<SUBMISSION>
<ACCESSION-NUMBER>0000950153-02-000097
<TYPE>DEF 14A
<PUBLIC-DOCUMENT-COUNT>4
<PERIOD>20020304
<FILING-DATE>20020124
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>ACTION PERFORMANCE COMPANIES INC
<CIK>0000892147
<ASSIGNED-SIC>5090
<IRS-NUMBER>860704792
<STATE-OF-INCORPORATION>AZ
<FISCAL-YEAR-END>0930
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>DEF 14A
<ACT>34
<FILE-NUMBER>000-21630
<FILM-NUMBER>02516281
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>4707 E BASELINE RD
<CITY>PHOENIX
<STATE>AZ
<ZIP>85040
<PHONE>6023373700
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>4707 E BASELINE RD
<CITY>PHOENIX
<STATE>AZ
<ZIP>85040
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
<FILENAME>p66067def14a.htm
<DESCRIPTION>DEF 14A
<TEXT>
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<TITLE>def14a</TITLE>
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<P align="center"><FONT size="4"><B>SCHEDULE 14A INFORMATION</B>
</FONT>

<P align="center"><FONT size="2">Proxy Statement Pursuant to Section&nbsp;14(a) of the Securities<BR>
Exchange Act of 1934 (Amendment No. &nbsp;&nbsp;)
</FONT>
<P><FONT size="2">Filed by the Registrant <IMG src="p66067checkbox.gif" alt="(CHECK BOX)"><br>
Filed by a Party other than the Registrant <IMG src="p66067box.gif" alt="(BOX)">
</FONT>
<P><FONT size="2">Check the appropriate box:
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
        <TD width="4%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="95%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD valign="top"><FONT size="2"><IMG src="p66067box.gif" alt="(BOX)"></FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
Preliminary Proxy Statement</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2"><IMG src="p66067checkbox.gif" alt="(CHECK BOX)"></FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
Definitive Proxy Statement</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2"><IMG src="p66067box.gif" alt="(BOX)"></FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
Definitive Additional Materials</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2"><IMG src="p66067box.gif" alt="(BOX)"></FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
Soliciting Material pursuant to Rule&nbsp;14a-11(c) or Rule&nbsp;14a-12</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2"><IMG src="p66067box.gif" alt="(BOX)"></FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
Confidential, for Use of the Commission Only (as permitted by Rule&nbsp;14a-6(e)(2))</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="3"><B>Action Performance Companies, Inc.</B></FONT>
<HR width="46%" align="center" size="1" noshade>
<DIV align="center"><FONT size="2">(Name of Registrant as Specified In Its Charter)</FONT></DIV>


<P align="center"><FONT size="2">&nbsp;</FONT>
<HR width="46%" align="center" size="1" noshade>
<DIV align="center"><FONT size="2">(Name of Person(s) Filing Proxy Statement)</FONT></DIV>

<P><FONT size="2">Payment of Filing Fee (Check the appropriate box):
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
        <TD width="4%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="95%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD valign="top"><FONT size="2"><IMG src="p66067checkbox.gif" alt="(CHECK BOX)"></FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
No fee required.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2"><IMG src="p66067box.gif" alt="(BOX)"></FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
Fee computed on table below per Exchange Act Rules&nbsp;14a-6(i)(4) and 0-11.</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">1)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="91%"><FONT size="2">Title of each class of securities to which transaction applies:</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="91%"><HR size="1" noshade></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">2)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="91%"><FONT size="2">Aggregate number of securities to which transaction applies:</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="91%"><HR size="1" noshade></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">3)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="91%"><FONT size="2">Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule&nbsp;0-11 (Set forth the amount on
which the filing fee is calculated and state how it was determined):</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="91%"><HR size="1" noshade></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">4)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="91%"><FONT size="2">Proposed maximum aggregate value of transaction:</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="91%"><HR size="1" noshade></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">5)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="91%"><FONT size="2">Total fee paid:</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="91%"><HR size="1" noshade></TD>
</TR>
</TABLE>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
        <TD width="4%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="95%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD valign="top"><FONT size="2"><IMG src="p66067box.gif" alt="(BOX)"></FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
Fee paid previously with preliminary materials.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2"><IMG src="p66067box.gif" alt="(BOX)"></FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
Check box if any part of the fee is offset as provided by Exchange
Act Rule&nbsp;0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">1)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="91%"><FONT size="2">Amount Previously Paid:</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="91%"><HR size="1" noshade></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">2)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="91%"><FONT size="2">Form, Schedule or Registration Statement No.:</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="91%"><HR size="1" noshade></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">3)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="91%"><FONT size="2">Filing Party:</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="91%"><HR size="1" noshade></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">4)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="91%"><FONT size="2">Date Filed:</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="91%"><HR size="1" noshade></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">&nbsp;</FONT>

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<P align="center"><FONT size="2"><B>ACTION PERFORMANCE COMPANIES, INC.</B>
</FONT>

<P align="center"><HR size="1" noshade>

<P align="center"><FONT size="2"><B>NOTICE OF ANNUAL MEETING OF SHAREHOLDERS<BR>
March&nbsp;4, 2002</B>
</FONT>

<P align="center"><HR size="1" noshade>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Annual Meeting of Shareholders of Action Performance Companies, Inc.,
an Arizona corporation, will be held at 9:00 a.m., on Monday, March&nbsp;4, 2002, at
The Hilton Phoenix Airport, 2435 S. 47th Street, Phoenix, Arizona for the
following purposes:
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To elect directors to serve until the next annual meeting of
shareholders and until their successors are elected and qualified.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To approve an amendment to our 2000 Stock Option Plan to increase the
number of shares of our common stock reserved for issuance pursuant to the plan
from the number of shares equal to 7% of our outstanding shares of common
stock, up to a maximum of 2,000,000 shares, to the number of shares equal to
13% of our outstanding shares of common stock, up to a maximum of 3,000,000
shares.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To approve our Annual Incentive Plan.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To ratify the appointment of Arthur Andersen LLP as our independent
auditors for the fiscal year ending September&nbsp;30, 2002.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To transact such other business as may properly come before the meeting
or any adjournment of the meeting.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These items of business are more fully described in the proxy statement
accompanying this notice.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Only shareholders of record at the close of business on January&nbsp;18, 2002
are entitled to notice of and to vote at the meeting.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All shareholders are cordially invited to attend the meeting in person.
To assure your representation at the meeting, however, we urge to mark, sign,
date, and return the enclosed proxy as promptly as possible in the
postage-prepaid envelope enclosed for that purpose. If you attend the meeting,
you may vote in person even if you previously have returned a proxy.
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
        <TD width="54%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="41%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
Sincerely,</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
&#047;s&#047;&nbsp;R.&nbsp;David Martin</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">Phoenix, Arizona</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
R. David Martin</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">January&nbsp;22, 2002</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
Secretary</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">&nbsp;</FONT>
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<P align="center"><FONT size="2"><B>ACTION PERFORMANCE COMPANIES, INC.<BR>
4707 East Baseline Road<BR>
Phoenix, Arizona 85040</B>
</FONT>

<P align="center"><HR size="1" noshade>

<P align="center"><FONT size="2"><B>PROXY STATEMENT</B>
</FONT>

<P align="center"><HR size="1" noshade>

<!-- link1 "VOTING AND OTHER MATTERS" -->
<P align="center"><FONT size="2"><B>VOTING AND OTHER MATTERS</B>
</FONT>

<P align="left"><FONT size="2"><B>General</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The enclosed proxy is solicited on behalf of Action Performance Companies,
Inc., an Arizona corporation, by our Board of Directors for use at our Annual
Meeting of Shareholders to be held at 9:00 a.m. on Monday, March&nbsp;4, 2002, or at
any adjournment of the meeting, for the purposes set forth in this proxy
statement and in the accompanying notice of Annual Meeting of Shareholders.
The meeting will be held at The Hilton Phoenix Airport, 2435 S. 47th Street,
Phoenix, Arizona.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These proxy solicitation materials are being first mailed on or about
January&nbsp;23, 2002, to all shareholders entitled to vote at the meeting.
</FONT>
<P align="left"><FONT size="2"><B>Voting Securities and Voting Rights</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shareholders of record at the close of business on January&nbsp;18, 2002 are
entitled to notice of and to vote at the meeting. On the record date, there
were outstanding 17,350,612 shares of our common stock. Each holder of common
stock voting at the meeting, either in person or by proxy, may cast one vote
per share of common stock held on all matters to be voted on at the meeting.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The presence, in person or by proxy, of the holders of a majority of the
total number of shares entitled to vote constitutes a quorum for the
transaction of business at the meeting. Assuming that a quorum is present, (1)
the affirmative vote of a plurality of the shares of our common stock present
in person or represented by proxy at the meeting and entitled to vote is
required for the election of directors; and (2)&nbsp;the affirmative vote of a
majority of the shares of our common stock present in person or proxy at the
meeting is required to approve the amendment to our 2000 Stock Option Plan, to
approve our Annual Incentive Plan, and to ratify the appointment of Arthur
Andersen LLP as our independent auditors for the fiscal year ending September
30, 2002.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Arizona law requires cumulative voting in elections for directors, which
means that each shareholder may cast that number of votes that is equal to the
number of shares held of record, multiplied by the number of directors to be
elected. Each shareholder may cast the whole number of votes for one candidate
or distribute such votes among two or more candidates. The enclosed proxy does
not seek discretionary authority to cumulate votes in the election of
directors.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Votes cast by proxy or in person at the meeting will be tabulated by the
election inspectors appointed for the meeting who will determine whether a
quorum is present. The election inspectors will treat abstentions as shares
that are present and entitled to vote for purposes of determining the presence
of a quorum, but as unvoted for purposes of determining the approval of any
matter submitted to the shareholders for a vote. If a broker indicates on the
proxy that it does not have discretionary authority as to certain shares to
vote on a particular matter, those shares will not be considered as present and
entitled to vote with respect to that matter.
</FONT>
<P align="left"><FONT size="2"><B>Voting of Proxies</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;When a proxy is properly executed and returned, the shares it represents
will be voted at the meeting as directed. If no specification is indicated,
the shares will be voted (1) &#147;for&#148; the election of nominees set forth in this
proxy statement; (2) &#147;for&#148; approval of the amendment to the 2000 Stock Option
Plan to increase the number of shares of common stock reserved for issuance
pursuant to that plan; (3) &#147;for&#148; the approval of our Annual Incentive
</FONT>
<P align="center"><FONT size="2">&nbsp;</FONT>

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<P><FONT size="2"> Plan; and
(4) &#147;for&#148; the ratification of the appointment of Arthur Andersen LLP as our
independent auditors for the fiscal year ending September&nbsp;30, 2002.
</FONT>
<P align="left"><FONT size="2"><B>Revocability of Proxies</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any person giving a proxy may revoke the proxy at any time before its use by
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;delivering to us written notice of revocation,
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;delivering to us a duly executed proxy bearing a later date, or
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;attending the meeting and voting in person.
</FONT>
<P align="left"><FONT size="2"><B>Solicitation</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will pay for this solicitation. In addition, we may reimburse
brokerage firms and other persons representing beneficial owners of shares for
expenses incurred in forwarding solicitation materials to such beneficial
owners. Some of our directors or officers may solicit proxies, personally or
by telephone or e-mail, without additional compensation.
</FONT>
<P align="left"><FONT size="2"><B>Annual Report and Other Matters</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our 2001 Annual Report to Shareholders, which was mailed to shareholders
with or preceding this proxy statement, contains financial and other
information about our company, but is not incorporated into this proxy
statement and is not to be considered a part of these proxy soliciting
materials or subject to Regulations 14A or 14C or to the liabilities of Section
18 of the Securities Exchange Act of 1934, as amended. The information
contained in the &#147;Compensation Committee Report on Executive Compensation,&#148;
&#147;Report of the Audit Committee of the Board of Directors,&#148; and &#147;Performance
Graph&#148; below shall not be deemed &#147;filed&#148; with the Securities and Exchange
Commission or subject to Regulations 14A or 14C or to the liabilities of
Section&nbsp;18 of the Exchange Act.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>We will provide upon written request, without charge to each shareholder
of record as of the record date, a copy of our annual report on Form&nbsp;10-K for
the fiscal year ended September&nbsp;30, 2001 as filed with the Securities and
Exchange Commission. Any exhibits listed in the Form&nbsp;10-K report also will be
furnished upon request at the actual expense incurred by us in furnishing such
exhibits. Any such requests should be directed to our company&#146;s secretary at
our executive offices set forth in this proxy statement.</B>
</FONT>
<!-- link1 "ELECTION OF DIRECTORS" -->
<P align="center"><FONT size="2"><B>ELECTION OF DIRECTORS</B>
</FONT>

<P align="left"><FONT size="2"><B>Nominees</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our bylaws provide that the number of directors shall be fixed from time
to time by resolution of our board of directors. All directors are elected at
each annual meeting of our shareholders. Directors hold office until the next
annual meeting of shareholders or until their successors have been elected and
qualified.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A board of eight directors is to be elected at the meeting. Unless
otherwise instructed, the proxy holders will vote the proxies received by them
for each of the nominees named below. All of the nominees currently are
directors of our company. In the event that any such nominee is unable or
declines to serve as a director at the time of the meeting, the proxies will be
voted for any nominee designated by the current board of directors to fill the
vacancy. We do not expect that any nominee will be unable or will decline to
serve as a director.
</FONT>
<P align="center"><FONT size="2">2</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth certain information regarding the nominees for directors.
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%">
<TR valign="bottom">
        <TD width="25%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="32%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="33%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD nowrap align="center"><FONT size="1"><B>Name</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Age</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Position Held</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD nowrap align="center"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Fred W. Wagenhals</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">60</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="3" align="left"><FONT size="2">Chairman of the Board, President, and Chief Executive Officer</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">R. David Martin</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">55</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="3" align="left"><FONT size="2">Chief Financial Officer, Secretary, Treasurer, and Director</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Melodee L. Volosin</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">37</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="3" align="left"><FONT size="2">Executive Vice President &#150; Sales and Director</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">John S. Bickford, Sr.</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">55</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="3" align="left"><FONT size="2">Executive Vice President &#150; Strategic Alliances and Director</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Edward J. Bauman</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">77</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="3" align="left"><FONT size="2">Director</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Herbert M. Baum</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">65</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="3" align="left"><FONT size="2">Director</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Lowell L. Robertson</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">71</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="3" align="left"><FONT size="2">Director</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Robert L. Matthews</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">64</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="3" align="left"><FONT size="2">Director</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Fred W. Wagenhals</I>, the founder of our company, has served as our Chairman
of the Board, President, and Chief Executive Officer for more than five years.
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>R.
David Martin </I>has served as our Chief Financial Officer since August
2000, as Secretary and Treasurer since March 2001, and as a director since
December 2000. Mr.&nbsp;Martin joined Deloitte &#038; Touche in June 1968 and served as
a partner of that firm from August 1978 until May 2000.
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Melodee L. Volosin </I>has served as our Executive Vice President &#150; Sales
since December 1999 and as a director since January 1997. Ms.&nbsp;Volosin served
as our Vice President &#150; Wholesale Division from September 1997 until December
1999. Ms.&nbsp;Volosin served as the Director of our Wholesale Division from May
1992 to September 1997. Ms.&nbsp;Volosin&#146;s duties include managing all of our
wholesale distribution of die-cast collectibles and other products, including
advertising programs and budgeting.
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>John S. Bickford, Sr. </I>has served as our Executive Vice President &#150;
Strategic Alliances since July 1997 and as a director of our company since
January 1997. Mr.&nbsp;Bickford served as a consultant to our company from January
1997 to June 1997. Since 1976, Mr.&nbsp;Bickford has served as President of MPD
Racing Products, Inc., which manufactures race car parts for distribution
through speed shops and high-performance engine shops. Mr.&nbsp;Bickford served as
President of Bickford Motorsports, Inc., which provided consulting and special
project coordination services to race car drivers, car owners, and other
businesses, from 1990 until 1997. Mr.&nbsp;Bickford also published Racing for Kids
magazine during 1996 and 1997. Mr.&nbsp;Bickford served as General Manager of Jeff
Gordon, Inc. from 1990 to 1995. Mr.&nbsp;Bickford currently serves as a director of
Equipoise Balancing, Inc., a privately held company.
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Edward J. Bauman </I>has served as a director of our company since February
1998. Mr.&nbsp;Bauman has served as Chairman of the Board of Anderson Bauman
Tourtellot Vos &#038; Co., a turnaround management consulting firm, since September
1989. Mr.&nbsp;Bauman also serves as a director of Elk River Development Corp., a
publicly traded company, and of Jay Garment Company, Precision Fabrics Group,
Inc., and American Emergency Vehicles, all of which are privately held
companies.
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Herbert M. Baum </I>has served as a director of our company since March 2001
and previously served as a director of our company from February 2000 until
September 2000. Mr.&nbsp;Baum has served as Chairman, President, and Chief
Executive Officer of The Dial Corporation, a consumer goods company marketing a
diversified line of consumer products under various major brand names, since
August 2000. Mr.&nbsp;Baum served as President and Chief Operating Officer of
Hasbro Inc., a multi-billion dollar designer and manufacturer of toys, games,
and interactive software, from January 1999 until August 2000. From 1993 to
1999, Mr.&nbsp;Baum was Chairman and Chief Executive Officer of Quaker State
Corporation. Mr.&nbsp;Baum serves on the boards of directors of Midas, Inc.,
Meredith Corporation, Fleming Companies, Inc., and Pepsi Americas, Inc., all
public companies.
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Lowell L. Robertson </I>has served as a director of our company since March
2001. Mr.&nbsp;Robertson is a retired partner with Deloitte &#038; Touche and a
Certified Public Accountant with over 37&nbsp;years of accounting and audit
</FONT>
<P align="center"><FONT size="2">3</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>


