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<SEC-DOCUMENT>0000891092-05-000781.txt : 20050421
<SEC-HEADER>0000891092-05-000781.hdr.sgml : 20050421
<ACCEPTANCE-DATETIME>20050421165916
ACCESSION NUMBER:		0000891092-05-000781
CONFORMED SUBMISSION TYPE:	DEF 14A
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20050520
FILED AS OF DATE:		20050421
DATE AS OF CHANGE:		20050421
EFFECTIVENESS DATE:		20050421

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:		05765326

	BUSINESS ADDRESS:	
		STREET 1:		28040 WEST HARRISON PARKWAY
		CITY:			VALENCIA
		STATE:			CA
		ZIP:			91355
		BUSINESS PHONE:		(661) 257-6060

	MAIL ADDRESS:	
		STREET 1:		28040 WEST HARRISON PARKWAY
		CITY:			VALENCIA
		STATE:			CA
		ZIP:			91355
</SEC-HEADER>
<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
<FILENAME>e20772def_14a.htm
<DESCRIPTION>NOTICE AND DEFINITIVE PROXY STATEMENT
<TEXT>
<HTML>
<HEAD>
<TITLE></TITLE>
</HEAD>
<BODY>




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<B> </B></FONT></P>
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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>UNITED STATES
                                                  <BR>SECURITIES AND EXCHANGE COMMISSION
                                                        <BR>Washington, D.C. 20549 </B></FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>SCHEDULE 14A
INFORMATION </B></FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>Proxy Statement
Pursuant to Section 14(a) of                                         the Securities
<BR>Exchange Act of 1934 (Amendment No. ___) </B></FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Filed by the
Registrant    [X] </B></FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Filed by a Party other
than the Registrant [&nbsp;&nbsp;&nbsp;] </B></FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Check the appropriate
box: </B></FONT></P>

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

    <TD><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></b></TD>

    <TD WIDTH=95%><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
        Preliminary Proxy Statement </FONT></b></TD>
  </TR>
</TABLE>
<BR>

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  <TR VALIGN=TOP>
    <TD WIDTH=5%><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>[&nbsp;&nbsp;&nbsp;] </FONT></b></TD>

    <TD><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></b></TD>

    <TD WIDTH=95%><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
        Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) </FONT></b></TD>
  </TR>
</TABLE>
<BR>

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  <TR VALIGN=TOP>
    <TD WIDTH=5%><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>[X] </FONT></b></TD>
    <TD><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></b></TD>

    <TD WIDTH=95%><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
        Definitive Proxy Statement </FONT></b></TD>
  </TR>
</TABLE>
<BR>

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  <TR VALIGN=TOP>
    <TD WIDTH=5%><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>[&nbsp;&nbsp;&nbsp;&nbsp;] </FONT></b></TD>
    <TD><b></b></TD>

    <TD WIDTH=95%><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
        Definitive Additional Materials </FONT></b></TD>
  </TR>
</TABLE>
<BR>

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  <TR VALIGN=TOP>
    <TD WIDTH=5%><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>[&nbsp;&nbsp;&nbsp;&nbsp;]  </FONT></b></TD>
    <TD><b></b></TD>

    <TD WIDTH=95%><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
        Soliciting Material Pursuant to Rule 14a-12 </FONT></b></TD>
  </TR>
</TABLE>
<br>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr align="center">
    <td><font face="Times New Roman, Times, Serif" size=2><b>TAITRON COMPONENTS
INCORPORATED</b></font>
      <hr size="1" noshade>
    </td>
  </tr>
  <tr align="center">
    <td>&nbsp;</td>
  </tr>
  <tr align="center">
    <td>
      <p align=CENTER><font face="Times New Roman, Times, Serif" size=2><b>(Name of Registrant
as Specified in Its Charter)</b></font>
      <hr size="1" noshade>
    </td>
  </tr>
  <tr align="center">
    <td>&nbsp;</td>
  </tr>
  <tr align="center">
    <td><font face="Times New Roman, Times, Serif" size=2><b>(Name of Person(s)
Filing Proxy Statement, if Other Than the Registrant)</b></font></td>
  </tr>
</table>
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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Payment of Filing Fee
(Check the appropriate box): </B></FONT></P>

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

    <TD WIDTH=5%><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>             [X]  </FONT></b></TD>

    <TD><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></b></TD>

    <TD WIDTH=90%><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>No
Fee Required </FONT></b></TD>
  </TR>
</TABLE>
<BR>

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

    <TD WIDTH=5%><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>             [&nbsp;&nbsp;&nbsp;]  </FONT></b></TD>

    <TD><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></b></TD>

    <TD WIDTH=90%><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Fee
computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. </FONT></b></TD>
  </TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
  <TR VALIGN=TOP>
    <TD WIDTH=5%><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1)  </FONT></b></TD>

    <TD><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></b></TD>

    <TD WIDTH=95%><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Title
of each class of securities to which transaction applies: </FONT></b></TD>
  </TR>
</TABLE>
<hr size="1" noshade>
<BR>


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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
  <TR VALIGN=TOP>
    <TD WIDTH=5%><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(2)  </FONT></b></TD>

    <TD><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></b></TD>

    <TD WIDTH=95%><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Aggregate
number of securities to which transactions applies: </FONT></b></TD>
  </TR>
</TABLE>
<hr size="1" noshade>
<BR>


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  <TR VALIGN=TOP>
    <TD WIDTH=5%><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(3)  </FONT></b></TD>

    <TD><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></b></TD>

    <TD WIDTH=95%><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Per
unit price or other underlying value of transaction computed          pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the          filing fee is
calculated and state how it was determined): </FONT></b></TD>
  </TR>
</TABLE>
<hr size="1" noshade>
<BR>


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  <TR VALIGN=TOP>
    <TD WIDTH=5%><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(4)  </FONT></b></TD>

    <TD><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></b></TD>

    <TD WIDTH=95%><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Proposed
maximum aggregate value of transaction: </FONT></b></TD>
  </TR>
</TABLE>
<hr size="1" noshade>
<BR>


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  <TR VALIGN=TOP>
    <TD WIDTH=5%><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(5)  </FONT></b></TD>

    <TD><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></b></TD>

    <TD WIDTH=95%><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Total
fee paid: </FONT></b></TD>
  </TR>
</TABLE>
<hr size="1" noshade>
<BR>


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

    <TD><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></b></TD>

    <TD WIDTH=95%><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Fee
paid previously with preliminary materials: </FONT></b></TD>
  </TR>
</TABLE>
<hr size="1" noshade>
<BR>


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

    <TD><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></b></TD>

    <TD WIDTH=95%><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Check
box if any part of the fee is offset as provided by Exchange Act          Rule 0-11(a)(2)
and identify the filing for which the offsetting fee          was paid previously.
Identify the previous filing by registration          statement number, or the Form or
Schedule and the date of its filing. </FONT></b></TD>
  </TR>
</TABLE>

<BR>

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  <TR VALIGN=TOP>
    <TD WIDTH=5%><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1)  </FONT></b></TD>

    <TD><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></b></TD>

    <TD WIDTH=95%><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Amount
previously paid: </FONT></b></TD>
  </TR>
</TABLE>
<hr size="1" noshade>
<BR>


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  <TR VALIGN=TOP>
    <TD WIDTH=5%><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(2)  </FONT></b></TD>

    <TD><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></b></TD>

    <TD WIDTH=95%><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Form,
Schedule or Registration Statement no.: </FONT></b></TD>
  </TR>
</TABLE>
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<BR>


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  <TR VALIGN=TOP>
    <TD WIDTH=5%><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(3)  </FONT></b></TD>

    <TD><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></b></TD>

    <TD WIDTH=95%><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Filing
Party: </FONT></b></TD>
  </TR>
</TABLE>
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<BR>


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  <TR VALIGN=TOP>
    <TD WIDTH=5%><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(4)  </FONT></b></TD>

    <TD><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></b></TD>

    <TD WIDTH=95%><b><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Date
Filed: </FONT></b></TD>
  </TR>
</TABLE>
<hr size="1" noshade>
<BR>




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<BR>
<TABLE WIDTH=100%><TR><TD WIDTH=20% ALIGN=left><FONT SIZE=1>&nbsp;</FONT></TD><TD WIDTH=60% ALIGN=center><FONT SIZE="2">
</FONT></TD><TD WIDTH=20% ALIGN=right><FONT SIZE="1">&nbsp;</FONT></TD></TR></TABLE>
<HR SIZE=5 noshade WIDTH=100% ALIGN=LEFT><BR>








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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=4>
<B>TAITRON COMPONENTS
INCORPORATED </B></FONT></P>

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<HR SIZE=1 noshade ALIGN=CENTER WIDTH=150>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
<B>NOTICE OF ANNUAL
MEETING OF SHAREHOLDERS </B></FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
<B>TO BE HELD MAY 20,
2005 </B></FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>TO THE SHAREHOLDERS OF
TAITRON COMPONENTS INCORPORATED: </B></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 20,
2005, at 10:00 a.m. Pacific time, at our corporate headquarters, located at 28040 West
Harrison Parkway, Valencia, CA 91355. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
the Annual Meeting, shareholders will be asked to consider and act upon the following
matters: </FONT></P>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>         1.  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>To
elect five directors for a term of one year; and </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>         2.  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>To
transact other business properly presented at the meeting or any postponement or
adjournment thereof. </FONT></TD>
</TR>
</TABLE>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board of Directors has fixed April 11, 2005, 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></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&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></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&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> </P>

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<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="65%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
    <td align="left" valign="bottom" width="35%"><font face="Times New Roman, Times, Serif" size=2>By Order of the Board of Directors</font></td>
  </tr>
  <tr>
    <td width="65%">&nbsp;</td>
    <td align="left" valign="bottom" width="35%">&nbsp;</td>
  </tr>
  <tr>
    <td width="65%">&nbsp;</td>
    <td align="left" valign="bottom" width="35%"><font face="Times New Roman, Times, Serif" size=2>/s/ Stewart Wang</font>
      <hr size="1" noshade align="left" width="250">
    </td>
  </tr>
  <tr>
    <td width="65%">&nbsp;</td>
    <td align="left" valign="top" width="35%"><font face="Times New Roman, Times, Serif" size=2>Stewart Wang
                                                                        <br>
      Chief Executive
Officer, President and <br>
                                                                        Chief Financial
Officer</font></td>
  </tr>
</table>
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>April 21, 2005 </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>28040 West Harrison Parkway <BR>
Valencia, California 91355  <BR>(661) 257-6060 </FONT></P>



