-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
 MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 N6HqMAlm3RfZKgKN67zLlsnkWA/qcgC+W6TPNcH9CycobRHe+QLqBvb/cO91a/lP
 UP1i5OYPOvnMJsui6ouVQQ==

<SEC-DOCUMENT>0000950123-10-041517.txt : 20100430
<SEC-HEADER>0000950123-10-041517.hdr.sgml : 20100430
<ACCEPTANCE-DATETIME>20100430131033
ACCESSION NUMBER:		0000950123-10-041517
CONFORMED SUBMISSION TYPE:	DEF 14A
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20100602
FILED AS OF DATE:		20100430
DATE AS OF CHANGE:		20100430
EFFECTIVENESS DATE:		20100430

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:		10785673

	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>f55641def14a.htm
<DESCRIPTION>DEF 14A
<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 align="center" style="font-size: 10pt; margin-top: 12pt"><B>SCHEDULE 14A</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 0pt"><B>(Rule&nbsp;14a-101)</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 0pt"><B>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>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Filed by the Registrant&nbsp;<FONT style="font-family: Wingdings">&#254;</FONT>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 0pt">Filed by a Party other than the Registrant&nbsp;<FONT style="font-family: Wingdings">&#111;</FONT>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Check the appropriate box:

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><FONT style="font-family: Wingdings">&#111;</FONT>&nbsp;&nbsp;&nbsp;Preliminary Proxy Statement
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 0pt"><FONT style="font-family: Wingdings">&#111;</FONT>&nbsp;&nbsp;&nbsp;Confidential, For Use of the Commission Only (as permitted by Rule&nbsp;14a-6(e)(2)
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 0pt"><FONT style="font-family: Wingdings">&#254;</FONT>&nbsp;&nbsp;&nbsp;Definitive Proxy Statement
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 0pt"><FONT style="font-family: Wingdings">&#111;</FONT>&nbsp;&nbsp;&nbsp;Definitive Additional Materials
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 0pt"><FONT style="font-family: Wingdings">&#111;</FONT>&nbsp;&nbsp;&nbsp;Soliciting Material Pursuant to Rule&nbsp;14a-11(c) or Rule&nbsp;14a-12
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt">American Shared Hospital Services
</DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Payment of Filing Fee (Check the appropriate box):
</DIV>


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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><FONT style="font-family: Wingdings">&#254;</FONT>&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>No fee required</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><FONT style="font-family: Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Fee computed on table below per Exchange Act Rules&nbsp;14a-6(i)(1) and 0-11.</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Title of each class of securities to which transaction applies:</TD>
</TR>

<TR>
    <TD style="font-size: 12pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="width: 100%; border-bottom: 1px solid #000000; FONT-size: 1px">&nbsp;</DIV></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Aggregate number of securities to which transactions applies:</TD>
</TR>

<TR>
    <TD style="font-size: 12pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="width: 100%; border-bottom: 1px solid #000000; FONT-size: 1px">&nbsp;</DIV></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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):</TD>
</TR>

<TR>
    <TD style="font-size: 12pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="width: 100%; border-bottom: 1px solid #000000; FONT-size: 1px">&nbsp;</DIV></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Proposed maximum aggregate value of transaction:</TD>
</TR>

<TR>
    <TD style="font-size: 12pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="width: 100%; border-bottom: 1px solid #000000; FONT-size: 1px">&nbsp;</DIV></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(5)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Total fee paid:</TD>
</TR>
<TR>
    <TD style="font-size: 12pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="width: 100%; border-bottom: 1px solid #000000; FONT-size: 1px">&nbsp;</DIV></TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><FONT style="font-family: Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Fee paid previously with preliminary materials:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><FONT style="font-family: Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Check box if any part of the fee is offset as provided by Exchange Act Rule&nbsp;0-11(a)(2) and
identify the filing for which the offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the form or schedule and the date of its filing.</TD>
</TR>

</TABLE>
</DIV>

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

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

<TR>
    <TD style="font-size: 12pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="width: 100%; border-bottom: 1px solid #000000; FONT-size: 1px">&nbsp;</DIV></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Form, Schedule or Registration Statement no.:</TD>
</TR>

<TR>
    <TD style="font-size: 12pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="width: 100%; border-bottom: 1px solid #000000; FONT-size: 1px">&nbsp;</DIV></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Filing Party:</TD>
</TR>

<TR>
    <TD style="font-size: 12pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="width: 100%; border-bottom: 1px solid #000000; FONT-size: 1px">&nbsp;</DIV></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Date Filed:</TD>
</TR>

<TR>
    <TD style="font-size: 12pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="width: 100%; border-bottom: 1px solid #000000; FONT-size: 1px">&nbsp;</DIV></TD>
</TR>

</TABLE>
</DIV>


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



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

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

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

<P><CENTER>
<TABLE border="0" width="90%" cellpadding="0" cellspacing="0">
<TR>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="76%"></TD>
</TR>
<TR><TD colspan="9"><A HREF="#000">NOTICE OF 2010 ANNUAL MEETING OF SHAREHOLDERS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#001">PROXY STATEMENT 2010 ANNUAL MEETING OF SHAREHOLDERS June 2, 2010</A></TD></TR>
<TR><TD colspan="9"><A HREF="#002">INTRODUCTION</A></TD></TR>
<TR><TD colspan="9"><A HREF="#003">PROPOSAL NO. 1 ELECTION OF DIRECTORS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#004">CERTAIN ADDITIONAL INFORMATION Security Ownership of Certain Beneficial Owners and Management</A></TD></TR>
<TR><TD colspan="9"><A HREF="#005">COMPENSATION OF EXECUTIVE OFFICERS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#006">CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Compensation Committee Interlocks and Insider Participation</A></TD></TR>
<TR><TD colspan="9"><A HREF="#007">AUDIT COMMITTEE REPORT</A></TD></TR>
<TR><TD colspan="9"><A HREF="#008">PROPOSAL NO. 2</A></TD></TR>
<TR><TD colspan="9"><A HREF="#009">APPROVAL OF THE AMENDMENT AND RESTATEMENT OF THE 2006 STOCK INCENTIVE PLAN</A></TD></TR>
<TR><TD colspan="9"><A HREF="#010">PROPOSAL NO. 3</A></TD></TR>
<TR><TD colspan="9"><A HREF="#011">RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</A></TD></TR>
<TR><TD colspan="9"><A HREF="#012">SHAREHOLDER PROPOSALS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#013">ANNUAL REPORT</A></TD></TR>
</TABLE>
</CENTER>
<!-- /TOC -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 14pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">AMERICAN
    SHARED HOSPITAL SERVICES<BR>
    <FONT style="font-size: 10pt">Four Embarcadero Center,
    Suite&#160;3700<BR>
    San&#160;Francisco, California 94111</FONT></FONT></B>
</DIV>


<!-- link1 "NOTICE OF 2010 ANNUAL MEETING OF SHAREHOLDERS" -->
<DIV align="left"><A NAME="000"></A></DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 12pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NOTICE OF
    2010 ANNUAL MEETING OF SHAREHOLDERS</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 12pt">To be held on June&#160;2,
    2010</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <FONT style="font-family: 'Times New Roman', Times">TO THE
    SHAREHOLDERS OF AMERICAN SHARED HOSPITAL SERVICES:
    </FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    NOTICE IS HEREBY GIVEN that, pursuant to a call of the Board of
    Directors, the 2010 Annual Meeting of Shareholders (the
    &#147;Meeting&#148;) of American Shared Hospital Services, a
    California corporation (the &#147;Company&#148;), will be held
    in the East Trianon Suite of The Carlyle Hotel, 35 East
    76th&#160;Street, New York, NY at 10:00&#160;a.m.&#160;Eastern
    Daylight Time, on Wednesday, June&#160;2, 2010 to consider and
    to act upon the following matters, all as set forth in the Proxy
    Statement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    1.&#160;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:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="50%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="48%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<!-- TableOutputBody -->
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Ernest A. Bates,&#160;M.D.&#160;
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    John F. Ruffle
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Olin C. Robison
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Raymond C. Stachowiak
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Stanley S. Trotman, Jr.
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    2.&#160;2006 STOCK INCENTIVE PLAN. To approve the amendment and
    restatement of the 2006 Stock Incentive Plan.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    3.&#160;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&#160;31, 2010.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    4.&#160;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.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Board of Directors knows of no matters, other than those set
    forth in paragraphs (1), (2)&#160;and (3)&#160;above, that will
    be presented for consideration at the Meeting.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Board of Directors has fixed the close of business on
    April&#160;23, 2010 as the Record Date for the determination of
    shareholders entitled to vote at the Meeting.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    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: 24pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    By Order of the Board of Directors
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <IMG src="f55641f5564101.gif" alt="-s- Willie R. Barnes">
</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Willie R. Barnes
</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Corporate Secretary</I>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Dated: April&#160;30, 2010
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    San&#160;Francisco, California
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

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

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 14pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">AMERICAN
    SHARED HOSPITAL SERVICES<BR>
    <FONT style="font-size: 10pt">Four Embarcadero Center,
    Suite&#160;3700<BR>
    San&#160;Francisco, California 94111</FONT></FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 18%; border-bottom: 1pt solid #000000"></CENTER>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>


<!-- link1 "PROXY STATEMENT 2010 ANNUAL MEETING OF SHAREHOLDERS June 2, 2010" -->
<DIV align="left"><A NAME="001"></A></DIV>


<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 12pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">PROXY
    STATEMENT<BR>
    2010 ANNUAL MEETING OF SHAREHOLDERS<BR>
    June&#160;2, 2010</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 18%; border-bottom: 1pt solid #000000"></CENTER>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>


<!-- link1 "INTRODUCTION" -->
<DIV align="left"><A NAME="002"></A></DIV>


<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">INTRODUCTION</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    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
    2010 Annual Meeting of Shareholders scheduled to be held in the
    East Trianon Suite of The Carlyle Hotel, 35 East
    76th&#160;Street, New York, NY at 10:00&#160;a.m.&#160;Eastern
    Daylight Time on Wednesday, June&#160;2, 2010 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&#160;30, 2010.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The matters to be considered and voted upon at the Meeting will
    be:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    1.&#160;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.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    2.&#160;To approve the amendment and restatement of the
    Company&#146;s 2006 Stock Incentive Plan.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    3.&#160;To ratify the appointment of Moss Adams LLP as the
    Company&#146;s Independent Registered Public Accounting Firm for
    the year ending December&#160;31, 2010.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    4.&#160;To transact such other business as may properly be
    brought before the Meeting and any and all adjournments thereof.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Only shareholders of record at the close of business on
    April&#160;23, 2010 (the &#147;Record Date&#148;) are entitled
    to notice of and to vote at the Meeting.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Revocability
    of Proxies</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    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 style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Solicitation
    of Proxies</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This proxy solicitation is being made by the Board of Directors
    of the Company. The expense of the solicitation will be paid by
    the Company. To the extent necessary to assure sufficient
    representation at the Meeting, proxies may be solicited by any
    appropriate means by directors, officers, regular employees of
    the Company and the stock transfer agent for the Common Shares,
    who will not receive any additional compensation therefor. The
    Company will request that banks, brokers and other fiduciaries
    solicit their customers who own beneficially the Common Shares
    listed of record in names of nominees and, although there is no
    formal arrangement to do so, the Company will reimburse such
    persons the reasonable expenses of such solicitation. In
    addition, the Company may pay for and utilize the services of
    individuals or companies 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 style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Outstanding
    Securities</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Board of Directors has fixed April&#160;23, 2010 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 estimated to
</DIV>
<!-- XBRL Paragraph Pagebreak -->
<!-- XBRL Pagebreak Begin -->

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

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

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    be outstanding and entitled to vote 4,595,070 Common Shares. The
    Common Shares are the only class of securities entitled to vote
    at the Meeting.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Vote
    Required and Voting Procedures</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    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 style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In connection with the election of directors, shares are
    permitted to be voted cumulatively, if (i)&#160;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)&#160;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 style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In connection with the solicitation by the Board of Directors of
    proxies for use at the Meeting, the Board of Directors has
    designated Ernest A. Bates,&#160;M.D. and Craig K. Tagawa as
    proxies. Common Shares represented by properly executed proxies
    will be voted at the Meeting in accordance with the instructions
    specified thereon. If no instructions are specified, the Common
    Shares represented by any properly executed proxy will be voted
    FOR the (1)&#160;election of the five nominees for the Board of
    Directors named herein, (2)&#160;approval and adoption for the
    amended and restated 2006 Stock Incentive Plan and
    (3)&#160;ratification of the appointment of the Company&#146;s
    Independent Registered Public Accounting Firm.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    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 style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    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)&#160;vote for the
    election of all five nominees named herein as directors,
    (ii)&#160;withhold authority to vote for all such director
    nominees or (iii)&#160;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 approve the amendment and restatement of the
    Company&#146;s 2006 Stock Incentive Plan, (i)&#160;vote for the
    proposal, (ii)&#160;vote against the proposal, or
    (iii)&#160;abstain. A shareholder may, with respect to the
    proposal to ratify the appointment of the Company&#146;s
    Independent Registered Public Accounting Firm, (i)&#160;vote for
    the ratification, (ii)&#160;vote against the ratification, or
    (iii)&#160;abstain.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    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.
    Abstentions are included in the determination of the number of
    shares represented at the Meeting for purposes of determining
    whether a quorum is present and are counted as a vote against
    when determining whether a proposal has been approved.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The rules of the New York Stock Exchange determine whether
    proposals presented at shareholder meetings are routine or
    non-routine. If a proposal is routine, a broker or other entity
    holding shares for an owner in street name may vote for the
    proposal without receiving voting instructions from the owner
    under certain circumstances. If a proposal is non-routine, the
    broker or other entity may vote on the proposal only if the
    owner has provided voting
</DIV>
<!-- XBRL Paragraph Pagebreak -->
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    2
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    instructions. A broker non-vote occurs when the broker or other
    entity is unable to vote on a proposal because the proposal is
    non-routine and the owner does not provide any voting
    instructions.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Beginning with the 2010 proxy season, the New York Stock
    Exchange has changed its rules to make the election of directors
    in an uncontested election a non-routine item. This means that
    brokers who do not receive voting instructions from their
    clients as to how to vote their shares for the election of
    directors cannot exercise discretion to vote for directors. Due
    to this rule change, at this year&#146;s annual meeting, the
    election of directors will be a non-routine item. Therefore, it
    is important that you instruct your broker as to how you wish to
    have your shares voted on these proposals, even if you wish to
    vote as recommended by the Board of Directors.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    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 proposals to approve the amendment and restatement
    of the Company&#146;s 2006 Stock Incentive Plan and to ratify
    the appointment of the Company&#146;s Independent Registered
    Public Accounting Firm require that a majority of those voting
    in person or by proxy vote FOR this proposal, provided that
    affirmative vote also represents at least a majority of the
    voting power required to constitute a quorum at the Annual
    Meeting, in order for this proposal to be approved.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Board of Directors has appointed Geraldine Zarbo of American
    Stock Transfer&#160;&#038; Trust&#160;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>


<!-- link1 "PROPOSAL NO. 1 ELECTION OF DIRECTORS" -->
<DIV align="left"><A NAME="003"></A></DIV>


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">PROPOSAL&#160;NO.&#160;1<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">ELECTION
    OF DIRECTORS</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Board of
    Directors</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    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.
    There are currently no vacancies on the Board of Directors.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For many years our founder, Ernest A. Bates,&#160;M.D., has
    served as both Chairman and Chief Executive Officer of the
    Company. The Board believes that Dr.&#160;Bates&#146; intimate
    knowledge of the Company&#146;s business and customers, and his
    significant ownership of our common stock, closely align him
    with the interests of all of our constituencies and position him
    well to lead the Board, which in turn determines the
    Company&#146;s overall direction. Since each of the
    Company&#146;s committees, through which the Board oversees
    management and reviews risk, is comprised only of independent
    directors, the Board has not considered it necessary to appoint
    a Lead Director. In addition, the small size of the Board makes
    communications among Directors and with management swift and
    simple and the independent directors see no benefit to adding
    one more layer of board governance.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    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>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Set forth below is certain information regarding each of the
    nominees.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    3
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">THE BOARD
    OF DIRECTORS RECOMMENDS A VOTE &#147;FOR&#148; THE ELECTION OF
    THE NOMINEES NAMED BELOW. PROPERLY EXECUTED PROXIES RETURNED TO
    THE COMPANY WILL BE VOTED &#147;FOR&#148; THE NOMINEES NAMED
    BELOW UNLESS OTHERWISE INSTRUCTED.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Nominees</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    ERNEST A. BATES,&#160;M.D., founder of the Company, has served
    as Chairman of the Board and Chief Executive Officer since the
    Company&#146;s incorporation. A board-certified neurosurgeon, he
    is currently Emeritus Vice Chairman of the Board of Trustees of
    The Johns Hopkins University and serves on the Board of Visitors
    of the John Hopkins Medical Center and the John Hopkins
    Neurosurgery Advisory Board. He serves on the boards of the
    University of Rochester, FasterCures, Shared Imaging, LLC and
    the Salzburg Global Seminar. Dr.&#160;Bates was appointed to the
    California Commission for Jobs and Economic Growth and the
    Magistrate Judge Merit Selection Panel. From
    <FONT style="white-space: nowrap">1981-1987</FONT> he
    was a member of the Board of Governors of the California
    Community Colleges, and he served on the California High Speed
    Rail Authority from 1997 to 2003. Dr.&#160;Bates is a member of
    the Board of Overseers at the University of California,
    San&#160;Francisco, School of Nursing. He is a trustee of the
    Museum of the African Diaspora and a member of the Brookings and
    Milken Institutes. He is a graduate of the School of Arts and
    Sciences of Johns Hopkins University and the University of
    Rochester School of Medicine and Dentistry. Dr.&#160;Bates is
    73&#160;years old. Dr.&#160;Bates is the father of former Board
    Member and current Company Vice President of Sales and Business
    Development, Ernest R. Bates.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    OLIN C. ROBISON has been a director since 2003.&#160;&#160;He
    was President and Chief Executive Officer of the Salzburg
    Seminar from 1991 to 2005 and President of Middlebury College
    from 1975 to 1990 and is currently President Emeritus and
    Professor Emeritus of that institution. Additionally,
    Mr.&#160;Robison is a Director of The Investment Company of
    America, American Mutual Fund and AMCAP (all of the American
    Funds Group) and is a former member of the Council (Board) of
    the Royal Institute of International Affairs in London. He
    received his undergraduate degree from Baylor University and
    holds a Doctor of Philosophy degree from Oxford University.
    Mr.&#160;Robison is 73&#160;years old.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    JOHN F. RUFFLE has been a director since 1995.&#160;&#160;He
    retired in 1993 as Vice-Chairman of the Board and a Director of
    J.P.&#160;Morgan&#160;&#038; Co. Incorporated and Morgan
    Guaranty Trust&#160;Co. of New York. He is a Trustee Emeritus of
    The Johns Hopkins University. From December 1996 to May 2009 he
    was a member of the board of trustees of certain mutual funds in
    the J.P.&#160;Morgan Family of mutual funds and certain
    investment funds managed by J.P.&#160;Morgan Investment
    Management, Inc. From March 2004 to January 2007, he was a
    director for Reckson Associates Realty Corp. Mr.&#160;Ruffle
    graduated from The Johns Hopkins University, has an MBA in
    finance from Rutgers University, and is a Certified Public
    Accountant. Mr.&#160;Ruffle is 73&#160;years old.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    RAYMOND C. STACHOWIAK joined the Board of Directors in 2009,
    becoming the fifth member of the Board and the fourth outside
    Director. He founded Shared Imaging in 1994 with the purchase of
    the assets of Shared Imaging Partners, L.P. He has served as
    President and Chairman since its inception. In December 1999, he
    acquired Advanced Healthcare Resources, Inc. of Iowa. Together
    these entities comprise Shared Imaging, LLC. Shared Imaging, LLC
    is a preferred independent provider of CT, MRI and PET/CT
    equipment and services. He received his undergraduate degree in
    Business from Indiana University in 1979 and received an MBA
    from Indiana University in 1985. Mr.&#160;Stachowiak has CPA
    (Certified Public Accountant), CPIM (Certification in Production
    and Inventory Management) and CIA (Certified Internal Auditor)
    certifications. Mr.&#160;Stachowiak is 52&#160;years old.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    STANLEY S. TROTMAN,&#160;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.&#160;Trotman was with PaineWebber since 1995
    following its consolidation with Kidder, Peabody, also an
    investment banking firm, and since 1990 had co-directed Kidder,
    Peabody&#146;s Health Care Group. Prior to this position, he
    headed the Health Care Group at Drexel Burnham Lambert, Inc.
    where he had been employed for approximately 22&#160;years. He
    is currently a director of Web MD Health Corp. and Ascend Health
    Care Corp., and was a director of Oncure Medical Corp. from 1999
    to 2007. Mr.&#160;Trotman received his undergraduate degree from
    Yale University in 1965 and obtained an MBA from Columbia
    Business School in 1967. Mr.&#160;Trotman is 66&#160;years old.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    4
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Meetings
    of the Board of Directors</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Board of Directors of the Company held four regular meetings
    and one special meeting during 2009. 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 style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Shareholders may communicate with the Board by writing to: Four
    Embarcadero Center, Suite&#160;3700; San&#160;Francisco, CA
    <FONT style="white-space: nowrap">94111-4107,</FONT>
    Attention: Ernest A. Bates,&#160;M.D. We encourage directors to
    attend our annual meeting and all directors attended the 2009
    Annual Meeting in person. All shareholder communications to
    directors are forwarded to them.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Committees
    of the Board of Directors</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company has standing Compensation, Nominating and Corporate
    Governance and Audit Committees, each of which is described
    below. The Company is in compliance with The NYSE Amex Stock
    Exchange (&#147;AMEX&#148;) enhanced board and board committee
    independence requirements that became fully applicable to the
    Company effective July&#160;31, 2005. Thus, a majority of our
    directors (Messrs.&#160;Robison, Ruffle, Stachowiak and Trotman)
    are independent under the AMEX rules and
    <FONT style="white-space: nowrap">Rule&#160;10A-3</FONT>
    under the Securities Exchange Act and each of the Committees
    described above is comprised of 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 <U>www.ashs.com</U>. 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. The Company&#146;s independent
    directors meet at least annually without management and the
    non-independent directors, as required by the AMEX rules.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Compensation Committee&#146;s functions are to
    (i)&#160;establish compensation arrangements and incentive goals
    for executive officers, (ii)&#160;administer compensation plans,
    (iii)&#160;evaluate the performance of executive officers and
    award incentive compensation, (iv)&#160;adjust compensation
    arrangements as appropriate based upon performance, and
    (v)&#160;review and monitor management development and
    succession plans and activities. The Compensation Committee met
    once during 2009. The Compensation Committee consists of
    Mr.&#160;Robison, Mr.&#160;Ruffle and Mr.&#160;Trotman.
    Mr.&#160;Robison is Chair of the Compensation Committee.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Compensation Committee is authorized to delegate its
    authority to a subcommittee when appropriate. It is authorized
    to hire independent compensation consultants and other
    professionals to assist in the design, formulation, analysis and
    implementation of compensation programs for the Company&#146;s
    executive officers and other key employees. In determining or
    recommending the amount or form of executive officer
    compensation, the Compensation Committee also takes into
    consideration information received from the Company&#146;s Chief
    Executive Officer. In doing so, however, the Compensation
    Committee customarily considers the comparative relationship of
    the recommended compensation to the compensation paid by other
    similarly situated companies, individual performance, tenure,
    internal comparability and the achievement of certain other
    operational and qualitative goals identified in the
    Company&#146;s strategic plan.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    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 in 2006 which is available on our
    website. The Nominating and Corporate Governance Committee met
    once during 2009. In 2010, the Nominating and Corporate
    Governance Committee recommended to the Board the nominations of
    Dr.&#160;Bates, Mr.&#160;Robison, Mr.&#160;Ruffle,
    Mr.&#160;Stachowiak and Mr.&#160;Trotman for election to the
    Board. Mr.&#160;Robison, Mr.&#160;Ruffle, Mr.&#160;Stachowiak
    and Mr.&#160;Trotman serve on the Nominating and Corporate
    Governance Committee. Mr.&#160;Trotman is Chair of the
    Nominating and Corporate Governance Committee.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The purpose of the Audit Committee is to review the financial
    reporting and internal controls of the Company, to appoint the
    independent auditors, and to review the reports of such
    auditors. The Audit Committee consists of Mr.&#160;Robison,
    Mr.&#160;Ruffle, Mr.&#160;Stachowiak and Mr.&#160;Trotman.
    Mr.&#160;Ruffle is Chair of the Audit Committee. During the
</DIV>
<!-- XBRL Paragraph Pagebreak -->
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    5
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    year 2009 the Audit Committee held four regular meetings and
    three telephonic meetings. For further information concerning
    the Audit Committee, refer to the &#147;Audit Committee
    Report.&#148; Mr.&#160;Ruffle is a &#147;financial expert&#148;
    and meets the applicable independence requirements of AMEX and
    <FONT style="white-space: nowrap">Rule&#160;10-A-3</FONT>
    under the Securities Exchange Act.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Identifying
    and Evaluating Director Nominees</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    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 style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To be eligible for consideration to the Board, any proposed
    candidate must be ethical, have proven judgment and experience,
    have professional skills and experience in dealing with complex
    problems that would be complementary to the needs of the
    Company, have demonstrated the ability to act independently, be
    willing to represent the interests of all shareholders and not
    just those of a particular interest, and be willing and able to
    devote sufficient time to fulfill the needs of a director of the
    Company.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Nominating and Corporate Governance Committee will consider
    director candidates submitted by shareholders to: Four
    Embarcadero Center, Suite&#160;3700, San&#160;Francisco, CA
    <FONT style="white-space: nowrap">94111-4107,</FONT>
    Attention: Nominating and Corporate Governance Committee. Such
    recommendations should be accompanied by (i)&#160;evidence of
    the shareholder&#146;s stock ownership over the last year,
    (ii)&#160;a statement that the shareholder is not a competitor
    of the Company, (iii)&#160;a resume and contact information for
    the director candidate, as well as a description of the
    candidate&#146;s qualifications and (iv)&#160;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&#160;days prior to the Annual Meeting
    or, if less than 70&#160;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 style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Based on the process described above, the Committee recommended
    and the Board determined to nominate each of the incumbent
    directors for re-election at the 2010 Annual Meeting of
    Shareholders. The Committee and Board concluded that each of the
    incumbent Directors should be nominated for re-election based on
    the experience, qualifications, attributes and skills identified
    in the biographical information contained under Election of
    Directors on pages 6 - 8. The Committee and the Board assessed
    these factors while considering the Company&#146;s long-standing
    history of providing Gamma Knife and other medical services to
    hospitals and medical centers in the United States, and its
    anticipated growth in providing similar services
    internationally, as well as providing proton beam radiation
    therapy services in the United States. In particular, the
    Committee and the Board considered the following factors:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

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

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Each nominee has extensive experience in guiding other
    organizations as both executive leaders and board members;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The nominees&#146; experiences reflect a range of occupations
    and industries which helps to provide differing viewpoints to
    help guide the Company. This specifically includes financial
    services (Mr.&#160;Ruffle and Mr.&#160;Trotman), health care
    (Dr.&#160;Bates, Mr.&#160;Stachowiak and Mr.&#160;Trotman),
    government and public policy (Mr.&#160;Robison and
    Mr.&#160;Ruffle), international policy and development
    (Mr.&#160;Robison, Mr.&#160;Ruffle and Mr.&#160;Trotman),
    business development (Dr.&#160;Bates and Mr.&#160;Stachowiak);
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The nominees have significant and substantive expertise in
    several areas that are applicable to the Board and its
    committees, including finance (all of the nominees), public
    company accounting and financial reporting
</TD>
</TR>
<!-- XBRL Paragraph Pagebreak -->

</TABLE>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    6
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

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

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>
</TD>
    <TD align="left">
    (Mr.&#160;Ruffle and Mr.&#160;Stachowiak), strategic planning
    (all of the nominees), operations management (all of the
    nominees) and corporate governance (all of the nominees);
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

