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<SEC-DOCUMENT>0000950153-06-000984.txt : 20060414
<SEC-HEADER>0000950153-06-000984.hdr.sgml : 20060414
<ACCEPTANCE-DATETIME>20060413205835
ACCESSION NUMBER:		0000950153-06-000984
CONFORMED SUBMISSION TYPE:	DEF 14A
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20060512
FILED AS OF DATE:		20060414
DATE AS OF CHANGE:		20060413
EFFECTIVENESS DATE:		20060414

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			ORTHOLOGIC CORP
		CENTRAL INDEX KEY:			0000887151
		STANDARD INDUSTRIAL CLASSIFICATION:	PHARMACEUTICAL PREPARATIONS [2834]
		IRS NUMBER:				860585310
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		DEF 14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-21214
		FILM NUMBER:		06759628

	BUSINESS ADDRESS:	
		STREET 1:		1275 WEST WASHINGTON STREET
		CITY:			TEMPE
		STATE:			AZ
		ZIP:			85281
		BUSINESS PHONE:		6024375520

	MAIL ADDRESS:	
		STREET 1:		1275 WEST WASHINGTON STREET
		CITY:			TEMPE
		STATE:			AZ
		ZIP:			85281
</SEC-HEADER>
<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
<FILENAME>p72164def14a.htm
<DESCRIPTION>DEF 14A
<TEXT>
<HTML>
<HEAD>
<TITLE>def14a</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="center" style="font-size: 14pt; margin-top: 12pt"><B>UNITED STATES SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B>Washington, D.C. 20549</B>
</DIV>

<DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 0pt"><B>SCHEDULE 14A</B></DIV>

<DIV align="center" style="font-size: 12pt; margin-top: 0pt"><B>(Rule&nbsp;14a &#151; 101)</B></DIV>


<DIV align="center" style="font-size: 12pt; margin-top: 12pt"><B>SCHEDULE 14A INFORMATION</B>
</DIV>


<DIV align="center" style="font-size: 12pt; margin-top: 12pt"><B>PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES<BR>
EXCHANGE ACT OF 1934</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 18pt">Filed by the Registrant <FONT face="Wingdings">&#254;</FONT><BR>
Filed by a party other than the Registrant <FONT face="Wingdings">&#111;</FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Check the appropriate box:<BR>
<FONT face="Wingdings">&#111;</FONT> Preliminary proxy statement.<BR>
<FONT face="Wingdings">&#111;</FONT> Confidential, for use of the Commission only (as permitted by Rule&nbsp;14a-6(e)(2)).<BR>
<FONT face="Wingdings">&#254;</FONT> Definitive proxy statement.<BR>
<FONT face="Wingdings">&#111;</FONT> Definitive additional materials.<BR>
<FONT face="Wingdings">&#111;</FONT> Soliciting material pursuant to 240.14a-12.

</DIV>
<DIV align="center" style="font-size: 14pt; margin-top: 12pt"><B>ORTHOLOGIC CORP.</B>
</DIV>

<DIV align="center"><DIV style="font-size: 3pt; margin-top: 1pt; width: 100%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>

<DIV align="center" style="font-size: 10pt">(Name of Registrant as Specified in Its Charter)</DIV>


<DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 100%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>

<DIV align="center" style="font-size: 10pt">(Name of Person(s) Filing Proxy Statement, if other than the Registrant)</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="85%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD colspan="15" align="left">Payment of filing fee (check the appropriate box):</TD>
</TR>
<TR valign="bottom">
    <TD><FONT face="Wingdings">&#254;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD colspan="13" valign="top" align="left">No fee required.</TD>
</TR>
<TR valign="bottom">
    <TD><FONT face="Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD colspan="13" valign="top" align="left">Fee computed on table below per Exchange Act Rules&nbsp;14a-6(i)(1) and 0-11.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="left" valign="top">1)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="9" valign="top" align="left">Title of each class of securities to which transaction applies:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD nowrap colspan="4" align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="left" valign="top">2)</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11" valign="top" align="left" nowrap>Aggregate number of securities to which transaction applies:</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD colspan="15" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="left" valign="top">3)</TD>
    <TD>&nbsp;</TD>
    <TD colspan="13" valign="top" align="left">Per unit price or other underlying value of transaction computed pursuant to Exchange Act
Rule&nbsp;0-11 (set forth the amount on which the filing fee is calculated and state how it was
determined): <DIV align="left">
<DIV style="font-size: 3pt; margin-top: 1pt; width: 100%; border-top: 1px solid #000000; margin-left:40%">&nbsp;</DIV>
</DIV>
</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="left" valign="top">4)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="9" valign="top" align="left">Proposed maximum aggregate value of transaction:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD nowrap colspan="2" align="left" valign="top" style="border-top: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="left" valign="top">5)</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD nowrap align="left" valign="top" colspan="3">Total fee paid:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="9" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT face="Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD colspan="13" valign="top" align="left">Fee paid previously with preliminary materials.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD colspan="13" valign="top" align="left">Check box if any part of the fee is offset as provided by Exchange
Act Rule&nbsp;0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the form or schedule and the date
of its filing.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="left" valign="top">1)</TD>
    <TD>&nbsp;</TD>
    <TD colspan="5" valign="top" align="left" nowrap>Amount Previously Paid:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="left" valign="top">2)</TD>
    <TD>&nbsp;</TD>
    <TD colspan="9" valign="top" align="left" nowrap>Form, Schedule or Registration Statement No.:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-bottom: 0px solid #000000">&nbsp;</TD>
    <TD colspan="2" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD nowrap colspan="2" align="left" valign="top" style="border-top: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="left" valign="top">3)</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD align="left" valign="top" colspan="3" nowrap>Filing Party:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="9" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="left" valign="top">4)</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD align="left" valign="top" colspan="3" nowrap>Date Filed:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="9" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><IMG src="p72164p7216400.gif" alt="(ORTHOLOGIC LOGO)">
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">1275 West Washington Street<BR>
Tempe, Arizona 85281
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">NOTICE OF ANNUAL MEETING OF STOCKHOLDERS<BR>
To Be Held Friday, May&nbsp;12, 2006
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">TO THE STOCKHOLDERS:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Annual Meeting of Stockholders of OrthoLogic Corp., a Delaware corporation (the
&#147;Company&#148;), will be held on Friday, May&nbsp;12, 2006 at 8:00 a.m., local time, at the offices of the
Company at 1275 West Washington Street, Tempe, Arizona 85281, for the following purposes:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; To elect two directors as Class&nbsp;III directors to serve until the Annual Meeting of
Stockholders to be held in the year 2009 or until their respective successors are elected;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; To consider and act upon a proposal to ratify and approve the OrthoLogic Corp. 2005 Equity
Incentive Plan;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; To transact such other business as may properly come before the Annual Meeting or any
adjournment thereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The foregoing items of business are more fully described in the Proxy Statement accompanying
this Notice.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stockholders of record at the close of business on Tuesday, March&nbsp;28, 2006 are entitled to
vote at the meeting and at any adjournment or postponement thereof. Shares can be voted at the
meeting only if the holder is present or represented by proxy. A list of stockholders entitled to
vote at the meeting will be open for inspection at the Company&#146;s corporate headquarters for any
purpose germane to the meeting during ordinary business hours for 10&nbsp;days prior to the meeting.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A copy of the Company&#146;s 2005 Annual Report to Stockholders, which includes certified financial
statements, is enclosed. All stockholders are cordially invited to attend the Annual Meeting in
person.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 50%">By order of the Board of Directors,

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 50%">/s/ John M. Holliman, III<BR>
John M. Holliman, III<BR>
Executive Chairman

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Tempe, Arizona<BR>
April&nbsp;15, 2006
</DIV>

<P>
<DIV style="width: 100%; border: 1px solid black; padding: 1px;">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>IMPORTANT: It is important that your stockholdings be represented at this
meeting. Whether or not you expect to attend the meeting, please complete,
date and sign the enclosed Proxy and mail it promptly in the enclosed envelope
to assure representation of your shares. No postage need be affixed if mailed
in the United States.</B>
</DIV>
</DIV>



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>OrthoLogic Corp.</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>PROXY STATEMENT FOR THE ANNUAL MEETING OF STOCKHOLDERS</B>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>TO BE HELD FRIDAY, MAY 12, 2006</B>

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>TABLE OF CONTENTS</B>
</DIV>

<DIV align="left">
<!-- TOC -->
</DIV>
<DIV align="left">
<A name="tocpage"></A>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD colspan="3" align="left"><A href="#101">SOLICITATION, EXECUTION AND REVOCATION OF PROXIES</A></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" align="left"><A href="#102">VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF</A></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#103">Security Ownership of Certain Beneficial Owners and Management</A></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" align="left"><A href="#104">PROPOSAL 1: ELECTION OF DIRECTORS</A></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#105">Board Meetings and Committees</A></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#106">Compensation of Directors</A></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#107">Executive Officers</A></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" align="left"><A href="#108">COMMITTEE REPORTS</A></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#109">Report of the Compensation Committee of the Board of Directors</A></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#110">Compensation Committee Interlocks and Insider Participation</A></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#111">Report of the Audit Committee of the Board of Directors</A></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" align="left"><A href="#112">CODE OF CONDUCT AND CORPORATE GOVERNANCE</A></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" align="left"><A href="#113">CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS</A></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" align="left"><A href="#114">EXECUTIVE COMPENSATION</A></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">.13</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#115">Summary Compensation Table</A></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#116">Option/SAR Grants in Last Fiscal Year</A></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#117">Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR Values</A></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#118">Employment Contracts, Termination of Employment, and Change-in-Control Arrangements</A></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" align="left"><A href="#119">STOCK PERFORMANCE GRAPH</A></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" align="left"><A href="#120">SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE</A></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" align="left"><A href="#121">PROPOSAL 2: APPROVAL OF THE ORTHOLOGIC CORP. 2005 EQUITY INCENTIVE PLAN</A></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" align="left"><A href="#122">EQUITY COMPENSATION PLANS</A></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" align="left"><A href="#123">INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON</A></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" align="left"><A href="#124">PRINCIPAL ACCOUNTING FIRM FEES</A></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" align="left"><A href="#125">OTHER MATTERS</A></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" align="left"><A href="#126">STOCKHOLDER PROPOSALS</A></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" align="left"><A href="#127">ANNUAL REPORT</A></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" align="left"><A href="#128">HOUSEHOLDING</A></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" align="left"><A href="#129">APPENDIX A &#151; AUDIT COMMITTEE CHARTER</A></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">A-1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" align="left"><A href="#130">APPENDIX B &#151; ORTHOLOGIC CORP. 2005 EQUITY INCENTIVE PLAN</A></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">B-1</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<!-- /TOC -->
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><IMG src="p72164p7216400.gif" alt="(ORTHOLOGIC LOGO)">
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">1275 West Washington Street<BR>
Tempe, Arizona 85281
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PROXY STATEMENT<BR>
ANNUAL MEETING OF STOCKHOLDERS<BR>
To Be Held Friday, May&nbsp;12, 2006</B>
</DIV>

<DIV align="left">
<A name="101"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SOLICITATION, EXECUTION AND REVOCATION OF PROXIES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proxies in the accompanying form are solicited on behalf, and at the direction, of the Board
of Directors of OrthoLogic Corp. (the &#147;Company&#148;) for use at the Annual Meeting of Stockholders to
be held on Friday, May&nbsp;12, 2006, at 8:00 a.m., local time, or any adjournment thereof (the &#147;Annual
Meeting&#148;) at the offices of the Company at 1275 West Washington Street, Tempe, Arizona 85281. All
shares represented by properly executed proxies, unless such proxies have previously been revoked,
will be voted in accordance with the direction on the proxies. If no direction is indicated, the
shares will be voted in favor of the proposals to be acted upon at the Annual Meeting. The Board
of Directors of the Company (the &#147;Board&#148;) is not aware of any other matter which may come before
the meeting. If any other matters are properly presented at the meeting for action, including a
question of adjourning the meeting from time to time, the persons named in the proxies and acting
thereunder will have discretion to vote on such matters in accordance with their best judgment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;When stock is in the name of more than one person, the proxy is valid if signed by any of such
persons unless the Company receives written notice to the contrary. If the stockholder is a
corporation, the proxy should be signed in the name of such corporation by an executive or other
authorized officer. If signed as attorney, executor, administrator, trustee, guardian or in any
other representative capacity, the signer&#146;s full title should be given and, if not previously
furnished, a certificate or other evidence of appointment should be furnished.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Proxy Statement and the form of proxy which is enclosed are being mailed to the Company&#146;s
stockholders commencing on or about April&nbsp;15, 2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A stockholder executing and returning a proxy has the power to revoke it at any time before it
is voted. A stockholder who wishes to revoke a proxy can do so by executing a later-dated proxy
relating to the same shares and delivering it to the Secretary of the Company prior to the vote at
the Annual Meeting, by written notice of revocation received by the Secretary prior to the vote at
the Annual Meeting or by appearing in person at the Annual Meeting, filing a written notice of
revocation and voting in person the shares to which the proxy relates.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to the use of the mails, proxies may be solicited by personal conversations or by
telephone, telex, facsimile or telegram by the directors, officers and regular employees of the
Company. Such persons will receive no additional compensation for such services. Arrangements
will also be made with certain brokerage firms and certain other custodians, nominees and
fiduciaries for the forwarding of solicitation materials to the beneficial owners of Common Stock
held of record by such persons, and such brokers, custodians, nominees and fiduciaries will be
reimbursed for their reasonable out-of-pocket expenses incurred in connection therewith. We have
also retained the firm of Georgeson Shareholder Communications, Inc. to assist us in the
solicitation of proxies. Georgeson Shareholder Communications, Inc. is located at 111 Commerce
Road, Carlstadt, New Jersey, 07072-2586. We will pay approximately $8,500 in fees plus expenses
for their services. All expenses incurred in connection with this solicitation will be borne by
the Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The mailing address of the principal executive offices of the Company is 1275 West Washington
Street, Tempe, Arizona 85281.
</DIV>

<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="102"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Only stockholders of record at the close of business on March&nbsp;28, 2006 (the &#147;Record Date&#148;) will be
entitled to vote at the Annual Meeting. On the Record Date, there were issued and outstanding
40,673,489 shares of the Company&#146;s Common Stock. Each holder of Common Stock is entitled to one
vote, exercisable in person or by proxy, for each share of the Company&#146;s Common Stock held of
record on the Record Date. The presence of a majority of the shares of Common Stock entitled to
vote, in person or by proxy, is required to constitute a quorum for the conduct of business at the
Annual Meeting. Abstentions and broker non-votes are each included in the determination of the
number of shares present for quorum purposes. The Inspector of Election appointed by the Chairman
of the Board of Directors shall determine the shares represented at the meeting and the validity of
proxies and ballots and shall count all proxies and ballots. The two nominees for director
receiving the highest number of affirmative votes (whether or not a majority) cast by the shares
represented at the Annual Meeting and entitled to vote thereon, a quorum being present, shall be
elected as directors. Abstentions and broker non-votes will not be taken into account in
determining the outcome of the election. The affirmative vote of a majority of the shares present
in person or by proxy and entitled to vote is required with respect to the approval of the other
proposals set forth herein. Uninstructed shares are not entitled to vote on Proposal No.&nbsp;2 relating
to the Company&#146;s Equity Incentive Plan, and therefore, broker non-votes do not affect the outcome.
Abstentions have the effect of negative votes. Stockholders are not entitled to any dissenter&#146;s or
appraisal rights under Delaware law or the Company&#146;s Restated Certificate of Incorporation for the
proposals set forth in this Proxy Statement.
</DIV>

