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<SEC-DOCUMENT>0001206774-03-000891.txt : 20031219
<SEC-HEADER>0001206774-03-000891.hdr.sgml : 20031219
<ACCEPTANCE-DATETIME>20031219100229
ACCESSION NUMBER:		0001206774-03-000891
CONFORMED SUBMISSION TYPE:	DEF 14A
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20040130
FILED AS OF DATE:		20031219
EFFECTIVENESS DATE:		20031219

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			NORTHERN TECHNOLOGIES INTERNATIONAL CORP
		CENTRAL INDEX KEY:			0000875582
		STANDARD INDUSTRIAL CLASSIFICATION:	CONVERTED PAPER & PAPERBOARD PRODS (NO CONTAINERS/BOXES) [2670]
		IRS NUMBER:				410857886
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0831

	FILING VALUES:
		FORM TYPE:		DEF 14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-11038
		FILM NUMBER:		031063766

	BUSINESS ADDRESS:	
		STREET 1:		6680 N HIGHWAY 49
		CITY:			LINO LAKES
		STATE:			MN
		ZIP:			55014
		BUSINESS PHONE:		6127841250

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	NORTHERN INSTRUMENTS CORP
		DATE OF NAME CHANGE:	19930328
</SEC-HEADER>
<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
<FILENAME>d13693.htm
<TEXT>
<HTML>
<HEAD>
<TITLE>AutoCoded Document</TITLE>
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<BODY>


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<P ALIGN=CENTER><FONT size=5 face="TIMES NEW ROMAN"><B>UNITED STATES SECURITIES AND EXCHANGE COMMISSION</B></FONT><br>
<FONT size=2 face="TIMES NEW ROMAN"><B>Washington, D.C. 20549</B></FONT></P>

<P ALIGN=CENTER><FONT size=5 face="TIMES NEW ROMAN"><B>SCHEDULE
  14A INFORMATION</B></FONT></P>
<p align="center"><strong><font size="3" face="Times New Roman, Times, serif"></font></strong></p>
<p align="center"><strong><font size="3" face="Times New Roman, Times, serif">Proxy
  Statement Pursuant to Section 14(a) of<br>
  the Securities Exchange Act of 1934 (Amendment No. &nbsp;&nbsp;)</font></strong></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr valign="top">
    <td colspan="2"><font size="2" face="Times New Roman, Times, serif">Filed
      by the Registrant&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<font size=3 face=WINGDINGS><b>x</b></font></p></td>
  </tr>
  <tr valign="top">
    <td colspan="2"><font size="2" face="Times New Roman, Times, serif">Filed
      by a Party other than the Registrant&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<font size=3 face=WINGDINGS><b>o</b></font></p></font></td>
  </tr>
  <tr valign="top">
    <td colspan="2">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td colspan="2"><font size="2" face="Times New Roman, Times, serif">Check
      the appropriate box:</font></td>
  </tr>
  <tr valign="top">
    <td width="5%">&nbsp;</td>
    <td width="95%">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="5%"><font size="2" face="Times New Roman, Times, serif"><font size=3 face=WINGDINGS><b>o</b></font></td>
    <td width="95%"><font size="2" face="Times New Roman, Times, serif">Preliminary
      Proxy Statement</font></td>
  </tr>
  <tr valign="top">
    <td width="5%"><font size="2" face="Times New Roman, Times, serif"><font size=3 face=WINGDINGS><b>o</b></font></td>
    <td width="95%"><font size="2" face="Times New Roman, Times, serif">Confidential,
      for Use of the Commission Only<br>
      (as permitted by Rule 14a-6(e)(2))</font></td>
  </tr>
  <tr valign="top">
    <td width="5%"><font size="2" face="Times New Roman, Times, serif"><font size=3 face=WINGDINGS><b>x</b></font></td>
    <td width="95%"><font size="2" face="Times New Roman, Times, serif">Definitive
      Proxy Statement</font></td>
  </tr>
  <tr valign="top">
    <td width="5%"><font size="2" face="Times New Roman, Times, serif"><font size=3 face=WINGDINGS><b>o</b></font></td>
    <td width="95%"><font size="2" face="Times New Roman, Times, serif">Definitive
      Additional Materials</font></td>
  </tr>
  <tr valign="top">
    <td width="5%"><font size="2" face="Times New Roman, Times, serif"><font size=3 face=WINGDINGS><b>o</b></font></td>
    <td width="95%"><font size="2" face="Times New Roman, Times, serif">Soliciting
      Material Pursuant to Rule 14a-12</font></td>
  </tr>
</table>
<p>&nbsp;</p>
<div align="center"><FONT FACE="Arial, Helvetica, sans-serif"><FONT SIZE="6">Northern Technologies International Corporation</FONT></FONT>
<HR SIZE="2" NOSHADE WIDTH="75%">
<font size="2" face="Times New Roman, Times, serif">(Name of
  Registrant as Specified In Its Charter)</font> </div>
<p>&nbsp;</p>
<HR SIZE="2" NOSHADE WIDTH="75%">
<div align="center"><font size="2" face="Times New Roman, Times, serif">(Name of
  Person(s) Filing Proxy Statement, if other than the Registrant)</font></div>
<p><font size="2" face="Times New Roman, Times, serif">Payment of Filing Fee (Check
  the appropriate box):</font></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr valign="top">
    <td width="5%"><font size="2" face="Times New Roman, Times, serif"><font size=3 face=WINGDINGS><b>x</b></font></td>
    <td colspan="2"><font size="2" face="Times New Roman, Times, serif">No fee
      required.</font></td>
  </tr>
  <tr valign="top">
    <td width="5%">&nbsp;</td>
    <td width="5%">&nbsp;</td>
    <td width="90%">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="5%"><font size="2" face="Times New Roman, Times, serif"><font size=3 face=WINGDINGS><b>o</b></font></td>
    <td colspan="2"><font size="2" face="Times New Roman, Times, serif">Fee computed
      on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.</font></td>
  </tr>
  <tr valign="top">
    <td width="5%">&nbsp;</td>
    <td width="5%">&nbsp;</td>
    <td width="90%">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="5%">&nbsp;</td>
    <td width="5%"><font size="2" face="Times New Roman, Times, serif">1.</font></td>
    <td width="90%"><font size="2" face="Times New Roman, Times, serif">Title
      of each class of securities to which transaction applies:</font></td>
  </tr>
  <tr valign="top">
    <td width="5%">&nbsp;</td>
    <td width="5%">&nbsp;</td>
    <td width="90%">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="5%">&nbsp;</td>
    <td width="5%">&nbsp;</td>
    <td width="70%"> <hr size="2" noshade></td>
  </tr>
  <tr valign="top">
    <td width="5%">&nbsp;</td>
    <td width="5%">&nbsp;</td>
    <td width="90%">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="5%">&nbsp;</td>
    <td width="5%"><font size="2" face="Times New Roman, Times, serif">2.</font></td>
    <td width="90%"><font size="2" face="Times New Roman, Times, serif">Aggregate
      number of securities to which transaction applies:</font></td>
  </tr>
  <tr valign="top">
    <td width="5%">&nbsp;</td>
    <td width="5%">&nbsp;</td>
    <td width="90%">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="5%">&nbsp;</td>
    <td width="5%">&nbsp;</td>
    <td width="70%"> <hr size="2" noshade></td>
  </tr>
  <tr valign="top">
    <td width="5%">&nbsp;</td>
    <td width="5%">&nbsp;</td>
    <td width="90%">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="5%">&nbsp;</td>
    <td width="5%"><font size="2" face="Times New Roman, Times, serif">3.</font></td>
    <td width="90%"><font size="2" face="Times New Roman, Times, serif">Per unit
      price or other underlying value of transaction computed pursuant to Exchange
      Act Rule 0-11 (set forth the amount on which the filing fee is calculated
      and state how it was determined):</font></td>
  </tr>
  <tr valign="top">
    <td width="5%">&nbsp;</td>
    <td width="5%">&nbsp;</td>
    <td width="90%">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width="5%">&nbsp;</td>
    <td width="5%">&nbsp;</td>
    <td width="70%"> <hr size="2" noshade></td>
  </tr>
  <tr valign="top">
    <td width="5%">&nbsp;</td>
    <td width="5%">&nbsp;</td>
    <td width="70%">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font size="2" face="Times New Roman, Times, serif">4.</font></td>
    <td><font size="2" face="Times New Roman, Times, serif">Proposed maximum aggregate
      value of transaction:</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td> <hr size="2" noshade></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font size="2" face="Times New Roman, Times, serif">5.</font></td>
    <td><font size="2" face="Times New Roman, Times, serif">Total fee paid:</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td> <hr size="2" noshade></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td><font size="2" face="Times New Roman, Times, serif"><font size=3 face=WINGDINGS><b>o</b></font></td>
    <td colspan="2"><font size="2" face="Times New Roman, Times, serif">Fee paid
      previously with preliminary materials.</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td><font size="2" face="Times New Roman, Times, serif"><font size=3 face=WINGDINGS><b>o</b></font></td>
    <td colspan="2"><font size="2" face="Times New Roman, Times, serif">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>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font size="2" face="Times New Roman, Times, serif">1.</font></td>
    <td><font size="2" face="Times New Roman, Times, serif">Amount Previously
      Paid:</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><hr size="2" noshade></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font size="2" face="Times New Roman, Times, serif">2.</font></td>
    <td><font size="2" face="Times New Roman, Times, serif">Form, Schedule or
      Registration Statement No.:</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><hr size="2" noshade></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font size="2" face="Times New Roman, Times, serif">3.</font></td>
    <td><font size="2" face="Times New Roman, Times, serif">Filing Party:</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><hr size="2" noshade></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td><font size="2" face="Times New Roman, Times, serif">4.</font></td>
    <td><font size="2" face="Times New Roman, Times, serif">Date Filed:</font></td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><hr size="2" noshade></td>
  </tr>
</table>
<p>&nbsp;</p>
<HR style="MARGIN-TOP: -2px" NOSHADE SIZE=4>
<HR style="MARGIN-TOP: -10px" NOSHADE SIZE=1>





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<!-- MARKER FORMAT-SHEET="Center Head Bold" -->
<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>NORTHERN
TECHNOLOGIES INTERNATIONAL CORPORATION</B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Center Head Bold" -->
<A NAME="A001"></A>
<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS</B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Center Head Bold" -->
<A NAME="A002"></A>
<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>January
30, 2004</B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">The
Annual Meeting of the Stockholders of Northern Technologies International
Corporation, a Delaware corporation (the &#147;Company&#148;), will be held at
Northern Technologies International Corporation Headquarters, 6680 North Highway
49, Lino Lakes, Minnesota 55014, beginning at 8:30 a.m., local time, on Friday,
January 30, 2004, for the following purposes:</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Hang Arabic In 1" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD ALIGN="LEFT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">1. </FONT></FONT></TD>
     <TD WIDTH="94%"><P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">To
elect ten persons to serve as the Company&#146;s Board of Directors until the next annual
meeting of the stockholders  or until their respective successors shall be elected and
qualified;</FONT></FONT></P></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD ALIGN="LEFT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">2. </FONT></FONT></TD>
     <TD WIDTH="94%"><P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">To
transact such other business as may properly come before the meeting.</FONT></FONT></P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">The
record date for determination of stockholders entitled to notice of and to vote
at the meeting and any adjournments thereof is the close of business on December
3, 2003.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">Whether
or not you expect to attend the meeting in person, please complete, sign, date
and promptly return the enclosed proxy in the envelope provided, which requires
no postage if mailed in the United States.</FONT></FONT></P>