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

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The Board particularly believes that Dr.&#160;Bates&#146; vast
    experience in the medical community both as a neurosurgeon and
    as an entrepreneur, as founder, President and CEO of the
    Company, brings unparalleled expertise to the board in a variety
    of areas.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Director
    Compensation</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table sets forth information regarding the
    compensation earned by or awarded to each non-employee director
    during the 2009 Fiscal Year.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="41%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="5%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="4%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="5%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="4%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=06 type=gutter -->
    <TD width="2%" align="right">&nbsp;</TD>	<!-- colindex=06 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=body -->
    <TD width="2%" align="left">&nbsp;</TD>	<!-- colindex=06 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Fees Earned or <BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>All Other<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Paid in Cash <BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Stock Awards<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Option Awards<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Compensation <BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
    <B>Name<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>($)(1) <BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>($)(2)(3)<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>($)(4)(5)<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>($)<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Total ($)<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>(a)</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>(b)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>(c)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>(d)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>(e)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>(f)</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Olin C. Robison
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    20,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,050
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,606
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    24,656
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    John F. Ruffle
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    20,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,050
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,606
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    24,656
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Raymond C. Stachowiak
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,410
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    12,499
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    23,909
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Stanley S. Trotman
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    20,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,050
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,606
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    24,656
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    Consists of the annual retainer fees for service as members of
    the Company&#146;s board of directors.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (2) </TD>
    <TD></TD>
    <TD valign="bottom">
    The amounts in column (c)&#160;reflect the grant date fair value
    dollar amount of stock awards granted to each non-employee
    director, computed in accordance with FASB ASC Topic 718.
    Assumptions used in the calculation of this amount are included
    in Note&#160;9 to the Company&#146;s audited financial
    statements for the fiscal year ended December&#160;31, 2009 and
    included in the Company&#146;s Annual Report on
    <FONT style="white-space: nowrap">Form&#160;10-K</FONT>
    filed with the Securities and Exchange Commission on
    March&#160;31, 2010. For further information concerning the
    restricted stock unit awards granted under the 2006 Stock
    Incentive Plan, see the section below entitled
    &#147;<I>Directors&#146; Equity Grants</I>.&#148;</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (3) </TD>
    <TD></TD>
    <TD valign="bottom">
    As of December&#160;31, 2009, the following non-employee
    directors each held stock awards granted during 2009 covering
    500&#160;shares of the Company&#146;s Common Stock:
    Mr.&#160;Robison, Mr.&#160;Ruffle, Mr.&#160;Stachowiak and
    Mr.&#160;Trotman.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (4) </TD>
    <TD></TD>
    <TD valign="bottom">
    The amounts in column (d)&#160;reflect the grant date fair value
    dollar amount of stock option awards granted to each
    non-employee director, computed in accordance with FASB ASC
    Topic 718. Assumptions used in the calculation of this amount
    are included in footnote 9 to the Company&#146;s audited
    financial statements for the fiscal year ended December&#160;31,
    2009 and included in the Company&#146;s Annual Report on
    <FONT style="white-space: nowrap">Form&#160;10-K</FONT>
    filed with the Securities and Exchange Commission on
    March&#160;31, 2010. The 2,000-share annual stock option award
    granted during the 2009 fiscal year was at an exercise price per
    share of $2.10. Mr.&#160;Stachowiak&#146;s initial 5,000 option
    award upon joining the board was at an exercise price of $2.82.
    For further information concerning the stock option awards
    granted under the 2006 Stock Incentive Plan, see the section
    below entitled &#147;<I>Directors&#146; Equity Grants</I>.&#148;</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (5) </TD>
    <TD></TD>
    <TD valign="bottom">
    As of December&#160;31, 2009 the following non-employee
    directors held options to purchase the following number of
    shares of the Company&#146;s common stock: Mr.&#160;Robison,
    29,000&#160;shares; Mr.&#160;Ruffle, 17,000&#160;shares;
    Mr.&#160;Stachowiak, 5,000&#160;shares; and Mr.&#160;Trotman,
    17,000&#160;shares. The options were granted under the
    Company&#146;s 2006 Stock Incentive Plan. For further
    information concerning the grant of options to non-employee
    directors under such plan, see the section below entitled
    &#147;<I>2006 Stock Incentive Plan</I>&#148;.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <I><FONT style="font-family: 'Times New Roman', Times">Directors&#146;
    Annual Retainer Fees</FONT></I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In 2009, non-employee directors were paid an annual retainer of
    $20,000, payable quarterly. New board member Mr.&#160;Stachowiak
    was paid a $10,000 pro-rata share of the retainer. Non-employee
    directors also received reimbursement of expenses incurred in
    attending meetings. No payment is made for attendance at
    meetings by any director who is a full time employee of the
    Company.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    7
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <I><FONT style="font-family: 'Times New Roman', Times">Directors&#146;
    Equity Grants</FONT></I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under the 2006 Stock Incentive Plan (the &#147;2006 Stock
    Plan&#148;), each individual who first becomes a non-employee
    director will, at the time of his or her election to the board,
    receive an option grant to purchase a specified number of shares
    of our common stock and a restricted stock unit award covering
    an additional number of shares of our common stock, provided
    that such individual has not previously been in the employ of
    the Company or any of its parents or subsidiaries. The specific
    number of shares subject to the initial award will be determined
    by the Compensation Committee of our Board of Directors, but
    will not exceed 10,000&#160;shares for the option component or
    3,000&#160;shares for the restricted stock unit component. In
    addition, on the date of each Annual Shareholders Meeting, each
    individual who will continue to serve as a non-employee director
    will automatically be granted an option to purchase a specified
    number of shares of our common stock and a restricted stock unit
    award covering an additional number of shares of our common
    stock, provided such individual has served as a non-employee
    director for at least six months. The specific number of shares
    subject to the annual award will be determined by the
    Compensation Committee of our Board of Directors, but will not
    exceed 3,000&#160;shares for the option component or
    750&#160;shares for the restricted stock unit component. There
    will be no limit on the number of such annual awards any one
    eligible non-employee director may receive over his or her
    period of continued service on the Board of Directors, and
    non-employee directors who have previously been in the
    Company&#146;s employ will be eligible to receive one or more
    such annual awards over their period of service on the Board of
    Directors. Each initial stock option and restricted stock unit
    award will vest in four equal annual installments upon the
    individual&#146;s completion of each year of service. Each
    annual stock option and restricted stock award will vest in one
    installment upon the individual&#146;s completion of one year of
    board service.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On the day of the 2009 Annual Meeting, non-employee Board
    members Mr.&#160;Robison, Mr.&#160;Ruffle and Mr.&#160;Trotman
    each received an option to purchase 2,000&#160;shares of the
    Company&#146;s common stock at an exercise price of $2.10 per
    share, the fair market value of the Company&#146;s common stock
    on that date, and a grant of 500 restricted stock units pursuant
    to the terms of the 2006 Plan. Upon joining the Board of
    Directors on September&#160;10, 2009, Mr.&#160;Stachowiak
    received an initial award consisting of an option to purchase
    5,000&#160;shares of the Company&#146;s stock at an exercise
    price of $2.82, the fair market value of the Company&#146;s
    stock on that date, and a grant of 500 restricted stock units.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On the day of the 2010 Annual Meeting, upon re-election to the
    Board, non-employee Board members Mr.&#160;Robison,
    Mr.&#160;Ruffle, Mr.&#160;Stachowiak and Mr.&#160;Trotman will
    each receive an option to purchase 2,000&#160;shares of the
    Company&#146;s common stock at an exercise price per share equal
    to the fair market value of the Company&#146;s common stock on
    the date of the Annual Meeting, and a grant of 500 restricted
    stock units pursuant to the terms of the 2006 Plan.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    8
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->


<!-- link1 "CERTAIN ADDITIONAL INFORMATION Security Ownership of Certain Beneficial Owners and Management" -->
<DIV align="left"><A NAME="004"></A></DIV>


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">CERTAIN
    ADDITIONAL INFORMATION<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Security
    Ownership of Certain Beneficial Owners and Management</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table sets forth certain information regarding the
    beneficial ownership of the Company&#146;s Common Shares as of
    April&#160;1, 2010, of (i)&#160;each person known to the Company
    to own beneficially 5% or more of the Common Shares,
    (ii)&#160;each nominee for director of the Company,
    (iii)&#160;each executive officer named in the Summary
    Compensation Table, and (iv)&#160;all directors and executive
    officers as a group. Except as otherwise indicated in the
    footnotes to the table or for shares of common stock held in
    brokerage accounts, which may from time to time, together with
    other securities held in those accounts, serve as collateral for
    margin loans made from such accounts, none of the shares
    reported as beneficially owned are currently pledged as security
    for any outstanding loan or indebtedness.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="61%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="9%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="7%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="7" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Common Shares Owned Beneficially</B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Amount and Nature of <BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Name and Address of Beneficial Owner</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Beneficial Ownership(2)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Percent of Class(3)</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="color: #000000; background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Directors and Named Officers
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Ernest A. Bates,&#160;M.D.(1)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    893,537
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    19.1
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Chairman of the Board and Chief Executive Officer
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="color: #000000; background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Olin C. Robison(1)(4)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    28,350
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    John F. Ruffle(1)(4)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    216,761
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4.7
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom" style="color: #000000; background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Raymond C. Stachowiak(1)(4)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    26,167
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Stanley S. Trotman, Jr.(1)(4)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    183,137
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4.0
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom" style="color: #000000; background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Ernest R. Bates(1)(4)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    75,345
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.6
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom" style="color: #000000; background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Vice President of Sales and Business Development
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Craig K. Tagawa(1)(4)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    104,823
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2.3
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Senior Vice President, Chief Operating and Financial Officer
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="color: #000000; background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    All Current Directors&#160;&#038; Executive Officers as a Group
    (7&#160;people)(4)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,528,120
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    31.4
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    5% or More Shareholders <BR>
    None
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

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

<TR>
    <TD valign="top">
    &#160;* </TD>
    <TD></TD>
    <TD valign="bottom">
    Less than 1%</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    The address of each such individual is
    <FONT style="white-space: nowrap">c/o&#160;American</FONT>
    Shared Hospital Services, Four Embarcadero Center,
    Suite&#160;3700, San&#160;Francisco, California 94111.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    (2) </TD>
    <TD></TD>
    <TD valign="bottom">
    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 style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    (3) </TD>
    <TD></TD>
    <TD valign="bottom">
    Shares that any person or group of persons is entitled to
    acquire upon the exercise of options or warrants within
    60&#160;days after April&#160;1, 2010, 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 style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    (4) </TD>
    <TD></TD>
    <TD valign="bottom">
    Includes shares underlying options that are currently
    exercisable or will become exercisable within 60&#160;days
    following April&#160;1, 2010: Dr.&#160;Bates,
    94,167&#160;shares; Mr.&#160;Bates, 58,516&#160;shares;
    Mr.&#160;Robison, 26,850&#160;shares; Mr.&#160;Ruffle,
    14,850&#160;shares; Mr.&#160;Stachowiak, 1,167&#160;shares;
    Mr.&#160;Trotman, 14,850&#160;shares; Mr.&#160;Tagawa,
    62,591&#160;shares; and Directors and Executive Officers as a
    group, 272,991&#160;shares.</TD>
</TR>

</TABLE>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    9
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->


<!-- link1 "COMPENSATION OF EXECUTIVE OFFICERS" -->
<DIV align="left"><A NAME="005"></A></DIV>


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">COMPENSATION
    OF EXECUTIVE OFFICERS</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Compensation
    Discussion and Analysis</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Introduction.</I>&#160;&#160;It is our intent in this
    Compensation Discussion and Analysis to inform our shareholders
    of the policies and objectives underlying the compensation
    programs for our three executive officers, Dr.&#160;Ernest A.
    Bates, Chairman of our Board and our Chief Executive Officer,
    Craig K. Tagawa, our Chief Financial Officer and Chief Operating
    Officer, and Ernest R. Bates, our Vice President of Sales and
    Business Development. The Compensation Committee of our Board of
    Directors administers the compensation programs for our
    executive officers with the objective of providing a competitive
    compensation package. However, we believe that the compensation
    paid to our executive officers should also be substantially
    dependent on our financial performance and the value created for
    our shareholders. For this reason, the Compensation Committee
    also utilizes our compensation programs to provide meaningful
    incentives for the attainment of our short-term and long-term
    strategic objectives and thereby reward those executive officers
    who make a substantial contribution to the attainment of those
    objectives.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Compensation Policy for Executive Officers.</I>&#160;&#160;We
    have designed the various elements comprising the compensation
    packages of our executive officers to achieve the following
    objectives:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

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

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    attract, retain, motivate and engage executives with superior
    leadership and management capabilities,
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    provide an overall level of compensation to each executive
    officer which is externally competitive, internally equitable
    and performance-driven,&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    ensure that total compensation levels are reflective of our
    financial performance and provide the executive officer with the
    opportunity to earn above-market total compensation for
    exceptional business performance.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each executive officer&#146;s compensation package typically
    consists of three elements: (i)&#160;a base salary, (ii)&#160;a
    cash bonus tied to our attainment of financial objectives or the
    individual officer&#146;s personal performance, and
    (iii)&#160;long-term, stock-based incentive awards designed to
    align and strengthen the mutuality of interests between our
    executive officers and our shareholders. In determining the
    appropriate level for each element of such compensation, the
    Compensation Committee subjectively reviews and evaluates the
    level of performance of the Company and the executive&#146;s
    level of individual performance and potential to contribute to
    the Company&#146;s future growth, and seeks to set compensation
    at a level that is both reasonable and equitable based on that
    assessment. Consistent with our philosophy of emphasizing pay
    for performance, the total compensation packages are designed to
    pay above the target when the Company exceeds its goals and
    below the target when the Company does not achieve its goals.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Elements of Compensation.</I>&#160;&#160;Each of the three
    major elements comprising the compensation package for our
    executive officers (salary, bonus and equity) is designed to
    achieve one or more of our overall objectives in fashioning a
    competitive level of compensation, tying compensation to the
    attainment of one or more of our strategic business objectives
    and subjecting a substantial portion of the executive
    officer&#146;s compensation to our financial success as measured
    in terms of our stock price performance. The manner in which the
    Compensation Committee has so structured each element of
    compensation may be explained as follows.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I><U>Base Salary.</U></I>&#160;&#160;The Compensation Committee
    reviews the base salary level of each executive officer each
    year. The base salary for the executive officers is determined
    on the basis of their level of responsibility, experience and
    individual performance. No changes were made in fiscal 2009.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I><U>Cash Incentive Compensation.</U></I>&#160;&#160;Because
    the Compensation Committee believes that the significant
    interests which Dr.&#160;Bates, Mr.&#160;Tagawa and
    Mr.&#160;Bates have in our common stock provide them with a
    substantial incentive to contribute to our financial success and
    the attainment of our financial goals, the Compensation
    Committee does not typically implement annual incentive
    compensation programs for them. From time to time, the
    Compensation Committee awards cash bonuses in recognition of
    their personal performance. However, for the 2009 fiscal year,
    no cash bonuses were awarded by the Compensation Committee to
    the Company&#146;s executive officers.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In 2006 the Board approved the Company&#146;s Long Term
    Incentive Compensation Plan (the &#147;Incentive Plan&#148;),
    which was subsequently approved by the Company&#146;s
    shareholders at the 2006 Annual Meeting. The Compensation
    Committee has the discretion under the Incentive Plan to
    implement one or more performance periods, each consisting of
    one or more calendar years up to a maximum of five years. The
    Compensation Committee will
</DIV>
<!-- XBRL Paragraph Pagebreak -->
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    10
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    establish the specific performance goals for each performance
    period and the specific formula for calculating the bonus to
    which the executive may become entitled within the first ninety
    days of that performance period, and will establish threshold,
    target and maximum levels of attainment. The maximum bonus
    payable per participant will be determined by multiplying the
    number of calendar years in the performance period by $250,000.
    To date, we have not used the Incentive Plan.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I><U>Equity Compensation.</U></I>&#160;&#160;In 2006 the Board
    approved the 2006 Stock Incentive Plan (the &#147;2006
    Plan&#148;) to replace the Company&#146;s 2001 Stock Option
    Plan, and the 2006 Plan was approved by our stockholders at the
    2006 Annual Meeting. For many years stock option grants were the
    sole form of equity award granted to our executive officers, and
    we continue to use stock option grants to provide long-term
    incentives to our executive officers. However, we structured the
    2006 Plan to provide us with more flexibility in designing
    equity incentives in an environment where a number of companies
    have moved from traditional option grants to other stock or
    stock-based awards, such as stock appreciation rights,
    restricted stock and restricted stock units. Accordingly, with
    the 2006 Plan, we have a broad array of equity incentives to
    utilize for purposes of attracting and retaining the services of
    key individuals, including stock options, stock appreciation
    rights, restricted stock, restricted stock units, and other
    stock-based awards. We continue to rely on equity incentives
    because we believe that such incentives are necessary for us to
    remain competitive in the marketplace for executive talent and
    other key employees.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Compensation Committee reviews and considers equity awards
    in connection with the annual review of the performance of our
    executive officers and other key employees. However, there may
    be variance from this practice when warranted by special
    circumstances. Each grant is designed to align the interests of
    the executive officer with those of the shareholders and to
    provide each individual with a significant incentive to manage
    the company from the perspective of an owner with an equity
    stake in the business. In past years, the equity awards have
    been in the form of stock options which generally vest and
    become exercisable in a series of installments over a five year
    service period, contingent upon the officer&#146;s continued
    employment with us. Accordingly, each such option will provide a
    return to the executive officer only to the extent he remains
    employed with us during the vesting period, and then only if the
    fair market value of the underlying shares appreciates over the
    period between grant and exercise of the option. No options were
    awarded to the Company&#146;s executive officers in 2009.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Market Timing of Equity Awards.</I>&#160;&#160;The
    Compensation Committee does not engage in any market timing of
    the equity awards made to the executive officers or other award
    recipients. As indicated above, awards for existing executive
    officers and employees are considered in connection with the
    annual review process which typically occurs in the fourth
    quarter each year. There is no established practice of timing
    our awards in advance of the release of favorable financial
    results or adjusting the award date in connection with the
    release of unfavorable financial developments affecting our
    business. Equity awards for new hires other than executive
    officers are typically made at the next scheduled Compensation
    Committee meeting following the employee&#146;s hire date. All
    stock option grants issued under our 2006 Plan have an exercise
    price per share no less than the fair market value per share on
    the grant date.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Executive Officer Perquisites.</I>&#160;&#160;It is not our
    practice to provide our executive officers with any meaningful
    perquisites.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Other Programs.</I>&#160;&#160;Our executive officers are
    eligible to participate in our 401(k) plan and our flexible
    benefit plan on the same basis as all other regular
    U.S.&#160;employees.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Deferred Compensation Programs.</I>&#160;&#160;We have not
    implemented any non-qualified deferred compensation programs for
    our executive officers or any supplemental executive retirement
    plans.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Compliance with Internal Revenue Code
    Section&#160;162(m).</I>&#160;&#160;Section&#160;162(m) of the
    Internal Revenue Code disallows a tax deduction to publicly held
    companies for compensation paid to certain of their executive
    officers to the extent such compensation exceeds
    $1.0&#160;million per covered officer in any year. The
    limitation applies only to compensation that is not considered
    to be performance-based under the terms of Section&#160;162(m).
    The stock options which have been granted to date to our
    executive officers have been structured so as to qualify as
    performance based compensation. Non-performance-based
    compensation paid to such officers for 2009 did not exceed the
    $1.0&#160;million limit per officer. However, we believe that in
    establishing the cash and equity incentive compensation programs
    for our executive officers, the potential deductibility of the
    compensation payable under those programs should be only
</DIV>
<!-- XBRL Paragraph Pagebreak -->
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    11
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    one of a number of relevant factors taken into consideration,
    and not the sole governing factor. For that reason, we may deem
    it appropriate to provide one or more executive officers with
    the opportunity to earn incentive compensation, whether through
    cash bonuses under the 2006 Incentive Plan or through equity
    awards, which together with base salary in the aggregate may be
    in excess of the amount deductible by reason of
    Section&#160;162(m) or other provisions of the Internal Revenue
    Code. We believe it is important to maintain cash and equity
    incentive compensation at the levels needed to attract and
    retain the executive officers essential to our success, even if
    all or part of that compensation may not be deductible by reason
    of the Section&#160;162(m) limitation.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Summary
    Compensation Information</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table provides certain summary information
    concerning the compensation earned for services rendered in all
    capacities to the Company and its subsidiaries for the year
    ended December&#160;31, 2009 by the Company&#146;s Chief
    Executive Officer, Chief Financial Officer and Vice President of
    Business Development. No other executive officers who would have
    otherwise been includable in such table on the basis of total
    compensation for the 2009 Fiscal Year are required to be
    included by reason of their termination of employment or change
    in executive status during that year. The listed individuals are
    hereinafter referred to as the &#147;named executive
    officers.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="47%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="3%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="2%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="2%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="2%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="2%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=06 type=gutter -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=06 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=body -->
    <TD width="4%" align="left">&nbsp;</TD>	<!-- colindex=06 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=07 type=gutter -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=07 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=07 type=body -->
    <TD width="3%" align="left">&nbsp;</TD>	<!-- colindex=07 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Option<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>All Other<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Salary<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Bonus<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Awards<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Compensation<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Total<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Year<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>($) (1)<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>($) (2)<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>($) (3)<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>($) (4)<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>($)<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Name and Principal Position (a)</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>(b)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>(c)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>(d)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>(e)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>(f)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>(g)</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="color: #000000; background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Ernest A. Bates,
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    2009
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    475,000
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    0
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    0
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    33,108
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    508,108
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="color: #000000; background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: 0pt; margin-left: 10pt">
    M.D. Chairman of the Board and Chief Executive Officer
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    2008
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    475,000
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    47,500
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    40,500
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    29,316
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    592,316
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Craig K. Tagawa,
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    2009
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    300,000
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    0
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    0
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    10,695
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    310,695
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: 0pt; margin-left: 10pt">
    Chief Operating Officer and Chief Financial Officer
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    2008
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    300,000
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    30,000
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    0
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    16,268
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    346,268
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="color: #000000; background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Ernest R. Bates,
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    2009
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    250,000
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    0
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    0
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    15,607
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    265,607
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="color: #000000; background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: 0pt; margin-left: 10pt">
    Vice President of Business Development
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    2008
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    250,000
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    25,000
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    0
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    15,000
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    290,000
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

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

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    Includes amounts deferred under the Company&#146;s Retirement
    Plan for Employees of American Shared Hospital Services, a
    qualified plan under section&#160;401(k) of the Internal Revenue
    Code.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (2) </TD>
    <TD></TD>
    <TD valign="bottom">
    Bonuses were accrued in 2008 and paid in first quarter 2009.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (3) </TD>
    <TD></TD>
    <TD valign="bottom">
    The amounts in column (e)&#160;reflect the aggregate grant date
    fair value of stock options granted to each named executive
    officer, computed in accordance with FASB ASC Topic 718.
    Assumptions used in the calculation of this amount are included
    in Note&#160;9 to the Company&#146;s audited financial
    statements for the fiscal year ended December&#160;31, 2009 and
    included in the Company&#146;s Annual Report on
    <FONT style="white-space: nowrap">Form&#160;10-K</FONT>
    filed with the Securities and Exchange Commission on
    March&#160;31, 2010.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (4) </TD>
    <TD></TD>
    <TD valign="bottom">
    The amounts in column (f)&#160;include matching contributions
    under the Company&#146;s 401K plan, automobile and parking
    allowance, income attributable to life insurance coverage paid
    by us, personal use of the Company&#146;s leased apartment, and
    premiums paid by the Company for long term disability coverage.</TD>
</TR>

</TABLE>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    12
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Outstanding
    Equity Awards at Fiscal Year-End</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table provides information concerning outstanding
    equity awards held by the named executive officers as of
    December&#160;31, 2009.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="34%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="5%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="6%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="6%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="18%">&nbsp;</TD>	<!-- colindex=05 type=maindata -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="13" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Option Awards</B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Number of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Number of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Securities<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Securities<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Underlying<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Underlying<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Unexercised<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Unexercised<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Options<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Options<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Unexercisable (#)<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Option Exercise<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Option Expiration<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Name</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Exercisable&#160;(#)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>(1)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Price&#160;($)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Date</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="color: #000000; background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Ernest A. Bates,&#160;M.D.&#160;
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    60,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    90,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3.036
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="bottom">
    December 5, 2014
</TD>
</TR>
<TR valign="bottom" style="color: #000000; background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17,500
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    32,500
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2.959
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="bottom">
    March 7, 2015
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Craig K. Tagawa
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    13,050
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,450
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    6.16
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="bottom">
    June 15, 2015
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    40,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    60,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2.76
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="bottom">
    December 5, 2014
</TD>
</TR>
<TR valign="bottom" style="color: #000000; background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Ernest R. Bates
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    28,333
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    21,667
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    6.50
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="bottom">
    February 7, 2014
</TD>
</TR>
<TR valign="bottom" style="color: #000000; background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    15,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2.76
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="bottom">
    December 5, 2014
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    The option shares vest in five equal annual installments over
    the five year period measured from their issue date (which was
    seven years before the expiration date, or ten years in the case
    of Mr.&#160;Tagawa&#146;s award expiring in 2015), provided each
    employee continues to provide services to the Company through
    each applicable vesting date. None of the option shares
    authorized under these awards had been exercised as of
    December&#160;31, 2009.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Grants of
    Plan-Based Awards</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    There were no stock options or stock awards granted in 2009 to
    any of the Company&#146;s executive officers named in the
    Summary Compensation Table.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Payments
    upon Termination or Change in Control</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under our 2006 Stock Plan, in the event a change in control
    occurs, each outstanding equity award under the Discretionary
    Grant Program will automatically accelerate in full, unless
    (i)&#160;that award is assumed by the successor corporation or
    otherwise continued in effect or (ii)&#160;the award is replaced
    with a cash retention program that preserves the spread existing
    on the unvested shares subject to that equity award (the excess
    of the fair market value of those shares over the exercise or
    base price in effect for the shares) and provides for subsequent
    payout of that spread in accordance with the same vesting
    schedule in effect for those shares. In addition, all unvested
    shares outstanding under the Discretionary Grant and Stock
    Issuance Programs will immediately vest upon the change in
    control, except to the extent our repurchase rights with respect
    to those shares are to be assigned to the successor corporation
    or otherwise continued in effect. Each outstanding equity award
    under the Stock Issuance Program, including restricted stock
    units, will vest as to the number of shares of common stock
    subject to that award immediately prior to the change in control
    and the underlying shares will become immediately issuable,
    unless that equity award is assumed by the successor corporation
    or otherwise continued in effect or replaced with a cash
    retention program similar to the program described in
    clause&#160;(ii) above.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The plan administrator has the discretion to structure one or
    more equity awards under the 2006 Plan so that those equity
    awards will vest in full either immediately upon a change in
    control or in the event the individual&#146;s service with us or
    the successor entity is terminated (actually or constructively)
    within a designated period following a change in control
    transaction, whether or not those equity awards are to be
    assumed or otherwise continued in effect or replaced with a cash
    retention program.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Options granted under our 1995 and 2001 Stock Option Plans
    provide that in the event of (i)&#160;a change in control of the
    company in which the holders of the Company&#146;s common stock
    receive consideration other than shares of common stock
    registered under Section&#160;12 of the Securities Exchange Act
    of 1934, (ii)&#160;any person acquiring beneficial ownership of
    25% or more of either the corporation&#146;s outstanding common
    stock or the company&#146;s outstanding voting securities, or
    (iii)&#160;a hostile take-over of the Company&#146;s board,
    options will be cancelled in
</DIV>
<!-- XBRL Paragraph Pagebreak -->
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    13
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    exchange for a cash payment from the Company in an amount equal
    to the number of shares of common stock at that time subject to
    such option, multiplied by the excess, if any, of the greater of
    (A)&#160;the highest per share price offered to the stockholders
    of the Company in any transaction whereby the change in control
    takes place or (B)&#160;the fair market value of a share of
    common stock on the date of occurrence of the change in control
    over the exercise price per share of common stock in effect
    under that option.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon a qualifying change in control of the Company, executive
    officers would potentially receive compensation pursuant to
    unvested option grants originally awarded under the 1995 plan.
    Only Mr.&#160;Tagawa has options awarded under the 1995 plan.
    Assuming a change in control occurred on December&#160;31, 2009
    and the change in control consideration paid per share was equal
    to the closing selling price of our common stock on
    December&#160;31, 2009, which was $2.88 per share, the option
    strike price for his award under the 1995 plan is greater than
    the closing selling price on that date, and so no compensation
    would have been paid to him.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Shares
    Authorized for Issuance Under Equity Compensation
    Plans</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table provides information as of December&#160;31,
    2009 with respect to shares of our common stock that may be
    issued under our existing equity compensation plan.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="39%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="8%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="8%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="9%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Number of Shares to<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>be Issued upon<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Weighted Average<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Exercise of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Exercise Price of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Number of Shares<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Outstanding Options,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Outstanding Options,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Remaining Available for<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Plan Category</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Warrants and Rights</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Warrants and Rights</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Future Issuance</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Equity compensation plans approved by security holders (1)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    600,930(2
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3.72(3
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    142,070(4
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Equity compensation plans not approved by security holders
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    N/A
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    N/A
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    N/A
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    600,930
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3.72
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    142,070
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    Consists of our 2006 Plan.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (2) </TD>
    <TD></TD>
    <TD valign="bottom">
    Includes 2,000&#160;shares of our common stock subject to
    restricted stock unit awards that will entitle each holder to
    one share of our common stock for each such unit that vests over
    the holder&#146;s period of continued service.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (3) </TD>
    <TD></TD>
    <TD valign="bottom">
    Calculated without taking into account 2,000&#160;shares of
    common stock subject to outstanding restricted stock unit awards
    that will become issuable, as those units vest, without any cash
    consideration or other payment required for such shares.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (4) </TD>
    <TD></TD>
    <TD valign="bottom">
    Shares reserved for issuance under the 2006 Plan may be issued
    upon the exercise of stock options or stock appreciation rights,
    through direct stock issuances or pursuant to restricted stock
    units or other stock based awards that vest upon the attainment
    of prescribed performance milestones or the completion of
    designated service periods.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Compliance
    with Section&#160;16(a) under the Securities Exchange Act of
    1934</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Reports filed under the Exchange Act and received by the Company
    on or after January&#160;1, 2009, indicate that during
    2009&#160;directors, officers and 10% shareholders of the
    Company filed all required reports within the periods
    established by applicable rules, with the following exceptions:
    (1)&#160;On May&#160;28, 2009 John F. Ruffle acquired
    500&#160;shares of the Company&#146;s stock, which was not
    reported to the Securities and Exchange Commission until
    August&#160;25, 2009; (2)&#160;On May&#160;28, 2009 Olin C.
    Robison acquired 500&#160;shares of the Company&#146;s stock,
    which was not reported to the Securities and Exchange Commission
    until August&#160;25, 2009; (3)&#160;On May&#160;28, 2009
    Stanley&#160;S.&#160;Trotman,&#160;Jr. acquired 500&#160;shares
    of the Company&#146;s stock, which was not reported to the
    Securities and Exchange Commission until November&#160;5, 2009;
    (4)&#160;On August&#160;20, 2009 Ernest A. Bates,&#160;M.D. sold
    50,000&#160;shares of the Company&#146;s stock, which was not
    reported to the Securities and Exchange Commission until
    August&#160;26, 2009; (5)&#160;On August&#160;20, 2009 Craig K.
    Tagawa sold 10,000&#160;shares of the Company&#146;s stock,
    which was not reported to the Securities and Exchange Commission
    until August&#160;26, 2009.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    14
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->


<!-- link1 "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Compensation Committee Interlocks and Insider Participation" -->
<DIV align="left"><A NAME="006"></A></DIV>


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Compensation
    Committee Interlocks and Insider Participation</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    None.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Policies
    and Procedures</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Audit Committee of the Board of Directors is responsible for
    reviewing and approving all related party transactions as
    defined under Securities and Exchange Commission rules and
    regulations. While we do not have a formal written policy or
    procedure for the review, approval or ratification of related
    party transactions, the audit committee must review the material
    facts of any such transaction and approve that transaction.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To identify related party transactions, each year we submit and
    require our directors and officers to complete director and
    officer questionnaires identifying transactions with the Company
    in which the director or officer or their family members have a
    conflict of interest. The Company reviews the questionnaire for
    potential related party transactions. In addition, at any
    scheduled meeting of the audit committee, management may
    recommend related party transactions to the committee, including
    the material terms of the proposed transactions, for its
    consideration.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In making its decision to approve or ratify a related party
    transaction, the audit committee will consider all relevant
    facts and circumstances available to the committee, including
    factors such as the aggregate value of the transaction, whether
    the terms of the related party transaction are no less favorable
    than terms generally available in an arms&#146; length
    transaction and the benefit of such transaction to us.
</DIV>


