SCHEDULE 14A INFORMATION
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|X| Preliminary Proxy Statement |_| Confidential, For Use of the
|_| Definitive Proxy Statement Commission Only (as permitted
|_| Definitive Additional Materials by Rule 14a-6(e)(2))
|_| Soliciting Material Pursuant to Rule
14a-11(c) or Rule 14a-12
COMMISSION FILE NO. 0-28452
U-SHIP, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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|_| Fee paid previously with preliminary materials:
|_| Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount previously paid:
----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement no.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
U-SHIP, INC.
5583 WEST 78TH STREET
EDINA, MINNESOTA 55439
March 25, 1999
Dear Shareholder:
You are cordially invited to attend the 1998 Annual Meeting of
Shareholders of U-Ship, Inc. to be held at the Radisson Plaza Hotel Minneapolis,
35 South Seventh Street, Minneapolis, Minnesota, on Monday, April 19, 1999, at
3:30 p.m. Minneapolis time.
At the Annual Meeting you will be asked to vote for the election of
seven directors. All of these nominees are currently directors and, I strongly
believe, represent a cohesive team and are moving the Company in the right
direction. By re-electing this group, the Board will be able to continue
implementing our new business plan and continue the improvements we have already
started to see. The Board is recommending to you that we change the Company name
to United Shipping & Technology, Inc. We believe that this name better
communicates to the public what exactly the Company does and projects the
Company's new image. We are also asking you to approve amendments to our 1995
Stock Option Plan and 1996 Director Stock Option Plan. We believe that the
amendments are necessary in order to attract quality employees and independent
directors and give the current key employees and directors an incentive to
remain with us. We are also asking you to ratify our decision to appoint Lurie,
Besikof, Lapidus & Co., LLP as the Company's independent public accountants for
the fiscal year ended June 30, 1999.
Whether or not you are able to attend the meeting in person, I urge you
to sign and date the enclosed proxy card and return it in the enclosed envelope.
If you do attend the meeting in person, you may withdraw your proxy and vote
personally on any matters properly brought before the meeting.
Sincerely,
U-SHIP, INC.
/s/ Peter C. Lytle
Peter C. Lytle
President and Chief Executive Officer
<PAGE>
U-SHIP, INC.
5583 WEST 78TH STREET
EDINA, MINNESOTA 55439
NOTICE OF 1998 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MONDAY, APRIL 19, 1999
NOTICE IS HEREBY GIVEN that the 1998 Annual Meeting of Shareholders of
U-Ship, Inc. (the "Company"), a Utah corporation, will be held at the Radisson
Plaza Hotel Minneapolis, 35 South Seventh Street, Minneapolis, Minnesota, on
Monday, April 19, 1999, at 3:30 p.m. Minneapolis time, and at any adjournment or
postponement thereof, for the following purposes, as more fully described in the
accompanying Proxy Statement:
1. To elect seven directors for the ensuing year and until their
successors are duly elected and qualified;
2. To consider and vote upon the amendment to the Restated Articles of
Incorporation of the Company to change the name of the Company to
United Shipping & Technology, Inc.;
3. To consider and vote upon amendments to the Company's 1995 Stock
Option Plan, including an amendment to increase the number of shares
for which options may be granted under such plan from 450,000 to
1,950,000 shares;
4. To consider and vote upon amendments to the Company's 1996 Director
Stock Option Plan, including an amendment to increase the number of
shares for which options may be granted under such plan from 100,000
to 210,000 shares;
5. To ratify the appointment of Lurie, Besikof, Lapidus & Co. LLP,
independent certified public accountants, as auditors of the Company
for its fiscal year ending June 30, 1999; and
6. In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the meeting or any
adjournment or postponement thereof.
The transfer books of the Company will not be closed for the Annual
Meeting. Only shareholders of record holding Common Stock at the close of
business on March 22, 1999, are entitled to receive notice of, and to vote at,
the Annual Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Kenneth D. Zigrino
Kenneth D. Zigrino
Secretary
Edina, Minnesota
March 25, 1999
- --------------------------------------------------------------------------------
ALL SHAREHOLDERS ARE CORDIALLY INVITED AND REQUESTED TO ATTEND THE ANNUAL
MEETING IN PERSON. SHAREHOLDERS WHO ARE UNABLE TO ATTEND IN PERSON ARE REQUESTED
TO COMPLETE, DATE AND SIGN THE ENCLOSED PROXY EXACTLY AS YOUR NAME APPEARS
THEREON AND PROMPTLY RETURN IT IN THE ENVELOPE PROVIDED, WHICH REQUIRES NO
POSTAGE IF MAILED IN THE UNITED STATES. YOUR PROXY IS BEING SOLICITED BY THE
BOARD OF DIRECTORS OF THE COMPANY. YOUR ATTENDANCE AT THE ANNUAL MEETING,
WHETHER IN PERSON OR BY PROXY, IS IMPORTANT TO ENSURE A QUORUM. IF YOU RETURN
YOUR PROXY, YOU STILL MAY VOTE YOUR SHARES IN PERSON BY GIVING WRITTEN NOTICE
BY SUBSEQUENT PROXY OR OTHERWISE) TO THE SECRETARY OF THE COMPANY AT ANY TIME
PRIOR TO THE VOTE AT THE ANNUAL MEETING.
- --------------------------------------------------------------------------------
<PAGE>
U-SHIP, INC.
5583 WEST 78TH STREET
EDINA, MINNESOTA 55439
-------------------
PROXY STATEMENT FOR
1998 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 19, 1999
------------------
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors (the "Board of Directors" or the "Board")
of U-Ship, Inc. (the "Company"), to be voted at the Annual Meeting of
Shareholders (the "Annual Meeting") to be held at the Radisson Plaza Hotel
Minneapolis, 35 South Seventh Street, Minneapolis, Minnesota, on Monday, April
19, 1999, at 3:30 p.m. Minneapolis time, and at any adjournment or postponement
thereof. The Notice of Annual Meeting, this Proxy Statement and the enclosed
proxy are first being mailed to shareholders on or about March 25, 1999.
The Board of Directors knows of no business which will be presented at
the Annual Meeting other than the matters referred to in the accompanying Notice
of Meeting. However, if any other matters are properly presented at the Annual
Meeting, it is intended that the persons named in the proxy will vote on such
matters in accordance with their judgment. If the enclosed proxy is executed and
returned, it nevertheless may be revoked at any time before it has been voted by
a later-dated proxy or a vote in person at the Annual Meeting. Shares
represented by properly executed proxies received on behalf of the Company will
be voted at the Annual Meeting (unless revoked prior to their vote) in the
manner specified therein. If no instructions are specified in a signed proxy
returned to the Company, the shares represented thereby will be voted (i) FOR
the election of the seven director nominees named herein; (ii) FOR the proposal
to approve the amendment to the Restated Articles of Incorporation of the
Company to change the Company's name; (iii) FOR the proposal to adopt amendments
to the Company's 1995 Stock Option Plan, including an amendment to increase the
number of shares for which options may be granted under such plan from 450,000
to 1,950,000 shares; (iv) FOR the proposal to adopt amendments to the Company's
1996 Director Stock Option Plan, including an amendment to increase the number
of shares for which options may be granted under such plan from 100,000 to
210,000 shares; and (v) FOR the appointment of Lurie, Besikof, Lapidus & Co.,
LLP, independent certified public accountants, as auditors of the Company for
its fiscal year ending June 30, 1999. If any other matters are properly
presented at the Annual Meeting for action, including a question of adjourning
or postponing the Annual Meeting from time to time, the persons named in the
proxies and acting thereunder will have discretion to vote on such matters in
accordance with their best judgement.
