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<SEC-DOCUMENT>0000891092-04-001914.txt : 20040426
<SEC-HEADER>0000891092-04-001914.hdr.sgml : 20040426
<ACCEPTANCE-DATETIME>20040426155120
ACCESSION NUMBER:		0000891092-04-001914
CONFORMED SUBMISSION TYPE:	DEF 14A
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20040528
FILED AS OF DATE:		20040426
EFFECTIVENESS DATE:		20040426

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			TAITRON COMPONENTS INC
		CENTRAL INDEX KEY:			0000942126
		STANDARD INDUSTRIAL CLASSIFICATION:	WHOLESALE-ELECTRONIC PARTS & EQUIPMENT, NEC [5065]
		IRS NUMBER:				954249240
		STATE OF INCORPORATION:			CA
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		DEF 14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-25844
		FILM NUMBER:		04754198

	BUSINESS ADDRESS:	
		STREET 1:		25202 ANZA DR
		CITY:			SANTA CLARITA
		STATE:			CA
		ZIP:			91355
		BUSINESS PHONE:		8052576060

	MAIL ADDRESS:	
		STREET 1:		25202 ANZA DR
		CITY:			SANTA CLARITA
		STATE:			CA
		ZIP:			91355
</SEC-HEADER>
<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
<FILENAME>e17583def14_a.htm
<DESCRIPTION>SCHEDULE 14A
<TEXT>
<html>
<head>
<title> </title>
</head>
<body>







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<p><table width=600><tr><td  align=center><font size=2><B>UNITED STATES  <BR>SECURITIES AND
EXCHANGE COMMISSION  <BR>Washington, D.C. 20549</B></font></td></tr></table>

<p><table width=600><tr><td  align=center><font size=2><B>SCHEDULE 14A INFORMATION</B></font></td></tr></table>

<p><table width=600><tr><td  align=center><font size=2><B>Proxy Statement Pursuant to
Section 14(a) of  <BR>the Securities Exchange Act of 1934 (Amendment No. ___)</B></font></td></tr></table>

<p><table width=600><tr>
    <td><font size=2><B>Filed by the Registrant&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;|X|</B></font></td>
  </tr></table>

<p><table width=600><tr>
    <td><font size=2><B>Filed by a Party other than the Registrant&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;|<u>&nbsp;&nbsp;&nbsp;</u>|</B></font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2><B>Check the appropriate box:</B></font></td></tr></table>

<P>
<table width=600>
  <tr>
    <td width=10% valign=top><FONT SIZE="2"><B>|<U>&nbsp;&nbsp;&nbsp;</U>|</B></FONT></td>
    <td width=90%><b><font size="2">Preliminary Proxy Statement</font></b></td>
  </tr>
</table>

<P>
<table width=600>
  <tr>
    <td width=10% valign=top><b><font size="2"><b>|<u>&nbsp;&nbsp;&nbsp;</u>|</b></font></b></td>
    <td width=90%><b><font size="2">Confidential, For Use of the Commission Only
      (as permitted by Rule 14a-6(e)(2))</font></b></td>
  </tr>
</table>

<P>
<table width=600>
  <tr>
    <td width=10% valign=top><b><font size="2">|X|</font></b></td>
    <td width=90%><b><font size="2">Definitive Proxy Statement</font></b></td>
  </tr>
</table>

<P>
<table width=600>
  <tr>
    <td width=10% valign=top><b><font size="2"><b>|<u>&nbsp;&nbsp;&nbsp;</u>|</b></font></b></td>
    <td width=90%><b><font size="2">Definitive Additional Materials</font></b></td>
  </tr>
</table>

<P>
<table width=600>
  <tr>
    <td width=10% valign=top><b><font size="2"><b>|<u>&nbsp;&nbsp;&nbsp;</u>|</b></font></b></td>
    <td width=90%><b><font size="2">Soliciting Material Pursuant to Rule 14a-12</font></b></td>
  </tr>
</table>

<p><table width=600><tr>
    <td  align=center><font size=2><B>TAITRON COMPONENTS INCORPORATED</B></font>
      <hr size="1" noshade>
      <font size=2><B>(Name of Registrant as Specified in Its Charter)</B></font>
      <hr size="1" noshade>
    </td>
  </tr></table>


<p><table width=600><tr><td  align=center><font size=2><B>(Name of Person(s) Filing Proxy
Statement, if Other Than the Registrant)</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>Payment of Filing Fee (Check the appropriate
box):</B></font></td></tr></table>

<P>
<table width=600>
  <tr>
    <td width=10% valign=top><b></b></td>
    <td width=10% valign="top"><b><font size="2">|X|</font></b></td>
    <td width=80%><b><font size="2">No Fee Required</font></b></td>
  </tr>
</table>

<P>
<table width=600>
  <tr>
    <td width=10% valign=top><b></b></td>
    <td width=10% valign="top"><b><font size="2"><b>|<u>&nbsp;&nbsp;&nbsp;</u>|</b></font></b></td>
    <td width=80%><b><font size="2">Fee computed on table below per Exchange Act
      Rules 14a-6(i)(4) and 0-11.</font></b></td>
  </tr>
</table>

<P>
<table width=600>
  <tr>
    <td width=10% valign=top><b><font size="2">&nbsp;(1) </font></b></td>
    <td width=90%><b><font size="2">Title of each class of securities to which
      transaction applies:</font></b></td>
  </tr>
</table>


<table width="600" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td>
      <hr size="1" noshade>
    </td>
  </tr>
</table>
<P>
<table width=600>
  <tr>
    <td width=10% valign=top><b><font size="2">&nbsp;(2) </font></b></td>
    <td width=90%><b><font size="2">Aggregate number of securities to which transactions
      applies:</font></b></td>
  </tr>
</table>


<table width="600" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td>
      <hr size="1" noshade>
    </td>
  </tr>
</table>
<P>
<table width=600>
  <tr>
    <td width=10% valign=top><b><font size="2">&nbsp;(3) </font></b></td>
    <td width=90%><b><font 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></b></td>
  </tr>
</table>
<table width="600" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td>
      <hr size="1" noshade>
    </td>
  </tr>
</table>
<P>
<table width=600>
  <tr>
    <td width=10% valign=top><b><font size="2">&nbsp;(4) </font></b></td>
    <td width=90%><b><font size="2">Proposed maximum aggregate value of transaction:</font></b></td>
  </tr>
</table>
<table width="600" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td>
      <hr size="1" noshade>
    </td>
  </tr>
</table>
<P>
<table width=600>
  <tr>
    <td width=10% valign=top><b><font size="2">&nbsp;(5) </font></b></td>
    <td width=90%><b><font size="2"> Total fee paid:</font></b></td>
  </tr>
</table>


<table width="600" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td>
      <hr size="1" noshade>
    </td>
  </tr>
</table>
<P>
<table width=600>
  <tr>
    <td width=10% valign=top><b><font size="2"><b>|<u>&nbsp;&nbsp;&nbsp;</u>|</b>
      </font></b></td>
    <td width=90%><b><font size="2"> Fee paid previously with preliminary materials:</font></b></td>
  </tr>
</table>


<table width="600" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td>
      <hr size="1" noshade>
    </td>
  </tr>
</table>
<P>
<table width=600>
  <tr>
    <td width=10% valign=top><b><font size="2"><b>|<u>&nbsp;&nbsp;&nbsp;</u>|</b>
      </font></b></td>
    <td width=90%><b><font 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></b></td>
  </tr>
</table>

<table width="600" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td>
      <hr size="1" noshade>
    </td>
  </tr>
</table>
<P>
<table width=600>
  <tr>
    <td width=10% valign=top><b><font size="2">&nbsp;(1) </font></b></td>
    <td width=90%><b><font size="2"> Amount previously paid:</font></b></td>
  </tr>
</table>


<table width="600" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td>
      <hr size="1" noshade>
    </td>
  </tr>
</table>
<P>
<table width=600>
  <tr>
    <td width=10% valign=top><b><font size="2">&nbsp;(2) </font></b></td>
    <td width=90%><b><font size="2"> Form, Schedule or Registration Statement
      no.:</font></b></td>
  </tr>
</table>


<table width="600" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td>
      <hr size="1" noshade>
    </td>
  </tr>
</table>
<P>
<table width=600>
  <tr>
    <td width=10% valign=top><b><font size="2">&nbsp;(3) </font></b></td>
    <td width=90%><b><font size="2"> Filing Party:</font></b></td>
  </tr>
</table>


<table width="600" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td>
      <hr size="1" noshade>
    </td>
  </tr>
</table>
<P>
<table width=600>
  <tr>
    <td width=10% valign=top><b><font size="2">&nbsp;(4) </font></b></td>
    <td width=90%><b><font size="2"> Date Filed:</font></b></td>
  </tr>
</table>


<table width="600" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td>
      <hr size="1" noshade>
    </td>
  </tr>
</table>
<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td><td width=480 align=center><font size="2">
</font></td><td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;






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<p><table width=600><tr><td  align=center><font size=4><B>TAITRON COMPONENTS INCORPORATED</B></font></td></tr></table>

<br>
<table width=600><tr><td><hr size=1 noshade align=CENTER width=150></td></tr></table>

<p><table width=600><tr><td  align=center><font size=3><B>NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS</B></font></td></tr></table>

<p><table width=600><tr><td  align=center><font size=3><B>TO BE HELD MAY 28, 2004</B></font></td></tr></table>

<br>
<table width=600><tr><td><hr size=1 noshade align=CENTER width=150></td></tr></table>


<p><table width=600><tr><td><font size=2><B>TO THE SHAREHOLDERS OF TAITRON COMPONENTS
INCORPORATED:</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You are cordially
invited to attend the Annual Meeting of Shareholders  of Taitron Components Incorporated,
a California corporation (the &#147;Company&#148;), to  be held on Friday, May 28, 2004,
at 10:00 a.m. Pacific time, at the Hyatt  Valencia, 24500 Town Center Drive, Valencia,
California 91355.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At the Annual
Meeting, shareholders will be asked to consider and act  upon the following matters:</font></td></tr></table>

<P><table width=600>
  <tr>
    <td width=3% valign=top>&nbsp;</td>
    <td width=6% valign="top"><font size="2">1. </font></td>
    <td width=91%><font size="2">To elect five directors for a term of one year;
      and</font></td>
  </tr></table>

<P><table width=600>
  <tr>
    <td width=3% valign=top>&nbsp;</td>
    <td width=6% valign="top"><font size="2">2. </font></td>
    <td width=91%><font size="2">To transact other business properly presented
      at the meeting or any postponement or adjournment thereof.</font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of
Directors has fixed April 21, 2004, as the record date for  the determination of
shareholders entitled to notice and to vote at the Annual  Meeting and any postponement
or adjournment thereof, and only shareholders of  record at the close of business on that
date are entitled to notice and to vote  at the Annual Meeting. A list of shareholders
entitled to vote at the Annual  Meeting will be available at the Annual Meeting and at
the offices of the  Company for 10 days prior to the Annual Meeting.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We hope that you
will use this opportunity to take an active part in  the affairs of the Company by voting
on the business to come before the Annual  Meeting, either by executing and returning the
enclosed Proxy Card or by casting  your vote in person at the Annual Meeting.</font></td></tr></table>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>IT IS IMPORTANT
THAT YOUR SHARES BE REPRESENTED AT THE ANNUAL MEETING REGARDLESS OF THE NUMBER OF SHARES
YOU HOLD. YOU ARE INVITED TO ATTEND THE ANNUAL MEETING IN PERSON, BUT WHETHER OR NOT YOU
PLAN TO ATTEND, PLEASE COMPLETE, DATE, SIGN AND RETURN THE ACCOMPANYING PROXY CARD IN
THE ENCLOSED ENVELOPE. IF YOU DO ATTEND THE ANNUAL MEETING, YOU MAY, IF YOU PREFER,
REVOKE YOUR PROXY AND VOTE YOUR SHARES IN PERSON.</B></FONT></td></tr></table>

