<SUBMISSION>
<ACCESSION-NUMBER>0000936392-06-000657
<TYPE>DEF 14A
<PUBLIC-DOCUMENT-COUNT>3
<PERIOD>20060717
<FILING-DATE>20060626
<DATE-OF-FILING-DATE-CHANGE>20060626
<EFFECTIVENESS-DATE>20060626
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>ASHWORTH INC
<CIK>0000820774
<ASSIGNED-SIC>2320
<IRS-NUMBER>841052000
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1031
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>DEF 14A
<ACT>34
<FILE-NUMBER>001-14547
<FILM-NUMBER>06924397
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>2765 LOKER AVE WEST
<CITY>CARLSBAD
<STATE>CA
<ZIP>92008
<PHONE>7604386610
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>2765 LOKER AVENUE WEST
<CITY>CARLSBAD
<STATE>CA
<ZIP>92008
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>CHARTER GOLF INC
<DATE-CHANGED>19920703
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
<FILENAME>a21705def14a.htm
<DESCRIPTION>DEFINITIVE PROXY STATEMENT
<TEXT>
<HTML>
<HEAD>
<TITLE>Ashworth, Inc.</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#toc">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" style="font-size: 18pt; margin-top: 12pt"><B>SCHEDULE 14A</B>
</DIV>


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


<DIV align="center" style="font-size: 12pt; margin-top: 12pt"><B>Proxy Statement Pursuant to Section&nbsp;14(a) of the Securities<BR>
Exchange Act of 1934 (Amendment No.&nbsp;&nbsp;&nbsp;&nbsp; )</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 3%; margin-top: 6pt">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-left: 3%; margin-top: 6pt">Check the appropriate box:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 3%; margin-top: 6pt"><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 &#167;240.14a-12
</DIV>

<DIV align="center" style="font-size: 14pt; margin-top: 12pt"><B><FONT style="border-bottom: 1px solid #000000">ASHWORTH, INC.</FONT></B>
</DIV>

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



<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>N/A</B><DIV style="border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV>(Name of Person(s) Filing Proxy Statement, if other than the Registrant)</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Payment of Filing Fee (Check the appropriate box):
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 3%; margin-top: 6pt"><FONT face="Wingdings">&#254;</FONT> No fee required.<BR>
<FONT face="Wingdings">&#111;</FONT> Fee computed on table below per Exchange Act Rules&nbsp;14a-6(i)(1) and 0-11.
</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="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="93%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">1)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Title of each class of securities to which transaction applies:</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>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 1px solid #000000">&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">2)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Aggregate number of securities to which transaction applies:</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>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 1px solid #000000">&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">3)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):</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>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 1px solid #000000">&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">4)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Proposed maximum aggregate value of transaction:</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>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 1px solid #000000">&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">5)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Total fee paid:</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>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 1px solid #000000">&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"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Fee paid previously with preliminary materials:</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>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 1px solid #000000">&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"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously.  Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.</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>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">1)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amount previously paid:</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>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 1px solid #000000">&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">2)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form, Schedule or Registration Statement No.:</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>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 1px solid #000000">&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">3)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Filing Party:</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>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 1px solid #000000">&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">4)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Date Filed:</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


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

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<P><HR noshade><P>

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

<!-- TOC -->
<A name="toc"><DIV align="CENTER" style="page-break-before:always"><U><B>TABLE OF CONTENTS</B></U></DIV></A>

<P><CENTER>
<TABLE border="0" width="90%" cellpadding="0" cellspacing="0">
<TR>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="76%"></TD>
</TR>
<TR><TD colspan="9"><A HREF="#000">NOTICE OF ANNUAL MEETING OF STOCKHOLDERS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#001">PROXY STATEMENT</A></TD></TR>
<TR><TD colspan="9"><A HREF="#002">ANNUAL MEETING OF STOCKHOLDERS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#003">BACKGROUND</A></TD></TR>
<TR><TD colspan="9"><A HREF="#004">PROPOSAL NO. 1</A></TD></TR>
<TR><TD colspan="9"><A HREF="#005">THE COMPANY&#146;S NOMINEES</A></TD></TR>
<TR><TD colspan="9"><A HREF="#006">CONTINUING DIRECTORS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#007">PROPOSAL NO. 2</A></TD></TR>
<TR><TD colspan="9"><A HREF="#008">SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT</A></TD></TR>
<TR><TD colspan="9"><A HREF="#009">CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#010">INDEPENDENT AUDITOR</A></TD></TR>
<TR><TD colspan="9"><A HREF="#011">SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE</A></TD></TR>
<TR><TD colspan="9"><A HREF="#012">STOCKHOLDER PROPOSALS FOR THE 2006 ANNUAL MEETING OF STOCKHOLDERS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#013">ANNUAL REPORT</A></TD></TR>
<TR><TD colspan="9"><A HREF="#014">INCORPORATION BY REFERENCE</A></TD></TR>
<TR><TD colspan="9"><A HREF="#015">OTHER MATTERS</A></TD></TR>
</TABLE>
</CENTER>
<!-- /TOC -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>


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


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">2765 Loker Avenue West<BR>
Carlsbad, California 92010<BR>
(760)&nbsp;438-6610
</DIV>

<!-- link1 "NOTICE OF ANNUAL MEETING OF STOCKHOLDERS" -->
<DIV align="left"><A NAME="000"></A></DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>NOTICE OF ANNUAL MEETING OF STOCKHOLDERS<BR>
TO BE HELD MONDAY, JULY 17, 2006</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Annual Meeting of Stockholders of Ashworth, Inc., a Delaware corporation (the &#147;Company&#148;),
will be held at The Coeur d&#146;Alene Resort, 115 S. 2<SUP style="font-size: 85%; vertical-align: text-top">nd</SUP> St., Coeur d&#146;Alene, Idaho, on July
17, 2006, at 8:00 A.M. local time, 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">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Elect three Class&nbsp;I directors of the Company to serve for the ensuing three
years, and elect four directors (two in each of Class&nbsp;II and Class&nbsp;III) appointed by
the Company&#146;s Board of Directors since the last Annual Meeting to serve until their
respective classes&#146; terms expire; 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">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Vote to ratify the selection of Moss Adams LLP as our independent auditor for
our fiscal year ending October&nbsp;31, 2006.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will also transact such other business as may properly come before the meeting or any
postponement or adjournment thereof. Stockholders of record at the close of business on June&nbsp;9,
2006 will be entitled to vote at the meeting or any postponement or adjournment thereof. Please
read the enclosed proxy statement carefully, as it contains important information.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All stockholders, even those not planning to personally attend the meeting, are urged to sign
and date the enclosed proxy card and return it promptly in the enclosed prepaid envelope to ensure
representation of your shares. Even if you submit a proxy card, you may still vote in person at
the 2006 Annual Meeting of Stockholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s Board of Directors recommends that you vote for the above proposals.
</DIV>

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

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 50%">/s/ Halina Balys

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 50%">Halina Balys<BR>
Secretary

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">June&nbsp;26, 2006
</DIV>


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

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">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>ASHWORTH, INC.</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">2765 Loker Avenue West<BR>
Carlsbad, California 92010<BR>
(760)&nbsp;438-6610

</DIV>


<!-- link1 "PROXY STATEMENT" -->
<DIV align="left"><A NAME="001"></A></DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>PROXY STATEMENT</B>
</DIV>

<!-- link1 "ANNUAL MEETING OF STOCKHOLDERS" -->
<DIV align="left"><A NAME="002"></A></DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>ANNUAL MEETING OF STOCKHOLDERS<BR>
TO BE HELD MONDAY, JULY 17, 2006</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This proxy statement is furnished by the Board of Directors (the &#147;Board&#148;) of Ashworth, Inc., a
Delaware corporation (the &#147;Company&#148;), in connection with the solicitation of proxies for use at the
2006 Annual Meeting of Stockholders (the &#147;Annual Meeting&#148;) and at any postponement or adjournment
thereof. The Annual Meeting will be held at The Coeur d&#146;Alene Resort, 115 S. 2<SUP style="font-size: 85%; vertical-align: text-top">nd</SUP>
Street, Coeur d&#146;Alene, Idaho, on Monday, July&nbsp;17, 2006, at 8:00 A.M. local time. All proxies will
be voted in accordance with the stockholders&#146; instructions contained therein. <B>Proxies returned
without instructions will be voted for the Company&#146;s nominees, as described in this proxy statement
and on the enclosed proxy card, and for ratification of the Company&#146;s appointment of Moss Adams LLP
(&#147;Moss Adams&#148;) as the Company&#146;s independent auditor. </B>The Company anticipates that it will mail
this proxy statement and the accompanying proxy on or about June&nbsp;26, 2006 to all stockholders of
the Company entitled to vote at the Annual Meeting.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any stockholder signing and returning the enclosed proxy may revoke it at any time before it
is voted at the Annual Meeting by: (i)&nbsp;providing a timely, later-dated written revocation of proxy
to the Secretary of the Company; (ii)&nbsp;providing a timely, later-dated amended proxy to the
Secretary of the Company; or (iii)&nbsp;voting in person at the Annual Meeting.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Shares Outstanding and Voting Rights</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All voting rights are vested exclusively in the holders of the Company&#146;s common stock, $.001
par value per share. Only stockholders of record at the close of business on June&nbsp;9, 2006 (the
&#147;Record Date&#148;) are entitled to notice of and to vote at the Annual Meeting or any postponement or
adjournment thereof. On the Record Date, the Company had 14,498,243 shares of common stock
outstanding, with each share entitled to one vote on all matters to be voted upon at the Annual
Meeting, including the election of each director.
</DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The conduct of business at the Annual Meeting requires a quorum, meaning that stockholders
representing a majority of the votes eligible to be cast must be present in person or represented
by proxy. Under applicable law and the Company&#146;s certificate of incorporation and bylaws,
abstentions and broker non-votes&#151;proxies submitted by brokers that do not indicate a vote on any of
the items&#151;count toward the quorum.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If a quorum is present, directors will be elected by a plurality of the votes cast; the
nominees receiving the highest total number of votes will be elected. Thus, abstentions and broker
non-votes have no effect on the election of directors. Ratification of the Company&#146;s appointment
of Moss Adams as its independent auditor requires the affirmative vote of a majority of shares
present and voting, in person or by proxy, at the Annual Meeting. Therefore, abstentions count as
votes against ratification of the appointment of Moss Adams, while broker non-votes have no effect
because they are not counted as present and voting.
</DIV>

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

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">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"><B>Solicitation of Proxies</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company previously engaged MacKenzie Partners, Inc. to solicit proxies by phone, mail and
electronic means at a cost of approximately $50,000. The Company&#146;s directors, officers and
employees may also solicit proxies personally or by telephone, without additional salary or
compensation to them. The Company will reimburse brokerage houses, custodians, nominees and
fiduciaries for the cost of forwarding proxy solicitation materials to the beneficial owners of the
Company&#146;s stock held of record by such persons.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The expense of soliciting proxies, including the cost of preparing, assembling and mailing
this proxy material to stockholders, will be borne by the Company.
</DIV>


<!-- link1 "BACKGROUND" -->
<DIV align="left"><A NAME="003"></A></DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On December&nbsp;22, 2005, Knightspoint Partners II, L.P. (&#147;Knightspoint&#148;) notified the Company
that a group of the Company&#146;s stockholders, led by Knightspoint, intended to nominate its own slate
of directors and propose certain amendments to the Company&#146;s bylaws.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On May&nbsp;5, 2006, the Company issued a joint press release with Knightspoint announcing that it
had entered into an agreement (the &#147;Agreement&#148;) with Knightspoint, several of its affiliates, and
other stockholders acting in concert with Knightspoint, under which, among other matters, the
Company agreed to appoint Peter M. Weil and David M. Meyer of Knightspoint to the Board as Class&nbsp;II
and Class&nbsp;III directors, respectively, effective May&nbsp;8, 2006, and to include Messrs.&nbsp;Weil and Meyer
in the Board&#146;s slate of nominees for election as directors at the Annual Meeting. As part of the
Agreement, Knightspoint withdrew its proposed amendments to the Company&#146;s bylaws and its nomination
of candidates for election to the Board and agreed to vote its shares in favor of all of the
Board&#146;s nominees at the Annual Meeting. Messrs.&nbsp;Weil and Meyer subsequently joined the Board on
May&nbsp;8, 2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, under the terms of the Agreement, Knightspoint and the Board (excluding Messrs.
Weil and Meyer) have agreed to mutually select a third independent director to be appointed to
Class&nbsp;II, whereupon the Board will take all appropriate action to move Mr.&nbsp;Weil to Class&nbsp;I, to the
extent permitted by applicable state law.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Also, pursuant to the Agreement, the Board appointed Mr.&nbsp;Meyer to the Compensation and Human
Resources Committee of the Board and a Special Committee of the Board was established for the
purpose of overseeing the Company&#146;s ongoing exploration of strategic alternatives.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Agreement also contained standard and customary terms such as the reimbursement of
expenses, under which Knightspoint will be reimbursed approximately $180,000, and a standstill
provision, which will be effective until the earlier of (i)&nbsp;one hundred and thirty (130)&nbsp;days prior
to the Company&#146;s 2007 Annual Meeting of Stockholders or (ii)&nbsp;ten (10)&nbsp;days before the date by which
stockholder notices must be delivered to the Company for the 2007 Annual Meeting pursuant to the
applicable provisions of the Company&#146;s bylaws. A copy of the Agreement was filed with the
Securities and Exchange Commission under the cover of Form 8-K on May&nbsp;9, 2006.
</DIV>

