UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-Q
           (Mark One)

               ( X)   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                      OF THE SECURITIES EXCHANGE ACT OF 1934
                      For the quarter ended March 31, 2004

                                       OR

               (  )   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                      OF THE SECURITIES EXCHANGE ACT OF 1934
                      Or the transition period from ___________ to ____________



                           Commission File No. 0-10394

                              DATA I/O CORPORATION
             (Exact name of registrant as specified in its charter)





           Washington                                      91-0864123

 (State or other jurisdiction of                        (I.R.S. Employer
 incorporation or organization)                        Identification No.)



               10525 Willows Road N.E., Redmond, Washington, 98052
          (Address of principal executive offices, including zip code)


                                 (425) 881-6444
              (Registrant's telephone number, including area code)



Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes X No

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Act). Yes No X

8,012,592  shares of no par value of the  Registrant's  Common Stock were issued
and outstanding as of May 7, 2004.

<PAGE>


                              DATA I/O CORPORATION

                                    FORM 10-Q
                      For the Quarter Ended March 31, 2004

                                      INDEX


Part I - Financial Information                                           Page

     Item 1.    Financial Statements (unaudited)                           3

     Item 2.    Management's Discussion and Analysis of
                Financial Condition and Results of Operations              8

     Item 3.    Quantitative and Qualitative Disclosures
                About Market Risk                                         12

     Item 4.    Controls and Procedures                                   13

Part II - Other Information

     Item 1.    Legal Proceedings                                         14

     Item 2.    Changes in Securities and Use of Proceeds                 14

     Item 3.    Defaults Upon Senior Securities                           14

     Item 4.    Submission of Matters to a Vote of Security Holders       14

     Item 5.    Other Information                                         14

     Item 6.    Exhibits and Reports on Form 8-K                          14

Signatures                                                                18


<PAGE>


PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

                                                    DATA I/O CORPORATION

                                                 CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                          Mar. 31,                      Dec. 31,
                                                                                           2004                          2003
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                      <C>                            <C>
(in thousands, except share data)                                                      (unaudited)
ASSETS
CURRENT ASSETS:
     Cash and cash equivalents                                                            $3,706                       $4,380
     Marketable securities                                                                 2,368                        2,354
     Trade accounts receivable, less allowance for
        doubtful accounts of $206 and $202                                                 5,606                        5,054

     Inventories                                                                           4,053                        4,607
     Other current assets                                                                    412                          431
                                                                                   ---------------------           ----------------
        TOTAL CURRENT ASSETS                                                              16,145                       16,826

Property and equipment - net                                                               1,465                        1,151
Other assets                                                                                   7                           11
                                                                                   ---------------------           ----------------
        TOTAL ASSETS                                                                     $17,617                      $17,988
                                                                                   =====================           ================

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
     Accounts payable                                                                     $1,213                       $1,285
     Accrued compensation                                                                    896                        1,186
     Deferred revenue                                                                      1,411                        1,430
     Other accrued liabilities                                                             1,254                        1,543
     Income taxes payable                                                                    403                          350
                                                                                   ---------------------           ----------------
         TOTAL CURRENT LIABILITIES                                                         5,177                        5,794

Deferred gain on sale of property                                                          1,023                        1,106
                                                                                   ---------------------           ----------------
         TOTAL LIABILITIES                                                                 6,200                        6,900

COMMITMENTS                                                                                    -                            -

STOCKHOLDERS' EQUITY:
     Preferred stock -
        Authorized, 5,000,000 shares, including
           200,000 shares of Series A Junior Participating
        Issued and outstanding, none                                                           -                            -
     Common stock, at stated value -
        Authorized, 30,000,000 shares
        Issued and outstanding, 8,010,717
           and 7,976,296 shares                                                           18,886                       18,797
     Accumulated deficit                                                                  (7,742)                      (8,038)
     Accumulated other comprehensive loss                                                    273                          329
                                                                                   ---------------------           ----------------
        TOTAL STOCKHOLDERS' EQUITY                                                        11,417                       11,088
                                                                                   ---------------------           ----------------
        TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                       $17,617                      $17,988
                                                                                   =====================           ================

See accompanying notes to consolidated financial statements.
</TABLE>


<PAGE>


                              DATA I/O CORPORATION

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                                           Mar. 31,                 Mar. 31,
For the three months ended                                                                   2004                    2003
-------------------------------------------------------------------------------------- ------------------     ---------------------
<S>                                                                                        <C>                      <C>
(in thousands, except per share data)

Net sales                                                                                   $6,834                  $6,155
Cost of goods sold                                                                           3,121                   2,718
                                                                                       ------------------     ---------------------
Gross margin                                                                                 3,713                   3,437

Operating expenses:
     Research and development                                                                1,204                   1,161
     Selling, general and administrative                                                     2,172                   1,928
     Net provision (reversal) for business restructuring                                         -                     (27)
                                                                                       ------------------     ---------------------
         Total operating expenses                                                            3,376                   3,062
                                                                                       ------------------     ---------------------

         Operating  income                                                                     337                     375


Non-operating income (expense):
     Interest income                                                                            35                      32
     Interest expense                                                                           (1)                     (3)
     Foreign currency exchange                                                                 (14)                    (76)
                                                                                       ------------------     ---------------------
         Total non-operating income (expense)                                                   20                     (47)

                                                                                       ------------------     ---------------------
        Income before income taxes                                                             357                     328

Income tax expense                                                                              61                      11
                                                                                       ------------------     ---------------------

Net  income                                                                                  $ 296                   $ 317
                                                                                       ==================     =====================


Basic and diluted earnings per share                                                         $0.04                   $0.04
                                                                                       ==================     =====================

Weighted average shares outstanding                                                          7,998                   7,845
                                                                                       ==================     =====================
Weighted average and potential shares outstanding                                            8,414                   7,847
                                                                                       ==================     =====================

See accompanying notes to consolidated financial statements.
</TABLE>

<PAGE>



                                                  DATA I/O CORPORATION

                                          CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                       (UNAUDITED)
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                                   Mar 31,            Mar 31,
For the three months ended                                                                          2004               2003
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                               <C>                <C>
(in  thousands)
OPERATING ACTIVITIES:
    Income from operations                                                                           $ 296            $ 317
    Adjustments to reconcile income from operations to net cash provided
     by (used in) operating activities:
       Depreciation and amortization                                                                   192              176
       Net loss on dispositions                                                                         54              298
       Amortization of deferred gain on sale                                                           (82)             (82)
       Net change in:
         Deferred revenue                                                                              (19)             (38)
         Trade accounts receivable                                                                    (550)            (351)
         Inventories                                                                                   553               94
         Other current assets                                                                           19              274
         Accrued costs of business restructuring                                                         -             (182)
         Accounts payable and accrued liabilities                                                     (595)              45
                                                                                                 -----------      --------------
    Net cash provided by (used in) operating activities                                               (132)             551

INVESTING ACTIVITIES:
    Purchases of property and equipment                                                               (554)            (142)
    Net from purchase and sale of marketable securities                                                (15)             737
                                                                                                 -----------      --------------
       Net cash provided by (used in) investing activities                                            (569)             595

FINANCING ACTIVITIES:
    Sale of common stock                                                                                81               58
    Proceeds from exercise of stock options                                                              8                -
                                                                                                 -----------      --------------
       Net cash provided by (used in) financing activities                                              89               58
                                                                                                 -----------      --------------
Increase/(decrease) in cash and cash equivalents                                                      (612)           1,204

Effects of exchange rate changes on cash                                                               (62)              58
Cash and cash equivalents at beginning of year                                                       4,380            4,383
                                                                                                 -----------      --------------
Cash and cash equivalents at end of quarter                                                         $3,706           $5,645
                                                                                                 ===========      ==============

See accompanying notes to consolidated financial statements.
</TABLE>

<PAGE>



                              DATA I/O CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 1 - FINANCIAL STATEMENT PREPARATION

Data I/O prepared the  financial  statements  as of March 31, 2004 and March 31,
2003,  according to the rules and  regulations  of the  Securities  and Exchange
Commission  ("SEC").  These  statements  are  unaudited  but,  in the opinion of
management,  include all adjustments (consisting of normal recurring adjustments
and accruals) necessary to present fairly the results for the periods presented.
The  balance  sheet at  December  31,  2003 has been  derived  from the  audited
financial  statements  at  that  date.  We have  condensed  or  omitted  certain
information and footnote  disclosures  normally included in financial statements
prepared in accordance  with  accounting  principles  generally  accepted in the
United States of America according to such SEC rules and regulations.  Operating
results for the three months ended March 31, 2004 are not necessarily indicative
of the results that may be expected for the year ending December 31, 2004. These
financial  statements  should be read in  conjunction  with the  annual  audited
financial  statements and the accompanying  notes included in the Company's Form
10-K for the year ended December 31, 2003.

Stock-Based Compensation

Data I/O has stock-based  employee  compensation plans. We apply APB Opinion 25,
Accounting  for Stock  Issued  to  Employees,  and  related  Interpretations  in
accounting  for our plans.  Stock expense for the first quarter of 2004 and 2003
would have been the result of options  issued with an  exercise  price below the
underlying  stock's market price. The following table  illustrates the effect on
net  income  and  earnings  per  share if Data I/O had  applied  the fair  value
recognition  provisions  of  FASB  Statement  123,  Accounting  for  Stock-Based
Compensation.

Data I/O's pro forma information follows (in thousands, except per share data):

<TABLE>
<CAPTION>

                                                                                         Mar. 31              Mar. 31,
                                                                                          2004                 2003
                                                                                    ----------------     ----------------
<S>                                                                                      <C>                  <C>
Net income (loss) - as reported                                                          $ 296                 $317

Deduct:  Total stock-based  employee  compensation  expense  determined under
fair value based method for awards granted,  modified,  or settled,  net of
related tax effects                                                                        (68)                 (80)
                                                                                    ----------------     ----------------
Net income (loss) - pro forma                                                             $228                 $237
                                                                                    ================     ================

Basic and diluted income (loss) per share - as reported                                  $0.04                $0.04
Basic and diluted income (loss) per share - pro forma                                    $0.03                $0.03
</TABLE>


NOTE 2 - INVENTORIES

Inventories consisted of the following components (in thousands):
<TABLE>
<CAPTION>

                                                                Mar. 31,                   Dec. 31,
                                                                 2004                       2003
                                                            ----------------          ----------------
<S>                                                             <C>                        <C>
                  Raw material                                   $2,101                    $2,100
                  Work-in-process                                 1,133                     1,411
                  Finished goods                                    819                     1,096
                                                            ----------------          ----------------
                                                                 $4,053                    $4,607
                                                            ================          ================
</TABLE>

We  continued to reduce the overall  level of inventory  based upon the level of
sales we have been  experiencing and are forecasting.  During the quarter we did
not significantly change the net carrying values of our inventory.

<PAGE>

NOTE 3 - PROPERTY AND EQUIPMENT

Property and equipment consisted of the following components (in thousands):

<TABLE>
<CAPTION>

                                                               Mar. 31,                    Dec. 31,
                                                                 2004                        2003
                                                            ----------------          ----------------
<S>                                                            <C>                        <C>
                  Leasehold improvements                       $   275                    $   259
                  Equipment                                     12,442                     12,016
                                                            ----------------          ----------------
                                                                12,717                     12,275
                  Less accumulated depreciation                 11,252                     11,124
                                                            ----------------          ----------------
                  Property and equipment - net                 $ 1,465                    $ 1,151
                                                            ================          ================
</TABLE>

NOTE 4 - BUSINESS RESTRUCTURING PROGRESS

During the first  quarter of 2003, we completed  most of the remaining  2001 and
2002 previously  accrued  restructure  charges  associated with actions taken to
reduce our breakeven  point and realign Data I/O with our market  opportunities.
These   payments   were  $27,000  less  than   anticipated   from  the  original
restructuring  related  charges that totaled $1.8 million  during 2001 and 2002.
Accordingly, included in the results for 2003 was a reversal of these previously
over-accrued  restructure  charges.  At December  31,  2003,  all  restructuring
expenses associated with the activities detailed above had been paid.

NOTE 5 - EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per
share (in thousands except per share data):

<TABLE>
<CAPTION>

                                                                                   For the first quarter
                                                                                ----------------------------
                                                                                   2004            2003
                                                                                -----------    -------------
<S>                                                                                <C>             <C>
Numerator for basic and diluted earnings per share:
       Net income                                                                 $ 296            $317
                                                                                -----------    -------------
Denominator:
        Denominator for basic earnings per share -
         weighted-average shares                                                  7,998           7,845
        Employee stock options                                                      416               2
                                                                                -----------    -------------
         Denominator for diluted earnings per share -
                 adjusted weighted-average shares and
                 assumed conversions of stock options                             8,414           7,847
                                                                                -----------    -------------
Basic and diluted earnings per share
         Total basic and diluted earnings per share                               $0.04           $0.04
                                                                                ===========    =============
</TABLE>

At  March  31,  2004  and  2003  there  were  1,325,522  and  1,131,088  shares,
respectively, of outstanding options potentially issueable as common stock.

NOTE 6 - ACCOUNTING FOR INCOME TAXES

The  Company's  effective  tax rate for the first three months of 2004  differed
from the statutory 34% tax rate  primarily due to  utilization  of net operating
loss  carryforwards.  The tax  valuation  allowance  increased by  approximately
$46,000  during the quarter  ended March 31,  2004.  As of March 31,  2004,  the
Company has a valuation allowance of $9,783,000.

<PAGE>

NOTE 7 - COMPREHENSIVE INCOME

During the first quarter of 2004 and 2003 total comprehensive income (loss) was
comprised of the following (in thousands):

<TABLE>
<CAPTION>

                                                                            For the first quarter
                                                                        ------------------------------
<S>                                                                            <C>              <C>

                                                                               2004             2003
                                                                        -------------    -------------
           Net income (loss)                                                   $296             $317
           Foreign currency translation gain (loss)                             (56)              58
                                                                        -------------    -------------
           Total comprehensive income (loss)                                   $240             $375
                                                                        =============    =============
</TABLE>

NOTE 8 - FOREIGN CURRENCY TRANSLATION AND DERIVATIVES

Data I/O  translates  assets  and  liabilities  of foreign  subsidiaries  at the
exchange  rate on the  balance  sheet date.  We  translate  revenues,  costs and
expenses of foreign  subsidiaries at average rates of exchange prevailing during
the  year.  We  charge or credit  translation  adjustments  resulting  from this
process to stockholders' equity, net of taxes. Realized and unrealized gains and
losses  resulting  from the effects of changes in  exchange  rates on assets and
liabilities  denominated  in foreign  currencies  are included in  non-operating
expense as foreign currency transaction gains and losses.

Data I/O accounts for its hedging  activities in  accordance  with SFAS No. 133,
Accounting for Derivatives and Hedging  Activities.  This statement  establishes
accounting  and reporting  standards  for  derivative  instruments  and requires
recognition  of  derivatives  as  assets  or  liabilities  in the  statement  of
financial position and measurement of those instruments at fair value.

Data I/O utilizes  forward  foreign  exchange  contracts to reduce the impact of
foreign currency exchange rate risks where natural hedging  strategies cannot be
effectively employed.  All hedging instruments held by us are fair value hedges.
Generally,  these contracts have maturities less than one year and require us to
exchange  foreign  currencies for U.S.  dollars at maturity.  The change in fair
value of the open hedge  contracts as of March 31, 2004 is an unrealized loss of
$4,100 and is included in accounts payable on the balance sheet.

Data I/O does not hold or issue  derivative  financial  instruments  for trading
purposes.  The purpose of our hedging  activities is to reduce the risk that the
valuation of the underlying  assets,  liabilities and firm  commitments  will be
adversely  affected by changes in exchange rates.  Our derivative  activities do
not create foreign currency exchange rate risk because fluctuations in the value
of the instruments  used for hedging  purposes are offset by fluctuations in the
value of the underlying exposures being hedged.

Item 2. Management's Discussion and Analysis of Financial Condition and Results
        of Operations

General

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q includes  forward-looking  statements  within
the meaning of the Private  Securities  Litigation  Reform Act of 1995. This Act
provides a "safe harbor" for  forward-looking  statements to encourage companies
to provide  prospective  information  about  themselves as long as they identify
these statements as forward-looking and provide meaningful cautionary statements
identifying important factors that could cause actual results to differ from the
projected results.  All statements other than statements of historical fact made
in this  Quarterly  Report  on Form  10-Q are  forward-looking.  In  particular,
statements  herein  regarding  industry  prospects or trends;  expected level of
expense;  future results of operations or financial  position;  changes in gross
margin;  integration of acquired  products and operations;  market acceptance of
our  newly  introduced  or  upgraded  products;  development,  introduction  and
shipment  of new  products;  and  any  other  guidance  on  future  periods  are
forward-looking  statements.  Forward-looking  statements  reflect  management's
current  expectations and are inherently  uncertain.  Although Data I/O believes
that  the  expectations  reflected  in  these  forward-looking   statements  are
reasonable, we cannot guarantee future results, levels of activity, performance,
achievements, or other future events. Moreover, neither Data I/O nor anyone else
assumes   responsibility   for  the   accuracy   and   completeness   of   these
forward-looking  statements.  Data I/O is under no duty to  update  any of these
forward-looking  statements after the date of this report. The Reader should not
place undue reliance on these forward-looking statements. The discussions in the
section entitled  "Business - Cautionary Factors That May Affect Future Results"
in Item 1 in the  Company's  Annual  report  on Form  10-K  for the  year  ended
December 31, 2003,  and in Exhibit 99.1 of this report  describe  some,  but not
all, of the factors that could cause these differences.

<PAGE>

OVERVIEW

Our goal is to continue to focus on managing the business to achieve  profitable
operations,  while  developing  and  enhancing  products  to drive  revenue  and
earnings  growth.  Our  challenge  continues  to be  operating  in the  weak and
uncertain economic environment with its limited capacity related demand and weak
capital spending, while positioning Data I/O to take advantage of an anticipated
recovery in capital spending. We expect that demand for capacity should improve,
in part based on  forecasted  increased  2004 unit  sales for the  semiconductor
industry, which should provide improved business opportunities for Data I/O.

We are  continuing  our  efforts  to  balance  increasing  costs  and  strategic
investments  in our  business  with the level of demand and mix of  business  we
expect.  We are focusing our research and  development  efforts in our strategic
growth  markets,  namely new  programming  technology and automated  programming
systems  for  the   manufacturing   environment,   particularly   extending  the
capabilities   and   support   for   our   FlashCORE    architecture   and   the
ProLINE-RoadRunner  and PS families.  To better  support our  customers in their
geographic  areas and time zones, we have expanded device support  operations in
Germany  and India and are in the  process of  setting  up a new device  support
center in Shanghai, China.

Our  customer  focus  has  been  on  strategic  high  volume  manufacturers  and
programming centers and supporting NAND Flash and  microcontrollers on our newer
products  to  gain  new   accounts   and  break  into  new   markets,   such  as
microcontrollers  for the automotive market. We are in the process of setting up
new  subsidiaries in China and Brazil.  We are expanding our China operations to
take advantage of the growth of  manufacturing  in China and are  establishing a
service  operation  in Brazil.  We  continue  our  efforts  to partner  with the
semiconductor manufacturers to better serve our mutual customers.

CRITICAL ACCOUNTING POLICY JUDGMENTS AND ESTIMATES

The preparation of financial statements in accordance with accounting principles
generally  accepted in the United  States  requires  that we make  estimates and
judgments,  which affect the reported amounts of assets,  liabilities,  revenues
and expenses,  and related disclosures of contingent assets and liabilities.  On
an on-going basis,  we evaluate our estimates,  including those related to sales
returns, bad debts, inventories,  investments,  intangible assets, income taxes,
warranty obligations,  restructuring charges,  contingencies such as litigation,
and contract terms that have multiple elements and other complexities typical in
the  telecommunications  equipment industry. We base our estimates on historical
experience  and other  assumptions  that we  believe  are  reasonable  under the
circumstances.  Actual results may differ from these  estimates  under different
assumptions or conditions.

We  believe  the  following  critical   accounting   policies  affect  the  more
significant  judgments and estimates  used in the  preparation  of its financial
statements.