<DIV align="left">
<A name="103"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth information regarding the beneficial ownership of the Company&#146;s
Common Stock at March&nbsp;11, 2006 with respect to (i)&nbsp;each person known to the Company to own
beneficially more than five percent of the outstanding shares of the Company&#146;s Common Stock, (ii)
each director of the Company, (iii)&nbsp;each of the named executive officers and (iv)&nbsp;all directors and
executive officers of the Company as a group.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="5"><B>Shares Beneficially</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="5" style="border-bottom: 1px solid #000000"><B>Owned (1)</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Identity of Stockholder or Group</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Number</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Percent</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">James M. Pusey (2)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">179,844</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">*</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">James T. Ryaby (3)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">220,088</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">*</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dana B. Shinbaum (4)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">*</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Michael D. Casey (5)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">60,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">*</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Fredric J. Feldman (6)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">285,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">*</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">John M. Holliman, III (7)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">693,513</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">1.7</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Elwood D. Howse (8)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">249,644</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">*</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">William M. Wardell (9)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Augustus A. White III (10)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">296,231</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">*</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Thomas R. Trotter (11)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30,146</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">*</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Sherry A. Sturman (12)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">251,188</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">*</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Heartland Advisors, Inc.<BR>
789 North Water Street<BR>
Milwaukee, Wisconsin 53202 (13)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">5,481,324</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">13.5</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">All directors and executive officers as a
group (11 persons) (14)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,276,504</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">5.3</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>Less than one percent</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Beneficial ownership is determined in accordance with the rules of the Securities and
Exchange Commission (&#147;SEC&#148;) and generally includes voting or investment power with respect to
securities. In accordance with SEC rules, shares, which may be acquired upon exercise of
stock options which are currently exercisable or which become exercisable within 60&nbsp;days of
the date of the table are deemed beneficially owned by the optionee. Except as indicated by
footnote,</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt">2
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">





<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>and subject to community property laws where applicable, the persons or entities named in the
table above have sole voting and investment power with respect to all shares of Common Stock
shown as beneficially owned by them.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes 179,844 shares Dr.&nbsp;Pusey has a right to acquire upon exercise of stock options.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes 217,188 shares Dr.&nbsp;Ryaby has a right to acquire upon exercise of stock options.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(4)</TD>
    <TD>&nbsp;</TD>
    <TD>Mr.&nbsp;Shinbaum has no beneficially owned shares at March&nbsp;11, 2006.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(5)</TD>
    <TD>&nbsp;</TD>
    <TD>All 60,000 are shares Mr.&nbsp;Casey has a right to acquire upon exercise of stock options.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(6)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes 199,000 shares Dr.&nbsp;Feldman has a right to acquire upon exercise of stock options.
Voting and investment power shared with spouse.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(7)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes 231,000 shares Mr.&nbsp;Holliman has a right to acquire upon exercise of stock options,
3,000 shares indirectly owned as trustee and 397,513 shares Mr.&nbsp;Holliman has voting power over
as a general partner in Valley Ventures III, LP.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(8)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes 201,000 shares Mr.&nbsp;Howse has a right to acquire upon exercise of stock options.
Voting and investment power shared with spouse.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(9)</TD>
    <TD>&nbsp;</TD>
    <TD>All 10,000 are shares Dr.&nbsp;Wardell has a right to acquire upon exercise of stock options.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(10)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes 191,500 shares Dr.&nbsp;White has a right to acquire upon exercise of stock options
and 6,878 indirectly
owned shares.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(11)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes 30,146 shares Mr.&nbsp;Trotter has a right to acquire upon exercise of stock options.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(12)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes 249,188 shares Ms.&nbsp;Sturman has a right to acquire upon exercise of stock options.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(13)</TD>
    <TD>&nbsp;</TD>
    <TD>Derived from a Schedule&nbsp;13G, Amendment No.&nbsp;12, dated February&nbsp;3, 2006 filed by the
stockholder pursuant to the Securities Exchange Act of 1934, as amended (the &#147;1934 Act&#148;). The
Schedule&nbsp;13G, as amended, states that the securities &#147;may be deemed beneficially owned within
the meaning of Rule&nbsp;13d-3 of the Securities Exchange Act of 1934 by (1)&nbsp;Heartland Advisors,
Inc. by virtue of its investment discretion and voting authority granted by certain clients,
which may be revoked at any time; and (2)&nbsp;William J. Nasgovitz, as a result of his ownership
interest in Heartland Advisors, Inc.&#148; The Schedule&nbsp;13G, as amended, also states that the
clients of Heartland Advisors, Inc. have the right to receive, or the power to direct the
receipt of dividends and proceeds from, the sale of shares included on the Schedule. The
Heartland Value Fund, a series of the Heartland Group, Inc., owns 3,100,000 shares of the
class of securities reported on the Schedule.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(14)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes 1,568,866 shares directors and executive officers have a right to acquire upon
exercise of stock options.</TD>
</TR>

</TABLE>




<P align="center" style="font-size: 10pt">3
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left">
<A name="104"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PROPOSAL 1: ELECTION OF DIRECTORS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Two directors are to be elected at the Annual Meeting to serve as Class&nbsp;II directors until the
Annual Meeting of Stockholders to be held in the year 2009 or until their respective successors are
elected. Unless otherwise instructed, the proxy holders will vote the Proxies received by them FOR
the Company&#146;s nominees Elwood D. Howse, Jr. and Dr.&nbsp;William Wardell, MD Ph.D. Mr.&nbsp;Howse and Dr.
Wardell are currently directors of the Company. The two nominees for director receiving the
highest number of affirmative votes (whether or not a majority) cast by the shares represented at
the Annual Meeting and entitled to vote thereon, a quorum being present, shall be elected as
directors. Only affirmative votes are relevant in the election of directors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the Company&#146;s Restated Certificate of Incorporation, the Board of Directors is
classified into three classes, with each class holding office for a three-year period. The Restated
Certificate of Incorporation restricts the removal of directors under certain circumstances. The
number of directors may be increased to a maximum of nine. Directors are elected by a plurality of
the votes present in person or represented by proxy and entitled to vote at the Annual Meeting.
Stockholders do not have the right to cumulate their votes in the election of directors. If any
nominee of the Company is unable or declines to serve as a director at the time of the Annual
Meeting, the proxies will be voted for any nominee who shall be designated by the present Board of
Directors to fill the vacancy. It is not expected that any nominee will be unable or will decline
to serve as a director.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The names of the nominees for director and of the directors, whose terms continue beyond the
Annual Meeting, and certain information about them, are set forth below.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>THE BOARD RECOMMENDS A VOTE IN FAVOR OF EACH NAMED NOMINEE</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><B>INFORMATION CONCERNING DIRECTORS AND EXECUTIVE OFFICERS</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><I>Nominees for Class&nbsp;III Directors Whose Terms Will Expire at the Annual Meeting Held in the Year
2009:</I>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="65%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="33%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Elwood D. Howse, Jr. </B>(1)(2)(3)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director since 1987</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Elwood D. Howse, Jr., 66, has served as a director of the Company since September&nbsp;1987. In 1982,
Mr.&nbsp;Howse founded Cable, Howse and Ragen, an investment banking and stock brokerage firm, now known
as Ragen MacKenzie and owned by Wells Fargo Bank. In 1977, Mr.&nbsp;Howse formed Cable &#038; Howse
Ventures, an early stage venture capital firm focused on technology. In 1976, he served as Vice
President, Corporate Finance, for Foster &#038; Marshall, a northwest stock brokerage firm. In 1974 he
was the Chief Financial Officer of Seattle Stevedore Company and the Miller Produce Company. Mr.
Howse has served as a corporate director and advisor to various public, private and non-profit
enterprises. He served on the board of the National Venture Capital Association and is past
President of the Stanford Business School Alumni Association. He currently serves on the boards of
directors of BSQUARE Corporation (BSQR), MicroPlanet Ltd. (TSXV &#150; MP), Formotus Inc., Perlego
Systems Inc., PowerTech Group, Inc., and not-for-profits, Junior Achievement Worldwide and Junior
Achievement of Washington.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="65%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="33%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>William M. Wardell, MD, Ph.D.</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director since February&nbsp;2006</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Dr.&nbsp;Wardell, 67, was appointed by the OrthoLogic Board of Directors on February&nbsp;11, 2006, to fill a
vacancy (Class&nbsp;III) on the Board. He owns and operates the consulting firm Wardell Associates
International LLC in Princeton, NJ, where he specializes in drug development, regulatory approval,
and safety for a range of pharmaceutical and biotechnology companies. Dr.&nbsp;Wardell has published
over one hundred scientific papers and four books, and has testified as an expert in drug
development during several Congressional hearings. Dr.&nbsp;Wardell has 22&nbsp;years of experience in the
healthcare industry, holding leadership positions as President, Protein Engineering Corporation
(now DYAX); Senior Vice President of Drug Development, Parke-Davis; Vice President and Medical
Director, Boehringer Ingelheim Pharmaceuticals; Senior Scientific Officer, Covance; and Executive
Director of the Covance Institute for Drug Development Sciences. During his tenure at these
companies, Dr.&nbsp;Wardell was responsible for 11 approved New Drug Applications. He previously served
as an associate professor of Pharmacology, Toxicology and Medicine, attending on the Clinical
Pharmacology consultation service of Strong Memorial Hospital at the University of Rochester
Medical Center, where he co-founded and directed the University&#146;s Center for the Study of
</DIV>


<P align="center" style="font-size: 10pt">4
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Drug Development. Dr.&nbsp;Wardell earned his MA, PhD in pharmacology, and MD at the University of
Oxford (UK), and was a Merck International Fellow in Clinical Pharmacology and Medicine under Dr.
Louis Lasagna at the University of Rochester / Strong Memorial Hospital. He currently serves on the
Board of Directors of PhytoCeutica, Inc., the Scientific Advisory Board of Eleos, Inc., and the
Board of the American Board of Clinical Pharmacology.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><I>Class&nbsp;II Directors Whose Terms Will Expire at the 2008 Annual Meeting:</I>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="65%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="33%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>John M. Holliman, III </B>(1) (4)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director since 1987</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">John M. Holliman, III, 52, became Executive Chairman and Principal Executive Officer of the Company
on April&nbsp;5, 2006 and has served as a director of the Company since September&nbsp;1987 and as Chairman
of the Board of Directors since August&nbsp;1997. Since February&nbsp;1993 he has been a general partner of
entities, which are the general partners of Valley Ventures, LP (formerly known as Arizona Growth
Partners, LP), Valley Ventures II, LP and Valley Ventures III, LP, all of which are venture capital
funds. From 1985 to 1993, he was the Managing Director and Senior Managing Director of Valley
Ventures&#146; predecessor, Valley National Investors, Inc., a venture capital subsidiary of The Valley
National Bank of Arizona.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="65%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="33%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Augustus A. White III, MD, Ph.D. </B>(2) (4)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director since 1993</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Dr.&nbsp;White, 69, became a director of the Company in July&nbsp;1993. He has been a Master of the Oliver
Wendell Holmes Society and the Ellen and Melvin Gordon Professor of Medical Education, Harvard
Medical School since July&nbsp;2001; Professor of Orthopedic Surgery at the Harvard Medical School and
the Harvard-MIT Division of Health Sciences and Technology since July&nbsp;1978; and Orthopedic
Surgeon-in-Chief, Emeritus, at the Beth Israel Deaconess Medical Center in Boston since 1990. From
1992 to 1994, he served as the Chief of Spine Surgery at Beth Israel and is Director of the Daniel
E. Hogan Spine Fellowship Program. He is a graduate of Brown University, the Stanford University
Medical School, holds a Ph.D. from the Karolinska Institute in Stockholm, and graduated from the
Advanced Management Program at the Harvard Business School. Dr.&nbsp;White is a recipient of the Bronze
Star, which he earned while stationed as a Captain in the U.S. Army Medical Corps in Vietnam. Dr.
White is currently a director of Zimmer Holdings, Inc., a publicly held designer, marketer and
manufacturer of orthopedic products.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><I>Class&nbsp;I Directors Whose Terms Will Expire at the 2007 Annual Meeting:</I>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="65%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="33%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Fredric J. Feldman, Ph.D. </B>(1) (2) (3)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director since 1991</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Fredric J. Feldman, Ph.D., 65, has been the President of FJF Associates, a consultant to health
care venture capital and emerging companies, since February&nbsp;1992. From September&nbsp;1995 to June
1996, he was the Chief Executive Officer of Biex, Inc., a women&#146;s healthcare company. He served as
Chief Executive Officer of Oncogenetics, Inc., a cancer genetics reference laboratory from 1992 to
1995. Between 1988 and 1992, Dr.&nbsp;Feldman was the President and Chief Executive Officer of
Microgenics Corporation, a medical diagnostics company. He was previously a director of Sangstat
Medical Corp., a publicly held biotech transplant drug company, and of Ostex International, Inc., a
publicly held developer of diagnostics and therapeutics for skeletal and connective tissue diseases
before their respective acquisitions by Genzyme and Inverness Medical.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="65%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="33%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Michael D. Casey </B>(4)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director since 2004</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Michael D. Casey, 60, became a director of the Company in January&nbsp;2004, filling a newly created
vacancy on the Board of Directors. Mr.&nbsp;Casey, who currently works as a consultant in the
biopharmaceutical field, was the Chairman, President, and Chief Executive Officer and a Director of
Matrix Pharmaceutical, Inc., a publicly traded cancer therapy company until it was acquired by
Chiron Corporation in March&nbsp;2002. Mr.&nbsp;Casey joined Matrix in October&nbsp;1997 from Schein
Pharmaceutical, Inc., where he was Executive Vice President from November&nbsp;1995 to December&nbsp;1996. In
1996 he was appointed President of the retail and specialty products division of Schein. From June
1993 to November&nbsp;1995, he served as President and Chief Operating Officer of Genetic Therapy, Inc.,
a biopharmaceutical company. Mr.&nbsp;Casey was President of McNeil Pharmaceutical (a unit of Johnson &#038;
Johnson) from 1989 to June&nbsp;1993 and Vice President, Sales and Marketing, for the Ortho
Pharmaceutical Corp. (a subsidiary of Johnson &#038; Johnson) from 1985 to 1989. Mr.&nbsp;Casey is a Director
of Allos Therapeutics Inc., Celgene Corporation, Cholestech Corporation and DURECT Corporation.
</DIV>


<P align="center" style="font-size: 10pt">5
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="65%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="33%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>James M. Pusey, MD</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director 2005 -2006</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">James M. Pusey, 47, most recently served as an executive vice president of neurology at Serono,
Inc. USA, a unit of Serono, SA (Geneva, Switzerland). Serono, Inc. USA is a biotechnology company
and a developer of recombinant prescription medicines, headquartered in Rockland, Mass. From
December&nbsp;1999 to July&nbsp;2003, Dr.&nbsp;Pusey was employed by AstraZeneca Pharmaceuticals USA, where he
served as Vice President of Marketing and then as a Vice President and Therapeutic Area Leader.
Prior to his employment with AstraZeneca, Dr.&nbsp;Pusey held a senior management position with
SmithKline Beecham, a research based pharmaceutical company. Dr.&nbsp;Pusey earned a Bachelor of
Medicine and Bachelor of Surgery degree from the Royal Free Hospital School of Medicine (London
University) and a Master of Business Administration from the London Business School.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Dr.&nbsp;Pusey resigned from the Board of Directors and the position of Chief Executive Officer and
President of the Company on April&nbsp;5, 2006.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="95%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD colspan="3" valign="top" align="left">******</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(1)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Member of the Executive Committee.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(2)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Member of the Audit Committee.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(3)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Member of the Compensation Committee.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(4)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Member of the Nominating Committee</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" valign="top" align="left">******</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left">
<A name="105"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>BOARD MEETINGS AND COMMITTEES</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Board of Directors was composed of six outside directors and one employee director, Dr.&nbsp;Pusey.
Dr.&nbsp;Pusey resigned from the Board of Directors and the position of Chief Executive Officer and
President of the Company on April&nbsp;5, 2006. The Board has determined that each director other than
Dr.&nbsp;Pusey is independent for purposes of Marketplace Rule&nbsp;4200(a)(15) of the National Association
of Securities Dealers, Inc. (&#147;NASD&#148;). The Board of Directors held a total of five meetings during
the fiscal year ended December&nbsp;31, 2005. No director attended fewer than 75% of the aggregate of
all meetings of the Board of Directors and any committee on which such director served during the
period of such service. Currently, the Board of Directors does not have a policy regarding
director attendance at the Company&#146;s annual meeting of stockholders. All of the directors attended
last year&#146;s annual meeting of stockholders in person.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board presently has an Executive Committee, an Audit Committee, a Compensation Committee
and a Nominating Committee. The Executive Committee, which acts on Board matters that arise
between meetings of the full Board of Directors, consists of Dr.&nbsp;Feldman, Mr.&nbsp;Holliman and Mr.
Howse and met five times during 2005.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Audit Committee</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Audit Committee, which is a separately-designated standing committee established in
accordance with section 3(a)(58)(A) of the Exchange Act, consisted of Mr.&nbsp;Howse (Chairman), Dr.
White and Mr.&nbsp;Holliman and met four times in 2005. Effective February&nbsp;11, 2006, Dr.&nbsp;Feldman
replaced Mr.&nbsp;Holliman on the Audit Committee. The Audit Committee assists the Board of Directors
in its oversight of financial reporting practices, including the independent auditors&#146;
qualifications and independence, and the performance of the Company&#146;s internal audit function. The
Audit Committee appoints the Company&#146;s independent auditors. The Audit Committee meets
independently with representatives of the Company&#146;s independent auditors and with representatives
of senior management. The Committee reviews the general scope of the Company&#146;s annual audit, the
fee charged by the independent auditors and other matters relating to internal control systems. In
addition, the Audit Committee is responsible for approving, reviewing and monitoring the
performance of non-audit services by the Company&#146;s auditors. The Audit Committee operates under a
written charter that has been adopted by the Board of Directors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors has determined that the composition of the Audit Committee, the
attributes of its members and the responsibilities of the Audit Committee, as reflected in its
charter, are in accordance with applicable NASD Marketplace Rules for audit committees. In
particular, all audit Committee members possess the required level of financial literacy, at least
one member of the Audit Committee meets the current standard of
</DIV>

