(13) Royalties, License and Employment Agreements

The Company had contractual agreements with five Officers in 2011, four Officers in 2010 and two Officers at December 31, 2009. The aggregate annual base compensation for these Officers under their respective contractual agreements for 2011, 2010 and 2009 were $2,299,000, $2,369,000 and $928,000 respectively. In addition, certain of these Officers were entitled to receive performance bonuses of up to 25% or 20% of their respective annual base salary, at the sole discretion of the Compensation Committee of the Board of Directors. In 2011, 2010 and 2009, Officers' bonuses of $486,000, $500,000 and $527,000 respectively were granted. The Chief Executive Officer and General Counsel's employment agreements provided for bonuses based on gross proceeds received by the Company from any joint venture or corporate partnering agreement.

In 2011, equity was granted as a form of compensation to these Officers:

Chief Executive Officer was granted 500,000 ten year options to purchase common stock at $0.41 per share which vested immediately;

General Counsel was granted 300,000 ten year options to purchase common stock at $0.41 per share.

Chief Financial Officer was granted 100,000 ten year options to purchase common stock at $0.31 per share which vest over one year;

Senior Vice President of Operations was granted 90,000 ten year options to purchase common stock at $0.55 per share; and

Vice President of Quality Control was granted 40,000 ten year options to purchase common stock at $0.37 per share which vest over one year.

In 2010, equity was granted as a form of compensation to these Officers:

Chief Executive Officer was granted 573,728 ten year options to purchase common stock at $2.71 - $0.66 per share which vested immediately;

General Counsel was granted 300,000 ten year options to purchase common stock at $0.66 per share which vested immediately; and

Chief Financial Officer was granted 100,000 ten year options to purchase common stock at $0.55 per share which vested immediately.

In 2009, no Officer was granted equity as a form of compensation.

The Company recorded stock compensation expense of $271,000, $495,000 and $32,000, respectively, during the years ended December 31, 2011, 2010 and 2009 with regard to these issuances.

An agreement was made and entered into as of the 31st day of December, 2008 with Robert E. Peterson which expired upon reaching term on December 31, 2011 without replacement. Mr. Peterson was previously engaged by the Company as its Chief Financial Officer pursuant to an Amended And Restated Engagement Agreement ("Engagement Agreement") made as of March 11, 2005.