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


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">AUDIT
    COMMITTEE REPORT</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    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 style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Audit Committee of the Board of Directors consists of four
    directors, all of whom are &#145;independent&#146; as defined in
    the listing standards of the AMEX. 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. During 2009, the Audit
    Committee held seven meetings, three of which were held
    telephonically. Mr.&#160;Ruffle is Chair of the Audit Committee.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    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&#160;31, 2009. 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 style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    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 within the meaning of the federal securities laws
    administered by the US Securities and Exchange Commission, and
    the Audit Committee satisfied itself as to the auditors&#146;
    independence.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Audit Committee discussed with the Independent Registered
    Public Accounting Firm all matters required to be discussed by
    Statement on Auditing Standards No.&#160;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>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    15
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    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
    <FONT style="white-space: nowrap">Form&#160;10-K</FONT>
    for the fiscal year ended December&#160;31, 2009, as filed with
    the Securities and Exchange Commission.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Submitted by the Audit Committee of the Board of Directors:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 9%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    John F. Ruffle (chairman)<BR>
    Olin C. Robison<BR>
    Raymond C. Stachowiak<BR>
    Stanley S. Trotman, Jr.
</DIV>


<!-- link1 "PROPOSAL NO. 2" -->
<DIV align="left"><A NAME="008"></A></DIV>


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">PROPOSAL&#160;NO.&#160;2</FONT></B>
</DIV>


<!-- link1 "APPROVAL OF THE AMENDMENT AND RESTATEMENT OF THE 2006 STOCK INCENTIVE PLAN" -->
<DIV align="left"><A NAME="009"></A></DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">APPROVAL
    OF THE AMENDMENT AND RESTATEMENT OF THE 2006 STOCK INCENTIVE
    PLAN</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our shareholders are being asked to approve an amendment and
    restatement of our 2006 Stock Incentive Plan (the
    &#147;Plan&#148;) that will effect the following principal
    changes:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (i)&#160;The number of shares of our common stock reserved for
    issuance under the Plan will be increased by an additional
    880,000&#160;shares, from 750,000&#160;shares to
    1,630,000&#160;shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (ii)&#160;The number of shares of our common stock that may be
    issued pursuant to tax-favored incentive stock options under
    Section&#160;422 of the Internal Revenue Code (the
    &#147;Code&#148;) will be increased by the same
    880,000&#160;share increase to the authorized reserve under the
    Plan.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (iii)&#160;The number of shares of our common stock reserved for
    award and issuance under the Plan will be reduced by a ratio of
    1.59&#160;shares of common stock for each share of common stock
    that is issued pursuant to a Full Value Award (as such term is
    defined below) made under the Plan after March&#160;18, 2010.
    For all other share issuances under the Plan, the share reserve
    will continue to be reduced on a one-for-one basis.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (iv)&#160;A new Incentive Bonus Program will be added, pursuant
    to which eligible persons may be provided with incentive bonus
    opportunities through performance unit awards and special cash
    incentive programs tied to the attainment of pre-established
    performance milestones. Awards under such program may be
    structured to qualify as performance-based compensation for
    purposes of Section&#160;162(m) of the Code, as described below.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (v)&#160;The limit on the number of shares of common stock for
    which awards may be made to any one participant in any calendar
    year will be changed from a single 150,000-share limitation to
    the following limits:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

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

<TR>
    <TD width="4%"></TD>
    <TD width="3%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;
</TD>
    <TD align="left">
    for awards denominated in terms of shares of our common stock,
    the maximum number of shares of common stock for which such
    awards may be made to any one person in any calendar year will
    not exceed 150,000&#160;shares in the aggregate; provided,
    however, that for a calendar year in which a person first
    commences service, the foregoing limitation will be increased to
    200,000&#160;shares;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;
</TD>
    <TD align="left">
    for awards denominated in terms of cash and subject to one or
    more performance-vesting conditions, the maximum dollar amount
    for which such awards may be made to any one person in any
    calendar year will not exceed $1,500,000.00 for each calendar
    year within the applicable performance measurement period, with
    any such performance period not to exceed five (5)&#160;years
    and with pro-ration based on the foregoing dollar amount in the
    event of any fractional calendar year included within such
    performance period.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (vi)&#160;Any accrued dividend equivalents on performance-based
    awards will be subject to the attainment of the applicable
    performance goals for those awards.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (vii)&#160;No out-of-the money stock options or stock
    appreciation rights may be cashed out without shareholder
    approval. Such prohibition will be in addition to the
    pre-existing provisions of the Plan that preclude the repricing
    of outstanding stock options and stock appreciation rights
    without shareholder approval.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    16
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (viii)&#160;There will be express authorization for certain
    adjustments to outstanding awards upon a change in control
    transaction, including the conversion of performance-based
    awards into service-only vesting awards upon their assumption in
    a change in control transaction effected prior to the completion
    of the applicable performance period.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (ix)&#160;There will be express authorization for the plan
    administrator to implement a non-employee Board member retainer
    fee deferral program under the Plan that would allow the
    non-employee Board members the opportunity to elect to convert
    the Board retainer fee to be earned for a particular year into
    restricted stock units that defer the issuance of the shares of
    common stock that vest under those restricted stock units until
    the individual&#146;s cessation of Board service or other
    permissible date or event under Code Section&#160;409A.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (x)&#160;The Plan has been renamed the Incentive Compensation
    Plan.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Board adopted the amended and restated Plan by unanimous
    written consent on April&#160;20, 2010, subject to shareholder
    approval at the Annual Meeting.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The proposed revisions contemplated by the amended and restated
    Plan are designed to assure that we will have a sufficient share
    reserve to fund future equity incentive awards to individuals in
    our employ or service who are essential to its financial success
    and long-term growth. In addition, the Plan as so amended and
    restated will continue to provide us with the flexibility needed
    to structure awards in a tax efficient manner and in a manner
    that will attract and retain talented and skilled individuals
    who have the potential to make significant contributions to our
    business and our overall growth and development. As indicated
    more specifically below, shareholder approval of the amended and
    restated Plan will also constitute approval of the various
    performance goals upon which specific vesting targets may be
    established for awards made under the Plan that are intended to
    qualify as performance-based compensation under Code
    Section&#160;162(m) and the per participant limitations imposed
    under the Plan on such awards.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Should the amended and restated Plan not be approved by the
    shareholders, then the changes summarized in items (i)-(v),
    (vii)&#160;and (x)&#160;above will not be implemented. However,
    the changes summarized in items (vi), (viii)&#160;and
    (ix)&#160;above will be implemented, and the Plan as so revised
    will continue in full force and effect until its scheduled
    February&#160;22, 2016 expiration date or any earlier
    termination date in accordance with the provisions of the Plan.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Summary
    Description of the Plan</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The principal terms and provisions of the Plan are summarized
    below. The summary, however, is not intended to be a complete
    description of all the terms of the Plan and is qualified in its
    entirety by reference to the complete text of the Plan. Any
    shareholder who wishes to obtain a copy of the actual Plan
    document may do so upon written request to our Corporate
    Secretary at our principal offices at Four Embarcadero Center,
    Suite&#160;3700, San&#160;Francisco, CA 94111.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Incentive Programs.</I>&#160;&#160;The Plan consists of four
    separate equity incentive programs: (i)&#160;the discretionary
    grant program, (ii)&#160;the stock issuance program,
    (iii)&#160;the incentive bonus program and (iv)&#160;the
    automatic grant program for the non-employee members of our
    Board of Directors. The principal features of each program are
    described below.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Types of Awards.</I>&#160;&#160;The various types of equity
    incentives which may be issued under the Plan (collectively, the
    &#147;Awards&#148;) are as follows: (i)&#160;stock options and
    stock appreciation rights under the discretionary grant program,
    (ii)&#160;stock bonuses and stock issuances pursuant to
    restricted stock awards, restricted stock units, performance
    shares and other stock-based awards under the stock issuance
    program, (iii)&#160;cash bonus awards, performance unit awards
    and dividend equivalent rights under the incentive bonus program
    (iv)&#160;and stock options and restricted stock unit awards to
    our non-employee Board members under the automatic grant program.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Administration.</I>&#160;&#160;The compensation committee of
    our Board of Directors will have the exclusive authority to
    administer the discretionary grant, incentive bonus and stock
    issuance programs with respect to Awards made to our executive
    officers and Board members and will also have the authority to
    make Awards under those programs to all other eligible
    individuals. However, our Board of Directors may at any time
    appoint a secondary committee of one or more Board members to
    have separate but concurrent authority with the compensation
    committee to make Awards under those programs to individuals
    other than executive officers and Board members.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    17
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The term &#147;plan administrator,&#148; as used in this
    summary, will mean our compensation committee and any secondary
    committee, to the extent each such entity is acting within the
    scope of its administrative authority under the Plan.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The compensation committee will have limited discretion under
    the automatic grant program to determine the number of shares
    subject to each option grant and restricted stock unit award
    made under that program, up to the maximum number of shares
    permissible per grant or award, but all option grants and
    restricted stock unit awards will otherwise be made in strict
    compliance with the express terms of that program.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Eligibility.</I>&#160;&#160;Officers and employees, as well
    as independent consultants and contractors, in our employ or in
    the employ of our parent or subsidiary companies (whether now
    existing or subsequently established) will be eligible to
    participate in the discretionary grant, incentive bonus and
    stock issuance programs. The non-employee members of our Board
    of Directors will also be eligible to participate in those
    programs as well as the automatic grant program. As of
    March&#160;31, 2010, approximately eleven persons (including
    three executive officers) were eligible to participate in the
    discretionary grant, incentive bonus and stock issuance
    programs, and four non-employee Board members were eligible to
    participate in those programs and the automatic grant program.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Securities Subject to Plan.</I>&#160;&#160;If the Plan is
    approved by our shareholders, 1,630,000&#160;shares of our
    common stock will initially be reserved for issuance over the
    term of the Plan. Such share reserve will be comprised of the
    following components: (i)&#160;the 750,000&#160;shares initially
    reserved for issuance under the Plan (which included the number
    of shares of common stock available for issuance under the
    predecessor plans on June&#160;28, 2006, including the shares
    subject to options outstanding at that time under the
    predecessor plans), and (ii)&#160;an additional share increase
    of 880,000&#160;shares. The shares of common stock issuable
    under the Plan may be drawn from shares of our authorized but
    unissued common stock or from shares of our common stock that
    the Company acquires, including shares purchased on the open
    market or in private transactions.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of March&#160;31, 2010, 598,930&#160;shares in the aggregate
    were subject to outstanding options under the Plan (including
    97,030&#160;shares subject to outstanding options granted under
    the predecessor plans that were transferred to the Plan),
    2,000&#160;shares were subject to unvested restricted stock
    units under the Plan, 7,000&#160;shares had been issued under
    the Plan, and 1,022,070&#160;shares remained available for
    future award under the Plan, assuming shareholder approval of
    the 880,000-share increase that forms part of this proposal.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Share Counting Provisions.</I>&#160;&#160;The number of
    shares of common stock reserved for award and issuance under the
    Plan will be reduced: (i)&#160;on a one-for-one basis for each
    share of common stock subject to an Award made under the
    discretionary grant program or subject to a stock option grant
    made under the automatic grant program, (ii)&#160;on a
    one-for-one basis for each share of common stock issued pursuant
    to a Full Value Award made under the stock issuance, incentive
    bonus and automatic grant programs prior to March&#160;18, 2010
    and (iii)&#160;by a fixed ratio of 1.59&#160;shares of common
    stock for each share of common stock issued pursuant to a Full
    Value Award made under the stock issuance, incentive bonus and
    automatic grant programs on or after March&#160;18, 2010.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For such purpose, a Full Value Award will be any of the
    following Awards made under the stock issuance, incentive bonus
    or automatic grant programs of the Plan that are settled in
    shares of our common stock: restricted stock awards (unless
    issued for cash consideration equal to the fair market value of
    the shares of common stock on the award date), restricted stock
    units, performance shares, performance units, and any other
    share-settled awards under the Plan other than (i)&#160;stock
    options and stock appreciation rights issued under the
    discretionary grant program, (ii)&#160;stock options issued
    under the automatic grant program and (iii)&#160;dividend
    equivalent rights under the incentive bonus program.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    18
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Shares of common stock subject to outstanding Awards made under
    the Plan (including the options transferred from the predecessor
    plans) will be available for subsequent issuance under the Plan
    to the extent those awards expire or terminate for any reason
    prior to the issuance of the shares of common stock subject to
    those awards. Such shares will be added back to the number of
    shares of common stock reserved for award and issuance under the
    Plan as follows:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

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

<TR>
    <TD width="4%"></TD>
    <TD width="3%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;
</TD>
    <TD align="left">
    For each share of common stock subject to such an expired,
    forfeited, cancelled or terminated award made under the
    discretionary grant program (including the options transferred
    from the predecessor plans) or subject to an option grant made
    under the automatic grant program, one share of common stock
    will become available for subsequent award and issuance under
    the Plan,
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;
</TD>
    <TD align="left">
    For each share of common stock subject to a forfeited or
    cancelled Full Value Award made under the stock issuance,
    automatic grant or incentive bonus program prior to
    March&#160;18, 2010, one share will become available for
    subsequent award and issuance.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;
</TD>
    <TD align="left">
    For each share of common stock subject to a forfeited or
    cancelled Full Value Award made under the stock issuance,
    automatic grant or incentive bonus program on or after
    March&#160;18, 2010, 1.59&#160;shares will become available for
    subsequent award and issuance.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;
</TD>
    <TD align="left">
    For each unvested share of common stock issued under the
    discretionary grant or stock issuance program for cash
    consideration not less than the fair market value per share of
    common stock on the award date and subsequently repurchased by
    us, at a price per share not greater than the original issue
    price paid per share, pursuant to our repurchase rights under
    the Plan, one share will become available for subsequent award
    and issuance under the Plan.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    There are no net counting provisions in effect under the Plan.
    Accordingly, the following share counting procedures will apply
    in determining the number of shares of common stock available
    from time to time for issuance and award under the Plan:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

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

<TR>
    <TD width="4%"></TD>
    <TD width="3%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;
</TD>
    <TD align="left">
    Should the exercise price of an option be paid in shares of our
    common stock, then the number of shares reserved for issuance
    under the Plan will be reduced by the gross number of shares for
    which that option is exercised, and not by the net number of new
    shares issued under the exercised option.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;
</TD>
    <TD align="left">
    Should shares of common stock otherwise issuable under the Plan
    be withheld by us in satisfaction of the withholding taxes
    incurred in connection with the exercise, issuance or vesting of
    an Award, then the number of shares of common stock available
    for issuance under the Plan will be reduced on the basis of the
    full number of shares that were issuable under the Award, and
    not on the basis of the net number of shares actually issued
    after any such share withholding.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;
</TD>
    <TD align="left">
    Upon the exercise of any stock appreciation right granted under
    the Plan, the share reserve will be reduced by the gross number
    of shares as to which such stock appreciation right is
    exercised, and not by the net number of shares actually issued
    upon such exercise.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Award Limitations.</I>&#160;&#160;Awards made under the Plan
    will be subject to the following per-participant limitations in
    order to provide the plan administrator with the opportunity to
    structure one or more of those awards as performance-based
    compensation under Section&#160;162(m) of the Code:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

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

<TR>
    <TD width="4%"></TD>
    <TD width="3%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;
</TD>
    <TD align="left">
    For awards denominated in shares of our common stock at the time
    of grant (whether payable in common stock, cash or a combination
    of both), a participant in the Plan may not receive awards for
    more than 150,000&#160;shares of our common stock in the
    aggregate. However, for the calendar year in which such person
    first commences service, the foregoing limitation will be
    increased to 200,000&#160;shares. Such share limitations will be
    subject to adjustment from time to time for stock splits, stock
    dividends and similar transactions affecting the number of
    outstanding shares of our common stock. Shareholder approval of
    this proposal will also constitute approval of those share
    limitations for purposes of Section&#160;162(m). Accordingly,
    such limitations will assure that any deductions to which we
    would otherwise be entitled upon the exercise of stock options
    or stock appreciation rights granted under the Plan will not be
    subject to the $1&#160;million limitation on the income tax
    deductibility of compensation paid per executive officer imposed
    under Section 162(m). In addition, shares issued under the stock
    issuance and incentive bonus programs
</TD>
</TR>

</TABLE>
<!-- XBRL Paragraph Pagebreak -->
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    19
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

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

<TR>
    <TD width="4%"></TD>
    <TD width="3%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>
</TD>
    <TD align="left">
    may also qualify as performance-based compensation that is not
    subject to the Section&#160;162(m) limitation, if the vesting of
    those shares is tied to the attainment of the corporate
    performance milestones discussed below in the summary
    description of the stock issuance program.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

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

<TR>
    <TD width="4%"></TD>
    <TD width="3%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;
</TD>
    <TD align="left">
    For performance-based awards denominated in cash dollars at the
    time of grant (whether payable in cash, shares of our common
    stock, or both), a participant in the Plan may not receive
    awards that exceed in the aggregate $1,500,000.00 for each
    calendar year within the applicable performance measurement
    period, with such performance period limited to a maximum of
    5&#160;years and with pro-ration based on such dollar limit for
    any fractional year included within such performance period.
    Shareholder approval of this proposal will also constitute
    approval of that $1,500,000.00 limitation for purposes of
    Section&#160;162(m). Accordingly, such limitation will assure
    that any deductions to which we would otherwise be entitled upon
    the payment of cash bonuses or the settlement of performance
    units under the incentive bonus plan will not be subject to the
    $1&#160;million limitation on the income tax deductibility of
    compensation paid per executive officer imposed under
    Section&#160;162(m), to the extent the vesting of those awards
    is tied to the attainment of one or more of the corporate
    performance milestones discussed below in the summary
    description of the stock issuance program.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>ISO Limitation.</I>&#160;&#160;The maximum number of shares
    of common stock which may be issued under the Plan pursuant to
    options intended to qualify as incentive stock options under the
    federal tax laws may not exceed 1,630,000&#160;shares in the
    aggregate (assuming shareholder approval of the 880,000-share
    increase that forms part of this proposal), subject to
    adjustment from time to time for stock splits, stock dividends
    and similar transactions affecting the number of outstanding
    shares of our common stock.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Equity
    Incentive Programs</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Discretionary Grant Program.</I>&#160;&#160;Under the
    discretionary grant program, eligible persons may be granted
    options to purchase shares of our common stock or stock
    appreciation rights tied to the value of our common stock. The
    plan administrator will have complete discretion to determine
    which eligible individuals are to receive such Awards, the time
    or times when those Awards are to be made, the number of shares
    subject to each such Award, the vesting schedule (if any) to be
    in effect for the Award, the maximum term for which the Award is
    to remain outstanding and the status of any granted option as
    either an incentive stock option or a non-statutory option under
    the federal tax laws.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each granted option will have an exercise price per share
    determined by the plan administrator, but the exercise price
    will not be less than one hundred percent of the fair market
    value of the option shares on the grant date. No granted option
    will have a term in excess of seven years. The shares subject to
    each option will generally vest in one or more installments over
    a specified period of service measured from the grant date.
    However, one or more options may be structured so that they will
    be immediately exercisable for any or all of the option shares.
    The shares acquired under such immediately exercisable options
    will be subject to repurchase by us, at the lower of the
    exercise price paid per share or the fair market value per
    share, if the optionee ceases service prior to vesting in those
    shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon cessation of service, the optionee will have a limited
    period of time in which to exercise his or her outstanding
    options to the extent exercisable for vested shares. The plan
    administrator will have complete discretion to extend the period
    following the optionee&#146;s cessation of service during which
    his or her outstanding options may be exercised
    <FONT style="white-space: nowrap">and/or</FONT> to
    accelerate the exercisability or vesting of such options in
    whole or in part. Such discretion may be exercised at any time
    while the options remain outstanding, whether before or after
    the optionee&#146;s actual cessation of service.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Plan will allow the issuance of two types of stock
    appreciation rights under the discretionary grant program:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

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

<TR>
    <TD width="4%"></TD>
    <TD width="3%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;
</TD>
    <TD align="left">
    Tandem stock appreciation rights provide the holders with the
    right to surrender their options for an appreciation
    distribution from us in an amount equal to the excess of
    (i)&#160;the fair market value of the vested
</TD>
</TR>

</TABLE>
<!-- XBRL Paragraph Pagebreak -->
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    20
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

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

<TR>
    <TD width="4%"></TD>
    <TD width="3%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>
</TD>
    <TD align="left">
    shares of our common stock subject to the surrendered option
    over (ii)&#160;the aggregate exercise price payable for those
    shares.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

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

<TR>
    <TD width="4%"></TD>
    <TD width="3%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;
</TD>
    <TD align="left">
    Stand-alone stock appreciation rights allow the holders to
    exercise those rights as to a specific number of shares of our
    common stock and receive in exchange an appreciation
    distribution from us in an amount equal to the excess of
    (i)&#160;the fair market value of the shares of common stock as
    to which those rights are exercised over (ii)&#160;the aggregate
    base price in effect for those shares. The base price per share
    may not be less than the fair market value per share of our
    common stock on the date the stand-alone stock appreciation
    right is granted, and the right may not have a term in excess of
    seven years.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The distribution with respect to any exercised tandem or
    stand-alone stock appreciation right will be made in shares of
    our common stock. Stock appreciation rights will remain
    exercisable for a limited period following the holder&#146;s
    cessation of service, but only to the extent those rights are
    exercisable at the time of such cessation of service. The plan
    administrator will have complete discretion to extend the period
    following the holder&#146;s cessation of service during which
    his or her outstanding stock appreciation rights may be
    exercised
    <FONT style="white-space: nowrap">and/or</FONT> to
    accelerate the exercisability or vesting of those stock
    appreciation rights in whole or in part. Such discretion may be
    exercised at any time while the stock appreciation right remains
    outstanding, whether before or after the holder&#146;s actual
    cessation of service.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Repricing Prohibition.</I>&#160;&#160;The plan administrator
    may not implement any of the following repricing/cash-out
    programs without obtaining stockholder approval: (i)&#160;the
    cancellation of outstanding options or stock appreciation rights
    in return for new options or stock appreciation rights with a
    lower exercise price per share, (ii)&#160;the cancellation of
    outstanding options or stock appreciation rights with exercise
    prices per share in excess of the then current fair market value
    per share of our common stock for consideration payable in cash,
    equity securities or in the form of any other award under the
    Plan, except in connection with a change in control transaction,
    or (iii)&#160;the direct reduction of the exercise price in
    effect for outstanding options or stock appreciation rights.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Stock Issuance Program.</I>&#160;&#160;Shares may be issued
    under the stock issuance program subject to performance or
    service vesting requirements established by the plan
    administrator. Shares may also be issued as a fully-vested bonus
    for past services without any cash outlay required of the
    recipient. Shares of our common stock may also be issued under
    the program pursuant to restricted stock units which entitle the
    recipients to receive those shares upon the attainment of
    designated performance goals or the completion of a prescribed
    service period or upon the expiration of a designated time
    period following the vesting of those units, including (without
    limitation), a deferred distribution date following the
    termination of the recipient&#146;s service with us. Performance
    shares may also be issued under the program in accordance with
    the following parameters:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

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

<TR>
    <TD width="4%"></TD>
    <TD width="3%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;
</TD>
    <TD align="left">
    The vesting of the performance shares will be tied to the
    attainment of corporate performance objectives over a specified
    performance period, all as established by the plan administrator
    at the time of the award.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;
</TD>
    <TD align="left">
    At the end of the performance period, the plan administrator
    will determine the actual level of attainment for each
    performance objective and the extent to which the performance
    shares awarded for that period are to vest and become payable
    based on the attained performance levels.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;
</TD>
    <TD align="left">
    The performance shares which so vest will be paid as soon as
    practicable following the end of the performance period, unless
    such payment is to be deferred for the period specified by the
    plan administrator at the time the performance shares are
    awarded or the period selected by the participant in accordance
    with the applicable requirements of Internal Revenue Code
    Section&#160;409A.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;
</TD>
    <TD align="left">
    Performance shares may be paid in cash or shares of our common
    stock.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;
</TD>
    <TD align="left">
    Performance shares may also be structured so that the shares are
    convertible into shares of our common stock, but the rate at
    which each performance share is to so convert will be based on
    the attained level of performance for each applicable
    performance objective.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The plan administrator has complete discretion under the program
    to determine which eligible individuals are to receive awards
    under the stock issuance program, the time or times when those
    awards are to be made, the form of those awards, the number of
    shares subject to each such award, the vesting schedule to be in
    effect for the award, the issuance schedule for the shares which
    vest under the award and the cash consideration (if any) payable
    per share.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    21
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In order to assure that the compensation attributable to one or
    more Awards under the program will qualify as performance-based
    compensation which will not be subject to the $1&#160;million
    limitation on the income tax deductibility of the compensation
    paid per executive officer which is imposed under Internal
    Revenue Code Section&#160;162(m), the plan administrator will
    also have the discretionary authority to structure one or more
    of those Awards so that the underlying shares of common stock
    will vest only upon the achievement of certain pre-established
    corporate performance goals based on one or more of the
    following criteria: (1)&#160;return on total shareholder equity;
    (2)&#160;earnings per share; (3)&#160;net income or operating
    income (before or after taxes); (4)&#160;earnings before
    interest, taxes, depreciation and amortization;
    (5)&#160;earnings before interest, taxes, depreciation,
    amortization and charges for stock-based compensation,
    (6)&#160;sales or revenue targets; (7)&#160;return on assets,
    capital or investment; (8)&#160;cash flow; (9)&#160;market
    share; (10)&#160;cost reduction goals; (11)&#160;budget
    comparisons; (12)&#160;measures of customer satisfaction;
    (13)&#160;any combination of, or a specified increase in, any of
    the foregoing; (14)&#160;new product development or successful
    completion of research and development projects; and
    (15)&#160;the formation of joint ventures, research or
    development collaborations, or the completion of other corporate
    transactions intended to increase our revenue or profitability
    or enhance our customer base. In addition, such performance
    goals may be based upon the attainment of specified levels of
    our performance under one or more of the measures described
    above relative to the performance of other entities and may also
    be based on the performance of any of our business units or
    divisions or any parent or subsidiary. Performance goals may
    include a minimum threshold level of performance below which no
    award will be earned, levels of performance at which specified
    portions of an award will be earned and a maximum level of
    performance at which an award will be fully earned. In addition,
    the performance goals may be subject to adjustment for one or
    more of the following items: (A)&#160;asset impairments or
    write-downs; (B)&#160;litigation or governmental investigation
    expenses and judgments, verdicts and settlements in connection
    therewith; (C)&#160;the effect of changes in tax law, accounting
    principles or other such laws or provisions affecting reported
    results; (D)&#160;accruals for reorganization and restructuring
    programs; (E)&#160;any extraordinary or nonrecurring items;
    (F)&#160;items of income, gain, loss or expense attributable to
    the operations of any acquired business and costs and expenses
    incurred in connection with mergers and acquisitions;
    (G)&#160;items of income, gain, loss or expense attributable to
    one or more business operations divested by us or the gain or
    loss realized upon the sale of any such business or the assets
    thereof, (H)&#160;accruals for bonus or incentive compensation
    costs and expenses associated with cash-based awards made under
    the Plan or our other bonus or incentive compensation plans, and
    (I)&#160;the impact of foreign currency fluctuations or changes
    in exchange rates.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Stockholder approval of this proposal will also constitute
    approval of the foregoing performance goals for purposes of
    establishing the specific vesting targets for one or more awards
    under the Plan that are intended to qualify as performance-based
    compensation under Section&#160;162(m).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Outstanding awards under the stock issuance program will
    automatically terminate, and no shares of our common stock will
    actually be issued in satisfaction of those awards, if the
    performance goals or service requirements established for such
    awards are not attained. However, the plan administrator will
    have the discretionary authority to issue shares of our common
    stock in satisfaction of one or more outstanding awards as to
    which the designated performance goals or service requirements
    are not attained. In no event, however, will any vesting
    requirements tied to the attainment of performance objectives be
    waived with respect to awards which were intended at the time of
    issuance to qualify as performance-based compensation under
    Section&#160;162(m), except in the event of the
    participant&#146;s death or disability or in connection with a
    change in control of the company, as described under the heading
    &#147;General Provisions&#160;&#151; <I>Change in
    Control.</I>&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Incentive Bonus Program.</I>&#160;&#160;Cash bonus awards,
    performance unit awards and dividend equivalent rights may be
    awarded under the incentive bonus program. Cash bonus awards
    will vest over an eligible individual&#146;s designated service
    period or upon the attainment of pre-established performance
    goals. Performance unit awards will be subject to the following
    parameters:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

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

<TR>
    <TD width="4%"></TD>
    <TD width="3%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;
</TD>
    <TD align="left">
    A performance unit will represent either (i)&#160;a unit with a
    dollar value tied to the level at which pre-established
    corporate performance objectives based on one or more
    performance goals are attained or (ii)&#160;a participating
    interest in a special bonus pool tied to the attainment of
    pre-established corporate performance objectives based on one or
    more performance goals. The amount of the bonus pool may vary
    with the level at which the applicable performance objectives
    are attained, and the value of each performance unit which
    becomes due and payable upon the attained level of performance
    will be determined by dividing
</TD>
</TR>

</TABLE>
<!-- XBRL Paragraph Pagebreak -->
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    22
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

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

<TR>
    <TD width="4%"></TD>
    <TD width="3%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>
</TD>
    <TD align="left">
    the amount of the resulting bonus pool (if any) by the total
    number of performance units issued and outstanding at the
    completion of the applicable performance period.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