<P align="center" style="font-size: 10pt">6
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">requisite financial management expertise and the Board of Directors has determined that Elwood
D. Howse, Jr., the Chairman of the Audit Committee, is an &#147;audit committee financial expert&#148; as
defined in Item 401(h) of Regulation&nbsp;S-K of the Securities and Exchange Commission (the &#147;SEC&#148;).
Additionally, Mr.&nbsp;Howse and each of the other members of the Audit Committee is an &#147;independent
director&#148; as defined in NASD Marketplace Rule&nbsp;4200(a)(15).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Audit Committee Charter is attached as Appendix&nbsp;A.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Compensation Committee</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Compensation Committee, which consists of Dr.&nbsp;Feldman and Mr.&nbsp;Howse, met four times during
2005. Each member of the Compensation Committee is an &#147;independent&#148; director as defined in NASD
Marketplace Rule&nbsp;4200(a)(15) and is an &#147;outside director&#148; as defined in Section 162(m) of the
Internal Revenue Code. The Compensation Committee reviews salaries and benefit programs designed
for senior management, officers and directors and administers certain grants under the Company&#146;s
stock option plans with a view to ensure that the Company is attracting and retaining highly
qualified managers through competitive salary and benefit programs and encouraging extraordinary
effort through incentive rewards.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Nominating Committee</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Nominating Committee examines and recommends nominations for the Board of Directors and
officers of the Company. The criteria prepared by the Nominating Committee are used to determine
whether the selection of a particular nominee, either nominated by the Company or by a stockholder,
would be appropriate. The Nominating Committee operates under a written charter, a copy of which
was provided as an annex to the proxy statement relating to the Company&#146;s June&nbsp;7, 2004 Annual
Meeting for the fiscal year ended December&nbsp;31, 2003. The Company does not, however, post the
Nominating Committee Charter on its website. Although the Nominating Committee has not established
minimum standards for Board nominees, the Nominating Committee generally seeks candidates with
chief operating, executive or financial officer experience in complex organizations; a commitment
to give the time and attention to the duties required of them; and evidence of an independent and
inquiring mind willing to question management&#146;s assumptions. On an as needed basis, the Nominating
Committee uses the services of outside consultants to assist the Nominating Committee to identify
capable director candidates.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Nominating Committee consists of Mr.&nbsp;Holliman and Dr.&nbsp;White. Dr.&nbsp;White is and Mr.
Holliman was an independent director under NASD Marketplace Rule&nbsp;4200(a)(15). However, on April&nbsp;5,
2006, Mr.&nbsp;Holliman became Executive Chairman and Principal Executive Officer of the Company and is
no longer an independent director under NASD Marketplace Rule&nbsp;4200(a)(15). On April&nbsp;7, 2006, Dr.
Wardell replaced Mr.&nbsp;Holliman on the Nominating Committee. The Nominating Committee met one time
during 2005. The Nominating Committee nominated Mr.&nbsp;Howse and Dr.&nbsp;Wardell for election as Class
III directors for this year&#146;s annual meeting of stockholders. Dr.&nbsp;Wardell was selected from a
list of potential director candidates obtained from a variety of sources, including from the CEO,
existing directors and referrals from business acquaintances and was appointed on February&nbsp;11, 2006
to fill a vacancy on the Board. Dr.&nbsp;Wardell was recommended for board service by a non-management
director of the Company and Dr.&nbsp;Pusey.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Stockholder Nomination of Director Candidates</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Nominating Committee will consider for nomination as a director of the Company any
director candidate recommended or nominated by stockholders in accordance with the process outlined
below.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stockholders wishing to recommend candidates for consideration by the Nominating Committee may
do so by providing the candidate&#146;s name, contact details, biographical data, and qualifications in
writing to the Nominating Committee, c/o Secretary, 1275 West Washington Street, Tempe, Arizona
85281. The Board may change the process for the means by which stockholders may recommend director
candidates to the Nominating Committee. Please refer to the Company&#146;s website at
www.orthologic.com and the Company&#146;s SEC filings for any changes to this process. The Company has
not received any stockholder recommendations of director candidates with regard to the election of
directors covered by this Proxy Statement or otherwise.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any stockholder entitled to vote for the election of directors at a meeting may nominate
persons for election as directors only if written notice of such stockholder&#146;s intent to make such
nomination is given, either by personal delivery at 1275 West Washington Street, Tempe, Arizona or
by United States mail, postage prepaid to
</DIV>

<P align="center" style="font-size: 10pt">7
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Secretary, OrthoLogic Corp., 1275 West Washington Street, Tempe, Arizona 85281, not later
than: (i)&nbsp;with respect to the election to be held at an annual meeting of stockholders, 20&nbsp;days in
advance of such meeting; and (ii)&nbsp;with respect to any election to be held at a special meeting of
stockholders for the election of directors, the close of business on the fifteenth (15th) day
following the date on which notice of such meeting is first given to stockholders. Each such
notice must set forth: (a)&nbsp;the name and address of the stockholder who intends to make the
nomination and of the person or persons to be nominated; (b)&nbsp;a representation that such stockholder
is a holder of record of stock of the corporation entitled to vote at such meeting and intends to
appear in person or by proxy at the meeting to nominate the person or persons specified in the
notice; (c)&nbsp;a description of all arrangements or understandings between such stockholder and each
nominee and any other person or persons (naming such person or persons) pursuant to which the
nomination or nominations are to be made by such stockholder; (d)&nbsp;such other information regarding
each nominee proposed by such stockholder as would have been required to be included in a proxy
statement filed pursuant to the proxy rules of the SEC if such nominee had been nominated, or
intended to be nominated, by the Board of Directors; and (e)&nbsp;the consent of each nominee to serve
as a director of the Company if elected. The chairman of the stockholders&#146; meeting may refuse to
acknowledge the nomination of any person not made in compliance with the foregoing procedure.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Stockholder Communications with Board</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stockholders wishing to communicate with the Board of Directors or with a Board member should
address communications to the Board or to the particular Board member, c/o Secretary, 1275 West
Washington Street, Tempe, Arizona 85281. All communications sent in this manner to the Board
members will be forwarded directly to the Board. From time to time, the Board may change the
process for the means by which stockholders may communicate with the Board or its members. Please
refer to the Company&#146;s website at www.orthologic.com for any changes to this process.
</DIV>
<DIV align="left">
<A name="106"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>COMPENSATION OF DIRECTORS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the year ended December&nbsp;31, 2005, the Company paid non-employee directors an annual
retainer of $24,000 payable quarterly in advance. All directors are eligible for the grant of
nonqualified stock options pursuant to the Company&#146;s 1997 Stock Option Plan. The Company issued
non-qualified options to acquire 10,000 shares at a price of $4.90 to each non-employee director on
January&nbsp;1, 2006. All such options vested immediately and were granted at the market price on the
date of grant. The options have been granted with ten-year terms.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On June&nbsp;10, 2005 the Board of Directors approved an annual award to each non-employee director
of $25,000 of restricted stock. Restricted stock will be granted on January 1 of each year with
the number of shares determined by the preceding day&#146;s closing market price. The shares granted are
restricted from sale for a period of one year from the date of issuance. On June&nbsp;10, 2005 and
January&nbsp;1, 2006 the Board awarded 6,410 and 5,102 shares of restricted stock, respectively, to
non-employee directors, subject to stockholder approval of Proposal 2 in this Proxy Statement.
</DIV>
<DIV align="left">
<A name="107"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>EXECUTIVE OFFICERS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth information regarding our executive officers:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="61%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Age</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Title</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" bgcolor="#cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">John M. Holliman, III
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">52</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Executive Chairman and Principal Executive Officer</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Randolph C. Steer, MD, Ph.D.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">56</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">President</TD>
</TR>
<TR valign="bottom" bgcolor="#cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">James M. Pusey, MD
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">47</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">President and Chief Executive Officer (resigned
effective April&nbsp;5, 2006)</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">James T. Ryaby, Ph.D.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">47</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Senior Vice President and Chief Scientific Officer</TD>
</TR>
<TR valign="bottom" bgcolor="#cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Les M. Taeger
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">55</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Senior Vice President and Chief Financial Officer</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Dana B. Shinbaum
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">43</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Vice President, Business
Development</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On March&nbsp;4, 2005, OrthoLogic announced the resignation of its Chief Executive Officer, Thomas
R. Trotter, and the hiring of Dr.&nbsp;James M. Pusey as its new Chief Executive Officer. Dr.&nbsp;Pusey
commenced employment on March&nbsp;15, 2005. Effective December&nbsp;31, 2005 Mr.&nbsp;Trotter&#146;s employment with
the Company terminated. On January&nbsp;9, 2006 OrthoLogic announced the resignation of its Chief
Financial Officer, Sherry A. Sturman, and the hiring of its new Chief Financial Officer, Les M.
Taeger, effective January&nbsp;16, 2006. Effective
</DIV>

<P align="center" style="font-size: 10pt">8
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">January&nbsp;16, 2006 Ms.&nbsp;Sturman began a two-year transition period per the terms of her
employment agreement leading to the termination of her employment with the Company. On April&nbsp;5,
2006 the Company announced the resignation of its Chief Executive Officer, Dr.&nbsp;James M. Pusey.
Effective April&nbsp;5, 2006, John M. Holliman, III, Chairman of the Board, assumed certain duties of
the Chief Executive Officer and Randolph C. Steer assumed the duties of the President.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Thomas R. Trotter (departed Executive) joined OrthoLogic as President and Chief Executive
Officer and a Director in October&nbsp;1997. From 1988 to October&nbsp;1997, Mr.&nbsp;Trotter held various
positions at Mallinckrodt, Inc. in St. Louis, Missouri, most recently as President of the Critical
Care Division and a member of the Corporate Management Committee. From 1984 to 1988, he was
President and Chief Executive Officer of Diamond Sensor Systems, a medical device company in Ann
Arbor, Michigan. From 1976 to 1984, he held various senior management positions at Shiley, Inc. (a
division of Pfizer, Inc.) in Irvine, California. He holds a B.S. degree from the University of
Maryland and a Masters of Business Administration from Pepperdine University.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;James
M. Pusey, MD (departed Executive), joined OrthoLogic as President and Chief Executive
Officer on March&nbsp;15, 2005. He most recently served as an executive vice president of neurology at
Serono, Inc. USA, a unit of Serono, SA (Geneva, Switzerland). Serono, Inc. USA is a biotechnology
company and a developer of recombinant prescription medicines, headquartered in Rockland, Mass.
From December&nbsp;1999 to July&nbsp;2003, Dr.&nbsp;Pusey was employed by AstraZeneca Pharmaceuticals USA, where
he served as Vice President of Marketing and then as a Vice President and Therapeutic Area Leader.
Prior to his employment with AstraZeneca, Dr.&nbsp;Pusey held a senior management position with
SmithKline Beecham, a research based pharmaceutical company. Dr.&nbsp;Pusey earned a Bachelor of
Medicine and Bachelor of Surgery degree from the Royal Free Hospital School of Medicine (London
University) and a Master of Business Administration from the London Business School.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;John M. Holliman, III, became Executive Chairman and Principal Executive Officer of the
Company on April&nbsp;5, 2006 and has served as a director of the Company since September&nbsp;1987 and as
Chairman of the Board of Directors since August&nbsp;1997. Since February&nbsp;1993 he has been a general
partner of entities, which are the general partners of Valley Ventures, LP (formerly known as
Arizona Growth Partners, LP), Valley Ventures II, LP and Valley Ventures III, LP, all of which are
venture capital funds. From 1985 to 1993, he was the Managing Director and Senior Managing
Director of Valley Ventures&#146; predecessor, Valley National Investors, Inc., a venture capital
subsidiary of The Valley National Bank of Arizona.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Randolph C. Steer, MD, Ph.D., became President of the Company on April&nbsp;5, 2006. Dr.&nbsp;Steer
has been an independent pharmaceutical, biotechnology and medical devices consultant since 1989,
and has provided consulting services to OrthoLogic since 2002. He has a broad scientific, medical
and business background, including extensive experience in pre-clinical, clinical and regulatory
affairs, having held key management positions in leading corporations and having served as an
advisor to many companies in the United States and abroad. Dr.&nbsp;Steer has also advised numerous
venture capital firms, investment banks and independent investors on the commercial development of
drugs, biologics, diagnostics and medical devices. He has served as Associate Director of Medical
Affairs at Marion Laboratories; Medical Director at Ciba Consumer Pharmaceuticals (Ciba-Geigy
Corporation); Vice President, Senior Vice President and Member of the Executive Committee at
Physicians World Communications Group; Chairman, President and Chief Executive Officer of Advanced
Therapeutics Communications International, a global drug regulatory group, and Chairman and Chief
Executive Officer of Vicus.com, Inc. He is a member of the Board of Directors of Techne
Corporation and BioCryst Pharmaceuticals. Dr.&nbsp;Steer received his MD degree from the Mayo Medical
School and his Ph.D. from the University of Minnesota, where he also completed a residency and
subspecialty fellowship in clinical and chemical pathology. He is a Fellow of the American College
of Clinical Pharmacology.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sherry A. Sturman (departing Executive) joined OrthoLogic as Director of Finance in October
1997 and began serving as the Vice President of Administration and Chief Financial Officer in June
2000, and was promoted to Senior Vice President in early 2003. From 1994 to 1997, Ms.&nbsp;Sturman was
employed as the Chief Financial Officer for ComCare, a large managed care company based in Phoenix.
She has over eighteen years of financial management experience in both health care and public
companies. She is a Certified Public Accountant, with a Masters degree in Business Administration.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Les M. Taeger joined OrthoLogic as Senior Vice President and Chief Financial officer on
January&nbsp;16, 2006. Mr.&nbsp;Taeger most recently served as Chief Financial Officer of CardioTech
International, Inc. (&#147;CardioTech&#148;). CardioTech is a publicly-traded, medical device company that
develops, manufactures and sells advanced products for the treatment of cardiovascular disease.
From September, 2000 to February, 2004, when Mr.&nbsp;Taeger became
</DIV>

