<SEC-DOCUMENT>0001534424-14-000266.txt : 20141022
<SEC-HEADER>0001534424-14-000266.hdr.sgml : 20141022
<ACCEPTANCE-DATETIME>20141022160659
ACCESSION NUMBER:		0001534424-14-000266
CONFORMED SUBMISSION TYPE:	DEF 14A
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20141203
FILED AS OF DATE:		20141022
DATE AS OF CHANGE:		20141022
EFFECTIVENESS DATE:		20141022

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:		141167825

	BUSINESS ADDRESS:	
		STREET 1:		2361 MCGAW AVENUE
		CITY:			IRVINE
		STATE:			CA
		ZIP:			92614
		BUSINESS PHONE:		949-769-3200

	MAIL ADDRESS:	
		STREET 1:		2361 MCGAW AVENUE
		CITY:			IRVINE
		STATE:			CA
		ZIP:			92614
</SEC-HEADER>
<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
<FILENAME>f14-0700.htm
<DESCRIPTION>DEF 14A
<TEXT>
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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;</font></div>

<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><img src="prodex.jpg" alt="(PRO-DEX LOGO)"></font></div>

<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0pt 0 10pt; text-align: justify">To Our Shareholders:</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt; text-align: justify">Fiscal year 2014&mdash;our first full year
under the stewardship of new senior management and our reformed Board of Directors&mdash;was importantly productive for Pro-Dex.
We have solidified and enhanced our management team, realized tangible operational and product-development milestones and set foundations
for growth.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt; text-align: justify">Among our fiscal 2014 accomplishments:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify">Right-sizing our cost footprint &ndash; It is an artful process to adjust expenditures to serve
a reduced revenue base without cutting the resources needed to rebuild that revenue base, yet we successfully executed this process
in fiscal 2014.</TD></TR></TABLE>


<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin-top: 10pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 18pt; text-align: right"></TD><TD STYLE="width: 18pt">&#9679;</TD><TD STYLE="text-align: justify">Monetizing inventory &ndash; In fiscal 2013, we built up inventory to reduce lead
times for products sold to our major customer, only to have that customer request an eight-month (including the first five months
of fiscal 2014) delivery hiatus. In the latter half of fiscal 2014, however, deliveries resumed, allowing us to monetize last
year&rsquo;s inventory investment. Further, the customer placed additional orders for deliveries through December 2015, which
we expect will speed inventory throughput and shorten the time in which our resources are invested in inventory.</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin-top: 10pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 18pt; text-align: right"></TD><TD STYLE="width: 18pt">&#9679;</TD><TD STYLE="text-align: justify">Generating positive cash flow &ndash; Reducing both operating expenses and investments
in inventory bodes well for cash flow, and we generated positive cash flows from operations during the second half of fiscal 2014.</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin-top: 10pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 18pt; text-align: right"></TD><TD STYLE="width: 18pt">&#9679;</TD><TD STYLE="text-align: justify">Raising capital through a common stock rights offering &ndash; Organic rebuilding of
our revenue base is the goal, but it can be a lengthy proposition. The additional capital we raised through our rights offering
that closed in April 2014 gives us the flexibility of employing capital more efficiently and being ready to take advantage of sensible
opportunities that may present themselves.</TD>
</TR></TABLE>


<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin-top: 10pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 18pt; text-align: right"></TD><TD STYLE="width: 18pt">&#9679;</TD><TD STYLE="text-align: justify">Strengthening our product development organization &ndash; In fiscal 2014 we revamped
our product development team in favor of experience. Through the efforts of this strengthened organization, two of the largest
design projects undertaken in Pro-Dex&rsquo;s history, which included development of potentially market-disruptive technology,
moved out of the design phase and into the test phase during the first quarter of fiscal 2015. We believe that commercialization
of these projects is now within our sights.</TD>
</TR></TABLE>


<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 10pt 0 0; text-align: justify">With these accomplishments setting a foundation,
we enter fiscal 2015 a changed company &ndash; with employees not only embracing, but contributing to, substantive change in the
way we do business, a mid-management team that is empowered to effect action, and a senior management team that comes to work every
day empowered to complete the turnaround of Pro-Dex.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 10pt 0 10pt; text-align: justify">To be sure, the turnaround has only begun,
and the challenges are still substantial. Our core business serving the medical device space is characterized by a long sales cycle
which prolongs our recovery. In addition, Pro-Dex&rsquo;s business is still primarily project-based, which results in uneven revenue
streams.</P>

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<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 20pt 0 0; text-align: justify">What has changed, however, is in how Pro-Dex
responds to these challenges:</P>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin-top: 10pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 18pt; text-align: right"></TD><TD STYLE="width: 18pt">&#9679;</TD><TD STYLE="text-align: justify">The medical device &ldquo;sales call&rdquo; is a technical one; our customers most often
are senior product development engineers in large organizations. Accordingly, the classic business model, to which we historically
subscribed, in which Business Development and Product Development were separate disciplines, succeeded only in making a long sales
cycle even longer. Thus, with a view toward shortening the sales cycle and making sales calls more effective, we have combined
these disciplines and vested responsibility in one Vice President who all of us support with our coordinated Business Development
activities.</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin-top: 10pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 18pt; text-align: right"></TD><TD STYLE="width: 18pt">&#9679;</TD><TD STYLE="text-align: justify">Most of our medical device opportunities are large, time consuming projects that create
uneven revenue streams during the design, or pre-production, phase. Of course, one way to address this operational issue is to
obtain more projects and, as described above, we are in pursuit of these. But, also as described above, this is a lengthy process.
Thus, in parallel to our pursuit of medical device projects, we are diversifying our product lines to leverage our core competencies
&ndash; marketing our expertise on an outsourcing basis in such areas as engineering, precision machining and assembly, and regulatory
consulting, to prospects in a variety of manufacturing-based industries.</TD>
</TR></TABLE>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin-top: 10pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 18pt; text-align: right"></TD><TD STYLE="width: 18pt">&#9679;</TD><TD STYLE="text-align: justify">On our balance sheet are cash and investments in amounts that we believe can both support
our existing business and give us the flexibility to consider capital allocation opportunities, possibly in diverse business segments,
that we believe represent potentially attractive returns.</TD>
</TR></TABLE>



<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 10pt 0 0; text-align: justify">Change is inherent to Pro-Dex&rsquo;s recovery,
and risk is inherent to change. Accordingly, the road ahead likely will not be without bumps &ndash; good management is not about
avoiding risk; rather it&rsquo;s about managing it. Your Board of Directors and management team are excited about successfully
navigating Pro-Dex&rsquo;s road ahead, and we look forward to reporting on our progress.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 10pt 0 0; text-align: justify">In the meantime, I welcome your comments and
questions. Please do not hesitate to reach our Board or me via phone at (800) 562-6204 or (949) 769-3200, fax at (949) 769-3281,
or email at investor.relations@pro-dex.com.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 10pt 0 0; text-align: justify">Harold A. Hurwitz</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify">Chief Executive Officer</P>



<div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>

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<P STYLE="font: 1pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

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<P STYLE="font: 18pt/normal Times New Roman, Times, Serif; margin: 3pt 0 0; text-align: center"><B>SCHEDULE 14A INFORMATION</B></P>

<P STYLE="font: 12pt/normal Times New Roman, Times, Serif; margin: 6pt 0 0; text-align: center"><B>Proxy Statement Pursuant to
Section&nbsp;14(a) of the</B></P>

<P STYLE="font: 12pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Securities Exchange Act of 1934</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 6pt 0 0">Filed by the Registrant&nbsp;&nbsp; <FONT STYLE="font-family: Wingdings">x</FONT>
&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;
Filed by a Party other than the Registrant&nbsp;&nbsp;&nbsp;<FONT STYLE="font-family: Wingdings">&#168;</FONT></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 10pt">Check the appropriate box:</P>

<table cellspacing="0" cellpadding="0" style="width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 3%; padding-right: 0.8pt; font: 11pt/115% Times New Roman, Times, Serif"><font style="font: 10pt Wingdings">&#168;</font></td>
    <td style="width: 1%; padding-right: 0.8pt; font: 11pt/115% Times New Roman, Times, Serif">&nbsp;</td>
    <td style="width: 96%; padding-right: 0.8pt; font: 11pt/115% Times New Roman, Times, Serif"><font style="font-size: 10pt">Preliminary Proxy Statement</font></td></tr>
</table>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 3%; padding-right: 0.8pt; line-height: 115%"><font style="font: 10pt Wingdings">&#168;</font><font style="font-size: 10pt"> </font></td>
    <td style="width: 1%; padding-right: 0.8pt; line-height: 115%">&nbsp;</td>
    <td style="width: 96%; padding-right: 0.8pt; line-height: 115%"><font style="font-size: 10pt"><b>Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))</b></font></td></tr>
</table>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 3%; padding-right: 0.8pt; line-height: 115%"><font style="font: 10pt Wingdings">x</font></td>
    <td style="width: 1%; padding-right: 0.8pt; line-height: 115%">&nbsp;</td>
    <td style="width: 96%; padding-right: 0.8pt; line-height: 115%"><font style="font-size: 10pt">Definitive Proxy Statement</font></td></tr>
</table>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 3%; padding-right: 0.8pt; line-height: 115%"><font style="font: 10pt Wingdings">&#168;</font></td>
    <td style="width: 1%; padding-right: 0.8pt; line-height: 115%">&nbsp;</td>
    <td style="width: 96%; padding-right: 0.8pt; line-height: 115%"><font style="font-size: 10pt">Definitive Additional Materials</font></td></tr>
</table>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 3%; padding-right: 0.8pt; line-height: 115%"><font style="font: 10pt Wingdings">&#168;</font></td>
    <td style="width: 1%; padding-right: 0.8pt; line-height: 115%">&nbsp;</td>
    <td style="width: 96%; padding-right: 0.8pt; line-height: 115%"><font style="font-size: 10pt">Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12</font></td></tr>
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<P STYLE="font: 24pt/normal Times New Roman, Times, Serif; margin: 6pt 0 0; text-align: center"><B>PRO-DEX, INC.</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>(Name of Registrant as Specified In
Its Charter)</B></P>

<P STYLE="font: 7.5pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>(Name of Person(s) Filing Proxy Statement
if other than the Registrant)</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 6pt 0 10pt">Payment of Filing Fee (Check the appropriate box):</P>

<table cellspacing="0" cellpadding="0" style="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 3%; padding-right: 0.8pt; line-height: 115%"><font style="font: 10pt Wingdings">x</font></td>
    <td style="width: 1%; padding-right: 0.8pt; line-height: 115%">&nbsp;</td>
    <td style="width: 96%; padding-right: 0.8pt; line-height: 115%"><font style="font-size: 10pt">No fee required</font></td></tr>
</table>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 3%; padding-right: 0.8pt; line-height: 115%"><font style="font: 10pt Wingdings">&#168;</font></td>
    <td style="width: 1%; padding-right: 0.8pt; line-height: 115%">&nbsp;</td>
    <td style="width: 96%; padding-right: 0.8pt; line-height: 115%"><font style="font-size: 10pt">Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.</font></td></tr>
</table>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr>
    <td style="width: 4%; padding-right: 0.8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: top; width: 4%; padding-right: 0.8pt; line-height: 115%"><font style="font-size: 10pt">1.</font></td>
    <td style="vertical-align: top; width: 92%; padding-right: 0.8pt; line-height: 115%"><font style="font-size: 10pt">Title of each class of securities to which transaction applies:</font></td></tr>
</table>
<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in"><B>&nbsp;&nbsp;</B></P>

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<table cellspacing="0" cellpadding="0" style="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr>
    <td style="width: 4%; padding-right: 0.8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: top; width: 4%; padding-right: 0.8pt; line-height: 115%"><font style="font-size: 10pt">2.</font></td>
    <td style="vertical-align: top; width: 92%; padding-right: 0.8pt; line-height: 115%"><font style="font-size: 10pt">Aggregate number of securities to which transaction applies:</font></td></tr>
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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in"><B>&nbsp;&nbsp;</B></P>

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<table cellspacing="0" cellpadding="0" style="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr>
    <td style="width: 4%; padding-right: 0.8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: top; width: 4%; padding-right: 0.8pt; line-height: 115%"><font style="font-size: 10pt">3.</font></td>
    <td style="vertical-align: top; width: 92%; padding-right: 0.8pt; line-height: 115%"><font style="font-size: 10pt">Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule&nbsp;0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):</font></td></tr>
</table>
<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><B>&nbsp;&nbsp;</B></P>

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<table cellspacing="0" cellpadding="0" style="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr>
    <td style="width: 4%; padding-right: 0.8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: top; width: 4%; padding-right: 0.8pt; line-height: 115%"><font style="font-size: 10pt">4.</font></td>
    <td style="vertical-align: top; width: 92%; padding-right: 0.8pt; line-height: 115%"><font style="font-size: 10pt">Proposed maximum aggregate value of transaction:</font></td></tr>
</table>
<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in">&nbsp;</P>

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<table cellspacing="0" cellpadding="0" style="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr>
    <td style="width: 4%; padding-right: 0.8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: top; width: 4%; padding-right: 0.8pt; line-height: 115%"><font style="font-size: 10pt">5.</font></td>
    <td style="vertical-align: top; width: 92%; padding-right: 0.8pt; line-height: 115%"><font style="font-size: 10pt">Total fee paid:</font></td></tr>
</table>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in"><B>&nbsp;&nbsp;</B></P>

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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 3%; padding-right: 0.8pt; line-height: 115%"><font style="font: 10pt Wingdings">&#168;</font></td>
    <td style="width: 1%; padding-right: 0.8pt; line-height: 115%">&nbsp;</td>
    <td style="width: 96%; padding-right: 0.8pt; line-height: 115%"><font style="font-size: 10pt">Fees paid previously with preliminary materials.</font></td></tr>
</table>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 3%; padding-right: 0.8pt; line-height: 115%"><font style="font: 10pt Wingdings">&#168;</font></td>
    <td style="width: 1%; padding-right: 0.8pt; line-height: 115%">&nbsp;</td>
    <td style="width: 96%; padding-right: 0.8pt; line-height: 115%"><font style="font-size: 10pt">Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.</font></td></tr>
</table>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 11pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr>
    <td style="width: 4%; padding-right: 0.8pt; line-height: 115%">&nbsp;</td>
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    <td style="vertical-align: top; width: 92%; padding-right: 0.8pt; line-height: 115%"><font style="font-size: 10pt">Amount Previously Paid:</font></td></tr>
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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><B>&nbsp;&nbsp;</B></P>

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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in">&nbsp;</P>

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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in">&nbsp;</P>

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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in">&nbsp;</P>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>

<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">2361 McGaw Avenue</font></div>

<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Irvine, California 92614</font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;</font><a name="FIS_NOTICE_OF_ANNUAL_MEETING"><!--EFPlaceholder--></a></font></div>

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<div>&#160;</div>
</div>

<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTICE OF ANNUAL MEETING OF SHAREHOLDERS</font></div>

<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">TO BE HELD DECEMBER 3, 2014</font></div>

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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0 0; text-align: justify">To the Shareholders of Pro-Dex,
Inc.:</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 4.5pt 0 0; text-align: justify; text-indent: 23pt">The Annual
Meeting of Shareholders (&ldquo;Annual Meeting&rdquo;) of Pro-Dex, Inc. (&ldquo;Pro-Dex&rdquo;, the &ldquo;Company&rdquo;, &ldquo;we&rdquo;,
&ldquo;us&rdquo; or &ldquo;our&rdquo;) will be held at our headquarters, 2361 McGaw Avenue, Irvine, California, on December 3,
2014, at 9:30 a.m. Pacific Standard Time, for the following purposes:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 23pt"></TD><TD STYLE="width: 0.25in">1.</TD><TD STYLE="text-align: justify; padding-right: 0.8pt">To elect five persons to serve as our directors for a term of one year each.
The nominees for election to our Board of Directors are named in the attached Proxy Statement, which is part of this Notice.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 23pt"></TD><TD STYLE="width: 0.25in">2.</TD><TD STYLE="text-align: justify; padding-right: 0.8pt">To ratify the appointment of Moss Adams, LLP as our independent registered
public accounting firm for the fiscal year ending June&nbsp;30, 2015.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 23pt"></TD><TD STYLE="width: 0.25in">3.</TD><TD STYLE="text-align: justify; padding-right: 0.8pt">To hold an advisory vote to approve the compensation of our Named Executive
Officers.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 23pt"></TD><TD STYLE="width: 0.25in">4.</TD><TD STYLE="text-align: justify; padding-right: 0.8pt">To approve the termination of our Amended and Restated 2004 Directors&rsquo;
Stock Option Plan.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 23pt"></TD><TD STYLE="width: 0.25in">5.</TD><TD STYLE="text-align: justify; padding-right: 0.8pt">To approve the establishment of the 2014 Employee Stock Purchase Plan.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 6pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 23pt"></TD><TD STYLE="width: 0.25in">6.</TD><TD STYLE="text-align: justify; padding-right: 0.8pt">To transact such other business as may properly come before the Annual Meeting
or any adjournments or postponements thereof.</TD></TR></TABLE>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">Only shareholders
of record at the close of business on October 8, 2014, 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="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">All shareholders
are cordially invited to attend the Annual Meeting in person. Whether or not you plan to attend the Annual Meeting, your vote is
important. In an effort to facilitate the voting process, we are pleased to avail ourselves of Securities and Exchange Commission,
or SEC, rules that allow proxy materials to be furnished to shareholders on the Internet. You can vote by proxy over the Internet
by following the instructions provided in the Notice of Internet Availability of Proxy Materials that was mailed to you on or about
October&nbsp;23, 2014, or, if you request printed copies of the proxy materials by mail, you can also vote by mail or by telephone.
Your promptness in voting by proxy will assist in its expeditious and orderly processing and will assure that you are represented
at the Annual Meeting. If you vote by proxy, you may nevertheless attend the Annual Meeting and vote your shares in person.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt"><B>TO ENSURE
YOUR REPRESENTATION AT THE ANNUAL MEETING, YOU ARE URGED TO READ THIS PROXY STATEMENT AND SUBMIT YOUR PROXY OR VOTING INSTRUCTIONS
AS SOON AS POSSIBLE BY FOLLOWING THE INSTRUCTIONS IN THE NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS, WHICH WAS MAILED TO
YOU ON OR ABOUT OCTOBER 23, 2014, OR, IF YOU REQUEST PRINTED COPIES OF THE PROXY MATERIALS BY MAIL, YOU CAN ALSO VOTE BY MAIL OR
BY TELEPHONE.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt"><B>OUR BOARD
OF DIRECTORS RECOMMENDS: A VOTE &ldquo;FOR&rdquo; EACH OF THE FIVE DIRECTOR NOMINEES NAMED IN THE PROXY STATEMENT; AND A VOTE &ldquo;FOR&rdquo;
EACH OF PROPOSALS 2 THROUGH 5.</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 6pt 0 0 301pt; text-indent: 0pt">By Order of the Board of
Directors,</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 6pt 0 0 301pt; text-indent: 0pt">PRO-DEX, INC.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 6pt 0 0 301pt; text-indent: 0pt">/s/ Harold A. Hurwitz</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 301pt; text-indent: 0pt">Corporate Secretary</P>


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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><img src="prodex.jpg"></font></div>

<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>

<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">2361 McGaw Avenue</font></div>

<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Irvine, California 92614</font></div>

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</div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">ANNUAL MEETING OF SHAREHOLDERS</font></div>

<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">TO BE HELD DECEMBER 3, 2014</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>

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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0 0; text-align: justify; text-indent: 23pt">The Board
of Directors (&ldquo;Board&rdquo;) of Pro-Dex, Inc. (&ldquo;Pro-Dex&rdquo;, the &ldquo;Company&rdquo;, &ldquo;we&rdquo;, &ldquo;us&rdquo;
or &ldquo;our&rdquo;) has made these materials available to you on the Internet, or, upon your request, has delivered printed versions
of these materials to you by mail, in connection with the Board&rsquo;s solicitation of proxies for use at our Annual Meeting of
Shareholders (&ldquo;Annual Meeting&rdquo;) to be held at Pro-Dex&rsquo;s headquarters, 2361 McGaw Avenue, Irvine, California,
on Wednesday, December&nbsp;3, 2014, at 9:30 a.m. Pacific Standard Time, and at any and all adjournments or postponements thereof.
Shareholders are requested to promptly vote by proxy over the Internet by following the instructions provided in the Notice of
Internet Availability of Proxy Materials, which was mailed to you on or about October&nbsp;23, 2014. If you request printed copies
of the proxy materials by mail, you can also vote by mail or by telephone. All shares represented by each properly submitted and
unrevoked proxy received on the Internet or by telephone prior to 11:59 p.m. Eastern Standard Time on Tuesday, December&nbsp;2,
2014, or by proxy card prior to or at the Annual Meeting, will be voted in the manner specified therein, and if no direction is
indicated (except in the case of broker non-votes), &ldquo;for&rdquo; each of the five director nominees named under Proposal No.
1; and &ldquo;for&rdquo; each of Proposal Nos. 2 through 5.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">Any shareholder
has the power to revoke his or her proxy at any time before it is voted. A proxy may be revoked by delivering a written notice
of revocation to our Secretary prior to or at the Annual Meeting, by voting again on the Internet or by telephone (only your latest
Internet or telephone proxy submitted prior to 11:59 p.m. Eastern Standard Time on Tuesday, December&nbsp;2, 2014, will be counted),
by submitting prior to or at the Annual Meeting a later dated proxy card executed by the person executing the prior proxy, or by
attendance at the Annual Meeting and voting in person by the person submitting the prior proxy.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">Any shareholder
who owns shares in street name and would like to vote in person at the Annual Meeting should inform his or her broker 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&rsquo;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 stock as of the record date. Upon submission of proper identification and ownership
documentation, we will be able to admit the shareholder to the Annual Meeting; however, such shareholder will not be able to vote
his or her shares at the Annual Meeting without a legal proxy. 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&rsquo;s vote will not be counted
unless he or she appears at the Annual Meeting and votes in person.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">Our Board
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 accompanying Notice of Annual Meeting. So far as is known to our Board, no other matters are to be brought
before the Annual Meeting. However, if any other matters are presented properly for action at the Annual Meeting or at any adjournments
or postponements thereof, it is intended that the proxies will be voted with respect thereto by the proxy holders in accordance
with the instructions and at the discretion of our Board or a properly authorized committee thereof.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt"><B>This proxy
statement, the accompanying shareholder letter, the accompanying proxy card and our Annual Report on Form 10-K are being made available
to our shareholders on the Internet at www.proxyvote.com through the notice and access process on or about October&nbsp;23, 2014.</B>
We will bear the cost of soliciting proxies</P>