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<BR>
<TABLE WIDTH=100%><TR><TD WIDTH=20% ALIGN=left><FONT SIZE=1>&nbsp;</FONT></TD><TD WIDTH=60% ALIGN=center><FONT SIZE="2">
</FONT></TD><TD WIDTH=20% ALIGN=right><FONT SIZE="1">&nbsp;</FONT></TD></TR></TABLE>
<HR SIZE=5 noshade WIDTH=100% ALIGN=LEFT><BR>





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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=4>
<B>TAITRON COMPONENTS
INCORPORATED </B></FONT></P>
<!-- MARKER FORMAT-SHEET="5 pt rule no space" FSL="Workstation" -->
<HR SIZE=2 noshade WIDTH=100% ALIGN=LEFT>


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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
<B>PROXY STATEMENT FOR
ANNUAL MEETING OF SHAREHOLDERS </B></FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
<B>TO BE HELD MAY 20,
2005 </B></FONT></P>

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<HR SIZE=1 noshade ALIGN=CENTER WIDTH=150>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>INTRODUCTION </B></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 20,
2005, at 10:00 a.m. Pacific time, at our corporate headquarters, located at 28040 West
Harrison Parkway, Valencia, CA 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></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
expense of 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></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company&#146;s Annual Report to Shareholders, including financial statements for the fiscal
year ended December 31, 2004, accompanies but does not constitute part of this Proxy
Statement. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
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></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company&#146;s 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 29, 2005. </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>OUTSTANDING SECURITIES
AND VOTING RIGHTS </B></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
close of business on April 11, 2005, 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
4,698,479 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 44 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></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&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  </FONT></P>







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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>shareholder&#146;s intention to cumulate
votes. If any shareholder gives this notice, all shareholders may cumulate their votes
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></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&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></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&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></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>PROPOSAL  -  ELECTION
OF DIRECTORS </B></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 2005 Annual
Meeting, each director will be elected for a term expiring at the 2006 Annual Meeting.
The Board of Directors proposes the election of the nominees named below. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&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> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board of Directors proposes the election of the following nominees as members of the
Board of Directors: </FONT></P>

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<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="23%">&nbsp;&nbsp;&nbsp;</td>
    <td align="left" width="77%">
      <font face="Times New Roman, Times, Serif" size=2>Tzu Sheng (Johnson) Ku <br>
      Stewart Wang
   <br>
      Richard Chiang <br>

  Craig Miller <br>

  Felix Sung </font>
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</td>
  </tr>
</table>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&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> </P>




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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>INFORMATION WITH
RESPECT TO DIRECTORS AND EXECUTIVE OFFICERS </B></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table sets forth certain information with respect to each director and
executive officer of the Company as of March 31, 2005. </FONT></P>
<div align="center">
  <TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>

    <TR VALIGN=Bottom>
      <TD ALIGN=LEFT WIDTH=207><b><font size=2>Name</font></b>
        <hr size="1" noshade align="left" width="35">
      </TD>
      <TD ALIGN=LEFT WIDTH=14><b></b></TD>
      <TD ALIGN=center WIDTH=54><b><font size=2>Age</font></b>
        <hr size="1" noshade width="35">
      </TD>
      <TD ALIGN=center WIDTH=14><b></b></TD>
      <TD ALIGN=center WIDTH=237><b><font size=2>Position</font></b>
        <hr size="1" noshade width="60">
      </TD>
      <TD ALIGN=center WIDTH=74>&nbsp;&nbsp;</TD>
    </TR>
    <TR VALIGN=Bottom>
      <TD ALIGN=LEFT valign="top" WIDTH=207>&nbsp;</TD>
      <TD ALIGN=LEFT valign="top" WIDTH=14>&nbsp;</TD>
      <TD ALIGN=CENTER valign="top" WIDTH=54>&nbsp;</TD>
      <TD ALIGN=LEFT valign="top" WIDTH=14>&nbsp;</TD>
      <TD ALIGN=LEFT valign="top" WIDTH=237>&nbsp;</TD>
      <TD ALIGN=LEFT valign="top" WIDTH=74>&nbsp;</TD>
    </TR>
    <TR VALIGN=Bottom>
      <TD ALIGN=LEFT valign="top" WIDTH=207><FONT SIZE=2>Tzu Sheng (Johnson) Ku</FONT></TD>
      <TD ALIGN=LEFT valign="top" WIDTH=14><FONT SIZE=2>&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD ALIGN=CENTER valign="top" WIDTH=54><FONT SIZE=2>56</FONT></TD>
      <TD ALIGN=LEFT valign="top" WIDTH=14><FONT SIZE=2>&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD ALIGN=LEFT valign="top" WIDTH=237><FONT SIZE=2>Chairman of the Board</FONT></TD>
      <TD ALIGN=LEFT valign="top" WIDTH=74>&nbsp;</TD>
    </TR>
    <TR VALIGN=Bottom>
      <TD ALIGN=LEFT valign="top" width="207">&nbsp;</TD>
      <TD ALIGN=LEFT valign="top" width="14">&nbsp;</TD>
      <TD ALIGN=CENTER valign="top" width="54">&nbsp;</TD>
      <TD ALIGN=LEFT valign="top" width="14">&nbsp;</TD>
      <TD ALIGN=LEFT valign="top" width="237">&nbsp;</TD>
      <TD ALIGN=LEFT valign="top" width="74">&nbsp;</TD>
    </TR>
    <TR VALIGN=Bottom>
      <TD ALIGN=LEFT valign="top" width="207"><FONT SIZE=2>Stewart Wang</FONT></TD>
      <TD ALIGN=LEFT valign="top" width="14"><FONT SIZE=2>&nbsp;</FONT></TD>
      <TD ALIGN=CENTER valign="top" width="54"><FONT SIZE=2>55</FONT></TD>
      <TD ALIGN=LEFT valign="top" width="14"><FONT SIZE=2>&nbsp;</FONT></TD>
      <TD ALIGN=LEFT valign="top" width="237"><FONT SIZE=2>President, Chief Executive Officer, &nbsp; <br>
        Chief Financial Officer and Director</FONT></TD>
      <TD ALIGN=LEFT valign="top" width="74">&nbsp;</TD>
    </TR>
    <TR VALIGN=Bottom>
      <TD ALIGN=LEFT valign="top" width="207">&nbsp;</TD>
      <TD ALIGN=LEFT valign="top" width="14">&nbsp;</TD>
      <TD ALIGN=CENTER valign="top" width="54">&nbsp;</TD>
      <TD ALIGN=LEFT valign="top" width="14">&nbsp;</TD>
      <TD ALIGN=LEFT valign="top" width="237">&nbsp;</TD>
      <TD ALIGN=LEFT valign="top" width="74">&nbsp;</TD>
    </TR>

    <TR VALIGN=Bottom>
      <TD ALIGN=LEFT valign="top" width="207"><FONT SIZE=2>Richard Chiang</FONT></TD>
      <TD ALIGN=LEFT valign="top" width="14"><FONT SIZE=2>&nbsp;</FONT></TD>
      <TD ALIGN=CENTER valign="top" width="54"><FONT SIZE=2>48</FONT></TD>
      <TD ALIGN=LEFT valign="top" width="14"><FONT SIZE=2>&nbsp;</FONT></TD>
      <TD ALIGN=LEFT valign="top" width="237"><FONT SIZE=2>Director</FONT></TD>
      <TD ALIGN=LEFT valign="top" width="74">&nbsp;</TD>
    </TR>
    <TR VALIGN=Bottom>
      <TD ALIGN=LEFT valign="top" width="207">&nbsp;</TD>
      <TD ALIGN=LEFT valign="top" width="14">&nbsp;</TD>
      <TD ALIGN=CENTER valign="top" width="54">&nbsp;</TD>
      <TD ALIGN=LEFT valign="top" width="14">&nbsp;</TD>
      <TD ALIGN=LEFT valign="top" width="237">&nbsp;</TD>
      <TD ALIGN=LEFT valign="top" width="74">&nbsp;</TD>
    </TR>
    <TR VALIGN=Bottom>
      <TD ALIGN=LEFT valign="top" width="207"><FONT SIZE=2>Craig Miller</FONT></TD>
      <TD ALIGN=LEFT valign="top" width="14"><FONT SIZE=2>&nbsp;</FONT></TD>
      <TD ALIGN=CENTER valign="top" width="54"><FONT SIZE=2>51</FONT></TD>
      <TD ALIGN=LEFT valign="top" width="14"><FONT SIZE=2>&nbsp;</FONT></TD>
      <TD ALIGN=LEFT valign="top" width="237"><FONT SIZE=2>Director</FONT></TD>
      <TD ALIGN=LEFT valign="top" width="74">&nbsp;</TD>
    </TR>
    <TR VALIGN=Bottom>
      <TD ALIGN=LEFT valign="top" width="207">&nbsp;</TD>
      <TD ALIGN=LEFT valign="top" width="14">&nbsp;</TD>
      <TD ALIGN=CENTER valign="top" width="54">&nbsp;</TD>
      <TD ALIGN=LEFT valign="top" width="14">&nbsp;</TD>
      <TD ALIGN=LEFT valign="top" width="237">&nbsp;</TD>
      <TD ALIGN=LEFT valign="top" width="74">&nbsp;</TD>
    </TR>
    <TR VALIGN=Bottom>
      <TD ALIGN=LEFT valign="top" width="207"><FONT SIZE=2>Felix Sung</FONT></TD>
      <TD ALIGN=LEFT valign="top" width="14"><FONT SIZE=2>&nbsp;</FONT></TD>
      <TD ALIGN=CENTER valign="top" width="54"><FONT SIZE=2>55</FONT></TD>
      <TD ALIGN=LEFT valign="top" width="14"><FONT SIZE=2>&nbsp;</FONT></TD>
      <TD ALIGN=LEFT valign="top" width="237"><FONT SIZE=2>Director</FONT></TD>
      <TD ALIGN=LEFT valign="top" width="74">&nbsp;</TD>
    </TR>
    <TR VALIGN=Bottom>
      <TD ALIGN=LEFT valign="top" width="207">&nbsp;</TD>
      <TD ALIGN=LEFT valign="top" width="14">&nbsp;</TD>
      <TD ALIGN=CENTER valign="top" width="54">&nbsp;</TD>
      <TD ALIGN=LEFT valign="top" width="14">&nbsp;</TD>
      <TD ALIGN=LEFT valign="top" width="237">&nbsp;</TD>
      <TD ALIGN=LEFT valign="top" width="74">&nbsp;</TD>
    </TR>
    <TR VALIGN=Bottom>
      <TD ALIGN=LEFT valign="top" width="207"><FONT SIZE=2>David Vanderhorst</FONT></TD>
      <TD ALIGN=LEFT valign="top" width="14"><FONT SIZE=2>&nbsp;</FONT></TD>
      <TD ALIGN=CENTER valign="top" width="54"><FONT SIZE=2>40</FONT></TD>
      <TD ALIGN=LEFT valign="top" width="14"><FONT SIZE=2>&nbsp;</FONT></TD>
      <TD ALIGN=LEFT valign="top" width="237"><FONT SIZE=2>Controller and Corporate Secretary</FONT></TD>
      <TD ALIGN=LEFT valign="top" width="74">&nbsp;</TD>
    </TR>
  </TABLE>
  <br>
</div>
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&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></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&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> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Stewart
Wang</I></B>, a co-founder of the Company, has served as Chief Executive Officer, President and a
Director of the Company since its organization in 1989. In addition, since November 2002,
Mr. Wang has also served as Chief Financial Officer of the Company. 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. </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><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> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Craig Miller </I></B>became a
director of the Company in May 2000. Since 2005, Mr. Miller has been Managing
Director of Janas Associates, an investment-banking firm. From 1998 to 2005,
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>
</P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&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> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&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> </P>