<P><FONT size="2">experience. Mr.&nbsp;Robertson was Senior Vice President and Controller for The
Dial Corporation from 1996 through 1997.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Robert L. Matthews </I>has served as a director of our company since April
2001. Mr.&nbsp;Matthews has served in various capacities with Bank One, Arizona
since 1992, most recently as the vice chairman of the board of directors.
Previously, Mr.&nbsp;Matthews served as Chairman of Security Pacific Bank of
Arizona and as the President and Chief Executive Officer of Arizona Bank.
</FONT>
<P align="left"><FONT size="2"><B>Meetings and Committees of the Board of Directors</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our board of directors held four meetings during the fiscal year ended
September&nbsp;30, 2001. Each of our directors attended at least 75% of the
aggregate of (i)&nbsp;the total number of meetings of our board of directors held
during fiscal 2001, and (ii)&nbsp;the total number of meetings held by all
committees of our board of directors on which such person served during fiscal
2001.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our bylaws authorize our board of directors to appoint among its members
one or more committees consisting of one or more directors. The Audit
Committee currently consists of Messrs.&nbsp;Robertson, Bauman and Matthews, and
Jack M. Lloyd, who is not standing for re-election, each of whom are
non-employee directors of our company. The Audit Committee reviews the annual
financial statements, any significant accounting issues, and the scope of the
audit with our independent auditors and discusses with the auditors any other
audit-related matters that may arise during the year. The Compensation
Committee, which consists of Messrs.&nbsp;Baum, Matthews, and Robertson, reviews and
acts on matters relating to compensation levels and benefit plans for key
executives of our company. The Senior Committee, which consists of Messrs.
Baum, Matthews, and Robertson, administers the discretionary program of our
1993 and 2000 Stock Option Plans with respect to grants of stock options and
awards to officers of our company, directors who are employees of our company,
and persons who own more than 10% of our issued and outstanding common stock.
During fiscal 2001, the Compensation Committee performed the functions of the
Senior Committee. Messrs.&nbsp;Baum, Matthews, and Robertson also serve on the
committee that administers our 1999 Employee Stock Purchase Plan. Mr.
Wagenhals administers our 1993 Stock Option Plan, our 1998 Stock Option Plan,
and our 2000 Stock Option Plan with respect to employees who are not directors
or officers of our company.
</FONT>
<P align="left"><FONT size="2"><B>Director Compensation and Other Information</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Employees of our company do not receive compensation for serving as
members of our board of directors. Non-employee directors receive $2,500 for
each meeting attended in person. All directors are reimbursed for their
expenses in attending meetings of our board of directors. Directors who are
not employees of our company are eligible to receive stock options pursuant to
the 2000 Stock Option Plan. Non-employee directors also are eligible to
receive other grants of stock options or awards pursuant to the discretionary
program of the 2000 Stock Option Plan.
</FONT>
<P align="center"><FONT size="2">4</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<!-- link1 "EXECUTIVE COMPENSATION" -->
<P align="center"><FONT size="2"><B>EXECUTIVE COMPENSATION</B>
</FONT>

<P align="left"><FONT size="2"><B>Summary of Cash and Other Compensation</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth certain information concerning the
compensation for the fiscal years ended September&nbsp;30, 1999, 2000, and 2001
earned by our Chief Executive Officer and by our other executive officers whose
cash salary and bonus exceeded $100,000 during fiscal 2001.
</FONT>
<!-- link1 "SUMMARY COMPENSATION TABLE" -->
<P align="center"><FONT size="2"><B>SUMMARY COMPENSATION TABLE</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
        <TD width="3%">&nbsp;</TD>
        <TD width="38%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="2%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="4%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="6%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="7%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="4%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="4%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Long Term</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Compensation</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Awards</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Securities</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>All Other</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Underlying</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Compensation</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD nowrap align="center" colspan="2"><FONT size="1"><B>Name and Principal Position(1)</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Year</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Salary($)(2)</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Bonus($)</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Options(#)(3)</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>($)(4)</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD colspan="2"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Fred W. Wagenhals</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">2001</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">600,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">1,000,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">300,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">400</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Chairman of the Board,
President,</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">2000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">600,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">50,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">200</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom" bgcolor="#eeeeee">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">and Chief Executive Officer</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">1999</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">591,731</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">250,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">50,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">3,200</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">R. David Martin</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">2001</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">210,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">500,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">150,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">2,826</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom" bgcolor="#eeeeee">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Chief Financial
Officer, Secretary, Treasurer, and Director</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">2000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">34,731</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">100,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Melodee L. Volosin</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">2001</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">175,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">250,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">90,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">3,400</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom" bgcolor="#eeeeee">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Executive Vice
President &#150; Sales and</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">2000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">165,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">30,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">40,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">3,800</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Director</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">1999</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">128,173</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">30,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">20,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">2,748</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom" bgcolor="#eeeeee">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">John S. Bickford, Sr.</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">2001</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">192,500</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">250,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">75,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">1,407</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Executive Vice
President &#150;</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">2000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">194,125</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">10,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">25,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">1,407</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom" bgcolor="#eeeeee">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Strategic Alliances and
Director</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">1999</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">172,835</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">35,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">20,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">1,346</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P>
<HR size="1" width="18%" align="left" noshade>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">(1)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">We consider Messrs.&nbsp;Wagenhals, Martin, and Bickford and Ms.&nbsp;Volosin to be
our executive officers. Mr.&nbsp;Martin joined our company during August 2000.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">(2)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Messrs.&nbsp;Wagenhals, Martin, and Bickford and Ms.&nbsp;Volosin also received
certain perquisites, the value of which did not exceed the lesser of
$50,000 or 10% of their salary and bonus during any fiscal year listed.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">(3)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">The exercise price of all stock options granted were equal to the fair
market value of our common stock on the date of grant.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">(4)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Amounts shown represent matching contributions we made to our 401(k)
Plan.</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">5</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="left"><FONT size="2"><B>Option Grants</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table provides information on stock options granted to the
officers listed during the fiscal year ended September&nbsp;30, 2001.
</FONT>
<!-- link1 "OPTION GRANTS IN LAST FISCAL YEAR" -->
<P align="center"><FONT size="2"><B>OPTION GRANTS IN LAST FISCAL YEAR</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
        <TD width="29%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="6%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="2%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="2%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="4%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="4%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="15"><FONT size="1"><B>Individual Grants</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="7"><FONT size="1"><B>Potential Realizable Value</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="15"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="7"><FONT size="1"><B>at Assumed Annual Rates of</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Number of</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Percent of Total</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="7"><FONT size="1"><B>Stock Price Appreciation</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Securities</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Options Granted to</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="7"><FONT size="1"><B>For Option Term (1)</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Underlying Options</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Employees in</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Exercise Price</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Expiration</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="7"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
        <TD nowrap align="center"><FONT size="1"><B>Name</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Granted (#)</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Fiscal Year</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>($/Sh)</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Date</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>5%</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>10%</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD nowrap align="center"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Fred W. Wagenhals</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">18,390</FONT></TD>
        <TD nowrap><FONT size="2">(2)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">1.9</FONT></TD>
        <TD nowrap><FONT size="2">%</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">5.98</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">3/02/11</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">68,963</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">175,441</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">181,610</FONT></TD>
        <TD nowrap><FONT size="2">(3)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">18.8</FONT></TD>
        <TD nowrap><FONT size="2">%</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">5.44</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">3/02/11</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">622,922</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">1,574,559</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom" bgcolor="#eeeeee">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">100,000</FONT></TD>
        <TD nowrap><FONT size="2">(4)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">10.4</FONT></TD>
        <TD nowrap><FONT size="2">%</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">20.80</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">7/11/11</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">1,307,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">3,318,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom" bgcolor="#eeeeee">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">R. David Martin</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">100,000</FONT></TD>
        <TD nowrap><FONT size="2">(4)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">10.4</FONT></TD>
        <TD nowrap><FONT size="2">%</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">5.44</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">3/02/11</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">343,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">867,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">50,000</FONT></TD>
        <TD nowrap><FONT size="2">(4)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">5.2</FONT></TD>
        <TD nowrap><FONT size="2">%</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">20.80</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">7/11/11</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">653,500</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">1,659,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom" bgcolor="#eeeeee">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Melodee L. Volosin</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">65,000</FONT></TD>
        <TD nowrap><FONT size="2">(4)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">6.7</FONT></TD>
        <TD nowrap><FONT size="2">%</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">2.50</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">11/08/10</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">104,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">259,350</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom" bgcolor="#eeeeee">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">25,000</FONT></TD>
        <TD nowrap><FONT size="2">(4)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">2.6</FONT></TD>
        <TD nowrap><FONT size="2">%</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">20.80</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">7/11/11</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">326,750</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">829,500</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom" bgcolor="#eeeeee">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">John S. Bickford, Sr.</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">50,000</FONT></TD>
        <TD nowrap><FONT size="2">(4)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">5.2</FONT></TD>
        <TD nowrap><FONT size="2">%</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">2.50</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">11/08/10</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">80,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">199,500</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">25,000</FONT></TD>
        <TD nowrap><FONT size="2">(4)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">2.6</FONT></TD>
        <TD nowrap><FONT size="2">%</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">20.80</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">7/11/11</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">326,750</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">829,500</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P>
<HR size="1" width="18%" align="left" noshade>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">(1)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Potential gains are net of the exercise price, but before taxes
associated with the exercise. Amounts represent hypothetical gains that
could be achieved for the respective options if exercised at the end of
the option term. The assumed 5% and 10% rates of stock price appreciation
are provided in accordance with the rules of the Securities and Exchange
Commission and do not represent our estimate or projection of the future
price of our common stock. Actual gains, if any, on stock option
exercises will depend upon the future market prices of our common stock.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">(2)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">All of the options vest and become exercisable on March&nbsp;2, 2004.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">(3)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">The options vest and become exercisable as follows: 66,666 of the
options vest and become exercisable on March&nbsp;2, 2002; 66,667 of the
options vest and become exercisable on March&nbsp;2, 2003; and 48,277 of the
options vest and become exercisable on March&nbsp;2, 2004.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">(4)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">One-third of the options vest and become exercisable on each of the
first, second, and third anniversaries of the date of grant.</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">6</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>




<P align="left"><FONT size="2"><B>Fiscal 2001 Option Exercises and Year-end Option Values</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table provides information on options exercised in fiscal
2001 by the officers listed and the value of each such officer&#146;s unexercised
options as of September&nbsp;30, 2001.
</FONT>
<!-- link1 "AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES" -->
<P align="center"><FONT size="2"><B>AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND<BR> FISCAL YEAR-END OPTION VALUES</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
        <TD width="35%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="2%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="1%">&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="3%">&nbsp;</TD>
        <TD width="4%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="4%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="7"><FONT size="1"><B>Number of Securities</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="7"><FONT size="1"><B>Value of Unexercised</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Shares</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="7"><FONT size="1"><B>Underlying Unexercised Options</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="7"><FONT size="1"><B>In-the Money Options</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Acquired on</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Value</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="7"><FONT size="1"><B>at Fiscal Year-End</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="7"><FONT size="1"><B>at Fiscal Year-End ($)(1)</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD nowrap align="center"><FONT size="1"><B>Name</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Exercise(#)</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Realized($)</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Exercisable</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Unexercisable</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Exercisable</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Unexercisable</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD nowrap align="center"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Fred W. Wagenhals</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">50,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">920,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">95,999</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">350,001</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">145,961</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">2,713,479</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">R. David Martin</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">33,333</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">216,667</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">425,662</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">2,128,338</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom" bgcolor="#eeeeee">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Melodee L. Volosin</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">10,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">133,894</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">35,392</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">123,334</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">62,331</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">1,255,420</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">John S. Bickford, Sr.</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">6,665</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">128,768</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">45,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">98,335</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">14,420</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">932,078</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P>
<HR size="1" width="18%" align="left" noshade>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">(1)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Calculated based upon the closing price of our common stock as reported
on the Nasdaq National Market on September&nbsp;30, 2001 of $18.21 per share.
The exercise prices of certain of the options held by our executive
officers on September&nbsp;30, 2001 were greater than $18.21 per share.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2"><B>Employment and Separation Agreements</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have an employment agreement with Fred W. Wagenhals that provides for
him to serve as our Chairman of the Board, President, and Chief Executive
Officer. The employment agreement has an initial term through July&nbsp;31, 2005,
and automatically renews for successive one-year terms unless either party
terminates by giving the other party at least 60&nbsp;days&#146; written notice.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The employment agreement provides for Mr.&nbsp;Wagenhals to receive a base
salary of $600,000 per annum. The employment agreement also provides that Mr.
Wagenhals will be eligible to receive a discretionary bonus in an amount
determined by a committee of our Board of Directors consisting entirely of
independent directors. In addition, the employment agreement generally
requires us to
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="91%"><FONT size="2">reimburse Mr.&nbsp;Wagenhals for any and all necessary, customary,
and usual expenses incurred in connection with our business and his
duties under his employment agreement;</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="91%"><FONT size="2">include Mr.&nbsp;Wagenhals in all stock option and comparable
programs available to our executives; and</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="91%"><FONT size="2">provide such other benefits that we make generally available to
all of our executive employees on a non-discriminatory basis.</FONT></TD>
</TR>
</TABLE>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The employment agreement provides for Mr.&nbsp;Wagenhals to receive his fixed
compensation and other amounts due to the date of termination of his employment
by reason of death. In the event that Mr.&nbsp;Wagenhals becomes disabled, we will
continue to pay Mr.&nbsp;Wagenhals&#146; base salary and other compensation for a period
of 12&nbsp;months from the date of his absence due to the disability. If Mr.
Wagenhals terminates his employment with &#147;good reason,&#148; as defined in the
agreement, or if we terminate the agreement without cause, he will receive his
base salary, continuation of benefits, and other compensation for a period of
three years after the effective date of the termination. We may terminate Mr.
Wagenhals&#146; employment for &#147;cause,&#148; as defined in the agreement, at any time
during the term of the agreement.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event of a &#147;change of control&#148; of our company (as defined in the
agreement), Mr.&nbsp;Wagenhals will be entitled to terminate his employment and
receive his base salary, continuation of benefits, and other compensation for a
period of three years after the effective date of the termination. The
employment agreement also contains provisions that prohibit Mr.&nbsp;Wagenhals from
competing with us for a period of 12&nbsp;months after the termination of his
employment with our company.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have no written employment contracts with any of our other executive
officers or directors. We offer our employees, including officers, medical and
life insurance benefits. Our executive officers and other key
</FONT>
<P align="center"><FONT size="2">7</FONT>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>


<P><FONT size="2"> personnel are
eligible to receive profit sharing distributions and discretionary bonuses
and to receive stock options under our stock option plans.
</FONT>
<P align="left"><FONT size="2"><B>401(k) Profit Sharing Plan</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In October 1994, we established a defined contribution plan that qualifies
as a cash or deferred profit sharing plan under Sections&nbsp;401(a) and 401(k) of
the Internal Revenue Code of 1986, as amended. Under the 401(k) plan,
participating employees may defer from 1% to 15% of their pre-tax compensation,
subject to the maximum allowed under the Internal Revenue Code. We will
contribute $.50 for each dollar contributed by the employee, up to a maximum
contribution of 2% of the employee&#146;s defined compensation. In addition, the
401(k) plan provides that we may make an employer profit sharing contribution
in such amounts as may be determined by our board of directors.
</FONT>
<P align="left"><FONT size="2"><B>1993 Stock Option Plan</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our 1993 Stock Option Plan, as amended, provides for the granting of
options to acquire common stock as well as stock-based awards, as described
below. The plan terminated on September&nbsp;24, 2001. As a result, we will no
longer grant any awards under the plan, but outstanding options or awards as of
that date will not be affected by virtue of the plan&#146;s expiration. A total of
2,750,000 shares of common stock was reserved for issuance under the 1993 Plan.
As of September&nbsp;30, 2001, we had issued an aggregate of 2,254,134 shares of
common stock upon exercise of options granted pursuant to the plan, and there
were outstanding options to acquire 493,965 shares of common stock under the
plan.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Options and awards were granted only to persons who at the time of grant
were either (a)&nbsp;key personnel, including officers and directors of our company
or our subsidiaries, or (b)&nbsp;consultants and independent contractors who
provided valuable services to our company or to our subsidiaries. Options that
are incentive stock options were only granted to employees of our company or
our subsidiaries. To the extent that granted options were incentive stock
options, the terms and conditions of those options were consistent with the
qualification requirements set forth in the Internal Revenue Code.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Options were granted for terms of up to ten years and become exercisable
in whole or in one or more installments at such time as determined upon the
grant of the options. To exercise an option, the optionholder will be required
to deliver to us full payment of the exercise price of the shares as to which
the option is being exercised.
</FONT>
<P align="left"><FONT size="2"><B>1998 Non-Qualified Stock Option Plan</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under our 1998 Non-Qualified Stock Option Plan, our board of directors
from time to time may grant to key employees of our company, other than
directors or executive officers, non-statutory options to purchase shares of
our common stock. The exercise price, term, vesting conditions, and other
terms for all options granted under the plan will be determined at the time of
grant by our board of directors or a board committee appointed to administer
the plan. A total of 500,000 shares of common stock may be issued pursuant to
the plan. As of September&nbsp;30, 2001, we have issued an aggregate of 52,333
shares of common stock upon exercise of options granted pursuant to the plan;
there were outstanding options to acquire 273,000 shares of common stock; and
an additional 174,667 shares remained available for grant. The plan expires in
2008.
</FONT>
<P align="left"><FONT size="2"><B>2000 Stock Option Plan</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During 2000, our board of directors adopted and our shareholders approved
our 2000 Stock Option Plan. The plan is intended to attract, retain, and
motivate directors, employees, and independent contractors who provide valuable
services to our company by providing them with the opportunity to acquire a
proprietary interest in our company and to link their interests and efforts to
the long-term interests of our shareholders. During October 2001, our Board of
Directors amended the plan to increase the number of shares that may be issued
under the plan to the number of shares equal to 13% of our outstanding shares
of common stock, up to a maximum of 3,000,000, subject to shareholder approval
at the meeting. See &#147;Proposal to Approve the Amendment to the 2000 Stock
Option Plan.&#148;
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The plan currently authorizes the issuance of a number of shares equal to
7% of our outstanding shares of common stock, up to a maximum of 2,000,000
shares. If the number of shares of common stock increases in the
</FONT>
<P align="center"><FONT size="2">8</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>


