<SEC-DOCUMENT>0001095811-01-505876.txt : 20011031
<SEC-HEADER>0001095811-01-505876.hdr.sgml : 20011031
ACCESSION NUMBER:		0001095811-01-505876
CONFORMED SUBMISSION TYPE:	DEF 14A
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20020111
FILED AS OF DATE:		20011029

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			NATURAL ALTERNATIVES INTERNATIONAL INC
		CENTRAL INDEX KEY:			0000787253
		STANDARD INDUSTRIAL CLASSIFICATION:	PHARMACEUTICAL PREPARATIONS [2834]
		IRS NUMBER:				841007839
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0630

	FILING VALUES:
		FORM TYPE:		DEF 14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-15701
		FILM NUMBER:		1768874

	BUSINESS ADDRESS:	
		STREET 1:		1185 LINDA VISTA DR
		CITY:			SAN MARCOS
		STATE:			CA
		ZIP:			92069
		BUSINESS PHONE:		6197447340

	MAIL ADDRESS:	
		STREET 1:		1185 LINDA VISTA DRIVE
		CITY:			SAN MARCOS
		STATE:			CA
		ZIP:			92069

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	AMERICAN ACQUISITIONS INC
		DATE OF NAME CHANGE:	19860929
</SEC-HEADER>
<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
<FILENAME>a76510dedef14a.htm
<DESCRIPTION>DEFINITIVE PROXY STATEMENT
<TEXT>
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<HEAD>
<TITLE>Natural Alternatives International, Inc. DEF 14A</TITLE>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center"><FONT size="2"><B>SCHEDULE 14A INFORMATION</B></FONT>

<P align="left"><FONT size="2">Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No.)</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Filed by the Registrant &#091;X&#093;
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Filed by a Party other than the Registrant &#091;&nbsp;&nbsp;&nbsp;&#093;
</FONT>
<P><FONT size="2">Check the appropriate box:
</FONT>
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        <TD width="4%">&nbsp;</TD>
        <TD width="2%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="91%">&nbsp;</TD>
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<TR valign="bottom">
        <TD></TD>
        <TD valign="top"><FONT size="2">&#091;&nbsp;&nbsp;&nbsp;&#093;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
Preliminary Proxy Statement</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD valign="top"><FONT size="2">&#091;X&#093;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
Definitive Proxy Statement</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD valign="top"><FONT size="2">&#091;&nbsp;&nbsp;&nbsp;&#093;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
Confidential, for Use of the Commission Only (as permitted by Rule&nbsp;14a-6(e)(2))</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD valign="top"><FONT size="2">&#091;&nbsp;&nbsp;&nbsp;&#093;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
Definitive Additional Materials</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD valign="top"><FONT size="2">&#091;&nbsp;&nbsp;&nbsp;&#093;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12</FONT></TD>
</TR>
</TABLE>
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<P>&nbsp;</P>
<P>


<P align="center"><FONT size="3"><B>NATURAL ALTERNATIVES INTERNATIONAL,
INC.</B></FONT>
<HR size="1" noshade>
<DIV align="center"><FONT size="2">(Name of Registrant as Specified In Its Charter)</FONT></DIV>

<P align="center"><FONT size="2">&nbsp;</FONT>
<HR size="1" noshade>
<DIV align="center"><FONT size="2">(Name of Person(s) Filing Proxy Statement, if other than the Registrant)</FONT></DIV>

<P><FONT size="2">Payment of Filing Fee (Check the appropriate box):
</FONT>
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<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
        <TD width="1%">&nbsp;</TD>
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        <TD width="2%">&nbsp;</TD>
        <TD width="93%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&#091;X&#093;</FONT></TD>

<TD align="left" valign="top" colspan="4"><FONT size="2">&nbsp;&nbsp;No
fee required.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&#091;&nbsp;&nbsp;&nbsp;&#093;</FONT></TD>
        <TD align="left" valign="top" colspan="4"><FONT size="2">&nbsp;&nbsp;Fee computed on table below per Exchange Act Rules&nbsp;14a-6(i)(4) and 0-11.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
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        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
(1)
</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top" colspan="2"><FONT size="2">Title of each class of securities to which transaction applies:<BR>
         Limited Partnership Interests<BR>
        <HR size="1" noshade></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
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        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
(2)
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">Aggregate number of securities to which transaction applies:<BR><BR>
        <HR size="1" noshade></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
(3)
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule&nbsp;0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):<BR><BR>
        <HR size="1" noshade></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
(4)
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">Proposed maximum aggregate value of transaction:<BR><BR>
        <HR size="1" noshade></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
(5)
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">Total fee paid:<BR><BR>
        <HR size="1" noshade></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&#091;&nbsp;&nbsp;&nbsp;&#093;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top" colspan="3"><FONT size="2">Fee paid previously with preliminary materials.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD></TD>
        <TD></TD>
        <TD valign="top"><FONT size="2">&#091;&nbsp;&nbsp;&nbsp;&#093;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top" colspan="3"><FONT size="2">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.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
(1)
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">Amount Previously Paid:<BR><BR>
        <HR size="1" noshade></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
(2)
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">Form, Schedule or Registration Statement No.:<BR><BR>
        <HR size="1" noshade></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
(3)
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">Filing Party:<BR><BR>
        <HR size="1" noshade></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
(4)
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">Date Filed:<BR><BR>
        <HR size="1" noshade></FONT></TD>
</TR>
</TABLE>
</CENTER>

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


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

<P align="center"><FONT size="2"><B>NATURAL ALTERNATIVES INTERNATIONAL, INC.</B></FONT>

<P>
<HR width="26%" align="center" size="1" noshade>
<P>

<P align="center"><FONT size="2"><FONT size="3"><B>Notice of Annual Meeting of Stockholders<BR>
to be Held on January&nbsp;11, 2002</B></FONT></FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An Annual Meeting of Stockholders of Natural Alternatives International,
Inc., a Delaware corporation (the &#147;Company&#148;), will be held at the Olympic
Resort Hotel and Spa, 6111 El Camino Real, Carlsbad, California 92009 on
Friday, January&nbsp;11, 2002, at 1:00 p.m., local time, for the following purposes:
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;Election of one (1)&nbsp;director of the Company in Class&nbsp;II to serve until
the next Annual Meeting of Stockholders held to elect directors in Class&nbsp;I (and
until the election and qualification of their successors).
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;Confirmation of Ernst &#038; Young LLP as the Company&#146;s independent auditors
for the fiscal year ending June&nbsp;30, 2002.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;Transaction of such other business as may properly come before the
Annual Meeting of Stockholders or any adjournment or postponement thereof.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors has fixed the close of business on November&nbsp;15,
2001 as the record date for determination of stockholders entitled to notice of
and to vote at the Annual Meeting of Stockholders or any adjournment or
postponement thereof.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All stockholders are cordially invited to attend the Annual Meeting of
Stockholders in person. <B>Regardless of whether you plan to attend the meeting,
please sign and date the enclosed Proxy and return it promptly in the
accompanying envelope, postage for which has been provided if mailed in the
United States. </B>The prompt return of Proxies will ensure a quorum and save the
Company the expense of further solicitation. Any stockholder returning the
enclosed Proxy may revoke it prior to its exercise by voting in person at the
meeting or by filing with the Secretary of the Company a written revocation or
a duly executed Proxy bearing a later date.
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="50%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="50%"><FONT size="2">By Order of the Board of Directors</FONT></TD>
</TR>
</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="50%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="50%"><FONT size="2">Mark A. LeDoux<BR>
Chairman of the Board and Chief Executive Officer</FONT></TD>
</TR>
</TABLE>
<P><FONT size="2">San Marcos, California<BR>
November&nbsp;29, 2001
</FONT>
<P align="center"><FONT size="2">&nbsp;
</FONT>

