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<SEC-DOCUMENT>0000897101-06-000633.txt : 20060324
<SEC-HEADER>0000897101-06-000633.hdr.sgml : 20060324
<ACCEPTANCE-DATETIME>20060324123541
ACCESSION NUMBER:		0000897101-06-000633
CONFORMED SUBMISSION TYPE:	DEF 14A
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20060419
FILED AS OF DATE:		20060324
DATE AS OF CHANGE:		20060324
EFFECTIVENESS DATE:		20060324

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			ELECTRO SENSORS INC
		CENTRAL INDEX KEY:			0000351789
		STANDARD INDUSTRIAL CLASSIFICATION:	INDUSTRIAL INSTRUMENTS FOR MEASUREMENT, DISPLAY, AND CONTROL [3823]
		IRS NUMBER:				410943459
		STATE OF INCORPORATION:			MN
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		DEF 14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-09587
		FILM NUMBER:		06708256

	BUSINESS ADDRESS:	
		STREET 1:		6111 BLUE CIRCLE DR
		CITY:			MINNETONKA
		STATE:			MN
		ZIP:			55343-9108
		BUSINESS PHONE:		9529300100

	MAIL ADDRESS:	
		STREET 1:		6111 BLUE CIRCLE DR
		CITY:			MINNETONKA
		STATE:			MN
		ZIP:			55343
</SEC-HEADER>
<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
<FILENAME>electro061205s1_def14a.htm
<DESCRIPTION>DEFINITIVE PROXY STATEMENT
<TEXT>
<HTML>
<HEAD>
<TITLE>Electro-Sensors, Inc. Definitive Proxy Statement dated April 19, 2006 </TITLE>
</HEAD>
<BODY>
<BR><BR>


<!-- MARKER FORMAT-SHEET="Head Minor Center Bold" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>SCHEDULE 14A -
<BR>INFORMATION REQUIRED IN PROXY STATEMENT  </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Minor Center Bold" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Schedule 14A Information </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Minor Center" FSL="Default" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Proxy Statement Pursuant to Section 14(a) of the
<BR>Securities Exchange Act of 1934
<BR>(Amendment No.____ ) </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Filed by the registrant&nbsp;&nbsp;&nbsp;[X] </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Filed by a party other than the registrant&nbsp;&nbsp;&nbsp;[&nbsp;&nbsp;&nbsp;] </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Check the appropriate box:</FONT></P>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>[&nbsp;&nbsp;&nbsp;]  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Preliminary Proxy Statement </FONT></TD>
</TR>
</TABLE>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>[&nbsp;&nbsp;&nbsp;]  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) </FONT></TD>
</TR>
</TABLE>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>[X]  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Definitive Proxy Statement  </FONT></TD>
</TR>
</TABLE>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>[&nbsp;&nbsp;&nbsp;]  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Definitive Additional Materials </FONT></TD>
</TR>
</TABLE>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>[&nbsp;&nbsp;&nbsp;]  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Soliciting Material Under Section 240.14a-12 </FONT></TD>
</TR>
</TABLE>

<!-- MARKER FORMAT-SHEET="Head Minor Center" FSL="Default" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE="3"><B>ELECTRO-SENSORS, INC.</B> </FONT><BR>
<FONT FACE="Times New Roman, Times, Serif" SIZE="2">(Name of Registrant as Specified in Its Charter) </FONT> </P>

<!-- MARKER FORMAT-SHEET="Head Minor Center" FSL="Default" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>N/A
<BR>(Name of Person(s) Filing Proxy Statement, if other than the Registrant) </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Payment of Filing Fee (Check the appropriate box): </FONT></P>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>[X]  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>No fee required </FONT></TD>
</TR>
</TABLE>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>[&nbsp;&nbsp;&nbsp;]</FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. </FONT></TD>
</TR>
</TABLE>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1) </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Title of each class of securities to which transaction applies: </FONT></TD>
</TR>
</TABLE>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(2) </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Aggregate
number of securities to which transactions applies: </FONT></TD>
</TR>
</TABLE>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(3)  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Per
unit price or other underlying value of transaction computed pursuant to Exchange Act
Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it
was determined): </FONT></TD>
</TR>
</TABLE>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(4)  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Proposed maximum aggregate value of transaction: </FONT></TD>
</TR>
</TABLE>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(5)  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Total fee paid: </FONT></TD>
</TR>
</TABLE>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>[&nbsp;&nbsp;&nbsp;]</FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Fee paid previously with preliminary materials. </FONT></TD>
</TR>
</TABLE>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>[&nbsp;&nbsp;&nbsp;]  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date of its filing. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1)  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Amount Previously Paid: </FONT></TD>
</TR>
</TABLE>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(2)  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Form, Schedule or Registration Statement No.: </FONT></TD>
</TR>
</TABLE>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(3)  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Filing Party: </FONT></TD>
</TR>
</TABLE>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(4)  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Date Filed: </FONT></TD>
</TR>
</TABLE>



<BR>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></P>
<HR SIZE=3 COLOR=GRAY NOSHADE>
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<BR>



<div align="center">
<IMG SRC="logo.jpg">
</div>
<!-- MARKER FORMAT-SHEET="Head Major Center Bold 1" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ELECTRO-SENSORS, INC.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6111 Blue Circle Drive&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Minnetonka, Minnesota 55343<BR>(952) 930-0100</FONT></H1>
<hr size=4 width="100%" noshade color="black">

<!-- MARKER FORMAT-SHEET="Head Major Center Bold" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
<BR>To Be Held April 19, 2006 </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>To the Shareholders of Electro-Sensors Inc.: </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notice
is hereby given that the Annual Meeting of Shareholders of Electro-Sensors, Inc. will be
held at the Sheraton Minneapolis West Hotel, 12201 Ridgedale Drive, Minnetonka, Minnesota,
on Wednesday, April 19, 2006, at 2:00 pm, Central Standard Time, for the following
purposes: </FONT></P>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=RIGHT WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1. </FONT></TD>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=91%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
To set the number of directors at five (5); </FONT></TD>
</TR>
<TR VALIGN=TOP>
<TD ALIGN=RIGHT WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2. </FONT></TD>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=91%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
To elect five (5) directors to serve until the next annual meeting of
shareholders; </FONT></TD>
</TR>
<TR VALIGN=TOP>
<TD ALIGN=RIGHT WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3. </FONT></TD>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=91%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
To ratify the selection of Boulay, Heutmaker, Zibell &amp; Co. P.L.L.P. as
independent auditors for the Company for the fiscal year ending December 31,
2006; and </FONT></TD>
</TR>
<TR VALIGN=TOP>
<TD ALIGN=RIGHT WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4. </FONT></TD>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=91%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
To take action upon any other business as may properly come before the meeting
or any adjournment or postponement thereof. </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accompanying
this Notice of Annual Meeting is a Proxy Statement, Form of Proxy and the Company&#146;s
10-KSB for the fiscal year ended December 31, 2005. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board of Directors has fixed the close of business on February 21, 2006 as the record date
for the determination of shareholders entitled to notice of and to vote at the Annual
Meeting of Shareholders. </FONT></P>


<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="BOTTOM">
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH></TR>
<TR VALIGN="TOP">
     <TD WIDTH="50%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="50%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">BY ORDER OF THE BOARD
OF DIRECTORS,</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">/s/ Bradley D. Slye</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Bradley D. Slye</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">President</FONT></TD></TR>
</TABLE>


<!-- MARKER FORMAT-SHEET="Head Left" FSL="Default" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Minnetonka, Minnesota<BR>Dated:
March 24, 2006 </FONT></P>
<BR><BR>



