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<SEC-DOCUMENT>0001003297-06-000404.txt : 20061026
<SEC-HEADER>0001003297-06-000404.hdr.sgml : 20061026
<ACCEPTANCE-DATETIME>20061026140740
ACCESSION NUMBER:		0001003297-06-000404
CONFORMED SUBMISSION TYPE:	DEF 14A
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20061130
FILED AS OF DATE:		20061026
DATE AS OF CHANGE:		20061026
EFFECTIVENESS DATE:		20061026

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			PRO DEX INC
		CENTRAL INDEX KEY:			0000788920
		STANDARD INDUSTRIAL CLASSIFICATION:	SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841]
		IRS NUMBER:				841261240
		STATE OF INCORPORATION:			CO
		FISCAL YEAR END:			0630

	FILING VALUES:
		FORM TYPE:		DEF 14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-14942
		FILM NUMBER:		061165327

	BUSINESS ADDRESS:	
		STREET 1:		MICRO MOTORS, INC.
		STREET 2:		151 EAST COLUMBINE
		CITY:			SANTA ANA
		STATE:			CA
		ZIP:			92707
		BUSINESS PHONE:		714-241-4411

	MAIL ADDRESS:	
		STREET 1:		MICRO MOTORS INC.
		STREET 2:		151 EAST COLUMBINE
		CITY:			SANTA ANA
		STATE:			CA
		ZIP:			92707
</SEC-HEADER>
<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
<FILENAME>pdexproxy1.htm
<TEXT>
<html>

<head>
<!-- Document Prepared With E-Services, LLC HTML Software-->
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<title>Pro-Dex, Inc. DEF-14A</title>



</head>

<body lang=EN-US link=blue vlink=purple>











<p align="center"><b>SCHEDULE 14A INFORMATION</b></p>

<p align="center"><b>Proxy Statement Pursuant to Section
14(a) of the Securities Exchange Act of 1934 </b> </p>

<table border="0" width="100%" id="table6" cellspacing="0" cellpadding="0" style="border-left-width: 0px; border-right-width: 0px; border-top-width: 0px">
	<tr>
		<td colspan="4" valign="top">Filed by the Registrant
		<font face="Wingdings">x</font></td>
	</tr>
	<tr>
		<td colspan="4" valign="top">

<p style='margin-top:0pt'>Filed by a Party other than the Registrant
<font face="Wingdings">o</font></p>

		</td>
	</tr>
	<tr>
		<td colspan="4" valign="top">&nbsp;</td>
	</tr>
	<tr>
		<td colspan="4" valign="top">Check the appropriate box:</td>
	</tr>
	<tr>
		<td width="3%" valign="top"><font face="Wingdings">o</font></td>
		<td width="95%" colspan="3" valign="top">Preliminary Proxy Statement</td>
	</tr>
	<tr>
		<td width="3%" valign="top"><font face="Wingdings">o</font></td>
		<td width="95%" colspan="3" valign="top">

<p style='margin-top:0pt'>Confidential, for Use of the Commission Only (as
permitted by Rule 14a-6(e)(2))</p>

		</td>
	</tr>
	<tr>
		<td width="3%" valign="top"><font face="Wingdings">x</font></td>
		<td width="95%" colspan="3" valign="top">

<p style='margin-top:0pt'>Definitive Proxy Statement</p>

		</td>
	</tr>
	<tr>
		<td width="3%" valign="top"><font face="Wingdings">o</font></td>
		<td width="95%" colspan="3" valign="top">

<p style='margin-top:0pt'>Definitive Additional Materials</p>

		</td>
	</tr>
	<tr>
		<td width="3%" valign="top" style="border-bottom-style: none; border-bottom-width: medium"><font face="Wingdings">o</font></td>
		<td width="95%" colspan="3" valign="top" style="border-bottom-style: none; border-bottom-width: medium">

<p style='margin-top:0pt'>Soliciting Material Pursuant to &#61479;
240.14a-11(c) or &#61479; 240.14a-12</p>

		</td>
	</tr>
	<tr>
		<td width="3%" valign="top" style="border-bottom-style: none; border-bottom-width: medium">&nbsp;</td>
		<td width="95%" colspan="3" valign="top" style="border-bottom-style: none; border-bottom-width: medium">

&nbsp;</td>
	</tr>
	<tr>
		<td width="98%" colspan="4" valign="bottom" style="border-left-style: none; border-left-width: medium; border-right-style: none; border-right-width: medium; border-top-style: none; border-top-width: medium; border-bottom: 1px solid #000000">
		<p align="center">PRO-DEX,
INC.</td>
	</tr>
	<tr>
		<td width="98%" align="center" colspan="4" valign="bottom" style="border-style: none; border-width: medium">

<p style='margin-top:0pt'>(Name of
Registrant as Specified In Its Charter)</p>

		</td>
	</tr>
	<tr>
		<td width="3%" valign="top" style="border-style: none; border-width: medium">&nbsp;</td>
		<td width="3%" valign="top" style="border-style: none; border-width: medium">&nbsp;</td>
		<td width="1%" valign="top" style="border-style: none; border-width: medium">&nbsp;</td>
		<td width="91%" valign="top" style="border-style: none; border-width: medium">&nbsp; </td>
	</tr>
	<tr>
		<td width="98%" colspan="4" valign="top" style="border-style: none; border-width: medium">
		<div style="border-top: 1px solid #000000">

<p align=center style='margin-top:0pt;text-align:center'>(Name of Person(s) Filing Proxy Statement if other than the
Registrant)</p>

		</div>
		</td>
	</tr>
	<tr>
		<td width="98%" colspan="4" valign="top" style="border-top-style: none; border-top-width: medium">Payment of Filing Fee (Check the
appropriate box):</td>
	</tr>
	<tr>
		<td width="98%" colspan="4" valign="top">&nbsp;</td>
	</tr>
	<tr>
		<td width="3%" valign="top"><font face="Wingdings">x</font></td>
		<td width="95%" colspan="3" valign="top">No fee required</td>
	</tr>
	<tr>
		<td width="3%" valign="top"><font face="Wingdings">o</font></td>
		<td width="95%" colspan="3" valign="top">

<p style='margin-top:0pt'>Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.</p>

		</td>
	</tr>
	<tr>
		<td width="3%" valign="top">&nbsp;</td>
		<td width="3%" valign="top">1.</td>
		<td width="92%" colspan="2" valign="top" style="border-bottom: 1px solid #000000">

<p align=left style='text-align:left;
'>Title of each class of
securities to which transaction applies:<br>
&nbsp;</p>

		</td>
	</tr>
	<tr>
		<td width="3%" valign="top">&nbsp;</td>
		<td width="3%" valign="top">2.</td>
		<td width="92%" valign="top" colspan="2" style="border-bottom: 1px solid #000000">

<p align=left style='text-align:left;
'>Aggregate number of securities
to which transaction applies:<br>
&nbsp;</p>

		</td>
	</tr>
	<tr>
		<td width="3%" valign="top">&nbsp;</td>
		<td width="3%" valign="top">3.</td>
		<td width="92%" valign="top" colspan="2" style="border-bottom: 1px solid #000000">

<p align=left style='text-align:left;
'>Per unit price or other
underlying value of transaction computed pursuant to Exchange Act
Rule&nbsp;0-11 <br>
(set forth the amount on which the filing fee is calculated and state how it
was determined):<br>
&nbsp;</p>

		</td>
	</tr>
	<tr>
		<td width="3%" valign="top">&nbsp;</td>
		<td width="3%" valign="top">4.</td>
		<td width="92%" valign="top" colspan="2" style="border-bottom: 1px solid #000000">

<p align=left style='text-align:left;
'>Proposed maximum aggregate
value of transaction:<br>
&nbsp;</p>

		</td>
	</tr>
	<tr>
		<td width="3%" valign="top">&nbsp;</td>
		<td width="3%" valign="top">5.</td>
		<td width="92%" valign="top" colspan="2" style="border-bottom: 1px solid #000000">

<p align=left style='text-align:left;
'>Total fee paid:<br>
&nbsp;</p>

		</td>
	</tr>
	<tr>
		<td width="3%" valign="top"><font face="Wingdings">o</font></td>
		<td width="95%" valign="top" colspan="3">

<p style='margin-left:18.0pt;text-indent:-18.0pt'>Fees paid
previously with preliminary materials.</p>

		</td>
	</tr>
	<tr>
		<td width="3%" valign="top">&nbsp;</td>
		<td width="95%" valign="top" colspan="3">&nbsp;</td>
	</tr>
	<tr>
		<td width="3%" valign="top"><font face="Wingdings">o</font></td>
		<td width="95%" valign="top" colspan="3">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.&nbsp; Identify
the previous filing by registration statement number, or the Form or Schedule
and the date of its filing.</td>
	</tr>
	<tr>
		<td width="3%" valign="top">&nbsp;</td>
		<td width="95%" valign="top" colspan="3">&nbsp;</td>
	</tr>
	<tr>
		<td width="3%" valign="top">&nbsp;</td>
		<td width="3%" valign="top">1.</td>
		<td width="1%" valign="top">&nbsp;</td>
		<td width="91%" valign="top">Amount Previously Paid:&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
		</td>
	</tr>
	<tr>
		<td width="3%" valign="top">&nbsp;</td>
		<td width="3%" valign="top">2.</td>
		<td width="1%" valign="top">&nbsp;</td>
		<td width="91%" valign="top">

<p style='margin-top:0pt;margin-right:0pt;margin-bottom:0pt;
margin-bottom:.0001pt;'>Form,
Schedule or Registration Statement No.:&nbsp; &nbsp; </p>

		</td>
	</tr>
	<tr>
		<td width="3%" valign="top">&nbsp;</td>
		<td width="3%" valign="top">3.</td>
		<td width="1%" valign="top">&nbsp;</td>
		<td width="91%" valign="top">

<p style='margin-top:0pt;margin-right:0pt;margin-bottom:0pt;
margin-bottom:.0001pt;'>Filing
Party:&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; </p>

		</td>
	</tr>
	<tr>
		<td width="3%" valign="top">&nbsp;</td>
		<td width="3%" valign="top">4.</td>
		<td width="1%" valign="top">&nbsp;</td>
		<td width="91%" valign="top">

<p style='margin-top:0pt;margin-right:0pt;margin-bottom:0pt;
margin-bottom:.0001pt;'>Date
Filed:&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; </p>



		</td>
	</tr>
</table>



<div class=MsoNormal align=center style='text-align:center'>

<p style="text-indent: -18.0pt; margin-left: 36.0pt; margin-right: 0pt; margin-top: 0pt; margin-bottom: .0001pt">&nbsp;</p>

<hr size=2 width="100%" noshade color=navy align=center>

</div>





<br clear=all
style='page-break-before:always'>












<p style='line-height:12.0pt'><b>&nbsp;</b></p>

<p align=center style='text-align:center'><img width=153
height=64 src="image001.jpg"></p>



<p align=center style='text-align:center'>151 E Columbine
  Avenue<br>
Santa Ana, California 92707<br>
______________________</p>

<p style='margin-top:0pt;margin-right:0pt;margin-bottom:12.0pt;
margin-left:0pt;page-break-after:auto' align="center"><b>NOTICE OF ANNUAL MEETING OF SHAREHOLDERS<br>
TO BE HELD NOVEMBER 30, 2006</b></p>

<p style='margin-bottom:12.0pt'>To
the shareholders of Pro-Dex, Inc.:</p>

<p style='margin-top:0pt;margin-right:0pt;margin-bottom:12.0pt;
margin-left:0pt; text-indent:36pt' align="justify">The Annual Meeting of Shareholders of
Pro-Dex, Inc. (the &quot;Company&quot;) will be held at the DoubleTree Hotel Santa Ana,
201 E. MacArthur Blvd, Santa Ana, California, on Thursday, November 30, 2006,
at 8:00 A.M. Pacific Time, for the following purposes:</p>

<ol>
	<li>
	<p style='margin-top:0pt;margin-left:24pt;' align="justify">To
elect one person to serve as a Class III director of the Company for a term of
three years. The Class III nominee for election to the Board is named in the
attached Proxy Statement, which is part of this Notice. </p></li>
	<li>
	<p style='margin-top:0pt;margin-left:24pt;' align="justify">To
approve the amendment and restatement of the Company's 2004 Stock Option Plan
to increase the aggregate number of shares of Common Stock authorized for
issuance under the plan by 500,000 from 1,500,000 to 2,000,000 and to add
restricted stock grants <a name="_DV_C5">to the types of awards available for
grant under the plan</a>.</p></li>
	<li>
	<p style='margin-top:0pt;margin-left:24pt;' align="justify">To
ratify the appointment of Moss Adams, LLP as independent public accountants of
the Company for the fiscal year ending June 30, 2007.</p></li>
	<li>
	<p style='margin-top:0pt;margin-left:24pt;' align="justify">To
transact such other business as may properly come before the Annual Meeting or
any adjournments or postponements thereof.</p></li>
</ol>

<p style='margin-bottom:12.0pt;text-indent:36.0pt' align="justify">Only shareholders of record at the close of business on October
13, 2006, are entitled to notice of and to vote at the Annual Meeting and at
any adjournments or postponements of the Annual Meeting.</p>

<p style='margin-bottom:12.0pt;text-indent:36.0pt' align="justify">All shareholders are cordially invited to attend the Annual
Meeting in person. Whether or not you plan to attend the Annual Meeting, please
sign the enclosed proxy and return it in the enclosed addressed envelope. Your
promptness in returning the proxy will assist in the expeditious and orderly
processing of the proxy and will assure that you are represented at the Annual
Meeting. If you return your proxy card, you may nevertheless attend the Annual
Meeting and vote your shares in person.</p>

<div align="left">

<table class=MsoNormalTable border=0 cellpadding=0
 style='border-collapse:collapse' width="75%">
 <tr>
  <td width=307 valign=top style='width:230.4pt;padding:0pt 5.4pt 0pt 5.4pt'>

  </td>
  <td width=307 valign=top style='width:230.4pt;padding:0pt 5.4pt 0pt 5.4pt'>
  <p align=left style='margin-bottom:12.0pt;text-align:left'>By
  Order of the Board of Directors,</p>
  <p align=left style='margin-bottom:12.0pt;text-align:left'>PRO-DEX
  INC.</p>

  <p align=left style='text-align:left'>/s/ Jeffrey J. Ritchey<br>
	Corporate
  Secretary</p>
  </td>
 </tr>
</table>

</div>

<p style='line-height:12.0pt'><b>&nbsp;</b></p>

<p style='line-height:12.0pt'><b>&nbsp;</b></p>

<p align=center style='text-align:center;line-height:12.0pt'><b>&nbsp;</b></p>

<p align=center style='text-align:center;line-height:12.0pt'><b>&nbsp;</b></p>



<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>



<br clear=all
style='page-break-before:always'>










<p style='line-height:12.0pt'><b>&nbsp;</b></p>

<p align=center style='text-align:center'><img width=185
height=76 src="image002.jpg"></p>



<p align=center style='text-align:center'>151 E Columbine
  Avenue<br>
Santa Ana, California 92707<br>
<b>______________________</b></p>

<p align=center style='text-align:center'><b>&nbsp;</b></p>

<p align=center style='text-align:center'><b>ANNUAL MEETING OF
SHAREHOLDERS<br>
TO BE HELD </b><b>NOVEMBER
30, 2006</b></p>

<p align=center style='text-align:center'><b>______________________ </b></p>

<p align="center"><b>PROXY STATEMENT</b></p>

<p align=center style='text-align:center'><a name="_DV_M50"></a><b>________________________</b></p>

<p align="center"><b>SOLICITATION OF PROXIES</b></p>



<p style='margin-top:0pt; text-indent:36pt' align="justify">The accompanying
proxy is solicited by the Board of Directors of Pro-Dex, Inc. (the &quot;Company&quot;)
for use at the Company's Annual Meeting of Shareholders to be held at the
DoubleTree Hotel Santa Ana, 201 E. MacArthur Blvd, Santa Ana, California, on
Thursday, November 30, 2006, at 8:00 A.M. Pacific Time, and at any and all
adjournments or postponements thereof. Shareholders are requested to complete,
date and sign the accompanying proxy card and promptly return it in the
accompanying envelope or otherwise mail it to the Company. All shares
represented by each properly executed and unrevoked proxy received in advance
of the Annual Meeting, and that are not revoked, will be voted in the manner
specified therein, and if no direction is indicated, &quot;for&quot; each of the
proposals described on the proxy card.</p>

<p style='margin-top:12.0pt;text-indent:36.0pt' align="justify">Any shareholder has the power to revoke his or her proxy at
any time before it is voted.&nbsp; A proxy may be revoked by delivering a written
notice of revocation to the Secretary of the Company, by submitting prior to or
at the Annual Meeting a later dated proxy executed by the person executing the
prior proxy, or by attendance at the Annual Meeting and voting in person by the
person executing the proxy.</p>

<p style='margin-top:12.0pt;text-indent:36.0pt' align="justify">Any shareholder
who would like to vote in person at the Annual Meeting and owns shares in
street name, should inform his/her broker bank of such plans and request a
legal proxy from the broker. Such shareholders will need to bring the legal
proxy with them to the Annual Meeting and valid picture identification such as
a driver's license or passport in addition to documentation indicating share
ownership. Such shareholders who do not receive the legal proxy in time, should
bring with them to the Annual Meeting their most recent brokerage account
statement showing that they owned Pro-Dex, Inc. stock as of the record date.&nbsp;
Upon submission of proper identification and ownership documentation, the
Company will be able to verify ownership of its Common Stock and admit the
shareholder to the Annual Meeting; however, such shareholder will not be able
to vote his/her shares at the Annual Meeting without a legal proxy.&nbsp;
Shareholders are advised that if they own shares in street name and request a
legal proxy, any previously executed proxy will be revoked, and such
shareholder's vote will not be counted unless he/she appears at the Annual
Meeting and votes in person.</p>

<p align="justify" style="text-indent: 36pt">The Company's Board of Directors does not
presently intend to bring any business before the Annual Meeting other than the
proposals referred to in this proxy statement and specified in the Notice of Meeting.
So far as is known to the Company's Board of Directors, no other matters are to
be brought before the meeting. As to any business that may properly come before
the meeting, however, it is intended that shares represented by proxies held by
management will be voted in accordance with the judgment of the persons voting
the shares.</p>

<p align=center style='text-align:center'>Page
1</p>

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<p align="justify" style="text-indent: 36pt">This proxy statement, the accompanying proxy card and the
Company's Annual Report are being mailed to the Company's shareholders on or
about October 30, 2006. &nbsp;The cost of soliciting proxies will be borne by the
Company. The solicitation will be made by mail and expenses will include
reimbursement paid to brokerage firms and others for their expenses in
forwarding solicitation material regarding the Annual Meeting to beneficial
owners of the Company's Common Stock. Further solicitation of proxies may be
made by telephone or oral communications with some shareholders. The Company's
regular employees, who will not receive additional compensation for the
solicitation, will make such further solicitations. </p>

<p align="center"><b>OUTSTANDING SHARES AND VOTING RIGHTS</b></p>

<p align="justify" style="text-indent: 36pt"><a name="_DV_M57"></a>Only holders of record of the 9,548,992
shares of the Company's Common Stock outstanding at the close of business on October
13, 2006, are entitled to notice of and to vote at the Annual Meeting or any
adjournment or postponement thereof.&nbsp; Under Colorado law, the Company's
Articles of Incorporation and the Company's Bylaws, <a name="_DV_C6">the
holders of shares entitled to cast </a>a
majority of the <a name="_DV_C8">total votes of the outstanding
shares of stock</a> entitled to vote<a
name="_DV_C9"> on each matter, as of the record date</a>, represented in person or by proxy, will constitute a
quorum for the transaction of business at <a name="_DV_C11">the
Annual Meeting.&nbsp; If a quorum is not present with respect to a matter, the
Annual Meeting may be postponed or adjourned to allow additional time for
obtaining additional proxies or votes.&nbsp; At any subsequent reconvening of the
Annual Meeting, all proxies will be voted in the same manner as the proxies
would have been voted at the original convening of the Annual Meeting, except
for any proxies that have been effectively revoked or withdrawn prior to the
reconvening of the Annual Meeting</a>.&nbsp;
Shares of the Company's Common Stock represented in person or by
proxy (regardless of whether the proxy has authority to vote on all matters),
as well as abstentions and broker non-votes, will be counted for purposes of
determining whether a quorum is present at the meeting.</p>

<p align="justify" style="text-indent: 36pt"><a name="_DV_M58"></a>An &quot;abstention&quot; is the voluntary act of
not voting by a shareholder who is present at a meeting and entitled to vote. &nbsp;&quot;Broker
non-votes&quot; are shares of voting stock held in record name by brokers and
nominees concerning which: (i) instructions have not been received from the
beneficial owners or persons entitled to vote; (ii) the broker or nominee does
not have discretionary voting power under applicable rules or the instrument
under which it serves in such capacity; or (iii) the record holder has
indicated on the proxy or has executed a proxy and otherwise notified the
Company that it does not have authority to vote such shares on that matter.</p>

<p align="justify" style="text-indent: 36pt"><a name="_DV_M59"></a>Assuming a quorum is present, for
Proposal 1 (the election of directors) the nominee for director for the Class
III position receiving the highest number of affirmative votes will be elected;
votes withheld and votes against a nominee have no practical effect. &nbsp;<a
name="_DV_M67"></a>In matters other than election of directors, assuming that a
quorum is present<b>, </b><a name="_DV_C20">for each matter, the matter
will be approved if the votes cast in favor of the matter exceed the votes cast
opposing the matter. &nbsp;In</a> such
matters, abstentions and broker non-votes <a name="_DV_C22">will
not be included in the vote totals and, therefore, will have no effect on the
vote.</a> &nbsp;Each shareholder will be entitled to one vote, in
person or by proxy, for each share of Common Stock held of record on the record
date. Votes cast at the meeting will be tabulated by the person or persons
appointed by the Company to act as inspectors of election for the meeting.</p>

<p align=left style='text-align:left'><b>Recommendation
of the Company's Board of Directors</b></p>

<p align="justify" style="text-indent: 36pt"><a name="_DV_M61"></a>The Company's Board of Directors recommends
that the Company's shareholders vote &quot;for&quot; each of the proposals described in
this proxy statement and the accompanying Notice of Meeting.</p>

<p align="justify" style="text-indent: 36pt"><a name="_DV_M62"></a><b>THE PROPOSALS TO BE VOTED UPON AT
THE MEETING ARE DISCUSSED IN DETAIL IN THIS PROXY STATEMENT. YOU ARE STRONGLY
URGED TO READ AND CONSIDER CAREFULLY THIS PROXY STATEMENT IN ITS ENTIRETY.</b><a
name="_DV_M63"></a></p>

<p align=left style='text-align:left;text-indent:0pt'><b>&nbsp;</b></p>

<p align=left style='text-align:left;text-indent:0pt'><b>&nbsp;</b></p>

<p align=center style='text-align:center'>Page 2</p>

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style='page-break-before:always'>










<p align=left style='text-align:left;text-indent:0pt'><b>SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT</b></p>

