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<SEC-DOCUMENT>0001121888-04-000033.txt : 20040708
<SEC-HEADER>0001121888-04-000033.hdr.sgml : 20040708
<ACCEPTANCE-DATETIME>20040708171233
ACCESSION NUMBER:		0001121888-04-000033
CONFORMED SUBMISSION TYPE:	DEF 14A
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20040708
FILED AS OF DATE:		20040708
EFFECTIVENESS DATE:		20040708

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			BOVIE MEDICAL CORP
		CENTRAL INDEX KEY:			0000719135
		STANDARD INDUSTRIAL CLASSIFICATION:	INDUSTRIAL ORGANIC CHEMICALS [2860]
		IRS NUMBER:				112644611
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		DEF 14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-31885
		FILM NUMBER:		04906631

	BUSINESS ADDRESS:	
		STREET 1:		734 WALT WHITMAN ROAD
		CITY:			MELVILLE
		STATE:			NY
		ZIP:			11747
		BUSINESS PHONE:		5164215452

	MAIL ADDRESS:	
		STREET 1:		734 WALT WHITMAN ROAD
		CITY:			MELVILLE
		STATE:			NY
		ZIP:			11747

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	AN CON GENETICS INC
		DATE OF NAME CHANGE:	19920703
</SEC-HEADER>
<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
<FILENAME>proxy.txt
<DESCRIPTION>PROXY
<TEXT>



                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                     INFORMATION REQUIRED IN PROXY STATEMENT

                     SCHEDULE 14A INFORMATION (Rule 14a-101)




                Proxy Statement Pursuant to Section 14(a) of the
                 Securities Exchange Act of 1934 (Amendment No.)

Filed by the Registrant [X] Filed by a Party other than the Registrant [ ] Check
the appropriate box:
[ ] Preliminary Proxy Statement            [ ] Confidential, for Use of the
[X] Definitive Proxy Statement             Commission Only (as Permitted by Rule
[ ] Definitive Additional Materials    14a-6(e) (2))
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12

                            BOVIE MEDICAL CORPORATION

              (Name of the Registrant as Specified In Its Charter)

    (Name of Person(s) Filing Proxy Statement, if other then the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i) (4) and 0-11.

1. Title of each class of securities to which transaction applies: _____

2. Aggregate number of securities to which transaction applies: _________

3. Per unit price or other underlying value of transaction  computed pursuant to
Exchange  Act Rule  0-11  (Set  forth the  amount  on which  the  filing  fee is
calculated and state how it was determined): ____________

4. Proposed maximum aggregate value of transaction: ______________

5. Total fee paid: _______________________________
[ ] Fee paid previously with preliminary materials

[ ] 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.

1. Amount Previously Paid:

2. Form, Schedule or Registration Statement No.:

3. Filing Party:

4. Date Filed:








                            Bovie Medical Corporation
                         734 Walt Whitman Road Suite 207
                               Melville, NY 11747

July 11, 2004


Dear Stockholder:

On behalf of your Board of Directors and Management,  you are cordially  invited
to attend the Annual  Meeting of Common  Stockholders  to be held on August 18 ,
2004 at 4:30P.M.,  at the Holiday Inn located at 215  Sunnyside  Blvd.,  (Exit46
Long  Island  Expressway  or Exit 38 Northern  State  Parkway)  Plainview,  Long
Island, NY 11803, Telephone No. (516)349-1240.

The enclosed Notice and Proxy Statement contain details  concerning the business
to come before the  meeting.  You will note that the Board of  Directors  of the
Company recommends a vote "FOR" the election of the nominated Directors to serve
until  the next  Annual  Meeting  of  Stockholders,  "FOR"  Ratification  of the
selection of Bloom & Company, as the Company's independent accountants.

Whether or not you attend the Annual Meeting, please vote as soon as possible by
returning  the enclosed  proxy.  Your vote is  important,  and voting by written
proxy will ensure your representation at the Annual Meeting. You may revoke your
proxy in accordance with the procedures  described in the Proxy Statement at any
time prior to the time it is voted.

Thank you for your support of Bovie.

Sincerely,
Bovie Medical Corporation


/s/ Andrew Makrides
PRESIDENT AND CHIEF EXECUTIVE OFFICER






This proxy statement and the accompanying proxy are being mailed to Bovie
Medical Corporation common stockholders beginning about July 11, 2004.



                            Bovie Medical Corporation
                         734 Walt Whitman Road Suite 207
                               Melville, NY 11747


July 11, 2004


NOTICE OF ANNUAL MEETING OF STOCKHOLDERS


Dear Stockholder:  Bovie Annual Meeting of Stockholders'  will be held on August
18, 2004 at 4:30P.M at the Holiday Inn located at 215 Sunnyside  Blvd.,  (Exit46
Long  Island  Expressway  or Exit 38 Northern  State  Parkway)  Plainview,  Long
Island, NY 11803 Telephone No. (516)349-1240.

At the meeting, stockholders will be asked to:

1. Elect Bovie's entire Board of Directors, and

2. Ratify the selection of Bovie's independent auditors for 2004,

3. Such other business properly brought before the meeting.

The  close of  business  on June 28,  2004 is the  record  date for  determining
stockholders  entitled  to  vote  at  the  Annual  Meeting.  Consequently,  only
stockholders  whose names  appear on our books as owning our Common Stock at the
close of  business on June 28, 2004 will be entitled to notice of and to vote at
the Annual Meeting and adjournment or postponement thereof.


PLEASE SIGN,  DATE AND PROMPTLY  RETURN THE PROXY IN THE ENCLOSED  ENVELOPE,  SO
THAT YOUR  SHARES  WILL BE  REPRESENTED  WHETHER  OR NOT YOU  ATTEND  THE ANNUAL
MEETING.

In order to facilitate  planning for the Annual Meeting,  please indicate on the
enclosed proxy whether or not you plan to attend the meeting.

By order of the board of directors



/s/ Andrew Makrides
CHIEF EXECUTIVE OFFICER

July 11, 2004



                                        CONTENTS

ABOUT THE ANNUAL MEETING                               1


ANNUAL REPORT                                          2


STOCK OWNERSHIP                                        3

MANAGEMENT                                             3

MEETINGS OF THE BOARD OF DIRECTORS                     4

DIRECTORS' COMPENSATION                                4

Executive Compensation                                 4

SECURITY OWNERSHIP OF BENEFICIAL OWNERS                6

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS         7

PRINCIPAL ACCOUNTANT FEES                              7
AND SERVICES

AUDIT COMMITTEE                                        8

PROPOSAL ONE: ELECTION OF DIRECTORS                    10

PROPOSAL TWO: RATIFACTION
OF SELECTION OF AUDITORS                               11

APPENDIX I - AUDIT                                      i
COMMITTEE CHARTER





                            ABOUT THE ANNUAL MEETING

WHO IS SOLICITATING YOUR VOTE?

The Board of Directors of Bovie Medical Corporation ("Bovie") is soliciting your
vote at the Annual Meeting of Bovie's common  stockholders  being held on August
18, 2004.