<P ALIGN="LEFT"><DIV STYLE="MARGIN-LEFT: 500px"><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="2">By Order of the Board of Directors<BR>&nbsp;<BR>
<DIV ALIGN="LEFT"><img src="jenniferslynchsig.jpg"  border="0">
<BR>&nbsp;<BR>Jennifer S. Lynch<BR><I>Corporate Secretary</I></DIV>
</FONT></DIV></P>



<!-- MARKER FORMAT-SHEET="Left Head Bold" -->
<A NAME="A004"></A>
<P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">December 12,
2003<BR>Lino Lakes, Minnesota</FONT></FONT></P>




<HR SIZE=5 COLOR=GRAY NOSHADE>
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<!-- MARKER FORMAT-SHEET="Center Head Bold" -->
<A NAME="A005"></A>
<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>NORTHERN TECHNOLOGIES
INTERNATIONAL CORPORATION<BR>6680
N. Highway 49<BR>Lino Lakes,
Minnesota 55014</B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Center Head Bold" -->
<A NAME="A008"></A>
<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>PROXY
STATEMENT<BR>FOR
ANNUAL MEETING OF STOCKHOLDERS</B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Center Head Bold" -->
<A NAME="A010"></A>
<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>January
30, 2004</B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Center Head Bold" -->
<A NAME="A011"></A>
<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>INTRODUCTION</B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">The
Annual Meeting of the Stockholders of Northern Technologies International
Corporation (the &#147;Company&#148;) will be held at Northern Technologies
International Corporation Headquarters, 6680 North Highway 49, Lino Lakes,
Minnesota 55014, beginning at 8:30&nbsp;a.m., local time, on Friday, January 30,
2004, or at any adjournments thereof (the &#147;Annual Meeting&#148;), for the
purposes set forth in the Notice of Meeting.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">A
proxy card is enclosed for your use. You are solicited on behalf of the Board of
Directors to SIGN AND RETURN THE PROXY CARD IN THE ACCOMPANYING ENVELOPE. No
postage is required if mailed within the United States. The cost of soliciting
proxies, including the preparation, assembly and mailing of proxies and
soliciting material, as well as the cost of forwarding such material to the
beneficial owners of the Company&#146;s common stock, will be borne by the
Company. Directors, officers and regular employees of the Company may, without
compensation other than their regular compensation, solicit proxies by
telephone, telegraph or personal conversation. The Company may reimburse
brokerage firms and others for expenses in forwarding proxy materials to the
beneficial owners of the Company&#146;s common stock.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">Any
stockholder giving a proxy may revoke it at any time prior to its use at the
Annual Meeting either by giving written notice of such revocation to the
Secretary of the Company, by filing a duly executed proxy bearing a later date
with the Secretary of the Company or by appearing at the Annual Meeting and
filing written notice of revocation with the Secretary of the Company prior to
use of the proxy. Proxies will be voted as specified by stockholders. Proxies
that are signed by stockholders but that lack any such specification will be
voted <B>in favor</B> of the election as a director of each of the nominees for
directors listed in this Proxy Statement.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">THE
BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE <B>FOR</B> THE ELECTION OF EACH OF
THE NOMINEES FOR DIRECTORS LISTED IN THIS PROXY STATEMENT.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">The
Company expects that this proxy material will first be mailed to stockholders on
or about December 12, 2003.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Center Head Bold" -->
<A NAME="A012"></A>
<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>HOUSEHOLDING
OF ANNUAL MEETING MATERIALS</B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">Some
banks, brokers and other nominee record holders may be participating in the
practice of &#147;householding&#148; proxy statements and annual reports. This
means that only one copy of the Company&#146;s Proxy Statement or Annual Report
to Stockholders may have been sent to multiple stockholders in each household.
The Company will promptly deliver a separate copy of either document to any
stockholder upon written or oral request to the Company, Northern Technologies
International Corporation, 6680 North Highway 49, Lino Lakes, Minnesota 55014,
Attn: Stockholder Information. Any stockholder who wants to receive separate
copies of the Company&#146;s Proxy Statement or Annual Report to Stockholders in
the future, or any stockholder who is receiving multiple copies and would like
to receive only one copy</FONT></FONT></P>



<HR SIZE=5 COLOR=GRAY NOSHADE>
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<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">per household,
should contact the stockholder&#146;s  bank, broker, or other nominee record holder, or
the stockholder may contact the  Company at the above address and phone number.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Center Head Bold" -->
<A NAME="A013"></A>
<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>VOTING
OF SHARES</B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">Only
holders of the Company&#146;s common stock, $.02 par value (the &#147;Common
Stock&#148;), of record at the close of business on December 3, 2003 will be
entitled to vote at the Annual Meeting. On December 3, 2003, the Company had
3,626,192 outstanding shares of Common Stock, each such share entitling the
holder thereof to one vote on each matter to be voted on at the Annual Meeting.
The holders of a majority of the shares entitled to vote and represented in
person or by proxy at the Annual Meeting (1,813,097 shares) will constitute a
quorum for the transaction of business at the Annual Meeting. In general, shares
of Common Stock represented by a properly signed and returned proxy card will be
counted as shares present and entitled to vote at the meeting for purposes of
determining a quorum, without regard to whether the card reflects abstentions
(or is left blank) or reflects a &#147;broker non-vote&#148; on a matter (i.e.,
a card returned by a broker because voting instructions have not been received
and the broker has no discretionary authority to vote). Holders of shares of
Common Stock are not entitled to cumulate voting rights.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">The
election of a nominee for director requires the approval of a plurality of the
votes of the shares present and entitled to vote in person or by proxy. Shares
represented by a proxy card voted as abstaining on any of the proposals will be
treated as shares present and entitled to vote that were not cast in favor of a
particular matter, and thus will be counted as votes against the matter. Shares
represented by a proxy card including any broker non-vote on a matter will be
treated as shares not entitled to vote on that matter, and thus will not be
counted in determining whether that matter has been approved.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Center Head Bold" -->
<A NAME="A014"></A>
<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>ELECTION
OF DIRECTORS</B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Left Head Bold" -->
<A NAME="A015"></A>
<P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>Nomination</B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">The
Bylaws of the Company, as amended, provide that the Board of Directors (the
&#147;Board&#148;) shall consist of such number of directors (but not fewer than
one) as is determined by the Board from time to time. The Board has set such
number of directors at ten. The Board has nominated the ten persons listed in
this Proxy Statement to serve as the directors of the Company until the next
regular meeting of stockholders or until their successors are elected and
qualified.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">Assuming
a quorum is represented at the Annual Meeting, either in person or by proxy, the
election of each director requires the affirmative vote of a plurality of the
shares of Common Stock represented in person or by proxy at the Annual Meeting.
The Board recommends a vote <B>FOR</B> the election of each of the nominees
listed in this Proxy Statement. The Board intends to vote the proxies solicited
on its behalf for the election of each of the nominees as directors. If prior to
the Annual Meeting the Board should learn that any of the nominees will be
unable to serve by reason of death, incapacity or other unexpected occurrence,
the proxies may be cast for another nominee to be designated by the Board to
fill such vacancy, unless the stockholder indicates to the contrary on the
proxy. Alternatively, the proxies may, at the Board&#146;s discretion, be voted
for such fewer nominees as results from such death, incapacity or other
unexpected occurrence. The Board has no reason to believe that any of the
nominees will be unable to serve.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Left Head Bold" -->
<A NAME="A016"></A>
<P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>Information
About Nominees</B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">The
following table sets forth certain information as of November 14, 2003, which
has been furnished to the Company by each person who has been nominated by the
Board to serve as a director for the ensuing year.</FONT></FONT></P>


<!-- MARKER FORMAT-SHEET="Para Center" -->
<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">2</FONT></FONT></P>

<HR SIZE=5 COLOR=GRAY NOSHADE>
<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 3; page: 3" -->


<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0">
<TR VALIGN="BOTTOM">
     <TH COLSPAN="1" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="1"><U>Name</U></FONT></FONT></TH>
     <TH COLSPAN="1" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="1">&nbsp;</FONT></FONT></TH>
     <TH COLSPAN="1" ALIGN="center" NOWRAP><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="1"><U>Age</U></FONT></FONT></TH>
     <TH COLSPAN="1" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="1">&nbsp;</FONT></FONT></TH>
     <TH COLSPAN="2" ALIGN="left"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="1"><U>Principal Occupation</U></FONT></FONT></TH>
     <TH COLSPAN="1" align=center NOWRAP><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="1"><U>Director Since</U></FONT></FONT></TH></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP" bgcolor=#CCFFFF>
     <TD WIDTH="32%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Philip M. Lynch</FONT></TD>
     <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="2%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">67</FONT></TD>
        <TD WIDTH="9%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="33%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Co-Chief Executive Officer and Chairman of the Board of the Company and Executive Vice President of Inter
Alia Holding Company</FONT></TD>
     <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="14%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">1979</FONT></TD>
     <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>


<TR VALIGN="TOP">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Dr. Donald A. Kubik</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">63</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Vice Chairman and Chief Technology Officer of the Company</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">1995</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP" bgcolor=#CCFFFF>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Richard G. Lareau</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">75</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Partner of Oppenheimer Wolff &amp; Donnelly LLP</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">1980</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Ursula Kiel-Dixon</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">50</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Senior Vice President at ThyssenKrupp A.G.</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2001</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP" bgcolor=#CCFFFF>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Mark J. Stone</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">44</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">President, Petrus International, Inc.</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Stephan C. Taylor</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">56</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">President and Co-founder of Taylor Packaging and C.E.O. of Zerust (U.K.) Ltd. and Zerust B.V.</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2001</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP" bgcolor=#CCFFFF>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Dr. Mehmet A. Gencer</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">51</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Founder and President of Atagencer LLC and IMET Corporation, Akron, Ohio</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2002</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Pierre Chenu</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">65</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Retired Vice-President, Worldwide Operations, in Asahi&#146;s Flat Glass Company</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2003</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP" bgcolor=#CCFFFF>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Tao Meng</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">39</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">General Manager of Tianjin Zerust Anti-Corrosion Technologies Ltd.</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2003</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Dr. Sunggyu Lee</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">51</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">C.W. LaPierre Professor and Chairman of Chemical Engineering Department, University of Missouri-Columbia</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">***</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;</FONT></TD></TR>
</TABLE>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">Mr.  Philip M.
Lynch has been Executive Vice President of Inter Alia Holding Company,  a  financial and
management consulting firm, for  more than six years. Mr. Lynch is a  member of the Board
of Directors of Fosbel S.A., headquartered  in Brussels,  Belgium  (operating  in North
America,  South America,  Asia and in 17 Western and three Eastern  European countries).
Fosbel S.A. is itself a joint venture  between  Glaverbel  S.A.,  (Bruxelles),  a leading
Belgian glass manufacturing  company and an affiliate of Asahi  Glass Co. Ltd., and
Cinven Limited, an English financial institution. Mr. Lynch is  also a member of the
Board of Directors of Agra Tagger AG. in Austria and EDR Inc. in  Cleveland, Ohio. Mr.
Philip M. Lynch is the father of Jennifer S. Lynch and G. Patrick  Lynch.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">Dr.  Donald  A.
Kubik has been employed by the Company since 1978, and was named Vice  Chairman in
September 1999. Dr. Kubik served as Vice President of the Company  from 1979 to September
1999 at which time Dr. Kubik was appointed Vice Chairman.  Additionally he served as
Co-Chief Executive Officer of the Company from  September 1999 to May 2000. In May 2000,
Dr. Kubik was made Chief Technology  Officer of the Company and is a member of the
Executive Committee. During his  employment as Chief Technology Officer with the Company,
Dr. Kubik has been  responsible for developing the patent that led to the Company&#146;s
introduction of protective plastic film and paper products incorporating  volatile
corrosion inhibitors. Prior to joining the Company, Dr. Kubik held a  research and
development position with Minnesota Mining &amp; Manufacturing (3M).</FONT></FONT></P>