<P align="center" style="font-size: 10pt">9
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Chief Financial Officer of CardioTech, Mr.&nbsp;Taeger served as Chief Financial Officer of Gish
Biomedical, Inc. (&#147;Gish&#148;). Gish, now a subsidiary of CardioTech pursuant to a merger transaction
involving the companies in April, 2003, specializes in the manufacture and sale of products used in
open-heart surgery, vascular access and orthopedic surgery. Prior to his employment with
CardioTech and Gish, Mr.&nbsp;Taeger was employed for over five years as Chief Financial Officer of
Cartwright Electronics, Inc., a division of Meggitt, PLC. Mr.&nbsp;Taeger is a Certified Public
Accountant, with a Bachelor degree in accounting.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dana
B. Shinbaum joined OrthoLogic as Vice President of Business Development in October&nbsp;2005.
Previously he served as Vice President, Product Planning and Market Analytics at Savient
Pharmaceuticals, Inc., and has over sixteen years of experience in
the pharmaceutical/biotechnology industry.
While at Savient his responsibilities included creating and developing new business opportunities,
leading global project teams and managing product launches. He played key strategic planning roles
in Savient&#146;s acquisition of Rosemont Pharmaceuticals Ltd. and the divestiture of Bio-Technology
General Ltd., Savient&#146;s global biologics business. Prior to joining Savient, Mr.&nbsp;Shinbaum was at
Wyeth-Ayerst Laboratories, where he served in a variety of market planning and marketing roles,
including Product Manager for the PREMARIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> franchise. Dana Shinbaum received a Master of Business
Administration, <I>summa cum laude</I>, from Drexel University in Philadelphia and a Bachelor of Arts
degree from Lafayette College in Easton, Pennsylvania.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;James T. Ryaby, Ph.D., joined OrthoLogic as Director of Research in 1991, became Vice
President of Research in 1997 and was promoted to Senior Vice President and Chief Technology
Officer in early 2003. Prior to joining OrthoLogic, he was a research scientist at Mt. Sinai
School of Medicine in New York, where he received his Ph.D. degree in cellular biology. His
current research interests are applications of peptides, cytokines, growth factors, and biophysical
stimulation in musculoskeletal tissue repair. Dr.&nbsp;Ryaby also serves as Adjunct Professor of
Bioengineering at Arizona State University.
</DIV>
<DIV align="left">
<A name="108"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>COMMITTEE REPORTS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>The following Reports of the Compensation Committee and Audit Committee of the Company&#146;s Board
of Directors and the performance graph included elsewhere in this proxy statement shall not be
deemed soliciting material or otherwise deemed filed and shall not be subject to the liabilities of
Section&nbsp;18 of the Securities Exchange Act of 1934, or deemed to be incorporated by reference by any
general statement incorporating by reference this proxy statement into any other filing under the
Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent the Company
specifically incorporates the Reports or the performance graph by reference therein.</I>
</DIV>
<DIV align="left">
<A name="109"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Compensation Committee of the Company&#146;s Board of Directors (the &#147;Compensation Committee&#148;)
recommends the compensation of the Chief Executive Officer to the Board and reviews and approves
the design, administration and effectiveness of compensation programs for other key executive
officers, including salary, cash bonus levels, other perquisites and certain option grants under
the Company&#146;s stock option plans (the &#147;Plans&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Compensation Philosophy</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The objectives of the Company&#146;s executive compensation policies are to attract, retain and
reward executive officers who contribute to the Company&#146;s success, to align the financial interests
of executive officers with the performance of the Company, to strengthen the relationship between
executive pay and shareholder value, to motivate executive officers to achieve the Company&#146;s
business objectives and to reward individual performance. During 2005, the Company used base
salary, executive officer cash bonuses, restricted stock and stock options to achieve these
objectives.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Review of Current Compensation Components of CEO and other Executive Officers
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Compensation Committee reviews all components of the CEO and other executive officers&#146;
compensation, including salary, bonus, restricted stock, accumulated vested and unvested stock
options, the dollar value to the executive and cost to the company of all perquisites and other
personal benefits, as well as the actual projected payout obligations under several potential
severance, change-in-control scenarios and any limitations on the deductibility for federal income
tax purposes of all compensation. Documentation is provided to the Compensation Committee
consisting of the following:
</DIV>

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

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<DIV style="font-family: 'Times New Roman',Times,serif">

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Each Executive has individual performance goals for the fiscal year</I>. The
Compensation Committee reviews the performance goals and expectations for individual
executive positions. Based on recommendations from the CEO and the Compensation
Committee&#146;s evaluation of the performance achievement of these goals, the Compensation
Committee determines the resulting bonus and/or changes to salary components for the
executive officers. The CEO also has individual performance objectives identified for
each fiscal year. The Compensation Committee evaluates the CEO&#146;s performance measured
against these objectives and evaluates and formulates any potential changes in
compensation accordingly.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>The Company&#146;s performance is compared against the goals for the fiscal year</I>.
Strategic, high level performance expectations are identified each fiscal year for the
Company. The CEO provides documentation to the Compensation Committee regarding the
expectations and corresponding results of operations.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>The level of compensation for executives in similar positions for companies of
similar size and development structure is used as a benchmark</I>. To enable the Company
to continue to attract and retain executives in the competitive marketplace, executive
compensation for similar companies is reviewed annually. The Company typically retains
this data through a review of publicly available executive compensation information for
comparable public companies listed on the Nasdaq National Market and through purchased
survey data tailored to the industry and size of the Company.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">The Compensation Committee&#146;s Conclusion
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based on the review detailed above, the Compensation Committee, at its meeting held at the
beginning of the fiscal year, formulates its recommendations regarding what areas of the
compensation components will be adjusted for the upcoming year and what the performance bonus for
the prior year will be.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Board Approval
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At the first Compensation Committee meeting of the year, the Compensation Committee reviews
the CEO and other executive officers&#146; compensation and bonuses. The final decisions regarding the
CEO and other executives&#146; total compensation packages are made by the full Board of Directors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Compensation Committee presents its recommendations to the full Board following the
initial Compensation Committee meeting, after which the Board votes on the recommendations from the
Compensation Committee. The recent changes to the CEO&#146;s and other executives&#146; compensation have
been disclosed on Form 8-K and filed with the U.S. Securities and Exchange Commission on February
16, 2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Chief Executive Officer Compensation</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Compensation Committee reviews the performance of the Chief Executive Officer at least
annually. In February&nbsp;2006, the Compensation Committee and Dr.&nbsp;Pusey reviewed the compensation
terms of Dr.&nbsp;Pusey&#146;s employment agreement. The Compensation Committee reviewed data from a survey
of salaries for companies comparable in size that are in the biopharmaceutical research and
development industry , the Company&#146;s operations and the executive&#146;s success in the attainment of
priority goals, particularly those related to clinical development of its lead product candidate,
product pipeline development, and financial strength of the Company. Based on these criteria, the
Compensation Committee recommended a base salary of $367,000 with an incentive bonus targeted at
50% of Dr.&nbsp;Pusey&#146;s base salary and special bonuses based on the occurrence of certain events.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Bonus Compensation</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the February&nbsp;2006 meeting, the Compensation Committee recommended discretionary bonuses
based on individual and Company performance during 2005 and awarded $126,000 to its Chief Executive
Officer, $92,003 to James T. Ryaby, $20,000 to Dana B. Shinbaum and $97,706 to Sherry A. Sturman.
For more information on the executive officers&#146; compensation, see the Summary Compensation Table.
</DIV>

<P align="center" style="font-size: 10pt">11
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Compensation Committee During 2005:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="65%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="33%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Fredric J. Feldman
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Elwood D. Howse, Jr.</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="margin-top: 6pt">
<A name="110"></A>
</DIV>
<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><B>COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During 2005, Fredric J. Feldman and Elwood D. Howse, Jr., each an independent director, served
on the Compensation Committee of the Board of Directors.
</DIV>
<DIV align="left">
<A name="111"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The role of the Audit Committee (the &#147;Audit Committee&#148;) is to assist the Board of Directors in
its oversight of the Company&#146;s financial reporting process. Management of the Company is
responsible for the preparation, presentation and integrity of the Company&#146;s financial statements,
the Company&#146;s accounting and financial reporting principles and internal controls and procedures
designed to assure compliance with accounting standards and applicable laws and regulations. The
independent auditors are responsible for auditing the Company&#146;s financial statements and expressing
an opinion as to their conformity with generally accepted accounting principles.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Among other matters, the Audit Committee monitors and oversees the activities and performance
of the external auditors, including the audit scope, external audit fees, and auditor independence
matters. The Audit Committee also is responsible for approving non-audit services proposed to be
performed by the independent auditor. The Audit Committee has responsibility to appoint and dismiss
the Company&#146;s independent auditor. Management and independent auditor presentations to and
discussions with the Audit Committee also cover various topics and events that may have significant
financial impact or are the subject of discussions between management and the independent auditor.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the performance of its oversight function, the Audit Committee reviewed and discussed the
audited financial statements with management and the independent auditors. The Audit Committee has
also discussed with the independent auditors the matters required to be discussed by Statement on
Auditing Standards No.&nbsp;61, as amended, <I>Communication with Audit Committees</I>, and Rule&nbsp;2-07 of
Regulation&nbsp;S-X. Finally, the Audit Committee has received the written disclosures and the letter
from the independent auditors required by Independence Standards Board Standard No.&nbsp;1, <I>Independence
Discussions with Audit Committees</I>, as currently in effect, and written confirmations from
management with respect to services provided by the auditors, has considered whether the provision
of non-audit services by the independent auditors to the Company is compatible with maintaining the
auditor&#146;s independence and has discussed with the auditors the auditors&#146; independence. The Audit
Committee met four times in 2005, each time meeting separately with the auditors without the
presence of management.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based upon the reports and discussions described in this report, the Audit Committee
recommended to the Board that the audited financial statements be included in the Company&#146;s Annual
Report on Form 10-K for the year ended December&nbsp;31, 2005 for filing with the Securities and
Exchange Commission.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Audit Committee During 2005
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top">John M. Holliman, III
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Elwood D. Howse, J., Chairman
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Augustus A. White, III</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left">
<A name="112"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>CODE OF CONDUCT AND CORPORATE GOVERNANCE</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In March&nbsp;2004, the Company adopted a code of conduct that applies to all of its employees and
has particular sections that apply only to its principal executive officer and senior financial
officers. The Company has posted the text of its code of conduct on its website under the
&#147;Investors&#148; section under the link for the &#147;Code of Conduct.&#148; In addition, the Company will
promptly disclose on its website (1)&nbsp;the nature of any amendment to its code of conduct that
applies to its principal executive officer and senior financial officers, and (2)&nbsp;the nature of any
waiver, including an implicit waiver, from a provision of its code of conduct that is granted to
one of these specified officers, the name of such officer who is granted the waiver and the date of
the waiver.
</DIV>

<P align="center" style="font-size: 10pt">12
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The full Board of Directors addresses all matters regarding corporate governance (that is, the
relationships of the Board, the stockholders and management in determining the direction and
performance of the Company) and the procedural rules regarding the operation of the Board itself.
As such, the Board reviews all proposals submitted by stockholders for action at the annual
stockholders&#146; meeting with regards to each such proposal.
</DIV>
<DIV align="left">
<A name="113"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company has entered into indemnity agreements with all of its directors and officers for
the indemnification of and advancing of expenses to such persons to the fullest extent permitted by
law.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On February&nbsp;23, 2006, the Company entered into an Asset Purchase Agreement and Plan of
Reorganization (the &#147;Definitive Agreement&#148;) to acquire certain assets and certain liabilities of
AzERx, Inc. (&#147;AzERx&#148;) for $390,000 in cash and the issuance of 1,325,000 shares of the Company&#146;s
common stock, with a market value of $7.5&nbsp;million based on the closing share price on the date the
Definitive Agreement was entered into. Pursuant to the terms of the Definitive Agreement, the
Company acquired an exclusive license for the core intellectual property relating to AzERx&#146;s lead
compound, AZX100, a 24-amino acid peptide. In addition, the Company agreed to issue 30,000 shares
of its common stock to Arizona Science and Technology Enterprises, LLC, the licensor of AzERx&#146;s
core technology patents, in connection with certain modifications of the license effective upon
consummation of the transactions contemplated in the Definitive Agreement. The transaction closed
February&nbsp;27, 2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Chairman of the Company&#146;s Board of Directors, John M. Holliman, III, is a member of the
AzERx board of directors and is affiliated with Valley Ventures III, L.P., an investment fund that
owned approximately 30% of AzERx&#146;s fully diluted equity at the time of the transaction. Mr.
Holliman recused himself from all Board matters involving AzERx. This included the Board&#146;s
analysis of AzERx as a potential target of acquisition for expanding the Company&#146;s drug development
portfolio, and subsequent negotiations between the Company and AzERx, which were led by the
Company&#146;s Chief Executive Officer. In addition, Mr.&nbsp;Holliman was not present during the
deliberations and vote of the Board approving the Definitive Agreement and the transactions
contemplated thereby. The Board has evaluated NASDAQ Listing Standards and Security and Exchange
Regulations regarding director independence and believes Mr.&nbsp;Holliman continued to meet the
requirements to be considered an independent director until April&nbsp;5, 2006, at which time Mr.
Holliman became Executive Chairman and Principal Executive Officer of the Company and no longer met
the requirements to be considered an independent director.
</DIV>
<DIV align="left">
<A name="114"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>EXECUTIVE COMPENSATION</B>
</DIV>

<DIV align="left">
<A name="115"></A>
</DIV>
<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><B>SUMMARY COMPENSATION TABLE</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth, with respect to the years ended December&nbsp;31, 2005, 2004 and
2003 compensation awarded to, earned by or paid to the Company&#146;s named executive officers at
December&nbsp;31, 2005.
</DIV>


<P align="center" style="font-size: 10pt">13
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Annual Compensation</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="23%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Long Term</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>Compensation Awards</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Restricted</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">All Other</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Other Annual</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Stock</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Securities</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Compensation</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">Name and</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Salary</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Bonus</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Compensation</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Awards</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Underlying</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">$</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">Principal Position</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 0px solid #000000">Year</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">$</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">$</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">$ (6)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">$ (3)(5)(7)(8)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 0px solid #000000">Options/SARs</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">(1)(2)(4)</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px; background: #cceeff">
    <TD colspan="29" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">

<TD><DIV style="margin-left:15px; text-indent:-15px">(Departed)</div>
<DIV style="margin-left:15px; text-indent:-15px">James M. Pusey</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">281,346</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">126,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,176,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">500,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">464,500</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">President and CEO</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">(Departed)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">350,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35,840</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1038</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Thomas R. Trotter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">350,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">157,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5400</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">President and CEO</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">359,823</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">673,250</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5400</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">(Departed)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">225,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">97,706</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">76,800</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Sherry A. Sturman</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">200,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">85,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">VP and CFO</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">190,192</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">103,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">James T. Ryaby, Ph.D.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">232,116</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">92,003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">96,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Senior VP</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">208,846</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">85,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Chief Scientific Officer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">207,692</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">87,300</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">42,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dana B. Shinbaum</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">47,596</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49,050</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">84,753</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">VP, Business
Development</div>
<DIV style="margin-left:15px; text-indent:-15px"></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>




<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes $250,000 in bonus compensation, $125,000 in relocation assistance, per Dr.
Pusey&#146;s March&nbsp;3, 2005 employment agreement and relocation assistance of $62,500 paid in 2006.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes $27,000 of personal expenses for Dr.&nbsp;Pusey, paid by the Company, per Dr.&nbsp;Pusey&#146;s March&nbsp;3, 2005 employment agreement.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes 200,000 shares of Restricted Stock, granted per Dr.&nbsp;Pusey&#146;s March&nbsp;3, 2005 employment agreement and subject to performance vesting requirements, valued at $1,176,000, based on the closing share price on the date of the grant (March&nbsp;3, 2005).</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(4)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes $50,000 bonus compensation and relocation payments of $34,753 in connection with Mr.&nbsp;Shinbaum&#146;s employment agreement with the Company.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(5)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes 15,000 shares of Restricted Stock granted to Mr.&nbsp;Shinbaum in connection with his employment agreement with the Company subject to performance vesting requirements and stockholder approval of the 2005 Equity Incentive Plan, valued at $49,050 based on the closing shares price on the date of grant (October&nbsp;29, 2005).</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(6)</TD>
    <TD>&nbsp;</TD>
    <TD>Other Annual Compensation includes an automobile allowance for Mr.&nbsp;Trotter</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(7)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes 20,000 shares of Restricted Stock granted on June&nbsp;10, 2005 to Ms.&nbsp;Sturman, subject
to stockholder approval of the 2005 Equity Incentive Plan, valued at $76,800 based on the closing
share price on the date of grant.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(8)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes 20,000 shares of Restricted Stock granted on April&nbsp;15, 2005 to Dr.&nbsp;Ryaby, subject to stockholder approval of the 2005 Equity Incentive Plan, valued at $96,000 based on the closing
share price on the date of grant.</TD>
</TR>

