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<SEC-DOCUMENT>0000950152-07-009625.txt : 20071214
<SEC-HEADER>0000950152-07-009625.hdr.sgml : 20071214
<ACCEPTANCE-DATETIME>20071214134140
ACCESSION NUMBER:		0000950152-07-009625
CONFORMED SUBMISSION TYPE:	DEF 14A
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20080129
FILED AS OF DATE:		20071214
DATE AS OF CHANGE:		20071214
EFFECTIVENESS DATE:		20071214

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			SIFCO INDUSTRIES INC
		CENTRAL INDEX KEY:			0000090168
		STANDARD INDUSTRIAL CLASSIFICATION:	AIRCRAFT ENGINES & ENGINE PARTS [3724]
		IRS NUMBER:				340553950
		STATE OF INCORPORATION:			OH
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		DEF 14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-05978
		FILM NUMBER:		071306808

	BUSINESS ADDRESS:	
		STREET 1:		970 E 64TH ST
		CITY:			CLEVELAND
		STATE:			OH
		ZIP:			44103
		BUSINESS PHONE:		2168818600

	MAIL ADDRESS:	
		STREET 1:		970 EAST 64TH STREET
		CITY:			CLEVELAND
		STATE:			OH
		ZIP:			44103

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	STEEL IMPROVEMENT & FORGE CO
		DATE OF NAME CHANGE:	19690520
</SEC-HEADER>
<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
<FILENAME>l29146adef14a.htm
<DESCRIPTION>SIFCO INDUSTRIES, INC.   DEF 14A
<TEXT>
<HTML>
<HEAD>
<TITLE>SIFCO Industries, Inc.   DEF 14A</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION<BR>
Washington, D.C. 20549</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><FONT style="font-size:13pt"><B>SCHEDULE 14A</B></FONT><BR>
<B>(RULE 14A-101)<BR>
SCHEDULE 14A INFORMATION</B><BR>
Proxy Statement Pursuant to Section&nbsp;14(a) of the Securities<BR>
Exchange Act of 1934 (Amendment No. )
</DIV>


<DIV align="left" style="font-size: 9pt; margin-top: 6pt">Filed by the Registrant&nbsp;<FONT face="Wingdings">&#254;</FONT><BR>
Filed by a Party other than the Registrant&nbsp;<FONT face="Wingdings">&#111;</FONT><BR>
Check the appropriate box:

</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 9pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><FONT face="Wingdings">&#111;</FONT>&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&nbsp;Preliminary Proxy Statement</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 9pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><FONT face="Wingdings">&#111;</FONT>&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&nbsp;Confidential, for Use of the Commission Only (as permitted by Rule&nbsp;14a-6(e)(2))</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 9pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><FONT face="Wingdings">&#254;</FONT>&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&nbsp;Definitive Proxy Statement</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 9pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><FONT face="Wingdings">&#111;</FONT>&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&nbsp;Definitive Additional Materials</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 9pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><FONT face="Wingdings">&#111;</FONT>&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&nbsp;Soliciting Material Pursuant to Section&nbsp;240.14a-11c or Section&nbsp;240.14a-12</TD>
</TR>

</TABLE>
</DIV>

<DIV align="center" style="font-size: 9pt; margin-top: 18pt"><FONT style="font-size:13pt"><U><B>SIFCO Industries, Inc</B>.</U></FONT><BR>
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
</DIV>


<DIV align="center" style="font-size: 9pt; margin-top: 18pt"><DIV style="width: 50%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV>(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
</DIV>


<DIV align="left" style="font-size: 9pt; margin-top: 6pt">Payment of Filing Fee (Check the appropriate box):

</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 9pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><FONT face="Wingdings">&#254;</FONT>&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&nbsp;No fee required.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 9pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><FONT face="Wingdings">&#111;</FONT>&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&nbsp;Fee computed on table below per Exchange Act Rules&nbsp;14a-6(i)(1) and 0-11.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 9pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Title of each class of securities to which transaction applies: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 9pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Aggregate number of securities to which transaction applies: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 9pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule&nbsp;0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined): <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 9pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Proposed maximum aggregate value of transaction: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 9pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">5.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Total fee paid: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></TR>


</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 9pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><FONT face="Wingdings">&#111;</FONT>&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Fee paid previously with preliminary materials.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 9pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><FONT face="Wingdings">&#111;</FONT>&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 9pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Amount Previously Paid: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 9pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Form, Schedule or Registration Statement No.: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 9pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Filing Party: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 9pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Date Filed: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 9pt">



</TABLE>
</DIV>

<!-- TOC -->
<A name="toc"><DIV align="CENTER" style="page-break-before:always"><U><B>TABLE OF CONTENTS</B></U></DIV></A>

<P><CENTER>
<TABLE border="0" width="90%" cellpadding="0" cellspacing="0">
<TR>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="76%"></TD>
</TR>
<TR><TD colspan="9"><A HREF="#000">NOTICE OF 2008 ANNUAL MEETING OF SHAREHOLDERS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#001">PROXY STATEMENT<BR> Mailed on or about December&nbsp;14, 2007</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#002">PROPOSAL TO ELECT SIX (6)&nbsp;DIRECTORS</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#003">PROPOSAL TO ADOPT THE SIFCO INDUSTRIES, INC. 2007 LONG-TERM INCENTIVE PLAN</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#004">PROPOSAL FOR APPROVAL OF DESIGNATION OF AUDITORS</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#005">SHAREHOLDER PROPOSALS FOR THE 2009 ANNUAL MEETING OF SHAREHOLDERS</A></TD></TR>
</TABLE>
</CENTER>
<!-- /TOC -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>









<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SIFCO Industries, Inc.</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>970 East 64th Street, Cleveland, Ohio 44103</B>

</DIV>
<!-- link1 "NOTICE OF 2008 ANNUAL MEETING OF SHAREHOLDERS" -->
<DIV align="left"><A NAME="000"></A></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>NOTICE OF 2008 ANNUAL MEETING OF SHAREHOLDERS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The 2008 Annual Meeting of Shareholders of SIFCO Industries, Inc. will be held at the National
City Center Annex Building, 1900 East 9th Street, Cleveland, Ohio, on January&nbsp;29, 2008 at 10:30
a.m., to consider and vote upon proposals to:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Elect six (6)&nbsp;directors, each to serve a one-year term expiring at the 2009 Annual
Meeting;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Adopt the SIFCO Industries, Inc. 2007 Long-term Incentive Plan.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Ratify the designation of Grant Thornton LLP as the independent registered public
accounting firm of the Company; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Consider and take action upon such other matters as may properly come before the
meeting or any adjournment thereof.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The holders of record of Common Shares at the close of business on December&nbsp;3, 2007 will be
entitled to receive notice of and vote at the meeting.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s Annual Report for the fiscal year ended September&nbsp;30, 2007 is included with this
Notice.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By order of the Board of Directors.
</DIV>


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">SIFCO Industries, Inc.<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">December 14, 2007&nbsp;</TD>
    <TD colspan="3" style="border-bottom: 1px solid #ffffff" align="left"> <I>Daniel G. Berick</I>, Secretary
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Kindly fill in, date and sign the enclosed proxy and promptly return it in the enclosed
addressed envelope, which requires no postage if mailed in the United States. If you are present
and vote in person at the meeting, your proxy will not be used.</b>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->2&nbsp;<!-- /Folio -->
</DIV>



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 12pt; margin-top: 18pt"><B>SIFCO Industries, Inc.</B>
</DIV>

<DIV align="center" style="font-size: 10pt">
<B>970 East 64th Street, Cleveland, Ohio 44103</B>
</DIV>


<!-- link1 "PROXY STATEMENT<BR> Mailed on or about December&nbsp;14, 2007" -->
<DIV align="left"><A NAME="001"></A></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PROXY STATEMENT</B><BR>
Mailed on or about December&nbsp;14, 2007
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>General Information</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The proxy that accompanies this statement is solicited by the Board of Directors of SIFCO
Industries, Inc. (the &#147;Company&#148;) for use at the 2008 Annual Meeting of the Shareholders of the
Company to be held January&nbsp;29, 2008, or at any adjournment thereof. This proxy statement was first
mailed on December&nbsp;14, 2007 to shareholders of record on December&nbsp;3, 2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any shareholder giving a proxy for the meeting may revoke it before it is exercised by giving
a later dated proxy or by giving notice of revocation to the Company in writing before or at the
2008 Annual Meeting. However, the mere presence at the 2008 Annual Meeting of the shareholder
granting a proxy will not revoke the proxy. Unless revoked by notice as above stated, shares
represented by valid proxies will be voted on all matters to be acted upon at the 2008 Annual
Meeting. On any matter or matters with respect to which the proxy contains instructions for
voting, such shares will be voted in accordance with such instructions. Abstentions will be deemed
to be present for the purpose of determining a quorum for the 2008 Annual Meeting. Abstentions will
not affect the vote on Proposal No.&nbsp;1, but will be counted as votes against as to the other
proposals acted upon at the meeting. Brokers who have not received voting instructions from
beneficial owners generally may vote in their discretion with respect to the election of directors
and the ratification of the selection of auditors. Broker non-votes will not affect the outcome of
any proposals brought before the 2008 Annual Meeting.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The cost of solicitation of proxies in the form accompanying this statement will be borne by
the Company. Proxies will be solicited by mail or by telephone or personal interview with an
officer or regular employee of the Company. The Company will request brokers and other custodians,
nominees and fiduciaries to forward proxy soliciting material to the beneficial owners of shares
they hold of record, and will reimburse such brokers, custodians, nominees and fiduciaries for
their expenses in so doing.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>OUTSTANDING SHARES AND VOTING RIGHTS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The record date for determining shareholders entitled to vote at the 2008 Annual Meeting is
December&nbsp;3, 2007. As of November&nbsp;30, 2007, the outstanding voting securities of the Company
consisted of 5,287,501 Common Shares. Each Common Share, exclusive of treasury shares, has one
vote. The Company held no Common Shares in its treasury on November&nbsp;30, 2007. The holders of a
majority of the Common Shares of the Company issued and outstanding, present in person or by proxy,
shall constitute a quorum for the purposes of the 2008 Annual Meeting.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The table below names the persons who are known by the Company to be the beneficial owners of
more than 5% of its outstanding Common Shares as of October&nbsp;31, 2007, and states the number of such
Common Shares beneficially owned by each such person and the percentage of the outstanding Common
Shares which that number of shares constitutes as of that date, unless otherwise indicated.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Name and Address</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Amount and Nature of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Percent</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>of Beneficial Owner</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Beneficial Ownership</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>of Class</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Ms.&nbsp;Janice Carlson and Mr.&nbsp;Charles H. Smith, III,<BR></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">2,002,049 </TD>
    <TD nowrap>(1)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">37.89% </TD>
    <TD nowrap>(1)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Trustees, Voting Trust Agreement<BR>
c/o SIFCO Industries, Inc.<BR>
970 E. 64<SUP style="font-size: 85%; vertical-align: text-top">th</SUP> Street<BR>
Cleveland, OH 44103</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Tontine Capital Management, LLC<BR></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">501,700</TD>
    <TD nowrap>(2)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">9.50% </TD>
    <TD nowrap>(2)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">55 Railroad Avenue,<BR>
Greenwich, CT 06830</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->3<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Name and Address</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Amount and Nature of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Percent</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>of Beneficial Owner</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Beneficial Ownership</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>of Class</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dimensional Fund Advisors, LP<BR></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">292,091</TD>
    <TD nowrap>(3)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">5.53% </TD>
    <TD nowrap>(3)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">1299 Ocean Avenue<BR>
Santa Monica, CA 90401</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As of October&nbsp;31, 2007, Janice Carlson and Charles H. Smith, III beneficially owned, as
Trustees, 2,002,049 Common Shares of the Company and such Common Shares have been deposited
with them or their predecessors, as Trustees, under a Voting Trust Agreement entered into as
of January&nbsp;30, 2007. The Voting Trust Agreement is for a three-year term ending January&nbsp;31,
2011. The Trustees under the Voting Trust Agreement share voting control with respect to all
such Common Shares. Although the Trustees do not have the power to dispose of the shares
subject to the Voting Trust, they share the power to terminate the Voting Trust or to return
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares subject to the Voting Trust to holders of voting trust certificates. Ms.&nbsp;P. S.
Gotschall-Wilhelm beneficially owns of record 360,572 shares (6.82%) of the Company, which
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares are subject to the Voting Trust Agreement. The Estate of Mr.&nbsp;C. H. Smith, Jr. owns of
record 536,236 shares (10.15%) of the Company, which shares are subject to the Voting Trust
Agreement. The executors and beneficiaries of the Estate have, subject to the terms of the
Voting Trust Agreement, voting power and investment power with respect to the shares held by
the Estate.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Based on a Schedule&nbsp;13G/A filed with the Securities and Exchange Commission (&#147;SEC&#148;) as of
December&nbsp;31, 2006, Tontine Capital Management, LLC (&#147;Tontine&#148;), the general partner of Tontine
Capital Partners, LP, a non-registered, privately-held investment partnership, possesses both
voting and investment power over 501,700 Common Shares of the Company as of December&nbsp;31, 2006.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Based on a Schedule&nbsp;13G/A filed with the SEC as of December&nbsp;31, 2006, Dimensional Fund
Advisors LP. (&#147;Dimensional&#148;), an investment advisor registered under Section&nbsp;203 of the
Investment Advisors Act of 1940, furnishes investment advice to four investment companies
registered under the Investment Company Act of 1940, and serves as investment manager to
certain other commingled group trusts and separate accounts. These investment companies,
trusts and accounts are the &#147;Funds.&#148; In its role as investment advisor or investment manager,
Dimensional possesses voting and/or investment power over 292,091 Common Shares of SIFCO
Industries, Inc. and may be deemed the beneficial owner of those shares owned by the Funds as
of December&nbsp;31, 2006. Dimensional has disclaimed beneficial ownership of all of such Common
Shares.</TD>
</TR>

</TABLE>
</DIV>
<!-- link2 "PROPOSAL TO ELECT SIX (6)&nbsp;DIRECTORS" -->
<DIV align="left"><A NAME="002"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>PROPOSAL TO ELECT SIX (6)&nbsp;DIRECTORS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Six (6)&nbsp;directors are to be elected at the 2008 Annual Meeting to hold office until the next
annual meeting of shareholders and until their respective successors are elected and qualified.
Shares represented by validly given proxies will be voted in favor of the following persons to
serve as directors unless the shareholder indicates to the contrary on the proxy. The six (6)
nominees receiving the most votes will be elected as directors at the 2008 Annual Meeting.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although the Company does not contemplate that any of the nominees will be unavailable for
election, if a vacancy in the slate of nominees is occasioned by death or other unexpected
occurrence, it is currently intended that the remaining directors will, by the vote of a majority
of their number, designate a different nominee for election to the Board at the 2008 Annual
Meeting.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Nominees for election to the Board of Directors</I>
</DIV>


<DIV align="left" style="margin-left: 5%; text-indent: -5%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>Jeffrey P. Gotschall</B>, 59, director of the Company since 1986, Chairman of the Board since 2001, and
Chief Executive Officer of the Company since 1990. Mr.&nbsp;Gotschall previously served the Company
from 1989 to 2002 as President, from 1986 to 1990 as Chief Operating Officer, from 1986
through 1989 as Executive Vice President and from 1985 through 1989 as President of SIFCO
Turbine Component Services.</DIV>


<DIV align="left" style="margin-left: 5%; text-indent: -5%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>Hudson D. Smith</B>, 56, director of the Company since 1988. Mr.&nbsp;Smith is currently the President of
Forged Aerospace Sales, LLC. Mr.&nbsp;Smith previously served the Company as Executive Vice
President from 2003 through January&nbsp;2005; as Treasurer from 1983 through January&nbsp;2005; as
President of SIFCO Forge Group from 1998 through 2003; as Vice President and General Manager
of SIFCO Forge Group from 1995 through 1997; as General Manager of SIFCO Forge Group&#146;s
Cleveland Operations from 1989 through 1995; and as General Sales Manager of SIFCO Forge Group
from 1985 through 1989. Refer to &#147;Director Compensation&#148; below for a discussion of certain
transactions between Mr.&nbsp;Smith and the Company.</DIV>


<DIV align="left" style="margin-left: 5%; text-indent: -5%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>Frank N. Nichols</B>, 67, director of the Company since 2006. Mr.&nbsp;Nichols is president of FNN
Enterprises, LLC. Mr.&nbsp;Nichols retired in 2005 from his position as Group Vice President for
the Fluid Management and Control Systems Branch of the Parker Hannifin Corporation Aerospace Group. He previously served from 1992
through 1996 as the Group Vice President for Parker Hannifin&#146;s Fluid Management and Control
Systems Midwest Region, and from 1982 through 1992 as the General Manager of Parker Hannifin&#146;s
Gas Turbine Fuel Systems Division. Mr.&nbsp;Nichols began his career at Parker Hannifin Corporation
in 1962.</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->4<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="margin-left: 5%; text-indent: -5%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>P. Charles Miller, Jr.</B>, 69, director of the Company since 2002. Mr.&nbsp;Miller is the Chairman and
CEO of Duramax Marine LLC. Prior to acquiring Duramax Marine in 1999, he had served as
President, CEO and director of Duramax, Inc. since 1982. Mr.&nbsp;Miller serves on the Board of
Advisors of Custom Rubber Corporation and the Atlas Steel Products Company. He also serves on
the Boards of numerous not-for-profit organizations.</DIV>


<DIV align="left" style="margin-left: 5%; text-indent: -5%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>Alayne L. Reitman, </B>43, director of the Company since 2002. Ms.&nbsp;Reitman currently serves as a
Trustee of The Cleveland Foundation and Hawken School. She previously served from 1999 to 2001
as President of Embedded Planet, a high-tech start-up company; from 1993 to 1998 as Vice
President and Chief Financial Officer of The Tranzonic Companies, Inc.; and from 1991 to 1993
as Senior Financial Analyst for American Airlines.</DIV>


<DIV align="left" style="margin-left: 5%; text-indent: -5%; margin-right: 0%; font-size: 10pt; margin-top: 6pt"><B>J. Douglas Whelan</B>, 68, director of the Company since 1995. Mr.&nbsp;Whelan retired in 1999 from his
positions as President, Chief Operating Officer and director of Wyman-Gordon Company. He
previously served from 1994 through 1997 as President of Wyman-Gordon Forgings, Houston, Texas
and from 1989 through 1994, as Vice President of Operations for the Cameron Forged Products
Division of Cooper Industries, Houston, Texas. From 1965 to 1989, Mr.&nbsp;Whelan served in a
variety of executive, technical and management positions with Cameron Iron Works. Mr.&nbsp;Whelan
serves on the Board of Advisors of Forged Products, Inc., Houston, Texas, a member company of
the Reserve Group of Akron, Ohio.</DIV>

