be considered at
the next annual meeting of stockholders of the Company and who wishes to have
such proposal presented in the Company's Proxy Statement for such meeting must
deliver such proposal in writing to the Company at 10 Sixth Road, Woburn,
Massachusetts 01801 on or before October 6, 2008.</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Stockholders
may recommend individuals to the Board of Directors for consideration as
potential director candidates by following the requirements under Article I,
Section 10 of the Bylaws.&#160;&#160;In order to be eligible to nominate a
person for election to our Board of Directors a stockholder must (i) comply with
the notice procedures set forth in the Bylaws and (ii) be a stockholder of
record on the date of giving such notice of a nomination as well as on the
record date for determining the stockholders entitled to vote at the meeting at
which directors will be elected.</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">To be
timely, a stockholder&#8217;s notice must be in writing and received by our corporate
secretary at our principal executive offices as follows: (A) in the case of an
election of directors at an annual meeting of stockholders, not less than 90
days nor more than 120 days prior to the first anniversary of the preceding
year&#8217;s annual meeting; provided, however, that in the event that the date of the
annual meeting is advanced by more than 20 days, or delayed by more than 60
days, from the first anniversary of the preceding year&#8217;s annual meeting, a
stockholder&#8217;s notice must be so received not earlier than the 120th day prior to
such annual meeting and not later than the close of business on the later of (x)
the 90th day prior to such annual meeting and (y) the tenth day following the
day on which notice of the date of such annual meeting was mailed or public
disclosure of the date of such annual meeting was made, whichever first occurs;
or (B) in the case of an election of directors at a special meeting of
stockholders, provided that the board of directors has determined that directors
shall be elected at such meeting, not earlier than the 120th day prior to such
special meeting and not later than the close of business on the later of (1) the
90th day prior to such special meeting and (2) the tenth day following the day
on which notice of the date of such special meeting was mailed or public
disclosure of the date of such special meeting was made, whichever first
occurs.</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
addition, a stockholder&#8217;s notice must contain the information specified in
Article I, Section 10 of the Bylaws and must be accompanied by the written
consent of the proposed nominee to serve as a director if
elected.&#160;&#160;The stockholder making a nomination must personally appear
at the annual or special meeting of stockholders to present the nomination,
otherwise the nomination will be disregarded.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Stockholders
interested in making a nomination should refer to the complete requirements set
forth in our Bylaws filed as an exhibit to our Current Report on Form 8-K filed
with the Securities and Exchange Commission on October 30, 2007. Provided that
the date of next year&#8217;s annual meeting of stockholders is not advanced by more
than 20 days, or delayed by more than 60 days, from the first anniversary of the
2008 annual meeting, any stockholder who wishes to make a nomination to be
considered for the next annual meeting must deliver the notice specified by our
Bylaws between November 14, 2008 and December 14, 2008. The By-Laws contain a
number of substantive and procedural requirements which should be reviewed by
any interested stockholder. Any notice should be mailed to: Secretary,
Bridgeline Software, Inc., 10 Sixth Road, Woburn, Massachusetts
01801.</font></div>
    <div><br></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 270pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;By
Order of the Board of Directors</font></div>
    <div>&#160;</div>
    <div style="MARGIN-LEFT: 270pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">/s/ <font size="2">Gary Cebula</font></div>
    <div style="MARGIN-LEFT: 270pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 270pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Gary
Cebula</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 270pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-STYLE: italic">Assistant
Secretary</font></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">February
27, 2008</font></div>
    <div>&#160;</div>
    <div>&#160;</div>
    <div>&#160;</div>
    <div>&#160;</div>
    <div>&#160;</div>
    <div>&#160;</div>
    <div>&#160;</div>
    <div>&#160;</div>
    <div>&#160;</div>
    <div>&#160;</div>
    <div>&#160;</div>
    <div><br>&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt">21</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Appendix A</font></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">PROXY</font></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">BRIDGELINE SOFTWARE,
INC.</font></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">10 Sixth Road</font></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Woburn, Massachusetts
01801</font></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
undersigned, revoking all proxies, hereby appoints Thomas Massie and Gary Cebula
and each of them, proxies with power of substitution to each, for and in the
name of the undersigned to vote all shares of Common Stock of Bridgeline
Software, Inc. (the "Company") which the undersigned would be entitled to vote
if present at the Annual Meeting of Stockholders of the Company to be held on
April 18, 2008, at 10:00 A.M. at the Hilton Boston/Woburn located at 2 Forbes
Road, Woburn, Massachusetts and any adjournments thereof, upon the matters set
forth in the Notice of Annual Meeting.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
undersigned acknowledges receipt of the Notice of Annual Meeting, Proxy
Statement and the Company's Annual Report.</font></div>
    <div><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <tr valign="top">
            <td align="left" style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">A.</font></font></div>
            </td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">To elect the following nominees
      as directors.</font></font></div>
            </td>
          </tr>
      </table>
    </div>
    <div><br></div>
    <div align="center">
      <table bgcolor="white" cellpadding="0" cellspacing="0" width="100%">
          <tr bgcolor="white">
            <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            <td width="25%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            <td width="15%">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold"><font style="DISPLAY: inline; TEXT-DECORATION: underline">For</font></font></font></div>
            </td>
            <td width="15%">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Withhold</font></font></font></div>
            </td>
            <td width="20%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            <td width="20%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
          </tr>
          <tr bgcolor="white">
            <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            <td width="25%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            <td width="15%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            <td width="15%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            <td width="20%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            <td width="20%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
          </tr>
          <tr bgcolor="white">
            <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">1</font></td>
            <td width="25%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">John
      Cavalier</font></td>
            <td width="15%">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-FAMILY: wingdings">o</font></font></div>
            </td>
            <td width="15%">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-FAMILY: wingdings">o</font></font></div>
            </td>
            <td width="20%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            <td width="20%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
          </tr>
          <tr bgcolor="white">
            <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            <td width="25%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            <td width="15%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            <td width="15%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            <td width="20%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            <td width="20%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
          </tr>
          <tr bgcolor="white">
            <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">2</font></td>
            <td width="25%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Robert
      Hegarty</font></td>