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<!-- 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>
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	<TD width="3%"></TD>
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	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="76%"></TD>
</TR>
<TR><TD colspan="9"><A HREF="#000">PROPOSAL 1</A></TD></TR>
<TR><TD colspan="9"><A HREF="#001">REPORT OF THE AUDIT COMMITTEE</A></TD></TR>
<TR><TD colspan="9"><A HREF="#002">REPORT OF THE HUMAN RESOURCES COMMITTEE</A></TD></TR>
<TR><TD colspan="9"><A HREF="#003">STOCKHOLDER RETURN PERFORMANCE GRAPH</A></TD></TR>
<TR><TD colspan="9"><A HREF="#004">SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT</A></TD></TR>
<TR><TD colspan="9"><A HREF="#005">PROPOSAL 2</A></TD></TR>
<TR><TD colspan="9"><A HREF="#006">STOCKHOLDERS&#146; PROPOSALS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#007">SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE</A></TD></TR>
<TR><TD colspan="9"><A HREF="#008">ANNUAL REPORTS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#009">OTHER MATTERS</A></TD></TR>
</TABLE>
</CENTER>
<!-- /TOC -->
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center"><FONT size="2"><B>NATURAL ALTERNATIVES INTERNATIONAL, INC.</B><BR>
1185 Linda Vista Drive<BR>
San Marcos, California 92069</FONT>

<P>
<HR width="26%" align="center" size="1" noshade>
<P>

<P align="center"><FONT size="2"><B>PROXY STATEMENT</B></FONT>

<P>
<HR width="26%" align="center" size="1" noshade>
<P>


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

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The enclosed Proxy is solicited on behalf of the Board of Directors of
Natural Alternatives International, Inc., a Delaware corporation (the
&#147;Company&#148;), for use at the meeting of Stockholders (&#147;Annual Meeting&#148;) to be
held on January&nbsp;11, 2002, at 1:00 p.m., local time, or at any adjournment or
postponement thereof. The Annual Meeting will be held at the Olympic Resort
Hotel and Spa, 6111 El Camino Real, Carlsbad, California 92009. This Proxy
Statement and the accompanying Proxy and annual report are first being mailed
to stockholders on or about November&nbsp;29, 2001.
</FONT>
<P align="left"><FONT size="2"><B>Voting</B></FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Only stockholders of record at the close of business on November&nbsp;15, 2001
will be entitled to vote at the Annual Meeting. On November&nbsp;15, 2001, there
were approximately 5,785,606 shares of Common Stock outstanding. The Company
is incorporated in Delaware and is not required by Delaware corporation law or
its Certificate of Incorporation to permit cumulative voting in the election of
directors.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each share of Common Stock will have one vote on each matter properly
presented and submitted to a vote at the Annual Meeting. An affirmative vote
of a majority of the shares represented at the Annual Meeting and entitled to
vote thereon (where the holders of a majority of the shares entitled to vote
are present in person or by Proxy) will be necessary to approve each matter,
except for the election of directors, who are elected by a plurality of the
votes of the shares present in person or by Proxy. There are no rights that
will accrue to stockholders dissenting in any matter known to the Company to be
raised at the Annual Meeting. Abstentions with respect to any matter are
treated as shares present or represented and entitled to vote on that matter
and thus have the same effect as negative votes. If shares are not voted by
the broker who is the record holder of the shares, or if shares are not voted
in other circumstances in which Proxy authority is defective or has been
withheld with respect to any matter, these non-voted shares are not deemed to
be present or represented for purposes of determining whether stockholder
approval of that matter has been obtained.
</FONT>
<P align="left"><FONT size="2"><B>Revocability of Proxies</B></FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;When the enclosed Proxy is properly executed and returned, the shares it
represents will be voted at the Annual Meeting in accordance with any
directions noted thereon, and if no such directions are indicated, the shares
it represents will be voted in favor of the proposals set forth in the notice
attached hereto. Any person giving a Proxy in the form accompanying this
statement has the power to revoke it any time before its exercise by filing
with the Secretary of the Company at the Company&#146;s principal executive office,
1185 Linda Vista Drive, San Marcos, California 92069, an instrument of
revocation or a duly executed Proxy bearing a later date, or by attending the
Annual Meeting and voting in person.
</FONT>
<P align="center"><FONT size="2">&nbsp;
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="left"><FONT size="2"><B>Solicitation</B></FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company is soliciting the enclosed Proxy and will bear the entire cost
of the solicitation of Proxies, including the preparation, assembly, printing
and mailing of this Proxy Statement, the Proxy and any additional material
furnished to stockholders. Copies of solicitation material will be furnished
to brokerage houses, fiduciaries and custodians holding shares in their names
that are beneficially owned by others to forward to such beneficial owners. In
addition, the Company may reimburse such persons for their cost of forwarding
the solicitation material to such beneficial owners. The Company has retained
Mellon Shareholder Services to assist in the solicitation of Proxies. The
solicitation of Proxies by mail may be supplemented by telephone, telegram
and/or personal solicitation by directors, officers, employees or agents of the
Company. No additional compensation will be paid for any such services.
Except as described above, the Company does not intend to solicit Proxies other
than by mail.
</FONT>
<!-- link1 "PROPOSAL 1" -->
<DIV align="left"><A NAME="000"></A></DIV>
<P align="center"><FONT size="2"><B>PROPOSAL 1<BR>
ELECTION OF CLASS II DIRECTOR</B></FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Directors of the Company are elected to serve three-year terms. The Class
II director to be elected at the Annual Meeting of stockholders to be held on
January&nbsp;11, 2002, will serve until his successor is elected and has qualified
or until his death, resignation or removal. The nominee for Class&nbsp;II director,
Lee G. Weldon, is currently a member of the Company&#146;s Board of Directors (the
&#147;Board&#148;) in Class&nbsp;II. Mr.&nbsp;Weldon was elected a Class&nbsp;II director at the
meeting of stockholders held on December&nbsp;6, 1999. The other currently serving
Class&nbsp;II director, Marie A. LeDoux, has recently declined to be nominated for
election as a Class&nbsp;II director for health reasons and her term as a Class&nbsp;II
director will expire on January&nbsp;11, 2002. The Board is presently evaluating
candidates to fill the vacancy created by Ms.&nbsp;LeDoux&#146;s decision not to seek
reelection as a Class&nbsp;II director, but has not as yet completed the evaluation
process. The Board does not know if it will complete the evaluation of
candidates to fill the Class&nbsp;II director vacancy prior to January&nbsp;11, 2002. If
it does, the Company shall publicly announce the proposed candidate and the
shares represented by the enclosed proxy will be voted for the election of the
Board nominee. If the Board does not nominate a candidate prior to January&nbsp;11,
2002, it will appoint a director to fill the Class&nbsp;II vacancy at such time as
it completes its evaluation of candidates, and that director will serve until
the next succeeding stockholder meeting held for the election of Class&nbsp;II
directors. The Class&nbsp;I directors on the Board, Mark A. LeDoux and Joe E.
Davis, are serving terms that will expire at the next meeting of stockholders
held to elect Class&nbsp;I directors. The sole Class&nbsp;III director on the Board, J.
Scott Schmidt, is serving a term that will expire at the next meeting of
stockholders held to elect the Class&nbsp;III directors.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless authority to do so is otherwise withheld, it is intended the shares
represented by the enclosed Proxy will be voted for the election of Lee G.
Weldon as a Class&nbsp;II director. Mr.&nbsp;Weldon has agreed to serve if elected. In
the event Mr.&nbsp;Weldon becomes unavailable or refuses to serve as a director (an
event that is not anticipated), the shares represented by the enclosed Proxy
will be voted for the election of such other nominee as the Board may select.
</FONT>
<P align="left"><FONT size="2"><B>Information About Nominee and Directors</B></FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Set forth below is information regarding the nominee for election as a
director in Class&nbsp;II and the continuing directors in Class&nbsp;I and Class&nbsp;III,
including information furnished by them as to their principal occupations at
present and for the last five years, certain directorships held by each, their
age as of November 2930, 2001, and the year in which each became a director of
the Company. There are no family relationships among any of the directors or
executive officers of the Company.
</FONT>
<P align="center"><FONT size="2">2
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
        <TD width="90%">&nbsp;</TD>
        <TD width="7%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="2">Name</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="3" align="center"><FONT size="2">Age</FONT></TD>
</TR>
<TR valign="top">
        <td align="left"><FONT size="2"><hr noshade size="1" width=31></FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="3" align="center"><FONT size="2"><hr noshade size="1"></FONT></TD>
</tr>
</TABLE>
</CENTER>
<P align="left"><FONT size="2"><B>CLASS II</B></FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
        <TD width="90%">&nbsp;</TD>
        <TD width="7%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Lee G. Weldon</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">62</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mr.&nbsp;Weldon has been a director of the Company since June of 1992. He was
the Chairman and Chief Executive Officer of Kal Healthway, Inc., a food
supplement distributor that was the earliest significant customer of the
Company, from 1978 to 1995. Mr.&nbsp;Weldon graduated from UCLA and obtained a
Bachelor of Science in Business Administration in 1963. Mr.&nbsp;Weldon became a
member of Young President&#146;s Organization (&#147;YPO&#148;) in 1982, and since 1990 he has
been a graduate member of YPO.
</FONT>
<P align="left"><FONT size="2"><B>The Board of Directors recommends a vote FOR the Class&nbsp;II nominee listed above.</B></FONT>