<!-- link1 "PROPOSAL NO. 1" -->
<DIV align="left"><A NAME="004"></A></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PROPOSAL NO. 1.<BR>
ELECTION OF DIRECTORS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s Board is divided into three classes with staggered three-year terms. Article&nbsp;10
of the Company&#146;s certificate of incorporation provides for three classes of directors, each
</DIV>

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

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">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">consisting of one-third of the total number of directors. At each Annual Meeting of
Stockholders, the directors of the class up for election are elected for a term of three years.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company currently has three Class&nbsp;I directors, three Class&nbsp;II directors and three Class
III directors, whose current terms expire, respectively, at the 2006, 2007 and 2008 Annual Meetings
of Stockholders (in all cases subject to the election and qualification of their successors or
their earlier death, resignation or removal). Pursuant to Article&nbsp;III, Section&nbsp;2 of the Company&#146;s
bylaws, however, two directors in each of Class&nbsp;II and Class&nbsp;III who were appointed by the Board
since the last Annual Meeting of Stockholders are standing for election at the 2006 Annual Meeting
of Stockholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Class&nbsp;I directors elected at the 2006 Annual Meeting of Stockholders will serve until the
2009 Annual Meeting of Stockholders (subject to the election and qualification of their successors
or their earlier death, resignation or removal). The Class&nbsp;II and Class&nbsp;III directors elected at
the 2006 Annual Meeting will serve the remainder of the terms for which they were appointed, except
to the extent Mr.&nbsp;Weil is moved from Class&nbsp;II to Class&nbsp;I upon the appointment of the third new
director, as discussed above. After his or her appointment, the third new director will serve
until the 2007 Annual Meeting of Stockholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>The Board recommends that you grant authority to Winston E. Hickman and Gary I. &#147;Sims&#148;
Schneiderman to vote your shares FOR the election of: John M. Hanson, Jr., James B. Hayes, and
Randall L. Herrel, Sr., as Class&nbsp;I directors; Detlef H. Adler and Peter M. Weil, as Class&nbsp;II
directors; and David M. Meyer and John W. Richardson, as Class&nbsp;III directors.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each of Messrs.&nbsp;Adler, Meyer, Richardson and Weil were appointed to the Board since the 2005
Annual Meeting of Stockholders. Therefore, pursuant to Article&nbsp;III, Section&nbsp;2 of the Company&#146;s
bylaws, such directors are standing for election to the Board at the 2006 Annual Meeting. All
directors have confirmed to the Company that they are willing to serve for the terms indicated.
</DIV>

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

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

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


<!-- link1 "THE COMPANY&#146;S NOMINEES" -->
<DIV align="left"><A NAME="005"></A></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>THE COMPANY&#146;S NOMINEES</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="28%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="0%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&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 nowrap align="center" colspan="3"><B>Present</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>New</B></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 nowrap align="center" colspan="3"><B>Director</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Term</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Term</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Age</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Title</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Since</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Expires</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Expires</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Class&nbsp;I</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">John M. Hanson, Jr.
(1) (3)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">66</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director, Audit<BR>
Committee Chairman
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1994</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2006</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2009</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">James B. Hayes
(2) (3) (4)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">68</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Lead Independent<BR>
Director
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2004</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2006</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2009</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Randall L. Herrel,
Sr. (4)
</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 and Chief
Executive Officer,
Chairman of the
Board,<BR>
Special Committee Chairman
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1996</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2006</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2009</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Class&nbsp;II</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Detlef H. Adler
(2) (3)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">48</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2006</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2007</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">*</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Peter M. Weil** (4)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">54</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2006</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2007</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">*</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Class&nbsp;III</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">David M. Meyer (2) (4)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">37</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2006</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2008</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">*</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">John W. Richardson
(1) (2)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">61</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2005</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2008</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">*</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<!-- link1 "CONTINUING DIRECTORS" -->
<DIV align="left"><A NAME="006"></A></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>CONTINUING DIRECTORS</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="28%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&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 nowrap align="center" colspan="3"><B>Present</B></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 nowrap align="center" colspan="3"><B>Director</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Term</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Age</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Title</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Since</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Expires</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Class&nbsp;II</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Stephen G. Carpenter
(1) (3) (4)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">66</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director, Corporate
Governance and
Nominating
Committee Chairman
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1997</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2007</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Class&nbsp;III</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">James G. O&#146;Connor
(1) (2)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">63</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director,
Compensation and
Human Resources
Committee Chairman
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2005</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2008</TD>
    <TD nowrap valign="top">&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>Member of the Audit Committee.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Member of the Compensation and Human Resources Committee.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD>Member of the Corporate Governance and Nominating Committee.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">(4)</TD>
    <TD>&nbsp;</TD>
    <TD>Member of the Special Committee.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>These directors are being nominated for election as required by Article&nbsp;III, Section&nbsp;2
of the Company&#146;s bylaws and, if elected, shall serve the remainder of the terms of their
respective classes.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left">**</TD>
    <TD>&nbsp;</TD>
    <TD>Mr.&nbsp;Weil is being nominated to serve as a Class&nbsp;II director until the appointment of a third
new director, at which time, subject to applicable state law, he will be moved to Class&nbsp;I.</TD>
</TR>

</TABLE>


<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">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There are no family relationships among the directors and executive officers of the
Company. The principal occupation of each director for the last five years, as well as other
information, is set forth below.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Detlef H. Adler</I>. Mr.&nbsp;Adler is the Chief Executive Officer of the Seidensticker Group, which is
both a supplier of woven shirts to the Company and a significant shareholder of the Company (owning
approximately 5% of the outstanding shares). Mr.&nbsp;Adler has been with Seidensticker since 1994 and
served as the Chief Financial Officer from 1994 to 1996, when he was named its Chief Executive
Officer. From 1989 to 1994, he served as the Director of Finance for Goldwell AG, then a
subsidiary of Kao Corp. Japan, where he oversaw the finance-related functions of all international
subsidiaries.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Stephen G. Carpenter</I>. Mr.&nbsp;Carpenter was a commercial banker for 36&nbsp;years and has been retired
since 1998. From 1994 to 1998, he served as Chairman and Chief Executive Officer of California
United Bank, where he also served as President and Chief Executive Officer from 1992 to 1994.
Before 1992, Mr.&nbsp;Carpenter served as Vice Chairman of Security Pacific Bank for three years. He
also served as a director of the Los Angeles Board of the Federal Reserve Bank of San Francisco.
He currently serves on the board of California United Bank.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>John M. Hanson, Jr</I>. Mr.&nbsp;Hanson is a certified public accountant. He was a stockholder and officer
of the accounting firm John M. Hanson &#038; Co. from 1968 until his retirement in 1998. He now
practices as a tax specialist for a limited number of clients.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>James B. Hayes</I>. In July&nbsp;2001, Mr.&nbsp;Hayes retired as President and Chief Executive Officer of Junior
Achievement, Inc., a not-for-profit organization providing economic education for young people in
the U.S. and throughout the world. Mr.&nbsp;Hayes served as Chairman of Junior Achievement&#146;s national
board of directors from 1991 to 1993 and as a board member from 1987 to 1995. Before 1995, Mr.
Hayes had a 35-year career in magazine publishing. He was Publisher of FORTUNE Magazine from 1986
to 1994. Mr.&nbsp;Hayes also served as Publisher of DISCOVER Magazine from 1984 to 1986, and
Advertising Sales Director of MONEY Magazine from 1982 to 1984. He held a number of executive
positions with SPORTS ILLUSTRATED from 1959 to 1982.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Randall L. Herrel, Sr</I>. Mr.&nbsp;Herrel has served as the Company&#146;s Chairman since April&nbsp;2001 and has
been a Director, President and the Chief Executive Officer of the Company since December&nbsp;1996.
From 1994 to 1996, Mr.&nbsp;Herrel served as President and Chief Operating Officer of Quiksilver, Inc.,
a young men&#146;s and women&#146;s apparel company. Mr.&nbsp;Herrel joined Quiksilver in 1989 and also served at
various times as Chief Financial Officer, Chief Operating Officer, Treasurer and Secretary.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>David M. Meyer</I>. Mr.&nbsp;Meyer is a Managing Member of Knightspoint Partners LLC, an investment firm he
co-founded in 2003. Since 2004, Mr.&nbsp;Meyer has served as Chairman of the Board of Directors of CPI
Corp., a consumer services company that operates the Sears Portrait Studios, and served, from 2004
to 2005, as a member of the interim Office of the Chief Executive. From 1995 to 2002, Mr.&nbsp;Meyer
served in various capacities at Credit Suisse First Boston, including as a director in the Mergers
and Acquisitions and Global Industrial and Services Groups in the firm&#146;s London office. Mr.&nbsp;Meyer
received a B.S. in Engineering/Operations Research from Princeton University in 1990 and an M.B.A.
from Stanford University in 1995.
</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="left" style="font-size: 10pt; margin-top: 6pt"><I>James G. O&#146;Connor</I>. In January&nbsp;2005, Mr.&nbsp;O&#146;Connor retired from his position as Ford Motor Company
Group Vice President for North America Marketing, Sales and Service. Mr.&nbsp;O&#146;Connor was responsible
for overseeing Ford, Lincoln-Mercury and Ford Customer Service divisions, Dealer Development, Ford
Performance Group, Global Marketing and export markets around the world. From 1998 to 2002, he was
Ford Motor Company Vice President and President of Ford Division responsible for the marketing,
sales and distribution of all Ford brand cars and trucks in the U.S.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>John W. Richardson</I>. Mr.&nbsp;Richardson is the Senior Vice President, Controller and Chief Accounting
Officer of Qwest Communications International (&#147;Qwest&#148;), a global provider of a variety of
telecommunications services. Mr.&nbsp;Richardson joined Qwest in April&nbsp;2003. From October&nbsp;2002 to April
2003, Mr.&nbsp;Richardson was an independent consultant. In October&nbsp;2002, Mr.&nbsp;Richardson retired from
Goodyear Tire &#038; Rubber Company (&#147;Goodyear&#148;), a worldwide manufacturer of tires, engineered products
and chemicals, where he served as the Vice President of Finance of the North American Tire unit
from 1999 to 2002. Mr.&nbsp;Richardson held general management and financial positions in Goodyear
operations in Great Britain and Ohio from 1967 to 1999. He holds a Certified Public Accountant
license from the state of Ohio (inactive)&nbsp;and received a B.B.A. degree from Ohio University in
1967.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Peter M. Weil</I>. Mr.&nbsp;Weil is a Partner of Lighthouse Retail Group LLC, a consulting firm
specializing in improving operating and positioning strategies for retailers. From 1996 to 2004,
Mr.&nbsp;Weil served as Senior Vice President/Director of Retail Forward (formerly, Price Waterhouse
Coopers &#150; retail consulting group). His consulting clients have included Hewlett Packard, Disney,
Brooks Brothers, Nordstroms, Family Dollar and Loblaws. Mr.&nbsp;Weil previously held Senior Vice
President positions with Macy&#146;s, Marshalls and J Baker/Morse Shoe in merchandising and supply chain
management.
</DIV>