<!-- MARKER FORMAT-SHEET="Para Center" -->
<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">3</FONT></FONT></P>

<HR SIZE=5 COLOR=GRAY NOSHADE>
<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 6; page: 6" -->

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">Mr.  Richard G.
Lareau has been a partner at the law firm of  Oppenheimer  Wolff &amp; Donnelly LLP since
1960. Mr. Lareau also serves as a  trustee of Mesabi Trust, a New York Stock Exchange
listed royalty trust.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">Mrs.
Ursula Kiel-Dixon, a German citizen, has been Head of Corporate Affairs
International with ThyssenKrupp A.G., Germany, since November 1999. Previously,
Mrs.&nbsp;Kiel-Dixon served as Head of Department, Sales and M&amp;A Strategy
with ThyssenKrupp Stainless GmbH, Germany, from October 1997 until October 1999,
and as Director, Marketing for ThyssenKrupp Nirosta GmbH, from April 1997 to
September 1997. From 1991 to 1997 Mrs.&nbsp;Kiel-Dixon was Deputy Head of
Controlling Department with Fried. Krupp A.G. Hoesch &#150; Krupp.
Mrs.&nbsp;Kiel-Dixon holds an M.A. in Economics from State University of New
York at Stony Brook, NY.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">Mr. Mark J.
Stone has been  President of Petrus  International,  Inc., an  international  consulting
firm,  since 1992.  Mr. Stone has  advised a variety of Japanese and other
multi-national  corporations in areas including project finance and  international
investment  strategy.  Mr. Stone was a director of Aqua Design,  Inc., an international
water desalination  company,  from 1988 - 1996.  Mr. Stone  was Director,  Marketing &amp; Business
Development  of Toray  Marketing &amp; Sales  (America)  Inc. from 1986 to 1992.  From
1980 - 1986 Mr.  Stone was  employed  by Mitsui &amp; Co.  (U.S.A.),  Inc.  where he
founded  and was  Treasurer  of Hydro  Management  Resources,  a Mitsui  subsidiary which
finances, owns, and operates water treatment projects.  Mr. Stone holds an A.B. from
Harvard University.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">Mr. Stephan
Taylor,  a citizen of the United Kingdom,  graduated in education from Bede College,
Durham  University,  England in 1969.  He then spent four years teaching before founding,
with his Father,  Taylor Packaging Ltd. Taylor Packaging  maintains a 50% ownership  in
both Zerust (UK) Ltd. and Zerust B.V., the company&#146;s joint ventures in the United Kingdom
and the  Netherlands.  Mr. Taylor is Chief  Executive  Officer of both companies.  Mr.
Taylor is also Chairman and Managing Director of Taylor Packaging Ltd, Taypac Moroc Sarl
and  T.P. Enterprises Ltd and Vice Chairman of Business Link County Durham, Business
Support Advisory Board, County Durham, England.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">Dr. Mehmet A.
Gencer has been the President and founder of IMET  Corporation,  Akron,  Ohio since 1997.
Dr. Gencer was with BF Goodrich  Company  from 1984 though  1999.  While with BF Goodrich
Co. he held the  positions  of Director of Emerging  Technologies,  Associate  Director
of Technology and New Business Development,  Senior R&amp;D Manager,  Environmental
Technology Research Manager and Biotechnology  Group Senior R&amp;D Engineer.  Dr. Gencer
obtained his Doctor of Philosophy in Chemical  Engineering  from Drexel  University,
Masters of  Science  in  Chemical  Engineering  from  University  of  Pennsylvania,  and
Bachelor  of  Science in  Chemical  Engineering  from Ege  University.  Dr. Gencer has
been  providing  consulting  services to the Company  since May 2000.  Atagencer  LLC, a
limited  liability  corporation  that is  principally  owned by Dr. Gencer,  maintains a
25% ownership  interest in the Company&#146;s  corporate  joint venture  located in Turkey.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">Mr. Pierre
Chenu, a citizen of Belgium,  most recently served as Vice President,  Worldwide
Operations,  Flat Glass Activities  within  the  Asahi-Glaverbel  Glass Group.  Prior to
that, Mr. Chenu was a member of the Executive  Committee of Glaverbel  S.A.,  with
various  operating  responsibilities in France, Spain, Italy, Russia, Germany, China and
the United States. Before joining Glaverbel,  Mr. Chenu  worked for U.S. Steel in steel
production in  Pittsburgh,  Pennsylvania  and for Corning Inc.  where he held various
staff,  line and  executive  positions in the United States,  France and the United
Kingdom.  Mr. Chenu holds a Master&#146;s  Degree in  Engineering,  with a  specialty in
metallurgy, from the University of Liege (Belgium) and a M.B.A. from Harvard University.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">Mr. Tao Meng,  a
citizen of China, received  his Bachelor&#146;s and Master&#146;s Degrees in Systems Engineering
at the Huazhong  University of Science and Technology. Following successful completion of
Advanced</FONT></FONT></P>


<!-- MARKER FORMAT-SHEET="Para Center" -->
<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">4</FONT></FONT></P>

<HR SIZE=5 COLOR=GRAY NOSHADE>
<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 7; page: 7" -->

<!-- MARKER FORMAT-SHEET="Para Flush" --> <P ALIGN="JUSTIFY"><FONT FACE="Times New
Roman, Times, Serif"><FONT SIZE="2">Training Programs in International Trading
and International Cooperation in England and Canada, Mr. Meng was appointed
Deputy Director, Division of America and Oceania in the Department of
International Cooperation at the Ministry of Internal Trade of the People&#146;s
Republic of China. From there, Mr. Meng was posted to New York where he served
as Chief Representative of the Ministry of Internal Trade of the People&#146;s
Republic of China in the United States from 1996 to 1999. In 1999, Mr. Meng was
named General Manager of Tianjin Zerust Co., where he currently serves as a
partner in charge of Northern Technologies joint venture company in
China.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">Dr. Sunggyu
Lee has been C.W. LaPierre  Professor and Chairman of Chemical Engineering Department,
University of  Missouri-Columbia since 1997. Previously, he served as Robert Iredell
Professor  and Head of Chemical Engineering Department, the University of Akron, for 8
years. He has authored 6 books and over 400 archival publications and received  19 U.S.
patents in a variety of chemical and polymer processes and products. He  is currently
serving as Editor of Dekker Encyclopedia of Chemical Processing,  Marcel Dekker, New
York, NY. Throughout his career, he has served as consultant  and technical advisor to a
number of national and international companies. He  received his Ph.D. from Case Western
Reserve University, Cleveland, OH in  1980.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">Prof.
Aradhna Krishna, age 42, served as director for the Company during fiscal year
2003 but is not standing for election as director for the ensuing year. Prof.
Krishna has been Professor of Marketing at University of Michigan Business
School since 2000 and Associate Professor of Marketing at the same institution
from 1998 until 2000. She was an Associate Professor of Marketing at Columbia
University from 1993 to 1998. She serves on the Editorial Boards of the Journal
of Marketing Research, Journal of Consumer Research, Marketing Science and
Marketing Letters, and has numerous articles published in academic journals.
Prof. Krishna holds a Ph.D. in marketing from the Stern School of Business, New
York University.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Left Head Bold" -->
<A NAME="A017"></A>
<P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>Information
About the Board and its Committees</B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">The  business
and affairs of the Company are managed by the Board, which held four  meetings during the
fiscal year ended August 31, 2003. Committees established  and maintained by the Board
consist of the Audit Committee, the Compensation  Committee, the Nominating Committee and
the Strategic Planning Committee.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">The
Audit Committee of the Board maintains an active role in communication with the
Company&#146;s independent auditors and with the management of the Company and
performs its duties and responsibilities set forth in the Audit Committee
Charter. The Audit Committee for fiscal 2003 consisted of Messrs. Lareau,
Vukcevich and Stone. The Audit Committee met five times during fiscal 2003.
Messrs. Lareau, Chenu and Stone currently serve on the Audit Committee and will
continue to serve as the Audit Committee for fiscal 2004.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">The
responsibilities  of the Compensation  Committee of the Board include setting the
compensation for the executive  officers of the  Company and setting the terms of and
grants of awards  under the  Company&#146;s  2000 Stock  Incentive  Plan.  The  Compensation
Committee  consists of Ms.  Krishna and Messrs.  Stone and Kiel-Dixon and met three times
during fiscal 2003.  Messrs.  Stone and Kiel-Dixon  will  serve as the Compensation
Committee for fiscal 2004.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">The
responsibilities of the Nominating Committee of the Board include making
recommendations for board nominees. It also reviews board practices, approves
management succession plans and reviews outside directors&#146; compensation.
The Nominating Committee will consider director nominations by shareholders.
Shareholders who wish to make recommendations may submit names in writing to the
Company by the deadline for shareholder proposals, together with biographical
information, the address and the telephone number of the proposed nominee. The
Board members serving on the Nominating Committee for fiscal 2003 were Messrs
Lynch and Stone and this committee conferred once during fiscal 2003, but did
not have a formal meeting.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">The
responsibilities of the Strategic Planning Committee of the Board include
developing the strategy of the Company and evaluating feasibility of long-term
projects of the Company. The Board members who served on the Strategic Planning
Committee during fiscal year 2003 were Messrs. Kubik, Gencer, Krishna, Stone,
Taylor and Chenu; the committee met twice during fiscal 2003. The Board members
who</FONT></FONT></P>


<!-- MARKER FORMAT-SHEET="Para Center" -->
<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">5</FONT></FONT></P>

<HR SIZE=5 COLOR=GRAY NOSHADE>
<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 8; page: 8" -->

