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<SEC-DOCUMENT>0000950134-04-006402.txt : 20040503
<SEC-HEADER>0000950134-04-006402.hdr.sgml : 20040503
<ACCEPTANCE-DATETIME>20040503060356
ACCESSION NUMBER:		0000950134-04-006402
CONFORMED SUBMISSION TYPE:	DEF 14A
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20040617
FILED AS OF DATE:		20040503
EFFECTIVENESS DATE:		20040503

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			AMERICAN SHARED HOSPITAL SERVICES
		CENTRAL INDEX KEY:			0000744825
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-MEDICAL LABORATORIES [8071]
		IRS NUMBER:				942918118
		STATE OF INCORPORATION:			CA
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		DEF 14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-08789
		FILM NUMBER:		04771398

	BUSINESS ADDRESS:	
		STREET 1:		FOUR EMBARCADERO CENTER
		STREET 2:		SUITE 3700
		CITY:			SAN FRANCISCO
		STATE:			CA
		ZIP:			94111-4107
		BUSINESS PHONE:		415-788-5300

	MAIL ADDRESS:	
		STREET 1:		FOUR EMBARCADERO CENTER
		STREET 2:		SUITE 3700
		CITY:			SAN FRANCISCO
		STATE:			CA
		ZIP:			94111-4107
</SEC-HEADER>
<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
<FILENAME>f98466ddef14a.htm
<DESCRIPTION>DEFINITIVE PROXY STATEMENT
<TEXT>
<HTML>
<HEAD>
<TITLE>def14a</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">

<HR size="4" noshade color="#000000" style="margin-top: -5px">
<HR size="1" noshade color="#000000" style="margin-top: -10px">





<P align="center" style="font-size: 18pt"><B>SCHEDULE 14A</B>

<DIV align="center" style="font-size: 10pt"><B>(Rule&nbsp;14a-101)</B></DIV>


<P align="center" style="font-size: 18pt"><B>INFORMATION REQUIRED IN PROXY STATEMENT<BR>
SCHEDULE 14A INFORMATION</B>


<P align="center" style="font-size: 10pt"><B>Proxy Statement Pursuant to Section&nbsp;14(a) of the<BR>
Securities Exchange Act of 1934</B>



<P align="left" style="font-size: 10pt">Filed by the Registrant <FONT face="Wingdings">&#254;</FONT><BR>
Filed by a Party other than the Registrant <FONT face="Wingdings">&#111;</FONT>


<P align="left" style="font-size: 10pt">Check the appropriate box:


<P align="left" style="font-size: 10pt"><FONT face="Wingdings">&#111;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Preliminary Proxy Statement<BR>
<FONT face="Wingdings">&#111;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Confidential, for Use of the Commission Only (as permitted by Rule14a-6(e)(2))<BR>
<FONT face="Wingdings">&#254;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Definitive Proxy Statement<BR>
<FONT face="Wingdings">&#111;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Definitive Additional Materials<BR>
<FONT face="Wingdings">&#111;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Soliciting Material Pursuant to &#167;240.14a-12

<P align="center" style="font-size: 24pt"><B>American Shared Hospital Services</B>

<DIV align="center" style="font-size: 10pt"><HR size="1" noshade>
(Name of Registrant as Specified In Its Charter)</DIV>


<P align="center" style="font-size: 24pt"><B>&nbsp;</B>

<DIV align="center" style="font-size: 10pt"><HR size="1" noshade>
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)</DIV>



<P align="left" style="font-size: 10pt">Payment of Filing Fee (Check the appropriate box):<BR>
<FONT face="Wingdings">&#254;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No fee required.<BR>
<FONT face="Wingdings">&#111;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fee computed on table below per Exchange Act Rules&nbsp;14a-6(i)(4) and 0-11.


<P>

<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%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Title of each class of securities to which transaction applies:</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt"><HR size="1" noshade>


<P>

<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%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Aggregate number of securities to which transaction applies:</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt"><HR size="1" noshade>


<P>

<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%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">(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):</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt"><HR size="1" noshade>


<P>

<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%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Proposed maximum aggregate value of transaction:</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt"><HR size="1" noshade>


<P>

<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%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">(5)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Total fee paid:</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt"><HR size="1" noshade>


<P>

<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="right"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Fee paid previously with preliminary materials.</TD>
</TR>

</TABLE>


<P>

<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="right"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Check box if any part of the fee is offset as provided by Exchange Act
Rule&nbsp;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>


<P>

<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%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Amount Previously Paid:</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt"><HR size="1" noshade>


<P>

<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%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Form, Schedule or Registration Statement No.:</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt"><HR size="1" noshade>


<P>

<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%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Filing Party:</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt"><HR size="1" noshade>


<P>

<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%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Date Filed:</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt"><HR size="1" noshade>


<P>
<HR size="1" noshade color="#000000" style="margin-top: -2px">
<HR size="4" noshade color="#000000" style="margin-top: -10px">









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


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

<DIV align="center">
<B><FONT size="4">AMERICAN SHARED HOSPITAL SERVICES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">Four Embarcadero Center,
Suite&nbsp;3700</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">San&nbsp;Francisco, California 94111</FONT></B>
</DIV>

<P align="center">
<B>NOTICE OF 2004 ANNUAL MEETING OF SHAREHOLDERS</B>

<DIV align="center">
<B>To be held on June&nbsp;17, 2004</B>
</DIV>

<P align="left">
<FONT size="2">TO THE SHAREHOLDERS OF AMERICAN SHARED HOSPITAL
SERVICES:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">NOTICE IS HEREBY GIVEN that, pursuant to a call
of the Board of Directors, the 2004 Annual Meeting of
Shareholders (the &#147;Meeting&#148;) of American Shared
Hospital Services, a California corporation (the
&#147;Company&#148;), will be held at the Ritz Carlton Hotel,
600 Stockton Street (corner of California Street),
San&nbsp;Francisco, California 94111 at 9:00 am (Pacific time),
on Thursday, June&nbsp;17, 2004 to consider and to act upon the
following matters, all as set forth in the Proxy Statement.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">1.&nbsp;ELECTION OF DIRECTORS. To elect the
    following five nominees to the Board of Directors to serve until
    the next Annual Meeting of Shareholders and until their
    successors are elected and have qualified.
    </FONT></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="61%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="36%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">Ernest A. Bates,&nbsp;M.D.<BR>
    Ernest R. Bates<BR>
    Olin C. Robison
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">John F. Ruffle<BR>
    Stanley S. Trotman,&nbsp;Jr.
    </FONT></TD>
</TR>

</TABLE>
</CENTER>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">2.&nbsp;AMENDMENTS TO 1995 AND 2001 STOCK OPTION
    PLANS. To amend the 1995 and 2001 Stock Option Plans to allow
    the Company&#146;s Chairman and Chief Executive Officer to
    participate.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">3.&nbsp;RATIFICATION OF INDEPENDENT ACCOUNTANTS.
    To ratify the appointment of Moss Adams LLP as the
    Company&#146;s independent accountants for the year ending
    December&nbsp;31, 2004.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">4.&nbsp;OTHER BUSINESS. To transact such other
    business and to consider and take action upon any and all
    matters that may properly come before the Annual Meeting and any
    and all adjournments thereof.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Board of Directors knows of no matters, other
than those set forth in paragraphs (1), (2)&nbsp;and
(3)&nbsp;above, that will be presented for consideration at the
Meeting.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Board of Directors has fixed the close of
business on April&nbsp;30, 2004 as the Record Date for the
determination of shareholders entitled to vote at the Meeting.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING
IN PERSON, PLEASE DATE, SIGN AND MAIL THE ENCLOSED PROXY IN THE
ENVELOPE PROVIDED AS PROMPTLY AS POSSIBLE. THE PROXY IS
REVOCABLE AND WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF
YOU ATTEND THE MEETING. IN ORDER TO FACILITATE THE PROVISION OF
ADEQUATE ACCOMMODATIONS, PLEASE INDICATE ON THE PROXY WHETHER
YOU PLAN TO ATTEND THE MEETING IN PERSON.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">By Order of the Board of Directors
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <IMG src="f98466df9846600.gif" alt="-s- WILLIE R. BARNES"></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Willie R. Barnes
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <I><FONT size="2">Corporate Secretary</FONT></I></TD>
</TR>

</TABLE>

<DIV align="left">
<FONT size="2">Dated: May&nbsp;3, 2004
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">San&nbsp;Francisco, California
</FONT>
</DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>

<!-- 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">INTRODUCTION</A></TD></TR>
<TR><TD colspan="9"><A HREF="#001">PROPOSAL NO. 1 ELECTION OF DIRECTORS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#002">PROPOSAL NO. 2 AMENDMENTS TO 1995 AND 2001 STOCK OPTION PLANS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#003">CERTAIN ADDITIONAL INFORMATION</A></TD></TR>
<TR><TD colspan="9"><A HREF="#004">AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES</A></TD></TR>
<TR><TD colspan="9"><A HREF="#005">CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#006">PERFORMANCE GRAPH, TOTAL RETURN TO SHAREHOLDERS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#007">AUDIT COMMITTEE REPORT</A></TD></TR>
<TR><TD colspan="9"><A HREF="#008">PROPOSAL NO. 3 RATIFICATION OF INDEPENDENT ACCOUNTANTS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#009">SHAREHOLDER PROPOSALS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#010">ANNUAL REPORT</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>

<P align="center">
<B><FONT size="4">AMERICAN SHARED HOSPITAL SERVICES</FONT></B>

<DIV align="center">
<B><FONT size="2">Four Embarcadero Center,
Suite&nbsp;3700</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">San&nbsp;Francisco, California 94111</FONT></B>
</DIV>

