Certificate of Incorporation as Amended

Proposals to Amend the Certificate of Incorporation and By-Laws

(Items 3 and 4 on the Proxy Card)

The Board of Directors is presenting two proposals for action by the shareholders, each consistent with recent authorizing legislation amending provisions of the New York Business Corporation Law ("New York BCL"), under which the Company is organized.

Item 3 is a proposal to amend the Company's Certificate of Incorporation by adding a provision which, in certain cases, would eliminate the personal liability of directors of the Company for monetary damages arising from breach of fiduciary duty as a director.

Item 4 is a proposal to adopt an amendment to the Company's By-laws which, in general, provides for indemnification of directors and officers of the Company.

The Board of Directors believes that the two proposals, in combination, will assist the Company in attracting and retaining qualified individuals to serve as directors and officers of the Company.

Each of the proposals is discussed below. The Board of Directors has recommended that the shareholders vote FOR approval of each proposal. Each proposal will be presented separately for shareholder vote; approval of one is not contingent upon approval of the other.

Proposal to Adopt an Amendment to the Certificate of Incorporation

Providing for Elimination of Certain Liabilities of Directors in Accordance with New York Law

(Item 3 on the Proxy Card)

The Board of Directors recommends that the shareholders approve a proposal to amend the Company's Certificate of Incorporation by adding an Article Sixth which would eliminate personal liability of the Company's directors to the Company or to its shareholders for monetary damages arising from breach of fiduciary duty.

Background

Since 1986, many states have enacted statutes to reduce the exposure of corporate directors to litigation seeking to impose upon them heavy monetary liability for their acts or inaction in such capacity.

The amendment to the New York BCL was, together with the earlier amendment permitting increased indemnification discussed below, New York's response to this need.

Such liability is not eliminated or limited if the acts or omissions of directors are in bad faith, involve intentional misconduct or knowing violations of law, violate certain statutory prohibitions, or result in a profit or other advantage to the director to which he is not legally entitled.

Text of Proposed Amendment

The text of Article Sixth proposed to be added to the Company's Certificate of Incorporation is as follows:

Reasons for the Proposed Amendment

Directors of New York corporations are required to perform their duties in good faith and with due care. A director may rely upon certain reports, opinions, and statements prepared by officers, employees, professional advisors, or committees of the Board.

The Company is requesting shareholder approval of an amendment to the Company's By-laws to permit the fullest possible indemnification permitted under the New York BCL.

Recent changes in the market for directors' and officers' liability insurance have resulted in reduced availability for directors and officers of meaningful liability coverage.

Because of such factors, the Company has chosen not to obtain such coverage.

Effect of the Proposed Amendment

The proposed amendment would protect each of the Company's directors against personal liability to the Company or its shareholders for any breach of duty unless a judgment or other final adjudication adverse to the director establishes one of the listed exceptions under New York law.

The amendment does not reduce the fiduciary duty of a director; it only eliminates monetary damage awards to the Company and its shareholders occasioned by a breach of that duty.

It does not affect equitable remedies, such as to enjoin or rescind a transaction involving a breach of fiduciary duty.

The limitation of liability afforded by the amendment affects only actions brought by the Company or its shareholders, and does not preclude or limit recovery of damages by third parties, nor does it affect the responsibility of directors under other laws.

Approval of the proposed amendment to the Certificate of Incorporation requires the affirmative vote of the holders of at least a majority of the issued and outstanding shares of Common Stock.

Board Recommendation: The Board of Directors recommends that the shareholders vote FOR approval of the foregoing proposal to amend the Company's Certificate of Incorporation (Item 3 on the Proxy Card).

Unless instructions to the contrary are indicated on the Proxy Card, it is intended that proxies will be voted in favor of the foregoing proposal.

Proposal to Adopt an Amendment to the By-Laws

Relating to Indemnification of Directors and Officers

(Item 4 on the Proxy Card)

The Board of Directors recommends that the shareholders approve a proposal to amend the Bylaws of the Company to add an Article 44 which relates to indemnification of directors, officers and others.

Background

A number of states have recently changed the indemnification provisions of their corporate laws in response to increasing concern over the ability of corporations to attract and retain qualified persons to serve as corporate directors and officers.

The New York BCL was amended in July 1986 to authorize New York corporations to provide for indemnification and advancement of expenses to directors and officers against liabilities incurred in shareholder derivative suits or third-party claims.

The New York statute now provides that the indemnification and advancement of expenses provisions thereof are not exclusive of any other rights to which a director or officer may be entitled.

Text of Proposed Amendment

The text of Article 44 proposed to be added to the Company's By-laws is set forth as Appendix A to this Proxy Statement.

Reasons for the Proposed Amendment

The principal objective of the statutory changes was to encourage capable and experienced persons to serve in corporate management by providing reasonable indemnification of the directors and officers of public corporations for their defense of both third-party and derivative actions.

The proposed amendment is being put to a vote of shareholders in order to ensure that directors and officers of the Company will receive indemnification to the fullest extent authorized by the new law.

This proposal is intended to help the Company attract and retain able and well-qualified persons as directors and officers by assuring them that the Company will hold them harmless when they do not act in bad faith or dishonestly or for their own interests.

Approval of the proposed amendment to the By-laws requires the affirmative vote of a majority of the votes cast by shareholders present in person or by proxy and entitled to vote at the meeting.

Board Recommendation: The Board of Directors recommends that the shareholders vote FOR approval of the foregoing proposal to amend the Company's Bylaws (Item 4 on the Proxy Card).

Unless instructions to the contrary are indicated on the Proxy Card, it is intended that proxies will be voted in favor of the foregoing proposal.

Appendix A

Proposed Article 44 of the By-Laws

Indemnification of Directors, Officers and Others

44(a) The Corporation shall, to the fullest extent now or hereafter permitted by the New York Business Corporation Law, indemnify any director or officer who is or was made, or threatened to be made, a party to an action or proceeding, whether civil or criminal, against judgments, fines, amounts paid in settlement, and costs, charges and expenses, including attorneys' fees.

44(b) The Corporation may indemnify any other person (including corporate personnel other than directors or officers) to whom the Corporation is permitted to provide indemnification or the advancement of expenses by applicable law.

44(c) The Corporation shall, from time to time, reimburse or advance to any person referred to in Section (a) the funds necessary for payment of expenses, including attorneys' fees, incurred in connection with any action or proceeding referred to in Section (a), upon receipt of a written undertaking.

44(d) The right to indemnification conferred by Section (a) shall not be retroactive to events occurring prior to the adoption of this Article 44.

44(e) This Article 44 may be amended, modified or repealed either by action of the Board of Directors of the Corporation or by the vote of the shareholders.