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

<TR>
    <TD width="4%"></TD>
    <TD width="3%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;
</TD>
    <TD align="left">
    Performance units may also be structured to include a
    service-vesting requirement which the participant must satisfy
    following the completion of the performance period in order to
    vest in the performance units awarded with respect to that
    performance period.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;
</TD>
    <TD align="left">
    Performance units which become due and payable following the
    attainment of the applicable performance objectives and the
    satisfaction of any applicable service-vesting requirement may
    be paid in cash or shares of our common stock valued at fair
    market value on the payment date.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Dividend equivalent rights may be issued as stand-alone awards
    or in tandem with other awards made under the Plan. Each
    dividend equivalent right award will represent the right to
    receive the economic equivalent of each dividend or
    distribution, whether in cash, securities or other property
    (other than shares of our common stock) which is made per issued
    and outstanding share of our common stock during the term the
    dividend equivalent right remains outstanding. Payment of the
    amounts attributable to such dividend equivalent rights may be
    made, in cash or shares of our common stock, either concurrently
    with the actual dividend or distribution made per issued and
    outstanding share of our common stock or may be made subject to
    a specified vesting schedule or a deferred payment date.
    However, any amounts attributable to dividend equivalent rights
    relating to an award subject to performance-vesting requirements
    will not vest or become payable prior to the vesting of that
    award upon the attainment of the applicable performance goals
    and will, accordingly, be subject to cancellation and forfeiture
    to the same extent as the underlying award in the event the
    performance goals are not attained.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The plan administrator has complete discretion under the program
    to determine which eligible individuals are to receive such
    awards under the program, the time or times when those awards
    are to be made, the form of each such award, the performance
    objectives for each such award, the amount payable at one or
    more designated levels of attained performance, any applicable
    service vesting requirements, the payout schedule for each such
    award and the method by which the award is to be settled (cash
    or shares of our common stock).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In order to assure that the compensation attributable to one or
    more awards under the program will qualify as performance-based
    compensation which will not be subject to the $1&#160;million
    limitation on the income tax deductibility of the compensation
    paid per executive officer which is imposed under Code
    Section&#160;162(m), the plan administrator also has the
    discretionary authority to structure one or more awards under
    the incentive bonus program so that those awards will vest only
    upon the achievement of certain pre-established corporate
    performance goals based on one or more of the performance goals
    described above in the summary of the stock issuance program.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The plan administrator has the discretionary authority at any
    time to accelerate the vesting of any and all awards outstanding
    under the incentive bonus program. However, no vesting
    requirements tied to the attainment of performance objectives
    may be waived with respect to awards which were intended at the
    time of issuance to qualify as performance-based compensation
    under Section&#160;162(m), except in the event of the
    participant&#146;s death or disability or in connection with a
    change in control as described under the heading &#147;General
    Provisions&#160;&#151; <I>Change in Control</I>.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Automatic Grant Program.</I>&#160;&#160;Under the automatic
    grant program, non-employee Board members will receive a series
    of automatic grants of stock options and restricted stock unit
    awards over their period of Board service. All grants under the
    automatic grant program will be made in strict compliance with
    the express provisions of such program, and shareholder approval
    of this proposal will also constitute pre-approval of each
    option grant and restricted stock unit award made under the
    automatic grant program on or after the date of the Annual
    Meeting and the subsequent exercise of those options and the
    subsequent issuance of the shares subject to those restricted
    stock unit awards in accordance with the terms of the program
    summarized below.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Two types of awards will be made under the program:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Initial Awards.</I>&#160;&#160;Each individual who first
    becomes a non-employee member of the Board will at the time of
    his or her election to the board, receive an option grant to
    purchase a specified number of shares of our common stock and a
    restricted stock unit award covering an additional number of
    shares of our common stock, provided that such individual has
    not previously been in our employ or employ of any parent or
    subsidiary
</DIV>
<!-- XBRL Paragraph Pagebreak -->
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    23
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    company. The specific number of shares subject to the initial
    award will be determined by the compensation committee of our
    Board of Directors, but will not exceed 10,000&#160;shares for
    the option component or more than 3,000&#160;shares for the
    restricted stock unit component.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Annual Award.</I>&#160;&#160;On the date of each annual
    shareholders meeting, each individual who will continue to serve
    as a non-employee Board member will automatically be granted an
    option to purchase a specified number of shares of our common
    stock and a restricted stock unit award covering an additional
    number of shares of our common stock, provided such individual
    has served as a non-employee Board member for at least six
    (6)&#160;months. The specific number of shares subject to the
    initial award will be determined by the compensation committee
    of our Board of Directors, but will not exceed 3,000&#160;shares
    for the option component or more than 1,000&#160;shares for the
    restricted stock unit component. There will be no limit on the
    number of such annual awards any one eligible non-employee
    member of the Board may receive over his or her period of
    continued service on the Board, and non-employee members of the
    Board who have previously been in our employ will be eligible to
    receive one or more such annual awards over their period of
    service on the Board.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    It is currently anticipated that the annual award to the
    non-employee Board members at the Annual Meeting will be
    comprise of an option grant for 2,000&#160;shares and a
    restricted stock unit award for an additional 500&#160;shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each option grant under the program will have an exercise price
    per share equal to the fair market value per share of our common
    stock on the grant date and will have a term of seven years,
    subject to earlier termination following the optionee&#146;s
    cessation of Board service. The option will be immediately
    exercisable for all of the option shares; however, we may
    repurchase, at the <I>lower </I>of the exercise price paid per
    share or the fair market value per share, any shares purchased
    under the option which are not vested at the time of the
    optionee&#146;s cessation of Board service. The shares subject
    to each initial automatic option grant will vest in four
    successive equal annual installments upon the optionee&#146;s
    completion of each year of Board service over the four-year
    period measured from the grant date. The shares subject to each
    annual automatic option grant made to a continuing Board member
    will vest upon the earlier of (i)&#160;that individual&#146;s
    completion of one year of Board service measured from the grant
    date or (ii)&#160;such individual&#146;s continuation in Board
    service through the day immediately preceding the date of the
    next annual shareholders meeting following such grant date.
    However, the shares will immediately vest in full upon the
    optionee&#146;s death or disability while a Board member or upon
    the occurrence of certain changes in ownership or control.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The option grants under the automatic option grant program will
    be taxable as non-statutory options under the Federal income tax
    laws.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The initial restricted stock unit award made to a newly elected
    or appointed non-employee Board member will vest in a series of
    four (4)&#160;successive equal annual installments upon his or
    her completion of each year of Board service over the four
    (4)-year period measured from the award date. Each annual
    restricted stock unit award made to a continuing non-employee
    Board member will vest upon his or her continuation in Board
    service through the earlier of (i) the completion of the one
    (1)-year period of service measured from the award date or
    (ii)&#160;the individual&#146;s continuation in such service
    capacity through the day immediately preceding the next annual
    shareholders meeting following such award date. However, each
    restricted stock unit award held by a non-employee Board member
    under the automatic grant program will immediately vest in full
    upon certain changes in control or ownership or his or her
    cessation of Board service by reason of death or disability. As
    the restricted stock units vest in one or more installments, the
    shares of common stock underlying those vested units will be
    promptly issued.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The plan administrator may implement a non-employee Board member
    retainer fee deferral program under the Plan that would allow
    the non-employee Board members the opportunity to elect, prior
    to the start of each calendar year, to convert the Board
    retainer fee to be earned for such year into restricted stock
    units under the stock issuance program that defer the issuance
    of the shares of common stock that vest under those restricted
    stock units until their cessation of Board service or other
    permissible date or event under Code Section&#160;409A.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    24
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Stock
    Awards</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table sets forth, as to our Chief Executive
    Officer, our Chief Financial Officer, our other named executive
    officers (as identified in the Summary Compensation Table, which
    appears elsewhere in this proxy statement) and the other
    individuals and groups indicated, the number of shares of our
    common stock subject to option grants made under the Plan from
    January&#160;1, 2009 through March&#160;31, 2010, together with
    the weighted average exercise price per share in effect for such
    option grants.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="75%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="4%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="5%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Number of <BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Shares<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Weighted <BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Underlying<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Average<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Options<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Exercise Price<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Name and Position</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Granted(#)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Per Share($)</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Ernest A. Bates,&#160;M.D.&#160;
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    None
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Ernest R. Bates
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    None
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Craig K. Tagawa
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    None
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    All current executive officers as a group (3&#160;persons)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    None
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Non-employee directors:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Olin C. Robison
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2.10
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    John F. Ruffle
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2.10
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Raymond C. Stachowiak
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2.82
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Stanely S. Trotman, Jr.&#160;
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2.10
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    All current non-employee directors as a group (4&#160;persons)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    11,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2.43
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    All employees, including current officers who are not executive
    officers, as a group (8&#160;persons)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    None
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table sets forth, as to our Chief Executive
    Officer, our Chief Financial Officer, our other named executive
    officers (as identified in the Summary Compensation Table, which
    appears elsewhere in this proxy statement) and the other
    individuals and groups indicated, the number of shares of common
    stock subject to restricted unit awards made in the aggregate
    under the Plan from January&#160;1, 2009 through March&#160;31,
    2010.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="73%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="12%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="12%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Number of Shares Subject to<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Name and Position</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Restricted Stock Unit Award&#160;(#)</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Ernest A. Bates,&#160;M.D.&#160;
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    None
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Ernest R. Bates
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    None
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Craig K. Tagawa
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    None
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    All current executive officers as a group (3&#160;persons)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    None
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Non-employee directors:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Olin C. Robison
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    500
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    John F. Ruffle
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    500
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Raymond C. Stachowiak
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    500
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Stanely S. Trotman, Jr.&#160;
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    500
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    All current non-employee directors as a group (4&#160;persons)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    All employees, including current officers who are not executive
    officers, as a group (8&#160;persons)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    None
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">New Plan
    Benefits</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    No Awards will be made on the basis of the amendments to the
    Plan that are the subject of this proposal prior to shareholder
    approval of this proposal at the Annual Meeting. The following
    continuing non-employee Board members will each receive an
    automatic option grant for 2,000&#160;shares of our common stock
    and a restricted stock unit award covering an additional
    500&#160;shares upon his election to the Board at the Annual
    Meeting: Olin Robison, John Ruffle, Raymond Stachowiak and
    Stanley Trotman,&#160;Jr. Each such option grant will have an
    exercise price per share equal to the fair market value per
    share of our common stock on the grant date.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    25
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">General
    Provisions</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Vesting Acceleration.</I>&#160;&#160;In the event there
    should occur a change in control, the following special vesting
    acceleration provisions will be in effect for all outstanding
    awards under the discretionary grant, stock issuance and
    incentive bonus programs:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (i)&#160;Each outstanding award will automatically accelerate in
    full upon a change in control, if that award is not assumed or
    otherwise continued in effect by the successor corporation or
    replaced with an incentive program which preserves the intrinsic
    value of the award and provides for the subsequent vesting and
    concurrent payout of that value in accordance with the same
    vesting schedule in effect for that award.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (ii)&#160;To the extent any outstanding award is subject to
    performance vesting upon the attainment of one or more specified
    performance goals, then upon the assumption, continuation or
    replacement of that award in a change in control transaction,
    the performance vesting condition will terminate, and such award
    will thereupon be converted into a service-vesting award that
    will vest upon the completion of a service period co-terminous
    with the portion of the performance period (and any subsequent
    service&#160;&#151; vesting component that was part of the
    original award) remaining at the time of the change in control.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (iii)&#160;The plan administrator will have complete discretion
    to grant one or more awards which will vest in the event the
    individual&#146;s service with us or the successor entity
    terminates within a designated period following a change in
    control transaction in which those awards are assumed or
    otherwise continued in effect.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (iv)&#160;The plan administrator will have the discretion to
    structure one or more awards so that those awards will
    immediately vest upon a change in control, whether or not they
    are to be assumed or otherwise continued in effect.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (v)&#160;Unless the plan administrator establishes a different
    definition for one or more awards, a change in control will be
    deemed to occur for purposes of the Plan in the event
    (a)&#160;we are acquired by merger or asset sale, (b)&#160;there
    occurs any transaction or series of related transactions
    pursuant to which any person or group of related persons
    acquires directly or indirectly beneficial ownership of
    securities possessing (or convertible into or exercisable for
    securities possessing) more than fifty percent (50%) of the
    total combined voting power of our outstanding securities,
    (c)&#160;there occurs a shareholder-approved sale, transfer or
    other disposition of all or substantially all of the
    Company&#146;s assets or (d)&#160;there is a change in a
    majority of the membership of the Board over a period of less
    than thirty-six (36)&#160;months that is not approved by the
    current membership of the Board or their approved successors.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The plan administrator&#146;s authority above extends to any
    awards intended to qualify as performance-based compensation
    under Section&#160;162(m), even though the accelerated vesting
    of those awards may result in their loss of performance-based
    status under Section&#160;162(m).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Changes in Capitalization.</I>&#160;&#160;In the event any
    change is made to the outstanding shares of our common stock by
    reason of any stock split, stock dividend, recapitalization,
    combination of shares, exchange of shares, spin-off transaction
    or other change in corporate structure effected without our
    receipt of consideration or should the value of our outstanding
    shares of common stock be substantially reduced by reason of a
    spin-off transaction or extraordinary dividend or distribution,
    or should there occur any change in control transaction or any
    other merger, consolidation or other reorganization, equitable
    adjustments will be made to: (i)&#160;the maximum number
    <FONT style="white-space: nowrap">and/or</FONT> class
    of securities issuable under the Plan; (ii)&#160;the maximum
    number
    <FONT style="white-space: nowrap">and/or</FONT> class
    of securities that may be issued pursuant to incentive stock
    options granted under the Plan, (iii)&#160;the maximum number
    <FONT style="white-space: nowrap">and/or</FONT> class
    of securities for which any one person may be granted common
    stock-denominated awards under the discretionary grant program
    or the stock issuance and incentive bonus programs of the Plan
    per calendar year; (iv)&#160;the number
    <FONT style="white-space: nowrap">and/or</FONT> class
    of securities and the exercise price per share in effect for
    outstanding stock option or stock appreciation right under the
    discretionary grant and automatic grant programs, (v)&#160;the
    number
    <FONT style="white-space: nowrap">and/or</FONT> class
    of securities subject to each outstanding award under the stock
    issuance and automatic grant programs and the cash consideration
    (if any) payable per share, (vi)&#160;the number
    <FONT style="white-space: nowrap">and/or</FONT> class
    of securities subject to each outstanding award under the
    incentive bonus program denominated in shares of our common
    stock, (vii)&#160;the number
    <FONT style="white-space: nowrap">and/or</FONT> class
    of securities subject to our outstanding repurchase rights under
    the Plan and the repurchase price payable per share and
    (viii)&#160;the maximum number
    <FONT style="white-space: nowrap">and/or</FONT> class
    of securities for which grants may subsequently be made under
    the automatic grant program to new and
</DIV>
<!-- XBRL Paragraph Pagebreak -->
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    26
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    continuing non-employee board members. Such adjustments will be
    made in such manner as the plan administrator deems appropriate,
    and such adjustments will be final, binding and conclusive.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Valuation.</I>&#160;&#160;The fair market value per share of
    our common stock on any relevant date under the Plan will be
    deemed to be equal to the closing selling price per share on
    that date on the American Stock Exchange. On March&#160;31,
    2010, the fair market value per share of our common stock
    determined on such basis was $2.89.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Shareholder Rights and Transferability.</I>&#160;&#160;No
    optionee will have any shareholder rights with respect to the
    option shares until such optionee has exercised the option and
    paid the exercise price for the purchased shares. The holder of
    a stock appreciation right will not have any shareholder rights
    with respect to the shares subject to that right unless and
    until such person exercises the right and becomes the holder of
    record of any shares of our common stock distributed upon such
    exercise. Options are not assignable or transferable other than
    by will or the laws of inheritance following optionee&#146;s
    death, and during the optionee&#146;s lifetime, the option may
    only be exercised by the optionee. However, the plan
    administrator may structure one or more non-statutory options
    under the Plan so that those options will be transferable during
    optionee&#146;s lifetime to one or more members of the
    optionee&#146;s family or to a trust established for the
    optionee
    <FONT style="white-space: nowrap">and/or</FONT> one
    or more such family members or to the optionee&#146;s former
    spouse, to the extent such transfer is in connection with the
    optionee&#146;s estate plan or pursuant to a domestic relations
    order. Stand alone stock appreciation rights will be subject to
    the same transferability restrictions applicable to
    non-statutory options.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A participant will have certain shareholder rights with respect
    to any shares of common stock issued to him or her under the
    Plan, whether or not his or her interest in those shares is
    vested. Accordingly, the participant will have the right to vote
    such shares and to receive any regular cash dividends paid on
    such shares, but will not have the right to transfer such shares
    prior to vesting. A participant will not have any shareholder
    rights with respect to the shares of common stock subject to a
    restricted stock unit or other share right award until that unit
    or award vests and the shares of common stock are actually
    issued thereunder. However, dividend-equivalent units may be
    paid or credited, either in cash or in actual or phantom shares
    of common stock, on outstanding restricted stock units or other
    share-right awards, subject to such terms and conditions as the
    plan administrator may deem appropriate. In no event, however,
    will any dividends or dividend-equivalent units relating to
    awards subject to performance-vesting conditions vest or
    otherwise become payable prior to the time the underlying award
    vests and will accordingly be subject to cancellation and
    forfeiture to the same extent as the underlying award in the
    event those performance conditions are not attained.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Special Tax Election.</I>&#160;&#160;The plan administrator
    may structure one or more awards so that shares of our common
    stock may be used as follows to satisfy all or part of the
    withholding taxes to which such holders of those awards may
    become subject in connection with the issuance, exercise,
    vesting or settlement of those awards:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

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

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    We will automatically withhold, from the shares of common stock
    otherwise issuable upon the issuance, exercise, vesting or
    settlement of such award, a portion of those shares with an
    aggregate fair market value equal to the applicable withholding
    taxes. The shares so withheld shall reduce the number of shares
    of common stock authorized for issuance under the Plan in
    accordance with the applicable reduction parameters in effect
    under the Plan.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The holder of the award may be given the right to deliver to us,
    at the time of the issuance, exercise, vesting or settlement of
    such award, one or more shares of our common stock previously
    acquired by such individual with an aggregate fair market value
    equal to all or a portion of the required withholding taxes. The
    shares so delivered will neither reduce the number of shares of
    common stock authorized for issuance under the Plan nor be added
    to the number of shares authorized for issuance under the Plan.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Amendment and Termination.</I>&#160;&#160;Our Board of
    Directors may amend or modify the Plan at any time, subject to
    any shareholder approval requirements under applicable law or
    regulation or pursuant to the listing standards of the stock
    exchange on which our shares of common stock are at the time
    primarily traded. However, no amendment that would reduce or
    limit the scope of the prohibition on repricing programs set
    forth in the Plan or otherwise eliminated such prohibition shall
    be effective unless approved by the shareholders.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    27
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Unless sooner terminated by our Board of Directors, the Plan
    will terminate on the earliest of (i)&#160;February&#160;22,
    2016, (ii)&#160;the date on which all shares available for
    issuance under the Plan have been issued as fully-vested shares
    or (iii)&#160;the termination of all outstanding Awards in
    connection with certain changes in control or ownership.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Summary
    of Federal Income Tax Consequences</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following is a summary of the Federal income taxation
    treatment applicable to us and the participants who receive
    awards under the Plan.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Option Grants.</I>&#160;&#160;Options granted under the
    discretionary grant program may be either incentive stock
    options which satisfy the requirements of Section&#160;422 of
    the Internal Revenue Code or non-statutory options which are not
    intended to meet such requirements. The Federal income tax
    treatment for the two types of options differs as follows:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Incentive Options.</I>&#160;&#160;No taxable income is
    recognized by the optionee at the time of the option grant, and
    no taxable income is recognized for regular tax purposes at the
    time the option is exercised, although taxable income may arise
    at that time for alternative minimum tax purposes. The optionee
    will recognize taxable income in the year in which the purchased
    shares are sold or otherwise made the subject of certain other
    dispositions. For Federal tax purposes, dispositions are divided
    into two categories: (i)&#160;qualifying, and
    (ii)&#160;disqualifying. A qualifying disposition occurs if the
    sale or other disposition is made more than two (2)&#160;years
    after the date the option for the shares involved in such sale
    or disposition is granted and more than one (1)&#160;year after
    the date the option is exercised for those shares. If the sale
    or disposition occurs before these two periods are satisfied,
    then a disqualifying disposition will result.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon a qualifying disposition, the optionee will recognize
    long-term capital gain in an amount equal to the excess of
    (i)&#160;the amount realized upon the sale or other disposition
    of the purchased shares over (ii)&#160;the exercise price paid
    for the shares. If there is a disqualifying disposition of the
    shares, then the excess of (i)&#160;the fair market value of
    those shares on the exercise date or (if less) the amount
    realized upon such sale or disposition over (ii)&#160;the
    exercise price paid for the shares will be taxable as ordinary
    income to the optionee. Any additional gain recognized upon the
    disposition will be a capital gain.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the optionee makes a disqualifying disposition of the
    purchased shares, then we will be entitled to an income tax
    deduction, for the taxable year in which such disposition
    occurs, equal to the amount of ordinary income recognized by the
    optionee as a result of the disposition. We will not be entitled
    to any income tax deduction if the optionee makes a qualifying
    disposition of the shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Non-Statutory Options.</I>&#160;&#160;No taxable income is
    recognized by an optionee upon the grant of a non-statutory
    option. The optionee will in general recognize ordinary income,
    in the year in which the option is exercised, equal to the
    excess of the fair market value of the purchased shares on the
    exercise date over the exercise price paid for the shares, and
    the optionee will be required to satisfy the tax withholding
    requirements applicable to such income. We will be entitled to
    an income tax deduction equal to the amount of ordinary income
    recognized by the optionee with respect to the exercised
    non-statutory option. The deduction will in general be allowed
    for our taxable year in which such ordinary income is recognized
    by the optionee.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Stock Appreciation Rights.</I>&#160;&#160;No taxable income
    is recognized upon receipt of a stock appreciation right. The
    holder will recognize ordinary income in the year in which the
    stock appreciation right is exercised, in an amount equal to the
    excess of the fair market value of the underlying shares of
    common stock on the exercise date over the exercise price, and
    the holder will be required to satisfy the tax withholding
    requirements applicable to such income. We will be entitled to
    an income tax deduction equal to the amount of ordinary income
    recognized by the holder in connection with the exercise of the
    stock appreciation right. The deduction will be allowed for our
    taxable year in which such ordinary income is recognized.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Restricted Stock Awards.</I>&#160;&#160;The recipient of
    unvested shares of common stock issued under the Plan will not
    recognize any taxable income at the time those shares are issued
    but will have to report as ordinary income, as and when those
    shares subsequently vest, an amount equal to the excess of
    (i)&#160;the fair market value of the shares on the vesting date
    over (ii)&#160;the cash consideration (if any) paid for the
    shares. The recipient may, however, elect under
    Section&#160;83(b) of the Code to include as ordinary income in
    the year the unvested shares are issued an amount equal
</DIV>
<!-- XBRL Paragraph Pagebreak -->
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    28
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    to the excess of (i)&#160;the fair market value of those shares
    on the issue date over (ii)&#160;the cash consideration (if any)
    paid for such shares. If the Section&#160;83(b) election is
    made, the recipient will not recognize any additional income as
    and when the shares subsequently vest. We will be entitled to an
    income tax deduction equal to the amount of ordinary income
    recognized by the recipient with respect to the restricted stock
    award. The deduction will in general be allowed for the taxable
    year in which such ordinary income is recognized by the
    recipient.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Restricted Stock Units.</I>&#160;&#160;No taxable income is
    recognized upon receipt of restricted stock units. The holder
    will recognize ordinary income in the year in which the shares
    subject to the units are actually issued to the holder. The
    amount of that income will be equal to the fair market value of
    the shares on the date of issuance, and the holder will be
    required to satisfy the tax withholding requirements applicable
    to such income. We will be entitled to an income tax deduction
    equal to the amount of ordinary income recognized by the holder
    at the time the shares are issued. The deduction will be allowed
    for the taxable year in which such ordinary income is recognized.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Cash Awards.</I>&#160;&#160;The payment of a cash award will
    result in the recipient&#146;s recognition of ordinary income
    equal to the dollar amount received. The recipient will be
    required to satisfy the tax withholding requirements applicable
    to such income. We will be entitled to an income tax deduction
    equal to the amount of ordinary income recognized by the holder
    at the time the cash award is paid. The deduction will be
    allowed for our taxable year in which such ordinary income is
    recognized.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Performance Units.</I>&#160;&#160;No taxable income is
    recognized upon receipt of performance units. The holder will
    recognize ordinary income in the year in which the performance
    units are settled. The amount of that income will be equal to
    the fair market value of the shares of common stock or cash
    received in settlement of the performance units, and the holder
    will be required to satisfy the tax withholding requirements
    applicable to such income. We will be entitled to an income tax
    deduction equal to the amount of the ordinary income recognized
    by the holder of the performance units at the time those units
    are settled. That deduction will be allowed for the taxable year
    in which such ordinary income is recognized.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Dividend Equivalent Rights.</I>&#160;&#160;No taxable income
    is recognized upon receipt of a dividend equivalent right award.
    The holder will recognize ordinary income in the year in which a
    payment pursuant to such right, whether in cash, securities or
    other property, is made to the holder. The amount of that income
    will be equal to the fair market value of the cash, securities
    or other property received, and the holder will be required to
    satisfy the tax withholding requirements applicable to such
    income. We will be entitled to an income tax deduction equal to
    the amount of the ordinary income recognized by the holder of
    the dividend equivalent right award at the time the dividend or
    distribution is paid to such holder. That deduction will be
    allowed for our taxable year in which such ordinary income is
    recognized.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Deductibility of Executive Compensation.</I>&#160;&#160;We
    anticipate that any compensation deemed paid by us in connection
    with the exercise of non-statutory options or stock appreciation
    rights or the disqualifying disposition of incentive stock
    option shares will qualify as performance-based compensation for
    purposes of Section&#160;162(m) and will not have to be taken
    into account for purposes of the $1&#160;million limitation per
    covered individual on the deductibility of the compensation paid
    to certain of our executive officers. Accordingly, the
    compensation deemed paid with respect to options and stock
    appreciation rights granted under the Plan will remain
    deductible by us without limitation under Section&#160;162(m).
    However, any compensation deemed paid by us in connection with
    shares issued under the stock issuance program or shares or cash
    issued under the incentive bonus program will be subject to the
    $1&#160;million limitation, unless the issuance of the shares or
    cash is tied to the attainment of one or more of the performance
    milestones described above.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Accounting Treatment.</I>&#160;&#160;The accounting
    principles applicable to awards made under the Plan may be
    summarized in general terms as follows:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Pursuant to the accounting standards under established FASB
    Accounting Standards Codification Topic 718, we will be required
    to expense all share-based payments, including grants of stock
    options, stock appreciation rights, restricted stock, restricted
    stock units, performance shares and all other stock-based awards
    under the Plan. Accordingly, stock options and stock
    appreciation rights which we grant to our employees and
    non-employee Board members and payable in shares of our common
    stock will have to be valued at fair value as of the grant date
    under an appropriate valuation formula, and that value will then
    have to
</DIV>
<!-- XBRL Paragraph Pagebreak -->
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    29
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    be charged as a direct compensation expense against our reported
    earnings over the requisite service period. For shares issuable
    upon the vesting of restricted stock units awarded under the
    Plan, we will be required to amortize over the requisite service
    period a compensation cost equal to the fair market value of the
    underlying shares on the date of the award. If any other shares
    are unvested at the time of their direct issuance, then the fair
    market value of those shares at that time will be charged to our
    reported earnings ratably over the requisite service period.
    Such accounting treatment for restricted stock units and direct
    stock issuances will generally be applicable whether vesting is
    tied to service periods or performance goals, although for
    performance-based awards, the grant date fair value will
    initially be determined on the basis of the probable outcome of
    performance goal attainment. The issuance of a fully-vested
    stock bonus will result in an immediate charge to our earnings
    equal to the fair market value of the bonus shares on the
    issuance date.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For performance units awarded under the Plan and payable in
    stock, we will be required to amortize, over the applicable
    performance period and any subsequent service vesting period, a
    compensation cost equal to the fair market value of the
    underlying shares on the date of the award. For performance
    units awarded under the 2010 Plan and payable in cash, we will
    amortize the potential cash expense over the applicable
    performance period and any subsequent service vesting period.
    Dividends or dividend equivalents paid on the portion of an
    award that vests will be charged against our retained earnings.
    However, if the award holder is not required to return the
    dividends or dividend equivalents if they forfeit their awards,
    such dividends or dividend equivalents paid on instruments that
    do not vest will be recognized by us as additional compensation
    cost.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Finally, it should be noted that the compensation expense
    accruable for performance-based awards under the Plan will, in
    general, be subject to adjustment to reflect the actual outcome
    of the applicable performance goals, and any expenses accrued
    for such performance-based awards will be reversed if the
    performance goals are not met, unless those performance goals
    are deemed to constitute market conditions (i.e., because they
    are tied to the price of our common stock) under FASB Accounting
    Standards Codification Topic 718.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Required
    Vote and Board Recommendation</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The affirmative vote of the holders of a majority of the shares
    present in person or represented by proxy and voting on
    Proposal&#160;No.&#160;2, provided that affirmative vote also
    represents at least a majority of the voting power required to
    constitute a quorum at the Annual Meeting, is required for
    approval of the amended and restated Plan.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Recommendation
    of the Board of Directors</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF
    PROPOSAL&#160;NO.&#160;2. PROPERLY EXECUTED PROXIES RETURNED TO
    THE COMPANY WILL BE VOTED FOR THE AMENDMENT AND RESTATEMENT OF
    THE 2006 STOCK INCENTIVE PLAN. </B>Our Board of Directors
    believes that it is in our best interests to implement and
    maintain a comprehensive incentive compensation program that
    will allow us the flexibility to design cash and equity awards
    to attract and retain key personnel essential to our long-term
    growth and financial success and to more closely align the
    interests of those individuals with those of our shareholders.
</DIV>


<!-- link1 "PROPOSAL NO. 3" -->
<DIV align="left"><A NAME="010"></A></DIV>


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">PROPOSAL&#160;NO.&#160;3</FONT></B>
</DIV>


<!-- link1 "RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM" -->
<DIV align="left"><A NAME="011"></A></DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">RATIFICATION
    OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company&#146;s consolidated financial statements for the
    years ended December&#160;31, 2009, 2008 and 2007 have been
    audited by Moss Adams LLP. The Audit Committee has appointed
    Moss Adams LLP to be the Company&#146;s Independent Registered
    Public Accounting Firm for the fiscal year ending
    December&#160;31, 2010, subject to Shareholder ratification at
    the Meeting.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Representatives of Moss Adams LLP are expected to be present at
    the Annual Meeting to respond to appropriate questions and will
    be given an opportunity to make a statement, if they so desire.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    30
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The aggregate fees billed by Moss Adams LLP and their respective
    affiliates for professional services performed for 2009 and 2008
    are as follows:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="51%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="3%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="3%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="3%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="3%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=06 type=gutter -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=06 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=body -->
    <TD width="3%" align="left">&nbsp;</TD>	<!-- colindex=06 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Audit-<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Audit<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Related<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>All Other<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Fees(1)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Fees(2)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Tax Fees(3)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Fees(4)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Total Fees</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>2009</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    132,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    10,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    106,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    248,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>2008</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    150,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    10,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    111,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    271,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    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.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (2) </TD>
    <TD></TD>
    <TD valign="bottom">
    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&#160;404 of the Sarbanes-Oxley
    Act.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (3) </TD>
    <TD></TD>
    <TD valign="bottom">
    Consists of tax compliance and preparation and other tax
    services.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (4) </TD>
    <TD></TD>
    <TD valign="bottom">
    Consists of fees for all other services other than those
    reported above.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    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 style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Policy
    on Audit Committee Pre-Approval of Audit and Permissible
    Non-Audit Services of the Independent Registered Public
    Accounting Firm</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    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 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 style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE IN FAVOR
    OF PROPOSAL&#160;NO.&#160;3. 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 31, 2010.</B>
</DIV>