<P align="center">
<HR size="1" width="30%" align="center" noshade>

<P align="center">
<B>PROXY STATEMENT</B>

<P align="center">
<HR size="1" width="30%" align="center" noshade>

<P align="center">
<B>2004 ANNUAL MEETING OF SHAREHOLDERS</B>

<DIV align="center">
<B>June&nbsp;17, 2004</B>
</DIV>

<P align="center">
<HR size="1" width="30%" align="center" noshade>

<DIV>&nbsp;</DIV>

<!-- link1 "INTRODUCTION" -->
<DIV align="left"><A NAME="000"></A></DIV>

<DIV align="center">
<B><FONT size="2">INTRODUCTION</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This Proxy Statement is being furnished to
shareholders of American Shared Hospital Services, a California
corporation (the &#147;Company&#148;), in connection with the
solicitation of proxies by the Company&#146;s Board of Directors
for use at the 2004 Annual Meeting of Shareholders scheduled to
be held at the Ritz Carlton Hotel, 600&nbsp;Stockton Street
(corner of California Street), San&nbsp;Francisco, California
94111 at 9:00&nbsp;am (Pacific time) on Thursday, June&nbsp;17,
2004 and at any adjournment or adjournments thereof (the
&#147;Meeting&#148;). It is anticipated that this Proxy
Statement and the Proxy will first be sent to shareholders on or
about May&nbsp;5, 2004.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The matters to be considered and voted upon at
the Meeting will be:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">1.&nbsp;To elect five persons to the Board of
    Directors to serve until the next Annual Meeting of Shareholders
    and until their successors are elected and have qualified.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">2.&nbsp;To amend the 1995 and 2001 Stock Option
    Plans to allow the Company&#146;s Chairman and Chief Executive
    Officer to participate.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">3.&nbsp;To ratify the appointment of Moss Adams
    LLP as the Company&#146;s independent accountants for the year
    ending December&nbsp;31, 2004.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">4.&nbsp;To transact such other business as may
    properly be brought before the Meeting and any and all
    adjournments thereof.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Only shareholders of record at the close of
business on April&nbsp;30, 2004 (the &#147;Record Date&#148;)
are entitled to notice of and to vote at the Meeting.
</FONT>

<P align="left">
<B><FONT size="2">Revocability of Proxies</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A proxy for use at the Meeting is enclosed. Any
shareholder who executes and delivers such proxy may revoke it
at any time prior to its use by filing with the Secretary of the
Company either written instructions revoking such proxy or a
duly executed proxy bearing a later date. Written notice of the
death of the person executing a proxy, before the vote is
counted, is tantamount to revocation of such proxy. A proxy may
also be revoked by attending the Meeting and voting in person.
</FONT>

<P align="left">
<B><FONT size="2">Solicitation of Proxies</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This proxy solicitation is being made by the
Board of Directors of the Company. The expense of the
solicitation will be paid by the Company. To the extent
necessary to assure sufficient representation at the Meeting,
proxies may be solicited by any appropriate means by directors,
officers, regular employees of the Company and the stock
transfer agent for the Common Shares, who will not receive any
additional compensation therefor. The Company will request that
banks, brokers and other fiduciaries solicit their customers who
own beneficially the Common Shares listed of record in names of
nominees and, although there is no formal arrangement to do so,
the Company will reimburse such persons the reasonable expenses
of such solicitation. In addition, the Company may pay for and
utilize the services of individuals or companies
</FONT>

<P align="center"><FONT size="2">1
</FONT>

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

<DIV align="left">
<FONT size="2">not regularly employed by the Company in
connection with the solicitation of proxies, if the Board of
Directors of the Company determines that this is advisable.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Outstanding Securities</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Board of Directors has fixed April&nbsp;30,
2004 as the Record Date for the determination of shareholders
entitled to notice of, and to vote at, the Meeting. At the close
of business on the Record Date, there were outstanding and
entitled to vote&nbsp;3,950,173 Common Shares. The Common Shares
are the only class of securities entitled to vote at the Meeting.
</FONT>

<P align="left">
<B><FONT size="2">Vote Required and Voting Procedures</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each holder of Common Shares will be entitled to
one vote, in person or by proxy, for each share standing in its
name on the books of the Company as of the Record Date for the
Meeting on each of the matters duly presented for vote at the
Meeting, except as indicated below in connection with the
election of directors.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with the election of directors,
shares are permitted to be voted cumulatively, if (i)&nbsp;a
shareholder present at the Meeting has given notice at the
Meeting, prior to the voting, of such shareholder&#146;s
intention to vote its shares cumulatively and (ii)&nbsp;the
names of the candidates for whom such shareholder desires to
cumulate votes have been placed in nomination prior to the
voting. If a shareholder has given such notice, all shareholders
may cumulate their votes for candidates in nomination.
Cumulative voting allows a shareholder to give one nominee as
many votes as is equal to the number of directors to be elected,
multiplied by the number of shares owned by such shareholder or
to distribute votes on the same principle between two or more
nominees. Discretionary authority to cumulate votes is hereby
solicited by the Board of Directors.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All outstanding shares of the Company&#146;s
Common Stock represented by properly executed and unrevoked
proxies received in time for the Meeting will be voted. A
shareholder may, with respect to the election of directors
(i)&nbsp;vote for the election of all five nominees named herein
as directors, (ii)&nbsp;withhold authority to vote for all such
director nominees or (iii)&nbsp;vote for the election of all
such director nominees other than any nominee(s) with respect to
whom the shareholder withholds authority to vote by so
indicating in the appropriate space on the proxy. Withholding
authority to vote for a director nominee will not prevent such
director nominee from being elected. A shareholder may, with
respect to the proposal for the amendment to the 1995 and 2001
Stock Option Plans, (i)&nbsp;vote for the amendment,
(ii)&nbsp;vote against the amendment, or (iii)&nbsp;abstain. A
shareholder may, with respect to the proposal to ratify the
appointment of the Company&#146;s independent accountants,
(i)&nbsp;vote for the ratification, (ii)&nbsp;vote against the
ratification, or (iii)&nbsp;abstain.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A proxy submitted by a shareholder may indicate
that all or a portion of the shares represented by such proxy
are not being voted by such shareholder with respect to a
particular matter. This could occur, for example, when a broker
is not permitted to vote stock held in street name on certain
matters in the absence of instructions from the beneficial owner
of the stock. The shares subject to any such proxy which are not
being voted with respect to a particular matter (the
&#147;non-voted shares&#148;) will be considered shares not
present and entitled to vote on such matter, although such
shares may be considered present and entitled to vote for other
purposes and will count for purposes of determining the presence
of a quorum. In the election of directors, the five nominees
receiving the highest number of votes of shares of Common Stock
represented in person or by proxy at the Meeting and entitled to
vote on such matter will be elected directors of the Company.
Accordingly, non-voted shares will not affect the outcome of the
election of directors. Non-voted shares also will not affect the
outcome of the proposal to ratify the appointment of independent
accountants.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with the solicitation by the Board
of Directors of proxies for use at the Meeting, the Board of
Directors has designated Ernest A. Bates,&nbsp;M.D. and Craig K.
Tagawa as proxies. Common Shares represented by properly
executed proxies will be voted at the Meeting in accordance with
the instructions specified thereon. If no instructions are
specified, the Common Shares represented by any properly
executed proxy will be voted FOR the (1)&nbsp;election of the
five nominees for the Board of Directors named herein,
(2)&nbsp;amendments to the 1995 and 2001 Stock Option Plans and
(3)&nbsp;ratification of the appointment of the Company&#146;s
independent auditors.
</FONT>

<P align="center"><FONT size="2">2
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Board of Directors is not aware of any
matters that will come before the Meeting other than as
described above. However, if such matters are presented, the
named proxies will, in the absence of instructions to the
contrary, vote such proxies in accordance with the judgment of
such named proxies with respect to any such other matter
properly coming before the Meeting.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A majority of the Common Shares outstanding on
the Record Date must be represented in person or by proxy at the
Annual Meeting in order to constitute a quorum for the
transaction of business. In the election of directors, the five
candidates receiving the highest number of votes will be elected
directors of the Company. The proposal to amend the stock option
plans will require an approving vote by the holders of a
majority of the Common Shares voting in person or by proxy on
the proposal, excluding any shares owned by Dr.&nbsp;Bates. The
Board will, however, count the shares owned by Dr.&nbsp;Bates in
determining whether a quorum is present at the meeting. The
proposal to ratify the appointment of the Company&#146;s
independent auditors require that a majority of those voting in
person or by proxy to vote&nbsp;FOR this proposal, in order for
this proposal to be approved.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Board of Directors has appointed Geraldine
Zarbo of American Stock Transfer&nbsp;&#38; Trust Company, the
registrar and transfer agent for the Common Shares, or her
designee, as the Inspector of Elections for the Annual Meeting.
The Inspector of Elections will determine the number of Common
Shares represented in person or by proxy at the Annual Meeting,
whether a quorum exists, the authenticity, validity and effect
of proxies and will receive and count the votes. The election of
directors will not be by ballot unless a shareholder demands
election by ballot at the Annual Meeting before the voting
begins.
</FONT>

<!-- link1 "PROPOSAL NO. 1 ELECTION OF DIRECTORS" -->
<DIV align="left"><A NAME="001"></A></DIV>

<P align="center">
<B><FONT size="2">PROPOSAL NO. 1</FONT></B>

<P align="center">
<B><FONT size="2">ELECTION OF DIRECTORS</FONT></B>

<P align="left">
<B><FONT size="2">Board of Directors</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company&#146;s Bylaws provide that there
shall be no less than five nor more than nine directors and that
the exact number shall be fixed from time to time by a
Resolution of the Board of Directors. The number of directors
currently is fixed at five.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Board of Directors is proposing the persons
named below for election to the Board of Directors. Each of the
persons identified below will be nominated for election to serve
until the next Annual Meeting of Shareholders and until their
successors shall be elected and qualified. Votes will be cast
pursuant to the enclosed proxy in such a way as to effect the
election of each of the persons named below or as many of them
as possible under applicable voting rules. If a nominee shall be
unable or unwilling to accept nomination for election as a
director, it is intended that the proxy holders will vote for
the election of such substitute nominee, if any, as shall be
designated by the Board of Directors. Each of the nominees named
below has notified the Board of Directors that, if elected, he
is willing to serve as a Director.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Set forth below is certain information regarding
each of the nominees.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">THE BOARD OF DIRECTORS RECOMMENDS A VOTE
&#147;FOR&#148; THE ELECTION OF THE NOMINEES NAMED BELOW.
PROPERLY EXECUTED PROXIES RETURNED TO THE COMPANY WILL BE VOTED
&#147;FOR&#148; THE NOMINEES NAMED BELOW UNLESS OTHERWISE
INSTRUCTED.</FONT></B>