Revenue Recognition:  Sales of our semiconductor  programming equipment products
requiring  installation  by us that is other than  perfunctory are recorded when
installation   is  complete,   or  at  the  later  of  customer   acceptance  or
installation,  if an  acceptance  clause is  specified  in the sales  terms.  We
recognize  revenue from other product  sales at the time of shipment.  We record
revenue from the sale of service and update contracts as deferred revenue and we
recognize it on a  straight-line  basis over the  contractual  period,  which is
typically one year. We establish a reserve for sales returns based on historical
trends in product  returns and  estimates  for new items.  If the actual  future
returns differ from historical levels, our revenue could be adversely affected.

Allowance for Doubtful  Accounts:  We base the  allowance for doubtful  accounts
receivable on our assessment of the collectibility of specific customer accounts
and the aging of accounts  receivable.  If there is a  deterioration  of a major
customer's  credit  worthiness  or actual  defaults  are higher than  historical
experience,  our  estimates  of the  recoverability  of amounts  due us could be
adversely affected.

Inventory  Provisions:  We base inventory  purchases and commitments upon future
demand  forecasts  and historic  usage.  If there is a  significant  decrease in
demand for our  products  or there is a higher  risk of  inventory  obsolescence
because of rapidly  changing  technology  and customer  requirements,  we may be
required to increase our inventory  provision  adjustments  and our gross margin
could be adversely affected.

Warranty  Accruals:  We accrue for warranty costs based on the expected material
and labor  costs to  fulfill  our  warranty  obligations.  If we  experience  an
increase in warranty  claims,  which are higher than our historical  experience,
our gross margin could be adversely affected.

Deferred  Taxes:  We have incurred tax losses in each of the last four years and
have net  operating  loss and tax credit  carryforwards  that begin  expiring in
2019. We have provided a full valuation allowance against our tax assets,  given
the  uncertainty as to their  realization.  In future years,  these benefits are
available to reduce or eliminate taxes on future taxable income.

Results of Operations

<TABLE>
<CAPTION>
NET SALES
--------------------------------------------------------------------------------------------------------------------
(in thousands)
                                                                                  First Quarter
                                                              -------------------------------------------------------
 Net sales by product line                                         2004              % Change          2003
---------------------------------------------------------------------------------------------------------------------
<S>                                                                <C>               <C>              <C>
 Non-automated programming systems                                 $2,582            1.2%             $2,552

 Automated programming systems                                      4,252           18.0%              3,603
                                                              -------------------------------------------------------
 Total programming systems                                         $6,834           11.0%             $6,155
                                                              =======================================================


                                                                                  First Quarter
                                                              -------------------------------------------------------

 Net sales by location                                              2004             % Change          2003
 --------------------------------------------------------------------------------------------------------------------

 United States                                                    $1,390           (23.4%)             $1,815

    % of total                                                     20.3%                                29.5%

 International                                                    $5,444            25.4%              $4,340

    % of total                                                     79.7%                                70.5%

 --------------------------------------------------------------------------------------------------------------------
</TABLE>

Revenues for the first quarter of 2004 increased by  approximately  11% compared
to the first  quarter of 2003.  The revenue  increase  relates to our  increased
sales of automated systems,  especially aftermarket products. Our revenue growth
is due to the increased  sales in Asia.  The impact of the weakened U.S.  Dollar
continues to favorably impact us both from making products made in the U.S. less
expensive  when sold overseas in U.S.  Dollars and from  Euro-based  sales which
translated into higher U.S.  Dollar reported sales.  During the first quarter of
2004, our backlog of orders was reduced from $1.5 million to $820,000.

Data I/O  continues  to  experience  a trend in its sales mix towards  increased
international sales and believes that, with the economic situation in the United
States and with the  electronics  industry trend toward  offshore and outsourced
manufacturing, this trend is likely to continue.

GROSS MARGIN
<TABLE>
<CAPTION>


                                                                              First Quarter
                                                                ------------------------------------------
(in thousands)                                                       2004                    2003
----------------------------------------------------------------------------------------------------------
<S>                                                                  <C>                     <C>
Gross Margin                                                         $3,713                  $3,437

Percentage of net sales                                               54.3%                  55.8%
----------------------------------------------------------------------------------------------------------
</TABLE>

Gross  margins  increased in dollars but  decreased as a percentage of sales for
the first quarter of 2004  compared with the same period of 2003.  Overall gross
margins  increased  primarily  due to the  increase  in sales  volume  and to an
increase in the  aftermarket  sales mix.  The higher  gross margin was offset in
part by  unfavorable  labor and overhead  variances  associated  with a $555,000
reduction in inventory during the quarter. Gross margins were favorably impacted
by the export  and  currency  translation  effects  of the  weaker  U.S.  Dollar
compared  to  the  Euro.  We  continue  to  forecast   margin   percentages   at
approximately the current quarter's level.

RESEARCH AND DEVELOPMENT
<TABLE>
<CAPTION>

                                                                              First Quarter
                                                                ------------------------------------------
(in thousands)                                                       2004                    2003
 ---------------------------------------------------------------------------------------------------------
<S>                                                                  <C>                     <C>
 Research and development                                            $1,204                  $1,161

 Percentage of net sales                                              17.6%                  18.9%
 ---------------------------------------------------------------------------------------------------------
</TABLE>

Research and development ("R&D") spending for the first quarter 2004 as compared
to the first  quarter 2003 was slightly more in dollars but less as a percentage
of sales. This increase in spending was primarily related to our new development
initiative in In-System Programming (ISP). During the quarter, we introduced the
new PS-288FC automated programming system, along with several other products. We
plan to  increase  our  engineering  development  spending  during 2004 with the
hiring of new  engineering  positions in our new Shanghai  based  subsidiary  in
China formed in April of 2004.

SELLING, GENERAL AND ADMINISTRATIVE
<TABLE>
<CAPTION>
                                                                              First Quarter
                                                                ------------------------------------------
(in thousands)                                                        2004                    2003
----------------------------------------------------------------------------------------------------------
<S>                                                                  <C>                     <C>
 Selling, general & administrative                                   $2,172                  $1,928

 Percentage of net sales                                              31.8%                  31.3%
 ---------------------------------------------------------------------------------------------------------
</TABLE>

Selling,  general and administrative  ("SG&A") expenses for the first quarter of
2004 were $244,000 more compared with the same period in 2003,  primarily due to
our strategic investments in Asia and the hiring of additional key personnel, as
well as the unfavorable  currency translation impact of European based operating
costs.  In addition,  we incurred  higher  commission  costs based on the higher
sales volume and a higher mix of  representative  sales vs.  distributor  sales.
Finally,  higher  expenses  related to Asian sales  meetings  and travel,  which
expenses  were  significantly  less in the  first  quarter  of  2003  due to the
cancellation of Asian sales meetings and travel as a result of SARS.

INTEREST
<TABLE>
<CAPTION>
                                                                              First Quarter
                                                                ------------------------------------------
(in thousands)                                                       2004                    2003
 ---------------------------------------------------------------------------------------------------------
<S>                                                                  <C>                     <C>
 Interest income                                                      $35                     $32

 Interest expense                                                     ($1)                    ($3)
 ---------------------------------------------------------------------------------------------------------
</TABLE>

Interest income increased  slightly in the first quarter of 2004 compared to the
same period in 2003 due to increased funds invested.

INCOME TAXES
<TABLE>
<CAPTION>

                                                                              First Quarter
                                                                ------------------------------------------
 (in thousands)                                                       2004                    2003
 ---------------------------------------------------------------------------------------------------------
<S>                                                                   <C>                     <C>
 Income tax expense (benefit)                                          $61                    $11
 ---------------------------------------------------------------------------------------------------------
</TABLE>

Tax expense recorded for the first quarter of 2004 was due to foreign taxes. Tax
valuation reserves increased by approximately  $46,000 during the quarter.  Data
I/O has valuation reserves of $9,783,000 as of March 31, 2004.

Financial Condition

LIQUIDITY AND CAPITAL RESOURCES
<TABLE>
<CAPTION>
                                                                 Mar. 31,                                   Dec. 31,
(in thousands)                                                     2004                   Change             2003
------------------------------------------------------------- --------------------- -------------------- -------------------
<S>                                                              <C>                      <C>              <C>
Working capital                                                  $10,968                   ($64)           $11,032
------------------------------------------------------------- --------------------- -------------------- -------------------
</TABLE>

Working capital decreased during the first three months of 2004 primarily due to
cash used by  operations.  Cash,  cash  equivalents  and  marketable  securities
decreased  approximately  $0.7  million  during this  period,  primarily  due to
payment of accrued  liabilities;  inventory decreased $0.6 million: and accounts
receivable  increased $0.6 million.  We continue to focus on reducing the amount
of inventory relative to our business level. Our receivables  increase is due in
part to the increased mix of  international  sales,  which typically have longer
sales terms and collection periods.  Should our business grow significantly,  we
anticipate  that we  will  need to  utilize  existing  liquidity  to  carry  the
increased receivables and inventory expected to be associated with sales growth.
As of March 31, 2004, Data I/O had no debt outstanding.

Data I/O estimates that capital  expenditures for property,  plant and equipment
during  the  remainder  of  2004  will  be  approximately  $500,000,   excluding
expenditures for strategic purposes. Data I/O's future capital requirements will
depend on a number of  factors  including  international  operations  expansion,
decisions to invest in new systems and technology  equipment,  costs  associated
with R&D,  successful  launch of new products and the potential use of funds for
strategic  purposes.  We expect to fund capital  expenditures  from existing and
internally generated funds or we may lease capital equipment. We believe that we
have sufficient  working capital  available under our operating plan to fund our
operations and capital requirements for at least 12 months.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to financial  market  risks,  including  fluctuations  in foreign
exchange rates and interest rates.

INTEREST RATE RISK

We invest our cash in a variety of short-term financial  instruments,  including
government  bonds,  commercial  paper and money  market  instruments,  which are
classified as available-for-sale. Our investments are made in accordance with an
investment  policy  approved  by  our  board  of  directors.  Our  portfolio  is
diversified and consists  primarily of investment  grade  securities to minimize
credit risk. Cash balances in foreign  currencies are operating balances and are
invested in demand or short-term deposits of the local operating bank.

Investments  in both fixed rate and floating rate interest  earning  instruments
carry a degree of interest rate risk.  Fixed rate securities may have their fair
market  value  adversely  impacted  because of a rise in interest  rates,  while
floating rate securities may produce less income than expected if interest rates
fall. Due in part to these factors,  our future investment income may fall short
of expectations  because of changes in interest rates or we may suffer losses in
principal if forced to sell  securities that have seen a decline in market value
because of changes in interest  rates.  We do not attempt to reduce or eliminate
our  exposure to interest  rate risk  through  the use of  derivative  financial
instruments due to the short-term nature of the investments.

<PAGE>

The table below provides information about our marketable securities,  including
principal  cash  flows  and the  related  weighted  average  interest  rates (in
thousands):
<TABLE>
<CAPTION>
                                                 Principal         Estimated Fair          Principal        Estimated Fair
                                                Cash Flows            Value at            Cash Flows           Value at
                                                 For 2004             March 31,             For Q1           December 31,
                                                                        2004                 2004               2003
                                              ----------------    ------------------    --------------     ----------------
<S>                                             <C>                <C>                     <C>               <C>
          Corporate Bonds                        $1,061                $1,061                $  754             $   754
                                                  1.503%                                      1.315%
          Euro-dollar bonds                         307                   307                     -                  -
                                                  1.290%
          Taxable Auction Securities                500                   500                   500                500
                                                  1.064%                                      1.136%
          Tax Advantaged Auction Securities         500                   500                 1,100              1,100
                                                  1.065%                                      1.286%
                                              ----------------    ------------------    --------------     ----------------
          Total portfolio value                  $2,368                $2,368                $2,354             $2,354
                                              ================    ==================    ==============     ================
</TABLE>

FOREIGN CURRENCY RISK

We have operations in Germany,  Canada,  and China and are setting up operations
in  Brazil.  Therefore,  we are  subject to risks  typical  of an  international
business including,  but not limited to, differing economic conditions,  changes
in  political   climate,   differing  tax  structures,   other  regulations  and
restrictions  and foreign  exchange  rate  volatility.  Accordingly,  our future
results  could be  materially  adversely  affected  by changes in these or other
factors.

Our sales and corresponding  receivables are substantially in U.S. dollars other
than sales made in our subsidiaries in Germany,  Canada, and China.  Through our
operations in Germany,  Canada,  and China and soon in Brazil,  we incur certain
product costs;  research and  development;  customer  service and support costs;
selling,  general  and  administrative  expenses  in  local  currencies.  We are
exposed,  in the normal course of business,  to foreign  currency risks on these
expenditures  and on related foreign  currency  denominated  monetary assets and
liabilities.  We have evaluated our exposure to these risks and believe that our
only significant exposure to foreign currencies at the present time is primarily
related to Euro-based receivables. We use forward contracts to hedge and thereby
minimize the currency risks associated with certain transactions  denominated in
Euros.

If our actual currency  requirement or timing in the period  forecasted  differs
materially from the notional amount of our forward  contracts and/or the natural
balancing of receivables and payables in foreign  currencies  during a period of
currency  volatility  or if we do not continue to manage our exposure to foreign
currency  through  forward   contracts  or  other  means,  we  could  experience
unanticipated  foreign  currency  gains or  losses.  In  addition,  our  foreign
currency  risk   management   policy  subjects  us  to  risks  relating  to  the
creditworthiness  of the  commercial  banks  with  which we enter  into  forward
contracts.  If one of these banks cannot honor its obligations,  we may suffer a
loss. We also invest in our international  operations,  which will likely result
in increased future operating expenses denominated in those local currencies. In
the future,  our  exposure to foreign  currency  risks from these other  foreign
currencies may increase and if not managed  appropriately,  we could  experience
unanticipated foreign currency gains and losses.

The  purpose of our foreign  currency  risk  management  policy is to reduce the
effect of exchange rate  fluctuation  on our results of  operations.  Therefore,
while our foreign  currency  risk  management  policy may reduce our exposure to
losses  resulting from unfavorable  changes in currency  exchange rates, it also
reduces or eliminates our ability to profit from  favorable  changes in currency
exchange rates.

At March 31,  2004,  we had two forward  contracts to sell Euros in exchange for
$341,960 with rates ranging from 1.1996 to 1.2145 all scheduled to be due within
the next quarter and the value at that date of $333,727.

Item 4. Controls and Procedures

(a) Evaluation of disclosure controls and procedures.

Under the supervision and with the  participation  of our management,  including
our Chief Executive Officer and Chief Financial Officer,  Data I/O evaluated the
effectiveness  of the  design  and  operation  of our  disclosure  controls  and
procedures (as defined in Rule  13a-15(e) and Rule 15d-15(e)  under the Exchange
Act) as of the end of the period covered by this report (the "Evaluation Date").
Based upon that  evaluation,  the Chief  Executive  Officer and Chief  Financial
Officer  concluded that, as of the Evaluation Date, our disclosure  controls and
procedures  were effective in timely  alerting them to the material  information
relating to Data I/O (or its consolidated  subsidiaries) required to be included
in our periodic SEC filings and Form 8-K reports.

<PAGE>

(b) Changes in internal controls.

There were no  significant  changes  made in our  internal  controls  or, to our
knowledge,  in other  factors that could  significantly  affect  these  controls
subsequent to the date of their evaluation.

Our  management,  including  the Chief  Executive  Officer  and Chief  Financial
Officer, does not expect that its disclosure controls and procedures or internal
control over financial reporting will prevent all error and all fraud. A control
system, no matter how well conceived and operated,  can provide only reasonable,
not  absolute,  assurance  that the  objectives  of the control  system are met.
Further,  the design of a control  system  must  reflect the fact that there are
resource  constraints,  and the benefits of controls must be considered relative
to their costs.  Because of the inherent  limitations in all control systems, no
evaluation of controls can provide  absolute  assurance  that all control issues
and  instances  of fraud,  if any,  within  Data I/O have been  detected.  These
inherent limitations include the realities that judgments in decision-making can
be faulty,  and that  breakdowns  can occur  because of simple error or mistake.
Additionally,  controls  can be  circumvented  by the  individual  acts  of some
persons,  by collusion of two or more people,  or by management  override of the
control. The design of any system of controls also is based in part upon certain
assumptions about the likelihood of future events, and there can be no assurance
that any design will succeed in achieving  its stated goals under all  potential
future  conditions;  over time, control may become inadequate because of changes
in conditions,  or the degree of compliance  with the policies or procedures may
deteriorate.  Because of the inherent  limitations in a  cost-effective  control
system, misstatements due to error or fraud may occur and not be detected.

PART II - OTHER INFORMATION

Item 1.   Legal Proceedings

          None

Item 2.   Changes in Securities, Use of Proceeds and Issuer Purchases of
          Equity Securities

          None

Item 3.   Defaults Upon Senior Securities

          None

Item 4.   Submission of Matters to a Vote of Security Holders

          None

Item 5.   Other Information

          None

Item 6.   Exhibits and Reports on Form 8-K

(a)       Exhibits

The  following  list is a subset  of the list of  exhibits  described  below and
contains all compensatory plans, contracts or arrangements in which any director
or  executive  officer  of Data  I/O is a  participant,  unless  the  method  of
allocation of benefits  thereunder is the same for management and non-management
participants:

(1) Amended and Restated 1982 Employee Stock Purchase Plan. See Exhibit 10.7,
    10.22, and 10.24.

(2) Amended and Restated Retirement Plan and Trust Agreement. See Exhibit 10.2,
    10.3, 10.4, 10.11, 10.14, 10.15, 10.16 and 10.25.

(3) Summary of Amended and Restated Management Incentive Compensation Plan.
    See Exhibit 10.12.

(4) Amended and Restated 1983 Stock Appreciation Rights Plan.  See Exhibit 10.1.

(5) Amended and Restated 1986 Stock Option Plan.  See Exhibit 10.19.

(6) Form of Change in Control Agreements. See Exhibit 10.5.

(7) 1996 Director Fee Plan.  See Exhibit 10.6 and 10.17.

(8) Letter Agreement with Frederick R. Hume. See Exhibit 10.20.

(9) Amended and Restated 2000 Stock Compensation Incentive Plan.
    See Exhibit 10.21 and 10.23.

          3   Articles of Incorporation:

              3.1  Data I/O's restated Articles of Incorporation filed November
                   2, 1987  (Incorporated  by  reference to Exhibit 3.1 of Data
                   I/O's 1987 Annual Report on Form 10-K (File No. 0-10394)).

              3.2  Data I/O's Bylaws as amended and restated as of October 2003.

              3.3  Certificate of Designation, Preferences and Rights of Series
                   A Junior  Participating  Preferred  Stock  (Incorporated  by
                   reference to Exhibit 1 of Data I/O's Registration  Statement
                   on Form 8-A filed March 13, 1998 (File No. 0-10394)).

          4    Instruments Defining the Rights of Security Holders, Including
               Indentures:

               4.1  Rights  Agreement,  dated as of April 4, 1998,  between Data
                    I/O Corporation and ChaseMellon Shareholder Services, L.L.C.
                    as Rights Agent, which includes:  as Exhibit A thereto,  the
                    Form of Right  Certificate;  and, as Exhibit B thereto,  the
                    Summary of Rights to Purchase Series A Junior  Participating
                    Preferred  Stock  (Incorporated  by  reference to Data I/O's
                    Current Report on Form 8-K filed on March 13, 1998).

               4.2  Rights Agreement,  dated as of March 31, 1988,  between Data
                    I/O  Corporation  and First Jersey  National Bank, as Rights
                    Agent,  as amended by Amendment  No. 1 thereto,  dated as of
                    May 28, 1992 and Amendment  No. 2 thereto,  dated as of July
                    16, 1997  (Incorporated by reference to Data I/O's Report on
                    Form 8-K filed on March 13, 1998).

               4.3  Amendment  No. 1, dated as of February 10,  1999,  to Rights
                    Agreement,  dated  as of  April 4,  1998,  between  Data I/O
                    Corporation and ChaseMellon Shareholder Services,  L.L.C. as
                    Rights  Agent  (Incorporated  by reference to Exhibit 4.1 of
                    Data I/O's Form 8-A/A dated February 10, 1999).

          10   Material Contracts:

               10.1 Amended and  Restated  1983 Stock  Appreciation  Rights Plan
                    dated February 3, 1993 (Incorporated by reference to Exhibit
                    10.23 of Data  I/O's 1992  Annual  Report on Form 10-K (File
                    No. 0-10394)).