<!-- link2 "PROPOSAL TO ADOPT THE SIFCO INDUSTRIES, INC. 2007 LONG-TERM INCENTIVE PLAN" -->
<DIV align="left"><A NAME="003"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>PROPOSAL TO ADOPT THE SIFCO INDUSTRIES, INC. 2007 LONG-TERM INCENTIVE PLAN</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On November&nbsp;8, 2007, the Board of Directors approved the SIFCO Industries, Inc. 2007 Long-Term
Incentive Plan (&#147;2007 Plan&#148;), subject to approval by the Company&#146;s shareholders at this Annual
Meeting. A copy of the 2007 Plan is attached to this proxy statement as Exhibit&nbsp;A. A summary of
the material provisions of the 2007 Plan is provided below; and this summary is qualified by
reference to the full and complete text of the 2007 Plan (any inconsistencies between this summary
and the text of the 2007 Plan will be governed by the text of the 2007 Plan).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Purpose. </I>The purpose of the 2007 Plan is to enhance the Company&#146;s ability to attract and
retain highly qualified employees, to motivate those employees by means of an opportunity to
acquire or increase their interest in the Company&#146;s operations and to align the interests of
participants and shareholders through the ownership of Company common shares and the performance of
the Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Administration. </I>The 2007 Plan is administered by the Board or a committee appointed by the
Board (the &#147;Administrator&#148;), which has broad power and authority, including conclusive authority to
construe and interpret the Plan and any related award agreement, authority to designate grantees
and determine types and terms of awards and authority to create any appropriate supplements to the
2007 Plan or subplans necessary to enable employees who are foreign nationals or employed outside
of the U.S. to participate in the 2007 Plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Eligibility. </I>Those persons eligible to participate in the 2007 Plan are Company employees and
employees of its affiliates who the Administrator determines and designates to be able to receive
awards under the 2007 Plan. The Company estimates that approximately 20 persons currently would be
eligible to be selected by the Administrator for participation in the Plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Shares Subject to the 2007 Plan and Award Limitations. </I>The total number of common shares of
the Company available for awards under the 2007 Plan is 250,000. Common shares subject to an award
that is forfeited, terminated, or expired without having been exercised will generally be available
again for grant under the 2007 Plan in the same amount as was originally counted against the
overall share limitation. The closing price of the Company&#146;s common shares as reported by The
American Stock Exchange was $19.55 per share on November&nbsp;30, 2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The 2007 Plan also includes limitations as to the awards that can be made to an individual
within any twelve-month period. Under the 2007 Plan, no more than 50,000 common shares subject to
options or stock appreciation rights (SARs) may be awarded to any one person in any twelve-month period. The 2007 Plan also
provides that no one person may be awarded restricted stock, restricted stock units, performance
shares and/or performance units relating to more than 50,000 common shares in any twelve-month
period. The maximum amount that may be earned by any person in any twelve-month period under a
performance-based award with a performance period of up to one
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->5<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">year is $2,000,000. Where a performance award has a performance period of up to five years, the maximum amount that may be
earned in respect of the performance period by any person is $5,000,000.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Adjustments upon Changes in Capitalization. </I>The number of Company common shares as to which
awards may be granted under the 2007 Plan (as well as the limitations upon the number of shares
subject to awards and subject to awards to an individual in a calendar year) will be appropriately
adjusted to reflect certain changes in our capitalization, including stock splits, stock dividends,
recapitalizations, and reclassifications. The Administrator has the authority to assume or
substitute awards in connection with mergers, reorganizations or similar transactions, in which
circumstances the overall number of shares available under the Plan also will be appropriately
adjusted.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Types of Awards. </I>The Administrator shall determine, as it deems appropriate, the type(s) of
award(s) to be made to each eligible participant and shall set forth, in a related award agreement
between the Company and the eligible participant, the terms, conditions, restrictions or
limitations of each award. Awards granted under the 2007 Plan may take the following forms:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Stock Options </B>- The Administrator may grant stock options pursuant to the 2007 Plan
and may determine the terms, conditions, restrictions or limitations of options,
including restrictions on vesting and transferability, and requirements for continued
employment or service. The Administrator will determine whether an option is to be an
incentive stock option or nonqualified option; and will determine the option&#146;s exercise
price, which may not be less than the fair market value of the Company&#146;s common stock on
the date of grant. Upon exercise of an option, the holder generally must make a payment
in cash, or cash equivalents acceptable to the Company, equal to the exercise price of
the stock option, although an award agreement may provide for alternative forms of
payment, including a cashless exercise or the tendering of previously-acquired common
stock of the Company having a fair market value at the time of exercise equal to the
exercise price. The Administrator may determine the expiration date of each option,
which will no later than 10&nbsp;years after the grant date. Stock options granted in the
form of incentive stock options are also subject to certain additional limitations as
provided in Section&nbsp;422 of the Internal Revenue Code of 1986, as amended (Code),
including the limitation that the aggregate fair market value of common stock with
respect to which incentive stock options may become exercisable by an employee in any
calendar year may not exceed $100,000.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Stock Appreciation Rights </B>- Stock appreciation rights (SARs) may be granted pursuant
to the 2007 Plan either separately or in conjunction with stock options. Upon exercise
of a SAR, the holder will receive payment from the Company of cash in the amount, and/or
Company common stock with a fair market value, equal to the appreciation in fair market
value of the Company&#146;s common shares (covered by the SAR) from the grant date of such
SARs to the exercise date. No SAR may be exercisable more than 10&nbsp;years from the date
of grant.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Restricted Stock and Restricted Stock Units</B><I>. </I>The Administrator may grant restricted
stock and restricted stock units with such terms, conditions, restrictions or
limitations as the Administrator may deem appropriate, including restrictions as to the
time period for which the shares will be restricted and including the satisfaction of
individual performance and/or Company performance objectives. During the period in
which any of the Company common shares are subject to any conditions, restrictions or
limitations, the holder of restricted stock generally may vote such shares and receive
dividends paid on the shares of common stock, subject to restrictions imposed by the
Administrator. A holder of restricted stock units generally has no rights as a
shareholder of the Company, but the Administrator may provide in an award agreement for
the receipt of dividends by a holder of restricted stock units and for the reinvestment
of those dividends.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Unrestricted Stock</B>. The Administrator may grant or sell unrestricted stock awards to
an eligible employee, free of any restrictions and at par value or a higher price as
determined by the Administrator.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Performance Shares, Performance Units, Performance Awards and Annual Incentive
Awards</B>. The Administrator may grant performance shares, performance units, performance
awards, and annual incentive awards that are valued based upon the extent to which
corresponding performance criteria have</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->6<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>been achieved during a specified performance
period. Performance shares are denominated in shares, whereas performance units are
denominated in units that are generally valued at one dollar per unit. The
Administrator may use business criteria and other measures of performance as it
considers appropriate, and performance targets and performance periods may vary among
awards and among participants. The Administrator may provide in performance share and
performance unit awards for discretion as to whether to take certain nonrecurring or
extraordinary events or items into account in determining whether performance targets
have been met. The form of the payout of performance share and performance unit awards
will be determined by the Administrator, and may be cash or common shares (or a
combination thereof) equal to the value of the award earned during the performance
period. Performance goals applicable to any award to a participant who is, or is
determined likely to become, a &#147;covered employee&#148; within the meaning of Code Section
162(m), shall be objective and otherwise meet the requirements of Code Section&nbsp;162(m).</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Transferability. </I>The Administrator has authority to restrict transferability of awards. The
2007 Plan also provides that certain types of awards may not be transferred, although options and
SARs may be transferred by will or the applicable laws of descent and distribution in the event of
the participant&#146;s death or, in certain limited instances, to family members.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Certain Other Possible Award Restrictions. </I>The Company may retain, in an award agreement, the
right to cause a forfeiture of the gain realized by a grantee due to actions of the grantee in
violation or breach of or in conflict with an employment agreement, noncompetition agreement,
non-solicitation agreement or confidentiality obligation or due to actions otherwise in competition
with the Company. The Company also may retain the right to cause a forfeiture of an award if a
grantee is terminated for cause (as defined in the 2007 Plan).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Amendment. </I>The Board may amend, suspend or terminate the 2007 Plan at any time, subject to
applicable shareholder approval requirements, including as set forth in the 2007 Plan. No
amendment, suspension or termination of the 2007 Plan may impair rights or obligations under any
outstanding Plan award without the participant&#146;s consent. The Administrator may amend, modify or
supplement the terms of any award, but may not impair the rights of the holder of an award without
the holder&#146;s consent.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Change in Control. </I>Outstanding options, SARs, restricted stock and restricted stock units may
be assumed in connection with and continue following a corporate transaction constituting a change
in control. In the event of a corporate transaction constituting a change in control of the
Company in which awards are not being assumed or continued, except as otherwise provided in an
award agreement, (i)&nbsp;options and SARs will vest and become exercisable for the 15&nbsp;day period
preceding the transaction, and restricted stock will vest, although the Administrator has authority
to elect to cancel any outstanding options, restricted stock and SARs and pay the holder the spread
between the exercise price of the SAR or stock option and the price paid in connection with the
change in control (and in the case of restricted stock, pay the holder the corporate transaction
price for such shares); and (ii)&nbsp;restricted stock units will be cancelled in exchange for a cash
payment in an amount equal to the product of (aa)&nbsp;the amount that would have been due under the
award if the performance goals (as measured as of the corporate transaction date) were to continue
to be achieved, and (bb)&nbsp;a fraction, the numerator of which is the number of months elapsed from
the beginning of the performance period to the corporate transaction date and the denominator of
which is the total number of months in the performance period.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Term. </I>Awards may be granted under the 2007 Plan for a period of ten (10)&nbsp;years from the date
of adoption of the 2007 Plan by the Board, at which date the 2007 Plan will expire without
affecting any awards that are then outstanding.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Federal Income Tax Consequences. </I>The following summarizes certain federal income tax
consequences relating to the 2007 Plan. The summary is based upon the laws and regulations
currently in effect and does not purport to be a complete statement of the law in this area.
Furthermore, the discussion below does not address the tax consequences of the receipt or exercise
of awards under foreign, state or local tax laws, and such tax laws may not correspond to the
federal income tax treatment described herein. The exact federal income tax treatment of
transactions under the 2007 Plan will vary depending upon the specific facts and circumstances
involved and participants are advised to consult their personal tax advisors with regard to all
consequences arising from the grant or exercise of awards and the disposition of any acquired
shares.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->7<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Stock Options and SARs. </I>The grant of a stock option or a SAR under the 2007 Plan will create
no income tax consequences to us or to the employee-recipient. A participant who is granted a
nonqualified stock option or a SAR will generally recognize ordinary compensation income at the
time of exercise in an amount equal to the excess of the fair market value of the common stock at
such time over the exercise price. The Company will generally be entitled to a deduction in the
same amount and at the same time as the participant recognizes ordinary income. If the stock
appreciation right is settled in shares of the Company&#146;s common stock, upon the participant&#146;s
subsequent disposition of such shares, the participant will recognize a capital gain or loss
(long-term or short-term, depending on the holding period) to the extent the amount realized from
the sale differs from the tax basis (i.e., the fair market value of the common stock on the
exercise date). Upon the participant&#146;s subsequent disposition of the shares of common stock
received with respect to a nonqualified option, the participant will recognize a capital gain or
loss (long-term or short-term, depending on the holding period) to the extent the amount realized
from the sale differs from the tax basis (i.e., the fair market value of the common stock on the
exercise date).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In general, a participant will recognize no income or gain as a result of the exercise of an
incentive stock option, except that the alternative minimum tax may apply. Except as described
below, the participant will recognize a long-term capital gain or loss on the disposition of the
common stock acquired pursuant to the exercise of an incentive stock option and we will not be
allowed a deduction. If the participant fails to hold the shares of common stock acquired pursuant
to the exercise of an incentive stock option for at least two years from the grant date of the
incentive stock option and one year from the exercise date, then the participant will recognize
ordinary compensation income at the time of the disposition equal to the lesser of the gain
realized on the disposition and the excess of the fair market value of the shares of common stock
on the exercise date over the exercise price. The Company will generally be entitled to a
deduction in the same amount and at the same time as the participant recognizes ordinary income.
Any additional gain realized by the participant over the fair market value at the time of exercise
will be treated as a capital gain.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Restricted Stock</I>. Generally, a participant will not recognize income and the Company will not
be entitled to a deduction at the time an award of restricted stock is made under the 2007 Plan,
unless the participant makes the election described below. A participant who has not made such an
election will recognize ordinary income at the time the restrictions on the stock lapse in an
amount equal to the fair market value of the restricted stock at such time. The Company will
generally be entitled to a corresponding deduction in the same amount and at the same time as the
participant recognizes income. Any otherwise taxable disposition of the restricted stock after the
time the restrictions lapse will result in a capital gain or loss to the extent the amount realized
by the participant from the sale differs from his or her tax basis (i.e., the fair market value of
the common stock on the date the restrictions lapse). Dividends paid in cash and received by a
participant prior to the time the restrictions lapse will constitute ordinary income to the
participant in the year paid and the Company will generally be entitled to a corresponding
deduction for such dividends. Any dividends paid in stock will be treated as an award of
additional restricted stock subject to the tax treatment described herein.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A participant may, within 30&nbsp;days after the date of the award of restricted stock, elect,
under the Code Section&nbsp;83(b), to recognize ordinary income as of the date of the award in an amount
equal to the fair market value of such restricted stock on the date of the award (less the amount,
if any, the participant paid for such restricted stock). If the participant makes such an
election, then the Company will generally be entitled to a corresponding deduction in the same
amount and at the same time as the participant recognizes income. If the participant makes the
election, then any cash dividends the participant receives with respect to the restricted stock
will be treated as dividend income to the participant in the year of payment and will not be
deductible by us. Any otherwise taxable disposition of the restricted stock (other than by
forfeiture) will result in a capital gain or loss. If the participant who has made an election
subsequently forfeits the restricted stock, then the participant will not be entitled to claim a
credit for the tax previously paid. In addition, we would then be required to include as ordinary
income the amount of any deduction we originally claimed with respect to such shares.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Restricted Stock Units</I>. A participant will not recognize income and the Company will not be
entitled to a deduction at the time an award of a restricted stock unit is made under the 2007
Plan. Upon the participant&#146;s receipt of shares (or cash) at the end of the restriction period, the participant will recognize ordinary
income equal to the amount of cash and/or the fair market value of the shares received, and the
Company will be entitled to a corresponding deduction in the same amount and at the same time. If
the restricted stock units are settled in whole or in part in
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">shares, upon the participant&#146;s subsequent disposition of the shares the participant will recognize a capital gain or loss
(long-term or short-term, depending on the holding period) to the extent the amount realized upon
disposition differs from the shares&#146; tax basis (i.e., the fair market value of the shares on the
date the participant received the shares).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Performance Shares</I>. The grant of performance shares will create no income tax consequences
for the Company or the participant. Upon the participant&#146;s receipt of shares and/or cash at the
end of the applicable performance period, the participant will recognize ordinary income equal to
the amount of cash and/or the fair market value of the shares received, except that if the
participant receives shares of restricted stock in payment of performance shares, recognition of
income may be deferred in accordance with the rules applicable to restricted stock as described
above. The Company will generally be entitled to a deduction in the same amount and at the same
time as the participant recognizes income. Upon the participant&#146;s subsequent disposition of the
shares, the participant will recognize a capital gain or loss (long-term or short-term depending on
the holding period) to the extent the amount realized from the disposition differs from the tax
basis of the shares (i.e., the fair market value of the shares on the date the participant received
the shares).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Performance Units</I>. The grant of a performance unit will create no income tax consequences to
the Company or the participant. Upon the participant&#146;s receipt of cash and/or shares at the end of
the applicable performance period, the participant will recognize ordinary income equal to the
amount of cash and/or the fair market value of the shares received, and the Company will be
entitled to a corresponding deduction in the same amount and at the same time. If performance
units are settled in whole or in part in shares, upon the participant&#146;s subsequent disposition of
the shares the participant will recognize a capital gain or loss (long-term or short-term,
depending on the holding period) to the extent the amount realized upon disposition differs from
the tax basis of the shares (i.e., the fair market value of the shares on the date the participant
received the shares).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Unrestricted Stock Awards, Performance Awards, Incentive Awards</I>. A participant who is granted
or paid an unrestricted stock award, a performance award, or an annual incentive award will
recognize ordinary income equal to the amount of cash paid and/or the fair market value of the
shares received on the date of the award, and the Company will be entitled to a corresponding
income tax deduction.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Section&nbsp;</I><I>162(m)</I><I> Limit on Deductibility of Compensation. </I>Section&nbsp;162(m) of the Internal Revenue
Code limits the deduction we can take for compensation we pay to our chief executive officer and
our four other highest paid officers (determined as of the end of each year) to $1,000,000 per year
per individual. However, performance-based compensation that meets the requirements of Section
162(m) does not have to be included as part of the $1,000,000 limit. The 2007 Plan is designed so
that awards granted to the covered individuals may meet the Section 162(m) requirements for
performance-based compensation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Code Section&nbsp;409A</I>. Awards under the 2007 Plan may constitute, or provide for, a deferral of
compensation under Section&nbsp;409A of the Internal Revenue Code. If the requirements of Section&nbsp;409A
are not complied with, holders of such awards may be taxed earlier than would otherwise be the case
(e.g., at the time of vesting instead of the time of payment) and may be subject to an additional
20&nbsp;percent penalty tax and, potentially, interest and penalties. We have sought to structure the
2007 Plan, and we expect to seek to structure awards under the 2007 Plan, to comply with Section
409A and the Department of Treasury regulations and other interpretive guidance that may be issued
by the Treasury Department and the Internal Revenue Service pursuant to Section&nbsp;409A. To the
extent that we determine that any award granted under the 2007 Plan is subject to Section&nbsp;409A, the
award agreement evidencing such award will generally incorporate the terms and conditions required
by Section&nbsp;409A. The 2007 Plan and any applicable awards may be modified to exempt the awards from
Section&nbsp;409A or comply with the requirements of Section&nbsp;409A.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Code Section&nbsp;280G</I>. Awards that are accelerated or enhanced as a result of a corporate
transaction that constitutes a change in control of the Company may give rise, in whole or in part,
to excess parachute payments within the meaning of Code Section&nbsp;280G to the extent such payments,
when aggregated with other payments subject to Code Section&nbsp;280G, exceed applicable limitations.
Any such excess parachute payments are not deductible by the Company, and are subject to a 20
percent excise tax payable by the employee.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Vote Required</B><I>.</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Approval of the 2007 Plan requires the affirmative vote of the holders of a majority of the
Company&#146;s common shares present in person or by proxy and entitled to vote at this Annual Meeting.
<B>The Board of Directors of SIFCO unanimously recommends a vote </B><U><B>FOR</B></U><B> the adoption of the SIFCO
Industries, Inc. 2007 Long-Term Incentive Plan.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>STOCK OWNERSHIP OF EXECUTIVE OFFICERS, DIRECTORS AND NOMINEES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth, as of October&nbsp;31, 2007, the number of Common Shares of the
Company beneficially owned by each director, nominee for director and named executive officer and
all directors and executive officers as a group, according to information furnished to the Company
by such persons:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Amount and Nature of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Name of Beneficial Owner</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Beneficial Ownership (1)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Percent of Class</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Jeffrey P. Gotschall (1)(2)(3)(4)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">148,100</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="CENTER" valign="top">2.80 %</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Hudson D. Smith (2)(3)(4)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">113,887</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="CENTER" valign="top">2.16 %</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Frank A. Cappello (1)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">39,000</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="CENTER" valign="top">*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">J. Douglas Whelan
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">8,000</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="CENTER" valign="top">*</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Frank N. Nichols
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">3,225</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="CENTER" valign="top">*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">P. Charles Miller, Jr.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2,700</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="CENTER" valign="top">*</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Alayne L. Reitman
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1,100</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="CENTER" valign="top">*</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">All Directors and Executive Officers as a Group (7 persons) (1)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">316,012</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="CENTER" valign="top">5.98 %</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">*&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>Common Shares owned are less than one percent of class.</TD>
</TR>
<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Unless otherwise stated below, the named person owns all of such shares of record and has
sole voting and investment power as to those shares. A portion of the total number of shares
for the following persons and group represents shares which could be acquired within 60&nbsp;days
of October&nbsp;31, 2007 by exercise of stock options: Mr.&nbsp;J. P. Gotschall, 5,000 shares; Mr.&nbsp;F. A.
Cappello, 38,000 shares; and all directors and executive officers as a group, 43,000 shares.
In accordance with SEC rules, the percentage ownership for each of Mr.&nbsp;J.P. Gotschall, Mr.
F.A. Cappello and the above-referenced group has been calculated assuming full exercise of the
aforementioned stock options by such individual or group, but no exercise of outstanding
options by any other person.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Includes, in the cases of Mr.&nbsp;J. P. Gotschall and Mr.&nbsp;H. D. Smith, shares owned by their
spouses and any minor children or in trust for them, their spouses and their lineal
descendants.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Includes Voting Trust Certificates issued by the aforementioned (see page 2) Voting Trust
representing an equivalent number of Common Shares held by such Trust as follows: Mr.&nbsp;J. P.
Gotschall &#151; 143,100; and Mr.&nbsp;H. D. Smith &#151; 112,447.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Mr.&nbsp;J. P. Gotschall and Mr.&nbsp;H. D. Smith are cousins.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;16(a) of the Securities Exchange Act of 1934 (&#147;Exchange Act&#148;) requires the Company&#146;s
officers and directors, and persons who own more than ten (10)&nbsp;percent of a registered class of the
Company&#146;s equity securities, to file reports of ownership and changes in ownership with the U.S.
Securities and Exchange Commission (&#147;SEC&#148;). Officers, directors and greater than ten (10)&nbsp;percent
shareholders are required by SEC regulations to furnish the Company with copies of all Section
16(a) forms they file.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based solely upon a review of Forms 3, 4 and 5 furnished to the Company during, or with
respect to, the fiscal year ended September&nbsp;30, 2007, the Company believes that no director,
officer, beneficial owner of more than ten (10)&nbsp;percent of its outstanding Common Shares or any
other person subject to Section 16(a) of the Exchange Act failed to file on a timely basis during
fiscal 2007 any reports required by 16(a) of the Exchange Act.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>CORPORATE GOVERNANCE AND BOARD OF DIRECTOR MATTERS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Board of Directors </B>&#151; The Company&#146;s Board of Directors held four (4)&nbsp;regularly scheduled
meetings during the last fiscal year. The Board of Directors&#146; standing committees are the Audit,
Compensation, and Nominating and Governance Committees. Directors are expected to attend Board
meetings, our annual shareholders&#146; meeting, and the meetings of the committees on which he or she