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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 0pt">pursuant to this proxy statement. The solicitation will be made through the Internet
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 our common stock, no par value per share (&ldquo;Common Stock&rdquo;). Further
solicitation of proxies may be made by mail upon request, and by telephone or oral communications with some shareholders. Our regular
employees, who will not receive additional compensation for the solicitation, or a compensated proxy solicitation firm, will make
such further solicitations.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 12pt 0 0; text-align: center"><B>OUTSTANDING SHARES AND VOTING RIGHTS</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">Only holders
of record of the 4,173,633 shares of our Common Stock outstanding at the close of business on October 8, 2014, are entitled to
notice of and to vote at the Annual Meeting or any adjournment or postponement thereof. Under Colorado law, our Articles of Incorporation
and our Bylaws, the holders of a majority of the total shares entitled to vote at the Annual Meeting, as of the record date, represented
in person or by proxy, will constitute a quorum for the transaction of business at the Annual Meeting. If a quorum is not present,
the Annual Meeting may be postponed or adjourned to allow additional time for obtaining additional proxies or votes. 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. Shares of our 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 Annual Meeting.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 11.25pt 0 0; text-align: justify; text-indent: 23pt">An &ldquo;abstention&rdquo;
is the voluntary act of not voting by a shareholder who is represented in person or by proxy at a meeting and entitled to vote.
&ldquo;Broker non-votes&rdquo; are shares of voting stock held in record name by brokers and nominees concerning which: (i)&nbsp;the
broker or nominee does not have discretionary voting power under applicable rules or the instruments under which it serves in such
capacity and instructions have not been received from the beneficial owners or persons entitled to vote; or (ii)&nbsp;the record
holder has indicated on the proxy or has executed a proxy and otherwise notified us that it does not have authority to vote such
shares on that matter.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">For Proposal
No. 1 (the election of directors), assuming that a quorum is present, the five nominees for director receiving the highest number
of affirmative votes will be elected; votes withheld and broker non-votes have no practical effect.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">For Proposal
No. 2 (to ratify the appointment of Moss Adams, LLP as our independent registered public accounting firm for the fiscal year ending
June&nbsp;30, 2015), Proposal No. 3 (advisory vote to approve the compensation of our Named Executive Officers), and Proposal No.
5 (to approve the establishment of the 2014 Employee Stock Purchase Plan), assuming that a quorum is present, the matter will be
approved if the votes cast in favor of the matter exceed the votes cast opposing the matter. In such matters, abstentions and broker
non-votes will not be included in the vote totals and, therefore, will have no effect on the vote.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">For Proposal
No. 4 (to approve the termination of the Amended and Restated 2004 Directors&rsquo; Stock Option Plan), assuming that a quorum
is present, the matter will be approved if the vote constitutes <FONT STYLE="font-family: Times New Roman, Times, Serif">the affirmative
vote of a majority of shares of Common Stock present in person or by proxy at the Annual Meeting and entitled to vote at the Annual
Meeting. As a result, </FONT><FONT STYLE="font-family: inherit,serif">abstentions and broker non-votes have the effect of a vote
against </FONT>Proposal No. 4<FONT STYLE="font-family: inherit,serif">.</FONT></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">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 Annual Meeting will be tabulated by the person or persons appointed by us to act as inspectors of election for the Annual
Meeting.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify"><B>Recommendations of our Board</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 4.5pt 0 0; text-align: justify; text-indent: 23pt">Our Board
recommends that our shareholders vote &ldquo;for&rdquo; each of the five director nominees named under Proposal No. 1; and &ldquo;for&rdquo;
each of Proposal Nos. 2 through 5.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt"><B>THE PROPOSALS
TO BE VOTED UPON AT THE ANNUAL 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></P>

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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 12pt 0 0; text-align: center"><B>SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 12pt 0 9pt; text-align: justify; text-indent: 23pt">The following
table sets forth information concerning the beneficial ownership of the Company&rsquo;s Common Stock as of October 8, 2014 by:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 23pt"></TD><TD STYLE="width: 0.3in">&#9679;</TD><TD>each member of the Board;</TD></TR></TABLE>

<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 23pt"></TD><TD STYLE="width: 0.3in">&#9679;</TD><TD>each of the Company&rsquo;s Named Executive Officers listed in the &ldquo;Summary Compensation Table&rdquo; included in the
&ldquo;Executive Compensation&rdquo; section of this proxy statement;</TD></TR></TABLE>

<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 23pt"></TD><TD STYLE="width: 0.3in">&#9679;</TD><TD>all of the Company&rsquo;s
directors and executive officers as a group; and</TD></TR></TABLE>

<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 23pt"></TD><TD STYLE="width: 0.3in">&#9679;</TD><TD>each person or entity known to the Company that beneficially owns more than five percent of the Company&rsquo;s Common Stock.</TD></TR></TABLE>

<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 23pt">Beneficial ownership
is determined in accordance with the rules of the SEC. Unless otherwise indicated below, the address of each beneficial owner is
c/o Pro-Dex, Inc., 2361 McGaw Avenue, Irvine, California, 92614. Unless otherwise indicated below, the Company believes that each
of the persons listed in the table (subject to applicable community property laws) has the sole power to vote and to dispose of
the shares listed opposite the shareholder&rsquo;s name.</P>

<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 23pt">The percentages
of Common Stock beneficially owned are based on 4,173,633 shares of Common Stock outstanding at October 8, 2014.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD STYLE="font-size: 8pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" NOWRAP STYLE="font-size: 8pt; font-weight: bold; text-align: center">Number of</TD><TD STYLE="font-size: 8pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" NOWRAP STYLE="font-size: 8pt; font-weight: bold; text-align: center">Percent of</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 8pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" NOWRAP STYLE="font-size: 8pt; font-weight: bold; text-align: center">Shares of Common</TD><TD STYLE="font-size: 8pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" NOWRAP STYLE="font-size: 8pt; font-weight: bold; text-align: center">Common Stock</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 8pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" NOWRAP STYLE="font-size: 8pt; font-weight: bold; text-align: center">Stock Beneficially</TD><TD STYLE="font-size: 8pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" NOWRAP STYLE="font-size: 8pt; font-weight: bold; text-align: center">Beneficially</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; font-weight: bold; text-align: justify; border-bottom: Black 1pt solid">Name and Address of Beneficial Owner</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" NOWRAP STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Owned</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" NOWRAP STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><b>Owned</b><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(1)</font></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0pt; text-align: justify; text-indent: 0pt">Nicholas J. Swenson, AO Partners I, L.P.; and AO Partners, LLC<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(2)</font></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 8pt; text-align: justify; text-indent: 0pt">3033 Excelsior Blvd. Suite 560</P></TD><TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="text-align: right">&nbsp;</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="text-align: right">&nbsp;</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 68%; text-align: justify; text-indent: 0pt; padding-left: 8pt">Minneapolis, MN 55416&#9;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 1%; text-align: left">&nbsp;</TD><TD NOWRAP STYLE="width: 12%; text-align: right">1,037,984</TD><TD NOWRAP STYLE="width: 2%; text-align: left; vertical-align: top"><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top"></font></TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 1%; text-align: left">&nbsp;</TD><TD NOWRAP STYLE="width: 12%; text-align: right">24.9</TD><TD NOWRAP STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; text-indent: -5.05pt; padding-left: 5.05pt">Raymond E. Cabillot; Farnam Street Partners, L.P.;</TD><TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="text-align: right">&nbsp;</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="text-align: right">&nbsp;</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0pt; text-align: justify; text-indent: 0pt">Farnam Street Capital, Inc.; and Peter O. Haeg<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(3)</font></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0pt; text-align: justify; text-indent: 8pt">3033 Excelsior Blvd., Suite 320</P></TD><TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="text-align: right">&nbsp;</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="text-align: right">&nbsp;</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; text-indent: 0pt; padding-left: 8pt">Minneapolis, MN 55416&#9;</TD><TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="text-align: right">510,560</TD><TD NOWRAP STYLE="text-align: left; vertical-align: top"><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top"></font></TD><TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="text-align: right">12.2</TD><TD NOWRAP STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; text-indent: -5.05pt; padding-left: 5.05pt"><font style="font-size: 10pt">Harold A. Hurwitz<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(4)</font></font></TD><TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="text-align: right">55,537</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="text-align: right">1.3</TD><TD NOWRAP STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; text-indent: -5.05pt; padding-left: 5.05pt"><font style="font-size: 10pt">Richard L. Van Kirk<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(4)</font></font></TD><TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="text-align: right">67,205</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="text-align: right">1.6</TD><TD NOWRAP STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; text-indent: -5.05pt; padding-left: 5.05pt"><font style="font-size: 10pt">David C. Hovda<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(4)</font></font></TD><TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="text-align: right">15,000</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="text-align: right"><font style="font-size: 10pt; line-height: 93%">*</font></TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; text-indent: -5.05pt; padding-left: 5.05pt">William J. Farrell III&#9;</TD><TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="text-align: right">1,000</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="text-align: right"><font style="font-size: 10pt">*</font></TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0pt; padding-left: 0pt; vertical-align: middle"><font style="font-size: 10pt">All Directors, Director Nominees and Executive Officers as a group (6&nbsp;persons)<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(4)</font></font></TD><TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="text-align: right">1,687,286</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="text-align: right">40.4</TD><TD NOWRAP STYLE="text-align: left">%</TD></TR>
</TABLE>


<div>
<hr style="COLOR: black" align="left" noshade size="2" width="15%">
</div>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 10pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.3in">*</TD><TD><FONT STYLE="font-size: 10pt; line-height: 115%">Indicates less than 1% of the outstanding shares of common stock.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.3in"><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(1)</font></TD><TD STYLE="text-align: justify">Applicable percentage ownership is based on 4,173,633 shares of Common Stock outstanding as of
October 8, 2014. Any securities not outstanding but subject to warrants or options exercisable as of October 8, 2014, 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.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 10pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.3in"><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(2)</font></TD><TD STYLE="text-align: justify">AO Partners, LLC is the General Partner of AO Partners I, L.P. Mr.&nbsp;Swenson is the Managing
Member of AO Partners, LLC, and, in such capacity, has the power to direct the affairs of AO Partners, LLC, including the voting
and disposition of shares of our Common Stock held by AO Partners I, L.P. As such, AO Partners I, L.P., AO Partners, LLC and Mr.&nbsp;Swenson
may be deemed to share voting and dispositive power with regard to the 1,037,984 shares of our Common Stock held by AO Partners
I, L.P.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 10pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.3in"><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(3)</font></TD><TD STYLE="text-align: justify; padding-right: 0.8pt">Farnam Street Partners, L.P., Farnam Street Capital, Inc., Raymond E. Cabillot,
and Peter O. Haeg claim shared voting power and shared dispositive power of 510,560 shares of our Common Stock held by Farnam Street
Partners, L.P.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 10pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(4)</font></TD><TD STYLE="text-align: justify; padding-right: 0.8pt">Includes shares of Common Stock issuable upon the exercise of options that
were exercisable as of October 8, 2014, or exercisable within 60 days after October 8, 2014, as follows: Mr.&nbsp;Hurwitz, 48,334
shares, Mr. Van Kirk, 60,002 shares, Mr. Hovda 15,000; and all directors, director nominees and Named Executive Officers as a group,
123,336 shares.</TD></TR></TABLE>



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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0pt; text-align: center"><B>Proposal No.&nbsp;1</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0 0; text-align: center"><B>ELECTION OF DIRECTORS</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0"><B>Current Board Structure and Director Terms</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">Our Board
is currently composed of five members. All directors or their successor nominees stand for election each year.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">Certain information
with respect to each of the nominees who will be presented at the Annual Meeting by our Board 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 a nominee become unavailable
to serve, proxies will be voted for such other person as may be designated by our Board.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">Unless the
authority to vote for directors has been withheld in the proxy, the person named in the accompanying proxy intends to vote at the
Annual Meeting for the election of each of the nominees presented below. In the election of directors, assuming a quorum is present,
the five nominees for director receiving the highest number of votes cast at the Annual Meeting will be elected as our directors.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 12pt 0 0; text-align: center"><B>DIRECTORS</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">Set forth below
is certain information with respect to our directors.</P>

<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr>
    <td style="vertical-align: bottom; width: 20%; padding-top: 0.1in; text-decoration: underline; line-height: 115%; text-align: center"><font style="font-size: 10pt"><u>Name</u></font></td>
    <td style="vertical-align: bottom; width: 2%; padding-top: 0.1in; text-align: center; line-height: 115%"><font style="font-size: 10pt">&nbsp;</font></td>
    <td style="vertical-align: bottom; width: 4%; padding-top: 0.1in; text-decoration: underline; line-height: 115%; text-align: center"><font style="font-size: 10pt"><u>Age</u></font></td>
    <td style="vertical-align: bottom; width: 2%; padding-top: 0.1in; text-align: center; line-height: 115%"><font style="font-size: 10pt">&nbsp;</font></td>
    <td style="vertical-align: bottom; width: 40%; padding-top: 0.1in; text-decoration: underline; line-height: 115%; text-align: center"><font style="font-size: 10pt"><u>Position With Company</u></font></td>
    <td style="vertical-align: bottom; width: 2%; padding-top: 0.1in; text-align: center; line-height: 115%"><font style="font-size: 10pt">&nbsp;</font></td>
    <td style="vertical-align: bottom; width: 5%; padding-top: 0.1in; text-decoration: underline; line-height: 115%; text-align: center"><font style="font-size: 10pt"><u>Audit</u></font></td>
    <td style="vertical-align: bottom; width: 2%; padding-top: 0.1in; text-align: center; line-height: 115%"><font style="font-size: 10pt">&nbsp;</font></td>
    <td style="vertical-align: bottom; width: 10%; padding-top: 0.1in; text-decoration: underline; line-height: 115%; text-align: center"><font style="font-size: 10pt"><u>Compensation</u></font></td>
    <td style="vertical-align: top; width: 2%; padding-top: 0.1in; text-align: justify; line-height: 115%"><font style="font-size: 10pt">&nbsp;</font></td>
    <td style="vertical-align: bottom; width: 11%; padding-top: 0.1in; text-decoration: underline; line-height: 115%; text-align: center"><font style="font-size: 10pt"><u>Nominating<BR>
and<BR>
Governance</u></font></td></tr>
<tr style="vertical-align: top">
    <td style="padding-top: 0.1in; line-height: 115%"><font style="font-size: 10pt">Raymond E. Cabillot</font></td>
    <td style="padding-top: 0.1in; text-align: justify; line-height: 115%">&nbsp;</td>
    <td style="padding-top: 0.1in; text-align: justify; line-height: 115%"><font style="font-size: 10pt">51</font></td>
    <td style="padding-top: 0.1in; text-align: justify; line-height: 115%">&nbsp;</td>
    <td style="padding-top: 0.1in; line-height: 115%"><font style="font-size: 10pt">Director</font></td>
    <td style="padding-top: 0.1in; text-align: justify; line-height: 115%">&nbsp;</td>
    <td style="padding-top: 0.1in; text-align: center; line-height: 115%"><font style="font-size: 10pt">X</font></td>
    <td style="padding-top: 0.1in; text-align: center; line-height: 115%">&nbsp;</td>
    <td style="padding-top: 0.1in; text-align: center; line-height: 115%"><font style="font-size: 10pt">X</font></td>
    <td style="padding-top: 0.1in; text-align: center; line-height: 115%">&nbsp;</td>
    <td style="padding-top: 0.1in; text-align: center; line-height: 115%"><font style="font-size: 10pt">C</font></td></tr>
<tr style="vertical-align: top">
    <td style="padding-top: 0.1in; line-height: 115%"><font style="font-size: 10pt">William J. Farrell III</font></td>
    <td style="padding-top: 0.1in; text-align: justify; line-height: 115%">&nbsp;</td>
    <td style="padding-top: 0.1in; text-align: justify; line-height: 115%"><font style="font-size: 10pt">41</font></td>
    <td style="padding-top: 0.1in; text-align: justify; line-height: 115%">&nbsp;</td>
    <td style="padding-top: 0.1in; line-height: 115%"><font style="font-size: 10pt">Director</font></td>
    <td style="padding-top: 0.1in; text-align: justify; line-height: 115%">&nbsp;</td>
    <td style="padding-top: 0.1in; text-align: center; line-height: 115%">&nbsp;</td>
    <td style="padding-top: 0.1in; text-align: center; line-height: 115%">&nbsp;</td>
    <td style="padding-top: 0.1in; text-align: center; line-height: 115%"><font style="font-size: 10pt">X</font></td>
    <td style="padding-top: 0.1in; text-align: center; line-height: 115%">&nbsp;</td>
    <td style="padding-top: 0.1in; text-align: center; line-height: 115%"><font style="font-size: 10pt">X</font></td></tr>
<tr style="vertical-align: top">
    <td style="padding-top: 0.1in; line-height: 115%"><font style="font-size: 10pt">David C. Hovda</font></td>
    <td style="padding-top: 0.1in; text-align: justify; line-height: 115%">&nbsp;</td>
    <td style="padding-top: 0.1in; text-align: justify; line-height: 115%"><font style="font-size: 10pt">52</font></td>
    <td style="padding-top: 0.1in; text-align: justify; line-height: 115%">&nbsp;</td>
    <td style="padding-top: 0.1in; line-height: 115%"><font style="font-size: 10pt">Director</font></td>
    <td style="padding-top: 0.1in; text-align: justify; line-height: 115%">&nbsp;</td>
    <td style="padding-top: 0.1in; text-align: center; line-height: 115%"><font style="font-size: 10pt">C</font></td>
    <td style="padding-top: 0.1in; text-align: center; line-height: 115%">&nbsp;</td>
    <td style="padding-top: 0.1in; text-align: center; line-height: 115%">&nbsp;</td>
    <td style="padding-top: 0.1in; text-align: center; line-height: 115%">&nbsp;</td>
    <td style="padding-top: 0.1in; text-align: center; line-height: 115%"><font style="font-size: 10pt">X</font></td></tr>
<tr style="vertical-align: top">
    <td style="padding-top: 0.1in; line-height: 115%"><font style="font-size: 10pt">Harold A. Hurwitz</font></td>
    <td style="padding-top: 0.1in; text-align: justify; line-height: 115%">&nbsp;</td>
    <td style="padding-top: 0.1in; text-align: justify; line-height: 115%"><font style="font-size: 10pt">62</font></td>
    <td style="padding-top: 0.1in; text-align: justify; line-height: 115%">&nbsp;</td>
    <td style="padding-top: 0.1in; line-height: 115%"><font style="font-size: 10pt">Director, Chief Executive Officer, President, Chief Financial Officer, Secretary</font></td>
    <td style="padding-top: 0.1in; text-align: justify; line-height: 115%">&nbsp;</td>
    <td style="padding-top: 0.1in; text-align: center; line-height: 115%">&nbsp;</td>
    <td style="padding-top: 0.1in; text-align: center; line-height: 115%">&nbsp;</td>
    <td style="padding-top: 0.1in; text-align: center; line-height: 115%">&nbsp;</td>
    <td style="padding-top: 0.1in; text-align: center; line-height: 115%">&nbsp;</td>
    <td style="padding-top: 0.1in; text-align: center; line-height: 115%">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td style="padding-top: 0.1in; line-height: 115%"><font style="font-size: 10pt">Nicholas J. Swenson</font></td>
    <td style="padding-top: 0.1in; text-align: justify; line-height: 115%">&nbsp;</td>
    <td style="padding-top: 0.1in; text-align: justify; line-height: 115%"><font style="font-size: 10pt">46</font></td>
    <td style="padding-top: 0.1in; text-align: justify; line-height: 115%">&nbsp;</td>
    <td style="padding-top: 0.1in; line-height: 115%"><font style="font-size: 10pt">Director, Chairman of the Board</font></td>
    <td style="padding-top: 0.1in; text-align: justify; line-height: 115%">&nbsp;</td>
    <td style="padding-top: 0.1in; text-align: center; line-height: 115%"><font style="font-size: 10pt">X</font></td>
    <td style="padding-top: 0.1in; text-align: center; line-height: 115%">&nbsp;</td>
    <td style="padding-top: 0.1in; text-align: center; line-height: 115%"><font style="font-size: 10pt">C</font></td>
    <td style="padding-top: 0.1in; text-align: center; line-height: 115%">&nbsp;</td>
    <td style="padding-top: 0.1in; text-align: center; line-height: 115%"><font style="font-size: 10pt">X</font></td></tr>
</table>
<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">____________________________</P>

<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 4%; padding-right: 0.8pt; line-height: 115%"><font style="font-size: 10pt">(X)</font></td>
    <td style="width: 96%; padding-right: 0.8pt; text-align: justify; line-height: 115%"><font style="font-size: 10pt">Member of the Committee</font></td></tr>
<tr style="vertical-align: top">
    <td style="padding-right: 0.8pt; line-height: 115%"><font style="font-size: 10pt">(C)</font></td>
    <td style="padding-right: 0.8pt; text-align: justify; line-height: 115%"><font style="font-size: 10pt">Chairman of the Committee</font></td></tr>
</table>
<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">Messrs. Cabillot,
Farrell, Hovda and Swenson currently each qualify as an &ldquo;independent director&rdquo; as such term is defined in Rule 5605(a)(2)
of the Nasdaq Listing Rules and we expect that each will continue to qualify as an &ldquo;independent director&rdquo; if elected.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">Our Board is
of the opinion that the election to our Board of the director nominees identified herein, each of whom has consented to serve if
elected, would be in our shareholders&rsquo; best interests.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 12pt 0 0; text-align: center"><B>OUR BOARD RECOMMENDS THAT
YOU VOTE &ldquo;FOR&rdquo; THE ELECTION OF THE<BR>
NOMINEES NAMED BELOW.</B></P>

<P STYLE="font: 10pt/11.25pt Times New Roman, Times, Serif; margin: 10pt 0 10pt; text-align: justify; text-indent: 23pt">Raymond
E. Cabillot (51), current director and nominee, has, from January 1998 until the present, served as Chief Executive Officer and
a director of Farnam Street Capital, Inc., the General Partner of Farnam Street Partners L.P., a private investment partnership
located in Minneapolis, MN. He was a Senior Research Analyst at Piper Jaffray, Inc. from 1990 to 1998. Prior
to that, he worked for Prudential Capital Corporation from 1987 to 1990 as an Associate Investment Manager and as an Investment
Manager. Mr. Cabillot serves as a director of several private companies. He was a director of O.I. Corporation, a Nasdaq
listed company (OICO), from 2006 to 2010. He served as Chairman of the Board of O.I. Corporation from 2007 through 2010 and during
2010 served as Co-Chairman of the Board of O.I. Corporation. Mr. Cabillot has a B.A. degree with a double major in Economics
and Chemistry from Saint Olaf College and an M.B.A. from the University of Minnesota. Mr. Cabillot has been a director of ours
since January 2013.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt; text-indent: 23pt">Mr. Cabillot brings the following experience,
qualifications, attributes and skills to our Board:</P>