<P><FONT size="2"> future, the
number of shares authorized for issuance under the plan will automatically
increase by 7% of such increases. If the proposal to amend the 2000 Stock
Option Plan is approved by the shareholders at the meeting, the number of
shares authorized for issuance under the plan will automatically increase to 13%
of such increases, up to a maximum of 3,000,000 shares. As originally adopted,
as of September&nbsp;30, 2001, there were 1,201,919 shares reserved for issuance
under the plan. If the proposal to amend the 2000 Stock Option Plan is
approved by the shareholders at the meeting, as of September&nbsp;30, 2001 there
would have been 2,232,135 shares reserved for issuance under the plan. As of
that date, we had issued an aggregate of 122,936 shares of common stock upon
exercise of options granted pursuant to the plan; there were outstanding
options to acquire 997,064 shares of common stock; and an additional 81,919
shares remained available for grant under the plan. If the proposal to amend
the 2000 Stock Option Plan is approved by the shareholders at the meeting, the
number of shares available for grant under the plan would increase to
1,112,135. The maximum number of shares covered by awards granted to any
individual in any year may not exceed 25% of the total number of shares that
may be issued under the plan.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Options granted under the plan may be either incentive stock options, as
defined under the Internal Revenue Code, or nonqualified options. The
expiration date, maximum number of shares purchasable, vesting provisions, and
any other provisions of options granted under the plan will be established at
the time of grant. The plan administrator will set the term of each option,
but no options may be granted for terms of greater than ten years. Options
will vest and become exercisable in whole or in one or more installments at
such time as may be determined by the plan administrator. Any unvested options
will automatically vest and become exercisable upon a change of control of our
company.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The plan includes an automatic grant program that automatically grants
options to our non-employee directors. Under the automatic grant program, each
non-employee serving on our board of directors on the date that the plan was
approved by our shareholders received options to acquire 8,000 shares of our
common stock. Each subsequent newly elected non-employee member of our board
of directors will receive an option to acquire 10,000 shares of common stock on
the date of his or her first appointment or election to our board of directors.
In addition, an option to acquire 8,000 shares of common stock will be granted
to each non-employee director at the meeting of our board of directors held
immediately after each annual meeting of shareholders in subsequent years. A
non-employee member of our board of directors will not be eligible to receive
this annual grant if the grant date of such annual grant would be within 90
days of the date on which the non-employee member received his or her initial
grant. Each initial grant will vest and become exercisable immediately on the
date of grant.
</FONT>
<P align="left"><FONT size="2"><B>Employee Stock Purchase Plan</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During 1999, our board of directors adopted and our shareholders approved
our 1999 Employee Stock Purchase Plan, or ESPP. The ESPP is intended to
provide an opportunity for our employees to acquire a proprietary interest in
our company by purchasing shares of our common stock through voluntary payroll
deductions. Under the ESPP, eligible employees may purchase shares of our
common stock at a purchase price per share equal to the lower of (a)&nbsp;85% of the
closing price of our common stock on the offering commencement date, or (b)&nbsp;85%
of the closing price of our common stock on the offering termination date. The
purchase price is to be paid through periodic payroll deductions not to exceed
15% of the participant&#146;s earnings during each six-month offering period. An
employee may not participate in the ESPP if the purchase would cause him or her
to own 5% or more of our company&#146;s combined voting power or value of our common
stock. Also, no participant may purchase more than $25,000 worth of common
stock annually.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The ESPP provides for successive six-month offering periods. In each of
the nine years beginning on February&nbsp;1, 2000 and ending on January&nbsp;31, 2009,
there will be two six-month offerings commencing on February 1 and August 1 of
each year and ending on the following July&nbsp;31 or January&nbsp;31, respectively.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We originally reserved 200,000 shares of our common stock for issuance
under the ESPP. That number will automatically increase on the first day of
each fiscal year beginning with the fiscal year beginning on October&nbsp;1, 2001.
The annual increase will be equal to the lesser of (a)&nbsp;200,000 shares or (b)&nbsp;1%
of our outstanding shares on the last day of our prior fiscal year. Our board
of directors may reduce the number of shares to be automatically added if the
directors determine that the automatic increase will be too large relative to
the anticipated number of share purchases under the ESPP. Under this formula,
we currently have reserved for issuance 371,703 shares of our common stock
under the ESPP, and a maximum of 1,800,000 shares of common stock may be issued
under the ESPP.
</FONT>
<P align="center"><FONT size="2">9</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The purchase right of a participant will terminate automatically in the
event the participant ceases to be an employee of our company or one of our
subsidiaries, and any payroll deductions collected from such individual during
the six-month period in which such termination occurs will be refunded.
However, in the event of the participant&#146;s
disability or death, such payroll deductions may be applied to the
purchase of the common stock on the next purchase date.
</FONT>
<P align="left"><FONT size="2"><B>Limitation of Directors&#146; Liability; Indemnification of Directors, Officers, Employees, and Agents</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Articles of Incorporation eliminate the personal liability of any
director of our company to us or our shareholders for money damages for any
action taken or failure to take any action as a director of our company, to the
fullest extent allowed by the Arizona Business Corporation Act. Under the
Business Corporation Act, directors of our company will be liable to our
company or our shareholders only for (a)&nbsp;the amount of a financial benefit
received by the director to which the director is not entitled; (b)&nbsp;an
intentional infliction of harm on our company or our shareholders; (c)&nbsp;certain
unlawful distributions to shareholders; and (d)&nbsp;an intentional violation of
criminal law. The effect of these provisions in the articles is to eliminate
the rights of our company and our shareholders (through shareholders&#146;
derivative suits on behalf of our company) to recover money damages from a
director for all actions or omissions as a director (including breaches
resulting from negligent or grossly negligent behavior) except in the
situations described in clauses (a)&nbsp;through (d)&nbsp;above. These provisions do not
limit or eliminate the rights of our company or any shareholder to seek
non-monetary relief such as an injunction or rescission in the event of a
breach of a director&#146;s duty of care.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Articles of Incorporation require us to indemnify and advance
expenses, to the fullest extent allowed by the Business Corporation Act, to any
person who incurs liability or expense by reason of such person acting as a
director of our company. This indemnification is mandatory with respect to
directors in all circumstances in which indemnification is permitted by the
Business Corporation Act, subject to the requirements of the Business
Corporation Act. In addition, we, in our sole discretion, may indemnify and
advance expenses, to the fullest extent allowed by the Business Corporation
Act, to any person who incurs liability or expense by reason of such person
acting as an officer, employee, or agent of our company, except where
indemnification is mandatory pursuant to the Business Corporation Act, in which
case we are required to indemnify such persons to the fullest extent required
by the Business Corporation Act.
</FONT>
<!-- link1 "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS" -->
<P align="center"><FONT size="2"><B>CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tod Wagenhals, the son of Fred Wagenhals, serves as an independent
commissioned representative of our company. Under this arrangement, we paid to
Tod Wagenhals commissions of approximately $65,000 during fiscal 2001. During
fiscal 2001, Tod Wagenhals lived in a house owned by our company that is
currently held for sale. We paid maintenance, insurance, and taxes on the
house through June 2001.
</FONT>
<!-- link1 "COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION" -->
<P align="center"><FONT size="2"><B>COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION</B>
</FONT>

<P align="left"><FONT size="2"><B>Overview and Philosophy</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our board of directors has appointed a Compensation Committee, consisting
of three non-employee members of our board of directors, which makes decisions
on the compensation of our executive officers. The Compensation Committee
makes every effort to ensure that the compensation plan is consistent with our
company&#146;s values and is aligned with our company&#146;s business strategy and goals.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our compensation program for executive officers consists primarily of base
salary, annual discretionary bonuses, and long-term incentives in the form of
stock options. Executives also participate in various other benefit plans,
including medical and retirement plans, that generally are available to all of
our employees.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our philosophy is to pay base salaries to executives at levels that enable
us to attract, motivate, and retain highly qualified executives. The bonus
program is designed to reward individuals for performance based on our
financial results as well as the achievement of personal and corporate
objectives that contribute to our long-term success in building shareholder
value. Stock option grants are intended to result in minimal or no rewards if
the price of our common stock does not appreciate, but may provide substantial
rewards to executives as our shareholders in general benefit from stock price
appreciation.
</FONT>
<P align="center"><FONT size="2">10</FONT>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We follow a subjective and flexible approach rather than an objective or
formula approach to compensation. Various factors, as discussed below, receive
consideration without any particular weighting or emphasis on any one factor.
In establishing compensation for the fiscal year ended September&nbsp;30, 2001, the
Compensation Committee took
into account, among other things, our financial results, compensation paid
in prior years, and compensation of executive officers employed by companies of
similar size in similar industries.
</FONT>
<P align="left"><FONT size="2"><B>Base Salary</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Base salaries for executive positions are established relative to our
financial performance and comparable positions in similarly sized companies.
From time to time, we may use competitive surveys and outside consultants to
help determine the relevant competitive pay levels. We target base pay at the
level required to attract and retain highly qualified executives. In
determining salaries, the Compensation Committee also takes into account
individual experience and performance, salary levels relative to other
positions within our company, and specific needs particular to our company.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Compensation Committee reviews salaries recommended by our Chief
Executive Officer and Chief Financial Officer for executive officers. In
formulating these recommendations, the Chief Executive Officer and Chief
Financial Officer consider our overall performance and conduct an informal
evaluation of individual officer performance. Final decisions on any
adjustments to the base salary for executives other than the Chief Executive
Officer and Chief Financial Officer are made by the Compensation Committee in
conjunction with those officers. The Compensation Committee&#146;s evaluation of
the recommendations by the Chief Executive Officer and Chief Financial Officer
considers the same factors outlined above and is subjective, with no particular
weight assigned to any one factor. After reviewing the recommendations, the
Compensation Committee approved base salary increases for all executive
officers effective October&nbsp;1, 2001.
</FONT>
<P align="left"><FONT size="2"><B>Annual Discretionary Bonuses</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Annual discretionary bonuses are based on our financial performance and
the efforts of our executives. Performance is measured based on profitability
and revenue and the successful achievement of functional and personal goals.
The Compensation Committee reviews discretionary bonuses recommended by the
Chief Executive Officer and the Chief Financial Officer for executive officers
other than those officers. In formulating these recommendations, the Chief
Executive Officer and the Chief Financial Officer take into consideration our
achievement of sales, net income, and other performance criteria as well as
individual responsibility, performance, and compensation levels. The
Compensation Committee reviews these recommendations with the Chief Executive
Officer and Chief Financial Officer and makes final adjustments to the
discretionary bonus amounts. The Compensation Committee&#146;s evaluation of the
factors described above is subjective, with no particular weight being assigned
to any one factor. During the first quarter of fiscal 2002, we paid incentive
bonuses to our executive officers for their performance during fiscal 2001.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Beginning fiscal 2002, and subject to shareholder approval at the meeting,
we intend to establish performance goals and target awards under our Annual
Incentive Plan, as described below under &#147;Proposal to Approve The Annual
Incentive Plan.&#148;
</FONT>
<P align="left"><FONT size="2"><B>Stock Option Grants</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We strongly believe in utilizing grants of stock options to tie executive
rewards directly to our long-term success and increases in shareholder value.
Stock option grants also will enable our executives to develop and maintain a
significant ownership position in our common stock. The amount of options
granted takes into account options previously granted to an individual. During
fiscal 2001, we granted options to acquire an aggregate of 615,000 shares of
common stock to certain key employees of our company. These option grants
included options to acquire 300,000, 150,000, 75,000, and 90,000 shares of
common stock to Messrs.&nbsp;Wagenhals, Martin, and Bickford and Ms.&nbsp;Volosin,
respectively, at exercise prices ranging from $2.50 to $20.80 per share.
</FONT>
<P align="center"><FONT size="2">11</FONT>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<P align="left"><FONT size="2"><B>Other Benefits</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive officers are eligible to participate in benefit programs
designed for all full-time employees of our company. These programs include
medical insurance, a qualified retirement program allowed under Section&nbsp;401(k)
of the Internal Revenue Code, and life insurance coverage.
</FONT>
<P align="left"><FONT size="2"><B>Chief Executive Officer Compensation</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Compensation Committee considers the same factors as outlined above
with respect to our other executive officers in evaluating the base salary,
incentive bonus, and other compensation of Fred W. Wagenhals, our Chairman of
the Board, President, and Chief Executive Officer. The Compensation
Committee&#146;s evaluation of Mr.&nbsp;Wagenhals&#146; base salary and incentive bonus is
subjective, with no particular weight assigned to any one factor. During the
first quarter of fiscal 2002, we paid a bonus of $1.0&nbsp;million to Mr.&nbsp;Wagenhals
reflecting his performance during fiscal 2001 and for our company&#146;s sales, net
income, and profits during that fiscal year.
</FONT>
<P align="left"><FONT size="2"><B>Compliance with Internal Revenue Code Section&nbsp;162(m)</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;162(m) of the Internal Revenue Code generally disallows a tax
deduction to public companies for compensation in excess of $1.0&nbsp;million paid
to each of any publicly held corporation&#146;s chief executive officer and four
other most highly compensated executive officers. Qualifying performance-based
compensation is not subject to the deduction limit if certain requirements are
met. Except for our Chief Executive Officer, we believe that our compensation
arrangements with our executive officers will not exceed the limits on
deductibility during the current fiscal year. During the current fiscal year,
compensation to our Chief Executive Officer exceeded $1.0&nbsp;million, the $600,000
of compensation over $1.0&nbsp;million will not be tax deductible.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This report has been furnished by the members of the Compensation
Committee of the Board of Directors of Action Performance Companies, Inc.
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
        <TD width="30%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="65%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">December&nbsp;28, 2001</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
Herbert M. Baum, Chairman<BR>
Robert L. Matthews<BR>
Lowell L. Robertson</FONT></TD>
</TR>
</TABLE>
</CENTER>
<!-- link1 "COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION" -->
<P align="center"><FONT size="2"><B>COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the fiscal year ended September&nbsp;30, 2001, our Compensation
Committee consisted of Herbert M. Baum, Robert L. Matthews, and Lowell L.
Robertson. None of such individuals had any contractual or other relationships
with our company during such fiscal year except as directors.
</FONT>
<!-- link1 "REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS" -->
<P align="center"><FONT size="2"><B>REPORT OF THE AUDIT COMMITTEE<BR>
OF THE BOARD OF DIRECTORS</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our board of directors has appointed an Audit Committee, currently
consisting of four directors as of the date of this proxy statement. All of
the members of the Audit Committee are independent of our company and
management, as that term is defined in the Nasdaq listing standards.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The primary responsibility of the Audit Committee is to oversee our
company&#146;s financial reporting process on behalf of our board of directors.
Management has the primary responsibility for the financial statements and the
reporting process, including the systems of internal controls. The independent
auditors are responsible for auditing our financial statements and expressing
an opinion that the financial statements are in conformity with generally
accepted accounting principles in the United States.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In fulfilling its oversight responsibilities, the Audit Committee reviewed
the audited financial statements with management and the independent auditors.
The Audit Committee discussed with the independent auditors the matters
required to be discussed by Statement of Auditing Standards No.&nbsp;61. This
included a discussion of the auditors&#146; judgments as to the quality, not just
the acceptability, of our company&#146;s accounting principles and such other
matters as are required to be discussed with the Audit Committee under
generally accepted auditing standards. In addition, the Audit Committee
received from the independent auditors written disclosures and the letter
required by Independence Standards Board Standard No.&nbsp;1. The Audit Committee
also discussed with the independent
</FONT>
<P align="center"><FONT size="2">12</FONT>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>


<P><FONT size="2"> auditors the auditors&#146; independence from
management and our company, including the matters covered by the written
disclosures and letter provided by the independent auditors.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Audit Committee discussed with our company&#146;s independent auditors the
overall scope and plans for their audits. The Audit Committee meets with the
independent auditors, with and without management present, to discuss the
results of their examinations, their evaluation of our company, the internal
controls, and the overall quality of the financial reporting. The Audit
Committee held four meetings during fiscal 2001.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based on the reviews and discussions referred to above, the Audit
Committee recommended to our board of directors, and our board approved, that
the audited financial statements be included in the Annual Report on Form&nbsp;10-K
for the fiscal year ended September&nbsp;30, 2001 for filing with the Securities and
Exchange Commission. The Audit Committee and our board of directors also have
recommended, subject to stockholder approval, the selection of our company&#146;s
independent auditors. See &#147;Ratification of Appointment of Independent
Auditors.&#148;
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
        <TD width="30%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="65%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">December&nbsp;28, 2002</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
Lowell L. Robertson, Chairman<BR>
Edward J. Bauman<BR>
Jack M. Lloyd<BR>
Robert L. Matthews</FONT></TD>
</TR>
</TABLE>
</CENTER>
<!-- link1 "SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE" -->
<P align="center"><FONT size="2"><B>SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;16(a) of the Exchange Act requires our directors, officers, and
persons who own more than 10% of a registered class of our equity securities to
file reports of ownership and changes in ownership with the Securities and
Exchange Commission. Directors, officers, and greater than 10% shareholders
are required by SEC regulations to furnish us with copies of all Section&nbsp;16(a)
forms they file. Based solely upon our review of the copies of such forms that
we received during the fiscal year ended September&nbsp;30, 2001, and written
representations that no other reports were required, we believe that each
person who at any time during such fiscal year was a director, officer, or
beneficial owner of more than 10% of our common stock complied with all Section
16(a) filing requirements during such fiscal year except that (a)&nbsp;Robert L.
Matthews and Lowell L. Robertson each filed a late Form&nbsp;3 with respect to his
initial statements of beneficial ownership, (b)&nbsp;Melodee L. Volosin filed a late
Form&nbsp;5 covering various transactions, and (c)&nbsp;Fred W. Wagenhals filed a late
Form&nbsp;5 covering one transaction.
</FONT>
<P align="center"><FONT size="2">13</FONT>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<!-- link1 "PERFORMANCE GRAPH" -->
<P align="center"><FONT size="2"><B>PERFORMANCE GRAPH</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following line graph compares cumulative total shareholder returns for
(a)&nbsp;our common stock; (b)&nbsp;the Standard &#038; Poor&#146;s SmallCap 600 Index; and (c)&nbsp;the
Russell 2000 Index. At this time, we do not believe we can reasonably identify
an industry peer group. We have instead selected the Russell 2000, which
includes companies with similar market capitalizations to ours, as a
comparative index for purposes of complying with certain requirements of the
SEC.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The graph assumes an investment of $100 in each of our common stock, the
SmallCap 600, and the Russell 2000 of $100 on September&nbsp;30, 1996. The graph
covers the five-year period from October&nbsp;1, 1996 through the fiscal year ended
September&nbsp;30, 2001. The calculation of cumulative shareholder return for the
SmallCap 600 and the Russell 2000 includes reinvestment of dividends. The
calculation of cumulative shareholder return on our common stock does not
include reinvestment of dividends because we did not pay dividends during the
measurement period. The performance shown is not necessarily indicative of
future performance.
</FONT>
<P>
<DIV align="center"><IMG src="p66067p6606701.gif">
</DIV>