WHAT WILL YOU BE VOTING ON?

1.  Election of Bovie's  Board of Directors  (see page 10). 2.  Ratification  of
BLOOM & COMPANY, as Bovie's auditors for 2004 (see page 11).

HOW MANY VOTES DO YOU HAVE?

You will have one vote for every share of the  Company's  common stock you owned
of record on June 28, 2004 (the record date).

HOW MANY VOTES CAN BE CAST BY ALL COMMON STOCKHOLDERS?

One vote for each of the Company's outstanding shares of common stock which were
outstanding  on the record date. The common stock will vote as a single class on
all  matters  scheduled  to be  voted  on at the  Annual  Meeting.  There  is no
cumulative voting.

HOW MANY VOTES MUST BE PRESENT TO HOLD THE MEETING?

A majority of the votes that can be cast,  or a minimum of 6,966,701  votes must
be present in person or by proxy in order to hold the meeting.

HOW DO YOU VOTE?

o    You can vote  either in person at the Annual  Meeting  or by proxy  without
     attending the Annual Meeting. We urge you to vote by proxy even if you plan
     to attend the Annual Meeting; so that we will know as soon as possible that
     enough votes will be present for us to hold the meeting.

o    To vote by proxy,  you must fill out the enclosed proxy,  date and sign it,
     and return it in the enclosed postage-paid envelope.

o    If you want to vote in  person  at the  Annual  Meeting,  and you hold your
     Bovie stock through a securities broker (that is, in street name), you must
     obtain a proxy from your broker and bring that proxy to the meeting.

CAN YOU CHANGE YOUR VOTE?

Yes.  Just send in a new proxy with a later  date,  or send a written  notice of
revocation  to  Bovie's  Secretary  at the  address  on the cover of this  proxy
statement.  If you attend the Annual Meeting and want to vote in person, you can
request that your previously submitted proxy not be used.

WHAT IF YOU DO NOT VOTE FOR SOME OF THE  MATTERS  LISTED ON YOUR  PROXY?

If you return a signed proxy without  indicating  your vote, your shares will be
voted "FOR" each of the  director  nominees  listed on the proxy,  "FOR" Bloom &
Company as auditor.

WHAT IF YOU VOTE "ABSTAIN"?

A vote to  "abstain" on any matter your shares will not be voted for such matter
and will have the effect of a vote against the proposal.



CAN YOUR SHARES BE VOTED IF YOU DO NOT RETURN YOUR PROXY AND DO NOT ATTEND THE
ANNUAL MEETING?

o    That depends upon  whether the shares are  registered  in your name or your
     broker's  name  ("street  name").  If you do not vote your  shares  held in
     street  name,  your  broker  can vote  your  shares  on any of the  matters
     scheduled to come before the meeting.

o    If you do not vote your  shares  held in your  broker's  name,  or  "street
     name",  and your  broker  does not vote them,  the votes will be broker non
     votes, which will have no effect on the vote for any matter scheduled to be
     considered at the Annual Meeting.

o    If you do not attend and vote your shares which are registered in your name
     or otherwise vote by proxy, your shares will not --- be voted.

COULD OTHER MATTERS BE DECIDED AT THE ANNUAL MEETING?

We do not know of any  other  matters  that  will be  considered  at the  Annual
Meeting.  If a stockholder  proposal that was excluded from this proxy statement
is  otherwise  properly  brought  before the  meeting,  we will vote the proxies
against that  proposal.  If any other matters arise at the Annual  Meeting,  the
proxies will be voted at the discretion of the proxy holders.

WHAT HAPPENS IF THE MEETING IS POSTPONED OR ADJOURNED?

Your proxy will still be valid and may be voted at the  postponed  or  adjourned
meeting.  You will  still be able to  change or revoke  your  proxy  until it is
actually voted.


ANNUAL REPORT

The Company  has  included  herewith a copy of its Annual  Report for the fiscal
year ended December 31, 2003 ("2003 Annual  Report").  Additional  copies of the
2003 Annual Report may be obtained by Shareholders  without charge by writing to
Andrew  Makrides,  President,  at the  Company's  New York  offices  at 734 Walt
Whitman Road  Melville,  NY 11747.  Any written  request  shall set forth a good
faith representation that the person making the request is a beneficial owner of
the  securities  of Bovie and entitled to vote as of June 28,  2004,  the record
date.

Confidentiality

It is the Company's  policy that all proxies,  ballots and voting materials that
identify the particular vote of a stockholder are kept  confidential,  except in
the following circumstances:

     o    to allow the election  inspector  appointed for our Annual  Meeting to
          certify the results of the vote;

     o    as necessary to meet  applicable  legal  requirements,  including  the
          pursuit or defense of a judicial  action;

     o    where we conclude in good faith that a bona fide dispute  exists as to
          the authenticity of one or more proxies,  ballots,  or votes, or as to
          the accuracy of the tabulation of such proxies, ballots, or votes;

     o    where  a  stockholder  expressly  requests  disclosure  or has  made a
          written comment on a proxy;

     o    where  contacting  stockholders by us is necessary to obtain a quorum,
          the names of stockholders who have or have not voted (but not how they
          voted) may be disclosed to us by the election inspector  appointed for
          the Annual Meeting;

     o    aggregate  vote  totals may be  disclosed  to us from time to time and
          publicly  announced at the meeting of  stockholders  at which they are
          relevant; and in the event of any solicitation of proxies with respect
          to  any  of  our  securities  by a  person  other  than  us  of  which
          solicitation we have actual notice.


STOCK OWNERSHIP

We encourage stock  ownership by our directors,  officers and employees to align
their interests with the interests of stockholders.  Management further believes
this  policy has played a  significant  role in the  progress of our company and
will,  ultimately,  lead to  beneficial  future  returns  for its  stockholders.
Management  also offers  incentives  and fosters  stock  ownership by all of its
employees  through  various  measures,  such as stock option grants,  restricted
stock awards, and participation in developing programs.

BOARD OF DIRECTORS

Director Selection

Bovie does not have any standing nominating committee or compensation committee.
All  candidates  for the  office  of  director  are  determined  by the Board of
Directors.  Given  Bovie's  present  size and  organization  and the  increasing
participation  of the members of the Board in matters  relating to  expansion of
markets for Bovie's business,  development of new technologies and allocation of
resources,  attention  has  not  previously  been  given  to  the  formation  of
nominating  or  compensation  committees.  Each member of the Board of Directors
participates in the consideration of director  nominees.  The Board of Directors
consists of five members, two of which qualify as independent directors; as such
terms are defined under the rules of the American Stock Exchange.

The Board of  Directors  has not  adopted  any  policy,  code or charter for its
nominating  process,  but in keeping  with the current  legislative  environment
intends to establish, where practicable and necessary, such nominating committee
and charter and  compensation  committee  in the  future.  Presently,  the Board
considers them,  especially skills and qualities of a potential director nominee
with  experience and expertise in the areas of finance,  management and business
as desirable qualities in a potential director nominee.  The Board will consider
nominees  provided by a qualified  security  holder or holders  representing  at
least 5% of Bovie's outstanding common stock, and that such shares were owned by
the security  holder  making the  nomination  for at least one year prior to the
nomination. See Other Business elsewhere in this proxy statement.

