SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act
of 1934 (Amendment No. )
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Check the appropriate box:
[x] Preliminary Proxy Statement
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(as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
Advantage Learning Systems, Inc.
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
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[x] No fee required.
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to which transaction applies:
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underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set
forth the amount on which the filing fee
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offset as provided by Exchange Act Rule 0-
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<PAGE>
Preliminary Copies
ADVANTAGE LEARNING SYSTEMS, INC.
2911 Peach Street
Wisconsin Rapids, Wisconsin 54495-8036
_____________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
April 14, 1999
To the Shareholders of Advantage Learning Systems,
Inc.:
The 1999 Annual Meeting of Shareholders of
Advantage Learning Systems, Inc. will be held at the
Company's offices, 2911 Peach Street, Wisconsin Rapids,
Wisconsin, on Wednesday, April 14, 1999 at 1:00 p.m.,
local time, for the following purposes:
(1) To elect seven directors to serve until the
2000 Annual Meeting of Shareholders and until
their successors are elected and qualified;
(2) To approve the Advantage Learning Systems,
Inc. Employee Stock Purchase Plan;
(3) To amend Advantage Learning Systems, Inc.'s
Amended and Restated Articles of
Incorporation to increase the authorized
Common Stock of the Company from 50,000,000
shares to 150,000,000 shares; and
(4) To transact such other business as may
properly come before the Annual Meeting, all
in accordance with the accompanying Proxy
Statement.
Shareholders of record at the close of business on
March 1, 1999 are entitled to notice of and to vote at
the Annual Meeting.
HOLDERS OF A MAJORITY OF THE OUTSTANDING SHARES
MUST BE PRESENT IN PERSON OR BY PROXY IN ORDER FOR THE
MEETING TO BE HELD. THEREFORE, SHAREHOLDERS ARE URGED
TO DATE, SIGN AND RETURN THE ACCOMPANYING PROXY IN THE
ENCLOSED ENVELOPE WHETHER OR NOT THEY EXPECT TO ATTEND
THE ANNUAL MEETING IN PERSON. IF YOU ATTEND THE
MEETING AND WISH TO VOTE YOUR SHARES PERSONALLY, YOU
MAY DO SO BY REVOKING YOUR PROXY AT ANY TIME PRIOR TO
THE VOTING THEREOF.
Timothy Sherlock,
Secretary
March 12, 1999
<PAGE>
Preliminary Copies
ADVANTAGE LEARNING SYSTEMS, INC.
2911 Peach Street
Wisconsin Rapids, Wisconsin 54495-8036
March 12, 1999
Proxy Statement
The enclosed proxy is solicited by the Board of
Directors of Advantage Learning Systems, Inc. (the
"Company") for use at the Annual Meeting of
Shareholders to be held on Wednesday, April 14, 1999
(the "Annual Meeting"). At the Annual Meeting, the
shareholders of the Company will elect seven directors,
each of whom will hold office until April 2000 and
until his or her successor is duly elected and
qualified. The Company's shareholders will also be
asked to approve the Company's Employee Stock Purchase
Plan and to approve an amendment to the Company's
Amended and Restated Articles of Incorporation to
increase the authorized common stock of the Company,
$0.01 par value (the "Common Stock") from 50,000,000
shares to 150,000,000 shares.
The expense of printing and mailing proxy
materials, including expenses involved in forwarding
materials to beneficial owners of Common Stock held in
the name of another person, will be borne by the
Company. No solicitation other than by mail is
contemplated, except that officers or employees of the
Company or its subsidiaries may solicit the return of
proxies from certain shareholders by telephone. The
Proxy Statement and the accompanying Proxy are being
sent to the Company's shareholders commencing on or
about March 12, 1999.
Only shareholders of record at the close of
business on March 1, 1999 (the "Record Date") are
entitled to notice of and to vote the shares of Common
Stock of the Company registered in their name at the
Annual Meeting. As of the Record Date, the Company had
outstanding __________ shares of Common Stock. The
presence, in person or by proxy, of the holders of a
majority of the shares of the Common Stock outstanding
on the Record Date is required for a quorum with
respect to the matters on which action is to be taken
at the Annual Meeting.
Any shareholder executing and delivering the
enclosed proxy may revoke the same at any time prior to
the voting thereof by written notice of revocation
given to the Secretary of the Company.
Abstentions and broker non-votes (i.e., proxies
from brokers or nominees indicating that such persons
have not received instructions from the beneficial
owners or other persons entitled to vote shares as to a
matter with respect to which brokers or nominees do not
have discretionary power to vote) will be treated as
present for purposes of determining the quorum.