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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During
2004, the Board of Directors met once. Only Mr. Miller was absent from the Board of
Directors meeting and the meeting 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 2004 Annual Meeting of Shareholders, only Mr.
Wang was in attendance. </FONT></P>

<!-- MARKER FORMAT-SHEET="Left Head 2 Bold" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Committees of the Board </B></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><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 2004. 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 are &#147;independent&#148; under Rule 4200(a)(15) of the National
Association of Securities Dealers (&#147;NASD&#148;) listing standards. The Board of Directors has
also determined that Mr. Miller is a &#147;financial expert&#148;, as that term is defined in Item
401(e)(2) of Regulation S-B . </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><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 2004. Members of the
Compensation Committee are Mr. Chiang, Mr. Miller and Mr. Sung. </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&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. However, 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> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board of Directors 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 2004, no professional search
firms or consultants were needed and, accordingly, no fees were paid in this regard to
professional search firms or consultants in 2004. The Board of Directors does not
evaluate candidates differently based on who made the recommendation for consideration. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&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></P>




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<BR>
<TABLE WIDTH=100%><TR><TD WIDTH=20% ALIGN=left><FONT SIZE=1>&nbsp;</FONT></TD><TD WIDTH=60% ALIGN=center><FONT SIZE="2">
- -4-</FONT></TD><TD WIDTH=20% ALIGN=right><FONT SIZE="1">&nbsp;</FONT></TD></TR></TABLE>
<HR SIZE=5 noshade WIDTH=100% ALIGN=LEFT><BR>





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<!-- MARKER FORMAT-SHEET="Left Head 2 Bold" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>SHAREHOLDER
COMMUNICATIONS WITH THE BOARD OF DIRECTORS </B></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>SUMMARY COMPENSATION
TABLE </B></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table sets forth as to the Chief Executive Officer (the &#147;Named Executive
Officer&#148;) information concerning all compensation paid for his services to the Company
for each of the three years ended December 31 indicated below. No other executive
officers of the Company had compensation exceeding $100,000 during the last fiscal year. </FONT></P>
<div align="center">
  <TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=640>

    <TR VALIGN=Bottom>
      <TD ALIGN=LEFT><b></b></TD>
      <TD ALIGN=LEFT><b></b></TD>
      <TD ALIGN=CENTER colspan="5"><b><font size=2>Annual Compensation </font></b>
        <hr size="1" noshade>
      </TD>
      <TD ALIGN=LEFT><b></b></TD>
      <TD ALIGN=CENTER colspan="3"><b><font size=2>Long-Term Compensation </font></b>
        <hr size="1" noshade>
      </TD>
    </TR>
    <TR VALIGN=Bottom>
      <TD ALIGN=LEFT><b><font size=2>Name and Principal Position </font></b>
        <hr size="1" noshade align="left" width="175">
        <b><font size=2> </font>
        </b></TD>
      <TD ALIGN=LEFT><b>&nbsp;&nbsp;</b></TD>
      <TD ALIGN=CENTER><b><font size=2>Year </font></b>
        <hr size="1" noshade>
      </TD>
      <TD ALIGN=LEFT><b>&nbsp;&nbsp;</b></TD>
      <TD ALIGN=CENTER><b><font size=2>Salary </font></b>
        <hr size="1" noshade>
      </TD>
      <TD ALIGN=LEFT><b>&nbsp;&nbsp;</b></TD>
      <TD ALIGN=CENTER><b><font size=2>Bonus </font></b>
        <hr size="1" noshade>
      </TD>
      <TD ALIGN=LEFT><b>&nbsp;&nbsp;</b></TD>
      <TD ALIGN=CENTER><b><font size=2>Securities <br>
Underlying <br>
Options (1) </font></b>
        <hr size="1" noshade>
        <b>
        </b></TD>
      <TD ALIGN=LEFT><b>&nbsp;&nbsp;</b></TD>
      <TD ALIGN=CENTER><b><font size=2>All Other <br>
Compensation (2) </font></b>
        <hr size="1" noshade>
      </TD>
    </TR>

    <TR VALIGN=Bottom>
      <TD ALIGN=LEFT><FONT SIZE=2>Stewart Wang</FONT></TD>
      <TD ALIGN=LEFT><FONT SIZE=2>&nbsp;</FONT></TD>
      <TD ALIGN=CENTER><FONT SIZE=2>2004</FONT></TD>
      <TD ALIGN=LEFT><FONT SIZE=2>&nbsp;</FONT></TD>
      <TD ALIGN=CENTER><FONT SIZE=2>$172,900</FONT></TD>
      <TD ALIGN=LEFT><FONT SIZE=2>&nbsp;</FONT></TD>
      <TD ALIGN=CENTER><FONT SIZE=2>$     &#151;</FONT></TD>
      <TD ALIGN=LEFT><FONT SIZE=2>&nbsp;</FONT></TD>
      <TD ALIGN=CENTER><FONT SIZE=2>20,000</FONT></TD>
      <TD ALIGN=LEFT><FONT SIZE=2>&nbsp;</FONT></TD>
      <TD ALIGN=CENTER><FONT SIZE=2>$ 14,000</FONT></TD>
    </TR>
    <TR VALIGN=Bottom>
      <TD ALIGN=LEFT><FONT SIZE=2>&nbsp;&nbsp;Chief Executive Officer, President and</FONT></TD>
      <TD ALIGN=LEFT><FONT SIZE=2>&nbsp;</FONT></TD>
      <TD ALIGN=CENTER><FONT SIZE=2>2003</FONT></TD>
      <TD ALIGN=LEFT><FONT SIZE=2>&nbsp;</FONT></TD>
      <TD ALIGN=CENTER><FONT SIZE=2>$145,600</FONT></TD>
      <TD ALIGN=LEFT><FONT SIZE=2>&nbsp;</FONT></TD>
      <TD ALIGN=CENTER><FONT SIZE=2>$     &#151;</FONT></TD>
      <TD ALIGN=LEFT><FONT SIZE=2>&nbsp;</FONT></TD>
      <TD ALIGN=CENTER><FONT SIZE=2>30,000</FONT></TD>
      <TD ALIGN=LEFT><FONT SIZE=2>&nbsp;</FONT></TD>
      <TD ALIGN=CENTER><FONT SIZE=2>$ 12,320</FONT></TD>
    </TR>
    <TR VALIGN=Bottom>
      <TD ALIGN=LEFT><FONT SIZE=2>&nbsp;&nbsp;Chief Financial Officer</FONT></TD>
      <TD ALIGN=LEFT><FONT SIZE=2>&nbsp;</FONT></TD>
      <TD ALIGN=CENTER><FONT SIZE=2>2002</FONT></TD>
      <TD ALIGN=LEFT><FONT SIZE=2>&nbsp;</FONT></TD>
      <TD ALIGN=CENTER><FONT SIZE=2>$171,383</FONT></TD>
      <TD ALIGN=LEFT><FONT SIZE=2>&nbsp;</FONT></TD>
      <TD ALIGN=CENTER><FONT SIZE=2>$     &#151;</FONT></TD>
      <TD ALIGN=LEFT><FONT SIZE=2>&nbsp;</FONT></TD>
      <TD ALIGN=CENTER><FONT SIZE=2>15,000</FONT></TD>
      <TD ALIGN=LEFT><FONT SIZE=2>&nbsp;</FONT></TD>
      <TD ALIGN=CENTER><FONT SIZE=2>$ 18,200</FONT></TD>
    </TR>
    <TR VALIGN=Bottom>
      <TD ALIGN=LEFT colspan="11">
        <hr size="1" noshade>
      </TD>
    </TR>
  </TABLE>

</div>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1)  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>All
numbers reflect number of shares of Class A Common Stock subject to options granted
during the year. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(2)  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Reflects
amounts owed for accrued vacation. </FONT></TD>
</TR>
</TABLE>
<BR>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>OPTION GRANTS IN
FISCAL 2004 </B></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following 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
Officer during the fiscal year ended December 31, 2004. </FONT></P>
<div align="center">
  <TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>

    <TR VALIGN=Bottom>
      <TD ALIGN=LEFT><b><font size=2>Name </font>

      </b>
        <hr size=1  noshade width="35" align="left">
    </TD>
      <TD ALIGN=LEFT>&nbsp;</TD>
      <TD ALIGN=CENTER><b><font size=2>Number of <br>
Securities <br>
Underlying <br>
Options <br>
Granted (#) </font>
      </b>
        <hr size=1  noshade width="80">
    </TD>
      <TD ALIGN=LEFT>&nbsp;</TD>
      <TD ALIGN=CENTER><b><font size=2>Percent of Total <br>
Options Granted <br>
to Employees in <br>
Fiscal 2004 </font>