<P align="left">
<B><FONT size="2">Nominees</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">ERNEST A. BATES,&nbsp;M.D., founder of the
Company, has served as Chairman of the Board of Directors and
Chief Executive Officer since the incorporation of the Company.
He is currently a member of the Board of Trustees of The Johns
Hopkins University and a Senior Trustee at the University of
Rochester, a member of the Board of Overseers of the University
of California at San&nbsp;Francisco School of Nursing, a member
of the State of California High Speed Rail Authority, and a
member of the Board of Directors of Salzburg Seminar.
Dr.&nbsp;Bates is also a board member of the Center for
Accelerating Medical Solutions-Milken Institute and a
</FONT>

<P align="center"><FONT size="2">3
</FONT>

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<DIV align="left">
<FONT size="2">member of the Brookings Institution.
Dr.&nbsp;Bates is a graduate of The Johns Hopkins University and
the University of Rochester School of Medicine. Dr.&nbsp;Bates
is 67&nbsp;years old. Dr.&nbsp;Bates is the father of Board
Nominee Ernest R. Bates.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">ERNEST R. BATES has been nominated for election
to the Company&#146;s Board of Directors. He has been Managing
Director, Institutional Fixed Income Sales of HSBC Securities
(USA), Inc. since 2003. Mr.&nbsp;Bates has also served as
Managing Director, Head of Asian Product for HSBC Securities
(USA)&nbsp;Inc. from 1999 to 2003. From 1993 through 1999,
Mr.&nbsp;Bates held various positions with Merrill Lynch, last
serving as Vice President, European Syndicate for Merrill Lynch
International. He received his undergraduate degree from Brown
University and a M.B.A. degree from The Wharton Business School.
Mr.&nbsp;Bates is 37&nbsp;years old. Ernest&nbsp;R. Bates is the
son of Board Member Dr.&nbsp;Ernest A. Bates.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">OLIN C. ROBISON has been a director since 2003.
He has been President and Chief Executive Officer of the
Salzburg Seminar since 1991. Mr.&nbsp;Robison was President of
Middlebury College from 1975 to 1990 and is currently President
Emeritus and Professor Emeritus of this institution. He is a
Director of The Investment Company of America, American Mutual
Fund and AMCAP (all of the American Funds Group) and is on the
Council (Board) of the Royal Institute of International Affairs
in London. He received his undergraduate degree from Baylor
University and holds the Doctor of Philosophy degree from Oxford
University. Mr.&nbsp;Robison is 67&nbsp;years old.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">JOHN F. RUFFLE has been a director of the Company
since 1995. He retired in 1993 as Vice-Chairman of the Board and
a Director of J.P.&nbsp;Morgan&nbsp;&#38; Co. Incorporated and
Morgan Guaranty Trust Co. of New&nbsp;York. He also is a
Director of Reckson Associates Realty Corporation; a member of
the Board of Trustees of certain mutual funds in the J.P Morgan
family of mutual funds and certain investment funds managed by
J.P Morgan Investment Management, Inc.; and a Trustee of The
Johns Hopkins University. He is a graduate of The Johns Hopkins
University, with an MBA in finance from Rutgers University, and
is a Certified Public Accountant. Mr.&nbsp;Ruffle is
67&nbsp;years old.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">STANLEY S. TROTMAN,&nbsp;JR., has been a director
of the Company since 1996. He retired in 2000 as a Managing
Director with the Health Care Group of PaineWebber Incorporated,
an investment banking firm. Mr.&nbsp;Trotman had been with
PaineWebber Incorporated since 1995 following the consolidation
of Kidder, Peabody, also an investment banking firm, with
PaineWebber. He had previously co-directed Kidder,
Peabody&#146;s Health Care Group since April 1990. Formerly he
had been head of the Health Care Group at Drexel Burnham
Lambert, Inc. where he had been employed for approximately
22&nbsp;years. He received his undergraduate degree from Yale
University in 1965 and holds an MBA from Columbia Business
School in 1967. Mr.&nbsp;Trotman is 60&nbsp;years old.
</FONT>

<P align="left">
<B><FONT size="2">Meetings of the Board of Directors</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Board of Directors of the Company held four
regular meetings during 2003. All Directors attended at least
75% of the aggregate number of meetings of both the Board of
Directors and of the Committees of the Board on which such
Director served during the year.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Shareholders may communicate with the Board by
writing to: Four Embarcadero Center, Suite&nbsp;3700;
San&nbsp;Francisco, CA 94111-4107, Attention: Ernest A. Bates.
Although we do not have a formal policy regarding director
attendance at our annual meeting, we encourage directors to
attend. All directors attended the 2003 Annual Meeting in
person, except one director who attended telephonically. All
shareholder communications to directors are forwarded to them.
</FONT>

<P align="left">
<B><FONT size="2">Committees of the Board of Directors</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company has standing Compensation, Stock
Option, Nominating and Audit Committees, each of which is
described below. The American Stock Exchange (&#147;AMEX&#148;)
has adopted enhanced board and board committee independence
requirements which will be effective for the Company after this
year&#146;s annual meeting. The Company is in the process of
complying with these new standards and intends to be in full
compliance by the date of the Annual Meeting.
</FONT>

<P align="center"><FONT size="2">4
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The function of the Compensation Committee is to
recommend to the Board of Directors the compensation of the
Company&#146;s executive officers. The Compensation Committee
did not meet during 2003. The Compensation Committee consists of
Mr.&nbsp;Barnes, Mr.&nbsp;Robison, Mr.&nbsp;Ruffle, and
Mr.&nbsp;Trotman. Mr.&nbsp;Trotman is Chair of the Compensation
Committee.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The purpose of the Stock Option Committee is to
administer the Company&#146;s 1995 Stock Option Plan and 2001
Stock Option Plan, and to determine recipients of awards
pursuant to such plans and the terms of such awards. No member
of the Stock Option Committee received a discretionary grant or
award under an option plan of the Company while serving on such
committee or during the year preceding such service. During 2003
the functions of the Stock Option Committee were performed by
the Board as a whole, which issued two stock option grants
during 2003 to employees who are not executive officers.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The purpose of the Nominating Committee is to
recommend candidates for election to the Board of Directors. The
Nominating Committee does not have a written charter. The
Nominating Committee met once during 2003. In 2004, the
Nominating Committee met and nominated Dr.&nbsp;Bates,
Mr.&nbsp;Bates, Mr.&nbsp;Robison, Mr.&nbsp;Ruffle and
Mr.&nbsp;Trotman for election to the Board. Mr.&nbsp;Bates was
recommended for consideration as a nominee by Mr.&nbsp;Ruffle.
All Directors serve on the Nominating Committee.
Mr.&nbsp;Trotman is Chair of the Nominating Committee. The
Nominating Committee will consider director candidates submitted
by shareholders to: Four Embarcadero Center, Suite&nbsp;3700,
San&nbsp;Francisco, CA 94111-4107, Attention: Dr Ernest A.
Bates. Such recommendations should be accompanied by
(i)&nbsp;evidence of the shareholder&#146;s stock ownership over
the last year, (ii)&nbsp;a statement that the shareholder is not
a competitor of the Company, (iii)&nbsp;a resume and contact
information for the director candidate, as well as a description
of the candidate&#146;s qualifications and (iv)&nbsp;a statement
whether the candidate has expressed interest in serving as a
director. The Nominating Committee follows the same process and
uses the same criteria for evaluating candidates proposed by
shareholders as it does for candidates proposed by other
parties. The Nominating Committee will consider such candidacy
and will advise the recommending shareholder of its final
decision. A shareholder who wishes to nominate a person for
Director must provide the nomination in writing to the Secretary
at the Company&#146;s principal offices pursuant to the notice
provisions in the By-laws. Such notice must be received not less
than 60&nbsp;nor more than 90&nbsp;days prior to the Annual
Meeting or, if less than 70&nbsp;days&#146; notice of the date
of such meeting has been given, then within 10 business days
following the first public disclosure of the meeting date or the
mailing of the Company&#146;s notice. Any such notice must
contain information regarding the nominee and the proponent.
Details concerning the nature of such information are available
without charge from the Company.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The purpose of the Audit Committee is to review
the financial reporting and internal controls of the Company, to
appoint the independent auditors, and to review the reports of
such auditors. The Audit Committee consists of Mr.&nbsp;Robison,
Mr.&nbsp;Ruffle, and Mr.&nbsp;Trotman. Mr.&nbsp;Ruffle is Chair
of the Audit Committee. During the year 2003 the Audit Committee
held four meetings and three telephonic meetings. For further
information concerning the Audit Committee, refer to the
&#147;Audit Committee Report.&#148; Mr.&nbsp;Ruffle is a
&#147;financial expert&#148; and meets the applicable
independence requirements of AMEX and Rule&nbsp;10-A-3 of the
Securities Exchange Act.
</FONT>

<P align="left">
<B><FONT size="2">Identifying and Evaluating Director
Nominees</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Nominating Committee uses various methods to
identify director nominees. The Nominating Committee assesses
the appropriate size and composition of the board and the
particular needs of the Board based on whether any vacancies are
expected due to retirement or otherwise. Candidates may come to
the attention of the Nominating Committee through current board
members, shareholders, or other sources. All candidates are
evaluated based on a review of the individual&#146;s
qualifications, skills, independence and expertise.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company intends to adopt a Code of Conduct no
later than June&nbsp;1, 2004, copies of which will be provided
free of charge upon a written request to: Four Embarcadero
Center, Suite&nbsp;3700, San&nbsp;Francisco, CA 94111-4107,
Attention: Craig K. Tagawa. We intend to post on our website any
amendments to our Code of Conduct, as well as any waivers from
the Code of Conduct for directors or executive officers
(including our
</FONT>