RECORD DATE AND OUTSTANDING COMMON STOCK
Only holders of the Common Stock of the Company whose names appear of
record on the books of the Company at the close of business on March 22, 1999
(the "Record Date"), are entitled to receive notice of, and to vote at, the
Annual Meeting. On the Record Date, the voting shares of the Company consisted
of 10,068,537 shares of Common Stock, each entitled to one vote per share.
Effective February 25, 1999, the Company has exercised its right to effect a
mandatory conversion of its outstanding Series A Cumulative Convertible
Preferred Stock ("Preferred Stock"). Whether or not a holder of Preferred Stock
has tendered such holder's Preferred Stock certificate, the Company will treat
such holder as the holder of Common Stock as of February 25, 1999, the date on
which notice of conversion was sent to holders of the Preferred Stock.
2
<PAGE>
REVOCABILITY OF PROXIES
Any shareholder who executes and returns a proxy may revoke it at any
time before it is voted. Any shareholder who wishes to revoke a proxy can do so
by (i) executing a later-dated proxy relating to the same shares and delivering
it to the Secretary of the Company prior to the vote at the Annual Meeting, (ii)
filing a written notice of revocation bearing a later date than the proxy with
the Secretary of the Company prior to the vote at the Annual Meeting, or (iii)
appearing in person at the Annual Meeting, filing a written notice of revocation
and voting in person the shares to which the proxy relates. Any written notice
or subsequent proxy should be delivered to U-Ship, Inc., 5583 West 78th Street,
Edina, Minnesota 55439, Attention: Kenneth D. Zigrino, Secretary of the Company,
or hand-delivered to the Secretary of the Company prior to the vote at the
Annual Meeting.
QUORUM; ABSTENTIONS; BROKER NON-VOTES
The presence, in person or by proxy, of the holders of at least a
majority of the shares of Common Stock outstanding and entitled to vote is
necessary to constitute a quorum for the transaction of business at the Annual
Meeting. All votes will be tabulated by the inspector of election for the Annual
Meeting, who will separately tabulate affirmative and negative votes,
abstentions and broker non-votes.
If a properly executed proxy is returned and the shareholder has
abstained from voting on any matter, the shares represented by such proxy will
be considered present at the Annual Meeting for purposes of determining a quorum
and for purposes of calculating the vote, but will not be considered to have
been voted in favor of such matter.
If a properly executed proxy is returned by a broker holding shares in
street name which indicates that the broker does not have discretionary
authority as to certain shares to votes on one or more matters, such shares will
be considered present at the Annual Meeting for determining a quorum, but will
not be considered to be represented at the Annual Meeting for purposes of
calculating the vote with respect to such matter.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Bylaws of the Company state that the Board shall consist of at
least three but not more than nine persons as determined by the Board or the
Company's shareholders. The Board has set the size of the Board at seven members
and has nominated for election to the Board the seven persons named below. The
shareholders are being requested to elect the seven nominees named below. All of
the nominees are currently members of the Board.
The persons named in the accompanying proxy will vote for the election
of the below named nominees, unless authority to vote is withheld. Shareholders
do not have cumulative voting rights with respect to the election of directors,
and proxies cannot be voted for a greater number of directors than the number of
nominees named below. The Board is informed that the nominees are willing to
serve as directors; however, if any nominee is unable to serve or for good cause
will not serve, the proxy may be voted for such other person as the proxies
shall, in their discretion, designate, or the Board may reduce the number of
directors to eliminate the vacancy.
NOMINEES FOR ELECTION AS DIRECTOR
The seven nominees receiving the highest number of affirmative votes of
the shares entitled to vote at the Annual Meeting shall be elected to the Board
of Directors. The following table sets forth certain information regarding the
nominees for election as director of the Company. All of the directors of the
Company elected at the Annual Meeting will serve for the ensuing year and until
their successors are duly elected and qualified. There are no family
relationships between any director or officer. THE BOARD OF DIRECTORS RECOMMENDS
THAT SHAREHOLDERS VOTE FOR THE NOMINEES LISTED BELOW.
3
<PAGE>
Name Age Position
- ---- --- --------
Peter C. Lytle 49 Chairman, President, Chief Executive Officer
and Director
Timothy G. Becker 38 Treasurer, Chief Financial Officer and Director
Marshall T. Masko 41 Vice Chairman and Director
James A. Bartholomew 42 Director
Marlin Rudebusch 51 Director
Susan M. Clemens 36 Director
Ronald G. Olson 58 Director
PETER C. LYTLE. Mr. Lytle became employed by the Company in May 1998
and has served as the Company's Chairman, President, Chief Executive Officer and
a director since June 1998. From March 1998 to May 1998, Mr. Lytle rendered
consulting services to the Company in connection with its strategic
restructuring. Mr. Lytle is a principal with the Business Development Group (the
"BDG") which he co-founded in 1994. The BDG provides turnaround management
services and strategic planning to companies in the United States and Europe.
His responsibilities at the BDG included acting as CEO and Chairman of Primo
Piatto, Inc. during a successful acquisition of the Borden Pasta Manufacturing
business (which was recently sold to Dakota Growers Pasta Company) and acting as
Chairman of Pink Business Interiors during a successful employee buyout and
reorganization. From 1986 to 1994, Mr. Lytle was employed by Land O' Lakes, Inc.
in a variety of positions from Vice President of Advanced Food Sciences to
General Manager of Business Development. Prior to that time he held positions
with the Beatrice Companies as a Group Brand Manager, and Allied International
as Vice President of Marketing and Business Development. He currently is on the
Board of Directors of Humanetics Corporation, BioSun Systems, Inc., Agrotec,
Inc. and Pink Business Interiors, Inc. He is on the Board of Advisors for the
Center for Advanced Biotechnology in Africa, and Menu Direct, Inc.
TIMOTHY G. BECKER. Mr. Becker is a director of the Company and has
served as its Chief Financial Officer and Treasurer since June 1998. From March
1998 to June 1998, Mr. Becker rendered consulting services to the Company in
connection with its strategic restructuring. Between February 1994 and March
1998, Mr. Becker has worked as an independent financial workout consultant for
his own firm, the Becker Group, Ltd., and during this time Mr. Becker served as
Chief Financial Officer of Primo Piatto, Inc. Between February 1992 and February
1994, Mr. Becker was employed as Director of Business Systems for Munsingwear,
Inc. Prior to 1992, Mr. Becker was employed as Senior Manager with Ernst & Young
LLP's Restructuring and Reorganization Consulting Practice. Mr. Becker has over
15 years of experience with a variety of companies during periods of financial
crisis and rapid change along with positioning companies and their balance
sheets for sale, merger or acquisitions. Mr. Becker is a Certified Public
Accountant and is a member of the Board of Directors of the Minnesota Chapter of
Turnaround Management Association.
MARSHALL T. MASKO. Mr. Masko was elected as Vice Chairman and a
director of the Company in June 1998. In addition, Mr. Masko has been retained
as an independent consultant to assist the Company in its marketing efforts.
From April 1996 to February 1998, Mr. Masko served as the Senior Vice President
- - Marketing of NordicTrack. From August 1994 to March 1996, he served as Senior
Vice President and General Manager of K-tel, International. Prior to that, Mr.
Masko was Group Vice President - Marketing for NordicTrack from January 1990 to
July 1994. His career experience includes new product development, brand
management, advertising management, direct response marketing, international
marketing, sales and retail marketing, strategic planning and business
development.