<!-- link1 "SHAREHOLDER PROPOSALS" -->
<DIV align="left"><A NAME="012"></A></DIV>


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">SHAREHOLDER
    PROPOSALS</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Shareholders who intend to have a proposal considered for
    inclusion in the Company&#146;s proxy materials for presentation
    at the 2011 Annual Meeting of Shareholders (the &#147;2011
    Annual Meeting&#148;) pursuant to
    <FONT style="white-space: nowrap">Rule&#160;14a-8</FONT>
    of the Exchange Act must submit the proposal to the Company no
    later than January&#160;1, 2011. Pursuant to
    <FONT style="white-space: nowrap">Rule&#160;14a-4(c)</FONT>
    of the Exchange Act, shareholders who intend to present a
    proposal at the 2011 Annual Meeting without inclusion of such
    proposal in the proxy materials are required to notify the
    Company of such proposal not later than March&#160;16, 2011, so
    long as the 2011 Annual Meeting is not advanced or delayed by
    more than 30&#160;days from June&#160;2, 2011 (the anniversary
    date of the prior year&#146;s annual meeting). If the Company
    does not receive notification of the proposal within that time
    frame, the proxy holders will be allowed to use their
    discretionary voting authority to vote on such
</DIV>
<!-- XBRL Paragraph Pagebreak -->
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    31
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    proposal when the proposal is raised at the 2011 Annual Meeting.
    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>


<!-- link1 "ANNUAL REPORT" -->
<DIV align="left"><A NAME="013"></A></DIV>


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">ANNUAL
    REPORT</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company&#146;s 2009 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: 24pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    By Order of the Board of Directors
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <IMG src="f55641f5564101.gif" alt="-s- Willie R. Barnes">
</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Willie R. Barnes
</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Corporate Secretary</I>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Dated: April&#160;30, 2010
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    San&#160;Francisco, California
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    32
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">AMERICAN
    SHARED HOSPITAL SERVICES</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><U><FONT style="font-family: 'Times New Roman', Times">INCENTIVE
    COMPENSATION PLAN<BR>
    (FORMERLY THE 2006 STOCK INCENTIVE PLAN)</FONT></U></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><U><FONT style="font-family: 'Times New Roman', Times">AS
    AMENDED AND RESTATED EFFECTIVE MARCH 18, 2010</FONT></U></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <FONT style="font-family: 'Times New Roman', Times">ARTICLE&#160;ONE<BR>
    </FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <U><FONT style="font-family: 'Times New Roman', Times">GENERAL
    PROVISIONS</FONT></U>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

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

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">I.&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">PURPOSE
    OF THE PLAN</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This Incentive Compensation Plan is intended to promote the
    interests of American Shared Hospital Services, a California
    corporation, by providing eligible persons in the
    Corporation&#146;s service with the opportunity to participate
    in one or more cash or equity incentive compensation programs
    designed to encourage them to continue their service
    relationship with the Corporation.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Capitalized terms shall have the meanings assigned to such terms
    in the attached Appendix.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

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

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">II.&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">STRUCTURE
    OF THE PLAN</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A.&#160;The Plan shall be divided into four separate equity
    incentive programs:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

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

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the Discretionary Grant Program under which eligible persons
    may, at the discretion of the Plan Administrator, be granted
    options to purchase shares of Common Stock or stock appreciation
    rights tied to the value of such Common Stock,
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the Stock Issuance Program under which eligible persons may, at
    the discretion of the Plan Administrator, be issued shares of
    Common Stock pursuant to restricted stock awards, restricted
    stock units or other stock-based awards which vest upon the
    completion of a designated service period or the attainment of
    pre-established performance milestones, or such shares of Common
    Stock may be issued through direct purchase or as a bonus for
    services rendered the Corporation (or any Parent or Subsidiary),
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the Incentive Bonus Program under which eligible persons may, at
    the discretion of the Plan Administrator, be provided with
    incentive bonus opportunities through performance unit awards
    and special cash incentive programs tied to the attainment of
    pre-established performance milestones,&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the Automatic Grant Program under which eligible non-employee
    Board members will automatically receive grants at designated
    intervals over their period of continued Board service.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    B.&#160;The provisions of Articles&#160;One and Six shall apply
    to all incentive compensation programs under the Plan and shall
    govern the interests of all persons under the Plan.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">III.
    ADMINISTRATION OF THE PLAN</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A.&#160;The Compensation Committee shall have sole and exclusive
    authority to administer the Discretionary Grant, Stock Issuance
    and Incentive Bonus Programs with respect to Section&#160;16
    Insiders. Administration of the Discretionary Grant, Stock
    Issuance and Incentive Bonus Programs with respect to all other
    persons eligible to participate in those programs may, at the
    Board&#146;s discretion, be vested in the Compensation Committee
    or a Secondary Board Committee, or the Board may retain the
    power to administer those programs with respect to all such
    persons. However, any Awards made to the members of the
    Compensation Committee other than pursuant to the Automatic
    Grant Program must be authorized by a disinterested majority of
    the Board.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    B.&#160;Members of the Compensation Committee or any Secondary
    Board Committee shall serve for such period of time as the Board
    may determine and may be removed by the Board at any time. The
    Board may also at any time terminate the functions of any
    Secondary Board Committee and reassume all powers and authority
    previously delegated to such committee.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

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

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    C.&#160;Each Plan Administrator shall, within the scope of its
    administrative functions under the Plan, have full power and
    authority (subject to the provisions of the Plan) to establish
    such rules and regulations as it may deem appropriate for proper
    administration of the Discretionary Grant, Stock Issuance and
    Incentive Bonus Programs and to make such determinations under,
    and issue such interpretations of, the provisions of those
    programs and any outstanding Awards thereunder as it may deem
    necessary or advisable. Decisions of the Plan Administrator
    within the scope of its administrative functions under the Plan
    shall be final and binding on all parties who have an interest
    in the Discretionary Grant, Stock Issuance and Incentive Bonus
    Programs under its jurisdiction or any Award thereunder.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    D.&#160;Service as a Plan Administrator by the members of the
    Compensation Committee or the Secondary Board Committee shall
    constitute service as Board members, and the members of each
    such committee shall accordingly be entitled to full
    indemnification and reimbursement as Board members for their
    service on such committee. No member of the Compensation
    Committee or the Secondary Board Committee shall be liable for
    any act or omission made in good faith with respect to the Plan
    or any Award made thereunder.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    E.&#160;Administration of the Automatic Grant Program shall be
    self-executing in accordance with the terms of that program, and
    no Plan Administrator shall exercise any discretionary functions
    with respect to any Award made under that program, except that
    the Compensation Committee shall have the express authority to
    establish from time to time the specific number of shares to be
    subject to the initial and annual Awards made to the
    non-employee Board members under such program.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

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

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">IV.&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">ELIGIBILITY</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A.&#160;The persons eligible to participate in the Plan are as
    follows:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (i)&#160;Employees,
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (ii)&#160;non-employee members of the Board or the board of
    directors of any Parent or Subsidiary,&#160;and
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (iii)&#160;consultants and other independent advisors who
    provide services to the Corporation (or any Parent or
    Subsidiary).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    B.&#160;The Plan Administrator shall have full authority to
    determine, (i)&#160;with respect to Awards made under the
    Discretionary Grant Program, which eligible persons are to
    receive such Awards, the time or times when those Awards are to
    be made, the number of shares to be covered by each such Award,
    the time or times when the Award is to vest and become
    exercisable, the maximum term for which such Award is to remain
    outstanding and the status of a granted option as either an
    Incentive Option or a Non-Statutory Option, (ii)&#160;with
    respect to Awards made under the Stock Issuance Program, which
    eligible persons are to receive such Awards, the time or times
    when the Awards are to be made, the number of shares subject to
    each such Award, the vesting and issuance schedules applicable
    to the shares which are the subject of such Award and the cash
    consideration (if any) payable for those shares, and
    (iii)&#160;with respect to Awards under the Incentive Bonus
    Program, which eligible persons are to receive such Awards, the
    time or times when the Awards are to be made, the performance
    objectives for each such Award, the amounts payable at
    designated levels of attained performance, any applicable
    service vesting requirements, the payout schedule for each such
    Award and the form (cash or shares of Common Stock) in which the
    Award is to be settled.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    C.&#160;The Plan Administrator shall have the absolute
    discretion to grant options or stock appreciation rights in
    accordance with the Discretionary Grant Program, to effect stock
    issuances and other stock-based awards in accordance with the
    Stock Issuance Program and to grant incentive bonus awards in
    accordance with the Incentive Bonus Program.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    D.&#160;The individuals who shall be eligible to participate in
    the Automatic Grant Program shall be limited to (i)&#160;those
    individuals who first become non-employee Board members on or
    after the Plan Effective Date, whether through appointment by
    the Board or election by the Corporation&#146;s shareholders,
    and (ii)&#160;those individuals who continue to serve as
    non-employee Board members on or after the Plan Effective Date.
    A non-employee Board member who has previously been in the
    employ of the Corporation (or any Parent or Subsidiary) shall
    not be eligible to receive an Award under the Automatic Grant
    Program at the time he or she first becomes a non-employee Board
</DIV>
<!-- XBRL Paragraph Pagebreak -->
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    2
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    member, but shall be eligible to receive periodic Awards under
    the Automatic Grant Program while he or she continues to serve
    as a non-employee Board member.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

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

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">V.&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">STOCK
    SUBJECT TO THE PLAN</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A.&#160;The stock issuable under the Plan shall be shares of
    authorized but unissued or reacquired Common Stock, including
    shares repurchased by the Corporation on the open market. The
    number of shares of Common Stock reserved for issuance over the
    term of the Plan shall be limited to one million six hundred
    thirty thousand (1,630,000) shares. Such share reserve is
    comprised of (i)&#160;the initial reserve of seven hundred fifty
    thousand (750,000) shares of Common Stock authorized under the
    Plan and (ii)&#160;an increase of an additional eight hundred
    eighty thousand (880,000) shares of Common Stock authorized by
    the Board on March&#160;18, 2010 and subject to shareholder
    approval at the 2010 Annual Meeting.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    B.&#160;The number of shares of Common Stock reserved for award
    and issuance under this Plan pursuant to Section&#160;V.A of
    this Article&#160;One shall be reduced: (i)&#160;on a
    one-for-one basis for each share of Common Stock subject to an
    Award made under the Discretionary Grant Program or subject to a
    stock option grant made under the Automatic Grant Program,
    (ii)&#160;on a one-for-one basis for each share of Common Stock
    issued pursuant to a Full Value Award made under the Stock
    Issuance, Incentive Bonus and Automatic Grant Programs prior to
    March&#160;18, 2010 and (iii)&#160;by a fixed ratio of
    1.59&#160;shares of Common Stock for each share of Common Stock
    issued pursuant to a Full Value Award made under the Stock
    Issuance, Incentive Bonus and Automatic Grant Programs on or
    after March&#160;18, 2010.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    C.&#160;The Plan serves as the successor to the Predecessor
    Plans, and no further stock option grants or stock issuances are
    to be made under those Predecessor Plans on or after the Plan
    Effective Date. All options outstanding under the Predecessor
    Plans on the Plan Effective Date were transferred to this Plan
    as part of the initial share reserve hereunder and shall
    continue in full force and effect in accordance with their
    terms, and no provision of this Plan shall be deemed to affect
    or otherwise modify the rights or obligations of the holders of
    those options with respect to their acquisition of shares of
    Common Stock thereunder. To the extent any options outstanding
    under the Predecessor Plans on the Plan Effective Date expire or
    terminate unexercised, the number of shares of Common Stock
    subject to those expired or terminated options at the time of
    expiration or termination shall be available for one or more
    Awards made under this Plan.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    D.&#160;The maximum number of shares of Common Stock that may be
    issued pursuant to Incentive Options granted under Plan shall
    not exceed one million six hundred thirty thousand (1,630,000)
    shares. However, in the event the shareholders do not approve
    the eight hundred eighty thousand (880,000) share increase to
    the authorized reserve under the Plan at the 2010 Annual
    Meeting, then the maximum number of shares of Common Stock that
    may be issued pursuant to Incentive Options granted under Plan
    shall be continue to be limited to seven hundred fifty thousand
    (750,000) shares of Common Stock.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    E.&#160;Each person participating in the Plan shall be subject
    the following limitations:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

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

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    for Awards denominated in terms of shares of Common Stock
    (whether payable in Common Stock, cash or a combination of
    both), the maximum number of shares of Common Stock for which
    such Awards may be made to such person in any calendar year
    shall not exceed One Hundred Fifty Thousand (150,000) shares of
    Common Stock in the aggregate; provided, however, that for the
    calendar year in which such person first commences Service, the
    foregoing limitation shall be increased to Two Hundred Thousand
    (200,000) shares,&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    for Awards denominated in terms of cash (whether payable in
    cash, Common Stock or a combination of both) and subject to one
    or more performance-vesting conditions, the maximum dollar
    amount for which such Awards may be made to such person in any
    calendar year shall not exceed One Million Five Hundred Thousand
    Dollars ($1,500,000.00) for each calendar year within the
    applicable performance measurement period, with any such
    performance period not to exceed five (5)&#160;years and with
    pro-ration based on the foregoing dollar amount in the event of
    any fractional calendar year included within such performance
    period.
</TD>
</TR>

</TABLE>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    3
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    F.&#160;Shares of Common Stock subject to outstanding Awards
    made under the Plan (including the options transferred from the
    Predecessor Plans) shall be available for subsequent issuance
    under the Plan to the extent those Awards expire or terminate
    for any reason prior to the issuance of the shares of Common
    Stock subject to those Awards. Such shares shall be added back
    to the number of shares of Common Stock reserved for award and
    issuance under the Plan as follows:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (i)&#160;for each share of Common Stock subject to such an
    expired, forfeited, cancelled or terminated Award made under the
    Discretionary Grant Program (including the options transferred
    from the Predecessor Plans) or subject to an option grant made
    under the Automatic Grant Program, one share of Common Stock
    shall become available for subsequent award and issuance under
    the Plan,
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (ii)&#160;for each share of Common Stock subject to a forfeited
    or cancelled Full Value Award made under the Stock Issuance,
    Automatic Grant or Incentive Bonus Program prior to
    March&#160;18, 2010, one share shall become available for
    subsequent award and issuance,
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (iii)&#160;for each share of Common Stock subject to a forfeited
    or cancelled Full Value Award made under the Stock Issuance,
    Automatic Grant or Incentive Bonus Program on or after
    March&#160;18, 2010, 1.59&#160;shares shall become available for
    subsequent award and issuance,&#160;and
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (iv)&#160;for each unvested share of Common Stock issued under
    the Discretionary Grant or Stock Issuance Program for cash
    consideration not less than the Fair Market Value per share of
    Common Stock on the Award date and subsequently repurchased by
    the Corporation, at a price per share not greater than the
    original issue price paid per share, pursuant to the
    Corporation&#146;s repurchase rights under the Plan, one share
    shall become available for subsequent award and issuance under
    the Plan.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    G.&#160;Should the exercise price of an option under the Plan be
    paid with shares of Common Stock, then the authorized reserve of
    Common Stock under the Plan shall be reduced by the gross number
    of shares for which that option is exercised, and not by the net
    number of shares issued under the exercised stock option. If
    shares of Common Stock otherwise issuable under the Plan are
    withheld by the Corporation in satisfaction of the withholding
    taxes incurred in connection with the issuance, exercise or
    vesting of an Award, then the number of shares of Common Stock
    available for issuance under the Plan shall be reduced by the
    gross number of shares issued, exercised or vesting under such
    Award, calculated in each instance prior to any such share
    withholding.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    H.&#160;If any change is made to the Common Stock by reason of
    any stock split, stock dividend, recapitalization, combination
    of shares, exchange of shares, spin-off transaction or other
    change affecting the outstanding Common Stock as a class without
    the Corporation&#146;s receipt of consideration, or should the
    value of outstanding shares of Company Stock be substantially
    reduced as a result of a spin-off transaction or an
    extraordinary dividend or distribution, or should there occur
    any merger, consolidation or other reorganization (including,
    without limitation, a Change in Control transaction), then
    equitable adjustments shall be made by the Plan Administrator to
    (i)&#160;the maximum number
    <FONT style="white-space: nowrap">and/or</FONT> class
    of securities issuable under the Plan, (ii)&#160;the maximum
    number
    <FONT style="white-space: nowrap">and/or</FONT> class
    of securities for which any one person may receive Common
    Stock-denominated Awards under the Plan per calendar year,
    (iii)&#160;the maximum number
    <FONT style="white-space: nowrap">and/or</FONT> class
    of securities that may be issued pursuant to Incentive Options
    granted under the Plan, (iv)&#160;the maximum number
    <FONT style="white-space: nowrap">and/or</FONT> class
    of securities for which stock option grants and restricted stock
    unit awards may subsequently be made under the Automatic Grant
    Program to new and continuing non-employee Board members,
    (v)&#160;the number
    <FONT style="white-space: nowrap">and/or</FONT> class
    of securities and the exercise or base price per share in effect
    under each outstanding Award under the Discretionary Grant
    Program, (vi)&#160;the number
    <FONT style="white-space: nowrap">and/or</FONT> class
    of securities subject to each outstanding Award under the Stock
    Issuance Program and the cash consideration (if any) payable per
    share, (vii)&#160;the number
    <FONT style="white-space: nowrap">and/or</FONT> class
    of securities subject to each outstanding Award under the
    Incentive Bonus Program denominated in shares of Common Stock
    and (viii)&#160;the number
    <FONT style="white-space: nowrap">and/or</FONT> class
    of securities subject to the Corporation&#146;s outstanding
    repurchase rights under the Plan and the repurchase price
    payable per share. The adjustments shall be made in such manner
    as the Plan Administrator deems appropriate, and such
    adjustments shall be final, binding and conclusive.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    I.&#160;Outstanding Awards under the Plan shall in no way affect
    the right of the Corporation to adjust, reclassify, reorganize
    or otherwise change its capital or business structure or to
    merge, consolidate, dissolve, liquidate or sell or transfer all
    or any part of its business or assets.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    4
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <FONT style="font-family: 'Times New Roman', Times">ARTICLE&#160;TWO<BR>
    </FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <U><FONT style="font-family: 'Times New Roman', Times">DISCRETIONARY
    GRANT PROGRAM</FONT></U>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

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

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">I.&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">OPTION
    TERMS</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each option shall be evidenced by one or more documents in the
    form approved by the Plan Administrator; <U>provided</U>,
    however, that each such document shall comply with the terms
    specified below. Each document evidencing an Incentive Option
    shall, in addition, be subject to the provisions of the Plan
    applicable to such options.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A.&#160;<B><U>Exercise Price</U></B>.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    1.&#160;The exercise price per share shall be fixed by the Plan
    Administrator; provided, however, that such exercise price shall
    not be less than one hundred percent (100%) of the Fair Market
    Value per share of Common Stock on the grant date.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    2.&#160;The exercise price shall become immediately due upon
    exercise of the option and shall, subject to the provisions of
    the documents evidencing the option, be payable in one or more
    of the forms specified below:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (i)&#160;cash or check made payable to the Corporation,
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (ii)&#160;shares of Common Stock valued at Fair Market Value on
    the Exercise Date and held for the requisite period (if any)
    necessary to avoid any additional charges to the
    Corporation&#146;s earnings for financial reporting purposes,
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (iii)&#160;shares of Common Stock otherwise issuable under the
    option but withheld by the Corporation in satisfaction of the
    exercise price, with such withheld shares to be valued at Fair
    Market Value on the exercise date,&#160;or
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (iv)&#160;to the extent the option is exercised for vested
    shares, through a special sale and remittance procedure pursuant
    to which the Optionee shall concurrently provide instructions to
    (a)&#160;a brokerage firm (reasonably satisfactory to the
    Corporation for purposes of administering such procedure in
    compliance with the Corporation&#146;s
    pre-clearance/pre-notification policies) to effect the immediate
    sale of the purchased shares and remit to the Corporation, out
    of the sale proceeds available on the settlement date,
    sufficient funds to cover the aggregate exercise price payable
    for the purchased shares plus all applicable income and
    employment taxes required to be withheld by the Corporation by
    reason of such exercise and (b)&#160;the Corporation to deliver
    the certificates for the purchased shares directly to such
    brokerage firm on such settlement date in order to complete the
    sale.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Except to the extent such sale and remittance procedure is
    utilized, payment of the exercise price for the purchased shares
    must be made on the Exercise Date.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    B.&#160;<B><U>Exercise and Term of Options.</U> </B>Each option
    shall be exercisable at such time or times, during such period
    and for such number of shares as shall be determined by the Plan
    Administrator and set forth in the documents evidencing the
    option. However, no option shall have a term in excess of seven
    (7)&#160;years measured from the grant date.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    C.&#160;<B><U>Effect of Termination of Service</U></B>.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    1.&#160;The following provisions shall govern the exercise of
    any options granted pursuant to the Discretionary Grant Program
    that are outstanding at the time of the Optionee&#146;s
    cessation of Service or death:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (i)&#160;Any option outstanding at the time of the
    Optionee&#146;s cessation of Service for any reason shall remain
    exercisable for such period of time thereafter as shall be
    determined by the Plan Administrator and set forth in the
    documents evidencing the option, but no such option shall be
    exercisable after the expiration of the option term.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (ii)&#160;Any option held by the Optionee at the time of the
    Optionee&#146;s death and exercisable in whole or in part at
    that time may be subsequently exercised by the personal
    representative of the Optionee&#146;s estate
</DIV>
<!-- XBRL Paragraph Pagebreak -->
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    5
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    or by the person or persons to whom the option is transferred
    pursuant to the Optionee&#146;s will or the laws of inheritance
    or by the Optionee&#146;s designated beneficiary or
    beneficiaries of that option.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (iii)&#160;Should the Optionee&#146;s Service be terminated for
    Misconduct or should the Optionee otherwise engage in Misconduct
    while holding one or more outstanding options granted under this
    Article&#160;Two, then all of those options shall terminate
    immediately and cease to be outstanding.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (iv)&#160;During the applicable post-Service exercise period,
    the option may not be exercised for more than the number of
    vested shares for which the option is at the time exercisable.
    No additional shares shall vest under the option following the
    Optionee&#146;s cessation of Service, except to the extent (if
    any) specifically authorized by the Plan Administrator in its
    sole discretion pursuant to an express written agreement with
    the Optionee. Upon the expiration of the applicable exercise
    period or (if earlier) upon the expiration of the option term,
    the option shall terminate and cease to be outstanding for any
    shares for which the option has not been exercised.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    2.&#160;The Plan Administrator shall have complete discretion,
    exercisable either at the time an option is granted or at any
    time while the option remains outstanding, to:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (i)&#160;extend the period of time for which the option is to
    remain exercisable following the Optionee&#146;s cessation of
    Service from the limited exercise period otherwise in effect for
    that option to such greater period of time as the Plan
    Administrator shall deem appropriate, but in no event beyond the
    expiration of the option term,
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (ii)&#160;include an automatic extension provision whereby the
    specified post-Service exercise period in effect for any option
    granted under this Article&#160;Two shall automatically be
    extended by an additional period of time equal in duration to
    any interval within the specified post-Service exercise period
    during which the exercise of that option or the immediate sale
    of the shares acquired under such option could not be effected
    in compliance with applicable federal and state securities laws,
    but in no event shall such an extension result in the
    continuation of such option beyond the expiration date of the
    term of that option, and/or
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (iii)&#160;permit the option to be exercised, during the
    applicable post-Service exercise period, not only with respect
    to the number of vested shares of Common Stock for which such
    option is exercisable at the time of the Optionee&#146;s
    cessation of Service but also with respect to one or more
    additional installments in which the Optionee would have vested
    had the Optionee continued in Service.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    D.&#160;<B><U>Shareholder Rights</U>. </B>The holder of an
    option shall have no shareholder rights with respect to the
    shares subject to the option until such person shall have
    exercised the option, paid the exercise price and become a
    holder of record of the purchased shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    E.&#160;<B><U>Repurchase Rights</U>.</B> The Plan Administrator
    shall have the discretion to grant options which are exercisable
    for unvested shares of Common Stock. Should the Optionee cease
    Service while such shares are unvested, the Corporation shall
    have the right to repurchase any or all of those unvested shares
    at a price per share equal to the <B><I>lower </I></B>of
    (i)&#160;the exercise price paid per share or (ii)&#160;the Fair
    Market Value per share of Common Stock at the time of
    repurchase. The terms upon which such repurchase right shall be
    exercisable (including the period and procedure for exercise and
    the appropriate vesting schedule for the purchased shares) shall
    be established by the Plan Administrator and set forth in the
    document evidencing such repurchase right.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    F.&#160;<B><U>Transferability of Options</U></B>. The
    transferability of options granted under the Plan shall be
    governed by the following provisions:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (i)&#160;<I><U>Incentive Options</U></I>:&#160;&#160;During the
    lifetime of the Optionee, Incentive Options shall be exercisable
    only by the Optionee and shall not be assignable or transferable
    other than by will or the laws of inheritance following the
    Optionee&#146;s death.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (ii)&#160;<I><U>Non-Statutory
    Options</U></I>.&#160;&#160;Non-Statutory Options shall be
    subject to the same limitation on transfer as Incentive Options,
    except that the Plan Administrator may structure one or more
    Non-Statutory Options so that the option may be assigned in
    whole or in part during the Optionee&#146;s lifetime to
</DIV>
<!-- XBRL Paragraph Pagebreak -->
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    6
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    one or more Family Members of the Optionee or to a trust
    established exclusively for the Optionee
    <FONT style="white-space: nowrap">and/or</FONT> one
    or more such Family Members, to the extent such assignment is in
    connection with the Optionee&#146;s estate plan or pursuant to a
    domestic relations order. The assigned portion may only be
    exercised by the person or persons who acquire a proprietary
    interest in the option pursuant to the assignment. The terms
    applicable to the assigned portion shall be the same as those in
    effect for the option immediately prior to such assignment and
    shall be set forth in such documents issued to the assignee as
    the Plan Administrator may deem appropriate.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (iii)&#160;<I><U>Beneficiary
    Designations</U></I>.&#160;&#160;Notwithstanding the foregoing,
    the Optionee may designate one or more persons as the
    beneficiary or beneficiaries of his or her outstanding options
    under this Article&#160;Two (whether Incentive Options or
    Non-Statutory Options), and those options shall, in accordance
    with such designation, automatically be transferred to such
    beneficiary or beneficiaries upon the Optionee&#146;s death
    while holding those options. Such beneficiary or beneficiaries
    shall take the transferred options subject to all the terms and
    conditions of the applicable agreement evidencing each such
    transferred option, including (without limitation) the limited
    time period during which the option may be exercised following
    the Optionee&#146;s death.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