<p style='text-indent:0pt'><a name="_DV_M64"></a>The following table
sets forth certain information with respect to the beneficial ownership of the
Company's Common Stock as of September 29, 2006 by (i) each person known by the
Company to beneficially own more than 5% of the outstanding shares of Common
Stock, (ii) each of the Company's current and nominated directors, (iii) each
of the Named Executive Officers (as hereinafter defined), and (iv) all current
directors and Named Executive Officers of the Company as a group.</p>



<div align="left">



<table class=MsoNormalTable border=0 cellpadding=0
 style='border-collapse:collapse' width="85%">
 <tr>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt'>
  <p><b><u><font size="2">Name of Beneficial Owner</font></u><sup><font size="2">(1)</font></sup></b></p>
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt'>
  <p align=center style='text-align:right;'><b><font size="2">Number of Shares of Common <u>
	<br>
	Stock Beneficially
  Owned</u></font><sup><font size="2">(2)</font></sup></b></p>
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt'>
  <p align=center style='text-align:right;'><b><font size="2">Percent of Common Stock <u>
	<br>
	Beneficially Owned</u></font><sup><font size="2">(3)</font></sup></b></p>
  </td>
 </tr>
 <tr>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt'>
  <p><font size="2">First Wilshire Securities
  Management Inc.<br>
	1224 East Green Street<br>
	Pasadena, CA 91106</font></p>
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt' align="right">

  <p><font size="2">&nbsp;&nbsp;&nbsp; 1,377,072
	</font> </p>
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt' align="right">


  <p><font size="2">14.4%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font></p>
  </td>
 </tr>
 <tr>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt'>
  &nbsp;
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt' align="right">

  &nbsp;</td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt' align="right">


  &nbsp;</td>
 </tr>
 <tr>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt'>
  <p><font size="2">Ronald G. Coss <br>
	3 Overlook Drive<br>
	Newport Coast, CA 92657</font></p>
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt' align="right">

  <p><font size="2">1,316,879<sup>(4)</sup> </font> </p>
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt' align="right">

  <p><font size="2">13.6%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font></p>
  </td>
 </tr>
 <tr>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt'>

  &nbsp;

  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt' align="right">

  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt' align="right">

  </td>
 </tr>
 <tr>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt'>
  <p><font size="2">George J. Isaac </font> </p>
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt' align="right">
  <p><font size="2">149,900</font><sup><font size="2">(4)</font></sup></p>
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt' align="right">
  <p><font size="2">&nbsp;1.6%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font> </p>
  </td>
 </tr>
 <tr>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt'>
  <p><font size="2">Mark P. Murphy</font></p>
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt' align="right">
  <p><font size="2">78,200</font><sup><font size="2">(4)</font></sup></p>
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt' align="right">
  <p><font size="2">&nbsp;*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font></p>
  </td>
 </tr>
 <tr>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt'>
  <p><font size="2">Michael A. Mesenbrink</font></p>
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt' align="right">
  <p><font size="2">65,000</font><sup><font size="2">(4)</font></sup></p>
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt' align="right">
  <p><font size="2">&nbsp;*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font></p>
  </td>
 </tr>
 <tr>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt'>
  <p><font size="2">Valerio L. Giannini</font></p>
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt' align="right">
  <p><font size="2">65,000</font><sup><font size="2">(4)</font></sup></p>
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt' align="right">
  <p><font size="2">&nbsp;*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font></p>
  </td>
 </tr>
 <tr>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt'>

  &nbsp;

  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt' align="right">

  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt' align="right">

  </td>
 </tr>
 <tr>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt'>
  <p><font size="2">Patrick Johnson </font> </p>
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt' align="right">
  <p><font size="2">567,216</font><sup><font size="2">(4)</font></sup></p>
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt' align="right">
  <p><font size="2">5.6%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font> </p>
  </td>
 </tr>
 <tr>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt'>
  <p><font size="2">Jeffrey J. Ritchey&nbsp;&nbsp;
	</font> </p>
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt' align="right">
  <p><font size="2">112,000</font><sup><font size="2">(4)</font></sup></p>
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt' align="right">
  <p><font size="2">1.2%&nbsp;&nbsp;&nbsp;&nbsp; </font></p>
  </td>
 </tr>
 <tr>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt'>
  <p><font size="2">Ajay Kumar</font></p>
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt' align="right">
  <p><font size="2">30,000</font><sup><font size="2">(4)</font></sup></p>
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt' align="right">
  <p><font size="2">&nbsp;*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font></p>
  </td>
 </tr>
 <tr>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt'>

  &nbsp;

  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt' align="right">

  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt' align="right">

  </td>
 </tr>
 <tr>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt'>
  <p align=left style='text-align:left'><font size="2">All Executive Officers
  and directors as a group (7 persons) </font> </p>
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt' align="right">
  <p><font size="2">1,062,316</font><sup><font size="2">(4)</font></sup></p>
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt' align="right">
  <p><font size="2">10.3%</font><b><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	</font> </b></p>
  </td>
 </tr>
 <tr>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt'>
  <p><font size="2">&nbsp;&nbsp; </font> </p>
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt' align="right">
  <p align=left style='text-align:left;'><font size="2">&nbsp;&nbsp;
	</font> </p>
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt' align="right">
  <p><font size="2">&nbsp;&nbsp;
  </font>
  </p>
  </td>
 </tr>
</table>

</div>

<p style='margin-left:36.0pt;text-indent:-36.0pt'>__________________________</p>

<p style='margin-top:6.0pt;margin-right:0pt;margin-bottom:0pt;
margin-left:36.0pt;margin-bottom:.0001pt;text-indent:-36.0pt'>* Less than 1%.</p>

<ol>
	<li>
	<p style='margin-top:6.0pt;margin-right:0pt;margin-bottom:0pt;
margin-bottom:.0001pt;' align="justify">Unless otherwise indicated, the address is c/o
Pro-Dex, Inc., 151 E. Columbine Avenue, Santa Ana, California 92707.</p></li>
	<li>
	<p style='margin-top:6.0pt;margin-right:0pt;margin-bottom:0pt;
margin-bottom:.0001pt;' align="justify">Unless otherwise indicated, to the Company's
knowledge, the persons named in the table have sole voting and sole investment
power with respect to all shares beneficially owned, subject to community
property and similar laws, where applicable.</p></li>
	<li>
	<p style='margin-top:6.0pt;margin-right:0pt;margin-bottom:0pt;
margin-bottom:.0001pt;' align="justify">Applicable percentage ownership is based on 9,548,992
shares of Common Stock outstanding as of September
29, 2006.&nbsp; Any securities not outstanding but subject to <a name="_DV_C25">warrants
or</a> options exercisable as of September
29, 2006 or exercisable within 60 days after such date are deemed to be
outstanding for the purpose of computing the percentage of outstanding Common
Stock beneficially owned by the person holding such warrants
or options but are not deemed to be outstanding for the purpose
of computing the percentage of Common Stock beneficially owned by any other
person.<a name="_DV_M75"></a><a name="_DV_M76"></a></p></li>
	<li>
	<p style='margin-top:6.0pt;margin-right:0pt;margin-bottom:0pt;
margin-bottom:.0001pt;' align="justify">Includes shares of Common Stock
	<a name="_DV_C28">issuable
upon the exercise of</a> warrants
and options which were exercisable as of September 29, 2006 or exercisable
within 60 days after September 29, 2006, as follows: Mr. Coss; <a name="_DV_C18">100,000</a><a
name="_DV_M78"></a> shares, Mr. Isaac, 45,000 shares; Mr. Murphy, 30,000
shares; Mr. Mesenbrink, 65,000 shares; Mr. Giannini, 45,000 shares; Mr.
Johnson, 494,316 shares; Mr. Ritchey; 110,000 shares, Mr. Kumar, 30,000 shares
and all current directors and Named Executive Officers as a group,
	<a
name="_DV_M79"></a>819,316 shares. </p></li>
</ol>

<p align=center style='text-align:center;line-height:12.0pt;
page-break-after:avoid'><b>Proposal No. 1</b></p>

<p align=center style='margin-top:12.0pt;text-align:center;
page-break-after:avoid'><b>ELECTION OF DIRECTORS</b></p>
<p align=center style='margin-top:12.0pt;text-align:justify;
page-break-after:avoid; text-indent:36pt'>The Company's
Articles of Incorporation provide for the classification of the Company's Board
of Directors.&nbsp; The Board of Directors, which currently is composed of four (4)
members, is divided into three (3) classes.&nbsp; Generally, absent earlier
resignation of a Class member, one Class stands for re-election at each annual
meeting of shareholders. The Board of Directors currently is comprised of two
Class I directors (George J. Isaac and Michael A. Mesenbrink), one Class II
director (Valerio L. Giannini), and one Class III director (Mark P. Murphy).&nbsp; <a
name="_DV_C14">Prior to October 18, 2006, the Board of Directors was
composed of five directors.&nbsp; On that date, Patrick L. Johnson tendered his
resignation as a Class II director and thereafter the size of the Board of
Directors was reduced from five to four.</a></p>

<p align=center style='text-align:center'>Page 3</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>



<br clear=all
style='page-break-before:always'>










<p style='margin-top:12.0pt;text-indent:36.0pt'>&nbsp;</p>

<p style='margin-top:12.0pt;text-indent:36.0pt' align="justify">The term of the
Class I directors expires in 2007.&nbsp; The term of the Class II director expires
in 2008. &nbsp;The term of the Class III director expires in 2006 and upon election,
the term of each such director shall expire again in 2009.</p>

<p align="justify" style="text-indent: 36pt">Certain information
with respect to each of the nominees who will be presented at the Annual
Meeting by the Board of Directors for election as a director is set forth
below. Although it is anticipated that each nominee will be available to serve
as a director, should that nominee become unavailable to serve, the proxies
will be voted for such other person as may be designated by the Company's Board
of Directors.</p>

<p align="justify" style="text-indent: 36pt">Unless the authority to vote for directors has been withheld in
the proxy, the persons named in the enclosed proxy intend to vote at the Annual
Meeting for the election of the nominee presented below. In the election of
directors, assuming a quorum is present, the Class III nominee receiving the
highest number of votes cast at the meeting will be elected as a director of
the Company.&nbsp; </p>



<p style='margin-top:0pt' align="center"><b>DIRECTORS</b></p>



<p style='text-indent:36.0pt'>Set forth
below is certain information with respect to the Company's continuing directors
and director nominees.</p>
<div align="center">
	<table class="MsoNormalTable" border="0" cellpadding="0" width="624" style="width: 90%; border-collapse: collapse; margin-left: 4.65pt">
		<tr style="height:12.75pt">
			<td nowrap valign="bottom" style="border-left: 1.0pt solid windowtext; border-right: medium none; border-top: 1.0pt solid windowtext; border-bottom: 1.0pt solid windowtext; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal"><b>Name</b></td>
			<td nowrap valign="bottom" style="border-left: medium none; border-right: medium none; border-top: 1.0pt solid windowtext; border-bottom: 1.0pt solid windowtext; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal" align="center" style="text-align:center"><b>Age</b></td>
			<td nowrap valign="bottom" style="border-left: medium none; border-right: medium none; border-top: 1.0pt solid windowtext; border-bottom: 1.0pt solid windowtext; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal"><b>Position with Company</b></td>
			<td nowrap valign="bottom" style="border-left: medium none; border-right: medium none; border-top: 1.0pt solid windowtext; border-bottom: 1.0pt solid windowtext; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal"><b>Class</b></td>
			<td nowrap valign="bottom" style="border-left: medium none; border-right: 1.0pt solid windowtext; border-top: 1.0pt solid windowtext; border-bottom: 1.0pt solid windowtext; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal"><b>Class Expiration Year</b></td>
		</tr>
		<tr style="height:12.75pt">
			<td nowrap valign="bottom" style="border-left: 1.0pt solid windowtext; border-right: medium none; border-top: medium none; border-bottom: medium none; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal">Mark P. Murphy</td>
			<td nowrap valign="bottom" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal" align="center" style="text-align:center">47</td>
			<td nowrap valign="bottom" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal">Director and Nominee</td>
			<td nowrap valign="bottom" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal">Class III</td>
			<td nowrap valign="bottom" style="border-left: medium none; border-right: 1.0pt solid windowtext; border-top: medium none; border-bottom: medium none; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal" align="center" style="text-align:center">2009</td>
		</tr>
		<tr style="height:12.75pt">
			<td nowrap valign="bottom" style="border-left: 1.0pt solid windowtext; border-right: medium none; border-top: medium none; border-bottom: medium none; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			</td>
			<td nowrap valign="bottom" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			</td>
			<td nowrap valign="bottom" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal">Chief Executive Officer and President</td>
			<td nowrap valign="bottom" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			</td>
			<td nowrap valign="bottom" style="border-left: medium none; border-right: 1.0pt solid windowtext; border-top: medium none; border-bottom: medium none; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			</td>
		</tr>
		<tr style="height:12.75pt">
			<td nowrap valign="bottom" style="border-left: 1.0pt solid windowtext; border-right: medium none; border-top: medium none; border-bottom: medium none; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal">George J. Isaac</td>
			<td nowrap valign="bottom" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal" align="center" style="text-align:center">61</td>
			<td nowrap valign="bottom" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal">Director&#185;</td>
			<td nowrap valign="bottom" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal">Class I</td>
			<td nowrap valign="bottom" style="border-left: medium none; border-right: 1.0pt solid windowtext; border-top: medium none; border-bottom: medium none; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal" align="center" style="text-align:center">2007</td>
		</tr>
		<tr style="height:12.75pt">
			<td nowrap valign="bottom" style="border-left: 1.0pt solid windowtext; border-right: medium none; border-top: medium none; border-bottom: medium none; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal">Michael A. Mesenbrink</td>
			<td nowrap valign="bottom" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal" align="center" style="text-align:center">59</td>
			<td nowrap valign="bottom" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal">Director&#185;</td>
			<td nowrap valign="bottom" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal">Class I</td>
			<td nowrap valign="bottom" style="border-left: medium none; border-right: 1.0pt solid windowtext; border-top: medium none; border-bottom: medium none; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal" align="center" style="text-align:center">2007</td>
		</tr>
		<tr style="height:13.5pt">
			<td nowrap valign="bottom" style="border-left: 1.0pt solid windowtext; border-right: medium none; border-top: medium none; border-bottom: 1.0pt solid windowtext; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal">Valerio L. Giannini</td>
			<td nowrap valign="bottom" style="border-left: medium none; border-right: medium none; border-top: medium none; border-bottom: 1.0pt solid windowtext; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal" align="center" style="text-align:center">68</td>
			<td nowrap valign="bottom" style="border-left: medium none; border-right: medium none; border-top: medium none; border-bottom: 1.0pt solid windowtext; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal">Director&#185;</td>
			<td nowrap valign="bottom" style="border-left: medium none; border-right: medium none; border-top: medium none; border-bottom: 1.0pt solid windowtext; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal">Class II</td>
			<td nowrap valign="bottom" style="border-left: medium none; border-right: 1.0pt solid windowtext; border-top: medium none; border-bottom: 1.0pt solid windowtext; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal" align="center" style="text-align:center">2008</td>
		</tr>
	</table>
</div>



<p><a name="_DV_M96"></a>__________________________</p>



<p><a name="_DV_M97"></a>(1)
Member of the Audit and Compensation Committees</p>

<p style='margin-top:12.0pt;text-indent:36.0pt' align="justify">Messrs. Giannini, Mesenbrink and Isaac are &quot;independent&quot;
directors as such term is defined in Rule 4200(a)(15) of the NASD listing
standards.&nbsp; </p>

<p style='margin-top:12.0pt;text-indent:36.0pt' align="justify">The Board of
Directors is of the opinion that the election to the Company's Board of
Directors of the Class III Director nominee identified herein, who has
consented to serve if elected, would be in the Company's best interests. The
name of the Class III Director nominee to be elected is Mark P. Murphy.</p>

<p align=center style='margin-top:12.0pt;text-align:center;
text-indent:36.0pt'><b>THE BOARD OF DIRECTORS RECOMMENDS
THAT YOU VOTE &quot;FOR&quot; ELECTION OF THE NOMINEE NAMED BELOW AS CLASS III DIRECTOR.<a
name="_DV_M100"></a></b></p>

<p style='margin-top:12.0pt;text-indent:36.0pt' align="justify">Mark P. Murphy
(47), Class III Director and nominee, was appointed the Company's Chief
Executive Officer and President in August 2006. Prior to August 2006, Mr.
Murphy served as the Chief Operating Officer and a director of Kyocera Tycom
Corporation, a manufacturing company that designs and sells precision cutting
instruments, where he managed the firm's 400 employees worldwide.&nbsp; Prior
to Kyocera Tycom, Mr. Murphy was Chief Operating Officer and a director of
Dynamotion Corporation and was with Arthur Young &amp; Co's consulting
practice.&nbsp; Mr. Murphy earned a BA in Business Administration and an MBA in
Finance from California State University at Fullerton.&nbsp; He joined the
Pro-Dex board of directors in 2002.</p>

<p align=center style='text-align:center'>Page
4</p>

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<p style='margin-bottom:12.0pt' align="center"><b>CONTINUING DIRECTORS</b></p>

<p style='text-indent:36.0pt' align="justify">George J. Isaac (61), Class I
Director,<i> </i>is a Certified Public Accountant and has had his own CPA firm
since 2003.&nbsp; Mr. Isaac served as a consultant to the Company and its
predecessor since 1978, became a member of the Company's Board of Directors in
July 1995, and was the Company's Chief Financial Officer from August 1995 to
July 2002 and Secretary from July 2002 to October 2003.&nbsp; Mr. Isaac was a
principal in the certified public accounting firm of Joseph B. Cohan and
Associates, Worcester, Massachusetts.&nbsp; Mr. Isaac is a director of Professional
Sales Associates, Inc. (&quot;PSA&quot;), a dental product sales organization, and
Commerce Bank &amp; Trust.&nbsp; Mr. Isaac has been a director of the Company since
1995.</p>

<p style='text-indent:36.0pt' align="justify">Michael A. Mesenbrink<b> </b>(59),
Class I Director, is currently a venture partner with Vangel Capital Group and
prior to that was CEO of Center For Advanced Laparoscopic Surgery, a national
bariatric surgery practice and company, and has been in the medical device and
health care industry for 32 years. He has served as CEO of a multi national
sports medicine company, Innovation Sports, Inc. and Executive Vice President of
a public medical device company, Medstone International. He was co founder of
Medical Imaging Centers of America (MICA) that went public and had a market
capitalization of $225 million. Mr. Mesenbrink was formerly with Johnson &amp; Johnson;
Becton-Dickinson and has founded several companies and held many senior
management roles in cardiovascular, surgery, and radiology product based
companies.&nbsp; Mr. Mesenbrink received a BA degree in Zoology/Chemistry from San Jose State University in 1970 and did postgraduate studies at the Menai Bridge Ocean
Science Laboratories, University of Wales, U.K.&nbsp; Mr. Mesenbrink has been a
director of the Company since 2002.</p>

<p style='text-indent:36.0pt' align="justify">Valerio L. Giannini (68), Class
II Director, has been a principal of Newcap Partners, a Los Angeles based
private investment banking firm since 1995.&nbsp; He previously served as CEO of a
subsidiary of the Geneva Companies, which was then a subsidiary of Chemical
Bank.&nbsp; Mr. Giannini joined Geneva from Cumberland Investment Group, a New York based private investment banking partnership. Prior to Cumberland, he held
appointments as Director of White House Operations, and as a Deputy Assistant
Secretary of Commerce. Mr. Giannini was also previously with the Corporate
Planning Division of IIT Research Institute (Chicago) and the Corporate Finance
department of Kidder, Peabody &amp; Co. New York.&nbsp; Mr. Giannini holds a
BSE from Princeton University. Mr. Giannini has been a director of the Company
since 2002.</p>



<p align=center style='text-align:center;page-break-after:avoid'><b>BUSINESS EXPERIENCE OF KEY MANAGEMENT</b></p>



<p style='text-indent:36.0pt'>Set forth
below is information concerning other non-director key management personnel of
the Company. <a name="_DV_M109"></a></p>

<p style='margin-top:12.0pt;text-indent:36.0pt' align="justify">Jeffrey J. Ritchey (43), is the
Company's<i> </i>Treasurer, Chief Financial Officer and Secretary. Mr. Ritchey
joined the Company's Micro Motors subsidiary as Controller in August 2001 and became
the Company's Chief Financial Officer in July 2002 and the Secretary in October
2003.&nbsp; Mr. Ritchey was the Chief Executive Officer of the Company from April
2006 to August 2006.&nbsp; Mr. Ritchey's previous experience includes serving as the
Controller and Finance Director of Kyocera Tycom Corporation from 1997 to 2001
and corporate and operational positions at Hughes Electronics and DIRECTV
(subsidiaries of General Motors) from 1990 to 1997.&nbsp; Mr. Ritchey received B. S.
degrees in Economics and Finance and a M.S. degree in Finance from the University of Arizona and has been a Chartered Financial Analyst (&quot;CFA&quot;) charterholder
since 1992.</p>










<p style='text-indent:36.0pt' align="justify">Patrick L. Johnson (45), is the
Company's<i> </i>Executive Vice President of Business Development.&nbsp; He joined
the Company's Micro Motors subsidiary as Vice President and General Manager in
March 2000 and served as the President and CEO of the Company from September
2002 to April 2006 and as a director of the
Company from December 2005 to October 2006.&nbsp; Mr. Johnson also
served as General Manager of Analytic Endodontics, Inc. (a division of Sybron
Dental) from 1997 to 2000 and General Manager of Tycom Dental, Inc. from 1996
to 1997, both dental related product manufacturers.&nbsp; Prior to that, Mr. Johnson
served as Vice-President and General Manager of Dabico, Inc., a manufacturing
company that specialized in the design and manufacture of in-ground service
equipment for commercial and military aircraft.&nbsp; Mr. Johnson received B.A.
degrees in Legal Studies and Philosophy from the University of California at Santa Cruz and a MBA degree from Pepperdine University. </p>

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<p style='margin-top:12.0pt;text-indent:36.0pt' align="justify">Ajay Kumar (40),
is the Company's<i> </i>Vice President of Product Development. Mr. Kumar joined
the Company in August 2005. &nbsp;From 2001 to 2004, he served as a Director of New
Product Development for the Dental Division of Zimmer Incorporated, where he
led a team of R&amp;D engineers and designers to develop the Company's next
generation implant designs. Mr. Kumar is named on 12 issued and 15 pending
patents. His previous positions included Manager of the R&amp;D Department and
Projects for Nobel Biocare from 1998 to 2001, and R&amp;D Engineer for
Steri-Oss from 1996 to 1998. &nbsp;Mr. Kumar has an MBA from University of California, Irvine and a Masters in Biomedical Engineering from Rutgers University. In
addition, he has a MSME from the University of Southern Illinois and a BSME
from the India Institute of Technology, Kurukshetra, India.</p>

<p align="center"><b><a name="_DV_C72">INTERESTS OF CERTAIN
PERSONS IN MATTERS TO BE ACTED UPON</a></b></p>