<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
        <TD width="46%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="2%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="2%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="2%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="2%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="2%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="2%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="23"><FONT size="1"><B>Cumulative Total Return</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="23"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>9/96</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>9/97</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>9/98</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>9/99</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>9/00</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>9/01</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Action Performance Companies, Inc.</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">100.00</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">226.21</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">209.71</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">163.59</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">26.70</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">141.44</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">S &#038; P SmallCap 600</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">100.00</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">136.97</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">115.95</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">136.28</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">169.23</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">170.92</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom" bgcolor="#eeeeee">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Russell 2000</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">100.00</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">133.19</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">107.86</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">128.43</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">158.47</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">124.86</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">14</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<!-- link1 "SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS, DIRECTORS, AND OFFICERS" -->
<P align="center"><FONT size="2"><B>SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS, DIRECTORS,<BR>
AND OFFICERS</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth certain information regarding the shares of
our outstanding common stock beneficially owned as of January&nbsp;18, 2002 by (1)
each director; (2)&nbsp;the executive officers set forth in the Summary Compensation
Table under the section entitled &#147;Executive Compensation;&#148; (3)&nbsp;all of our
directors and executive officers as a group; and (4)&nbsp;each other person who is
known by us to beneficially own or to exercise voting or dispositive control
over more than 5% of our common stock.
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
        <TD width="52%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="9%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="9%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="9%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="9%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="7"><FONT size="1"><B>Shares Beneficially Owned</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="7"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
        <TD nowrap align="center"><FONT size="1"><B>Name of Beneficial Owner(1)</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Number(2)</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Percent(2)</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD nowrap align="center"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Directors and Executive Officers:</B></FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Fred W. Wagenhals</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">2,109,599</FONT></TD>
        <TD nowrap><FONT size="2">(3)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">12.0</FONT></TD>
        <TD nowrap><FONT size="2">%</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom" bgcolor="#eeeeee">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">R. David Martin</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">49,080</FONT></TD>
        <TD nowrap><FONT size="2">(4)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">*</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Melodee L. Volosin</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">56,632</FONT></TD>
        <TD nowrap><FONT size="2">(5)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">*</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom" bgcolor="#eeeeee">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">John S. Bickford, Sr.</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">82,343</FONT></TD>
        <TD nowrap><FONT size="2">(6)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">*</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Edward J. Bauman</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">37,000</FONT></TD>
        <TD nowrap><FONT size="2">(7)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">*</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom" bgcolor="#eeeeee">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Herbert M. Baum</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">10,000</FONT></TD>
        <TD nowrap><FONT size="2">(8)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">*</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Lowell L. Robertson</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">10,000</FONT></TD>
        <TD nowrap><FONT size="2">(9)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">*</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom" bgcolor="#eeeeee">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Robert L. Matthews</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">10,300</FONT></TD>
        <TD nowrap><FONT size="2">(10)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">*</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">All directors and executive officers as a
group (eight persons)</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">2,364,954</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">13.3</FONT></TD>
        <TD nowrap><FONT size="2">%</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom" bgcolor="#eeeeee">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Non-management 5% Shareholders:</B></FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Lisa K. Wagenhals</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">1,963,600</FONT></TD>
        <TD nowrap><FONT size="2">(11)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">11.1</FONT></TD>
        <TD nowrap><FONT size="2">%</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom" bgcolor="#eeeeee">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Barrow, Hanley, Mewhinney &amp;
Strauss, Inc.(13)</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">1,514,150</FONT></TD>
        <TD nowrap><FONT size="2">(12)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">8.7</FONT></TD>
        <TD nowrap><FONT size="2">%</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P>
<HR size="1" width="18%" align="left" noshade>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">*</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Less than 1%</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">(1)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Each person named in the table has sole voting and investment power with
respect to all common stock beneficially owned by him or her, subject to
applicable community property law, except as otherwise indicated. Except
as otherwise indicated, each person may be reached at 4707 East Baseline
Road, Phoenix, Arizona 85040.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">(2)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">The percentages shown are calculated based upon 17,350,612 shares of
common stock outstanding on January&nbsp;18, 2002. The numbers and percentages
shown include the shares of common stock actually owned as of January&nbsp;18,
2002 and the shares of common stock that the identified person or group
had the right to acquire within 60&nbsp;days of such date. In calculating the
percentage of ownership, all shares of common stock that the identified
person or group had the right to acquire within 60&nbsp;days of January&nbsp;18,
2002 upon the exercise of options are deemed to be outstanding for the
purpose of computing the percentage of the shares of common stock owned by
such person or group, but are not deemed to be outstanding for the purpose
of computing the percentage of the shares of common stock owned by any
other person.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">(3)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Represents 1,923,600 shares of common stock and vested options to acquire
185,999 shares of common stock. Mr.&nbsp;Wagenhals shares voting and
dispositive power with his spouse with respect to the 1,923,600 shares of
common stock. See footnote 11.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">(4)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Includes 414 shares of common stock issuable upon conversion of
subordinated notes and 46,666 shares of common stock issuable upon
exercise of stock options.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">(5)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Includes 52,058 shares of common stock issuable upon exercise of stock
options.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">(6)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Includes 70,000 shares of common stock issuable upon exercise of stock
options.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">(7)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Includes 36,000 shares of common stock issuable upon exercise of stock
options.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">(8)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Represents 10,000 shares of common stock issuable upon exercise of stock
options.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">(9)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Represents 10,000 shares of common stock issuable upon exercise of stock
options.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">(10)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Includes 10,000 shares of common stock issuable upon exercise of stock
options.</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">15</FONT>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>




<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">(11)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Represents 1,923,600 shares of common stock over which Ms.&nbsp;Wagenhals
shares voting and dispositive power with Fred W. Wagenhals. See footnote
3.</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">(12)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Represents 1,547,450 shares beneficially owned by Barrow, Hanley,
Mewhinney &#038; Strauss, Inc. Barrow has sole voting and dispositive power
over 953,750 shares and shared voting and sole dispositive power over
593,700 shares. The address of Barrow is One McKinney Plaza, 3232
McKinney Avenue, 15th Floor, Dallas, Texas 75204-2429.</FONT></TD>
</TR>
</TABLE>
<!-- link1 "PROPOSAL TO APPROVE THE AMENDMENT TO THE 2000 STOCK OPTION PLAN" -->
<P align="center"><FONT size="2"><B>PROPOSAL TO APPROVE THE AMENDMENT TO<BR>
THE 2000 STOCK OPTION PLAN</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors has approved a proposal to amend our 2000 Stock
Option Plan, or 2000 Plan, subject to approval by our shareholders. See
&#147;Executive Compensation &#150; 2000 Stock Option Plan&#148; for a description of the
material terms of the 2000 Plan.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The 2000 Plan is intended to attract, retain, and motivate directors,
employees, and independent contractors who provide valuable services to our
company by providing them with the opportunity to acquire a proprietary
interest in our company and to link their interests and efforts to the
long-term interests of our shareholders. Currently, the plan authorizes the
issuance of a number of shares equal to 7% of our outstanding shares of common
stock, up to a maximum of 2,000,000 shares. As originally adopted, as of
September&nbsp;30, 2001, there were 1,201,919 shares reserved for issuance under the
plan. If the proposal to amend the 2000 Stock Option Plan is approved by the
shareholders at the meeting, as of September&nbsp;30, 2001 there would have been
2,232,135 shares reserved for issuance under the plan. As of that date, we had
issued an aggregate of 122,936 shares of common stock upon exercise of options
granted pursuant to the plan; there were outstanding options to acquire 997,064
shares of common stock; and an additional 81,919 shares remained available for
grant under the plan. If the proposal to amend the 2000 Stock Option Plan is
approved by the shareholders at the meeting, the number of shares available for
grant under the plan would increase to 1,112,135. The Board of Directors has
determined that an increase is necessary to provide a sufficient number of
shares to enable our company to continue to attract, retain, and motivate our
directors, employees, and independent contractors by making additional shares
available for grant under the 2000 Plan. Accordingly, during October 2001 the
Board of Directors amended the 2000 Plan to increase the number of shares that
may be issued under the 2000 Plan to the number of shares equal to 13% of our
outstanding shares of common stock, up to a maximum of 3,000,000 shares. The
Board of Directors believes it is in the best interests of our company to amend
the 2000 Plan. Accordingly, the Board of Directors recommends a vote &#147;FOR&#148; the
proposal to amend the 2000 Plan.
</FONT>
<P align="left"><FONT size="2"><B>Reasons for and Effect of the Proposed Amendment</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors believes that the approval of the proposed
amendment to the 2000 Plan is necessary to achieve the purposes of the 2000
Plan and to promote the welfare of our company and our stockholders generally.
As described above, if the proposal is not approved by our shareholders, we
will only have 81,919 shares available for grant under the 2000 Plan. We do
not believe that amount of shares will be sufficient for us to grant equity
compensation to our officers, directors, and key employees for the next few
fiscal years The Board of Directors also believes that the proposed amendment
to the 2000 Plan will aid our company in attracting and retaining officers and
key employees and motivating such persons to exert their best efforts on behalf
of our company. In addition, we expect that the proposed amendment will
further strengthen the identity of interests of the officers and key employees
with that of our shareholders.
</FONT>
<P align="left"><FONT size="2"><B>Ratification by Shareholders of the Amendment to the 2000 Plan</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Approval of the amendment to the 2000 Plan will require the affirmative
vote of the holders of a majority of the outstanding shares of our common stock
present in person or by proxy at the meeting. In the event that the amendment
to the 2000 Plan is not approved by our shareholders, the 2000 Plan will remain
in effect as previously adopted.
</FONT>
<P align="center"><FONT size="2">16</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<!-- link1 "PROPOSAL TO APPROVE THE ANNUAL INCENTIVE PLAN" -->
<P align="center"><FONT size="2"><B>PROPOSAL TO APPROVE THE ANNUAL INCENTIVE PLAN</B>
</FONT>

<P align="left"><FONT size="2"><B>General</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During December 2001, our board of directors approved the Annual Incentive
Plan that provides for the awarding of bonuses to our executive officers,
subject to the attainment of certain performance criteria. Our board of
directors will approve certain performance goals and other terms of the Annual
Incentive Plan. The full text of the Annual Incentive Plan is included as
&#147;Appendix&nbsp;A&#148; to this proxy statement.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Annual Incentive Plan permits the awarding of annual bonuses to
executive officers of our company based on the achievement of pre-established
performance goals. Our board of directors recommends a vote &#147;for&#148; the approval
of the Annual Incentive Plan.
</FONT>
<P align="left"><FONT size="2"><B>Eligibility and Administration</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Only our executive officers who are selected annually by the Compensation
Committee of the board of directors will be eligible to participate in our
Annual Incentive Plan. No executive officer or other employee will have a
right to be selected for participation in the plan for any fiscal year, whether
or not such officer or employee previously participated in the plan. Executive
officers may become eligible to participate in the plan after the beginning of
the fiscal year, and will participate in the plan for that fiscal year on a pro
rata basis. The Compensation Committee of the board of directors, which
consists of three independent directors, will have the authority to prescribe
rules relating to the Annual Incentive Plan. The decisions of the Compensation
Committee with respect to the Annual Incentive Plan will be final and
conclusive.
</FONT>
<P align="left"><FONT size="2"><B>Operation of the Annual Incentive Plan</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Establishment of Performance Measures and Target Awards</I>
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive officers selected to participate in the plan will be notified in
writing and will be apprised of the performance measures, performance goals,
and related award opportunities for the relevant fiscal year as soon as
practicable. The Compensation Committee may establish one or more performance
measures that a participant must achieve in order for that participant to
receive any portion of his or her award payment for the fiscal year. The
Compensation Committee may use various performance measures, applied
individually or in tandem, to determine award payments under the plan,
including the following: operating margin, operating margin improvement,
inventory management, net revenue growth, asset turnover, cash flow, earnings
per share, economic value added, cash-flow return on investment, expenses,
gross or net margin, increase in stock price, inventory turnover, market share,
net income (before or after taxes), return on assets, return on equity, return
on investment, return on sales, revenue, and total shareholder return. Prior
to the beginning of each fiscal year, or as soon as practicable thereafter, the
Compensation Committee will establish the target awards that correspond to
various levels of achievement of the pre-established performance measures. The
target awards will be established as a percentage of each participant&#146;s base
salary. For fiscal 2002, the Compensation Committee has established the target
awards for each executive in an amount not to exceed 150% of the respective
executive&#146;s base salary. The Compensation Committee may establish minimum
levels of performance goal achievement, below which no payouts of any final
awards will be made to any participant. In the event a participant changes job
description during the fiscal year, the Compensation Committee may adjust that
participant&#146;s target award to reflect the performance at each job level during
the fiscal year.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Modification of Performance Measures and Target Awards</I>
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Once performance goals for the fiscal year are determined by the
Compensation Committee, the performance goals generally will not be changed.
If, however, the Compensation Committee determines that external changes or
other unanticipated business conditions have materially affected the fairness
of the performance measures, then the Compensation Committee may approve
appropriate adjustments to the performance goals during the fiscal year as such
measures apply to the target award for the particular participant. The
committee may apply greater discretion and flexibility to modify target awards,
so long as the committee determines that as the result of such modification,
tax regulations will not adversely affect the deductibility for federal income
tax purposes of any amount paid under the plan.
</FONT>
<P align="center"><FONT size="2">17</FONT>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Final Awards and Award Limits</I>
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At the end of each fiscal year, the Compensation Committee will compute
the final awards for each participant. Final awards may vary above or below
the target award based on the level of achievement of the pre-established
performance measures. The Compensation Committee may establish guidelines
governing the maximum final awards that may be earned by participants in each
fiscal year, and such guidelines may be expressed as a percentage of
company-wide goals or financial measures, or such other measures as determined.
No executive officer, including our Chief Executive Officer, will be able to
earn an award greater than $2.0&nbsp;million under the Annual Incentive Plan during
any fiscal year.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Final awards will be paid in cash, in one lump sum, within 45 calendar
days of the end of each fiscal year. The Compensation Committee may permit or
require a participant to defer his or her receipt of the payment of cash that
would otherwise be due pursuant to his or her final award in order to preserve
full deductibility for federal income tax purposes.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Termination of Employment</I>
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event a participant&#146;s employment is terminated by reason of death,
disability, or retirement, the final award determined will be reduced to
reflect participation prior to termination only. The reduced award generally
will be calculated as a percentage of the final award based on the number of
days the participant was employed with the company during the fiscal year. In
the event a participant&#146;s employment is terminated by reason other than death,
disability, or retirement, the participant will forfeit any right to receive a
final award under the plan for the then-current fiscal year. Except in the
event of an involuntary employment termination for cause, the Compensation
Committee, in its sole discretion, may pay a prorated award for the portion of
the fiscal year that the participant was employed by our company, computed as
the Compensation Committee determines. Any award paid in connection with the
termination of employment will be paid within 45 calendar days following the
end of the fiscal year in which employment termination occurs.
</FONT>
<P align="left"><FONT size="2"><B>Plan Benefits</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Compensation Committee has established performance goals and target
awards for all plan participants under the Annual Incentive Plan for fiscal
2002. Because the amounts that may be received by the listed officers under
the Annual Incentive Plan during fiscal 2002 are not determinable, the
following table provides certain information with respect to incentive cash
compensation that would have been paid to the officers listed during fiscal
2001 if the maximum target awards included in the Annual Incentive Plan had
been achieved. None of our non-employee directors will receive any
compensation under the incentive compensation program.
</FONT>
<!-- link1 "NEW PLAN BENEFITS Annual Incentive Plan" -->
<P align="center"><FONT size="2"><B>NEW PLAN BENEFITS<BR>
Annual Incentive Plan</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="70%">
<TR valign="bottom">
        <TD width="78%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="8%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="8%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD nowrap align="center"><FONT size="1"><B>Name and Position</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Dollar Value</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD nowrap align="center"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Fred W. Wagenhals</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">900,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">R. David Martin</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">315,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom" bgcolor="#eeeeee">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Melodee Volosin</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">262,500</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">John S. Bickford, Sr.</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">288,750</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom" bgcolor="#eeeeee">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">All current executive officers as a group</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">1,766,250</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom" bgcolor="#eeeeee">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Non-executive director group</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Non-executive officer employee group</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2"><B>Duration and Amendment</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Annual Incentive Plan will become effective as of October&nbsp;1, 2001 and
will remain in effect until September&nbsp;30, 2006, or until earlier terminated by
our board of directors. The Committee will have the authority to amend or
terminate the Annual Incentive Plan at any time; however, shareholder approval
will be required if any such amendment will require shareholder approval to
maintain the qualification of the awards under the plan as performance-based
compensation under federal income tax regulations.
</FONT>
<P align="center"><FONT size="2">18</FONT>

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<P align="left"><FONT size="2"><B>Federal Income Tax Consequences</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;162(m) of the Internal Revenue Code generally disallows a tax
deduction for compensation in excess of $1.0&nbsp;million paid to our Chief
Executive Officer and any of our four other most highly compensated executive
officers. Qualifying performance-based compensation, such as that contemplated
by the plan, is not subject to the deduction limit if certain requirements are
met.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We believe that we have structured the Annual Incentive Plan in a manner
that complies with Section&nbsp;162(m) of the Internal Revenue Code. Accordingly,
and assuming the shareholders approve this proposal at the meeting, all
payments made to the executive officers under the plan during the term of
the plan will be deductible for federal income tax purposes.
</FONT>
<P align="left"><FONT size="2"><B>Approval by Stockholders of the Incentive Compensation Program</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Approval of the incentive compensation program will require the
affirmative vote of the holders of a majority of the outstanding shares of
common stock of our company present in person or by proxy at the meeting. Upon
approval of the program by our shareholders, the plan will remain in effect and
we will be able to deduct for federal income tax purposes all compensation paid
to the participants in the plan beginning in fiscal year 2002. In the event
that the proposal to approve the Annual Incentive Plan is not approved by our
shareholders at the meeting, any compensation paid to any executive officer
during any fiscal year that exceeds $1.0&nbsp;million will not be deductible by our
company for federal income tax purposes.
</FONT>
<!-- link1 "RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS" -->
<P align="center"><FONT size="2"><B>RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Aggregate fees billed to our company for the fiscal year ended September
30, 2001 by our principal accounting firm, Arthur Andersen LLP, are as follows:
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="92%">
<TR valign="bottom">
        <TD width="87%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Audit Fees</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">399,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Financial Information Systems Design and Implementation Fees</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom" bgcolor="#eeeeee">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">All Other Fees</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">$</FONT></TD>
        <TD align="right"><FONT size="2">445,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amounts listed as &#147;All Other Fees&#148; include $367,000 related to tax
compliance and other tax services and $78,000 of audit related fees, primarily
statutory audits of foreign subsidiaries, audits of benefit plans, and
registration statements. The members of our audit committee believe that the
non-audit services provided by Arthur Andersen LLP referenced above in
&#147;Financial Information Systems Design and Implementation Fees&#148; and &#147;All Other
Fees,&#148; are compatible with maintaining our principal accounting firm&#146;s
independence.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our board of directors has appointed Arthur Andersen LLP, independent
public accountants, to audit our consolidated financial statements for the
fiscal year ending September&nbsp;30, 2002 and recommends that the shareholders vote
in favor of the ratification of such appointment. In the event of a negative
vote on such ratification, our board of directors will reconsider its
selection. We anticipate that representatives of Arthur Andersen LLP will be
present at the meeting. These representatives will have the opportunity to
make a statement if they desire and will be available to respond to appropriate
questions.
</FONT>
<P align="center"><FONT size="2">19</FONT>