<TABLE BORDER="3" CELLPADDING="5" CELLSPACING="0" ALIGN="CENTER" WIDTH="80%">
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TO ASSURE YOUR REPRESENTATION AT THE
MEETING, PLEASE SIGN, DATE AND RETURN YOUR PROXY IN THE ENCLOSED ENVELOPE, WHETHER OR NOT
YOU EXPECT TO ATTEND IN PERSON. SHAREHOLDERS WHO ATTEND THE MEETING MAY REVOKE THEIR
PROXIES AND VOTE IN PERSON IF THEY SO DESIRE. </FONT></TD></TR>
</TABLE>





<BR>
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<div align="center">
<IMG SRC="logo.jpg">
</div>

<!-- MARKER FORMAT-SHEET="Head Minor Center Bold" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ELECTRO-SENSORS, INC.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6111 Blue Circle Drive&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Minnetonka, Minnesota 55343 (952) 930-0100</FONT></H1>
<HR ALIGN=LEFT WIDTH=100% COLOR="BLACK" SIZE=4 NOSHADE>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PROXY STATEMENT<BR>FOR<BR>ANNUAL MEETING OF
SHAREHOLDERS<BR>To Be Held April 19,
2006 </FONT></H1>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>GENERAL INFORMATION </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Proxy Statement is
furnished by the Board of Directors (the &#147;Board of Directors&#148;) of Electro-Sensors, Inc., a Minnesota corporation (the
&#147;Company&#148;), to the shareholders of the Company in connection with a solicitation of proxies to be voted at the Annual
Meeting of Shareholders (the &#147;Annual Meeting&#148;) to be held at 2:00 p.m., Central Time, on Wednesday, April 19, 2006, at
the Sheraton Minneapolis West Hotel, 12201 Ridgedale Drive, Minnetonka, Minnesota, and at any and all adjournments or
postponements thereof. This Proxy Statement and the accompanying materials are first being mailed to shareholders on or about
March 24, 2006. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If your shares are registered
in the name of a bank or brokerage firm, you may be eligible to vote your shares electronically via the Internet or telephone. A
large number of banks and brokerage firms are participating in the ADP Investor Communication Services online program. This
program provides eligible shareholders who receive a paper copy of the Annual Report and Proxy Statement the opportunity to vote
via the Internet or telephone. If your bank or brokerage firm is participating in ADP&#146;s program, your voting form will
provide instructions. If your voting form does not refer to Internet or telephone information, please complete and return the
paper proxy card in the postage paid envelope provided. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any proxy delivered pursuant
to this solicitation is revocable at the option of the person giving the proxy at any time before it is exercised. A proxy may be
revoked, prior to its exercise, by executing and delivering a later-dated proxy via the Internet, via telephone or by mail, by
delivering written notice of the revocation of the proxy to the Company&#146;s Secretary prior to the Annual Meeting, or by
attending and voting at the Annual Meeting. Attendance at the Annual Meeting, in and of itself, will not constitute a revocation
of a proxy. The shares represented by a proxy will be voted in accordance with the shareholder&#146;s directions if the proxy is
duly submitted and not validly revoked prior to the Annual Meeting. If no directions are specified on a duly submitted proxy, the
shares will be voted, in accordance with the recommendations of the Board of Directors, FOR approval of the number of directors to
be set at five, FOR the election of the directors nominated by the Board of Directors, FOR the ratification of the Company&#146;s
selection of auditors for the fiscal year ending December 31, 2006, FOR any proposal to adjourn the meeting for a period of not
more than 120 days for the purpose of soliciting additional proxies to approve the foregoing proposals and in accordance with the
discretion of the persons appointed as proxies on any other matters properly brought before the Annual Meeting and any all
adjournments or postponements thereof. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The expense of preparing,
printing, and mailing this Proxy Statement and the proxies solicited hereby will be borne by the Company. The Company will request
brokerage firms, banks, nominees, custodians, and fiduciaries to forward proxy materials to the beneficial owners of shares of
Common Stock as of the record date, and will provide reimbursement for the cost of forwarding the proxy materials in accordance
with customary practice. In addition to the use of the Internet and mail, proxies may be solicited by officers, directors, and
regular employees of the Company, without additional remuneration, in person or by telephone, telegraph, or facsimile
transmission. </FONT></P>



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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>OUTSTANDING SHARES &amp; VOTING RIGHTS </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company fixed the close
of business on February 21, 2006 as the record date for determining shareholders entitled to notice of and to vote at the Annual
Meeting. At February 21, 2006, the Company had outstanding 3,252,932 shares of Common Stock, the only outstanding class of capital
stock of the Company. Each share of Common Stock outstanding on the record date entitles the holder thereof to one (1) vote on
each matter to be voted upon by shareholders at the Annual Meeting. Holders of Common Stock are not entitled to cumulative voting
rights. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A majority of the shares of
Common Stock entitled to vote at the Annual Meeting, present in person or by proxy, constitutes a quorum for the transaction of
business. Abstentions are counted as shares present for purposes of determining the presence or absence of a quorum, and as
negative votes for purposes of determining the approval of any matter submitted to the shareholders for a vote. Proxies relating
to &#147;street name&#148; shares that are voted by brokers on some matters, but not on other matters as to which authority to
vote is withheld from the broker (&#147;broker non-votes&#148;) absent voting instructions from the beneficial owner, will be
treated as shares present for purposes of determining the presence or absence of a quorum but shall not be deemed to be
represented at the meeting for purposes of determining the approval of any matter submitted to the shareholders for a vote. The
Inspector of Election appointed by the Board of Directors will determine the shares represented at the meeting and the validity of
proxies and ballots, and will count all votes and ballots. </FONT></P>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>CORPORATE GOVERNANCE </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The business affairs of the
Company are conducted under the direction of the Board of Directors in accordance with the Minnesota Business Corporation Act and
our Articles of Incorporation and Bylaws. Members of the Board of Directors are informed of our business through discussions with
management, by reviewing materials provided to them and by participating in meetings of the Board of Directors and its committees,
among other activities. The corporate governance practices that we follow are summarized below. </FONT></P>

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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Independence </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors has
determined that Messrs. Marino, Miller and Strom, constituting a majority the Board of Directors, are independent directors as
defined by the listing standards of the Nasdaq Stock Market, since none of them are believed to have any relationships that, in
the opinion of the Board of Directors, would interfere with the exercise of independent judgment in carrying out the
responsibilities of a director. Messrs. Slye and Peterson are precluded from being considered independent by Nasdaq rules since
each of them currently serves as an executive officer of the Company. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors has
determined that each member of the Company&#146;s Audit Committee, Compensation Committee and Nominating Committee are independent
in accordance with the listing standards of the Nasdaq Stock Market. </FONT></P>

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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Code of Ethics and Business Conduct </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company has adopted the
Electro-Sensors Code of Ethics and Business Conduct (the &#147;Code of Conduct&#148;), a code of conduct that applies to all of
our directors, officers and employees. A copy of the Code of Conduct was provided with the Proxy Statement for the 2004 Annual
Meeting of Shareholders and is also available upon written request to the Chief Executive Officer. If we make any substantive
amendments to the Code of Conduct or grant any waiver, including any implicit waiver from a provision of the Code of Conduct to
our directors or executive officers, we will disclose the nature of such amendments or waiver in a report on Form 8-K. </FONT></P>

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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Director Attendance at Annual Meeting </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Directors&#146; attendance at
Annual Meetings can provide our shareholders with an opportunity to communicate with directors about issues affecting the Company,
thus, all directors are expected to attend the Annual Meetings of Shareholders. All five directors attended the 2005 Annual
Meeting of Shareholdings. </FONT></P>

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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Communications with the Board </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shareholders may communicate
directly with the Board of Directors. All communications should be directed to the Chairman of our Audit Committee at the address
below and should prominently indicate on the outside of the envelope that it is intended for the Board of Directors or for
non-management directors. If no director is specified, the communication will be forwarded to the entire Board. Shareholder
communications to the Board should be sent to: </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Board of Directors<BR>
Attention: Chairman, Audit Committee
<BR>Electro-Sensors, Inc.
<BR>6111 Blue Circle Drive
<BR>Minnetonka, Minnesota 55343-9108 </FONT></P>