<!-- link1 "PROPOSAL NO. 2" -->
<DIV align="left"><A NAME="007"></A></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PROPOSAL NO. 2<BR>
RATIFICATION OF SELECTION OF INDEPENDENT AUDITOR</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Audit Committee of the Board (the &#147;Audit Committee&#148;) has selected Moss Adams to serve as
our independent auditor for the fiscal year ending October&nbsp;31, 2006. Representatives of Moss Adams
are expected to be at the Annual Meeting, will have an opportunity to make a statement if they so
desire, and will be available to respond to appropriate questions.
</DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Selection of our independent auditor is not required to be submitted for stockholder approval,
but the Audit Committee is seeking ratification of its selection of Moss Adams from our
stockholders as a matter of good corporate practice. If the stockholders do not ratify this
selection, the Audit Committee will reconsider its selection of Moss Adams and will either continue
to retain this firm or appoint a new independent auditor. Even if the selection is ratified, the
Audit Committee may, in its discretion, appoint a different independent auditor at any time during
the year if it determines that such a change would be in the Company&#146;s best interests and those of
our stockholders.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>The Board recommends that you vote in favor of ratifying the selection of Moss Adams as the<BR>
Company&#146;s independent auditor.</B>
</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: 12pt"><B>Communicating with the Directors</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stockholders may communicate with the Board, its Committees, Mr.&nbsp;James B. Hayes, who is the
Company&#146;s Lead Independent Director, or any other member of the Board by sending a letter, care of
our Corporate Secretary, to 2765 Loker Avenue West, Carlsbad, CA 92010. The Board&#146;s policy is to
have all stockholder communications compiled by the Corporate Secretary and forwarded directly to
the Board, the Committee or the director, as indicated in the letter. All letters will be
forwarded to the appropriate party. The Board reserves the right to revise this policy in the
event that this process is abused, becomes unworkable, or otherwise does not efficiently serve the
purpose of the policy.
</DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board has determined that none of the Company&#146;s directors, with the exception of
Mr.&nbsp;Randall L. Herrel, Sr., the Chairman of the Board, President and Chief Executive Officer
of the Company, has a material relationship with the Company (either directly or as a partner,
shareholder or officer of an organization that has a relationship with the Company) unrelated to
his service as a director and that all of the Company&#146;s directors, with the exception of Mr.
Herrel, are independent under National Association of Securities Dealers (&#147;NASD&#148;) listing
standards.
</DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company has standing Audit, Compensation and Human Resources, and Corporate Governance and
Nominating Committees. The Company had an Executive Committee; however, the Executive Committee
was indefinitely suspended in June&nbsp;2005. The Company also formed a Special Committee on May&nbsp;8,
2006 as part of the Agreement with Knightspoint.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>The Audit Committee</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Audit Committee represents the Board in assessing the independence and objectivity of the
Company&#146;s independent public accountants, the integrity of management, the appropriateness of
accounting policies, and procedures and the adequacy of disclosures to stockholders. In this
regard, the Audit Committee assists the Board by reviewing the financial information disclosure,
the internal controls established by management and the internal and external audit process. The
Audit Committee is also responsible for the selection and retention of independent auditors to
audit the Company&#146;s financial statements of the Company and its subsidiaries.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Audit Committee currently consists of Messrs.&nbsp;Hanson (Chairman), Carpenter, O&#146;Connor and
Richardson, all of whom are independent under NASD listing standards. The Audit Committee and the
Board have determined that Mr.&nbsp;John M. Hanson, Jr., the Audit Committee Chairman, and Mr.&nbsp;John W.
Richardson both qualify as &#147;audit committee financial experts&#148; under SEC rules and regulations.
The Audit Committee has the authority to retain legal and other advisors of its choice at the
Company&#146;s expense, and such advisors report directly to the Committee. The Audit Committee Charter
is accessible on the Company&#146;s website at <U>www.ashworthinc.com</U> under the heading &#147;Investor Info.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>The Compensation and Human Resources Committee</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Compensation and Human Resources Committee advises the Board on policies and procedures
for compensation of executive officers and outside directors and administers the
</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">Company&#146;s equity incentive plans. This Committee currently consists of Messrs.&nbsp;O&#146;Connor
(Chairman), Adler, Hayes, Meyer and Richardson, all of whom are independent under NASD listing
standards. The Compensation and Human Resources Committee has the authority to retain legal and
other advisors of its choice at the Company&#146;s expense, and such advisors report directly to the
Committee. The Compensation and Human Resources Committee Charter is accessible via the Company&#146;s
website at <U>www.ashworthinc.com</U> under the heading &#147;Investor Info.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>The Corporate Governance and Nominating Committee</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Committee identifies individuals qualified to become directors of the Company, recommends
nominees for approval by the Board, recommends to the Board candidates for committees and the
chairpersons thereof, monitors and assesses the effectiveness of the Board and its committees, and
guides the establishment and implementation of corporate governance policies.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Corporate Governance and Nominating Committee currently consists of
Messrs.&nbsp;Carpenter (Chairman), Adler, Hanson and Hayes, all of whom are independent directors
under NASD listing standards. The Corporate Governance and Nominating Committee has the authority
to retain legal and other advisors of its choice at the Company&#146;s expense, and such advisors report
directly to the Committee. The Corporate Governance and Nominating Committee Charter is accessible
via the Company&#146;s website at <U>www.ashworthinc.com</U> under the heading &#147;Investor Info.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Corporate Governance and Nominating Committee considers stockholder recommendations for
candidates for membership on the Board in the same manner as it evaluates all other candidates.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s bylaws provide that nominations for the election of directors may be made by any
stockholder entitled to vote in the election of directors; provided, however, that a stockholder
may nominate a person for election as a director at a meeting only if written notice of such
stockholder&#146;s intent to make such nomination has been given to the Company&#146;s Secretary in
accordance with the Company&#146;s bylaws. Each notice must set forth: (i)&nbsp;the name and address of the
stockholder who intends to make the nomination and of the person or persons to be nominated; (ii)
the class and number of shares of the Company&#146;s stock that are beneficially owned by the
stockholder and a representation that the stockholder is a holder of record of stock of the Company
entitled to vote at such meeting and intends to appear in person or by proxy at the meeting and
nominate the person or persons specified in the notice; (iii)&nbsp;a description of all arrangements or
understandings between the 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 the
stockholder; (iv)&nbsp;such other information regarding each nominee proposed by such stockholder as
would be required to be included in a proxy statement filed pursuant to the proxy rules of the
Securities and Exchange Commission had the nominee been nominated by the Board; and (v)&nbsp;the consent
of each nominee to serve as a director of the Company if so elected.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Corporate Governance and Nominating Committee may identify potential nominees for
directors in a number of ways. It considers potential candidates who come to its members&#146;
attention through current officers, directors, stockholders, professional search firms or other
persons. Once a potential nominee has been identified, the Corporate Governance and Nominating
Committee evaluates the nominee&#146;s skills and characteristics to determine if he or she is qualified
to become a director. This evaluation includes an assessment of the nominee&#146;s judgment, experience
in formulating business strategy and policy, financial sophistication, leadership and objectivity,
all in
</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">the context of the needs of the Board. The Board believes that all members of the Board
should have the highest professional and personal ethics and values. Each director must also be
committed to increasing stockholder value. He or she must, therefore, have sufficient time to
devote significant energy and attention to the Company&#146;s strategic plans and operational execution.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Since the last Annual Meeting of Stockholders, Messrs.&nbsp;Adler, Meyer, Richardson and Weil were
appointed as directors to fill vacancies on the Board. Mr.&nbsp;Herrel initially recommended Mr.&nbsp;Adler
as a potential nominee, while Mr.&nbsp;Hanson initially recommended Mr.&nbsp;Richardson. Prior to their
appointment to the Board, Messrs.&nbsp;Adler and Richardson were interviewed by several directors on the
Corporate Governance and Nominating Committee to determine their qualifications based on the
criteria described above. Messrs.&nbsp;Meyer and Weil were appointed by the Board pursuant to the
Agreement, following extensive meetings and deliberations by the full Board regarding the terms of
the Agreement and the qualifications of Messrs.&nbsp;Meyer and Weil to serve on the Board.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>The Executive Committee</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The purpose of the Executive Committee was to act on behalf of the Board between Board
meetings, to provide additional support and resources to management of the Company in the nature of
that provided by the Board, and to provide for closer, more regular communication between the Board
and management of the Company between regular meetings of the Board. In June&nbsp;2005, the Board
suspended the Executive Committee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>The Special Committee</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Special Committee was formed by the Board on May&nbsp;8, 2006 pursuant to the Agreement. The
Special Committee consists of Messrs.&nbsp;Herrel, Carpenter, Hayes, Meyer and Weil; Mr.&nbsp;Herrel serves
as the Special Committee&#146;s chairman. The Special Committee oversees the Company&#146;s strategic
alternatives process and reports all deliberations and non-binding recommendations to the Company&#146;s
full Board for the Board&#146;s information and consideration of binding action. The Special Committee
Charter is accessible on the Company&#146;s website at <U>www.ashworthinc.com</U> under the heading &#147;Investor
Info.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Meetings of the Board and Committees Thereof</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During fiscal year 2005, the Board met in person six times, met telephonically three times and
took action twice by written consent in lieu of a meeting. During fiscal year 2005: the Audit
Committee met in person seven times and met telephonically 12 times; the Compensation and Human
Resources Committee met in person three times, met telephonically twice and took action once by
written consent in lieu of a meeting; the Corporate Governance and Nominating Committee met in
person seven times and met telephonically four times; and the Executive Committee met twice in
person. During fiscal year 2005, each of the directors attended at least 75% of the aggregate
number of the Board&#146;s meetings and meetings of the Committees on which he served.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Policy Regarding Director Attendance at Annual Meetings</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company encourages director attendance at its Annual Meetings of Stockholders and requests
that directors make reasonable efforts to attend such meetings. The Company&#146;s 2005 Annual Meeting
of Stockholders was attended by all directors then in office.
</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: 12pt"><B>Report of the Audit Committee</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Audit Committee reviews the Company&#146;s financial reporting process on behalf of the Board.
Management has the principal responsibility for the financial statements and the reporting process.
The Company&#146;s independent auditor opines on the conformity of our audited financial statements to
accounting principles generally accepted in the United States of America.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In its oversight of the financial reporting process, the Audit Committee has reviewed and
discussed with management and the independent auditor the Company&#146;s audited financial statements.
The Audit Committee has discussed with the independent auditor the matters required to be discussed
by Statement on Auditing Standards No.&nbsp;61 (Communication with Audit Committees). The Audit
Committee has also received from the independent auditor the written disclosures and the letter
required by Independence Standards Board No.&nbsp;1 (Independence Discussions with Audit Committees) and
discussed with them its independence from the Company and its management. The Audit Committee has
also considered whether the independent auditor&#146;s provision of non-audit services to the Company is
compatible with the auditor&#146;s independence.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In reliance on the reviews and discussions referred to above, the Audit Committee recommended
to the Board, and the Board has approved, that the audited financial statements be included in the
Company&#146;s Annual Report on Form 10-K for the year ended October&nbsp;31, 2005, for filing with the
Securities and Exchange Commission.
</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="36%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="60%">&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"><B>This report was submitted by the Audit Committee:</B></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"><B>John M. Hanson, Jr., Chairman</B></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"><B>Stephen G. Carpenter</B></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"><B>James G. O&#146;Connor</B></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"><B>John W. Richardson</B></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Compensation and Human Resources Committee Interlocks and Insider Participation</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The members of the Compensation and Human Resources Committee, Messrs.&nbsp;O&#146;Connor, Adler, Hayes,
Meyer and Richardson, are not current or former officers or employees of the Company. There are no
Compensation and Human Resources Committee interlocks between the Company and other entities
involving the Company&#146;s executive officers and directors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Report of the Compensation and Human Resources Committee</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Compensation and Human Resources Committee establishes and supervises the administration
of compensation strategy and policy. The Company&#146;s executive compensation program is designed to:
provide competitive levels of compensation in order to attract, retain and motivate skilled
employees; tie individual total compensation to individual performance and the Company&#146;s success;
and align the interests of the Company&#146;s executive officers with those of its stockholders. The
Compensation and Human Resources Committee periodically reviews the Company&#146;s compensation strategy
to evaluate its effectiveness in attaining the above goals.
</DIV>

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

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

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Overview of Executive Compensation Program</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s executive compensation program is designed to align the interests of the
Company&#146;s executives with those of the Company&#146;s stockholders. Executive compensation currently
consists of three components: Base Salary; Annual Bonus; and Stock Option Grants. Each component
of the compensation package and its rationale is outlined below. The Company&#146;s standard for
appropriate cash compensation is that equivalent to the 75<SUP style="font-size: 85%; vertical-align: text-top">th</SUP> percentile of the apparel
industry peer group.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The base salary for each position is reviewed annually and adjusted based upon each individual
executive&#146;s performance and potential. The Compensation and Human Resources Committee believes
that keeping base salaries competitive with industry peers helps to retain executives.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s bonus program rewards executives for their individual performance, as measured
against standards established in consultation with each executive, their contributions to the
development and retention of employees, their division&#146;s performance, and, for senior executives,
the Company&#146;s overall performance.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total compensation for executive officers also includes long-term incentives offered in the
form of stock options, which are generally provided through initial stock option grants at the date
of hire and periodic additional grants. The Board believes that stock option grants align the
interests of each executive officer with the interests of stockholders since the executive can
realize a gain only when the Company&#146;s stock appreciates in value.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In determining the amount of stock option grants, the Compensation and Human Resources
Committee considers the contributions of each executive to his or her division, the overall success
of the Company in the past fiscal year, each executive&#146;s potential, his or her contribution to the
development of his or her peers and subordinates, the responsibilities to be assumed by each
executive in the upcoming fiscal year, appropriate incentives for the promotion of the long-term
growth of the Company and grants made to other executives holding comparable positions in the
apparel industry peer group. The Company fixes the exercise price of the options at the common
stock&#146;s fair market value on the date of the grant or higher.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Stock Ownership Guidelines</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company has adopted Stock Ownership Guidelines (&#147;Guidelines&#148;) for the Company&#146;s
non-employee directors, the Chief Executive Officer and President (&#147;CEO&#148;), the Chief Financial
Officer (&#147;CFO&#148;), the Executive Vice President (&#147;EVP&#148;) and the Senior Vice President (&#147;SVP&#148;) levels
of executive management.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Guidelines are as follows:
</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">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>each non-employee director &#150; three (3)&nbsp;times the annual retainer;<BR></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>the CEO &#150; two (2)&nbsp;times the annual base salary;</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>each EVP and the CFO &#150; one and a half (1.5) times the annual base
salary; 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">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>each SVP &#150; one (1)&nbsp;times the annual base salary.</TD>
</TR>