      </b>
        <hr size=1  noshade width="100">
    </TD>
      <TD ALIGN=LEFT>&nbsp;</TD>
      <TD ALIGN=CENTER><b><font size=2>Exercise <br>
Price <br>
($/sh) (1) </font>

      </b>
        <hr size=1  noshade width="65">
    </TD>
      <TD ALIGN=LEFT>&nbsp;</TD>
      <TD ALIGN=CENTER><b><font size=2>Expiration <br>
Date </font>

      </b>
        <hr size=1  noshade width="65">
    </TD>
    </TR>
    <TR VALIGN=Bottom>

      <TD ALIGN=LEFT><FONT SIZE=2>Stewart Wang</FONT></TD>
      <TD ALIGN=LEFT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD ALIGN=CENTER><FONT SIZE=2>20,000</FONT></TD>
      <TD ALIGN=LEFT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD ALIGN=CENTER><FONT SIZE=2>25</FONT></TD>
      <TD ALIGN=LEFT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD ALIGN=CENTER><FONT SIZE=2>$1.72</FONT></TD>
      <TD ALIGN=LEFT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD ALIGN=CENTER><FONT SIZE=2>8/2/2014</FONT></TD>
    </TR>
    <TR>

      <TD COLSPAN=2></TD>
      <TD COLSPAN=2></TD>
      <TD COLSPAN=2></TD>
      <TD COLSPAN=2></TD>
      <TD></TD>
    </TR>
  </TABLE>

</div>
<HR SIZE=1 noshade ALIGN=left  WIDTH=75>


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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1)  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The
exercise price was market value of the Class A Common Stock on August 2, 2004, the date
of grant. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(2)  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The
shares subject to this option vest in three equal annual installments commencing on
August 2, 2005. </FONT></TD>
</TR>
</TABLE>
<BR>



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<BR>
<TABLE WIDTH=100%><TR><TD WIDTH=20% ALIGN=left><FONT SIZE=1>&nbsp;</FONT></TD><TD WIDTH=60% ALIGN=center><FONT SIZE="2">
- -5-</FONT></TD><TD WIDTH=20% ALIGN=right><FONT SIZE="1">&nbsp;</FONT></TD></TR></TABLE>
<HR SIZE=5 noshade WIDTH=100% ALIGN=LEFT><BR>






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<!-- MARKER PAGE="sheet: 75; page: 75" -->





<!-- MARKER FORMAT-SHEET="Left Head 2 Bold" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>AGGREGATED OPTION
EXERCISES IN FISCAL 2004 AND FISCAL YEAR-END OPTION VALUES </B></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table sets forth with respect to the Named Executive Officer information
regarding exercised and unexercised options and year-end option values related to options
to purchase shares of Class A Common Stock.</FONT></P>








<div align="center">
  <TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=700>


    <TR VALIGN=Bottom>
      <TD ALIGN=center>&nbsp;</TD>
      <TD ALIGN=center>&nbsp;</TD>
      <TD ALIGN=center>&nbsp;</TD>
      <TD ALIGN=center>&nbsp;</TD>
      <TD ALIGN=center>&nbsp;</TD>
      <TD ALIGN=center>&nbsp;</TD>
      <TD ALIGN=center colspan="3"><font size="1"><b>Number of Securities <br>
         Underlying
Unexercised <br>
         Options at <br>
December 31, 2004 (#)
</b></font>
        <hr size="1" noshade width="115">
      </TD>
      <TD ALIGN=center>&nbsp;</TD>
      <TD ALIGN=center colspan="3"><font size="1"><b>Value of Unexercised <br>
In-the-Money Options at <br>
December 31, 2004 (1)
      </b></font>
        <hr size="1" noshade width="115">
      </TD>
    </TR>
    <TR VALIGN=Bottom>
      <TD ALIGN=left><font size="1"><b>Name </b></font>
        <hr size="1" noshade align="left" width="30">
      </TD>
      <TD ALIGN=center>&nbsp;</TD>
      <TD ALIGN=center><font size="1"><b>Shares <br>
Acquired on <br>
Exercise (#) </b></font>
        <hr size="1" noshade width="55">
      </TD>
      <TD ALIGN=center>&nbsp;</TD>
      <TD ALIGN=center><font size="1"><b>Value <br>
Realized ($)
      </b></font>
        <hr size="1" noshade width="55">
      </TD>
      <TD ALIGN=center>&nbsp;</TD>
      <TD ALIGN=center><font size="1"><b>Exercisable </b></font>
        <hr size="1" noshade width="55">
      </TD>
      <TD ALIGN=center>&nbsp;</TD>
      <TD ALIGN=center><font size="1"><b>Unexercisable </b></font>
        <hr size="1" noshade width="65">
      </TD>
      <TD ALIGN=center>&nbsp;</TD>
      <TD ALIGN=center><font size="1"><b>Exercisable </b></font>
        <hr size="1" noshade width="55">
      </TD>
      <TD ALIGN=center>&nbsp;</TD>
      <TD ALIGN=center><font size="1"><b>Unexercisable </b></font>
        <hr size="1" noshade width="65">
      </TD>
    </TR>
    <TR VALIGN=Bottom>

      <TD ALIGN=LEFT><FONT SIZE=2>Stewart Wang</FONT></TD>
      <TD ALIGN=LEFT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD ALIGN=CENTER><FONT SIZE=2>&#151;</FONT></TD>
      <TD ALIGN=LEFT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD ALIGN=CENTER><FONT SIZE=2>&#151;</FONT></TD>
      <TD ALIGN=LEFT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD ALIGN=CENTER><FONT SIZE=2>192,000</FONT></TD>
      <TD ALIGN=LEFT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD ALIGN=CENTER><FONT SIZE=2>45,000</FONT></TD>
      <TD ALIGN=LEFT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD ALIGN=CENTER><FONT SIZE=2>$109,815</FONT></TD>
      <TD ALIGN=LEFT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD ALIGN=CENTER><FONT SIZE=2>$ 49,350</FONT></TD>
    </TR>
  </TABLE>
</div>
<HR SIZE=1 noshade ALIGN=left  WIDTH=75>


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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1)  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Represents
the difference between the last reported sale price of $2.45          per share for the
Class A Common Stock on December 31, 2004, and the          per share exercise price of
the option multiplied by the applicable          number of shares. </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Left Head 2 Bold" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Compensation of
Directors </B></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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></P>

<!-- MARKER FORMAT-SHEET="Left Head 2 Bold" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>REPORT OF THE AUDIT
COMMITTEE </B></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 Rule 4200(a)(15) of the NASD listing standards. 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 hereto as Appendix I. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During
fiscal 2004, 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></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&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></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
reliance on these reviews and discussions, and the report of the independent auditors,
the Audit Committee recommended to the Board of Directors that the audited financial
statements be included in the Company&#146;s Annual Report on Form 10-KSB for the year ended
December 31, 2004, for filing with the Securities and Exchange Commission. </FONT></P>

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<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="49%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
    <td width="51%"><font face="Times New Roman, Times, Serif" size="2"><b>AUDIT COMMITTEE
</b> <br>
  Craig Miller, Richard Chiang and Felix Sung </font></td>
  </tr>
</table>
<br>
<BR>
<TABLE WIDTH=100%><TR><TD WIDTH=20% ALIGN=left><FONT SIZE=1>&nbsp;</FONT></TD><TD WIDTH=60% ALIGN=center><FONT SIZE="2">
- -6-</FONT></TD><TD WIDTH=20% ALIGN=right><FONT SIZE="1">&nbsp;</FONT></TD></TR></TABLE>
<HR SIZE=5 noshade WIDTH=100% ALIGN=LEFT><BR>






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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&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></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>INDEPENDENT PUBLIC
ACCOUNTANTS </B></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Haskell
&amp; White LLP is our principal independent accounting firm. The fees described below
are fees for professional audit services rendered by Haskell &amp;White LLP for the audit
of the Company&#146;s annual financial statements for our fiscal years ended December 31, 2003
and December 31, 2004. </FONT></P>

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

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fees
for audit services, as approved by the Audit Committee and provided by our principal
accountant, totaled approximately $42,000 in 2003 and approximately $48,300 in 2004,
including fees associated with the annual audit and statutory audits.  </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Audit-Related Fees </I></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fees
for audit-related services provided by our principal accountant totaled approximately
$13,900 and $18,200 for the years ended December 31, 2003 and 2004, respectively.
Audit-related services consisted principally of work performed in reviewing the quarterly
financial statements. </FONT></P>

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

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
principal accountant did not provide any tax services to the Company for the years ended
December 31, 2003 and 2004. The Company paid fees totaling approximately $9,100 and
$11,800 during the years ended December 31, 2003 and 2004, respectively, to Beckman,
Kirkland &amp; Whitney LLP and Steven Dong &amp; Associates for the preparation of
federal and multi-state tax returns. </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>All Other Fees </I></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except
as described above, no other fees were incurred during the years ended December 31, 2003
and 2004 for services provided by our principal accountants. </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Policy on Audit
Committee Pre-Approval of Audit and Permissible Non-audit Services of Independent Auditors </B></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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. Our Audit Committee has
considered whether the provision of non-audit services is compatible with maintaining the
independent accountant&#146;s independence, and has approved such services. </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS </B></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During
the years ended December 31, 2004 and 2003, the Company purchased electronic component
products for a price of approximately $79,000 and $138,000, respectively, from Princeton
Technology Corporation, 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 negotiated
on an arm&#146;s length basis. The Company has entered into a distributor agreement with
Princeton Technology Corporation, and accordingly, the Company expects to continue
purchasing from Princeton Technology Corporation in the future. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During
the years ended December 31, 2004 and 2003, the Company made principal payments of
$1,000,000 and $1,500,000, respectively, and interest payments of $32,000 and $86,000,
respectively, 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 in the aggregate amount of
$2,618,000, that the Company considers to be in the normal course of business and
negotiated on an arm&#146;s length basis. In addition,  </FONT></P>