4
<PAGE>
JAMES A. BARTHOLOMEW. Mr. Bartholomew was elected to the Company's
Board in March 1998. Mr. Bartholomew has been a financial and strategic workout
consultant for the last 11 years with his own firm. Mr.Bartholomew is a
Certified Public Accountant and has been involved in a substantial number of
workout engagements including negotiations of acquisitions and divestitures,
negotiations with secured lenders, banks, asset based lenders, subordinated note
holders and unsecured creditors. For nine years prior to that he was employed by
the firm Deloitte, Haskins and Selles. He is a member of the Board of Directors
of the Minnesota Chapter of Turnaround Management Association.
MARLIN RUDEBUSCH. Mr. Rudebusch was elected to the Company's Board in
March 1998. Mr. Rudebusch is the Business Unit Director for Renal Systems
division of Minntech Corporation, by which he has been employed since December
1997. Between September 1994 and November 1997 he was the Vice President of
Marketing of Nutrition Medical and from 1993 to 1994 was Director of Marketing
at AudioScience. He served in various sales and marketing management positions
at Medtronic, Inc. between 1981 to 1993.
SUSAN M. CLEMENS. Ms. Clemens was elected to the Company's Board in
June 1998. Since February 1998, Ms. Clemens has been employed by Dakota Growers
Pasta Company in the position of Vice President of Human Resources. From August
1997 to February 1998, she was employed by Primo Piatto, Inc. as Vice President
of Human Resources and Administration. From January 1993 to August 1997, Ms.
Clemens was the Senior Human Resources Manager for Borden Foods Corporation.
Between 1986 and January 1993 Ms. Clemens was employed by Tiro Industries, Inc.
as Human Resources Manager.
RONALD G. OLSON. Mr. Olson was elected to the Company's Board in
December 1998. Since January 1990, Mr. Olson has served as President, Chief
Executive Officer and a Director of Grow Biz International, Inc. Mr. Olson has
also served as President and Chief Executive Officer of Franchise Business
Systems, Inc. since July 1988.
THE BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors held four meetings during the fiscal year ended
June 30, 1998. Each director attended at least 75% of the total number of
meetings of the Board and the total number of meetings held by all committees of
the Board on which he or she served during the fiscal year ended June 30, 1998.
The Board has established Audit, Compensation and Executive committees.
The Audit Committee currently consists of James A. Bartholomew and
Ronald G. Olson. The Audit Committee is empowered by the Board to review the
financial books and records of the Company in consultation with the Company's
accounting staff and its independent auditors and to review with the accounting
staff and independent auditors any questions raised with respect to accounting
and auditing policy and procedures. Where appropriate, the Audit Committee also
reviews transactions with management involving actual or potential conflicts of
interest. During the fiscal year ended June 30, 1998, at times when the
committee was composed of former directors Gary W. Ramsden and Donald L. Kotula,
the Audit Committee held two meetings. James A. Bartholomew and Ronald G. Olson,
the current members of the Audit Committee, joined the committee subsequent to
such meetings.
The Compensation Committee currently consists of Susan M. Clemens,
Marlin Rudebusch and James A. Bartholemew. The Compensation Committee is
authorized by the Board to establish general levels of compensation for all
employees of the Company, to set the annual salary of each of the executive
officers of the Company, to grant options and to otherwise administer the
Company's stock option plans, and to review and approve compensation and benefit
plans of the Company. During the fiscal year ended June 30, 1998, at times when
the committee was composed of former directors Donald L. Kotula and B. Richard
Vogen, the Compensation Committee held two meetings. Susan M. Clemens, Marlin
Rudebusch and James A. Bartholomew, the current members of the Compensation
Committee, joined the committee subsequent to such meetings.
In June 1998, the Board established an Executive Committee, which
consists of Peter C. Lytle, Susan M. Clemens and James A. Bartholomew. Subject
to certain limitations, the Executive Committee may exercise the power of the
Board when the Board is not in session. The Executive Committee did not hold
any meetings during fiscal 1998.
5
<PAGE>
DIRECTOR COMPENSATION
CASH COMPENSATION. The Company has not paid any cash compensation to a
director in his or her capacity as a director and has no present plan to pay
directors' fees.
DIRECTOR STOCK OPTION PLAN. In February 1995, the Company adopted its
1996 Director Stock Option Plan (the "1996 Director Plan"), pursuant to which it
automatically awards each outside director 5,000 shares of Common Stock for each
year of service as a director, not to exceed in the aggregate 15,000 shares per
director. The term of each option granted under the plan is five years and the
exercise price per share for stock granted under the plan is 100% of the fair
market value per share on the date on which the respective option is granted. As
described further in Proposal No. 4, the Company is asking the shareholders to
amend the 1996 Director Plan so that each outside director will automatically be
awarded 15,000 shares of Common Stock for each year of service as a director.
COMPENSATION TO MARSHALL T. MASKO. In March 1998, Mr. Masko, a director
of the Company, received an option for the purchase of 125,000 shares of Common
Stock. Such option had vested to the extent of 61,312 shares as of June 30,
1998. The right to purchase the remaining 63,688 shares was granted subject to
shareholder approval of an amendment to the Company's 1995 Stock Option Plan
increasing the number of shares available for the grant of options thereunder.
The option is exercisable at a price of $0.40 per share over a 10-year period.
The option is comparable to the terms of options granted to Messrs. Lytle,
Becker and Zigrino, officers of the Company who rendered consulting services
beginning in March 1998.
COMPENSATION TO RONALD G. OLSON. In December 1998, Mr. Olson became a
director of the Company. In connection with his becoming a director, in addition
to an option for 5,000 shares of common stock which was automatically granted
under the 1996 Director Plan, Mr. Olson was granted an option for the purchase
of 23,000 shares of Common Stock. The option is exercisable at a price of $3.875
per share.
CONSULTING COMPENSATION TO BRUCE H. SENSKE. Beginning in June 1998, Mr.
Senske, who was a director and executive officer of the Company during fiscal
year 1998, became employed by Manchester Financial Group, Inc. whereby Mr.
Senske provides consulting services to the Company at a rate of $125 per hour.
During fiscal year 1998, Mr. Senske was paid an aggregate of $4,625 for his work
as a consultant to the Company.
6
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the aggregate cash compensation paid
to or accrued by each of the Company's executive officers receiving in excess of
$100,000 (the "Named Executive Officers") for services rendered to the Company
during the fiscal years ended June 30, 1998, June 30, 1997 and June 30, 1996.
The Company has not formalized employment agreements with its executive
officers.
SUMMARY COMPENSATION TABLE
Annual Compensation
-------------------
Long-Term
Compensation
------------
Securities Underlying
Name and Principal Position Year Salary Options
- --------------------------- ---- ------ ---------------------
Peter C. Lytle (1) 1998 $16,667 125,000
Chief Executive Officer
Bruce H. Senske (2) 1998 $121,624 (3) 50,000
Vice President of Technology 1997 110,000 15,000
1996 114,000 --
- ---------------
(1) Mr. Lytle's employment with the Company began on May 4, 1998. In
connection with consulting services rendered to the Company as an
independent contractor between March 1998 and the commencement of his
employment, the Company granted Mr. Lytle an option to purchase 125,000
shares of common stock. Such option had vested to the extent of 61,312
shares as of June 30, 1998. The option to purchase the remaining 63,688
shares was granted subject to shareholder approval of an amendment to
the Company's 1995 Stock Option Plan increasing the number of shares
available for the grant of options thereunder.
