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<SEC-DOCUMENT>0000897101-10-001939.txt : 20101004
<SEC-HEADER>0000897101-10-001939.hdr.sgml : 20101004
<ACCEPTANCE-DATETIME>20101004164832
ACCESSION NUMBER:		0000897101-10-001939
CONFORMED SUBMISSION TYPE:	PRE 14A
PUBLIC DOCUMENT COUNT:		6
CONFORMED PERIOD OF REPORT:	20101105
FILED AS OF DATE:		20101004
DATE AS OF CHANGE:		20101004

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			Electromed, Inc.
		CENTRAL INDEX KEY:			0001488917
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS [3845]
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			MN

	FILING VALUES:
		FORM TYPE:		PRE 14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-34839
		FILM NUMBER:		101106307

	BUSINESS ADDRESS:	
		STREET 1:		500 SIXTH AVENUE NW
		CITY:			NEW PRAGUE
		STATE:			MN
		ZIP:			56071
		BUSINESS PHONE:		952-758-9299

	MAIL ADDRESS:	
		STREET 1:		500 SIXTH AVENUE NW
		CITY:			NEW PRAGUE
		STATE:			MN
		ZIP:			56071
</SEC-HEADER>
<DOCUMENT>
<TYPE>PRE 14A
<SEQUENCE>1
<FILENAME>elmd104921_pre14a.htm
<DESCRIPTION>PRELIMINARY PROXY STATEMENT
<TEXT>
<HTML>
<HEAD><TITLE></TITLE></HEAD>
<BODY>
<BR>
<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR STYLE="FONT-SIZE:1PX">
 <TD WIDTH="100%" VALIGN=TOP>
 <P ALIGN=CENTER>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2><B>UNITED STATES</B></FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2><B>SECURITIES AND EXCHANGE COMMISSION</B></FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2><B>Washington, D.C. 20549</B></FONT></P>
 </TD>
 </TR>
</TABLE>
<P ALIGN=CENTER><FONT SIZE=3><B>SCHEDULE
14A</B></FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>Proxy Statement Pursuant to Section 14(a) of<BR>
the Securities Exchange Act of 1934</FONT></P>

<P><FONT SIZE=2>Filed by the
Registrant <FONT FACE=WINGDINGS>x</FONT></FONT></P>

<P><FONT SIZE=2>Filed by a
Party other than the Registrant <FONT FACE=WINGDINGS>o</FONT></FONT></P>

<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR STYLE="FONT-SIZE:1PX">
 <TD WIDTH="5%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="95%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD COLSPAN=2 VALIGN=TOP>
 <P><FONT SIZE=2>Check the appropriate
 box:</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2 FACE=WINGDINGS>x</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>Preliminary
 Proxy Statement</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2 FACE=WINGDINGS>o</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>Confidential, for Use of the Commission Only (as permitted by Rule
 14a-6(e)(2))</B></FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2 FACE=WINGDINGS>o</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>Definitive
 Proxy Statement</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2 FACE=WINGDINGS>o</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>Definitive
 Additional Materials</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2 FACE=WINGDINGS>o</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>Soliciting
 Material Pursuant to &sect;240.14a-12</FONT></P>
 </TD>
 </TR>
</TABLE>

<BR>

<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR STYLE="FONT-SIZE:1PX">
 <TD WIDTH="100%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P ALIGN=CENTER><FONT SIZE=3><B>ELECTROMED,
 INC.</B></FONT></P>


 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>(Name of Registrant as Specified In Its Charter)</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P><FONT SIZE=1>&nbsp;</FONT></P>


 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>(Name of Person(s) Filing Proxy Statement, if other than the
 Registrant)</FONT></P>
 </TD>
 </TR>
</TABLE>

<BR>

<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR STYLE="FONT-SIZE:1PX">
 <TD WIDTH="5%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="5%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="90%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD COLSPAN=3 VALIGN=TOP>
 <P><FONT SIZE=2>Payment of
 Filing Fee (Check the appropriate box):</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2 FACE=WINGDINGS>x</FONT></P>
 </TD>
 <TD COLSPAN=2 VALIGN=TOP>
 <P><FONT SIZE=2>No fee
 required.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2 FACE=WINGDINGS>o</FONT></P>
 </TD>
 <TD COLSPAN=2 VALIGN=TOP>
 <P><FONT SIZE=2>Fee computed
 on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>(1)</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>Title of
 each class of securities to which transaction applies:</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P><FONT SIZE=1>&nbsp;</FONT></P>


 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>(2)</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>Aggregate
 number of securities to which transaction applies:</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P><FONT SIZE=1>&nbsp;</FONT></P>


 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>(3)</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>Per unit
 price or other underlying value of transaction computed pursuant to Exchange
 Act Rule 0-11 (set forth the amount on which the filing fee is calculated and
 state how it was determined):</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P><FONT SIZE=1>&nbsp;</FONT></P>


 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>(4)</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>Proposed
 maximum aggregate value of transaction:</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P><FONT SIZE=1>&nbsp;</FONT></P>


 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>(5)</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>Total fee
 paid:</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P><FONT SIZE=1>&nbsp;</FONT></P>


 </TD>
 </TR>
</TABLE>

<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR STYLE="FONT-SIZE:1PX">
 <TD WIDTH="5%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="5%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="90%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2 FACE=WINGDINGS>o</FONT></P>
 </TD>
 <TD COLSPAN=2 VALIGN=TOP>
 <P><FONT SIZE=2>Fee paid
 previously with preliminary materials.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2 FACE=WINGDINGS>o</FONT></P>
 </TD>
 <TD COLSPAN=2 VALIGN=TOP>
 <P><FONT SIZE=2>Check box if
 any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and
 identify the filing for which the offsetting fee was paid previously.
 Identify the previous filing by registration statement number, or the Form or
 Schedule and the date of its filing.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>(1)</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>Amount
 Previously Paid:</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P><FONT SIZE=1>&nbsp;</FONT></P>


 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>(2)</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>Form,
 Schedule or Registration Statement No.:</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P><FONT SIZE=1>&nbsp;</FONT></P>


 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>(3)</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>Filing
 Party:</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P><FONT SIZE=1>&nbsp;</FONT></P>


 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>(4)</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>Date Filed:</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>Persons who are to respond to the collection of information contained
 in this form are not required to respond unless the form displays a currently
 valid OMB control number.</B></FONT></P>
 </TD>
 </TR>
</TABLE>

<BR>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=3><P STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<BR>

<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR STYLE="FONT-SIZE:1PX">
 <TD WIDTH="100%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=3><B>ELECTROMED,
 INC.</B></FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2><B>500 Sixth Avenue NW</B></FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2><B>New Prague, MN 56071</B></FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2><B> (952) 758-9299</B></FONT></P>
 </TD>
 </TR>
</TABLE>
<P ALIGN=CENTER><FONT SIZE=2><B>NOTICE OF ANNUAL MEETING OF SHAREHOLDERS<BR>
TO BE HELD ON FRIDAY, NOVEMBER 5, 2010</B></FONT></P>

<P><FONT SIZE=2>To our
Shareholders: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Fiscal 2011 Annual Meeting of the Shareholders (the &#147;Annual Meeting&#148;) of
Electromed, Inc. (the &#147;Company&#148;) will be held on Friday, November 5, 2010, at
the offices of the Company, located at 500 Sixth Avenue Northwest, New Prague,
Minnesota. Registration for the Annual Meeting will begin at 9:45 a.m. Central
Time, and the Annual Meeting will commence at approximately 10:00 a.m. Central
Time. The purposes of the Annual Meeting are to consider and vote upon the
following proposals and to transact any other business as may properly come
before the Annual Meeting or any adjournments thereof:</FONT></P>

<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR STYLE="FONT-SIZE:1PX">
 <TD WIDTH="5%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="5%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="90%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>(1)</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>To set the
 number of directors at seven (7).</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>(2)</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>To elect
 directors to our Board of Directors to serve until the next annual meeting of
 shareholders or until such time as their successors are elected and
 qualified; </FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>(3)</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>To amend the
 Company&#146;s Articles of Incorporation to increase the number of authorized
 shares of capital stock from 10,000,000 to 15,000,000, consisting of
 13,000,000 shares of common stock, par value $0.01 per share, and 2,000,000
 shares of undesignated stock.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>(4)</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>To ratify
 the appointment of McGladrey &amp; Pullen, LLP as independent public
 accountant of the Company for the 2011 fiscal year.</FONT></P>
 </TD>
 </TR>
</TABLE>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
action may be taken on any one of the foregoing proposals at the Annual Meeting
on the date specified above, or on any date or dates to which the Annual
Meeting may be adjourned. The Board of Directors is not aware of any other
business to come before the Annual Meeting. The foregoing proposals are
described more fully in the enclosed proxy statement (the &#147;Proxy Statement&#148;). <B>If you have any questions regarding the information
contained in the Proxy Statement or regarding the completion of the enclosed
proxy card or would like directions to the Annual Meeting, please call the
Company at (952) 758-9299.</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Only
shareholders that were listed on the Company&#146;s records at the close of business
on Monday, October 4, 2010, the record date set by the Board of Directors for
the meeting, are entitled to notice of the Annual Meeting and to vote at the
Annual Meeting and any adjournments thereof. The stock transfer books of the
Company will not be closed. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
shareholders of record are cordially invited to attend the Annual Meeting in
person. However, to assure the presence of a quorum, the Board of Directors
requests that you promptly submit your proxy voting instructions by mail,
telephone, or Internet, as indicated on your proxy card, regardless of whether
you plan to attend the Annual Meeting. Your proxy vote is solicited by the
Board of Directors. The proxy is revocable and will not be used if you attend
and vote at the Annual Meeting in person or otherwise provide notice of your
revocation. If you would like to vote by mail, please mail your executed proxy
card to the Company&#146;s stock transfer agent in the enclosed envelope. </FONT></P>

<P><FONT SIZE=2>By order of
the Board of Directors, </FONT></P>

<P><FONT SIZE=2><img src="a104921001_v1.jpg" alt="-s- Robert D. Hansen"></FONT></P>

<P><FONT SIZE=2><I>Robert D. Hansen<BR></I>Chairman of the Board and Director<BR>
New Prague, Minnesota<BR>
October 14, 2010</FONT></P>

<P ALIGN=CENTER><FONT SIZE=2><B>IMPORTANT: THE PROMPT SUBMISSION OF PROXIES
WILL SAVE THE COMPANY THE EXPENSE OF FURTHER REQUESTS FOR PROXIES IN ORDER TO
ENSURE A QUORUM. AN ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE, OR YOU
MAY VOTE ONLINE OR BY PHONE.</B></FONT></P>

<P ALIGN=CENTER><FONT SIZE=2><B>Important
Notice Regarding the Availability of Proxy Materials<BR>for the Annual Meeting to
be Held on November 5, 2010:<BR>
The Proxy Statement, Form 10-K and Annual Report are available at<BR>
http://electromed.com/info_pages/investor_relations.html</B></FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=3><P STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<BR>

<TABLE ALIGN=CENTER BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="40%">
 <TR STYLE="FONT-SIZE:1PX">
 <TD WIDTH="40%" VALIGN=TOP STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P>&nbsp;</P>


 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2><B>Proxy Statement</B></FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>Fiscal 2011 Annual Meeting of Shareholders</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>Friday, November 5, 2010</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>10:00 a.m. Central Time</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P ALIGN=CENTER><FONT SIZE=2>&nbsp;</FONT></P>


 </TD>
 </TR>
</TABLE>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
proxy statement (the &#147;Proxy Statement&#148;) is furnished in connection with the
solicitation of proxies by the Board of Directors of Electromed, Inc., a
Minnesota corporation (the &#147;Company&#148;), for use at the Fiscal 2011 Annual
Meeting of Shareholders of the Company to be held on Friday, November 5, 2010
(the &#147;Annual Meeting&#148;), and at any adjournment thereof. The Annual Meeting will
be held at the offices of the Company, located at 500 Sixth Avenue Northwest,
New Prague, Minnesota. Registration for the Annual Meeting will begin at
approximately 9:45 a.m. Central Time. The Annual Meeting will commence at
approximately 10:00 a.m. Central Time. This solicitation is being made by mail;
however, the Company may also use its officers, directors, and employees
(without providing them with additional compensation) to solicit proxies from
shareholders in person or by telephone, facsimile or letter. Distribution of
this Proxy Statement and the proxy card via U.S. Mail is scheduled to begin on
or about October 14, 2010. </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2><B>Important
Notice Regarding the Availability of Proxy Materials<BR>
for the Annual Meeting of Shareholders to be Held on November 5, 2010:<BR>
The Proxy Statement, Form 10-K and Annual Report are available at <BR>
http://electromed.com/info_pages/investor_relations.html</B></FONT></P>

<P ALIGN=CENTER><FONT SIZE=2><B>QUESTIONS AND ANSWERS ABOUT THE ANNUAL
MEETING AND VOTING</B></FONT></P>

<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR STYLE="FONT-SIZE:1PX">
 <TD WIDTH="4%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="95%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 </TR>
 <TR STYLE="FONT-SIZE:1PX">
 <TD COLSPAN=2 VALIGN=TOP STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P><FONT SIZE=1><B>&nbsp;</B></FONT></P>


 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>Q:</B></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>Why did I receive this proxy statement?</B></FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>A:</B></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>The Company
 is soliciting your proxy vote at the Annual Meeting because you owned of
 record one or more shares of common stock of the Company at the close of
 business on Monday, October 4, 2010, the record date for the meeting, and are
 therefore entitled to vote at the Annual Meeting.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD COLSPAN=2 VALIGN=TOP STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P><FONT SIZE=1>&nbsp;</FONT></P>


 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>Q:</B></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>What is a proxy?</B></FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>A:</B></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>A proxy is
 your legal designation of another person or persons (the &#147;proxy&#148; or
 &#147;proxies,&#148; respectively) to vote on your behalf. By completing and returning
 the enclosed proxy card, you are giving Robert D. Hansen and Terry M.
 Belford, the proxies, the authority to vote your shares of common stock at
 the Annual Meeting in the manner you indicate on your proxy card. If you sign
 and return the enclosed proxy card but do not give direction with respect to
 any nominee or other proposal, the proxies will vote your shares as
 recommended by the Board of Directors. The proxies are authorized to vote in
 their discretion if other matters are properly submitted at the Annual
 Meeting, or any adjournments thereof.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD COLSPAN=2 VALIGN=TOP STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P><FONT SIZE=1>&nbsp;</FONT></P>


 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>Q:</B></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>When and where is the Annual Meeting?</B></FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>A:</B></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>The Annual
 Meeting will be held on Friday, November 5, 2010, at the offices of the
 Company, located at 500 Sixth Avenue Northwest, New Prague, Minnesota.
 Registration for the meeting will begin at approximately 9:45 a.m. Central
 Time. The Annual Meeting will commence at approximately 10:00 a.m. Central
 Time.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD COLSPAN=2 VALIGN=TOP STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P><FONT SIZE=1>&nbsp;</FONT></P>


 </TD>
 </TR>
</TABLE>
<P ALIGN=CENTER><FONT SIZE=2>- 1 -</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=3><P STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<BR>

<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR STYLE="FONT-SIZE:1PX">
 <TD WIDTH="5%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="5%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="90%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>Q:</B></FONT></P>
 </TD>
 <TD COLSPAN=2 VALIGN=TOP>
 <P><FONT SIZE=2><B>What am I voting on?</B></FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>A:</B></FONT></P>
 </TD>
 <TD COLSPAN=2 VALIGN=TOP>
 <P><FONT SIZE=2>You are voting on the following matters:</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>Proposal 1</B> &#151; To set the number of directors
 at seven (7);</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>Proposal 2</B> &#151; To elect the directors named in
 the Proxy Statement;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>Proposal 3</B> &#151; To amend the Company&#146;s Articles
 of Incorporation to increase the number of authorized shares of capital stock
 from 10,000,000 to 15,000,000, consisting of 13,000,000 shares of common
 stock, par value $0.01 per share, and 2,000,000 shares of undesignated stock.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>Proposal 4</B> &#151; To ratify the appointment of
 McGladrey &amp; Pullen, LLP as the Company&#146;s independent public accountant
 for the 2011 fiscal year.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN=2 VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD COLSPAN=3 VALIGN=TOP STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P><FONT SIZE=1><B>&nbsp;</B></FONT></P>