<p style='margin-top:12.0pt;text-indent:36.0pt' align="justify"><a
name="_DV_C73">The Company's executive officers have an interest in
Proposal No. 2 to approve the amendment and restatement of the 2004 Stock
Option Plan to increase the aggregate number of shares of Common Stock
authorized for issuance under the plan by 500,000 from 1,500,000 to 2,000,000
and </a><a name="_DV_C34">add</a> restricted stock<a name="_DV_C35">
grants to the types of awards available for grant under the plan</a> because such officers may
receive grants of stock options or restricted stock under the 2004 Stock Option
Plan.&nbsp; Because awards under the 2004 Stock Option Plan are discretionary, no
future awards under the 2004 Stock Option Plan are determinable at this
time for the Company's executive officers. </p>

<p align="center"><b>BOARD OF
DIRECTORS MEETINGS AND RELATED MATTERS</b></p>

<p align="justify" style="text-indent: 36pt">During the fiscal year ended June 30, 2006,
the Board of Directors held nine meetings and there were four actions by
unanimous written consent.&nbsp; Included in the nine meetings were meetings of the
Independent Members Committee that consists of three Board members, Michael A.
Mesenbrink, George Isaac and Valerio L. Giannini.&nbsp; George Isaac replaced Mark
P. Murphy on the Committee in August 2006.&nbsp; The Independent Members Committee
is comprised entirely of non-employee, &quot;independent&quot; (as defined in Rule
4200(a)(15) of the NASD listing standards) directors.&nbsp; In addition to general
oversight duties, the Independent members Committee performed the search for
the new Chief Executive Officer in fiscal year 2006.&nbsp; No director attended less
than 75% of the aggregate of all meetings of the Board of Directors and all
meetings of committees of the Board of Directors upon which he served.<a
name="_DV_M122"></a></p>

<p align="justify" style="text-indent: 36pt">The Board of Directors has an Audit Committee that consists of
three Board members, Michael A. Mesenbrink, George Isaac and Valerio L.
Giannini.&nbsp; Mark P. Murphy was replaced on the Audit Committee by George Isaac in August 2006.&nbsp; The Audit Committee is comprised entirely of non-employee,
&quot;independent&quot; (as defined in Rule 4200(a)(15) of the NASD listing standards)
directors and operates under a written charter adopted by the Board of
Directors.&nbsp; The duties of the Audit Committee include meeting with the
independent public accountants of the Company to review the scope of the annual
audit and to review the quarterly and annual financial statements of the
Company before the statements are released to the Company's shareholders. The
Audit Committee also evaluates the independent public accountants' performance
and makes recommendations to the Board of Directors as to whether the
independent public accounting firm should be retained by the Company for the
ensuing fiscal year. &nbsp;A copy of the Audit Committee's current charter may be
found at the Company's website at <u><font color="#0000FF">www.pro-dex.com</font></u>.&nbsp;
The charter may be found as follows:&nbsp; From our main web page, first click on &quot;Investor Relations,&quot; and then click on &quot;Governance,&quot; and then click on &quot;Audit Committee Charter.&quot;&nbsp;
The Audit Committee and Board of Directors have confirmed that the Audit
Committee does and will continue to include at least three members and has
confirmed that Mr. Isaac meets applicable NASD listing standards for
designation as an &quot;Audit Committee Financial Expert&quot; and being &quot;independent&quot;
based upon his experience noted herein.&nbsp; The Audit Committee held five meetings
during the fiscal year ended June 30, 2006.&nbsp;&nbsp; </p>



<p align=center style='text-align:center'><a name="_DV_M123"></a>Page
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<p style='text-indent:36.0pt' align="justify">The Board of Directors has a
Compensation Committee that consists of three Board members, Michael A.
Mesenbrink, George Isaac and Valerio L. Giannini.&nbsp; George Isaac replaced Mark
P. Murphy on the Compensation Committee in August 2006.&nbsp; The Compensation
Committee is comprised entirely of non-employee, &quot;independent&quot; (as defined in
Rule 4200(a)(15) of the NASD listing standards) directors and operates under a
written charter adopted by the Board of Directors, a copy of which may be found
at the Company's website at www.pro-dex.com.&nbsp; The charter may be found as
follows:&nbsp; From our main web page, first click on &quot;Investor Relations,&quot; and then
click on &quot;Governance,&quot; and then click on &quot;Compensation Committee Charter&quot;. &nbsp;The
Compensation Committee establishes compensation policies applicable to the Company's
executive officers.&nbsp; The Compensation Committee held one meeting during the
fiscal year ended June 30, 2006.</p>



<p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;text-indent:36.0pt'><a
name="_DV_M124"></a>The
entire Board of Directors performs the functions of a nominating committee.&nbsp; In
such capacity, the Board identifies and reviews the qualifications of candidate
nominees to the Board of Directors.&nbsp; The Board will consider candidate nominees
for election as a director who are recommended by shareholders.&nbsp; Recommendations
should be sent to the Secretary of the Company and should include the candidate's
name and qualifications and a statement from the candidate that he or she
consents to being named in the proxy statement and will serve as a director if
elected. In order for any such candidate to be considered for nomination and,
if nominated, to be included in the proxy statement, such recommendation must
be received by the Secretary not less than 120&nbsp;days prior to the anniversary date of
the Company's mailing of its proxy statement for the most recent annual meeting
of shareholders</p>

<p style='margin:0pt;margin-bottom:.0001pt' align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>

<p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;text-indent:36.0pt'>The Board of Directors
believes that it is desirable that directors possess an understanding of the
Company's business environment and have the knowledge, skills, expertise and
such diversity of experience that the Board's ability to manage and direct the
affairs and business of the Company is enhanced.&nbsp;&nbsp; Additional considerations
may include an individual's capacity to enhance the ability of committees of
the Board to fulfill their duties and/or satisfy any independence requirements
imposed by law, regulation or listing requirements.&nbsp; The Board of Directors may
receive candidate nomination suggestions from current Board members, Company
executive officers or other sources, which may be either unsolicited or in
response to requests from the Board for such candidates.&nbsp; The Board may also,
from time to time, engage firms that specialize in identifying director
candidates.&nbsp; Once a person has been identified by the Board as a potential
candidate, the Board may collect and review publicly available information
regarding the person to assess whether the person should be considered further.
If the Board determines that the candidate warrants further consideration, a
member of the Board may contact the person. Generally, if the person expresses
a willingness to be considered and to serve on the Board, the Board may request
information from the candidate, review the person's accomplishments and
qualifications and may conduct one or more interviews with the candidate.&nbsp; The
Board may consider all such information in light of information regarding any
other candidates that the Board might be evaluating for nomination to the Board
of Directors.&nbsp; Board members may also contact one or more references provided
by the candidate or may contact other members of the business community or other
persons that may have greater first-hand knowledge of the candidate's
accomplishments.&nbsp; With the nominee's consent, the Board may also engage an
outside firm to conduct background checks on candidates as part of the nominee
evaluation process.&nbsp; The Board's evaluation process does not vary based on the
source of the recommendation, though in the case of a shareholder nominee, the
Board may take into consideration the number of shares held by the recommending
shareholder and the length of time that such shares have been held. </p>

<p style='margin-top:12.0pt;text-indent:36.0pt' align="justify">As of June 30,
2006, four of the five members of the Board were &quot;independent&quot; directors (as
defined in Rule 4200(a)(15) of the NASD listing standards).&nbsp; As
a result of the resignation of Patrick L. Johnson as a director on October 18,
2006, three of the four members of the current Board are &quot;independent&quot;
directors.&nbsp; No paid consultants were engaged by the Company, the
Board or any of its committees for the purposes of identifying qualified,
interested Board candidates.&nbsp; A copy of the Board Procedures Concerning
Nominations may be found at the Company's website at <u><font color="#0000FF">www.pro-dex.com</font></u>.&nbsp; The Procedures may be
found as follows:&nbsp; From our main web page, first click on &quot;Investor Relations,&quot; and then click on &quot;Governance,&quot; and then click on &quot;Procedures Governing the
Nominating Function&quot;.&nbsp; </p>

<p align=center style='text-align:center'><a name="_DV_M125"></a>Page
7</p>

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<p style='margin-top:12.0pt;text-indent:36.0pt' align="justify">Directors of
the Company who are not also employees received a fee of $3,000 per quarter
plus $1,000 per board meeting attended, plus $750 per each day of committee
meetings attended, plus an annual option grant, together with reasonable
expenses of attendance at board meetings and committee meetings.&nbsp; </p>

<p align="center"><b>COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION</b></p>

<p style='margin-top:12.0pt;text-indent:36.0pt' align="justify">No director or executive officer of the Company serves as
an officer, director or member of a compensation committee of any other entity
for which an executive officer or director thereof is also a member of the
Company's Board of Directors.</p>

<p align="center"><b><a name="_DV_C96">FAMILY RELATIONSHIPS</a></b></p>

<p style='margin-top:10.0pt; text-indent:36pt'><a name="_DV_C97">There
are no family relationships among the Company's executive officers and
directors.</a></p>

<p align="center"><b>COMPENSATION OF EXECUTIVE OFFICERS
AND MANAGEMENT</b></p>

<p align="justify" style="text-indent: 36pt">The following table sets forth certain
compensation information for the three fiscal years ended June 30, 2006, 2005
and 2004, respectively, by the Chief Executive Officer and the other highest
paid executive officers of the Company serving as such at the end of the fiscal
year ended 2006 whose aggregate total annual salary and bonus for such year
exceeded $100,000 (the &quot;Named Executive Officers&quot;).</p>

<p style='margin-top:0pt' align="center"><a name="_DV_M133"></a><b><u>SUMMARY
COMPENSATION TABLE</u></b></p>

<div align="center">

<table class=MsoNormalTable border=0 cellpadding=0
 style='border-collapse:collapse' width="90%">
 <tr>
  <td valign=bottom style='padding:0pt; '>

  </td>
  <td valign=bottom style='padding:0pt; '>

  </td>
  <td colspan=3 valign=bottom style='padding:0pt; '>
  <p align=center style='text-align:center;page-break-after:
  avoid'><b><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Annual
  Compensation&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  </u></b></p>
  </td>
  <td valign=bottom style='padding:0pt; '>
  <p align=center style='text-align:center;page-break-after:
  avoid'><b>Long Term <br>
	<u>Compensation </u> </b></p>
  </td>
 </tr>
 <tr>
  <td valign=bottom style='padding:0pt; '>
  <p align=center style='text-align:center;page-break-after:
  avoid'><b>Name and <br>
	<u>Principal Position </u> </b></p>
  </td>
  <td valign=bottom style='padding:0pt; '>
  <p align=center style='text-align:center;page-break-after:
  avoid'><b>Fiscal <br>
	<u>Year </u> </b></p>
  </td>
  <td valign=bottom style='padding:0pt; '>
  <p align=center style='text-align:center;page-break-after:
  avoid'><b><u>Salary </u></b></p>
  </td>
  <td valign=bottom style='padding:0pt; '>
  <p align=center style='text-align:center;page-break-after:
  avoid'><b><u>Bonus </u></b></p>
  </td>
  <td valign=bottom style='padding:0pt; '>
  <p align=center style='text-align:center;page-break-after:
  avoid'><b>All Other <br>
	<u>Compensation <sup>(2)</sup>
  </u> </b></p>
  </td>
  <td valign=bottom style='padding:0pt; '>
  <p align=center style='text-align:center;page-break-after:
  avoid'><b>Securities <br>
	Underlying <br>
	<u>Stock Options </u> </b></p>
  </td>
 </tr>
 <tr>
  <td valign=bottom style='padding:0pt; '>

  </td>
  <td valign=bottom style='padding:0pt; '>

  &nbsp;

  </td>
  <td valign=bottom style='padding:0pt; '>

  </td>
  <td valign=bottom style='padding:0pt; '>

  </td>
  <td valign=bottom style='padding:0pt; '>

  </td>
  <td valign=bottom style='padding:0pt; '>

  </td>
 </tr>
 <tr>
  <td valign=bottom style='padding:0pt; '>
  <p style='page-break-after:avoid'>Patrick Johnson <sup>(3)</sup>
  <br>
	<font size="2">Executive Vice President of Business <br>
	Development,
  Former Director, &nbsp;<br>
	President and CEO </font>
  </p>
  </td>
  <td valign=bottom style='padding:0pt; ' align="center">
  <p style='page-break-after:avoid'>2006<br>
	2005 <br>
	2004</p>
  </td>
  <td valign=bottom style='padding:0pt; '>
  <p align=center style='text-align:center;page-break-after:
  avoid'>$199,449<br>
	$208,497<br>
	$188,964</p>
  </td>
  <td valign=bottom style='padding:0pt; '>
  <p align=center style='text-align:center;page-break-after:
  avoid'>$--<br>
	$67,757<u><sup>(1)<br>
	</sup></u>$--</p>
  </td>
  <td valign=bottom style='padding:0pt; '>
  <p align=center style='text-align:center;page-break-after:
  avoid'>$16,177<br>
	$10,981<br>
	$18,468</p>
  </td>
  <td valign=bottom style='padding:0pt; '>
  <p align=center style='text-align:center;page-break-after:
  avoid'>--<br>
	--<br>
	--</p>
  </td>
 </tr>
 <tr>
  <td valign=bottom style='padding:0pt; '>

  </td>
  <td valign=bottom style='padding:0pt; ' align="center">

  &nbsp;

  </td>
  <td valign=bottom style='padding:0pt; '>

  </td>
  <td valign=bottom style='padding:0pt; '>

  </td>
  <td valign=bottom style='padding:0pt; '>

  </td>
  <td valign=bottom style='padding:0pt; '>

  </td>
 </tr>
 <tr>
  <td valign=bottom style='padding:0pt; '>
  <p style='page-break-after:avoid'>Jeffrey J. Ritchey <sup>(4)<br>
	</sup><font size="2">Interim President and CEO, <br>
	Treasurer, CFO and
  Secretary </font></p>
  </td>
  <td valign=bottom style='padding:0pt; ' align="center">
  <p style='page-break-after:avoid'>2006<br>
	2005 <br>
	2004</p>
  </td>
  <td valign=bottom style='padding:0pt; '>
  <p align=center style='text-align:center;page-break-after:
  avoid'>$123,485<br>
	$123,859<br>
	$113,846</p>
  </td>
  <td valign=bottom style='padding:0pt; '>
  <p align=center style='text-align:center;page-break-after:
  avoid'>$5,000<br>
	$28,754<u><sup>(1)<br>
	</sup></u>$--</p>
  </td>
  <td valign=bottom style='padding:0pt; ' align="center">
  <p style='margin-top:0pt'>$11,827<br>
	$8,334<br>
	$10,230</p>
  </td>
  <td valign=bottom style='padding:0pt; '>
  <p align=center style='text-align:center;page-break-after:
  avoid'>--<br>
	20,000<br>
	--</p>
  </td>
 </tr>
 <tr>
  <td valign=bottom style='padding:0pt; '>

  </td>
  <td valign=bottom style='padding:0pt; ' align="center">

  &nbsp;

  </td>
  <td valign=bottom style='padding:0pt; '>

  </td>
  <td valign=bottom style='padding:0pt; '>

  </td>
  <td valign=bottom style='padding:0pt; ' align="center">

  </td>
  <td valign=bottom style='padding:0pt; '>

  </td>
 </tr>
 <tr>
  <td valign=bottom style='padding:0pt; '>
  <p style='page-break-after:avoid'>Ajay Kumar <sup>(5)<br>
	</sup><font size="2">Vice President of Product Development </font></p>
  </td>
  <td valign=bottom style='padding:0pt; ' align="center">
  <p style='page-break-after:avoid'>2006</p>

  </td>
  <td valign=bottom style='padding:0pt; '>
  <p align=center style='text-align:center;page-break-after:
  avoid'>$114,231</p>

  </td>
  <td valign=bottom style='padding:0pt; '>
  <p align=center style='text-align:center;page-break-after:
  avoid'>$--</p>

  </td>
  <td valign=bottom style='padding:0pt; ' align="center">
  <p style='margin-top:0pt'>$10,721</p>

  </td>
  <td valign=bottom style='padding:0pt; '>
  <p align=center style='text-align:center;page-break-after:
  avoid'>120,000</p>

  </td>
 </tr>
</table>

</div>

<p style='margin-left:71.5pt;text-indent:-44.0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <a
name="_DV_M135"></a>&nbsp;(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Represents
amounts earned in prior year and paid in year reported.</p>

<p style='margin-left:71.5pt;text-indent:-44.0pt'><a
name="_DV_M136"></a>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>

<p align=center style='text-align:center'>Page 8</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>



<br clear=all
style='page-break-before:always'>












<div align="center">












<table class=MsoNormalTable border=0 cellpadding=0 width=528
 style='width:90%;border-collapse:collapse'>
 <tr>
  <td width=528 colspan=5 valign=bottom style='width:396.0pt;padding:0pt 0pt 0pt 0pt'>
  <p style='page-break-after:avoid'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (2)<b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </b>All Other Compensation consists of:</p>
  </td>
 </tr>
 <tr>
  <td valign=bottom style='padding:0pt; '>
  <p style='page-break-after:avoid'><b>&nbsp;</b></p>
  <p style='page-break-after:avoid'><b>&nbsp;</b></p>
  <p style='page-break-after:avoid'><b>&nbsp;</b></p>
  <p style='page-break-after:avoid'><b><u>Name </u></b></p>
  </td>
  <td valign=bottom style='padding:0pt; '>
  <p align=center style='text-align:center;page-break-after:
  avoid'><b>Fiscal<br>
	<u>Year </u></b></p>
  </td>
  <td valign=bottom style='padding:0pt; '>
  <p align=center style='text-align:center;page-break-after:
  avoid'><b>Health insurance <br>
	and related<u><br>
&nbsp;payments</u></b></p>
  </td>
  <td valign=bottom style='padding:0pt; '>
  <p align=center style='text-align:center;page-break-after:
  avoid'><b>Matching <br>
	contributions to <br>
	the
  Company's<u><br>
&nbsp;401(k) plan</u></b></p>
  </td>
  <td valign=bottom style='padding:0pt; '>
  <p align=center style='text-align:center;page-break-after:
  avoid'><b>Automotive <u><br>
	reimbursement</u></b></p>
  </td>
 </tr>
 <tr>
  <td valign=bottom style='padding:0pt; '>

  </td>
  <td valign=bottom style='padding:0pt; '>

  &nbsp;</td>
  <td valign=bottom style='padding:0pt; '>

  </td>
  <td valign=bottom style='padding:0pt; '>

  </td>
  <td valign=bottom style='padding:0pt; '>

  </td>
 </tr>
 <tr>
  <td valign=bottom style='padding:0pt; '>
  <p style='page-break-after:avoid'>Patrick Johnson </p>

  </td>
  <td valign=bottom style='padding:0pt; ' align="center">
  <p style='page-break-after:avoid'>2006<br>
	2005 <br>
	2004</p>
  </td>
  <td valign=bottom style='padding:0pt; '>
  <p align=center style='text-align:center;page-break-after:
  avoid'>$13,886<br>
	$8,375<br>
	$12,004</p>
  </td>
  <td valign=bottom style='padding:0pt; '>
  <p align=center style='text-align:center;page-break-after:
  avoid'>$2,292<br>
	$2,606<br>
	--</p>
  </td>
  <td valign=bottom style='padding:0pt; '>
  <p align=center style='text-align:center;page-break-after:
  avoid'>$--<br>
	$--<br>
	$4,154</p>
  </td>
 </tr>
 <tr>
  <td valign=bottom style='padding:0pt; '>

  </td>
  <td valign=bottom style='padding:0pt; ' align="center">

  &nbsp;</td>
  <td valign=bottom style='padding:0pt; '>

  </td>
  <td valign=bottom style='padding:0pt; '>

  </td>
  <td valign=bottom style='padding:0pt; '>

  </td>
 </tr>
 <tr>
  <td valign=bottom style='padding:0pt; '>
  <p style='page-break-after:avoid'>Jeffrey J. Ritchey</p>
  <p align=left style='text-align:left;page-break-after:avoid'>. </p>
  </td>
  <td valign=bottom style='padding:0pt; ' align="center">
  <p style='page-break-after:avoid'>2006<br>
	2005 <br>
	2004</p>
  </td>
  <td valign=bottom style='padding:0pt; '>
  <p align=center style='text-align:center;page-break-after:
  avoid'>$10,183<br>
	$6,422<br>
	$8,867</p>
  </td>
  <td valign=bottom style='padding:0pt; '>
  <p align=center style='text-align:center;page-break-after:
  avoid'>$1,644<br>
	$1,912<br>
	$1,363</p>
  </td>
  <td valign=bottom style='padding:0pt; '>
  <p align=center style='text-align:center;page-break-after:
  avoid'>$--<br>
	--<br>
	--</p>
  </td>
 </tr>
 <tr>
  <td valign=bottom style='padding:0pt; '>

  </td>
  <td valign=bottom style='padding:0pt; ' align="center">

  </td>
  <td valign=bottom style='padding:0pt; '>

  </td>
  <td valign=bottom style='padding:0pt; '>

  </td>
  <td valign=bottom style='padding:0pt; '>

  </td>
 </tr>
 <tr>
  <td valign=bottom style='padding:0pt; '>
  <p style='page-break-after:avoid'>Ajay Kumar</p>

  </td>
  <td valign=bottom style='padding:0pt; '>
  <p style='page-break-after:avoid'>2006</p>

  </td>
  <td valign=bottom style='padding:0pt; '>
  <p align=center style='text-align:center;page-break-after:
  avoid'>$10,332</p>

  </td>
  <td valign=bottom style='padding:0pt; '>
  <p align=center style='text-align:center;page-break-after:
  avoid'>$--</p>

  </td>
  <td valign=bottom style='padding:0pt; '>
  <p align=center style='text-align:center;page-break-after:
  avoid'>$--</p>

  </td>
 </tr>
</table>



</div>



<p style='margin-top:0pt;margin-right:.5pt;margin-bottom:0pt;
margin-left:71.5pt;margin-bottom:.0001pt;text-indent:-44.0pt'>&nbsp;</p>
<table border="0" width="100%" id="table1" cellspacing="0" cellpadding="0">
	<tr>
		<td valign="top" align="center">(3)</td>
		<td width="1102" valign="top">
		<p align="justify">Mr. Johnson commenced employment with the Company in
		April&nbsp;2000 and was named President and Chief Executive Officer in
		September 2002. Mr. Johnson resigned as President and Chief Executive
		Officer in April 2006, at which time he was appointed Executive Vice
		President and Chief Business Development Officer. Mr. Johnson resigned
		as a Director in October 2006.</p></td>
	</tr>
	<tr>
		<td valign="top" align="center">&nbsp;</td>
		<td width="1102" valign="top">&nbsp;</td>
	</tr>
	<tr>
		<td valign="top" align="center">(4)</td>
		<td width="1102" valign="top">



<p align="justify">Mr. Ritchey commenced employment with the Company in August <a
name="_DV_C119">2001</a> and was named Treasurer and Chief Financial Officer in
July 2002 and Secretary in October 2003.&nbsp; Mr. Ritchey was appointed interim
President and Chief Executive Officer in April 2006 after the resignation of Mr.
Johnson and held those officer positions until the appointment of the Company's
current President and Chief Executive Officer, Mark P. Murphy, in August 2006.</p>



