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FORM 10-Q
 SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 Quarterly Report Under Section 13 or 15 (d)
of the Securities Exchange Act of 1934
For Quarter Ended March 31, 2009
 Commission File Number 0-13898
 Veramark Technologies, Inc.
  Delaware
    
    16-1192368(State or other jurisdiction of
Incorporation or Organization)
    
    (IRS Employer Identification Number)
  (Address of principal executive offices)(Zip Code)
  (Registrants telephone number, including area code)
  (Former name, former address and former fiscal year, if changed since last report)
 þ o
 o o
 o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller Reporting Company þ
 o þ




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##### 



INDEX
 PagePART I FINANCIAL INFORMATIONItem 1 Financial StatementsCondensed Balance Sheets 
March 31, 2009 (Unaudited) and December 31, 2008
    
    
    3  4Condensed Statements of Operations (Unaudited)
Three Months Ended March 31, 2009 and 2008
    
    
    5Condensed Statements of Cash Flows (Unaudited)
Three Months Ended March 31, 2009 and 2008
    
    
    6Notes To Condensed Financial Statements (Unaudited)
    
    
    7  11Item 2 Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    12  20Item 3 Quantative and Qualitative Disclosures About Market Risk
    
    
    21Item 4 Controls and Procedures
    
    
    21PART II OTHER INFORMATIONItem 5 Other Information
    
    
    22Item 6 Exhibits
    
    
    22  23Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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PART I   FINANCIAL INFORMATION
 VERAMARK TECHNOLOGIES, INC.
 
 CONDENSED BALANCE SHEETS
 (Unaudited)March 31,
    
    
    December 31,2009
    
    
    2008ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    647,780
    
    
    $
    1,014,669Investments
    
    
    971,858
    
    
    
    982,331Accounts receivable, trade (net
of allowance for doubtful accounts
of $17,000 and $30,000, respectively)
    
    
    1,110,693
    
    
    
    1,047,527Inventories, net
    
    
    28,285
    
    
    
    35,055Prepaid expenses and other current assets
    
    
    460,493
    
    
    
    244,511Total Current Assets
    
    
    3,219,109
    
    
    
    3,324,093PROPERTY AND EQUIPMENTCost
    
    
    3,987,179
    
    
    
    3,862,879Less accumulated depreciation
    
    
    (3,495,993
    )
    
    
    (3,406,882
    )Property and Equipment (Net)
    
    
    491,186
    
    
    
    455,997OTHER ASSETS:Software development costs (net of
accumulated amortization of $3,649,988
and $3,332,886, respectively)
    
    
    2,700,668
    
    
    
    2,719,787Pension assets
    
    
    3,168,139
    
    
    
    3,160,639Deposits and other assets
    
    
    905,761
    
    
    
    905,761Total Other Assets
    
    
    6,774,568
    
    
    
    6,786,187TOTAL ASSETS
    
    $
    10,484,863
    
    
    $
    10,566,277
 The accompanying notes are an integral part of these financial statements.
  3




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VERAMARK TECHNOLOGIES, INC.
 CONDENSED BALANCE SHEETS
 (Unaudited)March 31,
    
    
    December 31,2009
    
    
    2008LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIES:Accounts payable
    
    $
    378,222
    
    
    $
    270,842Accrued compensation and related taxes
    
    
    516,806
    
    
    
    466,150Deferred revenue
    
    
    3,709,973
    
    
    
    3,746,488Current portion of pension obligation
    
    
    498,059
    
    
    
    486,059Other accrued liabilities
    
    
    68,937
    
    
    
    94,954Total Current Liabilities
    
    
    5,171,997
    
    
    
    5,064,493Pension obligation
    
    
    4,866,178
    
    
    
    5,000,010Total Liabilities
    
    
    10,038,175
    
    
    
    10,064,503STOCKHOLDERS EQUITY:Common Stock, par value $.10; shares authorized,
40,000,000; shares issued and outstanding,
9,894,954 and 9,852,954
    
    
    989,495
    
    
    
    985,295Additional paid-in capital
    
    
    22,316,555
    
    
    
    22,293,688Accumulated deficit
    
    
    (22,219,315
    )
    
    
    (22,039,196
    )Treasury stock (80,225 shares, at cost)
    
    
    (385,757
    )
    
    
    (385,757
    )Accumulated other comprehensive income
    
    
    (254,290
    )
    
    
    (352,256
    )Total Stockholders Equity
    
    
    446,688
    
    
    
    501,774TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    10,484,863
    
    
    $
    10,566,277
 The accompanying notes are an integral part of these financial statements.
  4




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VERAMARK TECHNOLOGIES, INC.
 