<br>
<table width=600>
  <tr>
    <td width="333">&nbsp;</td>
    <td width="255"><font size=2>By Order of the Board of Directors</font></td>
  </tr>
  <tr>
    <td width="333">&nbsp;</td>
    <td width="255">&nbsp;</td>
  </tr>
  <tr>
    <td width="333">&nbsp;</td>
    <td width="255"><font size=2>/s/ Stewart Wang</font></td>
  </tr>
  <tr>
    <td width="333">&nbsp;&nbsp;</td>
    <td width="255"><font size=2>Stewart Wang <br>
      Chief Executive Officer, President and <br>
      Chief Financial Officer</font></td>
  </tr>
</table>

<p><table width=600><tr><td><font size=2>April 26, 2004</font></td></tr></table>

<p><table width=600><tr><td><font size=2>28040 West Harrison Parkway  <BR>Valencia,
California 91355  <BR>(661) 257-6060</font></td></tr></table>




<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td><td width=480 align=center><font size="2">
</font></td><td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<p><table width=600><tr><td  align=center><font size=4><B>TAITRON COMPONENTS INCORPORATED</B></font></td></tr></table>


<br>
<table width="600" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td>
      <hr size="1" noshade>
    </td>
  </tr>
</table>
<p><table width=600><tr><td  align=center><font size=3><B>PROXY STATEMENT FOR ANNUAL
MEETING OF SHAREHOLDERS</B></font></td></tr></table>

<p><table width=600><tr><td  align=center><font size=3><B>TO BE HELD MAY 28, 2004</B></font></td></tr></table>

<table width=600><tr><td><hr size=1 noshade align=CENTER width=150></td></tr></table>

<p><table width=600><tr><td><font size=2><B>INTRODUCTION</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Proxy
Statement is furnished in connection with the solicitation  of proxies by the Board of
Directors of Taitron Components Incorporated, a  California corporation (the
&#147;Company&#148;), for use at the Annual Meeting of  Shareholders, to be held on
Friday, May 28, 2004, at 10:00 a.m. Pacific time, at  the Hyatt Valencia, 24500 Town
Center Drive, Valencia, California 91355.  Accompanying this Proxy Statement is the Board
of Directors&#146; Proxy for the  Annual Meeting, which you may use to indicate your vote as
to the proposals  described in this Proxy Statement.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The expense of
this solicitation of proxies will be borne by the  Company. Solicitations will be made
only by use of the mail except that, if  deemed desirable, officers and regular employees
of the Company may solicit  proxies by telephone, telegraph or personal calls. Brokerage
houses, custodians,  nominees and fiduciaries will be requested to forward the proxy
soliciting  material to the beneficial owners of the stock held of record by those
persons  and the Company will reimburse them for their reasonable expenses incurred in
this regard.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s
Annual Report to Shareholders, including financial  statements for the fiscal year ended
December 31, 2003, accompanies but does not  constitute part of this Proxy Statement.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The purpose of the
meeting and the matters to be acted upon are set  forth in the attached Notice of Annual
Meeting. As of the date of this Proxy  Statement, the Board of Directors knows of no
other business that may be  presented for consideration at the Annual Meeting. All
proxies which are  properly completed, signed and returned to the Company prior to the
Annual  Meeting and which have not been revoked will be voted in favor of the proposals
described in this Proxy Statement unless otherwise directed. A shareholder may  revoke
his or her proxy at any time before it is voted either by filing with the  Secretary of
the Company, at its principal executive offices, a written notice  of revocation or a
duly executed proxy bearing a later date, or by attending the  Annual Meeting and
expressing a desire to vote his or her shares in person. If  any other business properly
comes before the meeting, votes will be cast  pursuant to those proxies in respect of any
other business in accordance with  the judgement of the persons acting under those
proxies.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s
principal executive offices are located at 28040 West  Harrison Parkway, Valencia, CA
91355. It is anticipated that the mailing to  shareholders of this Proxy Statement and
the enclosed proxy will commence on or  about April 28, 2004.</font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>OUTSTANDING SECURITIES AND VOTING RIGHTS</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The close of
business on April 21, 2004, has been fixed as the record  date for the determination of
shareholders entitled to notice and to vote at the  Annual Meeting or any postponement or
adjournment thereof. As of the record  date, the Company had outstanding 4,695,979 shares
of Class A common stock, par  value $0.001 per share, (the &#147;Class A Common
Stock&#148;), and 762,612 shares of  Class B common stock, par value $0.001 per share
(the &#147;Class B Common Stock,&#148;  and together with the Class A Common Stock, the
&#147;Common Stock&#148;). The Class A  Common Stock and the Class B Common Stock are the
only outstanding voting  securities of the Company. As of the record date, the Company
had 45 holders of  record of the Class A Common Stock. The Company believes there are
approximately  600 additional beneficial holders of its Class A Common Stock. There is
one  holder of the Class B Common Stock.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A holder of Class
A Common Stock is entitled to cast one vote for each  share held on the record date on
all matters to be considered at the Annual  Meeting. A holder of Class B Common Stock is
entitled to cast 10 votes for each  share held on the record date on all matters to be
considered at the Annual  Meeting. However, for the election of directors, a shareholder
shall be entitled  to cumulate his or her votes if the candidates&#146; names have been placed
in  nomination prior to the voting and the shareholder has given notice at the  Annual
Meeting prior to the voting of the shareholder&#146;s intention to cumulate  votes. If any
shareholder gives this notice, all shareholders may cumulate their  votes </font></td></tr></table>







<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td><td width=480 align=center><font size="2">
- -1-</font></td><td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;








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<p><table width=600><tr><td><font size=2>for candidates in nomination. With cumulative
voting, each shareholder is  entitled to that number of votes equal to the number of
shares held by that  shareholder multiplied by the number of directors to be elected
(multiplied by  10 for the holder of the Class B Common Stock). Each shareholder may then
cast  all of his or her votes for a single candidate or distribute his or her votes
among any or all of the candidates he or she chooses. An opportunity will be  given at
the Annual Meeting prior to the voting for any shareholder to announce  his or her
intention to cumulate his or her votes. The proxy holders are given,  under the terms of
the proxy, discretionary authority to cumulate votes  represented by shares for which
they are named in the proxy.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The five nominees
for election as Directors who receive the highest  number of votes will be elected. All
other matters that may properly come before  the meeting require for approval the
favorable vote of a majority of shares  voted at the meeting or by proxy.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Abstentions and
broker non-votes will be included in the determination  of shares present at the Annual
Meeting for purposes of determining a quorum.  Abstentions will be counted toward the
tabulation of votes cast on proposals  submitted to shareholders and will have the same
effect as negative votes, while  broker non-votes will not be counted as votes cast for
or against these matters.</font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>PROPOSAL NO. 1  -  ELECTION OF DIRECTORS</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In accordance with
the Articles of Incorporation and Bylaws of the  Company, the Board of Directors consists
of not less than three nor more than  seven members, the exact number to be determined by
the Board of Directors. At  each annual meeting of the shareholders of the Company,
directors are elected  for a one-year term. The Board of Directors is currently set at
five members,  and there currently are no vacancies. At the 2004 Annual Meeting, each
director  will be elected for a term expiring at the 2005 Annual Meeting. The Board of
Directors proposes the election of the nominees named below.</font></td></tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless marked otherwise, proxies
      received will be voted <b>FOR</b> the election of each of the nominees named
      below. If any person is unable or unwilling to serve as a nominee for the
      office of director at the date of the Annual Meeting or any postponement
      or adjournment thereof, the proxies may be voted for a substitute nominee,
      designated by the present Board of Directors to fill the vacancy. The Board
      of Directors has no reason to believe that any nominee will be unwilling
      or unable to serve if elected a director.</font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of
Directors proposes the election of the following nominees as members of the Board of
Directors:</font></td></tr></table>

<p>
<table width=600>
  <tr>
    <td width="260">&nbsp;&nbsp;</td>
    <td width="328"><font size=2>Tzu Sheng (Johnson) Ku <BR>
      Stewart Wang <BR>
      Richard Chiang <BR>
      Craig Miller <BR>
      Felix Sung</font></td>
  </tr>
</table>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>THE BOARD OF
DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE ELECTION OF THE
DIRECTORS NOMINATED ABOVE.</B></FONT></td></tr></table>

<p><table width=600><tr><td><font size=2><B>Information with Respect to Directors and
Executive Officers.</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following
table sets forth certain information with respect to each  directors and executive
officer of the Company as of March 31, 2004.</font></td></tr></table>

<br>
<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="600">
  <TR VALIGN="BOTTOM">
    <TH width="228"></TH>
    <TH width="39"></TH>
    <TH COLSPAN="2"></TH>
  </TR>
  <TR VALIGN="bottom" align="left">
    <TD WIDTH="228"><b><font size="2"><u>Name</u></font></b></TD>
    <TD ALIGN="center" WIDTH="39"><b><font size="2"><u>Age</u></font></b></TD>
    <TD ALIGN="center" WIDTH="51">&nbsp;</TD>
    <TD ALIGN="center" WIDTH="282"><b><font size="2"><u>Position</u></font></b></TD>
  </TR>
  <TR VALIGN="top" align="left">
    <TD width="228">&nbsp;</TD>
    <TD ALIGN="center" width="39">&nbsp;</TD>
    <TD width="51">&nbsp;</TD>
    <TD width="282">&nbsp;</TD>
  </TR>
  <TR VALIGN="top" align="left">
    <TD width="228"><font size="2">Tzu Sheng (Johnson) Ku</font></TD>
    <TD ALIGN="center" width="39"><font size="2">55</font></TD>
    <TD width="51"><font size="2">&nbsp;&nbsp;</font></TD>
    <TD width="282"><font size="2">Chairman of the Board</font></TD>
  </TR>
  <TR VALIGN="top" align="left">
    <TD width="228">&nbsp;</TD>
    <TD ALIGN="center" width="39">&nbsp;</TD>
    <TD width="51">&nbsp;</TD>
    <TD width="282">&nbsp;</TD>
  </TR>
  <TR VALIGN="top" align="left">
    <TD width="228"><font size="2">Stewart Wang</font></TD>
    <TD ALIGN="center" width="39"><font size="2">54</font></TD>
    <TD width="51"><font size="2"></font></TD>
    <TD width="282"><font size="2">President, Chief Executive Officer, <br>
      Chief Financial Officer and Director</font></TD>
  </TR>
  <TR VALIGN="top" align="left">
    <TD width="228">&nbsp;</TD>
    <TD ALIGN="center" width="39">&nbsp;</TD>
    <TD width="51">&nbsp;</TD>
    <TD width="282">&nbsp;</TD>
  </TR>
  <TR VALIGN="top" align="left">
    <TD width="228"><font size="2">Richard Chiang</font></TD>
    <TD ALIGN="center" width="39"><font size="2">47</font></TD>
    <TD width="51"><font size="2"></font></TD>
    <TD width="282"><font size="2">Director</font></TD>
  </TR>
  <TR VALIGN="top" align="left">
    <TD width="228">&nbsp;</TD>
    <TD ALIGN="center" width="39">&nbsp;</TD>
    <TD width="51">&nbsp;</TD>
    <TD width="282">&nbsp;</TD>
  </TR>
  <TR VALIGN="top" align="left">
    <TD width="228"><font size="2">Craig Miller</font></TD>
    <TD ALIGN="center" width="39"><font size="2">50</font></TD>
    <TD width="51"><font size="2"></font></TD>
    <TD width="282"><font size="2">Director</font></TD>
  </TR>
  <TR VALIGN="top" align="left">
    <TD width="228">&nbsp;</TD>
    <TD ALIGN="center" width="39">&nbsp;</TD>
    <TD width="51">&nbsp;</TD>
    <TD width="282">&nbsp;</TD>
  </TR>
  <TR VALIGN="top" align="left">
    <TD width="228"><font size="2">Felix Sung</font></TD>
    <TD ALIGN="center" width="39"><font size="2">54</font></TD>
    <TD width="51"><font size="2"></font></TD>
    <TD width="282"><font size="2">Director</font></TD>
  </TR>
  <TR VALIGN="top" align="left">
    <TD width="228">&nbsp;</TD>
    <TD ALIGN="center" width="39">&nbsp;</TD>
    <TD width="51">&nbsp;</TD>
    <TD width="282">&nbsp;</TD>
  </TR>
  <TR VALIGN="top" align="left">
    <TD width="228"><font size="2">David Vanderhorst</font></TD>
    <TD ALIGN="center" width="39"><font size="2">39</font></TD>
    <TD width="51"><font size="2"></font></TD>
    <TD width="282"><font size="2">Controller and Corporate Secretary</font></TD>
  </TR>
</TABLE>