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">are on the
Strategic Planning Committee for fiscal year 2004 are Messrs.  Kubik, Kiel-Dixon, Gencer,
Stone, Taylor and Chenu;</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">All of
the directors of the Company attended 75% or more of the aggregate meetings of
the Board and committees of the Board on which they served during fiscal 2003.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Left Head Bold" -->
<A NAME="A018"></A>
<P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>Compensation
of Directors</B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><I>Directors
Fees.</I> Each person who was a non-employee director for all of fiscal 2003
received an annual retainer of $10,000 in fiscal 2003 for services rendered as a
director of the Company, and each person who was a non-employee director for a
portion of fiscal 2003 received a portion of such fee. Each non-employee
director of the Company further received $1,000 for each Board meeting and
Strategic Planning meeting and $500 for each Committee (e.g. Audit and
Compensation) meeting attended. The Chairman of the Board does not receive any
Board or committee meeting fee. The Company pays the premium on a group health
insurance policy for the Chairman of the Board.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><I>Automatic
Option Grants to Non-Employee Directors.</I> Pursuant to the Company&#146;s 1994
and 2000 Stock Incentive Plans (the &#147;Plans&#148;), each non-employee
director of the Company is automatically granted a non-qualified option to
purchase 2,000 shares of Common Stock (a &#147;Director Option&#148;) on the
first day of each fiscal year in respect to their past year&#146;s services as a
non-employee director of the Company. Non-employee directors who are elected or
appointed to the Board following the first day of the Company&#146;s fiscal year
receive pro rata portion of 2,000 shares of Common Stock calculated by dividing
the number of months remaining in the fiscal year at the time of election or
appointment divided by twelve, which options are granted at the end of the
relevant fiscal year.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">On
September 1, 1998, Messrs. Dworkin, Hahn, Lareau, Lynch, Rikuta and Vukcevich
each received a Director Option to purchase 2,000 shares of Common Stock at an
exercise price of $6.25 per share, and on September 1, 1999, the same
individuals each received a Director Option to purchase 2,000 shares of Common
Stock at an exercise price of $6.5625 per share. Subsequently, Mr. Lynch
voluntarily forfeited his September 1, 1999 Director Option to purchase 2,000
shares to the Option Plan. All of such Director Options granted vest in equal
one-third installments over a three-year period.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">Automatic
option grants were made pursuant to the Company&#146;s Plan as of September 1,
2000 to Messrs. Dworkin, Lareau, Lynch, Rikuta, and Vukcevich, the
Company&#146;s non-employee directors. Each received a Director Option to
purchase 2,000 shares of Common Stock at an exercise price of $6.75.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">On February 9,
2001, Ms.  Kiel-Dixon,  Ms. Krishna,  Mr. Taylor, and Mr. Stone each received a Director
Option to purchase 1,000 shares  of Common Stock at an exercise price of $5.50 per share.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">Automatic
option grants were made pursuant to the Company&#146;s Plan as of September 1, 2001 to Mr.
Lareau,  Mr. Lynch,  Mr. Rikuta,  Mr.  Vukcevich,  Ms. Kiel-Dixon,  Ms. Krishna,  Mr.
Stone, and Mr. Taylor, the Company&#146;s  non-employee  directors.  Each received a Director
Option to purchase 2,000 shares of Common Stock at an exercise price of $5.00.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">Automatic
option grants were made pursuant to the Company&#146;s Plan as of September 1, 2002 to Mr.
Lareau,  Mr. Lynch,  Mr. Rikuta,  Mr.  Vukcevich,  Ms. Kiel-Dixon,  Ms. Krishna, Mr.
Stone, Mr. Taylor and Mr. Gencer, the Company&#146;s non-employee  directors.  Each received a
Director Option to purchase 2,000 shares of Common Stock at an exercise price of  $3.34.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">Automatic
option grants were made pursuant to the  Company&#146;s  Plan as of September 1, 2003 to Mr.
Lareau,  Mr. Lynch,  Mr. Meng,  Ms.  Krishna,  Ms.  Kiel-Dixon,  Mr. Gencer,  Mr. Chenu,
Mr. Stone, and Mr.</FONT></FONT></P>


<!-- MARKER FORMAT-SHEET="Para Center" -->
<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">6</FONT></FONT></P>

<HR SIZE=5 COLOR=GRAY NOSHADE>
<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 9; page: 9" -->

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">Taylor, the
Company&#146;s  non-employee  directors.  Each received a  Director Option to purchase 2,000
shares of Common Stock at an exercise price of  $5.30.</FONT></FONT></P>



<!-- MARKER FORMAT-SHEET="Left Head Bold" -->
<A NAME="A019"></A>
<P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>Executive
Officers of the Registrant</B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">The
executive officers of the Company, their ages and the offices held, as of
November 15, 2003, are as follows:</FONT></FONT></P>


<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" width=100%>
<TR VALIGN="BOTTOM">
     <TH COLSPAN="2" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="1"><U>Name</U></FONT></FONT></TH>
     <TH COLSPAN="1" ALIGN="center"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="1"><U>Age</U></FONT></FONT></TH>
     <TH COLSPAN="1" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="1">&nbsp;</FONT></FONT></TH>
     <TH COLSPAN="2" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="1"><U>Position in the Company</U></FONT></FONT></TH></TR>
<TR VALIGN="BOTTOM" bgcolor=#CCFFFF>
     <TD WIDTH="38%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Philip M. Lynch</FONT></TD>
     <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="2%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">67</FONT></TD>
        <TD WIDTH="6%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="46%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Chairman of the Board and Co-Chief Executive Officer*</FONT></TD>
     <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">G. Patrick Lynch</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">36</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">President and Co-Chief Executive Officer*</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM" bgcolor=#CCFFFF>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Dr. Donald A. Kubik</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">63</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Vice Chairman, Chief Technology Officer*</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Matthew C. Wolsfeld</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">29</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Chief Financial Officer*</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
</TABLE>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">*Members of the
Executive Committee</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">Mr.  Philip M.
Lynch has been  Executive  Vice  President  of Inter Alia  Holding  Company for more than
five years.  Mr.  Lynch is the  father of Mr. G. Patrick Lynch.  Refer to &quot;Directors
of the Registrant&quot; for a more detailed discussion.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">Mr. G. Patrick
Lynch,  an employee of the Company since 1995, has been  President and Co-Chief
Executive  Officer since May 2000. Mr.  G. Patrick Lynch was Vice President of Strategic
Planning,  Corporate Secretary and a member of the Executive  Committee,  which served
as Co-Chief  Executive  Officer from  September  1999 to May 2000.  Mr. G. Patrick  Lynch
is also an officer and director of Inter Alia  Holding  Company.  Prior to joining the
Company,  Mr. G. Patrick Lynch held  positions in sales  management for Fuji Electric
Co., Ltd.  in Tokyo,  Japan, and programming  project  management for BMW AG in Munich,
Germany.  Mr. G. Patrick Lynch received an M.B.A.  degree  from the  University of
Michigan  Business  School in Ann Arbor,  Michigan.  Mr. G. Patrick Lynch is the son of
Mr. Philip M. Lynch and  the brother of Jennifer S. Lynch.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">Dr.  Donald A.
Kubik has been  employed  by the  Company  since  1978.  Refer to  &quot;Directors  of
the  Registrant&quot;  for a more  detailed  discussion.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">Mr.  Matthew C.
Wolsfeld,  an employee of the Company since  February  2001,  has been the  Company&#146;s
Chief  Financial  Officer since  November 9, 2001. Mr.  Wolsfeld was Controller of the
Company from May 2001 through  November 2001.  Prior to joining the Company,  Mr.
Wolsfeld held an auditing position with  PricewaterhouseCoopers  LLP in Minneapolis,
Minnesota. Mr. Wolsfeld received a B.A. degree in  Accounting  from the  University of
Notre Dame and is currently  obtaining his M.B.A.  degree at the  University of
Minnesota,  Carlson  School of Business.  Mr. Wolsfeld is a Certified Public Accountant.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Left Head Bold" -->
<A NAME="A020"></A>
<P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>Officers of
the Registrant</B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">Officers
of the Company, their ages and the offices held, as of November 15, 2003, are as
follows:</FONT></FONT></P>



<!-- MARKER FORMAT-SHEET="Para Center" -->
<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">7</FONT></FONT></P>

<HR SIZE=5 COLOR=GRAY NOSHADE>
<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 10; page: 10" -->


<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" width=100%>
<TR VALIGN="BOTTOM">
     <TH COLSPAN="2" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="1"><U>Name</U></FONT></FONT></TH>
     <TH COLSPAN="1" ALIGN="center"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="1"><U>Age</U></FONT></FONT></TH>
     <TH COLSPAN="1" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="1">&nbsp;</FONT></FONT></TH>
     <TH COLSPAN="2" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="1"><U>Position in the Company</U></FONT></FONT></TH></TR>
<TR VALIGN="BOTTOM" bgcolor=#CCFFFF>
     <TD WIDTH="37%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Elsie F. Gilles</FONT></TD>
     <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="4%" ALIGN="CENTER" NOWRAP><FONT FACE="Times New Roman, Times, Serif" SIZE="2">62</FONT></TD>
     <TD WIDTH="8%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="42%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Treasurer</FONT></TD>
     <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Irina V. Roytman</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER" NOWRAP><FONT FACE="Times New Roman, Times, Serif" SIZE="2">38</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Vice President and Coordinator for Eastern Europe</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM" bgcolor=#CCFFFF>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Prof. Efim Ya. Lyublinski</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER" NOWRAP><FONT FACE="Times New Roman, Times, Serif" SIZE="2">66</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Vice President and Director of Applications Engineering</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Dr. Yelena L. Shanina</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER" NOWRAP><FONT FACE="Times New Roman, Times, Serif" SIZE="2">55</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Vice President and Director of Technical Coordination</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM" bgcolor=#CCFFFF>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Jennifer S. Lynch</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER" NOWRAP><FONT FACE="Times New Roman, Times, Serif" SIZE="2">30</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Corporate Secretary</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
</TABLE>