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<BR>
<TABLE WIDTH=100%><TR><TD WIDTH=20% ALIGN=left><FONT SIZE=1>&nbsp;</FONT></TD><TD WIDTH=60% ALIGN=center><FONT SIZE="2">
- -7-</FONT></TD><TD WIDTH=20% ALIGN=right><FONT SIZE="1">&nbsp;</FONT></TD></TR></TABLE>
<HR SIZE=5 noshade WIDTH=100% ALIGN=LEFT><BR>






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<!-- MARKER PAGE="sheet: 77; page: 77" -->






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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>during the years ended December 31,
2004 and 2003, the Company paid $17,716 and $0, respectively, to K.S. Best International
Co. Ltd. for professional fees related to the management of the Company&#146;s Taiwan office. </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT </B></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table sets forth, as of March 31, 2005, 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) the Named
Executive Officer, and (iv) all of the Company&#146;s executive officers and directors as a
group. As of March 31, 2005, the Company had issued and outstanding 4,698,479 shares of
Class A Common Stock and 762,612 shares of Class B Common Stock. Unless otherwise
indicated, the address of each of the executive officers and directors named below is c/o
Taitron Components Incorporated, 28040 West Harrison Parkway, Valencia, California 91355. </FONT></P>
<div align="center">
  <TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=700>



    <TR VALIGN=Bottom>
      <TD ALIGN=LEFT WIDTH=181>&nbsp;</TD>
      <TD ALIGN=center colspan="4"><font size="1"><b>Class A Common Stock (1)
</b></font>
        <hr size="1" noshade>
      </TD>
      <TD ALIGN=center WIDTH=17>&nbsp;</TD>
      <TD ALIGN=center WIDTH=19>&nbsp;</TD>
      <TD ALIGN=center colspan="4"><font size="1"><b>Class B Common Stock (1) </b></font>
        <hr size="1" noshade>
        <font size="1"><b>
</b></font></TD>
      <TD ALIGN=center WIDTH=15>&nbsp;</TD>
      <TD ALIGN=center colspan="2" rowspan="2"><font size="1"><b>Percent of All Classes <br>
        of Common Stock (1)
</b></font>
        <hr size="1" noshade width="100">
      </TD>
    </TR>
    <TR VALIGN=Bottom>
      <TD ALIGN=LEFT WIDTH=181><font size="1"><b>Name and Address of  <br>
        Beneficial Owner </b></font>
        <hr size="1" noshade align="left" width="100">
        <font size="1"><b>

    </b></font></TD>
      <TD ALIGN=center WIDTH=92 colspan="2"><font size="1"><b>Number of  <br>
        Shares

    </b></font>
        <hr size="1" noshade>
      <font size="1"></font></TD>
      <TD ALIGN=center WIDTH=16>&nbsp;&nbsp;</TD>
      <TD ALIGN=center WIDTH=76 colspan="2"><font size="1"><b>Percent of  <br>
        Class </b></font>
        <hr size="1" noshade>
        <font size="1"><b>

    </b></font><font size="1"></font></TD>
      <TD ALIGN=center WIDTH=19>&nbsp;&nbsp;</TD>
      <TD ALIGN=center WIDTH=75 colspan="2"><font size="1"><b>Number of <br>
        Shares </b></font>
        <hr size="1" noshade>
        <font size="1"><b>

    </b></font><font size="1"></font></TD>
      <TD ALIGN=center WIDTH=14>&nbsp;&nbsp;</TD>
      <TD ALIGN=center WIDTH=68><font size="1"><b>Percent of <br>
        Class </b></font>
        <hr size="1" noshade>
        <font size="1"><b>
</b></font></TD>
      <TD ALIGN=center WIDTH=15>&nbsp;&nbsp;</TD>
    </TR>
    <TR VALIGN=Bottom>
      <TD ALIGN=LEFT WIDTH=181><font size="1"></font></TD>
      <TD ALIGN=RIGHT WIDTH=68><font size="1"></font></TD>
      <TD ALIGN=LEFT WIDTH=24><font size="1"></font></TD>
      <TD ALIGN=LEFT WIDTH=16>&nbsp;</TD>
      <TD ALIGN=RIGHT WIDTH=59><font size="1"></font></TD>
      <TD ALIGN=LEFT WIDTH=17><font size="1"></font></TD>
      <TD ALIGN=LEFT WIDTH=19>&nbsp;</TD>
      <TD ALIGN=CENTER WIDTH=60><font size="1"></font></TD>
      <TD ALIGN=LEFT WIDTH=15><font size="1"></font></TD>
      <TD ALIGN=LEFT WIDTH=14>&nbsp;</TD>
      <TD ALIGN=RIGHT WIDTH=68><font size="1"></font></TD>
      <TD ALIGN=LEFT WIDTH=15>&nbsp;</TD>
      <TD ALIGN=RIGHT WIDTH=88><font size="1"></font></TD>
      <TD ALIGN=LEFT WIDTH=56><font size="1"></font></TD>
    </TR>
    <TR VALIGN=Bottom>

      <TD ALIGN=LEFT WIDTH=181><font size="1"><B>Executive Officers and Directors</B> </font></TD>
      <TD ALIGN=RIGHT WIDTH=68>&nbsp;</TD>
      <TD ALIGN=LEFT WIDTH=24><font size="1">&nbsp;&nbsp;&nbsp;</font></TD>
      <TD ALIGN=LEFT WIDTH=16>&nbsp;</TD>
      <TD ALIGN=RIGHT WIDTH=59>&nbsp;</TD>
      <TD ALIGN=LEFT WIDTH=17><font size="1">&nbsp;&nbsp;&nbsp;</font></TD>
      <TD ALIGN=LEFT WIDTH=19>&nbsp;</TD>
      <TD ALIGN=CENTER WIDTH=60><font size="1">&nbsp;</font></TD>
      <TD ALIGN=LEFT WIDTH=15><font size="1">&nbsp;&nbsp;&nbsp;</font></TD>
      <TD ALIGN=LEFT WIDTH=14>&nbsp;</TD>
      <TD ALIGN=RIGHT WIDTH=68>&nbsp;</TD>
      <TD ALIGN=LEFT WIDTH=15>&nbsp;</TD>
      <TD ALIGN=RIGHT WIDTH=88>&nbsp;</TD>
      <TD ALIGN=LEFT WIDTH=56><font size="1">&nbsp;</font></TD>
    </TR>
    <TR VALIGN=Bottom>
      <TD ALIGN=LEFT width="181"><font size="1"></font></TD>
      <TD ALIGN=RIGHT width="68"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="24"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="16">&nbsp;</TD>
      <TD ALIGN=RIGHT width="59"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="17"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="19">&nbsp;</TD>
      <TD ALIGN=CENTER width="60"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="15"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="14">&nbsp;</TD>
      <TD ALIGN=RIGHT width="68"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="15">&nbsp;</TD>
      <TD ALIGN=RIGHT width="88"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="56"><font size="1"></font></TD>
    </TR>
    <TR VALIGN=Bottom>

      <TD ALIGN=LEFT width="181"><font size="1">Stewart Wang</font></TD>
      <TD ALIGN=RIGHT width="68"><font size="1">1,023,270</font></TD>
      <TD ALIGN=LEFT width="24"><font size="1">(2)</font></TD>
      <TD ALIGN=LEFT width="16">&nbsp;</TD>
      <TD ALIGN=RIGHT width="59"><font size="1">21.79</font></TD>
      <TD ALIGN=LEFT width="17"><font size="1">%</font></TD>
      <TD ALIGN=LEFT width="19">&nbsp;</TD>
      <TD ALIGN=CENTER width="60"><font size="1">762,612</font></TD>
      <TD ALIGN=LEFT width="15"><font size="1">&nbsp;</font></TD>
      <TD ALIGN=LEFT width="14">&nbsp;</TD>
      <TD ALIGN=center width="68"><font size="1">100%</font></TD>
      <TD ALIGN=LEFT width="15">&nbsp;</TD>
      <TD ALIGN=RIGHT width="88"><font size="1">64.01</font></TD>
      <TD ALIGN=LEFT width="56"><font size="1">%(3)</font></TD>
    </TR>
    <TR VALIGN=Bottom>
      <td align=LEFT width="181"><font size="1">Tzu Sheng Ku</font></td>
      <td align=RIGHT width="68"><font size="1">917,652</font></td>
      <td align=LEFT width="24"><font size="1">(4)</font></td>
      <td align=LEFT width="16">&nbsp;</td>
      <td align=RIGHT width="59"><font size="1">19.54</font></td>
      <td align=LEFT width="17"><font size="1">%</font></td>
      <td align=LEFT width="19">&nbsp;</td>
      <td align=CENTER width="60"><font size="1">&nbsp;</font></td>
      <TD ALIGN=LEFT width="15"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="14">&nbsp;</TD>
      <TD ALIGN=center width="68"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="15">&nbsp;</TD>
      <TD ALIGN=RIGHT width="88"><font size="1">7.45</font></TD>
      <TD ALIGN=LEFT width="56"><font size="1">%</font></TD>
    </TR>
    <TR VALIGN=Bottom>
      <td align=LEFT width="181"><font size="1">Richard Chiang</font></td>
      <td align=RIGHT width="68"><font size="1">63,027</font></td>
      <td align=LEFT width="24"><font size="1">(5)</font></td>
      <td align=LEFT width="16">&nbsp;</td>
      <td align=RIGHT width="59"><font size="1">1.34</font></td>
      <td align=LEFT width="17"><font size="1">%</font></td>
      <td align=LEFT width="19">&nbsp;</td>
      <td align=CENTER width="60">&nbsp;</td>
      <TD ALIGN=LEFT width="15"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="14">&nbsp;</TD>
      <TD ALIGN=center width="68"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="15">&nbsp;</TD>
      <TD ALIGN=RIGHT width="88"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="56"><font size="1">*</font></TD>
    </TR>
    <TR VALIGN=Bottom>
      <td align=LEFT width="181"><font size="1">Craig Miller</font></td>
      <td align=RIGHT width="68"><font size="1">14,333</font></td>
      <td align=LEFT width="24"><font size="1">(6)</font></td>
      <td align=LEFT width="16">&nbsp;</td>
      <td align=RIGHT width="59">&nbsp;</td>
      <td align=LEFT width="17"><font size="1">*</font></td>
      <td align=LEFT width="19">&nbsp;</td>
      <td align=CENTER width="60"><font size="1">&nbsp;</font></td>
      <TD ALIGN=LEFT width="15"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="14">&nbsp;</TD>
      <TD ALIGN=center width="68"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="15">&nbsp;</TD>
      <TD ALIGN=RIGHT width="88"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="56"><font size="1">*</font></TD>
    </TR>
    <TR VALIGN=Bottom>
      <td align=LEFT width="181"><font size="1">Felix Sung</font></td>
      <td align=RIGHT width="68"><font size="1">65,060</font></td>
      <td align=LEFT width="24"><font size="1">(5)</font></td>
      <td align=LEFT width="16">&nbsp;</td>
      <td align=RIGHT width="59"><font size="1">1.19</font></td>
      <td align=LEFT width="17"><font size="1">%</font></td>
      <td align=LEFT width="19">&nbsp;</td>
      <td align=CENTER width="60">&nbsp;</td>
      <TD ALIGN=LEFT width="15"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="14">&nbsp;</TD>
      <TD ALIGN=center width="68"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="15">&nbsp;</TD>
      <TD ALIGN=RIGHT width="88"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="56"><font size="1">*</font></TD>
    </TR>

