THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

Insteel Industries Incorporated (IIIN)

1/13/2006 Proxy Information

In May 1997, we sold the assets of our ICS (“Insteel Construction Systems”) division to ICS 3-D Panel Works, Inc. (“ICSPW”), a new corporation organized by the division’s management group. Howard O. Woltz, Jr., our Chairman, was a principal Shareholder and a member of the board of directors of ICSPW. Prior to the sale, the Audit Committee of the Company’s Board reviewed the terms of the proposed transaction, focusing in particular on the participation of Mr. Woltz, Jr. as an investor in and director of ICSPW. Based upon the continuing operating losses of ICS and the prospective financial benefit to us from the sale of the division, the Audit Committee concluded that Mr. Woltz, Jr.’s participation was essential to the transaction and approval of the transaction was in our best interests. We financed the sale of the equipment by providing a secured loan. We retained the real property and leased it to ICSPW. In October 2003, ICSPW transferred its assets to a trustee under an Assignment for Benefit of Creditors. After transfer of its assets to the trustee, ICSPW continued to operate for a short period of time. During fiscal year 2005, ICSPW sold the equipment and we sold the real estate. As a combined result, we recorded a $793,000 net gain on the disposal of the real estate, the settlement on the release of the equipment lien and the collection of a note receivable that had been previously reserved.

Frances H. Johnson, a director, is President, and along with members of her family, owner of Johnson Concrete Company. Charles B. Newsome, a director, is Executive Vice President and General Manager of Johnson Concrete Company. During fiscal 2005, Johnson Concrete purchased materials from us valued at $701,000 ($651,000 for fiscal 2004) for use or resale in their normal course of business.

3/21/2005 8K Information

Mr. Howard O. Woltz has been Chairman of Insteel Industries, Inc. since 1958 and was employed by Insteel Industries and its predecessors in various capacities for more than 49 years until his executive retirment in April 2005.

1/13/2005 Proxy Information

In May 1997, the Company sold the assets of its ICS (“Insteel Construction Systems”) division to ICS 3-D Panel Works, Inc. (“ICSPW”), a new corporation organized by the division’s management group. Howard O. Woltz, Jr., Chairman of the Company, is a principal Shareholder and a member of the board of directors of ICSPW. Prior to the sale, the Audit Committee of the Company’s Board reviewed the terms of the proposed transaction, focusing in particular on the participation of Mr. Woltz, Jr. as an investor in and director of ICSPW. Based upon the continuing operating losses of ICS and the prospective financial benefit to the Company from the sale of the division, the Audit Committee concluded that Mr. Woltz, Jr.’s participation was essential to the transaction and approval of the transaction was in the best interests of the Company. The sale of the equipment was financed by the Company and secured by a UCC Financing Statement. The real property was retained by the Company and leased to ICSPW. The indebtedness remains unpaid In October 2003, ICSPW transferred its assets to a trustee under an Assignment for Benefit of Creditors. After transfer of its assets to the trustee, ICSPW continued to operate for a short period of time but is no longer in operation The Company has an offer from a prospective purchaser for the real property and a sale is expected to close in March 2005. It is not anticipated that the Company will receive full payment of the amounts owed by ICSPW. As of December 31, 2004, unpaid principal on the promissory note was $893,103. The entire balance has been reserved.

Frances H. Johnson, a director, is President, and along with members of her family, owner of Johnson Concrete Company. Charles B. Newsome, a director, is Executive Vice President and General Manager of Johnson Concrete Company. During fiscal 2004, Johnson Concrete purchased materials from the Company valued at $650,643 ($276,200 for fiscal 2003) for use or resale in their normal course of business.

Mr. Woltz is the father of H.O. Woltz III.

Management believes that amounts paid by the Company in connection with the transactions described above are reasonable and no less favorable to the Company than would have been paid or received pursuant to arms’ length transactions with unaffiliated parties.

6/21/2004 Proxy Information

C. Richard Vaughn, a member of the Executive Compensation Committee, is Chairman of the Board of Directors of John S. Clark Company, Inc. (“Clark”), a general building contractor, and Chairman of the Board of Riverside Building Supply, Inc. (“Riverside”), both located in Mount Airy, North Carolina. During the last fiscal year, the Company made no payments to Clark or Riverside. Riverside made payments to the Company in the amount of $4,722 for the purchase of materials. The Company believes that the terms of the transactions with Riverside were no less favorable to the Company than transactions with unaffiliated entities.

In May 1997, the Company sold the assets of its ICS (“Insteel Construction Systems”) division to ICS 3-D Panel Works, Inc. (“ICSPW”), a new corporation organized by the division’s management group. Howard O. Woltz, Jr., Chairman of the Company, is a principal Shareholder and a member of the board of directors of ICSPW. Prior to the sale, the Audit Committee of the Company’s Board reviewed the terms of the proposed transaction, focusing in particular on the participation of Mr. Woltz, Jr. as an investor in and director of ICSPW. Based upon the continuing operating losses of ICS and the prospective financial benefit to the Company from the sale of the division, the Audit Committee concluded that Mr. Woltz, Jr.’s participation was essential to the transaction and approval of the transaction was in the best interests of the Company. The sale of the equipment was financed by the Company and secured by a UCC Financing Statement. The real property was retained by the Company and leased to ICSPW. The indebtedness remains unpaid In October 2003, ICSPW transferred its assets to a trustee under an Assignment for Benefit of Creditors. It is expected that the business will continue to operate for a short period of time and then the trustee will seek buyers for the assets. The Company will sell the real property. It is not anticipated that the Company will receive full payment of the amounts owed. As of May 28, 2004, unpaid principal on the promissory note was $895,798. The entire balance has been reserved.

Frances H. Johnson, a director, is President, and along with members of her family, owner of Johnson Concrete Company. Charles B. Newsome, a director, is Executive Vice President and General Manager of Johnson Concrete Company. During fiscal 2003, Johnson Concrete purchased materials from the Company valued at $276,200 ($402,383 for fiscal 2002) for use or resale in their normal course of business.

Management believes that amounts paid by the Company in connection with the transactions described above are reasonable and no less favorable to the Company than would have been paid or received pursuant to arms’ length transactions with unaffiliated parties.

1/15/2003 Proxy Information

Frances H. Johnson, a director, is President, and along with members of her family, owner of Johnson Concrete Company. Charles B. Newsome, a director, is Executive Vice President and General Manager of Johnson Concrete Company. During fiscal 2002, Johnson Concrete purchased materials from Insteel Industries, Inc. valued at $402,383 ($482,839 for fiscal 2001) for use or resale in their normal course of business.

C. Richard Vaughn has served as Chairman and Chief Executive Officer of John S. Clark Company, Inc. from 1988 to the present. He served as Vice President of John S. Clark, a general building contracting company, from 1967-1970 and President from 1970-1988. Insteel made certain payments to John S. Clark Company for miscellaneous consulting and construction projects during 2002.