            <td width="15%">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-FAMILY: wingdings">o</font></font></div>
            </td>
            <td width="15%">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-FAMILY: wingdings">o</font></font></div>
            </td>
            <td width="20%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            <td width="20%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
          </tr>
      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <tr valign="top">
            <td style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">B.&#160;&#160;</font></font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">To amend the Bridgeline
      Software, Inc. Amended and Restated Stock Incentive Plan to increase the
      number of shares of Common Stock available for issuance upon exercise of
      options granted under the Plan from 1,400,000 shares to 2,000,000
      shares.</font></font></div>
            </td>
          </tr>
      </table>
    </div>
    <div>&#160;</div>
    <div align="center">
      <table bgcolor="white" cellpadding="0" cellspacing="0" width="100%">
          <tr bgcolor="white">
            <td width="16%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            <td width="16%">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font size="2"><font style="DISPLAY: inline; FONT-FAMILY: wingdings">o</font>&#160;
      For</font></div>
            </td>
            <td width="16%">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-FAMILY: wingdings">o</font>&#160;
      Against</font></div>
            </td>
            <td width="16%">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-FAMILY: wingdings">o</font>&#160;
      Abstain</font></div>
            </td>
            <td width="16%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
          </tr>
      </table>
    </div>
    <div>&#160;</div>
    <div>&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
          <tr valign="top">
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">C.</font></font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">To ratify the appointment of
      UHY LLP as the Company's independent auditors for the Company's fiscal
      year ending September 30,
2008.</font></font></div>
            </td>
          </tr>
      </table>
    </div>
    <div>&#160;</div>
    <div>
      <div align="center">
        <table bgcolor="white" cellpadding="0" cellspacing="0" width="100%">
            <tr bgcolor="white">
              <td width="16%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
              <td width="16%">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font size="2"><font style="DISPLAY: inline; FONT-FAMILY: wingdings">o</font>&#160;
      For</font></div>
              </td>
              <td width="16%">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-FAMILY: wingdings">o</font>&#160;
      Against</font></div>
              </td>
              <td width="16%">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-FAMILY: wingdings">o</font>&#160;
      Abstain</font></div>
              </td>
              <td width="16%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            </tr>
        </table>
      </div>
      <div><br>&#160;</div>
    </div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
          <tr valign="top">
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">D.</font></font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">In their discretion, on such
      other matters as may properly come before the
    meeting.</font></font></div>
            </td>
          </tr>
      </table>
    </div>
    <div>&#160;</div>
    <div>
      <div align="center">
        <table bgcolor="white" cellpadding="0" cellspacing="0" width="100%">
            <tr bgcolor="white">
              <td width="16%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
              <td width="16%">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font size="2"><font style="DISPLAY: inline; FONT-FAMILY: wingdings">o</font>&#160;
      For</font></div>
              </td>
              <td width="16%">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-FAMILY: wingdings">o</font>&#160;
      Against</font></div>
              </td>
              <td width="16%">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-FAMILY: wingdings">o</font>&#160;
      Abstain</font></div>
              </td>
              <td width="16%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            </tr>
        </table>
      </div>
      <div>&#160;</div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Please Sign on the Reverse Side and
Return this Proxy Promptly in the Enclosed Envelope.</font></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">This Proxy is solicited on behalf of
the Board of Directors, and when properly executed will be voted as directed
herein. If no direction is given, this Proxy will be voted FOR all
Proposals.</font></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Date:&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,
2008</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">___________________________________</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Signature)</font></div>
    <div>&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">___________________________________</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Signature,
if held jointly)</font></div>
    <div>&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Where
stock is registered in the names of two or more persons ALL should sign.
Signature(s) should correspond exactly with the name(s) as shown above. Please
sign, date and return promptly in the enclosed envelope. No postage need be
affixed if mailed in the United States.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Requests
for copies of proxy materials, the Company's Annual Report for its fiscal year
ended September 30, 2007 on Form 10-KSB should be addressed to Shareholder
Relations, Bridgeline Software, Inc., 10 Sixth Road, Woburn, Massachusetts
01801. This material will be furnished without charge to any stockholder
requesting it.</font></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Appendix B</font></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">BRIDGELINE SOFTWARE,
INC.</font></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">AMENDED AND RESTATED STOCK INCENTIVE
PLAN</font></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">As amended on April 23,
2007</font></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">As proposed to be amended on April
18, 2008</font></font></div>
    <div><br></div>
    <div>
      <div><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
            <tr valign="top">
              <td style="WIDTH: 81pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">SECTION
    1.</font></font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">General Purpose of the Plan;
      Definitions.</font></font></div>
              </td>
            </tr>
        </table>
      </div>
      <div>&#160;</div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The name
of the plan is the Bridgeline Software, Inc. Amended and Restated Stock
Incentive Plan (the &#8220;Plan&#8221;). The Plan amends and restates in its entirety the
2000 Stock Option Plan of Bridgeline Software, Inc. (the
&#8220;Company&#8221;).&#160;&#160;Any Options or Awards outstanding prior to the date of
this amendment and restatement shall be affected by this amendment and
restatement only to the extent specifically provided by the Board of Directors
of the Company and upon execution of an amendment to such Option.&#160;&#160;The
purpose of the Plan is to encourage and enable officers and employees of, and
other persons providing services to, the Company and its Affiliates to acquire a
proprietary interest in the Company. It is anticipated that providing such
persons with a direct stake in the Company&#8217;s welfare will assure a closer
identification of their interests with those of the Company and its
shareholders, thereby stimulating their efforts on the Company&#8217;s behalf and
strengthening their desire to remain with the Company.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
following terms shall be defined as set forth below:</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Affiliate</font>&#8221; means a parent
corporation, if any, and each subsidiary corporation of the Company, as those
terms are defined in Section 424 of the Code.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Award</font>&#8221; or &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Awards</font>&#8221;, except where
referring to a particular category of grant under the Plan, shall include
Incentive Stock Options, Non-Statutory Stock Options, Restricted Stock Awards,
Unrestricted Stock Awards, Performance Share Awards and Stock Appreciation
Rights. Awards shall be evidenced by a written agreement (which may be in
electronic form and may be electronically acknowledged and accepted by the
recipient) containing such terms and conditions not inconsistent with the
provisions of this Plan as the Committee shall determine.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Board</font>&#8221; means the Board of