(2) Mr. Senske's employment as the Company's Chief Executive Officer
terminated on June 3, 1998. Mr. Senske's compensation for 1998 reflects
his services as Chief Executive Officer through June 3 ,1998. Mr.
Senske remained a director and executive officer of the Company until
February 16, 1999. Mr. Senske presently consults with the Company on a
part-time basis. In June 1998, Mr. Senske earned $4,625 as a consultant
to the Company, which is reflected in his 1998 annual compensation.
(3) Includes severance compensation from the Company in the amount of
$36,666.
7
<PAGE>
The following tables summarize stock option grants and option exercises
during the fiscal year ended June 30, 1998 to or by the Named Executive Officers
and certain other information relative to such options.
OPTION GRANTS IN LAST FISCAL YEAR
(INDIVIDUAL GRANTS)
<TABLE>
<CAPTION>
Number of Securities Percent of Total Options
Underlying Options Granted to Employees in Exercise
Name Granted Fiscal Year Price Expiration Date
- ---------------- ------------------- ------------------------ ---------- ---------------
<S> <C> <C> <C> <C>
Peter C. Lytle 125,000 (1) 19.6 $0.40 March 23, 2008
Bruce H. Senske 50,000 7.8 $0.40 March 23, 2008
</TABLE>
- ------------
(1) In March 1998, as compensation for his services as a consultant, the
Company granted Mr. Lytle an option to purchase 125,000 shares of
Common Stock. Such option had vested to the extent of 61,312 shares as
of June 30, 1998. The right to purchase the remaining 63,688 shares was
granted subject to shareholder approval of an amendment to the
Company's 1995 Stock Option Plan increasing the number of shares
available for the grant of options thereunder.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities Value of
Shares Underlying Unexercised Unexercised In-the-
Acquired on Value Options at FY-End Money Options at FY-End
Name Exercise Realized Exercisable/Unexercisable Exercisable/Unexercisable
---- -------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Peter C. Lytle --- --- 61,312/63,688(1) $75,000/$25,475
Bruce H. Senske --- --- 50,000/0 $30,000
</TABLE>
- ------------
(1) In March 1998, as compensation for his services as a consultant, the
Company granted Mr. Lytle an option to purchase 125,000 shares of
Common Stock. Such option had vested to the extent of 61,312 shares as
of June 30, 1998. The right to purchase the remaining 63,688 shares was
granted subject to shareholder approval of an amendment to the
Company's 1995 Stock Option Plan increasing the number of shares
available for the grant of options thereunder.
PROPOSAL NO. 2
PROPOSAL TO APPROVE THE AMENDMENT OF THE RESTATED ARTICLES OF
INCORPORATION TO CHANGE THE COMPANY'S NAME TO
UNITED SHIPPING & TECHNOLOGY, INC.
The Board of Directors believes that it is desirable for the Company to
adopt a corporate name which better communicates the nature of its principal
business operations to its customers and to the public. On February 16, 1999,
the Board of Directors adopted, subject to shareholder approval, a resolution to
amend the Company's Restated Articles of Incorporation to change its corporate
name to United Shipping & Technology, Inc. The Company has been using this name
as an assumed name since September 1998. The Board of Directors recommends that
the shareholders approve this name change and adopt the following resolution at
the Annual Meeting of Shareholders.
RESOLVED, that Article 1 of the Restated Articles of
Incorporation of U-Ship, Inc. shall be amended in its entirety to read as
follows:
8
<PAGE>
ARTICLE I
The name of the Corporation is United Shipping & Technology, Inc.
Approval of the amendment requires the affirmative vote of a majority
of the shares present in person or represented by proxy and entitled to vote at
the Annual Meeting is required to approve the amendment. THE BOARD OF DIRECTORS
CONSIDERS THIS AMENDMENT TO BE IN THE BEST INTERESTS OF THE COMPANY AND ITS
SHAREHOLDERS AND RECOMMENDS THAT SHAREHOLDERS VOTE FOR APPROVAL OF THIS
AMENDMENT.
PROPOSAL NO. 3
TO APPROVE THE AMENDMENTS TO THE 1995 STOCK OPTION PLAN
GENERAL
The Board of Directors previously adopted the Company's 1995 Stock
Option Plan (the "1995 Plan") and reserved 450,000 shares of Common Stock for
issuance thereunder. A general description of the 1995 Plan is set forth below,
but such description is qualified in its entirety by reference to the full text
of the 1995 Plan.
DESCRIPTION OF THE 1995 PLAN
PURPOSE. The purpose of the 1995 Plan is to promote the interests of
the Company by providing employees of the Company and certain independent
contractors with an opportunity to acquire a proprietary interest in the Company
and thereby develop a stronger incentive to contribute to the Company's
continued success and growth. In addition, the granting of stock options will
assist the Company in attracting and retaining key personnel of outstanding
ability.
TERM. The term of the 1995 Plan is indefinite; however, the Board may
terminate the 1995 Plan at any time, provided that such termination will not
affect options then outstanding and provided further that no incentive stock
options may be granted under the 1995 Plan on or after June 5, 2005.
ADMINISTRATION. The 1995 Plan is administered by the Company's
Compensation Committee (the "Committee"). The 1995 Plan gives broad powers to
the Committee to administer and interpret the 1995 Plan, including the authority
to select the individuals to be granted stock options and to prescribe the
particular form and conditions of each option (which may vary from optionee to
optionee).
ELIGIBILITY. All employees of the Company or any subsidiary are
eligible to receive incentive stock options pursuant to the 1995 Plan. All
employees of, including any officer or director who is also an employee,
consultants to and independent contractors of the Company or any subsidiary are
eligible to receive nonqualified stock options. As of March 5, 1999, the Company
had 27 full-time and one part-time employees, including officers and directors
who are also employees.
OPTIONS. When a stock option is granted under the 1995 Plan, the
Committee, in its discretion, specifies the option price, the type of option
(either "incentive" or "nonqualified") to be granted, and the number of shares
of Common Stock which may be purchased upon exercise of the option. The exercise
price of a stock option may not be less than 100% of the fair market value of
the Company's Common Stock on the date of grant. On March 5, 1999, the closing
price of the Company's Common Stock as reported on the Nasdaq SmallCap Market
was $2.75. The term during which an option may be exercised and whether an
option will be exercisable immediately, in stages or
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otherwise are set by the Committee, but the term of any option may not exceed
ten years from the date of grant. Optionees may pay for shares upon exercise of
options with cash, certified check or Common Stock of the Company valued at the
stock's then fair market value. Each option granted under the 1995 Plan is
nontransferable during the lifetime of the optionee. As of March 5, 1999, the
Company had granted options to purchase 1,046,250 shares under the 1995 Plan,
554,752 of which have been granted subject to shareholder approval of an
increase in the number of shares available for grant under the plan. See "New
Plan Benefits" and "Interest of Certain Persons in Proposed Amendment to the
1995 Plan."
The Committee determines the form of stock option agreements which will
be used for stock options granted under the 1995 Plan. Such agreements govern
the right of an optionee to exercise an option upon termination of employment or
affiliation with the Company during the life of an optionee and following an
optionee's death. The Board or the Committee may impose additional or
alternative conditions and restrictions on the incentive or nonqualified stock
options granted under the 1995 Plan; however, each incentive option must contain
such limitations and restrictions upon its exercise as are necessary to ensure
that the option will be an incentive stock option as defined under the Code.