    <TR VALIGN=Bottom>
      <td align=LEFT width="181"><font size="1">David Vanderhorst</font></td>
      <td align=RIGHT width="68"><font size="1">30,833</font></td>
      <td align=LEFT width="24"><font size="1">(7)</font></td>
      <td align=LEFT width="16">&nbsp;</td>
      <td align=RIGHT width="59">&nbsp;</td>
      <td align=LEFT width="17"><font size="1">*</font></td>
      <td align=LEFT width="19">&nbsp;</td>
      <td align=CENTER width="60"><font size="1">&nbsp;</font></td>
      <TD ALIGN=LEFT width="15"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="14">&nbsp;</TD>
      <TD ALIGN=center width="68"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="15">&nbsp;</TD>
      <TD ALIGN=RIGHT width="88"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="56"><font size="1">*</font></TD>
    </TR>
    <TR VALIGN=Bottom>
      <TD ALIGN=LEFT width="181">&nbsp;</TD>
      <TD ALIGN=RIGHT width="68">&nbsp;</TD>
      <TD ALIGN=LEFT width="24">&nbsp;</TD>
      <TD ALIGN=LEFT width="16">&nbsp;</TD>
      <TD ALIGN=RIGHT width="59">&nbsp;</TD>
      <TD ALIGN=LEFT width="17">&nbsp;</TD>
      <TD ALIGN=LEFT width="19">&nbsp;</TD>
      <TD ALIGN=CENTER width="60">&nbsp;</TD>
      <TD ALIGN=LEFT width="15">&nbsp;</TD>
      <TD ALIGN=LEFT width="14">&nbsp;</TD>
      <TD ALIGN=center width="68">&nbsp;</TD>
      <TD ALIGN=LEFT width="15">&nbsp;</TD>
      <TD ALIGN=RIGHT width="88">&nbsp;</TD>
      <TD ALIGN=LEFT width="56">&nbsp;</TD>
    </TR>








    <TR VALIGN=Bottom>

      <TD ALIGN=LEFT width="181"><font size="1">All directors and executive officers <br>
        &nbsp;&nbsp;&nbsp;as a group (6 persons)</font></TD>
      <TD ALIGN=RIGHT width="68"><font size="1">2,114,175</font></TD>
      <TD ALIGN=LEFT width="24"><font size="1">(8)</font></TD>
      <TD ALIGN=LEFT width="16">&nbsp;</TD>
      <TD ALIGN=RIGHT width="59"><font size="1">45.02</font></TD>
      <TD ALIGN=LEFT width="17"><font size="1">%</font></TD>
      <TD ALIGN=LEFT width="19">&nbsp;</TD>
      <TD ALIGN=CENTER width="60"><font size="1">762,612</font></TD>
      <TD ALIGN=LEFT width="15"><font size="1">&nbsp;</font></TD>
      <TD ALIGN=LEFT width="14">&nbsp;</TD>
      <TD ALIGN=center width="68"><font size="1">100%</font></TD>
      <TD ALIGN=LEFT width="15">&nbsp;</TD>
      <TD ALIGN=RIGHT width="88"><font size="1">72.86</font></TD>
      <TD ALIGN=LEFT width="56"><font size="1">%(3)</font></TD>
    </TR>
    <TR VALIGN=Bottom>
      <td align=LEFT width="181"><font size="1"></font></td>
      <TD ALIGN=RIGHT width="68"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="24"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="16">&nbsp;</TD>
      <TD ALIGN=RIGHT width="59"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="17"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="19">&nbsp;</TD>
      <TD ALIGN=CENTER width="60"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="15"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="14">&nbsp;</TD>
      <TD ALIGN=RIGHT width="68"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="15">&nbsp;</TD>
      <TD ALIGN=RIGHT width="88"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="56"><font size="1"></font></TD>
    </TR>
    <TR VALIGN=Bottom>
      <td align=LEFT width="181"><font size="1"><b>5% Shareholders</b> </font></td>
      <TD ALIGN=RIGHT width="68"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="24"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="16">&nbsp;</TD>
      <TD ALIGN=RIGHT width="59"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="17"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="19">&nbsp;</TD>
      <TD ALIGN=CENTER width="60"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="15"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="14">&nbsp;</TD>
      <TD ALIGN=RIGHT width="68"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="15">&nbsp;</TD>
      <TD ALIGN=RIGHT width="88"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="56"><font size="1"></font></TD>
    </TR>
    <TR VALIGN=Bottom>
      <td align=LEFT width="181"><font size="1"></font></td>
      <td align=RIGHT width="68"><font size="1"></font></td>
      <td align=LEFT width="24"><font size="1"></font></td>
      <td align=LEFT width="16">&nbsp;</td>
      <td align=RIGHT width="59"><font size="1"></font></td>
      <td align=LEFT width="17"><font size="1"></font></td>
      <td align=LEFT width="19">&nbsp;</td>
      <TD ALIGN=CENTER width="60"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="15"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="14">&nbsp;</TD>
      <TD ALIGN=RIGHT width="68"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="15">&nbsp;</TD>
      <TD ALIGN=RIGHT width="88"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="56"><font size="1"></font></TD>
    </TR>
    <TR VALIGN=Bottom>
      <td align=LEFT width="181"><font size="1">FMR Corporation</font></td>
      <td align=RIGHT width="68"><font size="1">465,200</font></td>
      <td align=LEFT width="24"><font size="1">(9)</font></td>
      <td align=LEFT width="16">&nbsp;</td>
      <td align=RIGHT width="59"><font size="1">9.91</font></td>
      <td align=LEFT width="17"><font size="1">%</font></td>
      <td align=LEFT width="19">&nbsp;</td>
      <TD ALIGN=CENTER width="60"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="15"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="14">&nbsp;</TD>
      <TD ALIGN=RIGHT width="68"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="15">&nbsp;</TD>
      <TD ALIGN=RIGHT width="88"><font size="1">3.78</font></TD>
      <TD ALIGN=LEFT width="56"><font size="1">%</font></TD>
    </TR>
    <TR VALIGN=Bottom>
      <td align=LEFT width="181"><font size="1">&nbsp;&nbsp;82 Devonshire Street</font></td>
      <TD ALIGN=RIGHT width="68"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="24"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="16">&nbsp;</TD>
      <TD ALIGN=RIGHT width="59"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="17"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="19">&nbsp;</TD>
      <TD ALIGN=CENTER width="60"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="15"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="14">&nbsp;</TD>
      <TD ALIGN=RIGHT width="68"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="15">&nbsp;</TD>
      <TD ALIGN=RIGHT width="88"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="56"><font size="1"></font></TD>
    </TR>
    <TR VALIGN=Bottom>
      <td align=LEFT width="181"><font size="1">&nbsp;&nbsp;Boston, MA 02109</font></td>
      <TD ALIGN=RIGHT width="68"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="24"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="16">&nbsp;</TD>
      <TD ALIGN=RIGHT width="59"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="17"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="19">&nbsp;</TD>
      <TD ALIGN=CENTER width="60"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="15"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="14">&nbsp;</TD>
      <TD ALIGN=RIGHT width="68"><font size="1"></font></TD>
      <TD ALIGN=LEFT width="15">&nbsp;</TD>
      <TD ALIGN=RIGHT width="88">&nbsp;</TD>
      <TD ALIGN=LEFT width="56">&nbsp;</TD>
    </TR>




  </TABLE>
  <br>
</div>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>*  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Less
than 1.0%. </FONT></TD>
</TR>
</TABLE>


<!-- MARKER FORMAT-SHEET="Para Hang 05" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1)  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" 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>


<!-- MARKER FORMAT-SHEET="Para Hang 05" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(2)  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" 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, 50,958 shares owned by      the 401(k) trust and 207,000
shares of Class A Common Stock underlying      options that are or will be exercisable
within 60 days of April 21, 2005. </FONT></TD>
</TR>
</TABLE>


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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(3)  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" 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>


<!-- MARKER FORMAT-SHEET="Para Hang 05" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(4)  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Includes
81,962 shares of Class A Common Stock owned by Mr. Ku&#146;s wife,      10,457 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 38,333 shares of underlying      options that are or will be exercisable within 60
days of April 21, 2005. </FONT></TD>
</TR>
</TABLE>


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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(5)  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Includes
38,333 shares of underlying options that are or will be      exercisable within 60 days
of April 21, 2005.  </FONT></TD>
</TR>
</TABLE>


<!-- MARKER FORMAT-SHEET="Para Hang 05" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(6)  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Includes
13,333 shares of      underlying options that are or will be exercisable within 60 days
of April      21, 2005.  </FONT></TD>
</TR>
</TABLE>


<!-- MARKER FORMAT-SHEET="Para Hang 05" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(7)  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Includes
30,833 shares of underlying options that are or will      be exercisable within 60 days
of April 21, 2005.  </FONT></TD>
</TR>
</TABLE>


<!-- MARKER FORMAT-SHEET="Para Hang 05" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(8)  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" 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>


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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(9)  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Based
on Amendment No. 6 to Schedule 13G filed on February 14,      2005 by FMR Corporation,
Edward C. Johnson and Abigail P. Johnson. </FONT></TD>
</TR>
</TABLE>
<BR>