		</td>
	</tr>
	<tr>
		<td valign="top" align="center">&nbsp;</td>
		<td width="1102" valign="top">&nbsp;</td>
	</tr>
	<tr>
		<td valign="top" align="center">(5)</td>
		<td width="1102" valign="top">



<p align="justify">Mr. Kumar commenced employment with
the Company in August&nbsp;2005.</p></td>
	</tr>
</table>



<p align=center style='text-align:center'><b>OPTION GRANTS IN LAST FISCAL YEAR</b></p>

<p style='page-break-after:avoid'>The following table provides information regarding options granted in the
fiscal year ended June 30, 2006 to
the Named Executive Officer.</p>

<div align="left">

<table class=MsoNormalTable border=0 cellpadding=0 width=635
 style='width:90%;border-collapse:collapse'>
 <tr style='height:4.0pt'>
  <td width=155 valign=bottom style='border-bottom:1px solid #000000; width:116.55pt;height:4.0pt; padding-left:4.05pt; padding-right:4.05pt; padding-top:0pt; padding-bottom:0pt' align="center">
  <b>Name</b></td>
  <td width=78 valign=bottom style='border-bottom:1px solid #000000; width:58.5pt;height:4.0pt; padding-left:4.05pt; padding-right:4.05pt; padding-top:0pt; padding-bottom:0pt' align="center">
  <b>Grant<br>
	Date</b></td>
  <td width=90 valign=bottom style='border-bottom:1px solid #000000; width:67.5pt;height:4.0pt; padding-left:4.05pt; padding-right:4.05pt; padding-top:0pt; padding-bottom:0pt' align="center">
  <b>Number of<br>
	Securities<br>
	Underlying<br>
	Options<br>
	Granted</b></td>
  <td width=144 valign=bottom style='border-bottom:1px solid #000000; width:108.0pt;height:4.0pt; padding-left:4.05pt; padding-right:4.05pt; padding-top:0pt; padding-bottom:0pt' align="center">
  <b>Percent of Total<br>
&nbsp;Options Granted to<br>
&nbsp;Employees in Fiscal<br>
&nbsp;Year <sup>(1)</sup></b></td>
  <td width=78 valign=bottom style='border-bottom:1px solid #000000; width:58.25pt;height:4.0pt; padding-left:4.05pt; padding-right:4.05pt; padding-top:0pt; padding-bottom:0pt' align="center">
  <b>Exercise<br>
	Price Per<br>
	Share</b></td>
  <td width=90 valign=bottom style='border-bottom:1px solid #000000; width:67.75pt;height:4.0pt; padding-left:4.05pt; padding-right:4.05pt; padding-top:0pt; padding-bottom:0pt' align="center">
  <b>Expiration<br>
	Date</b></td>
 </tr>
 <tr style='height:4.0pt'>
  <td width=155 valign=bottom style='width:116.55pt;padding:0pt 4.05pt 0pt 4.05pt;
  height:4.0pt'>
  <p>Ajay Kumar</p>
  </td>
  <td width=78 valign=bottom style='width:58.5pt;padding:0pt 4.05pt 0pt 4.05pt;
  height:4.0pt'>
  <p align=center style='text-align:center'>08/01/05</p>
  </td>
  <td width=90 valign=bottom style='width:67.5pt;padding:0pt 4.05pt 0pt 4.05pt;
  height:4.0pt'>
  <p align="center">120,000 <b><sup>(2)</sup></b></p>
  </td>
  <td width=144 valign=bottom style='width:108.0pt;padding:0pt 4.05pt 0pt 4.05pt;
  height:4.0pt'>
  <p align=center style='text-align:center'>70.6%</p>
  </td>
  <td width=78 valign=bottom style='width:58.25pt;padding:0pt 4.05pt 0pt 4.05pt;
  height:4.0pt'>
  <p>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.85</p>
  </td>
  <td width=90 valign=bottom style='width:67.75pt;padding:0pt 4.05pt 0pt 4.05pt;
  height:4.0pt'>
  <p align=center style='text-align:center'>07/31/15</p>
  </td>
 </tr>
</table>

</div>

<p><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </u></p>



<p style='margin-left:15.95pt;text-indent:-15.95pt'>(1)  Based on options to purchase 170,000 shares
granted to our employees during the fiscal year ended June 30, 2006.</p>



<p style='margin-left:18.0pt;text-indent:-18.0pt'>(2)  The vest and become exercisable in four
equal annual installments commencing on the anniversary date of the grant.</p>



<p align=center style='text-align:center'><a name="_DV_M142"></a><a
name="_DV_M143"></a><b>AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES</b></p>
<p align=center style='text-align:justify; text-indent:36pt'>The following table provides information on option exercises in
fiscal year ended June 30, 2006 by the Named Executive Officers and unexercised
options held by each of them at the close of such fiscal year. The value of
the unexercised in-the-money options is based on the closing price of the
Company's Common Stock of $1.75 per share on the Nasdaq Capital Market as of
June 30, 2006, less the exercise price of the options.</p>

<p align=center style='text-align:center'><a name="_DV_M144"></a>Page
9</p>

<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>



<br clear=all
style='page-break-before:always'>










<p>&nbsp;</p>



<div align=center>

<table class=MsoNormalTable border=0 cellpadding=0
 style='border-collapse:collapse' width="90%">
 <tr>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt'>
  <p align=center style='text-align:center;line-height:12.0pt;
  page-break-after:avoid'><b>&nbsp;</b></p>
  <p align=center style='text-align:center;line-height:12.0pt;
  page-break-after:avoid'><b>&nbsp;</b></p>
  <p align=center style='text-align:center;line-height:12.0pt;
  page-break-after:avoid'><b><u>Name</u></b></p>
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt' align="center">
  <p style='margin-top:0pt;line-height:12.0pt'><b>Shares<br>
	Acquired on<br>
&nbsp;Exercise</b></p>
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt' align="center">
  <p align=center style='text-align:center;line-height:12.0pt;
  page-break-after:avoid'><b>&nbsp;</b></p>
  <p align=center style='text-align:center;line-height:12.0pt;
  page-break-after:avoid'><b>Value <u><br>
	Realized</u></b></p>
  </td>
  <td colspan=2 valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt'>
  <p align=center style='text-align:center;line-height:12.0pt;
  page-break-after:avoid'><b>Number of
  Securities <br>
	Underlying Unexercised <u><br>
	Options at June 30, 2006 (#)</u></b></p>
  </td>
  <td colspan=2 valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt'>
  <p align=center style='text-align:center;line-height:12.0pt;
  page-break-after:avoid'><b>Value of
  Unexercised <br>
	In-The-Money Options at <u><br>
	June 30, 2006 ($)</u></b></p>
  </td>
 </tr>
 <tr>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt'>
  <p align=center style='text-align:center;line-height:12.0pt;
  page-break-after:avoid'><b>&nbsp;</b></p>
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt' align="center">

  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt' align="center">
  <p align=center style='text-align:center;line-height:12.0pt;
  page-break-after:avoid'><b>&nbsp;</b></p>
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt'>
  <p align=center style='text-align:center;line-height:12.0pt;
  page-break-after:avoid'><b><u>Exercisable</u></b></p>
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt'>
  <p align=center style='text-align:center;line-height:12.0pt;
  page-break-after:avoid'><b><u>Unexercisable</u></b></p>
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt'>
  <p align=center style='text-align:center;line-height:12.0pt;
  page-break-after:avoid'><b><u>Exercisable</u></b></p>
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt'>
  <p align=center style='text-align:center;line-height:12.0pt;
  page-break-after:avoid'><b><u>Unexercisable</u></b></p>
  </td>
 </tr>
 <tr>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt'>
  <p style='line-height:14.0pt;page-break-after:avoid'>Patrick Johnson</p>
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt' align="center">
  <p style='line-height:14.0pt;
  page-break-after:avoid'>0</p>
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt' align="center">
  <p style='line-height:14.0pt;
  page-break-after:avoid'>$0</p>
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt'>
  <p align=center style='text-align:center;line-height:14.0pt;
  page-break-after:avoid'>494,316</p>
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt'>
  <p align=center style='text-align:center;line-height:14.0pt;
  page-break-after:avoid'>0</p>
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt'>
  <p align=center style='text-align:center;line-height:14.0pt;
  page-break-after:avoid'>$303,542</p>
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt'>
  <p align=center style='text-align:center;line-height:14.0pt;
  page-break-after:avoid'>$0</p>
  </td>
 </tr>
 <tr>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt'>
  <p style='line-height:14.0pt;page-break-after:avoid'>Jeffrey J. Ritchey</p>
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt' align="center">
  <p style='line-height:14.0pt;
  page-break-after:avoid'>0</p>
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt' align="center">
  <p style='line-height:14.0pt;
  page-break-after:avoid'>$0</p>
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt'>
  <p align=center style='text-align:center;line-height:14.0pt;
  page-break-after:avoid'>90,000</p>
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt'>
  <p align=center style='text-align:center;line-height:14.0pt;
  page-break-after:avoid'>30,000</p>
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt'>
  <p align=center style='text-align:center;line-height:14.0pt;
  page-break-after:avoid'>$91,250</p>
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt'>
  <p align=center style='text-align:center;line-height:14.0pt;
  page-break-after:avoid'>$19,950</p>
  </td>
 </tr>
 <tr>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt'>
  <p style='line-height:14.0pt;page-break-after:avoid'>Ajay Kumar</p>
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt' align="center">
  <p style='line-height:14.0pt;
  page-break-after:avoid'>0</p>
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt' align="center">
  <p style='line-height:14.0pt;
  page-break-after:avoid'>$0</p>
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt'>
  <p align=center style='text-align:center;line-height:14.0pt;
  page-break-after:avoid'>0</p>
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt'>
  <p align=center style='text-align:center;line-height:14.0pt;
  page-break-after:avoid'>120,000</p>
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt'>
  <p align=center style='text-align:center;line-height:14.0pt;
  page-break-after:avoid'>$0</p>
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt'>
  <p align=center style='text-align:center;line-height:14.0pt;
  page-break-after:avoid'>$0</p>
  </td>
 </tr>
</table>

</div>

<p align="center"><b>LONG-TERM INCENTIVE PLAN AWARDS</b></p>

<p style="text-indent: 36pt">In the fiscal year ended June 30, 2006, no
long-term incentive plan awards were given to the Named Executive Officers.</p>

<p align="center"><b>EQUITY COMPENSATION PLAN INFORMATION</b></p>



<p style='text-indent:36.0pt;page-break-after:avoid'>The following table sets forth information about the
Company's common stock that may be issued upon the exercise of options under
all of the Company's equity compensation plans as of June 30, 2006.</p>
<div align="left">
	<table class="MsoNormalTable" border="0" cellpadding="0" width="604" style="width: 95%; border-collapse: collapse; margin-left: 4.65pt">
		<tr style="height:12.75pt">
			<td nowrap valign="bottom" style="border-left: 1.0pt solid windowtext; border-right: medium none; border-top: 1.0pt solid windowtext; border-bottom: medium none; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			</td>
			<td nowrap valign="bottom" style="border-left: medium none; border-right: medium none; border-top: 1.0pt solid windowtext; border-bottom: medium none; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			</td>
			<td nowrap valign="bottom" style="border-left: medium none; border-right: medium none; border-top: 1.0pt solid windowtext; border-bottom: medium none; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			</td>
			<td nowrap valign="bottom" style="border-left: medium none; border-right: 1.0pt solid windowtext; border-top: 1.0pt solid windowtext; border-bottom: medium none; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal" align="center" style="text-align:center"><b>
			Number of Securities</b></td>
		</tr>
		<tr style="height:12.75pt">
			<td nowrap valign="bottom" style="border-left: 1.0pt solid windowtext; border-right: medium none; border-top: medium none; border-bottom: medium none; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			</td>
			<td nowrap valign="bottom" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal" align="center" style="text-align:center"><b>
			Number of Securities</b></td>
			<td nowrap valign="bottom" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			</td>
			<td nowrap valign="bottom" style="border-left: medium none; border-right: 1.0pt solid windowtext; border-top: medium none; border-bottom: medium none; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal" align="center" style="text-align:center"><b>
			Available for Issuance</b></td>
		</tr>
		<tr style="height:12.75pt">
			<td nowrap valign="bottom" style="border-left: 1.0pt solid windowtext; border-right: medium none; border-top: medium none; border-bottom: medium none; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			</td>
			<td nowrap valign="bottom" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal" align="center" style="text-align:center"><b>to
			be Issued Upon</b></td>
			<td nowrap valign="bottom" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal" align="center" style="text-align:center"><b>
			Weighted Average</b></td>
			<td nowrap valign="bottom" style="border-left: medium none; border-right: 1.0pt solid windowtext; border-top: medium none; border-bottom: medium none; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal" align="center" style="text-align:center"><b>
			Under Equity </b></td>
		</tr>
		<tr style="height:12.75pt">
			<td nowrap valign="bottom" style="border-left: 1.0pt solid windowtext; border-right: medium none; border-top: medium none; border-bottom: medium none; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			</td>
			<td nowrap valign="bottom" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal" align="center" style="text-align:center"><b>
			Exercise of</b></td>
			<td nowrap valign="bottom" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal" align="center" style="text-align:center"><b>
			Exercise Price of</b></td>
			<td nowrap valign="bottom" style="border-left: medium none; border-right: 1.0pt solid windowtext; border-top: medium none; border-bottom: medium none; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal" align="center" style="text-align:center"><b>
			Compensation Plans</b></td>
		</tr>
		<tr style="height:12.75pt">
			<td nowrap valign="bottom" style="border-left: 1.0pt solid windowtext; border-right: medium none; border-top: medium none; border-bottom: medium none; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			</td>
			<td nowrap valign="bottom" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal" align="center" style="text-align:center"><b>
			Outstanding Options,</b></td>
			<td nowrap valign="bottom" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal" align="center" style="text-align:center"><b>
			Outstanding Options,</b></td>
			<td nowrap valign="bottom" style="border-left: medium none; border-right: 1.0pt solid windowtext; border-top: medium none; border-bottom: medium none; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal" align="center" style="text-align:center"><b>
			(excluding services</b></td>
		</tr>
		<tr style="height:12.75pt">
			<td nowrap valign="bottom" style="border-left: 1.0pt solid windowtext; border-right: medium none; border-top: medium none; border-bottom: medium none; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal" align="center" style="text-align:center"><b>
			Plan Category</b></td>
			<td nowrap valign="bottom" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal" align="center" style="text-align:center"><b>
			Warrants and Rights</b></td>
			<td nowrap valign="bottom" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal" align="center" style="text-align:center"><b>
			Warrants, and Rights</b></td>
			<td nowrap valign="bottom" style="border-left: medium none; border-right: 1.0pt solid windowtext; border-top: medium none; border-bottom: medium none; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal" align="center" style="text-align:center"><b>
			reflected in column (a))</b></td>
		</tr>
		<tr style="height:12.75pt">
			<td nowrap valign="bottom" style="border-left: 1.0pt solid windowtext; border-right: medium none; border-top: 1.0pt solid windowtext; border-bottom: 1.0pt solid windowtext; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			</td>
			<td nowrap valign="bottom" style="border-left: medium none; border-right: medium none; border-top: 1.0pt solid windowtext; border-bottom: 1.0pt solid windowtext; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal" align="center" style="text-align:center">(a)</td>
			<td nowrap valign="bottom" style="border-left: medium none; border-right: medium none; border-top: 1.0pt solid windowtext; border-bottom: 1.0pt solid windowtext; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal" align="center" style="text-align:center">(b)</td>
			<td nowrap valign="bottom" style="border-left: medium none; border-right: 1.0pt solid windowtext; border-top: 1.0pt solid windowtext; border-bottom: 1.0pt solid windowtext; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal" align="center" style="text-align:center">(c)</td>
		</tr>
		<tr style="height:12.75pt">
			<td nowrap valign="bottom" style="border-left: 1.0pt solid windowtext; border-right: medium none; border-top: medium none; border-bottom: medium none; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal">Plans Approved by</td>
			<td nowrap valign="bottom" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			</td>
			<td nowrap valign="bottom" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			</td>
			<td nowrap valign="bottom" style="border-left: medium none; border-right: 1.0pt solid windowtext; border-top: medium none; border-bottom: medium none; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			</td>
		</tr>
		<tr style="height:12.75pt">
			<td nowrap valign="bottom" style="border-left: 1.0pt solid windowtext; border-right: medium none; border-top: medium none; border-bottom: medium none; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal">Stockholders</td>
			<td nowrap valign="bottom" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			</td>
			<td nowrap valign="bottom" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			</td>
			<td nowrap valign="bottom" style="border-left: medium none; border-right: 1.0pt solid windowtext; border-top: medium none; border-bottom: medium none; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			</td>
		</tr>
		<tr style="height:12.75pt">
			<td nowrap valign="bottom" style="border-left: 1.0pt solid windowtext; border-right: medium none; border-top: medium none; border-bottom: medium none; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal">&#149; Employee Plan</td>
			<td nowrap valign="bottom" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal" align="center" style="text-align:center">
			1,019,316</td>
			<td nowrap valign="bottom" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal" align="center" style="text-align:center">$1.58
			</td>
			<td nowrap valign="bottom" style="border-left: medium none; border-right: 1.0pt solid windowtext; border-top: medium none; border-bottom: medium none; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal" align="center" style="text-align:center">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
			88,045 </td>
		</tr>
		<tr style="height:12.75pt">
			<td nowrap valign="bottom" style="border-left: 1.0pt solid windowtext; border-right: medium none; border-top: medium none; border-bottom: 1.0pt solid windowtext; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal">&#149; Director Plan</td>
			<td nowrap valign="bottom" style="border-left: medium none; border-right: medium none; border-top: medium none; border-bottom: 1.0pt solid windowtext; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal" align="center" style="text-align:center">
			185,000</td>
			<td nowrap valign="bottom" style="border-left: medium none; border-right: medium none; border-top: medium none; border-bottom: 1.0pt solid windowtext; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal" align="center" style="text-align:center">$2.26
			</td>
			<td nowrap valign="bottom" style="border-left: medium none; border-right: 1.0pt solid windowtext; border-top: medium none; border-bottom: 1.0pt solid windowtext; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal" align="center" style="text-align:center">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
			240,000 </td>
		</tr>
		<tr style="height:12.75pt">
			<td nowrap valign="bottom" style="border-left: 1.0pt solid windowtext; border-right: medium none; border-top: medium none; border-bottom: medium none; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal">Plans Not Approved by</td>
			<td nowrap valign="bottom" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			</td>
			<td nowrap valign="bottom" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			</td>
			<td nowrap valign="bottom" style="border-left: medium none; border-right: 1.0pt solid windowtext; border-top: medium none; border-bottom: medium none; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			</td>
		</tr>
		<tr style="height:12.75pt">
			<td nowrap valign="bottom" style="border-left: 1.0pt solid windowtext; border-right: medium none; border-top: medium none; border-bottom: medium none; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal">Stockholders</td>
			<td nowrap valign="bottom" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal" align="center" style="text-align:center">
			100,000</td>
			<td nowrap valign="bottom" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal" align="center" style="text-align:center">$1.25
			</td>
			<td nowrap valign="bottom" style="border-left: medium none; border-right: 1.0pt solid windowtext; border-top: medium none; border-bottom: medium none; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal" align="center" style="text-align:center">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
			-&nbsp;&nbsp; </td>
		</tr>
		<tr style="height:12.75pt">
			<td nowrap valign="bottom" style="border-left: 1.0pt solid windowtext; border-right: medium none; border-top: 1.0pt solid windowtext; border-bottom: medium none; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			</td>
			<td nowrap valign="bottom" style="border-left: medium none; border-right: medium none; border-top: 1.0pt solid windowtext; border-bottom: medium none; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			</td>
			<td nowrap valign="bottom" style="border-left: medium none; border-right: medium none; border-top: 1.0pt solid windowtext; border-bottom: medium none; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			</td>
			<td nowrap valign="bottom" style="border-left: medium none; border-right: 1.0pt solid windowtext; border-top: 1.0pt solid windowtext; border-bottom: medium none; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			</td>
		</tr>
		<tr style="height:12.75pt">
			<td nowrap valign="bottom" style="border-left: 1.0pt solid windowtext; border-right: medium none; border-top: medium none; border-bottom: 1.0pt solid windowtext; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal">Total</td>
			<td nowrap valign="bottom" style="border-left: medium none; border-right: medium none; border-top: medium none; border-bottom: 1.0pt solid windowtext; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal" align="center" style="text-align:center">
			1,304,316</td>
			<td nowrap valign="bottom" style="border-left: medium none; border-right: medium none; border-top: medium none; border-bottom: 1.0pt solid windowtext; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal" align="center" style="text-align:center">$1.65
			</td>
			<td nowrap valign="bottom" style="border-left: medium none; border-right: 1.0pt solid windowtext; border-top: medium none; border-bottom: 1.0pt solid windowtext; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0pt; padding-bottom: 0pt">
			<p class="MsoNormal" align="center" style="text-align:center">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
			328,045 </td>
		</tr>
	</table>
</div>
<p style='text-indent:36.0pt;page-break-after:avoid'>&nbsp;</p>



<p align="center"><b>EMPLOYMENT CONTRACTS AND CHANGE IN CONTROL ARRANGEMENTS</b></p>

<p style='text-indent:36.0pt' align="justify"><a name="_DV_M152"></a>Mr. Murphy has an employment
agreement (&quot;Murphy Employment Agreement&quot;) with the Company dated August 14, 2006, concerning his employment as the Company's
President and Chief Executive Officer. Under the terms of the Murphy Employment
Agreement,
Mr. Murphy is to receive an annual salary of $280,000, subject to annual CPI
adjustment, plus health and life insurance benefits available to all Company
employees. </p>

<p style='text-indent:36.0pt;text-autospace:ideograph-numeric ideograph-other' align="justify">In
addition to the foregoing salary and benefits, Mr. Murphy is eligible for
additional compensation if he remains employed by the Company on a full time
basis (&quot;Continuing Employment Status&quot;) including the following: </p>

<p align=center style='text-align:center'>Page 10</p>

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<p style='text-indent:36.0pt;text-autospace:ideograph-numeric ideograph-other' align="justify">An
annual bonus equal to (i) 0.75% of his annual salary, times (ii) each one
percent (or any portion thereof) increase in pre-tax earnings (including
extraordinary gains and losses) per share for fiscal years ending after July 1,
2006 over the prior fiscal year. The annual bonus shall be payable within ten
days after Mr. Murphy has signed and the Company has filed with the <a
name="_DV_C153">Securities and Exchange</a> Commission
(&quot;SEC&quot;)<a name="_DV_M199"></a> &nbsp;the
required Chief Executive Officer certifications, without qualification, for
Form 10-KSB (or Form 10-K, as the case may be) for the
most recent fiscal year. Such Continuing Employment Status shall not be
required for additional compensation under the &quot;annual bonus&quot;
benefits in the event that during the period (i) following the conclusion of
the Company's fiscal year and (ii) prior to the Company's filing of Form 10-KSB
(or Form 10-K, as the case may be), his employment is terminated by the Company
without &quot;Cause&quot; or he resigns for &quot;Good Reason,&quot; each as
defined below). If his employment has been terminated by the Company without
Cause prior to the time that he has signed such certifications, or by Mr.
Murphy for Good Reason prior to the time that he has signed such
certifications, the annual bonus shall be payable within thirty (30) days
following the termination of his employment. &nbsp;The actual annual bonus for
fiscal year ending June 30, 2007 shall not exceed $25,000; and shall not exceed
$50,000 for fiscal year ending June 30, 2008.&nbsp; The bonus is not limited for
fiscal years ending after June 30, 2008. </p>