serves. During fiscal 2007 each director attended at least 75% of the total number of meetings of
the Board and the committees on which he or she served. SIFCO&#146;s independent directors meet
separately at each regularly scheduled Board meeting. All of the directors attended the Company&#146;s
2007 Annual Meeting of Shareholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Director Independence </B>&#151; The members of the Board of Directors&#146; standing committees are all
independent directors as defined in Section&nbsp;121A of the AMEX Listing Standards, Policies and
Requirements. The Board has affirmatively determined that Mr.&nbsp;J. D. Whelan, Ms.&nbsp;A. L. Reitman, Mr.
P. C. Miller, Jr., and Mr.&nbsp;F. N. Nichols meet these standards of independence. The Board has
affirmatively determined that Mr.&nbsp;J. D Gotschall and Mr.&nbsp;H. D. Smith do not meet these standards of
independence, are therefore not independent and, accordingly, are not members of any of the Board&#146;s
standing committees.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Board Committees</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><I>Audit Committee</I></U> &#151; The functions of the Audit Committee are to select, subject to
shareholder ratification, the Company&#146;s independent registered public accounting firm; to approve
all non-audit related services performed by the Company&#146;s independent registered public accounting
firm; to determine the scope of the audit; to discuss any special problems that may arise during
the course of the audit; and to review the audit and its findings for the purpose of reporting to
the Board of Directors. The members of the Audit Committee are all independent directors as defined
in Section&nbsp;121A of the AMEX Listing Standards, Policies and Requirements. Each member of the Audit
Committee is financially literate and A. L. Reitman is designated as the Audit Committee financial
expert. The Audit Committee, currently composed of A. L. Reitman (Chairperson), P. C. Miller, Jr.,
J. D. Whelan, and F. N. Nichols, held two (2)&nbsp;meetings separate from a regular board meeting and
two (2)&nbsp;meetings as a part of a regular board meeting during fiscal 2007. The Audit Committee
operates under a written charter that is available on the Company&#146;s website at
<U>www.sifco.com</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><I>Compensation Committee</I></U>&#151; The functions of the Compensation Committee are to review and
make recommendations to the Board to ensure that our executive compensation and benefit programs
are consistent with our compensation philosophy and corporate governance guidelines and, subject to
the approval of the Board, to establish the executive compensation packages offered to directors
and officers. Officer&#146;s base salary, target annual incentive compensation awards and granting of
stock options, and the number of shares that should be subject to each option so granted, are set
at competitive levels with the opportunity to earn reasonable pay for targeted performance as
measured against peer group of companies. The Compensation Committee is appointed by the Board,
and consists entirely of directors who are independent directors as defined in Section&nbsp;121A of the
AMEX Listing Standards, Policies and Requirements. Our Compensation Committee, currently composed
of J. D. Whelan (Chairperson), A. L. Reitman, P. C. Miller, Jr., and F. N. Nichols, held one (1)
meeting during fiscal 2007. The Compensation Committee operates under a written charter that is
available on the Company&#146;s website at <U>www.sifco.com.</U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><I>Nominating and Governance Committee</I></U> &#151; The functions of the Nominating and Governance
Committee are to recommend candidates for the Board of Directors and address issues relating to (i)
senior management performance and succession and (ii)&nbsp;the composition and procedures of the Board.
The Nominating and Governance Committee is currently composed of A. L. Reitman, J. D. Whelan, P. C.
Miller, Jr., and F. N. Nichols. The members of the Nominating and Governance Committee are all
independent directors as defined in Section&nbsp;121A of the AMEX Listing Standards, Policies and
Requirements. The Nominating and Governance Committee did not hold any formal meetings during the
last fiscal year; however, its function was fulfilled during sessions of the full Board of
Directors. The Nominating and Governance Committee operates under a written charter that is
available on the Company&#146;s website at <U>www.sifco.com</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Process for Selecting and nominating Directors &#151; </B>In its role as the nominating body for the
Board, the Nominating and Governance Committee reviews the credentials of potential director
candidates (including potential
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">candidates recommended by shareholders), conducts interviews and makes formal recommendations
to the Board for the annual and any interim election of directors. In making its recommendations,
the Nominating and Governance Committee considers a variety of factors, including skills,
independence, background, experience, diversity and compatibility with existing Board members.
Other than the foregoing, there are no stated minimum criteria for director nominees, although the
Nominating and Governance Committee may consider such other factors as it deems appropriate in the
best interests of the Company and its shareholders. The Nominating and Governance Committee will
consider shareholder nominations for directors at any time. Any shareholder desiring to have a
nominee considered by the Nominating and Governance Committee should submit such recommendation in
writing to a member of the Nominating and Governance Committee or the Secretary of the Company, c/o
SIFCO Industries, Inc., 970 East 64<SUP style="font-size: 85%; vertical-align: text-top">th</SUP> Street, Cleveland, OH 44103. The recommendation
letter should include the shareholder&#146;s own name, address and the number of shares owned and the
candidate&#146;s name, age, business address, residence address, and principal occupation, as well as
the number of shares the candidate owns. The letter should provide all of the information that
would need to be disclosed in the solicitation of proxies for the election of directors under
federal securities laws. Finally, the shareholder should also submit the recommended candidate&#146;s
written consent to be elected and commitment to serve if elected. The Company may also require a
candidate to furnish additional information regarding his or her eligibility and qualifications.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Compensation Committee Interlocks and Insider Participation &#151; </B>None of the directors who served
on the Compensation Committee during fiscal 2007 was a current or former officer or an employee of
the Company or had any relationship with the Company that would be required to be disclosed by the
Company under applicable related party transaction requirements. During fiscal 2007, no executive
officer of the Company served as a member of the board of directors or compensation committee of
any entity that has one or more of its executive officers serving as a member of the Company&#146;s
Board of Directors or Compensation Committee and, therefore, there were no interlocking
relationships (as described in Item&nbsp;407 (e) (iii)&nbsp;of SEC Regulation&nbsp;S-K) between members of the
Compensation Committee and the Company. J. D. Whelan, Frank N. Nicholas, P. Charles Miller, Jr.
and Alayne L. Reitman served as the members of the Compensation Committee during fiscal 2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Communications with the Board of Directors </B>&#151; Shareholders may communicate their concerns
directly to the entire Board of Directors or specifically to non-management directors of the Board.
Such communication can be confidential or anonymous, if so designated, and may be submitted in
writing to the following address: Board of Directors, SIFCO Industries, Inc., c/o Mr.&nbsp;Daniel G.
Berick, Secretary, 970 E. 64<SUP style="font-size: 85%; vertical-align: text-top">th</SUP> Street, Cleveland, Ohio 44103.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Code of Ethics </B>&#151; The Company&#146;s Code of Ethics applies to all of its employees, including its
Chief Executive Officer and its Chief Financial Officer. The Code of Ethics and all committee
charters are posted in the Investor Relations portion of the Company website <U>www.sifco.com</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Certain Relationships and Related Transactions </B>&#151;  There were no transactions between the
Company and its officers, directors or any person related to its officers or directors, or with any
holder of more than 5% of the Company&#146;s common shares, either during 2007 or up to the date of this
proxy statement, except for the relationship with Mr.&nbsp;H.D. Smith related to the sales
representative agreement that is in place and that is disclosed/discussed in Directors
Compensation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company reviews all transactions between the Company and any of our officers and
directors. The Company&#146;s Code of Ethics, which applies to all employees, emphasizes the importance
of avoiding situations or transactions in which personal interests interfere with the best
interests of the Company or its shareholders. In addition, the Company&#146;s corporate governance
practices include procedures for discussing and assessing relationships, including business,
financial, familial and nonprofit, among the Company and its officers and directors, to the extent
that they may arise. The Board reviews any transaction with a director to determine, on a
case-by-case basis, whether a conflict of interest exists. The Board ensures that all directors
voting on such a matter have no interest in the matter and discusses the transaction with counsel
as deemed necessary. The Board will generally delegate the task of discussing, reviewing and
approving transactions between the Company and any of its officers or directors to the Audit
Committee.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>COMPENSATION DISCUSSION AND ANALYSIS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Executive Compensation Philosophy and Objectives </B>&#151;  The Company recognizes the importance of
maintaining sound principles for the development and administration of our executive compensation
and benefit programs. Specifically, our executive compensation and benefit programs are designed to
meet the following objectives &#151; (i)&nbsp;to compensate executive officers at competitive levels to
ensure the Company attracts and retains key management employees throughout the organization; (ii)
to provide executive officers with the opportunity to earn reasonable pay for targeted performance;
(iii)&nbsp;to link executives&#146; compensation, particularly annual incentive compensation, to established
Company performance goals; and (iv)&nbsp;on occasion, to provide management with an &#147;special
recognition&#148; incentive to achieve certain extraordinary goals in response to changing market or
operational conditions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company believes that a disciplined focus on these core principles will benefit the
Company, and ultimately its shareholders, by ensuring that it can attract and retain highly
qualified executive officers who are committed to the Company&#146;s long-term success.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Role of the Compensation Committee &#151; </B>The Compensation Committee has taken the following steps
to ensure the Company&#146;s executive compensation and benefit programs are consistent with the
Company&#146;s compensation philosophy and corporate governance guidelines:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Utilized studies and surveys of qualified independent professionals to (i)&nbsp;assess the
competitiveness of our overall executive compensation and benefits program and (ii)
provide a high level and objective review of our executive compensation program;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Developed executive officer compensation structures based on targeting a competitive
level of pay as measured against similarly situated companies;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Maintained a practice of reviewing the performance and determining the total
compensation earned, paid or awarded to the Company CEO independent of input from the
CEO;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Reviewed, on an annual basis, the performance of executive officers with assistance
from the CEO and determined proper total compensation based on performance and
competitive levels as measured against similarly situated companies; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Maintained the practice of holding executive sessions (without management present) at
every Committee meeting</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Total Compensation &#151; </B>The Company seeks to compensate its executive officers at competitive
levels, with the opportunity to earn reasonable pay for targeted performance, through programs that
emphasize performance-based incentive compensation. To that end, total executive compensation is
structured to ensure that, due to the nature of the Company&#146;s business, there is a focus on the
Company&#146;s financial performance and shareholder return. The Company believes total executive
compensation is reasonable. Further, in light of its compensation philosophy, The Company believes
that the total compensation package for its executive officers should continue to consist of base
salary, annual (cash)&nbsp;incentive compensation awards, long-term incentive compensation, and certain
other benefits<B>.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Elements of Compensation</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><I>Base Salary</I></U> &#151; When determining the amount of base salary for the Company&#146;s executive
officers, the Compensation Committee considers the salaries of similarly situated personnel in
similar companies. When making adjustments in base salaries, the Compensation Committee also
considers corporate financial performance. In certain individual cases where deemed appropriate,
the Compensation Committee may also consider certain non-financial performance measures, such as
(i)&nbsp;increases in market share, (ii)&nbsp;manufacturing efficiency gains, (iii)&nbsp;improvements in product
quality, etc. For fiscal 2007, Mr.&nbsp;J. P. Gotschall and Mr.&nbsp;F. A. Cappello received increases of 0%
and 6.6%, respectively, in their base salaries. The increase for Mr.&nbsp;F.A. Cappello was the result
of the Company&#146;s improved financial performance along with his individual performance,
accomplishments and varied responsibilities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><I>Annual Incentive Compensation Awards</I></U> <B>&#151; </B>This form of non-equity incentive compensation
for executive officers provides for the award of annual cash bonuses. In years with strong
financial and/or strategic performance,
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">executive officers can earn cash incentive awards that would be considered reasonable as
compared to similarly situated companies.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Annual incentive compensation awards are intended to reinforce the Company&#146;s strategic
objectives, promote achievement of certain financial and/or strategic targets and reward the
performance of individual executive officers in fulfilling their respective defined
responsibilities. Consistent with its compensation philosophy, the Company&#146;s annual incentive
compensation award payments to executive officers are contingent upon the achievement of a specific
performance target during the applicable performance period. Specific annual performance targets
are generally based on a number of criteria including (i)&nbsp;the Company&#146;s consolidated profit before
tax, subject to certain adjustments, (ii)&nbsp;an individual business unit&#146;s operating profit, subject
to certain adjustments, (iii)&nbsp;an executive officer&#146;s performance relative to strategic objectives,
(iv)&nbsp;utilization (disposition)&nbsp;of performing (non-performing) Company assets or (v)&nbsp;other similar
criteria. These criteria may change from one period to another based on the particular strategic
focus of the Company for that respective period as deemed appropriate by the compensation committee
of the Board. Each performance target may also have a minimum threshold and maximum payout level.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For 2007, the specific performance targets for both of Mr.&nbsp;J.P. Gotschall and Mr.&nbsp;F.A.
Cappello were (i)&nbsp;to achieve $4.7&nbsp;million of consolidated SIFCO Industries, Inc. profit before tax
and (ii)&nbsp;to complete the effective disposition of certain non-performing assets of the Company&#146;s
non U.S. subsidiaries, while maintaining a positive cash flow from such divested operations during
the disposition process.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to setting performance targets, the Compensation Committee also sets each
executive officer&#146;s target annual incentive compensation amount. This target annual incentive
compensation amount is based on a percentage of each executive officer&#146;s base salary. In
determining the target annual incentive compensation amount, the Committee considers the
executive&#146;s base salary and determines the appropriate target annual incentive compensation amount
that is required to keep the executive&#146;s annual total cash compensation at a competitive level as
compared to similarly situated companies. In addition, the Compensation Committee may also consider
various other factors, including the impact that executive officers and other key employees are
capable of and should have relative to achieving the Company&#146;s stated performance target.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For 2007, Mr.&nbsp;J.P Gotschall and Mr.&nbsp;F.A. Cappello both had two (2)&nbsp;separate target annual
incentive compensation amounts as follows &#151; (i)&nbsp;0-75% of base salary, subject to a minimum
threshold amount, related to the achieved level of consolidated SIFCO Industries, Inc. profit
before tax of $4.7&nbsp;million and (ii)&nbsp;a &#147;special recognition&#148; cash incentive opportunity equal to
100% of base salary, related to the successful and effective disposition of certain non-performing
assets of the Company&#146;s non U.S. subsidiaries. These equated to targeted annual incentive
compensation amounts of $155,250 and $207,000 for Mr.&nbsp;J. P. Gotschall, and $120,750 and $160,000
for Mr.&nbsp;F. A. Cappello, respectively, which amounts were to be paid upon the achievement of the
above described performance targets. In 2007, Mr.&nbsp;J.P. Gotschall and Mr.&nbsp;F.A. Cappello received
cash bonuses of $362,250 (or 175% of base salary) and $280,750 (or 175% of base salary) at
year-end, respectively, because all stated performance targets were achieved or exceeded.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Because of the relative importance of annual incentive compensation awards to total
compensation and its direct link to the achievement of specific performance targets, the Company
believes that the annual incentive compensation awards remain an important part of its compensation
program.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><I>Long-Term Equity-Based Incentive Compensation</I></U> &#151; Historically, the primary form of the
Company&#146;s long-term incentive compensation consisted of nonqualified stock options. The Company
selected stock options because it believed they were a competitive form of compensation expected by
its executive officers and senior management. Two (2)&nbsp;separate long-term equity-based incentive
compensation plans were established by the Company in 1995 and 1998 to promote the long-term
financial interest of the Company by providing for the award of equity-based incentives to
executive officers and other senior management who provide critical, value-added services to the
Company. To reinforce the commitment to long-term results and to retain executives, the Company&#146;s
existing long-term equity-based compensation awards vest and become exercisable over a four year
period. The Compensation Committee has granted all of the awards available for granting under the
Company&#146;s two existing long-term equity-based incentive compensation plans. Therefore, no stock
option awards were granted in fiscal 2007 and, as of September&nbsp;30, 2007, no
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">further options are available to be awarded under either of the Company&#146;s two (2)&nbsp;existing
plans. Both Mr.&nbsp;J.P. Gotschall and Mr.&nbsp;F.A. Cappello have exercisable options as of September&nbsp;30,
2007.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With the change in the accounting treatment of options, the Company, like many other
companies, re-examined the cost and competitive need for options, which process included a review
of competitive data regarding equity-based awards. The Company determined that a combination of
equity-based, long-term incentive compensation awards (e.g. stock options, time-based stock
appreciation rights, performance-based restricted stock units, etc.) would provide a package of
incentive compensation vehicles that would more effectively align the interests of the Company&#146;s
executives with the interests of its shareholders and provide a balance between (i)&nbsp;rewards for
achieving specified financial targets and (ii)&nbsp;rewards for growth in market value over time. As
described in this proxy statement under &#147;Proposal to Adopt the 2007 Long-term Incentive
Compensation Plan,&#148; the Company is proposing, for shareholder approval, a new long-term incentive
compensation plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company has granted stock options only with an exercise price equal to or greater than the
market price of its common shares on the grant date. We do not attempt to time the grant of
stock-based awards to the release of material nonpublic information. Our practice is to publicly
release financial results for completed annual and quarterly periods at approximately the same time
we file the required annual or quarterly report with the SEC.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Other Benefits </B>&#151;  The Company maintains certain other plans which provide, or may provide,
compensation and benefits to our executive officers. These plans are principally our pension plan,
supplemental executive retirement plan, and 401(k) plan, which are generally made available to all
employees of the Company who meet certain eligibility requirements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><I>Pension Plan</I></U> &#151; The Company maintains a defined benefit pension plan for all non-union
salaried employees of the Company&#146;s U. S. operations that were hired prior to March&nbsp;1, 2003,
including the executive officers and certain other key employees. This defined benefit pension plan
was frozen as of March&nbsp;1, 2003 and, consequently, although the plan will otherwise continue, the
plan ceased the accrual of additional pension benefits for periods after March&nbsp;1, 2003.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><I>Supplemental Executive Retirement Plan</I></U> &#151; The Company has a supplemental executive
retirement plan, which provides supplemental retirement income to those employees whose maximum
annual benefit payable under the Pension Plan was limited by the Internal Revenue Code (&#147;IRC&#148;). The
only employee of the Company that had earned an accrued benefit under the Pension Plan that
exceeded such IRC limitation was Mr.&nbsp;J. P. Gotschall. As with the Pension Plan, this plan was also
frozen as of March&nbsp;1, 2003 and, consequently, although the plan will otherwise continue, the plan
ceased the accrual of additional pension benefits for periods after March&nbsp;1, 2003.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><I>4</I><I>01(k)</I><I> Plan</I></U> &#151; The Company&#146;s maintains a defined contribution plan, which has been
qualified under section 401(k) of the Internal Revenue (&#147;IRS&#148;) Code, and which covers all
non-union, salaried employees of the Company&#146;s U. S. operations, including the executive officers
and certain other key employees. The plan provides that covered employees may defer and contribute
1% to 10% of their annual salary, as defined and subject to certain IRS limitations, to the plan
and the Company will provide a nondiscretionary matching contribution equal to 50% of the employees
contributed amount, up to the initial 10% of the employees&#146; elected deferral contribution. Covered
employees may also contribute pre-tax amounts in excess of 10%, subject to certain IRS limitations,
that will not be eligible for the Company matching contributions. If and/or when Company
performance levels support it, there may also be a discretionary Company matching contribution
amount, up to 5% of the covered employees annual compensation (and also based on the employees
elected deferral contribution level), to be determined annually by the Board of Directors of the
Company based on predetermined performance objectives. For fiscal 2007, the Company will make an
additional discretionary matching contribution of 5%. The employees&#146; contributions and the matching
Company contribution may be placed, at the direction of the employee, in various combinations of
fixed income and equity security investments.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For fiscal 2007, the Company&#146;s combined matching contributions provided to Mr.&nbsp;J.P. Gotschall
and Mr.&nbsp;F.A. Cappello under its 401(k) plan were valued at $13,125 and $11,662, respectively.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->15<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><I>Perquisites and Other Benefits</I></U> <B>&#151; </B>The following other benefits are generally available
to all employees of the Company &#151; (i)&nbsp;100% of the premium cost for term life insurance coverage
with a death benefit equal to 150% of such employees&#146; annual base compensation and (ii)&nbsp;50% of the
premium cost for long term disability coverage (if such coverage is elected by the employee) with
income replacement equal to 60% of such employees&#146; annual base compensation up to a maximum of
$120,000 per year. The value of such perquisites to the named executive officers in fiscal 2007 was
not material.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><I>Change in Control Agreements and Severance Agreements</I></U> &#151; The Company has entered into
change in control agreements and/or severance agreements with its executive officers because it
believes that such agreements serve to protect the Company and such executive officers in the event
of involuntary termination of such executives for other than cause and/or as a result of a change
in control of the Company. The purpose of these agreements is to reinforce and encourage the
continued attention and dedication of these executive officers to their assigned duties without
distraction in the face of (i)&nbsp;solicitations by other employers and (ii)&nbsp;the potentially disturbing
circumstances arising from the possibility of a change in control of the Company. These agreements
are discussed below under &#147;Potential Payments upon Termination or Change in Control.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>EXECUTIVE COMPENSATION</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Summary Compensation Table for Fiscal 2007</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth information regarding the compensation of the Company&#146;s Chief
Executive Officer and Chief Financial Officer, the only named executive officers of the Company for
fiscal 2007:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="28%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Non-Equity</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Incentive</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>All Other</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Name and</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Compensation ($)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Stock Option Awards</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Compensation</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Total Compensation</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Principal Position</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Year</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Salary ($)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>(1) (4)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>($) (2)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>($) (3)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>($)</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Jeffrey P. Gotschall
Chairman and CEO</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">207,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">362,250</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">-0-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,175</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">582,425</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Frank A. Cappello
Vice President and CFO</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">161,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">280,750</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,247</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,037</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">457,034</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Reflects the value of (i)&nbsp;annual incentive compensation earnings in the amounts
of $155,250 for Mr.&nbsp;J.P. Gotschall and $120,750 for Mr.&nbsp;F.A. Cappello and (ii)
&#147;special recognition&#148; cash incentive earnings in the amounts of $207,000 for Mr.&nbsp;J.P.
Gotschall and $160,000 for Mr.&nbsp;F.A. Cappello.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Represents the proportionate amount of the total fair value of stock option
awards recognized by the Company as an expense in 2007 for financial accounting
purposes. The fair values of these awards and the amounts expensed in 2007 were
determined in accordance with Financial Accounting Standards Board Statement of
Financial Accounting Standards No.&nbsp;123(R), <I>Share-Based Payment </I>(&#147;SFAS 123(R)&#148;). The
awards for which expense is shown in this table include the awards described in Option
Exercises and Fiscal Year-end Values below. The assumptions used in determining the
grant date fair values of these awards are described in the notes to the Company&#146;s
consolidated financial statements, included in its annual reports to shareholders.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>All other compensation consists of (i)&nbsp;amounts contributed by the Company as
matching contributions with respect to U.S. employees pursuant to the SIFCO
Industries, Inc. Employees&#146; 401(k) Plan, a defined contribution plan and (ii)&nbsp;amounts
contributed by the Company&#146;s charitable foundation to educational organizations on
behalf of named executive officers.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Reference Compensation Discussion and Analysis for a detailed discussion of the
material terms of the Company&#146;s non-equity incentive compensation plan</TD>
</TR>

