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<SEC-DOCUMENT>0000950134-05-008419.txt : 20050429
<SEC-HEADER>0000950134-05-008419.hdr.sgml : 20050429
<ACCEPTANCE-DATETIME>20050429060120
ACCESSION NUMBER:		0000950134-05-008419
CONFORMED SUBMISSION TYPE:	DEF 14A
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20050616
FILED AS OF DATE:		20050429
DATE AS OF CHANGE:		20050429
EFFECTIVENESS DATE:		20050429

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:		05782474

	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>f08442def14a.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">

<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV>

<P align="center" style="font-size: 10pt"><B>SCHEDULE 14A<BR>
(Rule&nbsp;14a-101)<BR>
INFORMATION REQUIRED IN PROXY STATEMENT<BR>
SCHEDULE 14A INFORMATION<BR>
Proxy Statement Pursuant to Section&nbsp;14(a) of the Securities<BR>
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><BR>
Check the appropriate box:<BR>
<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 Rule&nbsp;14a-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 Rule&nbsp;14a-11(c) or Rule&nbsp;14a-12


<P align="center" style="font-size: 10pt">American Shared Hospital Services<BR>
(Name of Registrant as Specified in Its Charter)<BR>
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)



<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)(1) and 0-11.<BR>
(1)&nbsp;&nbsp;&nbsp;&nbsp;Title of each class of securities to which transaction applies:<BR>
(2)&nbsp;&nbsp;&nbsp;&nbsp;Aggregate number of securities to which transactions applies:<BR>
(3)&nbsp;&nbsp;&nbsp;&nbsp;Per unit price or other underlying value of transaction computed to Exchange Act Rule&nbsp;0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):<BR>
(4)&nbsp;&nbsp;&nbsp;&nbsp;Proposed maximum aggregate value of transaction:<BR>
(5)&nbsp;&nbsp;&nbsp;&nbsp;Total fee paid:<BR>&nbsp;<BR>
<FONT face="Wingdings">&#111;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fee paid previously with preliminary materials:<BR>&nbsp;<BR>
<FONT face="Wingdings">&#111;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.<BR>&nbsp;<BR>
(1)&nbsp;&nbsp;&nbsp;&nbsp;Amount previously paid:<BR>
(2)&nbsp;&nbsp;&nbsp;&nbsp;Form, Schedule or Registration Statement no.:<BR>
(3)&nbsp;&nbsp;&nbsp;&nbsp;Filing Party:<BR>
(4)&nbsp;&nbsp;&nbsp;&nbsp;Date Filed:

<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>

<P align="center" style="font-size: 10pt">&nbsp;
</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" style="font-size: 10pt;">
<B>AMERICAN SHARED HOSPITAL SERVICES</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>Four Embarcadero Center, Suite&nbsp;3700</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>San&nbsp;Francisco, California 94111</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>NOTICE OF 2005 ANNUAL MEETING OF SHAREHOLDERS</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>To be held on June&nbsp;16, 2005</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
TO THE SHAREHOLDERS OF AMERICAN SHARED HOSPITAL SERVICES:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
NOTICE IS HEREBY GIVEN that, pursuant to a call of the Board of
Directors, the 2005 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&nbsp;Stockton Street (corner of
California Street), San&nbsp;Francisco, California 94111 at
9:00&nbsp;am (Pacific time), on Thursday, June&nbsp;16, 2005 to
consider and to act upon the following matters, all as set forth
in the Proxy Statement.
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>1.</TD>
    <TD align="left">
    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.</TD>
</TR>

</TABLE>

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

<TR style="font-size: 1pt;">
    <TD width="65%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="16%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD align="left" valign="top">
    Ernest&nbsp;A. Bates,&nbsp;M.D.</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>John&nbsp;F. Ruffle</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Ernest&nbsp;R. Bates</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>Stanley&nbsp;S. Trotman,&nbsp; Jr.</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Olin&nbsp;C. Robison</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>2.</TD>
    <TD align="left">
    RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.
    To ratify the appointment of Moss Adams LLP as the
    Company&#146;s Independent Registered Public Accounting Firm for
    the year ending December&nbsp;31, 2005.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>3.</TD>
    <TD align="left">
    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.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Board of Directors knows of no matters, other than those set
forth in paragraphs&nbsp;(1)&nbsp;and (2)&nbsp;above, that will
be presented for consideration at the Meeting.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Board of Directors has fixed the close of business on
April&nbsp;18, 2005 as the Record Date for the determination of
shareholders entitled to vote at the Meeting.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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.
</DIV>

<DIV style="margin-top: 15pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="39%"></TD>
    <TD width="61%"></TD>
</TR>

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

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <IMG src="f08442f0844200.gif" alt="-s- WILLIE R. BARNES"></TD>
</TR>

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

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

</TABLE>

<DIV align="left" style="font-size: 10pt;">
Dated: April&nbsp;28, 2005
</DIV>

<DIV align="left" style="font-size: 10pt;">
San&nbsp;Francisco, California
</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"><FONT style="font-size: 11pt">INTRODUCTION</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#001"><FONT style="font-size: 11pt">PROPOSAL NO. 1 ELECTION OF DIRECTORS</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#002"><FONT style="font-size: 11pt">CERTAIN ADDITIONAL INFORMATION</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#003"><FONT style="font-size: 11pt">CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#004"><FONT style="font-size: 11pt">AUDIT COMMITTEE REPORT</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#005"><FONT style="font-size: 11pt">PROPOSAL NO. 2 RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#006"><FONT style="font-size: 11pt">SHAREHOLDER PROPOSALS</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#007"><FONT style="font-size: 11pt">ANNUAL REPORT</FONT></A></TD></TR>
</TABLE>
</CENTER>
<!-- /TOC -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 11pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>AMERICAN SHARED HOSPITAL SERVICES</B>
</DIV>