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

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">II.&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">INCENTIVE
    OPTIONS</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The terms specified below shall be applicable to all Incentive
    Options. Except as modified by the provisions of this
    Section&#160;II, all the provisions of Articles&#160;One, Two
    and Five shall be applicable to Incentive Options. Options which
    are specifically designated as Non-Statutory Options when issued
    under the Plan shall <U>not</U> be subject to the terms of this
    Section&#160;II.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A.&#160;<B><U>Eligibility</U>. </B>Incentive Options may only be
    granted to Employees.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    B.&#160;<B><U>Dollar Limitation</U>. </B>The aggregate Fair
    Market Value of the shares of Common Stock (determined as of the
    respective date or dates of grant) for which one or more options
    granted to any Employee under the Plan (or any other option plan
    of the Corporation or any Parent or Subsidiary) may for the
    first time become exercisable as Incentive Options during any
    one calendar year shall not exceed the sum of One Hundred
    Thousand Dollars ($100,000).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To the extent the Employee holds two (2)&#160;or more such
    options which become exercisable for the first time in the same
    calendar year, then for purposes of the foregoing limitations on
    the exercisability of those options as Incentive Options, such
    options shall be deemed to become first exercisable in that
    calendar year on the basis of the chronological order in which
    they were granted, except to the extent otherwise provided under
    applicable law or regulation.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    C.&#160;<B><U>10% Shareholder</U>. </B>If any Employee to whom
    an Incentive Option is granted is a 10% Shareholder, then the
    exercise price per share shall not be less than one hundred ten
    percent (110%) of the Fair Market Value per share of Common
    Stock on the option grant date, and the option term shall not
    exceed five (5)&#160;years measured from the option grant date.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">III.
    STOCK APPRECIATION RIGHTS</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A.&#160;<B><U>Authority</U></B>. The Plan Administrator shall
    have full power and authority, exercisable in its sole
    discretion, to grant stock appreciation rights in accordance
    with this Section&#160;III to selected Optionees or other
    individuals eligible to receive option grants under the
    Discretionary Grant Program.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    B.&#160;<B><U>Types</U></B>. Two types of stock appreciation
    rights shall be authorized for issuance under this
    Section&#160;III: (i)&#160;tandem stock appreciation rights
    (&#147;Tandem Rights&#148;) and (ii)&#160;stand-alone stock
    appreciation rights (&#147;Stand-alone Rights&#148;).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    C.&#160;<B><U>Tandem Rights</U></B>. The following terms and
    conditions shall govern the grant and exercise of Tandem Rights.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    1.&#160;One or more Optionees may be granted a Tandem Right,
    exercisable upon such terms and conditions as the Plan
    Administrator may establish, to elect between the exercise of
    the underlying option for shares of Common Stock or the
    surrender of that option in exchange for a distribution from the
    Corporation in an amount
</DIV>
<!-- XBRL Paragraph Pagebreak -->
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    7
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    equal to the excess of (i)&#160;the Fair Market Value (on the
    option surrender date) of the number of shares in which the
    Optionee is at the time vested under the surrendered option (or
    surrendered portion thereof) over (ii)&#160;the aggregate
    exercise price payable for such vested shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    2.&#160;No such option surrender shall be effective unless it is
    approved by the Plan Administrator, either at the time of the
    actual option surrender or at any earlier time. If the surrender
    is so approved, then the distribution to which the Optionee
    shall accordingly become entitled under this Section&#160;III
    shall be made in shares of Common Stock valued at Fair Market
    Value on the option surrender date.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    3.&#160;If the surrender of an option is not approved by the
    Plan Administrator, then the Optionee shall retain whatever
    rights the Optionee had under the surrendered option (or
    surrendered portion thereof) on the option surrender date and
    may exercise such rights at any time prior to the <I>later
    </I>of (i)&#160;five (5)&#160;business days after the receipt of
    the rejection notice or (ii)&#160;the last day on which the
    option is otherwise exercisable in accordance with the terms of
    the instrument evidencing such option, but in no event may such
    rights be exercised more than seven (7)&#160;years after the
    date of the option grant.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    D.&#160;<B><U>Stand-Alone Rights</U></B>. The following terms
    and conditions shall govern the grant and exercise of
    Stand-alone Rights:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    1.&#160;One or more individuals eligible to participate in the
    Discretionary Grant Program may be granted a Stand-alone Right
    not tied to any underlying option under this Discretionary Grant
    Program. The Stand-alone Right shall relate to a specified
    number of shares of Common Stock and shall be exercisable upon
    such terms and conditions as the Plan Administrator may
    establish. In no event, however, may the Stand-alone Right have
    a maximum term in excess of seven (7)&#160;years measured from
    the grant date. Upon exercise of the Stand-alone Right, the
    holder shall be entitled to receive a distribution from the
    Corporation in an amount equal to the excess of (i)&#160;the
    aggregate Fair Market Value (on the exercise date) of the shares
    of Common Stock underlying the exercised right over
    (ii)&#160;the aggregate base price in effect for those shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    2.&#160;The number of shares of Common Stock underlying each
    Stand-alone Right and the base price in effect for those shares
    shall be determined by the Plan Administrator in its sole
    discretion at the time the Stand-alone Right is granted. In no
    event, however, may the base price per share be less than the
    Fair Market Value per underlying share of Common Stock on the
    grant date. In the event outstanding Stand-alone Rights are to
    be assumed in connection with a Change in Control transaction or
    otherwise continued in effect, the shares of Common Stock
    underlying each such Stand-alone Right shall be adjusted
    immediately after such Change in Control so as to apply to the
    number and class of securities into which those shares of Common
    Stock would have been converted in consummation of such Change
    in Control had those shares actually been outstanding at that
    time. Appropriate adjustments to reflect such Change in Control
    shall also be made to the base price per share in effect under
    each outstanding Stand-alone Right, <U>provided</U> the
    aggregate base price shall remain the same. To the extent the
    actual holders of the Corporation&#146;s outstanding Common
    Stock receive cash consideration for their Common Stock in
    consummation of the Change in Control, the successor corporation
    may, in connection with the assumption or continuation of the
    outstanding Stand-alone Rights under the Discretionary Grant
    Program, substitute, for the securities underlying those assumed
    rights, one or more shares of its own common stock with a fair
    market value equivalent to the cash consideration paid per share
    of Common Stock in the Change in Control transaction.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    3.&#160;Stand-alone Rights shall be subject to the same
    transferability restrictions applicable to Non-Statutory Options
    and may not be transferred during the holder&#146;s lifetime,
    except if such assignment is in connection with the
    holder&#146;s estate plan and is to one or more Family Members
    of the holder or to a trust established for the holder
    <FONT style="white-space: nowrap">and/or</FONT> one
    or more such Family Members or pursuant to a domestic relations
    order covering the Stand-alone Right as marital property. In
    addition, one or more beneficiaries may be designated for an
    outstanding Stand-alone Right in accordance with substantially
    the same terms and provisions as set forth in Section&#160;I.F
    of this Article&#160;Two.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    4.&#160;The distribution with respect to an exercised
    Stand-alone Right shall be made in shares of Common Stock valued
    at Fair Market Value on the exercise date.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    8
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    5.&#160;The holder of a Stand-alone Right shall have no
    shareholder rights with respect to the shares subject to the
    Stand-alone Right unless and until such person shall have
    exercised the Stand-alone Right and become a holder of record of
    the shares of Common Stock issued upon the exercise of such
    Stand-alone Right.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    E.&#160;<B><U>Post-Service Exercise</U>.</B> The provisions
    governing the exercise of Tandem and Stand-alone Rights
    following the cessation of the recipient&#146;s Service shall be
    substantially the same as those set forth in Section&#160;I.C of
    this Article&#160;Two for the options granted under the
    Discretionary Grant Program, and the Plan Administrator&#146;s
    discretionary authority under Section&#160;I.C.2 of this
    Article&#160;Two shall also extend to any outstanding Tandem or
    Stand-alone Appreciation Rights.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    F.&#160;<B><U>Gross Counting</U>. </B>Upon the exercise of any
    Tandem or Stand-alone Right under this Section&#160;III, the
    share reserve under Section&#160;V of Article&#160;One shall be
    reduced by the gross number of shares as to which such right is
    exercised, and not by the net number of shares actually issued
    by the Corporation upon such exercise.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

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

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">IV.&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">CHANGE IN
    CONTROL</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A.&#160;In the event of a Change in Control, each outstanding
    Award under the Discretionary Grant Program shall automatically
    accelerate so that each such Award shall, immediately prior to
    the effective date of that Change in Control, become exercisable
    as to all the shares of Common Stock at the time subject to such
    Award and may be exercised as to any or all of those shares as
    fully vested shares of Common Stock. However, an outstanding
    Award under the Discretionary Grant Program shall <B><I>not
    </I></B>become exercisable on such an accelerated basis if and
    to the extent: (i)&#160;such Award is to be assumed by the
    successor corporation (or parent thereof) or is otherwise to
    continue in full force and effect pursuant to the terms of the
    Change in Control transaction or (ii)&#160;such Award is to be
    replaced with a cash retention program of the successor
    corporation which preserves the spread existing at the time of
    the Change in Control on any shares as to which the Award is not
    otherwise at that time vested and exercisable and provides for
    the subsequent vesting and concurrent payout of that spread in
    accordance with the same exercise/vesting schedule in effect for
    that Award, but only if such replacement cash program would not
    result in the treatment of the Award as an item of deferred
    compensation subject to Code Section&#160;409A or (iii)&#160;the
    acceleration of such Award is subject to other limitations
    imposed by the Plan Administrator. Notwithstanding the
    foregoing, any Award outstanding under the Discretionary Grant
    Program on the date of such Change in Control shall be subject
    to cancellation and termination, without cash payment or other
    consideration due the Award holder, if the Fair Market Value per
    share of Common Stock on the date of such Change in Control (or
    any earlier date specified in the definitive agreement for the
    Change in Control transaction) is less than the per share
    exercise or base price in effect for such Award.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    B.&#160;All outstanding repurchase rights under the
    Discretionary Grant Program shall automatically terminate, and
    the shares of Common Stock subject to those terminated rights
    shall immediately vest in full, in the event of a Change in
    Control, except to the extent: (i)&#160;those repurchase rights
    are to be assigned to the successor corporation (or parent
    thereof) or are otherwise to continue in full force and effect
    pursuant to the terms of the Change in Control transaction or
    (ii)&#160;such accelerated vesting is precluded by other
    limitations imposed by the Plan Administrator.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    C.&#160;Immediately following the consummation of the Change in
    Control, all outstanding Awards under the Discretionary Grant
    Program shall terminate and cease to be outstanding, except to
    the extent assumed by the successor corporation (or parent
    thereof) or otherwise continued in full force and effect
    pursuant to the terms of the Change in Control transaction.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    D.&#160;Each Award under the Discretionary Grant Program which
    is assumed in connection with a Change in Control or otherwise
    continued in effect shall be appropriately adjusted, immediately
    after such Change in Control, to apply to the number and class
    of securities which would have been issuable to the Optionee in
    consummation of such Change in Control had the Award been
    exercised immediately prior to such Change in Control.
    Appropriate adjustments to reflect such Change in Control shall
    also be made to the exercise price payable per share under each
    outstanding option, <U>provided</U> the aggregate exercise price
    payable for such securities shall remain the same. To the extent
    the actual holders of the Corporation&#146;s outstanding Common
    Stock receive cash consideration for their Common Stock in
    consummation of the Change in Control, the successor corporation
    may, in connection with the assumption or continuation of the
    outstanding options under the Discretionary Grant Program,
    substitute one or
</DIV>
<!-- XBRL Paragraph Pagebreak -->
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    9
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    more shares of its own common stock with a fair market value
    equivalent to the cash consideration paid per share of Common
    Stock in such Change in Control transaction.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    E.&#160;The Plan Administrator shall have the discretionary
    authority to structure one or more outstanding Awards rights
    under the Discretionary Grant Program so that those Awards
    shall, immediately prior to the effective date of a Change in
    Control, become exercisable as to all the shares of Common Stock
    at the time subject to those Awards and may be exercised as to
    any or all of those shares as fully vested shares of Common
    Stock, whether or not those Awards are to be assumed in the
    Change in Control transaction or otherwise continued in effect.
    In addition, the Plan Administrator shall have the discretionary
    authority to structure one or more of the Corporation&#146;s
    repurchase rights under the Discretionary Grant Program so that
    those rights shall immediately terminate upon the consummation
    of the Change in Control transaction, and the shares subject to
    those terminated rights shall thereupon vest in full.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    F.&#160;The Plan Administrator shall have full power and
    authority to structure one or more outstanding Awards under the
    Discretionary Grant Program so that those Awards shall become
    exercisable as to all the shares of Common Stock at the time
    subject to those Awards in the event the Optionee&#146;s Service
    is subsequently terminated by reason of an Involuntary
    Termination within a designated period following the effective
    date of any Change in Control transaction in which those Awards
    do not otherwise fully accelerate. In addition, the Plan
    Administrator may structure one or more of the
    Corporation&#146;s repurchase rights so that those rights shall
    immediately terminate with respect to any shares held by the
    Optionee at the time of such Involuntary Termination, and the
    shares subject to those terminated repurchase rights shall
    accordingly vest in full at that time.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    G.&#160;The portion of any Incentive Option accelerated in
    connection with a Change in Control shall remain exercisable as
    an Incentive Option only to the extent the applicable One
    Hundred Thousand Dollar ($100,000) limitation is not exceeded.
    To the extent such dollar limitation is exceeded, the
    accelerated portion of such option shall be exercisable as a
    Non-statutory Option under the Federal tax laws.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

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

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">V.&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">PROHIBITION
    ON REPRICING PROGRAMS</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Plan Administrator shall not (i)&#160;implement any
    cancellation/regrant program pursuant to which outstanding
    options or stock appreciation rights under the Plan are
    cancelled and new options or stock appreciation rights are
    granted in replacement with a lower exercise price per share,
    (ii)&#160;cancel outstanding options or stock appreciation
    rights under the Plan with exercise or base prices per share in
    excess of the then current Fair Market Value per share of Common
    Stock for consideration payable in cash, equity securities of
    the Corporation or in the form of any other Award under the
    Plan, except in connection with a Change in Control transaction,
    or (iii)&#160;otherwise directly reduce the exercise price in
    effect for outstanding options or stock appreciation rights
    under the Plan, without in each such instance obtaining
    shareholder approval.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <FONT style="font-family: 'Times New Roman', Times">ARTICLE&#160;THREE<BR>
    </FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <U><FONT style="font-family: 'Times New Roman', Times">STOCK
    ISSUANCE PROGRAM</FONT></U>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

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

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">I.&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">STOCK
    ISSUANCE TERMS</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Shares of Common Stock may be issued under the Stock Issuance
    Program, either as vested or unvested shares, through direct and
    immediate issuances. Each such stock issuance shall be evidenced
    by a Stock Issuance Agreement which complies with the terms
    specified below. Shares of Common Stock may also be issued under
    the Stock Issuance Program pursuant to restricted stock units or
    performance shares which entitle the recipients to receive the
    shares underlying those Awards upon the attainment of designated
    performance goals or the satisfaction of specified Service
    requirements or upon the expiration of a designated time period
    following the vesting of those awards or units.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A.&#160;<B><U>Issue Price</U></B>.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    1.&#160;The issue price per share shall be fixed by the Plan
    Administrator, but shall not be less than one hundred percent
    (100%) of the Fair Market Value per share of Common Stock on the
    issuance date.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    10
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    2.&#160;Shares of Common Stock may be issued under the Stock
    Issuance Program for any of the following items of consideration
    which the Plan Administrator may deem appropriate in each
    individual instance:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (i)&#160;cash or check made payable to the Corporation,
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (ii)&#160;past services rendered to the Corporation (or any
    Parent or Subsidiary);&#160;or
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (iii)&#160;any other valid consideration under the California
    Corporation Code.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    B.&#160;<B><U>Vesting Provisions</U></B>.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    1.&#160;Shares of Common Stock issued under the Stock Issuance
    Program may, in the discretion of the Plan Administrator, be
    fully and immediately vested upon issuance or may vest in one or
    more installments over the Participant&#146;s period of Service
    or upon the attainment of specified performance objectives. The
    elements of the vesting schedule applicable to any unvested
    shares of Common Stock issued under the Stock Issuance Program
    shall be determined by the Plan Administrator and incorporated
    into the Stock Issuance Agreement. Shares of Common Stock may
    also be issued under the Stock Issuance Program pursuant to
    restricted stock units or performance shares which entitle the
    recipients to receive the shares underlying those Awards upon
    the attainment of designated performance goals or the
    satisfaction of specified Service requirements or upon the
    expiration of a designated time period following the vesting of
    those Awards, including (without limitation) a deferred
    distribution date following the termination of the
    Participant&#146;s Service.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    2.&#160;The Plan Administrator shall also have the discretionary
    authority, consistent with Code Section&#160;162(m), to
    structure one or more Awards under the Stock Issuance Program so
    that the shares of Common Stock subject to those Awards shall
    vest (or vest and become issuable) upon the achievement of
    certain pre-established corporate performance objectives based
    on one or more Performance Goals and measured over the
    performance period (not to exceed five (5)&#160;years) specified
    by the Plan Administrator at the time of the Award.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    3.&#160;Any new, substituted or additional securities or other
    property (including money paid other than as a regular cash
    dividend) which the Participant may have the right to receive
    with respect to the Participant&#146;s unvested shares of Common
    Stock by reason of any stock dividend, stock split,
    recapitalization, combination of shares, exchange of shares,
    spin-off transaction, extraordinary dividend or distribution or
    other change affecting the outstanding Common Stock as a class
    without the Corporation&#146;s receipt of consideration shall be
    issued subject to (i)&#160;the same vesting requirements
    applicable to the Participant&#146;s unvested shares of Common
    Stock and (ii)&#160;such escrow arrangements as the Plan
    Administrator shall deem appropriate.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    4.&#160;The Participant shall have full shareholder rights with
    respect to any shares of Common Stock issued to the Participant
    under the Stock Issuance Program, whether or not the
    Participant&#146;s interest in those shares is vested.
    Accordingly, the Participant shall have the right to vote such
    shares and to receive any dividends paid on such shares, subject
    to any applicable vesting requirements, including (without
    limitation) the requirement that any dividends paid on shares
    subject to performance-vesting conditions shall be held in
    escrow by the Corporation and shall not vest or actually be paid
    to the Award holder prior to the time those shares vest. The
    Participant shall not have any shareholder rights with respect
    to the shares of Common Stock subject to a restricted stock unit
    or share right award until that award vests and the shares of
    Common Stock are actually issued thereunder. However,
    dividend-equivalent units may be paid or credited, either in
    cash or in actual or phantom shares of Common Stock, on
    outstanding Awards of performance share or restricted stock
    units, subject to such terms and conditions as the Plan
    Administrator may deem appropriate. In no event, however, shall
    dividends or dividend-equivalent units relating to Awards
    subject to performance-vesting conditions vest or otherwise
    become payable prior to the time the underlying Award (or
    portion thereof to which such dividends or dividend-equivalents
    units relate) vests upon the attainment of the applicable
    performance goals and shall accordingly be subject to
    cancellation and forfeiture to the same extent as the underlying
    Award in the event those performance conditions are not attained.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    5.&#160;Should the Participant cease to remain in Service while
    holding one or more unvested shares of Common Stock issued under
    the Stock Issuance Program or should the performance objectives
    not be attained with respect to one or more such unvested shares
    of Common Stock, then those shares shall be immediately
</DIV>
<!-- XBRL Paragraph Pagebreak -->
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    11
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    surrendered to the Corporation for cancellation, and the
    Participant shall have no further shareholder rights with
    respect to those shares. To the extent the surrendered shares
    were previously issued to the Participant for consideration paid
    in cash or cash equivalent, the Corporation shall repay to the
    Participant the <B><I>lower </I></B>of (i)&#160;the cash
    consideration paid for the surrendered shares or (ii)&#160;the
    Fair Market Value of those shares at the time of cancellation.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    6.&#160;The Plan Administrator may in its discretion waive the
    surrender and cancellation of one or more unvested shares of
    Common Stock which would otherwise occur upon the cessation of
    the Participant&#146;s Service or the non-attainment of the
    performance objectives applicable to those shares. Any such
    waiver shall result in the immediate vesting of the
    Participant&#146;s interest in the shares of Common Stock as to
    which the waiver applies. Such waiver may be effected at any
    time, whether before or after the Participant&#146;s cessation
    of Service or the attainment or non-attainment of the applicable
    performance objectives. However, no vesting requirements tied to
    the attainment of Performance Goals may be waived with respect
    to Awards which were intended at the time of grant to qualify as
    performance-based compensation under Code Section&#160;162(m),
    except in the event of the Participant&#146;s cessation of
    Service by reason of death or Permanent Disability or as
    otherwise provided in Section&#160;II of this Article&#160;Three.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    7.&#160;Outstanding Awards of restricted stock units or
    performance shares under the Stock Issuance Program shall
    automatically terminate, and no shares of Common Stock shall
    actually be issued in satisfaction of those Awards, if the
    performance goals or Service requirements established for such
    Awards are not attained or satisfied. The Plan Administrator,
    however, shall have the discretionary authority to issue vested
    shares of Common Stock under one or more outstanding Awards of
    restricted stock units or performance shares as to which the
    designated performance goals or Service requirements have not
    been attained or satisfied. However, no vesting requirements
    tied to the attainment of Performance Goals may be waived with
    respect to Awards which were intended, at the time those Awards
    were made, to qualify as performance-based compensation under
    Code Section&#160;162(m), except in the event of the
    Participant&#146;s cessation of Service by reason of death or
    Permanent Disability or as otherwise provided in Section&#160;II
    of this Article&#160;Three.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    8.&#160;The following additional requirements shall be in effect
    for any performance shares awarded under this Article&#160;Three:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (i)&#160;At the end of the performance period, the Plan
    Administrator shall determine the actual level of attainment for
    each performance objective and the extent to which the
    performance shares awarded for that period are to vest and
    become payable based on the attained performance levels.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (ii)&#160;The performance shares which so vest shall be paid as
    soon as practicable following the end of the performance period,
    unless such payment is to be deferred for the period specified
    by the Plan Administrator at the time the performance shares are
    awarded or the period selected by the Participant in accordance
    with the applicable requirements of Code Section&#160;409A.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (iii)&#160;Performance shares may be paid in (i)&#160;cash,
    (ii)&#160;shares of Common Stock or (iii)&#160;any combination
    of cash and shares of Common Stock, as set forth in the
    applicable Award Agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (iv)&#160;Performance shares may also be structured so that the
    shares are convertible into shares of Common Stock, but the rate
    at which each performance share is to so convert shall be based
    on the attained level of performance for each applicable
    performance objective.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

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

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">II.&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">CHANGE IN
    CONTROL</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A.&#160;Each Award outstanding under the Stock Issuance Program
    on the effective date of an actual Change in Control transaction
    may be (i)&#160;assumed by the successor corporation (or parent
    thereof) or otherwise continued in full force and effect
    pursuant to the terms of the Change in Control transaction or
    (ii)&#160;replaced with a cash incentive program of the
    successor corporation which preserves the Fair Market Value of
    the underlying shares of Common Stock at the time of the Change
    in Control and provides for the subsequent vesting and payment
    of that value in accordance with the same vesting schedule in
    effect for those shares at the time of such Change in Control.
    If any such Award is subject to a performance-vesting condition
    tied to the attainment of one or more specified performance
    goals, then upon the assumption, continuation or replacement of
    that Award, the performance vesting
</DIV>
<!-- XBRL Paragraph Pagebreak -->
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    12
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    condition shall automatically be cancelled, and such Award shall
    thereupon be converted into a Service-vesting Award that will
    vest upon the completion of a Service period co-terminous with
    the portion of the performance period (and any subsequent
    Service vesting component that was originally part of that
    Award) remaining at the time of the Change in Control. However,
    to the extent any Award outstanding under the Stock Issuance
    Program on the effective date of such Change in Control
    Transaction is not to be so assumed, continued or replaced, that
    Award shall vest in full immediately prior to the effective date
    of the actual Change in Control transaction and the shares of
    Common Stock underlying the portion of the Award that vests on
    such accelerated basis shall be issued in accordance with the
    applicable Award Agreement, unless such accelerated vesting is
    precluded by other limitations imposed in the Stock Issuance
    Agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    B.&#160;All of the Corporation&#146;s outstanding repurchase
    rights under the Stock Issuance Program shall terminate
    automatically, and all the shares of Common Stock subject to
    those terminated rights shall immediately vest in full, in the
    event of any Change in Control, except to the extent
    (i)&#160;those repurchase rights are to be assigned to the
    successor corporation (or parent thereof) or are otherwise to
    continue in full force and effect pursuant to the terms of the
    Change in Control transaction or (ii)&#160;such accelerated
    vesting is precluded by other limitations imposed in the Stock
    Issuance Agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    C.&#160;Each outstanding Award under the Stock Issuance Program
    which is assumed in connection with a Change in Control or
    otherwise continued in effect shall be adjusted immediately
    after the consummation of that Change in Control so as to apply
    to the number and class of securities into which the shares of
    Common Stock subject to that Award immediately prior to the
    Change in Control would have been converted in consummation of
    such Change in Control had those shares actually been
    outstanding at that time, and appropriate adjustments shall also
    be made to the cash consideration (if any) payable per share
    thereunder, provided the aggregate amount of such cash
    consideration shall remain the same. To the extent the actual
    holders of the Corporation&#146;s outstanding Common Stock
    receive cash consideration for their Common Stock in
    consummation of the Change in Control, the successor corporation
    may, in connection with the assumption or continuation of the
    outstanding Awards, substitute one or more shares of its own
    common stock with a fair market value equivalent to the cash
    consideration paid per share of Common Stock in such Change in
    Control transaction.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    D.&#160;The Plan Administrator shall have the discretionary
    authority to structure one or more unvested Awards under the
    Stock Issuance Program so that the shares of Common Stock
    subject to those Awards shall automatically vest (or vest and
    become issuable) in whole or in part immediately upon the
    occurrence of a Change in Control or upon the subsequent
    termination of the Participant&#146;s Service by reason of an
    Involuntary Termination within a designated period following the
    effective date of that Change in Control transaction. The Plan
    Administrator&#146;s authority under this Section&#160;II.D
    shall also extend to any Awards under the Stock Issuance Program
    which are intended to qualify as performance-based compensation
    under Code Section&#160;162(m), even though the actual vesting
    of those Awards pursuant to this Section&#160;II.D may result in
    their loss of performance-based status under Code
    Section&#160;162(m).
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <FONT style="font-family: 'Times New Roman', Times">ARTICLE&#160;FOUR<BR>
    </FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <U><FONT style="font-family: 'Times New Roman', Times">INCENTIVE
    BONUS PROGRAM</FONT></U>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

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

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">I.&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">INCENTIVE
    BONUS TERMS</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Plan Administrator shall have full power and authority to
    implement one or more of the following incentive bonus programs
    under the Plan:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (i)&#160;cash bonus awards (&#147;Cash Awards&#148;),
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (ii)&#160;performance unit awards (&#147;Performance Unit
    Awards&#148;),&#160;and
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (iii)&#160;dividend equivalent rights (&#147;DER Awards&#148;)
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A.&#160;<B><U>Cash Awards</U>. </B>The Plan Administrator shall
    have the discretionary authority under the Plan to make Cash
    Awards which are to vest in one or more installments over the
    Participant&#146;s continued Service with the Corporation or
    upon the attainment of specified performance objectives. Each
    such Cash Award shall be evidenced by one or
</DIV>
<!-- XBRL Paragraph Pagebreak -->
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    13
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    more documents in the form approved by the Plan Administrator;
    <B><I>provided however, </I></B>that each such document shall
    comply with the terms specified below.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    1.&#160;The elements of the vesting schedule applicable to each
    Cash Award shall be determined by the Plan Administrator and
    incorporated into the Incentive Bonus Award Agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    2.&#160;The Plan Administrator shall also have the discretionary
    authority, consistent with Code Section&#160;162(m), to
    structure one or more Cash Awards so that those Awards shall
    vest upon the achievement of pre-established corporate
    performance objectives based upon one or more Performance Goals
    measured over the performance period (not to exceed five
    (5)&#160;years) specified by the Plan Administrator at the time
    of the Award.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    3.&#160;Outstanding Cash Awards shall automatically terminate,
    and no cash payment or other consideration shall be due the
    holders of those Awards, if the performance objectives or
    Service requirements established for those Awards are not
    attained or satisfied. The Plan Administrator may in its
    discretion waive the cancellation and termination of one or more
    unvested Cash Awards which would otherwise occur upon the
    cessation of the Participant&#146;s Service or the
    non-attainment of the performance objectives applicable to those
    Awards. Any such waiver shall result in the immediate vesting of
    the Participant&#146;s interest in the Cash Award as to which
    the waiver applies. Such wavier may be effected at any time,
    whether before or after the Participant&#146;s cessation of
    Service or the attainment or non-attainment of the applicable
    performance objectives. However, no vesting requirements tied to
    the attainment of Performance Goals may be waived with respect
    to Awards which were intended, at the time those Awards were
    made, to qualify as performance-based compensation under Code
    Section&#160;162(m), except in the event of the
    Participant&#146;s cessation of Service by reason of death or
    Permanent Disability or as otherwise provided in Section&#160;II
    of this Article&#160;Four.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    4.&#160;Cash Awards which become due and payable following the
    attainment of the applicable performance objectives or
    satisfaction of the applicable Service requirement (or the
    waiver of such goals or Service requirement) may be paid in
    (i)&#160;cash, (ii)&#160;shares of Common Stock valued at Fair
    Market Value on the payment date or (iii)&#160;a combination of
    cash and shares of Common Stock as set forth in the applicable
    Award Agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    B.&#160;<B><U>Performance Unit Awards</U>. </B>The Plan
    Administrator shall have the discretionary authority to make
    Performance Unit Awards in accordance with the terms of this
    Article&#160;Four. Each such Performance Unit Award shall be
    evidenced by one or more documents in the form approved by the
    Plan Administrator; <B><I>provided however, </I></B>that each
    such document shall comply with the terms specified below.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    1.&#160;A Performance Unit shall represent either (i)&#160;a
    unit with a dollar value tied to the level at which
    pre-established corporate performance objectives based on one or
    more Performance Goals are attained or (ii)&#160;a participating
    interest in a special bonus pool tied to the attainment of
    pre-established corporate performance objectives based on one or
    more Performance Goals. The amount of the bonus pool may vary
    with the level at which the applicable performance objectives
    are attained, and the value of each Performance Unit which
    becomes due and payable upon the attained level of performance
    shall be determined by dividing the amount of the resulting
    bonus pool (if any) by the total number of Performance Units
    issued and outstanding at the completion of the applicable
    performance period.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    2.&#160;Performance Units may also be structured to include a
    Service requirement which the Participant must satisfy following
    the completion of the performance period in order to vest in the
    Performance Units awarded with respect to that performance
    period.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    3.&#160;Performance Units which become due and payable following
    the attainment of the applicable performance objectives and the
    satisfaction of any applicable Service requirement may be paid
    in (i)&#160;cash, (ii)&#160;shares of Common Stock valued at
    Fair Market Value on the payment date or (iii)&#160;a
    combination of cash and shares of Common Stock, as set forth in
    the applicable Award Agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    C.&#160;<B><U>DER Awards</U></B>. The Plan Administrator shall
    have the discretionary authority to make DER Awards in
    accordance with the terms of this Article&#160;Four. Each such
    DER Award shall be evidenced by one or more documents in the
    form approved by the Plan Administrator; <B><I>provided
    however</I></B>, that each such document shall comply with the
    terms specified below.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    14
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    1.&#160;The DER Awards may be made as stand-alone awards or in
    tandem with other Awards made under the Plan. The term of each
    such DER Award shall be established by the Plan Administrator at
    the time of grant, but no DER Award shall have a term in excess
    of seven (7)&#160;years.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    2.&#160;Each DER shall represent the right to receive the
    economic equivalent of each dividend or distribution, whether in
    cash, securities or other property (other than shares of Common
    Stock), which is made per issued and outstanding share of Common
    Stock during the term the DER remains outstanding. A special
    account on the books of the Corporation shall be maintained for
    each Participant to whom a DER Award is made, and that account
    shall be credited per DER with each such dividend or
    distribution made per issued and outstanding share of Common
    Stock during the term of that DER remains outstanding.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    3.&#160;Payment of the amounts credited to such book account may
    be made to the Participant either concurrently with the actual
    dividend or distribution made per issued and outstanding share
    of Common Stock or may be deferred for a period specified by the
    Plan Administrator at the time the DER Award is made or selected
    by the Participant in accordance with the requirements of Code
    Section&#160;409A. In no event, however, shall any DER Award
    made with respect to an Award subject to performance-vesting
    conditions under the Stock Issuance or Incentive Bonus Program
    vest or become payable prior to the vesting of that Award (or
    the portion thereof to which the DER Award relates) upon the
    attainment of the applicable performance goals and shall
    accordingly be subject to cancellation and forfeiture to the
    same extent as the underlying Award in the event those
    performance conditions are not attained.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    4.&#160;Payment may be paid in (i)&#160;cash, (ii)&#160;shares
    of Common Stock or (iii)&#160;a combination of cash and shares
    of Common Stock, as set forth in the applicable Award Agreement.
    If payment is to be made in the form of Common Stock, the number
    of shares of Common Stock into which the cash dividend or
    distribution amounts are to be converted for purposes of the
    Participant&#146;s book account may be based on the Fair Market
    Value per share of Common Stock on the date of conversion, a
    prior date or an average of the Fair Market Value per share of
    Common Stock over a designated period, as set forth in the
    applicable Award Agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    5.&#160;The Plan Administrator shall also have the discretionary
    authority, consistent with Code Section&#160;162(m), to
    structure one or more DER Awards so that those Awards shall vest
    only after the achievement of pre-established corporate
    performance objectives based upon one or more Performance Goals
    measured over the performance period (not to exceed five
    (5)&#160;years) specified by the Plan Administrator at the time
    the Award is made.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