               10.2 Amended and Restated  Retirement  Plan and Trust  Agreement.
                    (Incorporated  by reference  to Exhibit  10.26 of Data I/O's
                    1993 Annual Report on Form 10-K (File No. 0-10394)).

               10.3 First Amendment to the Data I/O Tax Deferred Retirement Plan
                    (Incorporated  by reference  to Exhibit  10.21 of Data I/O's
                    1994 Annual Report on Form 10-K (File No. 0-10394)).

               10.4 Second  Amendment  to the Data I/O Tax  Deferred  Retirement
                    Plan  (Incorporated  by reference  to Exhibit  10.26 of Data
                    I/O's 1995 Annual Report on Form 10-K (File No. 0-10394)).

               10.5 Form  of  Change  in  Control  Agreements  (Incorporated  by
                    reference to Exhibit  10.20 of Data I/O's 1994 Annual Report
                    on Form 10-K (File No. 0-10394)).

               10.6 Data I/O Corporation 1996 Director Fee Plan (Incorporated by
                    reference to Exhibit  10.27 of Data I/O's 1995 Annual Report
                    on Form 10K (File No. 0-10394)).

               10.7 Data I/O  Corporation  1982  Employee  Stock  Purchase  Plan
                    Amended and  Restated  December  11, 1996  (Incorporated  by
                    reference  to  Exhibit  10.1  to  Data  I/O's   Registration
                    Statement of Form S-8 (File No. 333-20657, filed January 29,
                    1997)).

               10.8 Purchase  and  Sale  Agreement  dated  as of  July  9,  1996
                    (Relating to the sale of Data I/O Corporation's headquarters
                    property in Redmond,  Washington consisting of approximately
                    79 acres of land and an  approximately  96,000  square  foot
                    building.  (Portions  of  this  exhibit  have  been  omitted
                    pursuant   to  an   application   for  an   order   granting
                    confidential  treatment.  The  omitted  portions  have  been
                    separately  filed  with  the  Commission)  (Incorporated  by
                    reference to Exhibit  10.32 of Data I/O's 1996 Annual Report
                    on Form 10-K (File No. 0-10394)).

               10.9 Letter dated as of December 20, 1996,  First  Amendment  and
                    extension of the Closing  Date under that  certain  Purchase
                    and Sale  Agreement  dated as of July 9, 1996.  (Portions of
                    this exhibit have been  omitted  pursuant to an  application
                    for an order granting  confidential  treatment.  The omitted
                    portions  have been  separately  filed with the  Commission)
                    (Incorporated  by reference  to Exhibit  10.33 of Data I/O's
                    1996 Annual Report on Form 10-K (File No. 0-10394)).

              10.10 Letter dated as of February 17, 1997,  Second  Amendment and
                    extension of the Closing  Date under that  certain  Purchase
                    and Sale  Agreement  dated as of July 9, 1996.  (Portions of
                    this exhibit have been  omitted  pursuant to an  application
                    for an order granting  confidential  treatment.  The omitted
                    portions  have been  separately  filed with the  Commission)
                    (Incorporated  by reference  to Exhibit  10.34 of Data I/O's
                    1996 Annual Report on Form 10-K (File No. 0-10394)).

              10.11 Third  Amendment  to the  Data I/O Tax  Deferred  Retirement
                    Plan  (Incorporated  by reference  to Exhibit  10.35 of Data
                    I/O's 1996 Annual Report on Form 10-K (File No. 0-10394)).

              10.12 Amended and Restated Management Incentive  Compensation Plan
                    dated January 1, 1997  (Incorporated by reference to Exhibit
                    10.25 of Data  I/O's 1997  Annual  Report on Form 10-K (File
                    No. 0-10394)).

              10.13 Amended and Restated  Performance  Bonus Plan dated  January
                    1, 1997  (Incorporated by reference to Exhibit 10.26 of Data
                    I/O's 1997 Annual Report on Form 10-K (File No. 0-10394)).

              10.14 Fourth  Amendment  to the Data I/O Tax  Deferred  Retirement
                    Plan  (Incorporated  by reference  to Exhibit  10.27 of Data
                    I/O's 1997 Annual Report on Form 10-K (File No. 0-10394)).

              10.15 Fifth  Amendment  to the  Data I/O Tax  Deferred  Retirement
                    Plan  (Incorporated  by reference  to Exhibit  10.28 of Data
                    I/O's 1997 Annual Report on Form 10-K (File No. 0-10394)).

              10.16 Sixth  Amendment  to the  Data I/O Tax  Deferred  Retirement
                    Plan  (Incorporated  by reference  to Exhibit  10.29 of Data
                    I/O's 1997 Annual Report on Form 10-K (File No. 0-10394)).

              10.17 Amended and Restated Data I/O Corporation  1996 Director Fee
                    Plan  (Incorporated  by reference  to Exhibit  10.32 of Data
                    I/O's 1997 Annual Report on Form 10-K (File No. 0-10394)).

              10.18 Amended and  Restated  1986 Stock  Option Plan dated May 12,
                    1998  (Incorporated  by reference  to Exhibit  10.37 of Data
                    I/O's 1998 Annual Report on Form 10-K (File No. 0-10394)).

              10.19 Sublease   dated   December  22,  1999  between   Data  I/O
                    Corporation and Imandi.com, Inc.

              10.20 Letter Agreement with Fred R. Hume dated January 29, 1999.

              10.21 Amended and Restated 2000 Stock Compensation  Incentive Plan
                    dated May 19, 2000. (Incorporated by reference to Data I/O's
                    2000 Proxy Statement dated March 27, 2000.)

              10.22 Amended and Restated 1982 Employee Stock Purchase Plan dated
                    May 16, 2001  (Incorporated  by reference to Data I/O's 2001
                    Proxy Statement dated March 28, 2001.)

              10.23 Amended and Restated 2000 Stock Compensation  Incentive Plan
                    dated May 19, 2000. (Incorporated by reference to Data I/O's
                    2002 Proxy Statement dated April 19, 2002.)

              10.24 Amended and  Restated  1982  Employee  Stock  Purchase  Plan
                    dated May 16, 2001. (Incorporated by reference to Data I/O's
                    2003 Proxy Statement dated March 31, 2003.)

              10.25 Amended and Restated Data I/O Tax Deferred Retirement
                    Plan                                                     19


<PAGE>



          31   Certification - Section 302:
               31.1     Chief Executive Officer Certification                45
               31.2     Chief Financial Officer Certification                46

          32   Certification - Section 906:
               32.1     Chief Executive Officer Certification                47
               32.2     Chief Financial Officer Certification                48

          99   Other Exhibits
               99.1  Risk Factors                                            49

               (b) Reports on Form 8-K

Data I/O  furnished a copy of a press release made on February 18, 2004 entitled
"Data I/O reports 4th quarter and 2003  profitability"  on a Form 8-K under Item
12. The  information  furnished in the Form 8-K pursuant to Item 12 shall not be
deemed filed under the Securities Exchange Act of 1934, as amended.

<PAGE>

                                   SIGNATURES


Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  Registrant  has duly  caused  this report to be signed on its
behalf by the undersigned thereunto duly authorized.



                                   DATA I/O CORPORATION
                                        (REGISTRANT)
DATED:   May 14, 2004


                                   By://S//Joel S. Hatlen
                                      Joel S. Hatlen
                                      Vice President - Finance
                                      Chief Financial Officer
                                      Secretary and Treasurer
                       (Principal Financial Officer and Duly Authorized Officer)




                                   By://S//Frederick R. Hume
                                      Frederick R. Hume
                                      President
                                      Chief Executive Officer
                       (Principal Executive Officer and Duly Authorized Officer)


<PAGE>


         Exhibit 10.25 Data I/O Corporation Tax Deferred Retirement Plan

                             ADOPTION AGREEMENT FOR

                          MetLife Defined Contribution

                     NON-STANDARDIZED 401(K) PROFIT SHARING
                                 PLAN AND TRUST

The  undersigned   Employer  adopts  MetLife  Defined   Contribution   Prototype
Non-Standardized  401(k) Profit  Sharing Plan and Trust and elects the following
provisions:

CAUTION:  Failure to properly  fill out this  Adoption  Agreement  may result in
disqualification of the Plan.

EMPLOYER INFORMATION
(An amendment to the Adoption Agreement is not needed solely to reflect a change
in the information in this Employer Information Section.)

1.      EMPLOYER'S NAME, ADDRESS AND TELEPHONE NUMBER

        Name:         Data I/O Corporation

        Address:      10525 Willows Road, N.E., PO Box 97046
                                     Street
                      Redmond                    Washington         98073-9746
                       City                        State                Zip
        Telephone:    425-881-6444

2.      EMPLOYER'S TAXPAYER IDENTIFICATION NUMBER 91-0864123

3.      TYPE OF ENTITY
        a. [X] Corporation (including Tax-exempt or Non-profit Corporation)
        b. [ ] Professional Service Corporation
        c. [ ] S Corporation
        d. [ ] Limited Liability Company that is taxed as:
               1. [ ] a partnership or sole proprietorship
               2. [ ] a Corporation
               3. [ ] an S Corporation
         e. [ ] Sole Proprietorship
         f. [ ] Partnership (including Limited Liability)
         g. [ ] Other:

         AND, the Employer is a member of (select all that apply):
         h. [ ] a controlled group
         i. [ ] an affiliated service group

4.      EMPLOYER FISCAL YEAR means the 12 consecutive month period:

        Beginning on January 1st (e.g., January 1st)
                      month  day
        and ending on December 31st
                       month   day

PLAN INFORMATION (An amendment to the Adoption Agreement is not needed solely to
reflect a change in the information in Questions 9 through 11.)

5.      PLAN NAME:

        Data I/O Corporation Tax Deferral Retirement Plan

6.      EFFECTIVE DATE
        a. [ ] This is a new Plan effective as of ______(hereinafter called the
                "Effective Date").
        b. [X] This is an amendment and restatement of a previously
               established qualified plan of the Employer which was
               originally effective February 1, 1984 (hereinafter called the
               "Effective Date"). The effective date of this amendment and
               restatement is March 1, 2004 .
        c. [ ] FOR GUST  RESTATEMENTS:  This is an amendment and restatement
               of a  previously  established  qualified  plan of the Employer to
               bring the Plan into compliance with GUST (GATT, USERRA, SBJPA and
               TRA '97).  The  original  Plan  effective  date was ___________
               (hereinafter called the "Effective Date"). Except as specifically
               provided in the Plan, the effective date of this amendment and
               restatement is _________. (May  enter a  restatement  date  that
               is the  first day of the current  Plan Year.  The Plan  contains
               appropriate  retroactive effective  dates with respect to
               provisions for the appropriate laws.)

7.      PLAN YEAR means the 12 consecutive month period:

        Beginning on January 1st (e.g., January 1st)
                      month  day
        and ending on December 31st
                       month   day

        EXCEPT that there will be a Short Plan Year:
        a.  [X]  N/A
        b.  [ ]  beginning on ____________________________ (e.g., July 1, 2000)
                                  month     day,     year
                 and ending on ___________________________
                                  month     day,     year

8.      VALUATION DATE means:
         a. [X] Every day that the Trustee, any transfer agent appointed
                by the Trustee or the Employer, and any stock exchange used by
                such agent are open for business (daily valuation).
         b. [ ] The last day of each Plan Year.
         c. [ ] The last day of each Plan Year half (semi-annual).
         d. [ ] The last day of each Plan Year quarter.
         e. [ ] Other (specify day or dates):__________________ (must be at
                least once each Plan Year).

9.       PLAN NUMBER assigned by the Employer
         a. [ ] 001
         b. [X] 002
         c. [ ] 003
         d. [ ] Other:____________

10.      TRUSTEE:
         a. [ ]Individual Trustee(s) who serve as discretionary Trustee(s)
               over assets not subject to control by a corporate Trustee.

                 Name(s)                        Title(s)

                 __________________________     _________________________
                 __________________________     _________________________
                 __________________________     _________________________

                  Address and Telephone number
                  1. [ ] Use Employer address and telephone number.
                  2. [ ] Use address and telephone number below:

                  Address:_______________________________________________
                                          Street
                          _______________  ______________  ______________
                               City            State             Zip
                  Telephone: ____________________________________________

         b.  [X]  Corporate Trustee

                  Name:         Reliance Trust Company

                  Address:      3384 Peachtree Road, N.E., Suite 900
                                           Street
                                Atlanta             Georgia         30326
                                  City                State          Zip
                  Telephone:    404-266-0663

                  AND, the corporate Trustee shall serve as:
                  1. [X] a directed (nondiscretionary) Trustee over all
                     Plan assets except for the following: n/a
                  2. [ ] a discretionary Trustee over all Plan assets
                     except for the following:


         AND, shall a separate trust agreement be used with this Plan?
         c.  [ ]  Yes
         d.  [X]  No
         NOTE:    If Yes is selected, an executed copy of the trust agreement
                  between the Trustee and the Employer must be attached to this
                  Plan. The Plan and trust agreement will be read and construed
                  together. The responsibilities, rights and powers of the
                  Trustee shall be those specified in the trust agreement.

11.      PLAN ADMINISTRATOR'S NAME, ADDRESS AND TELEPHONE NUMBER:
         (If none is named, the Employer will become the Administrator.)
         a. [X] Employer (Use Employer address and telephone number).
         b. [ ] Use name, address and telephone number below:

                Name:       ___________________________________________________

                Address:    ___________________________________________________
                                                Street
                            __________________    _______________    __________
                                   City                State             Zip
                  Telephone:

12.     CONSTRUCTION  OF PLAN This Plan shall be  governed  by the laws of the
        state or commonwealth  where the Employer's (or, in the case of a
        corporate Trustee,  such  Trustee's)  principal  place of business is
        located  unless another state or commonwealth is specified:
        Georgia

ELIGIBILITY REQUIREMENTS

13.     ELIGIBLE EMPLOYEES (Plan Section 1.18)
        FOR ALL PURPOSES OF THE PLAN (EXCEPT AS ELECTED IN d. or e. BELOW FOR
        EMPLOYER CONTRIBUTIONS) means all Employees (including Leased
        Employees) EXCEPT: 13 p.2222 NOTE: If different exclusions apply to
        Elective Deferrals than to other Employer contributions, complete this
        part a.-b. for the Elective Deferral component of the Plan.
         a.  [ ] N/A. No exclusions.
         b.  [X] The following are excluded, except that if b.3. is
                 selected, such Employees will be included (select all that
                 apply): 1. [X] Union Employees (as defined in Plan Section
                 1.18).
                 2. [X] Non-resident aliens (as defined in Plan Section 1.18).
                 3. [X] Employees who became Employees as the result of a "Code
                        Section  410(b)(6)(C) transaction" (as defined in
                        Plan Section 1.18).
                 4. [ ] Salaried Employees
                 5. [ ] Highly Compensated Employees
                 6. [X] Leased Employees
                 7. [ ] Other: _________

         HOWEVER, different exclusions will apply (select c. OR d. and/or e.):
         c.  [X]  N/A. The options elected in a.-b. above apply for all purposes
                  of the Plan.
         d.  [ ]  For purposes of all Employer contributions (other than
                  Elective Deferrals and matching contributions)...
         e.  [ ]  For purposes of Employer matching contributions...

         IF d. OR e. IS SELECTED, the following exclusions apply for such
         purposes (select f. or g.):
         f.  [ ]  N/A. No exclusions.
         g.  [ ]  The following are excluded, except that if g.3. is selected,
                  such Employees will be included (select all that apply):
                  1. [ ] Union Employees (as defined in Plan Section 1.18).
                  2. [ ] Non-resident aliens (as defined in Plan Section 1.18).
                  3. [ ] Employees who became  Employees as the result of a
                         "Code Section 410(b)(6)(C) transaction" (as defined in
                         Plan Section 1.18).
                  4. [ ] Salaried Employees
                  5. [ ] Highly Compensated Employees
                  6. [ ] Leased Employees
                  7. [ ] Other: _________

14.      THE FOLLOWING AFFILIATED EMPLOYER (Plan Section 1.6) will adopt this
         Plan as a Participating Employer (if there is more than one, or if
         Affiliated Employers adopt this Plan after the date the Adoption
         Agreement is executed, attach a list to this Adoption Agreement of such
         Affiliated Employers including their names, addresses, taxpayer
         identification numbers and types of entities):
         NOTE: Employees of an Affiliated Employer that does not adopt this
               Adoption Agreement as a Participating Employer shall not be
               Eligible Employees. This Plan could violate the Code Section
               410(b) coverage rules if all Affiliated Employers do not adopt
               the Plan.
         a.    [X] N/A
         b.    [ ] Name of First Affiliated Employer:
                   Address:_____________________________________________________
                                              Street
                           ________________  ________________  _________________
                                 City             State                Zip

                   Telephone: __________________________________________________

                   Taxpayer Identification Number: _____________________________

         AND, the Affiliated Employer is:
         c. [ ]Corporation (including Tax-exempt, Non-profit or Professional
         Service Corporation)
         d. [ ]S Corporation
         e. [ ]Limited Liability Company that is taxed as:
               1. [ ] a partnership or sole proprietorship
               2. [ ] a Corporation
               3. [ ] an S Corporation
         f. [ ] Sole Proprietorship
         g. [ ] Partnership (including Limited Liability
         h. [ ] Other:

15. CONDITIONS OF ELIGIBILITY (Plan Section 3.1)
    Any Eligible Employee will be eligible to participate in the Plan upon
    satisfaction of the following:
    NOTE: If the Year(s) of Service selected is or includes a fractional year,
          an Employee will not be required to complete any specified number of
          Hours of Service to receive credit for such fractional year. If
          expressed in months of service, an Employee will not be required to
          complete any specified number of Hours of Service in a particular
          month, unless elected in b.4. or i.4. below.

    ELIGIBILITY FOR ALL PURPOSES OF THE PLAN  (EXCEPT AS ELECTED IN e.-k. BELOW
    FOR  EMPLOYER CONTRIBUTIONS)(select a. or all that apply of b., c., and d.):
         15 p.2323
         NOTE: If different conditions apply to Elective Deferrals than to other
         Employer  contributions,  complete this part a.-d. for the Elective
         Deferral component of the Plan.
         a. [ ] No age or service required. (Go to e.-g. below)
         b. [X] Completion of the following service requirement which is based
                on Years of Service (or Periods of Service if the Elapsed Time
                Method is elected):
                1. [ ] No service requirement
                2. [ ] 1/2 Year of Service or Period of Service
                3. [ ] 1 Year of Service or Period of Service
                4. [ ] (not to exceed 1,000) Hours of Service within ______ (not
                       to exceed 12) months from the Eligible Employee's
                       employment commencement date. If an Employee does not
                       complete the stated Hours of Service during the specified
                       time period, the Employee is subject to the Year of
                       Service requirement in b.3. above.
                5. [X] Other: upon the earlier occurrence of the completion of
                       1 Year of Service or 1/4 Year of Service (may not exceed
                       one (1) Year of Service or Period of Service)
         c. [X] Attainment of age:
                1. [ ] No age requirement
                2. [ ] 20 1/2
                3. [ ] 21
                4. [X] Other: 18 (may not exceed 21)
         d. [ ] The service and/or age requirements specified above shall be
                waived with respect to any Eligible Employee who was employed
                on __________ and such Eligible Employee shall enter the Plan as
                of such date. The requirements to be waived are (select one or
                both)
                1. [ ] service requirement (will let part-time Eligible
                       Employees in Plan)
                2. [ ] age requirement

         HOWEVER, DIFFERENT ELIGIBILITY CONDITIONS WILL APPLY (select e. OR f.
         and/or g.):
         e. [X] N/A. The options elected in a.-d. above apply for all purposes
                of the Plan.
         f. [ ] For purposes of all Employer contributions (other than Elective
                Deferrals and matching contributions)...
         g. [ ] For purposes of Employer matching contributions...