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<TD STYLE="width: 23pt"></TD><TD STYLE="width: 0.3in">&#9679;</TD><TD>More than 25 years of experience as a financial analyst and investment
manager;</TD></TR></TABLE>

<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 23pt"></TD><TD STYLE="width: 0.3in">&#9679;</TD><TD>Four years of prior public company board experience, including three
years as Chairman and one year as Co-Chairman; and</TD></TR></TABLE>

<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 23pt"></TD><TD STYLE="width: 0.3in">&#9679;</TD><TD>Independent of our management.</TD></TR></TABLE>

<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>


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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify; text-indent: 23pt">William J. Farrell
III (41), current director and nominee, is co-founder and Chief Operating Officer, since January 2013, of FreshRealm, LLC, a developer
of new technologies to streamline fresh food distribution. In addition, from January
2011 until the present, he has served as Chief Executive Officer of Viszy Inc., a start-up company developing software and services
for the consumer market. Mr. Farrell is also Chief Executive Officer of B &#333; biam, LLC, a company that turns youth art into
apparel and other products, which it merchandises through its retail store and wholesale channels. From April 1998 to January 2011,
Mr. Farrell held various senior management roles at Medtronic, Inc. (NYSE: MDT), a multi-national medical technology company. His
engineering career began with eight years in production support, process development and operations. He then worked 10 years in
product development for Medtronic, during which time he led management teams in program, product and process development. At the
end of his tenure with Medtronic, he was Senior Director of Product Development and led corporate-wide initiatives to improve design,
reliability and manufacturability practices. Mr. Farrell has a B.S. degree in Mechanical Engineering from the University of Minnesota
(1996). Mr. Farrell has been a director of ours since January 2013.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify; text-indent: 23pt">Mr. Farrell brings
the following experience, qualifications, attributes and skills to our Board:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 23pt"></TD><TD STYLE="width: 0.3in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Current senior-level management, operating and board experience;</FONT></TD></TR></TABLE>
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 23pt"></TD><TD STYLE="width: 0.3in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">More than 12 years of experience in engineering and management roles
in the medical device industry, our primary target market; and</FONT></TD></TR></TABLE>
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 23pt"></TD><TD STYLE="width: 0.3in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Independent of our management.</FONT></TD></TR></TABLE>

<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 23pt">David C. Hovda
(52), current director and nominee, has served as President, Chief Executive Officer and a member of the Board of Directors of
Simplify Medical, Inc., a privately held medical device company that has developed a cervical artificial disc replacement optimized
for MRI imaging, since 2013. Prior to his tenure with Simplify Medical, he was President, Chief Executive Officer and a member
of the Board of Directors of SpinalMotion, Inc., a privately held medical device company that designed, developed and marketed
artificial discs for use in the spine, from 2004 to 2013. Prior to joining Spinal Motion, he held leadership positions with Arthrocare,
Inc. (Nasdaq: ARTC), a developer and manufacturer of surgical devices, instruments, and implants focused on enhancing surgical
techniques and patient outcomes, serving as the Vice President/General Manager of its Spine Division from 1999 to 2004, and as
the Managing Director of its ENT Division from 1997 to 1999. From 1992 to 1997, Mr. Hovda served in financial analysis and product
management positions with Medtronic, Inc. (NYSE: MDT), a multi-national medical technology company, which culminated in his service
as the European Business Manager of its Upper Airway Venture from 1995 to 1997. He holds more than 40 patents related to radio
frequency ablation technology, specific clinical applications, and artificial disc replacement designs and implantation methods.</P>


<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0pt">Mr. Hovda served for five years with the United States Navy, achieving the rank of Lieutenant. He received a Bachelor of Science
degree in Civil Engineering from Northwestern University and an M.B.A. from the Harvard Graduate School of Business Administration.
Mr. Hovda has been a director of ours since January 2013.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 10pt; text-align: justify; text-indent: 23pt">Mr. Hovda brings
the following experience, qualifications, attributes and skills to our Board:</P>


<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 23pt"></TD><TD STYLE="width: 0.3in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Current senior-level management, operating and board experience based
on more than 20 years of participation in the medical device industry, our primary target market, nine years of which are specifically
with medical devices to treat disorders of the spine, a sector within the medical device industry that we believe represents potential
for future revenue growth;</FONT></TD></TR></TABLE>

<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 23pt"></TD><TD STYLE="width: 0.3in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Core management and leadership skills gained through experience overseeing
and managing operations at the manager and chief executive officer levels, including experience in medical device intellectual
property, product development, clinical testing and marketing;</FONT></TD></TR></TABLE>

<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 23pt"></TD><TD STYLE="width: 0.3in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Experience in financial analysis, including operational restructuring,
acquisition opportunities and market entry feasibility; and</FONT></TD></TR></TABLE>

<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 23pt"></TD><TD STYLE="width: 0.3in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Independent of our management.</FONT></TD></TR></TABLE>

<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>


<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0 10pt; text-align: justify; text-indent: 23pt">Harold A.
Hurwitz (62), current director and nominee,&nbsp;has served as our Chief Executive Officer and President since February 2013 in
addition to his positions as Chief Financial Officer, Treasurer and Secretary, which he has held since joining the Company in October
2010. Between March 2010 and September 2010, Mr.&nbsp;Hurwitz served as an independent consultant, providing service primarily
to a molecular diagnostics company. From April 2008 to February 2010, Mr.&nbsp;Hurwitz served as Chief Financial Officer and Vice
President of Interventional Spine, Inc., a venture-backed medical device company.&nbsp;Prior to joining Interventional Spine in
April 2008, Mr.&nbsp;Hurwitz served as Principal Consultant, focused on the medical technology industry, with McDermott&nbsp;&amp;
Bull from December 2005 to March 2008.&nbsp;Mr.&nbsp;Hurwitz served as an independent consultant from December 2004 to December
2005, with his primary client during that time being Micro Therapeutics, Inc., a then-public medical device company (now part of
Covidien plc).&nbsp;He was Chief Financial Officer of Micro Therapeutics, Inc. from December 1997 to December 2004.&nbsp;Earlier
in his career, Mr.&nbsp;Hurwitz was a Partner with Coopers&nbsp;&amp; Lybrand L.L.P. (now PricewaterhouseCoopers LLP), where he
was a Business Assurance Partner, Team
</P>
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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 10pt; text-align: justify; text-indent: 0pt">Leader of its Orange County Medical Device Practice and an SEC Review Partner. He has a
broad financial background that includes more than 35 years of public accounting and financial management experience.&nbsp;In addition,
he has leadership experience in human resources and information technology, diversified fund raising and Sarbanes-Oxley compliance.&nbsp;Mr.&nbsp;Hurwitz
holds a B.A. in Economics from the University of California, Los Angeles. Mr. Hurwitz has been a director of ours since June 2013.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify; text-indent: 23pt">Mr. Hurwitz brings
the following experience, qualifications, attributes and skills to our Board:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 23pt"></TD><TD STYLE="width: 0.3in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">38 years of experience in accounting, reporting and financial management
based on 22 years as an employee and partner with Coopers &amp; Lybrand L.L.P. and 16 years as a chief financial officer and financial
consultant;</FONT></TD></TR></TABLE>

<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 23pt"></TD><TD STYLE="width: 0.3in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">11 years as a chief financial officer of publicly held companies,
including four years as our Chief Financial Officer; and</FONT></TD></TR></TABLE>

<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 23pt"></TD><TD STYLE="width: 0.3in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">30 years of senior-level management, operating and consulting experience
in the medical device industry, our primary target market.</FONT></TD></TR></TABLE>

<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify; text-indent: 23pt">Nicholas J. Swenson
(46), current director and nominee, is a businessman, investor and research analyst. He has served as President and Chief Executive
Officer of Air T, Inc. (AIRT), a Nasdaq listed company, since October 2013, as Chairman of the Board since August 2013 and as a
member of the Board of Directors since August 2012. Mr. Swenson serves as a director of several private companies as well. Also,
since March 2009, Mr. Swenson has been the Portfolio Manager of Groveland Capital, LLC.&nbsp;&nbsp;Prior to forming Groveland Capital,
Mr. Swenson was a Portfolio Manager and Partner at Whitebox Advisors, LLC, a multi-strategy hedge fund, from 2001 to 2009. From
1999 to 2001 he was a research analyst at Varde Partners, LLC, a partnership that specializes in distressed debt investing. He
was an Associate in Corporate Finance at Piper Jaffray, Inc. from 1996 to 1999. Mr. Swenson has a B.A. degree in History from Middlebury
College (1991) and an M.B.A. from the University of Chicago (1996). Mr. Swenson has been a director of ours since January 2013.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify; text-indent: 23pt">Mr. Swenson brings
the following experience, qualifications, attributes and skills to our Board:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 23pt"></TD><TD STYLE="width: 0.3in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">18 years of experience as a financial analyst and investment manager;</FONT></TD></TR></TABLE>

<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>


<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 23pt"></TD><TD STYLE="width: 0.3in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Public company senior-level management, operating and board experience;
and</FONT></TD></TR></TABLE>

<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>

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<TD STYLE="width: 23pt"></TD><TD STYLE="width: 0.3in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Independent of our management</FONT></TD></TR></TABLE>

<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>


<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: center"><B>BUSINESS EXPERIENCE OF KEY MANAGEMENT</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0 0; text-align: justify; text-indent: 23pt">Set forth below
is information concerning our other non-director key management personnel.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">Richard
L. Van Kirk (54) was appointed our Chief Operating Officer in April 2013. He joined the Company in January 2006 and was named Vice
President of Manufacturing in December 2006. Mr. Van Kirk&rsquo;s career includes more than 14 years of management experience in
manufacturing. Mr. Van Kirk previously served as Manufacturing Manager and Manager of Product Development at Comarco Wireless Technologies,
ChargeSource Division, which provides power and charging functionality for popular electronic devices and wireless accessories.
Prior to Comarco, Mr. Van Kirk was General Manager at Dynacast, a leader in precision die casting. Mr. Van Kirk earned a B.A. degree
in Business Administration at California State University, Fullerton and an M.B.A. from Claremont Graduate School.</P>

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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>BOARD MEETINGS AND RELATED MATTERS</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">During the
fiscal year ended June&nbsp;30, 2014, our Board held eight meetings and acted four times by unanimous written consent. For all
meetings at which our Board was not comprised entirely of independent directors, the independent members met immediately after
each Board meeting. The &ldquo;independent directors&rdquo; consist of all non-employee, &ldquo;independent directors&rdquo; (as
defined in Rule 5605(a)(2) of the Nasdaq Listing Rules). No director attended less than 75% of the aggregate of all meetings of
our Board and all meetings of committees of our Board upon which he served.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 0pt"><B>Audit Committee</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">Our
Board has an Audit Committee that consists of three Board members, Messrs. Hovda (Chairman), Cabillot and Swenson. The Audit
Committee is comprised entirely of non-employee, &ldquo;independent directors&rdquo; (as defined in Rule 5605(a)(2) of the
Nasdaq Listing Rules) and operates under a written charter adopted by our Board. The duties of the Audit Committee include
meeting with our independent registered public accounting firm to review the scope of the annual audit and to review our
quarterly and annual financial statements before the statements are released to our shareholders. The Audit Committee also
evaluates the independent public accounting firm&rsquo;s performance and appoints or replaces the independent public
accounting firm subject, if applicable, to the consideration of</P>

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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 10pt; text-align: justify; text-indent: 0pt">shareholder ratification for the ensuing fiscal year. A copy
of the Audit Committee&rsquo;s current charter may be found at http://pro-dex.com/media/ 23089/audit_committee_charter.pdf.
The Audit Committee and Board have confirmed that the Audit Committee does and will continue to include at least three
independent directors and has confirmed that Messrs. Hovda, Cabillot and Swenson each meet applicable SEC regulations for
designation as an &ldquo;Audit Committee Financial Expert&rdquo; based upon their respective experience noted elsewhere in
this proxy statement. The Audit Committee held seven meetings during the fiscal year ended June&nbsp;30, 2014.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0 0; text-align: justify; text-indent: 0pt"><B>Nominating/Corporate
Governance Committee</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt; text-indent: 23pt">Our Board has a Nominating/Corporate
Governance Committee (&ldquo;Nominating Committee&rdquo;) that consists of four Board members, Messrs. Cabillot (Chairman), Farrell,
Hovda and Swenson. The Nominating Committee is comprised entirely of non-employee, &ldquo;independent directors&rdquo; (as defined
in Rule 5605(a)(2) of the Nasdaq Listing Rules) and operates under a written charter adopted by our Board, a copy of which may
be found at http://pro-dex.com/media/23113/prodex_gov_committee_charter.pdf. In such capacity, the Nominating Committee identifies
and reviews the qualifications of candidate nominees to our Board. During the fiscal year ended June&nbsp;30, 2014, the full Board
carried out the duties typically ascribed to the Nominating Committee. As such, the Nominating Committee held no separate meetings
during the fiscal year ended June&nbsp;30, 2014.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0 0pt; text-align: justify; text-indent: 23pt">The Nominating
Committee works with our Board to determine the appropriate characteristics, skills and experiences for our Board as a whole and
its individual members with the objective of having a Board with diverse experience. The Nominating Committee believes that it
is desirable that directors possess an understanding of our business environment and have the requisite ethical standards, knowledge,
skills, expertise and diversity of experience such that our Board&rsquo;s ability to manage and direct our affairs and business
is enhanced. Additional considerations may include an individual&rsquo;s capacity to enhance the ability of committees of our Board
to fulfill their duties and/or satisfy any independence requirements imposed by law, regulation or listing requirements. The Nominating
Committee may receive candidate nomination suggestions from current Board members, our executive officers, our shareholders or
other sources, which may be either unsolicited or in response to requests from our Board for such candidates. The Nominating Committee
may also, from time to time, engage firms that specialize in identifying director candidates. Once a person has been identified
by the Nominating Committee as a potential candidate, the Nominating Committee may collect and review publicly available information
regarding the person to assess whether the person should be considered further. If the Nominating Committee determines that the
candidate warrants further consideration, a member of the Nominating Committee may contact the person. Generally, if the person
expresses a willingness to be considered and to serve on our Board, the Nominating Committee may request information from the candidate,
review the person&rsquo;s accomplishments and qualifications and may conduct one or more interviews with the candidate. The Nominating
Committee may consider all such information in light of information regarding any other candidates that it might be evaluating
for nomination to our Board. The Nominating Committee or other 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&rsquo;s qualifications and accomplishments. With the candidate&rsquo;s consent, the Nominating Committee may also
engage an outside firm to conduct background checks on the candidate as part of the evaluation process. The Nominating Committee&rsquo;s
evaluation process does not vary based on the source of the recommendation.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">Shareholder
nominations for director should be sent to our Secretary and should include the candidate&rsquo;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 satisfy the requirements discussed later in this proxy statement under the heading &ldquo;Proposals of Shareholders.&rdquo;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">In compiling
the list of our Board nominees appearing in this proxy statement, nominee referrals as well as nominee recommendations were received
from existing directors and members of management&mdash;both solicited and unsolicited.<B> </B> No paid consultants were engaged
by us, our Board or any of our Board&rsquo;s committees for the purposes of identifying qualified, interested Board candidates.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0pt; text-align: justify; text-indent: 0pt"><B>Compensation
Committee</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0pt; text-align: justify; text-indent: 23pt">Our Board
has a Compensation Committee that consists of three Board members, Messrs. Swenson (Chairman), Cabillot and Farrell. The Compensation
Committee is comprised entirely of non-employee, &ldquo;independent directors&rdquo; (as defined in Rule 5605(a)(2) of the Nasdaq
Listing Rules) and operates under a written charter adopted by our Board. A copy of the Compensation Committee&rsquo;s current
charter may be found at http://pro-dex.com/media/23092/compensation_committee_charter.pdf. The Compensation Committee establishes
compensation policies applicable to our executive officers and directors. The Compensation Committee held three meetings during
the fiscal year ended June&nbsp;30, 2014.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">The agenda
for each meeting of the Compensation Committee is usually developed by the Chairman of the Compensation Committee with input from
the other Compensation Committee members and our outside legal counsel.</P>

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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0pt; text-align: justify; text-indent: 0pt">The Compensation Committee meets regularly in executive
session. From time to time, various members of management and other employees, as well as outside advisors or consultants, may
be invited by the Compensation Committee to make presentations, provide financial or other background information or advice, or
otherwise participate in Compensation Committee meetings or executive sessions of the Board. Among other things, the charter of
the Compensation Committee grants the Compensation Committee authority to obtain, at our expense, advice and assistance from internal
and external legal, accounting or other advisors and consultants and other external resources that the Compensation Committee considers
necessary or appropriate in the performance of its duties. In particular, the Compensation Committee has the sole authority to
retain compensation consultants to assist in its evaluation of executive and director compensation, including the authority to
approve the consultant&rsquo;s reasonable fees and other retention terms.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 12pt 0 0; text-align: center"><B>FAMILY RELATIONSHIPS</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">There are no
family relationships among our executive officers and directors.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 12pt 0 0; text-align: center"><B>BOARD LEADERSHIP STRUCTURE</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">Our Board has
separated the roles of Chairman of the Board and Chief Executive Officer. Mr.&nbsp;Swenson, an independent director, serves as
Chairman of our Board and presides at all Board and shareholder meetings. Mr.&nbsp;Hurwitz, our Chief Executive Officer, serves
as our primary spokesperson and supervises our business, subject to the direction of our Board. The independent Board members annually
assess Mr.&nbsp;Hurwitz&rsquo;s performance as Chief Executive Officer. We believe that an independent Chairman of the Board is
better able to provide oversight and guidance to management, especially in relation to the Board&rsquo;s essential role in risk
management oversight, and to ensure the efficient use and accountability of resources. Furthermore, this separation provides for
focused engagement between these two roles in their respective areas of responsibility, while still providing for collaborative
participation. The separation of the Chairman of the Board and Chief Executive Officer roles, together with our other comprehensive
corporate governance practices, are designed to establish and preserve management accountability, provide a structure that allows
the Board to set objectives and monitor performance, and enhance shareholder value.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 12pt 0 0pt; text-align: center"><B>BOARD&rsquo;S ROLE IN RISK OVERSIGHT</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">Our Board has
an active role, as a whole and also at the committee level, in overseeing management of our risks. Our Board regularly reviews
information regarding our credit, liquidity and operations, as well as the risks associated with each. The Compensation Committee
is responsible for overseeing the management of risks relating to our executive compensation plans and arrangements. The Audit
Committee oversees management of financial risks. The Nominating Committee manages risks associated with the independence of our
Board and potential conflicts of interest. While each committee is responsible for evaluating certain risks and overseeing the
management of such risks, the entire Board is regularly informed through committee and management reports about such risks and
their mitigation. Our Board believes the division of risk management responsibilities described above is an effective approach
for evaluating and addressing the risks we face and that the structure allows our Board to exercise effective oversight of the
actions of management.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 12pt 0 0; text-align: center"><B>COMPENSATION OF EXECUTIVE
OFFICERS AND MANAGEMENT</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify"><B>Compensation Committee Procedures</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">The Compensation
Committee makes its most significant determinations with respect to annual compensation, bonus awards, and new financial and other
corporate performance objectives for executive compensation purposes, at one or more meetings held during the first quarter of
the fiscal year for which the targets and compensation levels are applicable. At various meetings throughout the year, the Compensation
Committee also considers matters related to individual compensation, such as compensation for new executive hires, as well as high-level
strategic issues, such as the efficacy of, and any risks relating to, our compensation strategies, policies and practices, potential
modifications to those strategies, policies and practices, and new trends, plans or approaches to compensation.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">Generally,
the Compensation Committee&rsquo;s process consists of two related elements: (i)&nbsp;the determination of compensation levels
and (ii)&nbsp;the establishment of financial and other corporate performance objectives in connection with our Annual Incentive
Plan. Our Annual Incentive Plan provides for payment of cash bonuses to participants following the completion of a fiscal year
subject to the attainment of certain performance goals. For executive officers other than our CEO, the Compensation Committee solicits
and considers evaluations and recommendations submitted to the Compensation Committee by our CEO. In the case of our CEO, the evaluation
of his performance is conducted by the</P>

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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 0pt">Compensation Committee, which determines any adjustments to his compensation. Our CEO may
not participate in, or be present during, any deliberations or determinations of the Compensation Committee regarding his compensation.
For all executive officers and directors, as part of its deliberations, the Compensation Committee may review and consider, as
appropriate, materials such as financial reports and projections, operational data, tax and accounting information, tally sheets
that set forth the total compensation that may become payable to executive officers in various hypothetical scenarios, our stock
performance data, and analyses of historical executive compensation levels and our current compensation levels. Periodically, the
Compensation Committee reviews all of our incentive compensation plans in order to evaluate the level of risk that such plans may
encourage and, along with management&rsquo;s report concerning such matters and their mitigation, to ensure that each plan is properly monitored and evaluated. The specific determinations of the Compensation Committee with respect to executive compensation for the
fiscal year ended June&nbsp;30, 2014 are described herein.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify"><B>Compensation Committee Philosophy</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">Our compensation
philosophy is predicated upon the following concepts:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 10pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 23pt"></TD><TD STYLE="width: 0.3in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">We pay competitively. We are committed to providing a pay program
that helps attract and retain highly qualified people in the industry. To ensure that pay is competitive, we compare our pay practices
with those of other leading companies of similar size and location(s) and set our pay parameters based on this review.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 10pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 23pt"></TD><TD STYLE="width: 0.3in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">We pay for sustained performance. Executive officers are rewarded
based upon corporate performance and individual performance. Corporate performance is evaluated by the Compensation Committee by
reviewing the extent to which strategic and business plan goals are met, including such factors as revenues, operating profit and
cash flow.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 10pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 23pt"></TD><TD STYLE="width: 0.3in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">We strive for fairness in the administration of pay and to achieve
a balance of the compensation paid to a particular individual as compared to the compensation paid to both our executives and executives
at comparable companies.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 10pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 23pt"></TD><TD STYLE="width: 0.3in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">We believe that employees should understand the performance evaluation
and pay administration process.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">The Compensation
Committee believes that it is important that our executives be compensated in a manner that closely links compensation with performance
and yet does not incent excessive risk-taking. To that end, the Compensation Committee has developed a comprehensive and balanced
compensation plan that includes a base salary; annual and multi-year cash incentives based upon our Annual Incentive Plan; and,
a package of benefits similar in scope and nature to those offered to all our other employees. The Compensation Committee believes
that equity-based incentives are an integral component of a competitive compensation plan, albeit in the form of a stock purchase
plan that allows employees to purchase shares of our Common Stock at a reasonably discounted price through payroll deductions,
rather than through stock option awards in which employees do not have a direct stake in our Common Stock and, in turn, a less
direct incentive to contribute to our success. Accordingly, in June 2014, our Board approved the termination of our Second Amended
and Restated 2004 Stock Option Plan and has proposed that, if approved by our shareholders, it be replaced by the Employee Stock
Purchase Plan as further described in Proposal No. 5 of this proxy statement.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">The Compensation
Committee believes that there are no risks related to our compensation plans that would result in a material adverse impact on
us. This conclusion is based upon management&rsquo;s risk analysis and the Compensation Committee&rsquo;s belief that the following
mitigating factors also serve to reduce such risks:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 10pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 23pt"></TD><TD STYLE="width: 0.3in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Incentives are capped at a maximum amount regardless of the degree
to which objectives may be exceeded.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 10pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 23pt"></TD><TD STYLE="width: 0.3in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Payments are based upon audited year end results.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 10pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 23pt"></TD><TD STYLE="width: 0.3in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Multiple objectives are used as performance targets.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 10pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 23pt"></TD><TD STYLE="width: 0.3in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Computations are reviewed at regular intervals during the year and
are subject to multiple levels of review at the management, committee, and full Board level.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 10pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 23pt"></TD><TD STYLE="width: 0.3in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">All incentives are based upon pre-established objective criteria
as approved by our Board.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify"><B>Compensation of Executive Officers</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">The following
table sets forth certain compensation information for the fiscal years ended June&nbsp;30, 2014 and 2013, for our principal executive
officer/principal financial officer and our Chief Operating Officer during fiscal year ended June&nbsp;30, 2014, who was the only
other executive officer whose compensation exceeded $100,000 (collectively, the &ldquo;Named Executive Officers&rdquo;).</P>

