2006 Incentive Compensation Plan. The Compensation Committee reviewed the results under the 2006 Incentive Compensation Plan (2006 Plan) and under each participant’s plan agreement. After confirming the results, the Compensation Committee then exercised its discretion to reduce the amounts payable under the 2006 Plan to the NEOs by amounts ranging from zero to eighteen percent.

Base Salary. The Compensation Committee approved base salary increases ranging from approximately 3% to 7.5% for the Company’s NEOs, with such increases to be made effective April 1, 2007.

2007 Incentive Compensation Plan. The Compensation Committee approved the 2007 Incentive Compensation Plan (2007 Plan), in which the NEOs will participate. The 2007 Plan includes performance metrics for the NEOs based on revenue (or revenue growth), accounts receivable days sales outstanding, and contract bookings measured at the Company level and the business unit level, and earnings before interest and taxes (expressed as a percentage of revenue) measured at the Company level. The 2007 Plan target incentive payment amounts for the NEOs range from 40% to 60% of the respective NEOs’ base salaries. Based on actual results in 2007, the potential payouts under the 2007 Plan may range from 0% to about 190% of these target amounts. The Compensation Committee also confirmed its intention to consider discretionary incentive compensation for 2007 for the NEOs outside of the 2007 Plan.

2007 Option Grants. The Compensation Committee approved grants of non-statutory stock options to the NEOs (other than George Pedersen) and other executive officers of the Company. Excluding Mr. Pedersen, who does not receive stock option grants, the grants to the NEOs ranged from 10,000 shares to 25,000 shares. Under the our new stock option grant policy (approved by the Compensation Committee effective January 1, 2007), these stock options will be granted and made effective on the pre-determined date of March 15, 2007 (Grant Date) and will have an exercise price equal to the fair market value of our common stock on the Grant Date, as measured by the closing price of our stock on Nasdaq on the Grant Date.

Description of Exhibit

Date: March 12, 2007

/s/ Kevin M. Phillips