Abstentions and broker non-votes will not be counted as
voting on any matter at the Annual Meeting. Each share
of Common Stock entitles its holder to cast one vote on
each matter to be voted upon at the Annual Meeting.
Unless otherwise directed, all proxies will be
voted FOR the election of each of the individuals
nominated to serve as a director, FOR approval of the
Company's Employee Stock Purchase Plan, and FOR
approval of an amendment to the Company's Amended and
Restated Articles of Incorporation.
Directors are elected by a plurality of the votes
cast by holders of the Company's Common Stock entitled
to vote at a meeting at which a quorum is present. In
other words, the seven directors who receive the
largest number of votes will be elected as directors.
Any shares not
<PAGE>
voted, whether by withheld authority,
broker non-votes or otherwise, will have no effect in
the election of directors except to the extent that the
failure to vote for an individual results in another
individual receiving a larger number of votes. Any
votes attempted to be cast "against" a candidate are
not given legal effect and are not counted as votes
cast in an election of directors.
The affirmative vote of a majority of the shares
present or represented and entitled to vote is required
to approve the Company's Employee Stock Purchase Plan.
The affirmative vote of a majority of the outstanding
shares of Common Stock is required to approve an
amendment to the Company's Amended and Restated
Articles of Incorporation.
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL
OWNERS
The following table lists as of the Record Date
information regarding the beneficial ownership of
shares of Common Stock by (i) each director, the Chief
Executive Officer and the next most highly compensated
executive officers of the Company whose total annual
compensation exceeded $100,000 (the "named executive
officers"), (ii) each person believed by the Company to
be a beneficial owner of more than 5% of the Common
Stock and (iii) all directors and executive officers of
the Company as a group. Except as otherwise indicated,
the address of each beneficial owner of more than 5% of
the Common Stock listed below is 2911 Peach Street,
Wisconsin Rapids, Wisconsin 54495-8036. All data has
been adjusted for a two-for-one stock split in the form
of a stock dividend payable on February 26, 1999.
Name and Address Amount and Nature of
of Beneficial Owner Beneficial Ownership(1) Percent of Class
Judith A. Paul 12,349,908(2) [36.5]%
Terrance D. Paul 12,349,908(3) [36.5]
Essex Investment 2,000,066(4) [5.9]
Management Company
Mark J. Bradley, as
Trustee of the Terrance 1,927,686(5) [5.7]
and Judith Paul
Descendants' Trust
Michael H. Baum 43,436(6) *
John R. Hickey 48,436(6) *
Timothy P. Welch 54,244(7) *
Perry S. Akins 10,000(8) *
John H. Grunewald 10,000(9) *
All directors and
executive officers 26,793,618 [79.2]
of the Company as
a group (8 persons)
_________________
* Less than 1% of the outstanding Common Stock.
(1) Except as otherwise noted, the persons named
in this table have sole voting and investment
power with respect to all shares of Common Stock
listed.
(2) Includes 27,900 shares of Common Stock held by
the Terrance and Judith Paul Foundation, Inc. as
to which Judith and Terrance Paul share voting and
investment power. Ms. Paul is married to Terrance
D. Paul, and Mr. Paul's shares of Common Stock
are not included in the number of shares beneficially
owned by Ms. Paul.
(3) Includes 27,900 shares of Common Stock held of
record by the Terrance and Judith Paul Foundation,
Inc. as to which Judith and Terrance Paul share
voting and investment power. Mr. Paul is married to
Judith A. Paul, and Ms. Paul's shares of Common Stock
are not included in the number of shares beneficially
owned by Mr. Paul.
(4) The address of Essex Investment Management Company is
125 High Street, Boston, Massachusetts 02110. This
information is based on a Schedule 13-G dated
January 5, 1999. Of these shares, Essex Investment
<PAGE>
Management Company has sole voting power as to
1,611,586 shares and sole dispositive power as to
all 2,000,066 shares.
(5) The address of the Trustee of the Terrance and Judith
Paul Descendants' Trust is 500 Third Street, Suite 700,
Wausau, Wisconsin 54403.
(6) Includes options for 23,436 shares of Common Stock which
are currently exercisable.
(7) Includes 9,400 shares of Common Stock indirectly held by
a family trust, of which Mr. Welch is the trustee.
(8) Includes 5,000 shares of Common Stock held by a family
trust, of which Mr. Akins is a trustee, and 2,500 shares
of Common Stock indirectly held by the same family
trust.
(9) Includes options for 5,000 shares of Common Stock which
are currently exercisable. Mr. Grunewald disclaims
beneficial ownership of 1,000 of the 5,000 shares of
Common Stock indicated above, as such shares are
held of record by his wife.