</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 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;The persons in positions covered by the Guidelines must retain stock acquired on option
exercises equaling a value of at least 50% of their net after-tax profits on each exercise of
options granted on or after March&nbsp;24, 2004 until the individual ownership goal is achieved.
</DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mr.&nbsp;Herrel&#146;s employment contract provides for a base salary of no less than $325,000 and
permits increases in salary, the grant of stock options and the award of a cash bonus at the
discretion of the Compensation and Human Resources Committee. In determining Mr.&nbsp;Herrel&#146;s total
compensation for fiscal year 2005, the Compensation and Human Resources Committee considered the
Company&#146;s overall performance, as measured by sales revenue, profitability, earnings per share and
share valuation. After considering such indicia of performance in fiscal year 2004, the Committee
voted to increase Mr.&nbsp;Herrel&#146;s salary for fiscal year 2005 to $425,000, but his salary was later
reduced by 10% to $382,500 with Mr.&nbsp;Herrel&#146;s consent, effective December&nbsp;19, 2005. On June&nbsp;1,
2006, the Committee approved the reinstatement of the full salary effective July&nbsp;1, 2006. For
achieving certain objectives as set forth in the fiscal 2004 bonus plan, Mr.&nbsp;Herrel was awarded
bonuses totaling $150,000 as well as options to purchase 45,000 shares.
</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="36%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="60%">&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"><B>This report was submitted by the</B></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"><B>Compensation and Human Resources Committee:</B></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"><B>James G. O&#146;Connor, Chairman</B></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"><B>Detlef H. Adler</B></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"><B>James B. Hayes</B></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"><B>David M. Meyer</B></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"><B>John W. Richardson</B></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During fiscal 2005, non-employee directors of the Company each received annual cash
compensation of $15,000, plus $1,000 for in-person attendance and $500 for telephonic attendance at
each Board meeting or Committee meeting that is not held in conjunction with a Board meeting. In
December&nbsp;2004, non-employee directors also received a grant of options to purchase 20,000 shares of
the Company&#146;s common stock, vesting quarterly over a 12-month period, at 5,000 shares per quarter
of service as directors, with the exception of options granted to Andre P. Gambucci, who retired
from the Board at the end of his last term as a director in March&nbsp;2005 and whose options vested
immediately. In addition, each director who served as the Audit Committee chairman or the
Compensation and Human Resources Committee chairman received additional annual cash compensation of
$6,000 and $3,000, respectively. In February&nbsp;2005, each director who served as the Audit or
Compensation and Human Resources Committee chairman also received an additional annual grant of an
option to purchase 10,000 shares of the Company&#146;s common stock with 2,500 vesting immediately and
2,500 vesting on each of May&nbsp;1, 2005, August&nbsp;1, 2005 and November&nbsp;1, 2005, at 2,500 shares per
quarter of service as a committee chairman. All options have an exercise price equal to the common
stock&#146;s fair market value on the date of grant. All directors receive reimbursement of expenses
for attendance at each Board or Committee meeting and an annual $1,000 allowance for
Ashworth<SUP style="font-size: 85%; vertical-align: text-top"><SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP></SUP> apparel. No other arrangement exists pursuant to which any director of the
Company was compensated during the Company&#146;s last fiscal year for any service provided as a
director.
</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;Effective November&nbsp;1, 2005, the Compensation and Human Resources Committee modified the
non-employee director compensation to the following: 1) each non-employee director receives
$30,000 in annual cash compensation plus $1,000 for in-person attendance and $500 for telephonic
attendance at each Board meeting or Committee meeting that is not held in conjunction with a Board
meeting; 2) an option to purchase 10,000 shares of the Company&#146;s common stock, vesting quarterly
over a 12-month period, at 2,500 shares for each quarter of service as a director; and 3) each
non-employee director who serves as the Audit Committee chairman, the Compensation and Human
Resources Committee chairman, the Corporate Governance and Nominating Committee chairman or the
Lead Independent Director receives additional annual cash compensation of $10,000, $7,500, $5,000
and $5,000, respectively, plus an option to purchase 5,000 shares of the Company&#146;s common stock,
vesting quarterly, over a 12-month period, at 1,250 shares for each quarter of service as a
Committee chairman or Lead Independent Director.
</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>Executive Officers of the Company</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Below are the names and business backgrounds of the executive officers of the Company, other
than Randall L. Herrel, Sr. whose position and business background are described above.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Peter E. Holmberg</B><BR>
<B>Executive Vice President &#150; Merchandising, Design and Production</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Mr.&nbsp;Holmberg, 54, joined the Company in July&nbsp;1998 and served as the Director of Corporate Sales
until December&nbsp;1999. He served as Vice President of Corporate Sales from December&nbsp;1999 to August
2001, when he was promoted to Senior Vice President of Sales and became responsible for Ashworth
Green Grass Sales. Mr.&nbsp;Holmberg then served as the Senior Vice President of Merchandising and
Design from May&nbsp;2005 until his promotion to Executive Vice President of Merchandising, Design and
Production in September&nbsp;2005. Before joining the Company, Mr.&nbsp;Holmberg served as National
Corporate Sales Manager for Cutter &#038; Buck, Inc., from 1995 to 1998, and as Regional Manager and
Buyer for Patrick James, Inc. from 1992 to 1995. Mr.&nbsp;Holmberg was the proprietor of The Country
Gentleman, an upscale retail store in Bellevue, Washington, from 1975 to 1992.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Winston E. Hickman</B><BR>
<B>Executive Vice President, Chief Financial Officer and Treasurer</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Mr.&nbsp;Hickman, 63, joined the Company on February&nbsp;23, 2006. Mr.&nbsp;Hickman most recently served as
Executive Vice President and Chief Financial Officer of REMEC, Inc., a NASDAQ-listed designer and
manufacturer of advanced wireless subsystems used in commercial and defense communications
applications. Mr.&nbsp;Hickman joined REMEC in 2003 from privately held Paradigm Wireless System, Inc.
where, beginning in 2000, he was an investor, Chief Financial Officer and a member of the board of
directors. Mr.&nbsp;Hickman has also served as board member, Chief Financial Officer and financial
advisor to a number of public and private companies. Mr.&nbsp;Hickman served as Chief Financial Officer
of Pacific Scientific Company, a NYSE-listed company with sales in excess of $300&nbsp;million. Prior to
Pacific Scientific, he held senior financial positions at Rockwell International, Allied-Signal and
Vans, Inc. He currently serves as a member of the board of directors of SRS Labs, Inc., a
NASDAQ-listed company, where he is Chairman of the Audit Committee. Mr.&nbsp;Hickman holds an M.B.A.
from the University of Southern California and a B.A. from California State University, Long Beach.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Gary I. (&#147;Sims&#148;) Schneiderman</B><BR>
<B>Executive Vice President &#150; Sales, Marketing and Customer Service</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Mr.&nbsp;Schneiderman, 45, joined the Company in September&nbsp;2001 and served as Vice President of Sales
for Ashworth and Callaway Golf apparel Retail Sales until January&nbsp;2004, when he was promoted to
Senior Vice President of Sales and became responsible for Callaway Golf apparel Green Grass Sales.
In September&nbsp;2005, Mr.&nbsp;Schneiderman was promoted to Executive Vice President of Sales, Marketing
and Customer Service. Before joining the Company, Mr.&nbsp;Schneiderman served in a number of
capacities at Tommy Hilfiger USA, including National Sales Manager for men&#146;s sportswear. He served
as a Regional Sales Manager for Pincus Brothers Maxwell Tailored Clothing from 1985 to 1990.
</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="#toc">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>Executive Compensation</B>
</DIV>


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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following information sets forth the total compensation for the Company&#146;s named executive
officers for fiscal year 2005, as well as the total compensation paid to each such individual for
the two previous fiscal years.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Summary Compensation Table</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="40%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="15" style="border-bottom: 1px solid #000000">Annual Compensation</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000">Long-term Compensation</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>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Long-Term</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">Securities</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Incentive</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">Fiscal</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">Underlying</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Plan</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">All Other</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Name and Principal Position</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Year</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Salary</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Bonus</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Compensation</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Options</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Payouts</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Compensation</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="3">($)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">($)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">($)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">(#)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">($)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">($)</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Randall L. Herrel, Sr.</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">422,074</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">45,000</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">4,209</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-0px">President and Chief Executive Officer</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">387,231</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">150,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">17,713</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(3)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">4,209</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</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">376,443</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">75,000</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">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">4,209</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></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">Gary I. Schneiderman</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">216,701</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">85,000</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(4)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">80,891</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(5)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">38,000</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(6)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-0px">Executive Vice President &#150;</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">187,338</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">123,769</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(7)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">4,015</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(3)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-0px">Sales, Marketing and Customer Service</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">166,308</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">78,769</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">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</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">Peter E. Holmberg</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">197,716</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">35,000</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(8)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-0px">Executive Vice President &#150;</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">191,812</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 nowrap align="right">&nbsp;</TD>
    <TD align="right">6,755</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(3)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-0px">Merchandising, Design and
Production</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">190,731</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,000</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">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</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">Peter S. Case<SUP style="font-size: 85%; vertical-align: text-top">(9)</SUP></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">188,558</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">25,000</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(10)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-0px">Former Executive</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">156,365</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">3,543</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(3)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD><DIV style="margin-left:15px; text-indent:-0px">Vice President, Chief Financial Officer<BR>
and Treasurer</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">150,481</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">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</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">Per B. Gasseholm<SUP style="font-size: 85%; vertical-align: text-top">(11)</SUP></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">229,661</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">30,000</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(12)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">5,993</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(13)</SUP></TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-0px">Former Executive Vice</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">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</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">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-0px">President and Chief Operating 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">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</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">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</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">Terence W. Tsang<SUP style="font-size: 85%; vertical-align: text-top"> (14)</SUP></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">189,322</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">30,000</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">4,440</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(15)</SUP></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-0px">Former Executive</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">259,189</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">85,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">11,951</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(3)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">4,340</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(16)</SUP></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-0px">Vice
President, Chief Financial and<BR>
Accounting Officer and Treasurer</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">253,973</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35,000</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">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">4,248</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(17)</SUP></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"><SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Option grant made on December&nbsp;21, 2004 based on performance for fiscal year 2004.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Includes $1,138 premium payment made for life insurance and $3,071 premium payment
made for disability insurance.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(3)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Option grant made in fiscal year 2004 based on performance for fiscal year 2003.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(4)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Mr.&nbsp;Schneiderman was paid a retention bonus in September&nbsp;2005 pursuant to an
employment agreement.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(5)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Includes a payment of $45,000 for the purchase of a golf club membership plus
$25,039 for the gross-up of applicable income taxes. Upon termination of his employment, Mr.
Scheiderman is required to reimburse the golf club membership cost (current market value at
the time of sale minus the club fee) to the Company.</TD>
</TR>

</TABLE>


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

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

<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"><SUP style="font-size: 85%; vertical-align: text-top">(6)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Includes 20,000 options granted pursuant an employment agreement entered into upon
Mr.&nbsp;Schneiderman&#146;s promotion his current position and 18,000 options granted on December&nbsp;21,
2004 based on performance for fiscal year 2004.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(7)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Mr.&nbsp;Schneiderman&#146;s bonus in fiscal 2004 consisted of $78,769 earned for calendar
year 2003 and $45,000 earned for fiscal year 2004.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(8)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Includes 20,000 options granted pursuant to an employment agreement entered into
upon Mr.&nbsp;Holmberg&#146;s promotion to his current position and 15,000 options granted on December
21, 2004 based on performance for fiscal year 2004.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(9)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Mr.&nbsp;Case joined the Company in June&nbsp;2000 and was promoted to Executive Vice
President, Chief Financial Officer and Treasurer in September&nbsp;2005. Mr.&nbsp;Case resigned
effective February&nbsp;1, 2006.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(10)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Includes 20,000 options granted pursuant to an employment agreement entered into
upon Mr.&nbsp;Case&#146;s promotion in September&nbsp;2005 and 5,000 options granted on December&nbsp;21, 2004
based on performance for fiscal year 2004.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(11)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Mr.&nbsp;Gasseholm joined the Company on November&nbsp;1, 2004 and served as Executive Vice
President and Chief Operations Officer until his resignation effective September&nbsp;16, 2005.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(12)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>These options were granted pursuant to an employment agreement.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(13)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Premium payment made for life insurance.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(14)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Mr.&nbsp;Tsang resigned effective July&nbsp;29, 2005.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(15)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Includes $2,188 premium payment made for life insurance and $2,250 premium payment
made for disability insurance.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(16)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Includes $2,188 premium payment made for life insurance and $2,152 premium payment
made for disability insurance.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(17)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Includes $2,188 premium payment made for life insurance and $2,060 premium payment
made for disability insurance.</TD>
</TR>