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<!-- link1 "DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS" -->
<P align="center"><FONT size="2"><B>DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shareholder proposals that are intended to be presented by such
shareholders at our annual meeting of shareholders to be held during calendar
2003 must be received by us no later than November&nbsp;5, 2002, in order to be
included in the proxy statement and form of proxy relating to such meeting.
Pursuant to Rule&nbsp;14a-4 under the Exchange Act, we intend to retain
discretionary authority to vote proxies with respect to shareholder proposals
for which the proponent does not seek to have us include the proposed matter in
the proxy statement for the annual meeting to be held during calendar 2003,
except in circumstances where (a)&nbsp;we receive notice of the proposed matter no
later than January&nbsp;17, 2003, and (b)&nbsp;the proponent complies with the other
requirements set forth in Rule&nbsp;14a-4.
</FONT>
<!-- link1 "OTHER MATTERS" -->
<P align="center"><FONT size="2"><B>OTHER MATTERS</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We know of no other matters to be submitted to the meeting. If any other
matters properly come before the meeting, it is the intention of the persons
named in the enclosed proxy card to vote the shares they represent as our Board
of Directors may recommend.
</FONT>
<P align="right"><FONT size="2">Dated: January&nbsp;22, 2002
</FONT>

<P align="center"><FONT size="2">20</FONT>

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<!-- link1 "APPENDIX A" -->
<P align="center"><FONT size="2"><B>APPENDIX A</B>
</FONT>

<P align="center"><FONT size="2"><B>ACTION PERFORMANCE COMPANIES, INC.<BR>
ANNUAL INCENTIVE PLAN</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>ARTICLE 1. Establishment and Purpose</B>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>1.1 Establishment of the Plan. </B>Action Performance Companies, Inc., an
Arizona corporation (the &#147;Company&#148;), hereby establishes an annual incentive
compensation plan to be known as &#147;Action Performance Companies, Inc. Annual
Incentive Plan&#148; (the &#147;Plan&#148;), as set forth in this document. The Plan permits
the awarding of annual bonuses to Employees (as defined in Section&nbsp;2.11) of the
Company, based on the achievement of pre-established performance goals.
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon approval by the Board of Directors of the Company, the Plan shall
become effective as of October&nbsp;1, 2001 (the &#147;Effective Date&#148;) and shall remain
in effect until September&nbsp;30, 2006, or until earlier terminated by the Board.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>1.2 Purpose. </B>The primary purposes of the Plan are to: (a)&nbsp;motivate
participants toward achieving annual goals that are within group and/or
individual control, and are considered key to the Company&#146;s success; (b)
encourage teamwork among Participants in various segments of the Company; and
(c)&nbsp;reward performance with pay that varies in relation to the extent to which
the pre-established goals are achieved.
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>ARTICLE 2. Definitions</B>
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Whenever used in the Plan, the following terms shall have the meanings set
forth below and, when the defined meaning is intended, the term is capitalized:
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.1
</B>&#147;<B>Target Award</B>&#148; means the various levels of incentive award payouts
which a Participant may earn under the Plan, as established by the Committee
pursuant to Sections&nbsp;5.1 and 5.2 herein.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.2
</B>&#147;<B>Board</B>&#148; or &#147;<B>Board of Directors</B>&#148; means the Board of Directors of the
Company.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.3
</B>&#147;<B>Cause</B>&#148; means: (a)&nbsp;willful misconduct on the part of a Participant
that is materially detrimental to the Company; or (b)&nbsp;the conviction of a
Participant for the commission of a felony or crime involving moral turpitude;
provided, however, that if the Participant has entered into an employment
agreement that is binding as of the date of employment termination, and if such
employment agreement defines &#147;Cause,&#148; such definition of &#147;Cause&#148; shall apply.
&#147;Cause&#148; under either (a)&nbsp;or (b)&nbsp;shall be determined in good faith by the
Committee.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.4 </B>&#091;Reserved&#093;
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.5
</B>&#147;<B>Code</B>&#148; means the Internal Revenue Code of 1986, as amended.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.6
</B>&#147;<B>Committee</B>&#148; means a committee of two (2)&nbsp;or more individuals,
appointed by the Board to administer the Plan, pursuant to Article&nbsp;3 herein.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.7
</B>&#147;<B>Company</B>&#148; means Action Performance Companies, Inc., an Arizona
corporation (including any and all Subsidiaries), and any successor thereto.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.8
</B>&#147;<B>Covered Employee</B>&#148; means a Participant who, as of the date of payout
of a Final Award, is one of the group of &#147;covered employees,&#148; as defined in the
Regulations promulgated under Code Section&nbsp;162(m), or any successor statute.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.9
</B>&#147;<B>Disability</B>&#148; means a disability as determined under the disability
plan of the Company or Subsidiary applicable to the Participant.
</FONT>

<P align="center"><FONT size="2">A-1</FONT>

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<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.10 </B>&#147;<B>Effective Date</B>&#148; means the date the Plan becomes effective, as set
forth in Section&nbsp;1.1 herein.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.11 </B>&#147;<B>Employee</B>&#148; means an executive officer of the Company.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.12 </B>&#147;<B>Exchange Act</B>&#148; means the Securities Exchange Act of 1934, as amended
from time to time, or any successor act thereto.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.13 </B>&#147;<B>Final Award</B>&#148; means the actual award earned during a Plan Year by a
Participant, as determined by the Committee following the end of the Plan Year.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.14 </B>&#147;<B>Participant</B>&#148; means an Employee who is actively participating in the
Plan.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.15 </B>&#147;<B>Plan</B>&#148; means Action Performance Companies, Inc. Annual Incentive
Plan, as set forth herein.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.16 </B>&#147;<B>Plan Year</B>&#148; means the Company&#146;s fiscal year.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.17 </B>&#147;<B>Retirement</B>&#148; shall have the meaning ascribed to such term in the
Company&#146;s tax-qualified retirement pension plan.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.18 </B>&#147;<B>Subsidiary</B>&#148; means any corporation (other than the Company) in which
the Company or a Subsidiary of the Company owns fifty percent (50%) or more of
the total combined voting power of all classes of stock.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.19 </B>&#147;<B>Target Award</B>&#148; means the award to be paid to Participants when the
Company meets &#147;targeted&#148; performance results, as established by the Committee.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.20 </B>&#147;<B>Actual Annual Earnings</B>&#148; means the actual earnings that will be used
to calculate the final award.
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>ARTICLE 3. Administration</B>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>3.1 The Committee. </B>The Plan shall initially be administered by the
Executive Compensation Committee of the Board. Subject to the terms of this
Plan, the Board may appoint a successor Committee to administer the Plan. The
members of the Committee shall be appointed by, and shall serve at the
discretion of, the Board.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>3.2 Authority of the Committee. </B>Except as limited by law or by the
Certificate of Incorporation or Bylaws of the Company, and subject to the
provisions herein, the Committee shall have full power to select Employees who
shall participate in the Plan; determine the size and types of Target Awards
and Final Awards; determine the terms and conditions of Target Awards in a
manner consistent with the Plan; construe and interpret the Plan and any
agreement or instrument entered into under the Plan; establish, amend, or waive
rules and regulations for the Plan&#146;s administration; and (subject to the
provisions of Article&nbsp;8 herein) amend the terms and conditions of any
outstanding Target Award to the extent such terms and conditions are within the
discretion of the Committee as provided in the Plan. Further, the Committee
shall make all other determinations which may be necessary or advisable for the
administration of the Plan. As permitted by law, the Committee may delegate
its authorities as identified hereunder.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>3.3 Decisions Binding. </B>All determinations and decisions of the Committee
as to any disputed question arising under the Plan, including questions of
construction and interpretation, shall be final, binding, and conclusive upon
all parties.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>3.4 Indemnification. </B>Each person who is or shall have been a member of
the Committee, or of the Board, shall be indemnified and held harmless by the
Company against and from any loss, cost, liability, or
</FONT><P align="center"><FONT size="2">A-2</FONT>

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<P align="left"><FONT size="2">expense that may be imposed upon or reasonably incurred by him or her in
connection with or resulting from any claim, action, suit, or proceeding to
which he or she may be a party, or in which he or she may be involved by reason
of any action taken or failure to act under the Plan, and against and from any
and all amounts paid by him or her in settlement thereof, with the Company&#146;s
approval, or paid by him or her in satisfaction of any judgment in any such
action, suit, or proceeding against him or her, provided he or she shall give
the Company an opportunity, at its own expense, to handle and defend the same
before he or she undertakes to handle and defend it on his or her own behalf.
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The foregoing right of indemnification shall not be exclusive of any other
rights of indemnification to which such persons may be entitled under the
Company&#146;s Certificate of Incorporation or Bylaws, as a matter of law, or
otherwise, or any power that the Company may have to indemnify them or hold
them harmless.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>ARTICLE 4. Eligibility and Participation</B>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>4.1 Eligibility. </B>Employees as defined in Section&nbsp;2.11 shall be eligible
to participate in the Plan.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>4.2 Participation. </B>Participation in the Plan shall be determined annually
by the Committee. Employees who are chosen to participate in the Plan in any
given Plan Year shall be so notified in writing, and shall be apprised of the
performance measure(s), performance goal(s), and related Award Opportunities
for the relevant Plan Year, as soon as is practicable.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>4.3 Partial Plan Year Participation. </B>Except as provided in Article&nbsp;8
herein, an Employee who becomes eligible after the beginning of a Plan Year may
participate in the Plan on a prorata basis for that Plan Year. The Committee,
in its sole discretion, retains the right to prohibit or allow participation in
the initial Plan Year of eligibility for any of the aforementioned Employees.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>4.4 No Right to Participate. </B>No Participant or other Employee shall at
any time have a right to be selected for participation in the Plan for any Plan
Year, despite having previously participated in the Plan.
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>ARTICLE 5. Award Determination</B>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>5.1 Performance Measures and Performance Goals. </B>Prior to the beginning of
each Plan Year, or as soon as practicable thereafter, the Committee shall
select performance measures and shall establish performance goals for that Plan
Year. Except as provided in Article&nbsp;8 herein, the performance measures may be
based on any combination of corporate and/or individual goals.
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Committee may establish one or more performance measures which must be
achieved for any Participant to receive any portion of his or her Final Award
payment for that Plan Year.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>5.2 Target Award. </B>Prior to the beginning of each Plan Year, or as soon as
practicable thereafter, the Committee shall establish, in writing, Target
Awards which correspond to various levels of achievement of the pre-established
performance goals. Except as provided in Article&nbsp;8 herein, in the event a
Participant changes job levels during a Plan Year, the Participant&#146;s Target
Award may be adjusted to reflect the amount of time at each job level during
the Plan Year.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>5.3 Adjustment of Performance Goals and Target Award. </B>Once established,
performance goals normally shall not be changed during the Plan Year. However,
except as provided in Article&nbsp;8 herein, if the Committee determines that
external changes or other unanticipated business conditions have materially
affected the fairness of the goals, then the Committee may approve appropriate
adjustments to the performance goals (either up or down) during the Plan Year
as such goals apply to the Target Award of specified Participants. In
addition, the Committee shall have the authority to reduce or eliminate the
Final Award determinations, based upon any objective or subjective criteria it
deems appropriate.
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding any other provision of this Plan, in the event of any
change in corporate capitalization, such as a stock split, or a corporate
transaction, such as any merger, consolidation, separation, including a
spin-off, or other distribution of stock or property of the Company, any
reorganization (whether or not such reorganization
</FONT>
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<P><FONT size="2"> comes within the definition of such term in Code Section&nbsp;368), or any
partial or complete liquidation of the Company, such adjustment shall be made
in the Target Award and/or the performance measures or performance goals
related to then-current performance periods, as may be determined to be
appropriate and equitable by the Committee, in its sole discretion, to prevent
dilution or enlargement of rights; provided, however, that subject to Article&nbsp;8
herein, any such adjustment shall not be made if it would eliminate the ability
of the Target Award held by Covered Employees to qualify for the
&#147;performance-based&#148; exception under Code Section&nbsp;162(m).
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>5.4 Final Award Determinations. </B>At the end of each Plan Year, Final
Awards shall be computed for each Participant as determined by the Committee.
Subject to the terms of Article&nbsp;8 herein, Final Award amounts may vary above or
below the Target Award, based on the level of achievement of the
pre-established corporate and/or divisional performance goals.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>5.5 Award Limit. </B>The Committee may establish guidelines governing the
maximum Final Awards that may be earned by Participants (either in the
aggregate, by Employee class, or among individual Participants) in each Plan
Year. The guidelines may be expressed as a percentage of Company-wide goals or
financial measures, or such other measures as the Committee shall from time to
time determine; provided, however, that the maximum payout with respect to a
Final Award payable to any one Participant in connection with performance in
any one Plan Year shall be two million dollars ($2,000,000).
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>5.6 Threshold Levels of Performance. </B>The Committee may establish minimum
levels of performance goal achievement, below which no payouts of Final Awards
shall be made to any Participant.
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>ARTICLE 6. Payment of Final Awards</B>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>6.1 Form and Timing of Payment. </B>A Participant&#146;s Final Award shall be paid
in cash, in one lump sum, within forty-five (45)&nbsp;calendar days after the end of
each Plan Year.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>6.2 Deferral of Final Award Payouts. </B>The Committee may permit (or
require, if necessary, to preserve full deductibility under Code Section
162(m)) a Participant to defer such Participant&#146;s receipt of the payment of
cash that would otherwise be due pursuant to his or her Final Award. If any
such deferral election is required or permitted, the Committee shall, in its
sole discretion, establish rules and procedures for such payment deferrals.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>6.3 Unsecured Interest. </B>No participant or any other party claiming an
interest in amounts earned under the Plan shall have any interest whatsoever in
any specific asset of the Company. To the extent that any party acquires a
right to receive payments under the Plan, such right shall be equivalent to
that of an unsecured general creditor of the Company.
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>ARTICLE 7. Termination of Employment</B>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>7.1 Termination of Employment Due to Death, Disability, or Retirement. </B>In
the event a Participant&#146;s employment is terminated by reason of death,
Disability, or Retirement, the Final Award determined in accordance with
Section&nbsp;5.4 herein shall be reduced to reflect participation prior to
termination only. The reduced award shall be determined by multiplying said
Final Award by a fraction; the numerator of which is the number of days of
employment in the Plan Year through the date of employment termination, and the
denominator of which is three hundred sixty-five (365). In the ease of a
Participant&#146;s Disability, the employment termination shall be deemed to have
occurred on the date that the Committee determines the definition of Disability
to have been satisfied.
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Final Award thus determined shall be paid within forty-five (45)
calendar days following the end of the Plan Year in which employment
termination occurs.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>7.2 Termination of Employment for Other Reasons. </B>In the event a
Participant&#146;s employment is terminated for any reason other than death,
Disability, or Retirement (of which the Committee shall be the sole judge), all
of the Participant&#146;s rights to a Final Award for the Plan Year then in progress
shall be forfeited. However, except in the event of an involuntary employment
termination for Cause, the Committee, in its sole
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<P align="left"><FONT size="2">discretion, may pay a prorated award for the portion of the Plan Year that
the Participant was employed by the Company, computed as determined by the
Committee.
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>ARTICLE 8. Covered Employees</B>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>8.1 Applicability of Article&nbsp;8. </B>The provisions of this Article&nbsp;8 shall
apply only to Covered Employees. In the event of any inconsistencies between
this Article&nbsp;8 and the other Plan provisions as they pertain to Covered
Employees, the provisions of this Article&nbsp;8 shall control.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>8.2 Establishment of Target Awards. </B>Except as provided in Section&nbsp;8.7
herein, the Target Awards for Covered Employees shall be established as a
percentage of each Covered Employee&#146;s Base Salary (as defined below). Within
ninety (90)&nbsp;days after the beginning of each Plan Year, the Committee shall
establish, in writing, various levels of Final Awards which will be paid with
respect to specified levels of attainment of the pre-established performance
goals.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>8.3 Components of Target Awards. </B>Each Covered Employee&#146;s Target Award
shall be based on: (a)&nbsp;the potential Final Awards corresponding to various
levels of achievement of the pre-established performance goals, as established
by the Committee; and (b)&nbsp;Company and business unit performance in relation to
the pre-established performance goals.
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except as provided in Section&nbsp;8.7 herein, performance measures which may
serve as determinants of Covered Employees&#146; Award Opportunities shall be
limited to one or more of the following: operating margin (including a
definition such as earnings before interest and taxes divided by net revenues),
operating margin improvement, inventory management, net revenue growth, asset
turnover (including a definition such as revenue divided by average total
assets), cash flow, earnings per share, economic value added, cash-flow return
on investment, expenses, gross or net margin, increase in stock price,
inventory turnover, market share, net income (before or after taxes), return on
assets, return on equity, return on investment, return on sales, revenue, and
total shareholder return. These performance measures may be applied singly or
in tandem.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>8.4 No Mid-Year Change in Award Opportunities. </B>Except as provided in
Section&nbsp;8.7 herein, each Covered Employee&#146;s Final Award shall be based
exclusively on the Target Award levels established by the Committee pursuant to
Section&nbsp;8.2 herein.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>8.5 Nonadjustment of Performance Goals. </B>Except as provided in Section&nbsp;8.7
herein, performance goals shall not be changed following their establishment,
and Covered Employees shall not receive any payout when the minimum
company/corporation performance goals are not met or exceeded.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>8.6 Individual Performance Evaluation and Discretionary Adjustments.</B>
Except as provided in Section&nbsp;8.7 herein, subjective evaluations of performance
shall not be applied to increase Final Awards. However, the Committee shall
have the discretion to decrease or eliminate the amount of the Final Award
otherwise payable to a Covered Employee.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>8.7 Possible Modifications. </B>If, on the advice of the Company&#146;s tax
counsel, the Committee determines that Code Section&nbsp;162(m) and the Regulations
thereunder will not adversely affect the deductibility for federal income tax
purposes of any amount paid under the Plan by permitting greater discretion
and/or flexibility with respect to Target Awards granted to Covered Employees
pursuant to this Article&nbsp;8, then the Committee may, in its sole discretion,
apply such greater discretion and/or flexibility to such Target Awards as is
consistent with the terms of this Plan, and without regard to the restrictive
provisions of this Article&nbsp;8.
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Without limiting the generality of the foregoing, in the event it is
determined that the Committee may make adjustments to performance goals to
reflect the impact of events that are extraordinary and/or nonrecurring without
precluding compliance with Code Section&nbsp;162(m), such adjustments may be made.
Further, in determining the degree to which performance goals have been
satisfied in any year, the Committee shall disregard the impact of accounting
changes made by the Financial Accounting Standards Board which become effective
after the performance goals for such year have been established.
</FONT>
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<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event the Committee determines that compliance with Code Section
162(m) is not desired with respect to any Target Awards granted or to be
granted under the Plan, then compliance with Code Section&nbsp;162(m) will not be
required (for example, if such a determination is made, the performance
measures specified in Section&nbsp;8.3 herein need not be the only determinants of
Final Awards, and subjective discretion may be applied to increase the Final
Awards of Covered Employees). In addition, in the event that changes are made
to Code Section&nbsp;162(m) to permit greater flexibility with respect to any Award
Opportunities under the Plan, the Committee may, subject to this Article&nbsp;8,
make any adjustments it deems appropriate.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>ARTICLE 9. Rights of Participants</B>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>9.1 Employment. </B>Nothing in the Plan shall interfere with or limit in any
way the right of the Company to terminate any Participant&#146;s employment at any
time, nor confer upon any Participant any right to continue in the employ of
the Company.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>9.2 Nontransferability. </B>No right or interest of any Participant in the
Plan shall be assignable or transferable, or subject to any lien, directly, by
operation of law or otherwise, including, but not limited to, execution, levy,
garnishment, attachment, pledge, and bankruptcy.
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>ARTICLE 10. Beneficiary Designation</B>
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Participant under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or successively) to
whom any benefit under the Plan is to be paid in case of his or her death
before he or she receives any or all of such benefit. Each designation will
revoke all prior designations by the same Participant, shall be in a form
prescribed by the Committee, and will be effective only when filed by the
Participant in writing with the Committee during his or her lifetime. In the
absence of any such designation, benefits remaining unpaid at the Participant&#146;s
death shall be paid to the Participant&#146;s estate.
</FONT>
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<!-- link1 "APPENDIX B" -->
<P align="center"><FONT size="2"><B>APPENDIX B</B></FONT>
<DIV align="center"><FONT size="2"><B>(Not Part of Proxy Statement)</B>
</FONT></DIV>