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

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
        <TD width="90%">&nbsp;</TD>
        <TD width="7%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="2">Mark A. LeDoux</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">47</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mr.&nbsp;LeDoux is Chairman of the Board of Directors, Chief Executive Officer
and Assistant Treasurer of the Company. Mr.&nbsp;LeDoux relinquished the title of
President during 2001. He was a director, the President and Chief Executive
Officer of Natural Alternatives, Inc., the predecessor corporation, from its
formation in 1981 until the 1986 merger into the Company. Mr.&nbsp;LeDoux has been
a director and Chief Executive Officer of the Company since the August 1986
merger of the predecessor corporation into the Company, which continued the
business and operations of Natural Alternatives, Inc. He was appointed
President of the Company in January 1999, an office he previously held from
August 1986 to December 1996. From 1976 to 1980, Mr.&nbsp;LeDoux held the position
of Executive Vice President and Chief Operating Officer of Kovac Laboratories,
a company which was engaged in the business of manufacturing nutritional
supplements. He attended the University of Oklahoma and graduated Cum Laude
with a Bachelor of Arts and Letters in 1975. Mr.&nbsp;LeDoux graduated from Western
State University, College of Law in 1979, receiving a Juris Doctor degree. Mr.
LeDoux is the son of Marie A. LeDoux, who is currently a director and the
Secretary of the Company.
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
        <TD width="90%">&nbsp;</TD>
        <TD width="7%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Joe E. Davis</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">66</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mr.&nbsp;Davis was appointed a director of the Company in February 2000. Mr.
Davis has been a private investor for over ten years, and currently serves as a
director of several public and privately held corporations, including BMC
Industries, Inc., Wilshire Technologies, Inc., and Freymiller Trucking, Inc.
Mr.&nbsp;Davis previously served as Chairman of the Board of Linear Corporation from
1987 to 1988, and as President and Chief Executive Officer of BMC Industries,
Inc. during 1985. From 1974 to 1982 Mr.&nbsp;Davis held the position of President
and Chief Executive Officer of National Health Enterprises, Inc. Mr.&nbsp;Davis
graduated from the University of Texas with a B.S. in chemistry and has an
M.B.A. from the Harvard Graduate School of Business Administration.
</FONT>
<P align="left"><FONT size="2"><B>CLASS III</B></FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
        <TD width="90%">&nbsp;</TD>
        <TD width="7%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">J. Scott Schmidt</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">64</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mr.&nbsp;Schmidt became a director of the Company in January 1999. Mr.&nbsp;Schmidt
is currently a Group Publisher with 101 Communications LLP. From 1995 until he
accepted his current position in 2000, Mr.&nbsp;Schmidt was a Management Consultant
specializing in communications, marketing, and mergers and acquisitions. Mr.
Schmidt was Chief Executive Officer of Thompson Newspapers
</FONT>
<P align="center"><FONT size="2">3
</FONT>

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

<P><FONT size="2">Corporation between from 1992 to 1994. From 1991 to 1992 Mr.&nbsp;Schmidt was
the President, Publisher and Partner of American Collegiate Network, Inc.,
which was the publisher of the National College Newspaper. Mr.&nbsp;Schmidt was
President and Chief Executive Officer of Hilton/Schmidt, Inc., which
specialized in consulting for media companies in the areas of editorial, sales,
marketing and acquisitions, prior thereto. Mr.&nbsp;Schmidt previously spent 27&nbsp;years with Tribune Company of Chicago, eventually serving as Vice
President/News and Information for the entire corporation. Mr.&nbsp;Schmidt
attended Bradley University and Northwestern University.
</FONT>
<P align="left"><FONT size="2"><B>Board Committees and Meetings</B></FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the fiscal year ended June&nbsp;30, 2001, the Board held six (6)&nbsp;regular
meetings. All directors then in office attended at least 75% of the aggregate
number of meetings of the Board and of the Committees on which such directors
served during the fiscal year ended June&nbsp;30, 2001.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All members of the Board hold office until the next meeting of
stockholders held for the purpose of election of the directors in their class
held on or about the expiration of their respective terms of office and the
election and qualification of their successors. All directors who are not also
employees or officers of the Company receive a minimum annual fee of $5,000,
payable in arrears, for service during the prior year on the date of the
meeting of stockholders held to elect Directors of their Class, plus a fee of
$1,000 for each Board and Committee meeting personally attended. Upon first
becoming a member of the Board of Directors, each outside director receives a
nonqualified stock option to purchase 10,000 common shares. Thereafter, during
each year an outside director serves on the Board of Directors, the outside
director receives an additional nonqualified stock option covering 10,000
common shares which vests ratably over three years. Executive officers serve
at the discretion of the Board. The Board has an Audit Committee and a Human
Resources Committee but does not have a Nominating Committee. The Human
Resources Committee functions as the compensation committee.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Audit Committee is composed of independent directors. The Audit
Committee functions pursuant to a written charter adopted by the Board during
2000. The Audit Committee recommends a firm of certified public accountants to
be appointed by the Board, subject to ratification by the stockholders, as
independent auditors to audit the Company&#146;s financial statements and to perform
services related to the audit. The Audit Committee also has the responsibility
to review the scope and results of the audit with the independent auditors,
review with management and the independent auditors the Company&#146;s interim and
year-end operating results, consider the adequacy of the internal accounting
and control procedures of the Company, review any non-audit services to be
performed by the independent auditors and consider the effect of such
performance on the independence of the auditors. The Audit Committee currently
consists of directors Davis, Weldon and Schmidt. During fiscal year 2001, the
Audit Committee met six (6) times.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Among other duties, the Human Resources Committee establishes and
recommends to the Board rates of salary, bonuses, retirement and other
compensation for all directors and officers of the Company and for such other
personnel it determines advisable or as the Board may designate. The Human
Resources Committee currently consists of directors Weldon and Schmidt.
Messrs.&nbsp;Weldon and Schmidt are not officers or employees of the Company or any
of its subsidiaries. During fiscal year 2001, the Human Resources Committee
met three (3) times.
</FONT>
<P align="center"><FONT size="2">4
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="center"><FONT size="2"><B>EXECUTIVE OFFICERS</B></FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%">
<TR valign="bottom">
        <TD width="17%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="62%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD nowrap align="center"><FONT size="1">Name</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center"><FONT size="1">Position</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1">Age</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1">First Year of Service</FONT></TD>
</TR>
<TR valign="bottom">
        <TD nowrap align="center"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
        <TD valign="top" nowrap><FONT size="2">Mark A. LeDoux(1)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
Chairman of the Board of Directors, Chief
Executive Officer and Assistant Treasurer
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">47
</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">1986</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD valign="top" nowrap><FONT size="2">Randell Weaver(2)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
Chief Operating Officer and Chief Financial Officer
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">43
</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">2001</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD valign="top" nowrap><FONT size="2">Robert K. Clausen(3)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
Senior Vice President Manufacturing
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">48
</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">2000</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD valign="top" nowrap><FONT size="2">R. David Lough(4)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
Vice President Business Development
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">56
</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">1998</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD valign="top" nowrap><FONT size="2">John A. Wise(5)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
Chief Scientific Officer
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">61
</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">1987</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P>
<HR size="1" width="18%" align="left" noshade>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">(1)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2"><B>Mark A. LeDoux</B>. Information concerning Mr.&nbsp;LeDoux&#146;s background and
experience is set forth at page 2 above.</FONT></TD>
</TR>
</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">(2)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2"><B>Randell Weaver </B>was appointed Chief Financial Officer in June, 2001 and
Chief Operating Officer on August&nbsp;24, 2001. After four years in public
accounting with Pannell Kerr Forster, Mr.&nbsp;Weaver served as Chief Financial
Officer of Microcomputer Memories, Inc. from 1984 to 1986. From 1986 to
1995, Mr.&nbsp;Weaver was the principal of Randell Weaver Consulting where he
managed operational and financial restructurings of troubled enterprises.
From 1995 to 1998, Mr.&nbsp;Weaver was President and Chief Financial
Officer, respectively, of two
subsidiaries of Grupo Industrial Bimbo, S.A. engaged in the baking
business. From 1999 to 2000, Mr.&nbsp;Weaver was retained by the shareholders
of Solutioneering, Inc. to assist in its bankruptcy reorganization. In
2000, Mr.&nbsp;Weaver joined CGM Group, LLC, a management consulting firm, as
Managing Director. Mr.&nbsp;Weaver has a bachelor of science degree in
Business Administration from California State University, Northridge and a
Master&#146;s Degree in Spiritual Psychology from the University of Santa Monica.</FONT></TD>
</TR>
</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">(3)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2"><B>Robert K. Clausen </B>joined the Company as Vice President Manufacturing in
October, 2000, and was promoted to Senior Vice President Manufacturing on
August&nbsp;24, 2001. Prior to joining the Company, Mr.&nbsp;Clausen was Director
of Manufacturing of Chattem, Inc. from 1993 to 2000. Mr.&nbsp;Clausen
received a B.S. in Biology from Upsala College in 1975 and a B.A. in
Chemistry from Rutgers University in 1978.</FONT></TD>
</TR>
</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">(4)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2"><B>R. David Lough </B>joined the Company in December 1998. Mr.&nbsp;Lough was
employed by Shaklee Corporation from 1975 to 1986 and from 1996 to 1998,
serving as Vice President, International the latter two years. From 1992
to 1995, he was the Vice President of International Business with Nature&#146;s
Sunshine, Inc. Mr.&nbsp;Lough received a B.S. in Packaging Engineering and
Marketing from Michigan State University in 1967. He earned his M.B.A. in
Marketing from Santa Clara University in 1971.</FONT></TD>
</TR>
</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">(5)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2"><B>John A. Wise </B>joined the Company in 1987 and served as Director of Science
and Technology and Vice President of Science and Technology until being
appointed to his current position. From 1982 to 1986, Dr.&nbsp;Wise was
Executive Vice President of Research and Development for United Sciences
of America, Inc. Dr.&nbsp;Wise received a B.S. in Preventative Medicine and a
B.A. in Zoology from the University of Washington in 1963 and an M.S. in
Microbiology from the University of Minnesota in 1967. He received his
Ph.D. in Microbiology from Oregon State University in 1970.</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">5
</FONT>