</TABLE>



<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Fiscal Year 2005 Stock Option Grants</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table provides information regarding stock options granted under the Company&#146;s
equity incentive plans during fiscal year 2005 to the named 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="28%">&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>
    <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>&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">Potential Realizable</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">Value at Assumed</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">Annual Rate of Stock</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">Price Appreciation</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" colspan="17" style="border-bottom: 0px solid #000000"><I>Individual Grants</I></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 0px solid #000000">for Option Term</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Number of</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>
    <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">Securities</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">% of Total</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>
    <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">Underlying</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Options Granted</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>
    <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">Options</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">to Employees in</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Exercise or</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Expiration</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" style="border-bottom: 1px solid #000000">Granted</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Fiscal Year</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Base Price</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Date</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">5%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">10%</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</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">($/sh)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">($)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">($)</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Randall L. Herrel, Sr.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">45,000</TD>
    <TD nowrap> <SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10.75</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12/21/14</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">304,228</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">770,973</TD>
    <TD>&nbsp;</TD>
</TR>
<TR><TD align="left" valign="top">&nbsp;</TD></TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Peter E. Holmberg</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">15,000</TD>
    <TD nowrap>        <SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10.75</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12/21/14</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">101,409</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">256,991</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Peter E. Holmberg</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">20,000</TD>
    <TD nowrap>        <SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6.87</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10/18/15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">86,410</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">218,980</TD>
    <TD>&nbsp;</TD>
</TR>
<TR><TD align="left" valign="top">&nbsp;</TD></TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Gary I. Schneiderman</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">18,000</TD>
    <TD nowrap>        <SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10.75</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12/21/14</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">121,691</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">308,389</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Gary I. Schneiderman</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">20,000</TD>
    <TD nowrap>        <SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7.03</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">09/12/15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">88,423</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">224,080</TD>
    <TD>&nbsp;</TD>
</TR>
<TR><TD align="left" valign="top">&nbsp;</TD></TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Peter S. Case</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">5,000</TD>
    <TD nowrap>         <SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10.75</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12/21/14</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">33,801</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">85,658</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Peter S. Case</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">20,000</TD>
    <TD nowrap>        <SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6.87</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10/18/15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">86,410</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">218,980</TD>
    <TD>&nbsp;</TD>
</TR>
<TR><TD align="left" valign="top">&nbsp;</TD></TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Terence W. Tsang</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">30,000</TD>
    <TD nowrap>        <SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10.75</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12/21/14</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">202,819</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">513,982</TD>
    <TD>&nbsp;</TD>
</TR>
<TR><TD align="left" valign="top">&nbsp;</TD></TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Per B. Gasseholm</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">30,000</TD>
    <TD nowrap>        <SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8.44</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11/01/14</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">159,236</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">403,536</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"><SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>These options were granted on December&nbsp;21, 2004 based on performance for fiscal
year 2004.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>These options were granted on an offer of employment or promotion.</TD>
</TR>

</TABLE>


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

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">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"><B>Aggregated Option Exercises and Fiscal Year-End Option Values</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table provides information on the number of options exercised and the value
realized from such exercises in fiscal year 2005, as well as the number and value of the options
remaining to each executive after such exercises.
</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>&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">Number of Securities</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Value of Unexercised</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="3">Underlying Unexercised</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">In-The-Money Options</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Shares Acquired</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Options at Fiscal Year-End</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">at Fiscal Year-End</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">

<TD nowrap align="center" style="border-bottom: 0px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">on Exercise</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Value Realized</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Exercisable/Unexercisable</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Exercisable/Unexercisable</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">(#)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">($)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">(#)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">($)</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Randall L. Herrel, Sr.<SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">900</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">246,213<B>/</B>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,174,938<B>/</B>0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Peter E. Holmberg</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">34,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">252,538</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35,755<B>/</B>20,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">91,110<B>/</B>137,400</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Gary I. Schneiderman</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">65,250</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">47,015<B>/</B>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30,250<B>/</B>0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Peter S. Case</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,181</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">98,672</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,362<B>/</B>20,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0<B>/</B>137,400</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Terence W. Tsang <SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">83,697</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">238,592</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">53,010<B>/</B>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">697,701<B>/</B>115,315</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Per B. Gasseholm</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0<B>/</B>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0<B>/</B>0</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"><SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>On December&nbsp;28, 2005, after the Company&#146;s fiscal year-end, Mr.&nbsp;Herrel exercised
options for 99,000 shares and held 70,000 of those shares. The value realized on exercise of
the options was $225,910.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>On November&nbsp;23, 2005, after the Company&#146;s fiscal year-end, Mr.&nbsp;Tsang exercised
options for 53,010 shares. The value realized on exercise of the options was $89,568.</TD>
</TR>

</TABLE>



<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Executive Employment Agreements, 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 previously entered into executive employment agreements with: Randall L. Herrel,
Sr., the Chief Executive Officer and President; Winston E. Hickman, the Executive Vice President,
Chief Financial Officer and Treasurer; Peter S. Case, former Executive Vice President, Chief
Financial Officer and Treasurer; Peter E. Holmberg, the Executive Vice President of Merchandising,
Design and Production; Gary I. &#147;Sims&#148; Schneiderman, the Executive Vice President of Sales,
Marketing and Customer Service; and Terence W. Tsang, former Executive Vice President, Chief
Financial and Accounting Officer and Treasurer. Messrs.&nbsp;Case and Tsang resigned from the Company
effective February&nbsp;1, 2006 and July&nbsp;29, 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Agreements With Current Executive Officers</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The employment agreement with Mr.&nbsp;Herrel provides for a base salary of not less than $325,000
and bonuses to be determined by the Board on the basis of merit and the Company&#146;s financial success
and progress. No bonus or stock options were awarded to Mr.&nbsp;Herrel under the fiscal 2005 bonus
plan. For achieving certain objectives as set forth in the fiscal 2004 bonus plan, Mr.&nbsp;Herrel was
awarded bonuses totaling $150,000 as well as options to purchase 45,000 shares. A $75,000 bonus,
as well as an option to purchase 17,713 shares, was awarded to Mr.&nbsp;Herrel in December&nbsp;2003 because
the Company achieved the goals set forth in the fiscal 2003 bonus plan. The agreement with Mr.
Herrel also provides, among other benefits, for a monthly automobile allowance and for the Company
to maintain a life insurance policy for $1,000,000, the beneficiary of which may be named by Mr.
Herrel. The agreement with Mr.&nbsp;Herrel includes severance payments, ranging from one to two times
his then annual base salary, upon termination of employment under specific circumstances, including
death, termination without cause, or change of
</DIV>

<P align="center" style="font-size: 10pt">17
</DIV>

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



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">control. In addition, if Mr.&nbsp;Herrel dies or is terminated without cause or in connection with
a change of control, all of his unvested stock options will immediately vest.
</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 employment agreement with Winston E.
Hickman. The agreement with Mr.&nbsp;Hickman provides for: a base salary of $300,000; a target bonus
of 50% of base salary, with the actual payment subject to the Board&#146;s discretion; the grant of
options to purchase 50,000 shares of the Company&#146;s common stock, with half of the options vesting
on each of the first two anniversaries of Mr.&nbsp;Hickman&#146;s employment with the Company; and coverage
under the Company&#146;s benefits programs. If Mr.&nbsp;Hickman is terminated without cause or resigns under
certain specified circumstances, the severance provisions of his employment agreement grant him: a
lump sum payment of either one-half or all of his then current annual salary, depending on the
timing and circumstances of his termination or resignation; a pro rata bonus; and immediate vesting
of a pro rata number of stock options.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On September&nbsp;16, 2005, the Company entered into an employment agreement with Peter E.
Holmberg. The agreement provides for a base salary of $225,000 and bonuses to be determined
periodically at the discretion of the Board on the basis of merit and the Company&#146;s financial
success and progress up to a maximum of 50% of the base salary, and a monthly automobile allowance.
Mr.&nbsp;Holmberg was also awarded options to purchase 20,000 shares of the Company&#146;s stock with
vesting on the first anniversary of the date of grant. No bonus was awarded to Mr.&nbsp;Holmberg under
the fiscal 2005 bonus plan. The agreement also provides that if a Qualifying Termination (as
defined in the agreement) occurs within two years of the effective date of the agreement, Mr.
Holmberg will be entitled to severance payments equal to his then annual base salary, immediate
vesting of the options awarded under the agreement, and continued insurance benefits for up to one
year.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On September&nbsp;7, 2005, the Company entered into an employment agreement with Gary I. &#147;Sims&#148;
Schneiderman. The agreement with Mr.&nbsp;Schneiderman provides for: a minimum base salary of
$300,000; bonuses to be determined by the Board on the basis of merit and the Company&#146;s financial
success and progress up to a maximum of 82.5% of his base salary; three guaranteed minimum
non-compete/retention payments of $85,000 on September&nbsp;12, 2005, $85,000 on November&nbsp;24, 2005 and
$40,000 following the close of final accounting records for 2006; stock options to purchase 20,000
shares for each of fiscal years 2005, 2006 and 2007; a monthly automobile allowance and a club
membership. The agreement also provides that if a Qualifying Termination (as defined in the
agreement) occurs, Mr.&nbsp;Schneiderman will be entitled to receive severance payments equal to 12
months of his then annual base salary, an additional cash payment of $50,000, payment of insurance
premiums for a period of 12&nbsp;months, and immediate vesting of all options.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On December&nbsp;12, 2005, the Compensation and Human Resources Committee of the Board approved
(with the consent of the affected executives) the 10% base salary reduction requested by the Board,
for each of the above executives, effective December&nbsp;19, 2005. On June&nbsp;1, 2006, the Compensation
and Human Resources Committee of the Board approved reinstatement of full salary effective July&nbsp;1,
2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Agreements With Former Executive Officers</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On September&nbsp;16, 2005, the Company entered into an employment agreement with Peter S. Case,
which terminated in connection with his resignation effective on February&nbsp;1, 2006. The agreement
provided for a base salary of $225,000 and bonuses to be determined by the Board on the
</DIV>

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

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



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">basis of merit and the Company&#146;s financial success and progress up to a maximum of 50% of the
base salary, and a monthly automobile allowance. Mr.&nbsp;Case was also awarded options to purchase
20,000 shares of the Company&#146;s stock with vesting on the first anniversary of the date of grant.
No bonus was awarded to Mr.&nbsp;Case under the fiscal 2005 bonus plan. The agreement also provided
that if a Qualifying Termination (as defined in the agreement) had occurred within two years of the
effective date of the agreement, Mr.&nbsp;Case would have been entitled to severance payments equal to
his then annual base salary, immediate vesting of the options awarded under the agreement, and
continued insurance benefits for up to one year.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On November&nbsp;1, 2004, the Company entered into an executive employment agreement with Per
Gasseholm. The agreement with Mr.&nbsp;Gasseholm provided for a base annual salary of not less than
$250,000 and bonuses to be determined by the Board on the basis of merit and the Company&#146;s
financial success and progress. Under the agreement, Mr.&nbsp;Gasseholm was awarded options to purchase
30,000 shares, which were to vest over three years. The Company also maintained a $1,000,000 life
insurance policy for Mr.&nbsp;Gasseholm. The agreement with Mr.&nbsp;Gasseholm provided for severance
payments equal to six months of his then annual base salary upon termination of employment by the
Company without cause, payable over six months. Mr.&nbsp;Gasseholm separated from the Company in
September&nbsp;2005. As of October&nbsp;31, 2005, the Company recorded a severance liability of
approximately $200,000 to cover future payments to which Mr.&nbsp;Gasseholm is entitled to under the
agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On December&nbsp;15, 2000, the Company entered into an executive employment agreement with Terence
Tsang, which terminated in connection with his resignation effective on July&nbsp;29, 2005. The
executive employment agreement provided for at-will employment with an annual base salary of no
less than $230,000 and bonuses to be determined by the Board on the basis of merit and the
Company&#146;s financial success and progress. The agreement with Mr.&nbsp;Tsang also provided for severance
payments equal to nine months of his then current salary upon termination of employment under
specific circumstances. The Company also maintained a $1,000,000 life insurance policy for Mr.
Tsang.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Change in Control Agreements</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additionally, the Company has entered into change in control agreements with the following
executives: Randall L. Herrel, Sr., Winston E. Hickman, Peter S. Case, Peter E. Holmberg, Gary I.
&#147;Sims&#148; Schneiderman, and Terence W. Tsang. The change in control agreements with Messrs.&nbsp;Case and
Tsang terminated due to their resignations from the Company. Upon a qualifying termination in
connection with a change in control, as defined in each agreement, the executive would be entitled
to severance payments (generally equal to the executive&#146;s highest base salary with the Company in
the prior three years, except that Mr.&nbsp;Herrel, and Mr.&nbsp;Tsang if his agreement were still in effect,
would receive an amount equal to twice the sum of his highest base salary for the prior three years
and his average bonus for the prior two years, and Mr.&nbsp;Hickman would receive an amount equal to one
and a half times his highest base salary for the prior three years), grossed up for applicable
excise taxes imposed by Section&nbsp;4999 of the Internal Revenue Code of 1986, as amended. In
addition, Mr.&nbsp;Herrel&#146;s and Mr.&nbsp;Hickman&#146;s change in control agreements (and Mr.&nbsp;Tsang&#146;s agreement if
it were still in effect) provides for the immediate vesting of all unexercised stock options and
the continuation of insurance benefits for up to two years (except for Mr.&nbsp;Hickman who is only
entitled to the continuation of insurance benefits for up to 18&nbsp;months). Effective as of February
28, 2006, the employment and change in control agreements for each of the then-current executive
officers were amended to comply with Section&nbsp;409A of the Internal Revenue Code, as amended.
</DIV>