Directors of the Company.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Cause</font>&#8221; shall mean, with
respect to any Award holder, a determination by the Company (including the
Board) or any Affiliate that the Holder&#8217;s employment or other relationship with
the Company or any such Affiliate should be terminated as a result of (i) a
material breach by the Award holder of any agreement to which the Award holder
and the Company (or any such Affiliate) are parties, (ii) any act (other than
retirement) or omission to act by the Award holder that may have a material and
adverse effect on the business of the Company, such Affiliate or any other
Affiliate or on the Award holder&#8217;s ability to perform services for the Company
or any such Affiliate, including, without limitation, the proven or admitted
commission of any crime (other than an ordinary traffic violation), (iii) any
material misconduct or material neglect of duties by the Award holder in
connection with the business or affairs of the Company or any such Affiliate, or
(iv) &#8220;Cause,&#8221; as such term is defined in any employment or other agreement
between the Award Holder and the Company (or any&#160;&#160;such
Affiliate).</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Change of Control</font>&#8221; shall have
the meaning set forth in Section 15.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Code</font>&#8221; means the Internal
Revenue Code of 1986, as amended, and any successor Code, and related rules,
regulations and interpretations.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Committee</font>&#8221; shall have the
meaning set forth in Section 2.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Company</font>&#8221; shall have the
meaning set forth in Section 1.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Disability</font>&#8221; means disability
as set forth in Section 22(e)(3) of the Code.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Effective Date</font>&#8221; means the date
on which the Plan is approved by the Board of Directors as set forth in Section
17.</font></div>
    <div><br></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
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        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Eligible Person</font>&#8221; shall have
the meaning set forth in Section 4.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Exchange Act</font>&#8221; shall mean the
Securities Exchange Act of 1934, as amended.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Fair Market Value</font>&#8221; on any
given date means the closing price per share of the Stock on such date as
reported by such registered national securities exchange on which the Stock is
listed, or, if the Stock is not listed on such an exchange, as quoted on NASDAQ;
provided, that, if there is no trading on such date, Fair Market Value shall be
deemed to be the closing price per share on the last preceding date on which the
Stock was traded. If the Stock is not listed on any registered national
securities exchange or quoted on NASDAQ, the Fair Market Value of the Stock
shall be determined in good faith by the Committee; provided, however, that for
purposes of a grant of any Award other than an Incentive Stock Option, Fair
Market Value shall be determined in a manner consistent with Section 409A
Authority.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Incentive Stock Option</font>&#8221; means
any Stock Option designated and qualified as an &#8220;incentive stock option&#8221; as
defined in Section 422 of the Code.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Independent Director</font>&#8221; means
any director who meets the independence requirement of NASDAQ Marketplace Rule
4200(a)(15).</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Mature Shares</font>&#8221; shall have the
meaning set forth in Section 5.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Non-Employee Director</font>&#8221; means
any director who: (i) is not currently an officer of the Company or an
Affiliate, or otherwise currently employed by the Company or an Affiliate, (ii)
does not receive compensation, either directly or indirectly, from the Company
or an Affiliate, for services rendered as a consultant or in any capacity other
than as a director, except for an amount that does not exceed the dollar amount
for which disclosure would be required pursuant to Rule 404(a) of Regulation S-K
promulgated by the SEC, (iii) does not possess an interest in any other
transaction for which disclosure would be required pursuant to Rule 404(a) of
Regulation S-K, and (iv) is not engaged in a business relationship for which
disclosure would be required pursuant to Rule 404(b) of Regulation
S-K.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Non-Statutory Stock Option</font>&#8221;
means any Stock Option that is not an Incentive Stock Option.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Normal Retirement</font>&#8221; means
retirement in good standing from active employment with the Company and its
Affiliates in accordance with the retirement policies of the Company and its
Affiliates then in effect.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Option</font>&#8221; or &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Stock Option</font>&#8221; means any option
to purchase shares of Stock granted pursuant to Section 5.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Outside Director</font>&#8221; means any
director who (i) is not an employee of the Company or of any &#8220;affiliated group,&#8221;
as such term is defined in Section 1504(a) of the Code, which includes the
Company (an &#8220;Affiliated Group Member&#8221;), (ii) is not a former employee of the
Company or any Affiliated Group Member who is receiving compensation for prior
services (other than benefits under a tax-qualified retirement plan) during the
Company&#8217;s or any Affiliated Group Member&#8217;s taxable year, (iii) has not been an
officer of the Company or any Affiliated Group Member and (iv) does not receive
remuneration from the Company or any Affiliated Group Member, either directly or
indirectly, in any capacity other than as a director. &#8220;Outside Director&#8221; shall
be determined in accordance with Section 162(m) of the Code and the Treasury
regulations issued thereunder.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Performance Share Award</font>&#8221; means
an Award pursuant to Section 8.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Plan</font>&#8221; shall have the meaning
set forth in Section 1.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">&#8220;Restricted</font> Stock Award&#8221; means
an Award granted pursuant to Section 6.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">SEC</font>&#8221; means the Securities and
Exchange Commission or any successor authority.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 409A Authority</font>&#8221; means
the requirements of paragraphs (a)(2), (a)(3), and (a)(4) of Section 409A of the
Code, as interpreted by IRS Notice 2005-1, Prop. Regs. 1.409A-1, <font style="DISPLAY: inline; FONT-STYLE: italic">et seq.</font>, and any further
guidance issued by the Internal Revenue Service.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Stock</font>&#8221; means the common stock,
$.001 par value per share, of the Company, subject to adjustments pursuant to
Section 3.</font></div>
    <div><br></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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        </div>
      </div>
      <div id="HDR">
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        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Stock Appreciation Right</font>&#8221;
means an Award granted pursuant to Section 9.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Unrestricted Stock Award</font>&#8221;
means Awards granted pursuant to Section 7.</font></div>
    <div><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
          <tr valign="top">
            <td style="WIDTH: 81pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">SECTION
    2.</font></font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Administration of Plan;
      Committee Authority to Select Participants and Determine
      Awards.</font></font></div>
            </td>
          </tr>
      </table>
    </div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 81pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">(a)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Committee</font>.&#160;&#160;The Plan
shall be administered by a committee of the Board (the &#8220;Committee&#8221;) consisting
of not less than two (2) persons each of whom qualifies as an Independent
Director, an Outside Director and a Non-Employee Director, but the authority and
validity of any act taken or not taken by the Committee shall not be affected if
any person administering the Plan is not an Independent Director, an Outside
Director or a Non-Employee Director. Except as specifically reserved to the
Board under the terms of the Plan, the Committee shall have full and final
authority to operate, manage and administer the Plan on behalf of the Company.