 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN=2 VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>Q:</B></FONT></P>
 </TD>
 <TD COLSPAN=2 VALIGN=TOP>
 <P><FONT SIZE=2><B>What does the Board recommend?</B></FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>A:</B></FONT></P>
 </TD>
 <TD COLSPAN=2 VALIGN=TOP>
 <P><FONT SIZE=2>The Board
 recommends a vote:</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN=2 VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>FOR</B> the proposal to set the number of
 directors at seven (7) (see Proposal 1);</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>FOR</B> the election of its seven director
 nominees (see Proposal 2); </FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>FOR</B> the proposal to amend the Company&#146;s
 Articles of Incorporation to increase the number of authorized shares of
 capital stock from 10,000,000 to 15,000,000, consisting of 13,000,000 shares
 of common stock, par value $0.01 per share, and 2,000,000 shares of
 undesignated stock (see Proposal 3); and</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>FOR</B> the ratification of the appointment of
 McGladrey &amp; Pullen, LLP as the Company&#146;s independent public accountant
 for the 2011 fiscal year (see Proposal 4).</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD COLSPAN=3 VALIGN=TOP STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P><FONT SIZE=1><B>&nbsp;</B></FONT></P>


 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>Q:</B></FONT></P>
 </TD>
 <TD COLSPAN=2 VALIGN=TOP>
 <P><FONT SIZE=2><B>How many votes do I have? </B></FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>A:</B></FONT></P>
 </TD>
 <TD COLSPAN=2 VALIGN=TOP>
 <P><FONT SIZE=2>On any
 matter which may properly come before the Annual Meeting, each shareholder
 entitled to vote thereon will have one (1) vote for each share of common
 stock owned of record by such shareholder as of the close of business on
 Monday, October 4, 2010. </FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN=2 VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD COLSPAN=3 VALIGN=TOP STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P><FONT SIZE=1>&nbsp;</FONT></P>


 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN=2 VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>Q:</B></FONT></P>
 </TD>
 <TD COLSPAN=2 VALIGN=TOP>
 <P><FONT SIZE=2><B>How many shares of common stock may vote at the Annual Meeting?</B></FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>A:</B></FONT></P>
 </TD>
 <TD COLSPAN=2 VALIGN=TOP>
 <P><FONT SIZE=2>At the close
 of business on Monday, October 4, 2010, there were 8,087,885 outstanding
 shares of common stock. This means that there may be 8,087,885 votes on any
 matter presented at the Annual Meeting. </FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN=2 VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD COLSPAN=3 VALIGN=TOP STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P><FONT SIZE=1>&nbsp;</FONT></P>


 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>Q:</B></FONT></P>
 </TD>
 <TD COLSPAN=2 VALIGN=TOP>
 <P><FONT SIZE=2><B>What vote is required to approve each of the Proposals? </B></FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>A:</B></FONT></P>
 </TD>
 <TD COLSPAN=2 VALIGN=TOP>
 <P><FONT SIZE=2><B>Proposal 1 &#150; Determination of the number of directors</B>
 &#151; Provided a quorum is present in person or by proxy at the Annual Meeting
 (consisting of at least a majority of the issued and outstanding stock as of
 the record date), the affirmative vote of the holders of a majority of the
 shares of common stock represented at the Annual Meeting (whether in person
 or by proxy) will result in approval of the proposal to set the number of
 directors at seven (7).</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN=2 VALIGN=TOP>
 <P><FONT SIZE=2><B>Proposal 2 &#150; Election of Directors</B> &#151; With
 respect to the election of directors, the nominees receiving the greatest
 number of votes relative to the votes cast for the other nominees will be elected,
 regardless of whether an individual nominee receives votes from a majority of
 the quorum of shares represented at the Annual Meeting (in person or by
 proxy). Although directors are elected by plurality vote, the presence (in
 person or by proxy) of shareholders representing an aggregate of at least a
 majority of the issued and outstanding shares of common stock is required to
 constitute a quorum for the election of directors. </FONT></P>
 </TD>
 </TR>
</TABLE>
<P ALIGN=CENTER><FONT SIZE=2>- 2 -</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=3><P STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<BR>

<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR STYLE="FONT-SIZE:1PX">
 <TD WIDTH="5%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="95%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>Shareholders
 do not have cumulative voting rights with respect to the election of
 directors or any other matter, which means that shareholders will not be able
 to cast all of their votes for a single director nominee. The cumulative
 voting method would entitle a shareholder to multiply the number of shares
 owned of record by such shareholder by the number of director positions being
 voted upon and then cast a number of votes equal to such total for only one
 nominee. Instead, shareholders will only be able to cast one vote per share
 owned of record for each director nominee at the Annual Meeting. Accordingly,
 a holder of 100 shares will only be able to cast 100 shares for each nominee
 (up to the number of directorships up for election) and will not instead be
 able to cast all of his or her votes for a single nominee (or distribute
 votes in any other manner).</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>Proposal 3 &#150; Amendment to the Articles of Incorporation</B>
 &#151; Provided a quorum is present in person or by proxy at the Annual Meeting
 (consisting of at least a majority of the issued and outstanding stock as of
 the record date), the affirmative vote of the holders of a majority of the
 shares of common stock represented at the Annual Meeting (whether in person
 or by proxy) will result in approval of the proposal to amend the Company&#146;s
 Articles of Incorporation to increase the number of authorized shares of
 stock.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>Proposal 4 &#150; Ratification of the Appointment of McGladrey &amp;
 Pullen, LLP as the Company&#146;s Registered Independent Public Accountant</B>
 &#151; Provided a quorum is present in person or by proxy at the Annual Meeting
 (consisting of at least a majority of the issued and outstanding stock as of
 the record date), the affirmative vote of the holders of a majority of the
 shares of common stock represented at the Annual Meeting (whether in person
 or by proxy) will result in approval of the proposal to ratify the
 appointment of McGladrey &amp; Pullen, LLP as the Company&#146;s independent
 public accountant for the 2011 fiscal year.</FONT></P>
 </TD>
 </TR>

 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD COLSPAN=2 VALIGN=TOP STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P><FONT SIZE=1>&nbsp;</FONT></P>


 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>

 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>Q:</B></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>What constitutes a quorum?</B></FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>A:</B></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>Transaction
 of business may occur at the Annual Meeting if a quorum is present. In order
 to achieve a quorum, shareholders holding at least a majority of the issued
 and outstanding shares of common stock as of the record date must be present
 in person or by proxy at the Annual Meeting. On Monday, October 4, 2010, the
 Company had 8,087,885 issued and outstanding shares of common stock and,
 therefore, the presence of 4,043,943 shares will constitute a quorum for the
 transaction of business on all proposals properly brought before the Annual
 Meeting. If you submit a proxy or vote in person at the meeting, your shares
 will be counted in determining whether a quorum is present at the Annual
 Meeting. Broker non-votes and abstentions are also counted for the purpose of
 determining a quorum, as discussed below. </FONT></P>
 </TD>
 </TR>
<TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD COLSPAN=2 VALIGN=TOP STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P><FONT SIZE=1>&nbsp;</FONT></P>


 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>Q.</B></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>What is the effect of abstentions and withhold votes?</B></FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>A:</B></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE="2">You may either vote <B>FOR</B> or <B>WITHHOLD</B> authority to vote for each nominee for the Board of Directors. If
you withhold authority to vote on any or all nominees, your vote will have no
effect on the outcome of the election. You may vote <B>FOR</B>,<B> AGAINST</B> or <B>ABSTAIN</B> on the other proposals. If you abstain from voting on any of the other
proposals, your shares will be deemed present but will not be deemed to have
voted in favor of the proposal, and it therefore has the same effect as a
vote against the proposal. If you sign and submit your proxy card without
providing voting instructions, your shares will be voted &#147;FOR&#148; each director
nominee and other proposal, as recommended by the Board of Directors. </FONT> </P>
 </TD>
 </TR>
<TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD COLSPAN=2 VALIGN=TOP STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P><FONT SIZE=1>&nbsp;</FONT></P>


 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>Q:</B></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>What is the effect of broker non-votes?</B></FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>A:</B></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>Shares that
 are held by stock brokers in &#147;street name&#148; may be voted by the stock broker
 on &#147;routine&#148; matters, such as ratification of our independent registered
 public accounting firm. To vote on &#147;non-routine&#148; matters, the stock broker
 must obtain shareholder direction. When the stock broker does not obtain
 direction to vote the shares, the stock broker&#146;s abstention is referred to as
 a &#147;broker non-vote.&#148; Broker non-votes will be considered present for quorum
 purposes at the Annual Meeting.</FONT></P>
 </TD>
 </TR>
</TABLE>
<P ALIGN=CENTER><FONT SIZE=2>- 3 -</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=3><P STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<BR>

<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR STYLE="FONT-SIZE:1PX">
 <TD WIDTH="5%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="5%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="90%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN=2 VALIGN=TOP>
 <P><FONT SIZE=2>If your
 shares are held in street name and you do not submit voting instructions to
 your broker on Proposals 1, 2 and 3 which are &#147;non-routine matters,&#148; your
 shares will not be counted in setting the number of directors, electing the
 director nominees at the Annual Meeting or approving the amendment to our
 Articles of Incorporation. Broker non-votes in connection with the election
 of directors are not deemed &#147;votes cast,&#148; and, since directors are elected by
 a plurality, will have no effect on the election. Approval of other
 non-routine business matters requires the affirmative vote of the majority of
 the shares present in person or by proxy at the Annual Meeting. Because
 broker non-votes will be counted as present but not be counted as a vote in
 favor of such proposals, they will have the same effect as a vote against
 such matters. </FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD COLSPAN=3 VALIGN=TOP STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P><FONT SIZE=1>&nbsp;</FONT></P>


 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>Q:</B></FONT></P>
 </TD>
 <TD COLSPAN=2 VALIGN=TOP>
 <P><FONT SIZE=2><B>How do I vote my shares?</B></FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>A:</B></FONT></P>
 </TD>
 <TD COLSPAN=2 VALIGN=TOP>
 <P><FONT SIZE=2>Shares of
 common stock can be voted only if the shareholder of record is present at the
 Annual Meeting, either in person or by proxy. Shareholders of record may vote
 using either of the following methods:</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>Proxy Card.</B> The enclosed proxy card is a
 means by which a shareholder may authorize the voting of his, her, its or
 their shares of common stock at the Annual Meeting. The shares of common
 stock represented by each properly executed proxy card will be voted at the
 Annual Meeting in accordance with the shareholder&#146;s directions. The Company
 urges you to specify your choices by marking the appropriate boxes on the
 enclosed proxy card. After you have marked your choices, please sign and date
 the proxy card and mail the proxy card to the Company&#146;s stock transfer agent,
 Wells Fargo Shareholder Services, in the enclosed envelope. If you prefer, you
 may vote online or by telephone using the instructions provided on the proxy.
 If you sign and return the proxy card without specifying your choices, your
 shares will be voted <B>FOR</B> the
 proposal to set the number of directors at seven (7), <B>FOR</B> the Board of Director&#146;s nominees, <B>FOR</B> the proposal to amend the Company&#146;s
 Articles of Incorporation, and <B>FOR</B>
 the ratification of the appointment of McGladrey &amp; Pullen, LLP as the
 Company&#146;s independent public accountant for the 2011 fiscal year.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>By telephone.</B> You may authorize the voting
 of your shares of common stock at the Annual Meeting by calling (800)
 560-1965 using a touch tone telephone. Complete instructions for telephone
 voting are provided on the proxy card.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>Online.</B> You may authorize the voting of your
 shares of common stock at the Annual Meeting by visiting the website
 www.eproxy.com/elmd. Complete
 instructions for voting online are provided on the proxy card.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>In person at the Annual Meeting.</B> All
 shareholders of record as of Monday, October 4, 2010 may vote in person at
 the Annual Meeting.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN=2 VALIGN=TOP>
 <P><FONT SIZE=2>You are a
 &#147;street name&#148; holder rather than a &#147;shareholder of record&#148; if your shares are
 held in the name of a stock broker, bank, trust or other nominee as a
 custodian. If you are a &#147;street name&#148; holder, you must instruct your nominee
 as to your voting preferences. Please contact your nominee/custodian to do
 so.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN=2 VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD COLSPAN=3 VALIGN=TOP STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P><FONT SIZE=1>&nbsp;</FONT></P>


 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN=2 VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>Q:</B></FONT></P>
 </TD>
 <TD COLSPAN=2 VALIGN=TOP>
 <P><FONT SIZE=2><B>Can I change my vote after I have mailed in my proxy card?</B></FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN=2 VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>A:</B></FONT></P>
 </TD>
 <TD COLSPAN=2 VALIGN=TOP>
 <P><FONT SIZE=2>Proxies
 solicited by the Board of Directors may be revoked at any time prior to the
 Annual Meeting. No specific form of revocation is required. You may revoke
 your proxy by:</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>Voting in
 person at the Annual Meeting;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>Returning a
 later-dated signed proxy card; or</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>Giving
 personal or written notice of the revocation to the inspector of election at
 the commencement of the Annual Meeting. </FONT></P>
 </TD>
 </TR>
</TABLE>
<P ALIGN=CENTER><FONT SIZE=2>- 4 -</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=3><P STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<BR>

<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR STYLE="FONT-SIZE:1PX">
 <TD WIDTH="4%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="95%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>If your
 shares are held in &#147;street name&#148; through a broker or other nominee, you will
 need to contact that nominee if you wish to change your voting instructions.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD COLSPAN=2 VALIGN=TOP STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P><FONT SIZE=1>&nbsp;</FONT></P>


 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>Q:</B></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>How will my shares be voted if I do not specify how they should be
 voted?</B></FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>A:</B></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>If you are a
 record holder and sign and return your proxy card, but do not mark choices
 for a particular proposal, then the proxies solicited by the Board of
 Directors will be in accordance with the Board&#146;s recommendation for that
 proposal, as set forth in this Proxy Statement. </FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>If you are a
 street name holder and do not submit specific voting instructions to your
 broker, the organization that holds your shares would be permitted to vote
 your shares with respect to &#147;routine&#148; items, but not with respect to
 &#147;non-routine&#148; items. On non-routine items for which you do not submit
 specific voting instructions to your broker, the shares will be treated as
 &#147;broker non-votes.&#148; Broker non-votes will be counted for purposes of
 determining whether a quorum is present, but will not be considered shares
 entitled to vote on the proposal and will not be treated as affirmative or
 opposing votes. The proposal to ratify the appointment of McGladrey &amp;
 Pullen, LLP as our independent registered public accounting firm is
 considered routine and therefore may be voted upon by your broker if you do
 not give instructions to your broker. The other proposals set forth on the
 Notice of Annual Meeting are non-routine matters.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD COLSPAN=2 VALIGN=TOP STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P><FONT SIZE=1>&nbsp;</FONT></P>


 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>Q:</B></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>Who can attend the Annual Meeting?</B></FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>A:</B></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>All
 shareholders of record as of the close of business on Monday, October 4,
 2010, may attend the Annual Meeting. We may request identification in order
 to ensure an orderly meeting.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD COLSPAN=2 VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD COLSPAN=2 VALIGN=TOP STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P><FONT SIZE=1>&nbsp;</FONT></P>


 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>Q:</B></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>What is the record date for the Annual Meeting?</B></FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>A:</B></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>The Board of
 Directors has fixed Monday, October 4, 2010, as the record date. </FONT></P>
 </TD>
 </TR>
 <TR>
 <TD COLSPAN=2 VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD COLSPAN=2 VALIGN=TOP STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P><FONT SIZE=1>&nbsp;</FONT></P>


 </TD>
 </TR>
 <TR>
 <TD COLSPAN=2 VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>Q:</B></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>Who will count the votes?</B></FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>A:</B></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>All proxies
 submitted to the Company and all votes cast at the Annual Meeting will be
 tabulated by our stock transfer agent, Wells Fargo Shareowner Services. </FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD COLSPAN=2 VALIGN=TOP STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P><FONT SIZE=1>&nbsp;</FONT></P>


 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>Q:</B></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>Who is paying for this proxy solicitation?</B></FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>A:</B></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>The entire
 cost of this proxy solicitation will be borne by the Company. The cost will
 include the cost of supplying necessary additional copies of the solicitation
 materials for beneficial owners of shares held of record by brokers, dealers,
 banks and voting trustees and their nominees and, upon request, the
 reasonable expenses of such record holders for completing the mailing of such
 materials to such beneficial owners.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD COLSPAN=2 VALIGN=TOP STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P><FONT SIZE=1>&nbsp;</FONT></P>


 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>Q:</B></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>How do I nominate a candidate for election as a director at next
 year&#146;s Annual Meeting?</B></FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>A:</B></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>Nominations
 for director are made by the Board of Directors upon recommendation by the
 independent directors. Shareholders may nominate a candidate for director for
 the Fiscal 2012 Annual Meeting by following the procedures explained below in
 this Proxy Statement under &#147;CORPORATE GOVERNANCE &#150; Nominating and Corporate
 Governance Committee&#148; and contained in the rules and regulations of the
 Securities and Exchange Commission.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD COLSPAN=2 VALIGN=TOP STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P><FONT SIZE=1>&nbsp;</FONT></P>


 </TD>
 </TR>
</TABLE>
<P ALIGN=CENTER><FONT SIZE=2>- 5 -</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=3><P STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<BR>