<P align="center"><FONT size="2">5
</FONT>

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<DIV align="left">
<FONT size="2">chief accounting officer and controller and
anyone else performing similar functions) within five business
days of the date of any amendment or waiver. The information on
our website is not a part of this proxy statement.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Director Compensation</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In 2003, non-employee directors were paid an
annual retainer of $20,000, payable quarterly. In addition,
non-employee directors are entitled to receive an automatic
grant of options on the date of the Company&#146;s Annual
Shareholder Meeting each year to acquire up to 4,000&nbsp;shares
of the Company&#146;s common stock at the market price on the
date of grant, until a Director has received options for a total
of 12,000&nbsp;shares. There was a grant of 4,000&nbsp;shares of
the Company&#146;s common stock to a newly elected non-employee
director, Olin C. Robison, during 2003. During 2003, the Board
of Directors held four regular meetings. Non-employee directors
also received reimbursement of expenses incurred in attending
meetings. No payment is made for attendance at meetings by any
director who is a full time employee of the Company.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Non-employee directors will receive in 2004 a
$20,000 annual retainer fee payable quarterly, and reimbursement
of expenses incurred in attending meetings. The election of
Ernest R. Bates and Olin C. Robison will result in annual
automatic option grants to Mr.&nbsp;Bates and Mr.&nbsp;Robison,
as described in the preceding paragraph.
</FONT>

<!-- link1 "PROPOSAL NO. 2 AMENDMENTS TO 1995 AND 2001 STOCK OPTION PLANS" -->
<DIV align="left"><A NAME="002"></A></DIV>

<P align="center">
<B><FONT size="2">PROPOSAL NO. 2</FONT></B>

<P align="center">
<B><FONT size="2">AMENDMENTS TO 1995 AND 2001 STOCK OPTION
PLANS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each of the 2001 Stock Option Plan (the
&#147;2001 Plan&#148;) and the 1995 Stock Option Plan (the
&#147;1995 Plan&#148; and together with the 2001 Plan, the
&#147;Plans&#148;) was approved previously by our stockholders.
The Board has determined that it would be in the best interests
of the Company and its stockholders to amend the Plans to
eliminate the prohibition on granting stock options to officers
who own more than 15% of the Company&#146;s common stock, which
will enable the Company to grant options in the future to its
Chairman and CEO, Dr.&nbsp;Ernest Bates (who holds more than 15%
of the Common Shares).
</FONT>

<P align="left">
<B><FONT size="2">Reasons for the Proposal</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In 1995, the Company completed a major financial
restructuring. The restructuring permitted the Company to amend
the capital and operating leases covering its medical equipment
to reduce monthly payments, eliminate $26.6&nbsp;million of
indebtedness and replace its operating line of credit. In
addition, the restructuring avoided the substantial dilution of
common shareholders that would have occurred under an
alternative plan proposed by the Company&#146;s creditors.
Existing shareholders retained 71% of the outstanding common
stock equity as opposed to 7% under the creditors&#146; plan.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The funding for the restructuring was provided by
two lenders whose loans were secured in part by a personal
guarantee of the Company&#146;s Chairman and CEO,
Dr.&nbsp;Ernest Bates. The total amount of the loans was
$6.5&nbsp;million. The lenders provided the financing only on
the condition that Dr.&nbsp;Bates agree to guarantee repayment.
According to the lenders, a primary purpose of the guarantee was
to assure that Dr.&nbsp;Bates would continue to be involved in
the affairs of the Company during the full term of the loans.
Dr.&nbsp;Bates entered into the required personal guarantees on
the condition that the Company compensate him with additional
equity that would enhance his ability to control fundamental
decisions of the Company. The Company issued 184,000 Common
Shares to Dr.&nbsp;Bates and, following approval by the
shareholders, granted him a 10-year option to acquire an
additional 1,495,000 Common Shares.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Since 1995, under the direction of
Dr.&nbsp;Bates, the Company has evolved and prospered. In 1998,
the Company sold its MRI and other businesses to Alliance
Imaging for $40,700,000, including the assumption of related
indebtedness (including the debt guaranteed by Dr.&nbsp;Bates).
Following the sale, the Company has become a leader in providing
Gamma Knife services and has increased operating income 58%
since 1999. The Common Stock price, which was as low as $0.25 in
the quarter preceding the 1995 restructuring, traded as high as
$7.90 on the American Stock Exchange during 2003. Additionally
in 2001, the Company initiated dividend payments to shareholders.
</FONT>

<P align="center"><FONT size="2">6
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During this nine-year period, Dr.&nbsp;Bates has
not received any stock options or other compensation in addition
to his base salary, except for cash bonuses in three of the
years. A provision in each of the 1995 Plan and the 2001 Plan
prohibits the granting of stock options to any person who owns
more than 15% of the outstanding Common Stock. This prohibition
was added to the 1995 Plan at the time of the large&nbsp;1995
option grant to Dr.&nbsp;Bates and was included in the 2001 Plan
because that option was still outstanding. In the opinion of the
Board, it is no longer appropriate to prohibit his participation
in the Plans because Dr.&nbsp;Bates&#146; option will expire on
August&nbsp;15, 2005.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The independent members of the Board believe that
it is in the best interest of the Company and its shareholders
for Dr.&nbsp;Bates to remain fully involved in the strategic
direction and daily affairs of American Shared. These Directors
believe that an ability to grant stock options to Dr.&nbsp;Bates
in the future under the Plans will provide an additional tool to
properly incentivize him for the benefit of all shareholders.
There are no understandings or agreements between the Board and
Dr.&nbsp;Bates as to future compensation or any option grants,
and Dr.&nbsp;Bates will not participate in any decision
affecting his compensation. If elected to the Board, Ernest R.
Bates will not participate in any decision affecting
Dr.&nbsp;Bates&#146; compensation. Nevertheless, the Board
considers it important that it have available all means,
including equity-based incentives, to structure a compensation
package that appropriately rewards Dr.&nbsp;Bates for his key
leadership role at the Company.
</FONT>

<P align="left">
<B><FONT size="2">Summary Description of the Plans</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The purposes of the Plans are to align the
interests of the Company&#146;s shareholders and recipients of
options by increasing the proprietary interest of such
recipients in the Company&#146;s growth and success and to
advance the interests of the Company by attracting and retaining
officers, other key employees and non-employee directors,
consultants and advisors. The Company may grant non-qualified
stock options and &#147;incentive stock options&#148; (within
the meaning of Section&nbsp;422 of the Internal Revenue Code of
1986, as amended the (&#147;Code&#148;)). In addition, options
are granted automatically to non-employee directors on the date
of each annual meeting of shareholders of the Company and on the
date a person first becomes a non-employee director.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Administration.</FONT></I><FONT size="2"> The
Plans are administered by a committee of the Board of Directors
(the &#147;Committee&#148;) consisting of not less than two
directors. Subject to the express provisions of the applicable
Plan, and except for options granted to non-employee directors,
the Committee has the authority to select eligible officers,
other key employees and non-employee consultants and advisors
who will receive awards and determine all of the terms and
conditions of each award and to determine the specific terms of
each award. Except with respect to grants to executive officers
of the Company, the Committee may delegate some or all of its
power and authority to administer the Plans to the Chief
Executive Officer or other executive officer of the Company.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Available Shares.</FONT></I><FONT size="2">
250,000 Common Shares were originally reserved for issuance
under the 2001 Plan, and 330,000 Common Shares were originally
reserved for issuance under the 1995 Plan, in each case subject
to adjustment in the event of a stock split or other similar
event or change in capitalization. In general, shares covered by
an option that expires or terminates unexercised or is cancelled
or forfeited would again be available for awards under the
applicable Plan. As of April&nbsp;5, 2004, there were options to
purchase an aggregate of 157,317 Common Shares outstanding under
the Plans, and 339,380&nbsp;shares remained available for future
grants.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Change in Control.</FONT></I><FONT size="2">
In the event of a change in control of the Company, all awards
will be &#147;cashed-out&#148; by the Company except, in the
case of a merger or similar transaction in which the
shareholders receive publicly traded common stock, all
outstanding options will represent a right to acquire the
appropriate number of shares of common stock received in the
merger or similar transaction.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Termination and
Amendment.</FONT></I><FONT size="2"> The Plans have a ten-year
term, unless terminated earlier by the Board of Directors. The
Board of Directors may amend the Plans at any time except that,
without the approval of the shareholders of the Company, no
amendment may, among other things, (i)&nbsp;increase the number
of Common Shares available under either Plan, (ii)&nbsp;reduce
the minimum purchase price of a Common Share subject to an
option or (iii)&nbsp;extend the term of either Plan, or
otherwise as required by applicable law or regulation.
</FONT>