</TABLE>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Based on the closing share price of the Company&#146;s common stock of $4.90 at December&nbsp;31, 2005,
the value of the restricted shares in (3), (5), (7)&nbsp;and (8)&nbsp;above is $980,000, $73,500, $98,000,
and $98,000, respectively. Although holders of restricted stock would be entitled to any cash
dividends on such stock, the Company currently does not intend to pay any cash dividends on its
common stock in the foreseeable future.
</DIV>

<DIV align="left">
<A name="116"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>OPTION/SAR GRANTS IN LAST FISCAL YEAR (1)</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth information about stock option grants during the last fiscal
year to the executive officers named in the Summary Compensation Table.
</DIV>

<P align="center" style="font-size: 10pt">14
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" colspan="21" style="border-bottom: 1px solid #000000"><B>Individual Grants</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>% of Total</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Securities</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Option/SARs</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Exercise</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Underlying</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Granted to</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>or Base</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Options/SARs</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Employees in</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Price</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Expiration</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Grant</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Granted (#)(1)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Fiscal Year</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>($/Sh)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Date</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Date Value</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px; background: #cceeff">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">James M. Pusey</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">425,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">65</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.88</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3/3/2015</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,190,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">75,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">12</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.31</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3/15/2015</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">189,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dana B. Shinbaum</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">8</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.27</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10/29/2015</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">80,000</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>




<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Consist entirely of stock options.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Present value of the grants at the date of the grants was determined using the Black-Scholes model and a risk free interest rate of 4.29%, volatility of 51%, expected term (from vesting
date) of 2.6&nbsp;years and 0% dividends yield, resulting in a per share option value of $2.80 at
March&nbsp;3, 2005, $2.52 at March&nbsp;15, 2005, and $1.60 at October&nbsp;29, 2005.</TD>
</TR>

</TABLE>


<DIV align="left">
<A name="117"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES (1)</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth information with respect to the executive officers named in the
Summary Compensation Table concerning option exercises during the last fiscal year and the number
and value of options outstanding at the end of the last fiscal year.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Number of Securities Underlying</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Unexercised Options</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Value of Unexercised In-the-</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>At FY-End (#) (1)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>Money Options at FY-End ($)(2)</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Exercisable</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Unexercisable</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Exercisable</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Unexercisable</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">James M. Pusey</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">134,375</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">365,625</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Thomas R. Trotter *</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">700,546</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">354</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">554,478</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Sherry A. Sturman</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">249,146</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">444</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">292,313</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">James T. Ryaby</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">217,146</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">354</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">149,028</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dana B. Shinbaum</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">81,500</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>In 2005 Mr.&nbsp;Trotter exercised 100,000 options and sold the shares realizing $171,200 of
value.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>No SARs are outstanding.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Value is based upon closing bid price of $4.90 as reported on the Nasdaq National Market for
December&nbsp;31, 2005, minus the exercise price, multiplied by the number of shares underlying the
option.</TD>
</TR>

</TABLE>


<DIV align="left">
<A name="118"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT, AND CHANGE-IN-CONTROL ARRANGEMENTS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company hired Dr.&nbsp;James M. Pusey as Chief Executive Officer to replace Mr.&nbsp;Trotter. Dr.
Pusey signed an employment agreement with OrthoLogic on March&nbsp;3, 2005, which provides for a minimum
base salary of $350,000, which may be increased subject to annual reviews, and allows for Dr.
Pusey&#146;s participation in a discretionary bonus program, which provides for a bonus of up to 50% of
his base salary. Dr.&nbsp;Pusey received a signing bonus of $125,000 and an additional bonus of
$125,000 payable at the one year anniversary of the commencement of his employment. In addition,
Dr.&nbsp;Pusey&#146;s employment agreement provides for the reimbursement of certain business, relocation and
travel expenses as well as the medical, dental and other fringe benefits generally granted to the
Company&#146;s senior management. Under Dr.&nbsp;Pusey&#146;s employment agreement, Dr.&nbsp;Pusey may be terminated
at any time, with or without cause, at the option of either the Company or Dr.&nbsp;Pusey. In the event
that Dr.&nbsp;Pusey is terminated without cause, he will be entitled to receive 12&nbsp;months&#146; salary,
payable at the rate in effect at the time of termination in the ordinary course of business as if Dr.&nbsp;Pusey
was continuing as an employee of the Company.
</DIV>

<P align="center" style="font-size: 10pt">15
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On March&nbsp;3, 2005, the Company granted to Dr.&nbsp;Pusey options to purchase 425,000 shares of the
Company&#146;s common stock at an exercise price equal to the closing price of the Company&#146;s common
stock on March&nbsp;3, 2005, as reported by the Nasdaq Stock Market, and granted to Dr.&nbsp;Pusey, effective
as of the date he commenced his employment, March&nbsp;15, 2005, an option to purchase an additional
75,000 shares of the Company&#146;s common stock at an exercise price equal to the closing price of the
Company&#146;s common stock on that date, as reported by the Nasdaq Stock Market (the grant of the
options to purchase 425,000 shares and 75,000 shares are collectively, the &#147;Initial Option Grant&#148;).
The grants are evidenced by a Letter of Stock Option Grant for 200,000 shares and a Letter of
Stock Option Grant for 300,000 shares, each of which provide for immediate vesting upon
effectiveness of the grants as to 10% of the shares covered thereby and monthly vesting of the
remainder in equal amounts over a period of 48&nbsp;months, subject to continued employment by Dr.
Pusey.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On March&nbsp;3, 2005, the Company also granted to Dr.&nbsp;Pusey 200,000 shares of restricted stock of
the Company (the &#147;Restricted Shares&#148;). The Letter of Restricted Stock Grant provides that the
Restricted Shares shall be subject to restrictions on transferability and forfeiture, with such
restrictions to lapse as to 50% of such stock upon the acceptance by the United States Food and
Drug Administration for filing of a New Drug Application for Chrysalin for fresh fracture
indications, and with the restrictions to lapse as to the remaining 50% upon the attainment of
certain milestones to be mutually agreed upon by Dr.&nbsp;Pusey and the Compensation Committee of the
Company&#146;s Board of Directors. On March&nbsp;18, 2006, 100,000 shares of Dr.&nbsp;Pusey&#146;s restricted stock
became fully vested.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event that the Company underwent a change of control or a sale of substantially all of
its assets, Dr.&nbsp;Pusey&#146;s employment agreement provided that Dr.&nbsp;Pusey would have been entitled to
receive a special bonus of up to $2.0&nbsp;million, and at least 90% of the shares included in the
Initial Option Grant would have fully vested and the restrictions on at least 90% of the Restricted
Shares would have fully lapsed upon such a change of control or sale of assets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On April&nbsp;5, 2006, Dr.&nbsp;Pusey resigned his position as Chief Executive Officer and President of
the Company. Under Dr.&nbsp;Pusey&#146;s separation agreement, Dr.&nbsp;Pusey will receive severance benefits of
$100,000, to be paid in six equal installments and the Company&#146;s normal executive health benefits
for the six month period following his resignation. In accordance with Company policy, all of Dr.
Pusey&#146;s unvested stock options and restricted stock were cancelled upon Dr.&nbsp;Pusey&#146;s resignation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effective April&nbsp;5, 2006, Mr.&nbsp;John M. Holliman, III, became Executive Chairman and Principal
Executive Officer. As of April&nbsp;15, 2006, Mr.&nbsp;Holliman does not have an employment contract or
agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effective April&nbsp;5, 2006, Randolph C. Steer, MD Ph.D., became President of the Company. Dr.
Steer has performed consulting services for the Company since 2002 and his compensation will
continue at the rate in effect prior to his appointment as President, at $250.00 per hour. As of
April&nbsp;15, 2006 Dr.&nbsp;Steer does not have a separate employment contract or agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On October&nbsp;17, 2005, the Company entered into an employment agreement with Dana B. Shinbaum (the
&#147;Shinbaum Employment Agreement&#148;), pursuant to which Mr.&nbsp;Shinbaum serves as the Company&#146;s Vice
President of Business Development and Strategic Marketing. Under the Shinbaum Employment
Agreement, Mr.&nbsp;Shinbaum may be terminated at any time, with or without cause, at the option of
either the Company or Mr.&nbsp;Shinbaum. It provides for a salary of $8,653.85, payable every two weeks.
This salary is subject to change upon 15&nbsp;days written notice to Mr.&nbsp;Shinbaum. Under the initial
terms of Mr.&nbsp;Shinbaum&#146;s employment with the Company, the Company granted him 15,000 shares of
restricted stock, subject to performance vesting requirements and options to purchase 50,000 shares
of the Company&#146;s common stock at an exercise price equal to the closing price of the Company&#146;s
common stock on the business day immediately preceding the date of such grant, as reported by the
Nasdaq Stock Market. In addition, Mr.&nbsp;Shinbaum is eligible to participate in the Company&#146;s
discretionary bonus program, which provides for a bonus of up to 40% of his base salary, and Mr.
Shinbaum will receive medical, dental and other fringe benefits generally granted to the Company&#146;s
senior management. Under the employment agreement, Mr.&nbsp;Shinbaum was granted a signing bonus of
$50,000, payable $35,000 on the date of the agreement and $15,000 upon completion of one year of
service. Upon termination, Mr.&nbsp;Shinbaum is entitled to continuation of his base salary, in effect
at the time of termination, for the twelve month period following termination, payable as if he was a
continuing employee of the Company. Mr.&nbsp;Shinbaum also received relocation assistance of $34,735.
</DIV>

<P align="center" style="font-size: 10pt">16
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On January&nbsp;10, 2006, the Company entered into an employment agreement with Les M. Taeger,
dated as of January&nbsp;10, 2006, effective as of January&nbsp;16, 2006 (the &#147;Taeger Employment Agreement&#148;),
pursuant to which Mr.&nbsp;Taeger serves as the Company&#146;s Senior Vice President / Chief Financial
Officer. Under the Taeger Employment Agreement, Mr.&nbsp;Taeger may be terminated at any time, with or
without cause, at the option of either the Company or Mr.&nbsp;Taeger. The Taeger Employment Agreement
provides for a salary of $6,730.77, payable every two weeks. Under the initial terms of Mr.
Taeger&#146;s employment with the Company, the Company granted him options to purchase 150,000 shares of
the Company&#146;s common stock at an exercise price equal to the closing price of the Company&#146;s common
stock on the business day immediately preceding the date of such grant, as reported by the Nasdaq
Stock Market. In addition, Mr.&nbsp;Taeger is eligible to participate in the Company&#146;s discretionary
bonus program, which provides for a bonus of up to 45% of his base salary, and Mr.&nbsp;Taeger will
receive medical, dental and other fringe benefits generally granted to the Company&#146;s senior
management.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On December&nbsp;27, 2005, the Company entered into a termination and severance agreement with
Thomas R. Trotter, the Company&#146;s former Chief Executive Officer (the &#147;Termination and Severance
Agreement&#148;), pursuant to which the Second Amended and Restated Employment Agreement, effective
February&nbsp;20, 2004, by and between the Company and Mr.&nbsp;Trotter (the &#147;Trotter Employment Agreement&#148;)
was terminated. Under the Termination and Severance Agreement, the termination of the Trotter
Employment Agreement was effective on January&nbsp;1, 2006, and in exchange for the termination, Mr.
Trotter will receive annual severance in the amount of $350,000, pro rated from January&nbsp;1, 2006
until March&nbsp;15, 2006, and annual severance in the amount of $330,000 from March&nbsp;16, 2006 until
March&nbsp;15, 2007. Mr.&nbsp;Trotter&#146;s severance, which is payable at the times and in the manner dictated
by the Company&#146;s standard payroll policies, is equal to the amounts Mr.&nbsp;Trotter otherwise would
have received for the applicable time periods had the Trotter Employment Agreement remained in
effect.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On November&nbsp;8, 2004, the Company entered into a Third Amended and Restated Employment
Agreement with Sherry A. Sturman (the &#147;Sturman Agreement&#148;), which provides for a minimum base
salary of $200,000 per year. Ms.&nbsp;Sturman is also eligible for annual and long-term incentives,
including performance-based bonuses. Under the terms of the Sturman Agreement, on January&nbsp;16, 2006,
Ms.&nbsp;Sturman elected a two-year transition leading to the termination of Ms.&nbsp;Sturman&#146;s employment
with the Company. Ms.&nbsp;Sturman is entitled to continue receiving salary, at declining base salary
rates, and benefits from January&nbsp;16, 2006 to January&nbsp;15, 2008.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company entered into an employment agreement with James Ryaby. This contract provides for
a one-year employment term that is automatically renewed for another year. The Company may
terminate Dr.&nbsp;Ryaby&#146;s employment with cause, in which case the Company shall be obligated to pay
Dr.&nbsp;Ryaby&#146;s salary through the date of termination. If the Company terminates Dr.&nbsp;Ryaby&#146;s
employment without cause, Dr.&nbsp;Ryaby is entitled, upon executing a severance agreement, to 12&nbsp;months
of salary.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the Company&#146;s stock option plans, upon the occurrence of a merger in which the Company
is not the surviving entity, a sale of substantially all of the assets of the Company, an
acquisition by a third party of 100% of the Company&#146;s outstanding equity securities or a similar
reorganization of the Company, 75% of all unvested options will vest, with the balance vesting
equally over 12&nbsp;months or according to the individual&#146;s vesting schedule, whichever is earlier. If
the option holder loses his position with the Company as a result of the merger or sale, 100% of
his options will immediately vest. Additionally, the Company&#146;s 1997 Stock Option Plan provides
that, upon a merger, consolidation or reorganization with another corporation in which the Company
is not the surviving corporation, outstanding options shall be substituted on an equitable basis
for options for appropriate shares of the surviving corporation, or optionees shall receive cash in
exchange for cancellation of outstanding options.
</DIV>
<DIV align="left">
<A name="119"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>STOCK PERFORMANCE GRAPH</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Set forth below is a graph comparing the cumulative total shareholder return on the Company&#146;s
Common Stock to the cumulative total return of (i)&nbsp;the NASDAQ Biotechnology Index, and (ii)&nbsp;the
Russell 2000 Index. The Company believes that the NASDAQ Biotechnology Index, which is composed of
companies that are classified as either biotechnology or pharmaceutical, is an appropriate index
for comparison. While many of the companies listed on that index may be larger in size based on
market capitalization, the type of research and development work is comparable to the Company&#146;s
activities. The graph is generated by assuming that $100 was invested on the last trading day in the fiscal year ended December&nbsp;31, 2000 in each of the Company&#146;s Common Stock, the
NASDAQ Biotechnology Index, and the Russell 2000 Index (all assume no dividends).
</DIV>
<P align="center" style="font-size: 10pt">17
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

</DIV>



<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><IMG src="p72164p7216401.gif" alt="(PERFORMANCE GRAPH)">
</DIV>

<DIV align="left">
<A name="120"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Under the securities laws of the United States, the Company&#146;s directors, its executive officers and
any persons holding more than 10% of the Company&#146;s Common Stock are required to report their
initial ownership of the Company&#146;s Common Stock and any subsequent changes in that ownership to the
SEC. Specific due dates for these reports have been established, and the Company is required to
disclose any failure to file by these dates. The company believes that all of these filing
requirements were satisfied during the year ended December&nbsp;31, 2005. In making these disclosures,
the Company has relied solely on written representations of those persons it knows to be subject to
the reporting requirements and copies of the reports that they have filed with the SEC.
</DIV>


<P align="center" style="font-size: 10pt">18


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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left">
<A name="121"></A>
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>PROPOSAL 2:<BR>
RATIFICATION AND APPROVAL OF<BR>
ORTHOLOGIC 2005 EQUITY INCENTIVE PLAN</B>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">OrthoLogic Corp.<BR>
Proposed 2005 Equity Incentive Plan