ELECTION OF DIRECTORS
The number of directors constituting the whole
Board of Directors is currently fixed at seven. The
Board of Directors has selected the seven members
currently serving on the Board as nominees for election
at the 1999 Annual Meeting. Directors elected at the
Annual Meeting will hold office for a one-year term and
until their successors are duly elected and qualified.
All nominees have indicated a willingness to serve
as directors, but if any of them should decline or be
unable to act as a director, the persons named in the
proxy will vote for the election of another person or
persons as the Board of Directors recommends.
NOMINEES STANDING FOR ELECTION
Name of Officer Office
Judith A. Ms. Paul is the co-founder of the Company and has
Paul been Chairman of the Board of Directors since
Age 52 1986. Ms. Paul acts as the Company spokesperson
and coordinates the Company's public relations and
customer communication policies. Ms. Paul has co-
written 101 Ways to Motivate Students to Read
(1995), and is the author of The Family Reading
Night Kit (1996) and The Literacy Partnership Kit
(1997). Ms. Paul holds a bachelors degree in
elementary education from the University of
Illinois.
Terrance D. Mr. Paul is the co-founder of the Company and has
Paul been Vice Chairman of the Board of Directors since
Age 52 July 1996. Mr. Paul is primarily responsible for
the Company's long-term strategic planning and new
product development strategy. Mr. Paul also
coordinates the research activities conducted by
the Institute for Academic Excellence, Inc., a
wholly-owned subsidiary of the Company (the
"Institute"). From November 1995 until July 1996,
Mr. Paul served as the Company's Chief Executive
Officer. From January 1992 until August 1993 and
again from September 1994 until November 1995, Mr.
Paul served as President of the Company. For the
12 years prior to 1992, Mr. Paul was President of
Best Power Technology, a manufacturer of
uninterruptible power supplies. Mr. Paul is the
author of several publications, including How to
Create World-Champion Readers (1993), Patterns of
Reading Practice (1996) and The New Technology of
Learning Information Systems (1997). He is also
the general editor of Fundamentals of Reading
Renaissance (1994-1996), the textbook used in
seminars on reading improvement by the Institute.
Mr. Paul holds a law degree
<PAGE>
from the University of
Illinois and an MBA from Bradley University.
Terrance Paul is Judith Paul's husband.
Michael H. Mr. Baum has been Chief Executive Officer of the
Baum Company since July 1996 and a Director since
Age 51 September 1994. Mr. Baum served as President of
the Company between November 1995 and June 1996.
From September 1994 until November 1995, Mr. Baum
served as the Managing Director of the Institute
and from June 1994 until September 1994, he served
as the Director of Educational Consulting for the
Institute. From 1984 until June 1994, Mr. Baum
held a variety of positions with Francorp, Inc.,
an international management consulting firm based
in Chicago, his last position being that of
Executive Vice President, which he held from
September 1991 until June 1994. Mr. Baum holds a
bachelors degree and a masters degree in teaching
from Yale University and an MBA from Northwestern
University.
John R. Mr. Hickey has been President of the Company since
Hickey July 1996 and a Director of the Company since
Age 43 October 1996. From January 1996 until June 1996,
Mr. Hickey served as Executive Vice President of
R.F. Technologies, Inc., a manufacturer of
protection devices, and from September 1995 until
December 1995, he served as Executive Vice
President of Liebert Corporation (a subsidiary of
Emerson Electric), a manufacturer of
uninterruptible power supplies. From January 1989
until June 1995, Mr. Hickey held various senior
management positions with Best Power Technology,
including Executive Vice President of Operations,
Senior Vice President of Sales and Marketing and
Vice President-International. In addition, Mr.
Hickey spent approximately ten years with Briggs
and Stratton, a manufacturer of air-cooled
gasoline engines for outdoor power equipment,
headquartered in Milwaukee, Wisconsin. While at
Briggs and Stratton, Mr. Hickey served in various
management positions, eventually rising to the
position of the Director of International Sales
and Finance Administration, a position he held
from October 1985 until January 1989. Mr. Hickey
holds a bachelors degree in international business
from the University of Wisconsin.
Timothy P. Timothy P. Welch has been a Director of the
Welch Company since August 1996. Mr. Welch is the
Age 56 founder of the predecessor to IPS Publishing,
Inc., a wholly-owned subsidiary of the Company
("IPS"). From June 1997 until October 1997, Mr.
Welch served as a consultant to IPS, and since
November 1997, he has worked for the Company on
special projects. From August 1996 until June
1997, Mr. Welch served as the Chief Executive
Officer of IPS, and for the 15 years prior
thereto, he served as the President of its
predecessor. Mr. Welch is also the founder and
Chief Executive Officer of Curriculum
Technologies, Inc., a firm specializing in multi-
media compact disk development for the adult
literacy and English as a second language markets.