         If f. OR g. IS SELECTED, the following eligibility conditions apply for
         such purposes:
         h. [ ] No age or service requirements
         i. [ ] Completion of the following service requirement which is based
                on Years of Service (or Periods of Service if the Elapsed Time
                Method is elected):
                1. [ ] No service requirement
                2. [ ] 1/2 Year of Service or Period of Service
                3. [ ] 1 Year of Service or Period of Service
                4. [ ] ____ (not to exceed 1,000) Hours of Service within (not
                       to exceed 12) months from the Eligible Employee's
                       employment commencement date. If an Employee does not
                       complete the stated Hours of Service during the specified
                       time period, the Employee is subject to the Year of
                       Service requirement in i.3. above.
                5. [ ] 1 1/2 Years of Service or Periods of Service
                6. [ ] 2 Years of Service or Periods of Service
                7. [ ] Other:___________________________________________________
                       (may not exceed two (2) Years of Service or Periods of
                       Service)
                NOTE: If more than one (1) Year of Service is elected 100%
                      immediate vesting is required.
         j. [ ] Attainment of age:
                1. [ ] No age requirement
                2. [ ] 20 1/2
                3. [ ] 21
                4. [ ] Other:________ (may not exceed 21)
         k. [ ] The service and/or age requirements specified above shall be
                waived with respect to any Eligible Employee who was employed
                on and such Eligible Employee shall enter the Plan as of such
                date.

                The requirements to be waived are (select one or both):
                1. [ ] service requirement (will let part-time Eligible
                       Employees in Plan)
                2. [ ] age requirement

16. EFFECTIVE DATE OF PARTICIPATION (Plan Section 3.2)
    An Eligible Employee who has satisfied the eligibility requirements will
    become a Participant for all purposes of the Plan (except as elected in
    g.-p. below for Employer contributions):
    NOTE: If different entry dates apply to Elective Deferrals than to other
          Employer contributions, complete this part a.-f. for the Elective
          Deferral component of the Plan.
    a. [ ] the day on which such requirements are satisfied.
    b. [X] the first day of the month coinciding with or next following the
           date on which such requirements are satisfied.
    c. [ ] the first day of the Plan Year quarter coinciding with or next
          following the date on which such requirements are satisfied.
    d. [ ] the earlier of the first day of the seventh month or the first day of
           the Plan Year coinciding with or next following the date on which
           such requirements are satisfied.
    e. [ ] the first day of the Plan Year next following the date on which
           such requirements are satisfied. (Eligibility must be 1/2 Year of
           Service (or Period of Service) or less and age must be 20 1/2 or
           less.)
    f. [ ] other: ____________________________________________________, provided
           that an Eligible Employee who has satisfied the maximum age (21) and
           service requirements (one (1) Year or Period of Service) and who is
           otherwise entitled to participate, shall commence participation no
           later than the earlier of (a) 6 months after such requirements are
           satisfied, or (b) the first day of the first Plan Year after such
           requirements are satisfied, unless the Employee separates from
           service before such participation date.

    HOWEVER, different entry dates will apply (select g. OR h. and/or i.):
    g. [X] N/A. The options elected in a.-f. above apply for all purposes
                of the Plan.
    h. [ ] For purposes of all Employer contributions (other than Elective
           Deferrals and matching contributions)...
    i. [ ] For purposes of Employer matching contributions...

    IF h. OR i. IS SELECTED, the following entry dates apply for such purposes
    (select one):
    j. [ ] the first day of the month coinciding with or next following the
           date on which such requirements are satisfied. k. [ ]the first day of
           the Plan Year quarter coinciding with or next following the date on
           which such requirements are satisfied.
    l. [ ] the first day of the Plan Year in which such requirements are
           satisfied.
    m. [ ] the first day of the Plan Year in which such requirements are
           satisfied, if such requirements are satisfied in the first 6 months
           of the Plan Year, or as of the first day of the next succeeding Plan
           Year if such requirements are satisfied in the last 6 months of the
           Plan Year.
    n. [ ] the earlier of the first day of the seventh month or the first day of
           the Plan Year coinciding with or next following the date on which
           such requirements are satisfied.
    o. [ ] the first day of the Plan Year next following the date on which such
           requirements are satisfied. (Eligibility must be 1/2 (or 1 1/2 if
           100% immediate Vesting is selected) Year of Service (or Period of
           Service) or less and age must be 20 1/2 or less.)
    p. [ ] other: _____________________________________________________________,
           provided that an Eligible Employee who has satisfied the maximum age
           (21) and service requirements (one (1) Year or Period of Service (or
           more than one (1) year if full and immediate vesting)) and who is
           otherwise entitled to participate, shall commence participation no
           later than the earlier of (a) 6 months after such requirements are
           satisfied, or (b) the first day of the first Plan Year after such
           requirements are satisfied, unless the Employee separates from
           service before such participation date.

SERVICE

17. RECOGNITION OF SERVICE WITH PREDECESSOR EMPLOYER (Plan Sections 1.57 and
    1.85)
    a. [X] No service with a predecessor Employer shall be recognized.
    b. [ ] Service with ______ will be recognized except as follows (select 1.
           or all that apply of 2. through 4.):
           1. [ ] N/A, no limitations.
           2. [ ] service will only be recognized for vesting purposes.
           3. [ ] service will only be recognized for eligibility purposes
           4. [ ] service prior to _____ will not be recognized.
           NOTE:  If the predecessor Employer maintained this qualified Plan,
                  then Years of Service (and/or Periods of Service) with such
                  predecessor Employer shall be recognized pursuant to Plan
                  Sections 1.57 and 1.85 and b.1. will apply.

18. SERVICE CREDITING METHOD (Plan Sections 1.57 and 1.85)
    NOTE: If no elections are made in this Section, then the Hours of Service
          Method will be used and the provisions set forth in the definition of
          Year of Service in Plan Section 1.85 will apply.
    ELAPSED TIME METHOD shall be used for the following purposes (select all
    that apply):
    a. [ ] N/A. Plan only uses the Hours of Service Method.
    b. [ ] all purposes. (If selected, skip to Question 19.)
    c. [ ] eligibility to participate.
    d. [ ] vesting.
    e. [X] sharing in allocations or contributions.

    HOURS OF SERVICE METHOD shall be used for the following purposes (select all
    that apply):
    f. [ ] N/A. Plan only uses the Elapsed Time Method.
    g. [X] eligibility to participate in the Plan. The eligibility computation
           period after the initial eligibility computation period shall...
           1. [X] shift to the Plan Year after the initial computation period.
           2. [ ] be based on the date an Employee first performs an Hour of
                  Service (initial computation period) and subsequent
                  computation periods shall be based on each anniversary date
                  thereof.
   h. [X] vesting. The vesting computation period shall be...
          1. [X] the Plan Year.
          2. [ ] the date an Employee first performs an Hour of Service and
                 each anniversary thereof.
   i. [ ] sharing in allocations or contributions (the computation period shall
          be the Plan Year).

   AND,  IF THE HOURS OF  SERVICE  METHOD IS BEING  USED,  the Hours of  Service
   will be  determined  on the basis of the method selected below. Only one
   method may be selected. The method selected below will be applied to
   (select j. or k.):
   j. [ ] all Employees.
   k. [X] salaried Employees only (for hourly Employees, actual Hours of
          Service will be used).

   ON THE BASIS OF:
   l. [ ] actual hours for which an Employee is paid or entitled to payment.
   m. [ ] days worked. An Employee will be credited with ten (10) Hours of
          of Service if under the Plan such Employee would be credited with at
          least one (1) Hour of Service during the day.
   n. [X] weeks worked. An Employee will be credited with forty-five (45) Hours
          of Service if under the Plan such Employee would be credited with at
          least one (1) Hour of Service during the week.
   o. [ ] semi-monthly payroll periods worked. An Employee will be credited with
          ninety-five (95) Hours of Service if under the Plan such Employee
          would be credited with at least one (1) Hour of Service during the
          semi-monthly payroll period.
   p. [ ] months worked. An Employee will be credited with one hundred ninety
          (190) Hours of Service if under the Plan such Employee would be
          credited with at least one (1) Hour of Service during the month.

 AND, a Year of Service means the applicable computation period during which an
 Employee has completed at least:
 q. [X] 1,000 (may not be more than 1,000) Hours of Service (if left blank, the
        Plan will use 1,000 Hours of Service).

VESTING

19. VESTING OF PARTICIPANT'S INTEREST (Plan Section 6.4(b))
    Vesting for Employer Contributions (except as otherwise elected in j. - q.
    below for matching contributions). The vesting schedule, based on a
    Participant's Years of Service (or Periods of Service if the Elapsed Time
    Method is elected), shall be as follows:
    a. [ ] 100% upon entering Plan.  (Required if  eligibility  requirement is
           greater than one (1) Year of Service or Period of Service.)

    b. [X] 3 Year Cliff:                   c. [ ] 5 Year Cliff:
             0-2 years       0 %                    0-4 years       0 %
             3 years       100 %                    5 years       100 %

    d. [ ] 6 Year Graded:                  e. [ ] 4 Year Graded:
             0-1 year        0 %                    1 year         25 %
             2 years        20 %                    2 years        50 %
             3 years        40 %                    3 years        75 %
             4 years        60 %                    4 years       100 %
             5 years        80 %
             6 years       100 %

    f. [ ] 5 Year Graded:                  g. [ ] 7 Year Graded:
             1 year         20 %                  0-2 years         0 %
             2 years        40 %                  3 years          20 %
             3 years        60 %                  4 years          40 %
             4 years        80 %                  5 years          60 %
             5 years       100 %                  6 years          80 %
                                                  7 years         100 %

    h. [ ] Other - Must be at least as liberal as either c. or g. above.

                   Service              Percentage
                   _______              __________
                   _______              __________
                   _______              __________
                   _______              __________
                   _______              __________
                   _______              __________
                   _______              __________

    VESTING FOR EMPLOYER MATCHING CONTRIBUTIONS
    The vesting schedule for Employer  matching  contributions, based on a
    Participant's  Years of Service (or Periods of Service if the Elapsed Time
    Method is elected) shall be as follows:
    i. [X] N/A. There are no matching  contributions subject to a vesting
           schedule OR the schedule in a.-h. above shall also apply to matching
           contributions.
    j. [ ] 100% upon entering Plan. (Required if  eligibility  requirement is
           greater than one (1) Year of Service or Period of Service.)
    k. [ ] 3 Year Cliff
    l. [ ] 5 Year Cliff
    m. [ ] 6 Year Graded
    n. [ ] 4 Year Graded
    o. [ ] 5 Year Graded
    p. [ ] 7 Year Graded
    q. [ ] Other - Must be at least as liberal as either l. or p. above.

                   Service             Percentage
                   _______             __________
                   _______             __________
                   _______             __________
                   _______             __________
                   _______             __________
                   _______             __________
                   _______             __________

20. FOR AMENDED PLANS (Plan Section 6.4(f))
    If the vesting schedule has been amended to a less favorable schedule,
    enter the pre-amended schedule below:
    a. [X] Vesting schedule has not been amended, amended schedule is more
           favorable in all years or prior schedule was immediate 100% vesting.
    b. [ ] Pre-amended schedule:

                  Service             Percentage
                  _______             __________
                  _______             __________
                  _______             __________
                  _______             __________
                  _______             __________
                  _______             __________
                  _______             __________

21. TOP HEAVY VESTING (Plan Section 6.4(c))
    If this Plan becomes a Top Heavy Plan, the following vesting schedule, based
    on number of Years of Service (or Periods of Service if the Elapsed Time
    Method is elected), shall apply and shall be treated as a Plan amendment
    pursuant to this Plan. Once effective, this schedule shall also apply to any
    contributions made before the Plan became a Top Heavy Plan and shall
    continue to apply if the Plan ceases to be a Top Heavy Plan unless an
    amendment is made to change the vesting schedule.
    a. [X] N/A (the regular vesting schedule already satisfies one of the
           minimum top heavy schedules).
    b. [ ] 6 Year Graded:
             0-1 year       0 %
             2 years       20 %
             3 years       40 %
             4 years       60 %
             5 years       80 %
             6 years      100 %
    c. [ ] 3 Year Cliff:
           0-2 years        0 %
           3 years        100 %
   d.  [ ] Other - Must be at least as liberal as either b. or c. above.

                   Service             Percentage
                   _______             __________
                   _______             __________
                   _______             __________
                   _______             __________
                   _______             __________
                   _______             __________
                   _______             __________

   NOTE: This Section does not apply to the account balances of any Participant
         who does not have an Hour of Service after the Plan has initially
         become top heavy. Such Participant's Account balance attributable to
         Employer contributions and Forfeitures will be determined without
         regard to this Section.

22. EXCLUDED VESTING SERVICE
    a. [X] No exclusions.
    b. [ ] Service prior to the Effective Date of the Plan or a predecessor
           plan.
    c. [ ] Service prior to the time an Employee has attained age 18.

23. VESTING FOR DEATH AND TOTAL AND PERMANENT DISABILITY
    Regardless of the vesting schedule, Participants shall become fully Vested
    upon (select a. or all that apply of b. and c.)
    a. [ ] N/A. Apply vesting schedule, or all contributions to the Plan are
           fully Vested.
    b. [X] Death.
    c. [X] Total and Permanent Disability.

24. NORMAL RETIREMENT AGE ("NRA") (Plan Section 1.45) means the:
    a. [X] date of a Participant's 65th birthday (not to exceed 65th).
    b. [ ] later of a Participant's ____ birthday (not to exceed 65th) or the
           ____ (not to exceed 5th) anniversary of the first day of the Plan
           Year in which participation in the Plan commenced.

25. NORMAL RETIREMENT DATE (Plan Section 1.46) means the:
    a. [X] Participant's "NRA".
    OR (select one)
    b. [ ] first day of the month coinciding with or next following the
           Participant's "NRA".
    c. [ ] first day of the month nearest the Participant's "NRA".
    d. [ ] Anniversary Date coinciding with or next following the Participant's
           "NRA".
    e. [ ] Anniversary Date nearest the Participant's "NRA".

26. EARLY RETIREMENT DATE (Plan Section 1.15) means the:
    a. [X] No Early Retirement provision provided.
    b. [ ] date on which a Participant...
    c. [ ] first day of the month coinciding with or next following the date
           on which a Participant...
    d. [ ] Anniversary Date coinciding with or next following the date on which
           a Participant...

    AND, if b., c., or d. is selected...
    e. [ ] attains age ________.
    f. [ ] attains age ________ and completes at least Years of Service (or
           Periods of Service) for vesting purposes.

    AND, if b., c. or d. is selected, shall a Participant become fully Vested
    upon attainment of the Early Retirement Date?
    g. [ ] Yes
    h. [ ] No

COMPENSATION

27. COMPENSATION (Plan Section 1.11) with respect to any Participant means:
    a. [ ] Wages, tips and other compensation on Form W-2.
    b. [ ] Section 3401(a) wages (wages for withholding purposes).
    c. [X] 415 safe-harbor compensation.

    COMPENSATION shall be based on the following determination period:
    d. [X] the Plan Year.
    e. [ ] the Fiscal Year coinciding with or ending within the Plan Year.
    f. [ ] the calendar year coinciding with or ending within the Plan Year.
    NOTE:  The Limitation  Year for Code Section 415 purposes  shall be the same
           as the determination  period for  Compensation unless an alternative
           period is specified: ________ (must be a consecutive twelve month
           period).

    ADJUSTMENTS TO COMPENSATION
    g. [ ] N/A. No adjustments.
    h. [X] Compensation shall be adjusted by: (select all that apply)
           1. [X] including compensation which is not currently includible in
                  the Participant's gross income by reason of the application of
                  Code Sections 125 (cafeteria plan), 132(f)(4) (qualified
                  transportation fringe), 402(e)(3) (401(k) plan), 402(h)(1)(B)
                  (simplified employee pension plan), 414(h) (employer pickup
                  contributions under a governmental plan), 403(b) (tax
                  sheltered annuity) or 457(b)(eligible deferred compensation
                  plan).
           2. [ ] excluding reimbursements or other expense allowances, fringe
                  benefits (cash or non-cash), moving expenses, deferred
                  compensation (other than deferrals specified in 1. above) and
                  welfare benefits.
           3. [ ] excluding Compensation paid during the determination
                  period while not a Participant in the component of the Plan
                  for which the definition is being used.
           4. [ ] excluding overtime.
           5. [ ] excluding bonuses.
           6. [ ] excluding commissions.
           7. [X] other: excluding relocation costs, group term life,
                  flexible benefits.
           NOTE:  Options 4., 5., 6. or 7. may not be selected if an integrated
                  allocation formula is selected (i.e., if 33.f. is selected).
                  In addition, if 4., 5., 6., or 7. is selected, the definition
                  of Compensation could violate the nondiscrimination rules.

    HOWEVER, FOR  SALARY  DEFERRAL  AND  MATCHING  PURPOSES  Compensation shall
    be adjusted by (for  such  purposes, the Plan automatically includes
    Elective Deferrals and other amounts in h.1. above):
    i. [X] N/A. No adjustments or same adjustments as in above.
    j. [ ] Compensation shall be adjusted by: (select all that apply)
           1. [ ] excluding reimbursements or other expense allowances, fringe
                  benefits (cash or non-cash), moving expenses, deferred
                  compensation (other than deferrals specified in h.1. above)
                  and welfare benefits.
           2. [ ] excluding Compensation paid during the determination period
                  while not a Participant in the component of the Plan for which
                  the definition is being used.
           3. [ ] excluding overtime
           4. [ ] excluding bonuses
           5. [ ] excluding commissions
           6. [ ] other:________________________________________________________

CONTRIBUTIONS AND ALLOCATIONS

28. SALARY REDUCTION ARRANGEMENT - ELECTIVE DEFERRALS (Plan Section 12.2)
    Each Participant may elect to have Compensation deferred by:
    a. [ ] _____%.
    b. [ ] up to ____%.
    c. [ ] from ____% to ____%.
    d. [X] up to the maximum percentage allowable not to exceed the limits of
           Code Sections 401(k), 402(g), 404 and 415.

    AND, Participants who are Highly Compensated Employees determined as of
    the beginning of a Plan Year may only elect to defer Compensation by:
    e. [X] Same limits as specified above.
    f. [ ] The percentage equal to the deferral limit in effect under Code
           Section 402(g)(3) for the calendar year that begins with or within
           the Plan Year divided by the annual compensation limit in effect for
           the Plan Year under Code Section 401(a)(17).

    MAY PARTICIPANTS make a special salary deferral election with respect to
    bonuses?
    g. [X] No.
    h. [ ] Yes, a Participant may elect to defer up to _____% of any bonus.

    PARTICIPANTS MAY commence salary deferrals on the effective date of
    participation and on the first day of each month (must be at least once
    each calendar year).

        Participants may modify salary deferral elections:
        1. [ ] As of each payroll period
        2. [X] On the first day of the month
        3. [ ] On the first day of each Plan Year quarter
        4. [ ] On the first day of the Plan Year or the first day of the 7th
               month of the Plan Year
        5. [ ] Other: _______ (must be at least once each calendar year)

    AUTOMATIC ELECTION: Shall Participants who do not affirmatively elect to
    receive cash or have a specified amount contributed to the Plan
    automatically have Compensation deferred?
        i. [X] No.
        j. [ ] Yes, by ____% of Compensation.

    SHALL THERE BE a special effective date for the salary deferral component of
    the Plan?
        k. [X] No.
        l. [ ] Yes, the effective date of the salary deferral component of the
               Plan is (enter month day, year).

29. SIMPLE 401(k) PLAN ELECTION (Plan Section 13.1)
    Shall the simple 401(k) provisions of Article XIII apply?
    a. [X] No. The simple 401(k) provisions will not apply.
    b. [ ] Yes. The simple 401(k) provisions will apply.

30. 401(k) SAFE HARBOR PROVISIONS (Plan Section 12.8)
    Will the ADP and/or ACP test safe harbor provisions be used? (select a., b.
    or c.)
    a. [X] No. (If selected, skip to Question 31.)
    b. [ ] Yes, but only the ADP (and NOT the ACP) Test Safe Harbor provisions
           will be used.
    c. [ ] Yes, both the ADP and ACP Test Safe Harbor provisions will be used.

           IF c. is selected, does the Plan permit matching contributions in
           addition to any safe harbor contributions elected in d. or e. below?
           1. [ ] No or N/A. Any matching contributions, other than any Safe
                  Harbor Matching Contributions elected in d. below, will be
                  suspended in any Plan Year in which the safe harbor provisions
                  are used.
           2. [ ] Yes, the Employer may make matching contributions in addition
                  to any Safe Harbor Matching contributions elected in d. below.
                  (If elected, complete the provisions of the Adoption Agreement
                  relating to matching contributions (i.e., Questions 31. and
                  32.) that will apply in addition to any elections made in d.
                  below. NOTE:  Regardless of any election made in Question 31.,
                  the Plan automatically provides that only Elective Deferrals
                  up to 6% of Compensation are taken into account in applying
                  the match set forth in that Question and that the maximum
                  discretionary matching contribution that may be made on behalf
                  of any Participant is 4% of Compensation.)