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



<P align="left"><FONT size="2"><B>Summary of Cash and Other Compensation</B></FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth compensation for services rendered in all
capacities to the Company during the fiscal years ending June&nbsp;30, 1999, 2000
and 2001 by each of the five most highly compensated executive officers:
</FONT>
<P align="center"><FONT size="2"><B>SUMMARY COMPENSATION TABLE<BR>
ANNUAL COMPENSATION</B></FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
        <TD width="20%">&nbsp;</TD>
        <TD width="15%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="2%">&nbsp;</TD>
        <TD width="5%">&nbsp;&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="4%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="7%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="7%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1">All Other</FONT></TD>
</TR>
<TR valign="bottom">
        <TD nowrap align="center"><FONT size="1">Name</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1">Year</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1">Salary</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1">Bonus</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1">Other(1)</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1">Compensation</FONT></TD>
</TR>
<TR valign="bottom">
        <TD nowrap align="center"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
</TR>

<TR valign="bottom">
        <TD nowrap><FONT size="2">Mark A. LeDoux</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">2001</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">212,019</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">203</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">2000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">253,662</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">17,010</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">28,779</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">1999</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">229,360</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">609</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">345,781</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">27,756</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD nowrap><FONT size="2">Peter C. Wulff (2)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">2001</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">169,859</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">203</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">2000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">100,962</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">2,810</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">1999</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD nowrap><FONT size="2">R. David Lough</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">2001</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">162,308</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">203</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">2000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">150,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">66,586</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">15,546</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">1999</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">75,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">9,246</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">2,739</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD nowrap><FONT size="2">Douglas E. Flaker(3)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">2001</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">135,289</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">12,703</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">2000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">111,077</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">15,941</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">18,693</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">1999</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">50,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2"></FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">9,339</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">2,588</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom">
        <TD nowrap><FONT size="2">John A. Wise</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">2001</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">170,769</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">203</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">61,216</FONT></TD>
        <TD nowrap><FONT size="2">(4)</FONT></TD>
</TR>

<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">2000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">143,385</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">19,139</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">17,263</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">1999</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">110,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">629</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">46,905</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">21,433</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P>
<HR size="1" width="18%" align="left" noshade>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">(1)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Amounts listed for named executive do not exceed the lesser of $50,000,
or 10% of salary and bonus combined, except as set forth in the following
table.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">(2)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Mr.&nbsp;Wulff resigned as Chief Financial Officer and an employee of the
Company on May&nbsp;25, 2001.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">(3)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Mr.&nbsp;Flaker resigned as Vice President Marketing and an employee of the
Company on August&nbsp;31, 2001.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">(4)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">The amount shown represents forgiveness of indebtedness owed by Dr.&nbsp;Wise to
the Company.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2"><B>Option Grants</B></FONT>