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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 6pt 0 10pt; text-align: center"><B>Summary Compensation Table</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 8pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 8pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 8pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center">Stock</TD><TD STYLE="font-size: 8pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center">Option</TD><TD STYLE="font-size: 8pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" NOWRAP STYLE="font-size: 8pt; font-weight: bold; text-align: center">All Other</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 8pt; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; font-weight: bold; text-align: justify">Name and</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 8pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 8pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center">Salary</TD><TD STYLE="font-size: 8pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center"><font style="font-size: 8pt"><b>Awards<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(1)</font></b></font></TD><TD STYLE="font-size: 8pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center"><font style="font-size: 8pt"><b>Awards<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(1)</font></b></font></TD><TD STYLE="font-size: 8pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" NOWRAP STYLE="font-size: 8pt; font-weight: bold; text-align: center; vertical-align: middle"><font style="font-size: 8pt"><b>Compensation<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(2)</font></b></font></TD><TD STYLE="font-size: 8pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center; vertical-align: middle">Total</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; font-weight: bold; text-align: justify; border-bottom: Black 1pt solid">Principal Position</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Year</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">($)</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">($)</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">($)</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" NOWRAP STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">($)</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">($)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 40%; font-size: 10pt; text-align: justify; text-indent: -5.05pt; padding-left: 5.05pt"><font style="font-size: 10pt">Harold A. Hurwitz</font><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(3)</font></TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; text-align: center; vertical-align: middle">2014</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 6%; text-align: right">222,004</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 6%; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 6%; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 1%; text-align: left">$</TD><TD NOWRAP STYLE="width: 6%; text-align: right">13,101</TD><TD NOWRAP STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 6%; text-align: right">235,105</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10.35pt; vertical-align: middle">Director, CEO, President, CFO, Treasurer &amp; Secretary</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: bottom">2013</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">192,311</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">8,650</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">6,227</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: left">$</TD><TD NOWRAP STYLE="text-align: right">12,048</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">219,236</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 11pt; text-align: justify; text-indent: -5.05pt; padding-left: 5.05pt"><font style="font-size: 10pt">Richard L. Van Kirk</font><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(4)</font></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: middle">2014</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">177,617</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: left">$</TD><TD NOWRAP STYLE="text-align: right">17,480</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">195,097</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10.35pt; vertical-align: middle">Chief Operating Officer&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: middle">2013</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">157,011</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">8,650</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">6,227</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: left">$</TD><TD NOWRAP STYLE="text-align: right">16,511</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">188,399</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<div>
<hr style="COLOR: black" align="left" noshade size="2" width="15%">
</div>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 15.95pt"><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(1)</font></TD><TD STYLE="text-align: justify">This amounts reported in these columns represent the grant date fair value of restricted stock
awards and stock options granted to Named Executive Officers in fiscal 2013, in accordance with the Stock Compensation Topic of
the FASB Accounting Standards Codification. Pursuant to SEC rules, the amounts shown exclude the impact of estimated forfeitures
related to service-based vesting conditions. For additional information on the valuation assumptions used with respect to the restricted
stock and option awards, refer to Notes to Consolidated Financial Statements set forth in our Annual Report on Form 10-K for the
fiscal year ended June 30, 2014. Amounts shown reflect accounting expenses and do not reflect whether the recipient has actually
realized a financial benefit from the awards. See the table of Outstanding Equity Awards at June 30, 2014, below, for more information
on options held by the Named Executive Officers. Stock options awarded have a term of ten years; vest in equal monthly or annual
installments as per the applicable option agreement over a period of up to four years, and have an exercise price equal to either
(a) the average of the high and low prices of our Common Stock on the Nasdaq Capital Market on the date of grant for options granted
under our First Amended and Restated 2004 Stock Option Plan, or (b) the closing price of our Common Stock on the Nasdaq Capital
Market on the last business day prior to the date of grant in which a closing price is available for options granted under our
Second Amended and Restated 2004 Stock Option Plan.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 10pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 15.95pt"><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(2)</font></TD><TD STYLE="text-align: justify">The amounts reported above under the heading &ldquo;All Other Compensation&rdquo; consist of the
following:</TD></TR></TABLE>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 80%; border-collapse: collapse">
<tr>
    <TD STYLE="width: 20%; text-align: center; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <TD STYLE="width: 1%; text-align: center; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <TD STYLE="width: 7%; text-align: center; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <TD STYLE="width: 17%; text-align: center; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <TD STYLE="width: 55%; border-bottom: Black 1pt solid; text-align: center; font-size: 8pt; line-height: 115%"><font style="font-size: 8pt"><b>All Other Compensation ($)</b></font></td></tr>
</table>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 8pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 8pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center">Insurance</TD><TD STYLE="font-size: 8pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center">401K Matching</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 8pt; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; font-weight: bold; text-align: justify">Name and</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 8pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 8pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center">Premiums</TD><TD STYLE="font-size: 8pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center">Contributions</TD><TD STYLE="font-size: 8pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center">Total</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; font-weight: bold; text-align: justify; border-bottom: Black 1pt solid">Principal Position</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Year</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">($)</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">($)</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">($)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 40%; text-align: justify; text-indent: -5.05pt; padding-left: 5.05pt">Harold A. Hurwitz&#9;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: center; vertical-align: middle">2014</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">10,327</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">2,774</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">13,101</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10.35pt; vertical-align: middle">Director, CEO, President, CFO, Treasurer &amp; Secretary.&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: middle">2013</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">9,914</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">2,134</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">12,048</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; text-indent: -5.05pt; padding-left: 5.05pt">Richard L. Van Kirk&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: middle">2014</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">15,705</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,775</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">17,480</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-left: 10.35pt">Chief Operating Officer&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: middle">2013</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">14,964</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,547</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">16,511</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 12pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 15.95pt"><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(3)</font></TD><TD STYLE="text-align: justify">Mr. Hurwitz was appointed our Chief Executive Officer and President on February 25, 2013, in addition
to continuing his position as CFO, Treasurer and Secretary.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 12pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 15.95pt"><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(4)</font></TD><TD STYLE="text-align: justify">Mr. Van Kirk was appointed our Chief Operating Officer on April 23, 2013.</TD></TR></TABLE>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 12pt 0 0"><B>Employment Agreements with Named Executive Officers</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 12pt 0 0 23pt"><U>Employment Arrangement with Harold A. Hurwitz</U></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">On February
25, 2013, Mr. Hurwitz began service as our Chief Executive Officer and President, in addition to continuing to serve as our Chief
Financial Officer, a position he has held since 2010. In connection with the appointment, Mr. Hurwitz entered into an at-will employment
arrangement (the &ldquo;February 2013 Employment Arrangement&rdquo;), the terms of which incorporate the terms of Mr. Hurwitz&rsquo;s
previously existing employment arrangement dated August 23, 2010 (except for the base compensation stated therein) and Mr. Hurwitz&rsquo;s
previously existing Change of Control Agreement dated July 19, 2011, which expired on July 19, 2014.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">Pursuant to
the terms of the February 2013 Employment Arrangement, Mr. Hurwitz&rsquo;s compensation consists of the following:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 10pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 23pt"></TD><TD STYLE="width: 0.3in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">A base salary at an annualized rate of $225,000.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 10pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 23pt"></TD><TD STYLE="width: 0.3in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Participation in our Annual Incentive Plan and our prior Long Term
Incentive Plan, the latter of which was terminated by our Board on June 26, 2014.</FONT></TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 10pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 23pt"></TD><TD STYLE="width: 0.3in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Mr. Hurwitz was permitted to participate in any program of stock
options or other equity grants that we provided to key employees from time to time. Such grants were made under the terms and provisions
of the Second Amended and Restated 2004 Stock Option Plan, which was terminated by our Board on June 26, 2014. Mr. Hurwitz is permitted
to participate in the Employee Stock Purchase Plan (the &ldquo;ESPP&rdquo;), which was approved by the Board in September 2014
and is subject to shareholder approval as further described in Proposal No. 5 of this proxy statement.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 10pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 23pt"></TD><TD STYLE="width: 0.3in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Health, dental, disability and life insurance, qualified retirement
plans, and optional employee benefits on the same terms as other employees, except Mr. Hurwitz will not participate in any Company-wide
employee bonus plans.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0 23pt"><U>Employment Arrangement with Richard L. Van
Kirk</U></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">On April 23,
2013, Mr. Van Kirk began service as our Chief Operating Officer. In connection with the appointment, Mr. Van Kirk entered into
an at-will employment arrangement (the &ldquo;April 2013 Employment Arrangement&rdquo;), which incorporates certain terms of Mr.
Van Kirk&rsquo;s existing at-will employment arrangement dated January 6, 2006 and Mr. Van Kirk&rsquo;s existing Change of Control
Agreement dated July 19, 2011, which expired on July 19, 2014. Pursuant to the April 2013 Employment arrangement, Mr. Van Kirk&rsquo;s
compensation consists of the following:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 10pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 23pt"></TD><TD STYLE="width: 0.3in">&#9679;</TD><TD><FONT STYLE="font-size: 10pt">A base salary at an annualized rate of $180,000.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 10pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 23pt"></TD><TD STYLE="width: 0.3in">&#9679;</TD><TD><FONT STYLE="font-size: 10pt">Participation in our Annual Incentive Plan and our prior Long Term Incentive Plan, the latter
of which was terminated by our Board on June 26, 2014.</FONT></TD></TR></TABLE>

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<TD STYLE="width: 23pt"></TD><TD STYLE="width: 0.3in">&#9679;</TD><TD><FONT STYLE="font-size: 10pt">Mr. Van Kirk was permitted to participate in any program of stock options or other equity grants
that we provided key employees from time to time. Such grants were made under the terms and provisions of the Second Amended and
Restated 2004 Stock Option Plan, which was terminated by our Board on June 26, 2014. Mr. Van Kirk is permitted to participate in
the ESPP, which was approved by our Board in September, 2014 and is subject to shareholder approval as further described in Proposal
No. 5 of this proxy statement.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 10pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 23pt"></TD><TD STYLE="width: 0.3in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Health, dental, disability and life insurance, qualified retirement
plans, and optional employee benefits on the same terms as other employees, except Mr. Van Kirk will not participate in any Company-wide
employee bonus plans.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify"><B>Fiscal Year 2013 Compensation
Reduction</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">Upon the recommendation
of management and as approved by the Compensation Committee and our Board, all our employees, including the Named Executive Officers,
became subject to a 5% reduction in base compensation, effective July&nbsp;1, 2012. Upon the recommendation of management and as
approved by the Compensation Committee and our Board, this reduction was discontinued as of the end of business on September 30,
2013.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0"><B>Annual Incentive Awards</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">In September
2013, our Board approved our Annual Incentive Plan (the &quot;AIP&rdquo;) to recognize both individual performance as well as overall
corporate performance. Awards were to be calculated by multiplying (a)&nbsp;an &ldquo;Individual Achievement Factor&rdquo; as determined
by each participant&rsquo;s achievement of his individual objectives, times (b)&nbsp;a &ldquo;Corporate Achievement Factor.&rdquo;
For fiscal year 2013, the Corporate Achievement Factor was established based on an EBITDA (as determined by our Board based on
our applicable audited financial statements and calculated substantially in conformance with our historic determination of EBITDA)
target of $800,000. No incentives were to be paid unless a minimum Corporate Achievement Factor was achieved, which minimum Corporate
Achievement Factor was established as EBITDA of $300,000. Because the minimum Corporate Achievement Factor was not achieved, no
awards were made under the terms of the AIP for fiscal year 2013.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">For fiscal
year 2014, AIP awards were subject to a formula based on threshold cash flows from operations of approximately $300,000, with no
Individual Achievement Factors as existed in prior years. Because the threshold cash flows from operations were not achieved, no
awards were made under the terms of the AIP for fiscal year 2014. In years subsequent to fiscal year 2014, we expect that the AIP
will be calculated in two parts, subject to formulas based on (a) threshold cash flows from operations, and (b) growth in cash
flows from operations. The Compensation Committee believes that this design, which balances short-term and long-term incentives,
reduces the inherent risk of incentive compensation by rewarding business decisions and actions over a longer term, thus avoiding
plan designs that could incentivize executives to take actions that would result in short-term gain in order to bolster annual
incentive compensation without regard to the long-term best interests of the Company.</P>

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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0"><B>Change of Control Agreements</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-indent: 23pt">The Company&rsquo;s prior change
of control agreements with Messrs. Hurwitz and Van Kirk expired on July 19, 2014 without continuation or renewal. As a result,
the Company is not a party to any change of control agreements.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0"><B>Outstanding Equity Awards at Fiscal Year End</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 10pt; text-align: justify; text-indent: 23pt">The following
table sets forth information about outstanding equity awards held by our Named Executive Officers as of June&nbsp;30, 2014.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="15" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Option Awards</TD><TD STYLE="font-size: 8pt; font-weight: bold; border-bottom: Black 1pt solid; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Stock Awards</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Number of Securities Underlying <BR>Unexercised Options</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 0pt solid">Number of<BR>
Shares of Stock</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" NOWRAP STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 0pt solid">Market&nbsp;Value<BR>
of&nbsp;Shares<BR>
of&nbsp;Stock</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; font-weight: bold; text-align: justify; border-bottom: Black 1pt solid">Name</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Exercisable <BR>(#)</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" NOWRAP STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Unexercisable<BR>(#)</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" NOWRAP STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Option<BR>Exercise&nbsp;Price<BR>($)</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Option<BR>Expiration<BR>Date</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">That<BR>Have Not<BR>Vested</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">That<BR>Have Not<BR>Vested</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 21%; text-align: justify; text-indent: -5.05pt; padding-left: 5.05pt">Harold A. Hurwitz&#9;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">20,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">&mdash;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 7%; text-align: right">1.97</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%; text-align: right">10</TD><TD STYLE="width: 1%; text-align: left">/07/2020</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-left: 2.35pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">22,916</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,084</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1.80</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">09</TD><TD STYLE="text-align: left">/12/2021</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-left: 2.35pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,667</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,333</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1.73</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">09</TD><TD STYLE="text-align: left">/11/2022</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-left: 2.35pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: middle">3,333</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: middle">$6,999</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; text-indent: -5.05pt; padding-left: 5.05pt">Richard L. Van Kirk&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,334</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">7.65</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">01</TD><TD STYLE="text-align: left">/06/2016</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; text-indent: -5.05pt; padding-left: 5.05pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,334</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">4.38</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">05</TD><TD STYLE="text-align: left">/18/2017</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; text-indent: -5.05pt; padding-left: 5.05pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">20,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1.97</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10</TD><TD STYLE="text-align: left">/07/2020</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; text-indent: -5.05pt; padding-left: 5.05pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">22,916</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,084</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1.80</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">09</TD><TD STYLE="text-align: left">/12/2021</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; text-indent: -5.05pt; padding-left: 5.05pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,667</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,333</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1.73</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">09</TD><TD STYLE="text-align: left">/11/2022</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; text-indent: -5.05pt; padding-left: 5.05pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: middle">3,333</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: middle">$6,999</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>









<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0"><B>Compensation of Directors</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-indent: 23pt"><U>2010 Directors&rsquo; Compensation
Plan</U></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">In 2010, the
Compensation Committee engaged Remedy Compensation Consulting (&ldquo;Remedy&rdquo;) as its independent compensation consultant
to assist the Compensation Committee in evaluating compensation strategies with respect to our employees and the non-employee directors
on our Board, noting that director compensation had not changed since 1997. As part of its engagement, the Compensation Committee
directed Remedy to develop a comparative group of companies and to perform analyses of competitive performance and compensation
levels for the group. The analysis with respect to compensation of non-employee Board members resulted in the Board&rsquo;s adoption,
in July 2010, of the compensation plan described below (the &ldquo;2010 Directors&rsquo; Compensation Plan&rdquo;). In 2011, the
Compensation Committee engaged the independent compensation consulting firm Compensia (who had acquired Remedy during 2011) to
perform an updated analysis based on the same comparative group of companies. Among the findings resulting from the updated analysis
were that the elements of the non-employee directors&rsquo; compensation plan described below fell generally at, or below, the
targeted 25th percentile of the comparative group of companies.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">The compensation
plan for non-employee members of our Board under the 2010 Directors Compensation Plan was as follows:</P>

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="width: 80%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr>
    <TD STYLE="width: 81%; font-size: 12pt; line-height: 115%">&nbsp;</td>
    <TD STYLE="vertical-align: bottom; width: 7%; font-size: 12pt; line-height: 115%">&nbsp;</td>
    <TD STYLE="width: 1%; font-size: 12pt; line-height: 115%">&nbsp;</td>
    <TD STYLE="width: 8%; font-size: 12pt; line-height: 115%">&nbsp;</td>
    <TD STYLE="width: 3%; font-size: 12pt; line-height: 115%">&nbsp;</td></tr>
<tr>
    <td style="vertical-align: top; padding-right: 0.75pt; padding-left: 10pt; text-indent: -10pt; font-size: 11pt; line-height: 115%"><font style="font-size: 10pt">Annual retainer for each director</font></td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 11pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><font style="font-size: 10pt">$</font></td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; text-align: right; font-size: 11pt; line-height: 115%"><font style="font-size: 10pt">24,000</font></td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 11pt; line-height: 115%">&nbsp;</td></tr>
<tr>
    <td style="vertical-align: top; padding-right: 0.75pt; padding-left: 10pt; text-indent: -10pt; font-size: 11pt; line-height: 115%"><font style="font-size: 10pt">Additional annual retainer for service as:</font></td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 11pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; font-size: 12pt; line-height: 115%">&nbsp;</td></tr>
<tr>
    <td style="vertical-align: top; padding-right: 0.75pt; padding-left: 40pt; text-indent: -10pt; font-size: 11pt; line-height: 115%"><font style="font-size: 10pt">Lead Director/Chairman</font></td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 11pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><font style="font-size: 10pt">$</font></td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; text-align: right; font-size: 11pt; line-height: 115%"><font style="font-size: 10pt">7,000</font></td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 11pt; line-height: 115%">&nbsp;</td></tr>
<tr>
    <td style="vertical-align: top; padding-right: 0.75pt; padding-left: 40pt; text-indent: -10pt; font-size: 11pt; line-height: 115%"><font style="font-size: 10pt">Committee Chair</font></td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 11pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><font style="font-size: 10pt">$</font></td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; text-align: right; font-size: 11pt; line-height: 115%"><font style="font-size: 10pt">5,000</font></td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 11pt; line-height: 115%">&nbsp;</td></tr>
</table>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">All retainers
were paid in quarterly installments at the end of each calendar quarter.&nbsp;In the event that a director attended more than six
Board meetings or more than six meetings of any committee upon which that director served in one fiscal year, an additional per
meeting fee of $1,000 for in person meetings or $500 for telephone meetings was paid. If any such &ldquo;excess&rdquo; committee
meeting was held on the same date as a Board meeting, only the Board meeting was considered compensable.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">In addition,
upon initial election or appointment to our Board, each director was granted an option for the purchase of 15,000 shares of our
Common Stock.&nbsp;Upon each occurrence of re-election to our Board, each director was granted an option for the purchase of an
additional 10,000 shares of our Common Stock.&nbsp;All such option grants were made as of the date of such election, appointment
or re-election and in accordance with the terms of our 2010 Directors&rsquo; Compensation Plan.</P>