<p style='text-indent:36.0pt;text-autospace:ideograph-numeric ideograph-other' align="justify">A
second bonus equal to the appreciation of an aggregate of 450,000 shares of the
Company's Common Stock over the closing price of such number of shares on the
day preceding the starting date of his employment with the Company. Entitlement
to this second bonus shall vest at the rate of 33.333% per year commencing with
the first anniversary of such starting date (subject to acceleration in certain
events as described below), and all or any part of each incremental vested
portion shall be exercisable within five years from the date such increment
first vested and payable in cash in the installments described below commencing
on the earliest of (i) 90 days written notice from Mr. Murphy to the Company,
based on the average closing price of the Company's common shares, over the ten
trading days immediately preceding receipt of such written 90-day notice
outside of any blackout periods applicable to all insiders, (ii) termination of
his employment (except for termination of his employment by the Company for
&quot;Cause&quot; or resignation by him without Good Reason), based on the
average closing price of the Company's common shares over the ten trading days
immediately preceding the date of termination, outside of any blackout periods
applicable to all insiders of the Company ) or (iii) in case of a Liquidity
Event as defined below, based on the price per share received by the Company's
shareholders in the Liquidity Event. Payments of this second bonus shall be in
quarterly installments equal to 10% of the Company's pretax net income (and
with respect to the final quarterly payment, so much as may remain to be paid),
including extraordinary gains and losses, as reported in the Company's
financial statements contained within Form 10-QSB or Form 10-KSB, as
the case may be (or Form 10-Q or Form 10-K, as the case may be<u>, </u>for the preceding quarter, payable
each quarter within thirty (30) days following the determination of such pretax
net income; provided, however, that any payments of this second bonus which are
earned but remain outstanding as of the date of his termination/severance of
employment shall be paid over a period of twelve (12) months as set forth in
the Murphy Employment Agreement. The unpaid portion shall become immediately
due and payable upon a Liquidity Event. </p>

<p style='text-indent:36.0pt;text-autospace:ideograph-numeric ideograph-other' align="justify">The
second bonus may be replaced at the Company's sole option on or before February
28, 2007 with a grant of 340,000 restricted shares of the Company's Common
Stock of the Company in accordance with an equity incentive compensation plan
if such a plan is approved by the Company's shareholders at the Company's 2006
Annual Meeting of Shareholders' (or other such special shareholders' meeting of
the Company) vesting at the rate of 85,000 shares per year commencing January
2, 2007 or the grant date, whichever is later. If the restricted stock grant is
pursuant to the Company's general equity incentive plan for its key employees
as approved by the Company's Board of Directors and shareholders, then the
Company shall register such shares with the SEC. </p>

<p style='text-indent:36.0pt;text-autospace:ideograph-numeric ideograph-other' align="justify">In
the event of a transaction in which the Company's shareholders receive cash or
marketable securities for their shares of stock of the Company (a
&quot;Liquidity Event&quot;), the vesting of the unvested restricted shares or
portion of the second bonus will accelerate immediately prior to the Liquidity
Event based on the amount received by the Company's shareholders. </p>

<p align=center style='text-align:center'>Page 11</p>

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<p style='text-indent:36.0pt;text-autospace:ideograph-numeric ideograph-other' align="justify">In
the event Mr. Murphy is terminated involuntarily by the Company without
&quot;Cause&quot; or resigns with &quot;Good Reason&quot; as defined below, the
Company shall pay him his (i) annual salary up through the date of termination
plus (ii) accrued vacation plus (iii) severance equal to $280,000 and (iv) any annual
bonus or second bonus earned but not yet paid as of the termination date. &nbsp;With
the exception of the earned amount of his annual bonus (to be paid within
thirty (30) days of his termination), the severance payment referred to above
shall be made in equal incremental payments over a period of twelve (12) months
from the termination date. </p>

<p style='text-indent:36.0pt;text-autospace:ideograph-numeric ideograph-other' align="justify">The
Murphy Employment Agreement defines &quot;Cause&quot; as termination due to:
(i) Mr. Murphy's failure or inability to perform his duties with the Company or
a related entity; (ii) his failure to substantially follow and comply with the
specific and lawful directives of the Board or any officer of the Company or a
related entity to whom he reports directly; (iii) the Board's determination on
advice of counsel of his commission of an act of fraud or dishonesty; his
engagement in illegal conduct, gross misconduct or an act of moral turpitude;
or his material violation of any material written policy, guideline, code,
handbook or similar document governing the conduct of directors, officers or
employees of the Company or its related entities; or (iv) a material breach by
Mr. Murphy of the terms of the Murphy Employment Agreement. The Murphy Employment
Agreement defines &quot;Good Reason&quot; as: (i) a reduction in Mr. Murphy's
salary or failure of the Company to pay any amount owing to him under the Murphy
Employment Agreement when due; or a material reduction in benefits provided to
him under the Murphy Employment Agreement; (ii) the Company's requiring him to
be based full time in any office or location outside of a sixty (60) mile
radius from his current residence in Yorba Linda, California; (iii) his being
requested by the Board to execute any documents or take any action in violation
of any laws or regulations applicable to the Company, commit an act of fraud or
dishonesty violation of any material written policy, guideline, code, handbook
or similar document governing the conduct of directors, officers or employees
of the Company or its related entities; (iv) a Liquidity Event, in which he is
not offered an executive position with substantially comparable compensation,
benefits and incentives with any successor to the Company based in any office
or location inside a sixty (60) miles radius from his current residence in
Yorba Linda; California; or (v) a material breach by the Company of the Murphy Employment
Agreement. &nbsp;Both the Company and Mr. Murphy has a 30 day cure period following
a notice of &quot;Cause&quot; or &quot;Good Reason&quot; as the case may be.</p>

<p align="justify" style="text-indent: 36pt"><b><a name="_DV_C231">Employment Agreement with </a>Patrick Johnson</b></p>

<p align="justify" style="text-indent: 36pt"><a name="_DV_C232">Mr. Johnson has an employment
agreement (&quot;Johnson Employment Agreement&quot;) with the Company dated April 12,
2006, as amended October 18, 2006, concerning his employment as the Company's
Executive Vice President of Business Development.&nbsp; Under the terms of the
Johnson Employment Agreement, Mr. Johnson is to receive an annual salary of
$180,000 and is entitled to severance equal to four months of his annual salary
if he is terminated involuntarily.</a></p>

<p align="justify" style="text-indent: 36pt"><b><a name="_DV_C233">Options and Warrants Generally</a></b></p>

<p align="justify" style="text-indent: 36pt">For
options and warrants other than those discussed above, the Board of Directors,
as the administrator of the Company's 2004 Employee Stock Option Plan and
Director Stock Option Plan, has the discretion to accelerate any outstanding
options held by the employees and directors in the event of an acquisition of
the Company by a merger or asset sale in which the outstanding options under
each such plan are not to be assumed by the successor corporation or
substituted with options to purchase shares of such corporation.</p>

<p align=center style='text-align:center;text-indent:0pt;page-break-after:
avoid'><a name="_DV_M154"></a><b>COMPENSATION COMMITTEE REPORT</b></p>

<p align="justify" style="text-indent: 36pt">The Company applies a consistent
philosophy to compensation for all employees, including senior management. This
philosophy is based on the premise that the achievements of the Company result
from the coordinated efforts of all individuals working toward common
objectives. The Company strives to achieve those objectives through teamwork
that is focused on meeting the expectations of customers and shareholders.</p>

<p align=center style='text-align:center'><a name="_DV_M156"></a>Page
12</p>

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<p style='page-break-after:avoid'><b>Compensation Philosophy</b>
</p>

<p align="justify" style="text-indent: 36pt">The goals of the compensation program are
to align compensation with business objectives and performance, and to enable
the Company to attract, retain and reward executive officers that contribute to
the long-term success of the Company. The Company's compensation program for
executive officers is based on the same four principles applicable to
compensation decisions for all employees of the Company:</p>

<ul>
	<li>
	<p style='margin-top:12.0pt' align="justify">The Company pays competitively. The Company is committed to
providing a pay program that helps attract and retain highly qualified people
in the industry.&nbsp; To ensure that pay is competitive, the Company compares its
pay practices with those of other leading companies of similar size and sets
its pay parameters based on this review.</p></li>
	<li>
	<p style='margin-top:12.0pt;margin-right:0pt;margin-bottom:
0pt;margin-bottom:.0001pt;' align="justify">The Company pays for relative sustained performance. Executive
officers are rewarded based upon corporate performance and individual
performance. Corporate performance is evaluated by the Board of Directors by
reviewing the extent to which strategic and business plan goals are met,
including such factors as revenues, operating profit and cash flow. </p></li>
	<li>
	<p style='margin-top:12.0pt;margin-right:0pt;margin-bottom:
0pt;margin-bottom:.0001pt;' align="justify">The Company strives for fairness in the administration of pay and
to achieve a balance of the compensation paid to a particular individual with
the compensation paid to other executives both inside the Company and at
comparable companies.</p></li>
	<li>
	<p style='margin-top:12.0pt;margin-right:0pt;margin-bottom:
0pt;margin-bottom:.0001pt;' align="justify">The Company believes that employees should understand the
performance evaluation and pay administration process. <a name="_DV_M162"></a>
	<a
name="_DV_M163"></a><a name="_DV_M164"></a><a name="_DV_M166"></a>
	<a
name="_DV_M167"></a></p></li>
</ul>

<p style='margin-top:12.0pt;page-break-after:avoid'><b>Compensation Vehicles</b></p>

<p style="text-indent: 36pt"><a name="_DV_M169"></a>The Company has historically used a
compensation program that consists of cash and equity based compensation. The
vehicles are:</p>

<p align="justify" style="margin-left: 36pt"><a name="_DV_M170"></a><u>Salary</u>. The Company sets base
salary for its employees by reviewing the base salary for competitive positions
in the market in order to attract, retain, and motivate highly talented
individuals at all levels in the organization. </p>

<p align="justify" style="margin-left: 36pt"><a name="_DV_M171"></a><u>Bonus</u>.&nbsp; The Company utilizes
incentive compensation plans for all employees to reward achievement of key
objectives and goals.</p>

<p style='page-break-after:avoid; margin-left:36pt' align="justify"><a name="_DV_M172"></a><u>Employee
Stock Option Program</u>. The purpose of this program is to provide additional
incentives to selected employees to work to maximize shareholder value.&nbsp; Compensation
Committee of the Board of Directors makes all stock option grants.&nbsp; Stock
options generally are granted with an exercise price equal to the fair market
value of the underlying Common Stock on the date of grant and vest in equal
annual installments over a four-year period. </p>

<p style='page-break-after:avoid; margin-left:36pt' align="justify"><u>Stock Appreciation Rights</u>.
The purpose of this program is to provide additional incentives to the Chief
Executive Officer to work to maximize shareholder value.&nbsp; The Compensation
Committee of the Board of Directors makes all grants of Stock Appreciation
Rights.&nbsp; Stock Appreciation Rights generally are granted with a base price
equal to the fair market value of the underlying Common Stock on the date of
grant and vest in equal annual installments over a three-year period. </p>

<p align="center"><b><a name="_DV_M173"></a>COMPENSATION COMMITTEE</b></p>

<div align="center">
	<table border="0" width="740" id="table2">
		<tr>
			<td align="center">

<p align=center style='text-align:center;text-indent:0pt'>Valerio L. Giannini </p>
			</td>
			<td align="center" width="220">Michael A. Mesenbrink</td>
			<td align="center" width="275">George Isaac</td>
		</tr>
	</table>
</div>










<p align=center style='text-align:center;text-indent:0pt;page-break-after:
avoid'><b>AUDIT COMMITTEE REPORT</b></p>

<p align="justify" style="text-indent: 36pt">The Audit Committee reports to and acts on
behalf of the Board of Directors in providing oversight to the financial
management, independent auditors, and financial reporting procedures of the
Company.&nbsp; The Company's management is responsible for preparing the Company's
financial statements and the independent auditors are responsible for auditing
those statements.&nbsp; In this context, the Audit Committee has reviewed and
discussed the audited financial statements contained in the 2006 Annual Report
on Form 10-KSB with management and the independent auditors.</p>

<p align=center style='text-align:center'>Page
13</p>

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<p align="justify" style="text-indent: 36pt"><a name="_DV_M177"></a>The Audit Committee has discussed with the
independent auditors the matters required to be discussed by the Statement on
Auditing Standards No. 61 (&quot;Communication with Audit Committees&quot;), as amended.&nbsp;
The Audit Committee has received the written disclosures and the letter from
the independent auditors required by Independence Standards Board Standard No.
1 (Independence Discussions with Audit Committees), as amended, and has
discussed with the independent auditors their independence.&nbsp; In concluding that
the auditors are independent, the Audit Committee considered, among other
factors, whether the non-audit services provided by Moss Adams, LLP were
compatible with maintaining their independence.&nbsp; </p>

<p align="justify" style="text-indent: 36pt"><a name="_DV_M178"></a>In reliance on the reviews and discussions
referred to above, the Audit Committee recommended to the Board of Directors
that the audited financial statements be included in the Company's Annual
Report on Form 10-KSB for the fiscal year ended June 30, 2006, for filing with
the Securities and Exchange Commission.&nbsp; </p>

<p style='page-break-after:avoid; text-indent:36pt' align="justify"><a name="_DV_M179"></a>The Audit
Committee has retained Moss Adams, LLP to serve as the Company's independent
auditors for the fiscal year ending June 30, 2007.</p>

<p align=center style='text-align:center;text-indent:0pt;page-break-after:
avoid'><a name="_DV_M180"></a><b>AUDIT COMMITTEE</b></p>

<div align="center">
	<table border="0" width="740" id="table3">
		<tr>
			<td align="center">

<p align=center style='text-align:center;text-indent:0pt'>Valerio L. Giannini </p>
			</td>
			<td align="center" width="220">Michael A. Mesenbrink</td>
			<td align="center" width="275">George Isaac</td>
		</tr>
	</table>
</div>

<p align="center"><b>DIRECTORS' COMPENSATION</b></p>

<p align="justify" style="text-indent: 36pt"><a name="_DV_M183"></a>Directors of the Company who are not also
employees receive a fee of $3,000 per quarter plus $1,000 per board meeting,
plus $750 per each day of committee meetings attended, together with reasonable
expenses of attendance at board meetings and committee meetings.&nbsp; The directors'
fees paid in the fiscal year ended June 30, 2006 are as follows:</p>



<div align=center>

<table class=MsoNormalTable border=0 cellpadding=0
 style='margin-left:91.65pt;border-collapse:collapse' width="55%">
 <tr>
  <td width=141 valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt'>
  <p style='line-height:12.0pt'><b><u>Director</u></b></p>
  </td>
  <td valign=bottom style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt'>
  <p align=center style='text-align:center;line-height:12.0pt'><b><a
  name="_DV_C251">Directors</a>' Fees received in the<br>
&nbsp;<u>Fiscal
  Year </u><a name="_DV_C254"><u>Ended</u></a><u> June 30, 2006</u></b></p>
  </td>
 </tr>
 <tr>
  <td width=141 valign=top style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt'>
  <p>George Isaac </p>
  </td>
  <td valign=top style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt' align="center">
  <p style='line-height:12.0pt'>$23,750</p>
  </td>
 </tr>
 <tr>
  <td width=141 valign=top style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt'>
  <p>Mark P. Murphy </p>
  </td>
  <td valign=top style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt' align="center">
  <p style='line-height:12.0pt'>$27,500</p>
  </td>
 </tr>
 <tr>
  <td width=141 valign=top style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt'>
  <p>Michael Mesenbrink </p>
  </td>
  <td valign=top style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt' align="center">
  <p style='line-height:12.0pt'>$28,250</p>
  </td>
 </tr>
 <tr>
  <td width=141 valign=top style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt'>
  <p>Valerio Giannini </p>
  </td>
  <td valign=top style='padding-left:5.4pt; padding-right:5.4pt; padding-top:0pt; padding-bottom:0pt' align="center">
  <p style='line-height:12.0pt'>$30,500</p>
  </td>
 </tr>
</table>

</div>

<p style='margin-top:12.0pt;text-indent:36.0pt'><a
name="_DV_M184"></a>The Company's shareholders have approved the Directors'
Plan pursuant to which non-employee directors may be granted options to
purchase shares of the Company's Common Stock. In accordance with the
Directors' Plan's provisions, the Board of Directors previously adopted a
policy to grant each outside director an initial option to purchase 20,000
shares of Common Stock on the date of his commencement of service as a director
and an option to purchase 15,000 shares on each anniversary date of such
service, exercisable at the closing price on the date of such grant. The
maximum term of each option is ten years. The options fully vest after 6 months
and expire 90 days from the termination of the director's service on the
Company's Board of Directors.</p>
<p style='margin-top:12.0pt;text-indent:36.0pt'>During the fiscal
year ended June 30, 2006, the Company's Directors, Messrs. Isaac, Mesenbrink,
Murphy, and Giannini, were each granted options to purchase 15,000 shares of Common
Stock, exercisable at share prices of $3.30, $2.94, $3.24 and $2.44 per share,
respectively.&nbsp; </p>

<p align=center style='text-align:center'><a name="_DV_M185"></a><a
name="_DV_M186"></a><a name="_DV_M187"></a>Page 14</p>

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<p align="center"><b>CODE OF BUSINESS CONDUCT AND ETHICS</b></p>

<p style='margin-top:12.0pt;text-indent:36.0pt' align="justify">Our code of business
conduct and ethics, as approved by our board of directors, can be obtained from
our Internet site at http://www.pro-dex.com/code_of_ethics.php.</p>

<p style='margin-top:12.0pt;text-indent:36.0pt' align="justify">We intend to
satisfy the disclosure requirement under Item 5.05 of Form 8-K relating to
amendments to or waivers from provisions of the code that relate to one of more
of the items set forth in Item 406(b) of Regulation S-B, by describing on our
Internet site, within four business days following the date of a waiver or a
substantive amendment, the date of the waiver or amendment, the nature of the
amendment or waiver, and the name of the person to whom the waiver was granted.</p>

<p style='margin-top:12.0pt;text-indent:36.0pt' align="justify">Information on
our Internet site is not, and shall not be deemed to be, a part of this proxy
statement or incorporated into any other filings we make with the Securities
and Exchange Commission. </p>

<p align="center"><b>SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE</b></p>

<p style='margin-top:12.0pt;text-indent:36.0pt' align="justify"><a
name="_DV_M188"></a>Under Section 16(a) of the Securities Exchange Act of 1934,
as amended, the directors and officers of the Company and any person who owns
more than ten percent of the Company's Common Stock are required to report
their initial ownership of the Company's Common Stock and any subsequent
changes in that ownership to the Securities and Exchange Commission (&quot;SEC&quot;) and
the Nasdaq Capital Market. Officers, directors and greater than 10%
shareholders are required by SEC regulations to furnish the Company with copies
of all forms they file in accordance with Section 16(a).&nbsp; Based solely on its
review of the copies of such forms received by it, or written representations
from certain reporting persons, that no other reports were required for those
persons, the Company believes that, during the fiscal year ended June 30, 2006,
its officers, directors and greater than 10% shareholders complied with all
filing requirements applicable to such persons.</p>



<p align=center style='text-align:center'><b>COMMUNICATIONS
WITH DIRECTORS</b></p>

<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board
has established a process to receive communications from shareholders.
Shareholders and other interested parties may contact any member (or all
members) of the Board, or the independent directors as a group, any Board
committee or any Chair of any such committee by mail or electronically. To
communicate with the Board of Directors, any individual directors or any group
or committee of directors, correspondence should be addressed to the Board of
Directors or any such individual directors or group or committee of directors
by either name or title. All such correspondence should be sent &quot;c/o
Corporate Secretary&quot; at 151 E. Columbine Avenue, Santa Ana, California 92707.&nbsp; To communicate with any of our directors electronically, a shareholder
should send an email to the Company's Secretary: jeff.ritchey@pro-dex.com. </p>



<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
communications received as set forth in the preceding paragraph will be opened
by the Company's Secretary for the sole purpose of determining whether the
contents represent a message to one or more of the directors.&nbsp; Any contents
that are not in the nature of advertising, promotions of a product or service,
patently offensive material or matters deemed inappropriate for the Board of
Directors will be forwarded promptly to the addressee. In the case of
communications to the Board or any group or committee of directors, the
Company's Secretary will make sufficient copies (or forward such information in
the case of e-mail) of the contents to send to each director who is a member of
the group or committee to which the envelope or e-mail is addressed. </p>
<p align="justify" style="text-indent: 36pt">It is the Company's policy that
its directors are invited and encouraged to attend all of the Company's annual
meetings of shareholders.&nbsp; All of the directors were in attendance at the 2005
Annual Meeting.</p>



<p align=center style='text-align:center'>Page 15</p>

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<p align=center style='margin-top:12.0pt;text-align:center;
page-break-after:avoid'><b>Proposal No. 2</b></p>

<p align=center style='margin-top:12.0pt;text-align:center'><b><a
name="_DV_C277">APPROVAL OF THE AMENDMENT AND RESTATEMENT<br>
OF THE 2004 STOCK OPTION PLAN</a></b></p>

<p style='margin-top:12.0pt'><b><a name="_DV_C278"><u>General</u></a></b></p>

<p align="justify" style="text-indent: 36pt"><a name="_DV_C279">The Company's 2004 Stock Option
Plan (the &quot;2004 Stock Option Plan&quot;) was initially approved by the Company's
Board of Director's effective as of October 16, 2003 and approved by the
Company's shareholders on December 11, 2003.&nbsp; On October 18, 2006, the
Compensation Committee and the Board of Directors approved an amendment and
restatement of the 2004 Stock Option Plan to increase the aggregate number of
shares of Common Stock authorized for issuance under the plan by 500,000 from
1,500,000 to 2,000,000 and add for restricted stock grants to the types of
awards available for grant under the plan</a><a name="_DV_M219"></a><b>,</b> subject
to shareholder approval at the Annual Meeting.</p>

<p align="justify" style="text-indent: 36pt"><a name="_DV_C280">The 2004 Stock Option Plan is
designed to enable the Company to offer an incentive-based compensation system
to the Company's key employees and officers. As of September 30, 2006, there
were approximately 121 employees (including all current executive officers)
eligible to participate in the 2004 Stock Option Plan.&nbsp; The 2004 Stock Option
Plan provides for the grant of incentive stock options, or ISOs, and
nonqualified stock options, or NQOs.&nbsp; If this proposal is approved the 2004
Stock Option Plan will also provide for grants of restricted stock.&nbsp; The
following summary description of the 2004 Stock Option Plan is qualified in its
entirety by reference to the full text of the 2004 Stock Option Plan, a copy of
which, as proposed to be amended and restated, is attached as <i>Appendix A</i>
to this proxy statement.</a></p>

<p><b><a name="_DV_C281">Shares Subject to the 2004 Stock Option Plan</a></b></p>

