Compensation for Named Executive Officers

The Compensation Committee of the Board of Directors (the
Committee) has established the annual salaries and stock option
allowances for 2017 for the Companys Named Executive Officers.
These salaries and option allowances, as well as estimated target
bonuses, are as follows:

The number of options to be granted each month is determined by
the following formula: (annual stock option allowance 12) /
([Fair Market Value on the date of grant] * 0.40). Each monthly
grant shall be made on the first trading day of the month, shall
be fully vested upon grant and shall be exercisable at a strike
price equal to the Fair Market Value (as defined in the Companys
2011 Stock Plan) on the date of grant. The options will be
subject to the terms and conditions of the Companys 2011 Stock
Plan and will be administered on a non-discretionary basis
without further action by the Board of Directors, provided that
only the Board of Directors may change the amount or terms of
future grants. These stock options are granted fully vested and
can generally be exercised up to 10 years following the date of
grant, regardless of employment status.

Salary for each Named Executive Officer, other than the Chief
Financial Officer, that is over $1 million has a substantial
surcharge to the Company under IRS rule 162(m). Thus, the Company
created, and the shareholders approved, the Performance Bonus
Plan (the Plan) for those whose salary the Company wants to cap
at $1 million to avoid the surcharges.>For 2017, the Named
Executive Officers, except for the Chief Executive Officer and
Chief Financial Officer, will participate in the Plan. Awards
under the Plan will only be paid after achievement of specified
performance goals. The Committee will be the administrator of the
Plan and will assign each participant a target award and
performance goal or goals for a performance period set by the
Committee. The Estimated Target Bonus amounts set out in the
table above are estimates only, and any actual amounts that may
be paid to these Named Executive Officers may differ based on
factors adopted by the Committee to the Plan.

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¹ The Companys stock option program for Named
Executive Officers, which is the same for other salaried
employees of the Company, provides a minimum annual stock option
allowance (equal to 5% of their available salaried compensation)
and allows the Named Executive Officers to allocate any amount of
their available salaried compensation to receive in the form of
stock options.