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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">Effective July&nbsp;1,
2012, our Board voluntarily reduced the amounts of the cash retainers described above by 12%. This reduction remained in effect
until May 2, 2013, at which time the compensation of non-employee directors on our Board was changed, as described below.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-indent: 23pt"><U>2013 Directors&rsquo; Compensation
Plan</U></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">On February
4, 2013, the AO Nominees (Messrs. Swenson, Cabillot and Farrell), each of whom was elected to our Board at the January 17, 2013
Annual Meeting of Shareholders, each opted to waive (a) receipt of stock options they were otherwise entitled to receive upon their
election to the Board, and (b) any cash retainers or meeting fees in excess of $200 per meeting and $2,000 per year.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">At its meeting
on May 2, 2013, our Board replaced the 2010 Directors&rsquo; Compensation Plan with the 2013 Directors&rsquo; Compensation Plan
that provides for the following:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 10pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 23pt"></TD><TD STYLE="width: 0.3in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Fees of $200 for participation in Board or Committee meetings, to
a maximum of $2,000 per fiscal year; and</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 10pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 23pt"></TD><TD STYLE="width: 0.3in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">An annual retainer of $23,000 for the Audit Committee Chair (which
may be modified in compensating any future Audit Committee Chair).</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 22.5pt">The 2013
Directors&rsquo; Compensation Plan has no provision for (a) retainers other than that described above, or (b) grants of options,
restricted stock or other forms of equity compensation.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 10pt; text-indent: 0.5in">The following table details the
cash retainers and fees, as well as equity compensation in the form of stock awards, paid to our non-employee directors during
fiscal 2014:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Name</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid; vertical-align: bottom"><P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: center; border-bottom: Black 0pt solid"><b>Fees Earned or<br>Paid in Cash<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(1)</font><br>($)</b></P></TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Option Awards<BR> ($)</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total<BR> ($)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 26%; text-align: justify; padding-left: 5.4pt">David C. Hovda</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 11%; text-align: right">24,400</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 11%; text-align: right">&mdash;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 11%; text-align: right">24,400</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-left: 5.4pt">William J. Farrell III</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">2,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">2,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-left: 5.4pt">Nicholas J. Swenson</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">2,800</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">2,800</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-left: 5.4pt">Raymond E. Cabillot</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">2,600</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">2,600</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 11pt; text-align: justify; padding-left: 5.4pt"><font style="font-size: 10pt">William L. Healey</font><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(2)</font></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">3,203</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">3,203</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<div>
<hr style="COLOR: black" align="left" noshade size="2" width="15%">
</div>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 15.95pt"><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(1)</font></TD><TD STYLE="text-align: justify">The cash amount reported in this column represents amounts paid to directors during fiscal 2014
and includes a portion of fees earned in fiscal 2013.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 10pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 15.95pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(2)</font></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Mr. Healey&rsquo;s position as a Board member terminated on June
7, 2013.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: center"><B>EQUITY COMPENSATION PLAN INFORMATION</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-indent: 0.5in">The following table provides information
as of June 30, 2014 with respect to shares of Common Stock that may be issued under the Company&rsquo;s equity compensation plans.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Plan Category</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" NOWRAP STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Number of Securities to<BR>
be Issued Upon Exercise<BR>
of Outstanding Options<BR>
Warrants and Rights</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" NOWRAP STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Weighted-Average<BR>
Exercise Price of<BR>
Outstanding Options,<BR>
Warrants and Rights</TD><TD STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" NOWRAP STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Number of Securities<BR>
Remaining Available for<BR>
Future Issuance Under<BR>
Equity Compensation Plans<BR>
(excluding securities<BR>
reflected in the<BR>
first column)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.25in; padding-left: 0.25in">Equity compensation plans approved by Stockholders:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 37%; text-align: left; text-indent: -0.25in; padding-left: 0.25in">Second Amended and Restated 2004 Stock Option Plan<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(1)</font></TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: center; vertical-align: middle">150,002</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: center; vertical-align: middle">$&nbsp;&nbsp;2.43</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: center; vertical-align: middle">531,381</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.25in; padding-left: 0.25in">Amended and Restated 2004 Directors&rsquo; Stock Option Plan<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(2)</font></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: middle">&nbsp;&nbsp;15,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: middle">$&nbsp;&nbsp;2.14</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: middle">173,334</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<div>
<hr style="COLOR: black" align="left" noshade size="2" width="15%">
</div>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(1)</font></FONT></TD><TD><FONT STYLE="font-size: 10pt">The Second Amended and Restated 2004 Stock Option Plan was terminated by our Board on June 26,
2014 and, as a result, no further options may be granted under such plan.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 10pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(2)</font></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">The Amended and Restated 2004 Directors&rsquo; Stock Option Plan
was terminated by our Board on June 26, 2014, subject to shareholder approval of its termination pursuant to Proposal No. 4 in
this proxy statement, and, as a result, no further options may be granted under this plan.</FONT></TD></TR></TABLE>

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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0"><B>Options and Restricted Stock Generally</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">Our Board,
as the administrator of each of the plans listed above, has the discretion to accelerate the vesting of any outstanding options
held by the employees and directors in the event of an acquisition of us 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 STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">In the event
of a change of control (as such term is defined in the stock option plans listed in the table above, which definition includes,
among other items, (a)&nbsp;conditions under which a person or group becomes a beneficial owner of 50% or more of the voting power
of our outstanding stock, or (b)&nbsp;a change in the composition of our Board occurring within a one-year period of 60% or more),
the Board has the discretion to accelerate the vesting of any outstanding options or shares of restricted stock held by employees.
Vesting of outstanding options held by members of our Board would be automatically accelerated as a result of a change of control.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 12pt 0 0; text-align: center"><B>AUDIT COMMITTEE REPORT</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">The Audit Committee
reports to and acts on behalf of our Board in providing oversight to our financial management, independent registered public accounting
firm, and financial reporting procedures. Our management is responsible for preparing our financial statements and the independent
registered public accounting firm is responsible for auditing those statements. In this context, the Audit Committee has reviewed
and discussed the audited financial statements contained in our 2014 Annual Report on Form 10-K with management and Moss Adams,
LLP, the independent registered public accounting firm engaged to audit such financial statements.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">The Audit Committee
has discussed with Moss Adams, LLP the matters required to be discussed by Auditing Standard No.&nbsp;16 (&ldquo;Communications
with Audit Committees&rdquo;). The Audit Committee has received the written disclosures and the letter from Moss Adams, LLP required
by applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accounting
firm&rsquo;s communications with the audit committee concerning independence and has discussed with Moss Adams, LLP its independence.
In concluding that Moss Adams, LLP is independent, the Audit Committee considered, among other factors, whether the non-audit services
provided by Moss Adams, LLP were compatible with maintaining its independence.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">In reliance
on the reviews and discussions referred to above, the Audit Committee recommended to our Board that the audited financial statements
be included in our Annual Report on Form 10-K for the fiscal year ended June&nbsp;30, 2014, and be filed with the SEC.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">The Audit Committee
has appointed Moss Adams, LLP to serve as our independent auditors for the fiscal year ending June&nbsp;30, 2015.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 12pt 0 0; text-align: center"><B>AUDIT COMMITTEE</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr>
    <TD STYLE="width: 32%; font-size: 10pt; line-height: 115%">&nbsp;</td>
    <TD STYLE="vertical-align: bottom; width: 1%; font-size: 10pt; line-height: 115%">&nbsp;</td>
    <TD STYLE="width: 33%; font-size: 10pt; line-height: 115%">&nbsp;</td>
    <TD STYLE="vertical-align: bottom; width: 1%; font-size: 10pt; line-height: 115%">&nbsp;</td>
    <TD STYLE="width: 33%; font-size: 10pt; line-height: 115%">&nbsp;</td></tr>
<tr style="vertical-align: bottom">
    <td style="padding-right: 0pt; text-align: center; font-size: 10pt; line-height: 115%"><font style="font-size: 10pt">David C. Hovda</font></td>
    <td style="padding-right: 0pt; font-size: 10pt; line-height: 115%">&nbsp;</td>
    <td style="padding-right: 0pt; text-align: center; font-size: 10pt; line-height: 115%"><font style="font-size: 10pt">&nbsp;&nbsp;Raymond E. Cabillot</font></td>
    <td style="padding-right: 0pt; font-size: 10pt; line-height: 115%">&nbsp;</td>
    <td style="padding-right: 0pt; text-align: center; font-size: 10pt; line-height: 115%"><font style="font-size: 10pt">Nicholas J. Swenson</font></td></tr>
</table>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 2pt 0 0; text-align: center"><B>CODE OF BUSINESS CONDUCT AND ETHICS</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 10pt; text-indent: 23pt">Our code of business conduct
and ethics, as approved by our Board, can be obtained from http://pro-dex.com/media/23086/ prodex_code_of_conduct.pdf.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0 0; text-align: justify; text-indent: 23pt">We intend to
satisfy the disclosure requirement under Item&nbsp;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&nbsp;406(b) of Regulation S-K and its successor regulation, by describing
on our Internet website, 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. There have been
no waivers of the ethics policy granted during the fiscal year ended June 30, 2014 and through the date of this proxy statement,
nor have there been any requests for such waivers during that period.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">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 SEC.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 12pt 0 0; text-align: center"><B>SECTION 16(a) BENEFICIAL
OWNERSHIP REPORTING COMPLIANCE</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">Under Section&nbsp;16(a)
of the Securities Exchange Act of 1934, as amended (the &ldquo;Exchange Act&rdquo;), our directors and officers and any person
who owns more than ten percent of our Common Stock are required to report their initial ownership of our Common Stock and any subsequent
changes in that ownership to the SEC and the Nasdaq Capital</P>

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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 0pt">Market. Officers, directors and greater than 10% shareholders are required
by SEC regulations to furnish us with copies of all forms they file in accordance with Section&nbsp;16(a). Based solely on our
review of the copies of such forms received by us, or written representations from certain reporting persons that no other reports
were required for those persons, we believe that during the fiscal year ended June&nbsp;30, 2014, our officers, directors and greater
than 10% shareholders complied with all Section&nbsp;16(a) filing requirements applicable to such persons.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 12pt 0 0; text-align: center"><B>POLICIES AND PROCEDURES FOR
APPROVAL OF RELATED PARTY TRANSACTIONS</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">Our Board
has the responsibility to review and discuss with management and approve, and has adopted written policies and procedures relating
to approval or ratification of, interested transactions with related parties. During this process, the material facts as to
the related party&rsquo;s interest in a transaction are disclosed to all Board members or an applicable committee. Under the
policies and procedures, the Board is to review each interested transaction with a related party that requires approval and either
approve or disapprove of the entry into the interested transaction.&nbsp;An &ldquo;interested transaction&rdquo; is any transaction
in which we are a participant and any related party has or will have a direct or indirect interest. Transactions that are
in the ordinary course of business and would not require either disclosure pursuant to Item&nbsp;404(a) of Regulation S-K under
the Securities Act or approval of the Board or an independent committee of the Board pursuant to applicable Nasdaq rules would
not be deemed interested transactions. No director may participate in any approval of an interested transaction with respect
to which he or she is a related party. Our Board intends to approve only those related party transactions that are in the
best interests of the Company and our shareholders.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">Since July&nbsp;1,
2013, the beginning of our fiscal year 2014, there has not been a transaction or series of related transactions to which we were
or are a party, or in which any director, executive officer, holder of more than 5% of any class of our voting securities, or any
member of the immediate family of any of the foregoing persons, had or will have a direct or indirect material interest, other
than (a) the issuance of 317,231 and 156,189 shares of our Common Stock to AO Partners I, LP (&ldquo;AO Partners&rdquo;) and Farnam
Street Partners, L.P. (&ldquo;Farnam Street Partners&rdquo;), respectively, under the terms of a rights offering of our Common
Stock completed on April 24, 2014 (the &ldquo;Rights Offering&rdquo;), pursuant to a registration statement on Form S-3 filed with
the SEC, and (b) a Standby Purchase Agreement (&ldquo;Standby Purchase Agreement&rdquo;) to which we were a party with AO Partners
and Farnam Street Capital, Inc. (&ldquo;Farnam Street Capital&rdquo;) in connection with the Rights Offering, and pursuant to which
no shares were issued. Mr. Swenson is affiliated with AO Partners, and Mr. Cabillot is affiliated with Farnam Street Partners and
Farnam Street Capital as described in the section &ldquo;Security Ownership of Certain Beneficial Owners and Management&rdquo;
in this proxy statement. Messrs. Swenson and Cabillot did not participate in deliberations of, and abstained from votes</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 0pt">taken by,
our Board with respect to matters regarding AO Partners, Farnam Street Partners and Farnam Street Capital in connection with the
Rights Offering and the Standby Purchase Agreement.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0"><B>Certain Relationships and Related Transactions</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">We have entered
into indemnification agreements with each of our directors and executive officers.&nbsp;The indemnification agreements and our
certificate of incorporation and bylaws require us to indemnify our directors and officers to the fullest extent permitted by Colorado
law.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0"><B>Director Independence</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">Our corporate
governance guidelines provide that a majority of the Board and all members of the Audit, Compensation and Nominating Committees
of the Board will be independent.&nbsp;On an annual basis, each director and executive officer is obligated to complete a Director
and Officer Questionnaire that requires disclosure of any transactions with us in which a director or executive officer, or any
member of his or her immediate family, have a direct or indirect material interest.&nbsp;Following completion of these questionnaires,
the Board, with the assistance of the Nominating Committee, makes an annual determination as to the independence of each director
using the current standards for &ldquo;independence&rdquo; established by the SEC and Nasdaq, additional criteria set forth in
our corporate governance guidelines and consideration of any other material relationship a director may have with us.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">The Board has
determined that all of its directors are independent under these standards, except for&nbsp;Mr.&nbsp;Hurwitz, our Chief Executive
Officer and President, who was appointed to our Board on June&nbsp;10, 2013.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 12pt 0 0; text-align: center"><B>COMMUNICATIONS WITH DIRECTORS</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">Our Board has
established a process to receive communications from shareholders. Shareholders and other interested parties may contact any member
(or all members) of our 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 our Board, any</P>

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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 0pt">individual directors or any group or committee of directors, correspondence
should be addressed to our Board or any such individual directors or group or committee of directors by either name or title. All
such correspondence should be sent &ldquo;c/o Corporate Secretary&rdquo; at 2361 McGaw Avenue, Irvine, California 92614. To communicate
with any of our directors electronically, a shareholder should send an email to our Secretary: hal.hurwitz@pro-dex.com.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">All communications
received as set forth in the preceding paragraph will be opened by the Company&rsquo;s Secretary for the sole purpose of determining
whether the contents represent a message to one or more of the directors. Any contents that are not in the nature of advertising,
promotions of a product or service or patently offensive material will be forwarded promptly to the addressee. In the case of communications
to the Board or any group or committee of directors, the Company&rsquo;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 STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">It is our
policy that our directors are invited and encouraged to attend all of our annual meetings of shareholders. All of the then-current
directors except for Mr. Hovda were in attendance at the 2013 Annual Meeting.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 12pt 0 0; text-align: center"><B>Proposal No.&nbsp;2</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0 0; text-align: center"><B>RATIFICATION OF APPOINTMENT
OF INDEPENDENT PUBLIC ACCOUNTANTS</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">The Audit Committee
has appointed the firm of Moss Adams, LLP as our independent registered public accounting firm for the fiscal year ending June&nbsp;30,
2015, and requests our shareholders to ratify this appointment. In the event that our shareholders do not ratify the selection
of Moss Adams, LLP as our independent public accountants, our Board will consider the selection of another independent public accounting
firm. Even if the appointment is ratified, the Audit Committee in its discretion may direct the appointment of a different independent
registered public accounting firm at any time during the year if it determines that such a change would be in our best interest
and the best interest of our shareholders.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">A representative
of Moss Adams, LLP is expected to be present at the Annual Meeting. He or she 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 STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 12pt; text-align: center"><B>ACCOUNTING FEES</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0 10pt; text-align: justify; text-indent: 23pt">The Audit Committee&rsquo;s
policy is to pre-approve all auditing services and permitted non-audit services (including the fees and terms thereof) to be performed
for us by our independent registered public accounting firm, subject to the de minimis exceptions for non-audit services described
in Section&nbsp;10A(i)(1)(B) of the Exchange Act, which are approved by the Audit Committee prior to the completion of the audit.
The Audit Committee considers whether the performance of any service by our independent registered public accounting firm is compatible
with maintaining such firm&rsquo;s independence.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 10pt; text-indent: 23pt">The following table sets forth
the aggregate fees billed to us for the fiscal years ended June 30, 2014 and 2013 by our independent registered public accounting
firm, Moss Adam, LLP, all of which were preapproved by the Audit Committee.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Years Ended June 30,</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 56%; font-size: 11pt; text-align: justify"><font style="font-size: 10pt">&#9;Audit Fees</font><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(1)</font></TD><TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">97,137</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">172,125</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 11pt; text-align: justify"><font style="font-size: 10pt">&#9;Audit-Related Fees</font><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(2)</font></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">22,775</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,280</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 11pt; text-align: justify"><font style="font-size: 10pt">&#9;Tax Fees</font><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(3)</font></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">35,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">36,410</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 11pt; text-align: justify; padding-bottom: 1pt"><font style="font-size: 10pt">&#9;All Other Fees</font><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(4)</font></TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">76,305</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-bottom: 2.5pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total&#9;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">231,217</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">212,815</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<div>
<hr style="COLOR: black" align="left" noshade size="2" width="15%">
</div>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 15.95pt"></TD><TD STYLE="width: 20.05pt"><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(1)</font></TD><TD STYLE="text-align: justify"><I>Audit Fees</I> consist of fees billed for professional services rendered for the audit of our
consolidated annual financial statements and review of the interim consolidated financial statements included in quarterly reports
and services that are normally provided in connection with statutory and regulatory filings or engagements.</TD></TR></TABLE>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 15.95pt"></TD><TD STYLE="width: 20.05pt"><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(2)</font></TD><TD STYLE="text-align: justify"><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 our consolidated financial statements and are not reported under &ldquo;Audit
Fees.&rdquo;</TD></TR></TABLE>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 15.95pt"></TD><TD STYLE="width: 20.05pt"><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(3)</font></TD><TD STYLE="text-align: justify"><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.</TD></TR></TABLE>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 15.95pt"></TD><TD STYLE="width: 20.05pt"><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(4)</font></TD><TD STYLE="text-align: justify"><I>All Other Fees</I> consist of fees for products and services other than the services reported
above. In fiscal 2014, the majority of the other fees related to accounting and tax consulting services provided in conjunction
with our Common Stock rights offering.</TD></TR></TABLE>

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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B>Required Vote and Board Recommendation</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">Although
shareholder ratification is not required for the appointment of Moss Adams, LLP as our independent registered public accounting
firm for the fiscal year ending June&nbsp;30, 2015, our Board has directed that this appointment be submitted to our shareholders
for ratification at the Annual Meeting. Assuming a quorum is 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.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt"><B>OUR BOARD
RECOMMENDS THAT OUR SHAREHOLDERS VOTE &ldquo;FOR&rdquo; THE RATIFICATION OF THE APPOINTMENT OF MOSS ADAMS, LLP TO SERVE AS OUR
INDEPENDENT PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING JUNE&nbsp;30,&nbsp;2015.</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 12pt 0 0; text-align: center"><B>Proposal No.&nbsp;3</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0 0; text-align: center"><B>ADVISORY VOTE TO APPROVE THE
COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">Pursuant
to Section 14A of the Exchange Act, we are asking our shareholders to vote to approve, on a nonbinding, advisory basis, the compensation
of our Named Executive Officers, commonly referred to as the &ldquo;say-on-pay&rdquo; vote. In accordance with the Exchange Act
requirements, we are providing our shareholders with an opportunity to express their views on our Named Executive Officers&rsquo;
compensation. Although this advisory vote is nonbinding, our Board and the Compensation Committee will review and consider the
voting results when making future decisions regarding our Named Executive Officer compensation and related executive compensation
programs.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">We encourage
shareholders to read the &ldquo;Compensation of Executive Officers and Management&rdquo; section in this proxy statement, including
the compensation tables and the related narrative disclosure, which describes the structure and amounts of the compensation of
our Named Executive Officers for the fiscal year ended June&nbsp;30, 2014. The compensation of our Named Executive Officers is
designed to enable us to attract and retain talented and experienced executives to lead us successfully in a competitive environment.
The Compensation Committee and our Board believe that our executive compensation strikes the appropriate balance between utilizing
responsible, measured pay practices and effectively incentivizing our Named Executive Officers to dedicate themselves fully to
value creation for our shareholders.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-indent: 23pt">Accordingly, we ask our shareholders
to vote &ldquo;FOR&rdquo; the following resolution at the Annual Meeting:</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 1in 0; text-align: justify">&ldquo;RESOLVED, that the shareholders
approve, on an advisory basis, the compensation of our Named Executive Officers, as disclosed pursuant to Item 402 of Regulation
S-K, including the compensation tables and any other related disclosure in the proxy statement.&rdquo;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0"><B>Required Vote and Board Recommendation</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">Assuming
a quorum is present at the Annual Meeting, this proposal to approve, on an advisory basis, the compensation of our Named Executive
Officers will be approved if the votes cast in favor of this proposal exceed the votes cast opposing this proposal.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt"><B>OUR BOARD
RECOMMENDS THAT OUR SHAREHOLDERS VOTE &ldquo;FOR&rdquo;, ON AN ADVISORY BASIS, THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS</B>.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 12pt 0 0; text-align: center"><B>Proposal No.&nbsp;4</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0 0; text-align: center"><B>APPROVAL OF THE TERMINATION
OF THE AMENDED AND RESTATED 2004 DIRECTORS&rsquo; STOCK OPTION PLAN</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">The Board seeks the approval of the
shareholders to terminate the Amended and Restated 2004 Directors&rsquo; Stock Option Plan (the &ldquo;2004 Directors&rsquo; Stock
Option Plan&rdquo;). The 2004 Directors&rsquo; Stock Option Plan was adopted by the Board, subject to shareholder approval, on
October 16, 2003.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">The Board has determined
that the 2004 Directors&rsquo; Stock Option Plan does not align with either (a) the 2013 Directors&rsquo; Compensation Plan described
in the section &ldquo;Compensation of Directors&rdquo; in this proxy statement, or (b) the philosophy of the Compensation Committee
with respect to stock options described in the section &ldquo;Compensation Committee Philosophy&rdquo; in this proxy statement,
and, in September 2014, approved termination of the 2004 Directors&rsquo; Stock Option Plan, subject to shareholder approval. Per
its terms, termination of the 2004 Directors&rsquo; Stock Option Plan requires approval of the holders of a majority of the shares
of Common Stock present, or represented by proxy, and entitled to vote at the Annual Meeting. There are 15,000 options outstanding
under the 2004 Directors&rsquo; Stock Option Plan, which will remain outstanding in accordance with their terms if the 2004 Directors&rsquo;
Stock Option Plan is terminated.</P>

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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0"><B>Required Vote and Board Recommendation</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">Assuming
a quorum is present at the Annual Meeting, this proposal to terminate the 2004 Directors&rsquo; Stock Option Plan will be approved
if the vote constitutes the affirmative vote of a majority of shares of
Common Stock present in person or by proxy at the Annual Meeting and entitled to vote at the Annual Meeting.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt"><B>OUR BOARD
RECOMMENDS THAT OUR SHAREHOLDERS VOTE &ldquo;FOR&rdquo; THE TERMINATION OF THE 2004 DIRECTORS&rsquo; STOCK OPTION PLAN</B>.<B> </B></P>