<P align="center"><FONT size="2">7
</FONT>

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

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Exercise Price of Stock
Options.</FONT></I><FONT size="2"> The period for the exercise
of a stock option and the option exercise price will be
determined by the Committee, provided that no option shall be
exercisable later than ten years after its date of grant. The
exercise price of all non-qualified stock options must be no
less than 25% of the fair market value of the Common Shares on
the date of the grant. The option exercise price of an incentive
stock option will not be less than the fair market value of the
Common Shares on the date of grant of such option, unless the
recipient of the incentive stock option is a ten percent holder,
in which case the option exercise price will be the price
required by the Code, currently 110% of fair market value.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Exercisability of Stock
Options.</FONT></I><FONT size="2"> In the event an
optionee&#146;s employment or service terminates for any other
reason other than death or permanent disability, each option
held by the optionee generally will be exercisable for a period
of no more than three months after termination of employment or
service to the extent the option was exercisable on the date of
such termination. In the event an optionee&#146;s employment or
service terminates by reason of death or permanent disability,
each option held by the optionee generally will be exercisable
for a period of no more than one year after termination of
employment or service to the extent the option was exercisable
on the date of such termination.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Non-Employee Director
Options.</FONT></I><FONT size="2"> Non-employee directors
automatically receive, on the date of first becoming a director
and on the date of each annual meeting of shareholders,
non-qualified options to purchase&nbsp;4,000 Common Shares (up
to an aggregate of 12,000 Common Shares for any director) at an
option exercise price equal to the fair market value of a Common
Share on the date of grant. Such options become fully
exercisable one year after their date of grant (or upon death or
permanent disability, if earlier) and expire ten years after the
date of grant.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>New Plan
Benefits</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Except for the automatic option grants to
non-employee directors as described above, awards under each
Plan are discretionary. Therefore, it is not possible to
determine the benefits that will be received in the future by
participants. In 2003, our named executive officers did not
receive option grants and our other employees as a group
received options to purchase an aggregate of 10,000&nbsp;shares.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Federal
Income Tax Consequences</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Neither the optionee nor the Company incurs any
federal tax consequences as a result of the grant of an option.
The optionee has no taxable income upon exercising an incentive
stock option (except that the alternative minimum tax may
apply), and we receive no deduction when the option is
exercised. Upon exercising a non-qualified stock option, the
optionee generally must recognize ordinary income equal to the
&#147;spread&#148; between the exercise price and the fair
market value of our common stock on the date of exercise, and
the Company ordinarily will be entitled to a deduction for the
same amount. In the case of an employee, the option spread when
a non-qualified stock option is exercised is subject to income
tax withholding. Any additional gain or loss at the time of
disposition of shares acquired on exercise of a non-qualified
stock option will be capital gain or loss.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The tax treatment of a disposition of shares
acquired on exercise of an incentive stock option depends on how
long the shares have been held. If the shares are sold more than
two years after the option grant date and more than one year
after the exercise date, then the optionee will recognize
long-term capital gain. If the shares are sold before these two
periods are satisfied, the optionee recognizes ordinary income
equal to the &#147;spread&#148; on the date of exercise, and any
additional gain or loss will be capital gain or loss. The
Company is not entitled to a deduction in connection with a
disposition of option shares, except in the case of a
disposition of shares acquired under an incentive stock option
before the applicable holding periods have been satisfied.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Vote
Required</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The proposed amendments to each of the 1995 Plan
and 2001 Plan may provide a direct benefit to Dr.&nbsp;Bates if
the Board chooses to grant him stock options in the future. The
proposal will require an approving vote by the holders of a
majority of the Common Shares voting in person or by proxy on
the proposal,
</FONT>

<P align="center"><FONT size="2">8
</FONT>

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

<DIV align="left">
<FONT size="2">excluding any shares owned by Dr.&nbsp;Bates. The
Board will, however, count the shares owned by Dr.&nbsp;Bates in
determining whether a quorum is present at the meeting.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">FOR THE REASONS SET FORTH ABOVE, THE
INDEPENDENT MEMBERS OF THE BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDED A VOTE IN FAVOR OF PROPOSAL NO.&nbsp;2. PROPERLY
EXECUTED PROXIES RETURNED TO THE COMPANY WILL BE VOTED
&#147;FOR&#148; THE AMENDMENT OF THE STOCK OPTION PLANS UNLESS
OTHERWISE INSTRUCTED.</FONT></B>

<!-- link1 "CERTAIN ADDITIONAL INFORMATION" -->
<DIV align="left"><A NAME="003"></A></DIV>

<P align="center">
<B><FONT size="2">CERTAIN ADDITIONAL INFORMATION</FONT></B>

<P align="left">
<B><FONT size="2">Security Ownership of Certain Beneficial
Owners and Management</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table sets forth certain
information regarding the beneficial ownership of the
Company&#146;s Common Shares as of April&nbsp;5, 2004, of
(i)&nbsp;each person known to the Company to own beneficially 5%
or more of the Common Shares, (ii)&nbsp;each nominee for
director of the Company, (iii)&nbsp;the chief executive officer
and the chief operating and financial officer named in the
Summary Compensation Table, and (iv)&nbsp;all directors and
executive officers as a group.
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="62%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Common Shares Owned Beneficially</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Amount and Nature</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">of Beneficial</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Percent of</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Name and Address of Beneficial Owner</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ownership(2)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Class(3)</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Directors and Named Officers
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Ernest A. Bates,&nbsp;M.D.(1)(4)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,587,300</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31.5</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Willie R. Barnes(1)(4)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Ernest R. Bates(1)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,450</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Olin C. Robison(1)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">John F. Ruffle(1)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">200,411</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5.1</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Stanley S. Trotman,&nbsp;Jr.(1)(4)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">142,762</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.6</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Craig K. Tagawa(1)(4)<BR>
    Senior Vice President, Chief Operating and Financial Officer
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">138,100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.4</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">All Current Directors&nbsp;&#38; Executive
    Officers as a Group (6&nbsp;people)(4)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,081,573</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40.3</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="1%"></TD>
    <TD width="4%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">*</FONT></TD>
    <TD align="left">
    <FONT size="2">Less than 1%
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The address of each such individual is
    c/o&nbsp;American Shared Hospital Services, Four Embarcadero
    Center, Suite&nbsp;3700, San&nbsp;Francisco, California 94111.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Each person directly or indirectly has sole
    voting and investment power with respect to the shares listed
    under this column as being owned by such person.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(3)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Shares that any person or group of persons is
    entitled to acquire upon the exercise of options or warrants
    within 60&nbsp;days after April&nbsp;5, 2004, are treated as
    issued and outstanding for the purpose of computing the percent
    of the class owned by such person or group of persons but not
    for the purpose of computing the percent of the class owned by
    any other person.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(4)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Includes shares underlying options that are
    currently exercisable or which will become exercisable within
    60&nbsp;days following April&nbsp;5, 2004: Dr.&nbsp;Bates,
    1,085,000&nbsp;shares; Mr.&nbsp;Barnes, 12,000&nbsp;shares;
    Mr.&nbsp;Trotman, 2,667&nbsp;shares; Mr.&nbsp;Tagawa,
    110,000&nbsp;shares; and Directors and Executive Officers as a
    group, 1,213,667&nbsp;shares.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">9
</FONT>

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

<P align="left">
<B><FONT size="2">Compensation of Executive Officers</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table sets forth the compensation
paid by the Company for the fiscal years ending
December&nbsp;31, 2001, December&nbsp;31, 2002 and
December&nbsp;31, 2003 in those years for services rendered in
all capacities during 2001, 2002 and 2003, respectively, to the
Chief Executive Officer and each executive officer other than
the Chief Executive Officer who served as an officer at
December&nbsp;31, 2003 and earned cash compensation of $100,000
or more during 2003.
</FONT>

<P align="center">
<B><FONT size="2">Summary Compensation Table</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="46%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Annual Compensation</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Other Annual</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Name and Principal Position</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Year</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Salary(1)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Bonus</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Compensation(3)</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Ernest A. Bates,&nbsp;M.D.
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2003</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">432,443</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Chairman of the Board,
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2002</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">432,630</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Chief Executive Officer
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2001</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">432,250</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">55,770</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(2)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Craig K. Tagawa
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2003</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">250,875</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100,000</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(2)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Chief Operating Officer and
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2002</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">274,459</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(4)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Chief Financial Officer
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2001</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">305,837</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(5)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30,745</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(2)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left">
<HR size="1" width="18%" align="left" noshade>
</DIV>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Each amount under this column includes amounts
    accrued in 2001, 2002, and 2003, that would have been paid to
    such persons in such years, except that such amounts were
    instead deferred pursuant to the Retirement Plan for Employees
    of American Shared Hospital Services, a defined contribution
    plan and ASHS&#146; Flexible Benefit Plan, a defined
    contribution plan. Both plans are available to employees of the
    Company generally.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The Company&#146;s Board of Directors approved
    year end performance bonuses for 2001 and 2003 which were
    accrued in the year indicated and were paid in the first quarter
    of 2002 and fourth quarter 2003.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(3)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The Company has determined that, with respect to
    the executive officers named in the Summary Compensation Table,
    the aggregate amount of other benefits does not exceed the
    lesser of $50,000 or 10% of the total annual salary and bonus
    reported in the Summary Compensation Table as paid to such
    executive officer in the relevant year.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(4)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Includes sales commissions of approximately
    $24,000 earned and paid in 2002.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(5)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Includes sales commissions of approximately
    $63,000 earned and paid in 2001.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Long Term Compensation Awards</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The &#147;Long Term Compensation Awards&#148;
Table has been omitted because no long term compensation awards
were made during the relevant years to the Company&#146;s
executive officers named in the Summary Compensation Table.
</FONT>

<P align="left">
<B><FONT size="2">Option Grants in Last Fiscal Year</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The &#147;Option Grants&#148; table has been
omitted because no option grants were made during 2003 to the
Company&#146;s executive officers named in the summary
compensation table.
</FONT>

<P align="left">
<B><FONT size="2">Shares Authorized for Issuance Under Equity
Compensation Plans</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table summarizes, as of
December&nbsp;31, 2003, the total shares of our common stock
that may be received by holders of options upon the vesting and
exercise of currently outstanding options, the weighted average
exercise price of those outstanding options and the number of
shares of our common stock that are
</FONT>

<P align="center"><FONT size="2">10
</FONT>

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

<DIV align="left">
<FONT size="2">still available for future issuance under our
equity compensation plans after considering the stock options
currently outstanding.
</FONT>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="42%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number of Shares</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">to be Issued Upon</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Weighted Average</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exercise of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exercise Price</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Outstanding</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">of Outstanding</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number of Shares</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Options, Warrants</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Options, Warrants</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Remaining Available</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Plan Category</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">and Rights</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">and Rights</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">for Future Issuance</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">1995 and 2001 Stock Option Plans (the only
    current equity compensation plans approved by our shareholders)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">179,317</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.38</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">324,350</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">1995 options granted to Company&#146;s Chairman
    and Chief Executive Officer (approved by shareholders)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,110,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.01</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Any equity compensation plans not approved by
    security holders
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">N/A</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">N/A</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">N/A</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,289,317</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.34</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">324,350</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">Long-Term Incentive Plan Awards in Last Fiscal
Year</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The &#147;Long-term Incentive Plan Awards&#148;
(&#147;LTIP Awards&#148;) table has been omitted because no LTIP
Awards were made during 2003 to the Company&#146;s executive
officers named in the Summary Compensation Table.
</FONT>

