12—PROFIT SHARING PLANS

The Company has established a 401(k) cash or deferred profit sharing plan covering all eligible full-time employees of the Company. Contributions to the 401(k) plan are made by the participants to their individual accounts through payroll withholding. Additionally, the plan provides for the Company to make profit sharing contributions to the plan in amounts at the discretion of management. The employer contribution for the years ended December 31, 1997, 1998 and 1999 was $258,000, $416,000 and $452,000, respectively.

The Company currently matches contributions each pay period at 50.0% of the employee’s contributions up to 6.0% of the employee’s compensation, not to exceed the federal limit of $10,000 per calendar year.

13—BASIC AND DILUTED NET INCOME (LOSS) PER COMMON SHARE

The following is a reconciliation of basic and diluted net income (loss) per common share computations for net income, pursuant to SFAS 128:

The effect of dilutive options excludes those stock options for which the impact would have been anti-dilutive based on the exercise price of the options. The number of options that were anti-dilutive at December 31, 1997, 1998 and 1999 were 75,950, 3,349,701 and 2,748,488, respectively.