 CONDENSED STATEMENTS OF OPERATIONS (Unaudited)
 Three Months Ended March 31,2009
    
    
    2008NET SALESProduct sales
    
    $
    468,269
    
    
    $
    611,500Service sales
    
    
    2,054,410
    
    
    
    2,060,146Total Net Sales
    
    
    2,522,679
    
    
    
    2,671,646COSTS AND OPERATING EXPENSES:Cost of sales
    
    
    644,219
    
    
    
    714,963Engineering and software development
    
    
    294,516
    
    
    
    297,858Selling, general and administrative
    
    
    1,773,627
    
    
    
    1,871,673Total Costs and Operating Expenses
    
    
    2,712,362
    
    
    
    2,884,494LOSS FROM OPERATIONS
    
    
    (189,683
    )
    
    
    (212,848
    )NET INTEREST INCOME
    
    
    9,564
    
    
    
    18,721LOSS BEFORE INCOME TAXES
    
    
    (180,119
    )
    
    
    (194,127
    )INCOME TAXES
    
    
    
    
    
    
    NET LOSS
    
    $
    (180,119
    )
    
    $
    (194,127
    )NET LOSS PER SHAREBasic
    
    $
    (0.02
    )
    
    $
    (0.02
    )Diluted
    
    $
    (0.02
    )
    
    $
    (0.02
    )
 The accompanying notes are an integral part of these financial statements.
  5




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VERAMARK TECHNOLOGIES, INC.
 
 CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
 Three
Months Ended March 31,2009
    
    
    2008OPERATING ACTIVITIES:Net Loss
    
    $
    (180,119
    )
    
    $
    (194,127
    )Adjustments to reconcile net loss to net cash flows
provided by operating activitiesDepreciation and amortization
    
    
    406,213
    
    
    
    331,589Bad debt expense
    
    
    (14,000
    )
    
    
    3,000Share based compensation expense
    
    
    27,067
    
    
    
    21,500Pension assets
    
    
    (7,500
    )
    
    
    (23,823
    )Loss on disposal of fixed assets
    
    
    0
    
    
    
    14,571Unrealized gain (loss) on sales of investments
    
    
    (5,351
    )
    
    
    41,060Changes in assets and liabilitiesAccounts receivable
    
    
    (49,166
    )
    
    
    187,615Inventories
    
    
    6,770
    
    
    
    17,970Prepaid expenses and other current assets
    
    
    (215,982
    )
    
    
    (5,324
    )Deposits and other assets
    
    
    0
    
    
    
    15,000Accounts payable
    
    
    107,380
    
    
    
    (58,854
    )Accrued compensation and related taxes
    
    
    50,656
    
    
    
    (339,643
    )Deferred revenue
    
    
    (36,515
    )
    
    
    122,340Other accrued liabilities
    
    
    (26,017
    )
    
    
    (89,143
    )Pension obligation
    
    
    (18,515
    )
    
    
    29,467Net cash provided by operating activities
    
    
    44,921
    
    
    
    73,198INVESTING ACTIVITIES:Sale (purchase) of investments
    
    
    10,473
    
    
    
    (184,626
    )Capitalized software development costs
    
    
    (297,983
    )
    
    
    (200,464
    )Additions to property and equipment
    
    
    (124,300
    )
    
    
    (55,345
    )Net cash flows used by investing activities
    
    
    (411,810
    )
    
    
    (440,435
    )FINANCING ACTIVITY:Exercise of stock options
    
    
    0
    
    
    
    25,905Net cash flows provided by financing activities
    
    
    0
    
    
    
    25,905NET DECREASE IN CASH AND CASH EQUIVALENTS
    
    
    (366,889
    )
    
    
    (341,332
    )CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
    
    1,014,669
    
    
    
    713,342CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    647,780
    
    
    $
    372,010
 2009
    
    
    2008SUPPLEMENTAL CASH FLOW INFORMATIONCash Transactions:Income taxes paid,net
    
    $
    2,750
    
    
    $
    4,425Interest paid
    
    $
    226
    
    
    $
    1,401
 The accompanying notes are an integral part of these financial statements.
  6




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NOTES TO CONDENSED FINANCIAL STATEMENTS
  (1) GENERAL
    (2) PROPERTY AND EQUIPMENT
  March 31,
    