<p align="justify" style="text-indent: 36pt"><a name="_DV_C282">As of September 30, 2006, a
total of 1,401,955 shares, net of cancelled or terminated shares, have been
awarded or currently are subject to outstanding awards under the 2004 Stock
Option Plan.&nbsp; Of the 1,500,000 shares currently authorized under the 2004 Stock
Option Plan, only 98,045 shares remain available for future awards under the
2004 Stock Option Plan.&nbsp; If this proposal is approved, the aggregate number of
shares authorized for issuance under the 2004 Stock Option Plan (including
shares already awarded or currently subject to outstanding awards) would
increase by 500,000 shares from 1,500,000 to 2,000,000.&nbsp; Any shares of Common
Stock that are subject to an award under the 2004 Stock Options Plan but are
not used because the terms and conditions of the award are not met may again be
used for awards under the 2004 Stock Option Plan.</a></p>

<p align="justify" style="text-indent: 36pt"><a name="_DV_C283">As soon as practicable
following shareholder approval of this proposal, the Company intends to
register on Form S-8 under the Securities Act of 1933, as amended, the issuance
of the increased amount of Common Stock available under the 2004 Stock Option
Plan.</a></p>

<p><b><a name="_DV_C284">Administration</a></b></p>

<p align="justify" style="text-indent: 36pt"><a name="_DV_C285">The 2004 Stock Option Plan is
to be administered by the Company's Board of Directors or an appropriate
committee of the Company's Board of Directors. The 2004 Stock Option Plan is
currently administered by the Compensation Committee. It is the intent of the
2004 Stock Option Plan that it be administered in a manner such that </a><u>restricted stock
grants and</u><a name="_DV_M229"></a> option
grants and exercises would be &quot;exempt&quot; under Rule 16b-3 of the
Securities Exchange Act of 1934, as amended (the &quot;Exchange Act&quot;).</p>
<p align="justify" style="text-indent: 36pt">The Company's Board of Directors or
an appropriate committee is empowered to select those eligible persons to whom <a
name="_DV_C54">restricted stock or</a> options shall be granted under the 2004
Stock Option Plan, to determine the time or times at which options or restricted
stock shall be granted, whether options will be ISOs or NQOs, and the number of
shares to be subject to each option or restricted stock grant, and to fix the
time and manner in which each option may be exercised, including the exercise
price and option period, and other terms and conditions of such options and
restricted stock, all subject to the terms and conditions of the 2004 Stock
Option Plan. The Company's Board of Directors or an appropriate committee has
sole discretion to interpret and administer the 2004 Stock Option Plan, and its
decisions regarding the 2004 Stock Option Plan are final.</p>

<p align=center style='text-align:center'><a name="_DV_C286">Page
</a>16</p>

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<p align="justify" style="text-indent: 36pt"><a name="_DV_C287">The 2004 Stock Option Plan may
be wholly or partially amended or otherwise modified, suspended or terminated
at any time and from time to time by the Company's Board of Directors. Neither the
Company's Board of Directors nor any committee may materially impair any
outstanding options </a><a name="_DV_C60">or
restricted stock granted under the 2004 Stock Option Plan</a>
without the express consent of the <a name="_DV_C62">holder of the option or
restricted stock</a> or increase the number of shares subject to the 2004 Stock
Option Plan, materially increase the benefits to optionees under the 2004 Stock
Option Plan, materially modify the requirements as to eligibility to
participate in the 2004 Stock Option Plan or alter the method of determining
the option exercise price without shareholder approval. No option <a
name="_DV_C63">or restricted stock</a><u> </u>may be granted under the 2004
Stock Option Plan after October 16, 2013.</p>

<p><b><a name="_DV_C288">Option Terms</a></b></p>

<p align="justify" style="text-indent: 36pt"><a name="_DV_C289">ISOs granted under the 2004
Stock Option Plan must have an exercise price of not less than 100% of the fair
market value of the Common Stock on the date the ISO is granted and must be
exercised, if at all, within ten years from the date of grant. In the case of
an ISO granted to an optionee who owns more than 10% of the total voting
securities of the Company on the date of grant, the exercise price may not be
less than 110% of fair market value on the date of grant, and the option period
may not exceed five years. NQOs granted under the 2004 Stock Option Plan must
have an exercise price of not less than 85% of the fair market value of the
Common Stock on the date the NQO is granted.</a></p>

<p align="justify" style="text-indent: 36pt"><a name="_DV_C290">Options may be exercised during
a period of time fixed by the Company's Board of Directors or an appropriate
committee, except that no option may be exercised more than ten years after the
date of grant. In the discretion of the Company's Board of Directors or an
appropriate committee, payment of the purchase price for the shares of stock
acquired through the exercise of an option may be made in the manner and for
the type of consideration determined by the Company's Board of Directors or an
appropriate committee, which may include cash, one or more promissory notes,
shares of the Company's Common Stock, consideration received under a cashless
exercise program implemented in connection with the 2004 Employee Option Plan,
or any combination of the foregoing.</a></p>

<p><b><a name="_DV_C64">Restricted Stock Terms</a></b></p>

<p align="justify" style="text-indent: 36pt">If this proposal is approved, the 2004 Stock Option Plan
will also provide for grants of restricted stock.&nbsp; Restricted stock may be
granted under the 2004 Stock Option Plan pursuant to restricted stock
agreements.&nbsp; Restricted stock may be granted in consideration for past or future
services to be rendered to the Company or an affiliate of the Company, or in
any other form of legal consideration acceptable to the Company's Board of
Directors or an appropriate committee.&nbsp; Shares of Common Stock acquired under a
restricted stock grant may be subject to forfeiture to the Company in
accordance with a vesting schedule as determined by the Company's Board of
Directors or an appropriate committee.&nbsp; In the event the recipient of a
restricted stock grant ceases to be employed by either the Company or an
affiliate of the Company, the Company may reacquire any forfeited shares that
have not vested as of such termination under the terms of the applicable
restricted stock agreement.&nbsp; Rights to acquire shares under a restricted stock
grant may be transferred only upon such terms and conditions as determined by
the Company's Board of Directors or an appropriate committee.</p>

<p><b><a name="_DV_C291">Federal Income Tax Consequences</a></b></p>

<p style="text-indent: 36pt"><b><a name="_DV_C66"><i><u>Options</u></i></a></b></p>
<p style="text-indent: 36pt" align="justify">Holders of NQOs do not realize income as a result of a
grant of the option, but normally realize compensation income upon exercise of
an NQO to the extent that the fair market value of the shares of Common Stock
on the date of exercise of the NQO exceeds the exercise price paid. The Company
will be required to withhold taxes on ordinary income realized by an optionee
upon the exercise of a NQO. In the case of an optionee subject to the
&quot;short-swing&quot; profit recapture provisions of Section 16(b) of the
Exchange Act, the optionee realizes income only upon the lapse of the six-month
period under Section 16(b), unless the optionee elects to recognize income
immediately upon exercise of his or her option.</p>

<p align=center style='text-align:center'><a name="_DV_C292">Page
</a>17</p>

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<br clear=all style='page-break-before:
always'>










<p align="justify" style="text-indent: 36pt"><a name="_DV_C293">Holders of ISOs will not be
considered to have received taxable income upon either the grant or the
exercise of the option. Upon the sale or other taxable disposition of the
shares, long-term capital gain will normally be recognized on the full amount
of the difference between the amount realized and the option exercise price
paid if no disposition of the shares has taken place within either two years from
the date of grant of the option or one year from the date of exercise. If the
shares are sold or otherwise disposed of before the end of the one-year or
two-year periods, the holder of the ISO must include the gain realized as
ordinary income to the extent of the lesser of the fair market value of the
option stock minus the option price, or the amount realized minus the option
price. Any gain in excess of these amounts, presumably, will be treated as
capital gain. The Company will be entitled to a tax deduction in regard to an
ISO only to the extent the optionee has ordinary income upon the sale or other
disposition of the option shares.</a></p>

<p align="justify" style="text-indent: 36pt"><a name="_DV_C294">Upon the exercise of an ISO,
the amount by which the fair market value of the purchased shares at the time
of exercise exceeds the option price will be an &quot;item of tax
preference&quot; for purposes of computing the optionee's alternative minimum
tax for the year of exercise. If the shares so acquired are disposed of prior
to the expiration of the one-year and two-year periods described above, there
should be no &quot;item of tax preference&quot; arising from the option
exercise.</a></p>

<p align="justify" style="text-indent: 36pt"><b><a name="_DV_C67"><i><u>Restricted
Stock</u></i></a></b></p>

<p align="justify" style="text-indent: 36pt"><a name="_DV_C68">Upon receipt of a restricted
stock grant, the recipient will recognize ordinary income equal to the excess,
if any, of the fair market value of the shares on the date of issuance over the
purchase price, if any, paid for the shares.&nbsp; The Company will be entitled
(subject to the requirement of reasonableness and the satisfaction of a tax
reporting obligation) to a corresponding income tax deduction in the tax year
in which such ordinary income is recognized by the recipient.&nbsp; Certain
different rules may apply to recipients who are subject to Section 16(b) of the
Exchange Act.</a></p>

<p align="justify" style="text-indent: 36pt"><a name="_DV_C69">However, if the shares issued
upon the grant of restricted stock are unvested and subject to forfeiture, the
recipient will not recognize any taxable income at the time of grant, but will
have to report as ordinary income, as and when the forfeiture restrictions
lapse, an amount equal to the excess of (i) the fair market value of the shares
on the date the forfeiture restrictions lapse, over (ii) the purchase price, if
any, paid for the shares.&nbsp; The recipient may, however, elect under Section
83(b) of the Internal Revenue Code of 1986, as amended, to include as ordinary
income in the year of the restricted stock grant an amount equal to the excess
of (x) the fair market value of the shares on the date of grant, over (y) the
purchase price, if any, paid for such shares.&nbsp; If the Section 83(b) election is
made, the recipient will not recognize any additional income as and when the
forfeiture restrictions lapse.</a></p>

<p align="justify" style="text-indent: 36pt"><b><a name="_DV_C70">Generally</a></b></p>

<p align="justify" style="text-indent: 36pt"><a name="_DV_C295">The tax discussion set forth
above is included for general information only and is based upon present law.
Each </a><a name="_DV_C71">recipient or </a><a
name="_DV_M248"></a>holder of options
or restricted stock<a name="_DV_M249"></a> under the 2004 Stock Option Plan should consult his or
her own tax advisor as to the specific tax consequences of the transaction to
him or her, including application and effect of federal, state, local and other
tax laws and the possible effects of changes in federal or other laws.</p>

<p><b><a name="_DV_C296">New Plan Benefits</a></b></p>

<p><a name="_DV_C297">Because awards under the 2004
Stock Option Plan are discretionary, no future awards under the 2004 Stock
Option Plan are determinable at this time. </a></p>
<p>&nbsp;</p>

<p align=center style='text-align:center'><a name="_DV_C298">Page
</a>18</p>

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</div>



<br clear=all style='page-break-before:
always'>














<p>Possible Anti-Takeover Effects</p>

<p align="justify" style="text-indent: 36pt"><a name="_DV_C299">Although not intended as an anti-takeover
measure by the Board of Directors, one of the possible effects of the 2004
Stock Option Plan could be to place additional shares, and to increase the
percentage of the total number of shares outstanding, in the hands of the
Company's officers (some of whom may also serve on the Board of Directors).
These persons may be viewed as part of, or friendly to, incumbent management
and may, therefore, under certain circumstances be expected to make investment
and voting decisions in response to a hostile takeover attempt that may serve
to discourage or render more difficult the accomplishment of the attempt.</a></p>

<p align="justify" style="text-indent: 36pt"><a name="_DV_C300">In addition, options and
restricted stock</a> may,
in the discretion of the Board of Directors or an appropriate committee,
contain a provision providing for the acceleration of the exercisability of
outstanding, but unexercisable, installments, or the vesting of unvested shares
upon the first public announcement of a tender offer, merger, consolidation,
sale of all or substantially all of the assets of the Company, or other
attempted changes in the control of the Company. In the opinion of the
Company's Board of Directors, such an acceleration provision merely ensures
that <a name="_DV_C76">holders of options and restricted stock</a> under the
2004 Stock Option Plan will be able to exercise their options<a name="_DV_C77">,
and that their restricted stock will vest,</a> as intended by the Company's
Board of Directors and shareholders prior to any such extraordinary corporate
transaction that might serve to limit or restrict that right. The Company's Board
of Directors is, however, presently unaware of any threat of hostile takeover
involving the Company.</p>

<p><b><a name="_DV_C301">Required Vote and Board Recommendation</a></b></p>

<p align="justify" style="text-indent: 36pt"><a name="_DV_C79">Assuming</a><a
name="_DV_M260"></a> the<a name="_DV_C80">
holders of</a><a name="_DV_M261"></a>
shares <a name="_DV_C82">entitled to cast</a><a
name="_DV_M262"></a> a majority of the <a
name="_DV_C84">total votes of the</a><a name="_DV_M263"></a> outstanding shares of <a name="_DV_C86">stock</a><a
name="_DV_M264"></a> entitled to vote on this
proposal<a name="_DV_C88">, represented in person or by
proxy, are present at the Annual Meeting, this proposal will be approved if the
votes cast in favor of this proposal exceed the votes cast opposing this
proposal.&nbsp; Abstentions and broker non-votes will be counted for purposes of
determining whether a quorum is present for this proposal, but will not be
included in the vote totals for this proposal and, therefore, will have no
effect on the vote</a><a name="_DV_M266"></a>.</p>

<p style='margin-top:12.0pt;text-indent:36.0pt' align="justify"><b><a
name="_DV_C303">THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE
&quot;FOR&quot; THE APPROVAL OF THE AMENDMENT AND RESTATEMENT OF THE 2004 STOCK
OPTION PLAN.</a></b></p>

<p align=center style='margin-top:12.0pt;text-align:center;
page-break-after:avoid'><b><a name="_DV_C304"><u>Proposal
No. 3</u></a></b></p>

<p align=center style='margin-top:12.0pt;text-align:center;
page-break-after:avoid'><b>RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC
ACCOUNTANTS</b></p>

<p style='margin-top:12.0pt;text-indent:36.0pt' align="justify">The Audit Committee of the Company
has appointed the firm of Moss Adams, LLP as the Company's independent
certified public accountants for the fiscal year ending June 30, 2007, and
requests the shareholders to ratify this appointment by the holders of a
majority of the shares represented either in person or proxy at the Annual
Meeting.&nbsp; In the event that the shareholders do not ratify the selection of
Moss Adams, LLP as the Company's independent public accountants, the Board of
Directors will consider the selection of another independent public accounting
firm. </p>



<p style='text-indent:36.0pt' align="justify">A
representative of Moss Adams, LLP is expected to be present at the Annual
Meeting, will have the opportunity to make a statement if such representative
desires to do so, and will be available to respond to appropriate questions. </p>

<p align=center style='text-align:center;text-indent:0pt;page-break-after:
avoid'><b>ACCOUNTING FEES</b></p>
<p align=center style='text-align:justify;text-indent:36pt;page-break-after:
avoid'>The Audit Committee's policy is to pre-approve all auditing services and permitted non-audit services (including the fees and terms thereof) to be performed for the Company by its independent auditor, subject to the de minimis exceptions for non-audit services described in Section 10A(i)(1)(B) of the Exchange Act which are approved by the Audit Committee prior to the completion of the audit.&nbsp; The Audit Committee considers whether the performance of any service by the Company's independent auditors is compatible with maintaining such auditor's independence.</p>

<p>&nbsp;</p>

<p align=center style='text-align:center'>Page 19</p>

<div class=MsoNormal align=center style='text-align:center'>

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</div>



<br clear=all
style='page-break-before:always'>










<p style='text-align:justify'>&nbsp;</p>



<p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;text-indent:24.5pt'>The following table sets
forth the aggregate fees billed to the Company for the fiscal years ended June
30, 2006 and June 30, 2005 by the Company's auditors, all of which were
preapproved by the Audit Committee:</p>
<p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;text-indent:24.5pt'>&nbsp;</p>
<div align="center">
	<table class="MsoNormalTable" border="0" cellpadding="0" style="border-collapse:collapse" width="60%">
		<tr style="height:12.35pt">
			<td width="190" valign="top" style="width:142.7pt;border-top:solid windowtext 1.5pt;
  border-left:solid windowtext 1.5pt;border-bottom:none;border-right:none;
  padding:0pt 1.5pt 0pt 1.5pt;height:12.35pt"></td>
			<td width="130" valign="top" style="width:97.8pt;border-top:solid windowtext 1.5pt;
  border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
  padding:0pt 1.5pt 0pt 1.5pt;height:12.35pt">
			<p class="MsoNormal" align="center" style="text-align:center;text-autospace:none">
			<b>Fiscal 2006</b></td>
			<td width="137" valign="top" style="width:102.45pt;border-top:solid windowtext 1.5pt;
  border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.5pt;
  padding:0pt 1.5pt 0pt 1.5pt;height:12.35pt">
			<p class="MsoNormal" align="center" style="text-align:center;text-autospace:none">
			<b>Fiscal 2005</b></td>
		</tr>
		<tr style="height:12.35pt">
			<td width="190" valign="top" style="width:142.7pt;border:none;border-left:solid windowtext 1.5pt;
  padding:0pt 1.5pt 0pt 1.5pt;height:12.35pt">
			<p class="MsoNormal" style="text-autospace:none">Audit Fees&#185;</td>
			<td width="130" valign="top" style="width:97.8pt;padding:0pt 1.5pt 0pt 1.5pt;
  height:12.35pt">
			<p class="MsoNormal" align="center" style="text-align:center;text-autospace:none">
			$126,406</td>
			<td width="137" valign="top" style="width:102.45pt;border:none;border-right:solid windowtext 1.5pt;
  padding:0pt 1.5pt 0pt 1.5pt;height:12.35pt">
			<p class="MsoNormal" align="center" style="text-align:center;text-autospace:none">
			$100,000</td>
		</tr>
		<tr style="height:12.35pt">
			<td width="190" valign="top" style="width:142.7pt;border:none;border-left:solid windowtext 1.5pt;
  padding:0pt 1.5pt 0pt 1.5pt;height:12.35pt"></td>
			<td width="130" valign="top" style="width:97.8pt;padding:0pt 1.5pt 0pt 1.5pt;
  height:12.35pt"></td>
			<td width="137" valign="top" style="width:102.45pt;border:none;border-right:solid windowtext 1.5pt;
  padding:0pt 1.5pt 0pt 1.5pt;height:12.35pt"></td>
		</tr>
		<tr style="height:12.35pt">
			<td width="190" valign="top" style="width:142.7pt;border:none;border-left:solid windowtext 1.5pt;
  padding:0pt 1.5pt 0pt 1.5pt;height:12.35pt">
			<p class="MsoNormal" style="text-autospace:none">Audit-Related Fees&#178;</td>
			<td width="130" valign="top" style="width:97.8pt;padding:0pt 1.5pt 0pt 1.5pt;
  height:12.35pt">
			<p class="MsoNormal" align="center" style="text-align:center;text-autospace:none">
			$86,131</td>
			<td width="137" valign="top" style="width:102.45pt;border:none;border-right:solid windowtext 1.5pt;
  padding:0pt 1.5pt 0pt 1.5pt;height:12.35pt">
			<p class="MsoNormal" align="center" style="text-align:center;text-autospace:none">
			$14,343</td>
		</tr>
		<tr style="height:12.35pt">
			<td width="190" valign="top" style="width:142.7pt;border:none;border-left:solid windowtext 1.5pt;
  padding:0pt 1.5pt 0pt 1.5pt;height:12.35pt"></td>
			<td width="130" valign="top" style="width:97.8pt;padding:0pt 1.5pt 0pt 1.5pt;
  height:12.35pt"></td>
			<td width="137" valign="top" style="width:102.45pt;border:none;border-right:solid windowtext 1.5pt;
  padding:0pt 1.5pt 0pt 1.5pt;height:12.35pt">
			<p align="center"></td>
		</tr>
		<tr style="height:12.35pt">
			<td width="190" valign="top" style="width:142.7pt;border:none;border-left:solid windowtext 1.5pt;
  padding:0pt 1.5pt 0pt 1.5pt;height:12.35pt">
			<p class="MsoNormal" style="text-autospace:none">Tax Fees&#179;</td>
			<td width="130" valign="top" style="width:97.8pt;padding:0pt 1.5pt 0pt 1.5pt;
  height:12.35pt">
			<p class="MsoNormal" align="center" style="text-align:center;text-autospace:none">
			$31,951</td>
			<td width="137" valign="top" style="width:102.45pt;border:none;border-right:solid windowtext 1.5pt;
  padding:0pt 1.5pt 0pt 1.5pt;height:12.35pt">
			<p class="MsoNormal" align="center" style="text-align:center;text-autospace:none">
			$30,071</td>
		</tr>
		<tr style="height:12.35pt">
			<td width="190" valign="top" style="width:142.7pt;border:none;border-left:solid windowtext 1.5pt;
  padding:0pt 1.5pt 0pt 1.5pt;height:12.35pt"></td>
			<td width="130" valign="top" style="width:97.8pt;padding:0pt 1.5pt 0pt 1.5pt;
  height:12.35pt"></td>
			<td width="137" valign="top" style="width:102.45pt;border:none;border-right:solid windowtext 1.5pt;
  padding:0pt 1.5pt 0pt 1.5pt;height:12.35pt"></td>
		</tr>
		<tr style="height:14.5pt">
			<td width="190" valign="top" style="width:142.7pt;border-top:none;border-left:
  solid windowtext 1.5pt;border-bottom:solid windowtext 1.5pt;border-right:
  none;padding:0pt 1.5pt 0pt 1.5pt;height:14.5pt">
			<p class="MsoNormal" style="text-autospace:none">All Other Fees<sup>4</sup></td>
			<td width="130" valign="top" style="width:97.8pt;border:none;border-bottom:solid windowtext 1.5pt;
  padding:0pt 1.5pt 0pt 1.5pt;height:14.5pt">
			<p class="MsoNormal" align="center" style="text-align:center;text-autospace:none">
			&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
			-&nbsp;&nbsp; </td>
			<td width="137" valign="top" style="width:102.45pt;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.5pt;border-right:solid windowtext 1.5pt;
  padding:0pt 1.5pt 0pt 1.5pt;height:14.5pt">
			<p class="MsoNormal" align="center" style="text-align:center;text-autospace:none">
			&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
			-&nbsp;&nbsp; </td>
		</tr>
		<tr style="height:12.35pt">
			<td width="190" valign="top" style="width:142.7pt;padding:0pt 1.5pt 0pt 1.5pt;
  height:12.35pt"></td>
			<td width="130" valign="top" style="width:97.8pt;padding:0pt 1.5pt 0pt 1.5pt;
  height:12.35pt"></td>
			<td width="137" valign="top" style="width:102.45pt;padding:0pt 1.5pt 0pt 1.5pt;
  height:12.35pt"></td>
		</tr>
	</table>
</div>
<p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;text-indent:24.5pt'>&nbsp;</p>