<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR STYLE="FONT-SIZE:1PX">
 <TD WIDTH="4%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="95%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>Q:</B></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>What is a shareholder proposal?</B></FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>A:</B></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>A
 shareholder proposal is a proposal submitted by a shareholder that, if approved,
 would recommend or require that the Company and/or the Board of Directors
 take the proposed action. If you intend to submit a shareholder proposal, the
 proposal should state as clearly as possible the course of action that you
 believe the Company should follow. If your proposal is included in the
 Company&#146;s proxy statement, then the Company must also provide the means for
 shareholders to vote on the matter via the proxy card. The deadlines and
 procedures for submitting shareholder proposals for the Fiscal 2012 Annual
 Meeting are explained in the following question and answer. The Company
 reserves the right to reject, rule out of order, or take appropriate action
 with respect to any proposal that does not comply with these and other
 applicable requirements.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD COLSPAN=2 VALIGN=TOP STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P><FONT SIZE=1><B>&nbsp;</B></FONT></P>


 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>Q:</B></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>When are shareholder proposals and director nominations due for the
 Fiscal 2012 Annual Meeting?</B></FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><B>A:</B></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>In order to
 be considered for inclusion in next year&#146;s proxy statement, shareholder
 proposals must be submitted in writing to the Company no later than June 16,
 2011 (approximately 120 days prior to the one year anniversary of the mailing
 of this Proxy Statement). The Company suggests that proposals for the Fiscal
 2012 Annual Meeting of Shareholders be submitted by certified mail, return
 receipt requested. The proposal must be in accordance with the provision of
 Rule 14a-8 promulgated by the Securities and Exchange Commission under the
 Exchange Act of 1934. </FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>Shareholders
 who intend to present a proposal or director nomination at the Fiscal 2012
 Annual Meeting of Shareholders without including such proposal or nomination
 in the Company&#146;s proxy statement must provide the Company notice of such
 proposal no later than August 31, 2011 (approximately 45 days prior to the
 one year anniversary of the mailing of this proxy statement). The Company
 reserves the right to reject, rule out of order, or take appropriate action
 with respect to any proposal that does not comply with these and other
 applicable requirements.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>If the
 Company does not receive notice of a shareholder proposal intended to be
 submitted to the Fiscal 2012 Annual Meeting of Shareholders by August 31,
 2011, the persons named in the proxy statement and on the proxy card
 accompanying the notice of meeting for next year&#146;s annual meeting may vote on
 any such proposal in their discretion. </FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>Management
 has not received any shareholder proposals for the Fiscal 2011 Annual
 Meeting. If any other matters are presented at the Annual Meeting on which a
 vote may properly be taken, the persons named as proxy holders in the
 enclosed proxy card will vote thereon in accordance with their best judgment.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD COLSPAN=2 VALIGN=TOP STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P><FONT SIZE=1>&nbsp;</FONT></P>


 </TD>
 </TR>
</TABLE>
<P ALIGN=CENTER><FONT SIZE=2>- 6 -</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=3><P STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>
<P ALIGN=CENTER><FONT SIZE=2><B>ELECTION OF DIRECTORS<BR>
(Proposals 1 and 2)</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Bylaws of the Company provide that the number of directors shall be determined
by the shareholders. The Company&#146;s Board of Directors has recommended that the
number of directors be increased from five to seven. The addition of two
directors will ensure that the Company is able to meet Nasdaq corporate
governance requirements and enable the Board of Directors to provide the more
extensive leadership, guidance and oversight necessary for a publicly traded
corporation.</FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Seven
directors have been nominated for election at the Annual Meeting to hold office
until the Fiscal 2012 Annual Meeting of Shareholders or until the successor of
each shall be elected and qualified in accordance with the Company&#146;s Bylaws.
Five of the nominees named herein presently serve as members of the Board of
Directors, namely, Dr. Noel Collis, Thomas Hagedorn, Craig Hansen, Robert
Hansen, and Dr. George Winn. Two of the nominees, Stephen Craney and Darrel
Kloeckner, are being nominated to fill the additional directorships that are
the subject of Proposal 1. The Company has no reason to believe that any of the
director nominees named below will be unable or unwilling to serve as director
if elected. If for any reason any nominee withdraws or is unable to serve as
director (neither of which is expected at this time), the shares represented by
all valid proxies will be voted for the election of a substitute nominee
recommended by the Board of Directors or, alternatively, not voted for any
nominee. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
seven nominees receiving the highest number of affirmative votes cast will be
elected as directors. Except as otherwise directed on the proxy cards, the
proxies will vote all valid proxies for the seven nominees identified below.</FONT></P>

<P><FONT SIZE=2><B>Nominees for Election as Directors at the
Annual Meeting</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board of Directors has recommended the following persons as nominees for
election as directors at the Annual Meeting: </FONT></P>

<TABLE Align=Center BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="65%">
 <TR STYLE="FONT-SIZE:1PX">
 <TD WIDTH="32%" VALIGN=BOTTOM>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="3%" VALIGN=BOTTOM>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="9%" VALIGN=BOTTOM>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="7%" VALIGN=BOTTOM>
 <P ALIGN=RIGHT>&nbsp;</P>
 </TD>
 <TD WIDTH="3%" VALIGN=BOTTOM>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="7%" VALIGN=BOTTOM>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="3%" VALIGN=BOTTOM>
 <P ALIGN=RIGHT>&nbsp;</P>
 </TD>
 <TD WIDTH="1%" VALIGN=BOTTOM>
 <P>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=BOTTOM STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P ALIGN=CENTER><FONT SIZE=1><B>Nominee Name</B></FONT></P>


 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN=2 VALIGN=BOTTOM STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P ALIGN=CENTER><FONT SIZE=1><B>Age (as of<BR>
 Annual Meeting)</B></FONT></P>


 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN=2 VALIGN=BOTTOM STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P ALIGN=CENTER><FONT SIZE=1><B>Year First<BR>
 Became a<BR>
 Director</B></FONT></P>


 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR BGCOLOR="#D6F3E8">
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=2>Robert D.
 Hansen (Chairman)</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>70</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>1993</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=2>Dr. Noel D.
 Collis, MD</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>58</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>1999</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR BGCOLOR="#D6F3E8">
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=2>Stephen H.
 Craney</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>66</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>-</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=2>Thomas M.
 Hagedorn</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>66</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>1997</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR BGCOLOR="#D6F3E8">
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=2>Craig N.
 Hansen</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>61</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>1993</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=2>Darrel L.
 Kloeckner</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>53</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>-</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR BGCOLOR="#D6F3E8">
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=2>Dr. George
 H. Winn</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>73</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>2005</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
</TABLE>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Biographical
information relating to each of the director nominees is set forth below: </FONT></P>

<P><FONT SIZE=2><I><B>Robert D. Hansen&#151;Chairman and Chief
Executive Officer</B></I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mr.
Hansen co-founded Electromed in 1992 and is responsible for the strategic
direction and development of the Company. Mr. Hansen is also a co-founder and
is President and Chief Executive Officer of Hansen Engine Corporation, a
research and development company that provides research and development
services to Electromed. Mr. Hansen joined Hansen Engine Corporation in January
1983 and has over forty years of business leadership and investment industry
experience. Mr. Hansen devotes approximately 5% of his time attending to
matters related to Hansen Engine Corporation where he is primarily responsible
for corporate governance matters through his service as a member of Hansen
Engine Corporation&#146;s board of directors. He was also the founder and CEO of
LockerMate Corporation until January 1995. Mr. Hansen received a BA Degree from
Dana College (1964), Masters of Arts Degree from the University of Cincinnati
in U.S. History (1966), and a Masters of Divinity Degree (1976) from Luther
Theological Seminary. He completed additional graduate studies in U.S. economic
history and foreign policy at the University of Cincinnati. In 1996, Mr. Hansen
was awarded a Mini-MBA in &#147;Managing Growing Companies&#148; from the University of
St. Thomas. Among other attributes, skills, experiences and qualifications, our
Board believes that Mr. Hansen&#146;s history with Electromed and management and
investment industry experience allow him to make a valuable contribution as a
director. Mr. Hansen is the brother of Craig Hansen, one of our directors.</FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>- 7 -</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=3><P STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>
<P><FONT SIZE=2><I><B>Craig Hansen&#151;Director</B></I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mr.
Hansen is the co-founder of Electromed and is the Vice President of Research
and Development at Hansen Engine Corporation. Mr. Hansen has been with Hansen
Engine Corporation since 1977. He is a graduate of Western Iowa Technical
School. He has more than forty patents in several fields with numerous
additional patents pending. The patents that Mr. Hansen has assigned to
Electromed form the technical basis for the SmartVest System. Mr. Hansen is the
brother of Robert Hansen, Electromed&#146;s Chief Executive Officer. Among other
attributes, skills, experiences and qualifications, our Board believes that Mr.
Hansen&#146;s history with Electromed and considerable experience with research and
development in the medical device industry make him uniquely qualified to serve
as a director.</FONT></P>

<P><FONT SIZE=2><I><B>Stephen Craney&#151;Director Nominee</B></I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Since
1984, Mr. Craney has founded and operated a number of successful companies,
including RiverSide Electronics, Ltd., RiverBend Electronics, Ltd., RiverStar,
Inc., and JMW Enterprises, Inc. Before becoming an entrepreneur, Mr. Craney
worked as an engineer, having earned an electrical engineering degree from the
University of Wisconsin-Madison. Mr.
Craney is also an active member of a number of community groups, such as the
Winona Historical Society. In addition, he has provided support and advice to
start up companies for more than 20 years through a local entrepreneur network.
Among other attributes,
skills, experiences and qualifications, our Board believes that Mr. Craney&#146;s
experience developing companies with a strong record of growth, his technical
knowledge in the electronics field, his research and development experience and
his connections within the business community make him uniquely qualified to
serve as a director. </FONT></P>

<P><FONT SIZE=2><I><B>Dr. Noel Collis&#151;Director</B></I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dr.
Collis is currently a self-employed physician and has been since 1990. Dr.
Collis is a graduate of the University of Minnesota School of Medicine and
practices Internal Medicine in Little Falls, Minnesota. Dr. Collis has served
on the faculty of the University of South Dakota School of Medicine. Among
other attributes, skills, experiences and qualifications, our Board believes
that, in addition to the industry relationships that Dr. Collis has developed,
his experience in practicing and teaching medicine give him an understanding of
the needs of physicians and patients, which makes him uniquely qualified to
serve as a director. </FONT></P>

<P><FONT SIZE=2><I><B>Thomas Hagedorn&#151;Director </B></I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mr.
Hagedorn has served for approximately fifteen years as president of various
entities in a family of real estate and mortgage companies headquartered in
Northern Virginia; namely Premium Financial Services, Premium Realty Ltd., and
Premium Title Services, a mortgage company, real estate brokerage company, and
title insurance company, respectively. As president of these entities Mr.
Hagedorn manages all aspects of the companies&#146; activities, including managing
between one to five employees in each company, maintaining records and funds
with respect to escrow accounts of clients totaling in excess of $10 million at
any given time, and coordinating responses in connection with regulatory audits
of the escrow accounts managed by each company. Mr. Hagedorn has also been a
founding investor for various start-up ventures, including Hansen Engine
Corporation, as well as several energy companies where new technology is a
principal factor. Mr. Hagedorn is a former member of the Minnesota State
Legislature and the U.S. Congress, representing southern Minnesota. Among other
attributes, skills, experiences and qualifications, our Board believes that Mr.
Hagedorn&#146;s leadership and management experience, as well as his familiarity
with the opportunities and challenges related to raising capital and his
knowledge of legislative procedures, allow him to make valuable contributions
as a director.</FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>- 8 -</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=3><P STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P><FONT SIZE=2><I><B>Darrel
Kloeckner&#151;Director Nominee</B></I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mr.
Kloeckner has been self-employed as a business consultant to privately held
corporations since 1995. Before that, Mr. Kloeckner worked as a certified
public accountant, providing consulting, accounting and tax services to
privately held corporations and their owners. Mr. Kloeckner holds an accounting
degree from the University of Minnesota. Among other attributes, skills,
experiences and qualifications, our Board believes that Mr. Kloeckner&#146;s
significant financial expertise, as well as his expertise in providing advice
and consultation to businesses of the Company&#146;s size, will allow him to make
valuable contributions as a director.</FONT></P>

<P><FONT SIZE=2><I><B>Dr. George
Winn&#151;Director</B></I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dr.
Winn has practiced dentistry with emphasis upon oral surgery and orthodontics
in New Prague, MN for more than forty-three years. He is a graduate of the
University of Minnesota School of Dentistry. Dr. Winn has served as an Adjunct
Professor in the School of Dentistry where he has offered studies in medical
ethics. Among other attributes, skills, experiences and qualifications, our
Board believes that, in addition to the industry relationships that Dr. Winn
has developed, his education and experience give him insight into the medical
device industry, which makes him uniquely qualified to serve as a director.</FONT></P>

<P><FONT SIZE=2><B>Required Vote and
Board Recommendation</B></FONT></P>

<P><FONT SIZE="2"><B><I>Proposal 1</I></B><I>:</I> The Board recommends that you vote &#147;<B>FOR</B>&#148; the proposal to increase the number of
directors to seven (7). Adoption of the proposal requires the affirmative vote
of a majority of the voting power of the shareholders present, whether in
person or by proxy, and entitled to vote at the Annual Meeting, provided that a
quorum is present. </FONT> </P>

<P><FONT SIZE="2"><B><I>Proposal 2</I></B><I>:</I> The Board recommends that you vote &#147;<B>FOR</B>&#148; each of the nominees to the Board of
Directors. The election of each nominee requires the affirmative vote of a
plurality of the voting power of the shareholders present, whether in person or
by proxy, and entitled to vote at the Annual Meeting, provided that a quorum is
present. </FONT> </P>

<P ALIGN=CENTER><FONT SIZE=2><B>AMENDMENT TO THE ARTICLES OF INCORPORATION TO
INCREASE <BR>
THE NUMBER OF AUTHORIZED SHARES FROM 10,000,000 TO 15,000,000, <BR>
INCLUDING 2,000,000 SHARES OF UNDESIGNATED STOCK</B></FONT></P>

<P ALIGN="JUSTIFY"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
September 23, 2010, the Board voted to submit to the Company&#146;s shareholders a
proposal to amend the Company&#146;s Articles of Incorporation to increase the
number of authorized shares of capital stock from 10,000,000 to 15,000,000,
consisting of 13,000,000 shares of common stock, $0.01 par value, and 2,000,000
undesignated shares.</FONT></P>

<P ALIGN="JUSTIFY"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
Articles of Incorporation currently authorize the Company to issued 10,000,000
shares of common stock. As of October 4, 2010, 8,087,885 shares are issued and
outstanding. In addition, approximately 697,115 shares have been reserved for
issuance pursuant to outstanding warrants issued by the Company. As a result,
the Company has approximately 1,215,000 shares that are not either issued and
outstanding or committed for issuance. The Board desires to increase the number
of authorized shares of capital stock to ensure it has the flexibility to
promptly take advantage of any strategic opportunities, to grant such equity
awards to officers, employees, directors, and consultants as may be desirable
in the future, and to evidence the Company&#146;s commitment to growth. </FONT></P>

<P ALIGN="JUSTIFY"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
shareholders have no preemptive rights with respect to any series of our
capital stock. If this proposed Amendment is adopted, the additional authorized
shares will be available for issuance from time to time at the discretion of
the Board without further action by the shareholders, except where shareholder
approval is required by law, by regulatory authorities or to obtain favorable
tax treatment for certain employee benefit plans. Thus, additional shares of
common stock might be issued at times and under circumstances that will have a
dilutive effect on earnings per share and on the equity ownership of the
present holders of our common stock.</FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>- 9 -</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=3><P STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>
<P ALIGN="JUSTIFY"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, although our Articles of Incorporation currently permit the Board to
establish one or more classes or series of shares and to fix the relative
rights, preferences, and limitations of each such class or series, all of the
Company&#146;s currently authorized shares are designated as common stock. Authorizing
2,000,000 shares of undesignated stock will allow the Board to use its ability
to designate classes or series of stock, providing the Board additional
flexibility to take advantage of any strategic opportunities that may arise in
the future. The availability of undesignated shares from which the Board can
designate a series of stock with the rights and preferences necessary for a
particular transaction, such as financings, strategic alliances, and
acquisitions, provides much greater flexibility and options for structuring
such transactions. </FONT></P>

<P ALIGN="JUSTIFY"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
undesignated shares will be available for designation and issuance by the Board
at such times, in such manners and for such purposes as the Board may deem
advisable without further action by the shareholders, except as may be required
by law or regulatory authorities. The Board may establish one or more classes
or series (which may include but is not limited to designation as additional
common shares) and fix the relative rights and preferences of each such class
or series. The rights and preferences of shares ultimately issued after the
Board establishes a class or series from such undesignated shares may include
rights that are more beneficial to such holders than to the holders of common
shares, including rights with respect to voting, payment upon liquidation,
receipt of dividends, payment of distributions and other preferences. The
equity interests of current shareholders may be significantly diluted if the
Board establishes classes of stock from the authorized undesignated shares and
then issues such shares. The Board has no current commitments or plans to
designate shares.</FONT></P>