    
    December 31,2009
    
    
    2008Machinery and equipment
    
    $
    128,390
    
    
    $
    128,390Computer hardware and software
    
    
    1,245,275
    
    
    
    1,224,343Furniture and fixtures
    
    
    1,227,717
    
    
    
    1,124,349Leasehold improvements
    
    
    1,385,797
    
    
    
    1,385,797$
    3,987,179
    
    
    $
    3,862,879
  (3) STOCK-BASED COMPENSATION
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Weighted
    
    
    WeightedAverage
    
    
    Average
    
    
    RemainingExercise
    
    
    Grant-Date
    
    
    Contractual
    
    
    IntrinsicShares
    
    
    Price
    
    
    Fair Value
    
    
    Term (Yrs)
    
    
    ValueOutstanding as of December 31, 2008
    
    
    1,899,583
    
    
    $
    1.28
    
    
    $
    1.07
    
    
    
    4.7
    
    
    $
    344,300Granted
    
    
    16,500
    
    
    $
    0.35
    
    
    
    
    
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Canceled
    
    
    (113,415
    )
    
    
    6.11
    
    
    
    
    
    
    
    
    
    
    
    (122,584
    )Outstanding as of March 31, 2009
    
    
    1,802,668
    
    
    $
    0.97
    
    
    $
    0.87
    
    
    
    4.8
    
    
    $
    221,716Options exercisable at March 31, 2009
    
    
    1,655,168
    
    
    $
    1.00
    
    
    $
    0.90
    
    
    
    4.4
    
    
    $
    221,716
  (4) TOTAL COMPREHENSIVE INCOME (LOSS)
  Three Months Ended March 31,2009
    
    
    2008Net income (loss)
    
    $
    (180,119
    )
    
    $
    (194,127
    )Reclassification to net periodic benefit cost
    
    
    
    
    
    
    22,122Unrealized change  pension
    
    
    103,317
    
    
    
    (36,247
    )Unrealized change on investments
    
    
    (5,351
    )
    
    
    41,060Total comprehensive loss
    
    $
    (82,153
    )
    
    $
    (167,192
    )
 (5) NET INCOME (LOSS) PER SHARE (EPS)
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Calculations of Earnings (Loss) Per Share
 Three Months Ended March 31,2009
    
    
    2008BasicNet loss
    
    $
    (180,119
    )
    
    $
    (194,127
    )Weighted average common shares outstanding
    
    
    9,784,729
    
    
    
    9,346,912Net loss per common share
    
    $
    (0.02
    )
    
    $
    (0.02
    )DilutedNet loss
    
    $
    (180,119
    )
    
    $
    (194,127
    )Weighted average common shares outstanding
    
    
    9,784,729
    
    
    
    9,346,912Additional dilutive effect of stock options and
warrants after application of treasury stock method
    
    
    
    
    
    
    Weighted average dilutive shares outstanding
    
    
    9,784,729
    
    
    
    9,346,912Net loss per common share assuming full obligation
    
    $
    (0.02
    )
    
    $
    (0.02
    )
  (6) INDEMNIFICATION OF CUSTOMERS
  (7) BENEFIT PLANS
 
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Three Months Ended March 31,2009
    
    
    2008Current Service Cost
    
    $
    
    
    
    $
    14,438Amortization of Prior Service Cost
    
    
    
    
    
    
    22,122Interest Cost
    
    
    (8,317
    )
    
    
    82,688Unrealized change
    
    
    103,317
    
    
    
    (36,247
    )Pension Expense
    
    $
    95,000
    
    
    $
    83,001
     Period Ending December 31, Unless Stated Otherwise,
 Q2  Q4 2009
    
    
    372,5442010
    
    
    502,0592011
    
    
    471,9252012
    
    
    506,9182013
    
    
    522,1592014  2018
    
    
    2,607,898
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Three Months Ended March 31,2009
    
    
    2008Current Service Cost
    
    $
    2,005
    
    
    $
    1,892Interest Cost
    
    
    1,407
    
    
    
    1,521PRHB Expense
    
    $
    3,412
    
    
    $
    3,413
  Period Ending December 31, Unless Stated Otherwise,
 Q2  Q4 2009
    
    
    10,2372010
    
    
    13,6492011
    
    
    13,6492012
    
    
    13,6492013
    
    
    13,6492014  2018
    
    
    36,745
  11




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Item 2 Managements Discussion and Analysis of Financial Condition and Results of Operations
 Results of Operations
  Overview
    Sales
    12