Management

The  following  table  sets forth  certain  information  as of the record  date,
regarding  each of the  executive  officers and  directors  of the Company.  The
Company's Executive Officers and directors are as follows:

Name                    Position                               Director Since
- -----                   ---------                              --------------
Andrew Makrides        Chairman or the Board,                  December, 1982
                       President, CEO& Director

J. Robert Saron        Director and President of               August, 1994
                       Aaron Medical Industries, Inc.

George W. Kromer, Jr.    Director                              October, 1995

Alfred V. Greco          Director                              April, 1998

Brian H. Madden          Director                              September, 2003

Moshe Citronowicz        Executive Vice-President
                         Chief Operating Officer                  -------

Charles Peabody          Chief Financial Officer,                 -------
                         Secretary- Treasurer

MEETINGS OF THE BOARD OF DIRECTORS

The Board of Directors  (the "Board") had four Special  Meetings of the Board of
Directors  in 2003,  each of which  was  attended  by all  directors,  including
telephonic  meetings of the Board.  In September  2003,  an audit  committee was
established,  consisting  of Brian H. Madden and George W. Kromer,  both of whom
qualify as  independent  directors  under the rules  promulgated by the American
Stock Exchange. The Board of Directors continues to manage Bovie's various stock
option Plans and the participation  activity requirements for each member of the
Board are  increasing  as we are  aggressively  pursuing  and  implementing  new
marketing  and other  strategies.  Due to the limited  number of members and the
increased degrees of activity of the Board of Directors (five) the Nominees,  if
elected,  intends to  consider  establishment  of  Executive,  and  Compensation
committees in accordance with the new legislation  (Sarbanes- Oxley Act) and the
procedures set forth in the Company's by-laws.

DIRECTORS' COMPENSATION

Directors' compensation is determined by the Board. Presently, the Board has not
established  a  compensation  committee  nor  does  it  have a  standard  policy
regarding  compensation  of members of the Board of Directors.  In the past, the
Board has granted  directors stock options and restricted common stock, in order
to assure that the directors  have an  opportunity  for and/or have an ownership
interest in common  with other  stockholders.  The  Nominees,  if  elected,  may
require the Board or  Compensation  Committee,  if and when  established,  among
other things,  to adopt a standard policy  regarding  compensation of members of
the Board.

EXECUTIVE COMPENSATION

The following tables set forth the compensation  paid to the executive  officers
of the registrant for the three years ended December 31, 2003:

                       Aggregated Option Exercises in Last
                  Fiscal Year and Fiscal Year End Option Values

                               Number of Value of
                             Unexercised Unexercised
                     Share                          Options         Options at
                    Acquired                     At Fiscal Year         Fiscal
                       On          Value            End (#)              Year
Name                Exercise (#)   Realized       Exercisable             End

Charles Peabody         --            --               85,000     $    117,250
Andrew Makrides         --            --              485,000        1,082,700
J. Robert Saron         --            --              505,000        1,145,350
Moshe Citronowicz       --            --              440,000          996,425
Alfred Greco            --            --              335,000          747,200
George Kromer           --            --              390,000          861,675
Other                   --            --            1,748,800        3,390,341
                      ----          ----            ---------        ---------
                        --            --            3,988,800      $ 8,340,941
                      ====          ====            =========        =========

The Price of the stock was $3.07 per share on  December  31,  2003.  The options
with  exercise  price less than $3.25 were  valued  using  Black-Scholes  option
pricing model at approximately $.05 per share.

In 2003,  the Board of Directors  adopted a resolution  increasing the number of
shares  covered by Bovie's 2001 executive and employee stock purchase and option
plan by a total of one million two hundred thousand (1,200,000) shares of common
stock  issuable  upon exercise of options to be granted under the Plan. In 2003,
the Board of Directors granted a total of 585,000 options to Executive  Officers
and Directors:

              George Kromer                                      85,000
              Alfred Greco                                       85,000
              Moshe Citronowicz                                 110,000
              Robert Saron                                      110,000
              Andrew Makrides                                   110,000
              Charles Peabody                                    60,000
              Brian Madden                                       25,000
                                                              ---------
                      Total                                     585,000
                                                              =========

Outside  Directors are compensated in their  capacities as Board members through
option grants. Our Board of Directors presently consists of its Chairman, Andrew
Makrides, J. Robert Saron, George W. Kromer, Jr., Alfred Greco and Brian Madden.
For the past  years,  pursuant  to a  written  agreement,  Mr.  Kromer  has been
retained by Bovie Medical Corporation as a business and management consultant on
a  month-to-month  basis at an average  monthly fee of $1,200.  Mr. Greco is the
owner-manager  of Alfred V Greco  PLLC,  counsel to Bovie,  to which  Bovie paid
legal fees of $73,646  during 2003. In May,  2004,  Alfred V Greco PLLC became a
partner of Sierchio Greco & Greco, LLP.

There have been no changes in the pricing of any options previously or currently
awarded.

On  January  3, 2004,  we  extended  employment  contracts  with  certain of our
officers for two years.  The  following  schedule  shows all contracts and terms
with officers of Bovie.

                   Bovie Medical Corporation December 31, 2003


                       *Contract       Expiration        Current        Auto
                         Date          Date(1)         Base Pay      Allowance

Andrew Makrides         01/01/98     12/31/2009(1)     $167,683       $ 6,310
J. Robert Saron         01/01/98     12/31/2009(1)      230,296         6,310
Moshe Citronowicz       01/01/98     12/31/2009(1)      158,637         6,310

- -------------------

(1)  Includes  extensions  of 2  years  to  each of the  contracts  for  Messrs.
Makrides,  Saron and  Citronowicz.  Salaries  increase  annually  pursuant  to a
contract formula. In the event of a change in control, each contract contains an
option to each respective officer to resign and receive 3 years salary.

Security Ownership of Certain Beneficial Owners and Management of Bovie

The following table sets forth certain information as of December 31, 2003, with
respect to the beneficial ownership of the Company's common stock by all persons
known  by the  Company  to be the  beneficial  owners  of  more  than  5% of its
outstanding  shares,  by officers  and  directors  who own common  stock  and/or
options to purchase common stock and by all officers and directors as a group.