Mr. Welch holds a bachelors degree in journalism
from the University of Wisconsin.
Perry S. Perry S. Akins has been a Director of the Company
Akins since September 1997. From 1966 to September
Age 58 1998, Mr. Akins was employed by ELS Educational
Services, Inc. ("ELS") (formerly known as
Washington Educational Research Associates, Inc.).
He served as President of ELS from 1977 until
1998. From 1997 until his
<PAGE>
retirement in 1998, Mr.
Akins also served as Chief Executive Officer of
ELS. Mr. Akins presently works for ELS pursuant
to a consulting agreement which continues until
2000. ELS teaches English as a second language to
students and professionals at its various ELS
Language Centers in the United States and abroad.
ELS also publishes and distributes English as a
second language materials worldwide. Mr. Akins
currently serves as a director of Chocolates a la
Carte, Inc., a manufacturer of specialty
chocolates for hotels and restaurants, Digital
Carpenters, a web site developer, and Western
Overseas Corporation, a customs brokerage service.
Mr. Akins holds a bachelors degree in Russian
language and history and a masters degree in
education with a minor in Russian language from
Southern Illinois University.
John H. Mr. Grunewald has been a Director of the Company
Grunewald since September 1997. From September 1993 to
Age 62 January 1997, Mr. Grunewald served as the
Executive Vice President, Chief Financial Officer
and Secretary of Polaris Industries Inc., a
manufacturer of snowmobiles, all-terrain vehicles
and personal watercraft. From June 1977 until
June 1993, Mr. Grunewald served as the Vice
President of Finance, Chief Financial Officer and
Secretary of Pentair, Inc., a diversified
manufacturing company. Mr. Grunewald currently
serves as a director of the Nash Finch Company, a
wholesale food distributor, Hydrobikes, Inc., a
manufacturer of recreational water bikes, and
Kinnard Investments, an investment banking firm.
Mr. Grunewald also serves as the Chairman of the
Board of Rise, Inc., a charitable institution
providing occupations for handicapped and disabled
children, and as a member of the Board of
Governors of the Bethel College Foundation. Mr.
Grunewald holds a bachelors degree in business
from St. Cloud State University and an MBA in
business finance from the University of Minnesota.
The Board of Directors of the Company has standing
Compensation and Audit Committees. The Board of
Directors does not have a Nominating Committee. The
Board of Directors held [four] meetings in 1998. Each
director attended at least 75% of the meetings of the
Board of Directors held during the period for which he
or she served on the Board, and each director attended
at least 75% of the meetings of the Board Committees on
which the director served in 1998.
The Compensation Committee is responsible for
making recommendations to the Board of Directors
concerning compensation levels of executive officers of
the Company and for administering the Company's
executive compensation plans, including the 1997 Stock
Incentive Plan. The members of the Compensation
Committee are Messrs. Akins (Chairman) and Grunewald,
neither of whom is an employee of the Company. The
Compensation Committee held [four] meetings in 1998.
The Audit Committee is responsible for nominating
the Company's independent auditors, reviewing the
scope, results and costs of the audit with the
Company's independent auditors and reviewing the
financial statements of the Company to ensure full
compliance with regulatory requirements and full
disclosure of necessary information to the Company's
shareholders. The members of the Audit Committee are
Messrs. Grunewald (Chairman) and Akins and Terrance D.
Paul. The Audit Committee held [four] meetings in
1998.
<PAGE>
APPROVAL OF EMPLOYEE STOCK PURCHASE PLAN
The complete text of the Company's Employee Stock
Purchase Plan is set forth in Appendix A. The
following summary of the material features of the
Company's Employee Stock Purchase Plan is qualified in
its entirety by reference to Appendix A.
The Board of Directors recommends a vote FOR
approval of the Company's Employee Stock Purchase Plan.
The Board of Directors approved the Company's
Employee Stock Purchase Plan on May 15, 1998, subject
to approval by the Company's shareholders. The purpose
of the Employee Stock Purchase Plan is to provide
employees of the Company and its subsidiaries with an
incentive to work for the continued success of the
Company by granting such employees the opportunity to
purchase the Company's Common Stock through one or more
offerings. The aggregate number of shares of Common
Stock subject to the Employee Stock Purchase Plan is
500,000. In addition, no one person may purchase
shares of Common Stock under the Employee Stock
Purchase Plan or any other employee stock purchase plan
of the Company or its subsidiaries having a fair market
value in excess of $25,000 for each calendar year.
The Employee Stock Purchase Plan permits the
Company to make one or more offerings to employees who
meet certain eligibility requirements of options to
purchase shares of the Company's Common Stock. The
first offering was for a period of six months,
commencing on July 1, 1998 and ending January 1, 1999.
