The revised schedule was deemed necessary because of the Company's recent reduction in the number of its directors, the additional work load and duties being assumed by the remaining directors, and the recent changes in legal requirements and the Company's corporate governance process. Also supporting the increase was the consultant's report stating that the level of the Company's existing compensation program was very near the bottom of the overall range of fees paid to directors of the Company's peers.

In 2004, each director who was not employed by the Company or its subsidiaries were paid Directors' fees of $600 for each committee meeting attended. Members of the Audit Committee and Corporate Governance and Nominating Committee (Governance Committee) received $800 for each committee meeting attended, and the Chairman of the Audit Committee received $1,000 for each committee meeting attended. The members of the Compensation Committee received an attendance fee of $500 for each committee meeting attended.

Under the new compensation schedule, a retainer of $20,000 per year is authorized for directors of the Company who are not employed by the Company or its subsidiaries. Such directors will receive, for each fiscal-year quarter during which he/she serves as a director, a payment equal to one-fourth of the annual retainer amount. One half of such sum will be paid in cash and the other half (if the Company's proposed Long-Term Incentive Compensation Plan is approved by the Shareholders at the April 26, 2005 Annual Meeting of Shareholders) will be paid in the form of a grant of Company stock (if such Plan is not approved, then the full amount of the retainer will be paid in cash).