                              Number of Shares                     Percentage
                                                    Nature of          of
  Name and Address          Title     Owned (i)     Ownership     Ownership (i)

Maxxim Medical Inc.         Common    3,000,000     Beneficial         17.2%
10300 49th Street, North
Clearwater, FL  33762

Directors and Officers

Andrew Makrides             Common    800,800(ii)   Beneficial          4.6%
734 Walt Whitman Road
Melville, NY  11746

George Kromer               Common    390,000(iii)  Beneficial          2.2%
P.O. Box 188
Farmingville, NY  11738

Alfred V. Greco             Common    386,500(iv)   Beneficial          2.2%
666 Fifth Avenue
New York, NY  10103

J. Robert Saron             Common    937,976(v)    Beneficial          5.3%
7100 30th Avenue North
St. Petersburg, FL 33710

Moshe Citronowicz           Common    614,591(vi)   Beneficial          3.5%
7100 30th Avenue North
St. Petersburg, FL 33710

Brian H. Madden             Common     50,000(vii)  Beneficial         0.01%
300 Garden City Plaza
Garden City, NY 11530

Officers and Directors as a group      3,304,867(viii)                 18.9%


(i)  Based on  13,464,528  outstanding  shares of  Common  Stock  and  3,988,000
outstanding  options  to acquire a like  number of shares of Common  Stock as of
December 31, 2003, of which  officers and  directors  owned a total of 2,265,000
options and 989,867 shares at December 31, 2003.

(ii) Includes  485,000 shares  reserved and underlying ten year options owned by
Mr. Makrides to purchase shares of Common Stock of the Company.  Exercise prices
for his options range from $.50 for 155,000 shares to $3.25 for 25,000 shares.

(iii) Includes shares reserved pursuant to 390,000 ten year options owned by Mr.
Kromer to purchase shares of the Company.  Exercise prices for his options range
from $.50 for 100,000 shares to $3.25 for 25,000 shares.

(iv) Includes 335,000 shares reserved pursuant to 10 year options exercisable at
prices  varying  between $.50 per share for 100,000 shares up to $3.25 per share
for 85,000 shares. Mr. Greco's wife an owner of 51,500 shares,  gifted 20,000 of
such shares to her recently married son and his wife, in May 2004.

(v) Includes  505,000 shares  reserved  pursuant to 10 year options owned by Mr.
Saron,  exercisable at prices ranging from $.50 per share for 75,000 shares, and
$3.25 per share for 110,000 shares.

(vi) Includes  440,000 shares reserved  pursuant to 10 year options owned by Mr.
Citronowicz  exercisable  at prices ranging from $.50 for 75,000 shares to $3.25
for 25,000.

(vii)  Includes  25,000  shares owned by Mr.  Madden's  wife in which Mr. Madden
disclaims  any  interest,  and options to purchase  25,000  shares at a price of
$3.25 per share owned by Mr. Madden.


(viii) Includes  2,265,000 shares reserved for outstanding  options owned by all
Executive  Officers  and  directors  as a group.  The last date  options  can be
exercised is September 29, 2013.

Certain Relationships and Related Transactions

In 2003,  the Executive  Officers and directors  were awarded a total of 400,000
and 185,000 options to purchase the Company's Common Stock at exercise prices of
$.70 and $3.25 per share under the Company's  2003  Executive and Employee Stock
Option Plan. See Remuneration

A director,  Alfred V. Greco Esq. is the principal of Alfred V. Greco PLLC,  the
Company's  counsel.  Mr. Greco's firm received $73,646 and $59,303 in legal fees
for the years 2003 and 2002,  respectively.  See "Security  Ownership of Certain
Beneficial Owners and Management."

A  director,  George  Kromer  also serves as a  consultant  to the Company  with
consulting compensation of $16,615 and $17,586 for 2003 and 2002, respectively.

Two relatives of the chief operating  officer of the Company are employed by the
Company.  Yechiel Tsitrinovich,  an engineering consultant received compensation
for 2003 and 2002 of $46,978 and $77,150 respectively.  The other relative, Arik
Zoran, is an employee of the Company in charge of the engineering department. He
has a two year  contract  providing for a salary of $90,000 per year plus living
expenses  and  benefits.  For 2003 he was paid  144,434  which  includes  living
expenses  and  benefits.  The  Company  is  attempting  at this time to secure a
permanent work visa for Mr. Zoran.

Principal Accountant Fees And Services

The following  table sets forth the aggregate fees billed to us for fiscal years
ended December 31, 2003 and 2002 by Bloom & Co., LLP, our principal  accountants
and auditors:

                                                 2003              2002
                                                 ----              ----

   Audit Fees (1)                         $    110,669       $    96,308
   Non-Audit Fees:

   Audit Related Fees(2)                            --                --
   Tax Fees(3)                                   5,000             5,000
   All other Fees(4)                                --                --
                                              --------          --------
       Total Fees paid to Auditor          $   115,669       $   101,308
                                              ========          ========


(1) Audit fees consist of fees billed for professional services rendered for the
audit  of  Bovie's  annual  financial  statements  and  review  of  the  interim
consolidated  financial  statements  included in quarterly  reports and services
that are normally  provided by Bloom & Co., LLP in connection with statutory and
regulatory filings or engagements; such fees constituted 95.7% of total billings
to Bovie during fiscal year ended December 31, 2003.

(2) Audit-Related fees consist of fees billed for assurance and related services
that are reasonably related to the performance of the audit or review of Bovie's
consolidated financial statements and are not reported under "Audit Fees".

(3) Tax fees consist of fees billed for professional  services  rendered for tax
compliance,  tax advice and tax planning  (domestic  and  international).  These
services include  assistance  regarding  federal,  state and  international  tax
compliance,  acquisitions and international tax planning and constituted 4.3% of
total billings by independent  accountant  during the fiscal year ended December
31, 2003.

(4) All other fees  consist of fees for  products  and  services  other than the
services  reported  above. In the past the board of directors had considered the
role of Bloom & Co.,  LLP in  providing  certain  tax  services to Bovie and had
concluded  that  such  services  were   compatible   with  Bloom  &  Co.,  LLP's
independence as our auditors.  In addition,  since the effective date of the SEC
rules  stating  that an auditor  is not  independent  of an audit  client if the
services  it provides to the client are not  appropriately  approved  (which was
previously  done by the  Board  of  Directors).  Now the  Audit  Committee  will
pre-approve  all  audit  and  permissible  non-audit  services  provided  by the
independent auditors.

The independent  auditor  performed all services  through full time employees of
the  independent  auditor.  Except for audit  related and tax  related  fees for
services,  no other fees were paid to Bloom & Co., LLP during  fiscal year ended
December 31, 2003.

The Audit  Committee  has  adopted a policy  for the  pre-approval  of  services
provided by the independent  auditors,  pursuant to which it may pre-approve any
service consistent with applicable law, rules and regulations. Under the policy,
the Audit Committee may also delegate authority to pre-approve certain specified
audit or permissible non-audit services to one or more of its members, including
the Chairman.  A member to whom  pre-approval  authority has been delegated must
report its  pre-approval  decisions,  if any, to the Audit Committee at its next
meeting, and any such pre-approvals must specify clearly in writing the services
and fees approved. Unless the Audit Committee determines otherwise, the term for
any service  pre-approved  by a member to whom  pre-approval  authority has been
delegated is twelve months.