<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td><td width=480 align=center><font size="2">
- -2-</font></td><td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;






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<!-- MARKER PAGE="sheet: 5; page: 5" -->




<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All officers are
appointed by and serve at the discretion of the Board  of Directors. There are no family
relationships between any directors or  officers of the Company.</font></td></tr></table>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Tzu Sheng
(&#147;Johnson&#148;) Ku</I></B>, a co-founder of the Company, has been the Chairman of the
Company since it was founded in 1989. Mr. Ku is also Chairman of both Johnson Premium
Hardwood Flooring and Americana Floors Incorporated. Johnson Premium Hardwood Flooring
is a manufacturer of pre-finished solid wood floors and Americana Floors Incorporated is
an importer, wholesaler and retailer of name brand hardwood floors.</FONT></td></tr></table>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Stewart Wan</I></B>g, a
co-founder of the Company, has served as Chief Executive Officer, President and a
Director of the Company since its organization in 1989. Prior to founding the Company,
Mr. Wang attended Pepperdine University, where he received his Masters of Business
Administration degree in 1989. From 1985 to 1986, Mr. Wang was employed by Diodes
Incorporated, a manufacturer and reseller of discrete rectifiers, as Purchasing and MIS
Manager and later as Chief Operating Officer and President from 1986 to 1987. Prior
thereto, from 1983 to 1985, Mr. Wang was Sales Manager for Rectron Limited, a rectifier
manufacturer in Taiwan. In addition, since November 2002, Mr. Wang has served as Chief
Financial Officer of the Company. During the 2004 annual Board meeting, the Board of
Directors will consider appointing a Chief Financial Officer, if necessary, under the
current market conditions.</FONT></td></tr></table>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Richard Chiang</I></B> has
been a Director of the Company since it was founded in 1989. Since 1986, Mr. Chiang has
been the Chairman of Princeton Technology Corporation, a fabless integrated circuit
design company. Mr. Chiang is also Chairman of Triton Management Corporation, a venture
capital fund management company managing in excess of $80 million. Since 1996, Mr.
Chiang also served as Chairman of Proware Technology Corporation, a networking storage
subsystem business company, and Chairman of Unifosa Corp., a DRAM memory module
manufacturer. Mr. Chiang also serves as a Director of both Alliance Venture Capital
Corporation and Triton Venture Capital Corp., a venture capital firm located in Taipei,
Taiwan. In addition, Mr. Chiang serves as a Director of both DataFab, Inc., a leading
Flash Memory Card Reader company in Taiwan, and FiberCom, a fiber optic passive
components manufacturer in Taiwan.</FONT></td></tr></table>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Craig Miller</I></B>
became a director of the Company in May 2000. Since 1998, Mr. Miller has been a director
of Mosaic Capital, LLC, an investment-banking firm. Prior thereto, Mr. Miller served as
Regional Vice President with Comerica Bank since 1994. From 1987 to 1994, Mr. Miller
served as Executive Vice President and Chief Financial Officer of Told Corporation, an
industrial real estate development firm. He started his career with Union Bank in 1976
as a management trainee and left in 1987 as Senior Vice President.</FONT></td></tr></table>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Felix Sung</I></B> became
a director of the Company in February 1995. Mr. Sung is the Managing Director and former
Vice President of Tai North Company, a company engaged in exporting electronics, plastic
parts and finished products to the United States and various European countries.</FONT></td></tr></table>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>David Vanderhorst</I></B>
joined the Company in July 1999 as its Controller. In addition, since November 2002, Mr.
Vanderhorst served as Corporate Secretary. Prior thereto, from 1991 to 1998, Mr.
Vanderhorst served as Controller and Chief Financial Officer for various companies. From
1987 to 1991, the national accounting firm of Kenneth Leventhal &amp; Company, now a
division of Ernst &amp; Young, LLP, employed Mr. Vanderhorst. Mr. Vanderhorst is a
Certified Public Accountant, receiving his professional certification in 1991.</FONT></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During 2003, the
Board of Directors met once. Each director attended  one hundred percent of the Board of
Directors meetings and the meetings of Board  committees on which he served. The Company
encourages, but does not require, all  incumbent directors and director nominees to
attend its annual meetings of  shareholders. At the 2003 Annual Meeting of Shareholders,
two directors then in  office were in attendance.</font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>Committees of the Board</B></font></td></tr></table>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Audit Committee</I> -
The Board of Directors has established an Audit Committee that reviews the audit and
control functions of the Company, the Company&#146;s accounting principles, policies and
practices and financial reporting, the scope of the audit conducted by the Company&#146;s
independent auditors, the fees and all non-audit services of the independent auditors,
and the independent auditor&#146;s opinion and management comment letter (if any) and
management&#146;s response thereto. The Audit Committee met once during fiscal 2003. Members
of the Audit Committee are Mr. Miller, Mr. Chiang and Mr. Sung. The Board of Directors
has determined that all members of the Audit Committee meet the independence standards
for audit committee members set forth in the Sarbanes-Oxley Act of 2002 and the listing
standards of the National Association of Securities Dealers (&#147;NASD&#148;). The
Board of Directors has also determined that Mr. Miller is a &#147;financial
expert&#148;, as that term has been defined by the Securities and Exchange Commission.</FONT></td></tr></table>







<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td><td width=480 align=center><font size="2">
- -3-</font></td><td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;






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<!-- MARKER PAGE="sheet: 6; page: 6" -->





<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Compensation
Committee</I> - The Board of Directors has established a Compensation Committee. The
function of the Compensation Committee is to review and make recommendations with
respect to compensation of executive officers and key employees, including
administration of the Company&#146;s 1995 Stock Incentive Plan. The Compensation Committee
met once during fiscal 2003. Members of the Compensation Committee are Mr. Chiang, Mr.
Miller and Mr. Sung.</FONT></td></tr></table>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Nominating
Committee</I> - The Company does not have a standing nominating committee. The Board of
Directors does not believe that it is necessary for the Company to have a standing
nominating committee since the Company has a relatively small board and the Company&#146;s
independent directors will serve in the capacity of a nominating committee when
necessary. All of the Company&#146;s directors participate in the consideration of director
nominees. But, consistent with applicable NASD listing standards, each director nominee
must be selected or recommended for the Board of Directors&#146; selection by a majority of
the independent directors of the Board of Directors. In considering candidates for
directorship, the Board of Directors considers the entirety of each candidate&#146;s
credentials and does not have any specific minimum qualifications that must be met in
order to be recommended as a nominee. The Board of Directors does believe, however, that
all Board members should have the highest character and integrity, a reputation for
working constructively with others, sufficient time to devote to Board matters and no
conflict of interest that would interfere with their performance as a director of a
public corporation.</FONT></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of
Directors may employ a variety of methods for identifying  and evaluating nominees for
director, including shareholder recommendations.  Periodically, the Board of Directors
assesses its size, the need for particular  expertise on the Board of Directors and
whether any vacancies are expected due  to retirement or otherwise. If vacancies are
anticipated or otherwise arise, the  Board of Directors will consider various potential
candidates for director who  may come to the Board of Directors&#146; attention through
current Board members,  professional search firms or consultants, shareholders or other
persons. The  Board of Directors may hire and pay a fee to consultants or search firms to
assist in the process of identifying and evaluating candidates. In 2003, no  professional
search firms or consultants were needed and, accordingly, no fees  were paid in this
regard to professional search firms or consultants in 2003.  The Board of Directors does
not evaluate candidates differently based on who  made the recommendation for
consideration.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shareholders who
wish to nominate a director for election at an annual  shareholder meeting must submit
their recommendations at least 120 days before  the date of the next scheduled annual
meeting of shareholders. Shareholders may  recommend candidates for consideration by the
Board of Directors by writing to  the Company&#146;s Corporate Secretary at 28040 West
Harrison Parkway, Valencia,  California 91355, giving the candidate&#146;s name, contact
information, biographical  data, and qualifications. A written statement from the
candidate consenting to  be named as a candidate and, if nominated and elected, to serve
as a director  should accompany any shareholder recommendation. There were no director
candidates put forward by shareholders for consideration at the 2004 Annual  Meeting.</font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>SHAREHOLDER COMMUNICATIONS WITH THE BOARD OF
DIRECTORS</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shareholders may
communicate with the Board of Directors by sending a  letter to Board of Directors of
Taitron Components Incorporated, c/o Office of  the Corporate Secretary, 28040 West
Harrison Parkway, Valencia, California  91355. All communications must contain a clear
notation indicating that they are  a &#147;Shareholder &#151; Board Communication&#148;
or &#147;Shareholder &#151; Director  Communication&#148; and must identify the author as
a shareholder. The office of the  Corporate Secretary will receive the correspondence and
forward it to the  Chairman of the Board or to any individual director or directors to
whom the  communication is directed, unless the communication is unduly hostile,
threatening, illegal, does not reasonably relate to the Company or its business,  or is
similarly inappropriate. The office of the Corporate Secretary has  authority to discard
any inappropriate communications or to take other  appropriate actions with respect to
any inappropriate communications.</font></td></tr></table>


<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td><td width=480 align=center><font size="2">
- -4-</font></td><td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;






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<!-- MARKER PAGE="sheet: 7; page: 7" -->




<p><table width=600><tr><td><font size=2><B>SUMMARY COMPENSATION TABLE</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following
table sets forth, as to the Chief Executive Officer and  as to each of the other most
highly compensated executive officers whose  compensation exceeded $100,000 during the
last fiscal year (the &#147;Named Executive  Officers&#148;), information concerning all
compensation paid for services to the  Company in all capacities for each of the three
years ended December 31, 2003  indicated below:</font></td></tr></table>

<br>
<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="600">
  <TR VALIGN="BOTTOM">
    <TH></TH>
    <TH COLSPAN="2"></TH>
    <TH COLSPAN="2"></TH>
    <TH COLSPAN="2"></TH>
    <TH COLSPAN="2"></TH>
    <TH></TH>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="center" colspan="5"><font size="1"><b><u>Annual Compensation</u></b>
      </font><font size=2></font></TD>
    <TD ALIGN="center">&nbsp;</TD>
    <TD ALIGN="center" colspan="3"><font size=2><b><u><font size="1">Long-Term
      Compensation</font></u> </b> </font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="1"><b><u>Name and Principal Position</u></b>
      </font><font size=2></font></TD>
    <TD ALIGN="center"><b><font size="1"><u>Year</u> </font></b></TD>
    <TD ALIGN="center"><b></b></TD>
    <TD ALIGN="center"><b><font size="1"><u>Salary</u> </font></b></TD>
    <TD ALIGN="center"><b></b></TD>
    <TD ALIGN="center"><b><font size="1"><u>Bonus</u> </font></b></TD>
    <TD ALIGN="center"><b></b></TD>
    <TD ALIGN="center"><b><font size="1"><b>Securities <br>
      Underlying <br>
      <u>Option (1) </u></b></font></b></TD>
    <TD ALIGN="center"><b></b></TD>
    <TD ALIGN="center"><b><font size=2><font size="1">All Other <br>
      <u>Compensation (2) </u></font></font></b></TD>
  </TR>
  <TR VALIGN="top">
    <TD ALIGN="LEFT"><font size="2">Stewart Wang,</font></TD>
    <TD ALIGN="center"><font size="2">2003</font></TD>
    <TD ALIGN="center"><font size="2">&nbsp;&nbsp;</font></TD>
    <TD ALIGN="center"><font size="2">$145,600</font></TD>
    <TD ALIGN="center"><font size="2">&nbsp;&nbsp;</font></TD>
    <TD ALIGN="center"><font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#151;</font></TD>
    <TD ALIGN="center"><font size="2">&nbsp;&nbsp;</font></TD>
    <TD ALIGN="center"><font size="2">30,000</font></TD>
    <TD ALIGN="center"><font size="2">&nbsp;&nbsp;</font></TD>
    <TD ALIGN="center"><font size="2">$12,320</font></TD>
  </TR>
  <TR VALIGN="top">
    <TD ALIGN="LEFT"><font size="2">Chief Executive Officer,</font></TD>
    <TD ALIGN="center"><font size="2">2002</font></TD>
    <TD ALIGN="center"><font size="2"></font></TD>
    <TD ALIGN="center"><font size="2">$171,383</font></TD>
    <TD ALIGN="center"><font size="2"></font></TD>
    <TD ALIGN="center"><font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#151;</font></TD>
    <TD ALIGN="center"><font size="2"></font></TD>
    <TD ALIGN="center"><font size="2">15,000</font></TD>
    <TD ALIGN="center"><font size="2"></font></TD>
    <TD ALIGN="center"><font size="2">$18,200</font></TD>
  </TR>
  <TR VALIGN="top">
    <TD ALIGN="LEFT"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;President and Chief
      <br>
      &nbsp;&nbsp;&nbsp;&nbsp;Financial Officer </font></TD>
    <TD ALIGN="center"><font size="2">2001</font></TD>
    <TD ALIGN="center"><font size="2"></font></TD>
    <TD ALIGN="center"><font size="2">$181,999</font></TD>
    <TD ALIGN="center"><font size="2"></font></TD>
    <TD ALIGN="center"><font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#151;</font></TD>
    <TD ALIGN="center"><font size="2"></font></TD>
    <TD ALIGN="center"><font size="2">27,500</font></TD>
    <TD ALIGN="center"><font size="2"></font></TD>
    <TD ALIGN="center"><font size="2">$18,269</font></TD>
  </TR>
  <TR VALIGN="top">
    <TD ALIGN="LEFT" colspan="10">
      <hr size="1" noshade>
    </TD>
  </TR>
</TABLE>