<DIV align="center" style="font-size: 11pt;">
<B>Four Embarcadero Center, Suite&nbsp;3700</B>
</DIV>

<DIV align="center" style="font-size: 11pt;">
<B>San&nbsp;Francisco, California 94111</B>
</DIV>

<DIV align="center" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 31%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 11pt; margin-top: 17pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>PROXY STATEMENT</B>
</DIV>

<DIV align="center" style="font-size: 11pt;">
<B>2005 ANNUAL MEETING OF SHAREHOLDERS</B>
</DIV>

<DIV align="center" style="font-size: 11pt;">
<B>June&nbsp;16, 2005</B>
</DIV>

<DIV align="center" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 31%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 11pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<!-- link1 "<FONT style="font-size: 11pt">INTRODUCTION</FONT>" -->
<DIV align="left"><A NAME="000"></A></DIV>

<DIV align="center" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>INTRODUCTION</B>
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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
2005 Annual Meeting of Shareholders scheduled to 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;16, 2005 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 April&nbsp;29, 2005.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The matters to be considered and voted upon at the Meeting will
be:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 11pt;">

<TR>
    <TD width="5%"></TD>
    <TD width="10%"></TD>
    <TD width="85%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>1.</TD>
    <TD align="left">
    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.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>2.</TD>
    <TD align="left">
    To ratify the appointment of Moss Adams LLP as the
    Company&#146;s Independent Registered Public Accounting Firm for
    the year ending December&nbsp;31, 2005.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>3.</TD>
    <TD align="left">
    To transact such other business as may properly be brought
    before the Meeting and any and all adjournments thereof.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
Only shareholders of record at the close of business on
April&nbsp;18, 2005 (the &#147;Record Date&#148;) are entitled
to notice of and to vote at the Meeting.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Revocability of Proxies</B>
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Solicitation of Proxies</B>
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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
</DIV>

<P align="center" style="font-size: 11pt;">1

<!-- 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" style="font-size: 11pt;">
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 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.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Outstanding Securities</B>
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Board of Directors has fixed April&nbsp;18, 2005 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;4,828,840 Common Shares. The Common Shares are the
only class of securities entitled to vote at the Meeting.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Vote Required and Voting Procedures</B>
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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 to ratify the appointment of the Company&#146;s
Independent Registered Public Accounting Firm, (i)&nbsp;vote for
the ratification, (ii)&nbsp;vote against the ratification, or
(iii)&nbsp;abstain.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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
</DIV>

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<DIV align="left" style="font-size: 11pt;">
directors. Non-voted shares also will not affect the outcome of
the proposal to ratify the appointment of the Independent
Registered Public Accounting Firm.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In connection with the solicitation by the Board of Directors of
proxies for use at the Meeting, the Board of Directors has
designated Ernest&nbsp;A. Bates,&nbsp;M.D. and Craig&nbsp;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 and
(2)&nbsp;ratification of the appointment of the Company&#146;s
independent auditors.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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 ratify the appointment of the
Company&#146;s independent auditors requires 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.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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.
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<!-- link1 "<FONT style="font-size: 11pt">PROPOSAL NO. 1 ELECTION OF DIRECTORS</FONT>" -->
<DIV align="left"><A NAME="001"></A></DIV>

<DIV align="center" style="font-size: 11pt;">
<B>PROPOSAL NO.&nbsp;1</B>
</DIV>

<DIV align="center" style="font-size: 11pt;">
<B>ELECTION OF DIRECTORS</B>
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Board of Directors</B>
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;s Bylaws provide that there shall be no fewer
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.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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.
</DIV>

<P align="center" style="font-size: 11pt;">3

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<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Set forth below is certain information regarding each of the
nominees.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>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.</B>
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Nominees</B>
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
ERNEST&nbsp;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
Vice Chairman of the Board of Trustees of The Johns Hopkins
University, a member of the Board of Trustees 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 Board of Directors of Copia and the
Capital Campaign Chairman and a Board Member of the Museum of
African Diaspora. Dr.&nbsp;Bates is also a member of the State
of California Commission for Jobs and Economic Growth, a member
of the Board of Directors of Salzburg Seminar, a board member of
the Center for Accelerating Medical Solutions-Milken Institute
and a 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 68&nbsp;years
old. Dr.&nbsp;Bates is the father of Board Member Ernest&nbsp;R.
Bates.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
ERNEST&nbsp;R. BATES has been a director of the Company since
2004. 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 38&nbsp;years old.
Ernest&nbsp;R. Bates is the son of Board Member
Dr.&nbsp;Ernest&nbsp;A. Bates.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
OLIN&nbsp;C. ROBISON has been a director of the Company 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 that institution. He is a
Director of The Investment Company of America, American Mutual
Fund and AMCAP (all of the American Funds Group) and has served
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 68&nbsp;years old.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
JOHN&nbsp;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 York. He is also 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 68&nbsp;years
old.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
STANLEY&nbsp;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 is
</DIV>