<P ALIGN="JUSTIFY"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An
increase in the number of authorized shares of common stock could, under
certain circumstances, be construed as having an anti-takeover effect (for
example, by diluting the stock ownership of a person seeking to effect a change
in the composition of the Board of Directors or contemplating a tender offer or
other transaction for the combination of the company with another company).
Similarly, while establishing an authorized pool of undesignated shares
provides flexibility in connection with possible acquisitions and other
corporate purposes by permitting the Board to establish and issue a class or
series of preferred stock with voting, conversion or other rights or
preferences, it could have the effect of (i) delaying or preventing a change in
control, (ii) causing the market price of the Company's common stock to
decline, or (iii) impairing the voting power and other rights of the holders of
the Company's common stock. We are not proposing the increase in authorized
shares or the establishment of an authorized pool of undesignated shares in
response to, and we have no knowledge of, any effort to accumulate our stock or
to obtain control of the Company by means of a merger, tender offer or
solicitation in opposition to management.</FONT></P>

<P><FONT SIZE=2><B>Required Vote and Board Recommendation</B></FONT></P>

<P ALIGN="JUSTIFY"><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board recommends that you vote &#147;<B>FOR</B>&#148; the proposal to amendment the Company&#146;s
Articles of Incorporation, as set forth above. Adoption of the proposal
requires the affirmative vote of a majority of the voting power of the
shareholders present, whether in person or by proxy, and entitled to vote at
the Annual Meeting, provided that a quorum is present. </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2><B>RATIFICATION OF THE APPOINTMENT OF MCGLADREY
&amp; PULLEN, LLP AS THE COMPANY&#146;S<BR>
INDEPENDENT REGISTERED PUBLIC ACCOUNTANT<BR>
(Proposal 4)</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board of Directors, acting on the recommendation of the Company&#146;s Audit
Committee, has selected McGladrey &amp; Pullen, LLP (&#147;McGladrey&#148;) as the
Company&#146;s registered independent public accountant for the fiscal year ending
June 30, 2011. McGladrey was the Company&#146;s registered independent public
accountant for the 2010 fiscal year. McGladrey has advised the Company that it
has no relationship to the Company except that of independent public
accountant.</FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
representative of McGladrey is expected to be present at the Annual Meeting.
Such representative will have an opportunity to make a statement if he or she
desires to do so, and will be available to respond to appropriate questions
regarding preparation of the financial statements.</FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>- 10 -</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=3><P STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>
<P><FONT SIZE=2><B>Audit Fees</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table presents fees billed by McGladrey to the Company for the audit
of the Company&#146;s annual financial statements, the review of the Company&#146;s
interim financial statements, and various other audit and non-audit services
provided in connection with the fiscal years ended June 30, 2010 and June 30,
2009. </FONT></P>

<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="85%" align=center>
 <TR STYLE="FONT-SIZE:1PX">
 <TD WIDTH="65%" VALIGN=BOTTOM>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="3%" VALIGN=BOTTOM>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="1%" VALIGN=BOTTOM>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="11%" VALIGN=BOTTOM>
 <P ALIGN=RIGHT>&nbsp;</P>
 </TD>
 <TD WIDTH="3%" VALIGN=BOTTOM>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="1%" VALIGN=BOTTOM>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="11%" VALIGN=BOTTOM>
 <P ALIGN=RIGHT>&nbsp;</P>
 </TD>
 <TD WIDTH="1%" VALIGN=BOTTOM>
 <P>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=BOTTOM STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P><FONT SIZE=1><B>Category</B></FONT></P>


 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN=2 VALIGN=BOTTOM STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P ALIGN=CENTER><FONT SIZE=1><B>Fiscal Year</B></FONT></P>


 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN=2 VALIGN=BOTTOM STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P ALIGN=CENTER><FONT SIZE=1><B>Fees</B></FONT></P>


 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR BGCOLOR="#D6F3E8">
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=2>Audit Fees<SUP>(1)</SUP></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=CENTER><FONT SIZE=2>2010</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>$249,000 </FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=CENTER><FONT SIZE=2>2009</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>$82,500 </FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR BGCOLOR="#D6F3E8">
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=2>Audit-Related
 Fees<SUP>(2)</SUP></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=CENTER><FONT SIZE=2>2010</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>$0</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=CENTER><FONT SIZE=2>2009</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>$34,500 </FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
</TABLE>

<BR>

<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR STYLE="FONT-SIZE:1PX">
 <TD WIDTH="5%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="5%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="90%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>(1)</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>Audit
 services included the annual audits and reviews of the Company&#146;s quarterly
 financial statements. The 2010 fees also include fees relating to the
 Company&#146;s initial public offering. </FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>(2)</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>Audit-related
 services related to responding to technical accounting questions and related
 research, and meetings with the Company&#146;s management. </FONT></P>
 </TD>
 </TR>
</TABLE>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;McGladrey
provided no other services to the Company in either fiscal 2010 or fiscal 2009
that are not included above.</FONT></P>

<P><FONT SIZE=2><B>Audit Committee Pre-Approval</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant
to its written charter, the Audit Committee is responsible for pre-approving
all audit and permitted non-audit services to be performed for the Company by
its independent public accounting firm or any other auditing or accounting
firm. During the year, circumstances may arise that will require the engagement
of the independent registered public accounting firm for additional services
not contemplated in the original pre-approval. In those instances, we will
obtain pre-approval of the Audit Committee before engaging the independent
registered public accounting firm.</FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
Audit and Audit-Related Fees incurred during fiscal 2010 were pre-approved by
the chairman of our Audit Committee. </FONT></P>

<P><FONT SIZE=2><B>Required Vote and Board Recommendation</B></FONT></P>

<P><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board of Directors recommends a vote &#147;<B>FOR</B>&#148; the ratification of the appointment
of McGladrey &amp; Pullen, LLP as the Company&#146;s registered independent public
accountant for the 2011 fiscal year. Adoption of the proposal requires the
affirmative vote of a majority of the voting power of the shareholders present,
whether in person or by proxy, and entitled to vote at the Annual Meeting,
provided that a quorum is present. </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2><B>CORPORATE GOVERNANCE</B></FONT></P>

<P><FONT SIZE=2><B>Independence</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
currently rely on Nasdaq Rule 5615(b)(1), which provides a twelve-month
phase-in period for a company listing in connection with its initial public
offering, to satisfy the Nasdaq Capital Market requirement that our Board of
Directors be comprised of a majority of independent directors. Our Board of
Directors has determined that four of the seven director nominees are
independent directors, as defined under the applicable regulations of the SEC
and the Nasdaq Capital Market. The four independent director nominees are
Thomas Hagedorn, Dr. Noel Collis, Stephen Craney and Darrel Kloeckner. In
determining independence, our Board of Directors considered that Mr. Hagedorn
is a director and owns approximately 11% of the outstanding equity of Hansen
Engine Corporation, an entity which receives payment from Electromed in
exchange for performing research and development services. In addition, our
Board of Directors considered that Mr. Hagedorn&#146;s son was an employee of
Electromed until June 30, 2010. Our Board of Directors also considered that the
Company has made payments of approximately $409,000, $380,000, and $228,000
during our 2010, 2009 and 2008 fiscal years, respectively, to RiverSide
Electronics, Ltd. (&#147;RiverSide&#148;), an entity which is solely owned by Stephen
Craney, in exchange for electronic parts. The Board of Directors determined
that the terms of its transactions with RiverSide were consistent with what
could be obtained in an arm&#146;s length transaction with an unrelated party and
that the transactions did not exceed 5% of RiverSide&#146;s gross annual revenues.
See &#147;CERTAIN TRANSACTIONS AND BUSINESS RELATIONSHIPS.&#148; </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>- 11 -</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=3><P STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>
<P><FONT SIZE=2><B>Code of Ethics</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board of Directors has approved a Code of Ethics that applies to all employees,
directors, and officers, including the Chief Executive Officer and the Chief
Financial Officer. The Code of Ethics is available in the &#147;Investor Relations&#148;
section of our website at www.electromed.com. We intend to disclose any
amendment to, or waiver for executive officers or directors of, our Code of
Ethics on our website, www.electromed.com, promptly following the date of the
amendment or waiver.</FONT></P>

<P><FONT SIZE=2><B>Director Attendance at Annual Meetings </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Directors&#146;
attendance at Annual Meetings can provide shareholders with an opportunity to
communicate directly with members of the Board about matters concerning the
Company. The Company encourages all directors to attend the Company&#146;s annual
meetings, but it does not have a formal attendance policy. The Company did not
have an annual meeting during its previous fiscal year.</FONT></P>

<P><FONT SIZE=2><B>Board Leadership Structure </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board believes the combined role of Chairman and Chief Executive Officer allows
the Company&#146;s leadership to develop strategic direction and hold management
accountable for the execution of strategy once it is developed. The combined
role promotes strategy development and execution and facilitates information
flow with management to aid in the Board&#146;s evaluation of management&#146;s
performance. The Board believes that the Company&#146;s Chief Executive Officer is
best situated to serve as Chairman because of his unique familiarity with the
Company&#146;s history, business and industry, which makes him most capable of effectively
leading discussions among directors of diverse backgrounds and experience
regarding the Company&#146;s operations and strategy identification, execution and
evaluation. The board has not appointed a lead independent director and
believes that the independent directors&#146; roles as members of their respective
committees provide sufficient oversight.</FONT></P>

<P><FONT SIZE=2><B>Risk Oversight </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;It
is management&#146;s responsibility to manage risk and bring to the Board&#146;s
attention the most material risks to the company. The Board of Directors has
oversight responsibility of the processes established to report and monitor
systems for material risks applicable to the company. The Audit Committee
provides oversight of management with respect to enterprise-wide risk
management, which focuses primarily on risks relating to the Company&#146;s ability
to maintain appropriate levels of credit and insurance coverage, financial and
accounting risks, and legal and compliance risks, including oversight of
internal controls over financial reporting. In addition, the Personnel and
Compensation Committee considers risks related to the attraction and retention
of talent and risks relating to the design of compensation programs and
arrangements. The Nominating and Corporate Governance Committee considers risks
and best practices relating to corporate governance policies and procedures.
The full Board considers strategic risks and opportunities and regularly
receives detailed reports from management and the committees, with respect to
their areas of responsibility for risk oversight. </FONT></P>

<P><FONT SIZE=2><B>Board and Committee Meetings</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During
the 2010 fiscal year, the Board of Directors held seven formal meetings. In
addition, directors frequently communicate with each other informally and, when
appropriate, take action by written consent of a majority of all directors in
accordance with the Minnesota Business Corporation Act and the Company&#146;s
Amended Articles of Incorporation. Each director attended at least 75% of the
total number of Board meetings held during the 2010 fiscal year and the total
number of meetings held by all committees on which the director served during
the 2010 fiscal year. </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>- 12 -</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=3><P STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>
<P><FONT SIZE=2><B>Committee Membership</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company&#146;s Board of Directors has three standing committees: the Audit
Committee, the Personnel and Compensation Committee, and the Nominating and
Corporate Governance Committee. The following table sets forth the membership
of each of the Company&#146;s standing committees prior to the Annual Meeting:</FONT></P>


<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR STYLE="FONT-SIZE:1PX">
 <TD WIDTH="34%" VALIGN=TOP STYLE='BORDER:NONE;BORDER-BOTTOM:SOLID BLACK .5PT'>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="33%" VALIGN=TOP STYLE='BORDER:NONE;BORDER-BOTTOM:SOLID BLACK .5PT'>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="33%" VALIGN=TOP STYLE='BORDER:NONE;BORDER-BOTTOM:  SOLID BLACK .5PT'>
 <P>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP STYLE='BORDER:SOLID BLACK .5PT;BORDER-TOP:NONE'>
 <P ALIGN=CENTER><FONT SIZE=2>Audit <BR>
 Committee</FONT></P>
 </TD>
 <TD VALIGN=TOP STYLE='BORDER-TOP:NONE;BORDER-LEFT:  NONE;BORDER-BOTTOM:SOLID BLACK .5PT;BORDER-RIGHT:SOLID BLACK .5PT'>
 <P ALIGN=CENTER><FONT SIZE=2>Nominating and Corporate <BR>
 Governance Committee</FONT></P>
 </TD>
 <TD VALIGN=TOP STYLE='BORDER-TOP:NONE;BORDER-LEFT:  NONE;BORDER-BOTTOM:SOLID BLACK .5PT;BORDER-RIGHT:SOLID BLACK .5PT'>
 <P ALIGN=CENTER><FONT SIZE=2>Personnel and <BR>
 Compensation Committee</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP STYLE='BORDER:SOLID BLACK .5PT;BORDER-TOP:NONE'>
 <P STYLE='MARGIN-LEFT:.05IN'><FONT SIZE=2>Dr. George H. Winn (Chair)</FONT></P>
 </TD>
 <TD VALIGN=TOP STYLE='BORDER-TOP:NONE;BORDER-LEFT:  NONE;BORDER-BOTTOM:SOLID BLACK .5PT;BORDER-RIGHT:SOLID BLACK .5PT'>
 <P STYLE='MARGIN-LEFT:.05IN'><FONT SIZE=2>Dr. Noel D. Collis (Chair)</FONT></P>
 </TD>
 <TD VALIGN=TOP STYLE='BORDER-TOP:NONE;BORDER-LEFT:  NONE;BORDER-BOTTOM:SOLID BLACK .5PT;BORDER-RIGHT:SOLID BLACK .5PT'>
 <P STYLE='MARGIN-LEFT:.05IN'><FONT SIZE=2>Thomas M. Hagedorn (Chair)</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP STYLE='BORDER:SOLID BLACK .5PT;BORDER-TOP:NONE'>
 <P STYLE='MARGIN-LEFT:.05IN'><FONT SIZE=2>Dr. Noel D. Collis</FONT></P>
 </TD>
 <TD VALIGN=TOP STYLE='BORDER-TOP:NONE;BORDER-LEFT:  NONE;BORDER-BOTTOM:SOLID BLACK .5PT;BORDER-RIGHT:SOLID BLACK .5PT'>
 <P STYLE='MARGIN-LEFT:.05IN'><FONT SIZE=2>Thomas M. Hagedorn</FONT></P>
 </TD>
 <TD VALIGN=TOP STYLE='BORDER-TOP:NONE;BORDER-LEFT:  NONE;BORDER-BOTTOM:SOLID BLACK .5PT;BORDER-RIGHT:SOLID BLACK .5PT'>
 <P STYLE='MARGIN-LEFT:.05IN'><FONT SIZE=2>Dr. Noel D. Collis</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP STYLE='BORDER:SOLID BLACK .5PT;BORDER-TOP:NONE'>
 <P STYLE='MARGIN-LEFT:.05IN'><FONT SIZE=2>Thomas M. Hagedorn</FONT></P>
 </TD>
 <TD VALIGN=TOP STYLE='BORDER-TOP:NONE;BORDER-LEFT:  NONE;BORDER-BOTTOM:SOLID BLACK .5PT;BORDER-RIGHT:SOLID BLACK .5PT'>
 <P STYLE='MARGIN-LEFT:.05IN'><FONT SIZE=2>Craig N. Hansen</FONT></P>
 </TD>
 <TD VALIGN=TOP STYLE='BORDER-TOP:NONE;BORDER-LEFT:  NONE;BORDER-BOTTOM:SOLID BLACK .5PT;BORDER-RIGHT:SOLID BLACK .5PT'>
 <P STYLE='MARGIN-LEFT:.05IN'><FONT SIZE=2>Dr. George H. Winn</FONT></P>
 </TD>
 </TR>
</TABLE>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Assuming
Proposals 1 and 2 are passed, our Board intends to reconstitute the committees
as follows after the Annual Meeting:</FONT></P>