In addition, the Board may authorize a committee consisting of members of
management of the Company and at least one director of the Company to administer
the Plan in the place of the Committee and have all the powers of the Committee
enumerated herein, provided however that in authorizing such committee the Board
shall specify the total number of options the committee is authorized to
grant.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 81pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(b)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Powers of
Committee</font>.&#160;&#160;The Committee shall have the power and authority to
grant and modify Awards consistent with the terms of the Plan, including the
power and authority:</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: 54pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(i)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;to
select the persons to whom Awards may from time to time be granted;</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: 54pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(ii)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;to
determine the time or times of grant, and the extent, if any, of Incentive Stock
Options, Non-Statutory Stock Options, Restricted Stock, Unrestricted Stock,
Performance Shares and Stock Appreciation Rights, or any combination of the
foregoing, granted to any one or more participants;</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: 54pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(iii)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;to
determine the number of shares to be covered by any Award;</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: 54pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(iv)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;to
determine and modify the terms and conditions, including restrictions, not
inconsistent with the terms of the Plan, of any Award, which terms and
conditions may differ among individual Awards and participants, and to approve
the form of written instruments evidencing the Awards; provided, however, that,
except as provided in Section 2(c), no such action shall materially adversely
affect rights under any outstanding Award without the participant&#8217;s
consent;</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: 54pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(v)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;to
accelerate the exercisability or vesting of all or any portion of any
Award;</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: 54pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(vi)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;to
extend the period in which any outstanding Stock Option or Stock Appreciation
Right may be exercised; and</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: 54pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(vii)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;to
adopt, alter and repeal such rules, guidelines and practices for administration
of the Plan and for its own acts and proceedings as it shall deem advisable; to
interpret the terms and provisions of the Plan and any Award (including related
written instruments); to make all determinations it deems advisable for the
administration of the Plan; to decide all disputes arising in connection with
the Plan; and to otherwise supervise the administration of the
Plan.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">All
decisions and interpretations of the Committee shall be binding on all persons,
including the Company and Plan participants. Neither the Company nor any member
or former member of the Committee or the Board shall be liable for any action or
determination made in good faith with respect to this Plan. </font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 81pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(c)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Section
409A</font>.&#160;&#160;Awards granted under the Plan are intended either to be
exempt from the rules of Section 409A of the Code or to satisfy those rules, and
the Plan and such Awards shall be construed accordingly. Granted Awards may be
modified at any time, in the Board&#8217;s discretion, so as to increase the
likelihood of exemption from or compliance with the rules of Section 409A of the
Code. Notwithstanding the foregoing, neither the Company nor any member or
former member of the Committee or the Board shall have any liability if an Award
(or any portion thereof), whether prior to or subsequent to any such
modification that may be made, is determined to be subject to the provisions of
Section 409A of the Code.</font></div>
    <div><br></div>
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        </div>
      </div>
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    </div>
    <div>
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            <td align="left" style="WIDTH: 81pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">SECTION
    3.</font></font></div>
            </td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Shares Issuable under the Plan;
      Mergers; Substitution.</font></font></div>
            </td>
          </tr>
      </table>
    </div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 81pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(a)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Shares
Issuable</font>.&#160;&#160;The maximum number of shares of Stock which may be
issued in respect of Awards (including Stock Appreciation Rights) granted under
the Plan, subject to adjustment upon changes in capitalization of the Company as
provided in this Section 3, shall be <font style="DISPLAY: inline; FONT-WEIGHT: bold">2,000,000</font> shares. For purposes
of this limitation, the shares of Stock underlying any Awards which are
forfeited, cancelled, reacquired by the Company or otherwise terminated (other
than by exercise), shares that are tendered in payment of the exercise price of
any Award and shares that are tendered or withheld for tax withholding
obligations shall be added back to the shares of Stock with respect to which
Awards may be granted under the Plan. Shares issued under the Plan may be
authorized but unissued shares or shares reacquired by the Company.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 81pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(b)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Limitation on
Awards</font>.&#160;&#160;In no event may any Plan participant be granted Awards
(including Stock Appreciation Rights) with respect to more than 500,000 shares
of Stock in any calendar year. The number of shares of Stock relating to an
Award granted to a Plan participant in a calendar year that is subsequently
forfeited, cancelled or otherwise terminated shall continue to count toward the
foregoing limitation in such calendar year. In addition, if the exercise price
of an Award is subsequently reduced, the transaction shall be deemed a
cancellation of the original Award and the grant of a new one so that both
transactions shall count toward the maximum shares issuable in the calendar year
of each respective transaction.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 81pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(c)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Stock Dividends, Mergers,
etc</font>.&#160;&#160;In the event that after approval of the Plan by the
stockholders of the Company in accordance with Section 17, the Company effects a
stock dividend, stock split or similar change in capitalization affecting the
Stock, the Committee shall make appropriate adjustments in (i) the number and
kind of shares of stock or securities with respect to which Awards may
thereafter be granted (including without limitation the limitations set forth in
Sections 3(a) and (b) above), (ii) the number and kind of shares remaining
subject to outstanding Awards, and (iii) the option or purchase price in respect
of such shares. In the event of any merger, consolidation, dissolution or
liquidation of the Company, the Committee in its sole discretion may, as to any
outstanding Awards, make such substitution or adjustment in the aggregate number
of shares reserved for issuance under the Plan and in the number and purchase
price (if any) of shares subject to such Awards as it may determine and as may
be permitted by the terms of such transaction, or accelerate, amend or terminate
such Awards upon such terms and conditions as it shall provide (which, in the
case of the termination of the vested portion of any Award, shall require
payment or other consideration which the Committee deems equitable in the
circumstances), subject, however, to the provisions of Section
15.&#160;&#160;Unless the Committee determines otherwise, any adjustments
pursuant to this Section 3(c) shall be made on terms and conditions consistent
with Section 409A of the Code.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 81pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(d)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Substitute
Awards</font>.&#160;&#160;The Committee may grant Awards under the Plan in
substitution for stock and stock based awards held by employees of another
corporation who concurrently become employees of the Company or an Affiliate as
the result of a merger or consolidation of the employing corporation with the
Company or an Affiliate or the acquisition by the Company or an Affiliate of
property or stock of the employing corporation. The Committee may direct that
the substitute awards be granted on such terms and conditions as the Committee
considers appropriate in the circumstances. Unless the Committee determines
otherwise, any substitutions pursuant to this Section 3(d) shall be made on
terms and conditions consistent with Section 409A of the Code.</font></div>
    <div><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <tr valign="top">
            <td align="left" style="WIDTH: 81pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">SECTION
    4.</font></font></div>
            </td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Eligibility.</font></font></div>
            </td>
          </tr>
      </table>
    </div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Awards
may be granted to officers, directors and employees of, and consultants and
advisers to, the Company or its Affiliates (&#8220;Eligible Persons&#8221;).</font></div>
    <div><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <tr valign="top">
            <td align="left" style="WIDTH: 81pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">SECTION
    5.</font></font></div>
            </td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Stock
      Options.</font></font></div>
            </td>
          </tr>
      </table>
    </div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;The
Committee may grant to Eligible Persons options to purchase
Stock.&#160;&#160;Any Stock Option granted under the Plan shall be in such form
as the Committee may from time to time approve.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Stock
Options granted under the Plan may be either Incentive Stock Options (subject to
compliance with applicable law) or Non-Statutory Stock Options. Unless otherwise
so designated, an Option shall be a Non-Statutory Stock Option. To the extent
that any option does not qualify as an Incentive Stock Option, it shall
constitute a Non-Statutory Stock Option. Neither the Company nor any member or
former member of the Committee or the Board shall have any liability if an
Option (or any portion thereof) that is intended to be an Incentive Stock Option
is determined not to be a Non-Statutory Option (including, without limitation,
due to a determination that the exercise of the Option was less than the Fair
Market Value of the Stock subject to the Option as of the grant
date).</font></div>
    <div><br></div>
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        </div>
      </div>
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        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">No
Incentive Stock Option shall be granted under the Plan after the tenth
anniversary of the date of adoption of the Plan by the Board.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Each