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Cost of Sales
  Operating Expenses
  Three Months Ended March 31,2009
    
    
    2008Gross expenditures for engineering and software development
    
    $
    593,000
    
    
    $
    498,000Less: Software development costs capitalized
    
    
    (298,000
    )
    
    
    (200,000
    )Net expenses for engineering and software development included in the
Companys statement of operations
    
    $
    295,000
    
    
    $
    298,000
  Liquidity and Capital Resources
     13




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14




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Accounting Pronouncements
 1)
    
    In December 2007, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 141(R), Business Combinations. SFAS 141(R)
establishes principles and requirements for how the acquirer recognizes and measures in its
financial statements the identifiable assets acquired, the liabilities assumed, any
noncontrolling interest in the acquiree, recognizes and measures the goodwill acquired in
the business combination or a gain from a bargain purchase, and determines what information
to disclose to enable users of the financial statements to evaluate the nature and
financial effects of the business combination. SFAS 141(R) is effective for fiscal years,
and interim periods within those fiscal years, beginning on or after December 15, 2008. As
such, the Company is adopted these provisions at the beginning of the fiscal year ending
December 31, 2009. Adoption of SFAS 141(R) did not have a material effect on the Companys
financial statements.
 2)
    
    In December 2007, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 160, Noncontrolling Interests in Consolidated
Financial Statements, an amendment of ARB No. 51. SFAS 160 establishes accounting and
reporting standards for the noncontrolling interest in a subsidiary and for the
deconsolidation of a subsidiary. SFAS 160 is effective for fiscal years, and interim
periods within those fiscal years, beginning on or after December 15, 2008. As such, the
Company adopted these provisions at the beginning of the fiscal year ending December 31,
2009. Adoption of SFAS 160 did not have a material effect on the Companys financial
statements.
 3)
    
    In March 2008, the Financial Accounting Standards Board (FASB) issued Statement of
Financial Accounting Standard (SFAS) No. 161, Disclosures about Derivative Instruments
and Hedging Activitiesan amendment of FASB Statement No. 133. SFAS 161 requires
enhanced disclosures about an entitys derivative and hedging activities. SFAS 161 is
effective for financial statements issued for fiscal years and interim periods beginning
after November 15, 2008 with early application encouraged. As such, the Company adopted
these provisions at the beginning of the fiscal year ended December 31, 2009. Adoption of
SFAS 161 did not have a material effect on the Companys financial statements.
 4)
    
    In May 2008, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standard (SFAS) No. 162, The Hierarchy of Generally Accepted Accounting
Principles. SFAS 162 identifies the sources of accounting principles and the framework for
selecting the principles used in the preparation of financial statements of nongovernmental
entities that are presented in conformity with generally accepted accounting principles
(GAAP) in the United States. SFAS 162 is effective 60 days following the SECs approval of
the Public Company Accounting Oversight Board amendments to AU Section 411, The Meaning of
Present Fairly in Conformity With Generally Accepted Accounting Principles. The Company is
currently evaluating the impact of SFAS 162 on its financial statements, but does not
expect it to have a material effect.
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5)
    
    In May 2008, the Financial Accounting Standards Board (FASB) issued Statement of
Financial Accounting Standard (SFAS) No. 163, Accounting for Financial Guarantee
Insurance Contractsan interpretation of FASB Statement No. 60 (SFAS 163). SFAS 163
interprets Statement 60 and amends existing accounting pronouncements to clarify their
application to the financial guarantee insurance contracts included within the scope of
that Statement. SFAS 163 is effective for financial statements issued for fiscal years
beginning after December 15, 2008, and all interim periods within those fiscal years. As
such, the Company adopted these provisions at the beginning of the fiscal year ended
December 31, 2009. Adoption of SFAS 163 did not have a material effect on the Companys
financial statements.
 6)
    