<table width=600>
  <tr>
    <td width=4% align=left valign=top><font size="2">(1) </font></td>
    <td width=2%>&nbsp;</td>
    <td width=94%><font size="2"> All numbers reflect number of shares of Class
      A Common Stock subject to options granted during the year.</font></td>
  </tr>
</table>

<table width=600>
  <tr>
    <td width=4% align=left valign=top><font size="2">(2) </font></td>
    <td width=2%>&nbsp;</td>
    <td width=94%><font size="2">The amount primarily consists of automobile allowances
      and accrued vacation.</font></td>
  </tr>
</table>

<p><table width=600><tr><td><font size=2><B>OPTION GRANTS IN FISCAL 2003</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following
table sets forth information with respect to grants of  options (&#147;Options&#148;) to
purchase Class A Common Stock under the 1995 Stock  Incentive Plan to the Named Executive
Officers during the fiscal year ended  December 31, 2003.</font></td></tr></table>

<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="600">
  <TR VALIGN="BOTTOM">
    <TH></TH>
    <TH></TH>
    <TH COLSPAN="2"></TH>
    <TH></TH>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="1"><b><u>Name</u></b> </font></TD>
    <TD ALIGN="center"><font size="1"><b>Number of <br>
      Securities <br>
      Underlying <br>
      Options <br>
      <u>Granted (#)</u> </b> </font> </TD>
    <TD ALIGN="center"><font size="1"><b>Percent of Total <br>
      Options <br>
      Granted to <br>
      Employees in <br>
      <u>Fiscal 2003</u> </b></font></TD>
    <TD ALIGN="center"><font size="1"><b>Exercise <br>
      Price <br>
      <u>($/sh) (1)</u></b> </font></TD>
    <TD ALIGN="center"><font size="1"><b>Expiration <br>
      <u>Date</u></b> </font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">Stewart Wang</font></TD>
    <TD ALIGN="center"><font size="2">30,000(2)</font></TD>
    <TD ALIGN="center"><font size="2">27.4%</font></TD>
    <TD ALIGN="center"><font size="2">$&nbsp;&nbsp;1.00</font></TD>
    <TD ALIGN="center"><font size="2">5/9/2013</font></TD>
  </TR>
</TABLE>

<table width=600><tr><td><hr size=1 noshade align=left  width=75></td></tr></table>

<table width=600>
  <tr>
    <td width=4% align=left valign=top><font size="2">(1) </font></td>
    <td width=2%>&nbsp;</td>
    <td width=94%><font size="2">The exercise price was market value of the Class
      A Common Stock on the date of grant.</font></td>
  </tr>
</table>

<table width=600>
  <tr>
    <td width=4% align=left valign=top><font size="2">(2) </font></td>
    <td width=2%>&nbsp;</td>
    <td width=94%><font size="2">The shares subject to this option vest in three
      equal annual installments commencing on May 9, 2004.</font></td>
  </tr>
</table>

<p><table width=600><tr><td><font size=2><B>AGGREGATED OPTION EXERCISES IN FISCAL 2003
AND FISCAL YEAR-END OPTION VALUES</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following
table sets forth with respect to the Named Executive  Officers information with respect
to options exercised, unexercised options and  year-end option values with respect to
options to purchase shares of Class A  Common Stock.</font></td></tr></table>

<p><table width=600><tr>
    <td><font size=2> </font></td>
  </tr></table>

<p>
<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="600">
  <TR VALIGN="BOTTOM">
    <TH></TH>
    <TH COLSPAN="2"></TH>
    <TH COLSPAN="2"></TH>
    <TH COLSPAN="2"></TH>
    <TH COLSPAN="2"></TH>
    <TH COLSPAN="2"></TH>
    <TH></TH>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT">&nbsp;</TD>
    <TD ALIGN="center" rowspan="2" valign="bottom"><font size="1"><b>Shares <br>
      Acquired on <br>
      <u>Exercise (#)</u></b> </font><font size=2></font></TD>
    <TD ALIGN="center" valign="bottom">&nbsp;</TD>
    <TD ALIGN="center" rowspan="2" valign="bottom"><font size=2><b><font size="1">Value
      <br>
      <u>Realized ($)</u> </font></b></font></TD>
    <TD ALIGN="center" valign="top">&nbsp;</TD>
    <TD ALIGN="center" colspan="3" valign="bottom"><font size=2><b><font size="1">Number
      of Securities <br>
      Underlying Unexercised <br>
      Options at <br>
      <u>December 31, 2003 (#)</u> </font></b></font></TD>
    <TD ALIGN="center" valign="bottom">&nbsp;</TD>
    <TD ALIGN="center" colspan="3" valign="bottom"><font size=2><b><font size="1">Value
      of Unexercised <br>
      In-the-Money Options at <br>
      <u>December 31, 2003 (1)</u> </font></b></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="1"><b><u>Name</u></b> </font></TD>
    <TD ALIGN="center" valign="bottom">&nbsp;</TD>
    <TD ALIGN="center" valign="top">&nbsp;</TD>
    <TD ALIGN="center" valign="bottom"><font size="1"><b><u>Exercisable</u></b> </font><font size=2></font></TD>
    <TD ALIGN="center" valign="bottom">&nbsp;</TD>
    <TD ALIGN="center" valign="bottom"><font size=2><b><font size="1"><u>Unexercisable</u> </font></b></font></TD>
    <TD ALIGN="center" valign="bottom">&nbsp;</TD>
    <TD ALIGN="center" valign="bottom"><font size="1"><b><u>Exercisable</u></b> </font><font size=2></font></TD>
    <TD ALIGN="center" valign="bottom">&nbsp;</TD>
    <TD ALIGN="center" valign="bottom"><font size=2><b><font size="1"><u>Unexercisable</u> </font></b></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT"><font size="2">Stewart Wang</font></TD>
    <TD ALIGN="center"><font size="2">&#151;</font></TD>
    <TD ALIGN="center"><font size="2">&nbsp;&nbsp;</font></TD>
    <TD ALIGN="center"><font size="2">&#151;</font></TD>
    <TD ALIGN="center"><font size="2">&nbsp;&nbsp;</font></TD>
    <TD ALIGN="center"><font size="2">167,833</font></TD>
    <TD ALIGN="center"><font size="2">&nbsp;&nbsp;</font></TD>
    <TD ALIGN="center"><font size="2">49,167</font></TD>
    <TD ALIGN="center"><font size="2">&nbsp;&nbsp;</font></TD>
    <TD ALIGN="center"><font size="2">$49,280</font></TD>
    <TD ALIGN="center"><font size="2">&nbsp;&nbsp;</font></TD>
    <TD ALIGN="center"><font size="2">$45,225</font></TD>
  </TR>
</TABLE>

<table width=600><tr><td><hr size=1 noshade align=left  width=75></td></tr></table>

<table width=600>
  <tr>
    <td width=4% align=left valign=top><font size="2">(1) </font></td>
    <td width=2%>&nbsp;</td>
    <td width=94%><font size="2"> Represents the difference between the last reported
      sale price of $2.13 per share for the Class A Common Stock on December 31,
      2003, and the per share exercise price of the option multiplied by the applicable
      number of shares.</font></td>
  </tr>
</table>

<p><table width=600><tr><td><font size=2><B>Compensation of Directors</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-employee
directors receive $1,500 for attending the annual Board of  Directors meeting. The
Company pays all out-of-pocket fees associated with the  directors&#146; attendance. In
addition, members of the Compensation Committee  receive an annual grant of 5,000
non-statutory stock options under the Company&#146;s  1995 Stock Incentive Plan, exercisable
at the fair market value of the Company&#146;s  Class A Common Stock on the date of grant, and
which vest in three equal annual  installments commencing on the first anniversary of the
grant date.</font></td></tr></table>



<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td><td width=480 align=center><font size="2">
- -5-</font></td><td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<p><table width=600><tr><td><font size=2><B>Compensation Committee Interlocks and Insider
Participation</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During fiscal
2003, the Compensation Committee of the Board of  Directors consisted of Craig Miller,
Richard Chiang and Felix Sung. None of  these individuals was an officer or employee of
the Company at any time during  fiscal 2003. During fiscal 2003, no executive officer of
the Company served as a  member of the board of directors or compensation committee of
any entity that  has or has had one or more executive officers serving as a member of the
Board  of Directors or Compensation Committee.</font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>REPORT OF THE COMPENSATION COMMITTEE ON
EXECUTIVE COMPENSATION</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Compensation
Committee has the responsibility to determine and  administer the Company&#146;s executive
compensation programs and make appropriate  recommendations concerning matters of
executive compensation. Set forth below  are the principal factors underlying the
Committee&#146;s philosophy used in setting  compensation for fiscal 2003.</font></td></tr></table>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Compensation
Philosophy.</I> At the direction of the Board of Directors, the Committee endeavors to
ensure that the compensation programs for executive officers of the Company are
competitive and consistent in order to attract and retain key executives critical to the
Company&#146;s long-term success. The Committee believes that the Company&#146;s overall financial
performance should be an important factor in the total compensation of executive
officers. At the executive officer level, the Committee has a policy that a significant
portion of potential compensation should consist of variable, performance-based
components, such as stock options and bonuses, which can increase or decrease to reflect
changes in corporate and individual performance. These incentive compensation programs
are intended to reinforce management&#146;s commitment to the enhancement of profitability
and shareholder value.</FONT></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Committee
takes into account various qualitative and quantitative  indicators of corporate and
individual performance in determining the level and  composition of compensation for the
Company&#146;s executive officers. In  implementing the Company&#146;s executive compensation
objectives, the Committee has  designed an executive compensation program consisting of
base salary, annual  incentive compensation, stock options and other employment benefits.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Committee
seeks to maintain levels of compensation that are  competitive with similar companies in
the Company&#146;s industry. To that end, the  Committee reviews proxy data and other
compensation data relating to companies  within the Company&#146;s industry. In addition, from
time to time, the Committee  also receives assessments and advice regarding the Company&#146;s
compensation  practices from independent compensation consultants.</font></td></tr></table>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Base Salary</I>. The
base salary of the executive officers represents the fixed component of their
compensation program. The Company&#146;s philosophy regarding base salaries is to maintain
salaries for the aggregate group of executive officers at levels the Committee believes
to be near the industry average. Periodic increases in base salary relate to individual
contributions to the Company&#146;s performance.</FONT></td></tr></table>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Annual Incentive
Compensation.</I> The Company&#146;s executive officers are eligible for annual incentive
compensation consisting primarily of cash bonuses based on the attainment of corporate
earnings. While performance against financial objectives is the primary measurement for
executive officers&#146; annual incentive compensation, non-financial performance also
affects pay. The Committee considers corporate performance measures such as net income,
basic earnings per common share, return on average common shareholders&#146; equity, sales
growth and expense management in making compensation decisions. The Committee also
appreciates the importance of achievements that may be difficult to quantify, and
accordingly recognizes qualitative factors, such as successful supervision of major
corporate projects and demonstrated leadership ability.</FONT></td></tr></table>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Stock Options.</I> The
Committee strongly believes that the Company&#146;s compensation program should provide
employees with an opportunity to increase their equity ownership and potentially gain
financially from Class A Common Stock price increases. By this approach, the best
interests of shareholders, executives and employees will be closely aligned. Therefore,
executives and other employees are eligible to receive stock options, giving them the
right to purchase shares of Class A Common Stock at a specified price in the future. The
Committee believes that the use of stock options as the basis for long-term incentive
compensation meets the Committee&#146;s compensation strategy and business needs of the
Company by achieving increased value for shareholders and retaining key employees.</FONT></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company
recommended to the Board of Directors the granting of  50,000 options to executive
officers to purchase the Class A Common Stock during  the 2003 fiscal year. In approving
grants and awards under the 1995 Stock  Incentive Plan, the quantitative and qualitative
factors and industry  comparisons outlined above were considered. The </font></td></tr></table>