AMENDMENT. The Board of Directors may from time to time suspend or
discontinue the 1995 Plan or amend it in any respect; provided, however, that no
such revision or amendment shall be made without the approval of the
shareholders if it would: (a) materially modify the eligibility requirements for
participants; (b) increase the maximum aggregate number of shares of stock which
may be issued pursuant to options; (c) reduce the minimum option price per
share, except in accordance with the 1995 Plan's antidilution provisions; (d)
extend the period of granting options; or (e) materially increase in any other
way the benefits accruing to optionees.
ANTIDILUTION PROVISIONS. The Board of Directors shall equitably adjust
the maximum number of shares of Common Stock reserved for issuance under the
1995 Plan, the number of shares covered by each outstanding option and the
option price per share in the event of stock splits or consolidations, stock
dividends or other transactions in which the Company receives no consideration.
PROPOSED PLAN AMENDMENTS
The Board has approved, subject to shareholder approval, an amendment
to the 1995 Plan which would increase the aggregate number of shares of the
Company's Common Stock available under the 1995 Plan from 450,000 to 1,950,000.
The Board believes that this amendment will advance the interests of the Company
and its shareholders by increasing the proprietary interest of employees in the
Company's long-term success and more closely aligning the interests of employees
with the Company's shareholders.
The Board has also approved, subject to shareholder approval, an
amendment to the 1995 Plan which would permit the committee administering the
1995 Plan to suspend or discontinue it at any time and to revise or amend it in
any respect; provided, that no revision or amendment may be made without
shareholder approval that: (i) absent such shareholder approval, would cause
Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), to become unavailable with respect to the 1995 Plan or (ii) requires
shareholder approval under any rules or regulations of the National Association
of Securities Dealers, Inc. or any exchange that are applicable to the Company.
The Board believes that this amendment will advance the interests of the Company
and its shareholders by more closely aligning the language of the plans to the
revised text of Section 16 of the Securities Exchange Act of 1934.
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TAX INFORMATION
Under present law, no tax results upon the grant of nonqualified
options pursuant to the 1995 Plan. However, in the year that a nonqualified
stock option is exercised, the optionee must recognize compensation, taxable as
ordinary income, equal to the difference between the option price and the fair
market value of the shares on the date of exercise. The Company normally will
receive a deduction equal to the amount of compensation the optionee is required
to recognize as ordinary income if the Company complies with any applicable
federal income tax withholding requirements.
Incentive stock options granted under the 1995 Plan are intended to
qualify for favorable tax treatment under Section 422 of the Code. Under Section
422, an optionee recognizes no taxable income when the option is granted.
Further, the optionee generally will not recognize any taxable income when the
option is exercised if he or she has at all times from the date of the option's
grant until three months before the date of exercise been an employee of the
Company. The Company ordinarily is not entitled to any income tax deduction upon
the grant or exercise of an incentive stock option. Certain other favorable tax
consequences may be available to the optionee if he or she does not dispose of
the shares acquired upon the exercise of an incentive stock option for a period
of two years from the granting of the option and one year from the receipt of
the shares.
The foregoing is only a summary of the general effect of United States
federal income taxation upon the optionee and the Company with respect to the
grant and exercise of options under the 1995 Plan and the subsequent sale of
shares. This summary does not discuss the income tax laws of any state or
foreign country in which an optionee may reside.
INTEREST OF CERTAIN PERSONS IN PROPOSED AMENDMENT TO THE 1995 PLAN
In March 1998, Marshall T. Masko, a director of the Company, and
Messrs. Lytle, Becker and Zigrino, officers of the Company, each received a five
year option for the purchase of 125,000 shares of Common Stock at an exercise
price of $.40 per share. Of the total amount of each option, 63,688 shares were
granted subject to shareholder approval of the amendment to the Company's 1995
Plan increasing the number of shares available for the grant of options
thereunder. See "New Plan Benefits."
In October 1998, Messrs. Lytle, Becker and Zigrino, officers of the
Company, each received a ten year option, vesting over a two-year period, for
the purchase of 100,000 shares of Common Stock at an exercise price of $1.25 per
share. Each 100,000 option was granted subject to shareholder approval of the
amendment to the Company's 1995 Plan increasing the number of shares available
for the grant of options thereunder. See "New Plan Benefits."
NEW PLAN BENEFITS
The following table sets forth the grant of options to Marshall T.
Masko, a director of the Company, and Messrs. Lytle, Becker and Zigrino,
officers of the Company who rendered consulting services to the Company
beginning in March 1998. The table also sets forth the grant of options for the
purchase of 100,000 shares of Common Stock in October 1998, to each of Messrs.
Lytle, Becker and Zigrino, officers of the Company. These options were granted
to each individual subject to shareholder approval of an amendment to the
Company's 1995 Plan increasing the number of shares available for the grant of
options thereunder. There are no options currently contemplated other than those
described below, although the amount of awards granted to date are not
necessarily indicative of the amounts that will be awarded in the future.
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1995 STOCK OPTION PLAN
NAME AND POSITION DOLLAR VALUE NUMBER OF SHARES
- ----------------- ------------ ----------------
Peter C. Lytle................................ $150,475 163,688
President, Chief Executive Officer
and Director
Timothy G. Becker............................. $150,475 163,688
Treasurer, Chief Financial Officer
and Director
Marshall T. Masko............................. $ 25,475 63,688
Vice Chairman and Director
Kenneth D. Zigrino............................ $150,475 163,688
Vice President - Administration,
General Counsel and Secretary
Executive Group............................... $451,426 491,064
Non-Executive Director Group.................. $150,475 63,688
Non-Executive Officer Employee Group.......... $ 0 0
- ------------------
VOTE REQUIRED
The affirmative vote of holders of a majority of the shares present in
person or represented by proxy and entitled to vote at the Annual Meeting is
required to approve the amendments. THE BOARD OF DIRECTORS CONSIDERS THE
AMENDMENTS TO THE 1995 PLAN TO BE IN THE BEST INTERESTS OF THE COMPANY AND ITS
SHAREHOLDERS AND RECOMMENDS THAT YOU VOTE FOR THE AMENDMENTS.
PROPOSAL NO. 4
TO APPROVE THE AMENDMENTS TO THE 1996 DIRECTOR STOCK OPTION PLAN
GENERAL
The Board of Directors and shareholders previously adopted the
Company's 1996 Director Stock Option Plan (the "1996 Director Plan") and
reserved 100,000 shares of Common Stock for issuance thereunder. A general
description of the 1996 Director Plan is set forth below, but such description
is qualified in its entirety by reference to the full text of the 1996 Director
Plan.
DESCRIPTION OF THE 1996 DIRECTOR PLAN
PURPOSE. The purpose of the 1996 Director Plan is to attract and retain
the best available individuals to serve as non-employee directors of the
Company, to provide additional incentives to the non-employee directors of the
Company to serve as directors, and to encourage their continued service on the
Board.
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<PAGE>
TERM. The term of the 1996 Director Plan is five years; however, the
Board may terminate the 1996 Director Plan at any time, provided that such
termination will not affect options then outstanding.
ADMINISTRATION. The 1996 Director Plan is administered by the
Committee. The 1996 Director Plan gives broad powers to the Committee to
administer and interpret the 1996 Director Plan, including the authority to
select the fair market value of the Common Stock and to make all other
determinations necessary or advisable for the administration of the 1996
Director Plan.
ELIGIBILITY. Options may be granted only to non-employee directors. All
options shall be automatically granted in an amount of 5,000 shares upon
becoming a director and 5,000 shares on each anniversary date thereafter.