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

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

<!-- link1 "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT" -->
<DIV align="left"><A NAME="008"></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;The following table sets forth certain information regarding the beneficial ownership of
common stock of the Company as of May&nbsp;31, 2006 (unless otherwise noted) by: (i)&nbsp;each person known
by the Company to own beneficially more than 5% of the Company&#146;s outstanding shares of common
stock; (ii)&nbsp;Seidensticker (Overseas) Limited; (iii)&nbsp;each of the Company&#146;s directors and director
nominees; (iv)&nbsp;the Company&#146;s Named Executive Officers; and (v)&nbsp;all directors and executive officers
of the Company as a group. Unless otherwise noted, each person listed below has sole voting power
and sole investment power with respect to shares shown as owned by him, her or it. Information as
to beneficial ownership is based upon statements furnished to the Company or reports filed with the
Securities and Exchange Commission by such persons.
</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>&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">Percent</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Shares</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Options <SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Total</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Owned <SUP style="font-size: 85%; vertical-align: text-top">(3)</SUP></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Name and Address <SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(#)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(#)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(#)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(%)</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Detlef H. Adler<SUP style="font-size: 85%; vertical-align: text-top">(4)</SUP></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">3,333</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,333</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Stephen G. Carpenter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">17,500</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(5)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">67,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">85,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">*</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Peter S. Case</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">9,868</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(6)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(7)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,868</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">*</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">John M. Hanson, Jr.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">87,200</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(8)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">62,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">149,700</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Per B. Gasseholm<SUP style="font-size: 85%; vertical-align: text-top">(9)</SUP></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">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">James B. Hayes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">33,333</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">38,333</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">*</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Randall L. Herrel, Sr.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">105,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">147,213</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">252,713</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.7</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Winston E. Hickman</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">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Peter E. Holmberg</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35,755</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50,755</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">*</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">James G. O&#146;Connor</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">12,500</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(10)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23,333</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35,833</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">*</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">David M. Meyer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">34,200</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(11)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">34,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">*</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">John W. Richardson</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">3,875</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,875</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">*</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Gary I. Schneiderman</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">47,015</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">48,015</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">*</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Terence W. Tsang <SUP style="font-size: 85%; vertical-align: text-top">(12)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">*</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Peter M. Weil</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">*</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">All executive officers and
directors as a group (15 persons)
<SUP style="font-size: 85%; vertical-align: text-top">(13)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">313,268</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">423,857</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">737,125</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.9</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>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dimensional Fund Advisors Inc.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">1,208,985</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(14)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,208,985</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8.3</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">1299 Ocean Avenue</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>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Santa Monica, CA 90401</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>
</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>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Magnetar Capital Partners LLC</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">1,002,993</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(15)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,002,993</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6.9</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">1603 Orrington Avenue</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>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">13<SUP style="font-size: 85%; vertical-align: text-top">th</SUP> Floor</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>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Evanston, IL 60210</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>
</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>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Discovery Group I, LLC</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">1,002,700</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(16)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,002,700</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6.9</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">233 South Wacker Drive</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>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Suite&nbsp;3620</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>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Chicago, IL 60606</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>
</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>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Disciplined Growth Investors, Inc.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">957,475</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(17)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">957,475</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6.6</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">100 South Fifth St.</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>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Suite&nbsp;2100</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>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Minneapolis, MN 55402</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>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


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

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">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="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>&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">Percent</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Shares</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Options <SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Total</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Owned <SUP style="font-size: 85%; vertical-align: text-top">(3)</SUP></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Name and Address <SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(#)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(#)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(#)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(%)</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Knightspoint Partners II, L.P.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

    <TD align="right">1,060,533</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(18)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,060,533</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7.3</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">787 Seventh Avenue, 9th Floor,</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>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">New York, NY 10019</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&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"><!-- 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>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Seidensticker (Overseas) Limited</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">713,980</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(19)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">713,980</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.9</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Room&nbsp;728, Ocean Center</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>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">5 Canton Road</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>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Tsimshatsui</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>
</TR>
<TR valign="top">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Kowloon, Hong Kong</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&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">*</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"><SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Unless otherwise indicated, the address for each stockholder is the same as the
address of the Company.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Represents shares of common stock that may be acquired pursuant to currently
exercisable stock options or stock options exercisable within 60&nbsp;days of May&nbsp;31, 2006.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(3)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Applicable percentage of ownership is based upon 14,498,243 shares of common
stock outstanding as of May&nbsp;31, 2006, together with applicable stock options for such
stockholder. Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and includes voting and investment power with respect
to shares. Shares of common stock subject to options currently exercisable or
exercisable within 60&nbsp;days after May&nbsp;31, 2006 are deemed outstanding for computing the
percentage of ownership of the person holding such stock options, but are not deemed
outstanding for computing the percentage ownership of any other person.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(4)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Mr.&nbsp;Adler was appointed to the Board effective January&nbsp;1, 2006.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(5)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>The shares are owned by the Stephen G./Jannell S. Carpenter Trust. Stephen G.
Carpenter and Jannell S. Carpenter have shared voting and investment powers.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(6)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Mr.&nbsp;Case was appointed as Executive Vice President, Chief Financial Officer and
Treasurer effective September&nbsp;16, 2005. The shares are owned by the Peter S. Case
Revocable Trust. Mr.&nbsp;Case has sole voting and investment powers. Mr.&nbsp;Case resigned
effective February&nbsp;1, 2006. Information regarding Mr.&nbsp;Case&#146;s ownership of shares is as
of February&nbsp;1, 2006.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(7)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Mr.&nbsp;Case&#146;s options expired on May&nbsp;3, 2006, 90&nbsp;days after his resignation.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(8)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>67,500 of these shares are owned by 7296 LTD, a family partnership. Mr.&nbsp;John
M. Hanson, Jr. is the General Partner of 7296 LTD and has sole voting and investment
powers. Mr.&nbsp;Hanson has direct ownership of the remaining 19,700 shares with sole voting
and investment powers.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(9)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Mr.&nbsp;Gasseholm resigned effective September&nbsp;16, 2005.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(10)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>The shares are owned by the James G. O&#146;Connor Revocable Trust. Mr.&nbsp;O&#146;Connor
has sole voting and investment powers.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(11)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Includes the 200 shares of common stock beneficially owned by Knightspoint
Partners II, L.P. The General Partner of Knightspoint Partners II, L.P. is Knightspoint
Capital Management II LLC. The sole Member of Knightspoint Capital Management II LLC is
Knightspoint Partners LLC. Mr.&nbsp;Meyer is a managing member of Knightspoint Partners LLC,
and thus is deemed to beneficially own shares owned by Knightspoint Partners II, L.P.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(12)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Mr.&nbsp;Tsang resigned effective July&nbsp;29, 2005.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(13)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>The totals include shares beneficially owned by Messrs.&nbsp;Tsang and Case, who
have resigned from the Company, as noted above. Absent shares owned by Messrs.&nbsp;Tsang and
Case, the directors and officers of the Company beneficially own 279,400 shares of the
Company&#146;s common stock and 423,857 subject to options exercisable within 60&nbsp;days of May
31, 2006.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(14)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>This information is based upon a Schedule&nbsp;13G/A filed by Dimensional Fund
Advisors with the Securities and Exchange Commission on February&nbsp;6, 2006. As of December
31, 2005, Dimensional Fund Advisors had sole voting and investment power of the 1,208,985
shares that it beneficially owns, and, as a company registered under the Investment
Advisors Act of 1940, disclaims beneficial ownership of these shares.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(15)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>This information is based upon a Schedule&nbsp;13G filed by Magnetar Capital
Partners LLC, Supernova Management LLC, and Alec N. Litowitz, as a group, with the
Securities and Exchange Commission on February&nbsp;14, 2006. As of December&nbsp;31, 2005,
Magnetar Capital Partners LLC, Supernova Management
LLC and Alec N. Litowitz had the shared voting and investment power of the 1,002,993
shares reported as beneficially owned.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt">21
</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"><SUP style="font-size: 85%; vertical-align: text-top">(16)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>This information is based upon a Schedule&nbsp;13G/A filed by Discovery Group I,
LLC, Discovery Equity Partners, L.P., Daniel J. Donoghue and Michael R. Murphy, as a
group, with the Securities and Exchange Commission on November&nbsp;7, 2005. As of November
4, 2005, Discovery Group I, LLC, Daniel J. Donoghue and Michael R. Murphy had the shared
voting and investment power of the 1,002,700 shares reported as beneficially owned. As
of such date, Discovery Equity Partners, L.P. was the beneficial owner of 863,370 shares
for which Discovery Group I, LLC, Daniel J. Donoghue and Michael R. Murphy had the shared
voting and investment power.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(17)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>This information is based upon a Schedule&nbsp;13G/A filed by Disciplined Growth
Investors, Inc. with the Securities and Exchange Commission on February&nbsp;1, 2006. As of
December&nbsp;31, 2005, Disciplined Growth Investors, Inc. had the sole voting and investment
power of the 957,475 shares reported as beneficially owned.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(18)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>This information is based upon a Schedule&nbsp;13D/A filed with the Securities and
Exchange Commission on May&nbsp;8, 2006. This Schedule&nbsp;13D was filed jointly by Knightspoint
Partners II, L.P., Knightspoint Capital Management II LLC, Knightspoint Partners, LLC,
Michael Koeneke, David Meyer, Starboard Value and Opportunity Master Fund Ltd., Parche,
LLC, Admiral Advisors, LLC, Ramius Capital Group, LLC, C4S &#038; Co., LLC, Peter A. Cohen,
Jeffrey M. Solomon, Morgan B. Stark, Thomas W. Strauss, Black Sheep Partners, LLC and
Brian Black (collectively, the &#147;Knightspoint Group&#148;). In addition, although they do not
affirm their membership in the group that is composed of, and affirmed by, the
Knightspoint Group, each of Michael Glazer, H. Michael Hecht, Peter M. Weil and Andrea
Weiss (collectively, the &#147;Other Reporting Persons&#148; and, together with the Knightspoint
Group, the &#147;Reporting Persons&#148;) filed the Schedule&nbsp;13D. Each Other Reporting Person
disclaims beneficial ownership of Common Stock held by the Knightspoint Group and,
similarly, the Knightspoint Group disclaims beneficial ownership of Common Stock held by
the Other Reporting Persons. As of May&nbsp;8, 2006, the Reporting Persons beneficially owned
an aggregate of 1,070,033 shares of which, the Knightspoint Group owned an aggregate of
1,060,533 shares and the Other Reporting Persons owned an aggregate of 9,500 shares.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(19)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>This information was provided by Seidensticker (Overseas) Limited on June&nbsp;12,
2006.</TD>
</TR>

</TABLE>


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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Set forth below is a line graph comparing the yearly percentage change in the cumulative total
stockholder returns on the Company&#146;s common stock over a five-year period with the cumulative total
return of the NASDAQ Stock Market (U.S. Companies) and the stocks of companies in the same Standard
Industrial Classification as the Company (SIC 2300-2399). The graph assumes that $100.00 was
invested on October&nbsp;31, 2000 in the Company&#146;s common stock and each index and that all dividends
were reinvested. The comparisons in the graph are required by the Securities and Exchange
Commission and are neither intended to forecast, nor necessarily indicative, of possible future
performance of the Company&#146;s common stock.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*</B><BR>
AMONG ASHWORTH, INC., THE NASDAQ STOCK MARKET (U.S.) INDEX<BR>
AND SIC CODE 2300 &#150; 2399
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><IMG src="a21705a2170501.gif" alt="(PERFORMANCE GRAPH)">