<div class=MsoNormal align=left style='text-align:left'>

<hr size=1 width="18%" noshade color=black align=left>

</div>

<p style='text-align:justify; margin-left:0pt; margin-right:0pt'>(1) <i>Audit Fees</i>
consist of fees billed for professional services rendered for the audit of the
Company's consolidated annual financial statements and review of the interim
consolidated financial statements included in quarterly reports and services
that are normally provided by Moss Adams LLP in connection with statutory and
regulatory filings or engagements. </p>



<p style='text-align:justify; margin-left:0pt; margin-right:0pt'>(2) <i>Audit-Related
Fees</i> consist of fees billed for assurance and related services that are
reasonably related to the performance of the audit or review of the Company's
consolidated financial statements and are not reported under &quot;Audit Fees.&quot; This
category includes fees related to the audit of Astromec, a business acquired
during 2006; and consultation regarding accounting or disclosure treatment of
transactions or events and/or the actual or potential impact of final or
proposed rules, standard or interpretation by the SEC, FASB or other regulatory
or standard-setting bodies as well as general assistance with implementation of
the requirements of SEC rules or listing standards promulgated pursuant to the
Sarbanes-Oxley Act of 2002. </p>



<p style='text-align:justify; margin-left:0pt; margin-right:0pt'>(3) <i>Tax Fees</i>
consist of fees billed for professional services rendered for tax compliance,
tax advice and tax planning. These services include assistance regarding
federal state and local tax compliance, planning and advice. </p>



<p style='text-align:justify; margin-left:0pt; margin-right:0pt'>(4) <i>All Other Fees</i>
consist of fees for products and services other than the services reported
above.</p>

<p align=left style='text-align:left;text-indent:0pt;page-break-after:
avoid'><b>Required Vote and Board
Recommendation</b></p>

<p style='page-break-after:avoid; text-indent:36pt' align="justify">Although shareholder ratification is not required
for the appointment of Moss Adams, LLP as the Company's independent public
accountants for the fiscal year ending June
30, 2007, the Board of Directors has directed that this appointment be
submitted to the Company's shareholders for ratification at the Annual Meeting.&nbsp; Assuming
the holders of shares entitled to cast
a majority of the <a name="_DV_C92">total votes of the outstanding
shares of stock entitled to vote on this proposal, represented in person or by
proxy, are present at the Annual Meeting, this proposal will be ratified and
approved if the votes cast in favor of this proposal exceed the votes cast
opposing this proposal.&nbsp; Abstentions and broker non-votes will be counted for
purposes of determining whether a quorum is present for this proposal, but will
not be included in the vote totals for this proposal and, therefore, will have
no effect on the vote</a>.</p>

<p style="text-indent: 36pt" align="justify"><b>THE BOARD OF DIRECTORS RECOMMENDS THAT THE
SHAREHOLDERS VOTE &quot;FOR&quot; THE RATIFICATION OF THE APPOINTMENT OF MOSS ADAMS, LLP
TO SERVE AS THE COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR
ENDING JUNE&nbsp;30,&nbsp;2007.</b><a name="_DV_M274"></a></p>

<p align=center style='text-align:center'><a name="_DV_M273"></a>Page
20</p>

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<br clear=all
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<p align=center style='text-align:center'><b>ANNUAL REPORT</b></p>

<p align="justify" style="text-indent: 36pt">The Company's Annual Report containing
audited financial statements for the fiscal year ended June 30, 2006
accompanies this proxy statement.&nbsp; Such report is not incorporated herein and
is not deemed to be a part of this proxy solicitation material.</p>

<p align="center"><b>PROPOSALS OF SHAREHOLDERS</b></p>

<p align="justify" style="text-indent: 36pt">Pursuant to Rule 14a-8 of the Securities
and Exchange Commission, proposals by shareholders which are intended for
inclusion in the Company's proxy statement and proxy card and to be presented
at the Company's next annual meeting must be received by the Company by July 2,
2007, in order to be considered for inclusion in the Company's proxy materials.
Such proposals should be addressed to the Company's Secretary and may be
included in next year's proxy materials if they comply with certain rules and
regulations of the Securities and Exchange Commission governing shareholder
proposals.<u> </u>Proposals
by shareholders that are not intended for inclusion in the Company's proxy
materials must also be received by the Company's Secretary no later than July
2, 2007.&nbsp; Every shareholder notice must also comply with certain
other requirements set forth in the Company's Bylaws, a copy of which may be
obtained by written request delivered to the Company's Secretary.</p>

<p align="center"><b><a name="_DV_M278"></a>OTHER MATTERS</b></p>

<p align="justify" style="text-indent: 36pt">The Board of Directors knows of no other
matters which will be acted upon at the Annual Meeting. If any other matters
are presented properly for action at the Annual Meeting or at any adjournment
or postponement thereof, it is intended that the proxy will be voted with respect
thereto in accordance with the best judgment and in the discretion of the proxy
holder.</p>

<p align="justify" style="text-indent: 36pt"><b>THE COMPANY'S SHAREHOLDERS ARE URGED TO
COMPLETE, SIGN AND RETURN PROMPTLY THE ACCOMPANYING PROXY CARD IN THE ENCLOSED
ENVELOPE.</b></p>

<p align=left style='margin-right:0pt;
margin-left:3.5in;text-align:left;
'>By
Order of the Board of Directors,<br>
<br>
PRO-DEX, INC.<br>
<br>
/s/ Jeffrey J. Ritchey<br>
Corporate Secretary<a name="_DV_M282"></a></p>

<p align=left style='margin-right:0pt;
margin-left:3.5in;text-align:left;
'>Santa Ana, California<br>
October<a name="_DV_M283"></a> 20, 2006</p>



<p style='margin-top:12.0pt' align="justify"><a name="_DV_M284"></a>SHAREHOLDERS
MAY OBTAIN FREE OF CHARGE A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB
FOR THE FISCAL YEAR ENDED <a name="_DV_C330"><u>JUNE</u></a> 30, 2006, (WITHOUT
EXHIBITS) AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION BY WRITING TO:&nbsp;
INVESTOR RELATIONS, PRO-DEX, INC., 151 E. COLUMBINE AVE, SANTA ANA, CALIFORNIA
92707 OR CALLiNG (714) 241-4411.</p>

<p align=center style='text-align:center'><a name="_DV_M285"></a><b>&nbsp;</b></p>

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<p align=left style='text-align:left'><b><u><font size="2">APPENDIX A</font></u></b></p>

<p align="center"><b><font size="2">PRO-DEX, INC.</font></b></p>

<p align="center"><b><font size="2">FIRST AMENDED AND RESTATED<br>
2004 STOCK OPTION PLAN</font></b></p>



<p><font size="2">This First Amended and Restated 2004 Stock Option Plan (the &quot;<u>Plan</u>&quot;)
is adopted in consideration for services rendered and to be rendered to
Pro-Dex, Inc. or any Related Company (as defined below).</font></p>

<p><font size="2">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>
Definitions</u>. The terms used in this Plan shall, unless otherwise indicated
or required by the particular context, have the following meanings:</font></p>

<p style="margin-left: 36pt" align="justify"><font size="2">(a)&nbsp;&nbsp;&nbsp;&nbsp; <u>
Award Shares</u>: The shares of Common Stock underlying an Option or Restricted
Stock granted to an Employee.</font></p>

<p style="margin-left: 36pt" align="justify"><font size="2">(b)&nbsp;&nbsp;&nbsp;&nbsp; <u>
Board</u>: The Board of Directors of Pro-Dex, Inc.</font></p>

<p style="margin-left: 36pt" align="justify"><font size="2">(c)&nbsp;&nbsp;&nbsp;&nbsp; <u>
Code</u>: The Internal Revenue Code of 1986, as amended.</font></p>

<p style="margin-left: 36pt" align="justify"><font size="2">(d)&nbsp;&nbsp;&nbsp;&nbsp; <u>
Common Stock</u>: The no par value common stock of Pro-Dex, Inc.</font></p>

<p style="margin-left: 36pt" align="justify"><font size="2">(e)&nbsp;&nbsp;&nbsp;&nbsp;
<u>Company</u>: Pro-Dex, Inc., a corporation incorporated under the laws of
Colorado, and any successors in interest by merger, operation of law, assignment
or purchase of all or substantially all of the property, assets or business of
the Company.</font></p>

<p style="margin-left: 36pt" align="justify"><font size="2">(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<u>Date of Grant</u>: The date on which an Option is granted under the Plan.</font></p>

<p style="margin-left: 36pt" align="justify"><font size="2">(g)&nbsp;&nbsp;&nbsp;
<u>Disinterested Person</u>: A director who has not been granted or awarded
equity securities pursuant to any plan of the Company or of any Related Company
of the Company during one year prior to that director's service as an
administrator of the Plan, except as otherwise provided in Rule 16b-3
promulgated under the Securities Exchange Act of 1934, as amended (the &quot;<u>Exchange
Act</u>&quot;) with respect to (i) participation in formula plans or ongoing
securities acquisitions plans, and (ii) an election to receive securities for an
annual retainer fee.</font></p>

<p style="margin-left: 36pt" align="justify"><font size="2">(h)&nbsp;&nbsp;&nbsp;&nbsp;
<u>Employee</u>: An Employee is an employee of the Company or any Related
Company.</font></p>

<p style="margin-left: 36pt" align="justify"><font size="2">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<u>Fair Market Value</u>: The Fair Market Value of the Option Shares. Such Fair
Market Value as of any date shall be determined by the Committee as of the last
business day for which the prices or quotes discussed in this sentence are
available prior to the date an Option is granted and shall mean (i) the average
(on that date) of the high and low prices of the Common Stock on the principal
national securities exchange by which the Common Stock is traded, if the stock
is then traded on a national securities exchange; or, (ii) the last reported
sale price (on that date) of the Common Stock on NASDAQ, if the stock is not
then traded on a national securities exchange; or (iii) the closing bid price
(or average of bid prices) last quoted (on that date) by an established
quotation service for over-the-counter securities, if the stock is not reported
on NASDAQ. However, if the Common Stock is not publicly-traded at the time an
Option is granted under the Plan, Fair Market Value shall be deemed to be the
fair value of the stock as determined in good faith by the Board or the
Committee, and a written record of the method of determining such value shall be
maintained.</font></p>

<p style="margin-left: 36pt" align="justify"><font size="2">(j)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
i<u>ncentive Stock Options (&quot;ISOs&quot;)</u>: &quot;Incentive Stock Options&quot; as that term
is defined in Section 422 of the Code.</font></p>
<p></p>

<p align="center">

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<p style="margin-left: 36pt" align="justify"><font size="2">(k)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Key
Employee</u>: A person designated by the Committee who either is employed by
the Company or a Related Company (see below) and upon whose judgment,
initiative and efforts the Company or a Related Company is largely dependent
for the successful conduct of its business; provided, however, that Key
Employees shall not include those members of the Board who are not employees of
the Company or a Related Company.</font></p>

<p style="margin-left: 36pt" align="justify"><font size="2">(l)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<u>Non-Incentive
Stock Options (&quot;Non-ISOs&quot;</u>): Options which are not intended to qualify as
&quot;Incentive Stock Options&quot; under Section 422 of the Code.</font></p>

<p style="margin-left: 36pt" align="justify"><font size="2">(m)&nbsp;&nbsp;&nbsp;&nbsp; <u>Option</u>:
The rights granted to an Employee to purchase Common Stock pursuant to the
terms and conditions of an Option Agreement.</font></p>

<p style="margin-left: 36pt" align="justify"><font size="2">(n)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Option
Agreement</u>: The written agreement (and any amendment or supplement thereto)
between the Company and an Employee designating the terms and conditions of an
Option.</font></p>

<p style="margin-left: 36pt" align="justify"><font size="2">(o)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<u>Committee</u>:
With respect to grants of Options to Employees who are not also Officers and/or
Directors of the Company, the Plan shall be administered by a Committee (&quot;<u>Committee</u>&quot;)
composed of the Board or at least two members of the Board. With respect to
grants of Options to Employees who are also Officers or Directors, the Plan
shall be administered by a committee, selected by the Board, consisting of two
or more persons, each of whom is a Disinterested Person. Such committee may
also be deemed an Committee.</font></p>

<p style="margin-left: 36pt" align="justify"><font size="2">(p)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<u>Option
Shares</u>: The shares of Common Stock underlying an Option granted to an
Employee.</font></p>

<p style="margin-left: 36pt" align="justify"><font size="2">(q)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<u>Optionee</u>:
An Employee who has been granted an Option.</font></p>

<p style="margin-left: 36pt" align="justify"><font size="2">(r)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<u>Related
Company</u>: Any corporation that is a &quot;parent corporation&quot; or a &quot;subsidiary
corporation&quot; with respect to the Company, as those terms are defined in Section
425 of the Code. The determination of whether a corporation is a Related
Company shall be made without regard to whether the corporation or the
relationship between the corporation and the Company now exists or comes into
existence hereinafter.</font></p>

<p style="margin-left: 36pt" align="justify"><font size="2">(s)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Restricted
Stock</u>: Shares of Common Stock granted pursuant to the terms of <u>Section
12</u> hereof.</font></p>

<p style="margin-left: 36pt" align="justify"><font size="2">(t)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Restricted
Stock Agreement</u>: The written agreement (and any amendment or supplement
thereto) between the Company and an Employee designating the terms and
conditions of Restricted Stock.</font></p>

<p style="margin-left: 36pt" align="justify"><font size="2">(u)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Stock
Award</u>: Any Option or Restricted Stock granted under this Plan.</font></p>

<p><font size="2">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Purpose and
Scope</u>.</font></p>

<p style="margin-left: 36pt" align="justify"><font size="2">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
purpose of this Plan is to advance the interests of the Company and its
shareholders by affording Employees an opportunity for investment in the
Company and the incentive advantages inherent in stock ownership in this
Company.</font></p>

<p style="margin-left: 36pt" align="justify"><font size="2">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
Plan authorizes the Committee to grant Stock Awards to Employees selected by
the Committee while considering criteria such as employment position or other
relationship with the Company, duties and responsibilities, ability,
productivity, length of service or association, morale, interest in the
Company, recommendations by supervisors, and other matters.</font></p>

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<p><font size="2">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Administration
of the Plan</u>.</font></p>

<p align="justify" style="margin-left: 36pt"><font size="2">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Plan shall be administered by the Committee. The Committee shall have the
authority granted to it under this Section and under each other Section of the
Plan.</font></p>

<p align="justify" style="margin-left: 36pt"><font size="2">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
accordance with and subject to the provisions of the Plan, the Committee shall
select the Employees to receive Stock Awards and shall determine (i) the number
of shares of Common Stock to be subject to each Stock Award, (ii) the time at
which each Stock Award is to be granted, (iii) whether a Stock Award shall be
granted in exchange for the cancellation and termination of a previously
granted option or options under the Plan or otherwise, (iv) the purchase price
for the Option Shares, (v) the option period, and (vi) the manner in which the
Option becomes exercisable. In addition, the Committee shall fix such other
terms of each Stock Award as the Committee may deem necessary or desirable. The
Committee shall determine the form of Option Agreement or Restricted Stock
Agreement to evidence each Stock Award.</font></p>

<p align="justify" style="margin-left: 36pt"><font size="2">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Committee
from time to time may adopt such rules and regulations for carrying out the purposes
of the Plan as it may deem proper and in the best interests of the Company. The
Committee shall keep minutes of its meetings and those minutes shall be
distributed to every member of the Board.</font></p>

<p align="justify" style="margin-left: 36pt"><font size="2">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board may from time to time make such changes in and additions to the Plan as
it may deem proper and in the best interest of the Company; provided, however,
that no such change or addition shall impair any Stock Award previously granted
under the Plan, and that the approval by the affirmative vote of the holders of
a majority of the Company's securities entitled to vote and represented at a
meeting duly held in accordance with the applicable laws of the State of
California, shall be required for any amendment which would:</font></p>

<p style='text-indent:36.0pt; margin-left:36pt'><font size="2">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; materially
modify the eligibility requirements for receiving Stock Awards under the Plan;</font></p>

<p style='text-indent:36.0pt; margin-left:36pt'><font size="2">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; materially
increase the benefits accruing to Employees under the Plan; or</font></p>

<p style='text-indent:36.0pt; margin-left:36pt'><font size="2">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; increase
the number of shares of Common Stock that may be issued under the Plan.</font></p>

<p align="justify" style="margin-left: 36pt"><font size="2">(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; All
actions taken and all interpretations and determinations made by the Committee
in good faith (including determinations of Fair Market Value) shall be final
and binding upon all Employees, the Company and all other interested persons.
No member of the Committee shall be personally liable for any action,
determination or interpretation made in good faith with respect to the Plan,
and all members of the Committee shall, in addition to rights they may have as
Directors of the Company be fully protected by the Company with respect to any
such action, determination or interpretation.</font></p>

<p align="justify" style="margin-left: 36pt"><font size="2">(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; It is
the further intent of the Plan that it conform in all respects with the
requirements of Rule 16b-3 of the Securities and Exchange Commission under the
Exchange Act (&quot;<u>Rule 16b-3</u>&quot;). To the extent that any aspect of the Plan
or its administration is at any time viewed as inconsistent with the
requirements of Rule 16b-3 or, in connection with ISOs, the Code, that aspect
shall be deemed to be modified, deleted, or otherwise changed as necessary to
ensure continued compliance with the Rule 16b-3 requirements.</font></p>

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<p><font size="2">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Number of Shares</u>.
The Board is authorized to appropriate, issue and sell for the purposes of the Plan, and the Committee is
authorized to grant Options with respect to, a total number, not in excess of&nbsp; 2,000,000 shares of Common Stock, either
treasury or authorized but unissued, or the number and kind of shares of stock or other securities
which in accordance with <u>Section 9</u> shall be substituted for the 2,000,000 shares or into which such 2,000,000 shares
shall be adjusted. Such number of shares shall &nbsp;include any options granted under any other stock option
plan of the Company that may from time to time become subject to and governed by the terms and
conditions of this Plan. All or any unsold shares&nbsp;subject to a Stock Award that for any reason expires or
otherwise terminates, may again be made subject to Stock Awards under the Plan.</font></p>

<p><font size="2">5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Eligibility</u>.
Options which are intended to qualify as ISOs will be granted only to Key
Employees. Key Employees and other Employees
may hold more than one Option under the Plan and may hold Stock Awards under the Plan and options or
awards granted pursuant to other plans or otherwise.</font></p>

<p><font size="2">6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Option Price</u>. The Committee shall
determine the purchase price for the Options Shares, provided that the purchase price to be paid by Optionees for the
Option Shares which are intended to qualify as ISOs shall not be less than 100 percent of the Fair Market
Value of the Option Shares at the time the ISO is granted. The price per share to be paid by the Optionee
at the time an NQO is exercised shall not be less than 85% of the Fair Market Value on the date as of
which the NQO is granted, as determined by the Committee. The purchase price for the Option Shares shall be
a fixed, and cannot be a fluctuating, price.</font></p>

<p><font size="2">7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Duration and
Exercise of Options</u>.</font></p>

<p align="justify" style="text-indent: 36pt"><font size="2">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Each
Option granted under the Plan shall be exercisable on such date or dates and
during such period and for such number of shares as shall be determined
pursuant to the provisions of the instrument evidencing such Option. The Committee
shall have the right to accelerate the date of exercise of any Option, provided
that the Committee shall not accelerate the exercise of any ISO granted if such
acceleration would violate the annual vesting limitation contained in Section
422(d)(1) of the Code.</font></p>

<p align="justify" style="text-indent: 36pt"><font size="2">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Except
as otherwise permitted under <u>Section 11</u>, during the lifetime of the
Optionee, the Option shall be exercisable only by the Optionee; provided, that
in the event of the legal disability of an Optionee, the guardian or personal
representative of the Optionee may exercise the Option. However, if the Option
is an ISO it may be exercised by the guardian or personal representative of the
Optionee only if such guardian or personal representative obtains a ruling from
the Internal Revenue Service or an opinion of counsel to the effect that
neither the grant nor the exercise of such power is violative of Section
422(b)(5) of the Code. Any opinion of counsel must be both from counsel and in a
form acceptable to the Committee.</font></p>

<p align="justify" style="text-indent: 36pt"><font size="2">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Committee
may determine whether any Option shall be exercisable as provided in Subsection
(a) of this <u>Section 7</u> or whether the Options shall be exercisable in
installments only; if the Committee determines the latter, it shall determine
the number of installments and the percentage of the Option exercisable at each
installment date. All such installments shall be cumulative.</font></p>

<p align="justify" style="text-indent: 36pt"><font size="2">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; If the
Optionee ceases to be employed by either the Company or a Related Company
because of the death or permanent and total disability (as defined in Section
22(e) (3) of the Code) of the Optionee, any Option held by the Optionee at the
time his employment ceases may be exercised within 90 days after the date his
employment ceased, but only to the extent that the Option was exercisable
according to its terms on the date the Optionee's employment ceased. After such
90-day period, any unexercised portion of an Option shall expire.</font></p>

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<p align="justify" style="text-indent: 36pt"><font size="2">(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Notwithstanding the provisions
of Subsection (d) of this <u>Section 7</u>, if an Optionee's employment by the
Company or a Related Company ceases for any reason other than the Optionee's
death or permanent and total disability, any unexercised portion of any Option
held by the Optionee at the time his employment ceases may be exercised within
30 days after the date his employment ceased, but only to the extent that the
Option was exercisable according to its terms on the date the Optionee's
employment ceased. After such date, any unexercised portion of an Option shall
expire.</font></p>

<p align="justify" style="text-indent: 36pt"><font size="2">(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Each
Option shall be exercised in whole or part by delivering to the office of the
Treasurer of the Company written notice of the number of shares with respect to
which the Option is to be exercised and by paying in full the purchase price
for the Option Shares purchased as set forth in <u>Section 8</u>; provided,
that an Option may not be exercised in part unless the purchase price for the
Option Shares purchased is at least $2,000.</font></p>

<p align="justify" style="text-indent: 36pt"><font size="2">(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To the
extent required to qualify for the exemption provided by Rule 16b-3 under the
Exchange Act, and any successor provision, at least six months must elapse from
the date of acquisition of an Option by any person who is subject to the
reporting requirements of Section 16(a) of the Exchange Act to the date of
exercise of such Option or disposition of the Option Shares.</font></p>

<p align="justify"><font size="2">8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Payment
for Option Shares</u>. If the purchase price of the Option Shares purchased by
any Optionee at one time exceeds $2,000, the Committee may permit all or part
of the purchase price for the Option Shares to be paid by the Optionee by (a)
delivering to the Company shares of the Company's Common Stock previously owned
by the Optionee with a Fair Market Value as of the date of payment equal to the
portion of the purchase price for the Option Shares that the Optionee does not
pay in cash, (b) having shares withheld from the amount of shares to be
received by the Optionee, (c) delivering an irrevocable subscription agreement
obligating the Optionee to take and pay for the shares to be purchased within
one year of the date of such exercise, or (d) complying with any other payment
mechanisms as the Committee may approve from time to time. As a condition to
the exercise of any Option granted under this Plan, the Optionee shall make
such arrangements as the Committee may require for the satisfaction of any
federal, state or withholding tax obligations which may arise in connection
with such exercise. The issuance, transfer or delivery of certificates of
shares of Common Stock pursuant to the exercise or Options may be delayed, at
the discretion of the Committee, until the Committee is satisfied that the
applicable requirements of federal and state securities laws and the
withholding provisions of the Code have been met. Until such person has been
issued a certificate or certificates for the Option Shares so purchased, he or
she shall possess no rights of a recordholder with respect to any of such
shares.</font></p>