OPTIONS. When a stock option is granted under the 1996 Director Plan,
the Committee, in its discretion, specifies the option price. The exercise price
of a stock option may not be less than 100% of the fair market value of the
Company's Common Stock on the date of grant. On March 5, 1999, the closing price
of the Company's Common Stock as reported on the Nasdaq SmallCap Market was
$2.75. The term of each option shall be five years. The first option shall
become exercisable in full on the later of (i) 12 months after the date on which
the 1996 Director Plan is first approved by the shareholders or (ii) the first
anniversary of the grant of the option. Optionees may pay for shares upon
exercise of options with cash, certified check or Common Stock of the Company
valued at the stock's then fair market value. Each option granted under the 1996
Director Plan is nontransferable during the lifetime of the optionee. On March
5, 1999, there were outstanding options granted under the 1996 Director Plan to
purchase 30,000 shares of Common Stock.
The Committee determines the form of stock option agreements which will
be used for stock options granted under the 1996 Director Plan. Such agreements
govern the right of an optionee to exercise an option upon termination of
employment or affiliation with the Company during the life of an optionee and
following an optionee's death.
AMENDMENT. The Board of Directors may from time to time suspend or
discontinue the 1996 Director Plan or amend it in any respect; provided,
however, that no such revision or amendment shall be made without the approval
of the shareholders if it would: (a) materially modify the eligibility
requirements for participants; (b) increase the maximum aggregate number of
shares of stock which may be issued pursuant to options; (c) reduce the minimum
option price per share, except in accordance with the 1996 Director Plan's
antidilution provisions; (d) extend the period of granting options; or (e)
materially increase in any other way the benefits accruing to optionees.
ANTIDILUTION PROVISIONS. The Board of Directors shall equitably adjust
the maximum number of shares of Common Stock reserved for issuance under the
1996 Director Plan, the number of shares covered by each outstanding option and
the option price per share in the event of stock splits or consolidations, stock
dividends or other transactions in which the Company receives no consideration.
PROPOSED PLAN AMENDMENTS
The Board has approved, subject to shareholder approval, an amendment
to the 1996 Director Plan which would increase the aggregate number of the
Company's Common Stock available under the 1996 Director Plan from 100,000 to
210,000 shares. The Board believes that this increase will advance the interests
of the Company and its shareholders by increasing the proprietary interest of
directors in the Company's long-term success and more closely aligning the
interests of the directors with the Company's shareholders.
The board has also approved, subject to Shareholder approval, an
amendment to the 1996 Director Plan concerning the amount of options granted to
each non-employee director. The current version of the 1996 Plan automatically
grants to each non-employee director an option to purchase 5,000 shares of
Common Stock upon he or she becoming a director, and subsequently an additional
5,000 shares upon each anniversary date of he or she
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<PAGE>
becoming a director. The maximum aggregate amount of options that a director can
receive under the current plan is 15,000 shares. The proposed amendment to the
1996 Director Plan would increase the automatic grant to each non-employee
director upon becoming a director to 15,000 shares of Common Stock, and
subsequently 15,000 shares upon each anniversary date of their becoming a
director. This increase would be awarded to each non-employee director for the
option he or she is entitled to receive in fiscal year 1999, provided he or she
was on the Board of Directors on June 30, 1998, and is re-elected at the 1998
Annual Meeting (the "Continuing Directors"). On each anniversary date
thereafter, each non-employee director would receive an option for the purchase
of 15,000 shares. The proposed amendment would also eliminate any maximum
aggregate amount of options that a non-employee director may receive under the
1996 Director Plan.
TAX INFORMATION
NONSTATUTORY STOCK OPTIONS. A participant will not recognize taxable
income upon the grant of a nonstatutory stock option. However, a participant who
exercises a nonstatutory stock option generally will recognize ordinary
compensation income in an amount equal to the excess of the fair market value of
the Common Stock acquired through the exercise of the option ("NSO Stock") on
the exercise date over the exercise price.
WITH RESPECT TO ANY NSO STOCK. A participant will have a tax basis
equal to the exercise price plus any income recognized upon the exercise of the
option. Upon selling NSO Stock, a participant generally will recognize capital
gain or loss in an amount equal to the excess of the sale price of the NSO Stock
over the participant's tax basis in the NSO Stock. This capital gain or loss
will be a long-term gain or loss if the participant has held the NSO Stock for
more than one year prior to the date of the sale, and will be a short-term
capital gain or loss if the participant has held the NSO Stock for a shorter
period.
TAX CONSEQUENCES TO THE COMPANY. The grant of an option under the 1996
Director Plan will have no tax consequences to the Company. The Company
generally will be entitled to a business-expense deduction with respect to any
ordinary compensation income recognized by a participant upon the exercise of an
option under the 1996 Director Plan.
INTEREST OF CERTAIN PERSONS IN PROPOSED AMENDMENT TO THE 1996 DIRECTOR PLAN
Upon the current terms of the 1996 Director Plan, each of the
non-employee directors become entitled to receive an option during fiscal year
1998 for 5,000 shares of Common Stock. If the amendments to the 1996 Director
Plan are approved, each of the Continuing Directors will instead receive options
for fiscal year 1999 totaling 15,000 shares of Common Stock. Such Continuing
Directors will also receive an option for 15,000 shares of Common Stock instead
of 5,000 shares, in each succeeding year in which they serve as directors of the
Company. See "New Plan Benefits."
NEW PLAN BENEFITS
The following tables sets forth the increase in the number of shares
each of the Continuing Directors would receive for his or her option grant for
fiscal year 1999 if the amendment to the 1996 Director Plan is approved. Each of
the Continuing Directors would have received an option for 5,000 shares of
Common Stock, but if the amendment to the 1996 Director Plan is approved each of
the Continuing Directors will receive options totaling 15,000 shares of Common
Stock for fiscal year 1999.
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1996 DIRECTOR OPTION PLAN
NAME AND POSITION DOLLAR VALUE NUMBER OF SHARES
- ----------------- ------------ ----------------
Marshall T. Masko........................... * 10,000
Vice Chairman and Director
James A. Bartholomew........................ * 10,000
Director
Marlin Rudebusch............................ * 10,000
Director
Susan M. Clemens............................ * 10,000
Director
Executive Group............................. $0 0
Non-Executive Director Group................ * 40,000
Non-Executive Officer Employee Group........ $0 0
- ------------------
* Indeterminable, fair market value will be determined at the date of the 1998
Annual Meeting.
VOTE REQUIRED
The affirmative vote of holders of a majority of the shares present in
person or represented by proxy and entitled to vote at the Annual Meeting is
required to approve the amendments. Abstentions will be considered shared
entitled to vote in the tabulation of votes cast on the proposal and will the
same effect as negative votes. Broker non-votes are counted towards a quorum,
but are not counted for any purpose in determining whether this matter has been
approved. THE BOARD OF DIRECTORS CONSIDERS THE AMENDMENTS TO THE 1996 PLAN TO BE
IN THE BEST INTERESTS OF THE COMPANY AND ITS SHAREHOLDERS AND RECOMMENDS THAT
YOU VOTE FOR THE AMENDMENTS.
PROPOSAL NO. 5
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed Lurie, Besikof, Lapidus & Co., LLP
as independent public accountants for the Company for the fiscal year ending
June 30, 1999. A proposal to ratify such appointment will be presented to the
shareholders at the Annual Meeting. Representatives of Lurie, Besikof, Lapidus &
Co., LLP are expected to be present at the Annual Meeting, will have an
opportunity to make a statement if they desire to do so, and will be available
to respond to appropriate questions from shareholders in attendance.