</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->16<!-- /Folio -->
</DIV>




<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Grants of Plan-Based Awards for Fiscal 2007</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth information regarding the grants of plan-based awards for the
Company&#146;s Chief Executive Officer and Chief Financial Officer, the only named executive officers of
the Company for fiscal 2007:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="25%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="34%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="10"><B>Estimated Future Payouts under Non-Equity</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="10" style="border-bottom: 1px solid #000000"><B>Incentive Plan Awards</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="CENTER"><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Grant Date</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Threshold ($)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Target ($)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Maximum ($)</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="15" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Jeffrey P. Gotschall</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">November 2006</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP align="center" valign="top">Fiscal 2007  Management Incentive Plan -Regular</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">51,750</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">103,500</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">155,250</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP align="center" valign="top">Fiscal 2007  Management Incentive Plan -Special</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">207,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">207,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">207,000</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Frank A. Cappello</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">November 2006</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP align="center" valign="top">Fiscal 2007  Management Incentive Plan -Regular</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">40,250</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">80,500</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">120,750</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP align="center" valign="top">Fiscal 2007  Management Incentive Plan -Special</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">160,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">160,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">160,000</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 0pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>The actual amounts paid are reflected in the Summary Compensation Table.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Reference Compensation Discussion and Analysis for a detailed discussion of the
material terms of the Company&#146;s non-equity incentive compensation plan.</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Outstanding Equity Awards at Fiscal Year-End for 2007</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For each individual named in the Summary Compensation Table, set forth below is information
relating to such person&#146;s exercise of stock options during fiscal 2007 and ownership of unexercised
stock options at September&nbsp;30, 2007.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Number of Securities</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Underlying Unexercised</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>Options at Year-End (#)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Option Exercise</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Option Expiration</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="CENTER" style="border-bottom: 1px solid #000000"><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Exercisable</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Unexercisable</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Price ($)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Date</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Jeffrey P. Gotschall</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">-0-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">April 2012</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Frank A. Cappello</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">-0-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6.81</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">March 2010</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">-0-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.69</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">November 2010</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">-0-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">April 2012</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">2,500</TD>
    <TD nowrap>(1)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">November 2013</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">3,000</TD>
    <TD nowrap>(2)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.74</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">July 2015</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 0pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>All of the remaining 2,500 options vest in November&nbsp;2007.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Of the remaining 3,000 options, 1,500 options vest in July&nbsp;2008 and 1,500 options
vest in July&nbsp;2009.</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Defined Benefit Pension Plans</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The amounts stated in the foregoing Summary Compensation Table do not include amounts related
to a change in the value of pension benefits payable to either Mr.&nbsp;J.P. Gotschall or Mr.&nbsp;F.A.
Cappello because, as described below, the Company&#146;s qualified, non-contributory pension plan known
as SIFCO Industries, Inc. Salaried Retirement Plan (the &#147;Retirement Plan&#148;) is frozen and,
therefore, no additional benefits accrued to either Mr.&nbsp;J.P. Gotschall or Mr.&nbsp;F.A. Cappello in
fiscal 2007. Both Mr.&nbsp;J.P. Gotschall and Mr.&nbsp;F.A. Cappello participate on the same basis as other
salaried employees in the Retirement Plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Summary Compensation Table on page 15 includes both base salary and incentive compensation.
Benefits payable under the Retirement Plan are calculated using only base salary. Under the terms
of the Retirement Plan, as amended March&nbsp;1, 2003 to cease the accrual of future retirement benefits
as of that date, the amount of normal annual retirement benefit payable to a participating employee is generally based upon (i)&nbsp;years of service with the
Company prior to
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->17<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">normal retirement date but limited to service through March&nbsp;1, 2003; (ii) &#147;final
average earnings&#148; (average base salary during the 60 consecutive month period, within the 120&nbsp;month
period preceding March&nbsp;1, 2003, during which the total amount of base salary was the highest); and
(iii)&nbsp;average Social Security covered compensation. For an employee retiring with 25&nbsp;years of
service or less as of March&nbsp;1, 2003, the benefit is equal to 2.144% of final average earnings minus .625% of average Social Security covered compensation multiplied by years of service up to 25
years. If an employee has more than 25&nbsp;years of service as of March&nbsp;1, 2003, the benefit is
increased by 1.25% of final average earnings multiplied by his years of service in excess of 25
years. The amount so determined is payable in the form of a single life annuity or, under certain
circumstances, a lump sum payment. Under the Internal Revenue Code, the maximum annual benefit
payable under the Retirement Plan to covered employees is limited to $180,000 per year for 2007.
Such limit was $160,000 in 2003, the year in which benefits under the Retirement Plan were frozen.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Supplemental Executive Retirement Plan</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The maximum amount of final average earnings used to compute benefits under the Retirement
Plan is limited by the Internal Revenue Code. Therefore, in response to such limitations, the
Company established a non-qualified Supplemental Executive Retirement Plan (&#147;SERP&#148;) to provide
covered employees with a benefit amount equal to what they would have been entitled to receive
under the Retirement Plan, as of March&nbsp;1, 2003, if no such limitations existed.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The estimated annual retirement benefit under the combined plans for each participant is based
upon the base salary at March&nbsp;1, 2003, the date on which benefits under the Retirement Plan and
SERP ceased to accrue for all participants. The following table shows estimated combined annual
benefits payable upon retirement under the Retirement Plan and the SERP.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="28%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="23" style="border-bottom: 1px solid #000000"><B>Years of Service</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Remuneration</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>15</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>20</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>25</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>30</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>35</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>40</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="25" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">$125,000</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">36,502</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">48,670</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">60,837</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">68,649</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">76,462</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">84,274</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:22px; text-indent:-15px">150,000</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">44,542</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">59,390</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">74,237</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">83,612</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">92,987</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">102,362</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:22px; text-indent:-15px">175,000</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">52,582</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">70,110</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">87,637</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">98,574</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">109,512</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">120,449</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:22px; text-indent:-15px">200,000</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">60,622</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">80,830</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">101,037</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">113,537</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">126,037</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">138,537</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:22px; text-indent:-15px">225,000</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">68,662</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">91,550</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">114,437</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">128,499</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">142,562</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">156,624</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:22px; text-indent:-15px">250,000</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">76,702</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">102,990</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">127,837</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">143,462</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">159,087</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">174,712</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:22px; text-indent:-15px">275,000</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">84,742</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">112,990</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">141,247</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">158,424</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">175,612</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">192,799</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:22px; text-indent:-15px">300,000</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">92,782</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">123,710</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">154,637</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">173,387</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">192,137</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">210,887</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:22px; text-indent:-15px">325,000</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">100,882</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">134,430</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">168,037</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">188,349</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">208,662</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">228,997</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The payments by the Company to fund the benefits under the Retirement Plan and SERP are
actuarially determined. The estimated annual benefits payable upon retirement and projected years
of credited service through March&nbsp;1, 2003, the date on which benefits under both plans ceased to
accrue for all participants, are as follows: Mr.&nbsp;J. P. Gotschall &#151; $140,500 (29.7&nbsp;years) and Mr.
F. A. Cappello &#151; $7,800 (3.1&nbsp;years). Total pension expense related to the Retirement Plan and
SERP for fiscal year 2007 was $60,400.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Potential Payments Upon Termination or Change-in-Control</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company has entered into Change in Control Severance Agreements with Mr.&nbsp;J.P. Gotschall
and Mr.&nbsp;F.A. Cappello, which provide severance benefits to such executives in the event of their
involuntary termination resulting from a change in control. In addition, the Company has entered
into a Separation Pay Agreement with Mr.&nbsp;F.A. Cappello, which provides severance benefits in the
event of his involuntary termination with or without a change in control. These agreements are
intended to protect the Company and such key executive officers in the event of their involuntary
termination for other than cause and/or as a result of a change in control of the Company. The
purpose of these agreements is to reinforce and encourage the continued attention and dedication of
these executives to their assigned duties without distraction in the face of (i)&nbsp;solicitations by
other employers and (ii)&nbsp;the potentially disturbing circumstances arising from the possibility of a
change in control of the Company. The Change in Control Severance Agreements provide for a number
of benefits, including lump sum severance payments (equal to $500,000 for Mr.&nbsp;J.P. Gotschall and
100% of annual compensation, including base salary plus annual cash incentive, for Mr.&nbsp;F.A.
Cappello), continuation of health and welfare insurance coverage for up to 24&nbsp;months following
termination, and accelerated vesting of existing stock options. The Separation Pay Agreement provides Mr.&nbsp;F.A. Cappello
with a severance
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->18<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">payment equal to 150% of his annual compensation, including base salary plus
annual cash incentive, and continuation of health and welfare insurance coverage for up to 18
months following termination. For purposes of determining annual compensation relative to severance
payments to Mr.&nbsp;F.A. Cappello, the annual cash incentive portion of his annual compensation is
determined by calculating an average of the annual cash incentive amounts awarded to Mr.&nbsp;F.A.
Cappello during the three fiscal years prior to termination.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Change in Control Severance Agreements provide that, upon the involuntary termination of
Mr.&nbsp;J.P. Gotschall or Mr.&nbsp;F. A. Cappello other than for cause after a change in control has
occurred, the Company is required to make the severance payments as outlined above. The Separation
Pay Agreement provides that, upon the involuntary termination of Mr.&nbsp;F.A. Cappello other than for
cause (regardless of whether a change in control has occurred), the Company is required to make the
severance payment as outlined above.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table describes the potential payments upon termination of employment of Mr.&nbsp;J.
P. Gotschall and Mr.&nbsp;F.A. Cappello. The table assumes the executives&#146; employment was terminated on
September&nbsp;28, 2007, the last business day of the Company&#146;s 2007 fiscal year.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Potential Payments Upon Termination of Employment</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Involuntary Not For</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Involuntary Not For</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Cause Termination &#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Cause Termination &#151;</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="CENTER"><B>Name and</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Voluntary</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>without a</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>with a</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="CENTER"><B>Principal Position</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Termination</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Change in Control</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Change in Control</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Jeffrey P. Gotschall
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">
Severance</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">-0-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">-0-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">500,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Stock Options</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">-0-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">-0-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">-0-</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Health &#038; Welfare Insurance</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">-0-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">-0-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,475</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Frank A. Cappello</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Severance</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">-0-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">338,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">563,333</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Stock Options</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">-0-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">-0-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">66,930</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Health &#038; Welfare Insurance</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">-0-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21,510</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28,680</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>DIRECTOR COMPENSATION</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth information regarding fiscal 2007 compensation for each
director other than Mr.&nbsp;J.P. Gotschall, whose compensation is set forth under the &#147;Executive
Compensation&#148; section above.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Director Compensation for Fiscal 2007</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Fees Earned or Paid</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>All Other</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Total</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="CENTER"><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>in Cash ($)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Compensation ($) (1)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Compensation ($)</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Hudson D. Smith</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">253,150</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">272,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">P. Charles Miller, Jr.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">-0-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Frank N. Nichols</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">-0-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Alayne L. Reitman</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">29,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">29,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">J. Douglas Whelan</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">-0-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26,000</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 0pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>All other compensation consists of (i)&nbsp;with respect to Mr.&nbsp;H.D. Smith,
payments made during fiscal 2007 under the Sales Representative Agreement, further
described in the narrative that follows, for services other than as director, and
(ii)&nbsp;with respect to all directors, amounts contributed by the Company&#146;s
charitable foundation to educational organizations on behalf of such directors.</TD>
</TR>

</TABLE>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->19<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">