The term of each subsequent offering is for a period of
12 months, commencing on January 1, 1999. Eligible
employees who elect to participate in the Employee
Stock Purchase Plan authorize periodic payroll
deductions from their compensation. A payroll
deduction account is maintained for each participating
employee. At the end of an offering period, the
payroll deduction account is totaled and the employee
is deemed to have purchased whole shares of the
Company's Common Stock at the offering price, which is
the lower of either (i) 85% of the fair market value of
the Company's Common Stock on the date on which an
offering commences (typically, January 1) or (ii) 85%
of the fair market value of the Company's Common Stock
on the day one year (six months in 1998) from the date
on which an offering commences.
APPROVAL OF AN AMENDMENT TO THE
AMENDED AND RESTATED ARTICLES OF INCORPORATION
The Board of Directors recommends a vote FOR
approval of an amendment to the Company's Amended and
Restated Articles of Incorporation.
The proposed amendment to the Company's Amended
and Restated Articles of Incorporation increases the
number of authorized shares of Common Stock from
50,000,000 shares to 150,000,000 shares. As of the
Record Date, of the 50,000,000 shares of Common Stock
presently authorized, ____________ shares were issued
and outstanding and 3,500,000 shares were reserved for
issuance pursuant to the Company's 1997 Stock Incentive
Plan and Employee Stock Purchase Plan. Because the
market value of the Company's Common Stock increased
significantly since the Company's initial public
offering, the Company effected a two-for-one stock
split by way of a stock dividend in February 1999.
The additional authorized shares of the Company's
Common Stock may be used for any proper corporate
purpose approved by the Board of Directors of the
Company. Their availability would enable
<PAGE>
the Company's
Board of Directors to act with flexibility when
favorable opportunities arise to expand or strengthen
the Company's business through the issuance of Common
Stock. Among the reasons for issuing additional shares
would be to increase the Company's capital through sale
of the Company's Common Stock, to engage in other types
of capital transactions, to undertake acquisitions and
to satisfy contractual commitments, including the
Company's 1997 Stock Incentive Plan and Employee Stock
Purchase Plan. The Board of Directors of the Company
has not proposed the increase in authorized capital
stock with the intention of discouraging tender offers
or takeover attempts. However, the availability of
authorized shares for issuance could render more
difficult or discourage a merger, tender offer, proxy
contest or other attempt to obtain control of the
Company.
The Company regularly reviews a range of financing
transactions including the issuance of the Company's
Common Stock. Except for shares reserved for issuance
as described above, the Company has no present
intention of issuing or selling Common Stock for any
purpose, but may do so if market and other conditions
indicate that such a course of action is advisable.
If the amendment to the Company's Amended and
Restated Articles of Incorporation is approved, the
Board of Directors of the Company generally may issue
the additional authorized shares of Common Stock
without further shareholder approval. In some
instances, shareholder approval for the issuance of
additional shares may be required by law or by the
requirements of the Nasdaq National Market, on which
the Common Stock is listed, or may otherwise be
necessary or desirable. Except in such cases, the
Company does not anticipate that further shareholder
authorization will be solicited. Shareholders are not
entitled to preemptive rights to purchase any new issue
of Common Stock.
EXECUTIVE COMPENSATION
Summary Compensation Information. The following
table sets forth the compensation for the past three
years for the named executive officers.
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term Compensation
Awards Payouts
Annual Securities LTIP
Compensation Underlying All Other
Name and Principal Year Salary($) Bonus($) Options/SARs(#) Payouts($) Compensation($)(4)
Position
<S> <C> <C> <C> <C> <C> <C>
Judith A. Paul 1998 $181,186 -- 12,862 -- $6,600
Chairman of the 1997 176,046 -- -- -- $5,809
Board 1996 156,184 -- -- -- 5,230
Terrance D. Paul 1998 181,186 -- 12,862 -- 6,600
Vice Chairman 1997 176,046 -- -- -- 6,270
of the Board 1996 156,184 -- -- -- 5,969
Michael H. Baum 1998 164,873 -- 31,109 6,509
Chief Executive 1997 168,370 -- 46,875 $324,665(2) 6,270
Officer 1996 141,080 -- -- 1,849(3) 5,587
John R. Hickey 1998 158,183 -- 31,109 6,244
President 1997 161,260 -- 46,875 216,443(2) 6,270
1996 66,923 $15,000(1) -- -- 3,207
</TABLE>
(1) Reflects a signing bonus that was paid to Mr.
Hickey when he began his employment with the Company
in July 1996.