Audit Committee

The primary  purpose of the Audit  Committee is to assist the Board of Directors
in its oversight of the Company's  accounting and financial  reporting processes
and  the  audits  of the  financial  statements.  The  Company's  management  is
responsible  for the  preparation,  presentation  and integrity of the Company's
financial statements,  and for maintaining  appropriate accounting and financial
reporting  principles and policies and internal controls and procedures designed
to  assure  compliance  with  accounting   standards  and  applicable  laws  and
regulations.  The independent  auditor is responsible for auditing the Company's
financial  statements  and  expressing  an opinion as to their  conformity  with
generally accepted accounting principles. The Audit Committee was established in
September  2003  and  held  one  meeting  to  date.  The  Audit  Committee,   as
established:

o    reviews and reassesses the formal written charter of the Audit Committee on
     an annual basis;

o    reviews the  integrity of the  Company's  financial  statements,  financial
     reporting  process and systems of internal controls  regarding  accounting,
     finance, and legal compliance;

o    reviews the qualifications  and performance of the independent  auditor and
     internal auditing process;

o    provides a means of communication among the independent auditor, management
     and the Board of Directors;

o    prepares  the report of the Audit  Committee  that SEC rules  require to be
     included in the Company's annual proxy statement;

o    reviews and  discusses  with  management  and the  independent  auditor the
     annual audited financial statements and quarterly financial statements;

o    appoints,  compensates,  retains and  oversees  the work of the  registered
     public  accounting  firm engaged for the purpose of preparing or issuing an
     audit report or performing other audit services for the fiscal year;

o    communicates  with the  independent  auditor about the scope and results of
     their audit examination and fees related to such work;

o    communicates  with  accounting  and  financial  management  to  review  the
     internal audit activities, discuss the accounting practices and procedures,
     and review the adequacy of the accounting and control systems;

o    reviews the audit  schedule and considers any issues raised by its members,
     the independent  auditor retained to audit the financial  statements of the
     Company, the legal staff or management;

o    reviews  the  independence  of the  independent  auditor,  and the range of
     audit,  and non-audit,  if any,  services  provided and fees charged by the
     independent auditor;

o    pre-approves all audit and permissible  non-audit  services provided by the
     independent auditors

o    manages the  receipt,  retention  and  treatment  of  complaints  regarding
     accounting,   internal   accounting  controls  or  audit  matters  and  the
     confidential,  anonymous  submission  of  concerns  regarding  questionable
     accounting or auditing matters;

o    discusses certification of the financial reports by the Principal Executive
     Officer and Chief Financial Officer.

A copy of the Audit  Committee  Charter is annexed  to this proxy  statement  as
Appendix 1.

                                 OTHER BUSINESS

Stockholder Proposals for Inclusion in Proxy Statement

Pursuant to the Company's policy,  stockholders may present proper proposals for
inclusion  in  the  Company's  proxy  statement  and  for  consideration  at the
Company's next annual meeting of  stockholders.  To be eligible for inclusion in
the Company's 2005 Proxy Statement, a stockholder's proposal must be received by
the Company no later than December 28, 2004 and must otherwise  comply with Rule
14a-8 under the Exchange Act.

Stockholder Proposals for Annual Meeting

For business to be properly  brought  before an annual meeting by a stockholder,
in addition to any other  applicable  requirements,  timely notice of the matter
must be first given to Bovie.  To be timely,  written notice must be received by
Bovie  at its  Melville,  N.Y.  office  by the  deadline  in last  year's  proxy
statement.  If the  proposal  is  submitted  for a  regularly  scheduled  annual
meeting,  the proposal must be received at Bovie's  principal  executive offices
not less than 120 calendar days before the date of the Company's proxy statement
released to  shareholders in connection with the previous year's annual meeting;
or (b) if the date of this year's  annual  meeting has been changed by more than
30 days from the date of the  previous  year's  meeting,  then the deadline is a
reasonable time before the Company begins to print and mail its proxy materials.
While the Board of Directors will consider  stockholder  proposals,  the Company
reserves the right to omit from the Company's 2005 Proxy  Statement  stockholder
proposals that it is not required to include under federal regulations.

Stockholder Nominations of Directors

The Board of Directors  adopted,  as part of the director  selection  process, a
policy  for  director  selection,  which  includes  consideration  of  potential
director nominees recommended by stockholders. The Board will identify, evaluate
and select potential director nominees,  including nominees  recommended by you,
using qualitative standards and certain procedures, as described under the Board
of Directors,  Director  Selection  above,  for  recommendation  to the Board of
Directors for selection.  Any  stockholder  entitled to vote for the election of
directors  at a meeting may nominate  persons for election as directors  only if
timely written notice of such  stockholder's  intent to make such  nomination is
given,  either by personal delivery or United States mail,  postage prepaid,  to
Mr. Andrew  Makrides,  President,  Bovie Medical  Corporation,  734 Walt Whitman
Road, Suite 207, Melville,  NY 11747. Refer to the section entitled the Board of
Directors, Director Selection beginning on page 4 for more information.

Costs of Solicitation

Bovie is making this  solicitation of proxies and is responsible for the payment
of all  expenses  incurred  in  connection  with  the  solicitation.  Management
estimates that the cost of solicitation of proxies will be approximately $20,000
to be incurred solely by Bovie.


                                  PROPOSAL ONE

                              ELECTION OF DIRECTORS

The  Board  of  Directors  has  nominated  all  of  the  current  directors  for
re-election  at the Annual  Meeting.  All directors  serve until the next Annual
Meeting  of  stockholders  or  until  their  successors  are  duly  elected  and
qualified.

THE NOMINEES

The following section gives information - provided by the nominees - about their
principal occupation, business experience and other matters.

THE BOARD RECOMMENDS THAT YOU VOTE "FOR" EACH OF THE FOLLOWING NOMINEES.

ANDREW MAKRIDES

J. ROBERT SARON

ALFRED V. GRECO

GEORGE W. KROMER, JR.

BRIAN H. MADDEN

Andrew  Makrides,  age 62,  Chairman of the Board of Directors,  President,  and
Chief Executive  Officer,  received a Bachelor of Arts degree in Psychology from
Hofstra  University  and a Doctor of  Jurisprudence  JD Degree from Brooklyn Law
School.  He is a member  of the Bar of the State of New York and  practiced  law
from 1968 until joining Bovie Medical  Corporation  as Executive  Vice President
and director,  in 1982. Mr. Makrides became President of the Company in 1985 and
the CEO in December 1998 and has served as such to date.

J.  Robert  Saron,  age 51,  Director,  holds a  Bachelors  degree in Social and
Behavioral  Science from the University of South  Florida.  From 1988 to present
Mr. Saron has served as a president  and director of Aaron  Medical  Industries,
Inc.  ("Aaron"),  a wholly owned  subsidiary of Bovie,  among other  things,  as
Bovie's marketing subsidiary.  Mr. Saron served as CEO and chairman of the Board
of the Company from 1994 to December  1998. Mr. Saron is presently the President
of Aaron and a member of the Board of Directors of the Company.

