Employment Agreement

1.

Employment .

(a)

You will continue to serve, during the Employment Term, as President and Chief Executive Officer of the Company with the customary responsibilities and authority of such positions and in accordance with the Company's By-Laws. You will report directly and only to the Board of Directors. If elected, you will also continue to serve as a Director of the Company. The Company shall during the Employment Term recommend and propose you as a Director of the Company and any Related Entity and, if the Chairman of the Board of Directors as of the date hereof at any time ceases to serve as such, as Chairman of the Board of Directors. To the extent you are not elected Chief Executive Officer of any Related Entity, such Chief Executive Officer shall report to you.

(b)

During the Employment Term, you shall devote substantially all of your business time and attention to the performance of your duties for the Company and serve the Company diligently and to the best of your ability. You may, however, perform teaching, consulting, patient care, and other activities as you have done from time to time in the past, provided that they do not materially conflict with the performance of your duties to the Company. In addition, you may manage your personal investments and be involved in civic and charitable activities so long as such activities do not materially interfere with your providing services hereunder. During the Employment Term, you shall not serve as a member of a board of directors of any other for-profit corporation (other than a Related Entity) without the prior written consent of the Board of Directors (which consent shall not be unreasonably withheld). In no event will the provisions of this Agreement in any way modify, alter, reduce, or limit the fiduciary obligations you owe to the Company as an officer and Director of the Company.

2.

Term . Except for earlier termination as provided in paragraph 4 hereof, your employment under this Agreement (the "Employment Term") is for an initial term that commenced on February 12, 1998 and ended on December 31, 2003 (the "Initial Term") and automatically extended since then. Unless notice is given of an intent not to extend the Initial Term or any extension thereof, by you or by the Company by written notice at least ninety (90) days prior to each December 31 during the Employment Term, the Employment Term shall be deemed as of such 90th day to have been extended and continue until the end of the following calendar year unless otherwise terminated as provided in paragraph 4 hereof.

3.

Compensation/Benefits .

(a)

During the Employment Term, you have received base salary at an annual rate of not less than $575,000, paid currently at periodic intervals in accordance with the Company's payroll practices for salaried employees. Adjustments in your base salary during the term of this Agreement (which shall thereafter be your "Base Salary") have been and may be effected from time to time upon the recommendation of the Compensation Committee and the approval of the Board of Directors based upon an annual review by the Compensation Committee, but your Base Salary, once increased, shall in no event be decreased; provided, however, that in the event there is a general reduction of compensation applicable to senior executives generally, nothing herein shall preclude the Board of Director's ability to reduce your Base Salary consistent with this reduction. You shall also participate in and be the beneficiary of any cash bonus payments, stock option and other equity programs, incentive programs, pension plans, profit sharing plans and other benefit programs and fringe benefit programs implemented by the Company and otherwise available to executive officers, nonindependent directors, and employees of the Company, at a level commensurate with your position, in accordance with the terms and conditions of such programs.

(b)

You have separately entered into one or more stock purchase agreements and stock option award agreements with the Company. With the sole exception of the provisions in this Agreement regarding vesting and exercisability of stock options, nothing in this Agreement will affect any term or provision of any stock purchase or stock option award agreement you have entered into or will enter into with the Company under any stock purchase or incentive plan of the Company and the stock options to purchase common shares previously granted to you shall remain outstanding, and in effect, in accordance with their respective terms.

(c)

The Company will during the Employment Term maintain insurance on your life in the amount of $1,000,000 payable to such beneficiary as you designate. You may change the designated beneficiary of this policy at any time. The Company will not borrow against or otherwise encumber the policy or proceeds thereof. The Company will also during the Employment Term maintain for your benefit a long term disability policy that will pay you at least 65 percent of your Base Salary during such period as you are unable, for physical or mental reasons, to perform the responsibilities of your current position, with such benefits commencing no later than six (6) months after incurrence of the disability.

(d)

During the Employment Term, subject to paragraph 14(o)(i), the Company will pay for or will reimburse the reasonable costs of your medical malpractice insurance and all customary, ordinary, and necessary business expenses incurred by you in the performance of your duties (including expenses related to equipment you customarily and normally use in connection with the performance of your duties to the Company), provided that you present such vouchers, receipts, or other documentation as are required by the regular procedures of the Company for the reimbursement of such expenses. In addition, during the Employment Term, the Company will pay you a monthly automobile cash allowance of $1,500 plus all expenses of maintaining and operating your automobile in accordance with current policy.