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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Committees and Meetings of the Board of Directors </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The present standing
committees of the Board of Directors are described below. </FONT></P>

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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Board Meetings </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors met
four times during the last fiscal year. No incumbent member of the Board of Directors attended fewer than 75% of the total number
of meetings held by the Board of Directors and the committees on which he served (during the periods that he served). </FONT></P>

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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Directors&#146; Compensation </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Directors who are not
employees of the Company receive $1,500 for each board and committee meeting they attend for their services on the Board.
</FONT></P>

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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Audit Committee </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Messrs. Strom, Marino, and Miller
currently serve as members of the Audit Committee. This committee met twice during the last fiscal year. The Audit Committee is
responsible for selecting the Company&#146;s independent auditors, and for assisting the Board of Directors in its oversight of
corporate accounting and internal controls, reporting practices of the Company and the quality and integrity of the financial
reports of the Company. The Audit Committee Charter specifies the composition and responsibilities of the committee. For more
information concerning the Audit Committee, see the Report of the Audit Committee on page 11 and the Audit Committee Charter
attached as Appendix A to the Proxy Statement for the 2004 Annual Meeting of Shareholders.<B> </B>The Board has named Geoff Miller
as the &#147;audit committee financial expert&#148; as defined by Item 401(e) of Regulation S-B under the Securities Act of 1933.
The Company acknowledges that the designation of Mr. Miller as the audit committee financial expert does not impose on Mr. Miller
any duties, obligations or liability that are greater than the duties, obligations and liability imposed on Mr. Miller as a member
of the Audit Committee and the Board of Directors in the absence of such designation or identification. </FONT></P>

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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Compensation Committee </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Messrs. Strom, Marino and Miller
currently serve as members of the Compensation/Stock Option Committee (the &#147;Compensation Committee&#148;). This committee met
three times during the last fiscal year. The Compensation Committee is responsible for making recommendations to the Board of
Directors concerning compensation of the Company&#146;s employees, officers, and directors, and is authorized to determine the
compensation of the Company&#146;s executive officers. The Compensation Committee is authorized to administer the various
incentive plans of the Company and has all powers of the attendant thereto, including the power to grant employee stock options.
</FONT></P>

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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Nominating Committee </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Messrs. Strom, Marino, and Miller
currently serve as members of the Nominating Committee. The Nominating Committee did not meet in fiscal year 2005. The Nominating
Committee is responsible for evaluating and nominating or recommending candidates for the Company&#146;s Board of Directors. A
copy of the Nominating Committee Charter, which has been adopted by the Company&#146;s Board of Directors, was attached as
Appendix B to the Proxy Statement for the 2004 Annual Meeting of Shareholders. </FONT></P>



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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Nominating Policy</I> </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Nominating Committee will
consider candidates for nomination as a director recommended by shareholders, directors, third party search firms and other
sources. The Nominating Committee believes that candidates for directors should have certain minimum qualifications, including
being able to read and understand basic financial statements, being over 18 years of age, having familiarity with the
Company&#146;s business and industry, having high moral character and mature judgment, being able to work collegially with others,
and not currently serving on more than three Boards of public companies. The Nominating Committee may modify these minimum
qualifications from time to time. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In evaluating director
nominees who meet the Company&#146;s minimum qualifications, the Nominating Committee considers the following factors and
qualifications, among others: </FONT></P>

<UL>
<LI><FONT FACE="Times New Roman, Times, Serif" SIZE=2>the appropriate size and the diversity of the Company&#146;s Board of Directors;</FONT>
<LI><FONT FACE="Times New Roman, Times, Serif" SIZE=2>the needs of the Board with respect to the particular talents and experience of its directors;</FONT>
<LI><FONT FACE="Times New Roman, Times, Serif" SIZE=2>the knowledge, skills and experience of nominees, including experience in
technology, business, finance, administration or public service, in light of prevailing business conditions and the knowledge,
skills and experience already possessed by other members of the Board; </FONT>
<LI><FONT FACE="Times New Roman, Times, Serif" SIZE=2>familiarity with domestic and international business matters;</FONT>
<LI><FONT FACE="Times New Roman, Times, Serif" SIZE=2>age and legal and regulatory requirements;</FONT>
<LI><FONT FACE="Times New Roman, Times, Serif" SIZE=2>experience with accounting rules and practices;</FONT>
<LI><FONT FACE="Times New Roman, Times, Serif" SIZE=2>appreciation of the relationship of the Company&#146;s business to the changing needs of society; and</FONT>
<LI><FONT FACE="Times New Roman, Times, Serif" SIZE=2>the desire to balance the considerable benefit of continuity with the periodic injection
of the fresh perspective provided by new members.</FONT>
</UL>



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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Nominating Committee will
consider the attributes of the candidates and the needs of the board, and will review all candidates in the same manner.
</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A shareholder who wishes to
recommend one or more directors must provide a written recommendation to the Secretary of the Company at the address below by
November 25, 2006. Notice of a recommendation must include name and address of the shareholder and the class and number of shares
such shareholder owns. With respect to the nominee, the shareholder should include the nominee&#146;s name, age, business address,
residence address, current principal occupation, five year employment history with employer names and a description of the
employer&#146;s business, the number of shares beneficially owned by the nominee, whether such nominee can read and understand
basic financial statements, and other board memberships, if any. </FONT></P>

<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Electro-Sensors, Inc.
<BR>Attn: Chairman, Nominating Committee
<BR>6111 Blue Circle Drive
<BR>Minnetonka, MN 55343-9108 </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The recommendation must be
accompanied by a written consent of the nominee to stand for election at the Annual Meeting if nominated by the Nominating
Committee and to serve if elected by the shareholders. The Company may require any nominee to furnish additional information that
may be needed to determine the eligibility of the nominee and whether the nominee has the attributes the Board believes are
important in its composition. </FONT></P>



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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ELECTION OF DIRECTORS
<BR>Proposals #1 and #2 </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Bylaws of the Company
provide that the shareholders at each annual meeting shall determine the number of directors, which shall not be less than one.
The Nominating Committee and the Board of Directors recommends that the number of directors be set at five and that five directors
be elected at the Annual Meeting to serve until the next Annual Meeting or until their successors are duly elected and qualified.
Under applicable Minnesota law, approval of the proposal to set the number of directors at five requires the affirmative vote of
the holders of the greater of (1) a majority of the voting power of the shares represented in person or by proxy at the annual
meeting with authority to vote on such matter or (2) a majority of the voting power of the minimum number of shares that would
constitute a quorum for the transaction of business at the annual meeting. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Nominating Committee
recommended and the Board of Directors selected the persons named below for election to the Board of Directors. All nominees are
currently directors of the Company. If, prior to the Annual Meeting, it should become known that any of the following individuals
will be unable to serve as a director after the Annual Meeting by reason of death, incapacity or other unexpected occurrence, the
proxies will be voted for such substitute nominee as is selected by the Board of Directors. The Board of Directors has no reason
to believe that any of the following nominees will be unable to serve. The election of the nominees requires the affirmative vote
by a plurality of the voting power of the shares present and entitled to vote on the election of directors at a meeting at which a
quorum is present. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets
forth the principal occupations (for at least the last five years) and directorships of the nominees: </FONT></P>