A1fred V. Greco,  Esq., age 68,  Director,  is the principal of Alfred V. Greco,
PLLC,  and has been counsel to the Company since its  inception.  Mr. Greco is a
member of the Bar of the State of New York and has been  engaged in the practice
of law for the  past 35 years in the  City of New  York.  The main  focus of Mr.
Greco's  experience  for the past 30 years has been in the area of corporate and
securities  law  during  which  he has  represented  a large  number  of  public
companies, executives,  securities brokerage firms and registered representative
and has developed a broad range of experience in administrative,  regulatory and
legal  aspects of  companies  whose  securities  are  publicly  held.  Mr. Greco
graduated from Fordham  University  School of Law with a Doctor of Jurisprudence
(JD)  Degree,  in July 1960.  He was admitted to the New York State Bar in March
1961.

George W. Kromer,  Jr., age 63,  filled a vacancy on the Board of Directors  and
became a director  on October 1, 1995.  Mr.  Kromer has in the past  served as a
Senior Financial Correspondent for "Today's Investor" and has been employed as a
consultant  by a number of  companies,  both private and public.  Bovie  Medical
Corporation  has also  retained Mr.  Kromer as a  consultant  in addition to his
capacity as a director.  He received a Master's  Degree in 1976 from Long Island
University in Health  Administration.  He was engaged as a Senior  Hospital Care
Investigator for the City of New York Health & Hospital Corporation from 1966 to
1986. He also holds a Bachelor of Science  Degree from Long Island  University's
Brooklyn  Campus and an Associate in Applied  Science  Degree from New York City
Community College, Brooklyn, New York.

Brian H. Madden,  age 50, joined the Board of Directors in September 2003. He is
an officer and principal  owner of Liberty  Title Agency LLC, a  non-affiliated,
privately owned full service title insurance agency located in Garden City, N.Y.
He also serves on a number of non-affiliated professional,  charitable and civic
organizations   including,   among  others,   the  New  York  State  Land  Title
Association,   National  Federation  of  Independent  Businesses,   Long  Island
Children's  Museum,  SUNY Old Westbury  Foundation,  and Our Lady of Consolation
Nursing Home. Mr. Madden is a member of our recently formed Audit Committee.  He
graduated Iona College with a BBA Degree in 1976.

                                  PROPOSAL TWO

                      RATIFICATION OF SELECTION OF AUDITORS


The  Board  of  Directors  has  selected  BLOOM  &  COMPANY,  ("BLOOM")  as  the
independent  auditors of Bovie for fiscal year ending  December 31, 2004.  BLOOM
has served as the independent  auditors of the Company since 1983.  Arrangements
have been made for a representative  of BLOOM to attend the Annual Meeting.  The
representative will have an opportunity to make a statement if he or she desires
to do so, and will be available to respond to appropriate stockholder questions.
The selection of BLOOM as the Company's  auditors must be ratified by a majority
of the votes cast at the Annual Meeting. BLOOM is a member of the Securities and
Exchange  Division of the American  Institute of  Certified  Public  Accountants
("AICPA")  duly  authorized to perform  audits of SEC  registrants.  The firm is
current with its peer review system and has  maintained an  unqualified  quality
control status since the inception of the peer review system  established by the
AICPA.

Audit Fees. The aggregate fees billed for professional services rendered for the
audit of our financial  statements  for the fiscal year ended  December 31, 2003
and the review of the Company's  financial  statements included in our quarterly
filings on Form 10QSB during that fiscal year were $115,669. There were no other
fees paid for other services performed by Bloom &Company or its employees.

THE BOARD RECOMMENDS THAT YOU VOTE "FOR" RATIFICATION OF BLOOM & CO., LLP AS THE
COMPANY'S INDEPENDENT AUDITORS FOR 2004.


                                   APPENDIX I


                             AUDIT COMMITTEE CHARTER


(Printed Name) (As Registered)
(Address)
 Date

                            BOVIE MEDICAL CORPORATION
                                      PROXY

PROXY FOR THE ANNUAL MEETING OF  STOCKHOLDERS TO BE HELD ON AUGUST 18, 2004 THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The  undersigned  hereby  acknowledges  receipt  of Notice of Annual  Meeting of
Stockholders and Proxy Statement of Bovie Medical Corporation in connection with
the 2004  Annual  Meeting to be held on August 18,  2004,  and  appoints  Andrew
Makrides  and  George W.  Kromer,  Jr.,  or either of them,  Proxy with power of
substitution, for and in the name of the undersigned, and hereby authorizes each
or either of them to  represent  and to vote,  all the shares of common stock of
Bovie  Medical  Corporation,  a  Delaware  corporation  ("Company"),   that  the
undersigned  would  be  entitled  to vote at the  Company's  Annual  Meeting  of
Stockholders  ("Annual  Meeting")  on August  18,  2004 and at any  adjournments
thereof,  upon the  matters  set forth in the Notice of Annual  Meeting,  hereby
revoking any Proxy heretofore given. The Proxies are further  authorized to vote
in their  discretion  upon such other  business as may properly  come before the
Annual Meeting. This proxy will be voted as specified.  If no direction is made,
this proxy will be voted in favor of all proposals.

THE BOARD RECOMMENDS A VOTE "FOR" EACH NOMINEE AND FOR PROPOSAL 2.
1. Election of Directors (check one box only)
FOR [   ]           AGAINST [   ]


EACH NOMINEE LISTED:

Andrew Makrides

J. Robert Saron

Alfred V Greco

George W. Kromer, Jr.

Brian Madden

(Instruction:  To  withhold  authority  to vote  for any  nominee,  circle  that
nominee's name in the above list)



(Continued and to be signed and dated on reverse side)


(Back of Proxy)

PROXY
(Please sign and date below)

2. To ratify the selection of BLOOM & CO., LLP as independent auditors for the
Company. FOR [ ] AGAINST [ ] ABSTAIN [ ]

I (We) will[ ] will not [ ] attend the meeting in person.

Dated:_________________________, 2004

- --------------------------
(Please Print Name)

- -------------------------
(Signature of Stockholder) (Title, if applicable)

- ---------------------------
(Please Print Name)


- -------------------------------
(Signature of Stockholder) (Title, if applicable)





NOTE:  PLEASE SIGN YOUR NAME OR NAMES EXACTLY AS SET FORTH  HEREON.  FOR JOINTLY
OWNED  SHARES,  EACH  OWNER  SHOULD  SIGN.  IF SIGNING  AS  ATTORNEY,  EXECUTOR,
COMMITTEE,  TRUSTEE OR GUARDIAN,  PLEASE  INDICATE THE CAPACITY IN WHICH YOU ARE
ACTING.  PROXIES EXECUTED BY CORPORATIONS  SHOULD BE SIGNED BY A DULY AUTHORIZED
OFFICER.  PLEASE DATE AND SIGN THIS PROXY AND MAIL IT  PROMPTLY IN THE  ENCLOSED
ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>2
<FILENAME>auditco.txt
<DESCRIPTION>AUDIT COMMITTEE CHARTER
<TEXT>
                                   APPENDIX I

                             AUDIT COMMITTEE CHARTER

                          CHARTER OF THE BOVIE MEDICAL
                       CORPORATION AUDIT COMMITTEE OF THE
                               BOARD OF DIRECTORS

The Board of Directors  ("Board") of Bovie Medical  Corporation  ("Company") has
established an Audit Committee  ("Committee") as a permanent  standing committee
with authority,  responsibility  and specific duties as described  herein.  This
Charter of the Audit  Committee  of the Board of Directors  ("Charter")  and the
composition  of the  Committee  are  intended  to comply  with  applicable  law,
including  state and federal  securities  laws, the rules and regulations of the
Securities  and  Exchange  Commission  ("SEC") and the American  Stock  Exchange
("ASE"), and the Company's Bylaws.