    In June 2008, the Financial Accounting Standards Board (FASB) issued FASB Staff
Position (FSP) EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment
Transactions are Participating Securities. FSP EITF 03-6-1 clarifies that share-based
payment awards that entitle their holders to receive nonforfeitable dividends or dividend
equivalents before vesting should be considered participating securities. We have granted
and expect to continue to grant restricted stock that contain non-forfeitable rights to
dividends and will be considered participating securities upon adoption of FSP EITF 03-6-1.
As participating securities, we will be required to include these instruments in the
calculation of our basic earnings per share (EPS), and we will need to calculate basic
EPS using the two-class method. Restricted stock is currently included in our dilutive
EPS calculation using the treasury stock method. The two-class method of computing EPS is
an earnings allocation formula that determines EPS for each class of common stock and
participating security according to dividends declared (or accumulated) and participation
rights in undistributed earnings. FSP EITF 03-6-1 is effective for financial statements
issued for fiscal years beginning after December 15, 2008, and all interim periods within
those fiscal years. As such, the Company adopted these provisions at the beginning of the
fiscal year ended December 31, 2009. Adoption of FSP EITF 03-6-1 did not have a material
effect on the Companys financial statements.
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Critical Accounting Policies
  
    
    Revenue recognition
    
    Capitalization of software development costs
    
    Allowance for Doubtful Accounts
    
    Pension liability
         17




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Risk Factors
  Intellectual Property Rights
  Existing Customer Base
  Product Development
 
 Declines in Demand for Software
  New Products and Services
   19




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Competition
  Marketing and Sales
  Security and Privacy Breaches in our Systems May Damage Client Relations and Inhibit our Growth
   20




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Item 3 Quantitative and Qualitative Disclosures About Market Risk
  
 Item 4 Controls and Procedures
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PART II  OTHER INFORMATION
 
 Item 5: Other Information
  
 Item 6: Exhibits
 (a)
    
    Financial Statements as set forth under Item 1 of this report on Form 10-Q(b)
    
    Exhibits required to be filed by Item 601 of Regulation S-K
 3.1
    
    
    Restated Certificate of Incorporation (incorporated by reference to
Exhibit 4.1 to the Companys Registration Statement on Form S-18
(File No. 2-96787) filed on March 22, 1985)3.2
    
    
    Bylaws (incorporated by reference to Exhibit 3 to the Companys
Registration Statement on Form S-8 filed on October 5, 1992)10.2
    
    
    Letter Agreement dated as of March 29, 2007 by and between the
Company and David G. Mazzella (incorporated by reference to Exhibit
10.1 to the Companys Current Report on Form 8-K filed on April 3,
2007)10.3
    
    
    Letter Agreement dated as of July 30, 2007 by and between the
Company and Martin LoBiondo (incorporated by reference to Exhibit
10.1 to the Companys Current Report on Form 8-K filed on August 3,
2007)10.4
    *
    
    Amended and Restated Board of Directors Deferred Compensation Plan
(incorporated by reference to Exhibit 10.1 to the Companys Current
Report on Form 8-K filed on November 26, 2007)10.5
    
    
    Consulting Agreement dated as of December 12, 2007 by and between
the Company and David G. Mazzella (incorporated by reference to
Exhibit 10.1 to the Companys Current Report on Form 8-K filed on
December 13, 2007)10.6
    *
    
    Employment Agreement dated as of December 17, 2007 by and between
the Company and Anthony C. Mazzullo (incorporated by reference to
Exhibit 10.1 to the Companys Current Report on Form 8-K filed on
December 19, 2007)10.7
    *
    
    Letter Agreement dated as of February 4, 2008 by and between the
Company and Douglas F. Smith (incorporated by reference to Exhibit
10.1 to the Companys Current Report on Form 8-K filed on February
4, 2008)10.8
    *
    
    Restricted Stock Award Agreement dated as of January 1, 2008 by and
between the Company and Anthony C. Mazzullo (incorporated by
reference to Exhibit 10.1 to the Companys Current Report on Form
8-K filed on March 25, 2008)10.9
    *
    
    2008 Incentive Plan for Management and Key Employees (incorporated
by reference to Exhibit 10.1 to the Companys Current Report on
Form 8-K filed on April 2, 2008)
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10.10
    *
    
    2008 Employee Stock Purchase Plan (incorporated by reference to
Exhibit F to the Companys Proxy Statement for its 2008 Annual
Meeting of Shareholders filed on April 29, 2008)10.11
    *
    
    Description of non-employee director compensation (incorporated by
reference to Exhibit 10.1 to the Companys Current Report on Form
8-K filed on August 18, 2008)10.12
    *
    
    Amended Salary Continuation Agreement dated as of October 10, 2008
by and between the Company and Ronald C. Lundy (incorporated by
reference to Exhibit 10.1 to the Companys Current Report on Form
8-K filed on October 17, 2008)10.13
    *
    