<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR VALIGN="BOTTOM">
<TH align=left><FONT FACE="Times New Roman, Times, Serif" SIZE=1>&nbsp;&nbsp;&nbsp;Name </FONT><HR SIZE=1 NOSHADE COLOR=BLACK></TH>
<TD WIDTH="6%">&nbsp;</TD>
<TH align=left><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Principal Occupation and Directorships </FONT><HR SIZE=1 NOSHADE COLOR=BLACK></TH>
<TD WIDTH="6%">&nbsp;</TD>
<TH><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Age </FONT><HR SIZE=1 NOSHADE COLOR=BLACK></TH>
<TD WIDTH="6%">&nbsp;</TD>
<TH><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Director Since </FONT><HR SIZE=1 NOSHADE COLOR=BLACK></TH></TR>

<TR VALIGN="TOP">
<TD WIDTH="18%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;Bradley D. Slye</FONT></TD>
<TD WIDTH="6%">&nbsp;</TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Chairman of the Board and President of the Company since 1997; Chief Financial Officer since 2000</FONT></TD>
<TD WIDTH="6%">&nbsp;</TD>
<TD ALIGN="CENTER" WIDTH="10%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">46</FONT></TD>
<TD WIDTH="6%">&nbsp;</TD>
<TD ALIGN="CENTER" WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE="2">1997</FONT></TD></TR>
<TR><TD>&nbsp;</TD></TR>

<TR VALIGN="TOP">
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;Peter R. Peterson</FONT></TD>
<TD WIDTH="6%">&nbsp;</TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">President, P.R. Peterson Company (a venture capital firm); Secretary of the Company since 1973; Director of PPT Vision, Inc. </FONT></TD>
<TD WIDTH="6%">&nbsp;</TD>
<TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">72</FONT></TD>
<TD WIDTH="6%">&nbsp;</TD>
<TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">1969</FONT></TD></TR>
<TR><TD>&nbsp;</TD></TR>

<TR VALIGN="TOP">
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;John S. Strom </FONT></TD>
<TD WIDTH="6%">&nbsp;</TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Retired; Vice President of Financial Planning &amp; Analysis of Northwest Bancorp (currently Wells Fargo) </FONT></TD>
<TD WIDTH="6%">&nbsp;</TD>
<TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">72</FONT></TD>
<TD WIDTH="6%">&nbsp;</TD>
<TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">1989</FONT></TD></TR>
<TR><TD>&nbsp;</TD></TR>

<TR VALIGN="TOP">
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;Joseph A. Marino</FONT></TD>
<TD WIDTH="6%">&nbsp;</TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">President and CEO of Cardia, Inc. (a medical equipment manufacturer) since 1998 </FONT></TD>
<TD WIDTH="6%">&nbsp;</TD>
<TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">54</FONT></TD>
<TD WIDTH="6%">&nbsp;</TD>
<TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">1994</FONT></TD></TR>
<TR><TD>&nbsp;</TD></TR>

<TR VALIGN="TOP">
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;Geoffrey W. Miller</FONT></TD>
<TD WIDTH="6%">&nbsp;</TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Controller of Wilcox Paper (a distributor of fine paper to the Printing Industry) since 2002; General Manager of AmSan&nbsp;&#150; Brissman Kennedy in 2001 (a distributor of janitoral supplies); CFO/VP Operations of AmSan&nbsp;&#150; Brissman Kennedy since 1999 </FONT></TD>
<TD WIDTH="6%">&nbsp;</TD>
<TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">51</FONT></TD>
<TD WIDTH="6%">&nbsp;</TD>
<TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">1999</FONT></TD></TR>
</TABLE>
<BR>


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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SECURITY OWNERSHIP OF CERTAIN<BR>BENEFICIAL OWNERS AND MANAGEMENT </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following  table sets forth  information,  as of February 21, 2006,  regarding the  beneficial  ownership of the
outstanding  shares of Common  Stock by persons  known by the  Company to  beneficially  own more than 5% of the  outstanding
shares of Common Stock,  by directors and director  nominees,  by the executive  officers  named in the Summary  Compensation
Table, and by such directors and executive officers as a group. </FONT></P>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 ALIGN=Center WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH><TH></TH>
     <TH COLSPAN=5><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Common Stock</FONT><HR SIZE=1 COLOR=BLACK NOSHADE></TH></TR>

<TR VALIGN=Bottom>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Name and Address<BR>of Beneficial Owner</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH><TH></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Number of Shares<BR>Beneficially Owned<SUP>(1)(2)</SUP> </FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH><TH></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Percent<BR>of Class </FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>

<TR VALIGN="TOP" BGCOLOR="#d6f3e8">
     <TD WIDTH=45% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Peter R. Peterson<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6111 Blue Circle Drive<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Minnetonka, MN 55343</FONT></TD>
     <TD WIDTH=1% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=12% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD WIDTH="15%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,264,551<SUP>(3)</SUP></FONT></TD>
        <TD WIDTH=13% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
     <TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD WIDTH="10%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>38.9%</FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD></TR>
<TR><TD>&nbsp;</TD></TR>

<TR VALIGN=TOP>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Bradley D. Slye<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6111 Blue Circle Drive<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Minnetonka, MN 55343</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER" WIDTH="10%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;150,276<SUP>(4)</SUP></FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER" WIDTH="10%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.6%</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD></TR>
<TR><TD>&nbsp;</TD></TR>

<TR VALIGN="TOP" BGCOLOR="#d6f3e8">
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>John S. Strom<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5005 Arden Avenue<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Edina, MN 55424 </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER" WIDTH="10%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10,000<SUP>(5)</SUP></FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER" WIDTH="10%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>*</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR><TD>&nbsp;</TD></TR>

<TR VALIGN=TOP>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Joseph A. Marino<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13770 Frontier Court<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Burnsville, MN 55337 </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER" WIDTH="10%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22,500<SUP>(6)</SUP></FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER" WIDTH="10%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>*</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR><TD>&nbsp;</TD></TR>

<TR VALIGN="TOP" BGCOLOR="#d6f3e8">
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Geoffrey W. Miller<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12735 42<SUP>nd</SUP> Place North<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Plymouth, MN 55442  </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER" WIDTH="10%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12,000<SUP>(7)</SUP></FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER" WIDTH="10%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>*</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR><TD>&nbsp;</TD></TR>

<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Daniel Zeff</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER" WIDTH="10%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;403,202<SUP>(8)</SUP></FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER" WIDTH="10%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>12.4%</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD></TR>
<TR><TD>&nbsp;</TD></TR>

<TR VALIGN="BOTTOM" BGCOLOR="#d6f3e8">
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Officers and Directors as a Group (5 persons)</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER" WIDTH="10%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,459,327<SUP>(9)</SUP></FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER" WIDTH="10%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>43.9%</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD></TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;*  </FONT></TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Indicates ownership of less than one percent (1.0%)</FONT></P></TD>
</TR>

<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1)  </FONT></TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Except as otherwise indicated, each person named or
included in the group has the sole power to vote and sole power to direct the disposition of all shares listed as beneficially
owned by him/her. </FONT></P></TD>
</TR>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(2)  </FONT></TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Beneficial ownership information is based on
information furnished by the specified persons and is determined in accordance with Rule 13d-3 under the Exchange Act, as required
for purposes of this Proxy Statement. Accordingly, it includes shares of Common Stock that are issuable upon the exercise of stock
options exercisable within 60 days of February 21, 2006. Such information is not necessarily to be construed as an admission of
beneficial ownership for other purposes. </FONT></P></TD>
</TR>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(3)  </FONT></TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Includes 5,850 shares held by Mr. Peterson&#146;s
spouse and 11,400 shares held in Keogh Plan. </FONT></P></TD>
</TR>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(4)  </FONT></TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Includes 5,190 shares held by Mr. Slye&#146;s
spouse, 905 shares held by Mr. Slye&#146;s children, 18,329 shares held by the ESOP for the account of Mr. Slye, and 33,000 shares
purchasable upon exercise of options presently exercisable or exercisable within 60 days of February 21, 2006. </FONT></P></TD>
</TR>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(5)  </FONT></TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Includes 9,000 shares purchasable upon exercise of
options presently exercisable or exercisable within 60 days of February 21, 2006. </FONT></P></TD>
</TR>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(6)  </FONT></TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Includes 15,000 shares purchasable upon exercise of
options presently exercisable or exercisable within 60 days of February 21, 2006. </FONT></P></TD>
</TR>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(7)  </FONT></TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Includes 12,000 shares purchasable upon exercise of
options presently exercisable or exercisable within 60 days of February 21, 2006. </FONT></P></TD>
</TR>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(8)  </FONT></TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In his most recent Schedule 13G/A filing with the
Securities and Exchange Commission on February 6, 2006, Mr. Zeff represents that he has sole voting and dispostive power over all
such shares. </FONT></P></TD>
</TR>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(9)  </FONT></TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Includes 69,000 shares that may be purchased by
officers and directors upon exercise of options presently exercisable or exercisable within 60 days of February 21, 2006, and
18,329 shares allocated to officers&#146; accounts under the ESOP. </FONT></P></TD>
</TR>
</TABLE>
<BR>