(2) Reflects payout made by the Company upon
termination of its phantom stock plan in connection
with the initial public offering of the Company's
Common Stock in September 1997.
(3) Reflects payment made in connection with shares
awarded under the Company's phantom stock plan.
(4) Reflects 401(k) plan matching amount paid by
the Company.
Option Grants. The following table provides
information on options granted to the named executive
officers during 1998.
Option/SAR Grants In Last Fiscal Year
Individual Grants
<TABLE>
<CAPTION>
% of Total
Number of Securi- Options/SARs
ties Underlying Granted to Exercise or Grant Date
Options/SARs Employees in Base Price Expiration Present
Name Granted (#)(1) Fiscal Year ($/Sh)(2) Date Value($)(3)
<S> <C> <C> <C> <C> <C>
Judith A. Paul 25,724 6.08% $19.4375 10/20/08 $390,490
Terrance D. Paul 25,724 6.08 19.4375 10/20/08 390,490
Michael H. Baum 28,170 6.66 13.3125 06/25/08 274,094
34,048 8.05 14.5313 09/01/08 352,737
John R. Hickey 28,170 6.66 13.3125 06/25/08 274,094
34,048 8.05 14.5313 09/01/08 352,737
</TABLE>
______________
(1) Except as otherwise noted, the vesting schedule
for options is 25% per year with each option being
fully exercisable four years from the date of grant.
(2) All options have an exercise price equal to
100% of the fair market of the Company's Common
Stock on the date of grant.
<PAGE>
(3) The grant date present values were determined
using the Black-Scholes model with the following
common assumptions: a 10 year expected period of
time to exercise; a weighted average risk-free rate
of return of 5.14%; an expected dividend yield of
0%; and a weighted average volatility factor of
58.94%.
On April 28, 1998 the Compensation Committee
authorized stock option grants for approximately 50,000
shares of Common Stock at an exercise price of $15.875
per share, including proposed grants to Messrs. Baum
and Hickey of 47,244 shares. This proposed grant of
options to employees was not completed, and the
authorization for the grants was subsequently
rescinded.
Option Exercises. The following table provides
information on options exercised during 1998, and
options held at year end, by the named executive
officers.
Aggregated Option/SAR Exercises In Last Fiscal Year And
FY-End Option/SAR Values
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Shares Underlying Unexercised In-the-Money Options/SARs
Acquired on Value Options/SARs at FY-End(#) at FY-End($)(1)
Name Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Judith A. Paul _ _ _ 25,724 _ $345,667
Terrance D. Paul _ _ _ 25,724 _ 345,667
Michael H. Baum _ _ 23,436 132,892 $582,971 2,931,309
John R. Hickey _ _ 23,436 132,892 582,971 2,931,309
______________
</TABLE>
(1) For valuation purposes, a December 31, 1998
market price of $32.875 was used.
(2) For valuation purposes, the market price on
November 3, 1998, the date of exercise, was used
($24.4063).
EMPLOYMENT AGREEMENTS
The Company has not entered into employment
agreements with any of the named executive officers.
However, IPS, one of the Company's wholly-owned
subsidiaries, has entered into an employment agreement
with Timothy Welch. This agreement was executed in
connection with the Company's acquisition of
substantially all of the assets of the IPS business on
August 1, 1996. Pursuant to such agreement, Mr. Welch
agreed to serve as IPS's Chief Executive Officer and to
serve as a member of the Board of Directors of both IPS
and the Company, subject to shareholder approval, for
the term of his employment agreement. The employment
agreement has a term of two years and originally
provided for an annual salary of $125,000. Effective
June 1, 1997, Mr. Welch resigned as Chief Executive
Officer of IPS; however, the employment agreement was
not terminated. Effective November 1, 1997, Mr. Welch
agreed to work for the Company on special projects.
His annual salary was reduced at that time to $75,000.
This revised arrangement terminated on August 1, 1998
(the termination date of the employment agreement).
With the exception of Mr. Welch's duties and his
salary, all other terms of the original employment
agreement remained unchanged. For his services to the
Company during 1998, Mr. Welch received $43,269. Under
the employment agreement, Mr. Welch was entitled to
receive benefits generally available to executive
employees of the Company, including deferred
compensation under certain employee benefit plans
adopted by the Company, and to participate in such
stock-based incentive plans as the Company may adopt,
including the 1997 Stock Incentive Plan. However, no
options were awarded to Mr. Welch in 1998.
<PAGE>
NON-EMPLOYEE DIRECTOR COMPENSATION
Directors of the Company who are not employees
receive a fee of $1,000 for each Board meeting which
they attend and $500 for each Committee meeting which
they attend, plus out-of-pocket expenses incurred in
connection with attendance at each such meeting. In
addition, in September 1998 each non-employee director
received options under the 1997 Stock Incentive Plan to
purchase a total of 3,000 shares of Common Stock, which
options vest 50% after one year and 50% after two
years. The Company will grant an additional 3,000
shares to each such director in September 1999, which
grants also have two year vesting schedules.