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<DIV align="left" style="font-size: 11pt;">
also a Director of Oncure Medical Corp. He received his
undergraduate degree from Yale University in 1965 and holds an
MBA from Columbia Business School in 1967. Mr.&nbsp;Trotman is
61&nbsp;years old.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Meetings of the Board of Directors</B>
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Board of Directors of the Company held four regular meetings
and two telephonic meetings during 2004. 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.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Shareholders may communicate with the Board by writing to:
Four&nbsp;Embarcadero Center, Suite&nbsp;3700;
San&nbsp;Francisco, CA 94111-4107, Attention: Ernest&nbsp;A.
Bates. We encourage directors to attend our annual meeting and
all directors attended the 2004 Annual Meeting in person. All
shareholder communications to directors are forwarded to them.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Committees of the Board of Directors</B>
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company has standing Compensation, Nominating and Corporate
Governance and Audit Committees, each of which is described
below. The American Stock Exchange (&#147;AMEX&#148;) recently
adopted enhanced board and board committee independence
requirements which will become fully applicable to the Company
on July&nbsp;31, 2005. The Company nevertheless is already in
compliance with most of these enhanced requirements and will
satisfy the remainder before July&nbsp;31, 2005. Thus, a
majority of our directors (Messrs.&nbsp;Robison, Ruffle and
Trotman) are independent under the AMEX rules and
Rule&nbsp;10A-3 under the Securities Exchange Act and each of
the Committees described above is comprised of these three
independent directors. Each of the Audit, Compensation and
Nominating and Corporate Governance Committees has adopted a
formal written charter. These, as well as our Code of
Professional Conduct and Ethics, are available on our website at
www.ashs.com. You may also request a copy of these documents
free of charge by writing our Corporate Secretary. We intend to
post on our website any amendments to our Code of Professional
Conduct and Ethics, as well as any waivers for directors or
executive officers (including our chief accounting officer and
controller and anyone else performing similar functions) within
five business days after the date of any amendment or waiver.
The information on our website is not part of this proxy
statement. Beginning with the 2005 Annual Meeting, the
Company&#146;s independent directors will meet at least annually
without management and the non-independent directors, as
required by the AMEX rules.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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 2004. The Compensation Committee consists of
Mr.&nbsp;Robison, Mr.&nbsp;Ruffle, and Mr.&nbsp;Trotman.
Mr.&nbsp;Trotman is Chair of the Compensation Committee.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The purpose of the Nominating and Corporate Governance Committee
is to recommend candidates for election to the Board of
Directors. The Company adopted a Nominating and Corporate
Governance Committee Charter during the past year which is
available on our website. The Nominating and Corporate
Governance Committee met once during 2004. In 2005, the
Nominating and Corporate Governance Committee by unanimous
written consent nominated Dr.&nbsp;Bates, Mr.&nbsp;Bates,
Mr.&nbsp;Robison, Mr.&nbsp;Ruffle and Mr.&nbsp;Trotman for
election to the Board. Mr.&nbsp;Robison, Mr.&nbsp;Ruffle and
Mr.&nbsp;Trotman serve on the Nominating and Corporate
Governance Committee. Mr.&nbsp;Trotman is Chair of the
Nominating and Corporate Governance Committee.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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
</DIV>

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<DIV align="left" style="font-size: 11pt;">
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 2004 the Audit Committee held three
regular meetings and five 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 under the
Securities Exchange Act.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, the Company has a Stock Option Committee whose
purpose 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 2004 the functions of the Stock Option Committee were
performed by the Board as a whole, which issued seven stock
option grants during 2004 to employees who are not executive
officers.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Identifying and Evaluating Director Nominees</B>
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Nominating and Corporate Governance Committee uses various
methods to identify director nominees. The Nominating and
Corporate Governance 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 and Corporate Governance 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.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Nominating and Corporate Governance Committee will consider
director candidates submitted by shareholders to:
Four&nbsp;Embarcadero Center, Suite&nbsp;3700,
San&nbsp;Francisco, CA 94111-4107, Attention: Nominating and
Corporate Governance Committee. 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 and Corporate
Governance 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
and Corporate Governance 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 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.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Director Compensation</B>
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 2004, 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
were grants of 4,000&nbsp;shares each of the Company&#146;s
common stock to non-employee directors, Ernest&nbsp;R. Bates and
Olin&nbsp;C. Robison, during 2004. Non-employee directors also
received
</DIV>

<P align="center" style="font-size: 11pt;">6

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<DIV align="left" style="font-size: 11pt;">
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.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Non-employee directors will receive in 2005 a $20,000 annual
retainer fee payable quarterly, and reimbursement of expenses
incurred in attending meetings. The election of Ernest&nbsp;R.
Bates and Olin&nbsp;C. Robison will result in annual automatic
option grants to Mr.&nbsp;Bates and Mr.&nbsp;Robison, as
described in the preceding paragraph.
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<!-- link1 "<FONT style="font-size: 11pt">CERTAIN ADDITIONAL INFORMATION</FONT>" -->
<DIV align="left"><A NAME="002"></A></DIV>

<DIV align="center" style="font-size: 11pt;">
<B>CERTAIN ADDITIONAL INFORMATION</B>
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Security Ownership of Certain Beneficial Owners and
Management</B>
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth certain information regarding the
beneficial ownership of the Company&#146;s Common Shares as of
April&nbsp;8, 2005, 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.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="61%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
</TR>


<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Common Shares Owned Beneficially</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Amount and</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Nature of Beneficial</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Percent of</B></TD>
</TR>

<TR>
    <TD align="center" nowrap><B>Name and Address of Beneficial Owner</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Ownership (2)</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Class (3)</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

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

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Ernest&nbsp;A. Bates,&nbsp;M.D.(1)(4)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">
    1,116,378</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">
    22.1%</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Ernest&nbsp;R. Bates(1)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">
    10,629</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">
    *</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Olin&nbsp;C. Robison(1)(4)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">
    4,000</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">
    *</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    John&nbsp;F. Ruffle(1)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">
    200,411</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">
    4.2%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Stanley&nbsp;S. Trotman,&nbsp;Jr.(1)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">
    142,762</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">
    3.0%</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Craig&nbsp;K. Tagawa(1)(4)<BR>
    Senior Vice President, Chief Operating and Financial Officer</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">
    138,100</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">
    2.8%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    All Current Directors&nbsp;&#38; Executive Officers as a
    Group<BR>
    (6&nbsp;people)(4)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">
    1,612,280</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">
    31.3%</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    5% or More Shareholders</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Seth&nbsp;W. Hamot; Roark, Rearden,&nbsp;&#38; Hamot LLC; and
    Costa Brava Partnership&nbsp;III L.P.(5)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">
    286,975</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">
    5.9%</TD>
</TR>