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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>EXECUTIVE COMPENSATION </FONT></H1>


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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Compensation Summary </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table
summarizes information concerning the compensation awarded or paid to, or earned by, the Company&#146;s Chairman and
President/Chief Executive Officer during each of the Company&#146;s last three fiscal years. No other executive officers received
salary and bonus for fiscal 2005 exceeding $100,000. </FONT></P>



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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Summary Compensation Table </FONT></H1>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 ALIGN=Center WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN="2" WIDTH="12%" BGCOLOR="#FFFFFF"><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH><TH></TH>
     <TH COLSPAN="2" WIDTH="5%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH><TH></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH><TH></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH><TH></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH><TH></TH>
     <TH COLSPAN=8><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Long-Term Compensation</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH><TH></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN="2" WIDTH="12%" BGCOLOR="#FFFFFF"><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH><TH></TH>
     <TH COLSPAN="2" WIDTH="5%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH><TH></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH><TH></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH><TH></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH><TH></TH>
     <TH COLSPAN=5><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Awards</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH><TH></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Payouts</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH><TH></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN="2" WIDTH="12%" BGCOLOR="#FFFFFF"><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Name and<BR>Principal<BR>Position</FONT></TH><TH></TH>
     <TH COLSPAN="2" WIDTH="5%"><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Year</FONT></TH><TH></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Salary<BR>($)</FONT></TH><TH></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Bonus<BR>($)</FONT></TH><TH></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Other<BR>Annual<BR>Comp<BR>($)</FONT></TH><TH></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Restricted<BR>Stock<BR>Award(s)<BR>($)</FONT></TH><TH></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Securities<BR>Underlying<BR> Option<BR> SARs<BR> (#)</FONT></TH><TH></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>LTIP<BR> Payouts<BR> ($)</FONT></TH><TH></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>All Other<BR> Comp <BR> ($)(a) <BR></FONT></TH></TR>
<TR>
     <TD COLSPAN="2" ALIGN="RIGHT" WIDTH="12%" BGCOLOR="#FFFFFF"><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD COLSPAN="2" ALIGN="RIGHT" WIDTH="5%"><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR>
<TD WIDTH="12%" BGCOLOR="#FFFFFF">&nbsp;</TD></TR>
<TR VALIGN="BOTTOM" BGCOLOR="#d6f3e8">
     <TD WIDTH="12%" ALIGN="LEFT" BGCOLOR="#FFFFFF"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Bradley D. Slye</FONT></TD>
     <TD WIDTH=1% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=3% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="5%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2005</FONT></TD>
     <TD WIDTH=1% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=3% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD WIDTH="7%" ALIGN="RIGHT" STYLE="text-indent:10; direction:rtl;"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>176,000</FONT></TD>
        <TD WIDTH=3% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD WIDTH="7%" ALIGN="RIGHT" STYLE="text-indent:10; direction:rtl;"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>88,000</FONT></TD>
        <TD WIDTH=3% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD WIDTH="7%" ALIGN="RIGHT" STYLE="text-indent:10; direction:rtl;"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>0</FONT></TD>
        <TD WIDTH=3% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD WIDTH="7%" ALIGN="RIGHT" STYLE="text-indent:10; direction:rtl;"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>0</FONT></TD>
        <TD WIDTH=3% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD WIDTH="7%" ALIGN="RIGHT" STYLE="text-indent:10; direction:rtl;"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>*0</FONT></TD>
        <TD WIDTH=3% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
     <TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD WIDTH="7%" ALIGN="RIGHT" STYLE="text-indent:10; direction:rtl;"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>0</FONT></TD>
        <TD WIDTH=3% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD WIDTH="7%" ALIGN="RIGHT" STYLE="text-indent:10; direction:rtl;"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10,807</FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT" WIDTH="12%" BGCOLOR="#FFFFFF"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Chairman</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT" WIDTH="5%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2004</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT" WIDTH="7%" STYLE="text-indent:10; direction:rtl;"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>176,000</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT" WIDTH="7%" STYLE="text-indent:10; direction:rtl;"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>88,000</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT" WIDTH="7%" STYLE="text-indent:10; direction:rtl;"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>0</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT" WIDTH="7%" STYLE="text-indent:10; direction:rtl;"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>0</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT" WIDTH="7%" STYLE="text-indent:10; direction:rtl;"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>75,000&nbsp;&nbsp;</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT" WIDTH="7%" STYLE="text-indent:10; direction:rtl;"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>0</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT" WIDTH="7%" STYLE="text-indent:10; direction:rtl;"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10,535</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM" BGCOLOR="#d6f3e8">
     <TD nowrap ALIGN="LEFT" WIDTH="12%" BGCOLOR="#FFFFFF"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>President, CEO, CFO&nbsp;&nbsp;&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT" WIDTH="5%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2003</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT" WIDTH="7%" STYLE="text-indent:10; direction:rtl;"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>176,000</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT" WIDTH="7%" STYLE="text-indent:10; direction:rtl;"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>88,000</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT" WIDTH="7%" STYLE="text-indent:10; direction:rtl;"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>0</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT" WIDTH="7%" STYLE="text-indent:10; direction:rtl;"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>0</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT" WIDTH="7%" STYLE="text-indent:10; direction:rtl;"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>0&nbsp;&nbsp;</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT" WIDTH="7%" STYLE="text-indent:10; direction:rtl;"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>0</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT" WIDTH="7%" STYLE="text-indent:10; direction:rtl;"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10,520</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN="26" ALIGN="RIGHT" WIDTH="12%" BGCOLOR="#FFFFFF"><HR NOSHADE COLOR=#000000 SIZE=1></TD></TR>
</TABLE>


<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN="CENTER" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(a) </FONT></TD>
<TD ALIGN=LEFT WIDTH=97%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Amounts reflect allocations to individual&#146;s
account of Company contributions to the ESOP, 401(k) Plan, and/or standard employee benefit plans. </FONT></TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN="CENTER" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2> &nbsp;*&nbsp;&nbsp;  </FONT></TD>
<TD ALIGN=LEFT WIDTH=97%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In February 2006, Mr. Slye voluntarily forfeited, for
no consideration from the Company, 150,000 options previously granted to him. </FONT></TD>
</TR>
</TABLE>
<BR>


<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Stock Options </FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There were no
(1)&nbsp;individual grants of options to purchase Company Common Stock made to the named executive officer(s) during fiscal 2005,
and (2)&nbsp;individual exercises of stock options by the named executive officer(s) during fiscal 2005. The following table sets
forth information concerning the number of options outstanding at the end of fiscal 2005 for the named executive officer(s).
</FONT></P>


<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Aggregated Options/SAR Exercises in Last Fiscal Year And
<BR>Fiscal Year-End Options/SAR Values (a) </FONT></H1>