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Overview</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;OrthoLogic Corp. is proposing its 2005 Equity Incentive Plan (the &#147;2005 Plan&#148;) to create a new
pool of available securities for issuance to its employees, directors and appropriate third
parties. The stated purposes of the 2005 Equity Incentive Plan are to attract and retain the best
available employees and directors of the Company or any subsidiary which now exists or hereafter is
organized or acquired by the Company, as well as appropriate third parties who can provide valuable
services to the Company, to provide additional incentive to such persons and to promote the success
and growth of the Company. The Company currently has approximately 40 employees and six
non-employee members on its Board who may participate in the 2005 Plan. We also may provide grants
to appropriate third parties in the future as provided in the 2005 Plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The 2005 Plan provides for the grant of incentive stock options, non-qualified stock options,
stock appreciation rights, restricted stock shares and restricted stock units. A maximum of
2,000,000 shares may be issued under the 2005 Plan and no person may receive awards for more than
300,000 shares in any calendar year.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Vote Required for Plan</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The 2005 Plan will be submitted to the stockholders for approval in order to satisfy
applicable SEC, NASDAQ and Internal Revenue Code requirements. Stockholder approval enables the
Company to take tax deductions for awards paid to an executive officer of the Company whose annual
compensation exceeds $1&nbsp;million. Any awards granted prior to such stockholder approval shall be
expressly conditioned upon such stockholder approval of the Plan. The affirmative vote of a
majority of the votes cast is required to approve the 2005 Plan. The following is a summary of the
material terms and provisions of the 2005 Plan. This summary is qualified in its entirety by
reference to the complete text of the 2005 Plan, which is attached to this Proxy Statement as
Appendix&nbsp;B.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Principal Features of the Equity Incentive Plan</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The 2005 Plan will be administered by a committee (the &#147;Committee&#148;) designated by the
Company&#146;s Board of Directors. For purposes of the power to grant awards to Company directors, the
Committee shall consist of the entire Board. For other 2005 Plan purposes, the 2005 Plan shall be
administered by a committee designated by the Board to administer the 2005 Plan and shall initially
be the Compensation Committee of the Board. The Committee may delegate some of its
responsibilities and powers to any executive officer or officers of the Company selected by it.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Stock Options</B>. Options may be incentive stock options (&#147;ISOs&#148;) or non-qualified stock options
(&#147;NSOs&#148;); provided, however, that incentive stock options may not be granted to directors or other
non-employees. The exercise price for any option shall not be less than one hundred percent of the
fair market value of the shares on the date of grant.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each option grant will be evidenced by a stock option agreement containing the terms and
conditions required by the 2005 Plan and such other terms as the Committee may deem appropriate in
each case. Each stock option agreement shall state the period or periods of time within which an
option may be exercised, as determined by the Committee. Options will have a maximum exercise term
of ten years from the date of grant. The Committee does not have the authority to &#147;reprice&#148;
options.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Stock Appreciation Rights</B>. Stock Appreciation Rights (&#147;SARs&#148;) provide a benefit that is
measured by the appreciation in value of the Company&#146;s stock over a period of time. Each SAR grant
will be evidenced by an agreement containing the terms and conditions required by the 2005 Plan and
such other terms as the Committee may deem appropriate in each case. Upon the exercise of SARs, the
Grantee (as defined in the 2005 Plan) will receive an amount determined by multiplying (1)&nbsp;the
difference obtained by subtracting the value of Company stock
</DIV>

<P align="center" style="font-size: 10pt">19
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">on the grant date from the value of Company stock on the exercise date, by (2)&nbsp;the number of
SARs exercised. The Committee may elect to pay the amount payable in cash, in shares of Company
stock, or in some combination thereof.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Restricted Stock</B>. Restricted Stock Awards may consist of shares issued subject to forfeiture
if specified conditions are not satisfied (&#147;Restricted Stock Shares&#148;) or agreements to issue shares
of Common Stock in the future if specified conditions are satisfied (&#147;Restricted Stock Units&#148;).
The Committee will determine the eligible persons to whom and the times at which restricted stock
awards will be made, the number of shares to be awarded, the time or times within which such awards
may be subject to forfeiture, and any other terms and conditions of the awards.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Grants of restricted stock may be conditioned upon the attainment of specified performance
goals or other criteria determined by the Committee. Unless otherwise provided in the applicable
agreement, the portion of the restricted stock award still subject to restriction will be forfeited
by the Grantee upon termination of the Grantee&#146;s service for any reason. If and when the
applicable restrictions lapse, unrestricted certificates for such shares will be delivered to the
Grantee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Change of Control. </B>Upon a Change of Control (as defined in the 2005 Plan), 75% of the unvested
Awards (as defined in the 2005 Plan) held by each Grantee shall automatically become vested. The
balance of each Grantee&#146;s unvested Awards will vest in 12 equal monthly installments following the
occurrence of a Change of Control, or according to the Grantee&#146;s individual vesting schedule,
whichever is earlier. If a Grantee loses his position with the Company as a result of or
subsequent to the occurrence of a Change of Control, 100% of the unexpired and unvested Awards
granted pursuant to the 2005 Plan held by such Grantee shall automatically become vested upon such
loss of position.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Amendment of the 2005 Plan</B>. The Board may from time to time amend, modify, suspend or
terminate the 2005 Plan; provided, however, that no such action shall (a)&nbsp;impair without the
Grantee&#146;s consent any Award theretofore granted under the Plan or (b)&nbsp;be made without stockholder
approval where such approval would be required as a condition of compliance with the Code or other
applicable laws or regulatory requirements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Certain Federal Income Tax Consequences of the 2005 Plan</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following is a brief summary of the principal income tax consequences under the Internal
Revenue Code (the &#147;Code&#148;) of awards made under the 2005 Plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Nonqualified Stock Options. </B>A Grantee will not recognize taxable income at the time an NSO is
granted. Upon exercise of the NSO, a Grantee will recognize compensation income in an amount equal
to the difference between the exercise price and the fair market value of the shares on the date of
exercise. The amount of such difference will be a deductible expense to the Company for tax
purposes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Incentive Stock Options. </B>A Grantee, upon exercise of an ISO, will not recognize taxable
income, if the Grantee complies with two separate holding periods: shares acquired upon exercise of
an ISO must be held for at least two years after the date of grant and for at least one year after
the date of exercise. The difference between the exercise price and the fair market value of the
stock at the date of exercise is, however, a tax preference item. When the shares of stock
received pursuant to the exercise of an ISO are sold or otherwise disposed of in a taxable
transaction, the optionee will recognize a capital gain or loss, measured by the difference between
the exercise price and the amount realized.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ordinarily, an employer granting ISOs will not be allowed any business expense deduction with
respect to stock issued upon exercise of an ISO. However, if all of the requirements for an ISO
are met except for the holding period rules set forth above, the Grantee will be required, at the
time of the disposition of the stock, to treat the lesser of the gain realized or the difference
between the exercise price and the fair market value of the stock at the date of exercise as
ordinary income and the excess, if any, as capital gain. The Company will be allowed a
corresponding business expense deduction to the extent of the amount of the Grantee&#146;s ordinary
income.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Stock Appreciation Rights. </B>A participant will not recognize taxable income upon the grant of
an SAR. Upon the exercise of an SAR, the amount paid or the value of stock delivered to the Grantee
will constitute compensation taxable to the Grantee as ordinary income. The Company is generally
entitled to an income tax deduction for any compensation income taxed to the Grantee upon exercise
of an SAR.
</DIV>

<P align="center" style="font-size: 10pt">20
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Restricted Stock Shares</B>. A Grantee receiving a restricted stock award will generally
recognize ordinary income in an amount equal to the fair market value of the stock at the time the
stock is no longer subject to forfeiture. While the restrictions are in effect, the Grantee will
recognize compensation income equal to the amount of any dividends received and the Company will be
allowed a deduction for that amount. A Grantee may elect, under Section 83(b) of the Code, within
30&nbsp;days of the stock grant to recognize taxable ordinary income on the date of grant equal to the
fair market value of the shares (determined without regard to the restrictions) on such date. The
Company will generally be entitled to a deduction equal to the amount that is taxable as ordinary
income to the Grantee in the year that such income is taxable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Restricted Stock Units</B>. A Grantee who has been granted restricted stock units will not
recognize taxable income until the applicable restriction has lapsed. The Grantee will then
recognize taxable income equal to the fair market value of the shares delivered or the amount of
cash paid. The Company is generally entitled to an income tax deduction for any compensation income
taxed to the grantee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>The Board recommends a vote in favor of the ratification and approval of the OrthoLogic Corp.
2005 Equity Incentive Plan.</B>
</DIV>
<DIV align="left">
<A name="122"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>EQUITY COMPENSATION PLANS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following provides tabular disclosure of the number of securities to be issued upon the
exercise of outstanding options, the weighted average exercise price of outstanding options, and
the number of securities remaining available for future issuance under equity compensation plans as
of December&nbsp;31, 2005, aggregated into two categories &#151; plans that have been approved by
stockholders and plans that have not.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Number of</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Securities Remaining</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Available for Future</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Number of</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Weighted-average</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Issuance Under</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Securities to be</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Exercise Price of</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Equity Compensation</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Issued upon</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Outstanding</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Plans (Excluding</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Exercise of Outstanding</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Options and</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Securities Reflected</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">Plan Category</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Options and Warrants</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Warrants</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">in 1st Column)</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Equity compensation plans
approved by stockholders</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,040,785</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">5.17</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">662,960</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Equity compensation plans
not approved by stockholders</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">500,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.62</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,540,785</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">5.09</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">662,960</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left">
<A name="123"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Officers, directors and employees of the Company have an interest in a matter being presented
for stockholder approval. Stockholder approval of the OrthoLogic Corp. 2005 Equity Incentive Plan
is required in order to grant officers, directors and employees of the Company securities under
such Plan and is being presented as Proposal No.&nbsp;2 in this Proxy Statement.
</DIV>

<P align="center" style="font-size: 10pt">21
</DIV>

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


<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">The following sets forth the proposed Awards from the 2005 Equity Incentive Plan as of March&nbsp;28,
2006:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">RESTRICTED</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">STOCK</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">James T. Ryaby, Ph.D., SrVP, CSO</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dana B. Shinbaum, VP Business Development</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Sherry A. Sturman (departing CFO)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Michael D. Casey, Director</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,512</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Fredric J. Feldman, Ph.D., Director</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,512</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">John M. Holliman, III, Chairman and Executive Officer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,512</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Elwood D. Howse, Director</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,512</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Augustus A. White, III, MD, Ph.D., Director</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,512</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">William M. Wardell, MD, Ph.D., Director</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,690</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">117,250</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">RESTRICTED</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">OPTIONS</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">STOCK</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Executive Group</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">400,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">46,512</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Non-Executive Director Group</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50,738</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Non-Executive Officers Employee Group</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">500,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">900,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">117,250</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="left">
<A name="124"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>PRINCIPAL ACCOUNTING FIRM FEES</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth the aggregate fees billed to the Company for the years ended
December&nbsp;31, 2005 and December&nbsp;31, 2004 by our principal accounting firm, Deloitte &#038; Touche LLP,
the member firms of Deloitte Touche Tohmatsu, and their respective affiliates (collectively,
&#147;Deloitte &#038; Touche&#148;).
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">Amount</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Type of Fee</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2004</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Audit-Fees (1)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">540,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">385,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Audit-Related Fees (2)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">270,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total Audit and Audit-Related Fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">562,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">655,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Tax Fees (3)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">312,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">All Other Fees (4)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Total Fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">597,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">967,000</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Audit fees include fees for services rendered by Deloitte &#038; Touche in connection with their
audits of the Company&#146;s financial statements for the fiscal years ended December&nbsp;31, 2005 and
2004, audit of management&#146;s assessment regarding the Management&#146;s Report on Internal Controls
over Financial Reporting as of December&nbsp;31, 2005 and 2004, and reviews of the financial
statements included in the Company&#146;s quarterly reports on Form 10-Q or annual reports on Form
10-K during the applicable fiscal year.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Audit-related fees include fees for services rendered by Deloitte &#038; Touche for matters such
as the purchase of substantially all of the assets of Chrysalis Biotechnology, Inc., audits of
employee benefit plans and responses to accounting and reporting-related matters.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD>Tax fees include fees for services rendered by Deloitte &#038; Touche for tax compliance,
preparation of original and amended tax returns, claims for refunds and tax payment-planning
services.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(4)</TD>
    <TD>&nbsp;</TD>
    <TD>Deloitte &#038; Touche did not perform nor bill the Company for any other services during the
fiscal years ended December&nbsp;31, 2005 and 2004 that are appropriately classified as &#147;All Other
Fees.&#148;</TD>
</TR>

</TABLE>




<P align="center" style="font-size: 10pt">22
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Audit Committee has concluded that the services provided by Deloitte &#038; Touche that
were not related to its audit of the Company&#146;s financial statements were at all times compatible
with maintaining that firm&#146;s independence.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consistent with the rules of the Securities and Exchange Commission regarding auditor
independence, the Audit Committee has responsibility for appointing, setting compensation for, and
overseeing the work of, the independent auditor. In recognition of this responsibility, the Audit
Committee has included in its charter the responsibility to pre-approve &#147;all auditing services and
permitted non-auditing services proposed to be performed by the independent auditor, subject to the
de minimis exceptions for non-audit services that were not recognized as non-audit services at the
time of engagement and which are subsequently approved by the committee prior to completion of the
audit.&#148; No fees were paid to the independent auditor pursuant to the &#147;de minimis&#148; exception to the
foregoing pre-approval policy in 2005.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Audit Committee of the Board of Directors has responsibility for the selection of an
independent auditor to audit the financial statements of the Company. In light of this, the Board
of Directors is not submitting the selection of the independent auditors for stockholder
ratification. As of the mailing date of the Proxy, April&nbsp;15, 2006, the Audit Committee had not yet
completed its independent auditing engagement process.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s current independent auditor, Deloitte &#038; Touche LLP, has audited the Company&#146;s
financial statements annually since 1987. Its representatives are expected to be present at the
Annual Meeting with the opportunity to make a statement if they desire to do so and are expected to
be available to respond to appropriate questions.
</DIV>
<DIV align="left">
<A name="125"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>OTHER MATTERS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company knows of no other matters to be submitted at the Annual Meeting. If any other
matter properly comes before the Annual Meeting, it is the intention of the persons named in the
enclosed proxy card to vote the shares they represent as the Board of Directors may recommend.
</DIV>
<DIV align="left">
<A name="126"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>STOCKHOLDER PROPOSALS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proposals of stockholders of the Company which are intended to be presented by such
stockholders at the Company&#146;s Annual Meeting for the fiscal year ending December&nbsp;31, 2006 must be
received by the Company no later than December&nbsp;20, 2006 in order that they may be considered for
inclusion in the proxy statement and form of proxy relating to that meeting. Additionally, if a
stockholder wishes to present to the Company an item for consideration as an agenda item for a
meeting without inclusion in the proxy statement, he, she or it must timely give notice to the
Secretary and give a brief description of the business desired to be discussed. To be timely for
next year&#146;s Annual Meeting, our bylaws require that such notice must have been delivered to or
mailed to and received by the Company between 60 and 90&nbsp;days prior to that Annual Meeting. If we
do not publicly announce our meeting date or give notice of our meeting date at least 70&nbsp;days
before next year&#146;s Annual Meeting, stockholders may submit items for consideration as agenda items
until 5:00 pm on the 15<SUP style="font-size: 85%; vertical-align: text-top">th</SUP> day after the public disclosure or notice.
</DIV>
<DIV align="left">
<A name="127"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ANNUAL REPORT</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A copy of the Company&#146;s 2005 Annual Report to Stockholders is enclosed. The Annual Report to
Stockholders is not a part of the proxy soliciting material enclosed herewith. Upon the written
request of any stockholder entitled to vote at the Annual Meeting, the Company will furnish,
without charge, a copy of the Company&#146;s annual report on Form 10-K for the year ended December&nbsp;31,
2005, as filed with the Securities and Exchange Commission. Copies of exhibits to the annual
report on Form 10-K are also available upon specific request and payment of 25 cents per page for
reproduction plus $3.00 for postage and handling. All requests should be directed to the Secretary
of the Company at 1275 West Washington Street, Tempe, Arizona 85281.
</DIV>