COMPENSATION COMMITTEE REPORT
The Compensation Committee was established after
completion of the Company's initial public offering in
September 1997. The Compensation Committee consists of
Messrs. Akins (Chairman) and Grunewald, neither of whom
is an employee of the Company. The Compensation
Committee is responsible for making recommendations to
the Board concerning the compensation levels of the
executive officers of the Company. The Compensation
Committee also administers the Company's 1997 Stock
Incentive Plan, with responsibility for determining the
awards to be made under such plan to the Company's
executive officers and to other eligible individuals.
The Compensation Committee reviews compensation
programs for executive officers in July of each year,
with any changes to such compensation programs
commencing in September of each year.
In 1998, the Compensation Committee made
compensation decisions with respect to the base
salaries of and the stock option grants to the
Company's executive officers. The Company does not
have a cash bonus program for executive officers. In
making compensation decisions, the Compensation
Committee reviewed information on the compensation
levels of executive officers of a group of public
companies with sales ranging from $35 million to $42
million in 1997. These companies were not identical to
the companies used in the performance graph. The
Committee reviewed the relative market capitalizations,
sales, earnings and compensation levels of the peer
group of companies in making its compensation
decisions. The Committee did not set the compensation
of the Company's executive officers at any specific
level as compared to the peer group of companies.
Also, in making its decisions the Committee did not
assign relative weights or importance to any specific
measure of financial performance of the Company.
Base Salary. The Compensation Committee sets the
base salaries of the Company's executive officers at
levels designed to attract and retain highly qualified
individuals. Based on the information reviewed, the
Committee determined to increase base salaries for the
Company's executive officers. The Committee believes
that the base salary increases were appropriate
relative to the Company's size and financial
performance compared with the peer group of companies.
Equity Based Compensation. Stock option grants
are the primary form of long-term incentive
compensation for the Company's executive officers. The
Compensation Committee believes stock options are an
effective means of incenting senior management to
increase the long-term value of the Company's Common
Stock. Based on the information described above, the
Committee determined to increase the annual stock
option grants to the executive officers of the Company.
The Committee believes that the total compensation
package provided to executive officers, including
options, is appropriate relative to all factors
considered by the Committee.
CEO Compensation. In evaluating Mr. Baum's
compensation, the Committee reviewed the compensation
levels for the chief executive officers of the peer
group of companies described above and
<PAGE>
the financial
performance of those peer group companies. The
Committee determined to increase Mr. Baum's base salary
and to increase the size of the annual stock option
grant to Mr. Baum. Mr. Baum's compensation was not
specifically tied to any specific financial performance
criteria. The Committee believes Mr. Baum's
compensation is appropriate given the Company's size
and financial performance.
In making compensation decisions, it is the
Compensation Committee's current intention to recommend
plans and awards which will meet the requirements for
deductibility for tax purposes under Section 162(m) of
the Internal Revenue Code of 1986, as amended.
The Compensation Committee:
Perry S. Akins, Chairman John H. Grunewald
PERFORMANCE GRAPH
The following graph compares the total stockholder
return on the Company's Common Stock since the
Company's initial public offering on September 25, 1997
with that of the Nasdaq Stock Market Index and a
Company constructed peer group index. The issuers
included in the peer group index are Apollo Group, Inc.
(APOL), CBT Group PLC (CBTSY), Computer Learning
Centers, Inc. (CLCX), Learning Tree International, Inc.
(LTRE), Sylvan Learning Systems, Inc. (SLVN), The
Learning Company, Inc. (TLC), Education Management
Corporation (EDMC) and TRO Learning, Inc. (TUTR). The
total return calculations set forth below assume $100
invested on September 25, 1997, with reinvestment of
dividends into additional shares of the same class of
securities at the frequency with which dividends were
paid on such securities through December 31, 1998.
Since the Company effected its initial public offering
in September 1997, the information in the graph is
provided at quarter end intervals. The stock price
performance shown in the graph below should not be
considered indicative of potential future stock price
performance.
Cumulative Total Return
09/25/1997 09/97 12/97 03/98 06/98 09/98 12/98
ADVANTAGE LEARNING 100 158 134 215 171 238 411
SYSTEMS, INC.
PEER GROUP 100 105 111 122 132 82 101
NASDAQ STOCK MARKET 100 100 94 110 113 103 132
(U.S.)