<P><FONT size="2">The following table contains information concerning the stock option grants to
the Company&#146;s named executive officers that were made for the fiscal year ended
June&nbsp;30, 2001:
</FONT>
<P align="center"><FONT size="2">6
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="center"><FONT size="2"><B>OPTION GRANTS IN FISCAL 2001</B></FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
        <TD width="27%">&nbsp;</TD>
        <TD width="12%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="2%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="2%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="2%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="2%">&nbsp;</TD>
        <TD width="4%">&nbsp;&nbsp;</TD>
        <TD width="7%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="9%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="2%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="2%">&nbsp;</TD>
        <TD width="2%">&nbsp;</TD>
        <TD width="2%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="2%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="7"><FONT size="1">Potential Realizable Value</FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1">Number of</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1">Percent of</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="7"><FONT size="1">at Assumed Annual Rate</FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1">Securities</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1">Total Options</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="7"><FONT size="1">of Stock Price Appreciation</FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1">Underlying</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1">Granted to</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1">Exercise or</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="7"><FONT size="1">for Option Term(2)</FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1">Options</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1">Employees in</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1">Base Price</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1">Expire</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="7"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1">Granted(#)</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1">Fiscal Year</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1">($/Share)(1)</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1">Date</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1">5%</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1">10%</FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
        <TD nowrap><FONT size="2">Mark A. LeDoux</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">30,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">16.6</FONT></TD>
        <TD nowrap><FONT size="2">%</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">2.00</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="3" align="center" nowrap><FONT size="2">August 27, 2010</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">37,734</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">95,625</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD nowrap><FONT size="2">Peter C. Wulff(3)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">29,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">16.0</FONT></TD>
        <TD nowrap><FONT size="2">%</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">2.00</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="3" align="center"><FONT size="2">August 27, 2010</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">36,476</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">92,437</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD nowrap><FONT size="2">R. David Lough</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">20,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">11.0</FONT></TD>
        <TD nowrap><FONT size="2">%</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">2.00</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="3" align="center"><FONT size="2">August 27, 2010</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">25,156</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">63,750</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD nowrap><FONT size="2">Douglas E. Flaker</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">20,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">11.0</FONT></TD>
        <TD nowrap><FONT size="2">%</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">2.00</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="3" align="center" nowrap><FONT size="2">August 27, 2010</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">25,156</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">63,750</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD nowrap><FONT size="2">John A. Wise</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">40,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">22.0</FONT></TD>
        <TD nowrap><FONT size="2">%</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">2.00</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="3" align="center" nowrap><FONT size="2">August 27, 2010</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">50,312</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">127,499</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD nowrap><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Robert K. Clausen</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">20,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">11.0</FONT></TD>
        <TD nowrap><FONT size="2">%</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">2.44</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="3" align="center"><FONT size="2">January 7, 2011</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">30,690</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">77,775</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P>
<HR size="1" width="18%" align="left" noshade>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">(1)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">The options granted to the foregoing executive officers were granted
under the Company&#146;s 1999 Omnibus Equity Incentive Plan. The Board granted
Mr.&nbsp;Clausen&#146;s stock options on January&nbsp;8, 2001. All other options were
granted on August&nbsp;28, 2000. All options were priced at the fair market
value price of the Company&#146;s Common Stock on the date of grant. The
following restrictions (among others) apply to the options granted: (a)
the recipient must be employed with the Company on a full time basis on
the date of exercise; (b)&nbsp;the recipient may not be in default of any
condition of any written employment agreement; and (b)&nbsp;one-third of the
options granted are exercisable on each of the three (3)&nbsp;anniversaries of
the date of grant of the option.</FONT></TD>
</TR>
</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">(2)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">The potential realizable value of each grant of options has been
calculated, pursuant to the regulations promulgated by the Securities and
Exchange Commission (the &#147;SEC&#148;), assuming the market price of the Common
Stock appreciates in value from the date of grant to the end of the option
term at the annualized rates of 5% and 10%, respectively. These numbers
are calculated based on the requirements promulgated by the SEC and do not
reflect the Company&#146;s estimates of future stock price growth. Unless the
market price of the Common Stock does in fact appreciate in excess of the
exercise price of the option over the option term, no value will be
realized from option grants made to the executive officers.</FONT></TD>
</TR>
</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">(3)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">All of Mr.&nbsp;Wulff&#146;s outstanding options terminated on August&nbsp;23, 2001.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2"><B>Option Exercises and Holdings</B></FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth information concerning option exercises and
option holdings by the Company&#146;s named executive officers under the 1992
Incentive Plan, the 1992 Nonqualified Stock Option Plan, the 1994 Nonqualified
Stock Option Plan, and the 1999 Omnibus Equity Incentive Plan for the year
ended June&nbsp;30, 2001.
</FONT>
<P align="center"><FONT size="2">7
</FONT>

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

<P align="center"><FONT size="2"><B>AGGREGATED OPTION/SAR EXERCISES
IN FISCAL YEAR 2001 AND<br>
FISCAL YEAR END OPTION/SAR VALUES</B></FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%">
<TR valign="bottom">
        <TD width="25%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="12%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="12%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="11%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="12%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1">Number of</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1">Value of Unexercised</FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1">Securities Underlying</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1">In-the-Money</FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1">Shares</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1">Unexercised Options/SARS</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1">Options/SARS at Fiscal</FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1">Acquired on</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1">Value</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1">at Fiscal Year-End(#)</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1">Year-End($)(1)</FONT></TD>
</TR>
<TR valign="bottom">
        <TD nowrap align="center"><FONT size="1">Name</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1">Exercise(#)</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1">Realized($)</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1">Exercisable/Unexercisable</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1">Exercisable/Unexercisable</FONT></TD>
</TR>
<TR valign="bottom">
        <TD nowrap align="center"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Mark A. LeDoux</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">40,000/20,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right" nowrap><FONT size="2">2,500/$5,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Peter C. Wulff</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">20,000/29,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right" nowrap><FONT size="2">2,417/$4,833</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">R. David Lough</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">30,000/20,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right" nowrap><FONT size="2">1,667/$3,333</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Douglas E. Flaker</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">23,333/16,667</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right" nowrap><FONT size="2">2,500/$2,500</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">John A. Wise</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" nowrap><FONT size="2">58,333/26,667</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">3,333/$6,667</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Robert K. Clausen</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;/20,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;/$5,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P><FONT size="2">The closing price of the Company&#146;s common stock at June&nbsp;30, 2001, as quoted on
the National Market System of the Nasdaq Stock Market, was $2.25.
</FONT>
<P align="left"><FONT size="2"><B>Defined Benefit Pension Plan</B></FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company sponsors a defined benefit pension plan (the &#147;Plan&#148;), which
provides retirement benefits to employees based generally on years of service
and compensation during the last five years before retirement. Effective June
21, 1999, the Company adopted an amendment to freeze benefit accruals of the
participants of the Plan. The Company&#146;s policy is to fund the net pension cost
accrued. However, the Company would not contribute an amount less than the
minimum funding requirements of the Employee Retirement Income Security Act of
1974 or more than the maximum tax-deductible amount.
</FONT>
<P align="left"><FONT size="2"><B>Employment Agreements</B></FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During 2001, the
Company had employment agreements with Mark A. LeDoux, Robert K. Clausen, R. David Lough, and John
A. Wise. During 2001, Director Marie A. LeDoux held the office of Secretary of
the Company, but did not have a written employment agreement. In her capacity
as Secretary of the Company, Mrs.&nbsp;LeDoux received annual compensation of
$12,000. The Company entered into an employment agreement with Mr.&nbsp;Weaver in
August, 2001.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The employment agreements for Messrs.&nbsp;LeDoux, Lough, Clausen and Wise each
have a term ending June&nbsp;30, 2001. Pursuant to all such agreements, each
executive officer remains employed by the Company following the expiration of
the stated term, with the salary and benefits prescribed in his employment
agreement. Mr.&nbsp;Weaver&#146;s employment agreement has a term ending on October&nbsp;31,
2002. The Company intends to execute new employment agreements with
Messrs.
LeDoux, Weaver, Lough, Clausen and Wise during the second quarter of fiscal
year 2002.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mr.&nbsp;LeDoux&#146;s employment agreement provides for an annual salary of
$225,000. In the event Mr.&nbsp;LeDoux&#146;s employment is terminated without cause, he
would be entitled to severance pay equal to one (1)&nbsp;year&#146;s compensation.
Following a Change of Control in the Company, as such term is defined in his
employment agreement, Mr.&nbsp;LeDoux will be entitled to receive 150% of his then
current salary if he voluntarily resigns or is terminated without cause.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mr.&nbsp;Weaver&#146;s employment agreement provides for an annual salary of
$195,000 as Chief Financial Officer and for an annual salary of $225,000 while
he is serving as both Chief Financial Officer
</FONT>
<P align="center"><FONT size="2">8
</FONT>