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

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">II.&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">CHANGE IN
    CONTROL</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A.&#160;The Plan Administrator shall have the discretionary
    authority to structure one or more Awards under the Incentive
    Bonus Program so that those Awards shall automatically vest in
    whole or in part immediately prior to the effective date of an
    actual Change in Control transaction or upon the subsequent
    termination of the Participant&#146;s Service by reason of an
    Involuntary Termination within a designated period following the
    effective date of such Change in Control. To the extent any such
    Award is, at the time of such Change in Control, subject to a
    performance-vesting condition tied to the attainment of one or
    more specified performance goals, then that performance vesting
    condition shall automatically be cancelled on the effective date
    of such Change in Control, and such Award shall thereupon be
    converted into a Service-vesting Award that will vest upon the
    completion of a Service period co-terminous with the portion of
    the performance period ((and any subsequent Service vesting
    component that was originally part of that Award) remaining at
    the time of the Change in Control.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    B.&#160;The Plan Administrator&#146;s authority under
    Section&#160;II.A above shall also extend to any Award under the
    Incentive Bonus Program intended to qualify as performance-based
    compensation under Code Section&#160;162(m), even though the
    automatic vesting of that Award may result in the loss of
    performance-based status under Code Section&#160;162(m).
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    15
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <FONT style="font-family: 'Times New Roman', Times">ARTICLE&#160;FIVE<BR>
    </FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <U><FONT style="font-family: 'Times New Roman', Times">AUTOMATIC
    GRANT PROGRAM</FONT></U>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

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

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">I.&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">TERMS</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A.&#160;<B><U>Grant Dates</U></B>. Grants shall be made pursuant
    to the Automatic Grant Program in effect under this
    Article&#160;Four as follows:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    1.&#160;Each individual who is first elected or appointed as a
    non-employee Board member at any time on or after the date of
    the 2006 Annual Meeting shall automatically be granted, on the
    date of such initial election or appointment, a Non-Statutory
    Option to purchase not more than ten thousand (10,000) shares of
    Common Stock and restricted stock units covering not more than
    three thousand (3,000) shares of Common Stock, provided that
    individual has not previously been in the employ of the
    Corporation or any Parent or Subsidiary. The actual number of
    shares for which such initial option grant and restricted stock
    unit award shall be made shall (subject to the respective ten
    thousand (10,000) and three thousand (3,000)-share limits) be
    determined by the Plan Administrator at the time of each such
    grant.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    2.&#160;On the date of each annual shareholders meeting,
    beginning with the 2006 Annual Meeting, each individual who is
    to continue to serve as a non-employee Board member, whether or
    not that individual is standing for re-election to the Board at
    that particular annual meeting, shall automatically be granted a
    Non-Statutory Option to purchase not more than three thousand
    (3,000) shares of common stock and restricted stock units
    covering up to not more than an additional one thousand (1,000)
    shares of Common Stock, provided that such individual has served
    as a non-employee Board member for a period of at least six
    (6)&#160;months. There shall be no limit on the number of such
    option grants and restricted stock unit awards any one
    continuing non-employee Board member may receive over his or her
    period of Board service, and non-employee Board members who have
    previously been in the employ of the Corporation (or any Parent
    or Subsidiary) shall be eligible to receive one or more such
    annual option grants and restricted stock unit awards over their
    period of continued Board service. The actual number of shares
    for which such annual option grants and restricted stock unit
    awards are made to each continuing non-employee Board member
    shall (subject to the respective three thousand (3,000) and one
    thousand (1,000)-share limits) be determined by the Plan
    Administrator on or before the date of the annual shareholders
    meeting on which those grants are to be made.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    B.&#160;<B><U>Exercise Price</U></B>.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    1.&#160;The exercise price per share for each option granted
    under this Article&#160;Four shall be equal to one hundred
    percent (100%) of the Fair Market Value per share of Common
    Stock on the option grant date.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    2.&#160;The exercise price shall be payable in one or more of
    the alternative forms authorized under the Discretionary Grant
    Program. Except to the extent the sale and remittance procedure
    specified thereunder is utilized, payment of the exercise price
    for the purchased shares must be made on the Exercise Date.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    C.&#160;<B><U>Option Term</U>. </B>Each option granted under
    this Article&#160;Four shall have a maximum term of seven
    (7)&#160;years measured from the option grant date, subject to
    earlier termination following the Optionee&#146;s cessation of
    Service.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    D.&#160;<B><U>Exercise and Vesting of Options</U>. </B>Each
    option granted under this Article&#160;Four shall be immediately
    exercisable for any or all of the option shares. However, any
    unvested shares purchased under the option shall be subject to
    repurchase by the Corporation, at the <B><I>lower </I></B>of
    (i)&#160;the exercise price paid per share or (ii)&#160;the Fair
    Market Value per share of Common Stock at the time of
    repurchase, upon the Optionee&#146;s cessation of Service prior
    to vesting in those shares. The shares subject to each initial
    ten thousand (10,000)-share-or-less grant shall vest, and the
    Corporation&#146;s repurchase right shall lapse, in four
    (4)&#160;successive equal annual installments upon the
    Optionee&#146;s completion of each year of service as a
    non-employee Board member over the four (4)-year period measured
    from the option grant date. The shares subject to each annual
    three thousand (3,000)-share-or-less grant made to a
    non-employee Board member for his or her continued Board service
    shall vest, and the Corporation&#146;s repurchase right shall
    lapse, in one installment upon the <B><I>earlier </I></B>of
    (i)&#160;the Optionee&#146;s completion of one (1)-year of
    service as a non-employee Board member measured from the grant
    date or (ii)&#160;the Optionee&#146;s continuation in such Board
    service through the day immediately preceding the next annual
    shareholders meeting following such grant date.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    16
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    E.&#160;<B><U>Vesting of Restricted Stock Units and Issuance of
    Shares</U>. </B>Each restricted stock unit award for up to three
    thousand (3,000) shares shall vest in a series of four
    (4)&#160;successive equal annual installments upon the
    individual&#146;s completion of each year of service as a
    non-employee Board member over the four (4)-year period measured
    from the date that award is made. Each restricted stock unit
    award for up to one thousand (1,000) shares shall vest in one
    installment upon the earlier of (i)&#160;the individual&#146;s
    completion of one (1)-year of service as a non-employee Board
    member measured from the date that award is made or
    (ii)&#160;the individual&#146;s continuation in such Board
    service through the day immediately preceding the next annual
    shareholders meeting following such grant date. However, each
    restricted stock unit award held by an individual under the
    Automatic Grant Program will immediately vest in full upon his
    or her cessation of Board service by reason of death or
    Permanent Disability. As the restricted stock units under the
    Automatic Grant Program vest in one or more installments, the
    shares of Common Stock underlying those vested units shall be
    promptly issued.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    F.&#160;<B><U>Limited Transferability of Options</U>. </B>Each
    option under this Article&#160;Four may be assigned in whole or
    in part during the Optionee&#146;s lifetime to one or more of
    his or her Family Members or to a trust established exclusively
    for the Optionee
    <FONT style="white-space: nowrap">and/or</FONT> one
    or more such Family Members, to the extent such assignment is in
    connection with the Optionee&#146;s estate plan or pursuant to a
    domestic relations order. The assigned portion may only be
    exercised by the person or persons who acquire a proprietary
    interest in the option pursuant to the assignment. The terms
    applicable to the assigned portion shall be the same as those in
    effect for the option immediately prior to such assignment and
    shall be set forth in such documents issued to the assignee as
    the Plan Administrator may deem appropriate. The Optionee may
    also designate one or more persons as the beneficiary or
    beneficiaries of his or her outstanding options under this
    Article&#160;Four, and the options shall, in accordance with
    such designation, automatically be transferred to such
    beneficiary or beneficiaries upon the Optionee&#146;s death
    while holding those options. Such beneficiary or beneficiaries
    shall take the transferred options subject to all the terms and
    conditions of the applicable agreement evidencing each such
    transferred option, including (without limitation) the limited
    time period during which the option may be exercised following
    the Optionee&#146;s death.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    G.&#160;<B><U>Termination of Service</U>. </B>The following
    provisions shall govern the exercise of any options held by the
    Optionee at the time the Optionee ceases Service:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (i)&#160;The Optionee (or, in the event of Optionee&#146;s death
    while holding the option, the personal representative of the
    Optionee&#146;s estate or the person or persons to whom the
    option is transferred pursuant to the Optionee&#146;s will or
    the laws of inheritance or the designated beneficiary or
    beneficiaries of such option) shall have a twelve (12)-month
    period following the date of such cessation of Service in which
    to exercise such option.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (ii)&#160;During the twelve (12)-month exercise period, the
    option may not be exercised in the aggregate for more than the
    number of vested shares of Common Stock for which the option is
    exercisable at the time of the Optionee&#146;s cessation of
    Service. However, should the Optionee cease to serve as a Board
    member by reason of death or Permanent Disability, then all
    shares at the time subject to the option shall immediately vest
    so that such option may, during the twelve (12)-month exercise
    period following such cessation of Board service, be exercised
    for any or all of those shares as fully vested shares of Common
    Stock.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (iii)&#160;In no event shall the option remain exercisable after
    the expiration of the option term. Upon the expiration of the
    twelve (12)-month exercise period or (if earlier) upon the
    expiration of the option term, the option shall terminate and
    cease to be outstanding for any vested shares for which the
    option has not been exercised. However, the option shall,
    immediately upon the Optionee&#146;s cessation of Service for
    any reason (other than cessation of Board service by reason of
    death or Permanent Disability), terminate and cease to be
    outstanding to the extent the option is not otherwise at that
    time exercisable for vested shares.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

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

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">II.&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">CHANGE IN
    CONTROL</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A.&#160;In the event of any Change in Control while the
    individual remains in Service, the following provisions shall
    apply:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (i)&#160;Should a Change in Control occur prior to the
    Optionee&#146;s cessation of Service, then the shares of Common
    Stock at the time subject to each outstanding option held by
    such Optionee under this Automatic
</DIV>
<!-- XBRL Paragraph Pagebreak -->
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    17
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Grant Program but not otherwise vested shall automatically vest
    in full so that each such option shall, immediately prior to the
    effective date of the Change in Control, become exercisable for
    all the option shares as fully vested shares of Common Stock and
    may be exercised for any or all of those vested shares.
    Immediately following the consummation of the Change in Control,
    each automatic option grant shall terminate and cease to be
    outstanding, except to the extent assumed by the successor
    corporation (or parent thereof) or otherwise continued in effect
    pursuant to the terms of the Change in Control transaction.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (ii)&#160;The shares of Common Stock which are at the time of
    such Change in Control subject to any outstanding restricted
    stock units awarded to such individual under the Automatic Grant
    Program shall, immediately prior to the effective date of the
    Change in Control, vest in full and be issued to such individual
    as soon as administratively practicable thereafter, but in no
    event later than fifteen (15)&#160;business days.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    B.&#160;All outstanding repurchase rights under this Automatic
    Grant Program shall automatically terminate, and the shares of
    Common Stock subject to those terminated rights shall
    immediately vest in full, in the event of any Change in Control
    or Hostile Take-Over.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    C.&#160;Each option which is assumed in connection with a Change
    in Control or otherwise continued in effect shall be
    appropriately adjusted, immediately after such Change in
    Control, to apply to the number and class of securities which
    would have been issuable to the Optionee in consummation of such
    Change in Control had the option been exercised immediately
    prior to such Change in Control. Appropriate adjustments shall
    also be made to the exercise price payable per share under each
    outstanding option, <U>provided</U> the aggregate exercise price
    payable for such securities shall remain the same. To the extent
    the actual holders of the Corporation&#146;s outstanding Common
    Stock receive cash consideration for their Common Stock in
    consummation of the Change in Control, the successor corporation
    may, in connection with the assumption or continuation of the
    outstanding options under the Automatic Grant Program,
    substitute one or more shares of its own common stock with a
    fair market value equivalent to the cash consideration paid per
    share of Common Stock in such Change in Control transaction.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

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

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">III.</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;REMAINING
    TERMS</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The remaining terms of each grant shall be the same as the terms
    in effect for option grants made under the Discretionary Grant
    Program, including the prohibition on repricing contained in
    Section&#160;V of Article&#160;Two.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

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

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">IV.&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">ALTERNATIVE
    AWARDS</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A.&#160;The Compensation Committee shall have full power and
    authority to award, in lieu of one or more initial or annual
    automatic option grants under this Article&#160;Four, unvested
    shares of Common Stock or restricted stock units which in each
    instance have an aggregate Fair Market Value substantially equal
    to the grant-date fair value (as determined for financial
    reporting purposes in accordance with FASB ASC Topic 781 or any
    successor standard) of the automatic option grant which such
    award replaces. Any such alternative award shall be made at the
    same time the automatic option grant or restricted stock unit
    award which it replaces would have been made, and the vesting
    provisions (including vesting acceleration) applicable to such
    award shall be substantially the same as in effect for the
    automatic option grant or restricted stock unit award so
    replaced.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    B.&#160;The Compensation Committee shall also have full power
    and authority to implement a non-employee Board member retainer
    fee deferral program under the Plan so as to allow the
    non-employee Board members the opportunity to elect, prior to
    the start of each calendar year, to convert the Board retainer
    fees to be earned for such year into restricted stock units
    under the Stock Issuance Program that will defer the issuance of
    the shares of Common Stock that vest under those restricted
    stock units until a permissible date or event under Code
    Section&#160;409A. If such program is implemented, the
    Compensation Committee shall have the authority to establish
    such rules and procedures as it deems appropriate for the filing
    of such deferral elections and the designation of the
    permissible distribution events under Code Section&#160;409A.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    18
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <FONT style="font-family: 'Times New Roman', Times">ARTICLE&#160;SIX<BR>
    </FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <U><FONT style="font-family: 'Times New Roman', Times">MISCELLANEOUS</FONT></U>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

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

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">I.&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">TAX
    WITHHOLDING</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A.&#160;The Corporation&#146;s obligation to deliver shares of
    Common Stock upon the issuance, exercise or vesting of an Award
    under the Plan shall be subject to the satisfaction of all
    applicable income and employment tax withholding requirements.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    B.&#160;The Plan Administrator may, in its discretion, structure
    one or more Awards so that shares of Common Stock may be used as
    follows to satisfy all or part of the Withholding Taxes to which
    such holders of those Awards may become subject in connection
    with the issuance, exercise, vesting or settlement of those
    Awards:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <U>Stock Withholding</U>: The Corporation may be given the right
    to withhold, from the shares of Common Stock otherwise issuable
    upon the issuance, exercise, vesting or settlement of such
    Award, a portion of those shares with an aggregate Fair Market
    Value equal to the applicable Withholding Taxes. The shares of
    Common Stock so withheld shall reduce the number of shares of
    Common Stock authorized for issuance under the Plan.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <U>Stock Delivery</U>: The election to deliver to the
    Corporation, at the time of the issuance, exercise or vesting of
    the Award, one or more shares of Common Stock previously
    acquired by such holder (other than in connection with the
    issuance exercise or vesting of the shares triggering the
    Withholding Taxes) with an aggregate Fair Market Value at the
    time of delivery equal to the percentage of the Withholding
    Taxes (not to exceed one hundred percent (100%)) designated by
    the individual. The shares of Common Stock so delivered shall
    not be added to the shares of Common Stock authorized for
    issuance under the Plan.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

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

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">II.&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">SHARE
    ESCROW/LEGENDS</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Unvested shares may, in the Plan Administrator&#146;s
    discretion, be held in escrow by the Corporation until the
    Participant&#146;s interest in such shares vests or may be
    issued directly to the Participant with restrictive legends on
    the certificates evidencing those unvested shares.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">III.
    EFFECTIVE DATE AND TERM OF THE PLAN</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A.&#160;The Plan became effective on the Plan Effective Date.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    B.&#160;The Plan serves as the successor to the Predecessor
    Plans, and no further option grants or stock issuances are to be
    made under the Predecessor Plans. All options outstanding under
    the Predecessor Plans at the time of the 2006 Annual Meeting
    were transferred to this Plan.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    C.&#160;The Plan was amended and restated on March&#160;18, 2010
    to (i)&#160;increase the number of shares of Common Stock
    authorized for issuance under the Plan by an additional eight
    hundred eighty thousand (880,000) shares, (ii)&#160;increase, by
    the same number, the number of shares of Common Stock that can
    be issued pursuant to Incentive Options granted under the Plan,
    (iii)&#160;add the Incentive Bonus Program to the Plan and
    (iv)&#160;effect certain other technical changes to the Plan.
    The March&#160;18, 2010 amendment and restatement is subject to
    shareholder approval at the 2010 Annual Meeting. Should such
    shareholder approval not be obtained at the 2010 Annual Meeting,
    then the authorized increases to the share reserve under the
    Plan and to the number of shares issuable pursuant to Incentive
    Options and the addition of the Incentive Bonus Program to the
    Plan shall not be implemented, and any Awards granted on the
    basis of those authorized share increases shall, in accordance
    with Section&#160;IV.C. below, terminate and cease to be
    outstanding.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    D.&#160;The Plan shall terminate upon the <U>earliest</U> to
    occur of (i)&#160;February&#160;22, 2016, (ii)&#160;the date on
    which all shares available for issuance under the Plan shall
    have been issued as fully vested shares or (iii)&#160;the
    termination of all outstanding Awards in connection with a
    Change in Control. Should the Plan terminate on
    February&#160;22, 2016, then all Awards outstanding at that time
    shall continue to have force and effect in accordance with the
    provisions of the documents evidencing those Awards.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    19
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

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

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">IV.&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">AMENDMENT
    OF THE PLAN</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A.&#160;The Board shall have complete and exclusive power and
    authority to amend or modify the Plan in any or all respects.
    However, no such amendment or modification shall adversely
    affect the rights and obligations with respect to Awards at the
    time outstanding under the Plan unless the Optionee or the
    Participant consents to such amendment or modification. In
    addition, amendments to the Plan will be subject to shareholder
    approval to the extent required under applicable law or
    regulation or pursuant to the listing standards of the Stock
    Exchange on which the Common Stock is at the time primarily
    traded, and no amendment that would reduce or limit the scope of
    the prohibition on repricing programs set forth in
    Section&#160;V of Article&#160;Two or otherwise eliminated such
    prohibition shall be effective unless approved by the
    shareholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    B.&#160;The Compensation Committee of the Board shall have the
    discretionary authority to adopt and implement from time to time
    such addenda or subplans to the Plan as it may deem necessary in
    order to bring the Plan into compliance with applicable laws and
    regulations of any foreign jurisdictions in which grants or
    awards are to be made under the Plan
    <FONT style="white-space: nowrap">and/or</FONT> to
    obtain favorable tax treatment in those foreign jurisdictions
    for the individuals to whom the grants or awards are made.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    C.&#160;Awards may be made under the Plan that involve shares of
    Common Stock in excess of the number of shares then available
    for issuance under the Plan, provided no shares shall actually
    be issued pursuant to those Awards until the number of shares of
    Common Stock available for issuance under the Plan is
    sufficiently increased by shareholder approval of an amendment
    of the Plan authorizing such increase. If shareholder approval
    is required and is not obtained within twelve (12)&#160;months
    after the date the first excess Award is made, then all Awards
    granted on the basis of such excess shares shall terminate and
    cease to be outstanding.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    D.&#160;The provisions of the Plan and the outstanding Awards
    under the Plan shall, in the event of any ambiguity, be
    construed, applied and interpreted in a manner so as to ensure
    that all Awards and Award Agreements provided to Optionees or
    Participants who are subject to U.S.&#160;income taxation either
    qualify for an exemption from the requirements of
    Section&#160;409A of the Code or comply with those requirements;
    provided, however, that the Corporation shall not make any
    representations that any Awards made under the Plan will in fact
    be exempt from the requirements of Section&#160;409A of the Code
    or otherwise comply with those requirements, and each Optionee
    and Participant shall accordingly be solely responsible for any
    taxes, penalties or other amounts which may become payable with
    respect to his or her Awards by reason of Section&#160;409A of
    the Code.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

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

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">V.&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">USE OF
    PROCEEDS</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Any cash proceeds received by the Corporation from the sale of
    shares of Common Stock under the Plan shall be used for general
    corporate purposes.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

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

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">VI.&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">REGULATORY
    APPROVALS</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A.&#160;The implementation of the Plan, the grant of any Award
    and the issuance of shares of Common Stock in connection with
    the issuance, exercise or vesting of any Award made under the
    Plan shall be subject to the Corporation&#146;s procurement of
    all approvals and permits required by regulatory authorities
    having jurisdiction over the Plan, the Awards made under the
    Plan and the shares of Common Stock issuable pursuant to those
    Awards.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    B.&#160;No shares of Common Stock or other assets shall be
    issued or delivered under the Plan unless and until there shall
    have been compliance with all applicable requirements of
    applicable securities laws, including the filing and
    effectiveness of the
    <FONT style="white-space: nowrap">Form&#160;S-8</FONT>
    registration statement for the shares of Common Stock issuable
    under the Plan, and all applicable listing requirements of any
    Stock Exchange on which Common Stock is then listed for trading.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

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

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">VII.&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">NO
    EMPLOYMENT/SERVICE RIGHTS</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Nothing in the Plan shall confer upon the Optionee or the
    Participant any right to continue in Service for any period of
    specific duration or interfere with or otherwise restrict in any
    way the rights of the Corporation (or any Parent or Subsidiary
    employing or retaining such person) or of the Optionee or the
    Participant, which rights are hereby expressly reserved by each,
    to terminate such person&#146;s Service at any time for any
    reason, with or without cause.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    20
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><U><FONT style="font-family: 'Times New Roman', Times">APPENDIX
    </FONT></U></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following definitions shall be in effect under the Plan:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A.&#160;<B><U>Annual Meeting</U> </B>shall mean the annual
    meeting of the Corporation&#146;s shareholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    B.&#160;<B><U>Automatic Grant Program</U> </B>shall mean the
    automatic option grant program in effect under Article&#160;Four
    of the Plan.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    C.&#160;<B><U>Award</U> </B>shall mean any of the following
    awards authorized for issuance or grant under the Plan: stock
    options, stock appreciation rights, direct stock issuances,
    restricted stock or restricted stock unit awards, performance
    shares, performance units, dividend-equivalent rights and cash
    incentive awards.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    D.&#160;<B><U>Board</U> </B>shall mean the Corporation&#146;s
    Board of Directors.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    E.&#160;<B><U>Change in Control</U> </B>shall mean a change in
    ownership or control of the Corporation effected through any of
    the following transactions:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (i)&#160;the closing of a merger, consolidation or other
    reorganization approved by the Corporation&#146;s shareholders,
    <U>unless</U> securities representing more than fifty percent
    (50%) of the total combined voting power of the voting
    securities of the successor corporation are immediately
    thereafter beneficially owned, directly or indirectly and in
    substantially the same proportion, by the persons who
    beneficially owned the Corporation&#146;s outstanding voting
    securities immediately prior to such transaction,
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (ii)&#160;the closing of a shareholder-approved sale, transfer
    or other disposition (including in whole or in part through one
    or more licensing arrangements) of all or substantially all of
    the Corporation&#146;s assets,
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (iii)&#160;the closing of any transaction or series of related
    transactions pursuant to which any person or any group of
    persons comprising a &#147;group&#148; within the meaning of
    <FONT style="white-space: nowrap">Rule&#160;13d-5(b)(1)</FONT>
    of the 1934&#160;Act (other than the Corporation or a person
    that, prior to such transaction or series of related
    transactions, directly or indirectly controls, is controlled by
    or is under common control with, the Corporation) acquires
    directly or indirectly beneficial ownership (within the meaning
    of
    <FONT style="white-space: nowrap">Rule&#160;13d-3</FONT>
    of the 1934&#160;Act) of securities possessing (or convertible
    into or exercisable for securities possessing) more than fifty
    percent (50%) of the total combined voting power of the
    Corporation&#146;s securities (as measured in terms of the power
    to vote with respect to the election of Board members)
    outstanding immediately after the consummation of such
    transaction or series of related transactions, whether such
    transaction involves a direct issuance from the Corporation or
    the acquisition of outstanding securities held by one or more of
    the Corporation&#146;s existing shareholders,&#160;or
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (iv)&#160;a change in the composition of the Board over a period
    of thirty-six (36)&#160;consecutive months or less such that a
    majority of the Board members ceases, by reason of one or more
    contested elections for Board membership, to be comprised of
    individuals who either (A)&#160;have been Board members
    continuously since the beginning of such period or (B)&#160;have
    been elected or nominated for election as Board members during
    such period by at least a majority of the Board members
    described in clause&#160;(A) who were still in office at the
    time the Board approved such election or nomination,
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    F.&#160;<B><U>Code</U> </B>shall mean the Internal Revenue Code
    of 1986, as amended.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    G.&#160;<B><U>Common Stock</U> </B>shall mean the
    Corporation&#146;s common stock.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    H.&#160;<B><U>Compensation Committee</U> </B>shall mean the
    Compensation Committee of the Board comprised of two (2)&#160;or
    more non-employee Board members.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    I.&#160;<B><U>Corporation</U> </B>shall mean American Shared
    Hospital Services, a California corporation, and any corporate
    successor to all or substantially all of the assets or voting
    stock of American Shared Hospital Services which has by
    appropriate action assumed the Plan.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    J.&#160;<B><U>Discretionary Grant Program</U> </B>shall mean the
    discretionary grant program in effect under Article&#160;Two of
    the Plan pursuant to which stock options and stock appreciation
    rights may be granted to one or more eligible individuals.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    A-1
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    K.&#160;<B><U>Eligible Director</U> </B>shall mean a
    non-employee Board member eligible to participate in the
    Automatic Grant Program in accordance with the eligibility
    provisions of Articles&#160;One and Four.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    L.&#160;<B><U>Employee</U> </B>shall mean an individual who is
    in the employ of the Corporation (or any Parent or Subsidiary,
    whether now existing or subsequently established), subject to
    the control and direction of the employer entity as to both the
    work to be performed and the manner and method of performance.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    M.&#160;<B><U>Exercise Date</U> </B>shall mean the date on which
    the Corporation shall have received written notice of the option
    exercise.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    N.&#160;<B><U>Fair Market Value</U> </B>per share of Common
    Stock on any relevant date shall be the closing selling price
    per share of Common Stock at the close of regular trading hours
    (i.e., before
    <FONT style="white-space: nowrap">after-hours</FONT>
    trading begins) on the date in question on the Stock Exchange
    determined by the Plan Administrator to be the primary market
    for the Common Stock, as such price is reported by the National
    Association of Securities Dealers (if primarily traded on the
    Nasdaq Global or Global Select Market) or as officially quoted
    in the composite tape of transactions on any other Stock
    Exchange on which the Company&#146;s common stock is then
    primarily traded. If there is no closing selling price for the
    Common Stock on the date in question, then the Fair Market Value
    shall be the closing selling price on the last preceding date
    for which such quotation exists.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    O.&#160;<B><U>Family Member</U> </B>means, with respect to a
    particular Optionee or Participant, any child, stepchild,
    grandchild, parent, stepparent, grandparent, spouse, former
    spouse, sibling, niece, nephew,
    <FONT style="white-space: nowrap">mother-in-law,</FONT>
    <FONT style="white-space: nowrap">father-in-law,</FONT>
    <FONT style="white-space: nowrap">son-in-law,</FONT>
    <FONT style="white-space: nowrap">daughter-in-law,</FONT>
    <FONT style="white-space: nowrap">brother-in-law</FONT>
    or
    <FONT style="white-space: nowrap">sister-in-law.</FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    P.&#160;<B><U>Full Value Award</U> </B>means any of the
    following Awards made under the Stock Issuance, Incentive Bonus
    or Automatic Grant Programs that are settled in shares of Common
    Stock: restricted stock awards (unless issued for cash
    consideration equal to the Fair Market Value of the shares of
    Common Stock on the award date), restricted stock unit awards,
    performance shares, performance units, cash incentive awards and
    any other Awards under the Plan other than (i)&#160;stock
    options and stock appreciation rights issued under the
    Discretionary Grant Program, (ii)&#160;stock options issued
    under the Automatic Grant Program and (iii)&#160;dividend
    equivalent rights under the Incentive Bonus Program.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Q.&#160;<B><U>Incentive Bonus Program</U> </B>shall mean the
    incentive bonus program in effect under Article&#160;Four of the
    Plan.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    R.&#160;<B><U>Incentive Option</U> </B>shall mean an option
    which satisfies the requirements of Code Section&#160;422.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    S.&#160;<B><U>Involuntary Termination</U> </B>shall mean the
    termination of the Service of any individual which occurs by
    reason of:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (i)&#160;such individual&#146;s involuntary dismissal or
    discharge by the Corporation (or any Parent or Subsidiary) for
    reasons other than Misconduct,&#160;or
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (ii)&#160;such individual&#146;s voluntary resignation following
    (A)&#160;a change in his or her position with the Corporation
    (or any Parent or Subsidiary) which materially reduces his or
    her duties and responsibilities or the level of management to
    which he or she reports, (B)&#160;a reduction in his or her
    level of compensation (including base salary, fringe benefits
    and target bonus under any corporate-performance based bonus or
    incentive programs) by more than fifteen percent (15%) or
    (C)&#160;a relocation of such individual&#146;s place of
    employment by more than fifty (50)&#160;miles, provided and only
    if such change, reduction or relocation is effected by the
    Corporation (or any Parent or Subsidiary) without the
    individual&#146;s consent.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    T.&#160;<B><U>Misconduct</U> </B>shall mean the commission of
    any act of fraud, embezzlement or dishonesty by the Optionee or
    Participant, any unauthorized use or disclosure by such person
    of confidential information or trade secrets of the Corporation
    (or any Parent or Subsidiary), or any other intentional
    misconduct by such person adversely affecting the business or
    affairs of the Corporation (or any Parent or Subsidiary) in a
    material manner. The foregoing definition shall not in any way
    preclude or restrict the right of the Corporation (or any Parent
    or Subsidiary) to discharge or dismiss any Optionee, Participant
    or other person in the Service of the Corporation (or any Parent
    or Subsidiary) for any other acts or omissions, but such other
    acts or omissions shall not be deemed, for purposes of the Plan,
    to constitute grounds for termination for Misconduct.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    A-2
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    U.&#160;<B><U>1934&#160;Act</U> </B>shall mean the Securities
    Exchange Act of 1934, as amended.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    V.&#160;<B><U>Non-Statutory Option</U> </B>shall mean an option
    not intended to satisfy the requirements of Code
    Section&#160;422.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    W.&#160;<B><U>Optionee</U> </B>shall mean any person to whom an
    option is granted under the Discretionary Grant or Automatic
    Grant Program.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    X.&#160;<B><U>Parent</U> </B>shall mean any corporation (other
    than the Corporation) in an unbroken chain of corporations
    ending with the Corporation, provided each corporation in the
    unbroken chain (other than the Corporation) owns, at the time of
    the determination, stock possessing fifty percent (50%) or more
    of the total combined voting power of all classes of stock in
    one of the other corporations in such chain.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Y.&#160;<B><U>Participant</U> </B>shall mean any person who is
    issued (i)&#160;shares of Common Stock, restricted stock units,
    performance shares, performance units or other stock-based
    awards under the Stock Issuance Program or (ii)&#160;an
    incentive bonus award under the Incentive Bonus Program.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Z.&#160;<B><U>Performance Goals</U> </B>shall mean any of the
    following performance criteria upon which the vesting of one or
    more Awards under the Plan may be based: (1)&#160;return on
    total shareholder equity; (2)&#160;earnings per share of Common
    Stock; (3)&#160;net income or operating income (before or after
    taxes); (4)&#160;earnings before interest, taxes, depreciation
    and amortization; (5)&#160;earnings before interest, taxes,
    depreciation, amortization and charges for stock-based
    compensation, (6)&#160;sales or revenue targets; (7)&#160;return
    on assets, capital or investment; (8)&#160;cash flow;
    (9)&#160;market share; (10)&#160;cost reduction goals;
    (11)&#160;budget comparisons; (12)&#160;measures of customer
    satisfaction; (13)&#160;any combination of, or a specified
    increase in, any of the foregoing; (14)&#160;new product
    development or successful completion of research and development
    projects; and (15)&#160;the formation of joint ventures,
    research or development collaborations, or the completion of
    other corporate transactions intended to enhance the
    Corporation&#146;s revenue or profitability or enhance its
    customer base. In addition, such performance goals may be based
    upon the attainment of specified levels of the
    Corporation&#146;s performance under one or more of the measures
    described above relative to the performance of other entities
    and may also be based on the performance of any of the
    Corporation&#146;s business units or divisions or any Parent or
    Subsidiary. Performance goals may include a minimum threshold
    level of performance below which no award will be earned, levels
    of performance at which specified portions of an award will be
    earned and a maximum level of performance at which an award will
    be fully earned.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each applicable performance goal may be structured at the time
    of the Award to provide for appropriate adjustments or
    exclusions for one or more of the following items:
    (A)&#160;asset impairments or write-downs; (B)&#160;litigation
    or governmental investigation expenses and any judgments,
    verdicts and settlements in connection therewith; (C)&#160;the
    effect of changes in tax law, accounting principles or other
    such laws or provisions affecting reported results;
    (D)&#160;accruals for reorganization and restructuring programs;
    (E)&#160;any extraordinary or nonrecurring items; (F)&#160;items
    of income, gain, loss or expense attributable to the operations
    of any business acquired by the Corporation or costs and
    expenses incurred in connection with mergers and acquisitions;
    (G)&#160;items of income, gain, loss or expense attributable to
    one or more business operations divested by the Corporation or
    the gain or loss realized upon the sale of any such business the
    assets thereof, (H)&#160;accruals for bonus or incentive
    compensation costs and expenses associated with cash-based
    awards made under the Plan or other bonus or incentive
    compensation plans of the Corporation, and (I)&#160;the impact
    of foreign currency fluctuations or changes in exchange rates.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    AA.&#160;<B><U>Permanent Disability or Permanently Disabled</U>
    </B>shall mean the inability of the Optionee or the Participant
    to engage in any substantial gainful activity by reason of any
    medically determinable physical or mental impairment expected to
    result in death or to be of continuous duration of twelve
    (12)&#160;months or more. However, solely for purposes of the
    Automatic Grant Program, Permanent Disability or Permanently
    Disabled shall mean the inability of the non-employee Board
    member to perform his or her usual duties as a Board member by
    reason of any medically determinable physical or mental
    impairment expected to result in death or to be of continuous
    duration of twelve (12)&#160;months or more.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    BB.&#160;<B><U>Plan</U> </B>shall mean the Corporation&#146;s
    Incentive Compensation Plan (formerly known as the 2006 Stock
    Incentive Plan), as set forth in this document and as
    subsequently amended or restated from time to time.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    CC.&#160;<B><U>Plan Administrator</U> </B>shall mean the
    particular entity, whether the Compensation Committee, the Board
    or the Secondary Board Committee, which is authorized to
    administer the Discretionary Grant, Stock Issuance and
</DIV>
<!-- XBRL Paragraph Pagebreak -->
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    A-3
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Incentive Bonus Programs with respect to one or more classes of
    eligible persons, to the extent such entity is carrying out its
    administrative functions under those programs with respect to
    the persons under its jurisdiction.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    DD.&#160;<B><U>Plan Effective Date</U> </B>shall mean the date
    of the 2006 Annual Meeting at which the Plan was approved by the
    shareholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    EE.&#160;<B><U>Predecessor Plans</U> </B>shall mean (i)&#160;the
    Corporation&#146;s 2001 Stock Option Plan and (ii)&#160;the
    Corporation&#146;s 1995 Stock Option Plan, as each such Plan is
    in effect immediately prior to the 2006 Annual Meeting.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    FF.&#160;<B><U>Secondary Board Committee</U> </B>shall mean a
    committee of one or more Board members appointed by the Board to
    administer the Discretionary Grant, Stock Issuance and Incentive
    Bonus Programs with respect to eligible persons other than
    Section&#160;16 Insiders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    GG.&#160;<B><U>Section&#160;16 Insider</U> </B>shall mean an
    officer or director of the Corporation subject to the
    short-swing profit liabilities of Section&#160;16 of the
    1934&#160;Act.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    HH.&#160;<B><U>Service</U> </B>shall mean the performance of
    services for the Corporation (or any Parent or Subsidiary,
    whether now existing or subsequently established) by a person in
    the capacity of an Employee, a non-employee member of the board
    of directors or a consultant or independent advisor, except to
    the extent otherwise specifically provided in the documents
    evidencing the option grant or stock issuance. For purposes of
    the Plan, an Optionee or Participant shall be deemed to cease
    Service immediately upon the occurrence of the either of the
    following events: (i)&#160;the Optionee or Participant no longer
    performs services in any of the foregoing capacities for the
    Corporation or any Parent or Subsidiary or (ii)&#160;the entity
    for which the Optionee or Participant is performing such
    services ceases to remain a Parent or Subsidiary of the
    Corporation, even though the Optionee or Participant may
    subsequently continue to perform services for that entity.
    Service shall not be deemed to cease during a period of military
    leave, sick leave or other personal leave approved by the
    Corporation; provided, <U>however</U>, that should such leave of
    absence exceed three (3)&#160;months, then for purposes of
    determining the period within which an Incentive Option may be
    exercised as such under the federal tax laws, the
    Optionee&#146;s Service shall be deemed to cease on the first
    day immediately following the expiration of such three (3)-month
    period, unless Optionee is provided with the right to return to
    Service following such leave either by statute or by written
    contract. Except to the extent otherwise required by law or
    expressly authorized by the Plan Administrator or by the
    Corporation&#146;s written policy on leaves of absence, no
    Service credit shall be given for vesting purposes for any
    period the Optionee or Participant is on a leave of absence.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    II.&#160;<B><U>Stock Exchange</U> </B>shall mean the American
    Stock Exchange, the Nasdaq Global or Global Select Market or the
    New York Stock Exchange.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    JJ.&#160;<B><U>Stock Issuance Agreement</U> </B>shall mean the
    agreement entered into by the Corporation and the Participant at
    the time of issuance of shares of Common Stock under the Stock
    Issuance Program.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    KK.&#160;<B><U>Stock Issuance Program</U> </B>shall mean the
    stock issuance program in effect under Article&#160;Three of the
    Plan.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    LL.&#160;<B><U>Subsidiary</U> </B>shall mean any corporation
    (other than the Corporation) in an unbroken chain of
    corporations beginning with the Corporation, provided each
    corporation (other than the last corporation) in the unbroken
    chain owns, at the time of the determination, stock possessing
    fifty percent (50%) or more of the total combined voting power
    of all classes of stock in one of the other corporations in such
    chain.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    MM.&#160;<B><U>10% Shareholder</U> </B>shall mean the owner of
    stock (as determined under Code Section&#160;424(d)) possessing
    more than ten percent (10%) of the total combined voting power
    of all classes of stock of the Corporation (or any Parent or
    Subsidiary).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    NN.&#160;<B><U>2010 Annual Meeting</U> </B>shall mean the 2010
    annual meeting of the Corporation&#146;s shareholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    OO.&#160;<B><U>Withholding Taxes</U> </B>shall mean the
    applicable federal and state income and employment withholding
    taxes to which the holder of an Award under the Plan may become
    subject in connection with the issuance, exercise, vesting or
    settlement of that Award.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    A-4
</DIV><!-- END PAGE WIDTH -->
<!-- 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: Helvetica,Arial,sans-serif">