<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 12pt 0 0; text-align: center"><B>Proposal No.&nbsp;5</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0 0; text-align: center; text-indent: 23pt"><B>APPROVAL OF THE
ESTABLISHMENT OF THE 2O14 EMPLOYEE STOCK PURCHASE PLAN</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0in; text-align: justify; text-indent: 0pt"><B>Background</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">The 2014 Employee
Stock Purchase Plan (the &ldquo;ESPP&rdquo;) was unanimously adopted by our Board in September&nbsp;2014, subject to approval
by our shareholders. If approved by our shareholders, the ESPP will replace our prior Employee Stock Option Plan that was terminated
by the Board in June&nbsp;2014, with the provision that options outstanding thereunder will remain outstanding in accordance with
their respective terms. The principal features of the ESPP are summarized below. The summary is qualified in its entirety by the
full text of the ESPP, which is set forth as Exhibit A to this proxy statement. <I>Capitalized terms used in this proposal are
defined in the ESPP.</I></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; background-color: white"><B>General</B><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">
</FONT></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">The
purpose of the ESPP is to provide an opportunity for our Eligible Employees to purchase shares of our Common Stock through payroll
deductions and thereby have an additional incentive to contribute to our success.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify"><B>Administration</B><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">
</FONT></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">The
ESPP will be administered by the Committee (comprised of the Compensation Committee as designated
by the Board). The Committee will have the authority and responsibility for the administration of the ESPP. The Committee
will delegate to the Chief Financial Officer of the Company (or his or her designee) the day-to-day administration of, and other
responsibilities relating to, the ESPP. The Committee or its delegate will have full power and authority to promulgate any rules
and regulations that it deems necessary for the proper administration of the ESPP, to interpret the provisions and supervise the
administration of the ESPP, to identify Eligible Employees or the parameters by which they shall be identified, to make factual
determinations relevant to ESPP entitlements and to take all necessary or advisable actions in connection with administration of
the ESPP.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify"><B>Eligibility
of Employees</B><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"> </FONT></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">Unless
otherwise determined by the Committee, any person who is an Employee as of the first day of the enrollment period designated by
the Committee that immediately precedes the Offering Date of a given Offering Period will be eligible to participate in that Offering
Period under the ESPP.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify"><B>Offering
Periods, Option Grants and Payroll Deductions</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">It is anticipated
that the ESPP will be implemented by a series of Offering Periods lasting six (6)&nbsp;months, with new Offering Periods commencing
on or about January&nbsp;1 and July&nbsp;1 of each year, or at such other times as may be determined by the Committee. The Committee
will have the power to change the duration&nbsp;and/or&nbsp;the frequency of Offering Periods (as well as the start and end dates
of Offering Periods) of future offerings without shareholder approval, subject to limited exceptions. If the ESPP is approved by
our shareholders pursuant to this Proposal No. 5, we anticipate that the initial Offering Period will commence on January 1, 2015.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">Subject to the
terms of the ESPP, on the Offering Date of each Offering Period, each Eligible Employee participating in such Offering Period will
be granted an option to purchase on each Purchase Date a number of shares of the Company&rsquo;s Common Stock determined by dividing
such Eligible Employee&rsquo;s Contributions accumulated prior to such Purchase Date and retained in the participant&rsquo;s account
as of the Purchase Date by the applicable Purchase Price.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">A participant can
elect to have payroll deductions made on each payday during the Offering Period, but the deduction cannot be more than fifteen
percent (15%) of the compensation he or she receives on each payday during the Offering Period. Once this election has been made
and the Offering Period begins, the participant may adjust the amount deducted only one time during that Offering Period. A participant
may not discontinue participation in the ESPP, except upon termination of such participant&rsquo;s status as an Eligible Employee
or Continuous Status as an Employee prior to the Purchase Date of an Offering Period. Subject to the other limitations described above and below, the maximum number of shares a participant may
purchase during each Offering Period is 7,500&nbsp;shares.</P>

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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: left"><B>Purchase
of Common Stock</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">The
purchase price of shares of our Common Stock purchased under the ESPP is anticipated to be the greater of: (a) 85% of the Fair
Market Value of a share of our Common Stock on the Purchase Date or (b) 85% of the arithmetic average of the VWAP of our Common
Stock for each of the thirty (30) Trading Days preceding the Purchase Date, provided, however, that the Committee may designate
a price with respect to future Offering Periods, subject to certain parameters.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">The purchase of
shares will happen automatically on the Purchase Date of each Offering Period. The contributions in the participant&rsquo;s account
will be used to purchase the greatest number of whole shares of Common Stock possible at the applicable Purchase Price. No fractional
shares will be purchased, and any excess contributions in a participant&rsquo;s account that cannot purchase a whole share will
be returned to the participant. As soon as possible, the number of shares of Common Stock purchased by each participant will be
deposited into an account established in the participant&rsquo;s name. Subject to a twelve-month non-transfer restriction required
by the terms of the ESPP, a participant may, at any time, direct the designated broker to sell his or her shares and deliver to
the participant the proceeds from the sale, less applicable expenses.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">In
no event will any participant be entitled to purchase an amount of shares representing 5% or more of the total combined voting
power of all classes of capital stock of the Company or at a rate that exceeds $25,000 of the Fair Market Value of such stock in
any calendar year. Any payroll deductions accumulated in a participant&rsquo;s account that are not applied toward the purchase
of shares on a Purchase Date due to these limitations will be returned to the participant.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify"><B>Termination
of Employment</B><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"> </FONT></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">Participation in
the ESPP will discontinue upon termination of the participant&rsquo;s status as an Eligible Employee&nbsp;and/or&nbsp;Continuous
Status as an Employee, for any reason, prior to the Purchase Date of an Offering Period. If participation is discontinued, the
contributions credited to the participant&rsquo;s account will be returned to him or her or, in the case of his or her death, to
the person or persons entitled them, and his or her option will be automatically terminated.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: left"><B>Amendment
and Termination</B><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"> </FONT></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">The
Board and/or the Committee may amend or terminate the ESPP at any time. With limited exceptions, termination of the ESPP cannot
be done in a manner that would affect options that were previously granted. The Board and/or Committee also cannot change the ESPP
in a way that would adversely affect the rights of a participant in options that were previously granted.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0"><B>Required Vote and Board Recommendation</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">Assuming
a quorum is present at the Annual Meeting, this proposal to approve the ESPP will be approved if the votes cast in favor of this
proposal exceed the votes cast opposing this proposal.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt"><B>OUR BOARD
RECOMMENDS THAT OUR SHAREHOLDERS VOTE &ldquo;FOR&rdquo; ADOPTION OF THE 2014 EMPLOYEE STOCK PURCHASE PLAN. </B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 12pt 0 0; text-align: center"><B>ANNUAL REPORT</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">Our Annual
Report on Form 10-K containing audited financial statements for the fiscal year ended June&nbsp;30, 2014 accompanies this proxy
statement. Such report is not incorporated herein and is not deemed to be a part of this proxy solicitation material.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: center"><B>PROPOSALS OF SHAREHOLDERS</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">Pursuant to
Rule 14a-8 of the SEC, proposals by shareholders and submissions by shareholders of director nominees that are intended for inclusion
in our proxy statement and proxy card and to be presented at our next annual meeting must be received by us by June 25, 2015, in
order to be considered for inclusion in our proxy materials. Such proposals should be addressed to our Secretary and may be included
in next year&rsquo;s proxy materials if they comply with certain rules and regulations of the SEC governing shareholder proposals.
Proposals by shareholders, as well as shareholder nominees for director, for possible consideration at our next annual meeting
that are not intended for inclusion in our proxy materials must also be received by our Secretary no later than June&nbsp;25, 2015.
Every shareholder notice must also comply with certain other requirements set forth in our Bylaws, a copy of which may be obtained
by written request delivered to our Secretary.</P>

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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 12pt 0 0; text-align: center"><B>OTHER MATTERS</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt">Our Board 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 STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 23pt"><B>OUR SHAREHOLDERS
ARE URGED TO PROMPTLY SUBMIT THEIR PROXY OR VOTING INSTRUCTIONS AS SOON AS POSSIBLE BY FOLLOWING THE INSTRUCTIONS IN THE NOTICE
OF INTERNET AVAILABILITY OF PROXY MATERIALS, WHICH WAS MAILED TO YOU ON OR ABOUT OCTOBER 23, 2014. IF YOU REQUEST PRINTED COPIES
OF THE PROXY MATERIALS BY MAIL, YOU CAN ALSO VOTE BY MAIL OR BY TELEPHONE.</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 6pt 0 0 311pt; text-indent: 0pt">By Order of the Board of
Directors,</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 6pt 0 0 311pt; text-indent: 0pt">PRO-DEX, INC.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 6pt 0 0 311pt; text-indent: 0pt">/s/ Harold A. Hurwitz</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 311pt; text-indent: 0pt">Corporate Secretary</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 6pt 0 0 311pt; text-indent: 0pt">Irvine, California</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify">SHAREHOLDERS MAY OBTAIN, FREE
OF CHARGE, A PAPER COPY OF OUR ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED JUNE 30, 2014, (WITHOUT EXHIBITS) AS FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION BY WRITING TO: INVESTOR RELATIONS, PRO-DEX, INC., 2361 MCGAW AVENUE, IRVINE, CALIFORNIA
92614 OR CALLING (949)&nbsp;769-3200.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 26pt 0 0 0pt; text-indent: 0pt">&nbsp;</P>

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<P STYLE="margin: 0"></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: right">Exhibit A</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 10pt; text-align: center">PRO-DEX, INC.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: center">2014 EMPLOYEE STOCK PURCHASE PLAN</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 0.5in">This 2014 Employee
Stock Purchase Plan (the &ldquo;<U>Plan</U>&rdquo;) provides Eligible Employees with an opportunity to purchase Company Common
Stock through payroll deductions and is intended as an employment incentive and to encourage ownership of Company Common Stock
to enable Eligible Employees to participate in the economic progress of the Company during the term of the Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 0.5in">The Company intends
to have the Plan qualify as an &ldquo;employee stock purchase plan&rdquo; under Section&nbsp;423 of the Code. The provisions of
the Plan shall be construed so as to extend and limit participation in a manner consistent with the requirements of Section&nbsp;423
of the Code.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 0.5in">1.<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Definitions</U>. Any capitalized term used in this Plan but not otherwise defined shall, unless otherwise indicated or
required by the particular context, have the following meanings:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 1in">(a)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Board of Directors</U>: The Board of Directors of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 1in">(b)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Code</U>: The Internal Revenue Code of 1986, as amended.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 1in">(c)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Common Stock</U>: The no par value common stock of Pro-Dex, Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 1in">(d)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Company</U>: Pro-Dex, Inc., a corporation incorporated under the laws of Colorado, together with any successors thereto.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 1in">(e)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Compensation</U>: The salary and wages paid to an Eligible Employee by the Company or a Designated Related Company including
any pre-tax contributions under any tax-qualified retirement plan sponsored by the Company. In addition, to the extent designated
by the Committee, &ldquo;<U>Compensation</U>&rdquo; may also include bonus or other cash incentive compensation, overtime, commissions,
and, to the extent applicable, salary reduction amounts contributed to any cafeteria plan, flexible benefit plan, or qualified
transportation plan established by the Company or any Designated Related Company in accordance with Code Section&nbsp;125 and related
sections of the Code, but shall not include severance pay, cost of living pay, housing pay, relocation pay, other taxable fringe
benefits and other extraordinary compensation, all as determined by the Committee in its sole discretion.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 1in">(f)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Committee</U>: The committee of the Board of Directors designated to administer the Plan, or, if no committee of the
Board of Directors is designated as the &ldquo;Committee&rdquo;, then the Board of Directors shall serve as the &ldquo;Committee&rdquo;.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0pt; text-align: justify; text-indent: 1in">(g)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Continuous Status as an Employee</U>: The absence of any interruption or termination of service as an Employee. Continuous
Status as an Employee shall not be considered interrupted in the case of (i)&nbsp;sick leave; (ii)&nbsp;military leave; (iii)&nbsp;any
other leave of absence approved by the Committee, provided that any such military, sick, or other leave of absence is for a period
of not more than 90&nbsp;days, unless reemployment upon the expiration of such leave is guaranteed by contract or statute; or (iv)&nbsp;in
the case of transfers between locations of the Company or between the Company and any Designated Related Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 1in">(h)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Contributions</U>: All amounts credited to the account of a participant pursuant to the Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 1in">(i)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Corporate Transaction</U>: A merger, consolidation, acquisition of property or stock, a separation, reorganization, or
liquidation of the Company and such other corporate events as are described in Section&nbsp;424 of the Code and the Treasury regulations
promulgated thereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 1in">(j)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Designated Related Company</U>: Any corporation that is a &ldquo;parent corporation&rdquo; or a &ldquo;subsidiary corporation&rdquo;
with respect to the Company, as those terms are defined in Section 424 of the Code and that has been designated by the Committee
from time to time in its sole discretion as eligible to participate in the Plan.</P>