<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td><td width=480 align=center><font size="2">
- -6-</font></td><td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<!-- MARKER PAGE="sheet: 9; page: 9" -->




<p><table width=600><tr><td><font size=2>number of options previously  awarded to and
held by executive officers was an important factor in determining  the size of current
option grants.</font></td></tr></table>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Other Employment
Benefits.</I> The Company provides a cafeteria plan to cover health and welfare benefits to
executives and all employees similar to those provided by similar companies in the
Company&#146;s industry. The Company also provides a 401(k) plan in which all employees are
eligible.</FONT></td></tr></table>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Chief Executive
Officer Compensation.</I> With respect to Mr. Wang, the Company&#146;s Chief Executive Officer,
the Committee established an annual base salary of $145,600 for him. In determining the
appropriate compensation figure for Mr. Wang, the Committee considered a variety of
factors, including a comparison of Mr. Wang&#146;s compensation at his level of experience
with the executive compensation paid in similar industry groups to executives with
comparable levels of experience.</FONT></td></tr></table>

<p><table width=600><tr><td  align=center><font size=2><B>COMPENSATION COMMITTEE</B></font></td></tr></table>

<p>
<table width=600>
  <tr>
    <td width="206">&nbsp;&nbsp;</td>
    <td width="382"><font size=2>Craig Miller <BR>
      Richard Chiang <BR>
      Felix Sung</font></td>
  </tr>
</table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The information in
this Compensation Committee Report shall not be  deemed to be &#147;soliciting
material,&#148; or to be &#147;filed&#148; with the Securities and  Exchange Commission
or to be subject to Regulation 14A or 14C as promulgated by  the Securities and Exchange
Commission, or to the liabilities of Section 18 of  the Securities Exchange Act of 1934,
as amended (the &#147;Exchange Act&#148;).</font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>REPORT OF THE AUDIT COMMITTEE</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Since 1995, the
Company has had an Audit Committee composed entirely of  non-management directors. The
members of the Audit Committee meet the  independence and experience requirements of the
NASD listing standards, as  applicable and as may be modified or supplemented. The Audit
Committee has  adopted, and the Board of Directors approved, a charter outlining the
practices  it follows. A copy of the charter is attached as Appendix I to the 2001 Proxy
Statement.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During fiscal
2003, the Audit Committee met one time with the senior  members of the Company&#146;s
financial management team. During that meeting,  management reviewed the audited
financial statements in the Annual Report with  the Audit Committee, including a
discussion of the quality, not just the  acceptability, of the accounting principles, the
reasonableness of significant  judgments and the clarity of disclosures in the financial
statements.  Additionally, the Audit Committee discussed written disclosures from the
independent auditors discussing matters required by SAS 61, &#147;Codification of
Statement on Auditing Standards, AU Section 380,&#148; and Independence Standards  Board
Standard No. 1, &#147;Independence Discussions with Audit Committees.&#148; The  Audit
Committee also has considered whether the independent auditors&#146; provision  of non-audit
services to the Company is compatible with the auditors&#146;  independence. The Audit
Committee has concluded that the independent auditors  are independent from the Company
and its management. The Audit Committee  discussed with the Company&#146;s independent
auditors the overall scope and plans  for their respective audit.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In performing all
of these functions, the Audit Committee acts only in  an oversight capacity. The Audit
Committee does not complete its reviews prior  to the Company&#146;s public announcements of
financial results and, necessarily, in  its oversight role, the Audit Committee relies on
the work and assurances of the  Company&#146;s management, which has the primary
responsibility for financial  statements and reports, and of the independent auditors,
who, in their report,  express an opinion on the conformity of the Company&#146;s annual
financial  statements to generally accepted accounting principles in the United States of
America.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In reliance on
these reviews and discussions, and the report of the  independent auditors, the Audit
Committee has recommended to the Board of  Directors, and the Board of Directors has
approved, that the audited financial  statements be included in the Company&#146;s Annual
Report on Form 10-KSB for the  year ended December 31, 2003, for filing with the
Securities and Exchange  Commission.</font></td></tr></table>

<p>
<p>
<table width=600>
  <tr>
    <td width="420">&nbsp;&nbsp;</td>
    <td width="168"><font size=2><b>AUDIT COMMITTEE</b> <br>
      Craig Miller <BR>
      Richard Chiang <BR>
      Felix Sung</font></td>
  </tr>
</table>





<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td><td width=480 align=center><font size="2">
- -7-</font></td><td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;






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<!-- MARKER PAGE="sheet: 10; page: 10" -->




<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The information in
this Audit Committee Report shall not be deemed to  be &#147;soliciting material,&#148;
or to be &#147;filed&#148; with the Securities and Exchange  Commission or to be subject
to Regulation 14A or 14C as promulgated by the  Securities and Exchange Commission, or to
the liabilities of Section 18 of the  Exchange Act.</font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>AUDIT FEES AND NON-AUDIT FEES</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following
table presents fees for professional audit services  rendered by Haskell &amp; White LLP
for the audit of the Company&#146;s annual financial  statements for the two years ended
December 31, 2003, and fees billed for other  services rendered by Haskell &amp; White
LLP, Beckman, Kirkland &amp; Whitney LLP and  Steven Dong &amp; Associates during those
periods. Certain amounts for 2002 have  been reclassified to conform to the 2003
presentation.</font></td></tr></table>

<br>
<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="500">
  <TR VALIGN="BOTTOM">
    <TH width="252"></TH>
    <TH COLSPAN="2"></TH>
    <TH width="36"></TH>
    <TH width="73"></TH>
    <TH width="34"></TH>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" WIDTH="252">&nbsp;</TD>
    <TD ALIGN="center" colspan="5"><font size=2><b>Fiscal Year Ended December
      31,</b></font>
      <hr size="1" noshade>
    </TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" WIDTH="252">&nbsp;</TD>
    <TD ALIGN="center" colspan="2"><font size=2><b>2002</b></font></TD>
    <TD ALIGN="center" WIDTH="36">&nbsp;</TD>
    <TD ALIGN="center" colspan="2"><font size=2><b>2003</b></font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" WIDTH="252"><font size="2">Audit fees:(1)</font></TD>
    <TD ALIGN="right" WIDTH="77"><font size="2">$45,100</font></TD>
    <TD ALIGN="LEFT" WIDTH="28">&nbsp;&nbsp;</TD>
    <TD ALIGN="RIGHT" WIDTH="36">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD ALIGN="RIGHT" WIDTH="73"><font size="2">$42,000</font></TD>
    <TD ALIGN="RIGHT" WIDTH="34">&nbsp;&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="252"><font size="2">Audit related fees:(2)</font></TD>
    <TD ALIGN="right" width="77"><font size="2">35,200</font></TD>
    <TD ALIGN="LEFT" width="28">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="36">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="73"><font size="2">13,900</font></TD>
    <TD ALIGN="RIGHT" width="34">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="252"><font size="2">Tax fees:(3)</font></TD>
    <TD ALIGN="right" width="77"><font size="2">10,900</font></TD>
    <TD ALIGN="LEFT" width="28">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="36">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="73"><font size="2">9,100</font></TD>
    <TD ALIGN="RIGHT" width="34">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="252">&nbsp;</TD>
    <TD ALIGN="right" width="77">
      <hr size="1" noshade align="right" width="45">
    </TD>
    <TD ALIGN="LEFT" width="28">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="36">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="73">
      <hr size="1" noshade align="right" width="45">
    </TD>
    <TD ALIGN="RIGHT" width="34">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="252"><font size="2">Total</font></TD>
    <TD ALIGN="right" width="77"><font size="2">$91,200</font></TD>
    <TD ALIGN="LEFT" width="28">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="36">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="73"><font size="2">$65,000</font></TD>
    <TD ALIGN="RIGHT" width="34">&nbsp;</TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="LEFT" width="252">&nbsp;</TD>
    <TD ALIGN="center" width="77">
      <hr size="2" noshade align="right" width="45">
    </TD>
    <TD ALIGN="LEFT" width="28">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="36">&nbsp;</TD>
    <TD ALIGN="RIGHT" width="73">
      <hr size="2" noshade align="right" width="45">
    </TD>
    <TD ALIGN="RIGHT" width="34">&nbsp;</TD>
  </TR>
</TABLE>

<br>
<table width=600><tr><td width=4% align=left valign=top><font size="1"><sup>(1)</sup> </font></td><td width=2%><font size="1"></font></td>
    <td width=94%><font size="2">Audit fees consisted of audit work performed
      in the preparation of financial statements, as well as work generally only
      the independent auditor can reasonably be expected to provide, such as statutory
      audits.</font></td>
  </tr></table>

<table width=600><tr><td width=4% align=left valign=top><font size="1"><sup>(2)</sup> </font></td><td width=2%><font size="1"></font></td>
    <td width=94%><font size="2">Audit related fees consisted principally of work
      performed in reviewing the quarterly financial statements.</font></td>
  </tr></table>

<table width=600><tr><td width=4% align=left valign=top><font size="1"><sup>(3)</sup> </font></td><td width=2%><font size="1"></font></td>
    <td width=94%><font size="2">Tax fees consisted of the preparation of federal
      and multi-state tax returns by Beckman, Kirkland &amp; Whitney and Steven
      Dong &amp; Associates.</font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company
anticipates that a representative of Haskell &amp; White LLP  will attend the 2004 Annual
Meeting for the purpose of responding to appropriate  questions. At the meeting, a
representative of Haskell &amp; White LLP will be  afforded an opportunity to make a
statement if he or she so desires.</font></td></tr></table>

<p><table width=600><tr><td><FONT SIZE="2"><B>Policy on Audit Committee Pre-Approval of Audit
and Permissible Non-audit Services of Independent Auditors</B></FONT></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consistent with
policies of the Securities and Exchange Commission  regarding auditor independence, the
Audit Committee has responsibility for  appointing, setting compensation and overseeing
the work of the independent  auditor. In recognition of this responsibility, the Audit
Committee has  established a policy to pre-approve all audit and permissible non-audit
services  provided by the independent auditor.</font></td></tr></table>

<p><table width=600><tr><td><FONT SIZE="2"><B>CHANGE IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE</B></FONT></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On January 6,
2003, the Company filed a Current Report on Form 8-K,  dated December 27, 2002, reporting
a change of the Company&#146;s accountants. Grant  Thornton LLP was previously the principal
accountants for the Company. On  December 27, 2002, the Company dismissed Grant Thornton
LLP as principal  accountants and engaged Haskell &amp; White LLP as principal
accountants to audit  the accounts of the Company for the year ending December 31, 2002.
The decision  to change accountants was approved by the Company&#146;s Audit Committee and the
Board of Directors.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the fiscal
years ended December 31, 2001 and 2000 and through  the date of this report, there were
no disagreements with Grant Thornton LLP on  any matter of accounting principles or
practices, financial statement disclosure  or auditing scope or procedure, which
disagreement, if not resolved to the  satisfaction of Grant Thornton LLP, would have
caused them to make reference to  the matter of the disagreement in connection with its
report. The auditors&#146;  report for the fiscal years ended December 31, 2001 and 2000 did
not contain an  adverse opinion or a disclaimer of opinion, nor were the reports modified
as to  uncertainty, audit scope or accounting principles.</font></td></tr></table>