<p><font size="2">9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font> <u>
<font size="2">Change in
Stock, Adjustments, Inc.</font></u></p>

<p align="justify" style="text-indent: 36pt"><font size="2">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In the
event that each of the outstanding shares of Common Stock (other than shares
held by dissenting shareholders which are not changed or exchanged) should be
changed into, or exchanged for, a different number or kind of shares of stock
or other securities of the Company, or, if further changes or exchanges of any
stock or other securities into which the Common Stock shall have been changed,
or for which it shall have been exchanged, shall be made (whether by reason of
merger, consolidation reorganization, recapitalization, stock dividends,
reclassification, split-up, combination or shares or otherwise), then there
shall be substituted for each share of Common Stock that is subject to the Plan
but not subject to an outstanding Option thereunder, the number and kind of
shares of stock or other securities into which each outstanding share of Common
Stock (other than shares held by dissenting shareholders which are not changed
or exchanged) shall be so changed or for which each outstanding share of Common
Stock (other than shares held by dissenting shareholders) shall be exchanged.
Any securities so substituted shall be subject to similar successive
adjustments.</font></p>

<p align="justify" style="text-indent: 36pt"><font size="2">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In the
event of any such changes or exchanges, the Committee shall determine whether,
in order to prevent dilution or enlargement of rights, an adjustment should be
made in the number, or kind, or Option price of the shares or other securities
then subject to an Option or Options granted pursuant to the Plan and the Committee
shall make any such adjustment, and such adjustments shall be made and shall be
effective and binding for all purposes of the Plan</font></p>

<p>

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<p align="justify"><font size="2">10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Relationship
to Employment</u>. Nothing contained in the Plan, or in any Stock Award granted
pursuant to the Plan, shall confer upon any recipient or holder of a Stock
Award any right with respect to continuance of employment by the Company or any
Related Company, or interfere in any way with the right of the Company or any
Related Company to terminate the employment of a Stock Award recipient or
holder at any time.</font></p>

<p align="justify"><font size="2">11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Nontransferability
of Option</u>. No Option granted under the Plan shall be transferable by the
Optionee, either voluntarily or involuntarily, except by will or the laws of
descent and distribution, pursuant to a qualified domestic relations order as
defined in the Code, or pursuant to the Employee Retirement Income Security Act
or rules promulgated thereunder; except that (a) Optionees who are not subject
to Section 16(b) of the Exchange Act may upon written notice transfer an Option
(i) to an Optionee's spouse, parents, siblings, or lineal descendants, or (ii)
to a trust for the benefit of the Optionee or any of the Optionee's spouse,
parents, siblings, or lineal descendants, or (iii) to any corporation or
partnership controlled by the Optionee; and (b) Optionees who are subject to
Section 16(b) of the Exchange Act may transfer Options to immediate family
members and family trusts. No Option shall be subject to execution, attachment
or similar process. Except as specifically provided herein, any attempt to
transfer the Option shall void the Option.</font></p>

<p align="justify"><font size="2">12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Restricted
Stock</u>: The Committee may grant shares of Restricted Stock pursuant to this
Plan.&nbsp; To the extent consistent with the Company's Bylaws, at the Committee's
election, shares of Restricted Stock may be (i) held in book entry form subject
to the Company's instructions until any restrictions relating to the Restricted
Stock lapse, or (ii)&nbsp;evidenced by a certificate, which certificate shall
be held in such form and manner as determined by the Committee and shall
contain an appropriate legend clearly stating that the transferability of the
Restricted Stock represented by the certificate is restricted by the Restricted
Stock Agreement and this Plan.&nbsp; The Restricted Stock Agreements shall be in
such form and shall contain such terms and conditions as the Committee shall
deem appropriate from time to time and the terms and conditions of separate
Restricted Stock Agreements need not be identical; <u>provided</u>, <u>however</u>,
that each Restricted Stock Agreement shall include (through incorporation of
the provisions hereof by reference in the agreement or otherwise) the substance
of each of the following provisions:</font></p>

<p align="justify" style="text-indent: 36pt"><font size="2">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Consideration</u>.
Restricted Stock may be awarded in consideration for (A)&nbsp;past or future
services actually or to be rendered to the Company or a Related Company, or
(B)&nbsp;any other form of legal consideration that may be acceptable to the Committee
in its sole discretion and permissible under applicable law.</font></p>

<p align="justify" style="text-indent: 36pt"><font size="2">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Vesting</u>.
Shares of Restricted Stock may be subject to forfeiture to the Company in
accordance with a vesting schedule to be determined by the Committee in its
sole discretion and set forth in the Restricted Stock Agreement.</font></p>

<p align="justify" style="text-indent: 36pt"><font size="2">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Termination
of Service</u>. In the event a Restricted Stock holder ceases to be employed by
either the Company or a Related Company, the Company may receive pursuant to a
forfeiture provision to be determined by the Committee in its sole discretion
and set forth in the Restricted Stock Agreement, any or all Restricted Shares
that have not vested as of the date of termination.</font></p>

<p align="justify" style="text-indent: 36pt"><font size="2">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Transferability</u>.
Rights to acquire shares of Common Stock under a Restricted Stock Agreement
shall be transferable by the holder only upon such terms and conditions as are
set forth in the Restricted Stock Agreement, as the Committee shall determine
in its sole discretion, so long as such Common Stock remains subject to the
terms and conditions of the Restricted Stock Agreement.</font></p>

<p>

</p>
<p></p>

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<p align="justify"><font size="2">13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Rights
as a Shareholder</u>. No person shall have any rights as a shareholder with
respect to any shares covered by an Stock Award until that person shall become
the holder of record of such shares (whether or not subject to forfeiture) and,
except as provided in <u>Section&nbsp;9</u>, no adjustments shall be made for
dividends or other distributions or other rights as to which there is an
earlier record date.</font></p>

<p align="justify"><font size="2">14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Securities
Laws Requirements</u>. No Award Shares shall be issued unless and until, in the
opinion of the Company, any applicable registration requirements of the
Securities Act of 1933, as amended (&quot;<u>Securities Act</u>&quot;), any applicable
listing requirements of any securities exchange on which stock of the same
class is then listed, and any other requirements of law or of any regulatory
bodies having jurisdiction over such issuance and delivery, have been fully
complied with. Each Option, each Restricted Stock certificate and each Award
Share certificate may be imprinted with legends reflecting federal and state
securities laws, restrictions and conditions, and the Company may comply
therewith and issue &quot;stop transfer&quot; instructions to its transfer agent and
registrar in good faith without liability.</font></p>

<p align="justify"><font size="2">15.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Disposition
of Shares</u>. Each Optionee, as a condition of exercise, and each Restricted
Stock holder, as a condition to the Restricted Stock grant, shall represent,
warrant and agree, in a form of written certificate approved by the Company, as
follows: (a) that all Award Shares are being acquired solely for his own
account and not on behalf of any other person or entity; (b) that no Award
Shares will be sold or otherwise distributed in violation of the Securities
Act, or any other applicable federal or state securities laws; (c) that if he
is subject to reporting requirements under Section 16(a) of the Exchange Act,
he will (i) not violate Section&nbsp;16(b) of the Exchange Act, (ii) furnish
the Company with a copy of each Form 4 and Form 5 filed by him, and (iii)
timely file all reports required under the federal securities laws; and
(d)&nbsp;that he will report all sales of Award Shares to the Company in
writing on a form prescribed by the Company.</font></p>

<p align="justify"><font size="2">16.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Effective
Date of Plan; Termination Date of Plan</u>. The Plan shall be effective on the
date of the approval of the Plan by the affirmative vote of the holders of a
majority of the Company's securities entitled to vote and represented at a
meeting duly held in accordance with applicable law. The initial Plan was
adopted, subject to shareholder approval, by the Board as of October 16, 2003
and approved by the shareholders on December 11, 2003. This first amended and
restated Plan was adopted, subject to shareholder approval, by the Board as of October
18, 2006. The Plan shall terminate on October 16, 2013, except as to Stock
Awards previously granted and outstanding under the Plan at that time. No Stock
Awards shall be granted after the date on which the Plan terminates. In no
event may the Option period exceed ten years from the date on which the Option
is granted. The Plan may be abandoned or terminated at any earlier time by the
Board, except with respect to any Options then outstanding under the Plan.</font></p>

<p align="justify"><font size="2">17.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Limitation
on Amount of Option</u>. The aggregate Fair Market Value (determined at the
time any ISO is granted) of the Common Stock with respect to which an
Optionee's ISOs, together with incentive stock options granted under any other
plan of the Company and any parent, are exercisable for the first time by such
Optionee during any calendar year shall not exceed $100,000. If an Optionee
holds ISOs that become first exercisable (including as a result of acceleration
of exercisability under the Plan) in any one year for shares having a Fair
Market Value at the date of grant in excess of $100,000, then the most recently
granted of the ISOs, to the extent that they are exercisable for shares having
an aggregate Fair Market Value in excess of the limit, shall be deemed to be NQOs.</font></p>

<p align="center"><font size="2">Page A-7</font></p>

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<p align="justify"><font size="2">18.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Ten
Percent Shareholder Rule</u>. With respect to ISOs, no Option may be granted to
a Key Employee who, at the time the Option is granted, owns stock possessing
more than 10 percent of the total combined voting power of all classes of stock
of the Company or of any &quot;parent corporation&quot; or &quot;subsidiary corporation&quot; as
those terms are defined in Section 425 of the Code, unless at the time the
Option is granted the purchase price for the Option shares is at least 110
percent of the Fair Market Value of the Option Shares at the time the ISO is
granted and such Option by its terms is not exercisable after the expiration of
five years from the Date of Grant. For purposes of the preceding sentence,
stock ownership shall be determined as provided in Section 425 of the Code.</font></p>

<p align="justify"><font size="2">19.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Withholding
Taxes</u>. The Company, or any Related Company, may take such steps as it may
deem necessary or appropriate for the withholding of any taxes which the
Company, or any Related Company, is required by any law or regulation or any
governmental authority, whether federal, state or local, domestic or foreign,
to withhold in connection with any Stock Award including, but not limited to,
the withholding of all or any portion of any payment or the withholding of
issuance of Option Shares to be issued upon the exercise of any Option.</font></p>

<p align="justify"><font size="2">20.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Change in
Control, Stock Dividends, Reorganization and Other Extraordinary Actions</u>.</font></p>

<p align="justify" style="text-indent: 36pt"><font size="2">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; If (i)
the Company shall at any time be involved in a transaction described in Section
424(a) of the Code (or any successor provision) or any &quot;corporate transaction&quot;
described in the regulations thereunder; (ii) the Company shall declare
dividends payable in, or shall subdivide or combine, its Common Stock or (iii)
any other event with substantially the same effect shall occur, the Committee
shall, with respect to each outstanding Option, proportionately adjust the
number of Option Shares and/or the exercise price per share so as to preserve
the rights of the Optionee substantially proportionate to the rights of the
Optionee prior to such event, and to the extent that such action shall include
an increase or decrease in the number of Option Shares subject to outstanding
Options, the number of shares available under this Plan shall automatically be
increased or decreased, as this case may be, proportionately, without further
action on the part of the Committee, the Company or the Company's shareholders.</font></p>

<p align="justify" style="text-indent: 36pt"><font size="2">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; If the
Company is liquidated or dissolved, the Committee may allow the holders of any
outstanding Options to exercise all or any part of the unvested portion of the
Options held by them; provided, however, that such Options must be exercised
prior to the effective date of such liquidation or dissolution. If the Option
Holders do not exercise their Options prior to such effective date, each
outstanding Option shall terminate as of the effective date of the liquidation
or dissolution. </font> </p>

<p align="justify" style="text-indent: 36pt"><font size="2">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
grant of a Stock Award shall not affect in any way the right or power of the
Company to make adjustments, reclassifications, reorganizations or changes of
its capital or business structure, to merge, consolidate or dissolve, to
liquidate or to sell or transfer all or part of its business or assets. </font> </p>

<p align="justify" style="text-indent: 36pt"><font size="2">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In the
event of a Change in Control (as defined below) of the Company, the Committee
may, in its discretion, accelerate all outstanding Options so that they
immediately become fully vested and immediately exercisable for the duration of
the term of the Option. For purposes of this Subsection (d), &quot;<u>Change in
Control</u>&quot; shall mean either one of the following: (i) when any &quot;person,&quot; as
such term is used in Sections 13(d) and 14(d) of the Exchange Act (other than a
shareholder of the Company on the date of this Plan), the Company, a subsidiary
or a Company Employee Benefit Plan, (including any trustee of such Plan acting
as trustee) becomes, after the date of this Plan, the &quot;beneficial owner&quot; (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 35% or more of the combined voting power
of the Company's then outstanding securities; or (ii) the occurrence of a
transaction requiring shareholder approval, arid involving the sale of all or
substantially all of the assets of the Company or the merger of the Company
with or into another corporation.</font></p>

<p align="justify" style="text-indent: 36pt"><font size="2">(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; If at any time the Company
declares an Extraordinary Dividend, as defined below, all Options shall
accelerate and thereupon become fully vested and immediately exercisable for
the duration of the term of the Option. For purposes of this Subsection (e), &quot;<u>Extraordinary
Dividend</u>&quot; shall mean a cash dividend payable to holders of record of the
Common Stock in an amount in excess of 10% of the then Fair Market Value of the
Company's Common Stock.</font></p>
<p></p>

<p align=center style='text-align:center'><font size="2">Page A-8</font></p>

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<p><font size="2">21.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Other
Provisions</u>.</font></p>

<p><font size="2">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
use of a masculine gender in the Plan shall also include within its meaning the
feminine, and the singular may include the plural, and the plural may include
the singular, unless the context clearly indicates to the contrary.</font></p>

<p align="justify" style="text-indent: 36pt"><font size="2">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Any
expenses of administering the Plan shall be borne by the Company.</font></p>

<p align="justify" style="text-indent: 36pt"><font size="2">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; This
Plan shall be construed to be in addition to any and all other compensation
plans or programs. Neither the adoption of the Plan by the Board nor the
submission of the Plan to the shareholders of the Company shall be construed as
creating any limitations on the power of authority of the Board to adopt such
other additional incentive or other compensation arrangements as the Board may
deem necessary or desirable.</font></p>

<p align="justify" style="text-indent: 36pt"><font size="2">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
corporate laws of the State of Colorado shall govern all issues concerning the
relative rights of the Company and its shareholders under the Plan. All other
questions and obligations under the Plan shall be construed and enforced in
accordance with the internal laws of the State of California, without giving
effect to any choice of law or conflict of law provision or rule (whether of
the State of California or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of California.</font></p>

<p align="justify" style="text-indent: 36pt"><font size="2">(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Notwithstanding
anything to the contrary contained in this Plan, the following provisions, in
compliance with the California Corporate Securities Law of 1968 and the rules
and regulations promulgated thereunder, shall apply to the Plan and all Options
granted under the Plan:</font></p>

<p style='text-indent:36.0pt; margin-left:36pt' align="justify"><font size="2">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Each
Option shall be exercisable in whole or in consecutive installments, cumulative
or otherwise, during its term as determined in the discretion of the Committee.
Each Option granted to an Optionee shall provide for the right to exercise at
the rate of at least 20% per year over five years from the date the Option is
granted, subject to reasonable conditions such as continued employment;
however, in the case of an Option granted to officers, directors, managers or
consultants of the Company, the Option may become fully exercisable, subject to
reasonable conditions such as continued employment, at any time or during any
period established by the Company.</font></p>

<p style='text-indent:36.0pt; margin-left:36pt' align="justify"><font size="2">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (A)
if the Optionee's employment with the Company terminates for any reason (other
than involuntary dismissal for &quot;cause&quot; or voluntary resignation in violation of
any agreement to remain in the employ of the Company), he or she may, at any
time before the expiration of thirty days after termination or before
expiration of the Option, whichever first occurs, exercise the Option (to the
extent that the Option was exercisable by him or her on the date of the
termination of his or her employment); (B) if the Optionee's employment
terminates due to disability (as defined in Section 22(e)(3) of the Code and
subject to such proof of disability as the Committee may require), the Option
may be exercised by the Optionee (or by his guardian(s), or conservator(s), or
other legal representative(s)) before the expiration of six months after
termination or before expiration of the Option, whichever first occurs (to the
extent that the Option was exercisable by him or her on the date of the
termination of his or her employment); and (C) in the event of the death of the
Optionee, an Option exercisable by him or her at the date of his or her death
shall be exercisable by his or her legal representative(s), legatee(s), or
heir(s), or by his or her beneficiary or beneficiaries so designated by him or
her, as the case may be, within six months after his or her death or before the
expiration of the Option, whichever first occurs (to the extent that the Option
was exercisable by him or her on the date of his or her death).</font></p>
<p style='text-indent:36.0pt; margin-left:36pt' align="justify"><font size="2">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Optionees under the Plan who
do not otherwise have access to financial statements of the Company will receive
the Company's financial statements at least annually.</font></p>

<p></p>

<p align=center style='text-align:center'><font size="2">Page A-9</font></p>

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<p style="text-indent: 36pt; margin-left: 36pt" align="justify"><font size="2">(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Except as permitted by rule
701 of the Securities Act, Options granted under the Plan are nontransferable
other than by will, by the laws of descent and distribution, by instrument to
an inter vivos or testamentary trust in which the Options are to be passed to
beneficiaries upon the death of the trustor (settlor), or by gift to immediate
family. The term &quot;immediate family&quot; means any child, stepchild, grandchild,
parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law or sister-in-law, and also includes
adoptive relationships.</font></p>
<p></p>

<p align=center style='text-align:center'><a name="_DV_M361"><font size="2">
</font></a></p>
<p align=center style='text-align:center'>&nbsp;</p>
<p align=center style='text-align:center'>&nbsp;</p>
<p align=center style='text-align:center'>&nbsp;</p>
<p align=center style='text-align:center'>&nbsp;</p>
<p align=center style='text-align:center'>&nbsp;</p>
<p align=center style='text-align:center'>&nbsp;</p>
<p align=center style='text-align:center'>&nbsp;</p>
<p align=center style='text-align:center'>&nbsp;</p>
<p align=center style='text-align:center'>&nbsp;</p>
<p align=center style='text-align:center'><font size="2">Page
A-10</font></p>

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<b><br clear=all
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</b>











<p align=center style='text-align:center'><b>THIS PROXY IS
SOLICITED BY THE BOARD OF DIRECTORS<br>
</b><a name="_DV_M286"></a><b>ANNUAL
MEETING OF SHAREHOLDERS <br>
</b><a name="_DV_M287"></a><b>TO
BE HELD NOVEMBER 30, 2006 </b></p>



<p>The undersigned hereby appoints George
Isaac and Michael A. Mesenbrink, and each of them, individually, as attorneys
and proxies, with full power of substitution, to represent and vote, as
designated below, all shares of Common Stock of Pro-Dex, Inc. held of record by
the undersigned on October&nbsp;13,&nbsp;2006, at the Annual Meeting of Shareholders
to be held at the DoubleTree Hotel Santa Ana, 201 E. MacArthur Blvd, Santa Ana,
California 92707 on November 30, 2006, at 8:00&nbsp;a.m., local time, and at
any and all adjournments or postponements thereof.</p>



<p style='margin-left:36.0pt;text-indent:-36.0pt'>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
To elect a Class III director as follows (circle one):</p>





<div align="left">





<table class=MsoNormalTable border=0 cellpadding=0
 style='border-collapse:collapse' width="75%">
 <tr>
  <td width=330 valign=top style='width:247.5pt;padding:0pt 0pt 0pt 0pt'>
  <p>FOR <br>
	approval of the
  election of the Class III nominee listed below (except as marked to the
  contrary below). </p>
  </td>
  <td width=292 valign=top style='width:218.75pt;padding:0pt 0pt 0pt 0pt'>
  <p>&nbsp;&nbsp;&nbsp;&nbsp; WITHHOLD AUTHORITY <br>
	to vote for the Class
  III nominee listed below. </p>
  </td>
  <td width=2 valign=top style='width:1.75pt;padding:0pt 0pt 0pt 0pt'>

  </td>
 </tr>
</table>



</div>



<p style='margin-left:35.0pt;text-indent:-18.5pt'>Mark P. Murphy</p>



<p>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <a
name="_DV_C344">To approve the amendment and restatement of the Company's
2004 Stock Option Plan (circle one).</a></p>



<div align="center">
	<table border="0" width="740" id="table4">
		<tr>
			<td align="center" width="202">



<p align=center style='text-align:center'><a name="_DV_C345">FOR
</a></p>



			</td>
			<td align="center">AGAINST </td>
			<td align="center">ABSTAIN</td>
		</tr>
	</table>
</div>



<p>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; To
ratify the appointment of Moss Adams, LLP as the Company's independent auditors
for the fiscal year ending June 30, 2007 (circle one). </p>



<div align="center">
	<table border="0" width="740" id="table5">
		<tr>
			<td align="center" width="202">



<p align=center style='text-align:center'><a name="_DV_C346">FOR
</a></p>



			</td>
			<td align="center">AGAINST </td>
			<td align="center">ABSTAIN</td>
		</tr>
	</table>
</div>



<p>4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In their discretion, the
proxies are authorized to vote upon such other business as may properly come
before the meeting or any adjournment or postponement thereof. </p>



<p style='text-indent:38.5pt'>This proxy
when properly executed will be voted in the manner directed herein by the
undersigned shareholder. If no direction is made, this proxy will be voted
&quot;FOR&quot; all Proposals. </p>



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<br clear=all
style='page-break-before:always'>










<p style='line-height:1.0pt'>&nbsp;</p>







<p><b>PLEASE MARK, SIGN, DATE
AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED ENVELOPE. </b></p>



<p style='margin-left:315.0pt;margin-top:0; margin-bottom:0.001pt'>Dated:____________, 2006 </p>

<p style='margin-left:315.0pt;margin-top:0; margin-bottom:0.001pt'>Name:_________________ </p>

<p style='margin-left:315.0pt;margin-top:0; margin-bottom:0.001pt'>Common Shares:_________ </p>

<p style='margin-left:315.0pt;'>_______________________ <br>
Signature </p>

<p style='margin-left:315.0pt;'><a
name="_DV_M307"></a>_______________________ <br>
Signature (if jointly held) </p>



<p style='margin-left:315.0pt;'>Please sign exactly as name appears in the records of
Pro-Dex, Inc. When shares are held by joint tenants, both should sign. When
signing as attorney, as executor, administrator, trustee or guardian, please
give full title as such. If a corporation, please sign in full corporate name
by President or other authorized officer. If a partnership, please sign in
partnership name by authorized person. </p>







<p align=center style='text-align:center'>&nbsp;</p>
<p align=center style='text-align:center'>&nbsp;</p>
<p align=center style='text-align:center'>&nbsp;</p>
<p align=center style='text-align:center'><b>End of Filing</b></p>

</p>







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-----END PRIVACY-ENHANCED MESSAGE-----