Non-Employee Director shall be automatically granted on the date of the
Company&#8217;s annual meeting of stockholders, a Non-Statutory Stock Option to
purchase 10,000 shares of Stock at an exercise price per share equal to no less
than the Fair Market Value of the Stock on the date of grant, such options to
vest over three years on the anniversary of the date of grant at the rate of
33.33% per year until fully vested.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Committee may also grant additional Non-Statutory Stock Options to purchase a
number of shares of Stock to be determined by the Committee in recognition of
services provided by a Non-Employee Director in his or her capacity as a
director, provided that such grants are in compliance with the requirements of
Rule 16b-3, as promulgated under the Securities Exchange Act of 1934, as amended
from time to time.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Committee in its discretion may determine the effective date of Stock Options,
provided, however, that grants of Incentive Stock Options shall be made only to
persons who are, on the effective date of the grant, employees of the Company or
an Affiliate. Stock Options granted pursuant to this Section 5 shall contain
such additional terms and conditions, not inconsistent with the terms of the
Plan, as the Committee shall deem desirable.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 81pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(a)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Exercise Price</font>.&#160;&#160;The
exercise price per share for the Stock covered by a Stock Option granted
pursuant to this Section 5 shall be determined by the Committee at the time of
grant but shall be not less than one hundred percent (100%) of Fair Market Value
on the date of grant. If an employee owns or is deemed to own (by reason of the
attribution rules applicable under Section 424(d) of the Code) more than ten
percent (10%) of the combined voting power of all classes of stock of the
Company or any subsidiary or parent corporation and an Incentive Stock Option is
granted to such employee, the option price shall be not less than one hundred
ten percent (110%) of Fair Market Value on the date of grant.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 81pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(b)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Option Term</font>.&#160;&#160;The
term of each Stock Option shall be fixed by the Committee, but no Incentive
Stock Option shall be exercisable more than ten (10) years after the date the
option is granted. If an employee owns or is deemed to own (by reason of the
attribution rules of Section 424(d) of the Code) more than ten percent (10%) of
the combined voting power of all classes of stock of the Company or any
subsidiary or parent corporation and an Incentive Stock Option is granted to
such employee, the term of such option shall be no more than five (5) years from
the date of grant.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 81pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(c)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Exercisability; Rights of a
Shareholder</font>. Stock Options shall become vested and exercisable at such
time or times, whether or not in installments, as shall be determined by the
Committee. The Committee, in its discretion, may accelerate the exercisability
of all or any portion of any Stock Option only in circumstances involving (i) a
Change of Control of the Company, (ii) undue hardship, including, but not
limited to, death or disability of the option holder, and (iii) a severance
arrangement with a departing option holder. An optionee shall have the rights of
a shareholder only as to shares acquired upon the exercise of a Stock Option and
not as to unexercised Stock Options.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 81pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(d)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Method of
Exercise</font>.&#160;&#160;Stock Options may be exercised in whole or in part,
by delivering written notice of exercise to the Company, specifying the number
of shares to be purchased. Payment of the purchase price may be made by delivery
of cash or bank check or other instrument acceptable to the Committee in an
amount equal to the exercise price of such Options, or, to the extent provided
in the applicable Option Agreement, by one or more of the following
methods:</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: 45pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(i)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;by
delivery to the Company of shares of Stock of the Company that either have been
purchased by the optionee on the open market, or have been beneficially owned by
the optionee for a period of at least six months and are not then subject to
restriction under any Company plan (&#8220;Mature Shares&#8221;); such surrendered shares
shall have a Fair Market Value equal in amount to the exercise price of the
Options being exercised; or</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: 45pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(ii)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;a
personal recourse note issued by the optionee to the Company in a principal
amount equal to such aggregate exercise price and with such other terms,
including interest rate and maturity, as the Company may determine in its
discretion; provided, however, that the interest rate borne by such note shall
not be less than the lowest applicable federal rate, as defined in Section
1274(d) of the Code; or</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: 45pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(iii)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;if
the class of Stock is registered under the Exchange Act at such time, by
delivery to </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: 45pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: 45pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
Company of a properly executed exercise notice along with irrevocable
instructions to a broker to deliver promptly to the Company cash or a check
payable and acceptable to the Company for the purchase price; provided that in
the event that the optionee chooses to pay the purchase price as so provided,
the optionee and the broker shall comply with such procedures and enter into
such agreements of indemnity and other agreements as the Committee shall
prescribe as a condition of such payment procedure (including, in the case of an
optionee who is an executive officer of the Company, such procedures and
agreements as the Committee deems appropriate in order to avoid any extension of
credit in the form of a personal loan to such officer). The Company need not act
upon such exercise notice until the Company receives full payment of the
exercise price; or</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: 45pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(iv)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;by
reducing the number of Option shares otherwise issuable to the optionee upon
exercise of the Option by a number of shares of Common Stock having a Fair
Market Value equal to such aggregate exercise price; provided, however, that the
optionee otherwise holds an equal number of Mature Shares; or</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: 45pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(v)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;by
any combination of such methods of payment.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
delivery of certificates representing shares of Stock to be purchased pursuant
to the exercise of a Stock Option will be contingent upon receipt from the
Optionee (or a purchaser acting in his stead in accordance with the provisions
of the Stock Option) by the Company of the full purchase price for such shares
and the fulfillment of any other requirements contained in the Stock Option or
imposed by applicable law.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 81pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(e)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Non-transferability of
Options</font>.&#160;&#160;Except as the Committee may provide with respect to a
Non-Statutory Stock Option, no Stock Option shall be transferable other than by
will or by the laws of descent and distribution and all Stock Options shall be
exercisable, during the optionee&#8217;s lifetime, only by the optionee.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 81pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(f)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Annual Limit on Incentive Stock
Options</font>.&#160;&#160;To the extent required for &#8220;incentive stock option&#8221;
treatment under Section 422 of the Code, the aggregate Fair Market Value
(determined as of the time of grant) of the Stock with respect to which
Incentive Stock Options granted under this Plan and any other plan of the
Company or its Affiliates become exercisable for the first time by an optionee
during any calendar year shall not exceed $100,000.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 81pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(g)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Lockup
Agreement</font>.&#160;&#160;Each Option shall provide that the optionee shall
agree for a period of time from the effective date of any registration of
securities of the Company (upon request of the Company or the underwriters
managing any underwritten offering of the Company&#8217;s securities) not to sell,
make any short sale of, loan, grant any option for the purchase of, or otherwise
dispose of, any shares issued pursuant to the exercise of such Option, without
the prior written consent of the Company or such underwriters, as the case may
be.</font></div>
    <div><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <tr valign="top">
            <td align="left" style="WIDTH: 81pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">SECTION
    6.</font></font></div>
            </td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Restricted Stock
      Awards.</font></font></div>
            </td>
          </tr>
      </table>
    </div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 81pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(a)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Nature of Restricted Stock
Award</font>.&#160;&#160;The Committee in its discretion may grant Restricted
Stock Awards to any Eligible Person, entitling the recipient to acquire, for
such purchase price, if any, as may be determined by the Committee, shares of
Stock subject to such restrictions and conditions as the Committee may determine
at the time of grant (&#8220;Restricted Stock&#8221;), including continued employment and/or
achievement of pre-established performance goals and objectives.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 81pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(b)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Acceptance of Award</font>. A
participant who is granted a Restricted Stock Award shall have no rights with
respect to such Award unless the participant shall have accepted the Award
within sixty (60) days (or such shorter date as the Committee may specify)
following the award date by making payment to the Company of the specified
purchase price, if any, of the shares covered by the Award and by executing and
delivering to the Company a written instrument that sets forth the terms and
conditions applicable to the Restricted Stock in such form as the Committee
shall determine.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 81pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(c)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Rights as a Shareholder</font>. Upon
complying with Section 6(b) above, a participant shall have all the rights of a
shareholder with respect to the Restricted Stock, including voting and dividend
rights, subject to non-transferability restrictions and Company repurchase or
forfeiture rights described in this Section 6 and subject to such other
conditions contained in the written instrument evidencing the Restricted Award.