On June 9, 1998, the Board of Directors engaged Lurie, Besikof, Lapidus
& Co., LLP as the Company's new independent accountant for the fiscal year
ending June 30, 1998. During the years ending June 30, 1996 and 1997, and
through June 9, 1998, the Company did not consult with Lurie, Besikof, Lapidus &
Co., LLP on items which (1) involved the application of accounting principles to
a specified transaction, either completed or proposed, or involved the type of
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<PAGE>
audit opinion that might be rendered on the Company's financial statements, or
(2) concerned the subject matter of a disagreement or reportable event with the
former auditor (as defined in Regulation S-B Item 304(a)(2)).
On June 9, 1998, Arthur Andersen LLP resigned as the Company's
independent accountant. Except for an explanatory paragraph with respect to
substantial doubt about the Company's ability to continue as a going concern
described in Note 2 to the Company's consolidated financial statements as of and
for the years ended June 30, 1996 and 1997, the reports of Arthur Andersen LLP
on the financial statements for the years ended June 30, 1996 and 1997,
contained no adverse opinion or disclaimer of opinion and were not qualified or
modified as to uncertainty, audit scope or accounting principles. In connection
with its audits for the years ended June 30, 1996 and 1997, and through June 9,
1998, there were no disagreements with Arthur Andersen LLP on any matter of
accounting principles or practices, financial statement disclosure or auditing
scope or procedure, which disagreements if not resolved to the satisfaction of
Arthur Andersen LLP would have caused them to make reference thereto in their
report on the financial statements for such years. During the years ended June
30, 1996 and 1997, and through June 9, 1998, there were no reportable events (as
defined in Regulation S-B Item 304(a)(1)(v)). Representatives of Arthur Andersen
LLP are not expected to be present at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS YOU VOTE IN FAVOR OF THE APPOINTMENT
OF LURIE, BESIKOF, LAPIDUS & CO., LLP AS INDEPENDENT PUBLIC ACCOUNTANTS FOR THE
FISCAL YEAR ENDING JUNE 30, 1999.
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SECURITY OWNERSHIP OF MANAGEMENT AND OTHERS
The following table contains certain information known to the Company
regarding beneficial ownership of its common stock as of March 5, 1999, (i) each
person who is known to the Company to own beneficially more than five percent of
the Company's common stock, (ii) each of the Company's directors, (iii) each
Named Executive Officer, and (iv) all current executive officers and directors
as a group. Unless otherwise noted, each person identified below has sole voting
and investment power with respect to such shares.
NAME AND ADDRESS
OF BENEFICIAL OWNER BENEFICIALLY OWNED(1) BENEFICIALLY OWNED(2)
- ------------------- --------------------- ---------------------
BankAmerica Corporation (3)........ 1,004,243 10.0%
555 California Street
San Francisco, CA 94104
Peter C. Lytle (4)................. 437,912 4.3%
Kenneth D. Zigrino (5)............. 248,812 2.4%
Marshall T. Masko (6).............. 196,813 1.9%
Timothy G. Becker (7).............. 123,814 1.2%
Susan Clemens (8).................. 125,001 1.2%
James A. Bartholomew (9) .......... 5,000 *
Marlin Rudebusch (10).............. 5,000 *
Ronald G. Olson.................... -- *
All directors and officers as
a group (8 person) (11)............ 1,142,352 10.8%
- -------------------
* Represents less than 1%.
(1) Beneficial ownership is determined in accordance with the rules of the
SEC and includes securities owned by or for, among others, the spouse,
children or certain other relatives of such person as well as other
securities as to which the person has or shares voting or investment
power or has the right to acquire within 60 days. The same shares may be
beneficially owned by more than one person. Voting or investment power
with respect to securities. Unless otherwise indicated, the address for
each listed shareholder is c/o U-Ship, Inc., 5583 West 78th Street,
Edina, Minnesota 55439. To the Company's knowledge, except as indicated
in the footnotes to this table, the persons named in this table have sole
voting and investment power with respect to all shares. The number of
shares beneficially owned includes shares issuable pursuant to warrants
and stock options that are exercisable within 60 days of March 5, 1999.
(2) Percentage of beneficial ownership is based on 10,068,537 shares
outstanding as of March 5, 1999. Shares issuable pursuant to warrants and
stock options are deemed outstanding for computing the percentage of the
person holding such warrants or stock options but are not deemed
outstanding for computing the percentage of any other person. Assumes no
exercise of: (a) 4,213,826 shares of Common Stock issuable upon exercise
of outstanding employee stock options, director stock options or
warrants, including warrants issued in conjunction with bridge financing
completed by the Company in December 1995, and private placements or (b)
up to 463,381 shares of Common Stock issuable upon exercise of warrants
granted to broker-dealers in connection with private placements and a
public offering of the Company's securities.
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<PAGE>
(3) As set forth in Schedule 13G/A jointly filed with the Commission on
February 10, 1999, by BankAmerica Corporation ("BAC"), Robertson Stephens
Investment Management Co. ("RSIMC"), Robertson, Stephens & Company
Investment Management, L.P. ("RSCIMLP") and The Robertson Stephens
Diversified Growth Fund ("RSDGF"). Includes 1,004,243 shares over which
BAC, RSIMC and RSCIMLP claim shared voting and dispositive power.
Includes 527,586 shares over which RSDGF claims shared voting and
dispositive power.
(4) Includes 251,600 shares owned directly and 125,000 shares purchasable
pursuant to warrants and 61,312 shares purchasable pursuant to a stock
option. Mr. Lytle was granted an option for the purchase of 63,688 shares
in March 1998, and was also granted an option in October 1998 for the
purchase of 100,000 shares, which grants are subject to the shareholders
of the Company approving an amendment to the Company's 1995 Stock Option
Plan increasing the number of shares available for grant thereunder.
(5) Includes 125,000 shares owned directly, 62,500 shares purchasable
pursuant to warrants and 61,312 shares purchasable pursuant to a stock
option. Mr. Zigrino was granted an option for the purchase of 63,688
shares in March 1998, and was also granted an option in October 1998 for
the purchase of 100,000 shares, which grants are subject to the
shareholders of the Company approving an amendment to the Company's 1995
Stock Option Plan increasing the number of shares available for grant
thereunder.
(6) Includes 93,734 shares owned directly, 41,667 shares purchasable pursuant
to warrants and 61,312 shares purchasable pursuant to a stock option. Mr.
Masko was granted an option for the purchase of 63,688 shares in March
1998, which grant is subject to the shareholders of the Company approving
an amendment to the Company's 1995 Stock Option Plan increasing the
number of shares available for grant thereunder.
(7) Includes 41,668 shares owned directly, 20,834 shares purchasable pursuant
to warrants, and 61,312 shares purchasable pursuant to a stock option.
Mr. Becker was granted an option for the purchase of 63,688 shares in
March 1998, and was also granted an option in October 1998 for the
purchase of 100,000 shares, which grants are subject to the shareholders
of the Company approving an amendment to the Company's 1995 Stock Option
Plan increasing the number of shares available for grant thereunder.
(8) Includes 83,334 shares owned directly and 41,667 shares purchasable
pursuant to warrants.
(9) Includes 5,000 shares purchasable pursuant to options.
(10) Includes 5,000 shares purchasable pursuant to options.