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<P><FONT size="2">and Chief Operating Officer. In the event Mr.&nbsp;Weaver&#146;s employment is
terminated without cause, he will be entitled to severance pay of three months&#146;
compensation. Mr.&nbsp;Weaver&#146;s employment agreement also provides for the issuance
to him of an option to purchase as many as 100,000 shares of Common Stock of the Company
at an exercise price equal to the last reported sale price on the Nasdaq Stock
Market on August&nbsp;31, 2001. The vesting of this option is subject to the
attainment of certain financial results during the Company&#146;s fiscal year ending
June&nbsp;30, 2002.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mr.&nbsp;Clausen&#146;s
employment agreement provides for an annual salary of
$170,000. In the event Mr.&nbsp;Clausen&#146;s employment is terminated without cause,
he will be entitled to severance pay of nine months&#146; compensation following
one year of employment and severance pay of one (1)&nbsp;year&#146;s
compensation following two years of employment. Following a Change of
Control in the Company, as such term is defined in his employment agreement,
Mr.&nbsp;Clausen will be entitled to receive 150% of his then current salary if he
voluntarily resigns or is terminated without cause.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mr.&nbsp;Lough&#146;s employment agreement provides for an annual salary of
$170,000. In the event Mr.&nbsp;Lough&#146;s employment is terminated without cause, he
would be entitled to severance pay equal to one (1)&nbsp;year&#146;s compensation.
Following a Change of Control in the Company, as such term is defined in his
employment agreement, Mr.&nbsp;Lough will be entitled to receive 150% of his then
current salary if he voluntarily resigns or is terminated without cause.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dr.&nbsp;Wise&#146;s employment agreement provides for an annual salary of $180,000.
In the event Dr.&nbsp;Wise&#146;s employment is terminated without cause, he would be
entitled to severance pay equal to one (1)&nbsp;year &#145;s compensation. Following a
Change of Control in the Company, as such term is defined in his employment
agreement, Dr.&nbsp;Wise will be entitled to receive 150% of his then current salary
if he voluntarily resigns or is terminated without cause.
</FONT>
<!-- link1 "REPORT OF THE AUDIT COMMITTEE" -->
<DIV align="left"><A NAME="001"></A></DIV>
<P align="center"><FONT size="2"><B>REPORT OF THE AUDIT COMMITTEE</B></FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Audit Committee
is a standing committee of the Board of Directors of the Company and
is composed entirely of the outside directors. The Audit Committee of the Board of Directors has reviewed and discussed
the Company&#146;s audited financial statements for the year ended June&nbsp;30, 2001
with management and has received the written disclosures and the letter from
Ernst &#38; Young LLP, the Company&#146;s independent auditors, required by Independent Standards
Board Standard No.&nbsp;1 (Independent Discussions with Audit Committee). The Audit
Committee has discussed with the independent auditors the Company&#146;s audited
financial statements for the year ended June&nbsp;30, 2001, the quality of the
Company&#146;s accounting principles and underlying estimates in its financial
statements and the auditor&#146;s independence as required by Statement on Auditing
Standards No.&nbsp;61 of the Auditing Standards Board of the American Institute of
Certified Public Accountants.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based on these discussions with Ernst &#038; Young LLP the Audit Committee
members recommended unanimously to the Board of Directors that the audited
financial statements be included in the Company&#146;s Annual Report on Form&nbsp;10-K
for the year ended June&nbsp;30, 2001.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The members of the Audit Committee are Joe E. Davis, J. Scott Schmidt and
Lee G. Weldon.
</FONT>
<!-- link1 "REPORT OF THE HUMAN RESOURCES COMMITTEE" -->
<DIV align="left"><A NAME="002"></A></DIV>
<P align="center"><FONT size="2"><B>REPORT OF THE HUMAN RESOURCES COMMITTEE</B></FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Human Resources Committee is a standing committee of the Board of
Directors of the Company and is composed entirely of outside directors. The
Human Resources Committee is responsible for adopting and evaluating the
effectiveness of Human Resources policies and programs for the Company and for
making recommendations regarding the appointment and compensation of the
Company&#146;s executive and other officers to the full Board of Directors of the
Company.
</FONT>
<P align="center"><FONT size="2">9
</FONT>

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<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following report is submitted by the Human Resources Committee members
with respect to the executive compensation policies established by the Human
Resources Committee and compensation paid or awarded to executive and other
officers for fiscal year 2001.
</FONT>
<P align="left"><FONT size="2"><B>Compensation Philosophy and Objectives</B></FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In adopting and evaluating the effectiveness of compensation programs for
executive officers, as well as other employees of the Company, the Human
Resources Committee is guided by three basic principles:
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;The Company must offer competitive salaries to be able to attract and
retain highly-qualified and experienced executives and other management
personnel.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;Annual executive compensation in excess of base salaries should be
tied to the Company&#146;s performance.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;The financial interest of the Company&#146;s senior executives should be
aligned with the financial interest of the stockholders, primarily through
stock option grants and other equity-based compensation programs which reward
executives for improvements in the long term value of the Company&#146;s Common
Stock.
</FONT>
<P align="left"><FONT size="2"><B>Salaries and Employee Benefit Programs</B></FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In order to retain executives and other key employees, and attract
well-qualified executives when the need arises, the Company strives to offer
salaries, health care and other employee benefit programs to its employees
comparable to those offered by competing businesses. In establishing salaries
for executive officers, the Human Resources Committee reviews the historical
performance of the executives and available information regarding prevailing
salaries and compensation programs offered by businesses of similar size and
industry classification in the same geographical area.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Committee believes the base salary and employee benefits of the
Company in 2001 were generally comparable to or lower than those offered by
comparable companies in and around San Diego County.
</FONT>
<P align="left"><FONT size="2"><B>Stock Options and Equity-Based Programs</B></FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In order to align the financial interest of senior executives and other
key employees with those of the stockholders, the Company grants stock options
to purchase Common Stock of the Company and may grant restricted stock and
stock units to its senior executives and other key employees on a periodic
basis. Grants of stock options, restricted stock and stock units to reward
senior executives and other key employees for performance, which results in
increases in the market price of the Company&#146;s Common Stock, which directly
benefits all stockholders.
</FONT>
<P align="left"><FONT size="2"><B>Chief Executive Officer&#146;s Compensation</B></FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mr.&nbsp;LeDoux, the Chairman of the Board and Chief Executive Officer, is
awarded a base salary and is evaluated substantially in accordance with the
foregoing policies. In May, 2000, Mr.&nbsp;LeDoux voluntarily reduced his salary
from $260,000 to $180,000 per annum. Pursuant to his employment agreement
dated as of November&nbsp;15, 2001, Mr.&nbsp;LeDoux&#146;s base salary was set at $225,000 per
annum. No incentive bonuses were issued to Mr.&nbsp;LeDoux in 2001. In determining
Mr.&nbsp;LeDoux&#146;s base salary during fiscal year 2001, the Human Resources Committee
considered the results of the cost containment program
</FONT>
<P align="center"><FONT size="2">10
</FONT>

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<P><FONT size="2">developed during 2000 and implemented throughout 2001 as well as the
financial performance of the Company and other factors.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The members of the Human Resources Committee are J. Scott Schmidt and Lee
G. Weldon.
</FONT>
<P align="left"><FONT size="2"><B>Human Resources Committee Interlocks and Insider Participation</B></FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There were no interlocks or other relationships among the Company&#146;s
executive officers and directors that are required to be disclosed under
applicable executive compensation disclosure regulations.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The foregoing reports of the Audit Committee and the Human Resources
Committee, respectively, and the Stockholder Return Performance Graph
hereinbelow are not &#147;soliciting material,&#148; are not deemed filed with the SEC
and shall not be deemed incorporated by reference by any general statement
incorporating by reference this Proxy Statement into any filing under the
Securities Act of 1933 or under the Securities Exchange Act of 1934, except to
the extent the Company specifically incorporates this report by reference and
shall not otherwise be deemed filed under such Acts.
</FONT>
<!-- link1 "STOCKHOLDER RETURN PERFORMANCE GRAPH" -->
<DIV align="left"><A NAME="003"></A></DIV>
<P align="center"><FONT size="2"><B>STOCKHOLDER RETURN PERFORMANCE GRAPH</B></FONT>

<P><FONT size="2">Set forth below is a line graph comparing the yearly performance of the
cumulative total stockholder return (change in stock price plus reinvested
dividends) on the Company&#146;s Common Stock with the total return of the Nasdaq US
Index and Nasdaq Pharmaceutical Companies for the period beginning June&nbsp;30,
1995, and ending June&nbsp;30, 2001. The comparisons in the graph are required by
the SEC and are not intended to forecast or be indicative of possible future
performance of the Company&#146;s Common Stock.
</FONT>