<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR STYLE="FONT-SIZE:1PX">
 <TD WIDTH="34%" VALIGN=TOP STYLE='BORDER:NONE;BORDER-BOTTOM:SOLID BLACK .5PT'>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="33%" VALIGN=TOP STYLE='BORDER:NONE;BORDER-BOTTOM:  SOLID BLACK .5PT'>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="33%" VALIGN=TOP STYLE='BORDER:NONE;BORDER-BOTTOM:  SOLID BLACK .5PT'>
 <P>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP STYLE='BORDER:SOLID BLACK .5PT;BORDER-TOP:NONE'>
 <P ALIGN=CENTER><FONT SIZE=2>Audit <BR>
 Committee</FONT></P>
 </TD>
 <TD VALIGN=TOP STYLE='BORDER-TOP:NONE;BORDER-LEFT:  NONE;BORDER-BOTTOM:SOLID BLACK .5PT;BORDER-RIGHT:SOLID BLACK .5PT'>
 <P ALIGN=CENTER><FONT SIZE=2>Nominating and Corporate <BR>
 Governance Committee</FONT></P>
 </TD>
 <TD VALIGN=TOP STYLE='BORDER-TOP:NONE;BORDER-LEFT:  NONE;BORDER-BOTTOM:SOLID BLACK .5PT;BORDER-RIGHT:SOLID BLACK .5PT'>
 <P ALIGN=CENTER><FONT SIZE=2>Personnel and <BR>
 Compensation Committee</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP STYLE='BORDER:SOLID BLACK .5PT;BORDER-TOP:NONE'>
 <P STYLE='MARGIN-LEFT:.05IN'><FONT SIZE=2>Darrel L. Kloeckner (Chair)</FONT></P>
 </TD>
 <TD VALIGN=TOP STYLE='BORDER-TOP:NONE;BORDER-LEFT:  NONE;BORDER-BOTTOM:SOLID BLACK .5PT;BORDER-RIGHT:SOLID BLACK .5PT'>
 <P STYLE='MARGIN-LEFT:.05IN'><FONT SIZE=2>Dr. Noel D. Collis (Chair)</FONT></P>
 </TD>
 <TD VALIGN=TOP STYLE='BORDER-TOP:NONE;BORDER-LEFT:  NONE;BORDER-BOTTOM:SOLID BLACK .5PT;BORDER-RIGHT:SOLID BLACK .5PT'>
 <P STYLE='MARGIN-LEFT:.05IN'><FONT SIZE=2>Thomas M. Hagedorn (Chair)</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP STYLE='BORDER:SOLID BLACK .5PT;BORDER-TOP:NONE'>
 <P STYLE='MARGIN-LEFT:.05IN'><FONT SIZE=2>Stephen H. Craney</FONT></P>
 </TD>
 <TD VALIGN=TOP STYLE='BORDER-TOP:NONE;BORDER-LEFT:  NONE;BORDER-BOTTOM:SOLID BLACK .5PT;BORDER-RIGHT:SOLID BLACK .5PT'>
 <P STYLE='MARGIN-LEFT:.05IN'><FONT SIZE=2>Thomas M. Hagedorn</FONT></P>
 </TD>
 <TD VALIGN=TOP STYLE='BORDER-TOP:NONE;BORDER-LEFT:  NONE;BORDER-BOTTOM:SOLID BLACK .5PT;BORDER-RIGHT:SOLID BLACK .5PT'>
 <P STYLE='MARGIN-LEFT:.05IN'><FONT SIZE=2>Darrel L. Kloeckner</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP STYLE='BORDER:SOLID BLACK .5PT;BORDER-TOP:NONE'>
 <P STYLE='MARGIN-LEFT:.05IN'><FONT SIZE=2>Thomas M. Hagedorn</FONT></P>
 </TD>
 <TD VALIGN=TOP STYLE='BORDER-TOP:NONE;BORDER-LEFT:  NONE;BORDER-BOTTOM:SOLID BLACK .5PT;BORDER-RIGHT:SOLID BLACK .5PT'>
 <P STYLE='MARGIN-LEFT:.05IN'><FONT SIZE=2>Craig N. Hansen</FONT></P>
 </TD>
 <TD VALIGN=TOP STYLE='BORDER-TOP:NONE;BORDER-LEFT:  NONE;BORDER-BOTTOM:SOLID BLACK .5PT;BORDER-RIGHT:SOLID BLACK .5PT'>
 <P STYLE='MARGIN-LEFT:.05IN'><FONT SIZE=2>Stephen H. Craney</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP STYLE='BORDER:NONE;BORDER-RIGHT:SOLID BLACK .5PT'>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP STYLE='BORDER-TOP:NONE;BORDER-LEFT:  NONE;BORDER-BOTTOM:SOLID BLACK .5PT;BORDER-RIGHT:SOLID BLACK .5PT'>
 <P STYLE='MARGIN-LEFT:.05IN'><FONT SIZE=2>Dr. George H. Winn</FONT></P>
 </TD>
 <TD VALIGN=TOP STYLE='BORDER:NONE'>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
</TABLE>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
Board of Directors has evaluated independence for the members of each committee
in accordance with Nasdaq Rule 5605(a)(2) and, with respect to the members of
the Audit Committee, Nasdaq Rule 5605(c)(2) and Rule 10A-3 of the Exchange Act.
The membership and responsibilities of each committee complies with the listing
requirements of the Nasdaq Capital Market, except that Mr. Craig Hansen, who is
not &#147;independent&#148; as defined under Nasdaq Rule 5605(a)(2), is a member of the
Nominating and Corporate Governance Committee, and Dr. George Winn, who is not
&#147;independent&#148; as defined under Nasdaq Rule 5605(a)(2), is currently a member of
the Audit Committee and the Personnel and Compensation Committee. The Board has
determined that Dr. Winn is not independent as a result of transactions between
Dr. Winn and the Company listed under the heading &#147;CERTAIN TRANSACTIONS AND
BUSINESS RELATIONSHIPS.&#148; The Board determined that it was appropriate for Dr.
Winn to serve on the Audit Committee and the Personnel and Compensation
Committee due to his business experience and familiarity with the medical
device industry, and in light of the fact that the Company is entitled to Audit
Committee phase-in periods under applicable SEC and Nasdaq rules. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
accordance with Nasdaq Rule 5615(b)(1) and Rule 10A-3(b)(1)(iv)(A) of the
Exchange Act, we intend to have an Audit Committee comprised only of
independent directors within the phase-in period provided to issuers listing
securities in connection with an initial public offering. In addition, as
permitted by the listing requirements of the Nasdaq Capital Market and other
applicable rules, our director nominees have been and will be selected, or
recommended to the full Board of Directors for selection, by a majority of
independent directors of the Board in a vote in which only independent
directors participate. Likewise, if at any time our Personnel and Compensation
Committee is not comprised only of independent directors, compensation for our
executive officers will be determined, or recommended to the full Board of
Directors for determination, by a majority of independent directors of the
Board in a vote in which only independent directors participate. </FONT></P>

<P><FONT SIZE=2><B>Audit Committee</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
Audit Committee currently consists of Dr. Noel Collis, Thomas M. Hagedorn, and
Dr. George Winn. Under its charter, the Audit Committee must be comprised of
not less than three independent directors, with the exception of the phase-in
period provided for under Nasdaq Rule 5615(b)(1) and Rule 10A-3(b)(1)(iv)(A),
and its composition must otherwise satisfy Nasdaq and SEC requirements
applicable to audit committees. Following the Annual Meeting, we intend to
appoint Mr. Kloeckner and Mr. Craney to the Audit Committee in place of Dr.
Winn and Dr. Collis. </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>- 13 -</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=3><P STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
principal functions of the Audit Committee are to evaluate and review the
Company&#146;s financial reporting process and systems of internal controls. The
Audit Committee evaluates the independence of the Company&#146;s independent
auditor, recommends selection of the Company&#146;s independent auditor to the Board
of Directors, approves fees to be paid to our independent auditor, and reviews
the Company&#146;s financial statements with management and the independent auditor.
The Audit Committee has recommended to the Board of Directors the appointment of
McGladrey &amp; Pullen, LLP to serve as the Company&#146;s independent auditor for
the 2011 fiscal year. The Audit Committee operates under a written charter
approved and adopted by the Board of Directors on April 20, 2010, a copy of
which is available in the &#147;Investor Relations&#148; section of the Company&#146;s website
at www.electromed.com. The Audit Committee held two formal meetings during the
2010 fiscal year. </FONT></P>

<P><FONT SIZE=2><B><i>Audit Committee Independence</i></B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
SEC rules and the Nasdaq Capital Market rules require our Audit Committee to be
made up entirely of independent directors within one year of the initial
listing of our securities. At this time, our Board of Directors has
affirmatively determined that&nbsp;Mr. Hagedorn and Dr.&nbsp;Collis&nbsp;meet
the definition of &#147;independent director&#148; for purposes of serving on an audit
committee under Nasdaq Rule 5605. The Board intends to have the Audit Committee
composed of entirely of independent directors within the time period specified
by the Nasdaq rules.</FONT></P>

<P><FONT SIZE=2><B><i>Audit Committee Review of Related Party
Transactions</i></B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
Audit Committee charter requires our Audit Committee to review and approve in
advance any related party transaction of the type required to be disclosed by
Item&nbsp;404 of Regulation&nbsp;S-K. All of our directors, officers and employees
are required to report to our Audit Committee any related party transaction (as
defined by applicable rules and regulations of the SEC and the Nasdaq Capital
Market) prior to its completion. We do not believe the terms of any of the
transactions and agreements described under the heading &#147;CERTAIN TRANSACTIONS
AND BUSINESS RELATIONSHIPS&#148; are any less favorable to us than could be obtained
in an arm&#146;s length transaction with an unrelated party. </FONT></P>

<P><FONT SIZE=2><B><i>Report of the Audit Committee</i></B></FONT></P>

<P><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>The
following report of the Audit Committee shall not be deemed to be filed with
the Securities and Exchange Commission (&#147;SEC&#148;) or incorporated by reference in
any previous or future documents filed by the Company with the SEC under the
Securities Act of 1933 or the Securities Exchange Act of 1934, except to the
extent that the Company specifically incorporates the reference in any such
document.</I> </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
accordance with its written charter adopted by the Board of Directors, as
amended, the Audit Committee assists the Board of Directors with fulfilling its
oversight responsibility regarding the quality and integrity of the accounting,
auditing and financial reporting practices of the Company. The Audit Committee
charter is available on the investor relations page of our website at www.electromed.com. The charter was
adopted on April 20, 2010. In discharging its oversight responsibilities
regarding the audit process, the Audit Committee: </FONT></P>

<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR STYLE="FONT-SIZE:1PX">
 <TD WIDTH="5%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="95%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>(1) reviewed and discussed the audited financial statements with
 management and the independent auditors; </FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>(2) discussed with the independent auditors the material required to
 be discussed by Statement on Auditing Standards No.&nbsp;61, as amended by
 Auditing Standard No.&nbsp;114, (AICPA, Professional Standards, Vol. 1, AU
 section 380), as adopted by the PCAOB in Rule 3200T, with and without
 management present; and </FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>(3) received the written disclosures and the letter from the
 independent accountant required by applicable requirements of the Public
 Company Accounting Oversight Board regarding the independent accountant&#146;s
 communications with the audit committee concerning independence, and has
 discussed with the independent accountant the independent accountant&#146;s
 independence.</FONT></P>
 </TD>
 </TR>
</TABLE>
<P ALIGN=CENTER><FONT SIZE=2>- 14 -</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=3><P STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based
upon the review and discussions referred to above, the Audit Committee
recommended to the Board of Directors that the audited financial statements be
included in the Company&#146;s Annual Report on Form&nbsp;10-K for the fiscal year
ended June 30, 2010, as filed with the Securities and Exchange Commission. </FONT></P>

<P><FONT SIZE=2><I>Audit Committee</I></FONT></P>

<P><FONT SIZE=2>Dr. George H.
Winn (Chair)<BR>
Dr. Noel D. Collis<BR>
Thomas M. Hagedorn</FONT></P>

<P><FONT SIZE=2><B>Personnel and Compensation Committee</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
current members of the Personnel and Compensation Committee are Dr. Noel D.
Collis, Thomas M. Hagedorn, and Dr. George H. Winn. Following the Annual
Meeting, we intend to appoint Mr. Kloeckner and Mr. Craney to the Personnel and
Compensation Committee in place of Dr. Winn and Dr. Collis. At this time, our
Board of Directors has affirmatively determined that Mr. Hagedorn and Dr.
Collis meet the definition of &#147;independent director&#148; for purposes of serving on
a compensation committee under Nasdaq Rule 5605. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board has authorized the Personnel and Compensation Committee to, among other
duties, develop the Company&#146;s compensation strategy, review compensation
policies and plans for the Company&#146;s executive officers, and administer the
Company&#146;s compensation plans. Neither the Personnel and Compensation Committee
nor the Board of Directors engages compensation consultants to assist in
determining or recommending the amount or form of compensation for executive
officers or directors. The Chief Executive Officer gives the Committee input in
regard to the compensation of the Chief Financial Officer, but the Chief
Executive Officer is not present during voting or deliberations relating to his
own compensation. The committee operates under a written charter adopted April
20, 2010, which is available in the &#147;Investor Relations&#148; section of our website
at www.electromed.com. The Personnel and Compensation Committee held two formal
meeting during the 2010 fiscal year. </FONT></P>

<P><FONT SIZE=2><B>Nominating and Corporate Governance Committee</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
current members of the Nominating and Corporate Governance Committee are Thomas
M. Hagedorn, Dr. Noel D. Collis (Chair), and Craig N. Hansen. Following the
Annual Meeting, we intend to appoint Dr. Winn to the Nominating and Corporate
Governance Committee. At this time, our Board of Directors has affirmatively
determined that Mr. Hagedorn and Dr. Collis meet the definition of &#147;independent
director&#148; for purposes of serving on a nominating committee under Nasdaq Rule
5605. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
Nominating and Corporate Governance Committee is responsible for oversight of
our corporate governance policies and procedures, our codes of conduct and
other corporate governance matters. Our independent directors, serving as the
Nominating and Corporate Governance Committee, make recommendations to our
Board of Directors regarding candidates for directorships and the size and composition
of our Board of Directors and its committees. The Nominating and Corporate
Governance Committee acts pursuant to a written charter, which was adopted
April 20, 2010 and amended September 23, 2010. The charter is available in the
&#147;Investor Relations&#148; section of our website at www.electromed.com. The Nominating and Corporate Governance
Committee was formed on April 20, 2010 and did not hold any formal meetings
during the 2010 fiscal year. </FONT></P>

<P><FONT SIZE=2><B><i>Director Nominations</i></B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Director
nominees are recommended to the full Board by a vote of our independent
directors. Shareholders may recommend a nominee to be considered by the
independent directors by submitting a written proposal to the Chairman of the
Board of Directors, at 500 Sixth Avenue Northwest, New Prague, Minnesota. A
consent signed by the proposed nominee agreeing to be considered as a director
should accompany the written proposal. The proposal should include the name and
address of the nominee, in addition to the qualifications and experience of
said nominee. </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>- 15 -</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=3><P STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;When
selecting candidates for recommendation to the Board of Directors, the
independent directors will consider the attributes of the candidates and the
needs of the Board and will review all candidates in the same manner,
regardless of the source of the recommendation. In evaluating director
nominees, a candidate should have certain minimum qualifications, including
being able to read and understand basic financial statements, be familiar with
our business and industry, have high moral character and mature judgment, and
be able to work collegially with others. In addition, factors such as the
following are also considered:</FONT></P>

<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR STYLE="FONT-SIZE:1PX">
 <TD WIDTH="2%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="3%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="95%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>appropriate size and diversity of the Board; </FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>needs of the Board with respect to particular talent and experience;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>knowledge, skills and experience of nominee; </FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>experience in domestic and international business affairs;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>familiarity with legal and regulatory requirements; </FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>appreciation of the relationship of our business to the changing
 needs of society; and</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>desire to balance the benefit of continuity with the periodic
 injection of the fresh perspective provided by a new member. </FONT></P>
 </TD>
 </TR>
</TABLE>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Nominating and Corporate Governance Committee does not have a formal diversity
policy at this time. However, as summarized above, the Nominating and Corporate
Governance Committee seeks to nominate candidates with a diverse range of
knowledge, experience, skills, expertise, and other qualities that will
contribute to the overall effectiveness of the Board of Directors.</FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
September 2010, the independent directors voted to recommended to the full
Board the nomination of Stephen Craney and Darrel Kloeckner to serve as
directors. Mr. Craney and Mr. Kloeckner were recommended to the Nominating and
Corporate Governance Committee by the Company&#146;s Chief Executive Officer.</FONT></P>

<P ALIGN=CENTER><FONT SIZE=2><B>SECURITY HOLDER COMMUNICATIONS TO THE BOARD
OF DIRECTORS</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
shareholder wishing to communicate with the Board of Directors about any matter
involving the business or operations of the Company should send the
communication, in written form, to the CEO of the Company at the Company&#146;s
principal place of business at 500 Sixth Avenue Northwest, New Prague,
Minnesota. The CEO of the Company will promptly send the communication to each
member of the Board of Directors. </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2><B>COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE
ACT</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company did not have equity securities registered pursuant to section 12 of the
Exchange Act during the 2010 fiscal year.</FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B>SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS,
DIRECTORS AND MANAGEMENT</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table sets forth certain information with respect to the beneficial
ownership of our outstanding common stock by (i) each of our named executive
officers (as defined in the section of this Proxy Statement entitled &#147;Executive
Compensation&#148;); (ii) each of our current directors and director nominees; and
(iii) all of our executive officers, current directors, and director nominees
as a group. We are not aware of any beneficial owners of more than 5% of our
common stock who are not executive officers or directors. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The percentage ownership
information shown in the table is based upon 8,087,885 shares outstanding as of
October 4, 2010.</FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>- 16 -</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=3><P STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless
otherwise indicated, the persons or entities identified in this table have sole
voting and investment power with respect to all shares shown as beneficially
owned by them. Except as otherwise noted below, the address for each person or
entity listed in the table is c/o Electromed, Inc., 500 Sixth Avenue NW, New
Prague, Minnesota 56071. </FONT></P>