    THE EMPLOYER WILL MAKE THE FOLLOWING ADP TEST SAFE HARBOR CONTRIBUTION FOR
    THE PLAN YEAR:
    NOTE:  The ACP Test Safe Harbor is automatically satisfied if the only
           matching contribution made to the Plan is either (1) a Basic Matching
           Contribution or (2) an Enhanced Matching Contribution that does not
           provide a match on Elective Deferrals in excess of 6% of
           Compensation.
    d. [ ] Safe Harbor Matching Contribution (select 1. or 2. AND 3.)
           1. [ ] Basic Matching Contribution. The Employer will make Matching
                  Contributions to the account of each "Eligible Participant" in
                  an amount equal to the sum of 100% of the amount of the
                  Participant's Elective Deferrals that do not exceed 3% of the
                  Participant's Compensation, plus 50% of the amount of the
                  Participant's Elective Deferrals that exceed 3% of the
                  Participant's Compensation but do not exceed 5% of the
                  Participant's Compensation.
           2. [ ] Enhanced Matching Contribution. The Employer will make
                  Matching Contributions to the account of each "Eligible
                  Participant" in an amount equal to the sum of:
                  a. [ ] ____% (may not be less than 100%) of the Participant's
                         Elective Deferrals that do not exceed ____% (if over 6%
                         or if left blank, the ACP test will still apply) of the
                         Participant's Compensation, plus
                  b. [ ] ____% of the Participant's Elective Deferrals that
                         exceed ____ % of the Participant's Compensation but do
                         not exceed ____% (if over 6% or if left blank, the ACP
                         test will still apply) of the Participant's
                         Compensation.
                         NOTE: a. and b. must be completed so that, at any rate
                         of Elective Deferrals, the matching contribution is at
                         least equal to the matching contribution receivable if
                         the Employer were making Basic Matching Contributions,
                         but the rate of match cannot increase as deferrals
                         increase. For example, if a. is completed to provide a
                         match equal to 100% of deferrals up to 4% of
                         Compensation, then b. need not be completed.
           3. [ ] The safe harbor matching contribution will be determined on
                  the following basis (and Compensation for such purpose will be
                  based on the applicable period):
                  a. [ ] the entire Plan Year.
                  b. [ ] each payroll period.
                  c. [ ] all payroll periods ending with or within each month.
                  d. [ ] all payroll periods ending with or within the Plan Year
                         quarter.
    e. [ ] Nonelective Safe Harbor Contributions (select one)
           1. [ ] The Employer will make a Safe Harbor Nonelective Contribution
                  to the account of each "Eligible Participant" in an amount
                  equal to ____% (may not be less than 3%) of the Employee's
                  Compensation for the Plan Year.
           2. [ ] The Employer will make a Safe Harbor Nonelective Contribution
                  to another defined contribution plan maintained by the
                  Employer (specify the name of the other plan): ____.

    FOR PURPOSES OF THE ADP Test Safe Harbor contribution, the term "Eligible
    Participant" means any Participant who is eligible to make Elective
    Deferrals with the following exclusions:
    f. [ ] Highly Compensated Employees.
    g. [ ] Employees who have not satisfied the greatest minimum age and
           service conditions permitted under Code Section 410(a).
    h. [ ] Other:______________________________________________________________
           (must be a category that could be excluded under the permissive or
            mandatory disaggregation rules of Regulations 1.401(k)-1(b)(3) and
            1.401(m)-1(b)(3)).

    SPECIAL EFFECTIVE DATE OF ADP AND ACP TEST SAFE HARBOR PROVISIONS
    i. [ ] N/A. The safe harbor provisions are effective as of the later of the
           Effective Date of this Plan or, if this is an amendment or
           restatement, the effective date of the amendment or restatement.
    j. [ ] The ADP and ACP Test Safe Harbor provisions are effective for the
           Plan Year beginning:
           _____________ (enter  the  first  day of the Plan Year for which the
           provisions are (or, for GUST updates, were) effective and, if
           necessary, enter any other special effective dates that apply with
           respect to the provisions).

31. FORMULA FOR DETERMINING EMPLOYER MATCHING CONTRIBUTIONS (Plan Section
    12.1(a)(2))
    NOTE:  Regardless of any election below, if the ACP test safe harbor is
           being used (i.e., Question 30.c. is selected), then the Plan
           automatically provides that only Elective Deferrals up to 6% of
           Compensation are taken into account in applying the match set forth
           below and that the maximum discretionary matching contribution that
           may be made on behalf of any Participant is 4% of Compensation.
    a. [ ] N/A. There will not be any matching contributions (Skip to
           Question 33).
    b. [X] The Employer ... (select 1. or 2.)
           1. [ ] may make matching contributions equal to a discretionary
                  percentage, to be determined by the Employer, of the
                  Participant's Elective Deferrals.
           2. [X] will make matching contributions equal to 100% (e.g., 50) of
                  the Participant's Elective Deferrals, plus:
                  a. [ ] N/A.
                  b. [X] an additional discretionary percentage, to be
                         determined by the Employer.

                  AND, in determining the matching contribution above, only
                  Elective Deferrals up to the percentage or dollar amount
                  specified below will be matched:(select 3. and/or 4. OR 5.)
                  3. [X] 4 % of a Participant's Compensation.
                  4. [ ] $______.
                  5. [ ] a discretionary percentage of a Participant's
                         Compensation or a discretionary dollar amount, the
                         percentage or dollar amount to be determined by the
                         Employer on a uniform basis to all Participants.
    c. [ ] The Employer may make matching contributions equal to a discretionary
           percentage, to be determined by the Employer, of each tier, to be
           determined by the Employer, of the Participant's Elective Deferrals.
    d. [ ] The Employer will make matching contributions equal to the sum of
           _____% of the portion of the Participant's Elective Deferrals which
           do not exceed ____% of the Participant's Compensation or $____ plus
           ____% of the portion of the Participant's Elective Deferrals which
           exceed ____% of the Participant's Compensation or $______, but does
           not exceed ____% of the Participant's Compensation or $____.
    NOTE:  If c. or d. above is elected, the Plan may violate the Code Section
           401(a)(4) nondiscrimination requirements if the rate of matching
           contributions increases as a Participant's Elective Deferrals or
           Years of Service (or Periods of Service) increase.

    PERIOD OF DETERMINING MATCHING CONTRIBUTIONS
    Matching contributions will be determined on the following basis (and any
    Compensation or dollar limitation used in determining the match will be
    based on the applicable period):
    e. [X] the entire Plan Year.
    f. [ ] each payroll period.
    g. [ ] all payroll periods ending within each month.
    h. [ ] all payroll periods ending with or within the Plan Year quarter.

    THE MATCHING CONTRIBUTION MADE ON BEHALF OF ANY PARTICIPANT for any Plan
    Year will not exceed:
    i. [X] N/A.
    j. [ ] $_______.

    MATCHING CONTRIBUTIONS WILL BE MADE ON BEHALF OF:
    k. [X] all Participants.
    l. [ ] only Non-Highly Compensated Employees.

    SHALL THE MATCHING CONTRIBUTIONS BE QUALIFIED MATCHING CONTRIBUTIONS?
    m. [ ] Yes. If elected, ALL matching contributions will be fully Vested and
           will be subject to restrictions on withdrawals. In addition,
           Qualified Matching Contributions may be used in either the ADP or ACP
           test.
    n. [X] No.

32. ONLY PARTICIPANTS WHO SATISFY THE FOLLOWING CONDITIONS WILL BE ELIGIBLE TO
    SHARE IN THE ALLOCATION OF MATCHING CONTRIBUTIONS:

    REQUIREMENTS FOR PARTICIPANTS WHO ARE ACTIVELY EMPLOYED AT THE END OF THE
    PLAN YEAR.
     a. [ ] N/A.
     b. [X] No service requirement.
     c. [ ] A Participant must complete a Year of Service (or Period of
            Service if the Elapsed Time Method is elected). (Could cause Plan to
            violate coverage requirements under Code Section 410(b).)
     d. [ ] A Participant must complete at least _____ (may not be more than
            1,000) Hours of Service during the Plan Year.(Could cause the Plan
            to violate coverage requirements under Code Section 410(b).)

     REQUIREMENTS FOR PARTICIPANTS WHO ARE NOT ACTIVELY EMPLOYED AT THE END OF
     THE PLAN YEAR
     (except as otherwise provided in i. through k. below).
     e. [ ] A Participant must complete more than ____ Hours of Service (not
            more than 500)(or ____ months of service (not more than three (3))
            if the Elapsed Time Method is elected).
     f. [ ] A Participant must complete a Year of Service (or Period of
            Service if the Elapsed Time Method is elected). (Could cause the
            Plan to violate coverage requirements under Code Section 410(b).)
     g. [X] Participants will NOT share in such allocations, regardless of
            service. (Could cause the Plan to violate coverage requirements
            under Code Section 410(b).)
     h. [ ] Participants will share in such allocations, regardless of
            service.

     PARTICIPANTS WHO ARE NOT ACTIVELY EMPLOYED AT THE END OF THE PLAN YEAR due
     to the following shall be eligible to share in the allocation of matching
     contributions regardless of the above conditions (select all that apply):
     i. [X] Death.
     j. [X] Total and Permanent Disability.
     k. [X] Early or Normal Retirement.

     AND, if 32.c., d., f., or g. is selected, shall the 410(b) ratio percentage
     fail safe  provisions apply (Plan Section 12.3(f))?
     l. [ ] No or N/A.
     m. [X] Yes (If selected, the Plan must satisfy the ratio percentage test of
            Code Section 410(b).)

33.  FORMULA FOR DETERMINING EMPLOYER'S PROFIT SHARING CONTRIBUTION (Plan
     Section 12.1(a)(3)) (d. may be selected in addition to b. or c.)
     a. [ ] N/A. No Employer Profit Sharing Contributions may be made (other
            than top heavy minimum contributions) (Skip to Question 34.)
     b. [X] Discretionary, to be determined by the Employer, not limited to
            current or accumulated Net Profits.
     c. [ ] Discretionary, to be determined by the Employer, out of current or
            accumulated Net Profits.
     d. [ ] Prevailing Wage Contribution. The Employer will make a Prevailing
            Wage Contribution on behalf of each Participant who performs
            services subject to the Service Contract Act, Davis-Bacon Act or
            similar Federal, State, or Municipal Prevailing Wage statutes. The
            Prevailing Wage Contribution shall be an amount equal to the balance
            of the fringe benefit payment for health and welfare for each
            Participant (after deducting the cost of cash differential payments
            for the Participant) based on the hourly contribution rate for the
            Participant's employment classification, as designated on Schedule A
            as attached to this Adoption Agreement. Notwithstanding anything in
            the Plan to the contrary, the Prevailing Wage Contribution shall be
            fully Vested. Furthermore, the Prevailing Wage Contribution shall
            not be subject to any age or service requirements set forth in
            Question 15. nor to any service or employment conditions set forth
            in Question 35.

            AND, if d. is selected, is the Prevailing Wage Contribution
            considered a Qualified Non-Elective Contribution?
            1. [ ] Yes.
            2. [ ] No.

            AND, if d. is selected, shall the amounts allocated on behalf of a
            Participant for a Plan Year pursuant to e. or f. below be reduced
            (offset) by the Prevailing Wage Contribution made on behalf of such
            Participant for the Plan Year under this Plan?
            3. [ ] No (If selected, then the Prevailing Wage Contribution will
                   be added to amounts allocated pursuant to e. or f. below.)
            4. [ ] Yes.

    CONTRIBUTION ALLOCATIONS
    If b. or c. above is selected, the Employer's  discretionary profit sharing
    contribution for a Plan Year will be allocated as follows:

    e. [X] NON-INTEGRATED ALLOCATION
           1. [X] In the same ratio as each Participant's Compensation bears to
                  the total of such Compensation of all Participants.
           2. [ ] In the same dollar amount to all Participants (per capita).
           3. [ ] In the same dollar amount per Hour of Service completed by
                  each Participant.
           4. [ ] In the same proportion that each Participant's points bears to
                  the total of such points of all Participants. A Participant's
                  points with respect to any Plan Year shall be computed as
                  follows (select all that apply):
                  a. [ ] ____ point(s) shall be allocated for each Year of
                         Service (or Period of Service if the Elapsed Time
                         Method is elected). However, the maximum Years of
                         Service (or Periods of Service) taken into account
                         shall not exceed ____ (leave blank if no limit on
                         service applies).
                  b. [ ] ____ point(s) shall be allocated for each full $____
                        (may not exceed $200) of Compensation.
                  c. [ ] ____ point(s) shall be allocated for each year of age
                         as of the end of the Plan Year.

    f. [ ] INTEGRATED ALLOCATION
           In accordance with Plan Section 4.3(b)(2) based on a Participant's
           Compensation in excess of:
           1. [ ] The Taxable Wage Base.
           2. [ ] ____% (not to exceed 100%) of the Taxable Wage Base. (See Note
                  below)
           3. [ ] 80% of the Taxable Wage Base plus $1.00.
           4. [ ] $____ (not greater than the Taxable Wage Base). (See Note
                  below)
           NOTE:  The integration percentage of 5.7% shall be reduced to:
                  1. 4.3% if 2. or 4. above is more than 20% and less than or
                     equal to 80% of the Taxable Wage Base.
                  2. 5.4% if 3. is elected or if 2. or 4. above is more than 80%
                     of the Taxable Wage Base.

34. QUALIFIED NON-ELECTIVE CONTRIBUTIONS (Plan Section 12.1(a)(4))
    NOTE: Regardless of any election made in this Question, the Plan
    automatically permits Qualified Non-Elective Contributions to correct a
    failed ADP or ACP test.
    a. [X] N/A. There will be no additional Qualified Non-Elective Contributions
           except as otherwise provided in the Plan.
    b. [ ] The Employer will make a Qualified Non-Elective Contribution equal to
           ____% of the total Compensation of those Participants eligible to
           share in the allocations.
    c. [ ] The Employer may make a Qualified Non-Elective Contribution in an
           amount to be determined by the Employer, to be allocated in
           proportion to the Compensation of those Participants eligible to
           share in the allocations.
    d. [ ] The Employer may make a Qualified Non-Elective Contribution in an
           amount to be determined by the Employer, to be allocated equally to
           all Participants eligible to share in the allocations (per capita).

    AND, if b., c., or d. is selected, the Qualified Non-Elective Contributions
    above will be made on behalf of:
    e. [ ] all Participants.
    f. [ ] only Non-Highly Compensated Employees.

35. REQUIREMENTS TO SHARE IN ALLOCATIONS OF EMPLOYER DISCRETIONARY PROFIT
    SHARING CONTRIBUTION, QUALIFIED NON-ELECTIVE CONTRIBUTIONS (other than
    Qualified Non-Elective Contributions under Plan Sections 12.5(c) and
    12.7(g)) AND FORFEITURES
    a. [ ] N/A. Plan does not permit such contributions.
    b. [X] Requirements for Participants who are actively employed at the end of
           the Plan Year.
           1. [X] No service requirement.
           2. [ ] A Participant must complete a Year of Service (or Period of
                  Service if the Elapsed Time Method is elected).
                  (Could cause Plan to violate coverage requirements under Code
                  Section 410(b).)
           3. [ ] A Participant must complete at least ___ (may not be more than
                  1,000) Hours of Service during the Plan Year. (Could cause the
                  Plan to violate coverage requirements under Code Section
                  410(b).)

    REQUIREMENTS FOR PARTICIPANTS WHO ARE NOT ACTIVELY  EMPLOYED AT THE END OF
    THE PLAN YEAR (except as otherwise provided in g. through i. below).
    c. [ ] A Participant must complete more than _____ Hours of Service (not
           more than 500)(or ____ months of service (not more than three (3)) if
           the Elapsed Time Method is elected).
    d. [ ] A Participant must complete a Year of Service (or Period of Service
           if the Elapsed Time Method is elected). (Could cause Plan to violate
           coverage requirements under Code Section 410(b).)
    e. [X] Participants will NOT share in such allocations, regardless of
           service. (Could cause Plan to violate coverage requirements under
           Code Section 410(b).)
    f. [ ] Participants will share in such allocations, regardless of service.

    PARTICIPANTS WHO ARE NOT ACTIVELY EMPLOYED AT THE END OF THE PLAN YEAR due
    to the following will be eligible to share in the allocations regardless of
    the above conditions (select all that apply):
    g. [X] Death.
    h. [X] Total and Permanent Disability.
    i. [X] Early or Normal Retirement.

    AND, if 35.b.2, b.3, d. or e. is selected, shall the 410(b) ratio percentage
    fail safe provisions apply (Plan Section 12.3(f))?
    j. [ ] No or N/A.
    k. [X] Yes (If selected, the Plan must satisfy the ratio percentage test of
           Code Section 410(b)).

36. FORFEITURES (Plan Sections 1.27 and 4.3(e))
    Except as provided in Plan Section 1.27, a Forfeiture will occur (if no
    election is made, a. will apply):
    a. [X] as of the earlier of (1) the last day of the Plan Year in which the
           Former Participant incurs five (5) consecutive 1-Year Breaks in
           Service, or (2) the distribution of the entire Vested portion of the
           Participant's Account.
    b. [ ] as of the last day of the Plan Year in which the Former Participant
           incurs five (5) consecutive 1-Year Breaks in Service.

    Will Forfeitures first be used to pay any administrative expenses?
    c. [X] Yes.
    d. [ ] No.

    AND, EXCEPT as otherwise provided below with respect to Forfeitures
    attributable to matching contributions, any remaining Forfeitures will be...
    e. [ ] added to any Employer discretionary contribution.
    f. [X] used to reduce any Employer contribution.
    g. [ ] added to any Employer matching contribution and allocated as an
           additional matching contribution.
    h. [ ] allocated to all Participants eligible to share in the allocations in
           the same proportion that each Participant's Compensation for the Plan
           Year bears to the Compensation of all Participants for such year.

    FORFEITURES OF MATCHING CONTRIBUTIONS WILL BE...
    i. [X] N/A. Same as above or no matching contributions.
    j. [ ] used to reduce the Employer's matching contribution.
    k. [ ] added to any Employer matching contribution and allocated as an
           additional matching contribution.
    l. [ ] added to any Employer discretionary profit sharing contribution.
    m. [ ] allocated to all Participants eligible to share in the matching
           allocations (regardless of whether a Participant elected any salary
           reductions) in proportion to each such Participant's Compensation for
           the year.
    n. [ ] allocated to all Non-Highly Compensated Employees eligible to share
           in the matching allocations (regardless of whether a Participant
           elected any salary reductions) in proportion to each such
           Participant's Compensation for the year.

37. ALLOCATIONS OF EARNINGS (Plan Section 4.3(c))
    Allocations of earnings with respect to amounts which are not subject to
    Participant directed investments and which are contributed to the Plan after
    the previous Valuation Date will be determined...
    a. [X] N/A. All assets in the Plan are subject to Participant investment
           direction.
    b. [ ] by using a weighted average based on the amount of time that has
           passed between the date a contribution or distribution was made and
           the date of the prior Valuation Date.
    c. [ ] by treating one-half of all such contributions as being a part of
           the Participant's nonsegregated account balance as of the previous
           Valuation Date.
    d. [ ] by using the method specified in Plan Section 4.3(c) (balance
           forward method).
    e. [ ] other: _____________________________________________________________
           (must be a definite predetermined formula that is not based on
           Compensation and that satisfies the nondiscrimination requirements of
           Regulation 1.401(a)(4)-4 and is applied uniformly to all
           Participants).

38. LIMITATIONS ON ALLOCATIONS (Plan Section 4.4)
    If any Participant is covered under another qualified defined contribution
    plan maintained by the Employer, other than a Master or Prototype Plan, or
    if the Employer maintains a welfare benefit fund, as defined in Code Section
    419(e), or an individual medical account, as defined in Code Section 415(l)
    (2), under which amounts are treated as Annual Additions with respect to any
    Participant in this Plan:
    a. [X] N/A. The Employer does not maintain another qualified defined
           contribution plan.
    b. [ ] The provisions of Plan Section 4.4(b) will apply as if the other
           plan were a Master or Prototype Plan.
    c. [ ] Specify the method under which the plans will limit total Annual
           Additions to the Maximum Permissible Amount, and will properly reduce
           any Excess Amounts, in a manner that precludes Employer discretion:
           ___________________________________________________________________

DISTRIBUTIONS

39. FORM OF DISTRIBUTIONS (Plan Sections 6.5 and 6.6)
    Distributions under the Plan may be made in (select all that apply)...
    a. [X] lump-sums.
    b. [ ] substantially equal installments.
    c. [X] partial withdrawals provided the minimum withdrawal is $1,000.