<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">Ms. Elsie F.
Gilles has been  employed by the Company since 1985,  serving in a variety of  capacities
in the areas of accounting  and  personnel.  Ms. Gilles has been the Treasurer of the
Company since November 20, 2000.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">Ms.  Irina V.
Roytman  has been  employed  by the Company  since  September  1994  serving in a variety
of  capacities  in the area of  international  business  development.  She has been Vice
President and  Coordinator  for Eastern  Europe since July 2000.  Ms. Roytman  holds B.S.
in engineering from the Technical University of St. Petersburg in Russia.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">Prof.  Efim Ya.
Lyublinski  has been  employed by the Company  since March 2000 in the  position  of Vice
President  and  Director of  Applications  Engineering.  Prof.  Lyublinski  is a Member
of the  Russian  Academy  of  Natural  Sciences.  From  1984 to 1999  Prof.  Lyublinski
was Head of  Laboratory  of Complex  Methods of  Corrosion  Protection  at the Central
Research  Institute  of  Structural  Materials  (&quot;Prometey&quot;),  St.  Petersburg.
Prof.  Lyublinski also held a Senior  Consulting  Position with Osmos  Technology,
Boston,  Massachusssetts  from 1995 to 1999.  Prof.  Lyublinski  holds 14 patents,  is
responsible for 64 inventions and has authored 8 books, 6  booklets, 140 articles and 75
contributions to various conferences in the areas of materials science and corrosion.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">Dr.
Yelena L. Shanina has been employed by the Company since April 2002 in the
position of Vice President and Director of Technical Coordination. Dr. Shanina
is a graduate of Moscow State University, Chemical Faculty specializing in
chemical kinetics. After graduating, Dr. Shanina worked as a senior researcher
of the Institute of Biochemical Physics of the Russian Academy of Sciences. Dr.
Shanina has authored more than 30 articles in her field. From 1998 until April
2002 Dr. Shanina also was responsible for applications engineering for
NTIC&#146;s Joint Venture in the Russian Federation, MostNIC, providing hands-on
technical support to MostNIC&#146;s customers with respect to the chemistry and
proper use of the NTIC industrial packaging formulations developed within the
Russian Federation, both at our Excor Technical Center in Dresden, Germany, and
stemming from the United States and Japan.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">Ms.  Jennifer
S. Lynch has been employed by the Company as Corporate  Secretary  since January,  2003.
Previously she was the Director  of Group  Programs at the Berlitz  Language  School in
Washington,  DC. She holds an M.A. in  International  Relations  from the Johns  Hopkins
University School of Advanced  International  Studies (SAIS).  Ms. Jennifer S. Lynch is
the sister of G. Patrick Lynch and the  daughter of Philip M. Lynch.</FONT></FONT></P>






<!-- MARKER FORMAT-SHEET="Para Center" -->
<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">8</FONT></FONT></P>

<HR SIZE=5 COLOR=GRAY NOSHADE>
<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 11; page: 11" -->



<!-- MARKER FORMAT-SHEET="Left Head Bold" -->
<A NAME="A021"></A>
<P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>PRINCIPAL
STOCKHOLDERS AND BENEFICIAL</B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Center Head Bold" -->
<A NAME="A022"></A>
<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>OWNERSHIP
OF MANAGEMENT</B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">The
following table sets forth information regarding the beneficial ownership of the
Common Stock of the Company as of December 11, 2003, unless otherwise noted (a)
by each stockholder who is known by the Company to own beneficially more than 5%
of the outstanding Common Stock, not including Institutional investors and/or
Mutual Funds, (b) by each director, (c) by each Named Executive Officer and
other officers, and (d) by all executive officers, officers and directors of the
Company as a group.</FONT></FONT></P>


<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" width=100%>
<TR VALIGN="BOTTOM">
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH>
     <TH COLSPAN="3"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Shares of Common Stock (1)</FONT></TH>
     <TH COLSPAN="1"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH>
     <TH COLSPAN="3"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Number of Unexercised</FONT></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH></TR>
<TR VALIGN="BOTTOM">
     <TH COLSPAN="2" ALIGN="left"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Name</FONT><HR WIDTH=10% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Amount</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH>
     <TH COLSPAN="1" NOWRAP><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Percent of Class (2)</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH>
     <TH COLSPAN="1"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Exercisable</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH>
     <TH COLSPAN="1" NOWRAP><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Unexercisable</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH></TR>
<TR VALIGN="BOTTOM" bgcolor=#CCFFFF>
     <TD WIDTH="41%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Inter Alia Holding Company (3)</FONT></TD>
     <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="9%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">911,668</FONT></TD>
     <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="12%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">25.06</FONT></TD>
     <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="12%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0</FONT></TD>
     <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="12%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0</FONT></TD>
     <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Dr. Donald A. Kubik</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">110,508</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">3.04</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2667</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM" bgcolor=#CCFFFF>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Richard G. Lareau</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">35,000</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0.96</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">6000</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">4000</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Mark Stone (4)</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">10,000</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0.27</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">1334</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">3666</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM" bgcolor=#CCFFFF>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Dr. Mehmet Gencer</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">4,000</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0.11</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">667</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">3333</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Elsie F. Gilles</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">3,352</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0.09</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">3667</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">1333</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM" bgcolor=#CCFFFF>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Philip M. Lynch (5)</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2,000</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0.05</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">4000</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">4000</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">G. Patrick Lynch (5)</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">1,700</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0.05</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">3000</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM" bgcolor=#CCFFFF>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Matthew C. Wolsfeld</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">1,524</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0.05</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">3334</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">6666</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Prof. Efim Ya. Lyublinski</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">1,101</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0.04</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM" bgcolor=#CCFFFF>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Irina Roytman (6)</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">650</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0.02</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">4666</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">3334</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Stephan Taylor</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&#151;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">*</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">1334</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">3666</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM" bgcolor=#CCFFFF>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Ursula Kiel-Dixon</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&#151;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">*</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">1334</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">3666</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Prof. Aradhna Krishna</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&#151;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">*</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">1334</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">3666</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM" bgcolor=#CCFFFF>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Dr. Yelena L. Shanina</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&#151;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">*</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Jennifer S. Lynch (5)</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&#151;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">*</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM" bgcolor=#CCFFFF>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Pierre Chenu</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&#151;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">*</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Tao Meng</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&#151;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">*</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM" bgcolor=#CCFFFF>
     <TD colspan=10 ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Directors and executive  officers as a</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM" bgcolor=#CCFFFF>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">group (18 persons) (7)</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">1,081,503</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">29.70</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">33,337</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">37,330</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
</TABLE>
&nbsp;<BR>

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<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(1)</FONT></FONT></TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">
All of the shares owned or held by individuals or entities possessing sole
voting and investment power with respect to such shares. These amounts do not
include any exercisable options.</FONT></FONT></P></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(2)</FONT></FONT></TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">
Based on 3,626,192 shares of Common Stock outstanding as of December 11, 2003.</FONT></FONT></P></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(3)</FONT></FONT></TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"> Includes
911,668 shares held of record by Inter Alia Holding Company, 16210 Parkland
Drive Shaker Heights, Ohio 44120, a financial and management consulting firm of
which Mr. Philip M. Lynch, the Chairman of the Board of Directors and the
Co-Chief Executive Officer of the Company, Mr. G. Patrick Lynch, President and
the Co-Chief Executive Officer of the Company and Ms. Jennifer S. Lynch are
shareholders.</FONT></FONT></P></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(4)</FONT></FONT></TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">
Includes 10,000 shares held jointly with his wife, Margery Stone.</FONT></FONT></P></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(5)</FONT></FONT></TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"> Does
not include 911,688 shares held of record or beneficially owned by Inter Alia
Holding Company, of which Mr. Philip M. Lynch, Ms. Jennifer S. Lynch and Mr. G.
Patrick Lynch are shareholders.</FONT></FONT></P></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(6)</FONT></FONT></TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">
Includes 350 shares held jointly with her husband, Alexander Roytman.</FONT></FONT></P></TD>
</TR>
</TABLE>
<BR>


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<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">9</FONT></FONT></P>


<HR SIZE=5 COLOR=GRAY NOSHADE>
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<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(7)</FONT></FONT></TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"> Includes
911,668 shares held of record by Inter Alia Holding Company, a financial and
management consulting firm of which Mr. Philip M. Lynch, the Chairman of the
Board of Directors and the Co-Chief Executive Officer of the Company, Mr. G.
Patrick Lynch, President and the Co-Chief Executive Officer of the Company and
Ms. Jennifer S. Lynch are shareholders.</FONT></FONT></P></TD>
</TR>
</TABLE>
<BR>

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<A NAME="A023"></A>
<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>EXECUTIVE
COMPENSATION AND OTHER BENEFITS</B></FONT></FONT></P>

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<A NAME="A024"></A>
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>Summary of
Cash and Certain Other Compensation Paid to Executive Officers</B></FONT></FONT></P>

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<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">The
following table provides summary information concerning cash and non-cash
compensation paid or accrued by the Company to or on behalf of the
Company&#146;s Co-Chief Executive Officers and the most highly compensated
executive officers of the Company whose cash and non-cash salary and bonus
exceeded $100,000 in the fiscal year ended August 31, 2003 (the &#147;Named
Executive Officers&#148;).</FONT></FONT></P>





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<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>Summary
Compensation Table</B></FONT></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" width=100%>
<TR VALIGN="BOTTOM">
     <TH COLSPAN="3"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH>
     <TH COLSPAN="14"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Annual Compensation</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="3"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH></TR>
<TR VALIGN="BOTTOM">
     <TH COLSPAN="1" ALIGN="LEFT" NOWRAP><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Name and Principal Position</FONT><HR WIDTH=43% SIZE=1 COLOR=BLACK NOSHADE></FONT></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Year</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH>
     <TH COLSPAN="2" ALIGN="CENTER" NOWRAP><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Salary ($)</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></FONT></TH>
     <TH COLSPAN="1"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Bonus<BR>($)(1)<HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Other<BR>($)(2)</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Underlying<BR>Options (#)</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1" ALIGN="CENTER" NOWRAP><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH></TR>
<TR VALIGN="BOTTOM" bgcolor=#CCFFFF>
     <TD WIDTH="41%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Philip M. Lynch (4)</FONT></TD>
     <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="1%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD WIDTH="3%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2003</FONT></TD>
        <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="1%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD WIDTH="7%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">1</FONT></TD>
        <TD WIDTH="6%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="1%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD WIDTH="7%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0</FONT></TD>
        <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="1%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD WIDTH="7%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0</FONT></TD>
        <TD WIDTH="6%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(3)</FONT></TD>
     <TD WIDTH="1%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD WIDTH="7%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2,000</FONT></TD>
        <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM" bgcolor=#CCFFFF>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><I>Chairman of the Board and Co-Chief</I></FONT></FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2002</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(3)</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2,000</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM" bgcolor=#CCFFFF>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><I>Executive Officer</I></FONT></FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2001</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(3)</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2,000</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>

     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>

<TR VALIGN=BOTTOM>
     <TD COLSPAN="3"></TD>
     <TD COLSPAN="3"></TD>
     <TD COLSPAN="3"></TD>
     <TD COLSPAN="3"></TD>
     <TD COLSPAN="3"></TD>
     <TD COLSPAN="3"></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Donald A. Kubik (4)</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2003</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">200,000</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">5,500</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><I>Vice Chairman and Chief Technology</I></FONT></FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2002</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">200,000</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">5,500</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><I>Officer</I></FONT></FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2001</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">200,000</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">5,250</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>

     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>

<TR VALIGN="BOTTOM" bgcolor=#CCFFFF>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">G. Patrick Lynch (4)</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2003</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">116,630</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">17,500</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">4,607</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(3)</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM" bgcolor=#CCFFFF>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><I>President and Co-Chief</I></FONT></FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2002</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">110,000</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">15,000</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">3,850</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(3)</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM" bgcolor=#CCFFFF>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><I>Executive Officer</I></FONT></FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2001</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">100,000</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">3,606</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(3)</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>