<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 ALIGN=Center WIDTH=100%>
<TR VALIGN=Bottom>
     <TH ROWSPAN=2 COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Name</FONT><HR NOSHADE COLOR=BLACK SIZE=1></TH><TH ROWSPAN=2></TH>
     <TH ROWSPAN=2 COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Shares<BR>Acquired<BR>On Exercise<BR>(#) </FONT><HR NOSHADE COLOR=BLACK SIZE=1></TH><TH ROWSPAN=2></TH>
     <TH ROWSPAN=2 WIDTH="8%"><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Value<BR>Realized<BR>($) </FONT><HR NOSHADE COLOR=BLACK SIZE=1></TH><TH ROWSPAN=2></TH>
     <TH COLSPAN="3" WIDTH="8%"><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Number of<BR>Securities Underlying<BR>Unexercised Options/SARs (a)<BR>at Fiscal Year-End (#)</FONT><HR NOSHADE COLOR=BLACK SIZE=1></TH><TH></TH>
     <TH COLSPAN="3" WIDTH="8%"><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Value of<BR>Unexercised In-the-Money<BR>Options/SARs<BR>at Fiscal Year-End ($)</FONT><HR NOSHADE COLOR=BLACK SIZE=1></TH></TR>
<TR VALIGN=Bottom>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Exercisable </FONT><HR NOSHADE COLOR=BLACK SIZE=1></TH><TH></TH>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Unexercisable </FONT><HR NOSHADE COLOR=BLACK SIZE=1></TH><TH></TH>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Exercisable </FONT><HR NOSHADE COLOR=BLACK SIZE=1></TH><TH></TH>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Unexercisable </FONT><HR NOSHADE COLOR=BLACK SIZE=1></TH></TR>
<TR><TD>&nbsp;</TD></TR>

<TR VALIGN="BOTTOM" BGCOLOR="#d6f3e8">
<TD WIDTH=15% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Bradley Slye</FONT></TD>
<TD WIDTH=1% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>

<TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>0</FONT></TD>
<TD WIDTH=6% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>

 <TD WIDTH="8%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>N/A</FONT></TD>
 <TD WIDTH=5% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>

 <TD WIDTH="8%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>33,000</FONT></TD>
 <TD WIDTH=6% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>

 <TD WIDTH="8%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>0</FONT></TD>
 <TD WIDTH=6% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>

 <TD WIDTH="8%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$77,000</FONT></TD>
 <TD WIDTH=6% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>

 <TD WIDTH="8%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$0</FONT></TD>
 <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
</TABLE>
<BR>



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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN="CENTER" WIDTH="3%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(a) </FONT></TD>
<TD ALIGN=LEFT WIDTH=97%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Consists entirely of stock options, does not include
the 150,000 options Mr. Slye voluntarily forfeited, see note in compensation summary. </FONT></TD>
</TR>
</TABLE>
<BR>



<BR>
<HR SIZE=3 COLOR=GRAY NOSHADE>
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<BR>



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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SECTION 16(a) BENEFICIAL OWNERSHIP
<BR>REPORTING COMPLIANCE </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to Section 16(a) of
the Exchange Act, the Company&#146;s directors, its executive officers, and any persons who beneficially own more than 10% of the
Company&#146;s Common Stock are required to report their initial ownership of Common Stock and subsequent changes in that
ownership to the Securities and Exchange Commission. Specific due dates for those reports have been established, and the Company
is required to disclose in this Proxy Statement any failure to file by those due dates during fiscal 2005. Based upon a review of
such reports furnished to the Company, or written representations that no reports were required, the Company believes that all of
those filing requirements were satisfied with respect to fiscal 2005. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>RATIFICATION OF INDEPENDENT AUDITORS
<BR>Proposal #3 </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s Board of
Directors retained Virchow, Krause and Company, LLC as its principal independent auditors for the fiscal year ended
December&nbsp;31, 2005 and has selected Boulay, Heutmaker, Zibell &amp; Co. P.L.L.C to serve as the Company&#146;s auditors for
the fiscal year ending December&nbsp;31, 2006. Prior to its selection as the Company&#146;s auditors for the fiscal year ending
December 31, 2006, the Company did not consult with Boulay, Heutmaker, Zibell regarding the application of accounting principles
to a specified or completed transaction or the type of audit opinion it may issue with respect to on the Company&#146;s financial
statements. The Board of Directors desires that the selection of Boulay, Heutmaker, Zibell as auditors for the 2006 fiscal year be
submitted to the shareholders for ratification. If the selection is not ratified, the Board of Directors will reconsider, though
not necessarily change, its decision. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On October 26, 2005, the
Company dismissed Virchow, Krause and Company, LLC as the Company&#146;s independent public accountants. The Company&#146;s Board
of Directors and audit committee participated in and approved the decision to change accountants.&nbsp; The reports of Virchow,
Krause and Company, LLC on the Company&#146;s financial statements for the fiscal years ended December 31, 2003 and 2004,
contained no adverse opinion or disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope, or
accounting principles. In connection with its audits for the fiscal years ended December 31, 2003, 2004 and 2005, there were no
disagreements with Virchow, Krause and Company, LLC on any matter of accounting principles or practices, financial statement
disclosure, auditing scope or procedure, which disagreements if not resolved to the satisfaction of Virchow, Krause and Company,
LLC would have caused them to make reference thereto in their report on the financial statements for such periods. A
representative of Virchow, Krause &amp; Company, LLC is expected to be present at the Annual Meeting, will have an opportunity to
make a statement if he or she desires to do so and will be available to respond to appropriate questions. </FONT></P>



<BR><BR><BR><BR><BR>
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<HR SIZE=3 COLOR=GRAY NOSHADE>
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<BR>



<!-- MARKER FORMAT-SHEET="Head Major Center Bold" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>DISCLOSURE OF FEES PAID TO INDEPENDENT AUDITORS </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Sub 2 Left" FSL="Default" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Audit Fees</B> </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following fees were paid
to Schweitzer, Karon &amp; Bremer, LLC (&#147;SKB&#148;) and Virchow, Krause &amp; Company, LLC (&#147;VKC&#148;) for fiscal years
2004 and 2005: </FONT></P>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 ALIGN=Center WIDTH=70%>
<TR VALIGN=Bottom>
     <TH COLSPAN="2" WIDTH="40%" STYLE="font-weight:bold;"><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH><TH></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>FY 2005(VKC)</FONT></TH><TH></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>FY 2004(VKC)</FONT></TH><TH></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>FY 2004(SKB)</FONT></TH></TR>
<TR>
     <TD COLSPAN="3" WIDTH="40%" STYLE="font-weight:bold;"></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN="BOTTOM" BGCOLOR="#d6f3e8">
     <TD WIDTH="40%" ALIGN="LEFT" STYLE="font-weight:bold;"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Audit Fees</FONT></TD>
     <TD WIDTH=1% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=5% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD WIDTH=12% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> 53,750</FONT></TD>
        <TD WIDTH=6% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD WIDTH=12% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> 53,035</FONT></TD>
        <TD WIDTH=6% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD WIDTH=12% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> 4,981</FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT" WIDTH="40%" STYLE="font-weight:bold;"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Audit-Related Fees</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>  1,600</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>      0</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>     0</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM" BGCOLOR="#d6f3e8">
     <TD ALIGN="LEFT" WIDTH="40%" STYLE="font-weight:bold;"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Tax Fees</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>  7,980</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> 10,775</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>     0</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT" WIDTH="40%" STYLE="font-weight:bold;"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>All Other Fees</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>  3,297</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>  2,694</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>     0</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
</TABLE>