</DIV>

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<DIV STYLE="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt">
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 1in">(k)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Eligible Employee</U>: An Employee eligible to participate in the Plan under the terms of Section&nbsp;2.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 1in">(l)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Employee</U>: Any person, who is an officer or employee of the Company or a Designated Related Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 1in">(m)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Exchange Act</U>: The Securities Exchange Act of 1934, as amended.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 1in">(n)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Fair Market Value</U>: The fair market value of the Company&rsquo;s Common Stock on a given date is (i) if the Company&rsquo;s
Common Stock is publicly traded, the closing price of the Common Stock on the Principal Market on such date (or, if such date is
not a Trading Day, then the closing price of the Common Stock on the Principal Market on the immediately preceding Trading Day),
or (ii) if the Company&rsquo;s Common Stock is not publicly traded, as determined by the Committee in good faith; provided, however,
that the Committee may in its discretion designate (i)&nbsp;the mean between the highest and lowest reported sales prices of the
Common Stock reported on the Principal Market on a given date as Fair Market Value as of such date for any purpose under the Plan
and/or (ii)&nbsp;the actual sales price as Fair Market Value in the case of dispositions of Common Stock under the Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 1in">(o)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Offering Date</U>: The first business day of each Offering Period under the Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0pt; text-align: justify; text-indent: 1in">(p)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Offering Period</U>: Means a period of six (6)&nbsp;months commencing on January&nbsp;1 and July&nbsp;1 of each year,
or such other date as designated by the Committee, provided, that, pursuant to Section&nbsp;3, the Committee may change the duration
of future Offering Periods (subject to a maximum Offering Period of twenty-seven (27)&nbsp;months) and/or the start and end dates
of future Offering Periods. If the Common Stock is publicly traded and last day of an Offering Period would otherwise fall on a
date that the Principal Market is closed, the Offering Period shall end on the last business day immediately preceding such date
on which the Principal Market is open.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 1in">(q)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Principal Market</U>. (i) The NASDAQ Capital Market, or (ii) if the Company&rsquo;s Common Stock is not then listed on
the NASDAQ Capital Market, the principal securities exchange or any other national market system or automated quotation system
on which the shares of Common Stock are listed, quoted or traded.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 1in">(r)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Purchase Date</U>: The last day of each Offering Period of the Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 1in">(s)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Purchase Price</U>: With respect to an Offering Period, an amount equal to the greater of (x) 85% (or such greater percentage
as designated by the Committee) of the Fair Market Value of a Share of Common Stock on the Purchase Date and (y) 85% (or such greater
percentage as designated by the Committee) of the arithmetic average of the VWAP of the Common Stock for each of the thirty (30)
Trading Days preceding the Purchase Date; provided, however, that the Committee may designate the Purchase Price with respect to
future Offering Periods to be an amount equal to 85% (or such greater percentage as designated by the Committee) of the Fair Market
Value of a Share of Common Stock on the Offering Date or on the Purchase Date, whichever is lower.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 1in">(t)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Share</U>: A share of Common Stock, as adjusted in accordance with Section&nbsp;16 of the Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 1in">(u)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Trading Day</U>. Any day on which the Common Stock is listed, quoted or traded on the Principal Market; provided that
&ldquo;Trading Day&rdquo; shall not include any day on which there are no reported sales or trades of the Company&rsquo;s Common
Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 1in">(v)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>VWAP</U>: If the Company&rsquo;s Common Stock is publicly traded, as of a given date, the dollar volume-weighted average
price for the Company&rsquo;s Common Stock on the Principal Market during the period beginning at 9:30:01 a.m., New York time,
and ending at 4:00:00 p.m., New York time, as reported by Bloomberg through its &ldquo;Volume at Price&rdquo; function or, if the
foregoing does not apply, the dollar volume-weighted average price of the Common Stock in the over-the-counter market on the electronic
bulletin board for such security during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York
time, as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for the Common Stock by Bloomberg for
such hours, the average of the highest closing bid price and the lowest closing ask price of any of the market makers for the Common
Stock as reported by OTC Markets Group (or an equivalent quotation or reporting system). If the &ldquo;VWAP&rdquo; cannot be calculated</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 0in">for the Common Stock on such date on any of the foregoing bases, the &ldquo;VWAP&rdquo; of the Common Stock on such date shall
be the fair market value as determined by the Committee. All calculations of &ldquo;VWAP&rdquo; shall be appropriately adjusted
for any stock dividend, stock split, stock combination or other similar transaction during such period. References in this Plan
to &ldquo;VWAP&rdquo; shall be disregarded if the Company&rsquo;s Common Stock is not then publicly traded.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 0.5in">2.<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Eligibility</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0pt; text-align: justify; text-indent: 1in">(a)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>Unless otherwise determined by the Committee (in a manner consistent with Section&nbsp;423 of the Code), any person who
is an Employee as of the first day of the enrollment period designated by the Committee that immediately precedes the Offering
Date of a given Offering Period shall be eligible to participate in such Offering Period under the Plan, subject to the requirements
of Section&nbsp;4(a) and the limitations imposed by Section&nbsp;423(b) of the Code.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 1in">(b)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>Any provisions of the Plan to the contrary notwithstanding, no Employee shall be granted an option under the Plan if, immediately
after the grant, such Employee (or any other person whose stock would be attributed to such Employee pursuant to Section&nbsp;424(d)
of the Code) would own capital stock of the Company and/or hold outstanding options to purchase stock possessing five percent (5%)
or more of the total combined voting power or value of all classes of stock of the Company or of any Designated Related Company,
or (ii) if such option would permit his or her rights to purchase stock under all employee stock purchase plans (described in Section&nbsp;423
of the Code) of the Company and any Designated Related Company to accrue at a rate that exceeds Twenty-Five Thousand Dollars ($25,000)
of the Fair Market Value of such stock (determined at the time such option is granted) for each calendar year in which such option
is outstanding at any time.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 1in">(c)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>Under the situations detailed in Sections&nbsp;2(a) and 2(b), to the extent necessary to comply with those Sections, a participant&rsquo;s
Contributions credited to his or her account may be returned to him or her and his or her option(s) may be terminated.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 0.5in">3.<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Offering Periods</U>. The Plan shall initially be implemented by a series of Offering Periods of six (6)&nbsp;months&rsquo;
duration, with new Offering Periods commencing on or about January&nbsp;1 and July&nbsp;1 of each year or at such other time or
times as may be determined by the Committee. The Plan shall continue until terminated in accordance with Section&nbsp;17 hereof.
The Committee shall have the power to change the duration&nbsp;and/or&nbsp;the frequency of Offering Periods (as well as the start
and end dates of Offering Periods) with respect to future offerings without shareholder approval; provided however any such change
shall comply with Section&nbsp;423(b) of the Code.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 0.5in">4.<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Participation</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 1in">(a)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>An Eligible Employee may become a participant in the Plan by completing required documents (&ldquo;<U>Enrollment Documents</U>&rdquo;)
and submitting them to the stock brokerage or other financial services firm or other agent designated by the Company (&ldquo;<U>Designated
Broker</U>&rdquo;) prior to the applicable Offering Date. The Enrollment Documents and their submission may be electronic, as directed
by the Company. The Enrollment Documents shall set forth the dollar amount of the participant&rsquo;s Compensation (subject to
Section&nbsp;5(a) below) to be paid as Contributions pursuant to the Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 1in">(b)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>Payroll deductions shall commence on the first full payroll paid following the Offering Date and shall end in the last payroll
paid on or prior to the Purchase Date of the Offering Period to which the Enrollment Documents are applicable, subject to Section&nbsp;9.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 0.5in">5.<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Method of Payment of Contributions</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 10pt; text-align: justify; text-indent: 1in">(a)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>Subject to the limitations set forth in Section&nbsp;2(b), a participant shall elect at the time and manner prescribed by
the Designated Broker to have payroll deductions made on each payday during the Offering Period in an amount not exceeding fifteen
percent (15%)&nbsp;of the Compensation which he or she receives on each payday during the Offering Period (or such other percentage
as the Committee may establish from time to time before an Offering Date); provided further that once such election has been made
and the Offering Period begins, the participant may only increase or decrease such election amount one time during such Offering
Period or as detailed in Section&nbsp;5(b) or elsewhere in this Plan. Notwithstanding the foregoing, any such change to an election
amount must be effected by completing</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 0in">and filing with the Designated Broker the required documents authorizing such a change in
the payroll deduction rate at least five (5)&nbsp;days prior to the Purchase Date. All payroll deductions made by a participant
shall be credited to his or her account under the Plan. A participant may not make any additional payments into such account. Finally,
subject to the limitations set forth in Section&nbsp;2(b), and absent an affirmative election to have his or her same contribution
election and attendant payroll deduction authorization carry over into subsequent Offering Periods, a participant must affirmatively
elect to participate in the Plan pursuant to this Section&nbsp;5(a) for each Offering Period.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 1in">(b)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>A participant may not discontinue his or her participation in the Plan, except as provided in Section&nbsp;9; provided,
however, that, a participant may (irrespective of the one-time per-Offering Period change in election set forth in Section 5(a))
reduce his or her payroll deduction to zero during an Offering Period by completing and filing with the Designated Broker the required
documents authorizing such a change in the payroll deduction rate if the documents are completed at least five (5)&nbsp;days prior
to the Purchase Date. Such change to zero will apply for the remainder of the Offering Period and will be irrevocable with respect
to the Offering Period. A participant&rsquo;s Contributions prior to the processing of the change in his or her payroll deduction
rate to zero will be paid to such participant, and his or her option for the current Offering Period will be automatically terminated,
and no further Contributions for the purchase of Shares shall be made during the Offering Period. Such a participant will be required
to actively make a new election for the next Offering Period that he or she chooses to participate in.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 1in">(c)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>Notwithstanding the foregoing, solely to the extent necessary to comply with Section&nbsp;423(b)(8) of the Code and Section&nbsp;2(b)
herein, a participant&rsquo;s payroll deductions may be decreased during any Offering Period scheduled to end during the then-current
calendar year to any amount below the elected dollar amount including a decrease to $0. Payroll deductions shall re-commence at
the rate provided in such participant&rsquo;s Enrollment Documents at the beginning of the first Offering Period that is scheduled
to end in the following calendar year, unless terminated as provided in Section&nbsp;9.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0pt; text-align: justify; text-indent: 0.5in">6.<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Grant of Option</U>. On the Offering Date of each Offering Period, each Eligible Employee participating in such Offering
Period shall be granted an option to purchase on each Purchase Date a number of Shares of the Company&rsquo;s Common Stock determined
by dividing such Eligible Employee&rsquo;s Contributions accumulated prior to such Purchase Date and retained in the participant&rsquo;s
account as of the Purchase Date by the applicable Purchase Price; provided however that the maximum number of Shares an Eligible
Employee may purchase during each Offering Period shall be 7,500 Shares
(subject to any adjustment pursuant to Section&nbsp;16 below), and provided further that such purchase shall be subject to the
limitations set forth in Sections&nbsp;2(b) and 11.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 0.5in">7.<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Exercise of Option</U>. Subject to Section&nbsp;9, a participant&rsquo;s option for the purchase of Shares will be exercised
automatically on the Purchase Date of each Offering Period, and the greatest number of whole Shares subject to the option will
be purchased at the applicable Purchase Price with the accumulated Contributions in his or her account. No fractional shares shall
be issued, and any excess Contributions in a participant&rsquo;s account that cannot purchase a whole Share shall be returned to
such participant. The Shares purchased upon exercise of an option hereunder shall be deemed to be transferred to the participant
on the Purchase Date. During his or her lifetime, a participant&rsquo;s option to purchase Shares hereunder is exercisable only
by him or her.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 0.5in">8.<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Holding Period and Delivery</U>. As promptly as practicable after a Purchase Date, the number of Shares purchased by
each participant upon exercise of his or her option shall be deposited into an account established in the participant&rsquo;s name
with the Designated Broker. Any payroll deductions accumulated in a participant&rsquo;s account that are not applied toward the
purchase of Shares on a Purchase Date due to limitations imposed by the Plan shall be returned to the participant. The Committee
may require that Shares be retained with the Designated Broker for a designated period of time&nbsp;and/or&nbsp;may establish other
procedures to permit tracking of disqualifying dispositions of such Shares. Subject to the holding period described in the following
sentence, a participant may, at any time, direct the Designated Broker to sell his or her Shares and deliver to the participant
the proceeds therefrom, less applicable expenses. Notwithstanding any other provision of the Plan to the contrary, all Shares purchased
by a participant cannot be sold or otherwise transferred by the participant to anyone else until twelve&nbsp;(12) months after
the Purchase Date; provided, however, that the Committee may increase or decrease (or waive) such holding period with respect to
future Offering Periods.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 0.5in">9.<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Withdrawal; Termination of Employment</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 1in">(a)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT> Upon termination of the participant&rsquo;s status as an Eligible Employee&nbsp;and/or&nbsp;Continuous Status as an Employee
prior to the Purchase Date of an Offering Period for any reason, whether voluntary or</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 20pt 0 0; text-align: justify; text-indent: 0in">involuntary, including retirement or death,
the Contributions credited to his or her account will be returned to him or her or, in the case of his or her death, to the person
or persons entitled thereto under Section&nbsp;13, and his or her option will be automatically terminated.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 1in">(b)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>Subject to Section&nbsp;9(a), in the event an Eligible Employee fails to remain in Continuous Status as an Employee of the
Company during the Offering Period in which the employee is a participant, he or she will be deemed to have elected to withdraw
from the Plan and the Contributions credited to his or her account will be returned to him or her and his or her option terminated.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 1in">(c)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>An Eligible Employee&rsquo;s withdrawal from an offering (other than under Section&nbsp;9(a)) will not have any effect upon
his or her eligibility to participate in a succeeding offering or in any similar plan that may hereafter be adopted by the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 0.5in">10.<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Interest</U>. No interest shall accrue on the Contributions of a participant in the Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0pt; text-align: justify; text-indent: 0.5in">11.<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Stock</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 1in">(a)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>Subject to adjustment as provided in Section&nbsp;16, the maximum number of Shares that shall be made available for sale
under the Plan shall be 704,715 Shares. If the Committee determines that, on a given Purchase Date, the number of shares with respect
to which options are to be exercised may exceed (i)&nbsp;the number of shares of Common Stock that were available for sale under
the Plan on the Offering Date of the applicable Offering Period, or (ii)&nbsp;the number of shares available for sale under the
Plan on such Purchase Date, the Committee may in its sole discretion provide (1)&nbsp;that the Company shall make a pro rata allocation
of the Shares of Common Stock available for purchase on such Offering Date or Purchase Date, as applicable, in as uniform a manner
as shall be practicable and as it shall determine in its sole discretion to be equitable among all participants exercising options
to purchase Common Stock on such Purchase Date, and continue the Plan as then in effect, or (2)&nbsp;that the Company shall make
a pro rata allocation of the Shares available for purchase on such Offering Date or Purchase Date, as applicable, in as uniform
a manner as shall be practicable and as it shall determine in its sole discretion to be equitable among all participants exercising
options to purchase Common Stock on such Purchase Date, and terminate the Plan pursuant to Section&nbsp;17 below. The Company may
make a pro rata allocation of the Shares available on the Offering Date of any applicable Offering Period pursuant to the preceding
sentence, notwithstanding any authorization of additional Shares for issuance under the Plan by the Company&rsquo;s shareholders
subsequent to such Offering Date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 1in">(b)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>The participant shall have no interest or voting right in Shares covered by his or her option until such option has been
exercised.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 0.5in">12.<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Administration</U>. The Committee shall supervise and administer the Plan and shall have full power to adopt, amend and
rescind any rules deemed desirable and appropriate for the administration of the Plan and not inconsistent with the Plan, to construe
and interpret the Plan, and to make all other determinations necessary or advisable for the administration of the Plan. The Committee
delegates the routine day-to-day administration of the Plan (including the selection of a Designated Broker for the Plan) to the
Chief Financial Officer of the Company (or his or her designee to perform such day-to-day administration).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 0.5in">13.<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Designation as Beneficiary</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 1in">(a)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>A participant may designate a beneficiary who is to receive any Shares and cash, if any, from the participant&rsquo;s account
under the Plan in the event of such participant&rsquo;s death subsequent to the end of an Offering Period but prior to delivery
to him or her of such Shares and cash. In addition, a participant may designate a beneficiary who is to receive any cash from the
participant&rsquo;s account under the Plan in the event of such participant&rsquo;s death prior to the Purchase Date of an Offering
Period. If a participant is married and the designated beneficiary is not the spouse, spousal consent shall be required for such
designation to be effective. Beneficiary designations under this Section&nbsp;13(a) shall be made in the form and manner prescribed
by the Designated Broker.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 10pt; text-align: justify; text-indent: 1in">(b)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>Such designation of beneficiary may be changed by the participant (and his or her spouse, if any) at any time by submission
of the required notice, which required notice may be electronic. In the event of the death of a participant and in the absence
of a beneficiary validly designated under the Plan who is living at the time of such participant&rsquo;s death, the Company shall
deliver such Shares and/or cash to the</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 0in">executor or administrator of the estate of the participant, on behalf of such
estate, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its discretion,
may deliver such Shares&nbsp;and/or&nbsp;cash to the applicable heirs at law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 0.5in">14.<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Transferability</U>. Neither Contributions credited to a participant&rsquo;s account nor any rights with regard to the
exercise of an option or to receive Shares under the Plan may be assigned, transferred, pledged or otherwise disposed of in any
way (other than by will, the laws of descent and distribution, or as provided in Section&nbsp;13)&nbsp;by the participant. Any
such attempt at assignment, transfer, pledge or other disposition shall be without effect, except that the Company may treat such
act as an election to withdraw funds in accordance with Section&nbsp;9.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 0.5in">15.<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Use of Funds</U>. All Contributions received or held by the Company under the Plan may be used by the Company for any
corporate purpose, and the Company shall not be obligated to segregate such Contributions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 0.5in">16.<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Adjustments Upon Changes in Capitalization; Corporate Transactions</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 1in">(a)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>Subject to any required action by the shareholders of the Company, the number of Shares covered by each option under the
Plan that has not yet been exercised, the number of Shares that have been authorized for issuance under the Plan but have not yet
been placed under option (collectively, the &ldquo;<U>Reserves</U>&rdquo;), the maximum number of Shares of Common Stock that may
be purchased by a participant in an Offering Period, the number of Shares of Common Stock set forth in Section&nbsp;11(a) above,
and the price per Share of Common Stock covered by each option under the Plan that has not yet been exercised, shall be proportionately
adjusted for any increase or decrease in the number of issued Shares resulting from a spin-off, stock split, reverse stock split,
stock dividend, combination or reclassification of the Common Stock (including any such change in the number of Shares of Common
Stock effected in connection with a change in domicile of the Company), or any other increase or decrease in the number of Shares
effected without receipt of consideration by the Company. Such adjustment shall be made by the Committee, whose determination in
that respect shall be final, binding and conclusive. Except as expressly provided herein, no issue by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof
shall be made with respect to, the number or price of Shares subject to an option.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 10pt; text-align: justify; text-indent: 1in">(b)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>In the event of a dissolution or liquidation of the Company, any Offering Period then in progress will terminate immediately
prior to the consummation of such action, unless otherwise provided by the Committee. In the event of a Corporate Transaction,
each option outstanding under the Plan shall be assumed or an equivalent option shall be substituted by the successor corporation
or a parent or subsidiary of such successor corporation. In the event that the successor corporation refuses to assume or substitute
for outstanding options, each Offering Period then in progress shall be shortened and a new Purchase Date shall be set (the &ldquo;<U>New
Purchase Date</U>&rdquo;), as of which date any Offering Period then in progress will terminate. The New Purchase Date shall be
on or before the date of consummation of the transaction and the Committee shall notify each participant in writing, at least five
(5)&nbsp;days prior to the New Purchase Date, that the Purchase Date for his or her option has been changed to the New Purchase
Date and that his or her option will be exercised automatically on the New Purchase Date, subject to Section&nbsp;9. For purposes
of this Section&nbsp;16, an option granted under the Plan shall be deemed to be assumed or substituted, without limitation, if,
at the time of issuance of the stock or other consideration upon a Corporate Transaction, each holder of an option under the Plan
would be entitled to receive upon exercise of the option the same number and kind of shares of stock or the same amount of property,
cash or securities as such holder would have been entitled to receive upon the occurrence of the transaction if the holder had
been, immediately prior to the transaction, the holder of the number of Shares of Common Stock covered by the option at such time
(after giving effect to any adjustments in the number of Shares covered by the option as provided for in this Section&nbsp;16);
provided however that if the consideration received in the transaction is not solely common stock of the successor corporation
or its parent (as defined in Section&nbsp;424(e) of the Code), the Committee may, with the consent of the successor corporation,
provide for the consideration to be received upon exercise of the option to be solely common stock of the successor corporation
or its parent equal in Fair Market Value to the per Share consideration received by holders of Common Stock in the transaction.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 20pt 0 0; text-align: justify; text-indent: 0.5in">17.<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Amendment or Termination</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 1in">(a)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>The Board and/or the Committee may at any time and for any reason terminate or amend the Plan. Except as provided in Section&nbsp;16,
no such termination of the Plan may affect options previously granted. Except as provided in Section&nbsp;16 and in this Section&nbsp;17,
no amendment to the Plan shall make any change in any option previously granted that adversely affects the rights of any participant.
In addition, to the extent necessary to comply with&nbsp;Rule&nbsp;16b-3 under the Exchange Act, or under Section&nbsp;423 of the
Code (or any successor rule or provision or any applicable law or regulation), the Company shall obtain shareholder approval in
such a manner and to such a degree as so required.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 1in">(b)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>Without shareholder consent and without regard to whether any participant rights may be considered to have been adversely
affected, the Committee shall be entitled to change the Offering Periods (solely prior to the commencement of the affected Offering
Periods), limit the frequency&nbsp;and/or&nbsp;number of changes in the amount withheld during an Offering Period (solely prior
to the commencement of the affected Offering Periods), permit payroll withholding in excess of the amount designated by a participant
in order to adjust for delays or mistakes in the Company&rsquo;s processing of properly completed withholding elections, establish
reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward the
purchase of Common Stock for each participant properly correspond with amounts withheld from the participant&rsquo;s Compensation,
and establish such other procedures as the Committee determines in its sole discretion advisable that are consistent with the Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 0.5in">18.<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Notices</U>. All notices or other communications by a participant to the Company under or in connection with the Plan
shall be deemed to have been duly given when received in the form specified by the Company at the location, or by the person, designated
by the Company for the receipt thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0pt; text-align: justify; text-indent: 0.5in">19.<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Conditions Upon Issuance of Shares</U>.&nbsp;Shares shall not be issued with respect to an option unless the exercise
of such option and the issuance and delivery of such Shares pursuant thereto shall comply with all applicable provisions of law,
domestic or foreign, including, without limitation, the Securities Act of 1933, as amended, the Exchange Act, the rules and regulations
promulgated thereunder, applicable state securities laws and the requirements of any stock exchange upon which the Shares may then
be listed, and shall be further subject to the approval of counsel for the Company with respect to such compliance. As a condition
to the exercise of an option, the Company may require the person exercising such option to represent and warrant at the time of
any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute
such Shares if, in the opinion of counsel for the Company, such a representation is required by any of the aforementioned applicable
provisions of law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 0.5in">20.<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Term of Plan; Effective Date</U>.&nbsp;The Plan shall become effective upon approval by the Company&rsquo;s shareholders.
It shall continue in effect for a term of ten (10)&nbsp;years unless sooner terminated under Section&nbsp;17.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 0.5in">21.<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Additional Restrictions of&nbsp;Rule&nbsp;16b-3</U>.&nbsp;The terms and conditions of options granted hereunder to, and
the purchase of Shares by, persons subject to Section&nbsp;16 of the Exchange Act shall comply with the applicable provisions of&nbsp;Rule&nbsp;16b-3.&nbsp;This
Plan shall be deemed to contain, and such options shall contain, and the Shares issued upon exercise thereof shall be subject to,
such additional conditions and restrictions as may be required by Rule&nbsp;16b-3&nbsp;to qualify for the maximum exemption from
Section&nbsp;16 of the Exchange Act with respect to Plan transactions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 0.5in">22.<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Not a Contract of Employment</U>.&nbsp;The adoption and maintenance of the Plan shall not be deemed to be a contract
between the Company or any Designated Related Company and any person or to be consideration for the employment of any person. Participation
in the Plan at any given time shall not be deemed to create the right to participate in the Plan, or any other arrangement permitting
an employee of the Company or any Designated Related Company to purchase Common Stock at a discount, in the future. The rights
and obligations under any participant&rsquo;s terms of employment with the Company or any Designated Related Company shall not
be affected by participation in the Plan. Nothing herein contained shall be deemed to give any person the right to be retained
in the employ of the Company or any Designated Related Company or to restrict the right of the Company or any Designated Related
Company to discharge any person at any time, nor shall the Plan be deemed to give the Company or any Designated Related</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 0in">Company
the right to require any person to remain in the employ of the Company or any Designated Related Company or to restrict any person&rsquo;s
right to terminate his or her employment at any time. The Plan shall not afford any participant any additional right to compensation
as a result of the termination of such participant&rsquo;s employment for any reason whatsoever.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0pt; text-align: justify; text-indent: 0.5in">23.<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Equal Rights and Privileges</U>.&nbsp;All Eligible Employees shall have equal rights and privileges with respect to the
Plan so that the Plan qualifies as an &ldquo;employee stock purchase plan&rdquo; within the meaning of Section&nbsp;423 of the
Code and the related Treasury regulations. Any provision of the Plan which is inconsistent with Section&nbsp;423 of the Code shall
without further act or amendment by the Company or the Committee be reformed to comply with the requirements of Section&nbsp;423.
This Section shall take precedence over all other provisions of the Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 0.5in">24.<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Other Provisions</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 1in">(a)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>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.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 1in">(b)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>Any expenses of administering the Plan shall be borne by the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 1in">(c)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>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 of Directors 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 of Directors to adopt such other additional incentive or other compensation
arrangements as the Board of Directors may deem necessary or desirable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 1in">(d)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>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.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 1in">(e)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>If any provision of the Plan shall be held illegal or invalid for any reason, such illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been
included.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: justify; text-indent: 1in">(f)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>Headings are given to the sections of this Plan solely as a convenience to facilitate reference. The reference to any statute,
regulation or other provision of law shall be construed to refer to any amendment to or successor of such provision of law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 10pt 0 10pt; text-align: justify; text-indent: 1in">(g)<FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>The Plan shall be binding upon the Company, its successors and assigns, and participants, their executors, administrators
and permitted transferees and beneficiaries.</P>


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<P STYLE="margin: 0"></P>

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<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr>
    <td style="width: 33%; font-size: 10pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; width: 1%; font-size: 10pt; line-height: 115%">&nbsp;</td>
    <td style="width: 66%; font-size: 10pt; line-height: 115%">&nbsp;</td></tr>
<tr>
    <td style="vertical-align: middle">
        <P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0.8pt 0 20pt"><i>PRO-DEX, &nbsp;&nbsp;INC.</i></P>
        <P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0.8pt 0 20pt"><i>2361&nbsp;&nbsp;MCGAW&nbsp;&nbsp;AVENUE</i></P>
        <P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0.8pt 0 20pt"><i>IRVINE,&nbsp;&nbsp;CA&nbsp;&nbsp;92614</i></P></td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 10pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom">
        <P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0.8pt 0 0"><b>VOTE BY INTERNET - www.proxyvote.com</b></P>
        <P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin: 4pt 0.8pt 0 0">Use the Internet to transmit your voting instructions
        and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have
        your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic
        voting instruction form.</P>
        <P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin: 8pt 0.8pt 0 0"><b>Electronic Delivery of Future PROXY MATERIALS</b></P>
        <P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin: 4pt 0.8pt 0 0">If you would like to reduce the costs incurred
        by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports
        electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using
        the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.</P>
        <P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin: 8pt 0.8pt 0 0"><b>VOTE BY PHONE - 1-800-690-6903</b></P>
        <P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin: 4pt 0.8pt 0 0">Use any touch-tone telephone to transmit your voting
        instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when
        you call and then follow the instructions.</P>
        <P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin: 8pt 0.8pt 0 0"><b>VOTE BY MAIL</b></P>
        <P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin: 4pt 0.8pt 0 0">Mark, sign and date your proxy card and return
        it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY
        11717.</P></td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr>
    <td style="width: 58%; font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; width: 2%; font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td style="width: 40%; font-size: 12pt; line-height: 115%">&nbsp;</td></tr>
<tr style="vertical-align: bottom">
    <td style="padding-right: 0.8pt; padding-left: 10pt; text-indent: -10pt; font-size: 10pt; line-height: 115%"><font style="font-size: 7.5pt">TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:</font></td>
    <td style="padding-right: 0.8pt; font-size: 10pt; line-height: 115%">&nbsp;</td>
    <td style="padding-right: 0.8pt; text-align: right; font-size: 10pt; line-height: 115%"><font style="font-size: 7.5pt">KEEP&nbsp;THIS&nbsp;PORTION&nbsp;FOR&nbsp;YOUR&nbsp;RECORDS</font></td></tr>
</table>
<P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0">&mdash; &mdash; &mdash; &mdash; &mdash; &mdash; &mdash; &mdash;
&mdash; &mdash; &mdash; &mdash; &mdash; &mdash; &mdash; &mdash; &mdash; &mdash; &mdash; &mdash; &mdash; &mdash; &mdash; &mdash;
&mdash; &mdash; &mdash; &mdash; &mdash; &mdash; &mdash; &mdash; &mdash; &mdash; &mdash; &mdash; &mdash; &mdash; &mdash; &mdash;
&mdash; &mdash; &mdash; &mdash; &mdash; &mdash; &mdash; &mdash; &mdash; &mdash; &mdash; &mdash; &mdash;&nbsp;&mdash;&nbsp;&mdash;&nbsp;&mdash;</P>

<P STYLE="font: 7.5pt/normal Times New Roman, Times, Serif; margin: 0; text-align: right">DETACH AND RETURN THIS PORTION ONLY</P>

<P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin: 10pt 0 0; text-align: center"><B>THIS&nbsp;&nbsp;&nbsp;&nbsp;PROXY&nbsp;&nbsp;&nbsp;&nbsp;CARD&nbsp;&nbsp;&nbsp;&nbsp;IS&nbsp;&nbsp;&nbsp;&nbsp;VALID&nbsp;&nbsp;&nbsp;&nbsp;ONLY&nbsp;&nbsp;&nbsp;&nbsp;WHEN&nbsp;&nbsp;&nbsp;&nbsp;
SIGNED&nbsp;&nbsp;&nbsp;&nbsp;AND&nbsp;&nbsp;&nbsp;&nbsp;DATED.</B></P>