<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company
requested that Grant Thornton LLP furnish it with a letter  addressed to the Securities
and Exchange Commission stating whether it agrees  with the above statements. A copy of
that letter is filed as Exhibit 16.1 to the  Current Report on Form 8-K, dated December
27, 2002, which is incorporated  herein by reference.</font></td></tr></table>






<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td><td width=480 align=center><font size="2">
- -8-</font></td><td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;






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<p><table width=600><tr><td><font size=2><B>STOCK  PERFORMANCE GRAPH</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>The following performance table compares the
five-year cumulative total return  for (i) the Class A Common Stock, (ii) the NASDAQ US
Companies index and (iii)  the peer group of companies. For each group an initial
investment of $100 is  assumed on December 31, 1998. The Company&#146;s fiscal year-end is
December 31. The  total return calculation assumes reinvestment of all dividends for the
indices.  The Company did not pay dividends on its Class A Common Stock during the time
frame set forth below:</font></td></tr></table>


<br>
<img src="e17583.gif" width="724" height="420"><br>
<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The data points
depicted on the graph are as follows:</font></td></tr></table>


<br>
<TABLE CELLPADDING="0" CELLSPACING="2" BORDER="2" WIDTH="600">
  <TR VALIGN="BOTTOM" align="center">
    <TD WIDTH="155"><b><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Date</font></b></TD>
    <TD colspan="2"><b><font size="2">The Company</font></b></TD>
    <TD colspan="2"><b><font size="2">Peer Group(1)</font></b></TD>
    <TD colspan="2" WIDTH="149"><b><font size="2">NASDAQ US Companies</font></b></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="center" width="155"><font size="2">December 31, 1998</font></TD>
    <TD ALIGN="center" colspan="2"><font size="2">$100.00</font></TD>
    <TD ALIGN="center" colspan="2"><font size="2">$100.00</font></TD>
    <TD ALIGN="center" colspan="2" width="149"><font size="2">$100.00</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="center" width="155"><font size="2">December 31, 1999</font></TD>
    <TD ALIGN="center" colspan="2"><font size="2">$119.87</font></TD>
    <TD ALIGN="center" colspan="2"><font size="2">$&nbsp;&nbsp;99.58</font></TD>
    <TD ALIGN="center" colspan="2" width="149"><font size="2">$185.84</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="center" width="155"><font size="2">December 31, 2000</font></TD>
    <TD ALIGN="center" colspan="2"><font size="2">$160.26</font></TD>
    <TD ALIGN="center" colspan="2"><font size="2">$154.37</font></TD>
    <TD ALIGN="center" colspan="2" width="149"><font size="2">$112.85</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="center" width="155"><font size="2">December 31, 2001</font></TD>
    <TD ALIGN="center" colspan="2"><font size="2">$&nbsp;&nbsp;99.36</font></TD>
    <TD ALIGN="center" colspan="2"><font size="2">$&nbsp;&nbsp;94.54</font></TD>
    <TD ALIGN="center" colspan="2" width="149"><font size="2">$&nbsp;&nbsp;88.90</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="center" width="155"><font size="2">December 31, 2002</font></TD>
    <TD ALIGN="center" colspan="2"><font size="2">$&nbsp;&nbsp;85.90</font></TD>
    <TD ALIGN="center" colspan="2"><font size="2">$&nbsp;&nbsp;49.04</font></TD>
    <TD ALIGN="center" colspan="2" width="149"><font size="2">$&nbsp;&nbsp;60.71</font></TD>
  </TR>
  <TR VALIGN="BOTTOM">
    <TD ALIGN="center" width="155"><font size="2">December 31, 2003</font></TD>
    <TD ALIGN="center" colspan="2"><font size="2">$136.54</font></TD>
    <TD ALIGN="center" colspan="2"><font size="2">$&nbsp;&nbsp;77.25</font></TD>
    <TD ALIGN="center" colspan="2" width="149"><font size="2">$&nbsp;&nbsp;90.81</font></TD>
  </TR>
</TABLE>


<br>
<table width=600>
  <tr>
    <td width=4% align=left valign=top><font size="2">(1) </font></td>
    <td width=2%>&nbsp;</td>
    <td width=94%><font size="2"> The peer group consists of the following electronic
      and industrial distribution companies: <br>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; All American Semiconductor, Inc. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Avnet,
      Inc. <br>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Arrow Electronics, Inc. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Jaco
      Electronics, Inc.</font></td>
  </tr>
</table>

<p><table width=600><tr><td><font size=2><B>CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the years
ended December 31, 2003 and 2002, the Company  purchased electronic component products of
approximately $138,000 and $64,000,  respectively, from a company controlled by Mr.
Chiang, a director of the  Company. All of these purchases were for products carried by
the Company in  inventory and the Company considers these purchases to be in the normal
course  of business and on an arm&#146;s length basis. The Company has entered into a
distributor agreement with the affiliated company, and accordingly, the Company  expects
that the purchases may continue in the future.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the years
ended December 31, 2003 and 2002, the Company paid  $1,500,000 and $0, respectively, of
principal payments and $86,000 and $13,000,  respectively, of interest payments to K.S.
Best International Co. Ltd., a  company controlled by the brother of the Company&#146;s Chief
Executive Officer. All  of these payments were for the repayment of principal and related
interest  charges on subordinated notes that the Company considers to be in the normal
course of business and on an arm&#146;s length basis.</font></td></tr></table>



<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td><td width=480 align=center><font size="2">
- -9-</font></td><td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;







<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 12; page: 12" -->




<p><table width=600><tr><td><font size=2><B>SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following
table sets forth, as of March 31, 2004, certain  information regarding the ownership of
the Company&#146;s Common Stock by (i) each  person (including any group) known by the Company
to be the beneficial owner of  more than 5% of the outstanding shares of Common Stock,
(ii) each of the  Company&#146;s directors and director nominees, (iii) each of the Named
Executive  Officers, and (iv) all of the Company&#146;s executive officers and directors as a
group. As of March 31, 2004, the Company had issued and outstanding 4,695,979  shares of
Class A Common Stock and 762,612 shares of Class B Common Stock.</font></td></tr></table>