<DIV align="center" style="font-size: 12pt; margin-top: 18pt"><B>ANNUAL
MEETING OF SHAREHOLDERS OF</B>
</DIV>


  <DIV align="center" style="font-size: 24pt; margin-top: 18pt"><b>AMERICAN SHARED
    HOSPITAL SERVICES</b> </DIV>


  <DIV align="center" style="font-size: 12pt; margin-top: 16pt"><b>June 2, 2010</b>
  </DIV>


<DIV align="center" style="font-size: 10pt; margin-top:20pt"><u><B>NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL</B></u>:
</DIV>


  <DIV align="Center" style="font-size: 10pt; margin-top: 3pt">The Notice of Meeting,
    Proxy Statement, Proxy Card<br>
    are available at www.ashs.com.</DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 25pt">Please sign, date and mail<BR>
your proxy card in the<BR>
envelope provided as soon<BR>
as possible.
</DIV>

<DIV align="center">
<TABLE style="font-size: 8pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="34%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="34%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD rowspan="2" align="right" valign="bottom"><DIV style="margin-left:0px; text-indent:-0px"><FONT face="Wingdings" style="font-size: 10pt">&#234;</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD rowspan="2" align="left" valign="bottom"><FONT face="Wingdings" style="font-size: 10pt">&#234;</FONT></TD></TR>
<TR valign="bottom">
    <TD>&nbsp;</TD>
    <TD nowrap align="center" valign="top">Please detach along perforated line and mail in the envelope provided.</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="center">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="50%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="19%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top">
          <DIV style="margin-left:0px; text-indent:-0px"><FONT face="webdings">&#103;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;20530300000000001000
            0</DIV>
        </TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
        <TD align="right" valign="top">060210</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
    <TABLE style="font-size: 7pt" cellspacing="0" border="0" cellpadding="0" width="100%">
      <!-- Begin Table Head -->
      <TR valign="bottom">
        <TD width="15%">&nbsp;</TD>
        <TD width="2%">&nbsp;</TD>
        <TD width="26%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <!-- VRule -->
        <TD width="1%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="2%">&nbsp;</TD>
        <TD width="30%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
      </TR>
      <!-- End Table Head -->
      <!-- Begin Table Body -->
      <TR style="font-size: 1px">
        <TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
        <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
        <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
        <TD colspan="7" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
        <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
        <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
      </TR>
      <TR valign="bottom">
        <TD colspan="14" valign="top" align="center"><b>The Board of Directors
          recommends a vote FOR election of the directors nominated herein, FOR
          the approval of the amendment and restatement<br>
          of the 2006 stock incentive plan and FOR the ratification of independent
          registered public accounting firm.<BR>
          </b> </TD>
      </TR>
      <TR valign="bottom">
        <TD colspan="14" valign="top" align="center"><b>PLEASE SIGN, DATE AND
          RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE
          OR BLACK INK AS SHOWN HERE</b><FONT face="Wingdings" style="font-size: 12pt">&#120;</FONT><BR>
        </TD>
      </TR>
      <TR style="font-size: 1px">
        <TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
        <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
        <TD valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
        <TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
        <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
        <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
        <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
        <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
        <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
        <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
        <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
        <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
      </TR>
      <TR valign="bottom">
        <TD valign="top" colspan="3">
          <DIV style="margin-left:15px; text-indent:-15px; text-align: justify">1. To elect five of the
            persons named below to the Board of Directors to serve until the 2011
            Annual Meeting of Shareholders and until their successors are elected
            and have qualified. </DIV>
        </TD>
        <TD>&nbsp;</TD>
        <TD align="left" valign="top">&nbsp;</TD>
        <TD style="border-right: 1px solid #000000">&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align="left" valign="top">&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align="center" valign="bottom">FOR</TD>
        <TD>&nbsp;</TD>
        <TD align="center" valign="bottom">AGAINST</TD>
        <TD>&nbsp;</TD>
        <TD align="center" valign="bottom">ABSTAIN</TD>
      </TR>
      <TR valign="bottom" style="font-size: 6pt">
        <TD rowspan="2" valign="top">
          <DIV style="margin-left:0px; text-indent:-0px"><bR>
            <FONT face="webdings" style="font-size: 16pt">&#099;</FONT>&nbsp;&nbsp;<B>FOR
            ALL NOMINEES <BR>
            <bR>
            <FONT face="webdings" style="font-size: 16pt">&#099;</FONT>&nbsp;WITHHOLD
            AUTHORITY <BR>
            &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FOR
            ALL NOMINEES <BR>
            <bR>
            <FONT face="webdings" style="font-size: 16pt">&#099;</FONT>&nbsp;&nbsp;FOR
            ALL EXCEPT</B><BR>
            &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(See
            instructions below) </DIV>
        </TD>
        <TD>&nbsp;</TD>
        <TD rowspan="2" align="left" valign="top"><B>NOMINEES:</B><BR>
          <FONT style="font-size: 12pt">O</FONT>&nbsp;&nbsp;Ernest A. Bates, M.D.<BR>
          <FONT style="font-size: 12pt">O</FONT>&nbsp;&nbsp;Olin C. Robison<bR>
          <FONT style="font-size: 12pt">O</FONT>&nbsp;&nbsp;John F. Ruffle<bR>
          <FONT style="font-size: 12pt">O</FONT>&nbsp;&nbsp;Raymond C. Stachowiak<bR>
          <FONT style="font-size: 12pt">O</FONT>&nbsp;&nbsp;Stanley S. Trotman,
          Jr. </TD>
        <TD>&nbsp;</TD>
        <TD align="left" valign="top">&nbsp;</TD>
        <TD style="border-right: 1px solid #000000">&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align="left" valign="top"><FONT style="font-size: 7pt; align: justify">
          <DIV style="margin-left:15px; text-indent:-15px; text-align: justify">2.&nbsp;&nbsp;2006
            STOCK INCENTIVE PLAN. TO APPROVE THE AMENDMENT AND RESTATEMENT OF
            THE COMPANY&#146;S 2006 STOCK INCENTIVE PLAN. </DIV>
          <br>
          <br>
          <FONT style="font-size: 7pt; align: justify">
          <DIV style="margin-left:15px; text-indent:-15px; text-align: justify">3.&nbsp;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 31, 2010. </DIV>
          </FONT> </FONT></TD>
        <TD>&nbsp;</TD>
        <TD align="center" valign="top"><FONT face="webdings" style="font-size: 16pt">&#099;</FONT><br>
          <br>
          <br>
          <br>
          <FONT face="webdings" style="font-size: 16pt">&#099;</FONT></TD>
        <TD>&nbsp;</TD>
        <TD align="center" valign="top"><FONT face="webdings" style="font-size: 16pt">&#099;</FONT><br>
          <br>
          <br>
          <br>
          <FONT face="webdings" style="font-size: 16pt">&#099;</FONT></TD>
        <TD>&nbsp;</TD>
        <TD align="center" valign="top"><FONT face="webdings" style="font-size: 16pt">&#099;</FONT><br>
          <br>
          <br>
          <br>
          <FONT face="webdings" style="font-size: 16pt">&#099;</FONT></TD>
      </TR>
      <TR valign="bottom" style="font-size: 4pt">
        <TD>&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align="left" valign="top">&nbsp;</TD>
        <TD style="border-right: 1px solid #000000">&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD colspan="7" align="left" valign="top"></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>
        <TD style="border-right: 1px solid #000000">&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD colspan="7" align="left" valign="top" rowspan="2"  style="text-align: justify">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 Proposals
          No. 2 and No. 3.
          <p style="margin-top: 6pt;  text-align: justify">The Board of Directors
            recommends a vote FOR election of the directors nominated herein,
            FOR the approval of the amendment and restatement of the 2006 stock
            incentive plan and FOR the ratification of independent registered
            public accounting firm.
          <p style="margin-top: 6pt;  text-align: justify">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 style="margin-top: 6pt; text-align: justify">PLEASE MARK, DATE
            AND SIGN AS YOUR NAME APPEARS ABOVE AND RETURN IN THE ENCLOSED ENVELOPE.
        </TD>
      </TR>
      <TR valign="bottom">
        <TD colspan="5" valign="bottom" align="left"><div style="font-size: 7pt; margin-left: 80px; text-indent: -80px; text-align: justify"><B><u>INSTRUCTIONS</u>:
          &nbsp;&nbsp;</B>To withhold authority to vote for any individual nominee(s), mark
          &#147;<b>FOR ALL EXCEPT</b>&#148; and fill in the circle next to each nominee
          you wish to withhold, as shown here: (<FONT face="webdings">&#110;</FONT>)</div>
        </TD>
        <TD style="border-right: 1px solid #000000">&nbsp;</TD>
        <TD>&nbsp;</TD>
      </TR>
      <TR style="font-size: 1px">
        <TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
        <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
        <TD colspan="1" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
        <TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align="left" valign="top">&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align="center" valign="top">&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align="center" valign="top">&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align="center" valign="top">&nbsp;</TD>
      </TR>
      <TR valign="bottom">
        <TD valign="top">
          <DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV>
        </TD>
        <TD>&nbsp;</TD>
        <TD align="left" valign="top">&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align="left" valign="top">&nbsp;</TD>
        <TD style="border-right: 1px solid #000000">&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD colspan="7" align="left" valign="bottom" rowspan="6"> <br>
          <br>
          <div align="center">MARK &#147;X&#148; HERE IF YOU PLAN TO ATTEND
            THE MEETING. <FONT face="webdings" style="font-size: 12pt">&#099;</FONT></div>

        </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>
        <TD style="border-right: 1px solid #000000">&nbsp;</TD>
        <TD>&nbsp;</TD>
      </TR>
      <TR valign="bottom">
        <TD valign="top">
          <DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV>
        </TD>
        <TD>&nbsp;</TD>
        <TD align="left" valign="top">&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align="left" valign="top">&nbsp;</TD>
        <TD style="border-right: 1px solid #000000">&nbsp;</TD>
        <TD>&nbsp;</TD>
      </TR>
      <TR valign="bottom">
        <TD valign="top">
          <DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV>
        </TD>
        <TD>&nbsp;</TD>
        <TD align="left" valign="top">&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align="left" valign="top">&nbsp;</TD>
        <TD style="border-right: 1px solid #000000">&nbsp;</TD>
        <TD>&nbsp;</TD>
      </TR>
      <TR valign="bottom">
        <TD valign="top">
          <DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV>
        </TD>
        <TD>&nbsp;</TD>
        <TD align="left" valign="top">&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align="left" valign="top">&nbsp;</TD>
        <TD style="border-right: 1px solid #000000">&nbsp;</TD>
        <TD>&nbsp;</TD>
      </TR>
      <TR valign="bottom">
        <TD valign="top">
          <DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV>
        </TD>
        <TD>&nbsp;</TD>
        <TD align="left" valign="top">&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align="left" valign="top">&nbsp;</TD>
        <TD style="border-right: 1px solid #000000">&nbsp;</TD>
        <TD>&nbsp;</TD>
      </TR>
      <TR style="font-size: 1px">
        <TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
        <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
        <TD colspan="1" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
        <TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align="left" valign="top">&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align="center" valign="top">&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align="center" valign="top">&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align="center" valign="top">&nbsp;</TD>
      </TR>
      <TR valign="bottom">
        <TD colspan="3" valign="top" align="left" style="text-align: justify">To change the address on your
          account, please check the box at right and indicate your new address
          in the address space above. Please note that changes to the registered
          name(s) on the account may not be submitted via this method.</TD>
        <TD>&nbsp;</TD>
        <TD align="left" valign="top">&nbsp;</TD>
        <TD valign="middle" style="border-right: 1px solid #000000"><FONT face="webdings" style="font-size: 16pt">&#099;</FONT></TD>
        <TD>&nbsp;</TD>
        <TD align="left" valign="top">&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align="center" valign="top">&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align="center" valign="top">&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align="center" valign="top">&nbsp;</TD>
      </TR>
      <TR style="font-size: 1px">
        <TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
        <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
        <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
        <TD colspan="1" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align="left" valign="top">&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align="center" valign="top">&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align="center" valign="top">&nbsp;</TD>
        <TD>&nbsp;</TD>
        <TD align="center" valign="top">&nbsp;</TD>
      </TR>
      <!-- End Table Body -->
    </TABLE>
</DIV>
<DIV align="center">
<TABLE style="font-size: 6pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom" style="font-size: 2px">
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD><!-- VRule -->
    <TD width="1%">&nbsp;</TD>
    <TD width="24%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD><!-- VRule -->
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD><!-- VRule -->
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD><!-- VRule -->
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD><!-- VRule -->
    <TD width="1%">&nbsp;</TD>
    <TD width="24%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD><!-- VRule -->
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD><!-- VRule -->
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 0px solid #000000">&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000; border-top: 0px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000; border-top: 0px solid #000000">&nbsp;</TD>
    <TD  style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000; border-right: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-right: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" nowrap><DIV style="margin-left:0px; text-indent:-0px">Signature of Shareholders
</DIV></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Date:
</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>Signature of Shareholders
</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Date:</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-right: 1px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" 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 colspan="3" 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 colspan="3" 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 style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 6pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>Note:</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each
        holder should sign.   When signing as executor, administrator, attorney, trustee or guardian, please
        give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized
        officer, giving full title as such.  If signer is a partnership, please sign in partnership name by authorized person.

</TD>
</TR>

</TABLE>
</DIV>

<DIV align="center" style="margin-top:-15pt">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%"></TD>
    <TD width="5%"></TD>
    <TD width="47%"></TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="left" valign="top"><FONT face="webdings">&#103;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top"><FONT face="webdings">&#103;</FONT></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 250pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 6pt">



</TABLE>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%"></TD>
    <TD width="5%"></TD>
    <TD width="47%"></TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top"><FONT face="Wingdings">&#111;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="webdings">&#103;</FONT></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


  <DIV align="center" style="font-size: 12pt; margin-top: 12pt"><b>AMERICAN SHARED
    HOSPITAL SERVICES </b>

  </DIV>


<DIV align="center" style="font-size: 9pt; margin-top: 3pt"><B>For the Annual Meeting of Shareholders to be held June 2, 2010

<BR>
<font style="font-size: 10pt"> THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS</font>
</B>
</DIV>

 <div align="center">
  <DIV align="justify" style="font-size: 8pt; margin-top: 6pt; width: 96%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 2, 2010 AT 10:00 AM
    EASTERN DAYLIGHT TIME AT THE CARLYLE HOTEL, 35 EAST 76TH STREET, NEW YORK,
    NY, 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 style="margin-top: 3pt">THE BOARD OF DIRECTORS RECOMMENDS A VOTE &quot;FOR&quot; THE ELECTION OF
      THE FIVE PERSONS NOMINATED FOR ELECTION TO THE BOARD OF DIRECTORS, &quot;FOR&quot;
      THE APPROVAL OF THE AMENDMENT AND RESTATEMENT OF THE 2006 STOCK INCENTIVE
      PLAN, AND &quot;FOR&quot; THE RATIFICATION OF MOSS ADAMS LLP AS THE COMPANY'S
      INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2010. 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'S DISCRETIONARY AUTHORITY TO CUMULATE
      VOTES, &quot;FOR&quot; THE ELECTION OF THE PERSONS NOMINATED ON THE REVERSE
      SIDE, AND WILL HAVE THE EFFECT OF WITHHOLDING DISCRETIONARY AUTHORITY TO
      CUMULATE VOTES, &quot;FOR&quot; THE APPROVAL OF THE AMENDMENT AND RESTATEMENT
      OF THE 2006 STOCK INCENTIVE PLAN AND &quot;FOR&quot; 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>

  </DIV>
</div>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><B>(Continued and to be signed on the reverse side)

</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%"></TD>
    <TD width="5%"></TD>
    <TD width="47%"></TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="left" valign="top"><FONT face="webdings">&#103;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">14475&nbsp;&nbsp;<FONT face="webdings">&#103;</FONT>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



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



</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>GRAPHIC
<SEQUENCE>2
<FILENAME>f55641f5564101.gif
<DESCRIPTION>GRAPHIC
<TEXT>
begin 644 f55641f5564101.gif
M1TE&.#EA/@$J`/?_````````,P``9@``F0``S```_P`S```S,P`S9@`SF0`S
MS``S_P!F``!F,P!F9@!FF0!FS`!F_P"9``"9,P"99@"9F0"9S`"9_P#,``#,
M,P#,9@#,F0#,S`#,_P#_``#_,P#_9@#_F0#_S`#__S,``#,`,S,`9C,`F3,`
MS#,`_S,S`#,S,S,S9C,SF3,SS#,S_S-F`#-F,S-F9C-FF3-FS#-F_S.9`#.9
M,S.99C.9F3.9S#.9_S/,`#/,,S/,9C/,F3/,S#/,_S/_`#/_,S/_9C/_F3/_
MS#/__V8``&8`,V8`9F8`F68`S&8`_V8S`&8S,V8S9F8SF68SS&8S_V9F`&9F
M,V9F9F9FF69FS&9F_V:9`&:9,V:99F:9F6:9S&:9_V;,`&;,,V;,9F;,F6;,
MS&;,_V;_`&;_,V;_9F;_F6;_S&;__YD``)D`,YD`9ID`F9D`S)D`_YDS`)DS
M,YDS9IDSF9DSS)DS_YEF`)EF,YEF9IEFF9EFS)EF_YF9`)F9,YF99IF9F9F9
MS)F9_YG,`)G,,YG,9IG,F9G,S)G,_YG_`)G_,YG_9IG_F9G_S)G__\P``,P`
M,\P`9LP`F<P`S,P`_\PS`,PS,\PS9LPSF<PSS,PS_\QF`,QF,\QF9LQFF<QF
MS,QF_\R9`,R9,\R99LR9F<R9S,R9_\S,`,S,,\S,9LS,F<S,S,S,_\S_`,S_
M,\S_9LS_F<S_S,S___\``/\`,_\`9O\`F?\`S/\`__\S`/\S,_\S9O\SF?\S
MS/\S__]F`/]F,_]F9O]FF?]FS/]F__^9`/^9,_^99O^9F?^9S/^9___,`/_,
M,__,9O_,F?_,S/_,____`/__,___9O__F?__S/___P``````````````````
M````````````````````````````````````````````````````````````
M````````````````````````````````````````````````````````````
M`````````````````````"P`````/@$J```(_P"O"1Q(L*#!0```L#+(L*'#
MAQ`C2IQ(L:+%BQ@S:MS(L:-'@@@!6/E(LJ3)DRA3JES)DJ`5`"L$AAS9LJ;-
MFSASZESY,J',A#$_L@JTLZC1HTB3&DSH\UK(H!U9):3)D)65A4JSZD2(5:O7
MBBN8_H3YL:?"JD"_JF7)M.O:MP99A04P%BI'IDT+FH7+]^-<D7T#"WP9-"3=
MJ'@!$"W(U*Y@BH&L+%XKM?'COF$+B^UH..'D@98O5]R\UBQ9T6MG#B:]L6>@
ML)^=AD8=T7!LHX'<DDU+^ZOKU7E;>PY+%?AIM;<KFDVND_!`A`(S]_XZ=^#>
MCCVOO8QMUK'6X!4K>_].*AXTS:G3M5:FVM,[QNJP]3(M[G5\1.("Q2=T6Y+_
MP[\"-549<^DU9Y]VO'%4W7X%_44@4@<Z9)AQX)%DA7L-S8<@3;\5F%2"U\R%
MH45S2>6=@YRAA!]$`.I7H5\C%B0>40RVYV%2)1(T%U5#62&914QQM11K&*UW
M4D_^#:1?3'^AI^)A$=D8'X`W'F4D01K*AM>#0Q(9H)<675>284EVIEB3QQT)
M6$1!FAABD%4>A21!XM&$)I02X>4>7AQ->)*>@42VPJ")*9;8"DE^%%*B,IEE
MVFQQ[@3BFVF9^:)#?]&GY9H@$6C55=:E6=*=A98JZI-G%129J86"&NE6$3;_
M&1->"_U($8KR17C-E3)"RA*IK`+%*$GZ^7AAL(26&B.6R[XJT8H4%CHL@7P:
M1*5+7KJ(TVO!)J:I2G(ABQ=-D1V;V(-/030L9SYF)5VHK++(*9UPYCJO<0<E
MEI.+IG*9TFLBKF!KM0P)*FS!;3T4DK\7%9O4POF-:^:W6)Z*8(7Z,90EM@3?
MU&VJ7VWLD)A*)OR0C28=BN-I^A%EYK`HT^NDDDWV6B_'8+($<++CKH4K1.F6
M#-.Z%^/I$9K-LM239-UA91K%$4_J\'.%3F8F0Z8E+6/*B1&]4H_F%BJPK0WQ
MFJ-4%'=V7YJLE"GV1!<R#):I=CWMT)(RL_8H>OPJ_V:MGLI=JM';.UGZ\=`9
MGJ;:-6!J"U&]BW8)TZ1EY_RL4S[RW*JJM):-9GYWCL0MW:P&&FC8\P6ZT%"F
M&^OCEB65"C5*0V5J^EBVFIYIE]$Q>#/.@H^UYHXV*[2XPAW7%C:P0`6*,.51
M&WKXYH8KMO?TA\]^$9FC:V]A\PV%).&.78DU%U$B)IZ\JG^M,/J]-LXY?N=`
MH_ZQ]F2BU12PUS/XY;G_DUW_/J8UBBPM>C5QT\DLEC>BM"==XDG2TBPWP$DY
M"GK"6Q](NG4^V;A/(GXR2(<>]<%-T4\F@QJ4JW9UIQ):187F:A\,Y1:>FW50
M:4;3F-^`5JI`H2=](@Q2SO^JIR_@S4PF1`1*"E/(P=PP;G(,?-X.&S2O<JTP
M/\9R7L.<^)4ZY<UKPH%(=IX%P(#]KG?["2'FDB69S@@L=5@A%1.Q=S_)\,<T
M8-S4MR[DK(R0+&H%].,4=>B]<'6M;_="D6U,:!_3^)".K++*](Q5&X'E\7^7
M[".;_$=%D*7D)63CV$.&$BPBM@YPC)06O`"#R,,)3'6=,IWI,KD1J]!0DU&R
M'`;'1*A7FJYY"VE="W]DF`>FLC&3:65LB`<Z5OG2=5?$I32?>"\=Z4HE2426
MI@[(&-GEJV<Z'&0JO3?-<II,BK34"-@RM\2I^$B+S_..(6$22CK-<F2<M"<\
MR\DT3PF)4W*T46,_!YJ>&:%FD01-Z'28>9G\*?2AHHF@:(`(T8H*AJ(7O:9%
,-]K%79:FFAL-"``[
`
end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