Unless the Committee shall otherwise determine, certificates evidencing shares
of Restricted Stock shall remain in the possession of the Company until such
shares are vested as provided in Section 6(e) below.</font></div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; MARGIN-RIGHT: 0pt"><br></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 81pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(d)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Restrictions</font>.&#160;&#160;Shares
of Restricted Stock may not be sold, assigned, transferred, pledged or otherwise
encumbered or disposed of except as specifically provided herein. In the event
of termination of employment by the Company and its Affiliates for any reason
(including death, Disability, Normal Retirement and for Cause), the Company
shall have the right, at the discretion of the Committee, to repurchase shares
of Restricted Stock which have not then vested at their purchase price, or to
require forfeiture of such shares to the Company if acquired at no cost, from
the participant or the participant&#8217;s legal representative. The Company must
exercise such right of repurchase or forfeiture within ninety (90) days
following such termination of employment (unless otherwise specified in the
written instrument evidencing the Restricted Stock Award).</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 81pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(e)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Vesting of Restricted Stock</font>.
The Committee at the time of grant shall specify the date or dates and/or the
attainment of pre-established performance goals, objectives and other conditions
on which the non-transferability of the Restricted Stock and the Company&#8217;s right
of repurchase or forfeiture shall lapse. Subsequent to such date or dates and/or
the attainment of such pre-established performance goals, objectives and other
conditions, the shares on which all restrictions have lapsed shall no longer be
Restricted Stock and shall be deemed &#8220;vested.&#8221; Subject to Section 13, the
Committee, in its discretion, may accelerate the exercisability of all or any
portion of any Restricted Stock Award only in circumstances involving (i) a
Change of Control of the Company, (ii) undue hardship, including, but not
limited to, death or disability of the Restricted Stock Award holder, and (iii)
a severance arrangement with a departing Restricted Stock Award
holder.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 81pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(f)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Waiver, Deferral and Reinvestment of
Dividends</font>. The written instrument evidencing the Restricted Stock Award
may require or permit the immediate payment, waiver, deferral or investment of
dividends paid on the Restricted Stock.</font></div>
    <div><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <tr valign="top">
            <td align="left" style="WIDTH: 81pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">SECTION
    7.</font></font></div>
            </td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Unrestricted Stock
      Awards.</font></font></div>
            </td>
          </tr>
      </table>
    </div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 81pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(a)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Grant or Sale of Unrestricted
Stock</font>.&#160;&#160;The Committee in its discretion may grant or sell to
any Eligible Person shares of Stock free of any restrictions under the Plan
(&#8220;Unrestricted Stock&#8221;) at a purchase price determined by the Committee. Shares
of Unrestricted Stock may be granted or sold as described in the preceding
sentence in respect of past services or other valid consideration.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 81pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(b)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Restrictions on
Transfers</font>.&#160;&#160;The right to receive unrestricted Stock may not be
sold, assigned, transferred, pledged or otherwise encumbered, other than by will
or the laws of descent and distribution.</font></div>
    <div><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <tr valign="top">
            <td align="left" style="WIDTH: 81pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">SECTION
    8.</font></font></div>
            </td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Performance Share
      Awards.</font></font></div>
            </td>
          </tr>
      </table>
    </div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;A
Performance Share Award is an award entitling the recipient to acquire shares of
Stock upon the attainment of specified performance goals. The Committee may make
Performance Share Awards independent of or in connection with the granting of
any other Award under the Plan. Performance Share Awards may be granted under
the Plan to any Eligible Person. The Committee in its discretion shall determine
whether and to whom Performance Share Awards shall be made, the performance
goals applicable under each such Award (which may include, without limitation,
continued employment by the recipient or a specified achievement by the
recipient, the Company or any business unit of the Company), the periods during
which performance is to be measured, and all other limitations and conditions
applicable to the Award or the Stock issuable thereunder.</font></div>
    <div><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <tr valign="top">
            <td align="left" style="WIDTH: 81pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">SECTION
    9.</font></font></div>
            </td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Stock Appreciation
      Rights.</font></font></div>
            </td>
          </tr>
      </table>
    </div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Committee in its discretion may grant Stock Appreciation Rights to any Eligible
Person (i) alone, or (ii) simultaneously with the grant of a Stock Option and in
conjunction therewith or in the alternative thereto. A Stock Appreciation Right
shall entitle the participant upon exercise thereof to receive from the Company,
upon written request to the Company at its principal offices, a number of shares
of Stock (with or without restrictions as to substantial risk of forfeiture and
transferability, as determined by the Committee in its sole discretion), an
amount of cash, or any combination of Stock and cash, as specified in such
request (but subject to the approval of the Committee in its sole discretion, at
any time up to and including the time of payment, as to the making of any cash
payment), having an aggregate Fair Market Value equal to the product of (a) the
excess of Fair Market Value, on the date of such request, over the exercise
price per share of Stock specified in such Stock Appreciation Right or its
related Option (which exercise price shall be not less than one hundred percent
(100%) of Fair Market Value on the date of grant), multiplied by (b) the number
of shares of Stock for which such Stock Appreciation Right shall be exercised.