<p align="center">
<IMG src="a76510dea7651001.gif" alt="(PERFORMANCE GRAPH)">
<p>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%">
<TR valign="bottom">
        <TD width="64%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1">6/30/96</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1">6/30/97</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1">6/30/98</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1">6/30/99</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1">6/30/00</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1">6/30/01</FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Natural Alternatives International, Inc.</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">100</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">80</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">211</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">36</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">19</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">24</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Nasdaq US</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">100</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">122</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">160</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">230</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">340</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">185</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Nasdaq Pharmaceuticals</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">100</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">101</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">104</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">145</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">334</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">241</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">11
</FONT>

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<P><FONT size="2">Assumes a $100 investment on June&nbsp;30, 1996 in each of the Company&#146;s Common
Stock, the securities comprising the Nasdaq US Index, and the securities
comprising the Nasdaq Pharmaceutical Companies.
</FONT>
<!-- link1 "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT" -->
<DIV align="left"><A NAME="004"></A></DIV>
<P align="center"><FONT size="2"><B>SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT</B></FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth certain information regarding the ownership
of the Company&#146;s common stock as of September&nbsp;30, 2001, by (i)&nbsp;each director
and nominee for director; (ii)&nbsp;each of the Company&#146;s executive officers named
in the Summary Compensation Table; (iii)&nbsp;all executive officers and directors
of the Company as a group; and (iv)&nbsp;each person who is known by the Company to
beneficially own more than 5% of the Company&#146;s Common Stock. Except as
otherwise indicated in the footnotes and subject to applicable community
property laws, to the Company&#146;s knowledge, the persons named in the table have
sole voting and investment power with respect to all shares of common stock.
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
        <TD width="5%">&nbsp;</TD>
        <TD width="55%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="9%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="9%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="4%">&nbsp;</TD>
        <TD width="2%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Shares Beneficially</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Percent Beneficially</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Owned</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Owned(1)</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Marie A. LeDoux</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">1,028,101</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">17.77%</FONT></TD>
</TR>

<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Mark A. LeDoux(2)</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">283,317</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">4.90%</FONT></TD>
</TR>

<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">J. Scott Schmidt(3)</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">12,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">.21%</FONT></TD>
</TR>

<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Lee G. Weldon(4)</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">52,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">.90%</FONT></TD>
</TR>

<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Joe E. Davis(5)</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">3,333</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">.06%</FONT></TD>
</TR>

<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Robert K. Clausen(6)</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">10,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">.02%</FONT></TD>
</TR>

<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">R. David Lough(7)</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">56,908</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">1.00%</FONT></TD>
</TR>

<TR valign="bottom">
        <TD colspan="2"><FONT size="2">John A. Wise(8)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">87,592</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">1.51%</FONT></TD>
</TR>
<TR valign="middle">
        <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2"><HR noshade size="1"></FONT></TD>
        <TD><FONT size="2">&nbsp; </FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2"><HR noshade size="1"></FONT></TD>
        <TD nowrap><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">All Directors and Officers
As a Group (8 Persons)</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">1,533,251</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">26.4%</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P>
<HR size="1" width="18%" align="left" noshade>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">(1)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Shares of Common Stock which were not outstanding but which could be
acquired upon exercise of an option within 60&nbsp;days from September&nbsp;30,
2001, are considered outstanding for the purpose of computing the
percentage of outstanding shares beneficially owned. However, such shares
are not considered to be outstanding for any other purpose.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">(2)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Includes 800 shares held in the name of Mr.&nbsp;LeDoux&#146;s wife, Julie LeDoux
and 8,000 shares held as custodian for his children and a niece. Also
includes 40,000 shares, which Mr.&nbsp;LeDoux has the right to acquire upon
exercise of options exercisable within 60&nbsp;days of September&nbsp;30, 2001.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">(3)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Includes 10,000 shares which Mr.&nbsp;Schmidt has the right to acquire upon
exercise of options excercisable within 60&nbsp;days of September&nbsp;30, 2001.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">(4)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Includes 10,000 shares which Mr.&nbsp;Weldon has the right to acquire upon
exercise of options exercisable within 60&nbsp;days of September&nbsp;30, 2001.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">(5)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Represents 3,333 shares which Mr.&nbsp;Davis has the right to acquire upon
exercise of stock options exercisable within 60&nbsp;days of September&nbsp;30,
2001.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">(6)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Represents 10,000 shares which Mr.&nbsp;Clausen has the right to acquire upon
exercise of options exercisable within 60&nbsp;days of September&nbsp;30, 2001.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">(7)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Includes 30,000 shares which Mr.&nbsp;Lough has the right to acquire upon
exercise of options exercisable within 60&nbsp;days of September&nbsp;30, 2001.</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">12
</FONT>

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



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">(8)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Includes 58,333 shares which Dr.&nbsp;Wise has the right to acquire upon
exercise of options exercisable within 60&nbsp;days of September&nbsp;30, 2001.</FONT></TD>
</TR>
</TABLE>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There is no arrangement known by the Company, the operation of which may
at a subsequent date, result in a change of control of the Company.
</FONT>
<P align="left"><FONT size="2"><B>Certain Relationships and Related Transactions</B></FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Director Marie A. LeDoux and Chairman of the Board and Chief Financial
Officer Mark A. LeDoux are each presently indebted to the Company in an amount
in excess of $60,000. Pursuant to an agreement with Mrs.&nbsp;LeDoux, the Company
pays the annual premium of a life insurance policy on her life. Each payment is
in the form of a loan to Mrs.&nbsp;LeDoux. The primary purpose of the insurance
policy is to provide liquidity to pay estate taxes and thereby avoid the
potentially depressive market effect of the sale of a substantial amount of
Company stock for such purpose. The indebtedness is to be repaid from the
death benefit to be paid pursuant to the policy. The loan
to Mark A. LeDoux was made for personal purposes. The balances of these loans
at June&nbsp;30, 2001 (rounded to the nearest thousand) are shown below:
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="1" width="55%">
<TR valign="bottom">
        <TD width="62%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="16%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="16%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1">June 30, 2001</FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Marie A. LeDoux</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">350,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Mark A. LeDoux</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">71,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<!-- link1 "PROPOSAL 2" -->
<DIV align="left"><A NAME="005"></A></DIV>
<P align="center"><FONT size="2"><B>PROPOSAL 2<BR>
SELECTION OF AUDITORS</B></FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject to stockholder approval at the Annual Meeting, the Board has
selected Ernst &#038; Young LLP to continue as the Company&#146;s independent auditors
for the fiscal year ending June&nbsp;30, 2002. A representative of Ernst &#038; Young
LLP is expected to be present at the Annual Meeting.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stockholder ratification of the selection of Ernst &#038; Young LLP as the
Company&#146;s independent auditors is not required by the Company&#146;s Bylaws or
otherwise. However, the Board is submitting the selection of Ernst &#038; Young LLP
to the stockholders for ratification as a matter of good corporate practice.
If the stockholders fail to ratify the selection, the Board will reconsider
whether or not to retain that firm. Even if the selection is ratified, the
Board in its discretion may direct the appointment of a different independent
accounting firm at any time during the year if the Board determines that such a
change would be in the best interests of the Company and its stockholders.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The affirmative vote of the holders of a majority of the shares
represented and voting at the meeting will be required to ratify the selection
of Ernst &#038; Young LLP.
</FONT>
<P align="center"><FONT size="2"><B>The Board of Directors recommends a vote FOR Proposal 2.</B></FONT>