<P align="center" style="font-size: 10pt">23
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="128"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>HOUSEHOLDING</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company has adopted the &#147;householding&#148; procedure approved by the Securities and Exchange
Commission that allows the Company to deliver one proxy statement and annual report to a household
of stockholders instead of delivering a set of documents to each stockholder in the household.
This procedure is more cost effective because it reduces the number of materials to be printed and
mailed. If they have elected, stockholders who share the same last name and address will receive
one proxy statement and annual report per address unless the Company receives, or has previously
received, contrary instructions. Stockholders will continue to receive separate proxy cards/voting
instruction forms to vote their shares.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If you would like to receive a separate copy of the proxy statement and annual report for this
year, please write or call the Company at the following address or telephone number: OrthoLogic
Corp., Corporate Secretary, 1275 West Washington Street, Tempe, Arizona 85281; (800)&nbsp;937-5520.
Upon receipt of your request, the Company will promptly deliver the requested materials to you.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="12%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">April&nbsp;15, 2006
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">THE BOARD OF DIRECTORS</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">24
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="129"></A>
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>APPENDIX A</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>AUDIT COMMITTEE CHARTER</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This charter shall be reviewed and updated annually and any change must be approved by the
board of directors.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Role</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The audit committee of the board of directors assists the board in fulfilling its
responsibility for oversight of the quality and integrity of the accounting, auditing and reporting
practices of the corporation and other such duties as described by the Securities and Exchange
Commission (the &#147;SEC&#148;), the NASDAQ and as directed by the board.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Committee Membership</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The membership of the committee shall consist of at least three directors who are generally
knowledgeable in financial and auditing matters, including at least one member who is a &#147;financial
expert&#148; as defined by the rules of the SEC and the NASDAQ. Each member must meet the independence
requirements established by the SEC and NASDAQ for audit committee members.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The board of directors shall appoint one member of the audit committee as chairperson. He or she
shall be responsible for leadership of the committee, including preparing the agenda, presiding
over the meetings, making committee assignments and reporting to the board of directors. The
chairperson will also maintain regular communication with the CEO, CFO and the lead independent
audit partner.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Responsibilities</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The audit committee&#146;s primary responsibilities include:
</DIV>


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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Appointment and dismissal of the independent auditor hired to audit the financial
statements of the corporation. In so doing, the committee shall be directly responsible
for the compensation and oversight of the work of the independent auditor, including
resolution of disagreements between management and the independent auditor. The
independent auditor will report directly to the audit committee.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Pre-approval of all auditing services and permitted non-auditing services proposed to be
performed by the independent auditor, subject to the de minimus exceptions for non-audit
services that were not recognized as non-audit services at the time of engagement and which
are subsequently approved by the committee prior to completion of the audit.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Ensure the rotation of the lead audit partner having primary responsibility for the
audit as required by the SEC.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To work with management to ensure the corporation does not hire, for the position of
CEO, CFO, controller, chief accounting officer or other similar position, individuals who
have been employees of the independent auditor during the year period prior to the
initiation of the corporation&#146;s audit and were involved in any capacity in the
corporation&#146;s audit.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Oversight of the independent auditor relationship by discussing with the auditor the
nature and rigor of the audit process, receiving and reviewing audit reports, and providing
the auditor full access to the committee (and the board) to report on any and all
appropriate matters.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Review of the audited financial statements, including related disclosures made in the
management&#146;s discussion and analysis, and discussing them with management and the
independent auditor. These discussions shall include consideration of the quality of the
corporation&#146;s accounting principles as applied in its financial reporting, including review
of estimates, reserves and accruals, review of critical accounting policies and judgmental
areas, review of audit adjustments whether or not recorded, review of the effects of
off-balance sheet structures on the corporation&#146;s financial statements, discussion of any
changes in the selection or application of accounting principles and such other inquires as
may be appropriate. Based on the review, the committee shall make its audit recommendation
to the board as to the inclusion of the corporation&#146;s audited financial statements in the
corporation&#146;s annual report on Form 10-K.</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt">- A-1 -
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


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



</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Reviewing, with management and the independent auditor, the quarterly financial
information prior to the corporation&#146;s filing of Form 10-Q with regard to:</TD>
</TR>

</TABLE>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>All critical accounting policies and practices to be used.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>All alternative treatments of financial information within generally accepted
accounting principles that have been discussed with management, ramifications of the
use of such alternative disclosures and treatments, and the treatment preferred by the
independent auditor.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Other material written communications between the independent auditor and
management, such as any management letter or schedule of unadjusted differences.</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">This review may be performed by the committee or its chairperson. The committee will also
include in its periodic reports a disclosure of all non-audit services to be performed by
the independent auditor.
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Reporting audit committee activities to the full board and issuing annually a report to
be included in the proxy statement for submission to the shareholders.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Review of disclosures made to the committee by the corporation&#146;s CEO and CFO during the
certification process for the corporation&#146;s periodic reports about any material weaknesses
or significant deficiencies in the design or operation of internal controls.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Discussing with management and the external auditors the quality and adequacy of the
corporation&#146;s internal controls.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Review of disclosures made by the corporation&#146;s CEO and CFO describing any fraud
involving management or any other employees having a significant role in the corporation&#146;s
internal controls.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Establish procedures for the receipt, retention and treatment of complaints received by
the corporation regarding accounting, internal accounting controls or auditing matters.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Establish procedures for the confidential receipt, retention and treatment of anonymous
submissions by employees of concerns regarding questionable accounting or auditing matters.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Review and approve all related party transactions.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The committee is expected to maintain free and open communication (including private executive
sessions at least annually) with the independent auditor and the management of the corporation. In
discharging this oversight role, the committee is empowered to investigate any matter brought to
its attention, with full power to retain outside counsel or other experts for this purpose. The
corporation will provide appropriate funding for such engagements.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Meetings</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The committee will hold periodic meetings and a minimum of one regular annual review meeting. The
President, Chief Executive Officer, Vice President of Finance and/or Chief Financial Officer may
attend any meeting of the committee, except for portions of the meetings where his, her or their
presence would be inappropriate, as determined by the committee chairperson.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Minutes and Reports</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Minutes of each meeting of the committee shall be kept and distributed to each member of the
committee, members of the board of directors who are not members of the committee and the secretary
of the corporation. The chairperson of the committee shall report to the board of directors from
time to time or whenever so requested by the board of directors.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>General</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The powers of the committee shall be limited, and all activities of the committee shall be governed
by the provisions of the bylaws of the corporation.
</DIV>



<P align="center" style="font-size: 10pt">- A-2 -
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left">
<A name="130"></A>
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>APPENDIX B</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ORTHOLOGIC CORP.<BR>
2005 EQUITY INCENTIVE PLAN</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>I. INTRODUCTION.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.01 <U>Purpose</U>. This plan shall be known as the OrthoLogic Corp. 2005 Equity
Incentive Plan (the &#147;Plan&#148;). The purposes of the 2005 Equity Incentive Plan are to attract
and retain the best available employees and directors of the Company or any subsidiary which
now exists or hereafter is organized or acquired by the Company, as well as appropriate
third parties who can provide valuable services to the Company, to provide additional
incentive to such persons and to promote the success and growth of the Company. These
purposes may be achieved through the grant of options to purchase Common Stock of OrthoLogic
Corp., the grant of Stock Appreciation Rights and the grant of Restricted Stock, as
described below.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.02 <U>Effective Date</U>. The effective date of the Plan shall be April&nbsp;15, 2005,
subject to the approval of the Plan by shareholders of the Company at the 2006 annual
meeting. Any Awards granted prior to such stockholder approval shall be expressly
conditioned upon such stockholder approval of the Plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>II. DEFINITIONS.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.01 &#147;<U>Award</U>&#148; means an Incentive Stock Option, Non-Qualified Stock Option, Stock
Appreciation Right or Restricted Stock grant, as appropriate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.02 &#147;<U>Award Agreement</U>&#148; means the agreement between the Company and the Grantee
specifying the terms and conditions as described thereunder.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.03 &#147;<U>Board</U>&#148; means the Board of Directors of OrthoLogic Corp.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.04 &#147;<U>Change of Control</U>&#148; shall be defined as a change in ownership or control
of the Company effected through any of the following transactions: (a)&nbsp;a statutory share
exchange, merger, consolidation or reorganization approved by the Company&#146;s stockholders,
unless securities representing more than 50% of the total combined voting power of the
voting securities of the successor corporation are immediately thereafter beneficially
owned, directly or indirectly, by the persons who beneficially owned the Company&#146;s
outstanding voting securities immediately prior to such transaction; (b)&nbsp;any stockholder
approved transfer or other disposition of all or substantially all of the Company&#146;s assets
(whether held directly or indirectly through one or more controlled subsidiaries) except to
or with a wholly-owned subsidiary of the Company); or (c)&nbsp;the acquisition, directly or
indirectly by any person or related group of persons of beneficial ownership (within the
meaning of Rule&nbsp;13d-3 of the Securities Exchange Act of 1934, as amended (the &#147;Exchange
Act&#148;) of securities possessing more than 50% of the total combined voting power of the
Company&#146;s outstanding securities pursuant to transactions with the Company&#146;s stockholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.05 &#147;<U>Code</U>&#148; means the Internal Revenue Code of 1986, as it may be amended from
time to time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.06 &#147;<U>Committee</U>&#148; means the committee described in Article&nbsp;4 or the person or
persons to whom the committee has delegated its power and responsibilities under Article&nbsp;4.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.07 &#147;<U>Common Stock</U>&#148; or &#147;<U>Stock</U>&#148; means the common stock of the Company
having a par value of $.0005 per share.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.08 &#147;<U>Company</U>&#148; means OrthoLogic Corp., a Delaware corporation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.09 &#147;<U>Fair Market Value</U>&#148; means for purposes of the Plan at any date shall be
(i)&nbsp;the reported closing price of such stock on the New York Stock Exchange or other
established stock exchange or Nasdaq National Market on such date, or if no sale of such
stock shall have been made on that date, on the
</DIV>

<P align="center" style="font-size: 10pt">B-1
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">preceding date on which there was such a sale, (ii)&nbsp;if such stock is not then listed on
an exchange or the Nasdaq National Market, the last trade price per share for such stock in
the over-the-counter market as quoted on Nasdaq or the pink sheets or successor publication
of the National Quotation Bureau on such date, or (iii)&nbsp;if such stock is not then listed or
quoted as referenced above, an amount determined in good faith by the Board or the
Committee.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.10 &#147;<U>Grant Date</U>&#148; means the date on which an Award is deemed granted, which
shall be the date on which the Committee authorizes the Award or such later date as the
Committee shall determine in its sole discretion.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.11 &#147;<U>Grantee</U>&#148; means an individual who has been granted an Award.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.12 &#147;<U>Incentive Stock Option</U>&#148; or &#147;<U>ISO</U>&#148; means an option that is intended
to meet the requirements of Section&nbsp;422 of the Code and regulations thereunder.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.13 &#147;<U>Non-Qualified Stock Option</U>&#148; or &#147;<U>NSO</U>&#148; means an option other than
an Incentive Stock Option.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.14 &#147;<U>Option</U>&#148; means an Incentive Stock Option or Non-Qualified Stock Option, as
appropriate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.15 &#147;<U>Performance Goal</U>&#148; means a performance goal established by the Committee
prior to the grant of any Award of Restricted Stock that is based on the attainment of goals
relating to one or more operating or business criteria, measured on an absolute basis or in
terms of growth or reduction related to the Company&#146;s objective to successfully develop
synthetic therapeutics for unmet medical needs. (Planned performance goals are confidential
and, accordingly, not described herein).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.16 &#147;<U>Plan</U>&#148; means the OrthoLogic Corp. 2005 Equity Incentive Plan as set forth
herein, as it may be amended from time to time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.17 &#147;<U>Restricted Stock</U>&#148; means shares or units of Common Stock which are subject
to restrictions established by the Committee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.18 &#147;<U>Stock Appreciation Right</U>&#148; or &#147;<U>SAR</U>&#148; means the right to receive
cash or shares of Common Stock based upon the excess of the Fair Market Value of one share
of Common Stock on the date the SAR is exercised over the Fair Market Value of one share of
Common Stock on the Grant Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>III. SHARES SUBJECT TO AWARD.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.01 <U>Available Shares</U>. The number of shares of Common Stock of the Company
which may be issued under the Plan shall not exceed 2,000,000 shares; provided that no
individual can be granted Awards covering, in the aggregate, more than 300,000 shares of
Common Stock in any calendar year. Shares issued under the Plan may come from authorized
but unissued shares, from treasury shares held by the Company, from shares purchased by the
Company on an open market for such purpose, or from any combination of the foregoing. If
any Award granted under this Plan is canceled, terminates, expires, or lapses for any
reason, any shares subject to such Award again shall be available for the grant of an Award
under the Plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.02 <U>Changes in Common Stock</U>. If any stock dividend is declared upon the
Company Stock, or if there is any stock split, stock distribution, or other recapitalization
of the Company with respect to the Common Stock, resulting in a split or combination or
exchange of shares, the Committee shall make or provide for such adjustment in the number of
and class of shares which may be delivered under the Plan, and in the number and class of
and/or price of shares subject to outstanding Awards as it may, in its discretion, deem to
be equitable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>IV. ADMINISTRATION</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.01 <U>Administration by the Committee</U>. For purposes of the power to grant
Awards to Company directors, the Committee shall consist of the entire Board. For other
Plan purposes, the Plan shall
</DIV>

<P align="center" style="font-size: 10pt">B-2
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">be administered by a committee designated by the Board to administer the Plan and shall
initially be the Compensation Committee of the Board. A majority of the members of the
Committee shall constitute a quorum. The approval of such a quorum, expressed by a vote at
a meeting held either in person or by conference telephone call, or the unanimous consent of
all members in writing without a meeting, shall constitute the action of the Committee and
shall be valid and effective for all purposes of the Plan.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.02 <U>Committee Powers</U>. The Committee is empowered to adopt such rules,
regulations and procedures and take such other action as it shall deem necessary or proper
for the administration of the Plan. The Committee shall also have authority to interpret
the Plan, and the decision of the Committee on any questions concerning the interpretation
of the Plan shall be final and conclusive. The Committee may consult with counsel, who may
be counsel for the Company, and shall not incur any liability for any action taken in good
faith in reliance upon the advice of counsel. Subject to the provisions of the Plan, the
Committee shall have full and final authority to:
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>designate the persons to whom Awards shall be granted;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>grant Awards in such form and amount as the Committee shall determine;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>impose such limitations, restrictions and conditions upon any such
Award as the Committee shall deem appropriate;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>waive in whole or in part any limitations, restrictions or conditions
imposed upon any such Award as the Committee shall deem appropriate; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(e)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>modify, extend or renew any Award previously granted, provided that
this provision shall not provide authority to reprice Awards to a lower
exercise price.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.03 <U>Delegation by Committee</U>. The Committee may delegate all or any part of its
responsibilities and powers to any executive officer or officers of the Company selected by
it. Any such delegation may be revoked by the Board or by the Committee at any time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>V. STOCK OPTIONS.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.01 <U>Granting of Stock Options</U>. Options may be granted to directors, officers
and key employees of the Company and any of its subsidiaries, as well as appropriate third
parties who can provide valuable services to the Company; provided, however that a maximum
of 2,000,000 shares of stock may be issued pursuant to the exercise of Incentive Stock
Options. In selecting the individuals to whom Options shall be granted, as well as in
determining the number of Options granted, the Committee shall take into consideration such
factors as it deems relevant pursuant to accomplishing the purposes of the Plan. A Grantee
may, if he is otherwise eligible, be granted an additional Option or Options if the
Committee shall so determine. Option grants under the Plan shall be evidenced by agreements
in such form and containing such provisions as are consistent with the Plan as the Committee
shall from time to time approve.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.02 <U>Type of Option</U>. At the time each Option is granted, the Committee shall
designate the Option as an Incentive Stock Option or a Non-Qualified Stock Option. Any
Option designated as an Incentive Stock Option shall comply with the requirements of Section
422 of the Code, including the requirement that incentive stock options may only be granted
to individuals who are employed by the Company, a parent or a subsidiary corporation of the
Company. If required by applicable tax rules regarding a particular grant, to the extent
that the aggregate fair market value (determined as of the date an Incentive Stock Option is
granted) of the shares with respect to which an Incentive Stock Option grant under this Plan
(when aggregated, if appropriate, with shares subject to other Incentive Stock Option grants
made before said grant under this Plan or another plan maintained by the Company or any ISO
Group member) is exercisable for the first time by an optionee during any calendar year
exceeds $100,000 (or such other limit as is prescribed by the Code), such option grant shall
be treated as a grant of Nonqualified Stock Options pursuant to Code Section&nbsp;422(d).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.03 <U>Option Terms</U>. Each option grant agreement shall specify the number of
Incentive Stock Options and/or Nonqualified Stock Options being granted; one option shall be
deemed granted for each
</DIV>