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<BR>
<TABLE WIDTH=100%><TR><TD WIDTH=20% ALIGN=left><FONT SIZE=1>&nbsp;</FONT></TD><TD WIDTH=60% ALIGN=center><FONT SIZE="2">
- -8-</FONT></TD><TD WIDTH=20% ALIGN=right><FONT SIZE="1">&nbsp;</FONT></TD></TR></TABLE>
<HR SIZE=5 noshade WIDTH=100% ALIGN=LEFT><BR>






<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 78; page: 78" -->





<!-- MARKER FORMAT-SHEET="Left Head 2 Bold" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>COMPLIANCE WITH
SECTION 16(A) OF THE SECURITIES EXCHANGE ACT </B></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent 00" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&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, 2004, all of these reports were
timely filed, except each of the following persons filed a Form 5 reporting one
transaction on an untimely basis: David Vanderhorst, Craig Miller, Felix Sung, Richard
Chiang, Stewart Wang and Tzu Sheng (Johnson) Ku. </FONT></P>

<!-- MARKER FORMAT-SHEET="Left Head 2 Bold" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>PROPOSALS OF
SHAREHOLDERS </B></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent 00" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
shareholder who intends to present a proposal at the 2006 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, 2005. In addition, in the event a shareholder proposal is not received by
the Company by December 27, 2005, the proxy to be solicited by the Board of Directors for
the 2006 Annual Meeting will confer discretionary authority on the holders of the proxy
to vote the shares if the proposal ultimately is presented at the 2006 Annual Meeting
without any discussion of the proposal in the Proxy Statement for that meeting. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent 00" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&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 2006 Annual Meeting is advanced or delayed more than 30 days from the
date of the 2005 Annual Meeting, shareholder proposals intended to be included in the
proxy materials for the 2006 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
2006 Annual Meeting. Upon determination by the Company that the date of the 2006 Annual
Meeting will be advanced or delayed by more than 30 days from the date of the 2005 Annual
Meeting, the Company will disclose that change in the earliest possible Quarterly Report
on Form 10-QSB. </FONT></P>

<!-- MARKER FORMAT-SHEET="Left Head 2 Bold" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>DELIVERY OF DOCUMENTS
TO SECURITY HOLDERS SHARING AN ADDRESS </B></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent 00" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company is delivering this Proxy Statement and its 2004 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></P>

<!-- MARKER FORMAT-SHEET="Para Indent 00" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&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></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Copies
of this Proxy Statement and the 2004 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></P>





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<BR>
<TABLE WIDTH=100%><TR><TD WIDTH=20% ALIGN=left><FONT SIZE=1>&nbsp;</FONT></TD><TD WIDTH=60% ALIGN=center><FONT SIZE="2">
- -9-</FONT></TD><TD WIDTH=20% ALIGN=right><FONT SIZE="1">&nbsp;</FONT></TD></TR></TABLE>
<HR SIZE=5 noshade WIDTH=100% ALIGN=LEFT><BR>







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<!-- MARKER PAGE="sheet: 79; page: 79" -->





<!-- MARKER FORMAT-SHEET="Left Head 2 Bold" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>OTHER MATTERS </B></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent 00" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&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></P>

<!-- MARKER FORMAT-SHEET="Left Head 2 Bold" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>EXPENSES </B></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent 00" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&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></P>

<!-- MARKER FORMAT-SHEET="Left Head 2 Bold" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>ANNUAL REPORT TO
SHAREHOLDERS </B></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent 00" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company&#146;s Annual Report for the year ended December 31, 2004 is being mailed to
shareholders along with this Proxy Statement. The Annual Report is not to be considered
part of the soliciting material. </FONT></P>

<!-- MARKER FORMAT-SHEET="Left Head 2 Bold" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>REPORT ON FORM 10-KSB </B></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent 00" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&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, 2004, 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> </P>




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<BR>
<TABLE WIDTH=100%><TR><TD WIDTH=20% ALIGN=left><FONT SIZE=1>&nbsp;</FONT></TD><TD WIDTH=60% ALIGN=center><FONT SIZE="2">
- -10-</FONT></TD><TD WIDTH=20% ALIGN=right><FONT SIZE="1">&nbsp;</FONT></TD></TR></TABLE>
<HR SIZE=5 noshade WIDTH=100% ALIGN=LEFT><BR>




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<!-- MARKER PAGE="sheet: 82; page: 82" -->



<!-- MARKER FORMAT-SHEET="Para Indent 00" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><B>Appendix
1</B></U> </FONT> </P>

<!-- MARKER FORMAT-SHEET="Center Head 3 Bold" FSL="Workstation" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
<B>AUDIT COMMITTEE
CHARTER                                        <BR>OF                          <BR>
  TAITRON
COMPONENTS INCORPORATED </B></FONT></P>

<!-- MARKER FORMAT-SHEET="Left Head 2 Bold" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U><b>Organization</b></U> </FONT> </P>

<!-- MARKER FORMAT-SHEET="Para Indent 00" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
charter (the &#147;Charter&#148;) governs the operations of the audit committee (the &#147;Audit
Committee&#148;) of Taitron Components Incorporated (the &#147;Company&#148;). The Audit Committee shall
review and reassess the Charter at least annually and will amend the charter, if
appropriate, with the approval of the Company&#146;s board of directors (the &#147;Board&#148;). The
Committee shall be appointed by the Board and shall be comprised of at least three
directors, each of whom must be independent of management and the Company. Each member of
the Audit Committee shall be considered independent if they have no relationship that may
interfere with the exercise of their independence from management and the Company. The
Board will also select a chairman for the Audit Committee. All Audit Committee members
shall be financially literate and experienced in reading and understanding financial
statements, including the Company&#146;s balance sheet, income statement and statement of cash
flow (or will become able to do so within a reasonable period of time after his or her
appointment to the Audit Committee). At least one member of the Company&#146;s Audit Committee
shall have past employment experience in finance or accounting or have a professional
certification in accounting or other comparable experience. </FONT></P>

<!-- MARKER FORMAT-SHEET="Left Head 2 Bold" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U><b>Statement of Policy</b></U> </FONT> </P>

<!-- MARKER FORMAT-SHEET="Para Indent 00" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Audit Committee shall provide assistance to the Board in fulfilling their oversight
responsibility to the shareholders, potential shareholders, the investment community, and
others relating to the Company&#146;s financial statements and the financial reporting
process, the systems of internal accounting and financial controls, the internal audit
function, the annual independent audit of the Company&#146;s financial statements and the
legal compliance and ethics programs as established by management and the Board. In so
doing, it is the responsibility of the Audit Committee to maintain free and open
communication between the Audit Committee, the independent auditors, the internal
auditors and the management of the Company. In discharging its oversight role, the Audit
Committee is empowered to investigate any matter brought to its attention with full
access to all books, records, facilities and personnel of the Company and the power to
retain outside counsel, or the other experts for this purpose. </FONT></P>

<!-- MARKER FORMAT-SHEET="Left Head 2 Bold" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Responsibilities and
Processes </B></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent 00" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
primary responsibility of the Audit Committee is to oversee the Company&#146;s financial
reporting process on behalf of the Board and report the results of their activities to
the Board. Management is responsible for preparing the Company&#146;s financial statements,
and the independent auditors are responsible for auditing those financial statements. The
Audit Committee in carrying out its responsibilities believes its policies and procedures
should remain flexible in order to best react to changing conditions and circumstances.
The Audit Committee should take the appropriate actions to set the overall corporate
&#147;tone&#148; for quality financial reporting, sound business risk practices and ethical
behavior. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent 00" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following shall be the principal recurring processes of the Audit Committee in carrying
out its oversight responsibilities. The processes are set forth as a guide with the
understanding that the Audit Committee may supplement them as appropriate. </FONT></P>

<!-- MARKER FORMAT-SHEET="Bullet 15" FSL="Workstation" -->
<TABLE WIDTH=100%>
  <TR>
    <TD WIDTH=10%></TD>
    <TD WIDTH=2% VALIGN=top><FONT SIZE=3>&#149;</FONT></TD>
    <TD WIDTH=3%></TD>
    <TD WIDTH=85%><FONT SIZE=2>The
Audit Committee  shall have a clear  understanding  with management and the independent
 auditors that                            the  independent  auditors  are  ultimately
 accountable  to the  Board  and  the  Audit                            Committee,  as
 representatives  of the  Company&#146;s  shareholders.  The  Audit  Committee
                           shall  have  the  ultimate   authority  and   responsibility
  to  evaluate  and,  where                            appropriate,  replace the
independent  auditors.  The Audit Committee shall discuss with
                           the  auditors  their  independence  from  management  and the
 Company  and the  matters                            included  in the  written
 disclosures  required by the  Independence  Standards  Board.
                           Annually,  the  Committee  shall review and  recommend to the
board the selection of the                            Company&#146;s independent auditors.</FONT></TD></TR></TABLE>




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<BR>
<TABLE WIDTH=100%><TR><TD WIDTH=20% ALIGN=left><FONT SIZE=1>&nbsp;</FONT></TD><TD WIDTH=60% ALIGN=center><FONT SIZE="2">
1</FONT></TD><TD WIDTH=20% ALIGN=right><FONT SIZE="1">&nbsp;</FONT></TD></TR></TABLE>
<HR SIZE=5 noshade WIDTH=100% ALIGN=LEFT><BR>





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<!-- MARKER PAGE="sheet: 83; page: 83" -->





<!-- MARKER FORMAT-SHEET="Bullet 15" FSL="Workstation" -->
<TABLE WIDTH=100%>
  <TR>
    <TD WIDTH=10%></TD>
    <TD WIDTH=2% VALIGN=top><FONT SIZE=3>&#149;</FONT></TD>
    <TD WIDTH=3%></TD>
    <TD WIDTH=85%><FONT SIZE=2>The
Audit  Committee  shall discuss with the internal  auditors and the  independent
 auditors the overall                            scope and plans for their  respective
 audits  including  the  adequacy of staffing  and
                           compensation.  In addition,  the Audit  Committee  shall
 discuss with  management,  the                            internal  auditors and the
independent  auditors the adequacy and  effectiveness  of the
                           accounting  and  financial  controls,  including  the
 Company&#146;s  system to monitor  and                            manage  business  risk and
legal  and  ethical  compliance  programs.  Furthermore,  the
                           Audit Committee  shall meet  separately  with the internal
 auditors and the independent                            auditors,  with  and  without
 management  present,  to  discuss  the  results  of their
                           examinations.</FONT></TD></TR></TABLE>