</TABLE>
</CENTER>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 11pt;">

<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>

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

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 11pt;">

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

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

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    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.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(3)&nbsp;</TD>
    <TD align="left">
    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;8, 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.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(4)&nbsp;</TD>
    <TD align="left">
    Includes shares underlying options that are currently
    exercisable or which will become exercisable within 60&nbsp;days
    following April&nbsp;8, 2005: Dr.&nbsp;Bates,
    214,000&nbsp;shares; Mr.&nbsp;Robison, 4,000&nbsp;shares;
    Mr.&nbsp;Tagawa, 110,000&nbsp;shares; and Directors and
    Executive Officers as a group, 328,000&nbsp;shares.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 11pt;">7

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

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 11pt;">

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

<TR valign="top">
    <TD>(5)&nbsp;</TD>
    <TD align="left">
    Based solely on information contained in a Schedule&nbsp;13G
    filed on February&nbsp;1, 2005 by Seth&nbsp;W. Hamot, a United
    States Citizen; Roark, Rearden&nbsp;&#38; Hamot LLC, a Delaware
    limited liability company; and Costa Brava Partnership&nbsp;III
    L.P., a Delaware limited partnership. Seth&nbsp;W. Hamot is the
    president of Roark, Reardon&nbsp;&#38; Hamot LLC, which is the
    general partner of Costa Brava Partnership&nbsp;III L.P. All of
    the shares of common stock that were beneficially owned by the
    reporting persons were held by Costa Brava Partnership&nbsp;III
    L.P.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Compensation of Executive Officers</B>
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth the compensation paid by the
Company for the fiscal years ending December&nbsp;31, 2002,
December&nbsp;31, 2003 and December&nbsp;31, 2004 in those years
for services rendered in all capacities during 2002, 2003 and
2004, 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, 2004 and earned cash
compensation of $100,000 or more during 2004.
</DIV>

<DIV align="center" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Summary Compensation Table</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="46%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>


<TR>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Annual Compensation</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Other Annual</B></TD><TD></TD>
</TR>

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

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Ernest A. Bates,&nbsp;M.D.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>$432,756</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>$0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Chairman of the Board,</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>$432,443</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>$0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Chief Executive Officer</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>$432,630</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>$0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="18">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Craig K. Tagawa</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>$260,696</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>$50,000(2)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Chief Operating Officer and</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>$250,875</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>$100,000(2)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Chief Financial Officer</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>$274,459(4)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>$0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 11pt;">

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

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Each amount under this column includes amounts accrued in 2002,
    2003, and 2004, 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.</TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    The Company&#146;s Board of Directors approved year end
    performance bonuses for 2003 and 2004 which were paid in the
    fourth quarter 2003 and 2004.</TD>
</TR>

<TR valign="top">
    <TD>(3)&nbsp;</TD>
    <TD align="left">
    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.</TD>
</TR>

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

</TABLE>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Long Term Compensation Awards</B>
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Option Grants in Last Fiscal Year</B>
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The &#147;Option Grants&#148; table has been omitted because no
option grants were made during 2004 to the Company&#146;s
executive officers named in the Summary Compensation Table.
</DIV>

<P align="center" style="font-size: 11pt;">8

<!-- 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" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Shares Authorized for Issuance Under Equity Compensation
Plans</B>
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table summarizes, as of December&nbsp;31, 2004,
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 still available for future issuance under our
equity compensation plans after considering the stock options
currently outstanding.
</DIV>

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

<TR style="font-size: 1pt;">
    <TD width="30%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Number of shares</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>to be issued</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Weighted average</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>upon exercise of</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>exercise price of</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Number of shares</B></TD><TD></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>outstanding options,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>outstanding options,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>remaining available for</B></TD><TD></TD>
</TR>

<TR>
    <TD align="center" nowrap><B>Plan Category</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>warrants and rights</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>warrants and rights</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>future issuance</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD align="left" valign="top">
    1995 and 2001 Stock Option Plans (the only current equity
    compensation plans approved by our shareholders)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>167,617</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>$2.56</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>324,080</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="13">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD align="left" valign="top">
    1995 options granted to Company&#146;s Chairman and Chief
    Executive Officer (approved by shareholders)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>264,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>$0.01</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="13">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD align="left" valign="top">
    Any equity compensation plans not approved by security holders</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>N/A</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>N/A</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>N/A</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    Total</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>431,617</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>$1.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>324,080</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Long-Term Incentive Plan Awards in Last Fiscal Year</B>
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The &#147;Long-term Incentive Plan Awards&#148; (&#147;LTIP
Awards&#148;) table has been omitted because no LTIP Awards were
made during 2004 to the Company&#146;s executive officers named
in the Summary Compensation Table.
</DIV>

<P align="center" style="font-size: 11pt;">9

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

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Aggregated Option Exercises in Last Fiscal Year and Fiscal
Year-End Option Values</B>
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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 2004, 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, 2004.
</DIV>

<DIV align="center" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR</B>
</DIV>

<DIV align="center" style="font-size: 11pt;">
<B>AND FISCAL YEAR-END OPTION VALUES</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="23%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
</TR>


<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Number of Securities</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Underlying</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Value of Unexercised</B></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Unexercised Options</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>In-the-Money Options</B></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Shares</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>At Fiscal Year-End</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>At Fiscal Year-End(1)</B></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Acquired on</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Value($)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" nowrap><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Exercise</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Realized</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Exercisable/</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Unexercisable</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Exercisable/</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Unexercisable</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    Ernest A. Bates,&nbsp;M.D.&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>846,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>$3,850,140</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">
    264,000</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    &#151;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">
    $1,568,160</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    &#151;</TD>
</TR>

<TR>
    <TD colspan="17">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    Craig K. Tagawa</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">
    110,000</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    &#151;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">
    &nbsp;&nbsp;&nbsp;448,250</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    &#151;</TD>
</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 11pt;">