(11) Includes an aggregate of 546,916 shares purchasable pursuant to currently
exercisable stock options and warrants.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In April 1998, various individual accredited investors, including
executive officers and directors of the Company, purchased 785,837 Units, each
Unit consisting of two shares of its $.004 par value per share Series A
Cumulative Convertible Preferred Stock and one warrant to purchase one share of
Common Stock at a price of $1.75 per share, at a price of $1.20 per Unit, for a
total consideration received by the Company of $943,003. Each Preferred Share
may be voted on an as-if-converted basis and is convertible into the Company's
$.004 par value Common Stock, commencing November 1, 1998, subject to
anti-dilution adjustments. Each share of Preferred Stock is entitled to a 5%
cumulative annual dividend. The Warrants may be exercised to purchase Common
Stock at any time before May 1, 2001. These Units were sold by the Company
without the services of an Agent. The closing of these transactions was
completed on May 4, 1998. The following executive officers and directors
purchased Preferred Stock and warrants in the amounts set forth respectively:
Number of
Preferred Number of
Name Position Shares Warrants
- ------------------ ----------------------------------- --------- ---------
Peter C. Lytle President, Chief Executive Officer 250,000 125,000
and Director
Susan M. Clemens Director 83,334 41,667
Kenneth D. Zigrino Vice President and Secretary 125,000 62,500
Marshall T. Masko Director 83,334 41,667
Timothy G. Becker Chief Financial Office and Director 41,668 20,884
Bruce M. Senske Executive Officer 30,000 15,000
The above persons purchased Units for the same consideration as was
paid by nonaffiliated purchasers. In separate closings on June 2, 1998, and June
8, 1998, the Company also completed a private placement in which it sold to
non-affiliated accredited investors, some of whom are officers and directors of
the Company, 1,441,912 Units. The Units were offered by R.J. Steichen & Co., a
non-exclusive agent of the Company on a "best-efforts, all or none" basis, at a
purchase price of $1.20 per Unit. The total consideration received by the
Company for the sale of these Units was $1,477,856, net of interest ($7,080) and
the Agent's commissions and nonaccountable expenses and other expenses of the
private placement.
In March 1998, Messrs. Lytle, Masko, Becker and Zigrino rendered
consulting services to the Company in connection with its strategic
restructuring, preceding its ultimate financing in April 1998. For their
services, the Company issued to each of them an option for the purchase of
125,000 shares of Common Stock. Such options had vested to the extent of 61,312
shares as of June 30, 1998. The right to purchase the remaining 63,668 shares
was granted subject to shareholder approval of an amendment to the Company's
1995 Stock Option Plan increasing the number of shares available for the grant
of options thereunder.
COMPLIANCE WITH SECTION 16(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's directors and officers and the holders of 10% or more of
the Company's stock to file with the SEC initial reports of changes in ownership
of equity securities of the Company. Based on the Company's review of copies of
such reports received by it, or written representations from reporting persons,
the Company believes that during fiscal year 1998 its directors and executive
officers filed all reports on a timely basis except as follows: (a) initial
reports on Form 3 following the election or appointment as executive officers or
directors of the Company by each of James A. Bartholomew, Marlin Rudebusch,
Timothy G. Becker, Susan M. Clemens, Kenneth D. Zigrino, Peter C. Lytle and
Marshall T. Masko through inadvertence were filed late; and (b) securities
ownership report on Form 4 by Bruce H. Senske in connection with his purchase of
15,000 Units in connection with the Company's 1998 private placement was filed
late.
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SHAREHOLDER PROPOSALS
Any shareholder who desires to submit a proposal for action by the
shareholders at the next annual meeting, in addition to meeting the shareholder
eligibility and other requirements of the Securities and Exchange Commission's
rules governing such proposals, must submit such proposal in writing to Kenneth
D. Zigrino, U-Ship, Inc., 5583 West 78th Street, Edina, Minnesota 55439 by
November 25, 1999. If the Company receives notice of a shareholder proposal
after February 8, 2000, persons named as proxies for the 1999 Annual Meeting of
Shareholders will have discretionary voting authority to vote on such proposal
at the meeting. Due to the complexity of the respective rights of the
shareholders and the Company in this area, any shareholder desiring to propose
such an action is advised to consult with his or her legal counsel with respect
to such rights. It is suggested that any such proposal be submitted by certified
mail, return receipt requested.
PROXY SOLICITATION
The cost of this solicitation of proxies will be paid by the Company.
Proxies will also be solicited by mail, except that solicitation personally or
by telephone may also be made by the Company's regular employees who will
receive no additional compensation for their services in connection with the
solicitation. Arrangements will be made with brokerage houses and other
custodians, nominees and fiduciaries for the forwarding of solicitation
materials and the annual report to beneficial owners of stock held by such
persons. The Company will reimburse such parties for their expenses in so doing.
ANNUAL REPORT TO SHAREHOLDERS AND FORM 10-KSB
A copy of the 1998 Annual Report to Shareholders of the Company
accompanies this Proxy Statement. A copy of the Company's Annual Report on Form
10-KSB for fiscal year 1998 will be provided without charge upon written request
of any shareholder whose proxy is being solicited by the Board of Directors. The
written request should be directed to Shareholder Relations, attention Kenneth
D. Zigrino, U-Ship, Inc., 5583 West 78th Street, Edina, Minnesota 55439. No part
of the 1998 Annual Report to Shareholders is incorporated herein and no part
thereof is to be considered proxy soliciting material.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Peter C. Lytle
Peter C. Lytle
President and Chief Executive Officer
Edina, Minnesota
March 25, 1999
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U-SHIP, INC.
5583 WEST 78TH STREET
EDINA, MINNESOTA 55439
(612) 941-4080
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, having duly received the Notice of Annual Meeting of
Shareholders and the Proxy Statement, dated March 25, 1999, hereby appoints
Peter C. Lytle and Kenneth D. Zigrino as proxies (each with the power to act
alone and with the power of substitution and revocation), to represent the
undersigned and to vote, as designated below, all shares of Common Stock of
U-Ship, Inc. (the "Company") held of record by the undersigned on March 22,
1999, at the Annual Meeting of Shareholders to be held at the Radisson Plaza
Hotel Minneapolis, 35 South Seventh Street, Minneapolis, Minnesota on Monday,
April 19, 1999, at 3:30 p.m., Minneapolis time, and at any adjournment or
postponement thereof.
1. To elect seven directors for the ensuing year and until their successors
are duly elected and qualified.
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY
(except as marked to the to vote for all nominees
contrary below) listed below
PETER C. LYTLE, TIMOTHY G. BECKER, MARSHALL T. MASKO, JAMES A. BARTHOLOMEW,
MARLIN RUDEBUSCH, SUSAN M. CLEMENS AND RICHARD G. OLSON.
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL, WRITE THAT
NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.
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2. To consider and vote upon the amendment to the Company's Restated Articles
of Incorporation to change the name of the Company to United Shipping &
Technology, Inc.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To consider and vote upon amendments to the Company's 1995 Stock Option
Plan, including an amendment to increase the number of shares for which
options may be granted under such plan from 450,000 to 1,950,000 shares.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. To consider and vote upon amendments to the Company's 1996 Director Stock
Option Plan, including an amendment to increase the number of shares for
which options may be granted under such plan from 100,000 to 210,000
shares.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. To ratify the appointment of Lurie, Besikof, Lapidus & Co., LLP independent
certified public accountants, as auditors of the Company for its fiscal
year ending June 30, 1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
6. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment or
postponement thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED ON THE
PROXY BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR PROPOSALS 1 THROUGH 5. ABSTENTIONS WILL BE COUNTED TOWARD THE
EXISTENCE OF A QUORUM.
Please sign exactly as name appears on this proxy. When shares are held by joint
tenants, both should sign. If signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by president or other authorized officer. If a
partnership, please sign in partnership name by an authorized person.
Dated:
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PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE
ENCLOSED ENVELOPE.