(e)

You shall be entitled to at least four (4) weeks of vacation per year, which vacation may be taken at such times as you elect with due regard to the needs of the Company.

(f)

Subject to paragraph 14(o)(i), the Company will pay, or will reimburse the reasonable costs of any legal, accounting or other professional services you incur in connection with your tax preparation and financial planning to an annual maximum of (i) the amount for financial planning and similar benefits generally made available to other senior executives of the Company for such year, plus (ii) $12,500 per year (together, the “Maximum Annual Professional Services Reimbursement Amount”), including, without limitation, a tax gross-up reimbursement, so long as the total direct reimbursement and tax gross-up reimbursement is no more than the Maximum Annual Professional Services Reimbursement Amount per year. For calendar years commencing after December 31, 2004, any accrued unused amount that would have been reimbursed under this paragraph 3(f) during such year will be forfeited to the extent reimbursable expenses are not incurred during the applicable year. For calendar years prior to 2004, any unused amounts under the annual reimbursable cap (the "Grandfathered Reimbursements") under this Agreement and the February 12, 1998 agreement between you and the Company shall continue to be available to you for reimbursement of legal, accounting or other professional service expenses (and tax gross ups) you incur in connection with your tax preparation and financial planning under the terms of this Section 3(f). For the avoidance of doubt, all reimbursements shall first be deemed to come from the annual allowance that, if unused, is subject to forfeiture.

(g)

During the Employment Term (and, subject to the terms of this paragraph, thereafter), the Company will continue to designate you as its nominee at the club at which you are currently designated as the nominee of the Company (the "Club") and, subject to paragraph 14(o)(i), pay any dues or other expenses incurred with regard to your use of the Club. After your termination of employment with the Company, you shall, at your election made to the Company within 45 days thereafter: (i) elect not to be designated by the Company as the nominee for the Company's Club membership; (ii) if permitted by the Club, have the Company transfer the Company's Club membership to you, with the Company having its bond either returned or assumed by you (in which case you would pay the Club any dues or other Club expenses incurred thereafter and, if you assumed the bond, would pay the Company the amount of the bond); or (iii) have the Company continue your designation as nominee for the Company's Club membership (in which case you would pay the dues and other Club expenses incurred thereafter and deposit the amount of the Club bond with the Company, with such amount (as adjusted in the same manner as the bond) returned to you by the Company at the earlier of such time as it receives a refund of the bond or you elect to cease being designated as the Company's nominee at the Club). Notwithstanding anything else herein, this obligation shall survive any termination of your employment with the Company.

(h)

Following any termination of your employment with the Company, if and to the extent the Company maintains any health benefit plans (and without any obligation to do so), you and your (and, after your death, your wife's) dependents shall be entitled to continue to participate therein by paying an amount equal to the COBRA cost thereof for the remainder of your life and that of your spouse at the time of such termination of employment. Notwithstanding anything else herein, this provision shall survive any termination of your employment with the Company.

4.

Termination . Except as otherwise provided in paragraph 2, the Employment Term shall end upon the earliest of the following to occur:

(a)

Your death.

(b)

Upon a vote of the Board of Directors and notice to you of termination as a result of your Permanent Disability. Permanent Disability means your inability, by reason of any physical or mental impairment, to substantially perform the significant aspects of your regular duties as contemplated by this Agreement and which inability is reasonably contemplated to continue for at least one (1) year from its incurrence and at least ninety (90) days from the date of such vote. Any question as to the existence, extent, or potentiality of your Permanent Disability shall be determined by a qualified independent physician selected by you (or, if you are unable to make such selection, by an adult member of your immediate family), and reasonably acceptable to the Company. Such physician's written determination of your Permanent Disability shall, upon delivery to the Company, be final and conclusive for purposes of this Agreement; provided, however, that no such determination shall be final and conclusive with respect to any disability coverage under paragraph 3(c).

(c)

Your Involuntary Termination, as set forth in paragraph 6 below.

(d)

Your Removal for Cause, as set forth in paragraph 7(a) below.