<TABLE border=0 CELLSPACING=0 CELLPADDING=0 WIDTH="85%" align=center>
 <TR STYLE="FONT-SIZE:1PX">
 <TD WIDTH="48%" VALIGN=BOTTOM>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="3%" VALIGN=BOTTOM>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="15%" VALIGN=BOTTOM>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="3%" VALIGN=BOTTOM>
 <P ALIGN=RIGHT>&nbsp;</P>
 </TD>
 <TD WIDTH="3%" VALIGN=BOTTOM>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="1%" VALIGN=BOTTOM>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="11%" VALIGN=BOTTOM>
 <P ALIGN=RIGHT>&nbsp;</P>
 </TD>
 <TD WIDTH="1%" VALIGN=BOTTOM>
 <P>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=BOTTOM STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P><FONT SIZE=1><B>Name</B></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN=2 VALIGN=BOTTOM STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P ALIGN=CENTER><FONT SIZE=1><B>Number of Shares<BR>
 Beneficially<BR>
 Owned</B></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN=2 VALIGN=BOTTOM STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P ALIGN=CENTER><FONT SIZE="1"><B>Percentage<BR>
of the Class<BR>
Beneficially<BR>
Owned<SUP>(1)</SUP></B> </FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=2>Robert D.
 Hansen<SUP>(2)</SUP></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P ALIGN=RIGHT><FONT SIZE=2>593,355</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P ALIGN=RIGHT><FONT SIZE=2>7.32</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=2>%</FONT></P>
 </TD>
 </TR>
  <TR>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=2>Terry M.
 Belford, CPA, CMA<SUP>(3)</SUP></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>52,000</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>*</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=2>Craig N.
 Hansen</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P ALIGN=RIGHT><FONT SIZE=2>531,000</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P ALIGN=RIGHT><FONT SIZE=2>6.57</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=2>%</FONT></P>
 </TD>
 </TR>
  <TR>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=2>Noel D.
 Collis, MD</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>487,666</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>6.03</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=2>%</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=2>Stephen H.
 Craney</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P ALIGN=RIGHT><FONT SIZE=2>258,334</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P ALIGN=RIGHT><FONT SIZE=2>3.19</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=2>%</FONT></P>
 </TD>
 </TR>
  <TR>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=2>Thomas M.
 Hagedorn</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>874,250</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>10.81</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=2>%</FONT></P>
 </TD>
 </TR>
  <TR>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=2>Darrel Kloeckner</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P ALIGN=RIGHT><FONT SIZE=2>15,000</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P ALIGN=RIGHT><FONT SIZE=2>*</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
  <TR>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=2>George H.
 Winn, DDS</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>592,708</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>7.33</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=2>%</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=2>Executive
 Officers and Directors as a Group (8 persons)<SUP>(4)</SUP></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P ALIGN=RIGHT><FONT SIZE=2>3,404,313</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P ALIGN=RIGHT><FONT SIZE=2>42.09</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=2>%</FONT></P>
 </TD>
 </TR>
</TABLE>

<P><FONT SIZE=2>* Indicates
ownership of less than 1%. </FONT></P>

<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR STYLE="FONT-SIZE:1PX">
 <TD WIDTH="5%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="95%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>(1)</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>Shares not
 outstanding but deemed beneficially owned by virtue of the right of a person
 to acquire them as of October 4, 2010, or within sixty days of such date, are
 treated as outstanding only when determining the percent owned by such
 individual and when determining the percent owned by a group. </FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>(2)</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>Includes
 14,000 shares which may be purchased upon exercise of warrants by Mr. Hansen
 that were exercisable as of October 4, 2010, or within 60 days of such date,
 100,000 shares of Electromed common stock pledged pursuant to a lending
 arrangement and 62,415 shares of Electromed common stock pledged as
 collateral under a secured promissory note.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>(3)</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>Includes
 38,000 shares which may be purchased upon exercise of warrants by Mr. Belford
 that were exercisable as of June 30, 2010, or within 60 days of such date.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>(4)</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>Includes
 52,000 shares which may be purchased upon exercise of warrants that were
 exercisable as of June 30, 2010, or within 60 days of such date.</FONT></P>
 </TD>
 </TR>
</TABLE>
<P ALIGN=CENTER><FONT SIZE=2><B>EXECUTIVE COMPENSATION</B></FONT></P>

<P><FONT SIZE=2><B>Executive Compensation Components for Fiscal
2010 </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have two named executive officers, Robert D. Hansen, our Chief Executive
Officer, and Terry M. Belford, our Chief Financial Officer. We provide a
compensation package to our named executive officers that includes base salary
and annual performance-based cash awards. Our named executive officers are also
eligible to receive perquisites and to participate in benefit arrangements that
are generally available to all salaried employees, such as group life
insurance. Historically, we have also periodically awarded our named executive
officers with long-term equity incentive grants in the form of warrants.
Pursuant to their employment agreements, our executives would be eligible to
participate in any employee benefit plan that provided opportunities to earn
equity incentive compensation. However, we do not have such a plan in place at
the present time. </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>- 17 -</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=3><P STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>
<P><FONT SIZE=2><I><B>Base Salary </B></I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
determining the appropriate base salaries for our named executive officers in
fiscal 2010, our Personnel and Compensation Committee reviewed individual
performance and our operating results during the preceding fiscal year and
considered compensation data for medical device manufacturing companies located
in the Midwest. The Personnel and Compensation Committee also considered the Chief
Executive Officer&#146;s recommendations as to compensation for the Chief Financial
Officer. The Personnel and Compensation Committee uses a subjective process to
set base salaries and does not specifically weight any factors. Based upon the
information reviewed by the Personnel and Compensation Committee, the Committee
made a recommendation with respect to compensation for the Chief Executive
Officer and Chief Financial Officer to the Board of Directors, and the Board of
Directors set the compensation for the Chief Executive Officer and Chief
Financial Officer based on the information and recommendation provided by the
Personnel and Compensation Committee. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
Chief Executive Officer earned a base salary of $184,950 during our 2010 fiscal
year and $159,500 during our 2009 fiscal year. Our Chief Financial Officer
earned a base salary of $128,450 during our 2010 fiscal year and $108,500
during our 2009 fiscal year.</FONT></P>

<P><FONT SIZE=2><I><B>Incentive
Compensation </B></I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
order to provide motivation to our named executive officers, we provide
performance-based incentive compensation upon achievement of goals established
by the Board of Directors on an annual basis. The incentive component of our
executive compensation package is comprised of short-term cash incentive compensation
and, historically, long-term equity compensation in the form of warrants that
typically vest in 20% increments over a 5-year period. </FONT></P>

<P><FONT SIZE=2><I><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></I><I>Cash Incentive Compensation </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During
our 2010 fiscal year, our named executive officers were
eligible to earn incremental cash incentive compensation of $1,875 for the
Chief Financial Officer and $2,500 for the Chief Executive Officer for each
increment of $250,000 of revenue in excess of the revenue threshold. During our
2009 fiscal year, our named financial officers were eligible to earn cash
incentive compensation of $7,500 for our Chief Financial Officer and $10,000
for our Chief Executive Officer for each $1,000,000 of revenue in excess of the revenue threshhold. Our Chief Financial Officer and Chief
Executive Officer earned cash incentive compensation of $67,500 and $90,000,
respectively, during the 2010 fiscal year for performance during the 2009
calendar year. Our Chief Financial Officer and Chief Executive Officer earned
cash incentive compensation of $46,875 and $62,500, respectively, during the
2009 fiscal year for performance during the 2008 calendar year. Cash incentive
awards earned by a named executive officer during a fiscal year are paid in
bi-monthly installments for the first ten months of the following fiscal year. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Either
the Personnel and Compensation Committee, when comprised solely of independent
directors, or the independent directors, by vote in which only the independent
directors participate, will set performance goals and related incentive
payments for future calendar years on an annual basis. </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>- 18 -</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=3><P STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>
<P><FONT SIZE=2><I><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></I><I>Equity Incentive Compensation </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
our 2009 fiscal year, our named executive officers were granted the following
warrants: </FONT></P>

<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR STYLE="FONT-SIZE:1PX">
 <TD WIDTH="5%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="5%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="90%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>In November
 2008, we issued warrants to purchase 35,000 shares of Electromed common stock
 to Terry M. Belford, our Chief Financial Officer. The warrants vest in annual
 20% increments, have a ten-year term, and an exercise price of $3.50 per
 share. </FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>In November
 2008, we issued warrants to purchase 35,000 shares of Electromed common stock
 to Robert D. Hansen, our Chief Executive Officer. The warrants vest in annual
 20% increments, have a ten-year term, and an exercise price of $3.50 per
 share. </FONT></P>
 </TD>
 </TR>
</TABLE>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
did not issue any warrants to our named executive officers during our 2010
fiscal year.</FONT></P>

<P><FONT SIZE=2><I><B>Perquisites and
Other Benefits </B></I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
believe that providing perquisites to our named executive officers is
beneficial because it improves our ability to retain qualified leaders and is
consistent with the practice of similarly-sized companies in our industry. Our
named executive officers are eligible to participate in our group health and
life insurance plans and receive matching contributions to a 401(k) plan, which
are benefits that are generally available to all of our salaried employees. The
goal of these programs is to promote health and welfare benefits. In addition,
we provide an automobile to our Chief Executive Officer and make monthly
automobile lease payments on behalf of our Chief Financial Officer. The
aggregate annual value of these perquisites was less than $10,000 for the last
completed fiscal year. As described in footnotes 5 and 7 to the Summary
Compensation Table, we also pay premiums with respect to life insurance
policies on our Chief Executive Officer and his three adult children. </FONT></P>

<P><FONT SIZE=2><B>Employment Agreements for our Named Executive
Officers </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior
to January 1, 2010, Robert D. Hansen, our Chief Executive Officer, was employed
pursuant to an Executive Employment Agreement dated January 3, 2005 (the &#147;2005
Employment Agreement&#148;), which was subject to annual renewal by our Board of
Directors. The 2005 Employment Agreement provided for an initial base salary of
$89,500, cash incentive awards upon achievement of annual revenue and net income
goals established by the Board of Directors, and equity incentive awards in the
form of warrants upon achievement of annual revenue goals established by the
Board of Directors. The 2005 Employment Agreement also provided that Electromed
would pay the premiums on health and life insurance policies for Mr. Hansen for
the term of the agreement, and would pay the premiums on life insurance
policies for each of Mr. Hansen&#146;s three adult children, in each case for the
benefit of the recipient&#146;s estate or another beneficiary chosen by the
recipient. Following termination of the 2005 Employment Agreement, we have
continued to pay the premiums on these life insurance policies.</FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effective
January 1, 2010, we entered into a new employment agreement with Mr. Hansen
(the &#147;2010 Employment Agreement&#148;), which superseded the 2005 Employment
Agreement. The 2010 Employment Agreement has an initial term of three years
(the &#147;Initial Term&#148;), with automatic renewal for one-year periods (each a
&#147;Renewal Term,&#148; together, the &#147;Renewal Terms&#148;) unless written notice of
non-renewal is provided by the Board of Directors or Mr. Hansen at least 90
days prior to the anniversary date of agreement, and subject to earlier
termination as described below. Mr. Hansen receives an initial base salary of
$209,000 per calendar year pursuant to the 2010 Employment Agreement, subject
to annual review and adjustment by our Board of Directors. Pursuant to the 2010
Employment Agreement, Mr. Hansen is also eligible to receive cash incentive
compensation, is entitled to the severance payments described below upon
termination without cause or resignation upon a change of control of
Electromed, and is entitled to maintain, at Electromed&#146;s expense, life
insurance policies of at least $1,000,000 for the benefit of his estate. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effective
January 1, 2010, we entered into an employment agreement with Terry M. Belford
to serve as our Chief Financial Officer. Prior to January 1, 2010, the terms of
Mr. Belford&#146;s employment were set by our Board of Directors on an annual basis.
Mr. Belford&#146;s employment agreement has an initial term of three years (the
&#147;Initial Term&#148;), with automatic renewal for one-year periods (each a &#147;Renewal
Term,&#148; together, the &#147;Renewal Terms&#148;) unless written notice of non-renewal is provided
by the Board of Directors or Mr. Belford at least 90 days prior to the
anniversary date of agreement, and subject to earlier termination as described
below. Mr. Belford receives an initial base salary of $146,000 per calendar
year pursuant to his employment agreement, subject to annual review and
adjustment by our Board of Directors. Mr. Belford is also eligible to receive
cash incentive compensation and is entitled to the severance payments described
below upon termination without cause or resignation upon a change of control of
Electromed. </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>- 19 -</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=3><P STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
employment agreements with Messrs. Hansen and Belford are terminable by the
Board of Directors at any time for any reason. If Messrs. Hansen or Belford are
terminated by the Board of Directors without cause prior to the expiration of
the Initial Term or any subsequent Renewal Term or if they resign within six
months of a change of control of the Company, Electromed would be required to
pay severance pursuant to each employment agreement. With respect to a
termination without cause, the amount of the severance payment would be equal
to the base salary of the executive then in effect. With respect to a
resignation upon a change in control, the amount of the severance payment would
be equal to the sum of two times (2x) the annual base salary then in effect. In
each instance, the executive would also be entitled to a pro rata portion of
any earned but unpaid incentive compensation at the time of termination and
would, in order to receive the severance and continued benefits, be required to
sign a release of claims against Electromed, return all property owned by
Electromed and agree not to disparage Electromed. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
employment agreements define &#147;cause&#148; as gross misconduct which damages Electromed;
fraud, misappropriation, or embezzlement by the employee; conviction of a
felony crime or a crime of moral turpitude; unethical conduct in the course of
employment; or a material breach of the employment agreement. The employment
agreements define &#147;change of control&#148; as: (i) a change in ownership, which is
deemed to have occurred in the event one person, or more than one person acting
as a group, acquires more than 50% of the total fair market value or total
voting stock of Electromed; (ii) a change in effective control, which is deemed
to have occurred when one person, or more than one person acting as a group,
acquires ownership of stock of Electromed possessing 30% or more of the total
voting power of the stock, or a majority of members of Electromed&#146;s Board of
Directors is replaced during any 12-month period; and/or (iii) a change in
ownership of a substantial portion of the assets of Electromed, which is deemed
to have occurred when one person, or more than one person acting as a group,
acquires assets from Electromed that have a total gross fair market value equal
to or greater then 40% of the total gross fair market value of all of the
assets of Electromed before the acquisition. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
of our executives has also entered into Non-Competition, Non-Solicitation, and
Confidentiality Agreements (the &#147;Confidentiality Agreements&#148;). Pursuant to the
Confidentiality Agreements, each of Messrs. Hansen and Belford agree to protect
confidential information of Electromed and to return all confidential
information and property of Electromed upon termination of employment for any
reason, and that they will not compete with Electromed or solicit customers or
business contacts of Electromed during the term of the agreement and for a
period of 12 months after termination, for any reason. In addition, the
executives agreed that they would inform any potential new employer of their
obligations under the Confidentiality Agreement before accepting new
employment. </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>- 20 -</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=3><P STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>
<P><FONT SIZE=2><B>Summary Compensation Table </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table provides information regarding the compensation earned during
fiscal 2010 and fiscal 2009 by our named executive officers: </FONT></P>

<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR STYLE="FONT-SIZE:1PX">
 <TD WIDTH="22%" VALIGN=BOTTOM>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="3%" VALIGN=BOTTOM>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="1%" VALIGN=BOTTOM>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="5%" VALIGN=BOTTOM>
 <P ALIGN=RIGHT>&nbsp;</P>
 </TD>
 <TD WIDTH="3%" VALIGN=BOTTOM>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="1%" VALIGN=BOTTOM>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="7%" VALIGN=BOTTOM>
 <P ALIGN=RIGHT>&nbsp;</P>
 </TD>
 <TD WIDTH="3%" VALIGN=BOTTOM>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="1%" VALIGN=BOTTOM>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="7%" VALIGN=BOTTOM>
 <P ALIGN=RIGHT>&nbsp;</P>
 </TD>
 <TD WIDTH="3%" VALIGN=BOTTOM>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="1%" VALIGN=BOTTOM>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="11%" VALIGN=BOTTOM>
 <P ALIGN=RIGHT>&nbsp;</P>
 </TD>
 <TD WIDTH="3%" VALIGN=BOTTOM>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="1%" VALIGN=BOTTOM>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="10%" VALIGN=BOTTOM>
 <P ALIGN=RIGHT>&nbsp;</P>
 </TD>
 <TD WIDTH="5%" VALIGN=BOTTOM>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="1%" VALIGN=BOTTOM>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="7%" VALIGN=BOTTOM>
 <P ALIGN=RIGHT>&nbsp;</P>
 </TD>
 <TD WIDTH="1%" VALIGN=BOTTOM>
 <P>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=BOTTOM STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P><FONT SIZE=1><B>Name and<BR>
 principal position</B></FONT></P>