<P align="left">
<B><FONT size="2">Aggregated Option Exercises in Last Fiscal
Year and Fiscal Year-End Option Values</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table sets forth the number of
shares acquired on exercise of stock options and the aggregate
gains realized upon exercise of such options during 2003, by the
Company&#146;s executive officers named in the Summary
Compensation Table. The following table also sets forth the
number of shares underlying exercisable and unexercisable
options held by such executive officers on December&nbsp;31,
2003.
</FONT>

<!-- link1 "AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES" -->
<DIV align="left"><A NAME="004"></A></DIV>

<P align="center">
<B><FONT size="2">AGGREGATED OPTION EXERCISES IN LAST FISCAL
YEAR</FONT></B>

<DIV align="center">
<B><FONT size="2">AND FISCAL YEAR-END OPTION VALUES</FONT></B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="31%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number of Securities</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Underlying</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Value of Unexercised</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Unexercised Options</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">In-the-Money Options</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Shares</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">At Fiscal Year-End</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">At Fiscal Year-End(1)</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Acquired on</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Value($)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Name</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exercise</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Realized</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exercisable/Unexercisable</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exercisable/Unexercisable</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Ernest A. Bates,&nbsp;M.D.
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">125,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">610,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,110,000/&nbsp;&nbsp;&nbsp;&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,648,900/&nbsp;&nbsp;&nbsp;&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Craig K. Tagawa
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">110,000/&nbsp;&nbsp;&nbsp;&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">453,750/&nbsp;&nbsp;&nbsp;&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">This amount is calculated by multiplying the
    number of Common Shares underlying the options at
    December&nbsp;31, 2003 by the market price per Common Share on
    such date less the option exercise price.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Employment Agreements</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company had no employment contracts with its
directors or executive officers named in the Summary
Compensation Table in 2003.
</FONT>

<P align="left">
<B><FONT size="2">Board of Directors Report on Executive
Compensation</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following Report of the Board of Directors
shall not be deemed incorporated by reference by any general
statement incorporating by reference this Proxy Statement into
any filing under the Securities Act or under the Exchange Act,
except to the extent that the Company specifically incorporates
this information by reference, and shall not otherwise be deemed
filed under such Acts.
</FONT>

<P align="center"><FONT size="2">11
</FONT>

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

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This Report of the Board of Directors describes
the Company&#146;s method of compensating its executive
officers, and describes the basis on which 2003 compensation was
paid to such executive officers, including those named in the
Summary Compensation Table.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 2003, the Board of Directors met once to
determine that compensation paid in 2003 by the Company to its
Chief Executive Officer and other executive officers would be
based on policies in effect in recent prior years.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company&#146;s compensation program seeks to
establish compensation that is competitive in both the
healthcare industry and among entrepreneurial, growth-oriented
companies in order to attract and retain high quality employees.
Compensation is linked to each employee&#146;s level of
responsibility and personal achievements with respect to
operational and financial goals established by the Chief
Executive Officer and the Board of Directors. Depending on the
individual officer&#146;s area of responsibility, such goals may
include new business and revenue acquisition, operating expense
reduction and control, operating efficiencies, etc. In addition,
the compensation system seeks to develop and encourage employee
ownership of the Company&#146;s stock through stock options.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The primary component of executive compensation
for the Company in 2003 was base salary and bonus, except in the
case of the Chief Operating and Financial Officer (who also is
CEO of the Company&#146;s Gamma Knife subsidiary) where sales
commissions were a substantial component of compensation in 2001
and 2002 and are included under &#147;salary&#148; in the table
above. Discretionary bonuses may be paid, based on a formula, if
financial and other results of the individual executive&#146;s
area of responsibility meet or exceed financial and operational
targets established at the beginning of the fiscal year. A bonus
of $100,000 for Craig K. Tagawa was paid for the year 2003,
based on continued growth in the Gamma Knife business.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition to base compensation, the Company has
used grants of stock options to retain senior executives and to
motivate them to improve long-term stock market performance. The
number of options granted in the past was determined by
reference to the level of responsibility of the particular
executive in the Company and such executive&#146;s proposed role
in the Company&#146;s future operations. In addition, during
1995 the Shareholders approved a grant of options to acquire
1,495,000&nbsp;Common Shares at an initial exercise price of
$0.01&nbsp;per share to the Company&#146;s Chairman and Chief
Executive Officer, in consideration of his continued service to
the Company and his personal guarantee of $6,500,000 of
indebtedness of the Company. The Company&#146;s Chairman and
Chief Executive Officer exercised options to acquire
125,000&nbsp;Common Shares in 2003.
</FONT>

<P align="left">
<B><FONT size="2">Board of Directors</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="65%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="32%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">Ernest A. Bates,&nbsp;M.D. Chairman
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">John F. Ruffle
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Willie R. Barnes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Stanley S. Trotman,&nbsp;Jr.
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Olin C. Robison
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<!-- link1 "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS" -->
<DIV align="left"><A NAME="005"></A></DIV>

<P align="center">
<B><FONT size="2">CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Willie R. Barnes, the Secretary and a director of
the Company, is a partner in the law firm of Musick,
Peeler&nbsp;&#38; Garrett LLP. That law firm performed legal
services for the Company in 2003. The management of the Company
is of the opinion that the fees paid to Mr.&nbsp;Barnes&#146;
law firm are comparable to those fees that would have been paid
for comparable legal services from a law firm not affiliated
with the Company. Mr.&nbsp;Barnes served during 2003 on the
Compensation, Stock Option and Nominating Committees of the
Board of Directors.
</FONT>

<P align="center"><FONT size="2">12
</FONT>

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

<P align="left">
<B><FONT size="2">Compliance with Section&nbsp;16(a) under the
Securities Exchange Act of 1934</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Reports filed under the Exchange Act and received
by the Company on or after January&nbsp;1, 2003, indicate that
during 2003&nbsp;directors, officers and 10% shareholders of the
Company filed all required reports within the periods
established by applicable rules, with the following exception:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">On November&nbsp;5, 2003, Ernest A.
    Bates,&nbsp;M.D., sold 300&nbsp;shares of the Company&#146;s
    stock on the open market. This sale was not reported to the
    Securities and Exchange Commission until November&nbsp;10, 2003.
    </FONT></TD>
</TR>

</TABLE>

<!-- link1 "PERFORMANCE GRAPH, TOTAL RETURN TO SHAREHOLDERS" -->
<DIV align="left"><A NAME="006"></A></DIV>

<P align="center">
<B><FONT size="2">PERFORMANCE GRAPH, TOTAL RETURN TO
SHAREHOLDERS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following graph and table compares cumulative
total shareholder return on the Company&#146;s Common Shares
(&#147;ASHS total return&#148;) (i)&nbsp;with the cumulative
total return of the Standard&nbsp;&#38; Poor&#146;s 500 Stock
Index (&#147;S&#38;P500&#148;) and (ii)&nbsp;with the
Standard&nbsp;&#38; Poors SmallCap 600 Stock Index
(&#147;S&#38;P SmallCap600&#148;), in each case during the five
years ended December&nbsp;31, 2003.
</FONT>

<P align="center">
<B><FONT size="2">COMPARISON OF CUMULATIVE FIVE YEAR TOTAL
RETURN</FONT></B>

<P align="center">
<IMG src="f98466df9846601.gif" alt="(COMPARISON LINE GRAPH)">

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="24%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="25"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="25" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Base</FONT></B></TD>
    <TD></TD>
    <TD colspan="19"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Period</FONT></B></TD>
    <TD></TD>
    <TD colspan="19"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD align="center" nowrap><FONT size="1">&nbsp;Company / Index</FONT></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Dec&nbsp;98</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Dec&nbsp;99</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Dec&nbsp;00</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Dec&nbsp;01</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Dec&nbsp;02</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Dec&nbsp;03</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="25"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="25" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;American Shared Hsptl Serv
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">242.86</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">128.57</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">179.47</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">253.41</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">571.40</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;S&#38;P 500 Index
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">155.63</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">141.46</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">124.65</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">97.10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">97.18</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;S&#38;P Smallcap 600 Index
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">110.94</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">124.03</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">132.13</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">112.80</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">158.63</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="25" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">13
</FONT>

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

<!-- link1 "AUDIT COMMITTEE REPORT" -->
<DIV align="left"><A NAME="007"></A></DIV>