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

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    This amount is calculated by multiplying the number of Common
    Shares underlying the options at December&nbsp;31, 2004 by the
    market price per Common Share on such date less the option
    exercise price.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Employment Agreements</B>
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company had no employment contracts with its directors or
executive officers named in the Summary Compensation Table in
2004.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Board of Directors Report on Executive Compensation</B>
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
This Report of the Board of Directors describes the
Company&#146;s method of compensating its executive officers,
and describes the basis on which 2004 compensation was paid to
such executive officers, including those named in the Summary
Compensation Table.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
During 2004, the Board of Directors met once to determine that
compensation paid in 2004 by the Company to its Chief Executive
Officer and other executive officers would be based on policies
in effect in recent prior years.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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
</DIV>

<P align="center" style="font-size: 11pt;">10

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

<DIV align="left" style="font-size: 11pt;">
efficiencies, etc. In addition, the compensation system seeks to
develop and encourage employee ownership of the Company&#146;s
stock through stock options.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The primary component of executive compensation for the Company
in 2004 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 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 $50,000 for Craig K. Tagawa was paid for the year 2004, based
on continued growth in the Gamma Knife business.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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
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 846,000 Common Shares in
2004.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Board of Directors</B>
</DIV>

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

<TR style="font-size: 1pt;">
    <TD width="65%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="32%">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Ernest A. Bates,&nbsp;M.D. Chairman</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    John F. Ruffle</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Ernest R. Bates</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Stanley S. Trotman,&nbsp;Jr.</TD>
</TR>

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

</TABLE>
</CENTER>

<!-- link1 "<FONT style="font-size: 11pt">CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS</FONT>" -->
<DIV align="left"><A NAME="003"></A></DIV>

<DIV align="center" style="font-size: 11pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS</B>
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Willie R. Barnes, the Secretary 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 2004. 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 2004 on the Compensation, Stock Option and Nominating
Committees of the Board of Directors until his term expired on
June&nbsp;17th 2004.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Compliance with Section&nbsp;16(a) under the Securities
Exchange Act of 1934</B>
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Reports filed under the Exchange Act and received by the Company
on or after January&nbsp;1, 2004, indicate that during
2004&nbsp;directors, officers and 10% shareholders of the
Company filed all required reports within the periods
established by applicable rules, with the following exception:
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 11pt;">

<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>

<TR valign="top">
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    On July&nbsp;21, 2004, Ernest A. Bates,&nbsp;M.D., sold
    2,222&nbsp;shares of the Company&#146;s stock in a private sale.
    This sale was not reported to the Securities and Exchange
    Commission until August&nbsp;2, 2004.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 11pt;">11

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

<DIV align="center" style="font-size: 11pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>PERFORMANCE GRAPH, TOTAL RETURN TO SHAREHOLDERS</B>
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following graph and table compares cumulative total
shareholder return on the Company&#146;s Common Shares
(&#147;ASHS&nbsp;total return&#148;) (i)&nbsp;with the
cumulative total return of the Standard&nbsp;&#38; Poor&#146;s
500&nbsp;Stock Index (&#147;S&#38;P500&#148;) and (ii)&nbsp;with
the Standard&nbsp;&#38; Poor&#146;s SmallCap 600&nbsp;Stock
Index (&#147;S&#38;P&nbsp;SmallCap&nbsp;600&#148;), in each case
during the five years ended December&nbsp;31, 2004.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 15pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>COMPARISON OF 5&nbsp;YEAR CUMULATIVE TOTAL RETURN*</B>
</DIV>

<DIV align="center" style="font-size: 8pt;">
AMONG AMERICAN SHARED HOSPITAL SERVICES, THE S&#38;P&nbsp;500
INDEX
</DIV>

<DIV align="center" style="font-size: 8pt;">
AND THE S&#38;P SMALLCAP&nbsp;600 INDEX
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<IMG src="f08442f0844201.gif" alt="(5 YR. TOTAL RETURN GRAPH)">
</DIV>

<DIV align="left" style="font-size: 7pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
*&nbsp;$100 invested on 12/31/99 in stock or index-including
reinvestment of dividends. Fiscal year ending December&nbsp;31.
</DIV>

<DIV align="left" style="font-size: 7pt; margin-top: 8pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
 Copyright <FONT style="font-size: 10pt"> (&#167;) </FONT> 2002,
Standard&nbsp;&#38; Poor&#146;s, a division of The McGraw-Hill
Companies, Inc. All rights reserved. <BR>
 www.researchdatagroup.com/S&#38;P.htm
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="43%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B><FONT face="helvetica,arial">Base</FONT></B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B><FONT face="helvetica,arial">Period</FONT></B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" nowrap><B>Company&nbsp;/&nbsp;Index</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B><FONT face="helvetica,arial">Dec99</FONT></B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B><FONT face="helvetica,arial">Dec00</FONT></B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B><FONT face="helvetica,arial">Dec01</FONT></B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B><FONT face="helvetica,arial">Dec02</FONT></B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B><FONT face="helvetica,arial">Dec03</FONT></B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B><FONT face="helvetica,arial">Dec04</FONT></B></TD><TD></TD>
</TR>


<TR valign="bottom" style="font-size: 1px">
    <TD colspan="24" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    AMERICAN SHARED HOSPITAL SERVICES</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>52.94</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73.79</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>104.18</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>159.43</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>162.93</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    S&#38;P 500 INDEX</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>90.89</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>80.09</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>62.39</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>80.29</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>89.02</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    S&#38;P SMALLCAP 600 INDEX</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>111.80</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>119.11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>101.69</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>141.13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>173.09</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 11pt;">12

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

<!-- link1 "<FONT style="font-size: 11pt">AUDIT COMMITTEE REPORT</FONT>" -->
<DIV align="left"><A NAME="004"></A></DIV>