(e)

Your voluntary termination (other than termination on account of death, Permanent Disability or termination by you for Good Reason) upon ninety (90) days prior written notice; provided, however, that the Company may waive such notice requirement in a written waiver delivered to you.

5.

Death and Disability .

(a)

If the Employment Term terminates by reason of your death or your Permanent Disability as provided in paragraph 4, then, except as provided in this paragraph 5(a), no further compensation will become payable to you under this Agreement, other than any earned but unpaid Base Salary, earned but unpaid bonuses, the pro rata portion of incentive compensation earned for services rendered through the date of your death or Permanent Disability, any deferred compensation and all other payments, benefits or fringe benefits to which you may be entitled under the terms of any applicable compensation arrangement or benefit, equity or fringe benefit plan or program or grant (other than any severance plan) or this Agreement (collectively, "Entitlements"). Entitlements shall be calculated and paid as set forth in paragraph 5(c) below. You shall also be entitled to the Stock Option Treatment (as set forth in paragraph 8(f) below). In the event of your termination on account of your Permanent Disability, the Company shall pay you 100% of your Base Salary which you would have received during the eighteen (18) month period following your date of termination, such payment to be made in lump sum on the sixtieth (60th) day following termination, reduced by the projected amount of disability payments you are expected to receive during such period, calculated at the time of your termination, and assuming your continuous disability for the full (18) month period, and the Company shall also (i) continue to provide for insurance and other payments that are to be made under disability policies or plans paid for or maintained by the Company, (ii) continue to provide life insurance at a level of coverage comparable to the coverage in effect for you at the time of your termination on account of Permanent Disability, and (iii) pay you a monthly amount equal to COBRA premiums for medical and dental coverage as set forth in subparagraph (b) below, in each case upon the same terms and conditions (except for the requirement of your continued employment) for a period of eighteen (18) months following your date of termination.

(b)

With respect to monthly amount for medical and dental coverage provided under paragraph 5(a), you shall be required to pay the applicable COBRA premium for you and your dependents, or to obtain coverage for you and your dependents under substitute arrangements, and you shall be paid a monthly amount by the Company equal to such amount, and to the extent you incur tax that you would not have incurred as an active employee as a result of the aforementioned coverage, you shall receive from the Company an additional gross-up payment in the amount necessary, subject to paragraph 14(o)(i), so that you will have no additional cost for receiving such items or any additional payment.

(c)

Earned but unpaid bonus shall mean any declared but unpaid bonus for any prior bonus period and, if the bonus for the current bonus period is other than totally discretionary, a pro rata portion of the calculated bonus for the bonus period based on days in the bonus period prior to termination of your services compared to total days in the bonus period. Any incentive compensation shall be deemed earned and shall be paid based on actual results during the measuring period and a pro rata measurement of the days in the incentive period prior to termination of your services compared to total days in the incentive period. Such pro rata bonus and incentive compensation shall be paid to you at the same time and form that bonuses and incentive compensation are paid to other active participants. Any deferred compensation shall be paid in accordance with the terms of the applicable plan. Base Salary shall be paid in accordance with normal payroll practice.

6.

Involuntary Termination .

(a)

Involuntary Termination shall mean either your termination by the Company in accordance with paragraph 6(b) hereof, or your resignation in accordance with paragraph 6(c) hereof.

(b)

Termination By The Company Without Cause : Your termination by the Company shall be considered to be "without cause" if (i) you are terminated or dismissed, for reasons other than your death, Permanent Disability or "Removal for Cause," as President or Chief Executive Officer, unless you have previously consented in writing to such removal or dismissal (which consent may be given or withheld in your sole discretion); provided, however, that your termination or dismissal as President shall not be a Termination by the Company without Cause if the person appointed President reports to you, or (ii) prior to your sixty-fifth (65th) birthday, the Company gives notice of nonextension of the Employment Term pursuant to paragraph 2 hereof.