<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For fiscal 2007, each director of the Company (other than directors who are employed by the
Company) received an annual retainer fee of $12,000 and an attendance fee of $2,000 per Board of
Directors meeting and $1,000 per committee meeting. Committee Chairpersons received an additional
$3,000 annual retainer for such service. The Company has determined its appropriate directors&#146;
compensation structures based on targeting a competitive level of pay as measured against similarly
situated companies.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mr.&nbsp;H.D. Smith previously held the position of Executive Vice President and Treasurer of the
Company. In connection with his resignation from the Company, Mr.&nbsp;Smith entered into a Sales
Representative Agreement with the Company, the terms of which are substantially the same as the
terms of other agreements the Company maintains with its third-party sales representatives.
Compensation under the Sales Representative Agreement, which resulted in payments of $252,000 in
fiscal 2007, is based strictly upon earned sales commissions with no guaranteed minimum obligation
to Mr.&nbsp;Smith.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>COMPENSATION COMMITTEE REPORT</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Compensation Committee has reviewed and discussed the above Compensation Discussion and
Analysis with management, and based on such review and discussions, has recommended to the Board of
Directors that the Compensation Discussion and Analysis be included in this proxy statement and in
the Company&#146;s Annual Report on Form 10-K for the fiscal year ended September&nbsp;30, 2007.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="24%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><U><I>Compensation Committee</I></U>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><I>J. Douglas Whelan, Chairperson</I></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><I>Frank N. Nichols</I></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><I>P. Charles Miller, Jr.</I></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><I>Alayne L. Reitman</I></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>AUDIT COMMITTEE REPORT</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Audit Committee reviewed and discussed the audited financial statements of the Company,
for the fiscal year ended September&nbsp;30, 2007, with the Company&#146;s management and with the Company&#146;s
independent registered public accounting firm, Grant Thornton LLP. The Audit Committee also
discussed with Grant Thornton LLP the matters required to be discussed by the Statement of Auditing
Standards No.&nbsp;61, as amended (Communication with Audit Committees).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Audit Committee received the written disclosures and the letter from Grant Thornton LLP
required by Independence Standards Board Standard No.&nbsp;1 certifying the firm&#146;s independence and the
Audit Committee discussed the independence of Grant Thornton LLP with that firm.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Audit Committee and the Board of Directors of the Company operate under a written charter
as last amended in July&nbsp;2004.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based upon 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-K for the fiscal year ended September&nbsp;30, 2007 for filing
with the SEC.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="24%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><U><I>Audit Committee</I></U>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><I>Alayne L. Reitman, Chairperson</I></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><I>Frank N. Nichols</I></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><I>P. Charles Miller, Jr.</I></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><I>J. Douglas Whelan</I></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->20<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>PRINCIPAL ACCOUNTING FEES AND SERVICES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Audit Fees</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fees paid or payable to Grant Thornton LLP for the audits of the annual financial statements
included in the Company&#146;s Forms 10-K and for the reviews of the financial statements included in
the Company&#146;s Forms 10-Q for the years ended September&nbsp;30, 2007 and 2006 were $161,100 and
$185,500, respectively. The Audit Committee has sole responsibility for determining whether and
under what circumstances an independent registered public accounting firm may be engaged to perform
audit-related services and must pre-approve any non-audit related service performed by such firm.
In fiscal 2006, all audit and non-audit related fees, to the extent they were incurred, were
pre-approved by the Audit Committee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Audit-related Fees</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fees paid or payable to Grant Thornton LLP for audit-related services for the years ended
September&nbsp;30, 2007 and 2006 were $3,000 and $6,500, respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Tax Fees</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fees paid or payable to Grant Thornton LLP for tax consulting services for the years ended
September&nbsp;30, 2007 and 2006 were $0 and $16,000, respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>All Other Fees</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There were no fees paid or payable during fiscal 2007 or fiscal 2006 to Grant Thornton LLP for
products or services other than the professional services described above.
</DIV>
<!-- link2 "PROPOSAL FOR APPROVAL OF DESIGNATION OF AUDITORS" -->
<DIV align="left"><A NAME="004"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>PROPOSAL FOR APPROVAL OF DESIGNATION OF AUDITORS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The firm of Grant Thornton LLP has been the Company&#146;s independent registered public accounting
firm since 2002. The Board of Directors has chosen that firm to audit the accounts of the Company
and its consolidated subsidiaries for the fiscal year ending September&nbsp;30, 2008, subject to the
ratification of the shareholders for which the affirmative vote of a majority of the Common Shares
present and voting at the 2008 Annual Meeting (in person or by proxy) is required. Grant Thornton
LLP has advised the Company that neither the firm nor any of its members or associates has any
direct or indirect financial interest in the Company or any of its affiliates other than as
auditors. The Board of Directors recommends ratification of the selection of Grant Thornton LLP as
the independent registered public accounting firm of the Company for the year ending September&nbsp;30,
2008.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Representatives of Grant Thornton LLP are expected to be present at the 2008 Annual Meeting
with the opportunity to make a statement if they desire to do so and to be available to respond to
appropriate questions.
</DIV>
<!-- link2 "SHAREHOLDER PROPOSALS FOR THE 2009 ANNUAL MEETING OF SHAREHOLDERS" -->
<DIV align="left"><A NAME="005"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>SHAREHOLDER PROPOSALS FOR THE 2009 ANNUAL MEETING OF SHAREHOLDERS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A shareholder who intends to present a proposal at the 2009 Annual Meeting, and who wishes to
have the proposal included in the Company&#146;s proxy statement and form of proxy for that meeting,
must deliver the proposal to the Company no later than August&nbsp;16, 2008. Any shareholder proposal
submitted other than for inclusion in the Company&#146;s proxy materials for the 2009 Annual Meeting
must be delivered to the Company no later than October&nbsp;30, 2008 or such proposal will be considered
untimely. If a shareholder proposal is received after October&nbsp;30, 2008, the Company may vote, in
its discretion as to the proposal, all of the Common Shares for which it has received proxies for
the 2009 Annual Meeting.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->21<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>OTHER MATTERS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company does not know of any other matters that will come before the meeting. In case any
other matter should properly come before the 2008 Annual Meeting, it is the intention of the
persons named in the enclosed proxy or their substitutions to vote in accordance with their best
judgment in accordance with the recommendation of the Board of Directors or, in the absence of such
a recommendation, in accordance with their judgment pursuant to the discretionary authority
conferred by the enclosed proxy.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By order of the Board of Directors.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">SIFCO Industries, Inc.&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left"><I>Daniel G. Berick, </I>Secretary&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">December&nbsp;14, 2007
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->22<!-- /Folio -->
</DIV>



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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;A</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SIFCO INDUSTRIES, INC. 2007 LONG-TERM INCENTIVE PLAN</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">SIFCO Industries, Inc., an Ohio corporation (the &#147;Company&#148;), sets forth herein the terms of the
SIFCO Industries, Inc. 2007 Long-Term Incentive Plan (the &#147;Plan&#148;), as follows:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>1.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>PURPOSE</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Plan is intended to enhance the Company&#146;s and its Affiliates&#146; (as defined herein) ability to
attract and retain highly qualified employees, and to motivate such persons to serve the Company
and its Affiliates and to expend maximum effort to improve the business results and earnings of the
Company, by providing to such persons an opportunity to acquire or increase a direct proprietary
interest in the operations and future success of the Company, and furthering the identity of
interests of employees and shareholders of the Company. Therefore, the Plan provides for the grant
of stock options, stock appreciation rights, restricted stock, restricted stock units, unrestricted
stock, performance shares, performance units, and annual and long-term performance awards. Any of
these awards may, but need not, be made as performance incentives to reward attainment of annual or
long-term performance goals in accordance with the terms hereof. Stock options granted under the
Plan may be nonqualified stock options or incentive stock options, as provided herein.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>2.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>DEFINITIONS</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">For purposes of interpreting the Plan and related documents (including Award Agreements), the
following definitions shall apply:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.1</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Administrator&#148; means the Board or, where pursuant to Section&nbsp;3.2 the Board has
delegated its authority to the Committee or one or more directors of the Company, the
Committee or such director or directors.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.2</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Affiliate&#148; means, with respect to the Company, any corporation which, with the
Company, is a member of a controlled group of employers under Section 414(b) of the
Code, and any other entity with which the Company would be considered a single employer
under Section 414(c) of the Code, applied using fifty percent (50%) as the percentage of
ownership required under such Code sections; <I>provided, however</I>, that the term
&#147;Affiliate&#148; shall be construed in accordance with the registration provisions of
applicable federal securities laws.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.3</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Annual Incentive Award&#148; means an Award made subject to attainment of performance
goals (as described in Section&nbsp;13) over a performance period of up to one year (the
Company&#146;s fiscal year, unless otherwise specified by the Committee).</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.4</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Award&#148; means a grant of an Option, Stock Appreciation Right, Restricted Stock,
Unrestricted Stock, Restricted Stock Unit, Performance Share, Performance Unit, Annual
Incentive Award or Performance Award, under the Plan.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.5</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Award Agreement&#148; means the agreement between the Company and a Grantee that
evidences and sets out the terms and conditions of an Award.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.6</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Award Shares&#148; shall have the meaning set forth in Section&nbsp;16.3 hereof.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.7</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Benefit Arrangement&#148; shall have the meaning set forth in Section&nbsp;14 hereof.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.8</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Board&#148; means the Board of Directors of the Company.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.9</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Cause&#148; means, as determined by the Administrator and unless otherwise provided
in an applicable agreement with the Company or an Affiliate, that a Separation from
Service shall have taken place as a</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->23<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>result of (i)&nbsp;any act of personal dishonesty by a Grantee in connection with his or
her responsibilities as an Employee and intended to result in substantial personal
enrichment to the Grantee, (ii)&nbsp;the Grantee&#146;s willful act constituting Gross
Misconduct and which is injurious to the Company, or (iii)&nbsp;a Grantee&#146;s conviction of,
or guilty plea to, a felony which the Administrator reasonably believes had or will
have a material detrimental effect on the Company&#146;s reputation or business.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.10</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Code&#148; means the Internal Revenue Code of 1986, as now in effect or as hereafter
amended.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.11</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Committee&#148; means a committee of, and designated from time to time by resolution
of, the Board, which shall be constituted as provided in Section&nbsp;3.2.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.12</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Company&#148; means SIFCO Industries, Inc., an Ohio corporation.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.13</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Corporate Transaction&#148; means a change in the ownership of the Company, a change
in the effective control of the Company, or a change in the ownership of a substantial
portion of the assets of the Company that constitutes a &#147;change in control&#148; under
Section&nbsp;409A.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.14</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Covered Employee&#148; means a Grantee who is a covered employee within the meaning
of Section&nbsp;162(m)(3) of the Code.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.15</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Disability&#148; means the Grantee is unable to engage in any substantial gainful
activity by reason of a medically determinable physical or mental impairment which can
be expected to result in death or which has lasted or can be expected to last for a
continuous period of not less than 12&nbsp;months.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.16</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Effective Date&#148; means the date the Plan is approved by the Board.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.17</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Employee&#148; means an employee of the Company or an Affiliate.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.18</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Exchange Act&#148; means the Securities Exchange Act of 1934, as now in effect or as
hereafter amended.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.19</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Fair Market Value&#148; means the value of a share of Stock, determined as follows:
if on the Grant Date or other determination date the Stock is listed on an established
national or regional stock exchange, or is publicly traded on an established securities
market, the Fair Market Value of a share of Stock shall be the closing price of the
Stock on such exchange or in such market (if there is more than one such exchange or
market the Administrator shall determine the appropriate exchange or market) on the
Grant Date or such other determination date (or if there is no such reported closing
price, the Fair Market Value shall be the mean between the highest bid and lowest asked
prices or between the high and low sale prices on such trading day) or, if no sale of
Stock is reported for such trading day, on the next preceding day on which any sale
shall have been reported. If the Stock is not listed on such an exchange, quoted on
such system or traded on such a market, Fair Market Value shall be the value of the
Stock as determined by the Administrator in good faith in a manner consistent with
Section&nbsp;409A.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.20</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Family Member&#148; means a person who is a spouse, former spouse, child, stepchild,
grandchild, parent, stepparent, grandparent, niece, nephew, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother, sister, brother-in-law, or
sister-in-law, including adoptive relationships, of the Grantee, any person sharing the
Grantee&#146;s household (other than a tenant or employee), a trust in which any one or more
of these persons have more than fifty percent (50%) of the beneficial interest, a
foundation in which any one or more of these persons (or the Grantee) control the
management of assets, and any other entity in which one or more of these persons (or the
Grantee) own more than fifty percent (50%) of the voting interests.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.21</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Grant Date&#148; means the date the Administrator has fixed, for each Award, the
identity of the Grantee, the maximum number of shares of Stock subject to the Award, and
the minimum exercise price or the Fair Market Value; provided that there is no
unreasonable delay in giving notice of the grant to the Grantee.</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->24<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.22</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Grantee&#148; means an Employee who receives or holds an Award under the Plan.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.23</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Gross Misconduct&#148; means (i)&nbsp;theft or damage of Company property, (ii)&nbsp;use,
possession, sale or distribution of illegal drugs, (iii)&nbsp;being under the influence of
alcohol or drugs (except to the extent medically prescribed) while on duty or on Company
premises, (iv)&nbsp;involvement in activities representing conflicts of interest; (v)
improper disclosure of confidential information; (vi)&nbsp;conduct endangering, or likely to
endanger, the health or safety of another Employee, or (vii)&nbsp;falsifying or
misrepresenting information on Company records.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.24</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Incentive Stock Option&#148; means an &#147;incentive stock option&#148; within the meaning of
Section&nbsp;422 of the Code, or the corresponding provision of any subsequently enacted tax
statute, as amended from time to time.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.25</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Nonqualified Stock Option&#148; means an Option that is not an Incentive Stock Option.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.26</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Option&#148; means an option to purchase one or more shares of Stock pursuant to the Plan.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.27</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Option Price&#148; means the exercise price for each share of Stock subject to an Option.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.28</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Other Agreement&#148; shall have the meaning set forth in Section&nbsp;14 hereof.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.29</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Performance Award&#148; means an Award made subject to the attainment of performance
goals (as described in Section&nbsp;13) over a performance period of up to five (5)&nbsp;years.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.30</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Performance-Based Compensation&#148; means compensation under an Award that is
intended to satisfy the requirements of Code Section 162(m) for certain
performance-based compensation paid to Covered Employees. Notwithstanding the
foregoing, nothing in this Plan shall be construed to mean that an Award which does not
satisfy the requirements for performance-based compensation under Code Section 162(m)
does not constitute performance-based compensation for other purposes, including Code
Section&nbsp;409A.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.31</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Performance Measures&#148; means measures as described in Section&nbsp;13 on which the
performance goals are based and which are approved by the Company&#146;s shareholders
pursuant to this Plan in order to qualify Awards as Performance-Based Compensation.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.32</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Performance Period&#148; means the period of time during which the performance goals
must be met in order to determine the degree of payout and/or vesting with respect to an
Award.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.33</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Performance Share&#148; means an Award under Section&nbsp;13 herein and subject to the
terms of this Plan, denominated in shares of Stock, the value of which at the time it is
payable is determined as a function of the extent to which corresponding performance
criteria have been achieved.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.34</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Performance Unit&#148; means an Award under Section&nbsp;13 herein and, subject to the
terms of this Plan, denominated in units, the value of which at the time it is payable
is determined as a function of the extent to which corresponding performance criteria
have been achieved. Unless otherwise stated as payable in shares of Stock, each
Performance Unit is valued at one dollar.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.35</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Plan&#148; means this SIFCO Industries, Inc. 2007 Long-Term Incentive Plan.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.36</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Purchase Price&#148; means the purchase price for each share of Stock pursuant to a
grant of Restricted Stock or Unrestricted Stock.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.37</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Reporting Person&#148; means a person who is required to file reports under Section
16(a) of the Exchange Act.</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->25<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.38</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Restricted Stock&#148; means shares of Stock, awarded to a Grantee pursuant to
Section&nbsp;10 hereof.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.39</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Restricted Stock Unit&#148; or &#147;RSU&#148; means a bookkeeping entry representing the
equivalent of one share of Stock awarded to a Grantee pursuant to Section&nbsp;10 hereof</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.40</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;SAR Exercise Price&#148; means the per share exercise price of a SAR granted to a
Grantee under Section&nbsp;9 hereof.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.41</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Section&nbsp;409A&#148; means Section&nbsp;409A of the Code and the guidance issued thereunder
by the United States Department of the Treasury and/or Internal Revenue Service.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.42</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Securities Act&#148; means the Securities Act of 1933, as now in effect or as
hereafter amended.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.43</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Separation from Service&#148; means a termination of Service with the Company and all
Affiliates that is a &#147;separation from service&#148; within the meaning of Section&nbsp;409A.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.44</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Service&#148; means service as an Employee of the Company or an Affiliate. Unless
otherwise stated in the applicable Award Agreement, a Grantee&#146;s change in position or
duties shall not result in interrupted or terminated Service, so long as such Grantee
continues to be an Employee of the Company or an Affiliate. Subject to the preceding
sentence, whether a termination of Service shall have occurred for purposes of the Plan
shall be determined by the Administrator, which determination shall be final, binding
and conclusive.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.45</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Stock&#148; means the common stock, par value $1 per share, of the Company.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.46</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Stock Appreciation Right&#148; or &#147;SAR&#148; means a right granted to a Grantee under
Section&nbsp;9 hereof.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.47</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Subsidiary&#148; means any &#147;subsidiary corporation&#148; of the Company within the meaning
of Section 424(f) of the Code.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.48</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Substitute Awards&#148; means Awards granted upon assumption of, or in substitution
for, outstanding awards previously granted by a company or other entity acquired by the
Company or any Affiliate or with which the Company or any Affiliate combines.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.49</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Ten Percent Stockholder&#148; means an individual who owns more than ten percent
(10%) of the total combined voting power of all classes of outstanding stock of the
Company, its parent or any of its Subsidiaries. In determining stock ownership, the
attribution rules of Section 424(d) of the Code shall be applied.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.50</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Unrestricted Stock&#148; means an Award pursuant to Section&nbsp;11 hereof.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>3.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>ADMINISTRATION OF THE PLAN</B></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>3.1</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Board</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Board shall have such powers and authorities related to the administration of the Plan as are
consistent with the Company&#146;s certificate of incorporation and by-laws and applicable law. The
Board shall have full power and authority to take all actions and to make all determinations
required or provided for under the Plan, any Award or any Award Agreement, and shall have full
power and authority to take all such other actions and make all such other determinations not
inconsistent with the specific terms and provisions of the Plan that the Board deems to be
necessary or appropriate to the administration of the Plan, any Award or any Award Agreement. All
such actions and determinations shall be by the affirmative vote of a majority of the members of
the Board present at a meeting or by unanimous consent of the Board executed in writing in
accordance with the Company&#146;s certificate of incorporation and by-laws and applicable law. The
interpretation and construction by the Board of any provision of the Plan, any Award or any Award
Agreement shall be final, binding and conclusive.
</DIV>