<!-- MARKER FORMAT-SHEET="Para Large Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Audit Fees </B>were for
professional services rendered for the audit of the Company&#146;s consolidated financial statements and review of the interim
consolidated financial statements included in quarterly reports and services that are normally provided by Virchow, Krause &amp;
Company, LLC in connection with statutory and regulatory filings or engagements. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Audit-Related Fees
</B>were for assurance and related services that are reasonably related to the performance of the audit or review of the
Company&#146;s consolidated financial statements and are not reported under &#147;Audit Fees.&#148; </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Tax Fees </B>were for
professional services for federal and state tax compliance, tax advice and tax planning. &nbsp; </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>All Other Fees </B>were
for certain financial reporting services in connection with an investment by the company. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to its written
charter, the Audit Committee is required to pre-approve all audit services, as well as all non-audit services performed by the
Company&#146;s independent auditors in order to assure that the provision of such non-audit services does not impair the
auditor&#146;s independence. Unless a particular service has received general pre-approval by the Audit Committee in accordance
with the Audit Committee&#146;s pre-approval policy, each service provided must be specifically pre-approved. Any proposed
services exceeding pre-approved costs levels will require specific pre-approval by the Audit Committee. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As part of the Company&#146;s
annual engagement agreement with its independent auditor, the Audit Committee pre-approves the following audit services to be
provided by the independent auditor: statutory and financial audits for the company and any of its subsidiaries and affiliates,
audit services associated with SEC registration statements, periodic reports and other documents filed with the SEC, production of
other documents issued by the independent auditor in connection with securities offerings (e.g., comfort letters, consents), and
assistance in responding to SEC comment letters. The Audit Committee also provides pre-approval in the annual engagement of most
consulting services provided by the independent auditor related to the accounting or disclosure treatment of transactions or
events and the actual or potential impact of final or proposed rules, standards or interpretations by the SEC, FASB, or other
regulatory or standard-setting bodies. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Audit Committee has also
provided the Company&#146;s independent auditors with a general pre-approval of certain non-audit services, primarily tax
services. The Audit Committee does not believe that performance of these tax services impairs the auditor&#146;s independence.
Specifically, the Audit Committee has given the independent auditors pre-approval for U.S. federal, state, and local tax planning
and advice, U.S. federal, state, and local tax compliance, international tax planning and advice, international tax compliance,
and tax planning and advice related to merger and acquisition activities. The Company&#146;s independent auditors must inform the
Audit Committee whenever a pre-approved service is provided. The aggregate amount of fees for these pre-approved tax services may
not exceed $8,000 without explicit approval by the Audit Committee. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The term of any pre-approval
is 12 months from the date of pre-approval, unless the Audit Committee specifically provides for a different term. The Audit
Committee retains the right to periodically revise the above list of pre-approved services. </FONT></P>



<BR>
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<!-- MARKER FORMAT-SHEET="Head Major Center Bold" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>AUDIT COMMITTEE REPORT </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Large Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors
maintains an Audit Committee comprised of three of the Company&#146;s directors. The Board of Directors and the Audit Committee
believe that the Audit Committee&#146;s current member composition satisfies the rule of the National Association of Securities
Dealers, Inc. (&#147;NASD&#148;) that governs audit committee composition, Rule 4350(d)(2), including the requirement that audit
committee members all be &#147;independent directors&#148; as that term is defined by NASD Rule 4200(a)(15). </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Audit Committee of the
Board of Directors oversees and monitors the participation of the Company&#146;s management and independent auditors throughout
the financial reporting process. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with its
function to oversee and monitor the financial reporting process of the Company, the Audit Committee has done the following:
</FONT></P>

<UL>

<LI><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Reviewed and discussed the audited financial statements for the fiscal year
ended December 31, 2005 with the Company&#146;s management;</FONT>

<LI><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Discussed with the Company&#146;s independent auditors those matters
required to be discussed by SAS 61 (Codification of Statements on Auditing Standards, AU &sect;380); and </FONT>

<LI><FONT FACE="Times New Roman, Times, Serif" SIZE=2> Received the written disclosure and the letter from the independent
auditors required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees) and has
discussed with the independent auditors its independence.</FONT>
</UL>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based on the foregoing, the
Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Company&#146;s
annual report on Form 10-KSB for the fiscal year ended December 31, 2005. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold 1" FSL="Default" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Audit Committee</B><BR><I>Joseph A. Marino</I><BR><I>John S. Strom</I><BR><I>Geoffrey W. Miller</I> </FONT> </P>



<BR><BR><BR><BR><BR>
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<!-- MARKER FORMAT-SHEET="Head Major Center Bold" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>OTHER MATTERS </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors knows
of no other matters to be brought before the Annual Meeting. However, if any other matters are properly brought before the Annual
Meeting, it is the intention of the persons named in the accompanying proxy to vote in accordance with their judgment on such
matters. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SHAREHOLDER PROPOSALS </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Large Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shareholder proposals for the
proxy statement for the 2007 Annual Meeting of Shareholders of the Company must be received no later than November 25, 2006 at the
Company&#146;s principal executive offices, 6111 Blue Circle Drive, Minnetonka, Minnesota 55343, directed to the attention of the
Chairman of the Audit Committee, or the Chairman of the Nominating Committee if the proposal relates to the nomination of a
director, in order to be considered by the Board of Directors for inclusion in next year&#146;s annual meeting proxy material
under the SEC&#146;s proxy rules. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Also, if a shareholder
proposal intended to be presented at the next annual meeting but not included in the Company&#146;s proxy statement and proxy is
received by the Company after February 8, 2007, then management named in the Company&#146;s proxy form for the next annual meeting
will have discretionary authority to vote shares represented by such proxies on the shareholder proposal, if presented at the
meeting, without including information about the proposal in the Company&#146;s proxy material. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>FORM 10-KSB </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Large Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A copy of the Company&#146;s
Annual Report to the Securities and Exchange Commission on Form 10-KSB for the fiscal year ended December 31, 2005 has been
provided with this Proxy Statement. The Company will furnish to any shareholder, upon written request, any exhibit described in
the list accompanying the Form 10-KSB upon the payment, in advance, of reasonable fees related to the Company&#146;s furnishing
such exhibits(s). Any such request should include a representation that the shareholder was the beneficial owner of shares of
Electro-Sensors Common Stock on February 21, 2006, the record date for the 2006 Annual Meeting, and should be directed to Mr.
Bradley Slye, Chief Executive Officer, at the Company&#146;s principal address. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>The foregoing Notice of Annual Meeting and Proxy Statement are sent by
order of the Board of Directors.</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left" FSL="Default" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Bradley D. Slye </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left" FSL="Default" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>President
<BR>March 24, 2006 </FONT></P>



<BR>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></P>
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<p style=' margin-bottom:0pt; margin-top:100pt;text-align:center;'><B><font SIZE=4>ELECTRO-SENSORS, INC.</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>PROXY FOR ANNUAL MEETING</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>April 19, 2006</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:8.33%;text-align:left;'><font size=2>The undersigned hereby appoints
BRADLEY D. SLYE and PETER R. PETERSON, and each of them, with full power of substitution, his or her Proxies to represent and
vote, as designated on the reverse side, all shares of the Common Stock of Electro-Sensors Inc. registered in the name of the undersigned at the
Annual Meeting of Shareholders of the Company to be held at the Sheraton Minnesota West Hotel, 12201 Ridgedale Drive, Minnetonka,
Minnesota, at 2:00 p.m. local time, on April 19, 2006, and at any adjournment thereof. The undersigned hereby revokes all proxies
previously granted with respect to such meeting.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>(Continued and to be signed on the reverse side)</font></b></p>


<BR>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></P>
<HR SIZE=3 COLOR=GRAY NOSHADE>
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<BR>




<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>
<B><font SIZE=2>ANNUAL MEETING OF SHAREHOLDERS OF</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=4>ELECTRO-SENSORS, INC.</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>April 19, 2006</font></b></p>