(c)

Termination By You For Good Reason : Your resignation shall be considered to be for Good Reason if you resign as President and Chief Executive Officer (whether or not you resign as a Director and, if Chairman of the Board, as Chairman of the Board) upon ninety (90) days' prior written notice within ninety (90) days after the occurrence of one of the following events: (i) your removal, dismissal or failure to be re-elected as President or Chief Executive Officer (other than on account of your termination for some other reason) or a de jure or de facto material reduction in your duties, title, responsibilities, authority, status, or reporting responsibilities (other than in connection with the appointment of a Chief Operating Officer or President who reports to you), unless you have previously consented in writing to such removal, dismissal or reduction (which consent may be given or withheld in your sole discretion); (ii) the failure to elect you, or your removal, dismissal or failure to be re-elected, as Chairman of the Board if the current Chairman of the Board ceases to serve as such; (iii) the failure of the Company to pay to you any amount due under this Agreement within ten (10) days after the later of its due date or your written demand for payment of such amount; (iv) any material breach by the Company of any provision of this Agreement which is not cured within thirty (30) days after your giving of written notice of such breach to the Company; (v) one year after a Change of Control, as defined in Exhibit A hereto, to the extent you are employed hereunder at that time; (vi) the relocation of the Company's principal executive office more than fifty (50) miles from the current location; or (vii) the failure of the Company to obtain and deliver to you a reasonably satisfactory written agreement from any successor to the Company as provided in paragraph 14(l).

(d)

Upon an Involuntary Termination, you will become entitled to the benefits specified in paragraph 8 of this Agreement. In addition, you will be entitled to your Entitlements as calculated and paid in accordance with paragraph 5(c) above.

7.

Removal for Cause .

(a)

Removal for Cause shall mean the termination of your duties as President, Chief Executive Officer and, if you are then serving in such capacity, Chairman of the Board, effected by the Board of Directors of the Company (after a Board of Directors meeting for which you had at least ten (10) days prior written notice and at which you had the opportunity to have counsel present to represent you in connection with issues concerning your removal for cause) by reason of any one or more of the following, which individually or in the aggregate has a material adverse effect on the aggregate business or affairs of the Company and any Related Entity:

(i)

your gross neglect of your duties, your willful and continuing refusal to perform your duties (other than, in any such case, because of a reasonably documented mental or physical illness), your refusal to obey any lawful order of the Board of Directors, or any material breach by you of any provision of paragraphs 11 or 12 of this Agreement, which, in any of the foregoing events, continues for more than thirty (30) days following your receipt of written notice from the Board of Directors that describes such breach or other event

(ii)

your willful misconduct with respect to the business or affairs of the Company or of any Related Entity

(iii)

your conviction of, or your plea of nolo contendere to, a misdemeanor involving embezzlement or fraud or other offense involving money or other property of the Company (other than a good faith dispute over expense account items), any criminal violation of the Securities Act of 1933 or the Securities Exchange Act of 1934, or any felony, provided your rights of appeal with respect to such matter have either lapsed or been exercised

(b)

Upon your Removal for Cause, you will be entitled to your Entitlements as calculated and paid in accordance with paragraph 5(c) above. In such case, no amounts will be payable to you under paragraph 8 of this Agreement for any reason whatsoever.

(c)

In the event of your voluntary termination in accordance with paragraph 4(e), you shall receive the same amounts as if you were Removed for Cause plus the Stock Option Treatment (as set forth in paragraph 8(f)).

8.

Severance Benefits .

(a)

Subject to paragraphs 8(b) and 8(e), upon an Involuntary Termination, you will become entitled to the following severance benefits:

(i)

The Company will pay you an amount equal to one and one-quarter (1-1/4) times the sum of (x) your Base Salary in effect (or, if improperly reduced, required to be in effect) at the time of your Involuntary Termination and (y) the average of the annual bonuses paid or payable to you during the three (3) completed fiscal years prior to your Involuntary Termination; and such payment shall made to you in lump sum on the date specified in paragraph 8(g) below.

(ii)

With respect to medical and dental coverage, you shall be required to pay the applicable COBRA premium for you and your dependents, or to obtain covering for you and your dependents under substitute arrangements, for eighteen (18) months, and you shall be reimbursed monthly by the Company for such amount, and to the extent you incur tax that you would not have incurred as an active employee as a result of the aforementioned coverage, you shall receive from the Company, subject to paragraph 14(o)(i), an additional gross-up payment in the amount necessary so that you will have no additional cost for receiving such items or any additional payment. The Company shall continue to provide you and your eligible dependents, upon the same terms and conditions (except for the requirement of your continued employment), with life insurance at a level of coverage comparable to the coverage in effect for you at the time of your Involuntary Termination for the eighteen (18) month period following your Involuntary Termination.