    AND, pursuant to Plan Section 6.12,
    d. [X] no annuities are allowed (Plan Section 6.12(b) will apply and the
           joint and survivor rules of Code Sections 401(a)(11) and 417 will not
           apply to the Plan).

           AND, if this is an amendment that is eliminating annuities, then an
           annuity form of payment is not available with respect to
           distributions that have an Annuity Starting Date beginning on or
           after:
           1. [X] N/A
           2. [ ] ____ (may not be a retroactive date), except that regardless
                  of the date entered, the amendment will not be effective prior
                  to the time set forth in Plan Section 8.1(e).

    e. [ ] annuities are allowed as the normal form of distribution (Plan
           Section 6.12 will not apply and the joint and survivor rules of Code
           Sections 401(a)(11) and 417 will automatically apply). If elected,
           the Pre-Retirement Survivor Annuity (minimum spouse's death benefit)
           will be equal to:
           1. [ ] 100% of Participant's interest in the Plan.
           2. [ ] 50% of Participant's interest in the Plan.
           3. [ ] ____% (may not be less than 50%) of a Participant's interest
                  in the Plan.

           AND, the normal form of the Qualified Joint and Survivor Annuity will
           be a joint and 50% survivor annuity unless otherwise elected below:
           4. [ ] N/A.
           5. [ ] Joint and 100% survivor annuity.
           6. [ ] Joint and 75% survivor annuity.
           7. [ ] Joint and 66 2/3% survivor annuity.

    NOTE:  If only a portion of the Plan assets may be distributed in an annuity
           form of payment, then select d. AND e. and the assets subject to the
           joint and survivor annuity provisions will be those assets
           attributable to (specify):(e.g., the money purchase pension plan that
           was merged into this Plan).

    AND, distributions may be made in...
    f. [X] cash only (except for insurance or annuity contracts).
    g. [ ] cash or property.

40. CONDITIONS FOR DISTRIBUTIONS UPON TERMINATION OF EMPLOYMENT
    Distributions upon termination of employment pursuant to Plan Section 6.4(a)
    of the Plan will not be made unless the following conditions have been
    satisfied:
    a. [ ] No distributions may be made until a Participant has reached Early or
           Normal Retirement Date.
    b. [X] Distributions may be made as soon as administratively feasible at the
           Participant's election.
    c. [ ] The Participant has incurred ________ 1-Year Break(s) in Service (or
           Period(s) of  Severance if the Elapsed Time Method is elected).
    d. [ ] Distributions may be made at the Participant's election as soon as
           administratively feasible after the Plan Year coincident with or next
           following termination of employment.
    e. [ ] Distributions may be made at the Participant's election as soon as
           administratively feasible after the Plan Year quarter coincident with
           or next following termination of employment.
    f. [ ] Distributions may be made at the Participant's election as soon as
           administratively feasible after the Valuation Date coincident with or
           next following termination of employment.
    g. [ ] Distributions may be made at the Participant's election as soon as
           administratively feasible _______ months following termination of
           employment.
    h. [ ] Other:______________________________________________________________
           (must be objective conditions which are ascertainable and are not
           subject to Employer discretion except as otherwise permitted in
           Regulation 1.411(d)-4 and may not exceed the limits of Code Section
           401(a)(14) as set forth in Plan Section 6.7).

41. INVOLUNTARY DISTRIBUTIONS
    Will involuntary distributions of amounts less than $5,000 be made in
    accordance with the provisions of Sections 6.4, 6.5 and 6.6?
    a. [X] Yes
    b. [ ] No

42. MINIMUM DISTRIBUTION TRANSITIONAL RULES (Plan Section 6.5(e))
    NOTE: This Section does not apply to (1) a new Plan or (2) an amendment or
          restatement of an existing Plan that never contained the provisions of
          Code Section 401(a)(9) as in effect prior to the amendments made by
          the Small Business Job Protection Act of 1996 (SBJPA).
    The "required beginning date" for a Participant who is not a "five percent
    (5%) owner" is:
    a. [ ] N/A. (This is a new Plan or this Plan has never included the
           pre-SBJPA provisions.)
    b. [ ] April 1st of the calendar year following the year in which the
           Participant  attains age 70 1/2. (The pre-SBJPA rules will continue
           to apply.)
    c. [X] April 1st of the calendar year following the later of the year in
           which the Participant attains age 70 1/2 or retires (the
           post-SBJPA rules), with the following exceptions (select one or both
           and if no election is made, both will apply effective as of
           January 1, 1996):
           1. [X] A Participant who was already receiving required minimum
                  distributions under the pre-SBJPA rules as of January 1, 1997
                  (not earlier than January 1, 1996) may elect to stop receiving
                  distributions and have them recommence in accordance with the
                  post-SBJPA rules. Upon the recommencement of distributions, if
                  the Plan permits annuities as a form of distribution then the
                  following will apply:
                  a. [X] N/A. Annuity distributions are not permitted.
                  b. [ ] Upon the recommencement of distributions, the original
                         Annuity Starting Date will be retained.
                  c. [ ] Upon the recommencement of distributions, a new
                         Annuity Starting Date is created.
           2. [X] A Participant who had not begun receiving required minimum
                  distributions as of January 1, 1997 (not earlier than
                  January 1, 1996) may elect to defer commencement of
                  distributions until retirement. The option to defer the
                  commencement of distributions (i.e., to elect to receive
                  in-service distributions upon attainment of age 70 1/2) will
                  apply to all such Participants unless the option below is
                  elected:
                  a. [X] N/A.
                  b. [ ] The in-service distribution option is eliminated with
                         respect to Participants who attain age 70 1/2 in or
                         after the calendar year that begins after the later of
                         (1) December 31, 1998, or (2) the adoption date of the
                         amendment and restatement to bring the Plan into
                         compliance with SBJPA. (This option may only be elected
                         if the amendment to eliminate the in-service
                         distribution is adopted no later than the last day of
                         the remedial amendment period that applies to the Plan
                         for changes under SBJPA.)

43. DISTRIBUTIONS UPON DEATH (Plan Section 6.6(h))
    Distributions upon the death of a Participant prior to receiving any
    benefits shall...
    a. [X] be made pursuant to the election of the Participant or beneficiary.
    b. [ ] begin within 1 year of death for a designated beneficiary and be
           payable over the life (or over a period not exceeding the life
           expectancy) of such beneficiary, except that if the beneficiary is
           the Participant's spouse, begin prior to December 31st of the year in
           which the Participant would have attained age 70 1/2.
    c. [ ] be made within 5 (or if lesser _____) years of death for all
           beneficiaries.
    d. [ ] be made within 5 (or if lesser _____) years of death for all
           beneficiaries, except that if the beneficiary is the Participant's
           spouse, begin prior to December 31st of the year in which the
           Participant would have attained age 70 1/2 and be payable over the
           life (or over a period not exceeding the life expectancy) of such
           surviving spouse.

44. HARDSHIP DISTRIBUTIONS (Plan Sections 6.11 and/or 12.9)
    a. [ ] No hardship distributions are permitted.
    b. [X] Hardship distributions are permitted from the following accounts
           (select all that apply):
           1. [X] All accounts.
           2. [ ] Participant's Elective Deferral Account.
           3. [ ] Participant's Account attributable to Employer matching
                  contributions.
           4. [ ] Participant's Account attributable to Employer profit sharing
                  contributions.
           5. [ ] Participant's Rollover Account.
           6. [ ] Participant's Transfer Account.
           7. [ ] Participant's Voluntary Contribution Account.
     NOTE: Distributions from a Participant's Elective Deferral Account are
           limited to the portion of such account attributable to such
           Participant's Elective Deferrals (and earnings attributable thereto
           up to December 31, 1988). Hardship distributions are not permitted
           from a Participant's Qualified Non-Elective Account (including any
           401(k) Safe Harbor Contributions) or Qualified Matching Contribution
           Account.

     AND, shall the safe harbor hardship rules of Plan Section 12.9 apply to
     distributions made from all accounts? (Note: The safe harbor hardship rules
     automatically apply to hardship distributions of Elective Deferrals.)
     c. [ ] No or N/A. The provisions of Plan Section 6.11 apply to hardship
            distributions from all accounts other than a Participant's Elective
            Deferral Account.
     d. [X] Yes. The provisions of Plan Section 12.9 apply to all hardship
            distributions.

     AND, are distributions restricted to those accounts in which a Participant
     is fully Vested?
     e. [X] Yes, distributions may only be made from accounts which are fully
            Vested.
     f. [ ] No. (If elected, the fraction at Plan Section 6.5(h) shall apply in
            determining vesting of the portion of the account balance not
            withdrawn).

     AND, the minimum hardship distribution shall be...
     g. [X] N/A. There is no minimum.
     h. [ ] $_____ (may not exceed $1,000).

45. IN-SERVICE DISTRIBUTIONS (Plan Section 6.10)
    a. [ ] In-service distributions may not be made (except as otherwise
           elected for Hardship Distributions).
    b. [X] In-service distributions may be made to a Participant who has not
           separated from service provided any of the following conditions have
           been satisfied (select all that apply):
           1. [X] the Participant has attained age 59-1/2.
           2. [ ] the Participant has reached Normal Retirement Age.
           3. [ ] the Participant has been a Participant in the Plan for at
                  least ____ years (may not be less than five (5)).
           4. [ ] the amounts being distributed have accumulated in the Plan for
                  at least two (2) years.

    AND, in-service distributions are permitted from the following accounts
    (select all that apply):
    c. [X] All accounts.
    d. [ ] Participant's Elective Deferral Account.
    e. [ ] Qualified Matching Contribution Account and portion of Participant's
           Account attributable to Employer matching contributions.
    f. [ ] Participant's Account attributable to Employer profit sharing
           contributions.
    g. [ ] Qualified Non-Elective Contribution Account.
    h. [ ] Participant's Rollover Account.
    i. [ ] Participant's Transfer Account.
    j. [ ] Participant's Voluntary Contribution Account.
    NOTE:  Distributions from a Participant's Elective Deferral Account,
           Qualified Matching Contribution Account and Qualified Non-Elective
           Account (including 401(k) Safe Harbor Contributions) are subject to
           restrictions and generally may not be distributed prior to age
           59 1/2.

    AND, are distributions restricted to those accounts in which a Participant
    is fully Vested? k. [X] Yes, distributions may only be made from accounts
    which are fully Vested.
    l. [ ] No. (If elected, the fraction at Plan Section 6.5(h) will apply in
           determining vesting of the portion of the account balance not
           withdrawn.)

    AND, the minimum distribution shall be...
    m. [X] N/A. There is no minimum.
    n. [ ] $_____ (may not exceed $1,000).

NONDISCRIMINATION TESTING

46. HIGHLY COMPENSATED EMPLOYEE (Plan Section 1.31)
    NOTE: If this is a GUST restatement, complete the questions in this
          Section retroactively to the first Plan Year beginning after 1996.

    Top-Paid Group Election. Will the top-paid group election be made? (The
    election made below for the latest year will continue to apply to subsequent
    Plan Years unless a different election is made.)
    a. [ ] Yes, for the Plan Year beginning in: _____.
    b. [X] No, for the Plan Year beginning in: 2004.

    Calendar Year Data Election. Will the calendar year data election be used?
    (The election made below for the latest year will continue to apply to
    subsequent Plan Years unless a different election is made.)
    c. [ ] Yes, for the Plan Year beginning in: _____.
    d. [X] No, for the Plan Year beginning in: 2004.

47. ADP AND ACP TESTS (Plan Sections 12.4 and 12.6). The ADP ratio and ACP
    ratio for Non-Highly Compensated Employees will be based on the following.
    The election made below for the latest year will continue to apply to
    subsequent Plan Years unless the Plan is amended to a different election.
    a. [ ] N/A. This Plan satisfies the ADP Test Safe Harbor rules and there are
           no contributions subject to an ACP test or for all Plan Years
           beginning in or after the Effective Date of the Plan or, in the case
           of an amendment and restatement, for all Plan Years to which the
           amendment and restatement relates.
    b. [X] PRIOR YEAR TESTING: The prior year ratio will be used for the
           Plan Year beginning in 2004 . (Note: If this election is made for the
           first year the Code Section 401(k) or 401(m) feature is added to this
           Plan (unless this Plan is a successor plan), the amount taken into
           account as the ADP and ACP of Non-Highly Compensated Employees for
           the preceding Plan Year will be 3%.)
    c. [ ] CURRENT YEAR TESTING: The current year ratio will be used for the
           Plan Year beginning in _____.
    NOTE:  In any Plan Year where the ADP Test Safe Harbor is being used but not
           the ACP Test Safe Harbor, then c. above must be used if an ACP test
           applies for such Plan Year.

TOP HEAVY REQUIREMENTS

48. TOP HEAVY DUPLICATIONS (Plan Section 4.3(i)): When a Non-Key Employee is a
    Participant in this Plan and a Defined Benefit Plan maintained by the
    Employer, indicate which method shall be utilized to avoid duplication of
    top heavy minimum benefits: (If b., c., d. or e. is elected, f. must be
    completed.)
    a. [X] N/A. The Employer does not maintain a Defined Benefit Plan. (Go to
           next Question)
    b. [ ] The full top heavy minimum will be provided in each plan (if
           selected, Plan Section 4.3(i) shall not apply).
    c. [ ] 5% defined contribution minimum.
    d. [ ] 2% defined benefit minimum.
    e. [ ] Specify the method under which the Plans will provide top heavy
           minimum benefits for Non-Key Employees that will preclude Employer
           discretion and avoid inadvertent omissions:

    NOTE:  If c., d., or e. is selected and the Defined Benefit Plan and this
           Plan do not benefit the same Participants, the uniformity requirement
           of the Section 401(a)(4) Regulations may be violated.

    AND, the "Present Value of Accrued Benefit" (Plan Section 9.2) for Top Heavy
    purposes shall be based on...
    f. [ ] Interest Rate:______________________________________________________
           Mortality Table:____________________________________________________

49. TOP HEAVY DUPLICATIONS (Plan Section 4.3(f)): When a Non-Key Employee is a
    Participant in this Plan and another defined contribution plan maintained by
    the Employer, indicate which method shall be utilized to avoid duplication
    of top heavy minimum benefits:
    a. [X] N/A. The Employer does not maintain another qualified defined
           contribution plan.
    b. [ ] The full top heavy minimum will be provided in each plan.
    c. [ ] A minimum, non-integrated contribution of 3% of each Non-Key
           Employee's 415 Compensation shall be provided in the Money Purchase
           Plan (or other plan subject to Code Section 412).
    d. [ ] Specify the method under which the Plans will provide top heavy
           minimum benefits for Non-Key Employees that will preclude Employer
           discretion and avoid inadvertent omissions, including any adjustments
           required under Code Section 415:

    NOTE:  If c. or d. is selected and both plans do not benefit the same
           Participants, the uniformity requirement of the Section 401(a)(4)
           Regulations may be violated.

MISCELLANEOUS

50. LOANS TO PARTICIPANTS (Plan Section 7.6)
    a. [ ] Loans are not permitted.
    b. [X] Loans are permitted.

    IF loans are permitted (select all that apply)...
    c. [X] loans will be treated as a Participant directed investment.
    d. [ ] loans will only be made for hardship or financial necessity.
    e. [X] the minimum loan will be $ 1,000 (may not exceed $1,000).
    f. [X] a Participant may only have 1 (e.g., one (1)) loan(s) outstanding at
           any time.
    g. [X] all outstanding loan balances will become due and payable in their
           entirety upon the occurrence of a distributable event (other than
           satisfaction of the conditions for an in-service distribution).
    h. [X] loans will only be permitted from the following accounts (select all
           that apply):
           1. [X] All accounts.
           2. [ ] Participant's Elective Deferral Account.
           3. [ ] Qualified Matching Contribution Account and/or portion of
                  Participant's Account attributable to Employer matching
                  contributions.
           4. [ ] Participant's Account attributable to Employer profit
                  sharing contributions.
           5. [ ] Qualified Non-Elective Contribution Account.
           6. [ ] Participant's Rollover Account.
           7. [ ] Participant's Transfer Account.
           8. [ ] Participant's Voluntary Contribution Account.
     NOTE: Department of Labor Regulations require the adoption of a separate
           written  loan  program  setting  forth the requirements outlined in
           Plan Section 7.6.

51. DIRECTED INVESTMENT ACCOUNTS (Plan Section 4.10)
    a. [ ] Participant directed investments are not permitted.
    b. [X] Participant directed investments are permitted for the following
           accounts (select all that apply):
           1. [X] All accounts.
           2. [ ] Participant's Elective Deferral Account.
           3. [ ] Qualified Matching Contribution Account and/or portion of
                  Participant's Account attributable to Employer matching
                  contributions.
           4. [ ] Participant's Profit Sharing Account.
           5. [ ] Qualified Non-Elective Contribution Account.
           6. [ ] Participant's Rollover Account.
           7. [ ] Participant's Transfer Account.
           8. [ ] Participant's Voluntary Contribution Account.
           9. [ ] Other:_______________________________________________________

    AND, is it  intended that the Plan comply with Act Section 404(c) with
    respect to the accounts subject to Participant investment direction?
    c. [ ] No.
    d. [X] Yes.

    AND, will voting rights on directed investments be passed through to
    Participants?
    e. [X] No. Employer stock is not an alternative OR Plan is not intended to
           comply with Act Section 404(c).
    f. [ ] Yes, for Employer stock only.
    g. [ ] Yes, for all investments.

52. ROLLOVERS (Plan Section 4.6)
    a. [ ] Rollovers will not be accepted by this Plan.
    b. [X] Rollovers will be accepted by this Plan.

    AND, if b. is elected, rollovers may be accepted...
    c. [X] from any Eligible Employee, even if not a Participant.
    d. [ ] from Participants only.

    AND, distributions from a Participant's Rollover Account may be made...
    e. [X] at any time.
    f. [ ] only when the Participant is otherwise entitled to a distribution
           under the Plan.

53. AFTER-TAX VOLUNTARY EMPLOYEE CONTRIBUTIONS (Plan Section 4.8)
    a. [X] After-tax voluntary Employee contributions will not be allowed.
    b. [ ] After-tax voluntary Employee contributions will be allowed.

54. LIFE INSURANCE (Plan Section 7.5)
    a. [X] Life insurance may not be purchased.
    b. [ ] Life insurance may be purchased at the option of the Administrator.
    c. [ ] Life insurance may be purchased at the option of the Participant.

    AND, if b. or c. is elected, the purchase of initial or additional life
    insurance  will be  subject to the following limitations (select all that
    apply):
    d. [ ] N/A, no limitations.
    e. [ ] each initial Contract will have a minimum face amount of $_______.
    f. [ ] each additional Contract will have a minimum face amount of $_______.
    g. [ ] the Participant has completed ____ Years of Service (or Periods of
           Service).
    h. [ ] the Participant has completed ____ Years of Service (or Periods of
           Service) while a Participant in the Plan.
    i. [ ] the Participant is under age on the Contract issue date.
    j. [ ] the maximum amount of all Contracts on behalf of a Participant may
           not exceed $_____.
    k. [ ] the maximum face amount of any life insurance Contract will be $___ .

<PAGE>

The  adopting  Employer  may rely on an opinion  letter  issued by the  Internal
Revenue  Service as evidence  that the plan is qualified  under Code Section 401
only to the extent provided in Announcement 2001-77, 2001-30 I.R.B.

The Employer may not rely on the opinion  letter in certain other  circumstances
or with respect to certain  qualification  requirements,  which are specified in
the opinion letter issued with respect to the plan and in Announcement 2001-77.

In  order  to have  reliance  in such  circumstances  or  with  respect  to such
qualification requirements,  application for a determination letter must be made
to Employee Plans Determinations of the Internal Revenue Service.