Notwithstanding the foregoing, the Committee may specify at the time of grant of
any Stock Appreciation Right that such Stock Appreciation Right may be
exercisable solely for cash and not for Stock.</font></div>
    <div><br></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <tr valign="top">
            <td align="left" style="WIDTH: 81pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">SECTION
    10.</font></font></div>
            </td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Termination of Stock Options
      and Stock Appreciation
Rights.</font></font></div>
            </td>
          </tr>
      </table>
    </div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Incentive
Stock Options:</font></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: 45pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(i)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Termination by
Death</font>.&#160;&#160;If any participant&#8217;s employment by the Company and its
Affiliates terminates by reason of death, any Incentive Stock Option owned by
such participant may thereafter be exercised to the extent exercisable at the
date of death, by the legal representative or legatee of the participant, for a
period of one year from the date of death, or until the expiration of the stated
term of the Incentive Stock Option, if earlier.</font></div>
    <div><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <tr valign="top">
            <td style="WIDTH: 108pt">
              <div>&#160;</div>
            </td>
            <td style="WIDTH: 27pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(ii)</font></font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Termination by Reason of
      Disability or Normal
Retirement</font>.</font></div>
            </td>
          </tr>
      </table>
    </div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 81pt; TEXT-INDENT: 54pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(A)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Any
Incentive Stock Option held by a participant whose employment by the Company and
its Affiliates has terminated by reason of Disability may thereafter be
exercised, to the extent it was exercisable at the time of such termination, for
a period of one year from the date of such termination of employment, or until
the expiration of the stated term of the Option, if earlier.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 81pt; TEXT-INDENT: 54pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(B)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Any
Incentive Stock Option held by a participant whose employment by the Company and
its Affiliates has terminated by reason of Normal Retirement may thereafter be
exercised, to the extent it was exercisable at the time of such termination, for
a period of ninety (90) days (or such longer period as the Committee shall
specify at any time) from the date of such termination of employment, or until
the expiration of the stated term of the Option, if earlier.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 81pt; TEXT-INDENT: 54pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(C)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;The
Committee shall have sole authority and discretion to determine whether a
participant&#8217;s employment has been terminated by reason of Disability or Normal
Retirement.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: 45pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(iii)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Termination for
Cause</font>.&#160;&#160;If any participant&#8217;s employment by the Company and its
Affiliates has been terminated for Cause, any Incentive Stock Option held by
such participant shall immediately terminate and be of no further force and
effect; provided, however, that the Committee may, in its sole discretion,
provide that such Option can be exercised for a period of up to thirty (30) days
from the date of termination of employment or until the expiration of the stated
term of the Option, if earlier.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: 45pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(iv)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Other Termination</font>. Unless
otherwise determined by the Committee, if a participant&#8217;s employment by the
Company and its Affiliates terminates for any reason other than death,
Disability, Normal Retirement or for Cause, any Incentive Stock Option held by
such participant may thereafter be exercised, to the extent it was exercisable
on the date of termination of employment, for three (3) months (or such other
period as the Committee shall specify) from the date of termination of
employment or until the expiration of the stated term of the Option, if
earlier.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 81pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(b)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Non-Statutory Stock Options and Stock
Appreciation Rights</font>.&#160;&#160;Any Non-Statutory Stock Option or Stock
Appreciation Right granted under the Plan shall contain such terms and
conditions with respect to its termination as the Committee, in its discretion,
may from time to time determine.</font></div>
    <div><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <tr valign="top">
            <td align="left" style="WIDTH: 81pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">SECTION
    11.</font></font></div>
            </td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Tax
      Withholding.</font></font></div>
            </td>
          </tr>
      </table>
    </div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 81pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(a)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Payment by
Participant</font>.&#160;&#160;Each participant shall, no later than the date as
of which the value of an Award or of any Stock or other amounts received
thereunder first becomes includable in the gross income of the participant for
Federal income tax purposes, pay to the Company, or make arrangements
satisfactory to the Committee regarding payment of any Federal, state, local
and/or payroll taxes of any kind required by law to be withheld with respect to
such income. The Company and its Affiliates shall, to the extent permitted by
law, have the right to deduct any such taxes from any payment of any kind
otherwise due to the participant.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 81pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(b)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Payment in
Shares</font>.&#160;&#160;A Participant may elect, with the consent of the
Committee, to have such tax withholding obligation satisfied, in whole or in
part, by (i) authorizing the Company to withhold from shares of Stock to be
issued pursuant to an Award a number of shares with an aggregate Fair Market
Value (as of the date the withholding is effected) that would satisfy the
minimum withholding amount due with respect to such Award, or (ii) delivering to
the Company a number of Mature Shares of Stock with an aggregate Fair Market
Value (as of the date the withholding is effected) that would satisfy the
minimum withholding amount due.</font></div>
    <div><br></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 81pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(c)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Notice of Disqualifying
Disposition</font>.&#160;&#160;Each holder of an Incentive Option shall agree to
notify the Company in writing immediately after making a disqualifying
disposition (as defined in Section 421(b) of the Code) of any Stock purchased
upon exercise of an Incentive Stock Option.</font></div>
    <div><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <tr valign="top">
            <td align="left" style="WIDTH: 81pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">SECTION
    12.</font></font></div>
            </td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Transfer and Leave of
      Absence.</font></font></div>
            </td>
          </tr>
      </table>
    </div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">For
purposes of the Plan, the following events shall not be deemed a termination of
employment:</font></div>
    <div><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
          <tr valign="top">
            <td style="WIDTH: 36pt">
              <div>&#160;</div>
            </td>
            <td style="WIDTH: 27pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)</font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">a
      transfer to the employment of the Company from an Affiliate or from the
      Company to an Affiliate, or from one Affiliate to
  another;</font></div>
            </td>
          </tr>
      </table>
    </div>
    <div><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
          <tr valign="top">
            <td style="WIDTH: 36pt">
              <div>&#160;</div>
            </td>
            <td style="WIDTH: 27pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)</font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">an
      approved leave of absence for military service or sickness, or for any
      other purpose approved by the Company, if the employee&#8217;s right to
      re-employment is guaranteed either by a statute or by contract or under
      the policy pursuant to which the leave of absence was granted or if the
      Committee otherwise so provides in
writing.</font></div>
            </td>
          </tr>
      </table>
    </div>
    <div><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <tr valign="top">
            <td align="left" style="WIDTH: 81pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">SECTION
    13.</font></font></div>
            </td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Amendments and
      Termination.</font></font></div>
            </td>
          </tr>
      </table>
    </div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The Board
may at any time amend or discontinue the Plan and the Committee may at any time
amend or cancel any outstanding Award (or provide substitute Awards at the same
or reduced exercise or purchase price or with no exercise or purchase price, but
such price, if any, must satisfy the requirements which would apply to the
substitute or amended Award if it were then initially granted under this Plan)
for the purpose of satisfying changes in law or for any other lawful purpose,
but, except as provided in Section 2(c), no such action shall materially
adversely affect rights under any outstanding Award without the holder&#8217;s
consent. In addition, no amendment to this Plan shall modify any outstanding
Award except to the extent that the Board shall determine that such modification
to an outstanding Award shall not be considered to be a material
modification.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">This Plan
shall terminate as of the tenth anniversary of its Effective Date. The Board may
terminate this Plan at any earlier time for any reason. No Award may be granted
after the Plan has been terminated. No Award granted while this Plan is in
effect shall be altered or impaired by termination of this Plan, except upon the
consent of the holder of such Award. The power of the Committee to construe and
interpret this Plan and the Awards granted prior to the termination of this Plan
shall continue after such termination.</font></div>
    <div><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <tr valign="top">
            <td align="left" style="WIDTH: 81pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">SECTION