(b)

Notwithstanding paragraph 8(a), upon your Involuntary Termination within three (3) years after a Change of Control, as defined in Exhibit A hereto, or within three (3) months prior thereto in anticipation of a Change of Control, you will become entitled to the following severance benefits in lieu of the amounts under paragraph 8(a) above:

(i)

The Company will make a lump sum payment to you at on the date specified in paragraph 8(g) below of an amount equal to three (3) times the sum of (x) your Base Salary in effect (or, if improperly reduced, required to be in effect) at the time of your Involuntary Termination and (y) the average of the annual bonuses paid or payable to you during the three (3) completed fiscal years prior to your Involuntary Termination or, if higher, the three (3) completed fiscal years prior to the Change of Control.

(ii)

Any bonus, vacation pay or other compensation accrued or earned under law or in accordance with the Company's policies applicable to you but not yet paid and any incurred but unreimbursed business expenses for the period prior to termination shall be payable, subject to paragraph 14(o)(i), in accordance with the Company's policies and the terms of the applicable plan

(iii)

With respect to medical and dental coverage, you shall be required to pay the applicable COBRA premium for you and your dependents, or to obtain covering for you and your dependents under substitute arrangements, for the thirty-six (36) month period following your Involuntary Termination, and you shall be reimbursed monthly by the Company for such amount, and to the extent you incur tax that you would not have incurred as an active employee as a result of the aforementioned coverage, you shall receive from the Company, subject to paragraph 14(o)(i), an additional gross-up payment in the amount necessary so that you will have no additional cost for receiving such items or any additional payment. The Company shall continue to provide you and your eligible dependents, upon the same terms and conditions (except for the requirement of your continued employment), with life insurance at a level of coverage comparable to the coverage in effect for you at the time of your Involuntary Termination for the thirty-six (36) month period following your Involuntary Termination.

(iv)

All stock options, whether heretofore or hereafter, granted to you shall become fully vested and immediately exercisable and, if the basis were an action in anticipation of the Change of Control, the option shall remain exercisable (unless the original terms would otherwise end) at least through the Change of Control

(c)

Each of your outstanding loans from the Company will become due and payable in accordance with their existing terms and provisions, and none of these loans will be forgiven or otherwise canceled in whole or in part.

(d)

The Company agrees that if your employment with the Company is terminated during the Employment Term for any reason whatsoever, you are not required to seek other employment or to attempt in any way to reduce any amounts payable to you by the Company pursuant to this Agreement. Further, the amount of any payment or benefit provided for in this Agreement shall not be reduced by any compensation earned by you or benefit provided to you as the result of employment by another employer or otherwise. In addition, the amounts payable hereunder shall not be subject to setoff, counterclaim, recoupment, defense or other right which the Company may have against you or others, except upon obtaining by the Company of a final nonappealable judgment against you.

(e)

In the event that you have received or commenced receipt of any payments or other rights under paragraphs 5(a) or 8(a), you shall not be entitled to any additional payments or rights under paragraphs 5(a), 8(a), or 8(b) with respect to any subsequent occurrence which might otherwise give rise to such payments or rights under such paragraphs, except as specifically provided with regard to paragraph 8(b).

(f)

Notwithstanding anything to the contrary in this Agreement or any other agreement between you and the Company, the Company agrees that if your employment with the Company terminates during the Employment Term for any reason (other than a Removal for Cause), including a termination of employment pursuant to paragraphs 4(a), 4(b), 4(c) and 4(e), (i) all of your stock options and other equity awards shall continue to vest in accordance with the terms of the applicable grant agreement notwithstanding the employment termination, (ii) you (or your executors or administrators of your estate, in the case of your death) shall be entitled to exercise any of your stock options at any time during the original term of such options, and (iii) all agreements relating to your stock options or other equity shall be deemed amended to the extent inconsistent with the foregoing (such continued vesting and exercisability, the "Stock Option Treatment").

(g)

Any amounts payable and benefits or additional rights provided pursuant to paragraphs 8(a) or 8(b) beyond Entitlements ("Release Conditioned Amounts") shall be payable only if you deliver to the Company a release of all claims that you have or may have (and you do not revoke the release within the revocation period) within sixty (60) days after your termination in a form substantially in the form of Exhibit B hereto. Release Conditioned Amounts shall be paid to you in a lump sum, or shall commence if in installme