</DIV>

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

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

<!-- link1 "CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS" -->
<DIV align="left"><A NAME="009"></A></DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company leases its Phenix City, Alabama distribution facility from 16 Downing, LLC, a
related party owned by certain members of Gekko Brands, LLC&#146;s management. Total payments under the
operating lease for this facility made during the years ended October&nbsp;31, 2005 and 2004 were
$400,000 and $128,000, respectively. The lease agreement requires monthly payments of $33,000
through June&nbsp;6, 2012.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Seidensticker (Overseas) Limited, a supplier of inventoried products to the Company,
beneficially owned 718,980 shares, or approximately 5%, of the Company&#146;s outstanding common stock,
as of June&nbsp;12, 2006. The President and Chief Executive Officer of Seidensticker (Overseas)
Limited, Detlef H. Adler, was elected to the Company&#146;s Board effective January&nbsp;1, 2006. During the
years ended October&nbsp;31, 2005, 2004 and 2003, we purchased approximately $5,800,000, $4,000,000 and
$3,900,000 of products from Seidensticker. We believe that the terms upon which we purchased the
inventoried products from Seidensticker are no less favorable than the terms of similar
arrangements with unrelated third parties.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the Agreement, the Company will reimburse to Knightspoint Partners II, L.P. its
actual expenses incurred in connection with the proxy contest in the amount of approximately
$180,000, as noted above. Mr.&nbsp;Meyer is a managing member of Knightspoint Partners LLC, an
affiliate of Knightspoint Partners II, L.P.
</DIV>

<!-- link1 "INDEPENDENT AUDITOR" -->
<DIV align="left"><A NAME="010"></A></DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Policy on Audit Committee Pre-approval of Audit and Permissible Non-audit Services of Independent Auditor</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consistent with policies of the Securities and Exchange Commission regarding auditor
independence and the Audit Committee Charter, the Audit Committee has the responsibility for
appointing, setting compensation and overseeing the work of the independent auditor. The Audit
Committee&#146;s policy is to pre-approve all audit and permissible non-audit services provided by the
independent auditor. Pre-approval is detailed as to the particular service or category of services
and is generally subject to a specific budget. The Audit Committee may also pre-approve particular
services on a case-by-case basis. In assessing requests for services by the independent auditor,
the Audit Committee considers whether such services are consistent with the auditor&#146;s independence,
whether the independent auditor is likely to provide the most effective and efficient service based
upon its familiarity with the Company, and whether the service could enhance the Company&#146;s ability
to manage or control risk or improve audit quality.
</DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to its periodic review of its outside audit requirements, the Audit Committee of the
Company&#146;s Board requested proposals for its independent audit services and interviewed several
accounting firms in connection with selecting the Company&#146;s independent auditor for its 2005 fiscal
year. As a result of this process, on March&nbsp;16, 2005, the Audit Committee dismissed KPMG LLP
(&#147;KPMG&#148;) as the Company&#146;s independent auditor and approved the engagement of Moss Adams, effective
March&nbsp;17, 2005, to serve as the Company&#146;s independent auditor for its fiscal year ended October&nbsp;31,
2005. Pursuant to the Audit Committee&#146;s Charter, which grants
</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" style="font-size: 10pt; margin-top: 6pt">the Audit Committee the sole authority to terminate and to appoint the Company&#146;s independent
auditor, the dismissal of KPMG and the appointment of Moss Adams was approved solely by the Audit
Committee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The reports issued by KPMG on the financial statements of the Company for the fiscal years
ended October&nbsp;31, 2004 and 2003 did not contain any adverse opinion or a disclaimer of opinion, or
any qualification or modification as to uncertainty, audit scope or accounting principles. During
the fiscal years ended October&nbsp;31, 2004 and 2003, and the subsequent interim period through March
16, 2005, there were no disagreements with KPMG on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if
not resolved to the satisfaction of KPMG, would have caused KPMG to make reference to the subject
matter of the disagreement in connection with its reports. In addition, during the fiscal years
ended October&nbsp;31, 2004 and 2003 and the subsequent interim period through March&nbsp;16, 2005, there
were no reportable events as defined in Item&nbsp;304(a)(1)(v) of Regulation&nbsp;S-K.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the fiscal years ended October&nbsp;31, 2004 and 2003, and the subsequent interim period
through March&nbsp;16, 2005, the Company did not consult with Moss Adams with respect to the application
of accounting principles to a specified transaction, either completed or proposed, or the type of
audit opinion that might be rendered on the Company&#146;s financial statements, or any other matters or
reportable events described in Items 304(a)(2)(i) and (ii)&nbsp;of Regulation&nbsp;S-K.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Independent Auditors&#146; Fees and Services</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Set forth below are the aggregate fees paid or accrued for professional services rendered to
the Company by KPMG, its independent auditor for fiscal year 2004 and Moss Adams, the Company&#146;s
independent auditor for fiscal year 2005.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="60%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&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: 0px solid #000000">Fiscal Years Ended October 31,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</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 &#150; KPMG<SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">287,700</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">292,866</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Audit Fees &#150; Moss Adams<SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">455,616</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Audit-related Fees &#150; KPMG<SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">55,470</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Audit-related Fees &#150; Moss Adams<SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Tax Fees<SUP style="font-size: 85%; vertical-align: text-top">(3)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">95,903</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">All Other Fees &#150; KPMG<SUP style="font-size: 85%; vertical-align: text-top">(4)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">105,250</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 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 Fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">755,316</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">549,529</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>
<!-- 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"><SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Audit fees represent fees billed for professional services rendered by the
Company&#146;s independent auditor for the audits of our annual financial statements and
internal control over financial reporting, review of the interim financial statements
included in our quarterly reports on Form 10-Q, and statutory audits and other SEC filings.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Audit-related fees consisted primarily of accounting consultation and employee
benefit plan audits.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(3)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>For fiscal year 2004, tax fees paid to KPMG primarily included tax compliance
fees of $63,573 and tax consulting fees of $32,330. For fiscal year 2005, the Company
retained an outside consultant to provide the tax compliance and tax consulting services.</TD>
</TR>

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

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(4)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Due diligence fees paid to KPMG LLP with respect to the acquisition of Gekko
Brands, LLC.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt">25
</DIV>

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

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




<!-- link1 "SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE" -->
<DIV align="left"><A NAME="011"></A></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to Section 16(a) of the Securities Exchange Act of 1934, as amended, the rules
promulgated thereunder, and the requirements of NASDAQ, executive officers and directors of the
Company and persons who beneficially own more than 10% of the common stock of the Company are
required to file with the Securities and Exchange Commission and NASDAQ and furnish to the Company
reports of ownership and change in ownership with respect to all equity securities of the Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based solely on its review of the copies of such reports received by the Company during or
with respect to the fiscal year ended October&nbsp;31, 2005 and/or written representations from such
reporting persons, the Company believes that its officers, directors and 10% stockholders complied
with all Section 16(a) filing requirements applicable to such individuals, except that Mr.
Schneiderman inadvertently filed a late Form&nbsp;4 to report one stock option grant on September&nbsp;12,
2005. Mr.&nbsp;Schneiderman has now reported the transaction.
</DIV>

<!-- link1 "STOCKHOLDER PROPOSALS FOR THE 2006 ANNUAL MEETING OF STOCKHOLDERS" -->
<DIV align="left"><A NAME="012"></A></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>STOCKHOLDER PROPOSALS FOR THE 2006 ANNUAL MEETING OF STOCKHOLDERS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any eligible stockholder of the Company wishing to have a proposal considered for inclusion in
the Company&#146;s 2007 Annual Meeting proxy solicitation materials must set forth such proposal in
writing and file it with the Company&#146;s Secretary on or before February&nbsp;26, 2007. The Board will
review new proposals from eligible stockholders if they are received by February&nbsp;26, 2007 and will
determine whether such proposals will be included in the Company&#146;s 2007 proxy solicitation
materials. A stockholder is eligible to present proposals to the Board if he or she is the record
or beneficial owner of at least one percent, or $2,000 in market value, of Company securities
entitled to be voted at the 2007 Annual Meeting and has held such securities for at least one year,
and he or she continues to own such securities through the date on which the meeting is held.
Proposals must be submitted in accordance with the Company&#146;s bylaws and comply with Securities and
Exchange Commission regulations promulgated pursuant to Rule&nbsp;14a-8 of the Exchange Act of 1934, as
amended.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If a stockholder desires to have a proposal presented at the Company&#146;s 2007 Annual Meeting of
Stockholders, including director nominations, and the proposal is not intended to be included in
the Company&#146;s related 2007 proxy solicitation materials, the stockholder must give advance notice
to the Company in accordance with the Company&#146;s bylaws.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;According to the bylaws of the Company, in order for a stockholder proposal to be properly
brought before any meeting of stockholders, the stockholder must give notice of the proposal in
writing to the Company&#146;s Secretary at the Company&#146;s principal executive offices not less than 90
days nor more than 120&nbsp;days in advance of the meeting; provided further, that if less than 95&nbsp;days&#146;
notice or prior public disclosure of the date of the scheduled meeting is given or made, notice by
the stockholder to be timely must be so delivered or received not later than the close of business
on the seventh day following the earlier of the date of the first public announcement of the date
of the meeting and the date on which such notice of the scheduled meeting was mailed. All
stockholder proposals must include the information required by the Company&#146;s bylaws. The address
of the Company&#146;s principal executive offices is as follows:
</DIV>

<P align="center" style="font-size: 10pt">26
</DIV>

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

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

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Secretary<BR>
Ashworth, Inc.<BR>
2765 Loker Avenue West<BR>
Carlsbad, California 92010
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stockholders may contact the Company&#146;s Secretary at the address set forth above for a copy of
the bylaw provisions that set forth the requirements for making stockholder proposals and
nominating director candidates.
</DIV>

<!-- link1 "ANNUAL REPORT" -->
<DIV align="left"><A NAME="013"></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;The Company&#146;s Annual Report to Stockholders for the fiscal year ended October&nbsp;31, 2005,
including audited financial statements, accompanies this proxy statement. Copies of the Company&#146;s
Annual Report on Forms 10-K and 10-K/A for the fiscal year ended October&nbsp;31, 2005 (without
exhibits) are available from the Company without charge upon written request of a stockholder.
Copies of the Form 10-K and Form 10-K/A are also available online through the Securities and
Exchange Commission at <U>www.sec.gov</U> as well as the Company&#146;s website at
<U>www.ashworthinc.com</U> under the heading &#147;Investor Info.&#148;
</DIV>

<!-- link1 "INCORPORATION BY REFERENCE" -->
<DIV align="left"><A NAME="014"></A></DIV>
<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>INCORPORATION BY REFERENCE</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In our filings with the Securities and Exchange Commission, information is sometimes
&#147;incorporated by reference.&#148; This means that we are referring you to information that has
previously been filed with the Securities and Exchange Commission, which information should be
considered as part of the filing that you are reading. Our 2005 Annual Report on Form 10-K, as
amended by the Form 10-K/A filed with the Securities and Exchange Commission on February&nbsp;28, 2006,
is incorporated herein by reference. Based upon Securities and Exchange Commission regulations,
the reports of the Audit Committee and the Compensation and Human Resources Committee, beginning on
pages 15 and 16, are not specifically incorporated by reference into any other filings that we make
with the Securities and Exchange Commission. This proxy statement is sent to you as part of the
proxy materials for the 2006 Annual Meeting of Stockholders. You may not consider this proxy
statement as material for soliciting the purchase or sale of our common stock.
</DIV>

<!-- link1 "OTHER MATTERS" -->
<DIV align="left"><A NAME="015"></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;At the time of the preparation of this proxy statement, the Board was not aware of any other
matters that will be presented for action at the 2006 Annual Meeting. Should any other matters
properly come before the meeting, action may be taken thereon pursuant to the proxies in the form
enclosed, which confer discretionary authority on the persons named therein or their substitutes
with respect to such matters.
</DIV>

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

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 50%">/s/ Halina Balys

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 50%">Halina Balys<BR>
Secretary

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Carlsbad, California<BR>
June&nbsp;26, 2006
</DIV>



<P align="center" style="font-size: 10pt">27
</DIV>

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


<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV align="center">
<TABLE style="font-size: 8pt" cellspacing="0" border="0" cellpadding="0" width="90%">
<!-- 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"><IMG src="a21705a2170500.gif" alt="(ASHWORTH LOGO)">
</DIV></TD>
    <TD rowspan="2"  valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>

<TD rowspan="3" align="justify" valign="top"><DIV align="justify"><B>VOTE BY INTERNET - <U>www.proxyvote.com</U></B><br>Use the Internet to transmit your voting instructions and for
electronic delivery of information up until 11:59&nbsp;P.M. Eastern Time
the day before the cut-off date or meeting date. Have your proxy
card in hand when you access the web site and follow the
instructions to obtain your records and to create an electronic
voting instruction form.</DIV></TD>
</TR>