     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>

<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Matthew C. Wolsfeld (4)</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2003</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">81,575</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">17,500</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">3,380</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><I>Chief Financial Officer</I></FONT></FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2002</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">65,000</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">15,000</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2,275</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">10,000</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2001</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">31,795</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(5)</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">5,000</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN=BOTTOM>
     <TD COLSPAN="3"></TD>
     <TD COLSPAN="3"></TD>
     <TD COLSPAN="3"></TD>
     <TD COLSPAN="3"></TD>
     <TD COLSPAN="3"></TD>
     <TD COLSPAN="3"></TD></TR>
</TABLE>


<HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE>


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<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(1)</FONT></FONT></TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">
Annually, prior to the November Board of Director&#146;s meeting, the
Compensation Committee recommends bonuses to be paid to the Executive Officers
of the Company. The Board then considers and, if it deems appropriate, approves
the bonuses. The annual bonuses are paid in the subsequent year based on the
services performed in the fiscal year covered in this 10-KSB; an estimated
accrual is prepared based on the Compensation Committee recommendations at the
July Board meeting.</FONT></FONT></P></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(2)</FONT></FONT></TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">
Compensation hereunder consists of contributions to the 401(k) plans of the
Named Executive Officers.</FONT></FONT></P></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(3)</FONT></FONT></TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">
Does not include any commissions payable to Inter Alia Holding Company, an
entity of which Mr. Philip Lynch and Mr. G. Patrick Lynch are shareholders,
under a certain Manufacturer&#146;s Representative Agreement. See &#147;Item 12
&#151; Certain Relationships and Related Party Transactions.&#148;</FONT></FONT></P></TD>
</TR>
</TABLE>
<BR>



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<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(4)</FONT></FONT></TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">
Denotes the individual as a member of the Executive Committee.</FONT></FONT></P></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(5)</FONT></FONT></TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"> This
amount represents a partial year as the Company hired Mr. Wolsfeld in February
of fiscal year 2001.</FONT></FONT></P></TD>
</TR>
</TABLE>
<BR>



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<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">10</FONT></FONT></P>

<HR SIZE=5 COLOR=GRAY NOSHADE>
<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 13; page: 13" -->



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<A NAME="A001"></A>
<P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>Option
Grants and Exercises.</B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">The
following tables summarize option grants to, and exercises by, the
Company&#146;s Named Executive Officers and the potential realizable value of
the options held by such persons as of August&nbsp;31, 2003.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Center Head Bold" -->
<A NAME="A002"></A>
<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>OPTION
GRANTS IN LAST FISCAL YEAR</B></FONT></FONT></P>


<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="100%">
<TR VALIGN="BOTTOM">
     <TH COLSPAN="3"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH>
     <TH COLSPAN="10"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Individual Grants</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH>
     <TH COLSPAN="5"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Potential Realizable<BR>Value at Assumed<BR>Annual Rates of Stock<BR>Price Appreciation<BR>For Option Term (2)</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="3"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH></TR>
<TR VALIGN="BOTTOM">
     <TH COLSPAN="3" align=left><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Name</FONT><HR WIDTH=40% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Number of<BR>Securities<BR>Underlying<BR>Options Granted (#)(1)</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Percent of<BR>Total Options<BR>Granted to<BR>Employees<BR>in Fiscal Year</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Exercise or<BR>Base Price<BR>($/Sh)</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Expiration<BR>Date</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">5%</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">10%</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH></TR>
<TR VALIGN="BOTTOM" bgcolor=#CCFFFF>
     <TD WIDTH="21%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Philip M. Lynch</FONT></TD>
     <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="7%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2,000</FONT></TD>
     <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="4%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="7%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">100</FONT></TD>
     <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="5%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="10%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">3.34</FONT></TD>
     <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="4%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="10%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">9/1/2007</FONT></TD>
     <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="4%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="10%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$1,846</FONT></TD>
     <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="10%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$4,078</FONT></TD>
     <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
</TABLE>


<HR WIDTH="10%" SIZE="1" COLOR="#000000" NOSHADE ALIGN="LEFT">


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<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(1)</FONT></FONT></TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">
The options were granted under the Company&#146;s Plan and are subject to the
terms of the Plan.</FONT></FONT></P></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(2)</FONT></FONT></TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">
These amounts represent certain assumed rates of appreciation only. Actual
gains, if any, on stock option exercises are dependent upon the future
performance of the Company&#146;s common stock and overall market conditions.
The amounts represented in this table might not necessarily be realized.</FONT></FONT></P></TD>
</TR>
</TABLE>
<BR>

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<P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">The
following table provides information for the year ended August 31, 2003 as to
the individual exercising of options and the potential realizable value of the
options held by the Named Executive Officers as of August 31, 2003.</FONT></FONT></P>

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<A NAME="A003"></A>
<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>Aggregated
Option Exercises in Fiscal 2003 and Fiscal <BR>2003 Year-End Option Values</B></FONT></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="100%">
<TR VALIGN="BOTTOM">
     <TH COLSPAN="3"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH>
     <TH COLSPAN="3"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH>
     <TH COLSPAN="3"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH>
     <TH COLSPAN="4"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Number of Unexercised<BR>Options at August 31, 2003(#)</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH>
     <TH COLSPAN="4"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Value of Unexercised<BR>In-the-Money Options<BR>at August 31, 2003 (1)</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="3"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH></TR>
<TR VALIGN="BOTTOM">
     <TH COLSPAN="3" align=left><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Name</FONT><HR WIDTH=20% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Shares Acquired<BR>on Exercise (#)</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Value<BR>Realized</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH>
     <TH COLSPAN="1"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Exercisable</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH>
     <TH COLSPAN="1"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Unexercisable</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH>
     <TH COLSPAN="1"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Exercisable</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH>
     <TH COLSPAN="1"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Unexercisable</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH>
     <TH COLSPAN="1"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH></TR>
<TR VALIGN="BOTTOM" bgcolor=#CCFFFF>
     <TD WIDTH="26%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Philip M. Lynch</FONT></TD>
     <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="7%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0</FONT></TD>
     <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="4%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="7%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$0</FONT></TD>
     <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="4%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="7%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">4,000</FONT></TD>
     <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="4%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="7%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">4,000</FONT></TD>
     <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="4%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="7%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$210</FONT></TD>
     <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="4%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="7%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$4,320</FONT></TD>
     <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Donald A. Kubik</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$0</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2,667</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$0</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$0</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM" bgcolor=#CCFFFF>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">G. Patrick Lynch</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$0</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2,000</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">1,000</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$0</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$0</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Matthew C. Wolsfeld</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">0</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$0</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">3,333</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">6,667</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$2,470</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">$4,930</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN=BOTTOM>
     <TD COLSPAN="3"></TD>
     <TD COLSPAN="3"></TD>
     <TD COLSPAN="3"></TD>
     <TD COLSPAN="3"></TD>
     <TD COLSPAN="3"></TD>
     <TD COLSPAN="3"></TD>
     <TD COLSPAN="3"></TD></TR>
<TR VALIGN="BOTTOM">
     <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
</TABLE>


<HR WIDTH="10%" SIZE="1" COLOR="#000000" NOSHADE ALIGN="LEFT">

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<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(1)</FONT></FONT></TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">
Value is calculated as the excess of the fair market value of the Common Stock
on August 31, 2003 over the exercise price of the options. On August 31, 2003,
the fair market value of the Common Stock was $5.30 per share.</FONT></FONT></P></TD>
</TR>
</TABLE>
<BR>

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<A NAME="A004"></A>
<P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>Change in
Control</B></FONT></FONT></P>

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<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">Under
the Company&#146;s 1994 Stock Incentive Plan and 2000 Stock Incentive Plan,
options granted under the plans will become fully exercisable following certain
changes in control of the Company, such as:</FONT></FONT></P>

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<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">&#149;</FONT></FONT></TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">
the sale, lease, exchange or other transfer of all or substantially all of the
assets of the Company to a corporation that is not controlled by the Company;</FONT></FONT></P></TD>
</TR>
</TABLE>
<BR>


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<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">11</FONT></FONT></P>

<HR SIZE=5 COLOR=GRAY NOSHADE>

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<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">&#149;</FONT></FONT></TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">
the approval by the Company&#146;s stockholders of any plan or proposal for the
liquidation or dissolution of the Company;</FONT></FONT></P></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">&#149;</FONT></FONT></TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">
certain merger or business combination transactions;</FONT></FONT></P></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">&#149;</FONT></FONT></TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"> more
than 40% of our outstanding voting shares are acquired by any person or group of
persons who did not own any shares of common stock on the effective date of the
plan; and</FONT></FONT></P></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">&#149;</FONT></FONT></TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">
certain changes in the composition of the Company&#146;s Board of Directors.</FONT></FONT></P></TD>
</TR>
</TABLE>
<BR>

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<A NAME="A005"></A>
<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS</B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">On
October 1, 1976, the Company entered into a Manufacturer&#146;s Representative
Agreement with The Saxxon Organization, Incorporated (the
&#147;Agreement&#148;). The Agreement has no expiration date and may be
terminated by either party upon 60 days written notice. Effective January 9,
1980, the Agreement was assigned by Saxxon to Inter Alia Holding Company, a
financial and management consulting firm of which Philip M. Lynch, the Chairman
of the Board of Directors of the Company, is an officer and director. Under the
Agreement, Inter Alia Holding Company (or the &#147;Representative&#148;) is
entitled to commissions from the Company on the net proceeds of sales of the
Company&#146;s product generated by Inter Alia Holding Company. The
Representative acts as an independent manufacturer&#146;s representative of the
Company. It has a non-exclusive worldwide right to offer for sale and solicit
orders for the Company&#146;s products in accordance with prices determined by
the Company. The Representative is responsible for all of its own operating
expenses with no entitlement for reimbursement from the Company for this
activity. The Representative has not effected any sales within the United
States. The Representative has developed sales outside the United States, which
resulted in commissions of approximately $51,882, $66,420 and $52,544, for the
fiscal years ended August 31, 2003, 2002 and 2001, respectively. In light of the
Company&#146;s own domestic sales effort and its distributor network within the
United States, the Company does not anticipate the Representative developing any
sales within the United States. Additionally, the Company&#146;s expanding
international joint venture program may also limit opportunities abroad for the
Representative. Thus, the Company does not anticipate that the Representative
will develop any significant sales volume for the Company in the future.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">The
Company paid reimbursement for travel and related Company expenses of $421,000,
$240,000, and $249,000 for the year ended August 31, 2003, 2002 and 2001,
respectively, to Inter Alia Holding Company of which the Company&#146;s Co-Chief
Executive Officer and Chairman of the Board is an officer and director. Such
reimbursements of travel and related expenses were not related to the functions
of Inter Alia Holding Company as representative, but rather were paid in respect
to the conduct of business for and on behalf of the Company. Mr. G. Patrick
Lynch, President and Co-Chief Executive Officer of the Company, and Ms. Jennifer
S. Lynch are also shareholders of Inter Alia Holding Company.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">On May
31, 2002, the Company made a loan of $50,000 to Atagencer LLC, a limited
liability corporation that is principally owned by Dr. Mehmet Gencer, a member
of the Company&#146;s Board of Directors. This loan was evidenced by a
promissory note held by the Company and the outstanding principal balance bore
interest at a rate of 2% per annum. The note was due five years from the date of
issuance<I>. </I>The loan was made to Atagencer LLC to enable it to obtain a 25%
share in Fibro NTI Joint Stock Company in Turkey, of which NTIC is a 50% owner.
This note was paid in full in July 2003. Additionally, Atagencer LLC entered
into a consulting agreement in 2001, prior to Dr. Gencer becoming a director in
2002, to provide</FONT></FONT></P>