<P align="center" style="font-size: 10pt">B-3
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">share of stock. In addition, each option grant agreement shall specify the
exercisability and/or vesting schedule of such options, if any.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.04 <U>Purchase Price</U>. The purchase price of the Common Stock covered by each
Option shall be not less than the Fair Market Value of such Stock on the Grant Date. Such
price shall be subject to adjustment as provided in Article&nbsp;X hereof. The purchase price for
a share subject to Option shall not be less than 100% of the Fair Market Value of the share
on the date the option is granted, provided, however, the option price of an Incentive Stock
Option shall not be less than 110% of the fair market value of such share on the date the
option is granted to an individual then owning (after the application of the family and
other attribution rules of Section 424(d) or any successor rule of the Code) more than 10%
of the total combined voting power of all classes of stock of the Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.05 <U>Method of Exercise</U>. An Option that has become exercisable may be
exercised from time to time by written notice to the Company stating the number of shares
being purchased and accompanied by the payment in full of the Option price for such shares.
The purchase price may be paid by any of the following methods, (a)&nbsp;by cash, (b)&nbsp;by check,
or (c)&nbsp;to the extent permitted under the particular grant agreement, by transferring to the
Company shares of stock of the Company at their fair market value as of the date of exercise
of the option, provided that the optionee held the shares of stock for at least six months.
Notwithstanding the foregoing, the Company may arrange for or cooperate in permitting
broker-assisted cashless exercise procedures.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.06 <U>Shareholder Rights</U>. A Grantee shall not, by reason of any Options granted
hereunder, have any right of a shareholder of the Company with respect to the shares covered
by Options until shares of Stock have been issued.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>VI. STOCK APPRECIATION RIGHTS.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.01 <U>Granting of SARs</U>. The Committee may, in its discretion, grant SARs to
directors, officers and key employees of the Company and any of its subsidiaries, as well as
appropriate third parties who can provide valuable services to the Company. SAR grants
under the Plan shall be evidenced by agreements in such form and containing such provisions
as are consistent with the Plan as the Committee shall from time to time approve.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.02 <U>Method of Exercise</U>. An SAR that has become exercisable may be exercised
by written notice to the Company stating the number of SARs being exercised.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.03 <U>Payment upon Exercise</U>. Upon the exercise of SARs, the Grantee shall be
entitled to receive an amount determined by multiplying (a)&nbsp;the difference obtained by
subtracting the Fair Market Value of a share of Common Stock as of the Grant Date of the SAR
from the Fair Market Value of a share of Common Stock on the date of exercise, by (b)&nbsp;the
number of SARs exercised. At the discretion of the Committee, the payment upon the exercise
of the SARs may be in cash, in shares of Common Stock of equivalent value, or in some
combination thereof. The number of available shares under Section&nbsp;3.01 shall only be
reduced by shares of Common Stock issued upon exercise of an SAR and shall not be affected
by any cash payments.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>VII. EFFECT OF TERMINATION OF EMPLOYMENT, DISABILITY OR DEATH.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.01 <U>Incentive Stock Options</U>. Unless otherwise provided herein or in a
specific Option Agreement which may provide longer or shorter periods of exercisability, no
ISO shall be exercisable after the expiration of the earliest of:
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>10&nbsp;years from the date the option is granted, or five years from the
date the option is granted to an individual owning (after the application of
the family and other attribution rules of Section 424(d) of the Code) at the
time such option was granted, more than 10% of the total combined voting power
of all classes of stock of the Company,</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt">B-4
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


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


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>three months after the date the Grantee ceases to perform services for
the Company or its subsidiaries, if such cessation is for any reason other than
death, disability (within the meaning of Code Section&nbsp;22(e)(3)), or cause,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>one year after the date the Grantee ceases to perform services for the
Company or its subsidiaries, if such cessation is by reason of death or
disability (within the meaning of Code Section&nbsp;22(e)(3)), or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the date the Grantee ceases to perform services for the Company or its
subsidiaries, if such cessation is for cause, as determined by the Board or the
Committee in its sole discretion;</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.02 <U>Non-Qualified Stock Options and SARs</U>. Unless otherwise provided herein or
in a specific NSO or SAR Agreement which may provide longer or shorter periods of
exercisability, no NSO or SAR shall be exercisable after the expiration of the earliest of:
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>10&nbsp;years from the date of grant,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>two years after the date the Grantee ceases to perform services for
the Company or its subsidiaries, if such cessation is for any reason other than
death, permanent disability, retirement or cause,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>three years after the date the Grantee ceases to perform services for
the Company or its subsidiaries, if such cessation is by reason of the
Grantee&#146;s death, permanent disability or retirement; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the date the Grantee ceases to perform services for the Company or its
subsidiaries, if such cessation is for cause, as determined by the Board or the
Committee in its sole discretion;</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.03 <U>ISOs, NSOs and SARs</U>. Unless otherwise provided in a specific grant
agreement or determined by the Committee, an Option or SAR shall only be exercisable for the
periods above following the date a Grantee ceases to perform services to the extent the
option was exercisable on the date of such cessation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>VIII. RESTRICTED STOCK AWARDS.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.01 <U>Granting of Restricted Stock</U>. The Committee may, in its discretion, grant
Restricted Stock to directors, officers and key employees of the Company and any of its
subsidiaries, as well as appropriate third parties who can provide valuable services to the
Company. Restricted Stock Awards may consist of shares issued subject to forfeiture if
specified conditions are not satisfied (&#147;Restricted Stock Shares&#148;) or agreements to issue shares of Common Stock in the future if specified conditions are satisfied (&#147;Restricted
Stock Units&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.02 <U>Terms of Restricted Stock Grants</U>. Each Restricted Stock Award shall be
confirmed by, and be subject to the terms of, an agreement identifying the restrictions
applicable to the Award. Restricted Stock Awards shall be subject to the following terms
and conditions:
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Committee may condition the grant of Restricted Stock upon the
attainment of Performance Goals so that the grant qualifies as
&#147;performance-based compensation&#148; within the meaning of Section 162(m) of the
Code. The Committee may also condition the grant of Restricted Stock upon such
other conditions, restrictions and contingencies as the Committee may
determine.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Except to the extent otherwise provided in the applicable Award
Agreement and (c)&nbsp;below, the portion of the Restricted Stock Award still
subject to restriction shall be forfeited by the Grantee upon termination of
the Grantee&#146;s service for any reason.</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt">B-5
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


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


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event of hardship or other special circumstances of a Grantee,
the Committee may waive in whole or in part any or all remaining restrictions
with respect to such Grantee&#146;s Restricted Stock Award.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If and when the applicable restrictions lapse, unlegended certificates
for such shares shall be delivered to the Grantee.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.03 <U>Shareholder Rights</U>. A Grantee receiving an Award of Restricted Stock
Shares shall have all of the rights of a shareholder of the Company, including the right to
vote the shares and the right to receive any cash dividends. Unless otherwise determined by
the Committee, cash dividends shall be paid in cash and dividends payable in stock shall be
paid in the form of additional Restricted Stock Shares. A Grantee receiving an Award of
Restricted Stock Units shall not be deemed the holder of any shares covered by the Award, or
have any rights as a shareholder with respect thereto, until such shares are issued to
him/her.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>IX. ACCELERATION OF EXERCISABILITY AND VESTING UNDER CERTAIN CIRCUMSTANCES.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.01 <U>Upon a Change in Control</U>. Notwithstanding any provision in the Plan to
the contrary, unless the particular letter of grant provides otherwise, 75% of the unvested
Awards held by each Grantee shall automatically become vested upon the occurrence, before
the expiration or termination of such option, of a Change in Control.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.02 <U>Balance of Awards</U>. The balance of each Grantee&#146;s unvested Awards will
vest exercisable in 12 equal monthly installments following the occurrence of a Change in
Control, or according to the Grantee&#146;s individual vesting schedule as applicable without
regard to this Article&nbsp;X, whichever is earlier. If a Grantee loses his position with the
Company as a result of or subsequent to the occurrence of a Change in Control, 100% of the
unexpired and unvested Awards granted pursuant to this Plan held by such optionee shall
automatically become vested upon such loss of position.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>X. EFFECT OF CHANGE IN STOCK SUBJECT TO PLAN.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.01 <U>Merger, Consolidation or Reorganization</U>. In the event of a merger,
consolidation or reorganization with another corporation in which the Company is not the
surviving corporation or a merger, consolidation or reorganization involving the Company in
which the Company Stock ceases to be publicly traded, the Committee shall, subject to the
approval of the Board of Directors of the Company, or the board of directors of any
corporation assuming the obligations of the Company hereunder, take action regarding each
outstanding and unexercised option pursuant to either clause (a)&nbsp;or (b)&nbsp;below:
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Appropriate provision may be made for the protection of such Award by
the substitution on an equitable basis of appropriate shares of the surviving
or related corporation, provided that the excess of the aggregate Fair Market
Value of the shares subject to such Award immediately before such substitution
over the exercise price thereof is not more than the excess of the aggregate
fair market value of the substituted shares made subject to option immediately
after such substitution over the exercise price thereof; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Committee may cancel such Award. In the event any Option or SAR
is canceled, the Company, or the corporation assuming the obligations of the
Company hereunder, shall pay the Grantee an amount of cash (less normal
withholding taxes) equal to the excess of the highest Fair Market Value per
share of the Stock during the 60-day period immediately preceding the merger,
consolidation or reorganization over the exercise price, multiplied by the
number of shares subject to such Award. In the event any other Award is
canceled, the Company, or the corporation assuming the obligations of the
Company hereunder, shall pay the Grantee an amount of cash or stock, as
determined by the Committee, based upon the highest Fair Market Value per share
of the Stock during the 60-day period immediately preceding the cancellation.</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt">B-6
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


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



</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding anything to the contrary, in the event a Change in Control should occur, the
Committee shall have the right to cancel such Awards and pay the Grantee an amount determined under
(b)&nbsp;above.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>XI. MISCELLANEOUS.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.01 <U>Withholding</U>. The Company shall have the power and the right to deduct or
withhold, or require a Grantee to remit to the Company, an amount sufficient to satisfy
Federal, state, and local taxes (including the Grantee&#146;s FICA obligation) required by law to
be withheld with respect to any taxable event arising or as a result of this Plan. With
respect to withholding required upon the exercise of Options or SARs, or upon the lapse of
restrictions on Restricted Stock, Grantees may elect, subject to the approval of the
Committee, to satisfy the withholding requirement, in whole or in part, by having the
Company withhold shares having a Fair Market Value on the date the tax is to be determined
equal to the minimum statutory total tax which could be imposed on the transaction.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.02 <U>No Employment or Retention Agreement Intended</U>. Neither the establishment
of, nor the awarding of Awards under this Plan shall be construed to create a contract of
employment or service between any Grantee and the Company or its subsidiaries; nor does it
give any Grantee the right to continued service in any capacity with the Company or its
subsidiaries or limit in any way the right of the Company or its subsidiaries to discharge
any Grantee at any time and without notice, with or without cause, or to any benefits not
specifically provided by this Plan, or in any manner modify the Company&#146;s right to
establish, modify, amend or terminate any profit sharing or retirement plans.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.03 <U>Non-transferability of Awards</U>. Any Award granted hereunder shall, by its
terms, be non-transferable by a Grantee other than by will or the laws of descent and shall
be exercisable during the Grantee&#146;s lifetime solely by the Grantee or the Grantee&#146;s duly
appointed guardian or personal representative. Notwithstanding the foregoing, the Committee
may permit a Grantee to transfer a Non-Qualified Stock Option or SAR to a family member or a
trust or partnership for the benefit of a family member, in accordance with rules
established by the Committee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.04 <U>Investment Representation</U>. Unless the shares of stock covered by the
Plan have been registered with the Securities and Exchange Commission pursuant to Section&nbsp;5
of the Securities Act of 1933, as amended, each Grantee by accepting an Award represents and
agrees, for himself or herself and his or her transferees by will or the laws of descent and
distribution, that all shares of stock purchased upon the exercise of the option grant will
be acquired for investment and not for resale or distribution. Upon such exercise of any
portion of any option grant, the person entitled to exercise the same shall upon request of
the Company furnish evidence satisfactory to the Company (including a written and signed
representation) to the effect that the shares of stock are being acquired in good faith for
investment and not for resale or distribution. Furthermore, the Company may if it deems
appropriate affix a legend to certificates representing shares of stock that such shares
have not been registered with the Securities and Exchange Commission and may so notify its
transfer agent.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.05 <U>Dissolution or Liquidation</U>. Upon the dissolution or liquidation of the
Company, any outstanding Awards theretofore granted under this Plan shall be deemed
canceled.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.06 <U>Controlling Law</U>. The law of the State of Delaware, except its law with
respect to choice of law, shall be controlling in all matters relating to the Plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.07 <U>Termination and Amendment of the Plan</U>. The Plan will expire ten (10)
years after the Effective Date, solely with respect to the granting of Incentive Stock
Options or such later date as may be permitted by the Code for Incentive Stock Options. The
Board may from time to time amend, modify, suspend or terminate the Plan; provided, however,
that no such action shall (a)&nbsp;impair without the Grantee&#146;s consent any Award theretofore
granted under the Plan or (b)&nbsp;be made without shareholder approval where such approval would
be required as a condition of compliance with the Code or other applicable laws or
regulatory requirements.
</DIV>


<P align="center" style="font-size: 10pt">B-7
</DIV>


<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ORTHOLOGIC CORP.<BR>
PROXY<BR>
2006 ANNUAL MEETING OF STOCKHOLDERS<BR>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned hereby appoints John M. Holliman, III and Les M. Taeger, and each or
either of them, as Proxies, with full power of substitution, to represent and to vote, as
designated below, all shares of common stock which the undersigned is entitled to vote at the
Annual Meeting of Stockholders of OrthoLogic Corp. to be held on May&nbsp;12, 2006, or any adjournment
thereof, hereby revoking any proxy previously given.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE
UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSAL NOS. 1and
2.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="50%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(Continued and to be dated and signed on the reverse side.)</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ORTHOLOGIC CORP.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;P.O. BOX 11365</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NEW YORK, N.Y. 10203-0365</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 18pt"><DIV style="border-bottom: 1px dashed #000000; font-size: 1px">&nbsp;</DIV>
</DIV>


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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>1.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>PROPOSAL TO ELECT TWO CLASS III DIRECTORS FOR A TERM EXPIRING IN YEAR 2009</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FOR all nominees listed below (except as marked to the contrary below) <FONT face="Wingdings">&#111;</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WITHHOLD AUTHORITY to vote for all nominees listed below <FONT face="Wingdings">&#111;</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Nominees: Elwood D. Howse, Jr., William M. Wardell, MD, Ph.D.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">(INSTRUCTIONS: To withhold authority to vote for any individual nominee, mark the &#147;For&#148; box
and write the nominee&#146;s name on the exceptions line below.)
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 0pt">Exceptions <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
</DIV>


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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>2.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>PROPOSAL TO APPROVE THE 2005 EQUITY INCENTIVE PLAN</TD>
</TR>

</TABLE>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="18%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="36%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">FOR <FONT face="Wingdings">&#111;</FONT>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">AGAINST <FONT face="Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">ABSTAIN <FONT face="Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>3. </B>In their discretion, the Proxies are authorized to vote upon such other business as may
properly come before the meeting or any adjournment thereof as set forth in the Notice and Proxy
Statement relating to this meeting, receipt of which is hereby acknowledged.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="53%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="45%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Change of Address and/or</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Comments Mark Here&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="Wingdings">&#111;</FONT></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="38%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="50%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>

</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Please sign exactly as name appears to the left. Where shares are
held by more than one owner, all should sign. When signing as an
attorney, executor, administrator, trustee or guardian, please give
full title as such. If a corporation, partnership, limited liability
entity, or any other entity, please sign in the name of the entity by
the president or other authorized officer.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Dated: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2006</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Signature</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Votes must be indicated in Black or Blue ink.</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">(Please sign, date and return this proxy in the enclosed postage prepaid envelope.)
</DIV>



<P align="center" style="font-size: 10pt">
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`
end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