<br>
<table border="0" cellspacing="0" cellpadding="0" width="700">
  <tr>
    <td width="189">&nbsp;</td>
    <td height=17 align="center" valign="bottom" colspan="4"><font size="1"><b><u>Class
      A Common Stock (1)</u></b></font></td>
    <td align="center" valign="bottom" width="15">&nbsp;</td>
    <td align="center" valign="bottom" width="20">&nbsp;</td>
    <td colspan="3" align="center" valign="bottom"><font size="1"><b><u>Class
      B Common Stock (1)</u></b></font></td>
    <td align="center" valign="bottom" width="10">&nbsp;</td>
    <td align="center" valign="bottom" colspan="2">&nbsp;</td>
  </tr>
  <tr>
    <td align="left" valign="bottom" width="189"><font size="1"><b><u>Name and
      Address of Beneficial Owner</u></b></font></td>
    <td height=17 align="center" valign="bottom" colspan="2"><b><u><font size=1><font size="1">Number
      of Shares</font></font></u></b></td>
    <td align="center" valign="bottom" width="12">&nbsp;</td>
    <td align="center" valign="bottom" colspan="2"><font size="1"><b><u>Percent
      of Class</u></b></font></td>
    <td align="center" valign="bottom" width="20">&nbsp;</td>
    <td align="center" valign="bottom" width="88"><font size="1"><b><u>Number
      of Shares</u></b></font></td>
    <td align="center" valign="bottom" width="19">&nbsp;&nbsp;</td>
    <td align="center" valign="bottom" width="84"><font size="1"><b><u>Percent
      of Class</u></b></font></td>
    <td align="center" valign="bottom" width="10">&nbsp;&nbsp;</td>
    <td colspan="2" align="center" valign="bottom">&nbsp;&nbsp;<font size="1"><b>Percent
      of All Classes <br>
      <u>of Common Stock (1)</u></b></font></td>
  </tr>
  <tr valign="bottom">
    <td align="left" valign="bottom" width="189"><font size=2><font size="2">Stewart
      Wang</font></font></td>
    <td height=17 align="right" width="77"> <font size=2> <font size="2"> 1,006,631</font></font></td>
    <td align="left" width="22"><font size=2><font size="2">(2)</font></font>&nbsp;&nbsp;</td>
    <td width="12">&nbsp;&nbsp;</td>
    <td align="right" width="58"><font size=2><font size="2">21.44%</font></font></td>
    <td width="15">&nbsp;</td>
    <td width="20">&nbsp;&nbsp;</td>
    <td align="center" width="88"><font size=2><font size="2">762,612</font></font></td>
    <td width="19">&nbsp;</td>
    <td align="center" width="84"><font size=2><font size="2">100%</font></font></td>
    <td width="10">&nbsp;</td>
    <td align="right" width="78"><font size=2><font size="2">63.87%</font></font></td>
    <td width="29"><font size=2><font size="2">(3)</font></font></td>
  </tr>
  <tr valign="bottom">
    <td align="left" valign="bottom" width="189">&nbsp;</td>
    <td height=23 align="right" width="77">&nbsp;</td>
    <td align="left" width="22">&nbsp;</td>
    <td width="12">&nbsp;</td>
    <td align="right" width="58">&nbsp;</td>
    <td width="15">&nbsp;</td>
    <td width="20">&nbsp;</td>
    <td align="center" width="88">&nbsp;</td>
    <td width="19">&nbsp;</td>
    <td align="center" width="84">&nbsp;</td>
    <td width="10">&nbsp;</td>
    <td align="right" width="78">&nbsp;</td>
    <td width="29">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left" valign="bottom" width="189"><font size=2><font size="2">Tzu
      Sheng Ku</font></font></td>
    <td height=23 align="right" width="77"> <font size=2> <font size="2"> 914,203</font></font></td>
    <td align="left" width="22"><font size=2><font size="2">(4)</font></font></td>
    <td width="12">&nbsp;</td>
    <td align="right" width="58"><font size=2><font size="2">19.47%</font></font></td>
    <td width="15">&nbsp;</td>
    <td width="20">&nbsp;</td>
    <td align="center" width="88">&nbsp;</td>
    <td width="19">&nbsp;</td>
    <td align="center" width="84">&nbsp;</td>
    <td width="10">&nbsp;</td>
    <td align="right" width="78"><font size=2><font size="2">7.42%</font></font></td>
    <td width="29">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left" valign="bottom" width="189">&nbsp;</td>
    <td height=35 align="right" width="77">&nbsp;</td>
    <td align="left" width="22">&nbsp;</td>
    <td width="12">&nbsp;</td>
    <td align="right" width="58">&nbsp;</td>
    <td width="15">&nbsp;</td>
    <td width="20">&nbsp;</td>
    <td align="center" width="88">&nbsp;</td>
    <td width="19">&nbsp;</td>
    <td align="center" width="84">&nbsp;</td>
    <td width="10">&nbsp;</td>
    <td align="right" width="78">&nbsp;</td>
    <td width="29">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left" valign="bottom" width="189"><font size=2><font size="2">FMR
      Corporation</font><font size="2"> <br>
      &nbsp;&nbsp;82 Devonshire Street<br>
      &nbsp;&nbsp;</font><font size="2">Boston, MA 02109</font></font></td>
    <td height=35 align="right" width="77"> <font size=2> <font size="2"> 487,700</font></font></td>
    <td align="left" width="22"><font size=2><font size="2">(5)</font></font></td>
    <td width="12">&nbsp;</td>
    <td align="right" width="58"><font size=2><font size="2">10.39%</font></font></td>
    <td width="15">&nbsp;</td>
    <td width="20">&nbsp;</td>
    <td align="center" width="88">&nbsp;</td>
    <td width="19">&nbsp;</td>
    <td align="center" width="84">&nbsp;</td>
    <td width="10">&nbsp;</td>
    <td align="right" width="78"><font size=2><font size="2">3.96% </font></font></td>
    <td width="29">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left" valign="bottom" width="189">&nbsp;</td>
    <td height=19 align="right" width="77">&nbsp;</td>
    <td align="left" width="22">&nbsp;</td>
    <td width="12">&nbsp;</td>
    <td align="right" width="58">&nbsp;</td>
    <td width="15">&nbsp;</td>
    <td width="20">&nbsp;</td>
    <td align="center" width="88">&nbsp;</td>
    <td width="19">&nbsp;</td>
    <td align="center" width="84">&nbsp;</td>
    <td width="10">&nbsp;</td>
    <td align="right" width="78">&nbsp;</td>
    <td width="29">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left" valign="bottom" width="189"><font size=2><font size="2">Richard
      Chiang</font></font></td>
    <td height=19 align="right" width="77"> <font size=2> <font size="2"> 59,694</font></font></td>
    <td align="left" width="22"><font size=2><font size="2">(6)</font></font></td>
    <td width="12">&nbsp;</td>
    <td align="right" width="58"><font size=2><font size="2">1.27% </font></font></td>
    <td width="15">&nbsp;</td>
    <td width="20">&nbsp;</td>
    <td align="center" width="88">&nbsp;</td>
    <td width="19">&nbsp;</td>
    <td align="center" width="84">&nbsp;</td>
    <td width="10">&nbsp;</td>
    <td align="right" width="78"><font size=2><font size="2">*&nbsp;&nbsp;</font></font></td>
    <td width="29">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left" valign="bottom" width="189">&nbsp;</td>
    <td height=22 align="right" width="77">&nbsp;</td>
    <td align="left" width="22">&nbsp;</td>
    <td width="12">&nbsp;</td>
    <td align="right" width="58">&nbsp;</td>
    <td width="15">&nbsp;</td>
    <td width="20">&nbsp;</td>
    <td align="center" width="88">&nbsp;</td>
    <td width="19">&nbsp;</td>
    <td align="center" width="84">&nbsp;</td>
    <td width="10">&nbsp;</td>
    <td align="right" width="78">&nbsp;</td>
    <td width="29">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left" valign="bottom" width="189"><font size=2><font size="2">Craig
      Miller</font></font></td>
    <td height=22 align="right" width="77"> <font size=2> <font size="2"> 11,000</font></font></td>
    <td align="left" width="22"><font size=2><font size="2">(7)</font></font></td>
    <td width="12">&nbsp;</td>
    <td align="right" width="58"><font size=2><font size="2">*&nbsp;&nbsp;</font></font></td>
    <td width="15">&nbsp;</td>
    <td width="20">&nbsp;</td>
    <td align="center" width="88">&nbsp;</td>
    <td width="19">&nbsp;</td>
    <td align="center" width="84">&nbsp;</td>
    <td width="10">&nbsp;</td>
    <td align="right" width="78"><font size=2><font size="2">*&nbsp;&nbsp;</font></font></td>
    <td width="29">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left" valign="bottom" width="189">&nbsp;</td>
    <td height=23 align="right" width="77">&nbsp;</td>
    <td align="left" width="22">&nbsp;</td>
    <td width="12">&nbsp;</td>
    <td align="right" width="58">&nbsp;</td>
    <td width="15">&nbsp;</td>
    <td width="20">&nbsp;</td>
    <td align="center" width="88">&nbsp;</td>
    <td width="19">&nbsp;</td>
    <td align="center" width="84">&nbsp;</td>
    <td width="10">&nbsp;</td>
    <td align="right" width="78">&nbsp;</td>
    <td width="29">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left" valign="bottom" width="189"><font size=2><font size="2">Felix
      Sung</font></font></td>
    <td height=23 align="right" width="77"> <font size=2> <font size="2"> 61,727</font></font></td>
    <td align="left" width="22"><font size=2><font size="2">(6)</font></font></td>
    <td width="12">&nbsp;</td>
    <td align="right" width="58"><font size=2><font size="2">1.31%</font></font></td>
    <td width="15">&nbsp;</td>
    <td width="20">&nbsp;</td>
    <td align="center" width="88">&nbsp;</td>
    <td width="19">&nbsp;</td>
    <td align="center" width="84">&nbsp;</td>
    <td width="10">&nbsp;</td>
    <td align="right" width="78"><font size=2><font size="2">*&nbsp;&nbsp;</font></font></td>
    <td width="29">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left" valign="bottom" width="189">&nbsp;</td>
    <td height=23 align="right" width="77">&nbsp;</td>
    <td align="left" width="22">&nbsp;</td>
    <td width="12">&nbsp;</td>
    <td align="right" width="58">&nbsp;</td>
    <td width="15">&nbsp;</td>
    <td width="20">&nbsp;</td>
    <td align="center" width="88">&nbsp;</td>
    <td width="19">&nbsp;</td>
    <td align="center" width="84">&nbsp;</td>
    <td width="10">&nbsp;</td>
    <td align="right" width="78">&nbsp;</td>
    <td width="29">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left" valign="bottom" width="189"><font size=2><font size="2">David
      Vanderhorst</font></font></td>
    <td height=23 align="right" width="77"> <font size=2> <font size="2"> 23,000</font></font></td>
    <td align="left" width="22"><font size=2><font size="2">(8)</font></font></td>
    <td width="12">&nbsp;</td>
    <td align="right" width="58"><font size=2><font size="2">*&nbsp;&nbsp;</font></font></td>
    <td width="15">&nbsp;</td>
    <td width="20">&nbsp;</td>
    <td align="center" width="88">&nbsp;</td>
    <td width="19">&nbsp;</td>
    <td align="center" width="84">&nbsp;</td>
    <td width="10">&nbsp;</td>
    <td align="right" width="78"><font size=2><font size="2">*&nbsp;&nbsp;</font></font></td>
    <td width="29">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left" valign="bottom" width="189">&nbsp;</td>
    <td align="right" width="77">&nbsp;</td>
    <td align="left" width="22">&nbsp;</td>
    <td width="12">&nbsp;</td>
    <td align="right" width="58">&nbsp;</td>
    <td width="15">&nbsp;</td>
    <td width="20">&nbsp;</td>
    <td align="center" width="88">&nbsp;</td>
    <td width="19">&nbsp;</td>
    <td align="center" width="84">&nbsp;</td>
    <td width="10">&nbsp;</td>
    <td align="right" width="78">&nbsp;</td>
    <td width="29">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="left" valign="bottom" width="189"><font size="2">All directors
      and executive <br>
      &nbsp;&nbsp; officers as a group (6 persons)</font> </td>
    <td align="right" width="77"> <font size=2> <font size="2">2,076,255</font></font></td>
    <td align="left" width="22"><font size=2><font size="2">(9)</font></font></td>
    <td width="12">&nbsp;</td>
    <td align="right" width="58"><font size=2><font size="2">38.04%</font></font></td>
    <td width="15">&nbsp;</td>
    <td width="20">&nbsp;</td>
    <td align="center" width="88"><font size=2><font size="2">762,612</font></font></td>
    <td width="19">&nbsp;</td>
    <td align="center" width="84"><font size=2><font size="2">100%</font></font></td>
    <td width="10">&nbsp;</td>
    <td align="right" width="78"><font size=2><font size="2">72.55%</font></font></td>
    <td width="29"><font size=2><font size="2">(3)</font></font></td>
  </tr>
</table>
<br>
<table width=600>
  <tr>
    <td width=4% align=left valign=top><font size="2">* </font></td>
    <td width=2%>&nbsp;</td>
    <td width=94%><font size="2"> Less than 1.0%. </font></td>
  </tr>
</table>
<table width=600>
  <tr>
    <td width=4% align=left valign=top><font size="2">(1) </font></td>
    <td width=2%>&nbsp;</td>
    <td width=94%><font size="2"> Beneficial ownership is determined in accordance
      with rules of the Securities and Exchange Commission that deem shares to
      be beneficially owned by any person who has or shares voting or investment
      power with respect to the shares. Unless otherwise indicated, the persons
      named in this table have sole voting and sole investment power with respect
      to all shares shown as beneficially owned, subject to community property
      laws where applicable.</font></td>
  </tr>
</table>

<table width=600>
  <tr>
    <td width=4% align=left valign=top><font size="2">(2) </font></td>
    <td width=2%>&nbsp;</td>
    <td width=94%><font size="2"> Includes 762,612 shares of Class A Common Stock
      issuable upon conversion of the 762,612 shares of Class B Common Stock owned
      by Mr. Wang, 2,700 shares of Class A Common Stock owned by Mr. Wang&#146;s
      wife, 49,319 shares owned by the 401(k) trust and 192,000 shares of Class
      A Common Stock underlying options that are or will be exercisable within
      60 days of the date hereof.</font></td>
  </tr>
</table>

<table width=600>
  <tr>
    <td width=4% align=left valign=top><font size="2">(3) </font></td>
    <td width=2%>&nbsp;</td>
    <td width=94%><font size="2"> Excludes 762,612 shares of Class A Common Stock
      issuable upon conversion of the 762,612 shares of Class B Common Stock owned
      by Mr. Wang.</font></td>
  </tr>
</table>

<table width=600>
  <tr>
    <td width=4% align=left valign=top><font size="2">(4) </font></td>
    <td width=2%>&nbsp;</td>
    <td width=94%><font size="2"> Includes 81,962 shares of Class A Common Stock
      owned by Mr. Ku&#146;s wife, 10,341 shares of Class A Common Stock owned
      by 401(k) trust, 133,635 shares of Class A Common Stock owned by Mr. Ku&#146;s
      three minor children as to which Mr. Ku exercises sole voting control and
      35,000 shares of underlying options that are or will be exercisable within
      60 days of the date hereof.</font></td>
  </tr>
</table>

<table width=600>
  <tr>
    <td width=4% align=left valign=top><font size="2">(5) </font></td>
    <td width=2%>&nbsp;</td>
    <td width=94%><font size="2"> Based on Amendment No. 5 to Schedule 13G filed
      on February 14, 2002 by FMR Corporation, Edward C. Johnson and Abigail P.
      Johnson. </font></td>
  </tr>
</table>

<table width=600>
  <tr>
    <td width=4% align=left valign=top><font size="2">(6) </font></td>
    <td width=2%>&nbsp;</td>
    <td width=94%><font size="2"> Includes 35,000 shares of underlying options
      that are or will be exercisable within 60 days of the date hereof. </font></td>
  </tr>
</table>

<table width=600>
  <tr>
    <td width=4% align=left valign=top><font size="2">(7) </font></td>
    <td width=2%>&nbsp;</td>
    <td width=94%><font size="2"> Includes 10,000 shares of underlying options
      that are or will be exercisable within 60 days of the date hereof. </font></td>
  </tr>
</table>

<table width=600>
  <tr>
    <td width=4% align=left valign=top><font size="2">(8) </font></td>
    <td width=2%>&nbsp;</td>
    <td width=94%><font size="2"> Includes 23,000 shares of underlying options
      that are or will be exercisable within 60 days of the date hereof. </font></td>
  </tr>
</table>

<table width=600>
  <tr>
    <td width=4% align=left valign=top><font size="2">(9) </font></td>
    <td width=2%>&nbsp;</td>
    <td width=94%><font size="2"> Includes the shares of Class A Common Stock
      referred to in footnotes (2), (4), (6), (7) and (8) above.</font></td>
  </tr>
</table>

<p><table width=600><tr><td><font size=2><B>COMPLIANCE WITH SECTION 16(A) OF THE
SECURITIES EXCHANGE ACT</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 16(a) of
the Exchange Act requires the Company&#146;s officers and  directors, and persons who own more
than ten percent of a registered class of  the Company&#146;s equity securities, to file
reports of ownership and changes in  ownership with the Securities and Exchange
Commission. Officers, directors and  greater than ten percent shareholders are required
to furnish the Company with  copies of all Section 16(a) forms they file. Based solely on
its review of the  copies of the forms received by it, or written representations from
certain  reporting persons that Section 16(a) forms were required and filed by those
persons, the Company believes that, during the year ended December 31, 2003, all  of
these reports were timely filed, except each of the following persons filed a  Form 5
reporting one transaction on an untimely basis: Craig Miller, Felix Sung,  Richard
Chiang, Stewart Wang and Tzu Sheng (Johnson) Ku.</font></td></tr></table>