<!-- MARKER FORMAT-SHEET="Bullet 15" FSL="Workstation" -->
<TABLE WIDTH=100%>
  <TR>
    <TD WIDTH=10%></TD>
    <TD WIDTH=2% VALIGN=top><FONT SIZE=3>&#149;</FONT></TD>
    <TD WIDTH=3%></TD>
    <TD WIDTH=85%><FONT SIZE=2>The
Audit Committee shall review the interim                            financial statements
with management and the                            independent auditors prior to the
filing of the                            Company&#146;s quarterly report on Form 10-Q. In
addition,                            the Audit Committee shall discuss the results of the
                           quarterly review and any other matters required to be
                           communicated to the Audit Committee by the
                           independent auditors under generally accepted
                           auditing standards. The chair of the Audit Committee
                           may represent the entire Audit Committee for the
                           purposes of this review.</FONT></TD></TR></TABLE>

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<TABLE WIDTH=100%>
  <TR>
    <TD WIDTH=10%></TD>
    <TD WIDTH=2% VALIGN=top><FONT SIZE=3>&#149;</FONT></TD>
    <TD WIDTH=3%></TD>
    <TD WIDTH=85%><FONT SIZE=2>The
Audit Committee shall review with  management and the  independent  auditors the
financial  statements                            to be  included in the  Company&#146;s
 Annual  Report on Form 10-K (or the annual  report to
                           shareholders  if  distributed  prior  to the  filing  of  Form
 10-K),  including  their                            judgment  about the quality,  not
just  acceptability,  of  accounting  principles,  the
                           reasonableness  of  significant  judgments  and the  clarity
of the  disclosures  in the                            financial  statements.  Moreover,
 the Audit  Committee shall discuss the results of the                            annual
audit and any other matters  required to be  communicated  to the Audit Committee
                           by the independent auditors under generally accepted auditing
standards.</FONT></TD></TR></TABLE>





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<BR>
<TABLE WIDTH=100%><TR><TD WIDTH=20% ALIGN=left><FONT SIZE=1>&nbsp;</FONT></TD><TD WIDTH=60% ALIGN=center><FONT SIZE="2">
2</FONT></TD><TD WIDTH=20% ALIGN=right><FONT SIZE="1">&nbsp;</FONT></TD></TR></TABLE>
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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=1>
<B>ANNUAL MEETING OF
SHAREHOLDERS OF </B></FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=5>
<B>TAITRON COMPONENTS
INCORPORATED </B></FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=1>
<B>May 20, 2005 </B></FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
Please date, sign and
mail                                                         <BR>your proxy card in the
                                                       <BR>envelope provided as soon
                                                             <BR>as possible. </FONT></P>




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<P ALIGN=CENTER>
<FONT FACE="Times New Roman, Times, Serif" SIZE="1">* Please detach
along perforated line and mail in the envelope provided. * </FONT></P>
<div align="center">
  <table border=0 cellspacing=0 cellpadding=0 width="700">

    <tr align="center">

      <td colspan=4 valign=top>

        <hr size="1" noshade>
      </td>
    </tr>

    <tr align="center">

      <td colspan=4 valign=top>
        <font size="1" color="black">THE BOARD OF DIRECTORS RECOMMENDS A VOTE &#147;FOR&#148; THE ELECTION OF
  DIRECTORS. <br>
        PLEASE SIGN, DATE AND
  RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.&nbsp; PLEASE MARK YOUR VOTE IN BLUE OR
  BLACK AS SHOWN HERE &nbsp; [X]</font></td>
    </tr>

    <tr align="center">

      <td colspan=4 valign=top>

        <hr size="1" noshade>
      </td>
    </tr>

    <tr>

      <td valign=top colspan="2">
        <font size="1" color="black">1.&nbsp;&nbsp; ELECTION
  OF DIRECTORS, as provided in the  <br>
        &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Company&#146;s Proxy Statement:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br>
        <br>
         &nbsp; <br>
        <br>
        &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
      <td valign=top width=115>&nbsp;&nbsp;</td>
      <td rowspan=12 valign=top width=301>
        <font size="1"><b><font color="black">THIS PROXY IS SOLICITED BY THE BOARD OF
  DIRECTORS OF TAITRON COMPONENTS INCORPORATED&nbsp; <br>
        <br>
        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.&nbsp; 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.&nbsp; <br>
        <br>
        This Proxy will be
  voted in accordance with the instructions set forth above.&nbsp; Where a vote is
  not specified, the proxies will vote the shares represented by the proxy
  &#147;FOR&#148; Proposal 1, and as said proxy shall deem advisable on such other
  business as may come before the Meeting, unless otherwise directed.&nbsp; <br>
        <br>
        The undersigned
  acknowledges receipt of a copy of the Notice of Annual Meeting of
  Shareholders and accompanying Proxy Statement dated April 21, 2005 relating
  to the Meeting.&nbsp; <br>
        <br>
        </font></b></font></td>
    </tr>

    <tr>

      <td valign=top width=157>&nbsp;</td>
      <td valign=top width=127><font size="1" color="black">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOMINEES:</font></td>
      <td valign=top width=115>&nbsp;</td>
    </tr>

    <tr>

      <td valign=top width=157><font size="1" color="black">[&nbsp;&nbsp;&nbsp;]&nbsp;&nbsp;FOR ALL NOMINEES</font></td>
      <td valign=top width=127><font size="1" color="black">&#149;&nbsp;&nbsp;&nbsp;Tzu Sheng  (Johnson)  Ku</font></td>
      <td valign=top width=115>&nbsp;</td>
    </tr>

    <tr>

      <td valign=top width=157><font size="1" color="black">[&nbsp;&nbsp;&nbsp;]&nbsp;&nbsp;WITHHOLD AUTHORITY <br>
        &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
         FOR ALL NOMINEES</font></td>
      <td valign=top width=127><font size="1" color="black"> &#149;&nbsp;&nbsp;&nbsp;Stewart Wang<br>
  </font></td>
      <td valign=top width=115>&nbsp;</td>
    </tr>

    <tr>

      <td valign=top width=157><font size="1" color="black">[&nbsp;&nbsp;&nbsp;]&nbsp;&nbsp;FOR ALL EXCEPT <br>
        &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(See instructions below)
        </font></td>
      <td valign=top width=127><font size="1" color="black"> &#149;&nbsp;&nbsp;Richard Chiang</font></td>
      <td valign=top width=115>&nbsp;</td>
    </tr>

    <tr>

      <td valign=top width=157>&nbsp;</td>
      <td valign=top width=127><font size="1" color="black">&#149;&nbsp;&nbsp;&nbsp;Craig Miller</font></td>
      <td valign=top width=115>&nbsp;</td>
    </tr>

    <tr>

      <td valign=top width=157>&nbsp;</td>
      <td valign=top width=127><font size="1" color="black">&#149;&nbsp;&nbsp;&nbsp;Felix Sung</font></td>
      <td valign=top width=115>&nbsp;</td>
    </tr>

    <tr>

      <td valign=top width=157>&nbsp;</td>
      <td valign=top width=127>&nbsp;</td>
      <td valign=top width=115>&nbsp;</td>
    </tr>

    <tr>

      <td valign=top colspan="2"><font size="1" color="black"></font><font size="1"><u><font color="black">INSTRUCTION:</font></u><font color="black">&nbsp; To withhold authority
  to vote for any individual <br>
        &nbsp;&nbsp;
         nominee(s), mark &#147;FOR ALL EXCEPT&#148; and fill in the
  circle next  <br>
        &nbsp;&nbsp;
        to each nominee you wish to withhold, as shown here:<font size="2"> &#149;</font></font></font></td>
      <td valign=top width=115>&nbsp;</td>
    </tr>
    <tr>
      <td valign=top colspan="2">
        <hr size="1" noshade>
      </td>
      <td valign=top width=115>&nbsp;</td>
    </tr>
    <tr>
      <td valign=top colspan="2">&nbsp;</td>
      <td valign=top width=115>&nbsp;</td>
    </tr>


    <tr>

      <td valign=top colspan="2">
        <hr size="1" noshade>
        </td>
      <td valign=top width=115>&nbsp;</td>
    </tr>


    <tr>

      <td valign=top colspan="2">
        <font size="1" color="black">To change &nbsp;the address on your account, please
  check the box at <br>
         right and indicate your new address in the address space
  above.&nbsp; <br>
        Please not that changes to the registered name(s) on the <br>
  account may not be submitted viathis method</font></td>
      <td valign=middle width=115 align="left"><font size="1">[&nbsp;&nbsp;&nbsp;]</font></td>
      <td valign=bottom width=301 align="center"><font size="1" color="black">Please check here if you plan to attend the meeting.  &nbsp;&nbsp;</font><font size="1">[&nbsp;&nbsp;&nbsp;]</font></td>
    </tr>
    <tr>
      <td valign=top colspan="4">
        <hr size="1" noshade>
      </td>
    </tr>

  </table>
  <br>
  <table border="0" cellspacing="0" cellpadding="0" width="700">
    <tr align="left" valign="bottom">
      <td><font size="1">Signature of Shareholder ___________________</font></td>
      <td><font size="1">&nbsp;&nbsp;</font></td>
      <td><font size="1">Date: _________</font></td>
      <td><font size="1">&nbsp;&nbsp;</font></td>
      <td><font size="1">Signature of Shareholder ___________________</font></td>
      <td><font size="1">&nbsp;&nbsp;</font></td>
      <td><font size="1">Date: _________</font></td>
    </tr>
  </table>
  <br>
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<BR>
</div>
<TABLE WIDTH=100%><TR><TD WIDTH=20% ALIGN=left><FONT SIZE=1>&nbsp;</FONT></TD>
    <TD WIDTH=60% ALIGN=center><FONT SIZE="2">
</FONT></TD>
    <TD WIDTH=20% ALIGN=right><FONT SIZE="1">&nbsp;</FONT></TD></TR></TABLE>
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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
<B>TAITRON COMPONENTS
INCORPORATED </B></FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>Proxy for Annual
Meeting of Shareholders </B></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
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 20, 2005 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></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>(Continued and to
be signed on the reverse side) </B></FONT></P>



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</FONT></TD>
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