<DIV align="center" style="font-size: 11pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>AUDIT COMMITTEE REPORT</B>
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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 2004, the
Audit Committee held eight meetings, five of which were held
telephonically. Mr.&nbsp;Ruffle is Chair of the Audit Committee.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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, 2004. 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.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Audit Committee discussed with the Independent Registered
Public Accounting Firm 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&#146; 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.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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, 2004,
as filed with the Securities and Exchange Commission.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Submitted by the Audit Committee of the Board of Directors:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 11pt;">

<TR>
    <TD width="18%"></TD>
    <TD width="82%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    John F. Ruffle (chairman)</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Olin C. Robison</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Stanley S. Trotman,&nbsp;Jr.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 11pt;">13

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<!-- link1 "<FONT style="font-size: 11pt">PROPOSAL NO. 2 RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</FONT>" -->
<DIV align="left"><A NAME="005"></A></DIV>

<DIV align="center" style="font-size: 11pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>PROPOSAL&nbsp;NO. 2</B>
</DIV>

<DIV align="center" style="font-size: 11pt;">
<B>RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM</B>
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;s consolidated financial statements for the
years ended December&nbsp;31, 2004, 2003 and 2002 have been
audited by Moss Adams&nbsp;LLP. The Audit Committee has
appointed Moss Adams&nbsp;LLP to be the Company&#146;s
Independent Registered Public Accounting Firm for the fiscal
year ending December&nbsp;31, 2005, subject to Shareholder
ratification at the Meeting (see Proposal&nbsp;No.&nbsp;2).
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Representatives of Moss Adams&nbsp;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.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The aggregate fees billed by Moss Adams&nbsp;LLP and their
respective affiliates for professional services performed for
2004 and 2003 are as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 11pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="15%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>


<TR valign="bottom" style="font-size: 1px">
    <TD colspan="20" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" nowrap><B>Audit-</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="11">&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" nowrap><B>Audit</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" nowrap><B>Related</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" nowrap><B>All Other</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" nowrap><B>Total</B></TD><TD></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" nowrap><B>Fees (a)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" nowrap><B>Fees (b)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Tax Fees (c)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" nowrap><B>Fees (d)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" nowrap><B>Fees</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR valign="bottom" style="font-size: 1px">
    <TD colspan="20" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="white">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <BR>
    <B>&nbsp;2004</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>$&nbsp;77,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>$&nbsp;12,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>$&nbsp;42,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>$131,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <BR>
    <B>&nbsp;2003</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>$&nbsp;69,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>$&nbsp;61,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>$130,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
(a)&nbsp;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.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
(b)&nbsp;Audit related fees were primarily related to meetings
with the audit committee, attendance at the annual stockholder
meeting, accounting advice, review of comment letter received
from the SEC and advice related to Section&nbsp;404 of the
Sarbanes-Oxley Act.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
(c)&nbsp;Consists of tax compliance and preparation and other
tax services.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
(d)&nbsp;Consists of fees for all other services other than
those reported above.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
All of the above services were approved by the Audit Committee.
The Audit Committee pre-approves all audit and permissible
non-audit services provided by the independent auditors.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Policy on Audit Committee Pre-Approval of Audit and
Permissible Non-Audit Services of the Independent Registered
Public Accounting Firm</B>
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Audit Committee pre-approves services performed by the
Company&#146;s Independent Registered Public Accounting Firm in
order to assure that the provision of such services and related
fees do not impair the Independent Registered Public Accounting
Firm&#146;s independence. The Independent Registered Public
Accounting Firm 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
</DIV>

<P align="center" style="font-size: 11pt;">14

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<DIV align="left" style="font-size: 11pt;">
may grant pre-approval for those permissible non-audit services
that it believes are services that would not impair the
independence of the Independent Registered Public Accounting
Firm. 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.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE IN FAVOR
OF PROPOSAL&nbsp;NO. 2. PROPERLY EXECUTED PROXIES RETURNED TO
THE COMPANY WILL BE VOTED &#147;FOR&#148; THE RATIFICATION OF
THE APPOINTMENT OF MOSS ADAMS LLP AS THE COMPANY&#146;S
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR
ENDING DECEMBER&nbsp;31, 2005.</B>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<DIV align="center" style="font-size: 11pt;">
<B>SHAREHOLDER PROPOSALS</B>
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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, 2006. 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.
</DIV>

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<DIV align="center" style="font-size: 11pt;">
<B>ANNUAL REPORT</B>
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;s 2004 Annual Report, which includes financial
statements, but which does not constitute a part of the proxy
solicitation material, accompanies this proxy statement.
</DIV>

<DIV style="margin-top: 34pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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    <TD width="61%"></TD>
</TR>

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

<TR>
    <TD style="font-size: 4pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <IMG src="f08442f0844200.gif" alt="WILLIE R. BARNES SIGNATURE"></TD>
</TR>

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

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

</TABLE>

<DIV align="left" style="font-size: 11pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
Dated: April&nbsp;28, 2005
</DIV>

<DIV align="left" style="font-size: 11pt;">
San&nbsp;Francisco, California
</DIV>

<P align="center" style="font-size: 11pt;">15

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<DIV align="right" style="font-size: 11pt;">
<B>EXHIBIT A</B>
</DIV>

<DIV align="center" style="font-size: 11pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>AMERICAN SHARED HOSPITAL SERVICES</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
A California Corporation
</DIV>

<DIV align="center" style="font-size: 10pt;">
(the &#147;Company&#148;)
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Audit Committee Charter</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
Adopted June&nbsp;17, 2004
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Purpose</B>
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Audit Committee (the &#147;Committee&#148;) is created by
the Board of Directors of the Company to:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 12pt;">

<TR>
    <TD width="11%"></TD>
    <TD width="89%"></TD>
</TR>

<TR valign="top">
    <TD> &#149;</TD>
    <TD align="left">
    assist the Board in its oversight responsibilities by overseeing
    the accounting and financial reporting processes of the Company
    and the audits of the financial statements of the Company by
    reviewing</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 12pt;">