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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>3.2</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Committee.</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Board from time to time may delegate to the Committee such powers and authorities related to
the administration and implementation of the Plan, as set forth in Section&nbsp;3.1 above and other
applicable provisions, as the Board shall determine, consistent with the certificate of
incorporation and by-laws of the Company and applicable law.
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Except as provided in Subsection (ii)&nbsp;and except as the Board may otherwise
determine, the Committee, if any, appointed by the Board to administer the Plan shall
consist of two or more outside directors of the Company who: (a)&nbsp;qualify as &#147;outside
directors&#148; within the meaning of Section 162(m) of the Code and who (b)&nbsp;meet such
other requirements as may be established from time to time by the Securities and
Exchange Commission for plans intended to qualify for exemption under Rule&nbsp;16b-3 (or
its successor) under the Exchange Act and who (c)&nbsp;comply with the independence
requirements of the stock exchange on which the Common Stock is listed.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The Board may also appoint one or more separate committees of the Board,
each composed of one or more directors of the Company who need not be outside
directors, but one of whom must be the Chief Executive Officer (or functional
equivalent), who may administer the Plan with respect to employees who are not
officers of the Company, may grant Awards under the Plan to such employees and may
determine all terms of such Awards.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In the event that the Plan, any Award or any Award Agreement entered into hereunder provides for
any action to be taken by or determination to be made by the Board, such action may be taken or
such determination may be made by an Administrator if the power and authority to do so has been
delegated to such Administrator by the Board as provided for in this Section. Unless otherwise
expressly determined by the Board, any such action or determination by the Administrator shall be
final, binding and conclusive. To the extent permitted by law, the Committee may delegate its
authority under the Plan to a member of the Board.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>3.3</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Terms of Awards</B>.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Subject to the other terms and conditions of the Plan, the Administrator shall have full and final
authority to:
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) designate Grantees,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) determine the type or types of Awards to be made to a Grantee,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) determine the number of shares of Stock to be subject to an Award,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) establish the terms and conditions of each Award (including, but not limited
to, the exercise price of any Option, the nature and duration of any restriction or
condition (or provision for lapse thereof) relating to the vesting, exercise,
transfer, or forfeiture of an Award or the shares of Stock subject thereto, the
treatment of an Award in the event of a change of control, and any terms or conditions
that may be necessary to qualify Options as Incentive Stock Options),
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) prescribe the form of each Award Agreement evidencing an Award, and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) amend, modify, or supplement the terms of any outstanding Award. Such
authority specifically includes the authority, in order to effectuate the purposes of
the Plan but without amending the Plan, to modify Awards to eligible individuals who
are foreign nationals or are individuals who are employed outside the United States to
recognize differences in local law, tax policy, or custom. Notwithstanding the
foregoing, no amendment, modification or supplement of any Award shall, without the
consent of the Grantee, impair the Grantee&#146;s rights under such Award.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company may retain the right in an Award Agreement to cause a forfeiture of the gain realized
by a Grantee on account of actions taken by the Grantee in violation or breach of or in conflict
with any employment agreement, noncompetition agreement, any agreement prohibiting solicitation of
employees or clients of the Company or any Affiliate thereof or any confidentiality obligation with
respect to the Company or any Affiliate thereof or otherwise in
</DIV>
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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">competition with the Company or any Affiliate thereof, or if the Grantee is terminated for Cause,
to the extent specified in such Award Agreement applicable to the Grantee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In order to facilitate the making of any Award or combination of Awards under this Plan, the
Administrator may provide for such special terms for awards to Grantees who are foreign nationals
or who are employed by the Company or any Affiliate outside of the United States of America or who
provide services to the Company or any Affiliate under an agreement with a foreign nation or
agency, as the Administrator may consider necessary or appropriate to accommodate differences in
local law, tax policy or custom. Moreover, the Administrator may approve such supplements to or
amendments, restatements or alternative versions of this Plan (including, without limitation,
sub-plans) as it may consider necessary or appropriate for such purposes, without thereby affecting
the terms of this Plan as in effect for any other purpose, and the Secretary of the Company or
other appropriate officer of the Company may certify any such document as having been approved and
adopted in the same manner as this Plan. No such special terms, supplements, sub-plans, amendments
or restatements, however, will include any provisions that are inconsistent with the terms of this
Plan as then in effect unless this Plan could have been amended to eliminate such inconsistency
without further approval by the shareholders of the Company.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>3.4</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>No Repricing</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Notwithstanding anything in this Plan to the contrary, no amendment or modification may be made to
an outstanding Option or SAR, including, without limitation, by reducing the exercise price of an
Option or replacing an Option or SAR with cash or another award type, that would be treated as a
repricing under the rules of the stock exchange on which the Stock is listed, in each case, without
the approval of the stockholders of the Company, provided, that, appropriate adjustments may be
made to outstanding Options and SARs pursuant to Section&nbsp;16 or Section&nbsp;5.3 and may be made to make
changes to achieve compliance with applicable law, including Section&nbsp;409A.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>3.5</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>No Liability.</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">No Administrator shall be liable for any action or determination made in good faith with respect to
the Plan or any Award or Award Agreement.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>3.6</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Share Issuance/Book-Entry</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Notwithstanding any provision of this Plan to the contrary, the issuance of the Stock under the
Plan may be evidenced in such a manner as the Administrator, in its discretion, deems appropriate,
including, without limitation, book-entry registration or issuance of one or more Stock
certificates.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>4.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>STOCK SUBJECT TO THE PLAN</B></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>4.1</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Number of Shares Available for Awards</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Subject to adjustment as provided in Section&nbsp;16 hereof, the number of shares of Stock available for
issuance under the Plan shall be equal to Two Hundred Fifty Thousand (250,000), all of which may be
granted as Incentive Stock Options. Stock issued or to be issued under the Plan shall be
authorized but unissued shares; or, to the extent permitted by applicable law, issued shares that
have been reacquired by the Company.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>4.2</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Adjustments in Authorized Shares</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Administrator shall have the right to substitute or assume Awards in connection with mergers,
reorganizations, separations, or other transactions to which Section 424(a) of the Code applies.
The number of shares of Stock reserved pursuant to Section&nbsp;4 shall be increased by the
corresponding number of Awards assumed and, in the case of a substitution, by the net increase in
the number of shares of Stock subject to Awards before and after the substitution.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>4.3</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Share Usage</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">With the exception of SARs, shares covered by an Award shall be counted as used as of the Grant
Date. Any shares of Stock that are subject to Awards of Options shall be counted against the limit
set forth in Section&nbsp;4.1 as one (1)&nbsp;share
</DIV>
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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">for every one (1)&nbsp;share subject to an Award of Options. With respect to SARs, the number of shares
actually issued to settle the SAR upon exercise will be counted against the aggregate number of
shares available for issuance under Section&nbsp;4.1. Any shares that are subject to Awards other than
Options or Stock Appreciation Rights shall be counted against the limit set forth in Section&nbsp;4.1 as
one (1)&nbsp;share for every one (1)&nbsp;share granted. If any shares covered by an Award granted under the
Plan are not purchased or are forfeited or expire, or if an Award otherwise terminates without
delivery of any Stock subject thereto or is settled in cash in lieu of shares, then the number of
shares of Stock counted against the aggregate number of shares available under the Plan with
respect to such Award shall, to the extent of any such forfeiture, termination or expiration, again
be available for making Awards under the Plan in the same amount as such shares were counted
against the limit set forth in Section&nbsp;4.1. The number of shares of Stock available for issuance
under the Plan shall not be increased by (i)&nbsp;any shares of Stock tendered or withheld or Award
surrendered in connection with the purchase of shares of Stock upon exercise of an Option as
described in Section&nbsp;12.2, or (ii)&nbsp;any shares of Stock deducted or delivered from an Award payment
in connection with the Company&#146;s tax withholding obligations as Section&nbsp;17.3
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>EFFECTIVE DATE, DURATION AND AMENDMENTS</B></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>5.1</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Effective Date</B>.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Plan shall be effective as of the Effective Date.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>5.2</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Term.</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Plan shall terminate automatically ten (10)&nbsp;years after the Effective Date and may be
terminated on any earlier date as provided in Section&nbsp;5.3.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>5.3</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Amendment and Termination of the Plan</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Board may, at any time and from time to time, amend, suspend, or terminate the Plan as to any
shares of Stock as to which Awards have not been made. An amendment shall be contingent on
approval of the Company&#146;s stockholders to the extent stated by the Board, required by applicable
law or required by applicable stock exchange listing requirements. In addition, an amendment will
be contingent on approval of the Company&#146;s stockholders if the amendment would: (i)&nbsp;materially
increase the benefits accruing to participants under the Plan, (ii)&nbsp;materially increase the
aggregate number of shares of Stock that may be issued under the Plan, or (iii)&nbsp;materially modify
the requirements as to eligibility for participation in the Plan. No Awards shall be made after
termination of the Plan. No amendment, suspension, or termination of the Plan shall, without the
consent of the Grantee, impair rights or obligations under any Award theretofore awarded under the
Plan.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>6.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>AWARD ELIGIBILITY AND LIMITATIONS</B></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>6.1</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Eligibility</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Subject to this Section&nbsp;6, Awards may be made under the Plan to any Employee of the Company or of
any Affiliate, as the Administrator shall determine and designate from time to time.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>6.2</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Multiple Awards and Substitute Awards.</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">An eligible Employee may receive more than one Award, subject to such restrictions as are provided
herein. Notwithstanding Sections&nbsp;8.1 and 9.1, the Option Price of an Option or the grant price of
a SAR that is a Substitute Award may be less than 100% of the Fair Market Value of a share of Stock
on the original date of grant; provided, that, the Option Price or grant price is determined in
accordance with Code Section&nbsp;424 and the regulations thereunder and Section&nbsp;409A.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->29<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>6.3</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Limitation on Shares of Stock Subject to Awards</B>.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Subject to adjustment as provided in Section&nbsp;16 hereof, during any time when the Company has a
class of equity security registered under Section&nbsp;12 of the Exchange Act:
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the maximum number of shares of Stock subject to Options or SARs that can be
awarded under the Plan to any Employee eligible for an Award under Section&nbsp;6 hereof is
Fifty Thousand (50,000) per twelve-month period;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) for Awards of Restricted Stock and/or Restricted Stock Units and/or
Performance Shares and/or Performance Units relating to shares of Stock that can be
awarded under the Plan to any Employee eligible for an Award under Section&nbsp;6 hereof,
no Grantee shall be awarded Restricted Stock and/or Restricted Stock Units and/or
Performance Shares and/or Performance Units relating to more than Fifty Thousand
(50,000) shares of Stock per twelve-month period; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the maximum amount that may be earned as an Annual Incentive Award in any
twelve-month period by any Employee eligible for such Award shall be Two Million
Dollars ($2,000,000) and the maximum amount that may be earned as a Performance Award
in respect of a Performance Period by any Employee eligible for such Award shall be
Five Million Dollars ($5,000,000).
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>7.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>AWARD AGREEMENT</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Each Award granted pursuant to the Plan shall be evidenced by an Award Agreement, in such form or
forms as the Administrator shall from time to time determine in accordance with applicable law,
including Section&nbsp;409A. Award Agreements granted from time to time or at the same time need not
contain similar provisions but shall be consistent with the terms of the Plan. Each Award
Agreement evidencing an Award of Options shall specify whether such Options are intended to be
Nonqualified Stock Options or Incentive Stock Options, and in the absence of such specification
such options shall be deemed Nonqualified Stock Options.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>8.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>TERMS AND CONDITIONS OF OPTIONS</B></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>8.1</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Option Price</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Option Price of each Option shall be fixed by the Administrator and stated in the Award
Agreement evidencing such Option. Except in the case of Substitute Awards, the Option Price of
each Option shall be at least one hundred percent (100%) the Fair Market Value on the Grant Date of
a share of Stock; <I>provided, however</I>, that in the event that a Grantee is a Ten Percent Stockholder,
the Option Price of an Option granted to such Grantee that is intended to be an Incentive Stock
Option shall be not less than one hundred ten percent (110%) of the Fair Market Value of a share of
Stock on the Grant Date. In no case shall the Option Price of any Option be less than the par
value of a share of Stock.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>8.2</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Vesting</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Subject to Sections&nbsp;8.3 and 16 hereof, each Option granted under the Plan shall become exercisable
at such times and under such conditions as shall be determined by the Administrator and stated in
the Award Agreement. For purposes of this Section&nbsp;8.2, fractional numbers of shares of Stock
subject to an Option shall be rounded down to the next nearest whole number.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>8.3</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Term.</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Each Option granted under the Plan shall terminate, and all rights to purchase shares of Stock
thereunder shall cease, upon the expiration of ten (10)&nbsp;years from the date such Option is granted,
or under such circumstances and on such date prior thereto as may be fixed by the Administrator and
stated in the Award Agreement relating to such Option; <I>provided, however</I>, that in the event that
the Grantee is a Ten Percent Stockholder, an Option granted to such Grantee that is intended to be
an Incentive Stock Option shall not be exercisable after the expiration of five years from its
Grant
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->30<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Date. If on the day preceding the date on which a Grantee&#146;s Options would otherwise terminate, the
Fair Market Value of shares of Stock underlying a Grantee&#146;s Options is greater than the Option
Price of such Options, the Company shall, prior to the termination of such Options and without any
action being taken on the part of the Grantee, consider such Options to have been exercised by the
Grantee. The Company shall deduct from the shares of Stock deliverable to the Grantee upon such
exercise the number of shares of Stock necessary to satisfy payment of the Option Price and all
withholding obligations.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>8.4</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Termination of Service</B>.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Each Award Agreement shall set forth the extent to which the Grantee shall have the right to
exercise the Option following the Grantee&#146;s Separation from Service. Such provisions shall be
determined in the sole discretion of the Administrator, need not be uniform among all Options
issued pursuant to the Plan, and may reflect distinctions based on the reasons for Separation from
Service.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>8.5</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Limitations on Exercise of Option.</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Notwithstanding any other provision of the Plan, in no event may any Option be exercised, in whole
or in part, prior to the date the Plan is approved by the stockholders of the Company as provided
herein or after the occurrence of an event referred to in Section&nbsp;16 hereof which results in
termination of the Option.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>8.6</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Method of Exercise.</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Subject to the terms of Article&nbsp;12 and Section&nbsp;17, an Option that is exercisable may be exercised
by the Grantee&#146;s delivery to the Company of notice of exercise on any business day, at the
Company&#146;s principal office, on the form specified by the Company. Such notice shall specify the
number of shares of Stock with respect to which the Option is being exercised and shall be
accompanied by payment in full of the Option Price of the shares for which the Option is being
exercised plus the amount (if any) of federal and/or other taxes which the Company may, in its
judgment, be required to withhold with respect to an Award.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>8.7</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Rights of Holders of Options</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Unless otherwise stated in the applicable Award Agreement, an individual holding or exercising an
Option shall have none of the rights of a stockholder (for example, the right to receive cash or
dividend payments or distributions attributable to the subject shares of Stock or to direct the
voting of the subject shares of Stock) until the shares of Stock covered thereby are fully paid and
issued to him. Except as provided in Section&nbsp;16 hereof, no adjustment shall be made for dividends,
distributions or other rights for which the record date is prior to the date of such issuance.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>8.8</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Delivery of Stock Certificates.</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Promptly after the exercise of an Option by a Grantee and the payment in full of the Option Price,
such Grantee shall be entitled to the issuance of a stock certificate or certificates or, as
provided in Section&nbsp;3.7, a book entry registration evidencing his or her ownership of the shares of
Stock subject to the Option.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>8.9</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Transferability of Options</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Except as provided in Section&nbsp;8.10, during the lifetime of a Grantee, only the Grantee (or, in the
event of legal incapacity or incompetency, the Grantee&#146;s guardian or legal representative) may
exercise an Option. Except as provided in Section&nbsp;8.10, no Option shall be assignable or
transferable by the Grantee to whom it is granted, other than by will or the laws of descent and
distribution.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>8.10</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Family Transfers.</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If authorized in the applicable Award Agreement, a Grantee may transfer, not for value, all or part
of an Option which is not an Incentive Stock Option to any Family Member. For the purpose of this
Section&nbsp;8.10, a &#147;not for value&#148; transfer is a transfer which is (i)&nbsp;a gift, (ii)&nbsp;a transfer under a
domestic relations order in settlement of marital property
</DIV>
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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">rights; or (iii)&nbsp;a transfer to an entity in which more than fifty percent (50%) of the voting
interests are owned by Family Members (or the Grantee) in exchange for an interest in that entity.
Following a transfer under this Section&nbsp;8.10, any such Option shall continue to be subject to the
same terms and conditions as were applicable immediately prior to transfer. Subsequent transfers
of transferred Options are prohibited except to Family Members of the original Grantee in
accordance with this Section&nbsp;8.10 or by will or the laws of descent and distribution. The events
of termination of Service of Section&nbsp;8.4 hereof shall continue to be applied with respect to the
original Grantee, following which the Option shall be exercisable by the transferee only to the
extent, and for the periods specified, in Section&nbsp;8.4.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>8.11</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Limitations on Incentive Stock Options.</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">An Option shall constitute an Incentive Stock Option only (i)&nbsp;if the Grantee of such Option is an
employee of the Company or any Subsidiary of the Company; (ii)&nbsp;to the extent specifically provided
in the related Award Agreement; and (iii)&nbsp;to the extent that the aggregate Fair Market Value
(determined at the time the Option is granted) of the shares of Stock with respect to which all
Incentive Stock Options held by such Grantee become exercisable for the first time during any
calendar year (under the Plan and all other plans of the Grantee&#146;s employer and its Affiliates)
does not exceed One Hundred Thousand Dollars ($100,000). This limitation shall be applied by
taking Options into account in the order in which they were granted.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>8.12</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Notice of Disqualifying Disposition</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If any Grantee shall make any disposition of shares of Stock issued pursuant to the exercise of an
Incentive Stock Option under the circumstances described in Code Section 421(b) (relating to
certain disqualifying dispositions), such Grantee shall notify the Company of such disposition
within ten (10)&nbsp;days thereof.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>8.13</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Section&nbsp;409A Limitation</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">No Option shall have any feature that would allow for the deferral of compensation (within the
meaning of Section&nbsp;409A) other than the deferral of recognition of income until the later of the
exercise or disposition of the Option or the time the shares of Stock acquired pursuant to the
exercise of the Option first become substantially vested (as defined in Treasury Regulation&nbsp;Section
1.83-3(b)).
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>9.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS</B></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>9.1</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Right to Payment and Grant Price.</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">A SAR shall confer on the Grantee to whom it is granted a right to receive, upon exercise thereof,
the excess of (A)&nbsp;the Fair Market Value of one share of Stock on the date of exercise over (B)&nbsp;the
grant price of the SAR as determined by the Administrator. The Award Agreement for a SAR shall
specify the grant price of the SAR, which shall be at least one hundred percent (100%) the Fair
Market Value of a share of Stock on the date of grant, and whether the Grantee shall have the right
to receive Stock and/or cash on the date of exercise. SARs may be granted in conjunction with all
or part of an Option granted under the Plan or without regard to any Option.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>9.2</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Other Terms.</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Except as otherwise specified in the Award Agreement, the Administrator shall determine at the date
of grant or thereafter, the time or times at which and the circumstances under which a SAR may be
exercised in whole or in part (including, without limitation, based on achievement of performance
goals and/or future service requirements), the time or times at which SARs shall cease to be or
become exercisable following termination of Service or upon other conditions, the method of
exercise, method by or forms in which Stock will be delivered to Grantees, whether or not a SAR
shall be in tandem with an Option, and any other terms and conditions of any SAR.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>9.3</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Term.</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Each SAR granted under the Plan shall terminate, and all rights thereunder shall cease, upon the
expiration of ten (10)&nbsp;years from the date such SAR is granted, or under such circumstances and on
such date prior thereto as is set forth in
</DIV>
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</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">the Plan or as may be fixed by the Administrator and stated in the Award Agreement relating to such
SAR.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>9.4</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Transferability of SARs</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Except as provided in Section&nbsp;9.5, during the lifetime of a Grantee, only the Grantee (or, in the
event of legal incapacity or incompetency, the Grantee&#146;s guardian or legal representative) may
exercise a SAR. Except as provided in Section&nbsp;9.5, no SAR shall be assignable or transferable by
the Grantee to whom it is granted, other than by will or the laws of descent and distribution.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>9.5</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Family Transfers.</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If authorized in the applicable Award Agreement, a Grantee may transfer, not for value, all or part
of a SAR to any Family Member. For the purpose of this Section&nbsp;9.5, a &#147;not for value&#148; transfer is
a transfer which is (i)&nbsp;a gift, (ii)&nbsp;a transfer under a domestic relations order in settlement of
marital property rights; or (iii)&nbsp;a transfer to an entity in which more than fifty percent (50%) of
the voting interests are owned by Family Members (or the Grantee) in exchange for an interest in
that entity. Following a transfer under this Section&nbsp;9.5, any such SAR shall continue to be
subject to the same terms and conditions as were applicable immediately prior to transfer.
Subsequent transfers of transferred SARs are prohibited except to Family Members of the original
Grantee in accordance with this Section&nbsp;9.5 or by will or the laws of descent and distribution.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>9.6</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Section&nbsp;409A Limitation</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">No SAR shall have any feature that would allow for the deferral of compensation (within the meaning
of Section&nbsp;409A) other than the deferral of recognition of income until the exercise of the SAR.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>10.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>TERMS AND CONDITIONS OF RESTRICTED STOCK AND RESTRICTED STOCK UNITS</B></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>10.1</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Grant of Restricted Stock or Restricted Stock Units.</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Awards of Restricted Stock and/or Restricted Stock Units may be made for no consideration (other
than par value of the shares which is deemed paid by Services already rendered). As determined by
the Administrator, on the Grant Date the Restricted Stock may also be sold to an Employee in
consideration of a cash payment by an Employee.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>10.2</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Restrictions</B>.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">At the time an Award of Restricted Stock or Restricted Stock Units is made, the Administrator may,
in its sole discretion, establish a period of time (a &#147;restricted period&#148;) applicable to such
Restricted Stock or Restricted Stock Units. Each Award of Restricted Stock or Restricted Stock
Units may be subject to a different restricted period. The Administrator may, in its sole
discretion, at the time an Award of Restricted Stock or Restricted Stock Units is made, prescribe
restrictions in addition to or other than the expiration of the restricted period, including the
satisfaction of corporate or individual performance objectives, which may be applicable to all or
any portion of the Restricted Stock or Restricted Stock Units as described in Article&nbsp;13. Neither
Restricted Stock nor Restricted Stock Units may be sold, transferred, assigned, pledged or
otherwise encumbered or disposed of during the restricted period or prior to the satisfaction of
any other restrictions prescribed by the Administrator with respect to such Restricted Stock or
Restricted Stock Units.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>10.3</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Restricted Stock Certificates</B>.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company shall issue, in the name of each Grantee to whom Restricted Stock has been granted,
stock certificates representing the total number of shares of Restricted Stock granted to the
Grantee, as soon as reasonably practicable after the Grant Date. The Administrator may provide in
an Award Agreement that either (i)&nbsp;the Secretary of the Company shall hold such certificates for
the Grantee&#146;s benefit until such time as the Restricted Stock is forfeited to the Company or the
restrictions lapse, or (ii)&nbsp;such certificates shall be delivered to the Grantee, <I>provided, however</I>,
that such certificates shall bear a legend or legends that comply with the applicable securities
laws and regulations and makes appropriate reference to the restrictions imposed under the Plan and
the Award Agreement. In the alternative,
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->33<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">as provided in Section&nbsp;3.7, the Company may make a book entry registration evidencing a Grantee&#146;s
ownership of shares of Restricted Stock.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>10.4</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Rights of Holders of Restricted Stock.</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Unless the Administrator otherwise provides in an Award Agreement, holders of Restricted Stock
shall have the right to vote such Stock and the right to receive any dividends declared or paid
with respect to such Stock. The Administrator may provide that any dividends paid on Restricted
Stock must be reinvested in shares of Stock, which may or may not be subject to the same vesting
conditions and restrictions applicable to such Restricted Stock. All distributions, if any,
received by a Grantee with respect to Restricted Stock as a result of any stock split, stock
dividend, combination of shares, or other similar transaction shall be subject to the restrictions
applicable to the original Grant.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>10.5</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Rights of Holders of Restricted Stock Units.</B></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="9%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>10.5.1</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Voting and Dividend Rights.</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Holders of Restricted Stock Units shall have no rights as stockholders of the Company. The
Administrator may provide in an Award Agreement evidencing a grant of Restricted Stock Units that
the holder of such Restricted Stock Units shall be entitled to receive, upon the Company&#146;s payment
of a cash dividend on its outstanding Stock, a cash payment for each Restricted Stock Unit held
equal to the per-share dividend paid on the Stock. Such Award Agreement may also provide that such
cash payment will be deemed reinvested in additional Restricted Stock Units at a price per unit
equal to the Fair Market Value of a share of Stock on the date that such dividend is paid.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="9%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>10.5.2</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Creditor&#146;s Rights.</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">A holder of Restricted Stock Units shall have no rights other than those of a general creditor of
the Company. Restricted Stock Units represent an unfunded and unsecured obligation of the Company,
subject to the terms and conditions of the applicable Award Agreement.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>10.6</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Termination.</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Unless the Administrator otherwise provides in an Award Agreement , upon a Grantee&#146;s Separation
from Service, any Restricted Stock or Restricted Stock Units held by such Grantee that have not
vested, or with respect to which all applicable restrictions and conditions have not lapsed, shall
immediately be forfeited. Upon forfeiture of Restricted Stock or Restricted Stock Units, the
Grantee shall have no further rights with respect to such Award, including but not limited to any
right to vote Restricted Stock or any right to receive dividends with respect to shares of
Restricted Stock or Restricted Stock Units.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>10.7</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Delivery of Stock.</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Upon the expiration or termination of any restricted period and the satisfaction of any other
conditions prescribed by the Administrator, the restrictions applicable to shares of Restricted
Stock or Restricted Stock Units settled in Stock shall lapse, and, unless otherwise provided in the
Award Agreement (in which case the time and form of payment shall be specified in the Award
Agreement in accordance with Section&nbsp;409A), a stock certificate for such shares shall be delivered,
free of all such restrictions, to the Grantee or the Grantee&#146;s beneficiary or estate, as the case
may be. Neither the Grantee, nor the Grantee&#146;s beneficiary or estate, shall have any further
rights with regard to a Restricted Stock Unit once the share of Stock represented by the Restricted
Stock Unit has been delivered.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>10.8</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>No Acceleration of Restricted Stock Units.</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Except as permitted under Section&nbsp;409A, no acceleration of the time and form of payment of
Restricted Stock Units shall be permitted.
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->34<!-- /Folio -->
</DIV>