    14.</font></font></div>
            </td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Status of
      Plan.</font></font></div>
            </td>
          </tr>
      </table>
    </div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;With
respect to the portion of any Award which has not been exercised and any
payments in cash, Stock or other consideration not received by a participant, a
participant shall have no rights greater than those of a general creditor of the
Company unless the Committee shall otherwise expressly determine in connection
with any Award or Awards. In its sole discretion, the Committee may authorize
the creation of trusts or other arrangements to meet the Company&#8217;s obligations
to deliver Stock or make payments with respect to Awards hereunder, provided
that the existence of such trusts or other arrangements is consistent with the
provision of the foregoing sentence.</font></div>
    <div><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <tr valign="top">
            <td align="left" style="WIDTH: 81pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">SECTION
    15.</font></font></div>
            </td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Change of Control
      Provisions.</font></font></div>
            </td>
          </tr>
      </table>
    </div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Upon
the occurrence of a Change of Control as defined in this Section
15:</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: 45pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(i)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;subject
to the provisions of clause (iii) below, after the effective date of such Change
of Control, each holder of an outstanding Stock Option, Restricted Stock Award,
Performance Share Award or Stock Appreciation Right shall be entitled, upon
exercise of such Award, to receive, in lieu of shares of Stock (or consideration
based upon the Fair Market Value of Stock), shares of such stock or other
securities, cash or property (or consideration based upon shares of such stock
or other securities, cash or property) as the holders of shares of Stock
received in connection with the Change of Control;</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: 45pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(ii)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;the
Committee may accelerate, fully or in part, the time for exercise of, and waive
any or all conditions and restrictions on, each unexercised and unexpired Stock
Option, Restricted Stock Award, Performance Share Award and Stock Appreciation
Right, effective upon a date prior or subsequent to the effective date of such
Change of Control, as specified by the Committee; or</font></div>
    <div><br></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: 45pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(iii)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;each
outstanding Stock Option, Restricted Stock Award, Performance Share Award and
Stock Appreciation Right may be cancelled by the Committee as of the effective
date of any such Change of Control provided that (x) prior written notice of
such cancellation shall be given to each holder of such an Award and (y) each
holder of such an Award shall have the right to exercise such Award to the
extent that the same is then exercisable or, in full, if the Committee shall
have accelerated the time for exercise of all such unexercised and unexpired
Awards, during the thirty (30) day period preceding the effective date of such
Change of Control.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Unless
the Committee determines otherwise, the foregoing actions shall be taken, if at
all, on terms and conditions consistent with Section 409A of the
Code.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#8220;Change
of Control&#8221; shall mean the occurrence of any one of the following
events:</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: 45pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(i)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;any
&#8220;person&#8221; (as such term is used in Sections 13(d) and 14(d)(2) of the Exchange
Act) becomes, after the Effective Date of this Plan, a &#8220;beneficial owner&#8221; (as
such term is defined in Rule 13d-3 promulgated under the Exchange Act) (other
than 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 stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company), directly or indirectly,
of securities of the Company representing fifty percent (50%) or more of the
combined voting power of the Company&#8217;s then outstanding securities (other than
as a result of (i) an acquisition of securities directly from the Company or
(ii) an acquisition of securities by the Company which by reducing the
securities outstanding increases the proportionate voting power represented by
the securities owned by any such person to fifty percent (50%) or more of the
combined voting power of the Company&#8217;s then outstanding securities);
or</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: 45pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(ii)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;the
stockholders of the Company approve a merger or consolidation of the Company
with any other corporation or other entity, other than a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) more than fifty percent (50%) of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation; or</font></div>
    <div style="MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: 45pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(iii)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;the
stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company&#8217;s assets.</font></div>
    <div><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <tr valign="top">
            <td align="left" style="WIDTH: 81pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">SECTION
    16.</font></font></div>
            </td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">General
      Provisions.</font></font></div>
            </td>
          </tr>
      </table>
    </div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 81pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">(a)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">No Distribution; Compliance with
Legal Requirements</font>. The Committee may require each person acquiring
shares pursuant to an Award to represent to and agree with the Company in
writing that such person is acquiring the shares without a view to distribution
thereof.&#160;&#160;No shares of Stock shall be issued pursuant to an Award
until all applicable securities laws and other legal and stock exchange
requirements have been satisfied. The Committee may require the placing of such
stop orders and restrictive legends on certificates for Stock and Awards as it
deems appropriate.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 81pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(b)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Delivery of Stock
Certificates</font>. Delivery of stock certificates to participants under this
Plan shall be deemed effected for all purposes when the Company or a stock
transfer agent of the Company shall have delivered such certificates in the
United States mail, addressed to the participant, at the participant&#8217;s last
known address on file with the Company.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 81pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(c)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Other Compensation Arrangements; No
Employment Rights</font>.&#160;&#160;Nothing contained in this Plan shall
prevent the Board from adopting other or additional compensation arrangements,
including trusts, subject to stockholder approval if such approval is required;
and such arrangements may be either generally applicable or applicable only in
specific cases. The adoption of the Plan or any Award under the Plan does not
confer upon any employee any right to continued employment with the Company or
any Affiliate.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 81pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(d)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Certain Indebtedness to the
Company</font>.&#160;&#160;No Option or other Award may be exercised at any time
after the Committee has determined, in good faith, that the participant is
indebted to the Company or any Affiliate for advances of salary, advances of
expenses, recoverable draws or other amounts unless and until either
(a)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 81pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 81pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">such
indebtedness is satisfied in full or (b) such condition is waived by the
Committee. The period during which any Option or other Award may by its terms be
exercised shall not be extended during any period in which the participant is
prohibited from such exercise by the preceding sentence, and the neither Company
nor any member or former member of the Committee or the Board shall have any if
any Option or other Award expires unexercised in whole or in part during such
period or if any Option that is intended to be an Incentive Stock Option is
deemed to be a Non-Statutory Stock Option because such Option is not exercised
within three months after the termination of the participant&#8217;s employment with
the Company or an Affiliate.</font></div>
    <div><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <tr valign="top">
            <td align="left" style="WIDTH: 81pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">SECTION
    17.</font></font></div>
            </td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Effective Date of
      Plan.</font></font></div>
            </td>
          </tr>
      </table>
    </div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;This
Plan shall become effective upon its adoption by the Company&#8217;s Board of
Directors. If the Plan shall not be approved by the shareholders of the Company
within twelve months following its adoption, this Plan shall terminate and be of
no further force or effect.</font></div>
    <div><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <tr valign="top">
            <td align="left" style="WIDTH: 81pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">SECTION
    18.</font></font></div>
            </td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Governing
      Law.</font></font></div>
            </td>
          </tr>
      </table>
    </div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">This Plan
shall be governed by, and construed and enforced in accordance with, the
substantive laws of The Commonwealth of Massachusetts without regard to its
principles of conflicts of laws.</font></div>
    <div><br></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">________________________</font></div>
    <div><br></div>
    <div><br></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">This
Amended and Restated Stock Incentive Plan was approved by the Board of Directors
of the Company on August 18, 2006, and was approved by the stockholders of the
Company on September 18, 2006.&#160;&#160;This Amended and Restated Stock
Incentive Plan was amended on April 23, 2007.&#160;&#160;The Board of Directors
of the Company approved an additional amendment to the Amended and Restated
Stock Incentive Plan on January 21, 2008 which is subject to stockholder
approval.</font></div>
    <div><br></div>
    <div><br></div>
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