<TR>
    <TD width="6%"></TD>
    <TD width="11%"></TD>
    <TD width="83%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD> &#149;</TD>
    <TD align="left">
    the qualifications, independence and performance of the
    Company&#146;s independent auditors;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD> &#149;</TD>
    <TD align="left">
    the quality and integrity of the financial statements of the
    Company;&nbsp;and</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 12pt;">

<TR>
    <TD width="11%"></TD>
    <TD width="89%"></TD>
</TR>

<TR valign="top">
    <TD> &#149;</TD>
    <TD align="left">
    prepare the audit committee report that Securities and Exchange
    Commission (the &#147;SEC&#148;) rules require to be included in
    the Company&#146;s annual proxy statement.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 12pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
It is not the duty of the Committee to determine that the
Company&#146;s financial statements are complete and accurate
and are in accordance with GAAP or to plan or conduct audits.
This is the responsibility of management and the independent
auditors.
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Membership</B>
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Committee shall consist of at least three members, comprised
solely of independent directors meeting the independence and
experience requirements of the American Stock Exchange. The
Nominating and Corporate Governance Committee shall recommend
nominees for appointment to the Committee annually and as
vacancies or newly created positions occur. Committee members
shall be appointed by the Board and may be removed by the Board
at any time. The Board shall designate the Chairperson of the
Committee.
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Authority and Responsibilities</B>
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition to any other responsibilities which may be assigned
from time to time by the Board, to fulfill its responsibilities
and duties, the Committee shall:
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Independent Auditors</B>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 12pt;">

<TR>
    <TD width="11%"></TD>
    <TD width="89%"></TD>
</TR>

<TR valign="top">
    <TD> &#149;</TD>
    <TD align="left">
    Be directly responsible for the appointment, compensation,
    retention and oversight (subject, if applicable, to shareholder
    ratification) of the independent auditors engaged to</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 11pt;">16

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<TR>
    <TD width="11%"></TD>
    <TD width="89%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD align="left">
    <FONT style="font-size: 12pt">conduct the audit of the Company
    (including resolution of disagreements between management and
    the independent auditors regarding financial reporting) or other
    audit, review or attest services. The independent auditors shall
    report directly to the Committee.
    </FONT></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT style="font-size: 12pt"> &#149;</FONT></TD>
    <TD align="left">
    <FONT style="font-size: 12pt">Pre-approve all audit services and
    permissible non-audit services to be provided by the independent
    auditors either before the independent auditors are engaged to
    render such services or pursuant to pre-approval policies and
    procedures established by the Committee. The Committee may
    delegate its authority to pre-approve services to one or more
    Committee members, provided that such designees present any such
    approvals to the full Committee at the next Committee meeting.
    </FONT></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT style="font-size: 12pt"> &#149;</FONT></TD>
    <TD align="left">
    <FONT style="font-size: 12pt">Evaluate the independent
    auditors&#146; qualifications, performance and independence. As
    part of such evaluation, at least annually, the Committee shall
    obtain a formal written statement from the Company&#146;s
    independent auditors describing all relationships between the
    independent auditors and the Company consistent with
    Independence Standards Board Standard No.&nbsp;1; actively
    engage in a dialogue with the independent auditors with respect
    to any disclosed relationships or services that may impact the
    objectivity and independence of the independent auditor; and
    take, or recommend that the full Board take, appropriate action
    to oversee the independence of the independent auditors.
    </FONT></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 12pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<I>Financial Statements; Disclosure and Other Compliance
Matters</I>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 12pt;">

<TR>
    <TD width="11%"></TD>
    <TD width="89%"></TD>
</TR>

<TR valign="top">
    <TD> &#149;</TD>
    <TD align="left">
    Review, in conjunction with management, the Company&#146;s
    policies generally with respect to the Company&#146;s earnings
    press releases and with respect to financial information and
    earnings guidance provided to analysts and rating agencies,
    including the use of non-GAAP financial information.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD> &#149;</TD>
    <TD align="left">
    Review with management and the independent auditors, in separate
    meetings if the Committee deems it appropriate:</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 12pt;">

<TR>
    <TD width="6%"></TD>
    <TD width="11%"></TD>
    <TD width="83%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD> &#149;</TD>
    <TD align="left">
    the annual audited financial statements, including the
    Company&#146;s disclosures under &#147;Management&#146;s
    Discussion and Analysis of Financial Condition and Results of
    Operations,&#148; prior to the filing of the Company&#146;s
    Form&nbsp;10-K. As part of such review, the Committee shall
    obtain a report from the Company&#146;s independent auditors on
    those matters required pursuant to SEC Regulation&nbsp;S-X
    Rule&nbsp;2-07;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD> &#149;</TD>
    <TD align="left">
    either on its own or through its Chairperson, the quarterly
    financial statements, including the Company&#146;s disclosures
    under &#147;Management&#146;s Discussion and Analysis of
    Financial Condition and Results of Operations,&#148; prior to
    the filing of the Company&#146;s Form&nbsp;10-Q;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD> &#149;</TD>
    <TD align="left">
    either on its own or through its Chairperson, the quarterly and
    annual earnings press releases prior to their publication.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 12pt;">

<TR>
    <TD width="11%"></TD>
    <TD width="89%"></TD>
</TR>

<TR valign="top">
    <TD> &#149;</TD>
    <TD align="left">
    Review, in conjunction with the chief executive and financial
    officers of the Company, the Company&#146;s internal controls
    and disclosure controls and procedures, including whether there
    are any significant deficiencies in the design or operation of
    such controls and</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 11pt;">17