<P align="center"><FONT size="2"><B>ACTION PERFORMANCE COMPANIES, INC.<BR>
2000 STOCK OPTION PLAN<BR>
(AS AMENDED THROUGH OCTOBER 2001)</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>THIS STOCK OPTION AGREEMENT </B>is made as of the Grant Date, as set forth on
the attached Exhibit&nbsp;A, by and between <B>Action Performance Companies, Inc.</B>, an
Arizona corporation (the &#147;Company&#148;), and the person named as the Optionholder
(the &#147;Optionholder&#148;) on the attached Exhibit&nbsp;A.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Optionholder is a key person associated with the Company, and the Company
considers it desirable and in its best interest that Optionholder be given an
inducement to acquire a proprietary interest in the Company and added incentive
to advance the interest of the Company by possessing an option to purchase the
Company&#146;s common stock, par value $.01 per share (the &#147;Common Stock&#148;), all in
accordance with the Action Performance Companies, Inc. 2000 Stock Option Plan
(the &#147;Plan&#148;), a copy of which is attached as Exhibit&nbsp;B. For purposes of this
Agreement, the term &#147;Company&#148; includes any parent or subsidiary of the Company
as defined in Section&nbsp;424 of the Internal Revenue Code of 1986, as amended (the
&#147;Code&#148;).
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>NOW, THEREFORE, </B>it is agreed by and between the parties as follows:
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Grant of Option</B>. The Company hereby grants to Optionholder, as of the
grant date (the &#147;Grant Date&#148;) specified in the attached Exhibit&nbsp;A, the right,
privilege and option (&#147;Option&#148;) to purchase shares of Common Stock as set forth
on the attached Exhibit&nbsp;A (the &#147;Optioned Shares&#148;), subject in all respects to
the terms, conditions and provisions of this Agreement and the Plan, which is
attached hereto as Exhibit&nbsp;B and incorporated by reference in this Agreement.
The Optionholder acknowledges having received and carefully reviewed a copy of
the Plan. It is set forth in Exhibit&nbsp;A whether or not the Option is intended
to be an Incentive Stock Option as defined in Section&nbsp;422 of the Code.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Option Price</B>. The option price (the &#147;Option Price&#148;) as determined by
the Plan Administrator is set forth on the attached Exhibit&nbsp;A, which price has
been determined by the Plan Administrator to be not less than 100% of the Fair
Market Value per share of the Common Stock on the Grant Date of this Option if
the Option is an Incentive Stock Option (110% if the Option is an Incentive
Stock Option and the Optionholder is a shareholder who at the Grant Date owns
stock possessing more than 10% of the combined voting power of all classes of
stock of the Company or any parent or subsidiary of the Company).
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Vesting of Option</B>.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <B>Vesting Schedule</B>. The vesting schedule shall be as set forth on
Exhibit&nbsp;A hereto.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <B>$100,000 Limitation</B>. To the extent that the aggregate Fair Market
Value (determined as of the Grant Date) of Common Stock with respect to which
an Incentive Stock Option is granted which becomes exercisable for the first
time during any calendar year (under this Agreement and any other agreement
between the Company and Optionholder) exceeds $100,000, the portion of the
Option representing such excess value shall be treated as a Non-Qualified Stock
Option.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <B>Acceleration</B>. The Plan Administrator may, by resolution adopted after
the Grant Date in its sole and absolute discretion, allow the Option to be
exercised on an accelerated basis, provided that in no event shall the Plan
Administrator accelerate the exercise period for an Incentive Stock Option
granted hereunder so as to violate the $100,000 Limitation.
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Exercise of Option</B>. The Option issued hereunder shall be exercisable
by written notice to the Company, addressed to the Company at its principal
place of business, in accordance with the terms of the Plan. Such notice shall
state the election to exercise the Option and the number of shares with respect
to which it is being
</FONT>
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<P><FONT size="2"> exercised, and shall be signed by the Optionholder. Such notice shall be
accompanied by payment in full of the exercise price for the number of shares
being purchased. Payment may be made in cash or by check or, if then permitted
by the Plan Administrator, by tendering duly endorsed certificates representing
shares of Common Stock then owned by the Optionholder and held for the
requisite period necessary to avoid a charge to the Company&#146;s earnings and
valued at Fair Market Value on the date of exercise. Upon the exercise of the
Option, the Company shall deliver, or cause to be delivered, to the
Optionholder a certificate or certificates representing the shares of Common
Stock purchased upon such exercise as soon as practicable after payment for
those shares has been received by the Company. If the Option is exercised
pursuant to Section&nbsp;10 hereof by any person other than the Optionholder, such
notice shall be accompanied by appropriate proof of the right of such person to
exercise the Option. All shares that are purchased and paid for in full upon
the exercise of the Option shall be fully paid and non-assessable.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Stock Lock-up</B>. The Optionholder hereby agrees that, at the request of
the Company, the Optionholder (or in the case of the Optionholder&#146;s death, his
or her successors as provided under the Plan) shall agree not to sell or
otherwise transfer any acquired Optioned Shares during any stock lock-up period
agreed to by the Company and any underwriter associated with a public offering
of Common Stock.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Termination of Option</B>. The Option, to the extent not previously
exercised, shall terminate upon the first to occur of the date that is (a)
three months after termination of the Optionholder&#146;s Service (as defined in the
Plan) with the Company or any parent or subsidiary of the Company, unless due
to death or Disability (as defined in Section&nbsp;22(e)(3) of the Code); (b)&nbsp;one
year after termination of Service due to death or Disability; or (c)
<B>&#091;ALTERNATIVE 1: DISCRETIONARY GRANT&#093; </B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;years after the Grant Date (five
years after the Grant Date if the Option is an Incentive Stock Option and the
Optionholder is a shareholder who at the Grant Date owns stock possessing more
than 10% of the combined voting power of all classes of stock of the Company or
any parent or subsidiary of the Company) <B>&#091;ALTERNATIVE 2: AUTOMATIC GRANT&#093; </B>ten
years after the Grant Date. Notwithstanding the foregoing (i)&nbsp;if the
Optionholder&#146;s Service is terminated by the Company in its good faith judgment,
for (A)&nbsp;commission of a crime by the Optionholder or for reasons involving
moral turpitude; (B)&nbsp;an act by the Optionholder which tends to bring the
Company into disrepute; or (C)&nbsp;negligent, fraudulent or willful misconduct by
the Optionholder, or (ii)&nbsp;if after the Service of the Optionholder is
terminated, the Optionholder commits acts detrimental to the Company&#146;s
interests, then the Option shall thereafter be void for all purposes.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>No Privilege of Stock Ownership</B>. The holder of the Option granted
hereunder shall not have any of the rights of a stockholder with respect to the
Optioned Shares until such Optionholder shall have exercised the Option, paid
the Option Price, and received a stock certificate for the purchased shares of
Common Stock.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Liability of the Company</B>.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;If the Optioned Shares covered by this Agreement exceed, as of the
Grant Date, the number of shares of Common Stock which may without shareholder
approval be issued under the Plan, then this Option shall be void with respect
to such excess shares unless shareholder approval of an amendment increasing
the number of shares of Common Stock issuable under the Plan is obtained prior
to exercise of the Option with respect to such excess shares.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;The inability of the Company to obtain approval from any regulatory
body having authority deemed by the Company to be necessary to the lawful
issuance and sale of any Common Stock pursuant to this Agreement shall relieve
the Company of any liability with respect to the nonissuance or sale of the
Common Stock as to which such approval shall not have been obtained. The
Company, however, shall use its best efforts to obtain all such approvals.
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>No Employment or Service Contract</B>. Nothing in this Agreement or in the
Plan shall confer upon the Optionholder any right to continue in the Service of
the Company (or any parent or subsidiary corporation of the Company employing
or retaining Optionholder) for any period of time or to interfere with or
otherwise restrict in any way the rights of the Company (or any parent or
subsidiary corporation of the Company employing or retaining Optionholder) or
the Optionholder, which rights are hereby expressly reserved by each, to
terminate the Service of Optionholder at any time for any reason whatsoever,
with or without cause.
</FONT>
<P align="center"><FONT size="2">B-2</FONT>

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<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Assignability</B>. If this Option is an Incentive Stock Option, neither
this Option nor any rights or privileges conferred hereby shall be assignable
or transferable by the Optionholder other than by will or by the laws of
descent and distribution, and this Option shall be exercisable only by
Optionholder during the Optionholder&#146;s lifetime. If this Option is not an
Incentive Stock Option, unless the Optionholder has received written consent of
the Plan Administrator, neither this Option nor any rights or privileges
conferred hereby shall be assignable or transferable by the Optionholder other
than by will or by the laws of descent and distribution, and this Option shall
be exercisable only by Optionholder during the Optionholder&#146;s lifetime. Upon
the death of Optionholder, the rights of the successors to Optionholder shall
be limited as set forth in the Plan.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Binding Affect</B>. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective heirs, executors,
administrators, successors and permitted assigns.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Compliance With Laws and Regulations; Securities Matters</B>.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;The exercise of this Option and the issuance of the Common Stock upon
such exercise shall be subject to compliance by the Company and the
Optionholder with all applicable requirements of law relating thereto and with
all applicable regulations of any stock exchange or trading market on which the
shares of the Common Stock may be listed at the time of such exercise and
issuance. In connection with the exercise of this Option, Optionholder shall
execute and deliver to the Company such representations in writing as may be
requested by the Company in order for it to comply with applicable requirements
of federal and state securities laws.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;The Option granted hereunder may be exercised by the Optionholder only
if (i)&nbsp;the shares of Common Stock which are to be issued upon such exercise are
registered under the Securities Act of 1933, as amended (the &#147;1933 Act&#148;) and
any and all other applicable securities laws, or (ii)&nbsp;the Company, upon advice
of counsel, determines that the issuance of the shares of Common Stock upon the
exercise of the Option is exempt from registration requirements.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;The Company is under no obligation to register, under the 1933 Act or
any other applicable securities laws, any of the shares of Common Stock to be
issued to the Optionholder upon the exercise of the Option or to take any
action which would make available any exemption from registration. If the
shares to be issued to the Optionholder upon the exercise of the Option have
not been registered under the 1933 Act and all other applicable securities
laws, those shares will be &#147;restricted securities&#148; within the meaning of Rule
144 under the 1933 Act and must be held indefinitely without any transfer, sale
or other disposition unless (a)&nbsp;the shares are subsequently registered under
the 1933 Act and all other applicable securities laws, or (b)&nbsp;the Optionholder
obtains an opinion of counsel which is satisfactory to counsel for the Company
that the shares may be sold in reliance on an exemption from registration
requirements. In the event that the shares to be issued upon exercise of the
Option are &#147;restricted securities,&#148; the certificates representing shares of
Common Stock issued upon exercise of an Option shall be endorsed with a legend
reading substantially as follows:
</FONT>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND ARE &#145;RESTRICTED SECURITIES&#146; AS DEFINED BY
RULE 144 UNDER THAT ACT. THE SHARES MAY NOT BE SOLD,
TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT REGISTERING THE
SHARES UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR, IN LIEU THEREOF, AN OPINION OF COUNSEL FOR THIS
COMPANY TO THE EFFECT THAT REGISTRATION IS NOT
REQUIRED UNDER THAT ACT.</FONT></TD>
</TR>
</TABLE>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Withholding Taxes; Other Deductions</B>. The Company shall have the right
to deduct from any settlement of the Option, including the delivery or vesting
of shares (a)&nbsp;an amount sufficient to cover withholding as required by law for
any federal, state or local taxes, and (b)&nbsp;any amounts due from the
Optionholder to the Company or to any subsidiary or parent of the Company or to
take such other action as may be necessary to satisfy any such withholding or
other obligations, including withholding from any other cash amounts due or to
become due from the Company to the Optionholder an amount equal to such taxes
or obligations.
</FONT>
<P align="center"><FONT size="2">B-3</FONT>

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<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Defined Terms</B>. All capitalized terms herein which are not otherwise
defined herein shall have the same meaning ascribed to such terms in the Plan.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Notices</B>. Any notice required to be given or delivered to the Company
under the terms of this Agreement shall be in writing and addressed to the
Company in care of the Company&#146;s Secretary at its principal corporate offices.
Any notice required to be given or delivered to Optionholder shall be addressed
to the address indicated on Exhibit&nbsp;A. All notices shall be deemed to have
been given or delivered upon personal delivery or upon deposit in the U.S.
mail, postage prepaid and properly addressed to the party to be notified.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Construction</B>. This Agreement and the Option evidenced hereby are made
and granted pursuant to the Plan and are in all respects limited by and subject
to the express terms and provisions of the Plan. All decisions of the Plan
Administrator with respect to any question or issue arising under the Plan or
this Agreement shall be conclusive and binding on all persons having an
interest in this Option.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>IN WITNESS WHEREOF </B>the parties hereto have executed this Agreement or
caused it to be executed as of the Grant Date.
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
        <TD width="56%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="39%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
<B>Action Performance Companies, Inc.</B></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
By:____________________________________</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
Its:____________________________________</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
<B>Optionholder</B></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
<HR size="1" noshade></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
Printed Name:____________________________</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
Social Security Number:</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
<HR size="1" noshade></FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">B-4</FONT>

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<!-- link1 "EXHIBIT A" -->
<P align="center"><FONT size="2"><B>EXHIBIT A</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
        <TD width="20%">&nbsp;</TD>
        <TD width="20%">&nbsp;</TD>
        <TD width="60%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">Type of Grant:</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
_______ Discretionary Grant</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
_______ Automatic Grant to Non-Employee Director</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">Name of Optionholder:</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
&nbsp;<HR
size="1" noshade></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">Address of Optionholder:</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>

<TD align="left" valign="top"><FONT size="2">&nbsp;<HR size="1" noshade></Font>
</TR>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>

<TD align="left" valign="top"><FONT size="2">&nbsp;<HR size="1" noshade></font>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><FONT size="2">&nbsp;</FONT></TD>
</TR>


<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">Grant Date:</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">&nbsp;<HR size="1" noshade></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">Option Price per Share:</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">Number of Optioned
Shares intended to be
Incentive Stock Options
under Section&nbsp;422 of the
Internal Revenue Code:</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="bottom"><FONT size="2">
&nbsp;<br>&nbsp;<HR size="1" noshade></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">Number of Optioned
Shares not intended
to be Incentive Stock
Options:</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="bottom"><FONT size="2">
&nbsp;<HR size="1" noshade></FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left"><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">Vesting Schedule:</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
&nbsp;<HR size="1" noshade>
</FONT></TD>
</TR>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
&nbsp;<HR size="1" noshade>
</FONT></TD>

<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
&nbsp;<HR size="1" noshade>
</FONT></TD>

<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
&nbsp;<HR size="1" noshade>
</FONT></TD>

</TABLE>
</CENTER>


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<!-- link1 "EXHIBIT B" -->
<P align="center"><FONT size="2"><B>EXHIBIT B</B>
</FONT>

<P align="center"><FONT size="2"><B>ACTION PERFORMANCE COMPANIES, INC.<BR>
FIRST AMENDED AND RESTATED<BR>
2000 STOCK OPTION PLAN</B>
</FONT>