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<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">12</FONT></FONT></P>

<HR SIZE=5 COLOR=GRAY NOSHADE>
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<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">consulting
services to the Company. During fiscal 2003 and  2002, the Company paid $96,000 and
$79,000, respectively, for these services.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">On
June 30, 2002, the Company made a loan of &#128;125,000 to Mutec Instruments
GmbH. This loan is evidenced by a promissory note held by the Company and the
outstanding principal balance bears interest at a rate of 6.55% per annum. The
note is due to the Company ten years from the date of the note<I>. </I>NTIC
currently owns 30% of the company. The proceeds of the loan will be used by
Mutec Instruments GmbH to obtain capital equipment and finance operations.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">On
June 1, 2003, the Company made a loan of $25,000 to Tao Meng, who subsequently
became a member of the Company&#146;s Board of Directors on July 15, 2003. The
loan is evidenced by a promissory note held by the Company which bears interest
at a rate of 2% per annum. The note is due to the Company five years from the
date of issuance<I>. </I>The loan was obtained by Tao Meng to obtain a 25% share
in Tianjin ZERUST Ltd. in China, of which NTIC is a 25% owner.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Center Head Bold" -->
<A NAME="A006"></A>
<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>REPORT
OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS</B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">Notwithstanding
anything to the contrary set forth in any of the Company&#146;s previous or
future filings under the Securities Act or the Exchange Act that might
incorporate this Proxy Statement or future filings with the SEC, in whole or in
part, the following report shall not be deemed to be incorporated by reference
into any such filing.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">All of
the members of the Audit Committee are independent for purposes of the American
Stock Exchange listing requirements and for purposes of the applicable rules and
regulations promulgated under the Securities Exchange Act of 1934. The Audit
Committee operates under written charter adopted by the board of Directors,
which is included in this proxy statement as Appendix A.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">The
Audit Committee has reviewed and discussed the audited financial statements of
the Company for the fiscal year ended August 31, 2003 with the Company&#146;s
management. The Audit Committee has discussed with Deloitte &amp; Touche LLP,
the Company&#146;s independent public accountants, the matters required to be
discussed by Statement on Auditing Standards No.61 (Communication with Audit
Committees). The Audit Committee believes that the provision by Deloitte &amp;
Touche LLP of services other than auditing and review of the Company&#146;s
quarterly financial statements is compatible with the maintenance by Deloitte
&amp; Touche LLP of its independence from the Company.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">The
Audit Committee has also received the written disclosures and the letter from
Deloitte &amp; Touche LLP required by Independence Standards Board Standard No.
1 (Independence Discussions with Audit Committees) and the Audit Committee has
discussed the independence of Deloitte &amp; Touche LLP with that firm.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">Based
on the Audit Committee&#146;s review and discussions noted above, the Audit
Committee recommended to the Board of Directors that the Company&#146;s audited
financial statements be included in the Company&#146;s Annual Report on Form
10-KSB for the fiscal year ended August 31, 2003 for filing with the SEC.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<A NAME="A007"></A>
<P ALIGN="LEFT"><DIV STYLE="MARGIN-LEFT: 500px"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B><I>Audit
Committee</I></B></FONT><FONT SIZE="2"><BR>Richard G. Lareau, Chairman<BR>Mark Stone<BR>Pierre Chenu</FONT></FONT></DIV></P>



<!-- MARKER FORMAT-SHEET="Para Center" -->
<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">13</FONT></FONT></P>

<HR SIZE=5 COLOR=GRAY NOSHADE>
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<!-- MARKER PAGE="sheet: 3; page: 3" -->

<!-- MARKER FORMAT-SHEET="Left Head Bold" -->
<A NAME="A008"></A>
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>Audit
Committee Financial Expert</B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">The
Board of Directors of the Company is in the process of determining if any of the members of the
Audit Committee are considered audit committee financial experts, as that term
is defined in the applicable rules and regulations promulgated under the
Securities Exchange Act of 1934. The Board of Directors has concluded that the
members of the Audit Committee are qualified to serve on the Audit Committee by
the virtue of their experience and qualification.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Center Head Bold" -->
<A NAME="A009"></A>
<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>INDEPENDENT
AUDITORS</B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">In
January 2003, the Audit Committee approved the engagement of Deloitte &amp;
Touche LLP, to serve as the Company&#146;s independent certified public
accountants to audit the Company&#146;s financial statements for the fiscal year
ended August 31, 2003. The Company&#146;s Audit Committee, however, has not
approved the engagement of an independent certified public accountant to audit
the Company&#146;s financial statements for the fiscal year ending August 31,
2004. The Audit Committee will address this matter at its next meeting and will
engage an independent certified public accountant for the fiscal year ended
August 31, 2004.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">The
Company has requested and expects a representative of its auditing firm to be
present at the Annual Meeting, either by phone or in person, to make a statement
if they so desire and to respond to appropriate questions.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><I>Audit
Fees. </I>Audit fees billed by Deloitte &amp; Touche LLP for services rendered
in auditing the Company&#146;s financial statements for fiscal 2003 and 2002 and
reviewing the financial statements included in the Company&#146;s quarterly
reports on Form 10-Q for fiscal years 2003 and 2002 totaled $93,930 and $87,775,
respectively.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><I>Financial
Information System Design and Implementation Fees. </I>Deloitte &amp; Touche LLP
did not bill the company for any financial information systems design and
implementation services during fiscal year 2003 or 2002.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><I>All
Other Fees. </I>Fees billed by Deloitte &amp; Touche LLP for all other non-audit
services, including tax-related services, provided during fiscal 2003 and 2002
totaling $66,000 and $74,700, respectively.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Center Head Bold" -->
<A NAME="A010"></A>
<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE</B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">Section
16(a) of the Securities Exchange Act of 1934, as amended (the &#147;Exchange
Act&#148;), requires the Company&#146;s directors and executive officers and all
persons who beneficially own more than 10% of the outstanding shares of the
Company&#146;s Common Stock to file with the Securities and Exchange Commission
initial reports of ownership and reports of changes in ownership of the
Company&#146;s Common Stock. Executive officers, directors and greater than 10%
beneficial owners are also required to furnish the Company with copies of all
Section 16(a) forms they file. To the Company&#146;s knowledge, based upon a
review of the copies of such reports furnished to the Company and written
representations that no other reports were required, during the fiscal year
ended August 31, 2003, none of the directors, officers and beneficial owners of
greater than 10% of the Company&#146;s Common Stock failed to file on a timely
basis the forms required by Section 16 of the Exchange Act.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Center Head Bold" -->
<A NAME="A011"></A>
<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>STOCKHOLDER
PROPOSALS FOR NEXT ANNUAL MEETING</B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">Proposals
of stockholders of the Company that intend to be presented in the proxy
materials relating to the next Annual Meeting must be received by the Company at
its principal executive offices on or before August 14, 2004.</FONT></FONT></P>



<!-- MARKER FORMAT-SHEET="Para Center" -->
<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">14</FONT></FONT></P>

<HR SIZE=5 COLOR=GRAY NOSHADE>
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<!-- MARKER PAGE="sheet: 4; page: 4" -->

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">A
stockholder who wishes to make a proposal at the next Annual Meeting without
including the proposal in our proxy statement must notify us by October 28,
2004. If a stockholder fails to provide notice by this date, then the persons
named as proxies in the proxies that we solicit for the next Annual Meeting will
have discretionary authority to vote on the proposal.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Center Head Bold" -->
<A NAME="A012"></A>
<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>OTHER
BUSINESS</B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">The
Company knows of no business that will be presented for consideration at the
Annual Meeting other than that described in this Proxy Statement. As to other
business, if any, that may properly come before the Annual Meeting, it is
intended that proxies solicited by the Board will be voted in accordance with
the judgment of the person or persons voting the proxies.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Center Head Bold" -->
<A NAME="A013"></A>
<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>MISCELLANEOUS</B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>THE COMPANY
WILL FURNISH WITHOUT CHARGE A COPY OF ITS ANNUAL REPORT ON FORM 10-KSB FOR THE
FISCAL YEAR ENDED AUGUST 31, 2003, TO EACH PERSON WHO WAS A STOCKHOLDER OF THE
COMPANY AS OF DECEMBER 3, 2003, UPON RECEIPT FROM ANY SUCH PERSON OF A WRITTEN
REQUEST FOR SUCH AN ANNUAL REPORT. SUCH REQUEST SHOULD BE SENT TO: NORTHERN
TECHNOLOGIES INTERNATIONAL CORPORATION, 6680 N. HIGHWAY 49, LINO LAKES, MINNESOTA
55014; ATTN: STOCKHOLDER INFORMATION.</B></FONT></FONT></P>


<P ALIGN="LEFT"><DIV STYLE="MARGIN-LEFT: 500px"><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="2">By Order of the Board of Directors<BR>&nbsp;<BR>
<DIV ALIGN="LEFT"><IMG SRC="pmlynchsig.jpg" border="0">
<BR>&nbsp;<BR>Philip M. Lynch<BR><I>Chairman and Co-Chief Executive Officer</I></DIV>
</FONT></DIV></P>



<!-- MARKER FORMAT-SHEET="Para Flush" -->
<A NAME="A015"></A>
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">December 12,
2003<BR>Lino Lakes, Minnesota</FONT></FONT></P>



<!-- MARKER FORMAT-SHEET="Para Center" -->
<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">15</FONT></FONT></P>