This Adoption Agreement may be used only in conjunction with basic Plan document
#03. This Adoption Agreement and the basic Plan document shall together be known
as MetLife Defined Contribution Prototype Non-Standardized 401(k) Profit Sharing
Plan and Trust #03-005.

The  adoption of this Plan,  its  qualification  by the IRS, and the related tax
consequences are the  responsibility of the Employer and its independent tax and
legal advisors.

Metropolitan  Life Insurance  Company will notify the Employer of any amendments
made  to  the  Plan  or of  the  discontinuance  or  abandonment  of  the  Plan.
Furthermore,  in order to be eligible to receive such notification,  we agree to
notify Metropolitan Life Insurance Company of any change in address.

This Plan may not be used,  and shall  not be  deemed  to be a  Prototype  Plan,
unless an authorized  representative  of Metropolitan Life Insurance Company has
acknowledged  the use of the  Plan.  Such  acknowledgment  is for  administerial
purposes only. It acknowledges  that the Employer is using the Plan but does not
represent  that this  Plan,  including  the  choices  selected  on the  Adoption
Agreement, has been reviewed by a representative of the sponsor or constitutes a
qualified retirement plan.

Metropolitan Life Insurance Company

By: /s/ R Lopez

With regard to any questions  regarding the provisions of the Plan,  adoption of
the Plan,  or the effect of an opinion  letter from the IRS, call or write (this
information  must be  completed  by the  sponsor of this Plan or its  designated
representative):

Name:             MetLife - Plan Design & Consulting, G1-09

Address:          13045 Tesson Ferry Road

                  St. Louis Missouri 63128

Telephone:        (314) 525-8801

<PAGE>

The Employer and Trustee hereby cause this Plan to be executed on ____________.

Furthermore,  this Plan may not be used unless acknowledged by Metropolitan Life
Insurance Company or its authorized representative.

EMPLOYER:

By:      /s/Joel S. Hatlen
         Data I/O Corporation

[   ]    The signature of the Trustee appears on a separate trust agreement
         attached to the Plan,

OR

/s/ Wm. Kelly, VP, MetLife as Agent for the Trustee
                          TRUSTEE


<PAGE>


                                     EGTRRA
                                AMENDMENT TO THE

                Data I/O Corporation Tax Deferral Retirement Plan

<PAGE>

                                    ARTICLE I
                                    PREAMBLE

1.1  Adoption and  effective  date of amendment.  This  amendment of the plan is
     adopted to reflect certain provisions of the Economic Growth and Tax Relief
     Reconciliation  Act of 2001 ("EGTRRA").  This amendment is intended as good
     faith  compliance with the requirements of EGTRRA and is to be construed in
     accordance with EGTRRA and guidance issued thereunder.  Except as otherwise
     provided,  this  amendment  shall be  effective  as of the first day of the
     first plan year beginning after December 31, 2001.

1.2  Supersession of inconsistent provisions. This amendment shall supersede the
     provisions of the plan to the extent those provisions are inconsistent with
     the provisions of this amendment.

                                   ARTICLE II
                          ADOPTION AGREEMENT ELECTIONS

--------------------------------------------------------------------------------

     The  questions  in this  Article II only need to be  completed  in order to
     override  the default  provisions  set forth  below.  If all of the default
     provisions   will   apply,   then  these   questions   should  be  skipped.

     Unless the employer  elects  otherwise  in this  Article II, the  following
     defaults apply:

     1)   The  vesting  schedule  for  matching  contributions  will be a 6 year
          graded schedule (if the plan currently has a graded schedule that does
          not satisfy  EGTRRA) or a 3 year cliff schedule (if the plan currently
          has a cliff schedule that does not satisfy EGTRRA),  and such schedule
          will apply to all  matching  contributions  (even  those made prior to
          2002).
     2)   Rollovers are automatically excluded in determining whether the $5,000
          threshold has been  exceeded for  automatic  cash-outs (if the plan is
          not subject to the  qualified  joint and  survivor  annuity  rules and
          provides for automatic cash-outs). This is applied to all participants
          regardless of when the distributable event occurred.
     3)   The suspension period after a hardship  distribution is made will be 6
          months and this will only apply to hardship  distributions  made after
          2001.
     4)   Catch-up contributions will be allowed.
     5)   For target benefit plans, the increased compensation limit of $200,000
          will be applied retroactively (i.e., to years prior to 2002).

--------------------------------------------------------------------------------

2.1      Vesting Schedule for Matching Contributions

          If there are matching contributions subject to a vesting schedule that
          does not satisfy  EGTRRA,  then unless  otherwise  elected below,  for
          participants  who complete an hour of service in a plan year beginning
          after December 31, 2001, the following  vesting schedule will apply to
          all matching contributions subject to a vesting schedule:

          If the plan has a graded vesting  schedule (i.e., the vesting schedule
          includes a vested  percentage that is more than 0% and less than 100%)
          the following will apply:

                 Years of vesting service      Nonforfeitable percentage

                           2                               20%
                           3                               40%
                           4                               60%
                           5                               80%
                           6                              100%

          If the plan does not have a graded  vesting  schedule,  then  matching
          contributions will be nonforfeitable upon the completion of 3 years of
          vesting service.

          In lieu  of the  above  vesting  schedule,  the  employer  elects  the
          following schedule:
          a. [ ] 3 year cliff (a participant's accrued benefit derived from
                 employer matching contributions shall be nonforfeitable upon
                 the participant's completion of three years of vesting
                 service).
          b. [ ] 6 year graded schedule (20% after 2 years of vesting service
                 and an additional 20% for each year thereafter).
          c. [ ] Other (must be at least as liberal as a. or the b. above):

                 Years of vesting service      Nonforfeitable percentage

                          --------                      ---------%
                          --------                      ---------%
                          --------                      ---------%
                          --------                      ---------%
                          --------                      ---------%

         The vesting schedule set forth herein shall only apply to participants
         who complete an hour of service in a plan year beginning after December
         31, 2001, and, unless the option below is elected, shall apply to all
         matching contributions subject to a vesting schedule.
         d. [ ] The vesting schedule will only apply to matching contributions
                made in plan years beginning after December 31, 2001
                (the prior schedule will apply to matching contributions made
                in prior plan years).

2.2      Exclusion of Rollovers in Application of Involuntary Cash-out
         Provisions (for profit sharing and 401(k) plans only). If the plan is
         not subject to the qualified joint and survivor annuity rules and
         includes involuntary cash-out provisions, then unless one of the
         options below is elected, effective for distributions made after
         December 31, 2001, rollover contributions will be excluded in
         determining the value of the participant's nonforfeitable account
         balance for purposes of the plan's involuntary cash-out rules.
         a. [ ] Rollover contributions will not be excluded.
         b. [ ] Rollover contributions will be excluded only with respect to
                distributions made after ________________________.
                (Enter a date no earlier than December 31, 2001.)
         c. [ ] Rollover contributions will only be excluded with respect to
                participants who separated from service after ______________.
                (Enter a date. The date may be earlier than December 31, 2001.)

2.3      Suspension period of hardship distributions. If the plan provides for
         hardship distributions upon satisfaction of the safe harbor (deemed)
         standards as set forth in Treas. Reg. Section 1.401(k)-1(d)(2)(iv),
         then, unless the option below is elected, the suspension period
         following a hardship distribution shall only apply to hardship
         distributions made after December 31, 2001.
            [X] With regard to hardship distributions made during 2001, a
                participant shall be prohibited from making elective deferrals
                and employee contributions under this and all other plans until
                the later of January 1, 2002, or 6 months after receipt of the
                distribution.

2.4      Catch-up contributions (for 401(k) profit sharing plans only): The plan
         permits catch-up contributions (Article VI) unless the option below is
         elected.
            [ ] The plan does not permit catch-up contributions to be made.

                                   ARTICLE III
                        VESTING OF MATCHING CONTRIBUTIONS

3.1     Applicability. This Article shall apply to participants who complete an
        Hour of Service after December 31, 2001, with respect to accrued
        benefits derived from employer matching  contributions made in plan
        years beginning after December 31, 2001. Unless otherwise elected by
        the employer in Section 2.1 above, this Article shall also apply to all
        such participants with respect to accrued  benefits derived from
        employer matching contributions made in plan years beginning prior to
        January 1, 2002.

3.2      Vesting  schedule.  A participant's  accrued benefit derived from
         employer matching contributions  shall vest as provided in Section 2.1
         of this amendment.

                                   ARTICLE IV
                              INVOLUNTARY CASH-OUTS

4.1      Applicability and effective date. If the plan provides for involuntary
         cash-outs of amounts less than $5,000, then unless otherwise elected in
         Section 2.2 of this amendment, this Article shall apply for
         distributions made after December 31, 2001, and shall apply to all
         participants. However, regardless of the preceding, this Article shall
         not apply if the plan is subject to the qualified joint and survivor
         annuity requirements of Sections 401(a)(11) and 417 of the Code.

4.2      Rollovers disregarded in determining value of account balance for
         involuntary distributions. For purposes of the Sections of the plan
         that provide for the involuntary distribution of vested accrued
         benefits of $5,000 or less, the value of a participant's nonforfeitable
         account balance shall be determined without regard to that portion of
         the account balance that is attributable to rollover contributions (and
         earnings allocable thereto) within the meaning of Sections 402(c),
         403(a)(4), 403(b)(8), 408(d)(3)(A)(ii), and 457(e)(16) of the Code. If
         the value of the participant's nonforfeitable account balance as so
         determined is $5,000 or less, then the plan shall immediately
         distribute the participant's entire nonforfeitable account balance.

                                    ARTICLE V
                             HARDSHIP DISTRIBUTIONS

5.1      Applicability and effective date.  If the plan provides for hardship
         distributions upon satisfaction of the safe harbor (deemed) standards
         as set forth in Treas. Reg. Section  1.401(k)-1(d)(2)(iv), then this
         Article  shall apply for calendar years beginning after 2001.

5.2      Suspension period following hardship distribution. A participant who
         receives a distribution of elective deferrals after December 31, 2001,
         on account of hardship shall be prohibited from making elective
         deferrals and employee contributions under this and all other plans of
         the employer for 6 months after receipt of the distribution.
         Furthermore, if elected by the employer in Section 2.3 of this
         amendment, a participant who receives a distribution of elective
         deferrals in calendar year 2001 on account of hardship shall be
         prohibited from making elective deferrals and employee contributions
         under this and all other plans until the later of January 1, 2002, or 6
         months after receipt of the distribution.

                                   ARTICLE VI
                             CATCH-UP CONTRIBUTIONS

Catch-up  Contributions.  Unless  otherwise  elected  in  Section  2.4  of  this
amendment,  all employees who are eligible to make elective deferrals under this
plan and who have  attained  age 50 before  the close of the plan year  shall be
eligible to make catch-up  contributions  in accordance with, and subject to the
limitations  of, Section 414(v) of the Code. Such catch-up  contributions  shall
not  be  taken  into  account  for  purposes  of  the  provisions  of  the  plan
implementing  the required  limitations of Sections  402(g) and 415 of the Code.
The plan shall not be treated as failing to satisfy the  provisions  of the plan
implementing  the  requirements of Section  401(k)(3),  401(k)(11),  401(k)(12),
410(b),  or 416 of the Code,  as  applicable,  by  reason of the  making of such
catch-up contributions.

                                   ARTICLE VII
                         INCREASE IN COMPENSATION LIMIT

Increase in Compensation  Limit.  The annual  compensation  of each  participant
taken into account in determining  allocations for any plan year beginning after
December 31, 2001,  shall not exceed  $200,000,  as adjusted for  cost-of-living
increases  in  accordance  with  Section   401(a)(17)(B)  of  the  Code.  Annual
compensation means  compensation  during the plan year or such other consecutive
12-month period over which  compensation is otherwise  determined under the plan
(the  determination  period).  If this is a target benefit plan,  then except as
otherwise elected in Section 2.5 of this amendment,  for purposes of determining
benefit accruals in a plan year beginning after December 31, 2001,  compensation
for  any  prior  determination   period  shall  be  limited  to  $200,000.   The
cost-of-living  adjustment  in effect  for a  calendar  year  applies  to annual
compensation  for the  determination  period  that  begins  with or within  such
calendar year.

                                  ARTICLE VIII
                                   PLAN LOANS

Plan loans for  owner-employees  or  shareholder-employees.  If the plan permits
loans to be made to  participants,  then  effective  for plan  loans  made after
December 31, 2001, plan provisions  prohibiting  loans to any  owner-employee or
shareholder-employee shall cease to apply.

                                   ARTICLE IX
              LIMITATIONS ON CONTRIBUTIONS (IRC SECTION 415 LIMITS)

9.1      Effective date. This Section shall be effective for limitation years
         beginning after December 31, 2001.

9.2      Maximum annual addition. Except to the extent permitted under Article
         VI of this amendment and Section 414(v) of the Code, if applicable, the
         annual addition that may be contributed or allocated to a participant's
         account under the plan for any limitation year shall not exceed the
         lesser of:

         a. $40,000, as adjusted for increases in the cost-of-living under
            Section 415(d) of the Code, or

         b. 100 percent of the participant's compensation, within the meaning
            of Section 415(c)(3) of the Code, for the limitation year.

         The  compensation  limit  referred  to in b.  shall  not  apply to any
         contribution  for  medical  benefits  after  separation  from  service
         (within the  meaning of Section  401(h) or Section  419A(f)(2)  of the
         Code) which is otherwise treated as an annual addition.

                                    ARTICLE X
                         MODIFICATION OF TOP-HEAVY RULES

10.1     Effective date. This Article shall apply for purposes of determining
         whether the plan is a top-heavy plan under Section 416(g) of the Code
         for plan years beginning after December 31, 2001, and whether the plan
         satisfies the minimum benefits requirements of Section 416(c) of the
         Code for such years. This Article amends the top-heavy provisions of
         the plan.

10.2     Determination of top-heavy status.

10.2.1   Key employee. Key employee means any employee or former employee
         (including any deceased employee) who at any time during the plan year
         that includes the determination date was an officer of the employer
         having annual compensation greater than $130,000 (as adjusted under
         Section 416(i)(1) of the Code for plan years beginning after December
         31, 2002), a 5-percent owner of the employer, or a 1-percent owner of
         the employer having annual compensation of more than $150,000. For this
         purpose, annual compensation means compensation within the meaning of
         Section 415(c)(3) of the Code. The determination of who is a key
         employee will be made in accordance with Section 416(i)(1) of the Code
         and the applicable regulations and other guidance of general
         applicability issued thereunder.

10.2.2   Determination of present values and amounts. This Section 10.2.2 shall
         apply for purposes of determining the present values of accrued
         benefits and the amounts of account balances of employees as of the
         determination date.

         a.       Distributions during year ending on the determination date.
                  The present values of accrued benefits and the amounts of
                  account balances of an employee as of the determination date
                  shall be increased by the distributions made with respect to
                  the employee under the plan and any plan aggregated with the
                  plan under Section 416(g)(2) of the Code during the 1-year
                  period ending on the determination date. The preceding
                  sentence shall also apply to distributions under a terminated
                  plan which, had it not been terminated, would have been
                  aggregated with the plan under Section 416(g)(2)(A)(i) of the
                  Code. In the case of a distribution made for a reason other
                  than separation from service, death, or disability, this
                  provision shall be applied by substituting "5-year period" for
                  "1-year period."

         b.       Employees not performing services during year ending on the
                  determination date. The accrued benefits and accounts of any
                  individual who has not performed services for the employer
                  during the 1-year period ending on the determination date
                  shall not be taken into account.

10.3     Minimum benefits.

10.3.1   Matching contributions. Employer matching contributions shall be taken
         into account for purposes of satisfying the minimum contribution
         requirements of Section 416(c)(2) of the Code and the plan. The
         preceding sentence shall apply with respect to matching contributions
         under the plan or, if the plan provides that the minimum contribution
         requirement shall be met in another plan, such other plan. Employer
         matching contributions that are used to satisfy the minimum
         contribution requirements shall be treated as matching contributions
         for purposes of the actual contribution percentage test and other
         requirements of Section 401(m) of the Code.

10.3.2   Contributions under other plans. The employer may provide, in an
         addendum to this amendment, that the minimum benefit requirement shall
         be met in another plan (including another plan that consists solely of
         a cash or deferred arrangement which meets the requirements of Section
         401(k)(12) of the Code and matching contributions with respect to which
         the requirements of Section 401(m)(11) of the Code are met). The
         addendum should include the name of the other plan, the minimum benefit
         that will be provided under such other plan, and the employees who will
         receive the minimum benefit under such other plan.

                                   ARTICLE XI
                                DIRECT ROLLOVERS

11.1     Effective date. This Article shall apply to distributions made after
         December 31, 2001.

11.2     Modification of definition of eligible retirement plan. For purposes of
         the direct rollover provisions of the plan, an eligible retirement plan
         shall also mean an annuity contract described in Section 403(b) of the
         Code and an eligible plan under Section 457(b) of the Code which is
         maintained by a state, political subdivision of a state, or any agency
         or instrumentality of a state or political subdivision of a state and
         which agrees to separately account for amounts transferred into such
         plan from this plan. The definition of eligible retirement plan shall
         also apply in the case of a distribution to a surviving spouse, or to a
         spouse or former spouse who is the alternate payee under a qualified
         domestic relation order, as defined in Section 414(p) of the Code.

11.3     Modification of definition of eligible rollover distribution to exclude
         hardship distributions. For purposes of the direct rollover provisions
         of the plan, any amount that is distributed on account of hardship
         shall not be an eligible rollover distribution and the distributee may
         not elect to have any portion of such a distribution paid directly to
         an eligible retirement plan.

11.4     Modification of definition of eligible rollover distribution to include
         after-tax employee contributions. For purposes of the direct rollover
         provisions in the plan, a portion of a distribution shall not fail to
         be an eligible rollover distribution merely because the portion
         consists of after-tax employee contributions which are not includible
         in gross income. However, such portion may be transferred only to an
         individual retirement account or annuity described in Section 408(a) or
         (b) of the Code, or to a qualified defined contribution plan described
         in Section 401(a) or 403(a) of the Code that agrees to separately
         account for amounts so transferred, including separately accounting for
         the portion of such distribution which is includible in gross income
         and the portion of such distribution which is not so includible.


                                   ARTICLE XII
                           ROLLOVERS FROM OTHER PLANS

Rollovers   from   other   plans.   The   employer,   operationally   and  on  a
nondiscriminatory basis, may limit the source of rollover contributions that may
be accepted by this plan.

                                  ARTICLE XIII
                           REPEAL OF MULTIPLE USE TEST

Repeal of  Multiple  Use Test.  The  multiple  use test  described  in  Treasury
Regulation  Section  1.401(m)-2  and the plan  shall not  apply  for plan  years
beginning after December 31, 2001.

                                   ARTICLE XIV
                               ELECTIVE DEFERRALS

14.1     Elective Deferrals - Contribution Limitation. No participant shall be
         permitted to have elective deferrals made under this plan, or any other
         qualified plan maintained by the employer during any taxable year, in
         excess of the dollar limitation contained in Section 402(g) of the Code
         in effect for such taxable year, except to the extent permitted under
         Article VI of this amendment and Section 414(v) of the Code, if
         applicable.

14.2     Maximum Salary Reduction Contributions for SIMPLE plans. If this is a
         SIMPLE 401(k) plan, then except to the extent permitted under Article
         VI of this amendment and Section 414(v) of the Code, if applicable, the
         maximum salary reduction contribution that can be made to this plan is
         the amount determined under Section 408(p)(2)(A)(ii) of the Code for
         the calendar year.

                                   ARTICLE XV
                           SAFE HARBOR PLAN PROVISIONS

Modification of Top-Heavy  Rules.  The top-heavy  requirements of Section 416 of
the Code and the plan shall not apply in any year  beginning  after December 31,
2001, in which the plan consists solely of a cash or deferred  arrangement which
meets  the  requirements  of  Section   401(k)(12)  of  the  Code  and  matching
contributions  with respect to which the  requirements of Section  401(m)(11) of
the Code are met.

                                   ARTICLE XVI
                    DISTRIBUTION UPON SEVERANCE OF EMPLOYMENT

16.1     Effective date. This Article shall apply for distributions and
         transactions made after December 31, 2001, regardless of when the
         severance of employment occurred.

16.2     New distributable event. A participant's elective deferrals, qualified
         nonelective contributions, qualified matching contributions, and
         earnings attributable to these contributions shall be distributed on
         account of the participant's severance from employment. However, such a
         distribution shall be subject to the other provisions of the plan
         regarding distributions, other than provisions that require a
         separation from service before such amounts may be distributed.