<P align="center"><FONT size="2"><B>Adopted by the Board of Directors as of January&nbsp;27, 2000<BR>
Approved by the Shareholders on March&nbsp;30, 2000</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purpose</B>. The purpose of this 2000 Stock Option Plan (the &#147;Plan&#148;) is to
attract, retain and motivate employees, directors, and independent contractors
by providing them with the opportunity to acquire a proprietary interest in
ACTION PERFORMANCE COMPANIES, INC., an Arizona corporation (the &#147;Company&#148;) and
to link their interest and efforts to the long-term interests of the Company&#146;s
shareholders.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Plan Administration</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.1 In General</B>. The Plan shall be administered by the Company&#146;s Board of
Directors (the &#147;Board&#148;). Except for the power to amend the Plan as provided in
Section&nbsp;12, the Board, in its sole discretion, may delegate all or any portion
of its authority and duties under the Plan to one or more committees appointed
by the Board and consisting of at least one member of the Board, under such
conditions and limitations as the Board may from time to time establish. The
Board and/or any committee that has been delegated the authority to administer
the Plan shall be referred to as the &#147;Plan Administrator.&#148; Except as otherwise
explicitly set forth in the Plan, the Plan Administrator shall have the
authority, in its discretion, to determine all matters relating to awards (as
described in Section&nbsp;5) under the Plan, including the selection of the
individuals to be granted awards, the time or times of grant, the type of
awards, the number of shares of the Company&#146;s common stock (&#147;Common Stock&#148;)
subject to an award, vesting conditions, and any and all other terms,
conditions, restrictions and limitations, if any, of an award. To the extent
that the Plan Administrator determines that the restrictions imposed by the
Plan preclude the achievement of the material purposes of the awards in
jurisdictions outside the United States, the Plan Administrator will have the
authority and discretion to modify those restrictions as the Plan Administrator
determines to be necessary or appropriate to conform to applicable requirements
or practices of jurisdictions outside of the United States. The Plan
Administrator shall have the authority and discretion to interpret the Plan, to
establish, amend, and rescind any rules and regulations relating to the Plan,
to determine the terms and provisions of any award agreement made pursuant to
the Plan, and to make all other determinations that may be necessary or
advisable for the administration of the Plan. In controlling and managing the
operation and administration of the Plan, the Plan Administrator shall take
action in a manner that conforms to the articles of incorporation and bylaws of
the Company, as amended from time to time, and applicable state law. All
decisions made by the Plan Administrator pursuant to the Plan and related
orders and resolutions shall be final, conclusive, and binding on all persons.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.2 Rule&nbsp;16b-3 and Code Section&nbsp;162(m)</B>. Notwithstanding any provision of
this Plan to the contrary, only the Board or a committee composed of two or
more &#147;Non-Employee Directors&#148; may make determinations regarding grants of
awards to officers, directors, and 10% shareholders of the Company. For
purposes of this Plan, the term &#147;Non-Employee Directors&#148; shall have the meaning
set forth in Rule&nbsp;16b-3 promulgated under the Securities Exchange Act of 1934,
as amended (the &#147;1934 Act&#148;). The Plan Administrator shall have the authority
and discretion to determine the extent to which awards will conform to the
requirements of Section&nbsp;162(m) of the Internal Revenue Code of 1986, as amended
(the &#147;Code&#148;) and to take such action, establish such procedures, and impose
such restrictions as the Plan Administrator determines to be necessary or
appropriate to conform to such requirements.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.3 Other Plans</B>. The Plan Administrator also shall have authority to
grant awards as an alternative to, as a replacement of, or as the form of
payment for grants or rights earned or due under the Plan or other compensation
plans or arrangements of the Company or a subsidiary of the Company, including
the plan of any entity acquired by the Company or a subsidiary of the Company.
</FONT>

<P align="center"><FONT size="2">B-1</FONT>

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<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Eligibility</B>. Any employee, proposed employees, and independent
contractors who provide valuable services to the Company shall be eligible to
receive awards under the Plan. Directors who are not employees of the Company
shall be eligible to receive awards only pursuant to the provisions of Section
6 of the Plan. An award may be granted to a proposed employee prior to the
date the proposed employee first performs services for the Company, provided
that such awards shall not become vested prior to the date the employee first
performs such services. Subject to the foregoing, the Plan Administrator, in
its discretion, may grant any award permitted under the provisions of the Plan
to any eligible person and may grant more than one award to any eligible
person. For purposes of the Plan, the &#147;Company,&#148; with respect to all awards
under the Plan other than Incentive Stock Options, includes any entity that is
directly or indirectly controlled by the Company or any entity in which the
Company has a significant interest, as determined by the Plan Administrator.
With respect to Incentive Stock Options (as defined in Section&nbsp;5.2), the
&#147;Company&#148; includes any parent or subsidiary of the Company as defined in
Section&nbsp;424 of the Code.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares Subject to the Plan</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>4.1 Number and Source</B>. The shares offered under the Plan shall be shares
of Common Stock and may be unissued shares or shares now held or subsequently
acquired by the Company as treasury shares, as the Plan Administrator may from
time to time determine. Subject to the provisions of Section&nbsp;4.3, the number
of shares of Common Stock for which awards may be granted under the Plan
(including shares that may be issued upon exercise of options that are intended
to be Incentive Stock Options) shall not exceed in the aggregate seven percent
(7%) of the issued shares of Common Stock of the Company as of the Approval
Date (as defined in Section&nbsp;18); provided that, if the number of issued shares
of Common Stock is increased after the Approval Date, the maximum number of
shares of Common Stock for which awards may be granted under the Plan shall be
increased by seven percent (7%) of such increase. Subject to adjustment as
provided in Section&nbsp;4.3, the aggregate number of shares that may be issued
under the Plan (including shares that may be issued upon exercise of options
that are intended to be Incentive Stock Options) shall not exceed 2,000,000
shares. The aggregate number of shares that may be covered by awards granted
to any one individual in any year shall not exceed 25% of the total number of
shares that may be issued under the Plan.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>4.2 Shares Available</B>. Any shares subject to an award granted under the
Plan that are not delivered because the award is forfeited, terminated or
canceled or any shares of Common Stock that are not delivered because the award
is settled in cash or used to satisfy the applicable tax withholding obligation
shall not be deemed to have been delivered for purposes of determining the
maximum number of shares of Common Stock available for delivery under the Plan
and shall again be available for the granting of awards under the Plan. If the
exercise price of any stock option granted under the Plan is satisfied by
tendering shares of Common Stock to the Company (by either actual delivery or
by attestation), only the number of shares of Common Stock issued net of the
shares of Common Stock tendered shall be deemed delivered for purposes of
determining the maximum number of shares of Common Stock available for delivery
under the Plan. The payment of cash dividends and dividend equivalents paid in
cash in conjunction with outstanding awards shall not be counted against the
shares available for issuance.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>4.3 Adjustment of Shares Available</B>. The Plan Administrator shall have
authority to proportionately adjust the aggregate number and type of shares
available for awards under the Plan, the maximum number and type of shares that
may be subject to awards to any individual under the Plan, the number and type
of shares covered by each outstanding award, and the exercise price per share
(but not the total price) for stock options outstanding under the Plan for any
increase or decrease in the number of issued shares of Common Stock resulting
from the payment of any stock dividend or from any stock split, split-up,
combination or exchange of shares, consolidation, spin-off, reorganization, or
recapitalization of shares or any like capital adjustment.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>4.4 Change of Control</B>. In the event of a Change of Control of the Company
(as defined below), any unexercisable and/or unvested portion of the
outstanding awards shall be immediately exercisable and vested in full upon
consummation of the Change of Control. The exercise and/or vesting of any
award that is permissible solely by reason of this Section&nbsp;4.4 shall be
conditioned upon the consummation of the Change of Control. Any awards that
are not exercised upon consummation of the Change of Control shall terminate
and cease to be outstanding effective as of the date of the Change of Control.
Unless otherwise determined by the Board, a &#147;Change of Control&#148; shall be deemed
to have occurred in the event of any of the following:
</FONT>

<P align="center"><FONT size="2">B-2</FONT>

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<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;any &#147;person&#148; (as such term is used in Section&nbsp;13(d) and 14(d)(2) of
the 1934 Act) is or becomes a beneficial owner, directly or indirectly, of
stock of the Company representing 25&nbsp;percent or more of the total voting power
of the Company&#146;s then-outstanding stock;
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;a tender offer (for which a filing has been made with the SEC that
purports to comply with the requirements of Section&nbsp;14(d) of the 1934 Act and
the corresponding SEC rules) is made for the stock of the Company; provided,
that in case of a tender offer described in this Section&nbsp;4.4(b), the Change in
Control will be deemed to have occurred upon the first to occur of (i)&nbsp;any time
during the offer when the person (using the definition in Section&nbsp;4.4(a) above)
making the offer owns or has accepted for payment stock of the Company with 25
percent or more of the total voting power of the Company&#146;s outstanding stock,
or (ii)&nbsp;three business days before the offer is to terminate unless the offer
is withdrawn first, if the person making the offer could own, by the terms of
the offer plus any shares owned by such person, stock with 50&nbsp;percent or more
of the total voting power of the Company&#146;s outstanding stock when the offer
terminates;
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;the direct or indirect sale or exchange by the shareholders of the
Company of all or substantially all of the stock of the Company if the
shareholders of the Company before such sale or exchange do not retain,
directly or indirectly, at least a majority of the beneficial interest in the
voting stock of the Company after such sale or exchange;
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;a merger or consolidation if the shareholders of the Company before
such merger or consolidation do not retain, directly or indirectly, at least a
majority of the beneficial interest in the voting stock of the Company after
such merger or consolidation (regardless of whether the Company is the
surviving corporation);
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;the sale, exchange or transfer of all or substantially all of the
assets of the Company to any person other than a parent or subsidiary of the
Company;
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;a liquidation or dissolution of the Company to any person other than a
parent or subsidiary of the Company; or
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;individuals who were the Board&#146;s nominees for election as directors of
the Company immediately prior to a meeting of the shareholders of the Company
involving a contest for the election of directors shall not constitute a
majority of the Board following the election.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Discretionary Awards</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>5.1 Types of Discretionary Awards</B>. The Plan Administrator shall have
authority to make discretionary grants of awards under the Plan to all eligible
persons other than non-employee directors of the Company. Discretionary awards
granted under the Plan shall be either Incentive Stock Options or Nonqualified
Stock Options (as defined in Section&nbsp;5.2).
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>5.2 Stock Options</B>. The Plan Administrator may grant stock options,
designated as &#147;Incentive Stock Options,&#148; which comply with the provisions of
Section&nbsp;422 of the Code or any successor statutory provision, or &#147;Nonqualified
Stock Options&#148; that do not comply with the provisions of Section&nbsp;422 of the
Code or any successor statutory provision. The price for which shares may be
purchased upon exercise of a particular option shall be determined by the Plan
Administrator at the time of grant; provided that, the exercise price of an
option shall not be less than 100% of the Fair Market Value (as defined in
Section&nbsp;13) of the Common Stock on the date such option is granted (110% of the
Fair Market Value if options are intended to be Incentive Stock Options and are
granted to a shareholder who at the time the option is granted owns or is
deemed to own stock possessing more than 10% of the total combined voting power
of all classes of stock of the Company or of any parent or subsidiary of the
Company). The Plan Administrator shall set the term of each stock option, but
no option shall be exercisable more than 10&nbsp;years after the date such option is
granted (five years if the option is an Incentive Stock Option granted to a
shareholder who at the time the option is granted owns or is deemed to own
stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company or of any parent or subsidiary of the Company).
In addition, to the extent the aggregate Fair Market Value (determined as of
the date the option is granted) of Common Stock with respect to which Incentive
Stock Options granted to a particular individual become exercisable
</FONT><P align="center"><FONT size="2">B-3</FONT>

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<P align="left"><FONT size="2">for the first time during any calendar year (under the Plan and all other
stock option plans of the Company) exceeds $100,000 (or such corresponding
amount as may be set by the Code) such options shall be treated as Nonqualified
Stock Options. An optionholder and the Plan Administrator can agree at any
time to convert an Incentive Stock Option to a Nonqualified Stock Option.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>5.3 Payment; Deferral</B>. Awards granted under the Plan may be settled
through cash payments, the delivery of Common Stock (valued at Fair Market
Value) or the granting of replacement awards or combinations thereof as the
Plan Administrator shall determine. Any award settlement, including payment
deferrals, may be subject to such conditions, restrictions, and contingencies
as the Plan Administrator shall determine. The Plan Administrator may permit
or require the deferral of any award payment, subject to such rules and
procedures as it may establish, which may include provisions for the payment or
crediting of interest, or dividend equivalents, including converting such
credits to deferred stock unit equivalents.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>5.4 Individual Award Agreements</B>. Stock options shall be evidenced by
agreements between the Company and the recipient in such form and content as
the Plan Administrator from time to time approves, which agreements shall
substantially comply with and be subject to the terms of the Plan. Such
individual agreements may contain such provisions or conditions as the Plan
Administrator deems necessary or appropriate to effectuate the sense and
purpose of the Plan and may be amended from time to time in accordance with the
terms thereof.
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Automatic Grant Program</B>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>6.1 Amount and Date of Grant. </B>During the term of the Plan, the Company
shall make automatic grants of options (&#147;Automatic Options&#148;) in the form of
Nonqualified Stock Options to each Board member who is not employed by the
Company, whether or not such person is a Non-Employee Director as referred to
in Section&nbsp;2.2, (each an &#147;Eligible Director&#148;) as follows:
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <B>Initial Director Grants. </B>On the Approval Date, the Company shall grant
an Automatic Option to acquire 8,000 shares of Common Stock to each Eligible
Director serving as a member of the Board as of such date.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <B>New Director Grants. </B>On the Initial Grant Date (as defined below),
each new member of the Board who is an Eligible Director and who has not
previously received an Automatic Option under Section&nbsp;6.1(a), this Section
6.1(b), or under the Company&#146;s 1993 Stock Option Plan shall be granted an
Automatic Option to acquire 10,000 shares of Common Stock for so long as shares
of Common Stock are available under Section&nbsp;4.1 hereof. The &#147;Initial Grant
Date&#148; shall be the date that an Eligible Director is first appointed or elected
to the Board.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <B>Annual Grants. </B>Each year on the Annual Grant Date (as defined below),
an Automatic Option to acquire 8,000 shares of Common Stock shall be granted to
each Eligible Director for so long as shares of Common Stock are available
under Section&nbsp;4.1 hereof. The &#147;Annual Grant Date&#148; shall be the date of the
Company&#146;s annual meeting of shareholders held in each year commencing as of the
first annual meeting occurring after the Approval Date. Any Eligible Director
who was granted an Automatic Option under Section&nbsp;6.1(b) within 90&nbsp;days prior
to an Annual Grant Date shall be ineligible to receive an Automatic Option
pursuant to this Section&nbsp;6.1(c) on such Annual Grant Date.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>6.2 Exercise Price. </B>The exercise price per share of Common Stock subject
to each Automatic Option granted under this Section&nbsp;6 shall be equal to 100
percent of the Fair Market Value per share of the Common Stock on the date such
Automatic Option is granted, as determined in accordance with Section&nbsp;13.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>6.3 Vesting</B>. Each Automatic Option granted pursuant to this Section&nbsp;6
shall vest and become exercisable immediately on the date of grant.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>6.4 Term of Automatic Options. </B>Each Automatic Option shall expire on the
tenth anniversary (the &#147;Expiration Date&#148;) of the date on which such Automatic
Option is granted. Should a holder of an Automatic Option cease, for any
reason other than death, to serve as a member of the Board, then the option
holder shall have 90&nbsp;days measured from the date of such cessation of Board
service in which to exercise his or her
</FONT><P align="center"><FONT size="2">B-4</FONT>

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<P align="left"><FONT size="2">unexercised Automatic Options. Should an option holder die while serving
as a Board member or within 90&nbsp;days after cessation of Board service, then the
personal representative of the option holder&#146;s estate (or the person or persons
to whom the Automatic Option is transferred pursuant to a qualified domestic
relations order, the option holder&#146;s will or in accordance with the laws of the
descent and distribution) shall have a one-year period measured from the date
of the option holder&#146;s cessation of Board service (or such longer period as may
be determined by the Plan Administrator in its discretion) in which to exercise
any unexercised Automatic Options. In no event, however, may any Automatic
Option be exercised after the Expiration Date of such Automatic Option.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>6.5 Other Terms. </B>Except as expressly provided otherwise in this Section
6, an Automatic Option shall be subject to all of the terms and conditions of
the Plan, provided that Eligible Directors shall not be entitled to receive
other awards under the Plan. Eligible Directors shall, however, be entitled to
receive awards under other plans of the Company in accordance with the terms
and conditions thereof.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Award Exercise</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>7.1 Precondition to Stock Issuance</B>. Options shall be exercisable in
accordance with such terms and conditions and during such periods as may be
established by the Plan Administrator. No shares shall be delivered pursuant
to the exercise of any stock option, in whole or in part, until payment in full
of the option price thereof (in cash or stock as provided in Section&nbsp;7.3) is
received by the Company. No holder of an option, or any legal representative,
legatee or distributee shall be or be deemed to be a holder of any shares
subject to such option or right unless and until such option or right is
exercised, the full exercise price is paid, and such shares are issued.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>7.2 No Fractional Shares</B>. No stock option may at any time be exercised
with respect to a fractional share.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>7.3 Form of Payment</B>. An optionee may exercise a stock option using as the
form of payment (a)&nbsp;cash or cash equivalent, (b)&nbsp;stock-for-stock payment (as
described below), (c)&nbsp;cashless exercises (as described below), (d)&nbsp;any
combination of the above, or (e)&nbsp;such other means as the Plan Administrator may
approve.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <B>Stock-for-Stock Payment. </B>Any optionee who owns Common Stock may use
such shares as a form of payment to exercise stock options granted under the
Plan. The Plan Administrator, in its discretion, may restrict or rescind this
right by notice to optionees. A stock option may be exercised in such manner
only by tendering (actually or by attestation) to the Company whole shares of
Common Stock acceptable to the Plan Administrator and having a Fair Market
Value equal to or less than the exercise price. If an option is exercised by
surrender of shares having a Fair Market Value less than the exercise price,
the option holder must pay the difference in cash.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <B>Cashless Exercises. </B>The Plan Administrator may permit an option
holder to elect to pay the exercise price upon the exercise of an option by
irrevocably authorizing a third party to sell shares of Common Stock (or a
sufficient portion of the shares) acquired upon exercise of the option and
remit to the Company a sufficient portion of the sale proceeds to pay the
entire exercise price and any tax withholding resulting from such exercise.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>7.4 Form and Time of Exercises. </B>Unless otherwise specified herein, each
exercise required or permitted to be made by any option holder or other person
entitled to benefits under the Plan, and any permitted modification or
revocation thereof, shall be in writing filed with the Plan Administrator at
such times, in such form, and subject to such restrictions and limitations, not
inconsistent with the terms of the Plan, as the Plan Administrator shall
require.
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Transferability</B>. Any Incentive Stock Option granted under the Plan
shall, during the recipient&#146;s lifetime, be exercisable only by such recipient,
and shall not be assignable or transferable by such recipient other than by
will or the laws of descent and distribution. Except as specifically allowed
by the Plan Administrator, any other award under the Plan and any of the rights
and privileges conferred thereby shall not be assignable or transferable by the
recipient other than (i)&nbsp;pursuant to a qualified domestic relations order
(&#147;QDRO&#148;), or (ii)&nbsp;by will or the laws of descent and distribution and such
award shall be exercisable during the recipient&#146;s lifetime only by the
recipient or the person to whom the Option is transferred pursuant to a
qualified domestic relations order.
</FONT>
<P align="center"><FONT size="2">B-5</FONT>