    Form of 2008 Employee Stock Purchase Plan Enrollment Agreement
(incorporated by reference to Exhibit 4.2 to the Companys
Registration Statement on Form S-8 (File No. 333-155286) filed on
November 12, 2008)14
    
    
    Code of Business Conduct and Ethics (incorporated by reference to
Exhibit E to the Companys Proxy Statement for its 2008 Annual
Meeting of Shareholders filed on April 29, 2008)31.1
    
    
    Certification of Chief Executive Officer Pursuant to Section 302 of
the Sarbanes-Oxley Act of 200231.2
    
    
    Certification of Chief Financial Officer Pursuant to Section 302 of
the Sarbanes-Oxley Act of 200232.1
    
    
    Certification of Chief Executive Officer Pursuant to Section 906 of
the Sarbanes-Oxley Act of 200232.2
    
    
    Certification of Chief Financial Officer Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002
 *
    
    Management contract or compensatory plan or arrangement (c)
    
    Schedules required to be filed by Regulation S-X
 none
 All other schedules are omitted because they are not applicable or the required
information is shown in the financial statements or notes thereto.
  23




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/s/ Anthony C. Mazzullo

Anthony C. MazzulloPresident and CEO
  /s/ Ronald C. Lundy

Ronald C. LundyVice President of Finance and CFO
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##### Table of Contents



EXHIBIT INDEX
 Exhibit No.
    
    Description3.1
    
    
    Restated Certificate of Incorporation (incorporated by reference to Exhibit 4.1 to the Companys
Registration Statement on Form S-18 (File No. 2-96787) filed on March 22, 1985)3.2
    
    
    Bylaws (incorporated by reference to Exhibit 3 to the Companys Registration Statement on Form
S-8 filed on October 5, 1992)10.2
    
    
    Letter Agreement dated as of March 29, 2007 by and between the Company and David G. Mazzella
(incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed on
April 3, 2007)10.3
    
    
    Letter Agreement dated as of July 30, 2007 by and between the Company and Martin LoBiondo
(incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed on
August 3, 2007)10.4
    *
    
    Amended and Restated Board of Directors Deferred Compensation Plan (incorporated by reference to
Exhibit 10.1 to the Companys Current Report on Form 8-K filed on November 26, 2007)10.5
    
    
    Consulting Agreement dated as of December 12, 2007 by and between the Company and David G.
Mazzella (incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K
filed on December 13, 2007)10.6
    *
    
    Employment Agreement dated as of December 17, 2007 by and between the Company and Anthony C.
Mazzullo (incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K
filed on December 19, 2007)10.7
    *
    
    Letter Agreement dated as of February 4, 2008 by and between the Company and Douglas F. Smith
(incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed on
February 4, 2008)10.8
    *
    
    Restricted Stock Award Agreement dated as of January 1, 2008 by and between the Company and
Anthony C. Mazzullo (incorporated by reference to Exhibit 10.1 to the Companys Current Report on
Form 8-K filed on March 25, 2008)10.9
    *
    
    2008 Incentive Plan for Management and Key Employees (incorporated by reference to Exhibit 10.1
to the Companys Current Report on Form 8-K filed on April 2, 2008)10.10
    *
    
    2008 Employee Stock Purchase Plan (incorporated by reference to Exhibit F to the Companys Proxy
Statement for its 2008 Annual Meeting of Shareholders filed on April 29, 2008)10.11
    *
    
    Description of non-employee director compensation (incorporated by reference to Exhibit 10.1 to
the Companys Current Report on Form 8-K filed on August 18, 2008)10.12
    *
    
    Amended Salary Continuation Agreement dated as of October 10, 2008 by and between the Company and
Ronald C. Lundy (incorporated by reference to Exhibit 10.1 to the Companys Current Report on
Form 8-K filed on October 17, 2008)10.13
    *
    
    Form of 2008 Employee Stock Purchase Plan Enrollment Agreement (incorporated by reference to
Exhibit 4.2 to the Companys Registration Statement on Form S-8 (File No. 333-155286) filed on
November 12, 2008)14
    
    
    Code of Business Conduct and Ethics (incorporated by reference to Exhibit E to the Companys
Proxy Statement for its 2008 Annual Meeting of Shareholders filed on April 29, 2008)31.1
    
    
    Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    
    Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1
    
    
    Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2
    
    
    Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 *
    
    Management contract or compensatory plan or arrangement  25