 </TD>
 <TD VALIGN=BOTTOM STYLE="BORDER-BOTTOM:SOLID BLACK 0PX">
 <P><FONT SIZE=1><I><B>&nbsp;</B></I></FONT></P>


 </TD>
 <TD COLSPAN=2 VALIGN=BOTTOM STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P ALIGN=CENTER><FONT SIZE=1><B>Year</B></FONT></P>


 </TD>
 <TD VALIGN=BOTTOM STYLE="BORDER-BOTTOM:SOLID BLACK 0PX">
 <P><FONT SIZE=1><I><B>&nbsp;</B></I></FONT></P>


 </TD>
 <TD COLSPAN=2 VALIGN=BOTTOM STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P ALIGN=CENTER><FONT SIZE=1><B>Salary<BR>
 ($)<SUP>(1)</SUP></B></FONT></P>


 </TD>
 <TD VALIGN=BOTTOM STYLE="BORDER-BOTTOM:SOLID BLACK 0PX">
 <P><FONT SIZE=1><I><B>&nbsp;</B></I></FONT></P>


 </TD>
 <TD COLSPAN=2 VALIGN=BOTTOM STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P ALIGN=CENTER><FONT SIZE=1><B>Option<BR>
 awards<BR>
 ($)</B></FONT></P>


 </TD>
 <TD VALIGN=BOTTOM STYLE="BORDER-BOTTOM:SOLID BLACK 0PX">
 <P><FONT SIZE=1><I><B>&nbsp;</B></I></FONT></P>


 </TD>
 <TD COLSPAN=2 VALIGN=BOTTOM STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P ALIGN=CENTER><FONT SIZE=1><B>Non-equity<BR>
 incentive<BR>
 plan<BR>
 compensation<BR>
 ($)</B></FONT></P>


 </TD>
 <TD VALIGN=BOTTOM STYLE="BORDER-BOTTOM:SOLID BLACK 0PX">
 <P><FONT SIZE=1><I><B>&nbsp;</B></I></FONT></P>


 </TD>
 <TD COLSPAN=2 VALIGN=BOTTOM STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P ALIGN=CENTER><FONT SIZE=1><B>All other<BR>
 compensation<BR>
 ($)</B></FONT></P>


 </TD>
 <TD VALIGN=BOTTOM STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P><FONT SIZE=1><I><B>&nbsp;</B></I></FONT></P>


 </TD>
 <TD COLSPAN=2 VALIGN=BOTTOM STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P ALIGN=CENTER><FONT SIZE=1><B>Total<BR>
 ($)</B></FONT></P>


 </TD>
 <TD VALIGN=BOTTOM STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P><FONT SIZE=1><I><B>&nbsp;</B></I></FONT></P>


 </TD>
 </TR>
 <TR>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=2>Robert D.
 Hansen</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P ALIGN=CENTER><FONT SIZE=2>2010</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P ALIGN=RIGHT><FONT SIZE=2>184,950</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P ALIGN=RIGHT><FONT SIZE=2>0</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P ALIGN=RIGHT><FONT SIZE=2>90,000 </FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=2><SUP> (3)</SUP></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P ALIGN=RIGHT><FONT SIZE=2>17,025 </FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=2><SUP> (5)(6)</SUP></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P ALIGN=RIGHT><FONT SIZE=2>291,975</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><I>Chief Executive Officer</I></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>

 <TR>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=CENTER><FONT SIZE=2>2009</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>159,500</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>75,529 </FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=2><SUP> (2)</SUP></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>62,500 </FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=2><SUP> (4)</SUP></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>15,440 </FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=2><SUP> (7)(8)</SUP></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>312,969</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=2>Terry M.
 Belford</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P ALIGN=CENTER><FONT SIZE=2>2010</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P ALIGN=RIGHT><FONT SIZE=2>128,450</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P ALIGN=RIGHT><FONT SIZE=2>0</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P ALIGN=RIGHT><FONT SIZE=2>67,500 </FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=2><SUP> (3)</SUP></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P ALIGN=RIGHT><FONT SIZE=2>7,622 </FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=2><SUP> (9)</SUP></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P ALIGN=RIGHT><FONT SIZE=2>203,572</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2><I>Chief Financial Officer</I></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>

 <TR>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=CENTER><FONT SIZE=2>2009</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>108,500</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>75,529 </FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=2><SUP> (2)</SUP></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>46,875 </FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=2><SUP> (4)</SUP></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>6,594 </FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=2><SUP> (10)</SUP></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>237,468</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
</TABLE>

<BR>

<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR STYLE="FONT-SIZE:1PX">
 <TD WIDTH="5%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="95%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>(1)</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>Amounts
 shown are not reduced to reflect the named executive officers&#146; elections, if
 any, to contribute portions of their salaries to 401(k) plans.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>(2)</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>Represents
 the grant date fair value of warrants awarded during the fiscal year ended
 June 30, 2009, in accordance with Financial Accounting Standards Board
 Accounting Standards Codification Topic 718, Compensation &#151; Stock
 Compensation, for outstanding performance-based option awards. The
 assumptions used to determine the valuation of the 2009 warrant awards are
 discussed in Note 7 to our consolidated financial statements included in our
 Annual Report on Form 10-K for the 2010 fiscal year.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>(3)</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>Reflects a
 cash incentive payment earned as of December 31, 2009 for achieving
 performance goals for the 2009 calendar year.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>(4)</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>Reflects a
 cash incentive payment earned as of December 31, 2008 for achieving
 performance goals for the 2008 calendar year.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>(5)</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>Includes
 premiums totaling $6,823 paid by the Company with respect to life insurance
 for the benefit of Mr. Hansen and his three adult children.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>(6)</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>Includes a
 Company match of $10,202 to Mr. Hansen&#146;s 401(k) plan.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>(7)</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>Includes
 life insurance premiums totaling $6,560 paid for life insurance policies for
 the benefit of Mr. Hansen and his three adult children.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>(8)</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>Includes a
 Company match of $8,880 to Mr. Hansen&#146;s 401(k) plan.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>(9)</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>Includes a
 Company match of $7,622 to Mr. Belford&#146;s 401(k) plan.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>(10)</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>Includes a
 Company match of $6,594 to Mr. Belford&#146;s 401(k) plan.</FONT></P>
 </TD>
 </TR>
</TABLE>
<P ALIGN=CENTER><FONT SIZE=2>- 21 -</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=3><P STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>
<P><FONT SIZE=2><B>Outstanding Equity Awards at June 30, 2010</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table sets forth certain information regarding equity awards granted
to our named executive officers outstanding as of June 30, 2010:</FONT></P>

<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR STYLE="FONT-SIZE:1PX">
 <TD WIDTH="35%" VALIGN=BOTTOM>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="3%" VALIGN=BOTTOM>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="1%" VALIGN=BOTTOM>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="11%" VALIGN=BOTTOM>
 <P ALIGN=RIGHT>&nbsp;</P>
 </TD>
 <TD WIDTH="3%" VALIGN=BOTTOM>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="1%" VALIGN=BOTTOM>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="12%" VALIGN=BOTTOM>
 <P ALIGN=RIGHT>&nbsp;</P>
 </TD>
 <TD WIDTH="3%" VALIGN=BOTTOM>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="1%" VALIGN=BOTTOM>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="8%" VALIGN=BOTTOM>
 <P ALIGN=RIGHT>&nbsp;</P>
 </TD>
 <TD WIDTH="3%" VALIGN=BOTTOM>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="1%" VALIGN=BOTTOM>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="10%" VALIGN=BOTTOM>
 <P ALIGN=RIGHT>&nbsp;</P>
 </TD>
 <TD WIDTH="1%" VALIGN=BOTTOM>
 <P>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN=11 VALIGN=BOTTOM STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P ALIGN=CENTER><FONT SIZE=1><B>Option awards</B></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN=11 VALIGN=BOTTOM>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=BOTTOM STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P><FONT SIZE=1><B>Name</B></FONT></P>


 </TD>
 <TD VALIGN=BOTTOM STYLE="BORDER-BOTTOM:SOLID BLACK 0PX">
 <P><FONT SIZE=1><I><B>&nbsp;</B></I></FONT></P>


 </TD>
 <TD COLSPAN=2 VALIGN=BOTTOM STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P ALIGN=CENTER><FONT SIZE=1><B>Number of<BR>
 securities<BR>
 underlying<BR>
 unexercised<BR>
 options<BR>
 ()<BR>
 Exercisable<SUP>(1)</SUP></B></FONT></P>


 </TD>
 <TD VALIGN=BOTTOM STYLE="BORDER-BOTTOM:SOLID BLACK 0PX">
 <P><FONT SIZE=1><I><B>&nbsp;</B></I></FONT></P>


 </TD>
 <TD COLSPAN=2 VALIGN=BOTTOM STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P ALIGN=CENTER><FONT SIZE=1><B>Number of<BR>
 securities<BR>
 underlying<BR>
 unexercised<BR>
 options<BR>
 ()<BR>
 Unexercisable<SUP>(1)</SUP></B></FONT></P>


 </TD>
 <TD VALIGN=BOTTOM STYLE="BORDER-BOTTOM:SOLID BLACK 0PX">
 <P><FONT SIZE=1><I><B>&nbsp;</B></I></FONT></P>


 </TD>
 <TD COLSPAN=2 VALIGN=BOTTOM STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P ALIGN=CENTER><FONT SIZE=1><B>Option<BR>
 exercise<BR>
 price<BR>
 ($)</B></FONT></P>


 </TD>
 <TD VALIGN=BOTTOM STYLE="BORDER-BOTTOM:SOLID BLACK 0PX">
 <P><FONT SIZE=1><I><B>&nbsp;</B></I></FONT></P>


 </TD>
 <TD COLSPAN=2 VALIGN=BOTTOM STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P ALIGN=CENTER><FONT SIZE=1><B>Option</B><BR><B>expiration</B><BR><B>date</B></FONT></P>


 </TD>
 <TD VALIGN=BOTTOM STYLE="BORDER-BOTTOM:SOLID BLACK 0PX">
 <P><FONT SIZE=1><I><B>&nbsp;</B></I></FONT></P>


 </TD>
 </TR>
 <TR>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=2>Robert D.
 Hansen</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P ALIGN=RIGHT><FONT SIZE=2>35,000 </FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=2><SUP> (2)</SUP></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=2>$</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P ALIGN=RIGHT><FONT SIZE=2>3.50</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P ALIGN=RIGHT><FONT SIZE=2>11/24/2018</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=2>Terry M.
 Belford</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>12,000</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=2>$</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>2.00</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>1/3/2011</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P ALIGN=RIGHT><FONT SIZE=2>12,000</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=2>$</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P ALIGN=RIGHT><FONT SIZE=2>2.00</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P ALIGN=RIGHT><FONT SIZE=2>1/1/2012</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>35,000 </FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=2><SUP> (2)</SUP></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=2>$</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>3.50</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT SIZE=2>11/24/2018</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
</TABLE>

<BR>

<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR STYLE="FONT-SIZE:1PX">
 <TD WIDTH="5%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="95%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>(1)</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>The
 Exercisable and Unexercisable options are denominated as warrants to purchase
 common stock of the Company. </FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>(2)</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>The option
 vests ratably on November 24 of each year from Fiscal Years 2010 &#150; 2014, and
 expires on November 24, 2018. </FONT></P>
 </TD>
 </TR>
</TABLE>
<P ALIGN=CENTER><FONT SIZE=2><B>DIRECTOR COMPENSATION</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table provides information regarding compensation paid to and earned
by the non-employee directors during fiscal 2010: </FONT></P>

<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR STYLE="FONT-SIZE:1PX">
 <TD WIDTH="58%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="2%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="12%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="2%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="11%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="3%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="8%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="1%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=BOTTOM STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P><FONT SIZE=1><B>Name</B></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P ALIGN=CENTER><FONT SIZE=1><B>Fees Earned or<BR>
 Paid in Cash<SUP>(1)<BR>
 </SUP>($)</B></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P ALIGN=CENTER><FONT SIZE=1><B>All Other<BR>
 Compensation<BR>
 ($)</B></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=BOTTOM STYLE="BORDER-BOTTOM:SOLID BLACK 1PX">
 <P ALIGN=CENTER><FONT SIZE=1><B>Total<BR>
 ($)</B></FONT></P>
 </TD>
 <TD VALIGN=BOTTOM>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>

 <TR>
 <TD VALIGN=TOP BGCOLOR="#D6F3E8">
 <P><FONT SIZE=2>Craig N.
 Hansen</FONT></P>
 </TD>
 <TD VALIGN=TOP BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP BGCOLOR="#D6F3E8">
 <P ALIGN=CENTER><FONT SIZE=2>$3,000</FONT></P>
 </TD>
 <TD VALIGN=TOP BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP BGCOLOR="#D6F3E8">
 <P ALIGN=CENTER><FONT SIZE=2>-</FONT></P>
 </TD>
 <TD VALIGN=TOP BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP BGCOLOR="#D6F3E8">
 <P ALIGN=CENTER><FONT SIZE=2>$3,000</FONT></P>
 </TD>
 <TD VALIGN=TOP BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>

 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>Noel D.
 Collis, MD</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>$2,000</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>-</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>$2,000</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>

 <TR>
 <TD VALIGN=TOP BGCOLOR="#D6F3E8">
 <P><FONT SIZE=2>Thomas M.
 Hagedorn</FONT></P>
 </TD>
 <TD VALIGN=TOP BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP BGCOLOR="#D6F3E8">
 <P ALIGN=CENTER><FONT SIZE=2>$3,000</FONT></P>
 </TD>
 <TD VALIGN=TOP BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP BGCOLOR="#D6F3E8">
 <P ALIGN=CENTER><FONT SIZE=2>-</FONT></P>
 </TD>
 <TD VALIGN=TOP BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP BGCOLOR="#D6F3E8">
 <P ALIGN=CENTER><FONT SIZE=2>$3,000</FONT></P>
 </TD>
 <TD VALIGN=TOP BGCOLOR="#D6F3E8">
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>

 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>George H.
 Winn DDS</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>$3,000</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>-</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2>$3,000</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
</TABLE>

<BR>

<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR STYLE="FONT-SIZE:1PX">
 <TD WIDTH="5%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="95%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>(1)</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>In fiscal
 2010, each non-employee director was paid $1,000 for each Board meeting the
 director attended. </FONT></P>
 </TD>
 </TR>
</TABLE>
<P ALIGN=CENTER><FONT SIZE=2>- 22 -</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=3><P STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>
<P ALIGN=CENTER><FONT SIZE=2><B>CERTAIN TRANSACTIONS AND BUSINESS
RELATIONSHIPS</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Described
below are transactions and series of similar transactions that have occurred
during the 2010 and 2009 fiscal years, to which we were or are a party in
which: </FONT></P>