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<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Withholding Taxes; Other Deductions. </B>All distributions under the Plan
are subject to withholding of all applicable taxes, and the Plan Administrator
may condition the delivery of any shares or other benefits under the Plan on
satisfaction of the applicable withholding obligations. The Company shall have
the right to deduct from any settlement of an award granted under the Plan,
including the delivery or vesting of shares, (a)&nbsp;an amount of cash or shares of
Common Stock having a value sufficient to cover withholding as required by law
for any federal, state or local taxes, and (b)&nbsp;any amounts due from the
recipient of such award to the Company or to any parent or subsidiary of the
Company or to take such other action as may be necessary to satisfy any such
withholding or other obligations, including withholding from any other cash
amounts due or to become due from the Company to such recipient an amount equal
to such taxes or obligations. The Plan Administrator also may, in its
discretion, permit the holder of an award to deliver to the Company, at the
time the award is exercised or vests, one or more shares of Common Stock
previously acquired by such individual (other than pursuant to the transaction
triggering the taxes) with an aggregate Fair Market Value up to or equal to
(but not in excess of) the amount of the taxes incurred in connection with such
exercise or vesting.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Termination of Services</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>10.1 Definition of &#147;Service.&#148; </B>For purposes of the Plan, unless it is
evidenced otherwise in the option agreement with the holder, the holder is
deemed to be in &#147;Service&#148; to the Company so long as such individual renders
continuous services on a periodic basis to the Company (or to any parent or
subsidiary) in the capacity of an employee, director, or an independent
consultant or advisor. In the discretion of the Plan Administrator, an option
holder will be considered to be rendering continuous services to the Company
even if the type of services change, e.g., from employee to independent
consultant. An option holder will be considered to be an employee for so long
as such individual remains in the employ of the Company or one or more parent
or subsidiary of the Company.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>10.2 Termination of Incentive Stock Options.</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <B>Termination of Service Other than Disability or Death. </B>If any option
holder ceases to be in Service to the Company for any reason other than
permanent disability or death and any vested option held by such person is an
Incentive Stock Option, then such holder may, within three months after the
date of termination of such Service, but in no event after the stated
expiration date of such Incentive Stock Option, exercise some or all of the
Incentive Stock Options that the holder was entitled to exercise on the date
the holder&#146;s Service terminated; provided, that if the option holder is
discharged for &#147;Cause&#148; (as defined below) or commits acts detrimental to the
Company&#146;s interests after the Service of the option holder has been terminated,
then the Incentive Stock Options shall immediately be void for all purposes.
&#147;Cause&#148; shall mean a termination of Service based upon a finding by the Plan
Administrator that the option holder (i)&nbsp;has willfully engaged in conduct
involving dishonesty, fraud, theft or embezzlement; (ii)&nbsp;within a reasonable
period of time after written notice and demand for substantial performance is
delivered by the Company, has repeatedly failed or refused, in a material
respect, to follow reasonable policies or directives established by the
Company; (iii)&nbsp;within a reasonable period of time after written notice and
demand for substantial performance is delivered by the Company, has willfully
and persistently failed to attend to his or her material duties or obligations
with the Company (other than any such failure as a result of the option
holder&#146;s disability, as defined in Section&nbsp;10.2(b); (iv)&nbsp;has willfully
performed an act, or willfully failed to act, where such act or failure to act
is demonstrably and materially injurious to the Company, monetarily or
otherwise; (v)&nbsp;has engaged in egregious misconduct involving serious moral
turpitude to the extent that, in the reasonable judgment of the Plan
Administrator, the option holder&#146;s credibility and reputation no longer conform
to the standard of the Company&#146;s employees; or (vi)&nbsp;has misrepresented or
concealed a material fact for purposes of securing employment with the Company.
For purposes of this Section&nbsp;10.2, no act or failure to act on the part of an
option holder shall be deemed &#147;willful&#148; unless the Plan Administrator
reasonably determines that the act was done or omitted to be done by the option
holder not in good faith and without a reasonable belief that the option
holder&#146;s action or omission was in the best interest of the Company. Any
written notice and demand required by this Section&nbsp;10.2 shall identify, with
reasonable specificity, the manner in which the Company believes the option
holder has failed to follow the Company&#146;s policies and directives or has failed
to attend to his or her material duties.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <B>Disability of Option Holder. </B>If any option holder ceases to be in
Service to the Company by reason of permanent disability within the meaning
Section&nbsp;22(e)(3) of the Code (as determined by the Plan Administrator), the
holder shall for a period of one year after the date of termination of Service,
but in no event
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<P align="left"><FONT size="2">after the stated expiration date of the holder&#146;s Incentive Stock Options,
be entitled to exercise Incentive Stock Options that the holder was entitled to
exercise on the date the holder&#146;s Service terminated as a result of the
disability.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <B>Death of Option Holder. </B>If an option holder dies while in the
Company&#146;s Service, any vested Options that are Incentive Stock Options that the
option holder was entitled to exercise on the date of death will be exercisable
for a period of one year (or such longer period as may be determined by the
Plan Administrator in its discretion) after such date or until the stated
expiration date of the option holder&#146;s Incentive Stock Options, whichever
occurs first, by the person or persons to whom the option holder&#146;s rights pass
under a will or by the laws of descent and distribution.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>10.3 Termination of Nonqualified Options. </B>Any Nonqualified Options that
are exercisable at the time an option holder ceases to be in Service to the
Company shall remain exercisable for such period of time thereafter as
determined by the Plan Administrator in its discretion. In the absence of any
provision in the documents evidencing such options or other determination by
the Plan Administrator, the options shall remain exercisable pursuant to the
terms of Section&nbsp;10.2 of the Plan; provided, however, that in the event of the
death of a recipient, whose Nonqualified Options have been transferred to a
former spouse pursuant to a qualified domestic relations order, such former
spouse shall have a period of one year (or such longer period as may be
determined by the Plan Administrator in its discretion) after the recipient&#146;s
date of death to exercise such Options.
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Term of the Plan</B>. The Plan shall become effective as of January&nbsp;27,
2000 and shall remain in full force and effect through January&nbsp;27, 2010,
subject to shareholder approval pursuant to Section&nbsp;18, and unless sooner
terminated by the Board. After the Plan is terminated, no future awards may be
granted, but awards previously granted shall remain outstanding in accordance
with their applicable terms and conditions and the Plan&#146;s terms and conditions.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Plan Amendment and Termination; Bifurcation of the Plan</B>. The Board
may, without action on the part of the Company&#146;s shareholders, amend, change,
make additions to, or suspend or terminate the Plan as it may, from time to
time, deem necessary or appropriate and in the best interests of the Company;
provided that the Board may not, without the consent of the applicable option
holders, take any action that disqualifies any option previously granted under
the Plan for treatment as an Incentive Stock Option or which adversely affects
or impairs the rights of the holder of any option outstanding under the Plan;
and further provided that, except as provided in Section&nbsp;4.3, the Board may
not, without the approval of the Company&#146;s shareholders, (a)&nbsp;increase the
aggregate number of shares of Common Stock subject to the Plan, (b)&nbsp;reduce the
exercise price at which options may be granted, (c)&nbsp;extend the term of the
Plan, (d)&nbsp;enlarge the class of persons eligible to receive awards under the
Plan, (e)&nbsp;materially increase the benefits accruing to participants under the
Plan, or (f)&nbsp;if such approval is required (i)&nbsp;to comply with Section&nbsp;422 of the
Code with respect to Incentive Stock Options, or (ii)&nbsp;for purposes of Section
162(m) of the Code. Notwithstanding any provision of this Plan to the contrary,
the Board, in its sole discretion, may bifurcate the Plan so as to restrict,
limit or condition the use of any provision of the Plan to participants who are
officers, directors or shareholders subject to Section&nbsp;16 of the 1934 Act
without so restricting, limiting or conditioning the Plan with respect to other
participants
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fair Market Value. </B>For purposes of the Plan, the &#147;Fair Market Value&#148;
of a share of Common Stock on any relevant date shall be determined in
accordance with the following provisions:
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>13.1 </B>If the Common Stock is at the time listed or admitted to trading on
any stock exchange or the Nasdaq Stock Market, then the Fair Market Value shall
be the closing selling price per share of Common Stock on the date in question
as reported on the stock exchange or trading market determined by the Plan
Administrator to be the primary market for the Common Stock. If there is no
reported sale of Common Stock on such exchange or trading market on the date in
question, then the Fair Market Value shall be the closing selling price on the
exchange or trading market on the last preceding date for which such quotation
exists.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>13.2 </B>If the Common Stock is not at the time listed or admitted to trading
on any stock exchange or the Nasdaq Stock Market, but is traded in
over-the-counter market, the Fair Market Value shall be the closing selling
price (or, if such information is not available, the average of the highest bid
and lowest asked prices) per share of Common Stock on the date in question in
the over-the-counter market. If there is no reported closing
</FONT><P align="center"><FONT size="2">B-7</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>


<P align="left"><FONT size="2">selling price (or bid and asked prices) for the Common Stock on the date
in question, then the closing selling price (or the average of the highest bid
price and lowest asked price) on the last preceding date for which such
quotations exist shall be determinative of Fair Market Value.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>13.3 </B>If the Common Stock at the time is not listed or admitted to trading
on any stock exchange or traded in the over-the-counter market, then the Fair
Market Value shall be determined by the Plan Administrator after taking into
account such factors as the Plan Administrator shall deem appropriate,
including one or more independent professional appraisals.
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No Repricing Without Shareholder Approval. </B>No stock options granted
under the Plan may be repriced without the approval of the shareholders of the
Company within 12&nbsp;months of such repricing. Shareholder approval shall be
evidenced by the affirmative vote of the holders of the majority of the shares
of the Company&#146;s capital stock present in person or by proxy and voting at the
meeting. For purposes of the Plan, &#147;repricing&#148; shall include amendments to
stock options that reduce the exercise price of such options, as well as those
situations in which new options are issued to an option holder in place of
cancelled options, and which would be reportable in the repricing table of the
Company&#146;s proxy statement for its annual meeting of shareholders.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>15.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General Restrictions. </B>Notwithstanding any other provision of the
Plan, the Company shall have no liability to deliver any shares of Common Stock
under the Plan or make any other distribution of benefits under the Plan unless
such delivery or distribution would comply with all applicable laws (including,
without limitation, the requirements of the Securities Act of 1933), and the
applicable requirements of any securities exchange, the Nasdaq Stock Market, or
similar entity. To the extent that the Plan provides for issuance of stock
certificates to reflect the issuance of shares of Common Stock, the issuance
may be effected on a non-certificated basis to the extent not prohibited by
applicable law or the applicable rules of any stock exchange, the Nasdaq Stock
Market, or similar entity.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>16.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Plan Not Exclusive</B>. This Plan is not intended to be the exclusive
means by which the Company may issue awards to acquire its Common Stock.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>17.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Governing Law</B>. The Plan shall be governed by, and all questions
arising hereunder shall be determined in accordance with, the laws of the State
of Arizona.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>18.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Approval by Shareholders</B>. This Plan shall be submitted to the
shareholders of the Company for their approval at a regular or special meeting
to be held within 12&nbsp;months after the adoption of this Plan by the Board.
Shareholder approval shall be evidenced by the affirmative vote of the holders
of a majority of the shares of the Company&#146;s Common Stock present in person or
by proxy and voting at the meeting. The date on which the shareholders approve
the plan shall be the &#147;Approval Date&#148; of the Plan. If the shareholders decline
to approve this Plan at such meeting or if this Plan is not approved by the
shareholders within 12&nbsp;months after its adoption by the Board, this Plan (and
all awards granted hereunder) shall automatically terminate to the same extent
and with the same effect as though this Plan had never been adopted. If this
Plan is approved by shareholders, all awards granted under the Plan to persons
who are &#147;Affiliates&#148; of the Company (as defined under the Securities Act of
1933, as amended) shall be deemed acquired on the date such approval is
obtained.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>19.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Limitation of Implied Rights. </B>Neither an option holder nor any other
person shall, by reason of participation in the Plan, acquire any right in or
title to any assets, funds or property of the Company or any subsidiary
whatsoever, including, without limitation, any specific funds, assets, or other
property which the Company or any subsidiary, in their sole discretion, may set
aside in anticipation of a liability under the Plan. An option holder shall
have only a contractual right to the common stock or other amounts, if any,
payable under the Plan, unsecured by any assets of the Company or any
subsidiary, and nothing contained in the Plan shall constitute sufficient to
pay any benefits to any person. The Plan does not constitute a contract of
employment, and selection as to receive any aware under the Plan will not give
any participating employee the right to be retained in the employ of the
Company or any subsidiary, nor any right or claim to any benefit under the
Plan, unless such right or claim has specifically accrued under the terms of
the Plan.
</FONT>
<P align="center"><FONT size="2">B-8</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<P align="center"><FONT size="2"><B>THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS</B>
</FONT>

<P align="center"><FONT size="2"><B>ACTION PERFORMANCE COMPANIES, INC.</B>
</FONT>

<P align="center"><FONT size="2"><B>2002 ANNUAL MEETING OF SHAREHOLDERS</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned shareholder of ACTION PERFORMANCE COMPANIES, INC., an
Arizona corporation (the &#147;Company&#148;), hereby acknowledges receipt of the Notice
of Annual Meeting of Shareholders and Proxy Statement of the Company, each
dated January&nbsp;22, 2002, and hereby appoints Fred W. Wagenhals and R. David
Martin, and each of them, proxies and attorneys-in-fact, with full power to
each of substitution, on behalf and in the name of the undersigned, to
represent the undersigned at the 2002 Annual Meeting of Shareholders of ACTION
PERFORMANCE COMPANIES, INC., to be held on Monday, March&nbsp;4, 2002, at 9:00 a.m.,
local time, at The Hilton Phoenix Airport, 2435 S. 47th Street, Phoenix,
Arizona 85034, and at any adjournment or adjournments thereof, and to vote all
shares of common stock that the undersigned would be entitled to vote if then
and there personally present on the matters set forth on the reverse side of
this proxy card.
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
        <TD width="3%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="96%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD valign="top"><FONT size="2"><IMG src="p66067checkbox.gif" alt="(CHECK BOX)"></FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
<B>Please mark your votes as in this example</B></FONT></TD>
</TR>
</TABLE>
</CENTER>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
        <TD width="3%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="13%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="21%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="21%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="26%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center"><FONT size="1"><B>WITHHOLD</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center"><FONT size="1"><B>FOR </B>all nominees</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center"><FONT size="1"><B>AUTHORITY</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center"><FONT size="1">listed at right (except</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center"><FONT size="1">to vote for all nominees</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center"><FONT size="1">as indicated)</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center"><FONT size="1">listed at right</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center"><FONT size="1"><B>Nominees:</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center"><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center"><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="left"><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">1.</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
ELECTION<BR>
OF<BR>
DIRECTORS:
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="center" valign="top"><FONT size="2"><IMG src="p66067box.gif" alt="(BOX)">
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="center" valign="top"><FONT size="2"><IMG src="p66067box.gif" alt="(BOX)">
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">Fred W. Wagenhals<BR>
R. David Martin<BR>
Melodee L. Volosin<BR>
John S. Bickford, Sr.<BR>
Edward J. Bauman<BR>
Herbert M. Baum<BR>
Lowell L. Robertson<BR>
Robert L. Matthews</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P><FONT size="2">If you wish to withhold authority to vote for any
individual nominee, strike a line through that nominee&#146;s
name in the list at right.
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2">2.</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Proposal to amend the Company&#146;s 2000 Stock Option Plan to increase the
number of shares of the Company&#146;s common stock that may be purchased
pursuant to that plan.</FONT></TD>
</TR>
</TABLE>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
        <TD width="5%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="22%">&nbsp;</TD>
        <TD width="8%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="22%">&nbsp;</TD>
        <TD width="8%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="22%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD valign="top"><FONT size="2"><IMG src="p66067box.gif" alt="(BOX)"></FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
<B>FOR</B>
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2"><IMG src="p66067box.gif" alt="(BOX)">
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2"><B>AGAINST</B>
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2"><IMG src="p66067box.gif" alt="(BOX)">
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2"><B>ABSTAIN</B></FONT></TD>
</TR>
</TABLE>
</CENTER>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2">3.</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Proposal to approve the Company&#146;s Annual Incentive Plan</FONT></TD>
</TR>
</TABLE>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
        <TD width="5%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="22%">&nbsp;</TD>
        <TD width="8%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="22%">&nbsp;</TD>
        <TD width="8%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="22%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD valign="top"><FONT size="2"><IMG src="p66067box.gif" alt="(BOX)"></FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
<B>FOR</B>
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2"><IMG src="p66067box.gif" alt="(BOX)">
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2"><B>AGAINST</B>
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2"><IMG src="p66067box.gif" alt="(BOX)">
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2"><B>ABSTAIN</B></FONT></TD>
</TR>
</TABLE>
</CENTER>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2">4.</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Proposal to ratify the appointment of Arthur Andersen LLP as the
independent auditors of the Company for the fiscal year ending September
30, 2002.</FONT></TD>
</TR>
</TABLE>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
        <TD width="5%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="22%">&nbsp;</TD>
        <TD width="8%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="22%">&nbsp;</TD>
        <TD width="8%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="22%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD valign="top"><FONT size="2"><IMG src="p66067box.gif" alt="(BOX)"></FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
<B>FOR</B>
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2"><IMG src="p66067box.gif" alt="(BOX)">
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2"><B>AGAINST</B>
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2"><IMG src="p66067box.gif" alt="(BOX)">
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2"><B>ABSTAIN</B></FONT></TD>
</TR>
</TABLE>
</CENTER>
<P><FONT size="2">and upon such matters that may properly come before the meeting or any
adjournment or adjournments thereof.
</FONT>
<P><FONT size="2"><B>THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS INDICATED,
WILL BE VOTED FOR THE ELECTION OF DIRECTORS; FOR THE PROPOSAL TO AMEND THE
COMPANY&#146;S 2000 STOCK OPTION PLAN; FOR THE PROPOSAL TO APPROVE THE COMPANY&#146;S
ANNUAL INCENTIVE PLAN; FOR THE RATIFICATION OF THE APPOINTMENT OF ARTHUR
ANDERSEN LLP AS THE INDEPENDENT AUDITORS OF THE COMPANY; AND AS SAID PROXIES
DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY COME BEFORE THE MEETING.</B>
</FONT>
<P><FONT size="2">A majority of such attorneys-in-fact or substitutes as shall be present and
shall act at said meeting or any adjournment or adjournments thereof (or if
only one shall be present and act, then that one) shall have and may exercise
all of the powers of said attorneys-in-fact hereunder.
</FONT>
<P align="center"><FONT size="1"><B>Sign, date, and return the proxy card promptly using the enclosed envelope.</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
        <TD width="32%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="35%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="23%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">Signature_______________________</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">__________________________________</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">Dated:___________, 2002</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="center" valign="top"><FONT size="2">
Signature if held jointly</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
        <TD width="5%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="92%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD valign="top"><FONT size="2"><B>NOTE:</B></FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
<B>(This proxy should be dated, signed by the shareholder(s) exactly as
his or her name appears hereon, and returned promptly in the
enclosed envelope. Persons signing in a fiduciary capacity should
so indicate. If shares are held by joint tenants or as community
property, both shareholders should sign.</B></FONT></TD>
</TR>
</TABLE>
</CENTER>



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