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

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


<!-- link1 "STOCKHOLDERS&#146; PROPOSALS" -->
<DIV align="left"><A NAME="006"></A></DIV>
<P align="center"><FONT size="2"><B>STOCKHOLDERS&#146; PROPOSALS</B></FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under SEC Regulation&nbsp;Section&nbsp;240.14a-5 adopted pursuant to Section&nbsp;14(a) of
the Securities Exchange Act of 1934, stockholders who intend to submit
proposals at the 2003 Annual Meeting must submit such proposals to the Company
no later than August&nbsp;3, 2002 in order for them to be included in the Proxy
Statement and the form of Proxy to be distributed by the Board in connection
with that meeting. If the 2003 Annual Meeting is held on a date which is not
within 30&nbsp;days of January&nbsp;11, 2003, then such proposals must be submitted a
reasonable time before the Company begins to print and mail its proxy
materials. If a stockholder wishes to have a proposal considered at
the 2003 Annual Meeting but does not utilize the process set forth in Regulation&nbsp;Section
240.14a-8, the Company&#146;s bylaws control the timely filing of such proposals.
Under the Company&#146;s bylaws, a stockholder proposal is not timely unless
delivered to or mailed to the Secretary of the Company and received at the
executive offices of the Company not less than thirty (30)&nbsp;days nor more than
sixty (60)&nbsp;days prior to the meeting as originally scheduled. In the event
less than forty (40)&nbsp;days notice or prior public disclosure of the date of the
meeting is given or made to stockholders, notice by the stockholder to be made
timely must be received by the Company not later than the close of business on
the tenth day following the day on which notice of the date of the annual
meeting was made or publicly disclosed. It is recommended that stockholders
submitting proposals or notices of proposals direct them to the Secretary and
to the Chief Financial Officer of the Company and utilize Certified Mail-Return
Receipt Requested. Stockholders&#146; proposals should be submitted to Natural
Alternatives International, Inc., 1185 Linda Vista Drive, Suite&nbsp;D, San Marcos,
CA 92069, Attn: Chief Financial Officer.
</FONT>
<!-- link1 "SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE" -->
<DIV align="left"><A NAME="007"></A></DIV>
<P align="center"><FONT size="2"><B>SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE</B></FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;16(a) of the Securities Exchange Act of 1934 requires the
Company&#146;s officers and directors, and any persons holding more than 10% of the
Company&#146;s Common Stock, to file reports of ownership and changes in ownership
with the SEC. Executive officers, directors and greater than 10% stockholders
are required by SEC regulations to furnish the Company with copies of all
Section&nbsp;16(a) forms they file. Specific due dates for these reports have been
established and the Company is required to identify in this Proxy Statement
those persons who failed to timely file these reports.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based solely on its review of the copies of reporting forms received by
the Company, the Company believes that during the fiscal year ended June&nbsp;30,
2001, all filing requirements under Section&nbsp;16(a) were satisfied.
</FONT>
<!-- link1 "ANNUAL REPORTS" -->
<DIV align="left"><A NAME="008"></A></DIV>
<P align="center"><FONT size="2"><B>ANNUAL REPORTS</B></FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s 2001 Annual Report, which includes audited financial
statements for the Company&#146;s fiscal year ended June&nbsp;30, 2001, is being mailed
on or about November&nbsp;29, 2001, with this Proxy Statement to stockholders of
record on November&nbsp;15, 2001.
</FONT>
<P align="center"><FONT size="2">14
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<!-- link1 "OTHER MATTERS" -->
<DIV align="left"><A NAME="009"></A></DIV>
<P align="center"><FONT size="2"><B>OTHER MATTERS</B></FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board knows of no other matters which will be brought before the
Annual Meeting. If any other matter is properly brought before the Annual
Meeting or any adjournment thereof, it is intended that the persons named in
the enclosed form of Proxy will vote on such matters in accordance with their
best judgment.
</FONT>
<P><FONT size="2">By Order of the Board of Directors
</FONT>
<P><FONT size="2">Mark A. LeDoux<BR>
Chairman of the Board and Chief Executive Officer
</FONT>
<P align="center"><FONT size="2">15
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="center"><FONT size="2"><B>NATURAL ALTERNATIVES INTERNATIONAL, INC.<BR>
a Delaware Corporation<BR>
ANNUAL MEETING OF STOCKHOLDERS<BR>
________________, _____</B></FONT>

<P align="center"><FONT size="2"><B>THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS</B></FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned hereby appoints Mark A. LeDoux and Randell Weaver as
proxies, each with the power to appoint his substitute, and hereby authorizes
them to represent and vote, as designated on the reverse hereof, all of the
shares of Common Stock of Natural Alternatives International, Inc., held of
record by the undersigned on November&nbsp;15, 2001, at the Annual Meeting of
Stockholders to be held on January&nbsp;11, 2002, or any adjournment thereof.
</FONT>
<P align="center"><FONT size="2">(Please date and sign on the other side)</FONT>

<P align="center"><FONT size="2"><B>FOLD AND DETACH HERE</B></FONT>

<P align="center"><FONT size="2">&nbsp;
</FONT>

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


<P><FONT size="2">The Board of Directors recommends a vote FOR the election of the nominee for
Class&nbsp;II Director</FONT>
<br>
<P align="left"><FONT size="2">1.&nbsp;&nbsp;ELECTION OF CLASS II DIRECTOR</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%">
<TR valign="bottom">
        <TD width="45%">&nbsp;</TD>
        <TD width="10%">&nbsp;</TD>
        <TD width="45%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD nowrap align="center"><FONT size="1"><B>FOR NOMINEE</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center"><FONT size="1"><B>WITHHOLD AUTHORITY</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD nowrap align="center"><FONT size="1"><B>LISTED BELOW</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center"><FONT size="1"><B>TO VOTE FOR NOMINEE LISTED BELOW</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD valign="top" align="center"><FONT size="2">&#091;&nbsp;&nbsp;&nbsp;&#093;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="center" valign="top"><FONT size="2">
&#091;&nbsp;&nbsp;&nbsp;&#093;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;<br>Nominee:&nbsp;&nbsp;Lee G. Weldon</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">2.&nbsp;&nbsp;To ratify the appointment of Ernst &#038; Young LLP as the Company&#146;s independent
auditors:</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%">
<TR valign="bottom">
        <TD width="34%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="28%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="28%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD nowrap align="center"><FONT size="1"><B>FOR</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center"><FONT size="1"><B>AGAINST</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center"><FONT size="1"><B>ABSTAIN</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD valign="top" align="center"><FONT size="2">&#091;&nbsp;&nbsp;&nbsp;&#093;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="center" valign="top"><FONT size="2">
&#091;&nbsp;&nbsp;&nbsp;&#093;
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="center" valign="top"><FONT size="2">&#091;&nbsp;&nbsp;&nbsp;&#093;</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P align="left"><FONT size="2">3.&nbsp;&nbsp;In their discretion, upon such other business as may properly come before
the meeting:</FONT>


<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%">
<TR valign="bottom">
        <TD width="34%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="28%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="28%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD nowrap align="center"><FONT size="1"><B>FOR</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center"><FONT size="1"><B>AGAINST</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center"><FONT size="1"><B>ABSTAIN</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD valign="top" align="center"><FONT size="2">&#091;&nbsp;&nbsp;&nbsp;&#093;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="center" valign="top"><FONT size="2">
&#091;&nbsp;&nbsp;&nbsp;&#093;
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="center" valign="top"><FONT size="2">&#091;&nbsp;&nbsp;&nbsp;&#093;</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P><FONT size="2">Please mark your votes as indicated in this sample
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#091;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#093;</FONT>

<P><FONT size="2"><B>PLEASE MARK, SIGN, DATE AND MAIL THIS PROXY CARD
PROMPTLY, USING THE ENCLOSED ENVELOPE.</B>
</FONT>
<P><FONT size="2">Dated:&nbsp;_________________________________&nbsp;*
</FONT>
<P><FONT size="2">_________________________________________________<BR>
SIGNATURE OF STOCKHOLDER
</FONT>
<P><FONT size="2">_________________________________________________<BR>
SIGNATURE OF JOINT STOCKHOLDER
</FONT>
<P><FONT size="2">NOTE: If signing as attorney, executor, administrator, trustee or guardian,
please give full title as such, and, if signing for a corporation, give your
title. When shares are in the names of more than one person, each should
sign.
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
        <TD width="92%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
</TR>
</TABLE>
</CENTER>

<P align="center"><FONT size="2">&nbsp;</FONT>

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end

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