<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR STYLE="FONT-SIZE:1PX">
 <TD WIDTH="5%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="5%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="90%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>the amounts
 involved exceeded the lesser of $120,000 or one percent of the average of our
 total assets at year end for our last two completed fiscal years; and</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>&#149;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2>a director,
 executive officer, beneficial owner of more than 5% of any class of our
 voting securities or any member of their immediate family had or will have a
 direct or indirect material interest. </FONT></P>
 </TD>
 </TR>
</TABLE>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
obtain engineering services from Hansen Engine Corporation (d/b/a Hansen Engine
Technologies, Inc.) (&#147;Hansen Engine&#148;) pursuant to a Letter Agreement dated
February 16, 2010 (the &#147;2010 Agreement&#148;). Robert Hansen, our Chief Executive
Officer, is the President, Chief Executive Officer and Chairman of the Board of
Directors of Hansen Engine and owns approximately 11% of that entity&#146;s
outstanding common stock. Mr. Hansen devotes approximately 5% of his time
attending to matters related to Hansen Engine Corporation where he is primarily
responsible for corporate governance matters through his service as a member of
Hansen Engine&#146;s board of directors. In addition, Craig Hansen, a member of our
Board of Directors and the brother of Robert Hansen, and Thomas Hagedorn, a
member of our Board of Directors, are each a director of Hansen Engine and own
approximately 12% and 11%, respectively, of that entity&#146;s outstanding common
stock. The 2010 Agreement provides that Hansen Engine will perform research and
development work, primarily relating to the improvement of device performance
of the SmartVest System, in exchange for a monthly fee of $30,000, through the
end of the current term in December 2010. During our 2010 and 2009 fiscal
years, expenses incurred to Hansen Engine were approximately $280,000 and
$115,000, respectively. The 2010 Agreement provides that all design outputs
will be the property of Electromed and that all patents that result from work
performed pursuant to the agreement must be assigned to us. Such assignments
are effected in writing pursuant to our standard form of patent assignment. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;From
May 2006 through December 2009, we leased a 5,000 square-foot building from
George Winn, a member of our Board of Directors. Our monthly lease payment for
the building was approximately $7,000 until we bought the building for $555,000
on December 9, 2009. We also purchased an approximately 1.25 acre parcel of
land adjacent to our original campus in March 2008, from Wil/Win Investments
LLC, an entity in which Dr. Winn has a 50% equity interest, in exchange for
shares of Electromed common stock valued at approximately $105,000. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
March 2, 2010, we purchased from Robert D. Hansen, our Chief Executive Officer
and the chairman of our Board of Directors, the non-controlling interest in
Electromed Financial, LLC, a Minnesota limited liability company (&#147;Electromed
Financial&#148;) that was our majority-owned subsidiary. The purchase price for Mr.
Hansen&#146;s interest in Electromed Financial was $125,000 and was accounted for as
an equity transaction. Electromed Financial is now our wholly-owned subsidiary.
Electromed Financial was formed on May 23, 2002 to assist in raising capital from
outside investors and may be engaged to support other financial-related
objectives of the Company. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company purchases electronic parts from RiverSide Electronics, Ltd.
(&#147;RiverSide&#148;), an entity which is solely owned by Stephen Craney, a director
nominee. The Company has made payments to RiverSide of approximately $409,000,
$380,000, and $228,000 during our 2010, 2009 and 2008 fiscal years,
respectively. The Board of Directors has determined that the terms of its
transactions with RiverSide were consistent with what could be obtained in an
arm&#146;s length transaction with an unrelated party. </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2><B>OTHER INFORMATION</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management
knows of no other matters which may be brought before the Annual Meeting. If
any other matters are presented at the meeting on which a vote may properly be
taken, the persons named as proxy holders in the enclosed proxy card will vote
thereon in accordance with their best judgment. </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>- 23 -</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=3><P STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>
<P ALIGN=CENTER><FONT SIZE=2><B>ANNUAL REPORT AND FINANCIAL STATEMENTS</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THE
COMPANY&#146;S ANNUAL REPORT, INCLUDING THE COMPANY&#146;S ANNUAL REPORT ON FORM 10-K FOR
THE FISCAL YEAR ENDED JUNE 30, 2010 (WITHOUT EXHIBITS), ACCOMPANIES THE
DELIVERY OF THIS PROXY STATEMENT. NO PART OF THE ANNUAL REPORT IS INCORPORATED
HEREIN AND NO PART THEREOF IS TO BE CONSIDERED PROXY SOLICITING MATERIAL. THE
COMPANY WILL FURNISH WITHOUT CHARGE TO EACH PERSON WHOSE PROXY IS BEING
SOLICITED, UPON WRITTEN REQUEST OF ANY SUCH PERSON, ANY EXHIBIT DESCRIBED IN
THE LIST ACCOMPANYING THE FORM 10-K, UPON THE PAYMENT, IN ADVANCE, OF REASONABLE
FEES RELATED TO THE COMPANY&#146;S FURNISHING SUCH EXHIBIT(S). ANY SUCH REQUESTS
SHOULD INCLUDE A REPRESENTATION THAT THE SHAREHOLDER WAS THE BENEFICIAL OWNER
OF SHARES OF ELECTROMED COMMON STOCK ON OCTOBER 4, 2010, THE RECORD DATE FOR
THE FISCAL 2011 ANNUAL MEETING, AND SHOULD BE DIRECTED TO ROBERT HANSEN, CHIEF
EXECUTIVE OFFICER, AT THE COMPANY&#146;S PRINCIPAL ADDRESS.</FONT></P>

<P><FONT SIZE=2>Dated: October
14, 2010<BR>
New Prague, Minnesota </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>- 24 -</FONT></P>


<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=3><P STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<BR>

<P ALIGN=CENTER><FONT SIZE=3 FACE=ARIAL><B>Electromed, Inc.<BR><BR>
</B><FONT SIZE=2 FACE=ARIAL><B>ANNUAL MEETING OF STOCKHOLDERS</B></FONT></FONT></P>

<P ALIGN=CENTER><FONT SIZE=2 FACE=ARIAL><B>Friday, November 5, 2010 <BR>
10:00 am central time </B></FONT></P>

<P ALIGN=CENTER><FONT SIZE=2 FACE=ARIAL><B>Electromed Headquarters<BR>
500 Sixth Avenue NW<BR>
New Prague, MN 56071 </B></FONT></P>

<P ALIGN=CENTER><FONT SIZE=2 FACE=ARIAL><B>Important Notice Regarding the Availability
of Proxy Materials for the Annual Meeting:</B></FONT></P>

<P ALIGN=CENTER><FONT SIZE=2 FACE=ARIAL>The Notice and Proxy Statement, 10K and Annual Report are
available under the &#147;Investor Relations&#148; tab at<BR>
www.electromed.com.</FONT></P>

<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR STYLE="FONT-SIZE:1PX">
 <TD WIDTH="74%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="25%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=2 FACE=ARIAL><B>Electromed,
 Inc.</B></FONT></P>
 </TD>
 <TD ROWSPAN=3 VALIGN=BOTTOM>
 <P ALIGN=RIGHT><FONT FACE="ARIAL" SIZE="5"><B>proxy</B> </FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=2 FACE=ARIAL><B>500 Sixth
 Avenue NW</B></FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=BOTTOM>
 <P><FONT SIZE=2 FACE=ARIAL><B>New Prague, MN
 56071</B></FONT></P>
 </TD>
 </TR>
</TABLE>

<BR>

<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR STYLE="FONT-SIZE:1PX">
 <TD WIDTH="100%" VALIGN=TOP STYLE='BORDER:NONE;BORDER-BOTTOM:  SOLID BLACK 1PX'>
 <P>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP STYLE='BORDER:NONE'>
 <P><FONT SIZE=2 FACE=ARIAL><B>This proxy is
 solicited by the Board of Directors for use at the Annual Meeting on November
 5, 2010. </B></FONT></P>
 </TD>
 </TR>
</TABLE>

<P><FONT SIZE=2 FACE=ARIAL>The shares
of stock you hold in your account or in a dividend reinvestment account will be
voted as you specify on the reverse side. </FONT></P>

<P><FONT SIZE=2 FACE=ARIAL><B>If no choice is specified, the proxy will be voted &#147;FOR&#148; Items 1, 2, 3
and 4. </B></FONT></P>

<P><FONT SIZE=2 FACE=ARIAL>By signing
the proxy, you revoke all prior proxies and appoint Robert D. Hansen and Terry
M. Belford, and each of them with full power of substitution, to vote your
shares on the matters shown on the reverse side and any other matters which may
come before the Annual Meeting and all adjournments. </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2 FACE=ARIAL><I>See reverse for voting instructions.</I></FONT></P>


<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=3><P STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<BR>



<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR STYLE="FONT-SIZE:1PX">
 <TD WIDTH="20%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="60%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="20%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2><IMG SRC="smlogo.jpg" ALT=""></FONT></P>
 </TD>

 <TD VALIGN=TOP>
 <P><FONT SIZE=1 FACE=ARIAL>Shareowner Services<SUP>SM</SUP><BR>
P.O. Box 64945<BR>
St. Paul, MN 55164-0945 </FONT></P>
 </TD>
 </TR>
</TABLE>





<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR STYLE="FONT-SIZE:1PX">
 <TD WIDTH="36%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="31%" VALIGN=TOP >
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="31%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP STYLE='BORDER:NONE;BORDER-RIGHT:SOLID BLACK 1PX'>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP STYLE='BORDER-top:  SOLID BLACK 1PX;BORDER-LEFT:  NONE;BORDER-BOTTOM:SOLID BLACK 1PX;BORDER-RIGHT:SOLID BLACK 1PX'>
 <P STYLE='MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT'><FONT  SIZE=2 FACE=ARIAL><B>COMPANY<BR><BR></B></FONT></P>
 </TD>
 </TR>
</TABLE>

<BR>

<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR STYLE="FONT-SIZE:1PX">
 <TD WIDTH="50%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="4%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="1%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="45%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN=2 VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=3  FACE=ARIAL><B>Vote
 by Internet, Telephone or Mail <BR>
 24 Hours a Day, 7 Days a Week</B></FONT></P>
 </TD>
 </TR>
 <TR STYLE="FONT-SIZE:5PX">
 <TD VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD COLSPAN=2 VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN=2 VALIGN=TOP>
 <P ALIGN=CENTER><FONT SIZE=2  FACE=ARIAL>Your phone or Internet vote authorizes the named proxies to vote your
 shares in the same manner as if you marked, signed and returned your proxy
 card.</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN=2 VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
<P><FONT SIZE=2><img src="a104921002_v1.jpg" alt="(IMAGE)"></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2 FACE=ARIAL><B>INTERNET</B><FONT  FACE=ARIAL> &#150;
 www.eproxy.com/elmd<BR>
 Use the Internet to vote your proxy until 12:00 p.m. (CT) on November 4,
 2010.</FONT></FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
<P><FONT SIZE=2><img src="a104921003_v1.jpg" alt="(IMAGE)"></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2 FACE=ARIAL><B>PHONE &#150;
 1-800-560-1965<BR>
 </B><FONT FACE=ARIAL>Use a touch-tone telephone to vote your proxy until 12:00
 p.m. (CT) on November 4, 2010.</FONT></FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
<P><FONT SIZE=2><img src="a104921004_v1.jpg" alt="(IMAGE)"></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=2 FACE=ARIAL><B>MAIL</B><FONT  FACE=ARIAL> &#150; Mark,
 sign and date your proxy card and return it in the postage-paid envelope
 provided so that it is received by the close of business on November 4, 2010.</FONT></FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN=3 VALIGN=TOP>
 <P><FONT SIZE=2 FACE=ARIAL><B>If you vote your
 proxy by Internet or by Telephone, you do NOT need to mail back your Proxy
 Card.</B></FONT></P>
 </TD>
 </TR>
</TABLE>
<P ALIGN=CENTER><FONT SIZE=2 FACE=ARIAL><I><B>To vote by mail as the Board
of Directors recommends on all items below,<BR> simply sign, date and return this proxy
in the enclosed postage-paid return envelope.</B></I></FONT></P>

<P ALIGN=CENTER><FONT SIZE=2 FACE=WINGDINGS>&#242;</font><FONT SIZE=2><I>&nbsp;Please detach here&nbsp;</I></FONT><FONT SIZE=2 FACE=WINGDINGS>&#242;</FONT></P>

<div style="BORDER-BOTTOM:  dashed BLACK 1px"></div>

<P ALIGN=CENTER><FONT SIZE=2 FACE=ARIAL><B>The Board of Directors Recommends a Vote
FOR Items 1, 2, 3 and 4.</B></FONT></P>

<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="95%">
 <TR STYLE="FONT-SIZE:1PX">
 <TD WIDTH="2%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="14%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="19%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="20%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="2%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="3%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="7%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="2%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="3%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="6%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="2%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="2%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="3%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="10%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD COLSPAN=3 VALIGN=TOP>
 <P><FONT FACE="ARIAL" SIZE="1"><B>1.</B> Set the number of directors at 7. </FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1 FACE=WINGDINGS>o</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1 FACE=ARIAL>For</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1 FACE=WINGDINGS>o</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN="RIGHT"><FONT SIZE=1 FACE=ARIAL>Against</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1 FACE=WINGDINGS>o</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1 FACE=ARIAL>Abstain</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD COLSPAN=2 VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN=3 VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN=3 VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD COLSPAN=2 VALIGN=TOP>
 <P><FONT FACE="ARIAL" SIZE="1"><B>2.</B> Election of directors: </FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1 FACE=ARIAL>01 Dr. Noel D. Collis, MD</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1 FACE=ARIAL>05 Robert D. Hansen</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1 FACE=WINGDINGS>o</FONT></P>
 </TD>
 <TD COLSPAN=2 ROWSPAN=2 VALIGN=TOP>
 <P><FONT SIZE=1 FACE=ARIAL>Vote FOR<BR>
 all nominees</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN=RIGHT><FONT SIZE=1  FACE=WINGDINGS>o</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN=3 ROWSPAN=3 VALIGN=TOP>
 <P><FONT SIZE=1 FACE=ARIAL>Vote WITHHELD<BR>
 from all nominees<BR>
 (except as marked)</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD COLSPAN=2 VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1 FACE=ARIAL>02 Stephen H. Craney</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1 FACE=ARIAL>06 Darrel L. Kloeckner</FONT></P>
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 <P><FONT SIZE=1 FACE=ARIAL>03 Thomas M. Hagedorn</FONT></P>
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 <P><FONT SIZE=1 FACE=ARIAL>07 Dr. George H. Winn, DDS</FONT></P>
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 <P><FONT SIZE=1 FACE=ARIAL>04 Craig N. Hansen</FONT></P>
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 </TD>
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 <TD COLSPAN=4 VALIGN=TOP>
 <P><FONT SIZE=1 FACE=ARIAL><B> (Instructions: To withhold authority to
 vote for any indicated nominee,<BR>
 write the number(s) of the nominee(s) in the box provided to the right.)</B></FONT></P>
 </TD>
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 </TD>
 </TR>
 <TR>
 <TD COLSPAN=4 VALIGN=TOP>
 <P><FONT SIZE=1 FACE=ARIAL><B>3.</B><FONT SIZE=1  FACE=ARIAL> To increase the
 number of authorized shares from 10 million to 15 million, consisting of
 13,000,000 shares of common stock and 2,000,000 shares of undesignated stock.</FONT></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1 FACE=WINGDINGS>o</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1 FACE=ARIAL>For</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1 FACE=WINGDINGS>o</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN="RIGHT"><FONT SIZE=1 FACE=ARIAL>Against</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1 FACE=WINGDINGS>o</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1 FACE=ARIAL>Abstain</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD COLSPAN=4 VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
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 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
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 </TD>
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 </TD>
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 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
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 <P><FONT SIZE=1>&nbsp;</FONT></P>
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 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
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 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
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 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD COLSPAN=4 VALIGN=TOP>
 <P><FONT SIZE=1 FACE=ARIAL><B>4.</B><FONT SIZE=1  FACE=ARIAL> Ratify the
 appointment of McGladrey &amp; Pullen, LLP as independent registered public
 accounting firm for the fiscal year ending June 30, 2011.</FONT></FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1 FACE=WINGDINGS>o</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1 FACE=ARIAL>For</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1 FACE=WINGDINGS>o</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P ALIGN="RIGHT"><FONT SIZE=1 FACE=ARIAL>Against</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1 FACE=WINGDINGS>o</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1 FACE=ARIAL>Abstain</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD COLSPAN=4 VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
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 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
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 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
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 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
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 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
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 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
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 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
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 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN=13 VALIGN=TOP>
 <P><FONT SIZE=1 FACE=ARIAL>In their discretion, the proxies may vote on any other
 matters that are properly brought before the Meeting and any adjournment or
 postponement thereof.</FONT></P>
 </TD>
 </TR>
</TABLE>

<BR>

<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR STYLE="FONT-SIZE:1PX">
 <TD WIDTH="100%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1 FACE=ARIAL><B>THIS PROXY WHEN
 PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN,
 WILL BE VOTED <U>FOR</U> EACH PROPOSAL.</B></FONT></P>
 </TD>
 </TR>
</TABLE>

<BR>

<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
 <TR STYLE="FONT-SIZE:1PX">
 <TD WIDTH="45%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="3%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="7%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="3%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="33%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD WIDTH="9%" VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1 FACE=ARIAL>Address Change? Mark box, sign,
 and indicate changes below:</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1 FACE=WINGDINGS>o</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP nowrap>
 <P><FONT SIZE=1 FACE=ARIAL>Date&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP STYLE='BORDER:NONE;BORDER-BOTTOM:  SOLID BLACK 1PX'>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 </TR>
  <TR STYLE="FONT-SIZE:3PX">
 <TD VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD COLSPAN=3 VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN=3 VALIGN=TOP>
 <P><FONT SIZE=1 FACE=ARIAL>Signature(s) in Box</FONT></P>
 </TD>
 </TR>
 <TR STYLE="FONT-SIZE:3PX">
 <TD VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 <TD COLSPAN=3 VALIGN=TOP>
 <P>&nbsp;</P>
 </TD>
 </TR>
 <TR>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD VALIGN=TOP>
 <P><FONT SIZE=1>&nbsp;</FONT></P>
 </TD>
 <TD COLSPAN=3 VALIGN=TOP>
 <P ALIGN=JUSTIFY><FONT SIZE=1 FACE=ARIAL>Please
 sign exactly as your name(s) appears on Proxy. If held in joint tenancy, all
 persons should sign. Trustees, administrators, etc., should include title and
 authority. Corporations should provide full name of corporation and title of
 authorized officer signing the Proxy.</FONT></P>
 </TD>
 </TR>
</TABLE>

<BR>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=3>
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`
end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