I.       Purpose and Scope

The  purpose  of  the   Committee   is  to  assist  the  Board  to  fulfill  its
responsibility  for  oversight of the quality and  integrity of the  accounting,
auditing and  financial  reporting  practices of the Company and to perform such
other duties as may be required of it by the Board.  The committee's  duties and
responsibilities  include, without limitation,  oversight of: (i) the accounting
and  financial  reporting  processes  and  systems of  internal  accounting  and
financial  controls of the Company;  (ii) the performance of the internal audits
and  integrity of the  financial  statements  of the  Company;  (iii) the annual
independent audit of the Company's financial  statements,  the engagement of the
independent  auditor  and the annual  evaluation  of the  independent  auditor's
function,  qualifications,  services,  performance  and  independence;  (iv) the
performance of the Company's  internal and independent audit functions;  (v) the
compliance by the Company with legal and regulatory requirements related to this
Charter,  including the Company's  disclosure controls and procedures;  and (vi)
the evaluation of the Company's risk issues.

II.  Audit Committee Charter, Membership and Organization

A.   Charter.  This Charter shall be reviewed and reassessed by the Committee at
     least  annually.  Any proposed  changes shall be submitted to the Board for
     its approval.

B.   Member. The Committee shall consist of no fewer than two (2) members of the
     Company's Board based on the recommendation of the Nominating and Corporate
     Governance  Committee.  The Committee shall be compromised of Directors who
     meet the  independence,  experience and expertise  requirements of the SEC,
     ASE and other  applicable  law. The  Nominating  and  Corporate  Governance
     Committee  will assess and  determine the  qualifications  of the Committee
     members.

C.   Term of Members and Selection of Chair.  The members of the Committee shall
     be   appointed   annually   by  the  Board.   Committee   members  may  not
     simultaneously  serve on the  audit  committee  of more than  three  public
     companies without the consent of the Board obtained in each case.

D.   Meetings. In order to discharge its  responsibilities,  the Committee shall
     each year  establish a schedule of  meetings;  additional  meetings  may be
     scheduled but the Committee must meet not less  frequently  than quarterly.
     In planning the annual  schedule of meetings,  the  Committee  shall ensure
     that sufficient opportunities exist for its members to meet separately with
     the independent  auditors  and/or the head of the Company's  internal audit
     function  without  management  present;  to meet separately with management
     without the  independent  auditors  and/or head of the  Company's  internal
     auditors   present;   to  meet  separately  with  management   without  the
     independent  auditors  and/or  head  of  the  Company's  internal  auditors
     present;  and to meet in private with only the Committee  members  present.
     Such  meetings may be held in person or  telephonically  and may be held at
     such times and places as the  Committee  determines.  The  Committee  is to
     maintain free and open  communication  with the  independent  auditor,  the
     internal  auditors and  management  of the  Company.  In  discharging  this
     oversight  role, the Committee  shall  endeavor to  investigate  any matter
     brought to its attention, and shall have full access to all books, records,
     facilities  and  personnel  of the Company and the power to retain  outside
     counsel,  accountants or other experts. The Committee may form and delegate
     authority to subcommittees when appropriate.

E.   Quorum.  A quorum  at any  meeting  of the  Committee  shall  consist  of a
     majority of the members.  All determinations of the Committee shall be by a
     majority of the members present at a meeting duly called or held, except as
     may be otherwise  specifically  provided for in this Charter.  In the event
     that there are only two members  present,  and such presence  constitutes a
     quorum,  all  determinations  of the  Committee,  shall be  unanimous.  Any
     decision or determination of the Committee reduced to writing and consented
     to (including,  but not limited to, by means of electronic transmission) by
     all of the members of the  Committee  shall be fully as  effective as if it
     had been made at a meeting duly called and held.

F.   Agenda, Minutes and Reports. An agenda, together with materials relating to
     the  subject  matter  of each  meeting,  shall  be sent to  members  of the
     Committee prior to each meeting.  Minutes for all meetings of the Committee
     shall  be  prepared  to  document   the   Committee's   discharge   of  its
     responsibilities.  The  minutes  shall be  circulated  in draft form to all
     Committee members to ensure an accurate final record, and shall be approved
     at a subsequent meeting of the Committee.  In addition, the Committee shall
     make regular reports to the Board,  including therein any issues that arise
     with  respect  to the  quality  or  integrity  of the  Company's  financial
     statements, the Company's compliance with legal or regulatory requirements,
     the performance of the Company's  independent  auditors, or the performance
     of the Company's  internal audit  function.  The Committee  shall make such
     other periodic reports to the Board as seem useful to it from time to time,
     or as may be required of it by the Board.

G.   Performance and Evaluation. The Committee shall evaluate its performance on
     an annual basis based on criteria established by the Nominating and
     Corporate Governance Committee.

III. Audit Committee Compensation

The  compensation  of  the  Committee  members  shall  be as  determined  by the
Compensation  Committee  and  approved  by the Board.  Fees may be paid in cash,
stock,  options,  or other forms  ordinarily  available to members of the Board.
Committee  members may also receive all regular benefits  accorded to members of
the Board generally.  Members of the Committee may receive no other compensation
from the Company other than such director's fees and benefits.

IV.  Audit Committee Authority and Responsibilities

A.   Authority Over Independent  Auditor.  The Company's  independent auditor is
     solely   accountable  to  the   Committee,   as   representatives   of  the
     stockholders. The Committee (subject to any action that may be taken by the
     Board) shall have the ultimate  authority and  responsibility to select (or
     nominate for stockholder  ratification),  evaluate and, where  appropriate,
     replace  the  independent  auditor;  to  approve  the  compensation  of the
     independent  auditor;  and to oversee the  performance  of the  independent
     auditor's  duties.  The  Committee  may obtain  input from  management,  as
     necessary. The independent auditors shall report directly to the Committee.