<P align="center">
<B><FONT size="2">AUDIT COMMITTEE REPORT</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following Report of the Audit Committee does
not constitute soliciting material and should not be deemed
filed or incorporated by reference into any other filing of the
Company under the Securities Act of 1933 or the Securities
Exchange Act of 1934, except to the extent the Company
specifically incorporates the Report by reference therein.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Audit Committee of the Board of Directors
consists of three directors, all of whom are
&#145;independent&#146; as defined in the listing standards of
the American Stock Exchange. The primary purpose of the Audit
Committee is to review the financial reporting and internal
controls of the Company, to appoint independent auditors, to
review the reports of such auditors, and to review annually the
Audit Committee charter, a copy of which is attached as
Exhibit&nbsp;A. During 2003, the Audit Committee held seven
meetings, three of which were held telephonically.
Mr.&nbsp;Ruffle is Chair of the Audit Committee.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Audit Committee reviewed and held discussions
with management and the independent auditors regarding the
financial statements of the Company for the fiscal year ended
December&nbsp;31, 2003. These discussions included the quality
of the Company&#146;s internal controls, the audit plans, audit
scope and identification of audit risks. In addition, the
Committee assured that the independent auditors reviewed and
discussed with management the interim financial reports prior to
each quarterly earnings announcement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company&#146;s independent auditors provided
a formal written statement that described all relationships
between the auditors and the Company with respect to the
auditors&#146; independence as required by Independence
Standards Board Standard No.&nbsp;1, &#147;Independence
Discussions with Audit Committees,&#148; and the Audit Committee
satisfied itself as to the auditors&#146; independence.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Audit Committee discussed with the
independent accountants all matters required to be discussed by
Statement on Auditing Standards No.&nbsp;61, as amended,
&#147;Communication with Audit Committees&#148; and, with and
without the presence of management, reviewed and discussed the
results of the independent auditors examination of the
Company&#146;s financial statements. Management, being
responsible for the Company&#146;s financial statements,
represented that the Company&#146;s consolidated financial
statements were prepared in accordance with generally accepted
accounting principles. The independent auditors are responsible
for the examination of those statements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Based on the Audit committee&#146;s discussions
with management and the independent auditors, and the Audit
Committee&#146;s review as described previously, The Audit
Committee recommended to the Board of Directors that the
Company&#146;s audited financial statements be included in its
Annual Report on Form&nbsp;10-K for the fiscal year ended
December&nbsp;31, 2003, as filed with the Securities and
Exchange Commission.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Submitted by the Audit Committee of the Board of
Directors:
</FONT>

<P align="center">
<FONT size="2">John F. Ruffle <I>(chairman)</I>
</FONT>

<DIV align="center">
<FONT size="2">Olin C. Robison
</FONT>
</DIV>

<DIV align="center">
<FONT size="2">Stanley S. Trotman,&nbsp;Jr.
</FONT>
</DIV>

<!-- link1 "PROPOSAL NO. 3 RATIFICATION OF INDEPENDENT ACCOUNTANTS" -->
<DIV align="left"><A NAME="008"></A></DIV>

<P align="center">
<B><FONT size="2">PROPOSAL NO. 3</FONT></B>

<P align="center">
<B><FONT size="2">RATIFICATION OF INDEPENDENT
ACCOUNTANTS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company&#146;s consolidated financial
statements for the years ended December&nbsp;31, 2003, 2002 and
2001 have been audited by Moss Adams LLP. The Audit Committee
has appointed Moss Adams LLP to be the Company&#146;s
independent auditors for the fiscal year ending
December&nbsp;31, 2004, subject to Shareholder ratification at
the Meeting (see Proposal No.&nbsp;3).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Representatives of Moss Adams LLP are expected to
be present at the Annual Meeting to respond to appropriate
questions and will be given an opportunity to make a statement
if they so desire.
</FONT>

<P align="center"><FONT size="2">14
</FONT>

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

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The aggregate fees billed by Moss Adams LLP and
their respective affiliates for professional services rendered
in 2003 and 2002 are as follows:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="45%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Audit-</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Audit</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Related</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">All Other</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Fees(a)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Fees(b)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Tax Fees(c)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Fees(d)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Total Fees</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">2003</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">68,750</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">61,300</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">130,050</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">2002</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">62,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">62,125</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">128,625</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>

<DIV>&nbsp;</DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">(a)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Consists of fees billed for professional services
    rendered in connection with the audit of our consolidated
    financial statements and review of interim condensed
    consolidated financial statements included in our quarterly
    reports and services normally provided in connection with
    statutory and regulatory filings or engagements.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">(b)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Consists of fees for services that are reasonably
    related to the performance of the audit or review of our
    consolidated financial statements that are not reported under
    &#147;Audit Fees.&#148;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">(c)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Consists of tax compliance and preparation and
    other tax services.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">(d)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Consists of fees for all other services other
    than those reported above.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All of the above services were approved by the
Audit Committee. The Audit Committee pre-approves all audit and
permissible non&nbsp;-audit services provided by the independent
auditors.
</FONT>

<P align="left">
<B><FONT size="2">Policy on Audit Committee Pre-Approval of
Audit and Permissible Non-Audit Services of the Independent
Auditor</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Audit Committee pre-approves services
performed by the Company&#146;s independent auditor in order to
assure that the provision of such services and related fees do
not impair the auditor&#146;s independence. The independent
auditor must provide the Audit Committee with an engagement
letter outlining the scope of the audit services proposed to be
performed during the applicable calendar year and the proposed
fees for such audit services. If agreed to by the Audit
Committee, the engagement letter will be formally accepted by
the Audit Committee as evidenced by the execution of the
engagement letter by the Chair of the Audit Committee. The Audit
Committee approves, if necessary, any changes in terms,
conditions and fees resulting from changes in audit scope,
Company structure or other matters. The Audit Committee may
grant pre-approval for those permissible non-audit services that
it believes are services that would not impair the independence
of the auditor. The Audit Committee may not grant approval for
any services categorized as &#147;Prohibited Non-Audit
Services&#148; by the Securities and Exchange Commission.
Certain non-audit services have been pre-approved by the Audit
Committee, and all other non-audit services must be separately
approved by the Audit Committee.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">FOR THE REASONS SET FORTH ABOVE, THE BOARD OF
DIRECTORS UNANIMOUSLY RECOMMENDED A VOTE IN FAVOR OF PROPOSAL
NO.&nbsp;3. PROPERLY EXECUTED PROXIES RETURNED TO THE COMPANY
WILL BE VOTED &#147;FOR&#148; THE RATIFICATION OF THE
APPOINTMENT OF MOSS ADAMS&nbsp;LLP AS THE COMPANY&#146;S
INDEPENDENT ACCOUNTANTS FOR THE YEAR ENDING DECEMBER&nbsp;31,
2004.</FONT></B>

<!-- link1 "SHAREHOLDER PROPOSALS" -->
<DIV align="left"><A NAME="009"></A></DIV>

<P align="center">
<B><FONT size="2">SHAREHOLDER PROPOSALS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under certain circumstances, shareholders are
entitled to present proposals at shareholders&#146; meetings. To
be eligible for inclusion in the Proxy Statement for the
Company&#146;s next Annual Meeting of Shareholders, a
shareholder proposal must be received at the Company&#146;s
principal executive offices prior to February&nbsp;1, 2005. A
Shareholder&#146;s notice should list each proposal and contain
a brief description of the business to be brought before the
meeting; the name and address of the shareholder proposing such
business; the number of shares held by the shareholder; and any
material interest of the shareholder in the business.
</FONT>

<P align="center"><FONT size="2">15
</FONT>
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<!-- link1 "ANNUAL REPORT" -->
<DIV align="left"><A NAME="010"></A></DIV>

<P align="center">
<B><FONT size="2">ANNUAL REPORT</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company&#146;s 2003 Annual Report, which
includes financial statements, but which does not constitute a
part of the proxy solicitation material, accompanies this proxy
statement.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="36%"></TD>
    <TD width="64%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">By Order of the Board of Directors
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <IMG src="f98466df9846600.gif" alt="-s- WILLIE R. BARNES"></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Willie R. Barnes
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <I><FONT size="2">Corporate Secretary</FONT></I></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Dated:&nbsp;May&nbsp;3, 2004
</FONT>

<DIV align="left">
<FONT size="2">San&nbsp;Francisco, California
</FONT>
</DIV>

<P align="center"><FONT size="2">16
</FONT>
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<P align="right">
<B><FONT size="2">EXHIBIT A</FONT></B>

<P align="center">
<B><FONT size="2">AMERICAN SHARED HOSPITAL SERVICES</FONT></B>

<DIV align="center">
<B><FONT size="2">AUDIT COMMITTEE CHARTER</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">I.&nbsp;PURPOSE</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The primary function of the Audit Committee of
American Shared Hospital Services (&#147;the Committee&#148;) is
to assist the Board of Directors in fulfilling its oversight
responsibilities relating to:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">1)&nbsp;The quality, reliability and integrity of
    the Company&#146;s external financial reporting processes.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">2)&nbsp;The adequacy of the Company&#146;s
    internal accounting and administrative controls including
    compliance with corporate policies and tax, legal and regulatory
    requirements.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">3)&nbsp;The performance of the Company&#146;s
    independent accountants, who are accountable to the Board of
    Directors and the Committee.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">II.&nbsp;COMPOSITION</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Committee shall be comprised of at least
three independent directors each of whom shall meet the
independence and experience requirements of the American Stock
Exchange. At least one member shall have accounting or related
financial management expertise.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The members of the Committee shall be elected by
the Board at the annual organizational meeting of the Board. The
members of the Committee shall serve until their successors
shall be duly elected and qualified.
</FONT>

<P align="left">
<B><FONT size="2">III.&nbsp;MEETINGS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Committee shall hold such regular meetings as
may be necessary and such special meetings as may be called by
the Committee Chairman. The Committee shall meet at least once a
year with management and the independent accountants. Meetings
may be held in separate executive sessions to discuss any
matters that the Committee or each of these groups believes
should be discussed privately.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Committee shall report through its
Chairperson to the Board of Directors on the results of its
meetings and activities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Committee shall maintain minutes or other
records as appropriate of all meetings and activities.
</FONT>