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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>11.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>TERMS AND CONDITIONS OF UNRESTRICTED STOCK AWARDS</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Administrator may, in its sole discretion, grant (or sell at par value or such other higher
purchase price determined by the Administrator) an Unrestricted Stock Award to any Grantee pursuant
to which such Grantee may receive shares of Stock free of any restrictions (&#147;Unrestricted Stock&#148;)
under the Plan. Unrestricted Stock Awards may be granted or sold as described in the preceding
sentence in respect of past Services and other valid consideration, or in lieu of, or in addition
to, any cash compensation due to such Grantee.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>12.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>FORM OF PAYMENT FOR OPTIONS AND RESTRICTED STOCK</B></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>12.1</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>General Rule.</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Payment of the Option Price for the shares of Stock purchased pursuant to the exercise of an Option
or the Purchase Price for Restricted Stock shall be made in cash or in cash equivalents acceptable
to the Company.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>12.2</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Surrender of Stock</B>.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">To the extent the Award Agreement so provides, payment of the Option Price for shares of Stock
purchased pursuant to the exercise of an Option or the Purchase Price for Restricted Stock may be
made all or in part through the tender or attestation to the Company of shares of Stock, which
shall be valued, for purposes of determining the extent to which the Option Price or Purchase Price
has been paid thereby, at their Fair Market Value on the date of exercise or surrender.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>12.3</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Cashless Exercise.</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">With respect to an Option only (and not with respect to Restricted Stock), to the extent permitted
by law and to the extent the Award Agreement so provides, payment of the Option Price for shares
purchased pursuant to the exercise of an Option may be made all or in part by delivery (on a form
acceptable to the Administrator) of an irrevocable direction to a licensed securities broker
acceptable to the Company to sell shares of Stock and to deliver all or part of the sales proceeds
to the Company in payment of the Option Price and any withholding taxes described in Section&nbsp;17.3.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>13.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>TERMS AND CONDITIONS OF PERFORMANCE SHARES, PERFORMANCE UNITS, PERFORMANCE AWARDS AND ANNUAL
INCENTIVE AWARDS</B></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>13.1</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Grant of Performance Units/Performance Shares.</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Subject to the terms and provisions of this Plan, the Administrator, at any time and from time to
time, may grant Performance Units and/or Performance Shares to Grantees in such amounts and upon
such terms as the Committee shall determine.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>13.2</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Value of Performance Units/Performance Shares.</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Each Performance Unit shall have an initial value that is established by the Administrator at the
time of grant. The Administrator shall set performance goals in its discretion which, depending on
the extent to which they are met, will determine the value and/or number of Performance
Units/Performance Shares that will be paid out to the Grantees.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>13.3</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Earning of Performance Units/Performance Shares.</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Subject to the terms of this Plan, after the applicable Performance Period has ended, the holder of
Performance Units/Performance Shares shall be entitled to receive payout on the value and number of
Performance Units/Performance Shares earned by the Grantees over the Performance Period, to be
determined as a function of the extent to which the corresponding performance goals have been
achieved.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->35<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>13.4</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Form and Timing of Payment of Performance Units/Performance Shares</B>.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Payment of earned Performance Units/Performance Shares shall be as determined by the Administrator
and as evidenced in the Award Agreement. Subject to the terms of this Plan, the Administrator, in
its sole discretion, may pay earned Performance Units/Performance Shares in a lump sum in the form
of cash or in shares of Stock (or in a combination thereof) equal to the value of the earned
Performance Units/Performance Shares beginning at the close of the applicable Performance Period,
or within a stated period after the end of the Performance Period. Any shares may be granted
subject to any restrictions deemed appropriate by the Administrator. Such time and form of payment
shall be specified in the Award Agreement in accordance with Section&nbsp;409A. The determination of
the Administrator with respect to the form of payout of such Awards shall be set forth in the Award
Agreement pertaining to the grant of the Award.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>13.5</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Performance Conditions</B>.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The right of a Grantee to exercise or receive a grant or settlement of any Award, and the timing
thereof, may be subject to such performance conditions as may be specified by the Administrator.
The Administrator may use such business criteria and other measures of performance as it may deem
appropriate in establishing any performance conditions. If and to the extent required under Code
Section&nbsp;162(m), any power or authority relating to an Award intended to qualify under Code Section
162(m), shall be exercised by the Committee.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>13.6</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Performance-Based Compensation Awards Granted to Designated Covered Employees.</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If and to the extent that the Administrator determines that an Award (including, without
limitation, an Annual Incentive Award and/or a Performance Award) to be granted to a Grantee who is
designated by the Committee as likely to be a Covered Employee should qualify as Performance-Based
Compensation, the grant, exercise and/or settlement of such Award shall be contingent upon
achievement of pre-established performance goals and other terms set forth in this Section&nbsp;13.6.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>13.6.1</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Performance Goals Generally.</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The performance goals for such Awards shall consist of one or more business criteria and a targeted
level or levels of performance with respect to each of such criteria, as specified by the Committee
consistent with this Section&nbsp;13.6. Performance goals shall be objective and shall otherwise meet
the requirements of Code Section 162(m) and regulations thereunder including the requirement that
the level or levels of performance targeted by the Committee result in the achievement of
performance goals being &#147;substantially uncertain.&#148; The Committee may determine that such Awards
shall be granted, exercised and/or settled upon achievement of any one performance goal or that two
or more of the performance goals must be achieved as a condition to grant, exercise and/or
settlement of such Awards. Performance goals may differ for Awards granted to any one Grantee or
to different Grantees.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>13.6.2</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Timing For Establishing Performance Goals.</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Performance goals shall be established not later than the earlier of (i)&nbsp;ninety (90)&nbsp;days after the
beginning of any performance period applicable to such Awards and (ii)&nbsp;the day on which 25% of any
performance period applicable to such Awards has expired, or at such other date as may be required
or permitted for &#147;performance-based compensation&#148; under Code Section&nbsp;162(m).
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>13.6.3</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Settlement of Awards; Other Terms.</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Settlement of such Awards shall be in cash, Stock, other Awards or other property, in the
discretion of the Administrator. The Administrator may, in its discretion, reduce the amount of a
settlement otherwise to be made in connection with such Awards. The Administrator shall specify in
the Award Agreement the circumstances in which such Performance or Annual Incentive Awards shall be
paid or forfeited in the event of termination of Service by the Grantee prior to the end of a
Performance Period or settlement of Awards. Award Agreements shall specify the time and form of
payment in accordance with Section&nbsp;409A.
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>13.6.4</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Performance Measures</B>.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The performance goals upon which the payment or vesting of an Award to a Covered Employee that is
intended to qualify as Performance-Based Compensation shall be limited to the following Performance
Measures:
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) net earnings;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) operating earnings;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) pretax earnings;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) earnings (or losses) per share;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Stock price, including growth measures and total shareholder return and appreciation
in and/or maintenance of the price of the shares of Stock or any publicly traded securities
of the Company;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) earnings (or losses), including earnings or losses before taxes, earnings (or
losses) before interest and taxes, earnings (or losses) before interest, taxes and
depreciation, earnings (or losses) before interest, taxes, depreciation and amortization, or
earnings (or losses) before interest, taxes, depreciation, amortization and stock-based
compensation, and other similar adjustments to earnings (or losses);
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) sales or revenue, or sales or revenue growth, whether in general, by type of product
or service, or by type of customer;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) net income (or loss) before or after taxes and before or after allocation of
corporate overhead and bonus;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) operating income (or loss) before or after taxes;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) gross, cash or operating margins;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) gross profits;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) return measures, including return on assets or net assets, capital (including total
capital or invested capital), investment, equity, sales or net sales, or revenue;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) cash flow, including operating cash flow, free cash flow, cash flow return on
equity, cash flow return on investment, and cash flow per share (before or after dividends);
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) economic value added models or equivalent metrics;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) productivity ratios;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) expense targets;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) market share;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) financial ratios as provided in credit agreements of the Company and its
subsidiaries;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) working capital targets;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) year-end cash;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u) debt reductions;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) reductions in cost;
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(w) improvement in or attainment of expense levels or working capital levels;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) shareholder equity;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(y) implementation, completion or attainment of measurable objectives with respect to
research, development, products or projects, recruiting and maintaining personnel, and
strategic and operational initiatives;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(z) completion of acquisitions of business or companies.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(aa) completion of divestitures and asset sales; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(bb)&nbsp;any combination of any of the foregoing business criteria.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Any Performance Measure(s) may be used to measure the performance of the Company, a Subsidiary,
and/or Affiliate as a whole or any business unit of the Company, Subsidiary, and/or Affiliate or
any combination thereof, as the Committee may deem appropriate, or any of the above Performance
Measures as compared to the performance of a group of comparator companies, or published or special
index that the Committee, in its sole discretion, deems appropriate, or the Company may select
Performance Measure (f)&nbsp;above as compared to various stock market indices. The Committee also has
the authority to provide for accelerated vesting of any Award based on the achievement of
performance goals pursuant to the Performance Measures specified in this Section&nbsp;13; <I>provided,
however</I>, that such vesting shall not result in accelerated payment in violation of Section&nbsp;409A.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>13.6.5</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Evaluation of Performance</B>.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Committee may provide in any such Award that any evaluation of performance may include or
exclude any of the following events that occur during a Performance Period: (a)&nbsp;asset write-downs;
(b)&nbsp;litigation or claim judgments or settlements; (c)&nbsp;the effect of changes in tax laws, accounting
principles, or other laws or provisions affecting reported results; (d)&nbsp;any reorganization and
restructuring programs; (e)&nbsp;extraordinary nonrecurring items as described in Accounting Principles
Board Opinion No.&nbsp;30 and/or in management&#146;s discussion and analysis of financial condition and
results of operations appearing in the Company&#146;s annual report to shareholders for the applicable
year; (f)&nbsp;acquisitions or divestitures; and (g)&nbsp;foreign exchange gains and losses. To the extent
such inclusions or exclusions affect Awards to Covered Employees, they shall be prescribed in a
form that meets the requirements of Code Section 162(m) for deductibility.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>13.6.6</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Adjustment of Performance-Based Compensation.</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Awards that are intended to qualify as Performance-Based Compensation may not be adjusted upward.
The Administrator shall retain the discretion to adjust such Awards downward, either on a formula
or discretionary basis, or any combination as the Committee determines.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>13.6.7</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Administrator Discretion.</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In the event that applicable tax and/or securities laws change to permit Administrator discretion
to alter the governing Performance Measures without obtaining shareholder approval of such changes,
the Administrator shall have sole discretion to make such changes without obtaining shareholder
approval provided the exercise of such discretion does not violate Section&nbsp;409A. In addition, in
the event that the Committee determines that it is advisable to grant Awards that shall not qualify
as Performance-Based Compensation, the Committee may make such grants without satisfying the
requirements of Code Section 162(m) and base vesting on Performance Measures other than those set
forth in Section&nbsp;13.6.4.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>13.6.8</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Status of Section&nbsp;13.6 Awards Under Code Section&nbsp;</B><B>162(m)</B><B>.</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">It is the intent of the Company that Awards under Section&nbsp;13.6 hereof granted to persons who are
designated by the Committee as likely to be Covered Employees within the meaning of Code Section
162(m) and regulations thereunder
shall, if so designated by the Committee, constitute &#147;qualified performance-based compensation&#148;
within the meaning
</DIV>