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="11%"></TD>
    <TD width="89%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD align="left">
    <FONT style="font-size: 12pt">procedures, material weaknesses in
    such controls and procedures, any corrective actions taken with
    regard to such deficiencies and weaknesses and any fraud
    involving management or other employees with a significant role
    in such controls and procedures.
    </FONT></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT style="font-size: 12pt"> &#149;</FONT></TD>
    <TD align="left">
    <FONT style="font-size: 12pt">Review and discuss with the
    independent auditors those matters required to be discussed with
    the Audit Committee by the auditors pursuant to Statement on
    Auditing Standards No.&nbsp;61, as amended.
    </FONT></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT style="font-size: 12pt"> &#149;</FONT></TD>
    <TD align="left">
    <FONT style="font-size: 12pt">Recommend to the Board that the
    annual audited financial statements be included in the
    Company&#146;s Form&nbsp;10-K for filing with the SEC.
    </FONT></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT style="font-size: 12pt"> &#149;</FONT></TD>
    <TD align="left">
    <FONT style="font-size: 12pt">Prepare the audit committee report
    that Securities and Exchange Commission rules require to be
    included in the Company&#146;s annual proxy statement.
    </FONT></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT style="font-size: 12pt"> &#149;</FONT></TD>
    <TD align="left">
    <FONT style="font-size: 12pt">Approve all related party
    transactions, as defined by applicable American Stock Exchange
    rules, to which the Company is a party.
    </FONT></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT style="font-size: 12pt"> &#149;</FONT></TD>
    <TD align="left">
    <FONT style="font-size: 12pt">Establish procedures for:
    </FONT></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 12pt;">

<TR>
    <TD width="6%"></TD>
    <TD width="11%"></TD>
    <TD width="83%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD> &#149;</TD>
    <TD align="left">
    the receipt, retention and treatment of complaints received by
    the Company regarding accounting, internal accounting controls
    or auditing matters;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD> &#149;</TD>
    <TD align="left">
    the confidential, anonymous submission by employees of the
    Company of concerns regarding questionable accounting or
    auditing matters.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 12pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<I>Reporting to the Board</I>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 12pt;">

<TR>
    <TD width="11%"></TD>
    <TD width="89%"></TD>
</TR>

<TR valign="top">
    <TD> &#149;</TD>
    <TD align="left">
    The Committee shall report to the Board periodically. This
    report shall include a review of any recommendations or issues
    that arise with respect to the qualifications, independence and
    performance of the Company&#146;s independent auditors, the
    quality or integrity of the Company&#146;s financial statements,
    and any other matters that the Committee deems appropriate or is
    requested to be included by the Board.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD> &#149;</TD>
    <TD align="left">
    The Committee shall periodically review and assess the adequacy
    of this Charter and recommend any proposed changes to the Board
    for approval.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 12pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Procedures</B>
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Committee shall meet as often as it determines is
appropriate to carry out its responsibilities under this
Charter, but not less frequently than quarterly. The Chairperson
of the Committee, in consultation with the other Committee
members, shall determine the frequency and length of the
Committee meetings and shall set meeting agendas consistent with
this Charter.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Committee shall meet separately, periodically, with
management or other personnel responsible for internal control
functions, and with the independent auditors.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Audit Committee is authorized (without seeking Board
approval) to retain special legal, accounting or other advisors
and may request any officer or employee of the Company or the
Company&#146;s
</DIV>

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<DIV align="left" style="font-size: 11pt;">
outside counsel or independent auditor to meet with any members
of, or advisors to, the Audit Committee.
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Audit Committee shall have available appropriate funding
from the Company as determined by the Audit Committee for
payment of:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 12pt;">

<TR>
    <TD width="11%"></TD>
    <TD width="89%"></TD>
</TR>

<TR valign="top">
    <TD> &#149;</TD>
    <TD align="left">
    compensation to any accounting firm engaged for the purpose of
    preparing or issuing an audit report or performing other audit,
    review or attest services for the Company;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD> &#149;</TD>
    <TD align="left">
    compensation to any advisers employed by the Audit
    Committee;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD> &#149;</TD>
    <TD align="left">
    ordinary administrative expenses of the Audit Committee that are
    necessary or appropriate in carrying out its duties.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 12pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Committee may delegate its authority to subcommittees or the
Chairperson of the Committee when it deems appropriate and in
the best interests of the Company.
</DIV>

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

<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;16, 2005

<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 A. BATES, M.D. AND CRAIG 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 16, 2005 AT 9:00 AM
PACIFIC TIME AT THE RITZ CARLTON HOTEL, 600 STOCKTON STREET, SAN 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 AND &#147;FOR&#148; THE RATIFICATION OF MOSS ADAMS LLP AS THE COMPANY&#146;S
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2005. 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 RATIFICATION OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM. 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)

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

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

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

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

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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, and FOR Proposal
No.&nbsp;2.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors recommends a vote FOR election of the directors nominated herein and
FOR the ratification of independent registered public accounting firm.


<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="4%" nowrap align="left">1.&nbsp;&nbsp;</TD>
    <TD>ELECTION OF DIRECTORS. To elect five of the persons named below to the Board of Directors to
serve until the 2006 Annual Meeting of Shareholders and until their successors are elected and
have qualified.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="left">&nbsp;&nbsp;&nbsp;</TD>
    <TD><FONT face="Wingdings">&#111;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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="4%" nowrap align="left">&nbsp;&nbsp;&nbsp;</TD>
    <TD><FONT face="Wingdings">&#111;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WITHHOLD AUTHORITY to vote for all nominees.</TD>
</TR>

</TABLE>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="83%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(Instruction:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">To withhold authority for any individual nominee(s), write that nominee&#146;s
name(s) in the space below.)</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">NOMINEES:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Ernest A. Bates, M.D.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Ernest R. Bates</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Olin C. Robison</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">John F. Ruffle</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Stanley S. Trotman, Jr.</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<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="4%" nowrap align="left">2.&nbsp;&nbsp;</TD>
    <TD>RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM. To ratify the appointment of
Moss Adams LLP as the Company&#146;s independent registered public accounting firm for the year
ending December&nbsp;31, 2005.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="left">&nbsp;&nbsp;&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;&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>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="43%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Signature
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Date
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Signature
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Date
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Signature, if held jointly</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<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-----