<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td><td width=480 align=center><font size="2">
- -10-</font></td><td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 13; page: 13" -->




<p><table width=600><tr><td><font size=2><B>PROPOSALS OF SHAREHOLDERS</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any shareholder
who intends to present a proposal at the 2005 Annual  Meeting of Shareholders for
inclusion in the Company&#146;s Proxy Statement and proxy  form relating to the Annual Meeting
must submit the proposal to the Company at  its principal executive offices by December
27, 2004. In addition, in the event  a shareholder proposal is not received by the
Company by December 27, 2004, the  proxy to be solicited by the Board of Directors for
the 2005 Annual Meeting will  confer discretionary authority on the holders of the proxy
to vote the shares if  the proposal ultimately is presented at the 2005 Annual Meeting
without any  discussion of the proposal in the Proxy Statement for that meeting.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The rules and
regulations of the Securities and Exchange Commission  provide that if the date of the
Company&#146;s 2005 Annual Meeting is advanced or  delayed more than 30 days from the date of
the 2004 Annual Meeting, shareholder  proposals intended to be included in the proxy
materials for the 2005 Annual  Meeting must be received by the Company within a
reasonable time before the  Company begins to print and mail the proxy materials for the
2005 Annual  Meeting. Upon determination by the Company that the date of the 2005 Annual
Meeting will be advanced or delayed by more than 30 days from the date of the  2004
Annual Meeting, the Company will disclose that change in the earliest  possible Quarterly
Report on Form 10-QSB.</font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>DELIVERY OF DOCUMENTS TO SECURITY HOLDERS
SHARING AN ADDRESS</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company is
delivering this Proxy Statement and its 2003 Annual  Report on Form 10-KSB to all
stockholders of record as of the record date.  Stockholders residing in the same
household who hold their shares in the name of  a bank, broker or other holder of record
may receive only one Annual Report and  Proxy Statement if previously notified by their
bank, broker or other holder.  This process by which only one annual report or proxy
statement, as the case may  be, is delivered to multiple security holders sharing an
address, unless  contrary instructions are received from one or more of the security
holders, is  called &#147;householding.&#148; Householding may provide convenience for
stockholders and  cost savings for companies. Once begun, householding may continue
unless  instructions to the contrary are received from one or more of the stockholders
within the household.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Street name
stockholders in a single household who received only one  copy of the Annual Report and
Proxy Statement may request to receive separate  copies in the future by following the
instructions provided on the voting  instruction form sent to them by their bank, broker
or other holder of record.  Similarly, street name stockholders who are receiving
multiple copies may  request that only a single set of materials be sent to them in the
future by  checking the appropriate box on the voting instruction form. Alternatively,
street name stockholders whose holders of record utilize the services of ADP (as
indicated on the voting instruction form sent to them) may send written  instructions to
Householding Department, 51 Mercedes Way, Edgewood, New York  11717 or call
1-800-542-1061. The instructions must include the stockholder&#146;s  name and account number
and the name of the bank, broker or other holder of  record. Otherwise, street name
stockholders should contact their bank, broker or  other holder.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Copies of this
Proxy Statement and the 2003 Annual Report on Form  10-KSB are available promptly by
calling (661) 257-6060, or by writing to  Attention: Investor Relations, Taitron
Components Incorporated, 28040 West  Harrison Parkway, Valencia, California 91355. If you
are receiving multiple  copies of this Proxy Statement and the Annual Report, you also
may request  orally or in writing to receive a single copy of this Proxy Statement and
the  Annual Report by calling (661) 257-6060, or writing to Attention: Investor
Relations, Taitron Components Incorporated, 28040 West Harrison Parkway,  Valencia,
California 91355.</font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>OTHER MATTERS</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of
Directors is not aware of any matter to be acted upon at  the Annual Meeting other than
described in this Proxy Statement. Unless  otherwise directed, all shares represented by
the persons named in the  accompanying proxy will be voted in favor of the proposals
described in this  Proxy Statement. If any other matter properly comes before the
meeting, however,  the proxy holders will vote thereon in accordance with their best
judgment.</font></td></tr></table>






<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td><td width=480 align=center><font size="2">
- -11-</font></td><td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;






<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 14; page: 14" -->




<p><table width=600><tr><td><font size=2><B>EXPENSES</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The entire cost of
soliciting proxies will be borne by the Company.  Solicitation may be made by mail. The
Company will request brokerage houses,  nominees, custodians, fiduciaries and other like
parties to forward soliciting  material to the beneficial owners of the Common Stock held
of record by them and  will reimburse those persons for their reasonable charges and
expenses in  connection therewith.</font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>ANNUAL REPORT TO SHAREHOLDERS</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s
Annual Report for the year ended December 31, 2003 is  being mailed to shareholders along
with this Proxy Statement. The Annual Report  is not to be considered part of the
soliciting material.</font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>REPORT ON FORM 10-KSB</B></font></td></tr></table>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>THE COMPANY
UNDERTAKES, UPON WRITTEN REQUEST, TO PROVIDE, WITHOUT CHARGE, EACH PERSON FROM WHOM THE
ACCOMPANYING PROXY IS SOLICITED WITH A COPY OF THE COMPANY&#146;S ANNUAL REPORT ON FORM
10-KSB FOR THE YEAR ENDED DECEMBER 31, 2003, AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, INCLUDING THE FINANCIAL STATEMENTS AND SCHEDULES THERETO, BUT EXCLUDING
EXHIBITS THERETO. REQUESTS SHOULD BE ADDRESSED TO TAITRON COMPONENTS INCORPORATED,
ATTENTION: INVESTOR RELATIONS, 28040 WEST HARRISON PARKWAY, VALENCIA, CALIFORNIA 91355.</B></FONT></td></tr></table>


<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td><td width=480 align=center><font size="2">
- -12-</font></td><td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 15; page: 15" -->



<p><table width=600><tr><td align=center><font size=1><B>ANNUAL MEETING OF SHAREHOLDERS OF</B></font></td></tr></table>

<p><table width=600><tr><td  align=center><font size=4><B>TAITRON COMPONENTS INCORPORATED</B></font></td></tr></table>

<p><table width=600><tr><td align=center><font size=1><B>May 28, 2004</B></font></td></tr></table>

<p><table width=600><tr><td  align=center><font size=3>Please date, sign and mail  <BR>your
proxy card in the  <BR>envelope provided as soon  <BR>as possible.</font></td></tr></table>

<p><table width=600><tr><td align=center><font size=1><B>* Please detach along perforated
line and mail in  the envelope provided. *</B></font></td></tr></table>




<br>
<table border cellspacing=1 cellpadding=0 width=700>
  <tr align="center">
    <td valign="TOP" colspan=3> <font size="1">THE BOARD OF DIRECTORS RECOMMENDS
      A VOTE &quot;FOR&quot; THE ELECTION OF DIRECTORS. <br>
      PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK
      YOUR VOTE IN BLUE OR BLACK AS SHOWN HERE&nbsp;&nbsp;<font size="2">&nbsp;
      |X|</font></font></td>
  </tr>
  <tr>
    <td width="29%" valign="TOP" align="left"> <FONT SIZE="1">1. ELECTION OF
DIRECTORS, as provided in the Company&#146;s Proxy Statement:<br>
<br>
<br>
|&nbsp;&nbsp;&nbsp;|&nbsp; FOR ALL NOMINEES<br>
|&nbsp;&nbsp;&nbsp;|&nbsp; WITHHOLD AUTHORITY<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FOR ALL NOMINEES|&nbsp;<br>
|&nbsp;&nbsp;&nbsp;|&nbsp; FOR ALL EXCEPT<br>
(See instructions below)&nbsp;<U><br>
<br>
INSTRUCTION:</U> To withhold authority to vote for any individual nominee(s),
mark &quot;FOR ALL EXCEPT&quot; and fill in the circle next to each nominee
you wish to withhold, as shown here: |<U>&nbsp;&nbsp;&nbsp;</U>|</FONT></td>
    <td width="25%" valign="TOP" align="left"><font size="1">&nbsp;&nbsp;&nbsp;&nbsp;NOMINEES</font><br>
      <br>
      <font size="1">|&nbsp;&nbsp;&nbsp;| Tzu Sheng (Johnson) Ku <br>
      </font><font size="1">|&nbsp;&nbsp;&nbsp;| Stewart Wang</font><font size="1">
      <br>
      |&nbsp;&nbsp;&nbsp;| Richard Chiang <br>
      |&nbsp;&nbsp;&nbsp;| Craig Miller <br>
      |&nbsp;&nbsp;&nbsp;| Felix Sung </font> <br>
    </td>
    <td width="46%" valign="TOP" rowspan=3> <font size="1"><b>THIS PROXY IS SOLICITED
      BY THE BOARD OF DIRECTORS OF <br>
      TAITRON COMPONENTS INCORPORATED <br>
      <br>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned revokes any other proxy to
      vote at such Meeting and hereby ratifies and confirms all that said attorneys
      and proxies, and each of them, may lawfully do by virtue hereof. With respect
      to matters not known at the time of the solicitation hereof, said proxies
      are authorized to vote in accordance with their best judgment. <br>
      <br>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Proxy will be voted in accordance with
      the instructions set forth above. Where a vote is not specified, the proxies
      will vote the shares represented by the proxy &quot;FOR&quot; Proposal 1,
      and as said proxy shall deem advisable on such other business as may come
      before the Meeting, unless otherwise directed. <br>
      <br>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned acknowledges receipt of a
      copy of the Notice of Annual Meeting of Shareholders and accompanying Proxy
      Statement dated April 26, 2004 relating to the Meeting.</b> <br>
      <br>
      <br>
      <br>
      Please check here if you plan to attend the meeting.&nbsp;&nbsp;&nbsp; |&nbsp;&nbsp;&nbsp;|</font></td>
  </tr>
  <tr>
    <td valign="TOP" colspan="2">&nbsp; </td>
  </tr>
  <tr>
    <td valign="TOP" colspan="2"> <FONT SIZE="1">To change the address on your
account, please check the box at right and indicate your new address in
the address space above. Please not that changes to the registered name(s)
on the account may not be submitted via this method&nbsp;&nbsp;|<U>&nbsp;&nbsp;&nbsp;</U>|</FONT></td>
  </tr>
  <tr valign="bottom">
    <td colspan="2"><font size="1">Signature of Shareholder&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Date:</font></td>
    <td width="46%"><font size="1">Signature of Shareholder&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Date:</font></td>
  </tr>
</table>
<P>
<table width=600>
  <TR>
    <TD width=10% valign=top><b><font size="1"> Note: </font></b></TD>
    <TD width=90% valign=top><b><font size="1"> Please sign exactly as your name
      or names appear on this Proxy. When shares are held jointly, each holder
      should sign. When signing as executor, administrator, attorney, trustee
      or guardian, please give full title as such. If the signer is a corporation,
      please sign full corporate name by duly authorized officer, giving full
      title as such. If signer is a partnership, please sign in partnership name
      by authorized person.</font></b></TD>
  </TR>
</TABLE>













<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> -13-</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;












<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 16; page: 16" -->











<p><table width=600><tr><td  align=center><font size=3><B>TAITRON COMPONENTS INCORPORATED</B></font></td></tr></table>

<p><table width=600><tr><td  align=center><font size=2><B>Proxy for Annual Meeting of
Shareholders</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned, a
shareholder of TAITRON COMPONENTS INCORPORATED, a  California corporation (the
&#147;Company&#148;), hereby appoints STEWART WANG and DAVID  VANDERHORST, or either of
them, the proxies of the undersigned, each with full  power of substitution, to attend,
vote and act for the undersigned at the Annual  Meeting of Shareholders of the Company,
to be held on May 28, 2004 and any  postponements or adjournments thereof, and in
connection herewith to vote and  represent all of the shares of the Company which the
undersigned would be  entitled to vote as follows:</font></td></tr></table>

<p><table width=600><tr><td  align=center><font size=2><B>(Continued and to be signed on
the reverse side)</B></font></td></tr></table>




<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td><td width=480 align=center><font size="2">
- -14-</font></td><td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;


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end

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