<p style=' margin-bottom:0pt; margin-top:48pt;text-align:center;'><font size=2>Please date, sign and mail</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>your proxy card in the</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>envelope provided as soon</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>as possible.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=1>Please detach along perforated line and mail in the envelope provided.</font></p>

<HR ALIGN=LEFT WIDTH=100% color=black SIZE=1>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=1>The Board of Directors recommends that you vote FOR each proposal.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=1>PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE </font></B><font face=Wingdings>x</font></p>


<p style=' margin-bottom:0pt; margin-top:24pt;text-align:center;'><b><font size=2> </font></b></p>

<DIV style="width: 100%; margin-left: 50%">


<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="margin-left:0in;border-collapse:collapse">
    <tr >
        <TD WIDTH="4%" VALIGN="top" STYLE="padding:0in 5.4pt 0in 5.4pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="56%" VALIGN="TOP" STYLE="padding:0in 5.4pt 0in 5.4pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="13%" VALIGN="BOTTOM" STYLE="padding:0in 5.4pt 0in 5.4pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=2>FOR</font></B></p> </td>
        <TD WIDTH="13%" VALIGN="BOTTOM" STYLE="padding:0in 5.4pt 0in 5.4pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=2>AGAINST</font></B></p> </td>
        <TD WIDTH="13%" VALIGN="BOTTOM" STYLE="padding:0in 5.4pt 0in 5.4pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=2>ABSTAIN</font></B></p> </td> </tr>
    <tr >
        <td width="4%" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>1.</font></p> </td>
        <td width="56%" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Set number of directors at five</font></p> </td>
        <td width="13%" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>o</font></p> </td>
        <td width="13%" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>o</font></p> </td>
        <td width="13%" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>o</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="margin-left:0in;border-collapse:collapse">
    <tr >
        <TD WIDTH="4%" VALIGN="TOP" STYLE="padding:0in 5.4pt 0in 5.4pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>2.</font></p> </td>
        <TD WIDTH="42%" VALIGN="TOP" STYLE="padding:0in 5.4pt 0in 5.4pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Elect five directors:</font></p> </td>
        <TD width=55% VALIGN="bottom" STYLE="padding:0in 5.4pt 0in 5.4pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>NOMINEES:</font></p> </td>
</tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>



<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="margin-left:.25in;border-collapse:collapse;">
    <tr >
        <TD WIDTH="4%" VALIGN="TOP" STYLE="padding:0in 5.4pt 0in 5.4pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="4%" VALIGN="TOP" STYLE="padding:0in 5.4pt 0in 5.4pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>o</font></p> </td>
        <TD WIDTH="31%" VALIGN="TOP" STYLE="padding:0in 5.4pt 0in 5.4pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font SIZE=2>FOR ALL NOMINEES</font></p> </td>
        <TD WIDTH="6%" VALIGN="TOP" STYLE="padding:0in 5.4pt 0in 5.4pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>m</font></p> </td>
        <TD WIDTH="54%" VALIGN="TOP" STYLE="padding:0in 5.4pt 0in 5.4pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>B. Slye</font></p> </td> </tr>
    <tr >
        <td width="4%" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="4%" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="31%" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="6%" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>m</font></p> </td>
        <td width="54%" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>P. Peterson</font></p> </td> </tr>
    <tr >
        <td width="4%" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="4%" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>o</font></p> </td>
        <td width="31%" valign=top style='padding:0in 5.4pt 0in 5.4pt' nowrap>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font SIZE=2>WITHHOLD AUTHORITY</font></p> </td>
        <td width="6%" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>m</font></p> </td>
        <td width="54%" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>G. Miller</font></p> </td> </tr>
    <tr >
        <td width="4%" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="4%" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="31%" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font SIZE=2>FOR ALL NOMINEES</font></p> </td>
        <td width="6%" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>m</font></p> </td>
        <td width="54%" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>J. Marino</font></p> </td> </tr>
    <tr >
        <td width="4%" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="4%" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="31%" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="6%" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>m</font></p> </td>
        <td width="54%" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>J. Strom</font></p> </td> </tr>
    <tr >
        <td width="4%" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="4%" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>o</font></p> </td>
        <td width="31%" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font SIZE=2>FOR ALL EXCEPT</font><br> <font size=2>(See instructions below)</font></p> </td>
        <td width="6%" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="54%" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:4.17%;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="1"><U><B>INSTRUCTION</B></U> </FONT><FONT SIZE="1">: To withhold authority to vote for any individual nominee(s), mark &#147;FOR ALL EXCEPT&#148; and fill in the circle next to each nominee you wish to withhold, as shown here: </FONT> <FONT FACE="WingDings" SIZE="2">l </FONT></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:4.17%;text-align:left;'><font size=2>&nbsp;</font></p>


<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="margin-left:0in;border-collapse:collapse">
    <tr >
        <TD WIDTH="4%" VALIGN="TOP" STYLE="padding:0in 5.4pt 0in 5.4pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="56%" VALIGN="TOP" STYLE="padding:0in 5.4pt 0in 5.4pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="13%" VALIGN="bottom" STYLE="padding:0in 5.4pt 0in 5.4pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=2>FOR</font></B></p> </td>
        <TD WIDTH="13%" VALIGN="bottom" STYLE="padding:0in 5.4pt 0in 5.4pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=2>AGAINST</font></B></p> </td>
        <TD WIDTH="13%" VALIGN="bottom" STYLE="padding:0in 5.4pt 0in 5.4pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=2>ABSTAIN</font></B></p> </td> </tr>
    <tr >
        <td width="4%" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3.</font></p> </td>
        <td width="56%" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Approve appointment of Boulay, Heutmaker, Zibell &amp; Co. P.L.L.P as independent auditors for the current fiscal year.</font></p> </td>
        <td width="13%" style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>o</font></p> </td>
        <td width="13%" style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>o</font></p> </td>
        <td width="13%" style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>o</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:4.17%;text-align:left;'><font size=2>&nbsp;</font></p>


<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="margin-left:0in;border-collapse:collapse">
    <tr >
        <TD WIDTH="4%" VALIGN="TOP" STYLE="padding:0in 5.4pt 0in 5.4pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>4.</font></p> </td>
        <TD WIDTH="95%" VALIGN="TOP" STYLE="padding:0in 5.4pt 0in 5.4pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Other Matters. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:4.17%;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><B><font SIZE=2>THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS
DIRECTED OR, IF NO DIRECTION IS GIVEN FOR A PARTICULAR PROPOSAL, WILL BE VOTED FOR SUCH PROPOSAL.</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

</div>


<DIV style="width: 100%; margin-right: 50%">


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0in;border-collapse:collapse'>
    <tr >
        <td width="81%" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method.</font></p> </td>
        <td width="18%" style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>o</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

</div>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
    <tr >
        <td width="10%" valign=bottom style='border-right:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt' nowrap>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>Signature of Shareholder</font></p> </td>
        <td width="30%" valign=top style='border:solid black 1.0pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="5%" valign=bottom style='border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>Date:</font></p> </td>
        <td width="5%" valign=top style='border:solid black 1.0pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10%" valign=bottom style='border-right:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt' nowrap>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>Signature of Shareholder</font></p> </td>
        <td width="30%" valign=top style='border:solid black 1.0pt;border-color:gray; border-left:none;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="5%" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>Date:</font></p> </td>
        <td width="5%" valign=top style='border:solid black 1.0pt;border-color:gray; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="margin-left:0in;border-collapse:collapse">
    <tr >
        <TD WIDTH="4%" VALIGN="TOP" STYLE="padding:0in 5.4pt 0in 5.4pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1><B>NOTE:</B></font></p> </td>
        <TD WIDTH="95%" VALIGN="TOP" STYLE="padding:0in 5.4pt 0in 5.4pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>
This proxy must be signed exactly as the name appears hereon. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.
</font></p> </td> </tr></table>


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