<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr>
    <td style="font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td style="font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td style="font-size: 12pt; line-height: 115%">&nbsp;</td>
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    <td colspan="2" style="font-size: 12pt; line-height: 115%">&nbsp;</td>
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<tr>
    <td style="vertical-align: top; border-top: black 1.5pt solid; border-left: black 1.5pt solid; padding-left: 7.5pt; font-size: 11pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; border-top: black 1.5pt solid; padding-right: 0.8pt; font-size: 11pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; border-top: black 1.5pt solid; padding-right: 0.8pt; font-size: 11pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; border-top: black 1.5pt solid; padding-right: 0.8pt; font-size: 11pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: top; border-top: black 1.5pt solid">
        <P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0.8pt 0 0; text-align: center"><b>For</b></P>
        <P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0.8pt 0 0; text-align: center"><b>All</b></P></td>
    <td style="vertical-align: bottom; border-top: black 1.5pt solid; padding-right: 0.8pt; font-size: 11pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: top; border-top: black 1.5pt solid">
        <P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0.8pt 0 0; text-align: center"><b>Withhold</b></P>
        <P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0.8pt 0 0; text-align: center"><b>All</b></P></td>
    <td style="vertical-align: bottom; border-top: black 1.5pt solid; padding-right: 0.8pt; font-size: 11pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: top; border-top: black 1.5pt solid">
        <P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0.8pt 0 0; text-align: center"><b>For&nbsp;All</b></P>
        <P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0.8pt 0 0; text-align: center"><b>Except</b></P></td>
    <td style="vertical-align: bottom; border-top: black 1.5pt solid; padding-right: 0.8pt; font-size: 11pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; border-top: black 1.5pt solid">
        <P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0.8pt 0 0">To withhold authority to vote for any individual
        nominee(s), mark &ldquo;For All Except&rdquo; and write the number(s) of the nominee(s) on the line below.</P></td>
    <td style="vertical-align: bottom; border-top: black 1.5pt solid; padding-right: 0.8pt; font-size: 11pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; border-top: black 1.5pt solid; padding-right: 0.8pt; font-size: 11pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; border-top: black 1.5pt solid; padding-right: 0.8pt; font-size: 11pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; border-top: black 1.5pt solid; padding-right: 0.8pt; font-size: 11pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; border-top: black 1.5pt solid; padding-right: 0.8pt; font-size: 11pt; line-height: 115%">&nbsp;</td>
    <td colspan="2" style="vertical-align: bottom; border-top: black 1.5pt solid; padding-right: 0.8pt; font-size: 11pt; line-height: 115%">&nbsp;</td>
    <td colspan="2" style="vertical-align: bottom; border-top: black 1.5pt solid; padding-right: 0.8pt; font-size: 11pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; border-top: black 1.5pt solid; border-right: black 1.5pt solid; padding-right: 0.3pt; font-size: 11pt; line-height: 115%">&nbsp;</td></tr>
<tr>
    <td colspan="3" style="vertical-align: top; border-left: black 1.5pt solid; padding-left: 7.5pt; font-size: 10pt; line-height: 115%"><font style="font-size: 8pt"><b>The Board of Directors recommends you vote FOR each of the following director nominees:</b></font></td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 11pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: top; font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 11pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: top; font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 11pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: top; font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 11pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: top; font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 11pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 11pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; border-top: black 1.5pt solid; padding-right: 0.8pt; font-size: 10pt; line-height: 115%">&nbsp;</td>
    <td colspan="2" style="vertical-align: bottom; border-top: black 1.5pt solid; border-right: black 1.5pt solid; padding-right: 0.3pt; font-size: 11pt; line-height: 115%">&nbsp;</td>
    <td colspan="2" style="vertical-align: bottom; padding-right: 0.8pt; font-size: 11pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; border-right: black 1.5pt solid; padding-right: 0.3pt; font-size: 11pt; line-height: 115%">&nbsp;</td></tr>
<tr>
    <td style="vertical-align: bottom; border-left: black 1.5pt solid">
        <P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0 0 8pt"><b>1.</b></P></td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom">
        <P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0.8pt 0 0">Election of Directors Nominees</P></td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; text-align: center; font-size: 8pt; line-height: 115%"><font style="font: 10pt Wingdings">&#168;</font></td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; text-align: center; font-size: 8pt; line-height: 115%"><font style="font: 10pt Wingdings">&#168;</font></td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; text-align: center; font-size: 8pt; line-height: 115%"><font style="font: 10pt Wingdings">&#168;</font></td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom">
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    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
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    <td colspan="2" style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; border-right: black 1.5pt solid; padding-right: 0.3pt; font-size: 8pt; line-height: 115%">&nbsp;</td></tr>
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    <td style="vertical-align: top; border-left: black 1.5pt solid; padding-left: 7.5pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
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    <td style="vertical-align: bottom; font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; font-size: 12pt; line-height: 115%">&nbsp;</td>
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    <td style="vertical-align: bottom; font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td colspan="2" style="vertical-align: bottom; font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td colspan="2" style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; border-right: black 1.5pt solid; padding-right: 0.3pt; font-size: 8pt; line-height: 115%">&nbsp;</td></tr>
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    <td style="border-left: black 1.5pt solid; padding-left: 7.5pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td colspan="20" style="border-right: black 1.5pt solid; padding-right: 17.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td></tr>
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    <td style="vertical-align: top; border-left: black 1.5pt solid; padding-left: 7.5pt; font-size: 8pt; line-height: 115%"><font style="font-size: 8pt">01</font></td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td colspan="19" style="vertical-align: top; border-right: black 1.5pt solid; padding-right: 16.8pt; font-size: 8pt; line-height: 115%"><font style="font-size: 8pt">Raymond E. Cabillot&nbsp;&nbsp;&nbsp;&nbsp;02&nbsp;&nbsp;William J. Farrell III&nbsp;&nbsp;&nbsp;&nbsp;03&nbsp;&nbsp;David C. Hovda&nbsp;&nbsp;&nbsp;&nbsp;04&nbsp;&nbsp;Harold A. Hurwitz&nbsp;&nbsp;&nbsp;&nbsp;05&nbsp;&nbsp;Nicholas J. Swenson</font></td></tr>
<tr>
    <td colspan="11" style="border-left: black 1.5pt solid; padding-right: 3.3pt; padding-left: 7.5pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td colspan="2" style="font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td colspan="2" style="font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td colspan="3" style="font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td colspan="3" style="border-right: black 1.5pt solid; padding-right: 1.8pt; font-size: 10pt; line-height: 115%">&nbsp;</td></tr>
<tr style="vertical-align: bottom">
    <td colspan="11" style="border-left: black 1.5pt solid; padding-right: 3.3pt; padding-left: 7.5pt; font-size: 8pt; line-height: 115%"><font style="font-size: 8pt"><b>The Board of Directors recommends you vote FOR each of proposals 2 through 5.</b></font></td>
    <td style="padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="padding-right: 0.8pt; text-align: center; font-size: 8pt; line-height: 115%"><font style="font-size: 8pt"><b>For</b></font></td>
    <td style="padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="padding-right: 0.8pt; text-align: center; font-size: 8pt; line-height: 115%"><font style="font-size: 8pt"><b>Against</b></font></td>
    <td style="padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td colspan="2" style="padding-right: 0.8pt; text-align: center; font-size: 8pt; line-height: 115%"><font style="font-size: 8pt"><b>Abstain</b></font></td>
    <td colspan="2" style="padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="border-right: black 1.5pt solid; padding-right: 0.3pt; font-size: 8pt; line-height: 115%">&nbsp;</td></tr>
<tr>
    <td style="border-left: black 1.5pt solid; padding-left: 7.5pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td colspan="10" style="font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td colspan="2" style="font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td colspan="2" style="font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td colspan="3" style="font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td colspan="3" style="border-right: black 1.5pt solid; padding-right: 1.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td></tr>
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    <td style="vertical-align: top; border-left: black 1.5pt solid; padding-left: 7.5pt; font-size: 8pt; line-height: 115%"><font style="font-size: 8pt"><b>2</b></font></td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td colspan="9" style="vertical-align: top; padding-right: 8.8pt; font-size: 8pt; line-height: 115%"><font style="font-size: 8pt">To ratify the appointment of Moss Adams, LLP as our independent registered public accounting firm for the fiscal year ending June 30, 2015.</font></td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: top; padding-right: 0.8pt; text-align: center; font-size: 8pt; line-height: 115%"><font style="font: 10pt Wingdings">&#168;</font></td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: top; padding-right: 0.8pt; text-align: center; font-size: 8pt; line-height: 115%"><font style="font: 10pt Wingdings">&#168;</font></td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td colspan="2" style="vertical-align: top; padding-right: 0.8pt; text-align: center; font-size: 8pt; line-height: 115%"><font style="font: 10pt Wingdings">&#168;</font></td>
    <td colspan="2" style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: top; border-right: black 1.5pt solid; padding-right: 0.3pt; font-size: 8pt; line-height: 115%">&nbsp;</td></tr>
<tr>
    <td colspan="11" style="border-left: black 1.5pt solid; padding-right: 3.3pt; padding-left: 7.5pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td colspan="2" style="font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td colspan="2" style="font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td colspan="3" style="font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td colspan="3" style="border-right: black 1.5pt solid; padding-right: 1.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td></tr>
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    <td style="vertical-align: top; border-left: black 1.5pt solid; padding-left: 7.5pt; font-size: 8pt; line-height: 115%"><font style="font-size: 8pt"><b>3</b></font></td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td colspan="9" style="vertical-align: top; padding-right: 8.8pt; font-size: 8pt; line-height: 115%"><font style="font-size: 8pt">Advisory vote to approve the compensation of our Named Executive Officers.</font></td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: top; padding-right: 0.8pt; text-align: center; font-size: 8pt; line-height: 115%"><font style="font: 10pt Wingdings">&#168;</font></td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: top; padding-right: 0.8pt; text-align: center; font-size: 8pt; line-height: 115%"><font style="font: 10pt Wingdings">&#168;</font></td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td colspan="2" style="vertical-align: top; padding-right: 0.8pt; text-align: center; font-size: 8pt; line-height: 115%"><font style="font: 10pt Wingdings">&#168;</font></td>
    <td colspan="2" style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: top; border-right: black 1.5pt solid; padding-right: 0.3pt; font-size: 8pt; line-height: 115%">&nbsp;</td></tr>
<tr>
    <td colspan="11" style="border-left: black 1.5pt solid; padding-right: 3.3pt; padding-left: 7.5pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td colspan="2" style="font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td colspan="2" style="font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td colspan="3" style="font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td colspan="3" style="border-right: black 1.5pt solid; padding-right: 1.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td></tr>
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    <td style="vertical-align: top; border-left: black 1.5pt solid; padding-left: 7.5pt; font-size: 8pt; line-height: 115%"><font style="font-size: 8pt"><b>4</b></font></td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td colspan="9" style="vertical-align: top; padding-right: 8.8pt; font-size: 8pt; line-height: 115%"><font style="font-size: 8pt">To approve the termination of the Amended and Restated 2004 Directors&rsquo; Stock Option Plan.</font></td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: top; padding-right: 0.8pt; text-align: center; font-size: 8pt; line-height: 115%"><font style="font: 10pt Wingdings">&#168;</font></td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: top; padding-right: 0.8pt; text-align: center; font-size: 8pt; line-height: 115%"><font style="font: 10pt Wingdings">&#168;</font></td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td colspan="2" style="vertical-align: top; padding-right: 0.8pt; text-align: center; font-size: 8pt; line-height: 115%"><font style="font: 10pt Wingdings">&#168;</font></td>
    <td colspan="2" style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: top; border-right: black 1.5pt solid; padding-right: 0.3pt; font-size: 8pt; line-height: 115%">&nbsp;</td></tr>
<tr>
    <td colspan="11" style="border-left: black 1.5pt solid; padding-right: 3.3pt; padding-left: 7.5pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td colspan="2" style="font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td colspan="2" style="font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td colspan="3" style="font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td colspan="3" style="border-right: black 1.5pt solid; padding-right: 1.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td></tr>
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    <td style="vertical-align: top; border-left: black 1.5pt solid; padding-left: 7.5pt; font-size: 8pt; line-height: 115%"><font style="font-size: 8pt"><b>5</b></font></td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td colspan="9" style="vertical-align: top; padding-right: 8.8pt; font-size: 8pt; line-height: 115%"><font style="font-size: 8pt">To approve the establishment of the 2014 Employee Stock Purchase Plan.</font></td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: top; padding-right: 0.8pt; text-align: center; font-size: 8pt; line-height: 115%"><font style="font: 10pt Wingdings">&#168;</font></td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: top; padding-right: 0.8pt; text-align: center; font-size: 8pt; line-height: 115%"><font style="font: 10pt Wingdings">&#168;</font></td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td colspan="2" style="vertical-align: top; padding-right: 0.8pt; text-align: center; font-size: 8pt; line-height: 115%"><font style="font: 10pt Wingdings">&#168;</font></td>
    <td colspan="2" style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: top; border-right: black 1.5pt solid; padding-right: 0.3pt; font-size: 8pt; line-height: 115%">&nbsp;</td></tr>
<tr>
    <td colspan="11" style="border-left: black 1.5pt solid; padding-right: 3.3pt; padding-left: 7.5pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td colspan="2" style="font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td colspan="2" style="font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td colspan="3" style="font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td colspan="3" style="border-right: black 1.5pt solid; padding-right: 1.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td></tr>
<tr>
    <td colspan="11" style="vertical-align: top; border-left: black 1.5pt solid; padding-right: 3.3pt; padding-left: 7.5pt; font-size: 8pt; line-height: 115%"><font style="font-size: 8pt"><b>NOTE:</b> 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.</font></td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td colspan="2" style="vertical-align: bottom; font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td colspan="2" style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; border-right: black 1.5pt solid; padding-right: 0.3pt; font-size: 8pt; line-height: 115%">&nbsp;</td></tr>
<tr>
    <td colspan="3" style="border-left: black 1.5pt solid; padding-left: 7.5pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td colspan="2" style="font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td colspan="2" style="font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td colspan="2" style="font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td colspan="2" style="font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td colspan="2" style="font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td colspan="2" style="font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td colspan="3" style="font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td colspan="3" style="border-right: black 1.5pt solid; padding-right: 1.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td></tr>
<tr>
    <td colspan="3" style="vertical-align: top; border-left: black 1.5pt solid; padding-left: 7.5pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td colspan="2" style="vertical-align: bottom; font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td colspan="2" style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; border-right: black 1.5pt solid; padding-right: 0.3pt; font-size: 8pt; line-height: 115%">&nbsp;</td></tr>
<tr>
    <td colspan="9" style="border-left: black 1.5pt solid; padding-right: 1.3pt; padding-left: 7.5pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td colspan="2" style="font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td colspan="2" style="font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td colspan="2" style="font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td colspan="3" style="font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td colspan="3" style="border-right: black 1.5pt solid; padding-right: 1.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td></tr>
<tr>
    <td colspan="9" style="vertical-align: top; border-left: black 1.5pt solid">
        <P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 1.3pt 0 7.5pt">Please sign exactly as your name(s) appear(s)
        hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should
        each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name,
        by authorized officer.</P></td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td colspan="2" style="vertical-align: bottom; font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td colspan="2" style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; border-right: black 1.5pt solid; padding-right: 0.3pt; font-size: 8pt; line-height: 115%">&nbsp;</td></tr>
<tr>
    <td style="border-left: black 1.5pt solid; padding-left: 7.5pt; font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td colspan="4" style="font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td style="font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td style="font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td colspan="3" style="font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td colspan="2" style="font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td colspan="2" style="vertical-align: bottom; font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td colspan="2" style="border-right: black 1.5pt solid; padding-right: 1.8pt; font-size: 12pt; line-height: 115%">&nbsp;</td></tr>
<tr>
    <td style="border-left: black 1.5pt solid; padding-left: 7.5pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td colspan="5" style="border-top: black 1pt solid; border-right: black 1pt solid; border-left: black 1pt solid; padding-right: 1.05pt; padding-left: 0.75pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td colspan="2" style="border-top: black 1pt solid; border-right: black 1pt solid; padding-right: 1.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td colspan="2" style="font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td colspan="4" style="border-top: black 1pt solid; border-right: black 1pt solid; border-left: black 1pt solid; padding-right: 1.05pt; padding-left: 0.75pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td colspan="3" style="border-top: black 1pt solid; border-right: black 1pt solid; padding-right: 1.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td colspan="4" style="border-right: black 1.5pt solid; padding-right: 1.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td></tr>
<tr>
    <td style="vertical-align: top; border-left: black 1.5pt solid; padding-left: 7.5pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; border-left: black 1pt solid; border-bottom: black 1.5pt solid; padding-right: 0.05pt; padding-left: 0.75pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td colspan="4" style="vertical-align: bottom; border-bottom: black 1.5pt solid; border-right: black 1pt solid; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; border-bottom: black 1.5pt solid; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; border-bottom: black 1.5pt solid; border-right: black 1pt solid; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; border-left: black 1pt solid; border-bottom: black 1.5pt solid; padding-right: 0.05pt; padding-left: 0.75pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td colspan="3" style="vertical-align: bottom; border-bottom: black 1.5pt solid; border-right: black 1pt solid; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; border-bottom: black 1.5pt solid; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td colspan="2" style="vertical-align: bottom; border-bottom: black 1.5pt solid; border-right: black 1pt solid; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td colspan="2" style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td colspan="2" style="vertical-align: bottom; border-right: black 1.5pt solid; padding-right: -5.7pt; font-size: 8pt; line-height: 115%">&nbsp;</td></tr>
<tr>
    <td style="vertical-align: top; border-left: black 1.5pt solid; border-bottom: black 1.5pt solid; padding-left: 7.5pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; border-bottom: black 1.5pt solid; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td colspan="4" style="vertical-align: bottom; border-bottom: black 1.5pt solid">
        <P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0.8pt 0 0">Signature [PLEASE SIGN WITHIN BOX]</P></td>
    <td style="vertical-align: bottom; border-bottom: black 1.5pt solid; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; border-bottom: black 1.5pt solid">
        <P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0.8pt 0 0">Date</P></td>
    <td style="vertical-align: bottom; border-bottom: black 1.5pt solid; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; border-bottom: black 1.5pt solid; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; border-bottom: black 1.5pt solid; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">Signature (Joint Owners)</td>
    <td colspan="3" style="vertical-align: bottom; border-bottom: black 1.5pt solid">
        <P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0.8pt 0 0"></P></td>
    <td style="vertical-align: bottom; border-bottom: black 1.5pt solid; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td colspan="2" style="vertical-align: bottom; border-bottom: black 1.5pt solid">
        <P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0.8pt 0 0">Date</P></td>
    <td colspan="2" style="vertical-align: bottom; border-bottom: black 1.5pt solid; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td colspan="2" style="vertical-align: bottom; border-bottom: black 1.5pt solid; border-right: black 1.5pt solid; padding-right: -5.7pt; font-size: 8pt; line-height: 115%">&nbsp;</td></tr>
<tr>
    <td style="width: 5%">&nbsp;</td>
    <td style="width: 1%">&nbsp;</td>
    <td style="width: 28%">&nbsp;</td>
    <td style="width: 1%">&nbsp;</td>
    <td style="width: 3%">&nbsp;</td>
    <td style="width: 1%">&nbsp;</td>
    <td style="width: 8%">&nbsp;</td>
    <td style="width: 4%">&nbsp;</td>
    <td style="width: 6%">&nbsp;</td>
    <td style="width: 1%">&nbsp;</td>
    <td style="width: 18%">&nbsp;</td>
    <td style="width: 1%">&nbsp;</td>
    <td style="width: 5%">&nbsp;</td>
    <td style="width: 1%">&nbsp;</td>
    <td style="width: 7%">&nbsp;</td>
    <td style="width: 1%">&nbsp;</td>
    <td style="width: 3%">&nbsp;</td>
    <td style="width: 3%">&nbsp;</td>
    <td style="width: 1%">&nbsp;</td>
    <td style="width: 1%">&nbsp;</td>
    <td style="width: 1%">&nbsp;</td></tr>
</table>

<!-- Field: Page; Sequence: 36 -->
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<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin: 1pt 0in 1pt 0.7pt"><DIV STYLE="font-size: 1pt; border-top: gray 0.75pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin: 4in 0 0"><B>Important Notice Regarding the Availability of
Proxy Materials for the Annual Meeting:</B> The Notice &amp; Proxy Statement, Shareholder Letter, Proxy Card and Annual Report on Form 10-K is/are
available at <U>www.proxyvote.com</U>.</P>

<P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin-top: 4.5pt; text-align: left; margin-bottom: 0">&mdash;&nbsp;&mdash;&nbsp;&mdash;&nbsp;&mdash;&nbsp;&mdash;&nbsp;&mdash;&nbsp;&mdash;&nbsp;&mdash;&nbsp;&mdash;&nbsp;&mdash;&nbsp;&mdash;&nbsp;&mdash;&nbsp;&mdash;&nbsp;&mdash;&nbsp;
&mdash;&nbsp;&mdash;&nbsp;&mdash;&nbsp;&mdash;&nbsp;&mdash;&nbsp;&mdash;&nbsp;&mdash;&nbsp;&mdash;&nbsp;&mdash;&nbsp;&mdash;&nbsp;&mdash;&nbsp;&mdash;&nbsp;&mdash;&nbsp;&mdash;&nbsp;&mdash;&nbsp;&mdash;&nbsp;&mdash;&nbsp;&mdash;&nbsp;&mdash;&nbsp;&mdash;&nbsp;
&mdash;&nbsp;&mdash;&nbsp;&mdash;&nbsp;&mdash;&nbsp;&mdash;&nbsp;&mdash;&nbsp;&mdash;&nbsp;&mdash;&nbsp;&mdash;&nbsp;&mdash;&nbsp;&mdash;&nbsp;&mdash;&nbsp;&mdash;&nbsp;&mdash;&nbsp;&mdash;&nbsp;&mdash;&nbsp;&mdash;&nbsp;&mdash;&nbsp;&mdash;&nbsp;&mdash;&nbsp;&mdash;&nbsp;&mdash;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr>
    <td style="width: 4%; font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; width: 1%; font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td style="width: 90%; font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; width: 1%; font-size: 12pt; line-height: 115%">&nbsp;</td>
    <td style="width: 4%; font-size: 12pt; line-height: 115%">&nbsp;</td></tr>
<tr style="vertical-align: bottom">
    <td style="border-top: black 1.5pt solid; border-left: black 1.5pt solid; padding-left: 7.5pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="border-top: black 1.5pt solid; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="border-top: black 1.5pt solid">
        <P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0.8pt 0 0; text-align: center"><b>PRO-DEX, INC.</b></P>
        <P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0.8pt 0 0; text-align: center"><b>Annual Meeting of Shareholders</b></P>
        <P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0.8pt 0 0; text-align: center"><b>December 3, 2014 9:30 AM</b></P>
        <P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0.8pt 0 0; text-align: center"><b>This proxy is solicited
        by the Board of Directors</b></P></td>
    <td style="border-top: black 1.5pt solid; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="border-top: black 1.5pt solid; border-right: black 1.5pt solid; padding-right: -5.7pt; font-size: 8pt; line-height: 115%">&nbsp;</td></tr>
<tr>
    <td style="vertical-align: top; border-left: black 1.5pt solid; padding-left: 7.5pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: top">
        <P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin: 30pt 0.8pt 0 0">The undersigned hereby appoints Harold A. Hurwitz
as attorney and proxy, 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 8, 2014, at the Annual Meeting of Shareholders to be held at Pro-Dex,
Inc., 2361 McGaw Avenue, Irvine, California 92614, on December 3, 2014, at 9:30 a.m., local time, and at any and all adjournments
or postponements thereof.</P>
        <P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin: 10pt 0.8pt 0 0"><b>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 &ldquo;FOR&rdquo;
        each of the director nominees in proposal 1, and &ldquo;FOR&rdquo; each of proposals 2 through 5.</b></P></td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="vertical-align: bottom; border-right: black 1.5pt solid; padding-right: -5.7pt; font-size: 8pt; line-height: 115%">&nbsp;</td></tr>
<tr style="vertical-align: bottom">
    <td style="border-bottom: black 1.5pt solid; border-left: black 1.5pt solid; padding-left: 7.5pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="border-bottom: black 1.5pt solid; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="border-bottom: black 1.5pt solid">
        <P STYLE="font: 8pt/normal Times New Roman, Times, Serif; margin: 50pt 0.8pt 0 0; text-align: center"><b>Continued and to be signed
        on reverse side</b></P></td>
    <td style="border-bottom: black 1.5pt solid; padding-right: 0.8pt; font-size: 8pt; line-height: 115%">&nbsp;</td>
    <td style="border-right: black 1.5pt solid; border-bottom: black 1.5pt solid; padding-right: -5.7pt; font-size: 8pt; line-height: 115%">&nbsp;</td></tr>
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`
end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