B.   Specific  Duties and  Responsibilities.  The Committee  also shall have the
     following specific duties and responsibilities:

1.   Financial Statement and Disclosure Matters

     o    Review of the Company's Annual Report on Form 10-K

     o    Review of the Company's Quarterly Reports on Form 10-Q

     o    Review of other public  releases of financial  information,  including
          earnings  release  announcements

     o    Review process for CEO and CFO certifications mandated by the SEC

     o    Review use of pro-forma and other non-GAAP  financial  information and
          off-balance  sheet  structures

     o    Consult  with  independent  auditor  regarding  significant  reporting
          issues,  judgments  and risk  exposures,  and the  Company's  internal
          controls

     o    Discuss with independent  auditor the matters required to be discussed
          by  Statement on Auditing  Standards  No. 61, as amended

     o    Prepare the Audit Committee  report required to be included as part of
          the  Company's  annual  proxy  statement

     o    Periodically   review  with  management  the  Company's   then-current
          disclosure controls and procedures

2.   Oversight of the Company's Relationship with the Independent Auditor

     a.   Engagement  of  Independent  Auditor.  The Committee  shall,  prior to
          commencement of the annual audit, review with management, the internal
          auditors, and the independent auditors the proposed scope of the audit
          plan and fees,  including  the areas of business to be  examined,  the
          adequacy  of the  personnel  to be  assigned  to the  audit  and other
          factors that may affect the time lines of such audit,  the  procedures
          to be  followed,  special  areas  to be  investigated,  as well as the
          adequacy  of  the  program  for  integration  of the  independent  and
          internal audit efforts.  The Committee shall give due consideration to
          whether the independent auditor's performance of non-audit services is
          legally permissible and compatible with the auditor's independence and
          review and pre-approve all audit and permitted non-audit services. The
          Committee  shall  also  give  final  approval  to any fees paid to the
          independent auditor including fees for any non-audit services.

     b.   Review of Reports of Independent  Auditor. The Committee shall receive
          and review all reports prepared by the independent  auditor and ensure
          that the independent  auditor has full access to the Committee and the
          Board during its  performance of the annual audit to report on any and
          all appropriate matters.

     c.   Determination  of Performance of  Independent  Auditor.  The Committee
          shall, on an annual basis,  evaluate the  qualifications,  performance
          and independence of the independent  auditor,  including review of the
          lead partner,  considering  whether the auditor's quality controls are
          adequate  and  the  provision  of  permitted   non-audit  services  is
          compatible with maintaining the auditor's independence and taking into
          account the  opinions  of  management  and the  internal  auditor.  In
          connection with this assessment, the Committee shall obtain and review
          a report  by the  independent  auditor  describing  all  relationships
          between  the  independent  auditor  and  the  Company,  including  the
          disclosures required by the Independence  Standard Boards Standard No.
          1. The  Committee  also  shall  review a report  from the  independent
          auditor at least annually  regarding any material issues raised by the
          most recent quality-control review, or peer review, of the firm, or by
          any other  inquiry  or  investigation  regarding  the firm  within the
          preceding five years.  The Committee  shall present its conclusions to
          the Board and, if so determined by the  Committee,  recommend that the
          Board take additional action to satisfy itself of the  qualifications,
          performance and independence of the independent auditor.

     d.   Policies for Employment of Former Audit Staff. The Committee shall set
          clear hiring policies for the Company's  hiring of employees or former
          employees of the independent auditor.

3.   Oversight of the Company's Internal Audit Function

     a.   Succession   Planning.   The  Committee  shall  review  financial  and
          accounting personnel succession planning within the Company, including
          the  appointment  and  replacement  of the  senior  internal  auditing
          executive.

     b.   Review of Internal Audit  Function.  The Committee  shall discuss with
          the    independent    auditor   the    internal    audit    department
          responsibilities,  budget and staffing and any recommended  changes in
          the planned  scope of the internal  audit.  The  Committee  also shall
          review the significant  reports to management prepared by the internal
          auditing department and management's responses.

     c.   Internal Review of Company's Disclosure Controls.  The Committee shall
          receive reports from the CEO and CFO on all  significant  deficiencies
          in the design or operation of internal  controls which could adversely
          affect the Company's ability to record, process,  summarize and report
          financial data and any fraud,  whether or not material,  that involved
          management  or  other  employees  who have a  significant  role in the
          Company's   internal   controls.   The  Committee  shall  review  such
          deficiency  reports with the CEO, the CFO and the General  Counsel and
          shall  discuss  the quality and  adequacy  of the  Company's  internal
          controls periodically as required.

4.   Compliance Oversight Responsibilities.

     a.   Review Adequacy of the Company's Code of Conduct.  The Committee shall
          review the Company's Code of Conduct at least annually.  The Committee
          shall recommend to management any necessary changes to ensure that the
          codes are  adequate in meeting the  Committee's  requirements  and all
          applicable   legal   and   regulatory   requirements   including   the
          requirements of the ASE.

     b.   Obtain and Review  Annual  Compliance  Reports.  The  Committee  shall
          obtain  annual  reports  from  management  and  the  Company's  senior
          internal  auditing  executive  confirming  that  the  Company  and its
          subsidiary/foreign   affiliated   entities  are  in  conformity   with
          applicable  legal  requirements  and the Company's Code of Conduct and
          any applicable  policies of the Company's  Disclosure  Committee.  The
          Committee shall discuss any concerns with management.

     c.   Establishment  of "Whistle  Blowing"  Procedures.  The Committee shall
          establish  and review  whistleblower  procedures  with  respect to the
          protection of employees who act lawfully to: (i) provide  information,
          cause   information  to  be  provided,   or  otherwise  assist  in  an
          investigation;  or (ii) file, cause to be filed, testify,  participate
          in  or  otherwise  assist  in a  proceeding  filed  as a  result  of a
          violation of securities  laws relating to fraud against  shareholders.
          The  Committee  shall  establish  procedures  for:  (i)  the  receipt,
          retention  and  treatment  of  complaints   received  by  the  Company
          regarding   accounting,   internal  accounting  controls  or  auditing
          matters; and (ii) the confidential,  anonymous  submissions by Company
          employees of concerns  regarding  questionable  accounting or auditing
          matters.

     d.   Discussion  of Legal  and  Compliance  Matters.  The  Committee  shall
          discuss with the Company's General Counsel legal matters that may have
          a  material  impact  on the  financial  statements  or  the  Company's
          compliance  policies.  The  Committee  shall  review  with the General
          Counsel the  programs  and  policies of the  Company  with  respect to
          compliance  with  applicable  laws,  regulations and any covenants and
          restrictions in any third party  agreements and monitor the results of
          these compliance efforts.

     e.   Review of Certain Transactions with Directors and Related Parties. The
          Committee shall review, no less frequently than annually, a summary of
          the Company's  transactions with Directors and officers of the Company
          and with firms that employ  Directors,  as well as any other  material
          related party/insider transactions.

5.   Limitation of Audit Committee's Role

While  the  Committee  has the  responsibilities  and  powers  set forth in this
Charter, it is not the duty of the Committee to plan or conduct audits,  prepare
the Company's financial statements, or to determine that the Company's financial
statements and  disclosures are complete and accurate and are in accordance with
generally  accepted  accounting  principles and applicable law. These duties are
the responsibilities of the Company's management and the independent auditor.





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