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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">of Code Section 162(m) and regulations thereunder. Accordingly, the terms of
Section&nbsp;13.6, including the definitions of Covered Employee and other terms used therein, shall be
interpreted in a manner consistent with Code Section 162(m) and regulations thereunder. The
foregoing notwithstanding, because the Committee cannot determine with certainty whether a given
Grantee will be a Covered Employee with respect to a fiscal year that has not yet been completed,
the term Covered Employee as used herein shall mean only a person designated by the Committee, at
the time of grant of an Award, as likely to be a Covered employee with respect to that fiscal year.
If any provision of the Plan or any Award Agreement relating to such Awards does not comply or is
inconsistent with the requirements of Code Section 162(m) or regulations thereunder, such provision
shall be construed or deemed amended to the extent necessary to conform to such requirements.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>13.7</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>No Acceleration.</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Except as permitted under Section&nbsp;409A, no acceleration of the time and form of payment of
Performance Shares, Performance Units, Performance Awards, and Annual Incentive Awards shall be
permitted.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>14.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>PARACHUTE LIMITATIONS</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Notwithstanding any other provision of this Plan or of any other agreement, contract, or
understanding heretofore or hereafter entered into by a Grantee with the Company or any Affiliate,
except an agreement, contract, or understanding that expressly addresses Section&nbsp;280G or Section
4999 of the Code (an &#147;Other Agreement&#148;), and notwithstanding any formal or informal plan or other
arrangement for the direct or indirect provision of compensation to the Grantee (including groups
or classes of Grantees or beneficiaries of which the Grantee is a member), whether or not such
compensation is deferred, is in cash, or is in the form of a benefit to or for the Grantee (a
&#147;Benefit Arrangement&#148;), if the Grantee is a &#147;disqualified individual,&#148; as defined in Section
280G(c) of the Code, any Option, Restricted Stock, Restricted Stock Unit, Performance Share or
Performance Unit held by that Grantee and any right to receive any payment or other benefit under
this Plan shall not become exercisable or vested (i)&nbsp;to the extent that such right to exercise,
vesting, payment, or benefit, taking into account all other rights, payments, or benefits to or for
the Grantee under this Plan, all Other Agreements, and all Benefit Arrangements, would cause any
payment or benefit to the Grantee under this Plan to be considered a &#147;parachute payment&#148; within the
meaning of Section&nbsp;280G(b)(2) of the Code as then in effect (a &#147;Parachute Payment&#148;) <U>and</U>
(ii)&nbsp;if, as a result of receiving a Parachute Payment, the aggregate after-tax amounts received by
the Grantee from the Company under this Plan, all Other Agreements, and all Benefit Arrangements
would be less than the maximum after-tax amount that could be received by the Grantee without
causing any such payment or benefit to be considered a Parachute Payment.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>15.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>REQUIREMENTS OF LAW</B></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>15.1</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>General.</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company shall not be required to sell or issue any shares of Stock under any Award if the sale
or issuance of such shares would constitute a violation by the Grantee, any other individual
exercising an Option, or the Company of any provision of any law or regulation of any governmental
authority, including without limitation any federal or state securities laws or regulations. If at
any time the Company shall determine, in its discretion, that the listing, registration or
qualification of any shares subject to an Award upon any securities exchange or under any
governmental regulatory body is necessary or desirable as a condition of, or in connection with,
the issuance or purchase of shares hereunder, no shares of Stock may be issued or sold to the
Grantee or any other individual exercising an Option pursuant to such Award unless such listing,
registration, qualification, consent or approval shall have been effected or obtained free of any
conditions not acceptable to the Company, and any delay caused thereby shall in no way affect the
date of termination of the Award. Without limiting the generality of the foregoing, in connection
with the Securities Act, upon the exercise of any Option or any SAR that may be settled in shares
of Stock or the delivery of any shares of Stock underlying an Award, unless a registration
statement under such Act is in effect with respect to the shares of Stock covered by such Award,
the Company shall not be required to sell or issue such shares unless the Administrator has
received evidence satisfactory to it that the Grantee or any other individual exercising an Option
may acquire such shares pursuant to an exemption from registration under the Securities Act. Any
determination in this connection by the Administrator shall be final, binding, and conclusive. The
Company may, but shall in no event be obligated to,
register any securities covered hereby pursuant to the Securities Act. The Company shall not be
obligated to take any
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">affirmative action in order to cause the exercise of an Option or a SAR or
the issuance of shares of Stock pursuant to the Plan to comply with any law or regulation of any
governmental authority. As to any jurisdiction that expressly imposes the requirement that an
Option (or SAR that may be settled in shares of Stock) shall not be exercisable until the shares of
Stock covered by such Option (or SAR) are registered or are exempt from registration, the exercise
of such Option (or SAR) under circumstances in which the laws of such jurisdiction apply shall be
deemed conditioned upon the effectiveness of such registration or the availability of such an
exemption.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>15.2</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Rule&nbsp;16b-3.</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">During any time when the Company has a class of equity security registered under Section&nbsp;12 of the
Exchange Act, it is the intent of the Company that Awards pursuant to the Plan and the exercise of
Options and SARs granted hereunder will qualify for the exemption provided by Rule&nbsp;16b-3 under the
Exchange Act. To the extent that any provision of the Plan or action by the Administrator does not
comply with the requirements of Rule&nbsp;16b-3, it shall be deemed inoperative to the extent permitted
by law and deemed advisable by the Administrator, and shall not affect the validity of the Plan.
In the event that Rule&nbsp;16b-3 is revised or replaced, the Administrator may exercise its discretion
to modify this Plan in any respect necessary to satisfy the requirements of, or to take advantage
of any features of, the revised exemption or its replacement.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>16.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>EFFECT OF CHANGES IN CAPITALIZATION.</B></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>16.1</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Changes in Stock.</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If the number of outstanding shares of Stock is increased or decreased or the shares of Stock are
changed into or exchanged for a different number or kind of shares or other securities of the
Company on account of any recapitalization, reclassification, stock split, reverse split,
combination of shares, exchange of shares, stock dividend or other distribution payable in capital
stock, or other increase or decrease in such shares effected without receipt of consideration by
the Company occurring after the Effective Date, the number and kinds of shares for which grants of
Options and other Awards may be made under the Plan, including, without limitation, the limits set
forth in Section&nbsp;6.3, shall be adjusted proportionately and accordingly by the Company. In
addition, the number and kind of shares for which Awards are outstanding shall be adjusted
proportionately and accordingly so that the proportionate interest of the Grantee immediately
following such event shall, to the extent practicable, be the same as immediately before such
event. Any such adjustment in outstanding Options or SARs shall not change the aggregate Option
Price or SAR Exercise Price payable with respect to shares that are subject to the unexercised
portion of an outstanding Option or SAR, as applicable, but shall include a corresponding
proportionate adjustment in the Option Price or SAR Exercise Price per share. The conversion of
any convertible securities of the Company shall not be treated as an increase in shares effected
without receipt of consideration. Notwithstanding the foregoing, in the event of any distribution
to the Company&#146;s stockholders of securities of any other entity or other assets (including an
extraordinary dividend but excluding a non-extraordinary dividend of the Company) without receipt
of consideration by the Company, the Company shall, in such manner as the Company deems
appropriate, adjust (i)&nbsp;the number and kind of shares subject to outstanding Awards and/or (ii)&nbsp;the
exercise price of outstanding Options and Stock Appreciation Rights to reflect such distribution.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>16.2</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Reorganization in Which the Company Is the Surviving Entity Which Does Not
Constitute a Corporate Transaction.</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Subject to Section&nbsp;16.3 hereof, if the Company shall be the surviving entity in any reorganization,
merger, or consolidation of the Company with one or more other entities which does not constitute a
Corporate Transaction, any Option or SAR theretofore granted pursuant to the Plan shall pertain to
and apply to the securities to which a holder of the number of shares of Stock subject to such
Option or SAR would have been entitled immediately following such reorganization, merger, or
consolidation, with a corresponding proportionate adjustment of the Option Price or SAR Exercise
Price per share so that the aggregate Option Price or SAR Exercise Price thereafter shall be the
same as the aggregate Option Price or SAR Exercise Price of the shares remaining subject to the
Option or SAR immediately prior to such reorganization, merger, or consolidation. Subject to any
contrary language in an Award Agreement evidencing an Award, any restrictions applicable to such
Award shall apply as well to any replacement shares received by the
Grantee as a result of the reorganization, merger or consolidation. In the event of a transaction
described in this
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->40<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Section&nbsp;16.2, Restricted Stock Units shall be adjusted so as to apply to the
securities that a holder of the number of shares of Stock subject to the Restricted Stock Units
would have been entitled to receive immediately following such transaction.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>16.3</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Corporate Transaction in Which Awards Are Not Assumed.</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Except as otherwise provided in an Award Agreement, upon the occurrence of a Corporate Transaction
in which outstanding Options, SARs, Restricted Stock Units and Restricted Stock are not being
assumed or continued:
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) All outstanding shares of Restricted Stock shall be deemed to have vested,
and the shares of Stock subject thereto shall be delivered, immediately prior to the
occurrence of such Corporate Transaction.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Either of the following two actions shall be taken:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) fifteen (15)&nbsp;days prior to the scheduled consummation of a Corporate
Transaction, all Option and SARs outstanding hereunder shall become immediately
exercisable and shall remain exercisable for a period of fifteen (15)&nbsp;days, <I>or</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) the Administrator may elect, in its sole discretion, to cancel any
outstanding Awards of Options, Restricted Stock, and/or SARs and pay or
deliver, or cause to be paid or delivered, to the holder thereof an amount in
cash or securities having a value (as determined by the Administrator acting in
good faith), in the case of Restricted Stock, equal to the formula or fixed
price per share paid to holders of shares of Stock and, in the case of Options
or SARs, equal to the product of the number of shares of Stock subject to the
Option or SAR (the &#147;Award Shares&#148;) multiplied by the amount, if any, by which
(aa)&nbsp;the formula or fixed price per share paid to holders of shares of Stock
pursuant to such transaction exceeds (bb)&nbsp;the Option Price or SAR Exercise
Price applicable to such Award Shares.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Restricted Stock Units shall be cancelled in exchange for a cash payment in
an amount determined by taking the <I>product of </I>(A)&nbsp;the amount that would have been due
under such Award of Restricted Stock Units if the Performance Goals (as measured as of
the date of the Corporate Transaction) were to continue to be achieved at the same
rate through the Performance Period; <I>and </I>(B)&nbsp;a fraction, the numerator of which is the
number of whole months that have been elapsed from the beginning of the Performance
Period to the date of the Corporate Transaction, and the denominator of which is the
number of whole months in the Performance Period.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">With respect to the Company&#146;s establishment of an exercise window, (i)&nbsp;any exercise of an Option or
SAR during such fifteen-day period shall be conditioned upon the consummation of the event and
shall be effective only immediately before the consummation of the event, and (ii)&nbsp;upon
consummation of any Corporate Transaction, the Plan and all outstanding but unexercised Options and
SARs shall terminate. The Administrator shall send notice of an event that will result in such a
termination to all individuals who hold Options and SARs not later than the time at which the
Company gives notice thereof to its stockholders.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>16.4</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Corporation Transaction in Which Awards Are Assumed.</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Plan, Options, SARs, Restricted Stock Units and Restricted Stock theretofore granted shall
continue in the manner and under the terms so provided in the event of any Corporate Transaction to
the extent that provision is made in writing in connection with such Corporate Transaction for the
assumption or continuation of the Options, SARs, Restricted Stock Units and Restricted Stock
theretofore granted, or for the substitution for such Options, SARs, Restricted Stock Units and
Restricted Stock for new common stock options and stock appreciation rights and new common stock
units and restricted stock relating to the stock of a successor entity, or a parent or subsidiary
thereof, with appropriate adjustments as to the number of shares (disregarding any consideration
that is not common stock) and option and stock appreciation right exercise prices.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->41<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>16.5</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Adjustments</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Adjustments under this Section&nbsp;16 related to shares of Stock or securities of the Company shall be
made by the Administrator, whose determination in that respect shall be final, binding and
conclusive. No fractional shares or other securities shall be issued pursuant to any such
adjustment, and any fractions resulting from any such adjustment shall be eliminated in each case
by rounding downward to the nearest whole share. The Administrator shall determine the effect of a
Corporate Transaction upon Awards other than Options, SARs, Restricted Stock Units and Restricted
Stock, and such effect shall be set forth in the appropriate Award Agreement. The Administrator
may provide in the Award Agreements at the time of grant for different provisions to apply to an
Award in place of those described in Sections&nbsp;16.1, 16.2, 16.3 and 16.4.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>16.6</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>No Limitations on Company</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The making of Awards pursuant to the Plan shall not affect or limit in any way the right or power
of the Company to make adjustments, reclassifications, reorganizations, or changes of its capital
or business structure or to merge, consolidate, dissolve, or liquidate, or to sell or transfer all
or any part of its business or assets.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>17.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>GENERAL PROVISIONS</B></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>17.1</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>No Employment Rights</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">No provision in the Plan or in any Award or Award Agreement shall be construed to confer upon any
individual the right to remain in the employ or service of the Company or any Affiliate, or to
interfere in any way with any contractual or other right or authority of the Company either to
increase or decrease the compensation or other payments to any individual at any time, or to
terminate any employment or other relationship between any individual and the Company. In
addition, notwithstanding anything contained in the Plan to the contrary, unless otherwise stated
in the applicable Award Agreement, no Award granted under the Plan shall be affected by any change
of duties or position of the Grantee, so long as such Grantee continues to be an Employee of the
Company or an Affiliate. The obligation of the Company to pay any benefits pursuant to this Plan
shall be interpreted as a contractual obligation to pay only those amounts described herein, in the
manner and under the conditions prescribed herein. The Plan shall in no way be interpreted to
require the Company to transfer any amounts to a third party trustee or otherwise hold any amounts
in trust or escrow for payment to any Grantee or beneficiary under the terms of the Plan.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>17.2</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Nonexclusivity of the Plan</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Neither the adoption of the Plan nor the submission of the Plan to the stockholders of the Company
for approval shall be construed as creating any limitations upon the right and authority of the
Administrator to adopt such other incentive compensation arrangements (which arrangements may be
applicable either generally to a class or classes of individuals or specifically to a particular
individual or particular individuals) as the Administrator in its discretion determines desirable.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>17.3</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Withholding Taxes</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company or an Affiliate, as the case may be, shall have the right to deduct from payments of
any kind otherwise due to a Grantee any federal, state, or local taxes of any kind required by law
to be withheld with respect to the vesting of or other lapse of restrictions applicable to an Award
or upon the issuance of any shares of Stock upon the exercise of an Option or pursuant to an Award.
At the time of such vesting, lapse, or exercise, the Grantee shall pay to the Company or the
Affiliate, as the case may be, any amount that the Company or the Affiliate may reasonably
determine to be necessary to satisfy such withholding obligation. Subject to the prior approval of
the Company or the Affiliate, which may be withheld by the Company or the Affiliate, as the case
may be, in its sole discretion, the Grantee may elect to satisfy such obligations, in whole or in
part, (i)&nbsp;by causing the Company or the Affiliate to withhold shares of Stock otherwise issuable to
the Grantee or (ii)&nbsp;by delivering to the Company or the Affiliate shares of Stock already owned by
the Grantee. The shares of Stock so delivered or withheld shall have an aggregate Fair Market
Value equal to such withholding obligations. The Fair Market Value of the shares of Stock used to
satisfy such withholding
obligation shall be determined by the Company or the Affiliate as of the date that the amount of
tax to be withheld is to
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->42<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">be determined. A Grantee who has made an election pursuant to this
Section&nbsp;17.3 may satisfy his or her withholding obligation only with shares of Stock that are not
subject to any repurchase, forfeiture, unfulfilled vesting, or other similar requirements. The
maximum number of shares of Stock that may be withheld from any Award to satisfy any federal, state
or local tax withholding requirements upon the exercise, vesting, lapse of restrictions applicable
to such Award or payment of shares pursuant to such Award, as applicable, cannot exceed such number
of shares having a Fair Market Value equal to the minimum statutory amount required by the Company
to be withheld and paid to any such federal, state or local taxing authority with respect to such
exercise, vesting, lapse of restrictions or payment of shares.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>17.4</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Captions</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The use of captions in this Plan or any Award Agreement is for the convenience of reference only
and shall not affect the meaning of any provision of the Plan or such Award Agreement.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>17.5</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Other Provisions</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Each Award granted under the Plan may contain such other terms and conditions not inconsistent with
the Plan as may be determined by the Administrator, in its sole discretion.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>17.6</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Number and Gender</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">With respect to words used in this Plan, the singular form shall include the plural form, the
masculine gender shall include the feminine gender, etc., as the context requires.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>17.7</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Severability</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If any provision of the Plan or any Award Agreement shall be determined to be illegal or
unenforceable by any court of law in any jurisdiction, the remaining provisions hereof and thereof
shall be severable and enforceable in accordance with their terms, and all provisions shall remain
enforceable in any other jurisdiction.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>17.8</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Governing Law</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The validity and construction of this Plan and the instruments evidencing the Awards hereunder
shall be governed by the laws of the State of Ohio, other than any conflicts or choice of law rule
or principle that might otherwise refer construction or interpretation of this Plan and the
instruments evidencing the Awards granted hereunder to the substantive laws of any other
jurisdiction.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>17.9</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Section&nbsp;409A of the Code</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Plan is intended to comply with Section&nbsp;409A, or an exemption to Section&nbsp;409A, with regard to
Awards hereunder that constitute nonqualified deferred compensation within the meaning of Section
409A. By accepting an Award, a Grantee agrees to bear all taxes that are imposed upon the Grantee
in connection with the Award, and the Company does not assume, and will not be liable to any
Grantee (or beneficiary of a Grantee) for, any cost or liability arising in connection with such
tax liability. In particular, the Company shall not reimburse any Employee for the amount of any
tax liability incurred by an Employee under Section&nbsp;409A or any other provision of the Code.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>* * *</B>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->43<!-- /Folio -->
</DIV>



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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SIFCO Industries, Inc.</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS</B>

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The undersigned hereby appoints JEFFREY P. GOTSCHALL and HUDSON D. SMITH, and each of them, the
proxies of the undersigned to vote the shares of the undersigned at the Annual Meeting of
Shareholders of SIFCO Industries, Inc., to be held on January&nbsp;29, 2008, and at any and all
adjournments thereof.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="60%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="2" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>

    <TD colspan="2" align="left" valign="top">Signature</TD>

</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">Signature if held jointly</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>

<TD align="left" valign="top">Dated: </TD>
<TD align="left" valign="top" style="border-bottom: 1px solid #000000">&nbsp;</td>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">NOTE: The signature of this proxy should
correspond with the name (or names), as shown
hereon, in which your stock is registered.
Where stock is registered jointly in the name
of two or more persons, all should sign.</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">(Proxy continued on other side)
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%"></TD>
    <TD width="5%"></TD>
    <TD width="47%"></TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="left" valign="top"><B>SIFCO Industries, Inc.</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top"><B>Proxy</B></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>IF NO INSTRUCTION IS INDICATED, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEES FOR
DIRECTORS, FOR THE ADOPTION OF THE SIFCO INDUSTRIES, INC. 2007 LONG-TERM INCENTIVE PLAN, FOR THE
PROPOSAL TO RATIFY THE DESIGNATION OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM AND, IN THE
DISCRETION OF THE PROXIES, ON SUCH OTHER BUSINESS AS MAY COME BEFORE THE MEETING OR ANY
ADJOURNMENT.</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>ELECT SIX (6)&nbsp;DIRECTORS. To elect the following persons for one-year terms expiring at the
2009 Annual Meeting of Shareholders:</TD>
</TR>

</TABLE>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Nominees:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Jeffrey P. Gotschall
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Frank N. Nichols
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">P. Charles Miller, Jr.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Alayne L. Reitman
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Hudson D. Smith
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">J. Douglas Whelan</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><FONT face="Wingdings">&#111;</FONT>&nbsp;FOR all nominees listed above
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT face="Wingdings">&#111;</FONT>&nbsp;WITHHOLD AUTHORITY</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><I>(except as noted below)</I>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">To vote for all nominees</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>(INSTRUCTIONS: If you wish to withhold authority to vote for any individual nominee, write that
nominee&#146;s name in the space below.)</I></TD>
</TR>
<TR style="font-size: 12pt"><TD>&nbsp;</TD></TR>
<TR valign="bottom" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>TO ADOPT THE SIFCO INDUSTRIES, INC. 2007 LONG-TERM INCENTIVE PLAN</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT face="Wingdings">&#111;</FONT>&nbsp;FOR &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="Wingdings">&#111;</FONT>&nbsp;AGAINST&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp; <FONT face="Wingdings">&#111;</FONT>&nbsp;ABSTAIN

</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>RATIFY THE DESIGNATION OF GRANT THORNTON LLP as the independent registered public accounting
firm for the year ending September&nbsp;30, 2008.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face="Wingdings">&#111;</FONT>&nbsp;FOR &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="Wingdings">&#111;</FONT>&nbsp;AGAINST &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp; <FONT face="Wingdings">&#111;</FONT>&nbsp;ABSTAIN

</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Consider and take action upon such other matters as may properly come before the meeting or
any adjournment thereof.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom" style="font-size: 6pt">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><FONT face="Wingdings">&#111;</FONT>&nbsp;GRANT AUTHORITY
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT face="Wingdings">&#111;</FONT>&nbsp;WITHHOLD AUTHORITY</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">(continued from other side)
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>



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