This amendment has been executed this 6th day of March, 2004.

Name of Employer: Data I/O Corporation


By: /s/Joel S. Hatlen
         EMPLOYER

Name of Plan: Data I/O Corporation Tax Deferral Retirement Plan


<PAGE>


Exhibit 31.1

Section 302 Certification
I, Frederick R. Hume, certify that:
1.   I have reviewed this quarterly report on Form 10-Q of Data I/O Corporation;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material fact or omit to state a material fact necessary to make the
     statements made, in light of the circumstances under which such statements
     were made, not misleading with respect to the period covered by this
     report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this report, fairly present in all material
     respects the financial condition, results of operations and cash flows of
     the registrant as of, and for, the periods presented in this report;

4.   The registrant's other certifying officer(s) and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

     a)   Designed such disclosure controls and procedures, or caused such
          disclosure controls and procedures to be designed under our
          supervision, to ensure that material information relating to the
          registrant, including its consolidated subsidiaries, is made known to
          us by others within those entities, particularly during the period in
          which this report is being prepared;

     b)  Evaluated the effectiveness of the registrant's disclosure controls and
         procedures and presented in this report our conclusions about the
         effectiveness of the disclosure controls and procedures, as of the end
         of the period covered by this report based on such evaluation; and

     c)  Disclosed in this report any change in the registrant's internal
         control over financial reporting that occurred during the registrant's
         most recent fiscal quarter (the registrant's fourth fiscal quarter in
         the case of an annual report) that has materially affected, or is
         reasonably likely to materially affect, the registrant's internal
         control over financial reporting; and

5.   The registrant's other certifying officer(s) and I have disclosed, based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's auditors and the audit committee of the registrant's board
     of directors (or persons performing the equivalent functions):

     a) All significant deficiencies and material weaknesses in the design or
        operation of internal control over a financial reporting which are
        reasonably likely to adversely affect the registrant's ability to
        record, process, summarize and report financial information; and

    b)  Any fraud, whether or not material, that involves management or other
        employees who have a significant role in the registrant's internal
        control over financial reporting.

Date May 14, 2004               /s/ FREDERICK R. HUME
                                Frederick R. Hume
                                President and Chief Executive Officer
                                (Principal Executive Officer)


<PAGE>

Exhibit 31.2

Section 302 Certification
I, Joel S. Hatlen, certify that:
1.   I have reviewed this quarterly report on Form 10-Q of Data I/O Corporation;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material fact or omit to state a material fact necessary to make the
     statements made, in light of the circumstances under which such statements
     were made, not misleading with respect to the period covered by this
     report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this report, fairly present in all material
     respects the financial condition, results of operations and cash flows of
     the registrant as of, and for, the periods presented in this report;

4.   The registrant's other certifying officer(s) and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

      a)  Designed such disclosure controls and procedures, or caused such
          disclosure controls and procedures to be designed under our
          supervision, to ensure that material information relating to the
          registrant, including its consolidated subsidiaries, is made known to
          us by others within those entities, particularly during the period in
          which this report is being prepared;

      b)  Evaluated the effectiveness of the registrant's disclosure controls
          and procedures and presented in this report our conclusions about
          the effectiveness of the disclosure controls and procedures, as of the
          end of the period covered by this report based on such evaluation; and

      c)  Disclosed in this report any change in the registrant's internal
          control over financial reporting that occurred during the registrant's
          most recent fiscal quarter (the registrant's fourth fiscal quarter in
          the case of an annual report) that has materially affected, or is
          reasonably likely to materially affect, the registrant's internal
          control over financial reporting; and

5.   The registrant's other certifying officer(s) and I have disclosed, based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's auditors and the audit committee of the registrant's board
     of directors (or persons performing the equivalent functions):

      a) All significant deficiencies and material weaknesses in the design or
         operation of internal control over a financial reporting which are
         reasonably likely to adversely affect the registrant's ability to
         record, process, summarize and report financial information; and

      b) Any fraud, whether or not material, that involves management or other
         employees who have a significant role in the registrant's internal
         control over financial reporting.

Date May 14, 2004                /s/ JOEL S. HATLEN
                                 Joel S. Hatlen
                                 Vice President and Chief Financial Officer
                                 (Principal Financial Officer)


<PAGE>




Exhibit 32.1

Certification by Chief Executive Officer
Pursuant to 18 U.S.C. Section 1350
As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the quarterly  Report of Data I/O Corporation (the "Company")
on Form 10-Q for the period  ended March 31,  2004 as filed with the  Securities
and Exchange Commission on the date hereof (the "Report"), I, Frederick R. Hume,
Chief  Executive  Officer of the Company,  certify,  that  pursuant to 18 U.S.C.
Section 1350, as adopted  pursuant to Section 906 of the  Sarbanes-Oxley  Act of
2002, that:

(1)  The Report fully complies with the  requirements  of Section 13(a) or 15(d)
     of the Securities Exchange Act of 1934; and
(2)  The information  contained in the Report fairly  presents,  in all material
     respects, the financial condition and results of operations of the Company.


/s/ Frederick R. Hume
Frederick R. Hume
Chief Executive Officer
(Principal Executive Officer)
May 14, 2004

<PAGE>


Exhibit 32.2
Certification by Chief Financial Officer
Pursuant to 18 U.S.C. Section 1350
As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the quarterly  Report of Data I/O Corporation (the "Company")
on Form 10-Q for the period  ended March 31,  2004 as filed with the  Securities
and Exchange  Commission on the date hereof (the  "Report"),  I, Joel S. Hatlen,
Chief  Financial  Officer of the Company,  certify,  that  pursuant to 18 U.S.C.
Section 1350, as adopted  pursuant to Section 906 of the  Sarbanes-Oxley  Act of
2002, that:

(1)  Report fully  complies with the  requirements  of Section 13(a) or 15(d) of
     the Securities Exchange Act of 1934; and
(2)  The information  contained in the Report fairly  presents,  in all material
     respects, the financial condition and results of operations of the Company.


/s/ Joel S. Hatlen
Joel S. Hatlen
Chief Financial Officer
(Principal Financial Officer)
May 14, 2004

<PAGE>

Exhibit 99.1

CAUTIONARY FACTORS THAT MAY AFFECT FUTURE RESULTS
--------------------------------------------------------------------------------

Data I/O's  disclosure  and  analysis in this  Quarterly  Report  contains  some
forward-looking  statements.  Forward-looking  statements  include  our  current
expectations  or  forecasts  of future  events.  The reader can  identify  these
statements by the fact that they do not relate strictly to historical or current
facts.  In  particular,  these  include  statements  relating to future  action,
prospective products, new technologies, future performance or results of current
and anticipated  products,  sales efforts,  expenses,  outsourcing of functions,
outcome of contingencies, and financial results.

Any or all of the forward-looking  statements in this Quarterly Report or in any
other public  statement  made may turn out to be wrong.  They can be affected by
inaccurate   assumptions   we  might  make,   or  known  or  unknown  risks  and
uncertainties can affect these forward-looking  statements.  Many factors -- for
example,  product  competition  and product  development -- will be important in
determining future results.  Moreover,  neither Data I/O nor anyone else assumes
responsibility  for the  accuracy  and  completeness  of  these  forward-looking
statements. Actual future results may materially vary.

We undertake no obligation  to publicly  update any  forward-looking  statements
after the date of this Quarterly Report, whether as a result of new information,
future events or otherwise.  The reader should not place undue  reliance on such
forward-looking  statements.  The reader is  advised,  however,  to consult  any
future  disclosures Data I/O makes on related subjects in our 10-Q, 8-K and 10-K
reports to the SEC and press  releases.  Also,  note that Data I/O  provides the
following cautionary discussion of risks,  uncertainties and possible inaccurate
assumptions  relevant to our  business.  These are  factors  that we think could
cause  Data  I/O's  actual  results  to  differ  materially  from  expected  and
historical results. Other factors besides those listed here could also adversely
affect  Data  I/O.  This  discussion  is  permitted  by the  Private  Securities
Litigation Reform Act of 1995.

RISK FACTORS

Development, Introduction and Shipment of New Products

Data I/O  currently is developing  new  engineering  and  automated  programming
systems.  Significant technological,  supplier,  manufacturing or other problems
may delay the development, introduction or production of these products.

For example, we may encounter these problems:

o technical problems in the development of a new programming system platform or
  the robotics for new automated handing systems

o inability to hire qualified personnel

o delays or failures to perform by third parties involved in our development
  projects

Delays in the development,  completion and shipment of new products,  or failure
of customers to accept new products, may result in a decline in sales in 2004.

Variability in Quarterly Operating Results

Data I/O's operating  results tend to vary from quarter to quarter.  Our revenue
in each quarter  substantially depends upon orders received within that quarter.
Conversely,  our  expenditures  are based on  investment  plans and estimates of
future revenues. We may, therefore,  be unable to quickly reduce our spending if
our revenues decline in a given quarter. As a result, operating results for that
quarter  will  suffer.  Our  results of  operations  for any one quarter are not
necessarily indicative of results for any future periods.

Other factors, which may cause our quarterly operating results to fluctuate,
include:

o increased competition

o timing of new product announcements

o product releases and pricing changes by us or our competitors

o market acceptance or delays in the introduction of new products

o production constraints

o labor or material shortages

o the timing of significant orders

o war or terrorism

o health issues (such as SARS)

o customers' budgets

o adverse movements in exchange rates, interest rates or tax rates

o cyclical nature of demand for our customers' products

o general economic conditions in the countries where we sell products

Due to all of the foregoing factors, it is possible that in some future
quarters, our operating results will be below expectations of analysts and
investors.

Rapid Technological Change

Product technology in Data I/O's industry evolves rapidly, making timely product
innovation  essential to success in the marketplace.  Introducing  products with
improved  technologies or features may render our existing products obsolete and
unmarketable.  Technological  advances that may  negatively  impact our business
include:

o new device package types, densities, and technologies requiring hardware and
  software changes in order to be programmed by our products

o electronics equipment manufacturing practices, such as widespread use of
  in-circuit programming

o customer software platform preferences different from those on which our
  products operate

o more rigid industry standards, which would decrease the value-added element
  of our products and support services

If we cannot  develop  products  in a timely  manner  in  response  to  industry
changes,  or if our products do not perform  well,  our  business and  financial
condition will be adversely affected. Also, our new products may contain defects
or errors  that give rise to product  liability  claims  against us or cause our
products to fail to gain market  acceptance.  Our future success  depends on our
ability to successfully  compete with other  technology  firms in attracting and
retaining key technical personnel.

Economic and Market Conditions

Our business is highly  impacted by capital  spending  plans and other  economic
cycles that affect the users and  manufacturers  of ICs.  These  industries  are
highly  cyclical and are  characterized  by rapid  technological  change,  short
product  life cycles,  fluctuations  in  manufacturing  capacity and pricing and
gross margin pressures. As we experienced in recent years, our operations may in
the  future  reflect  substantial   fluctuations  from   period-to-period  as  a
consequence of these industry patterns,  general economic  conditions  affecting
the timing of orders from major customers,  and other factors  affecting capital
spending. These factors could have a material adverse effect on our business and
financial condition.

History of Losses

We have  incurred  net losses in two of our last  three  fiscal  years.  We will
continue  to examine our level of  operating  expense  based upon our  projected
revenues.  Any planned  increases  in  operating  expenses  may result in larger
losses in future periods if projected revenues are not achieved. As a result, we
may need to  generate  greater  revenues  than we have  recently  to achieve and
maintain  profitability.  However, we cannot provide assurance that our revenues
will  increase  and our  strategy  may not be  successful,  resulting  in future
losses.

Affects of Restructuring Activities

Our  previously   implemented   restructuring   plans  may  yield  unanticipated
consequences,  such as increased burden on our administrative,  operational, and
financial resources and increased responsibilities for our management personnel.
As a result, our ability to respond to unexpected challenges may be impaired and
we may be unable to take advantage of new opportunities.

In  addition,  many  of the  employees  that  were  terminated  as a part of our
restructuring  possessed specific knowledge or expertise,  and that knowledge or
expertise  may prove to have been  important  to our  operations.  In that case,
their absence may create significant difficulties,  particularly if our business
experiences  significant  growth Also, the reduction in workforce related to our
restructuring  may subject us to the risk of  litigation,  which could result in
substantial  cost.  Any  failure by us to properly  manage this rapid  change in
workforce  could  impair our  ability to  efficiently  manage our  business,  to
maintain and develop important relationships with third-parties,  and to attract
and retain customers.  It could also cause us to incur higher operating cost and
delays in the  execution of our business plan or in the reporting or tracking of
our financial results.

Need for Additional Funding

Our  past  revenues  have  been  and our  future  revenues  may  continue  to be
insufficient  to support the expense of our  operations and any expansion of our
business. We may therefore need additional equity or debt capital to finance our
operations.  If we are unable to generate  sufficient cash flows from operations
or to obtain funds through  additional debt or equity financing,  we may have to
reduce some or all of our development and sales and marketing  efforts and limit
the expansion of our business.

We believe our existing cash and cash equivalents will be sufficient to meet our
working capital  requirements  for at least the next twelve months.  Thereafter,
depending on the  development of our business,  we may need to raise  additional
cash for working capital or other expenses. We may also encounter  opportunities
for  acquisitions or other business  initiatives  that require  significant cash
commitments,  or  unanticipated  problems  or  expenses  that could  result in a
requirement for additional cash before that time.

Therefore,  we may seek  additional  funding  through  public or private debt or
equity  financing or from other sources.  We have no commitments  for additional
financing,  and we may experience  difficulty in obtaining  funding on favorable
terms,  if at all. Any financing we obtain may contain  covenants  that restrict
our freedom to operate our business or may require us to issue  securities  that
have rights, preferences or privileges senior to our Common Stock and may dilute
your ownership interest.

Competition

Technological  advances have reduced the barriers of entry into the  programming
systems  markets.  We expect  competition to increase from both  established and
emerging  companies.  If we fail to compete  successfully  against  current  and
future sources of competition,  our profitability and financial performance will
be adversely impacted.

Dependence on IC Manufacturers

We work  closely  with  most  semiconductor  manufacturers  to  ensure  that our
programming   systems  comply  with  their  requirements.   In  addition,   many
semiconductor  manufacturers  recommend our programming systems for use by users
of their programmable devices. These working relationships enable us to keep our
programming systems product line up to date and provide end-users with broad and
current  programmable device support.  Our business may be adversely affected if
our relationships with semiconductor manufactures deteriorate.

Dependence on Suppliers

Certain parts used in our products are currently  available from either a single
supplier or from a limited number of suppliers. If we cannot develop alternative
sources of these components,  if sales of parts are discontinued by the supplier
or we experience  deterioration in our relationship with these suppliers,  there
may be delays or reductions  in product  introductions  or shipments,  which may
materially adversely affect our operating results.

Because we rely on a small number of suppliers for certain parts, we are subject
to  possible  price  increases  by these  suppliers.  Also,  we may be unable to
accurately forecast our production schedule. If we under estimate our production
schedule,  suppliers may be unable to meet our demand for components. This delay
in the supply of key components may  materially  adversely  affect our business.
Over  estimation  of  demand  will lead to excess  inventories  that may  become
obsolete.

The non-automated  programming  system products we acquired when we acquired SMS
in  November  1998  are  currently  manufactured  to  our  specifications  by  a
third-party  foreign  contract  manufacturer.  We may not be able  to  obtain  a
sufficient  quantity of these  products if and when needed,  which may result in
lost sales.

<PAGE>

Reliance on Third-Party Distribution Channels

Data  I/O  has  an   internal   sales  force  and  also   utilizes   third-party
representatives,  and distributors.  Therefore, the financial stability of these
distributors is important. Highly skilled professional engineers use most of our
products.  To be effective,  third-party  distributors must possess  significant
technical,  marketing  and sales  resources  and must devote their  resources to
sales  efforts,  customer  education,   training  and  support.  These  required
qualities limit the number of potential third-party  distributors.  Our business
will suffer if we cannot  attract and retain a  sufficient  number of  qualified
third-party distributors to market our products.

International Operations

International sales represented 70% of our net revenue for the fiscal year ended
December  31,  2003 and 79% for the  first  quarter  of  2004.  We  expect  that
international  sales  will  continue  to be a  significant  portion  of our  net
revenue. International sales may fluctuate due to various factors, including:

o migration of manufacturing to low cost geographies

o unexpected changes in regulatory requirements

o tariffs and taxes

o difficulties in staffing and managing foreign operations

o longer average payment cycles and difficulty in collecting accounts receivable

o fluctuations in foreign currency exchange rates

o impact of the Euro

o compliance with applicable export licensing requirements

o product safety and other certification requirements

o difficulties in integrating foreign and outsourced operations

o political and economic instability

The European  Community and European  Free Trade  Association  have  established
certain electronic emission and product safety requirements ("CE"). Although our
products  currently  meet  these  requirements,  failure  to obtain  either a CE
certification  or a waiver for any product may  prevent us from  marketing  that
product in Europe.

We operate  subsidiaries  in Germany,  China and Canada and soon in Brazil.  Our
business and financial  condition is sensitive to currency exchange rates or any
other restrictions imposed on their currencies.  Currency exchange  fluctuations
in Canada,  China, Brazil and Germany may adversely affect our investment in our
subsidiaries.

Protection of Intellectual Property

Data I/O relies on patents,  copyrights, trade secrets and trademarks to protect
our intellectual property, as well as product development and marketing skill to
establish and protect our market  position.  We attempt to protect our rights in
proprietary  software products,  including TaskLink and other software products,
by retaining  the title to and copyright of the software and  documentation,  by
including  appropriate  contractual  restrictions  on use and  disclosure in our
licenses, and by requiring our employees to execute non-disclosure agreements.

Because of the rapidly  changing  technology  in the  semiconductor,  electronic
equipment  and  software  industries,  portions of our products  might  possibly
infringe upon existing patents or copyrights, and we may, therefore, be required
to obtain  licenses or  discontinue  the use of the  infringing  technology.  We
believe that any exposure we may have regarding possible  infringement claims is
a reasonable  business  risk  similar to that assumed by other  companies in the
electronic   equipment   and  software   industries.   However,   any  claim  of
infringement,  with or  without  merit,  could  be  costly  and a  diversion  of
management's attention,  and an adverse determination could adversely affect our
reputation,  preclude  us from  offering  certain  products,  and  subject us to
substantial liability.

Acquisitions

We may pursue  acquisitions  of  complementary  technologies,  product  lines or
businesses. Future acquisitions may include risks, such as:

o burdening management and our operating teams during the integration of the
  acquired entity

o diverting management's attention from other business concerns

o failing to successfully integrate the acquired products

o lack of acceptance of the acquired products by our sales channels or customers

o entering markets where we have no or limited prior experience

o potential loss of key employees of the acquired company

o additional burden of support for an acquired programmer architecture

Future acquisitions may also impact Data I/O's financial position.  For example,
we may use significant  cash or incur  additional  debt,  which would weaken our
balance sheet. We may also capitalize  goodwill and intangible  assets acquired,
the impairment of which would reduce our profitability. We cannot guarantee that
future acquisitions will improve our business or operating results.

Dependence on Key Personnel

We have  employees  located in the U.S.,  Germany,  Canada  and  China.  We also
utilize  independent  contractors for specialty work,  primarily in research and
development,  and utilize  temporary  workers to adjust  capacity to fluctuating
demand.  Many of our employees are highly skilled and our continued success will
depend in part upon our  ability to attract and retain  employees  who can be in
great demand within the industry.  None of our  employees are  represented  by a
collective  bargaining  unit and we believe  relations  with our  employees  are
favorable  though  no  assurance  can be made  that this will be the case in the
future.  Refer to the section  captioned  "Affects of Restructuring  Activities"
above.

Potential Volatility of Stock Price

The stock prices of technology  companies  tend to fluctuate  significantly.  We
believe factors such as  announcements  of new products by us or our competitors
and quarterly variations in financial results may cause the market price of Data
I/O's Common Stock to fluctuate substantially.  In addition,  overall volatility
in the stock market,  particularly in the technology  company  sector,  is often
unrelated  to  the  operating   performance   of  companies.   If  these  market
fluctuations continue in the future, they may adversely affect the price of Data
I/O's Common Stock.