<P align="left">
<B><FONT size="2">IV.&nbsp;RESPONSIBILITIES</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">While the Committee has the responsibilities and
powers set forth in the Charter, it is not the duty of the
Committee to plan or conduct audits or to determine that the
Company&#146;s financial statements are complete, accurate and
in accordance with generally accepted accounting principles.
This is the responsibility of management and the independent
accountants.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">To fulfill its responsibilities, the Audit
Committee will:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Recommend to the Board of Directors the
    appointment of the Company&#146;s independent accountants to
    conduct the annual audit.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Evaluate together with the Board of Directors the
    performance of the independent accountants and, if so determined
    by the Committee, recommend that the Board of Directors replace
    the independent accountants.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Ensure that the independent accountants submit,
    at least annually, to the Committee a formal, written statement
    delineating all relationships between the independent
    accountants and the Company. The Committee is responsible for
    actively engaging in a dialogue with the independent accountants
    with respect to any disclosed relationships or services that may
    impact their objectivity and independence,
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">17
</FONT>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">
    <FONT size="2">and for recommending that the Board take
    appropriate action in response to the independent
    accountants&#146; report to satisfy itself of the independent
    accountants&#146; independence.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Confer with the independent accountants
    concerning the scope and nature of their examinations of the
    books and records of the Company.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Review the audited financial statements to be
    included in the Company&#146;s annual Report on form 10-K prior
    to filing such reports with the Securities and Exchange
    Commission. Such reviews shall include discussions with the
    independent accountants, concerning such matters as the nature
    and extent of any significant changes in accounting principles
    or their application.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Provide a report to be included in the
    Company&#146;s annual proxy statement that discloses the
    Committee&#146;s oversight with respect to financial reporting.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Assure that the independent accountants review
    the Company&#146;s financial information to be included in its
    quarterly reports on Form&nbsp;10-Q prior to filing such reports
    with the Securities and Exchange Commission. Such review shall
    include discussions with management concerning such matters as
    the nature and extent of any significant changes in accounting
    principles or their application.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Review the costs of audit services performed by
    the independent accountants.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Meet periodically with management and the
    independent accountants to review the Company&#146;s major
    financial risk exposures and the steps management has taken to
    monitor and control such exposures.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Obtain from the independent accountants their
    recommendations regarding internal controls and the matters
    relating to the accounting procedures and the books and records
    of the Company and the corrective actions implemented.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Provide an open avenue of communication with the
    independent accountants, management and the Board of Directors.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Review the Audit Committee Charter on an annual
    basis and recommend changes, if any, to the Board of Directors.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">18
</FONT>
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<DIV style="font-family: 'Times New Roman',Times,serif">
</DIV>

<P align="center" style="font-size: 10pt">AMERICAN SHARED HOSPITAL SERVICES

<P align="center" style="font-size: 10pt">For the Annual Meeting of Shareholders to be held June&nbsp;17, 2004

<P align="center" style="font-size: 10pt">THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

<P align="left" style="font-size: 10pt">THE UNDERSIGNED HEREBY
NOMINATE(S), CONSTITUTE(S) AND APPOINT(S) ERNEST&nbsp;A.
BATES, M.D. AND CRAIG&nbsp;K. TAGAWA, AND EACH OF THEM, ATTORNEYS, AGENTS, AND
PROXIES OF THE UNDERSIGNED, WITH FULL POWERS OF SUBSTITUTION TO EACH, TO ATTEND
AND TO ACT AS PROXY OR PROXIES OF THE UNDERSIGNED AT THE ANNUAL MEETING OF
SHAREHOLDERS OF AMERICAN SHARED HOSPITAL SERVICES TO BE HELD ON
JUNE&nbsp;17, 2004 AT
9:00&nbsp;AM PACIFIC TIME AT THE RITZ CARLTON HOTEL,
600&nbsp;STOCKTON STREET, SAN&nbsp;FRANCISCO, CALIFORNIA, OR ANY ADJOURNMENTS THEREOF, AND TO VOTE AS SPECIFIED
HEREIN THE NUMBER OF SHARES THAT THE UNDERSIGNED, IF PERSONALLY PRESENT, WOULD
BE ENTITLED TO VOTE.

<P align="left" style="font-size: 10pt">THE BOARD OF DIRECTORS RECOMMENDS A VOTE &#147;FOR&#148; THE ELECTION OF THE FIVE PERSONS
NOMINATED FOR ELECTION TO THE BOARD OF DIRECTORS, &#147;FOR&#148; THE AMENDMENT TO THE
1995 AND 2001 STOCK OPTION PLANS, AND &#147;FOR&#148; THE RATIFICATION OF MOSS ADAMS LLP
AS THE COMPANY&#146;S INDEPENDENT ACCOUNTANTS FOR 2004. YOU ARE ENCOURAGED TO
SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES. THIS PROXY WHEN
PROPERLY EXECUTED WILL BE VOTED AS DIRECTED. IF NO DIRECTION IS MADE, IT WILL
BE VOTED, SUBJECT TO THE PROXYHOLDER&#146;S DISCRETIONARY AUTHORITY TO CUMULATE
VOTES, &#147;FOR&#148; THE ELECTION OF THE PERSONS NOMINATED ON THE REVERSE SIDE, AND
WILL HAVE THE EFFECT OF WITHHOLDING DISCRETIONARY AUTHORITY TO CUMULATE VOTES
AND &#147;FOR&#148; THE AMENDMENT TO THE 1995 AND 2001 STOCK OPTION PLANS, AND &#147;FOR&#148; THE
RATIFICATION OF INDEPENDENT ACCOUNTANTS. THE BOARD OF DIRECTORS IS NOT AWARE OF
ANY OTHER MATTERS THAT WILL COME BEFORE THE ANNUAL MEETING, OTHER THAN THOSE
DESCRIBED IN THIS PROXY. HOWEVER, IF SUCH MATTERS ARE PRESENTED, THE NAMED
PROXIES WILL, IN THE ABSENCE OF INSTRUCTIONS TO THE CONTRARY, VOTE SUCH PROXIES
IN ACCORDANCE WITH THE JUDGMENT OF SUCH NAMED PROXIES WITH RESPECT TO ANY SUCH
OTHER MATTER PROPERLY COMING BEFORE THE MEETING. THIS PROXY MAY BE REVOKED
PRIOR TO ITS EXERCISE BY FILING WITH THE SECRETARY OF THE COMPANY AN INSTRUMENT
IN WRITING REVOKING THIS PROXY OR A DULY EXECUTED PROXY BEARING A LATER DATE.
THIS PROXY ALSO MAY BE
REVOKED BY ATTENDANCE AT THE MEETING AND ELECTION TO VOTE IN PERSON.

<P align="center" style="font-size: 10pt">(continued, and to be signed on the other side)

<!-- 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">
<P align="left" style="font-size: 10pt"><FONT face="Wingdings">&#254;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; PLEASE MARK YOUR VOTE AS IN THIS EXAMPLE



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This proxy when properly executed will be voted in the manner directed
herein and in the discretion of the proxy holders and all other matters coming
before the meeting. If no direction is made, this proxy will be voted FOR the
election of directors recommended herein, FOR Proposal No.&nbsp;2, and FOR Proposal
No.3.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors recommends a vote FOR election of the directors
nominated herein, FOR the amendment to the 1995 and 2001 Stock Option Plans,
and FOR the ratification of independent accountants.


<P>

<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="right">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>ELECTION OF DIRECTORS. To elect five of the persons named below to the
Board of Directors to serve until the 2005 Annual Meeting of Shareholders
and until their successors are elected and have qualified.</TD>
</TR>

</TABLE>


<P>

<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%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>FOR all nominees (except as indicated to the contrary below).</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>WITHHOLD AUTHORITY to vote for all nominees.</TD>
</TR>

</TABLE>


<P>

<TABLE width="100%" border="0" cellpadding="2" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>
<TR valign="top">
    <TD nowrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (Instruction:&nbsp;</TD>
    <TD>To withhold authority for any individual nominee(s), write
that nominee&#146;s name(s) in the space below.)</TD>
</TR>
</TABLE>


<P>

<TABLE width="100%" border="0" cellpadding="2" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>
<TR valign="top">
    <TD nowrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NOMINEES:&nbsp;</TD>
    <TD>Ernest A. Bates, M.D.<br>
Ernest R. Bates<br>
Olin C. Robison<br>
John F. Ruffle<br>
Stanley S. Trotman, Jr.</TD>
</TR>
</TABLE>


<P>

<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="right">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>AMENDMENT TO 1995 AND 2001 STOCK OPTION PLANS. To amend the 1995 and
2001 Stock Option Plans to allow the Company&#146;s Chairman and Chief
Executive Officer to participate.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><FONT face="Wingdings">&#111;</FONT> FOR &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face="Wingdings">&#111;</FONT> AGAINST &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face="Wingdings">&#111;</FONT> ABSTAIN</TD>
</TR>

</TABLE>


<P>

<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="right">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>RATIFICATION OF INDEPENDENT ACCOUNTANTS. To ratify the appointment of
Moss Adams LLP as the Company&#146;s independent accountants for the year ended
December&nbsp;31, 2004.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><FONT face="Wingdings">&#111;</FONT> FOR &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face="Wingdings">&#111;</FONT> AGAINST &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face="Wingdings">&#111;</FONT> ABSTAIN</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned hereby ratifies and confirms all that said attorneys and
proxies, or any of them, or their substitutes, shall lawfully do or cause to be
done by virtue hereof, and hereby revokes any and all proxies heretofore given
by the undersigned to vote at the
Meeting. The undersigned acknowledges receipt of the Notice of the Annual
Meeting and the Proxy Statement accompanying such Notice.

<P align="left" style="font-size: 10pt">PLEASE MARK, DATE AND SIGN AS YOUR NAME APPEARS ABOVE AND RETURN IN THE
ENCLOSED ENVELOPE.



<P align="left" style="font-size: 10pt">I plan to attend the meeting in person <FONT face="Wingdings">&#111;</FONT>


<P>

<TABLE width="100%" border="0" cellpadding="2" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>
<TR valign="top">
    <TD nowrap>Signature&nbsp;</TD>
    <TD><U>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</U><U>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</U><U>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</U><U>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</U>&nbsp;&nbsp;Date</TD>
</TR>
</TABLE>


<P>

<TABLE width="100%" border="0" cellpadding="2" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>
<TR valign="top">
    <TD nowrap>Signature&nbsp;</TD>
    <TD><U>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</U><U>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</U><U>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</U><U>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</U>&nbsp;&nbsp;Date<br>
Signature, if held jointly</TD>
</TR>
</TABLE>

<P align="left" style="font-size: 10pt">NOTE: Please date this proxy and sign as your name(s) appear(s) on this
document. Joint owners should each sign personally. Corporate proxies should
be signed by an authorized officer. Executors, administrators, trustees, etc.
should give their full titles.




<P align="center" style="font-size: 10pt">&nbsp;
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`
end

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