<TR valign="bottom">
    <TD rowspan="3" valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B><I>ASHWORTH, INC.<BR>
ATTN: CORPORATE SECRETARY<BR>
2765 LOKER AVENUE WEST<BR>
CARLSBAD, CA 92010</I></B>
</DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 6pt"><!-- Blank Space -->
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD>&nbsp;</TD>
    <TD align="justify" valign="top"><DIV Style="margin-top: 6pt"><B>ELECTRONIC DELIVERY OF FUTURE SHAREHOLDER COMMUNICATIONS</B><br>
<DIV align="justify">If you would like to reduce the costs incurred
by Ashworth, Inc.
in mailing proxy materials, you can consent to receiving all future
proxy statements, proxy cards and annual reports electronically
via e-mail or the Internet. To sign up for electronic delivery, please
follow the instructions above to vote using the Internet and,
when prompted, indicate that you agree to receive or access
shareholder communications electronically in future years.</DIV></DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 6pt"><!-- Blank Space -->
    <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="justify" valign="top"><DIV align="justify"><B>VOTE BY
PHONE - 1-800-690-6903</B><br>
Use any touch-tone telephone to transmit your voting instructions
up until 11:59&nbsp;P.M. Eastern Time the day before the cut-off date
or meeting date. Have your proxy card in hand when you call
and then follow the instructions.</DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 6pt"><!-- Blank Space -->
    <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="justify" valign="top"><DIV align="justify"><B>VOTE BY MAIL</B><br>
Mark, sign and date your proxy card and return it in the postage-paid
envelope we have provided or return it to Ashworth, Inc.,
c/o ADP, 51 Mercedes Way, Edgewood, NY 11717.</DIV></TD>
</TR>

<TR valign="bottom" style="font-size: 6pt"><!-- Blank Space -->
    <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>

<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center" style="margin-top: 38pt">
<TABLE style="font-size: 8pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="45%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="25%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->

<TR valign="bottom">

<TD NOWRAP valign="top"><DIV style="margin-left:0px; text-indent:-0px"><FONT style="font-size: 6pt">TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS

FOLLOWS: &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT style="font-size: 6pt">ASHWR 1
</FONT></TD>
    <TD>&nbsp;</TD>

<TD NOWRAP align="right" valign="top" colspan="3"><FONT style="font-size: 6pt">KEEP
THIS PORTION FOR YOUR RECORDS</FONT></TD>
</TR>


<TR style="font-size: 2px">
    <TD colspan="9" valign="top" align="left" style="border-top: 2px DASHED #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="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>

<TD NOWRAP align="right" valign="top" colspan="3"><FONT style="font-size: 6pt">DETACH
AND RETURN THIS PORTION ONLY</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="9" valign="top" align="center"><B>THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.</B><BR></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: black 2px solid; BORDER-RIGHT: black 2px solid; BORDER-TOP: black 2px solid; PADDING-BOTTOM: 4px; PADDING-LEFT: 4px; PADDING-RIGHT: 4px; PADDING-TOP: 4px; WIDTH: 100%">


<DIV align=center>
<TABLE border="0" cellpadding="0" cellSpacing="0" style="FONT-SIZE: 7pt" width="100%">
<!-- Begin Table Head -->
  <TR style="FONT-SIZE: 1pt" valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="31%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
  <TR valign="bottom">
    <TD>&nbsp;</TD>
    <TD align="left" colspan="3" valign="top"><B>ASHWORTH, INC.</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
  <TR style="font-size: 2pt">
    <TD>&nbsp;</TD>
    <TD align="left" colspan="3" valign="top">&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="left" valign="top">&nbsp;</TD>
    <TD align="right" style="BORDER-RIGHT: black 2pt solid; BORDER-TOP: black 2pt solid" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>




  <TR valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" colspan="2" valign="top"><B>This proxy is being solicited on behalf of the Board of Directors of Ashworth, Inc.
</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
<TD align=right style="BORDER-RIGHT: black 2pt solid; BORDER-TOP: black 0pt solid" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>



  <TR style="FONT-SIZE: 2pt" valign="bottom"><!-- Blank Space -->
    <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>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp; </TD>
    <TD>&nbsp;</TD>

<TD align=right style="BORDER-RIGHT: black 2pt solid; BORDER-TOP: black 0pt solid" valign="top">&nbsp;</TD><!-- Blank Space -->
    <TD>&nbsp;</TD></TR>

  <TR valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" colSpan=2 valign="bottom"><B>Vote on Directors </B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>For<BR>All</B> </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>Withhold<BR>All</B> </TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap valign="top"><B>For All<BR>Except</B> </TD>
    <TD>&nbsp;</TD>

<TD align="left" valign="top" rowspan="2"><DIV align="justify">To withhold
authority to vote for any individual nominee,<BR> mark &#147;For All Except&#148;
and write the nominee&#146;s number<BR> on the line below.</DIV>
 </TD>

<TD align=right style="border-right: black 0pt solid; border-top: black 0pt solid" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
  <TR style="FONT-SIZE: 6pt" valign="bottom"><!-- Blank Space -->
    <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>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD><!-- Blank Space -->
    <TD>&nbsp;</TD>
</TR>

  <TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left" noWrap valign="top">&nbsp; </TD>
    <TD><B>1.</B>&nbsp;</TD>
    <TD align="left" valign="top"><DIV align="justify">Elect three Class&nbsp;I directors of the Company to serve
for the ensuing three years, and elect four directors
(two in each of Class&nbsp;II and Class&nbsp;III) appointed by
the Company&#146;s Board of Directors since the last Annual
Meeting to serve until their respective classes&#146; terms
expire.</DIV></TD>
    <TD>&nbsp;</TD>

<TD align="center" valign="middle"><FONT face="wingdings" style="font-size: 8pt">&#111;</FONT></TD>
    <TD>&nbsp;</TD>

<TD align="center" valign="middle"><FONT face="wingdings" style="font-size: 8pt">&#111;</FONT></TD>
    <TD align="center" nowrap valign="top"><B>&nbsp; </B></TD>

<TD align="center" valign="middle"><FONT face="wingdings" style="font-size: 8pt">&#111;</FONT></TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="left" colspan="2" valign="middle">
<DIV style="BORDER-BOTTOM: #000000 1px solid; FONT-SIZE: 1pt">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="FONT-SIZE: 3pt" valign="bottom"><!-- Blank Space -->
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&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="left" colspan="1" valign="bottom">
<DIV style="BORDER-BOTTOM: #000000 0px solid; FONT-SIZE: 1pt">&nbsp;</DIV></TD><!-- Blank Space -->
    <TD>&nbsp;</TD>
</TR>

<TR style="FONT-SIZE: 7pt" valign="bottom"><!-- Blank Space -->
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV align="justify">The nominees are: 1) John M. Hanson, Jr., 2) James B.
Hayes, and 3) Randall L. Herrel, Sr., as Class&nbsp;I
directors; 4) Detlef H. Adler and 5) Peter M. Weil, as
Class&nbsp;II directors; and 6) David M. Meyer and 7) John W.
Richardson, as Class&nbsp;III directors.</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 align="left" colspan="1" valign="bottom">
<DIV style="BORDER-BOTTOM: #000000 0px solid; FONT-SIZE: 1pt">&nbsp;</DIV></TD><!-- Blank Space -->
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 8pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom" style="font-size: 1pt">
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="70%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&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 nowrap align="center"><B>For</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Against</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Abstain</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="5"><B>Vote on Proposal</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" 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">2.</TD>
    <TD colspan="4" align="left" valign="top"><DIV align="justify">Vote to ratify the selection of Moss Adams LLP as our independent auditor for our fiscal year
ending October&nbsp;31, 2006.</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT face="Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT face="Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT face="Wingdings">&#111;</FONT></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="justify" style="font-size: 8pt; margin-left:4%; margin-right:2%; margin-top: 6pt"><B>The Board of Directors of Ashworth, Inc. recommends voting FOR the above nominees and FOR the
ratification of Moss Adams LLP as the Company&#146;s independent auditor.</B>
</DIV>

<DIV align="justify" style="font-size: 8pt; margin-left:4%; margin-right:2%; margin-top: 6pt"><B>This proxy will be voted in the manner directed herein by the stockholder. If no direction is
given, this proxy will be voted FOR all nominees and FOR ratification of the Company&#146;s appointment
of Moss Adams LLP as the Company&#146;s independent auditor.</B>
</DIV>

<DIV align="justify" style="font-size: 8pt; margin-left:4%; margin-right:2%; margin-top: 6pt"><B>This proxy confers discretionary voting authority with respect to matters not known or determined at the time of this mailing.</B>
</DIV>

<DIV align="left">
<TABLE style="font-size: 8pt" cellspacing="0" border="0" cellpadding="0" width="50%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="4%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="75%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Yes</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>No</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<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="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&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">Please indicate if you plan to attend this meeting.</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom"><FONT face="Wingdings">&#111;</FONT></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="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&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"><DIV align="justify"><U><B>HOUSEHOLDING ELECTION</B></U> - Please indicate if you consent to receive certain future investor communications in a single package per household.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom"><FONT face="Wingdings">&#111;</FONT></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align=center>
<TABLE border="0" cellpadding="0" cellSpacing="0" style="FONT-SIZE: 7pt" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="14%">&nbsp;</TD></TR>
<!-- End Table Head --><!-- Begin Table Body -->

  <TR style="FONT-SIZE: 12pt" valign="bottom">

    <TD>&nbsp;</TD>
    <TD align="left" colSpan=2      style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-RIGHT: #000000 1px solid; BORDER-TOP: #000000 1px solid"      valign="top">&nbsp; </TD>
    <TD align="left" style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 0px solid; BORDER-RIGHT: #000000 1px solid; BORDER-TOP: #000000 1px solid"  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" colSpan=2      style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-RIGHT: #000000 1px solid; BORDER-TOP: #000000 1px solid" valign="top">&nbsp; </TD>
    <TD align="left" style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 0px solid; BORDER-RIGHT: #000000 1px solid; BORDER-TOP: #000000 1px solid"  valign="top">&nbsp; </TD>
    <TD align="left" valign="top">&nbsp; </TD>

<TD align="right" valign="top" nowrap>&nbsp;</TD></TR>
  <TR valign="bottom">
    <TD>&nbsp;</TD>
    <TD align="left" colSpan=2 noWrap      style="BORDER-BOTTOM: #000000 0px solid; BORDER-LEFT: #000000 0px solid; BORDER-RIGHT: #000000 0px solid; BORDER-TOP: #000000 0px solid" valign="top">Signature
[PLEASE SIGN WITHIN BOX] </TD>

<TD nowrap align="left" style="BORDER-BOTTOM: #000000 0px solid; BORDER-LEFT: #000000 0px solid; BORDER-RIGHT: #000000 0px solid; BORDER-TOP: #000000 0px solid"  valign="top">&nbsp;&nbsp;Date </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" colSpan=2      style="BORDER-BOTTOM: #000000 0px solid; BORDER-LEFT: #000000 0px solid; BORDER-RIGHT: #000000 0px solid; BORDER-TOP: #000000 0px solid" valign="top">Signature (Joint
Owners) </TD>
    <TD align="left" style="BORDER-BOTTOM: #000000 0px solid; BORDER-LEFT: #000000 0px solid; BORDER-RIGHT: #000000 0px solid; BORDER-TOP: #000000 0px solid"  valign="top">Date</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</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="#toc">Table of Contents</A></H5><P>


<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="center" style="font-size: 10pt; margin-top: 1pt"><DIV style="border-bottom: 2px dashed #000000; font-size: 1px">&nbsp;</DIV>
</DIV>

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

<DIV style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: black 2px solid; BORDER-RIGHT: black 2px solid; BORDER-TOP: black 2px solid; PADDING-BOTTOM: 4px; PADDING-LEFT: 4px; PADDING-RIGHT: 4px; PADDING-TOP: 4px; WIDTH: 100%">


<DIV align="center" style="font-size: 18pt; margin-top: 36pt"><B>ASHWORTH, INC.</B>
</DIV>

<DIV align="justify" style="margin-top: 24pt; margin-left: 2%; margin-right:2%; font-size: 12pt">The undersigned hereby appoints Winston E. Hickman and Gary I. &#147;Sims&#148; Schneiderman, and each of them individually,
as proxies with the power to appoint their substitutes and hereby authorizes them to represent and vote, as designated
on the reverse side, all of the shares of common stock of Ashworth, Inc., held by the undersigned on June&nbsp;9, 2006, at
the Annual Meeting of stockholders to be held on Monday, July&nbsp;17, 2006, or any adjournment thereof, with like effect as
if the undersigned were personally present and voting upon the matters listed on the reverse side.
</DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 6pt">&nbsp;
</DIV>
</DIV>
<P align="center" style="font-size: 10pt">

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