<HR SIZE=5 COLOR=GRAY NOSHADE>
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<!-- MARKER FORMAT-SHEET="Center Head Bold" -->
<A NAME="A016"></A>
<P ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>Appendix
A</B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Center Head Bold" -->
<A NAME="A017"></A>
<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>AUDIT
COMMITTEE CHARTER<BR>of
the<BR>BOARD
OF DIRECTORS<BR>of<BR>NORTHERN
TECHNOLOGIES INTERNATIONAL CORPORATION</B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Left Head Bold" -->
<A NAME="A022"></A>
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B><U>Organization</U></B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">This
charter governs the operations of the Northern Technologies International
Corporation Audit Committee (the &#147;Committee&#148;). The Committee shall
review and reassess the charter periodically and submit changes to the board of
directors for consideration and approval. Members of the Committee shall be
appointed by the board of directors and shall serve until their successors are
appointed and qualify. Each Committee member may be removed by the Board at any
time. The Committee shall be comprised of at least three directors, each of whom
shall be independent as required by Section 10A of the Securities Exchange Act
of 1934 (the &#147;Exchange Act&#148;), as amended by the Sarbanes-Oxley Act of
2002, and the rules promulgated thereunder, and Rule 4200(a)(15) of the American
Stock Exchange, as amended from time to time.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">All
members of the Committee shall be able to read and understand fundamental
financial statements, including a balance sheet, income statement and cash flow
statement, and otherwise meet any qualifications for members of an audit
committee pursuant to the American Stock Exchange Rules and the Exchange Act.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">The
Board shall be responsible for determining the &#147;independence&#148; of
Committee members and whether a committee member qualifies as an &#147;audit
committee financial expert&#148; as defined by the Exchange Act and rules
promulgated thereunder and by the American Stock Exchange Listing Requirements.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Left Head Bold" -->
<A NAME="A023"></A>
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B><U>Statement of
Policy</U></B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">The
Committee is a committee of the Board of Directors. The Committee&#146;s primary
function is to provide assistance to the board of directors in fulfilling its
oversight responsibility to the stockholders relating to the Company&#146;s
annual and quarterly financial statements provided to stockholders and the
Securities and Exchange Commission (the SEC), the financial reporting process
and the systems of internal accounting and financial controls which management
and the Board of Directors have established, the annual independent audit of the
Company&#146;s financial statements and the legal compliance and ethics programs
as established by management and the Board of Directors. In so doing, it is the
responsibility of the Committee to maintain free and open communication between
the Committee, independent auditors and management of the Company.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">The
Committee should have a clear understanding with the independent auditors that
the Committee is directly responsible for the appointment, compensation,
retention and oversight of the independent auditors, and that the ultimate
accountability of the independent auditors is to the Committee and to the Board
of Directors. In discharging its oversight role, the Committee is empowered to
investigate any matter brought to its attention by the auditors, an employee,
the Co-Chief Executive Officers, the Chief Financial Officer or any outside
party and in conducting any such investigation, the Committee shall have full
access to all books, records, facilities, and personnel of the Company and the
power to retain outside counsel or other experts or advisors as the Committee
deems necessary for this purpose.</FONT></FONT></P>



<!-- MARKER FORMAT-SHEET="Para Center" -->
<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">16</FONT></FONT></P>

<HR SIZE=5 COLOR=GRAY NOSHADE>
<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 6; page: 6" -->

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">The
Company shall provide appropriate funding, as determined by the Committee, for
payment of compensation to any registered public accounting firm engaged for the
purpose of preparing or issuing an audit report or performing other audit,
review or attest services for the Company and for any advisors employed by the
Committee as well as for the payment of ordinary administrative expenses of the
Committee that are necessary or appropriate in carrying out its duties.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">The
Committee will set procedures for disclosure of information to the Committee and
review the procedures set up by the Company. The Committee will make regular
reports to the Board of Directors concerning its activities. The Committee will
meet a least once each fiscal quarter.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Left Head Bold" -->
<A NAME="A024"></A>
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B><U>Responsibilities
and Processes</U></B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">The
primary responsibilities of the Committee are as follows:</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Hang Roman" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">&#149;</FONT></FONT></TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">
The Committee shall oversee the Company&#146;s financial reporting process on
behalf of the Board and report the results of their activities to the Board.</FONT></FONT></P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Roman" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">&#149;</FONT></FONT></TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">
The Committee shall have sole authority to appoint, retain and oversee the work
of the Company&#146;s independent auditors and establish the compensation to be
paid to the independent auditors. The Company&#146;s independent auditors shall
report directly to the Committee.</FONT></FONT></P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Roman" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">&#149;</FONT></FONT></TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">
The Committee shall establish procedures for the receipt, retention and
treatment of complaints regarding accounting, internal accounting controls or
auditing matters and for the confidential, anonymous submission by the
Company&#146;s employees of concerns regarding questionable accounting or
auditing matters.</FONT></FONT></P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Roman" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">&#149;</FONT></FONT></TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">
The Committee shall pre-approve all audit services and permissible non-audit
services to be provided by the independent auditor (other than with respect to
de minimus exceptions permitted by the Sarbanes-Oxley Act of 2002) as provided
under the federal securities laws and listing requirements and regulations of
the SEC, as may be amended from time to time.</FONT></FONT></P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Roman" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">&#149;</FONT></FONT></TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">
The Committee shall oversee the establishment and administration (including the
grant of any waiver from) a written code of ethics applicable to each of the
Company&#146;s co-principal executive officers, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions.</FONT></FONT></P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">In
carrying out its responsibilities, the Committee believes its policies and
procedures should remain flexible, in order to best react to changing conditions
and to ensure that the corporate accounting and reporting practices of the
Company are in accordance with all requirements and are of the highest quality.
Therefore, the Committee shall take all actions that are consistent with this
Charter, the Company&#146;s Certificate of Incorporation and by-laws that the
Committee deems necessary or appropriate to fulfill its responsibilities.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">The
following shall be the principal recurring processes of the Committee in
carrying out its oversight responsibilities. These processes are set forth as a
guide, with the understanding that the Committee may supplement them as
appropriate and is not intended be a comprehensive list of all of the actions
that the Committee will take in discharging its duties.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Hang Roman" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">&#149;</FONT></FONT></TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">
The Committee shall review and discuss with the auditors (a) their independence
from management and the Company and the matters included in the written
disclosures required by the</FONT></FONT></P></TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Para Center" -->
<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">17</FONT></FONT></P>

<HR SIZE=5 COLOR=GRAY NOSHADE>
<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 7; page: 7" -->

<!-- MARKER FORMAT-SHEET="Para Hang Roman" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">&nbsp;</FONT></FONT></TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">Independence
Standards Board Standard No. the  matters required to be discussed by Statement on
Auditing Standards (SAS) No. 61  and (b) the independence requirements for auditors of
the Sarbanes-Oxley Act.  The Committee shall obtain and review a written statement from
the auditors  regarding their independence consistent with the Independence Standards
Board  Standard No. 1 or any successor standard, as either may be amended from time to
time. The Committee shall consider whether the auditor&#146;s performance of  permissible
nonaudit services is compatible with the auditor&#146;s  independence.</FONT></FONT></P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Roman" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">&#149;</FONT></FONT></TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">
The Committee shall review and discuss with management and the independent
auditors the Company&#146;s quarterly financial statements, including
disclosures made under the &#147;Management&#146;s Discussion and Analysis of
Financial Condition and Results of Operations,&#148; and the matters required to
be discussed pursuant to Statement on Auditing Standards No. 61, prior to the
filing of its Form 10-QSB, including the results of the independent
auditors&#146; review of the quarterly financial statements to the extent
applicable.</FONT></FONT></P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Roman" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">&#149;</FONT></FONT></TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">
The Committee shall review the financial statements contained in the annual
report to stockholders with management.</FONT></FONT></P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Roman" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">&#149;</FONT></FONT></TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">
The Committee shall review and discuss with management and the independent
auditors the Company&#146;s annual audited financial statements to be included
in the Company&#146;s Annual Report on Form 10-KSB (or the annual report to
stockholders if distributed prior to the filing of Form 10-KSB), including
disclosures made under the &#147;Management&#146;s Discussion and Analysis of
Financial Condition and Results of Operations,&#148; and the matters required to
be discussed pursuant to Statement on Auditing Standards No. 61, and recommend
to the Board whether the audited financial statements should be included in the
Company&#146;s Form 10-KSB. Also, the Committee shall discuss the results of the
annual audit and any other matters required to be communicated to the Committee
by the independent auditors under generally accepted auditing standards..</FONT></FONT></P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Roman" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">&#149;</FONT></FONT></TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">
The Committee shall review and discuss with management and the independent
auditors, as applicable (a) major issues regarding accounting principles and
financial statement presentations, including any significant changes in the
Company&#146;s selection or application accounting principles, and major issues
as to the adequacy of the Company&#146;s internal controls and any special audit
steps adopted in light of material control deficiencies; (b) analyses prepared
by management or the independent auditors setting forth significant financial
reporting issues and judgments made in connections with the preparation of the
financial statements, including analyses of the effects of alternative GAAP
methods on the financial statements; (c) any management letter provided by the
independent auditors and the Company&#146;s response to that letter; (d) any
problems, difficulties or differences encountered in the course of the audit
work, including any disagreements with management or restrictions on the scope
of the independent auditors&#146; activities or on access to requested
information and management&#146;s response thereto; (e) the effect of regulatory
and accounting initiatives, as well as off-balance sheet structures, on the
financial statements of the Company; and (f) earnings press releases and
financial information and earnings guidance provided to analysts and rating
agencies.</FONT></FONT></P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Roman" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">&#149;</FONT></FONT></TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">
The Committee shall discuss with management the Company&#146;s major financial
risk exposures and the steps management has taken to monitor the control such
exposures.</FONT></FONT></P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Roman" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">&#149;</FONT></FONT></TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">
The Committee shall obtain and review a report from the independent auditors at
least annually regarding (a) the independent auditors&#146; internal
quality-control procedures, (b) any material issues raised by the most recent
quality-control, or peer review, of the firm, or by any inquiry or investigation
by governmental or professional authorities within the preceding five years</FONT></FONT></P></TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Para Center" -->
<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">18</FONT></FONT></P>

<HR SIZE=5 COLOR=GRAY NOSHADE>
<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 8; page: 8" -->


<!-- MARKER FORMAT-SHEET="Para Hang Roman" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">&nbsp;</FONT></FONT></TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">respecting one or more independent audits carried out by the firm, (c) any steps
taken to deal with any such issues, and (d) all relationships between the
independent auditors and the Company.</FONT></FONT></P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Roman" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">&#149;</FONT></FONT></TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">
The Committee shall review with the independent auditors their reports delivered
pursuant to Section 10A(k) of the Exchange Act.</FONT></FONT></P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Roman" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">&#149;</FONT></FONT></TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">
The Committee shall discuss with the independent auditors the overall scope and
plans for their respective audits, including the adequacy of staffing and
compensation.</FONT></FONT></P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Roman" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">&#149;</FONT></FONT></TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">
The Committee shall review and where appropriate, approve, all related party
transactions.</FONT></FONT></P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Roman" -->
<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="RIGHT" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">&#149;</FONT></FONT></TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="94%"><P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">
The chair of the Committee shall review any press release containing any
financial information before such press release is publicly disseminated.</FONT></FONT></P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Left Head Bold" -->
<A NAME="A025"></A>
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B><U>Indemnification</U></B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">The
Committee members will be indemnified by the Company to the maximum extent
provided under Delaware law or in accordance with any indemnification agreements
between the Company and such Committee members.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Left Head Bold" -->
<A NAME="A026"></A>
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B><U>Accountability
of Outside Auditors</U></B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="JUSTIFY"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">The
independent auditors employed by the Company are accountable to the Committee
and the Board of Directors, as representatives of the Company&#146;s
stockholders. The independent auditors employed by the Company will report
directly to the Committee.</FONT></FONT></P>



<!-- MARKER FORMAT-SHEET="Para Center" -->
<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">19</FONT></FONT></P>

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