SUBMISSION OF SHAREHOLDER PROPOSALS
In accordance with the Company's Amended and
Restated By-Laws, nominations, other than by or at the
direction of the Board of Directors, of candidates for
election as directors at the 2000 Annual Meeting of
Shareholders and any other shareholder proposed
business to be brought before the 2000 Annual Meeting
of Shareholders must be submitted to the Company not
later than December 15, 1999. Shareholder proposed
nominations and other shareholder proposed business
must be made in accordance with the Company's Amended
and Restated By-Laws which provide, among other things,
that shareholder proposed nominations must be
<PAGE>
accompanied by certain information concerning the
nominee and the shareholder submitting the nomination,
and that shareholder proposed business must be
accompanied by certain information concerning the
proposal and the shareholder submitting the proposal.
To be considered for inclusion in the proxy statement
solicited by the Board of Directors, shareholder
proposals for consideration at the 2000 Annual Meeting
of Shareholders of the Company must be received by the
Company at its principal executive offices, 2911 Peach
Street, Wisconsin Rapids, Wisconsin 54495-8036 on or
before November 13, 1999. Proposals should be directed
to Mr. Timothy Sherlock, Secretary. To avoid disputes
as to the date of receipt, it is suggested that any
shareholder proposal be submitted by certified mail,
return receipt requested.
INDEPENDENT PUBLIC ACCOUNTANTS
The Company has selected Arthur Andersen LLP as
the Company's independent auditors for the fiscal year
ending December 31, 1999. Representatives of Arthur
Andersen LLP will be present at the Annual Meeting to
make any statement they may desire and to respond to
questions from shareholders.
PENDING LEGAL PROCEEDINGS
No director or executive officer of the Company is
an adverse party or has an interest adverse to the
Company or its subsidiaries in any material pending
legal proceeding.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of
1934 requires the Company's directors and officers,
among others, to file reports with the Securities and
Exchange Commission disclosing their ownership, and
changes in their ownership, of stock in the Company.
Copies of these reports must also be furnished to the
Company. Based solely on a review of these copies, the
Company believes that during 1998, all filing
requirements were complied with.
OTHER MATTERS
Although management is not aware of any other
matters that may come before the Annual Meeting, if any
such matters should be presented, the persons named in
the accompanying proxy intend to vote such proxy in
accordance with their best judgment.
The Company's financial statements, supplementary
financial information and management's discussion and
analysis of financial condition and results of
operations are incorporated herein by reference to the
Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1998. Shareholders may obtain
a copy of the Company's Annual Report as filed on Form
10-K at no cost by writing to Mr. Timothy Sherlock,
Secretary, Advantage Learning Systems, Inc., 2911 Peach
Street, Wisconsin Rapids, Wisconsin 54495-8036.
By Order of the Board of
Directors,
Timothy Sherlock,
Secretary
<PAGE>
Appendix A
ADVANTAGE LEARNING SYSTEMS, INC.
EMPLOYEE STOCK PURCHASE PLAN
1. Purpose. The purpose of this Plan is to
provide employees of Advantage Learning Systems, Inc.
(the "Company") and of its Subsidiaries (as defined in
Paragraph 12 hereof) with an opportunity to purchase
Company common stock through annual offerings to be
made commencing on the 1st day of January (1st day of
July for 1998), and thus develop a stronger incentive
to work for the continued success of the Company. The
aggregate number of shares of common stock of the
Company (the "Stock") authorized to be sold pursuant to
options granted under this Plan is 250,000 shares,
subject to adjustment as provided in Paragraph 17
hereof. In computing the number of shares available
for grant, any shares relating to options which are
granted, but which subsequently lapse, are canceled or
are otherwise not exercised by the final date for
exercise, shall be deemed available for future grants
of options. It is the intention of the Company to have
the Plan qualify as an "employee stock purchase plan"
under Section 423 of the Internal Revenue Code of 1986,
as amended (the "Code") and, therefore, the provisions
of the Plan shall be construed so as to govern
participation in a manner consistent with the
requirements of Section 423(b) of the Code.
2. Administration. Subject to the general
control of the Company's Board of Directors (the
"Board"), the Plan shall be administered by a committee
appointed by the Board (the "Committee"). The
Committee shall consist of one or more members and who
need not be members of the Board. The Board may at any
time replace a member of such Committee. Any expenses
of the Committee shall be paid by the Company. The
Committee may adopt regulations not inconsistent with
the provisions of this Plan for the administration
thereof, and its interpretation and construction of the
Plan and the regulations shall be final and conclusive.
Any action to be taken by the Committee shall be on a
vote of a majority of the Committee either at a meeting
or in writing.
3. Eligibility.
(a) All employees of the Company or of any
Subsidiary designated from time to time by the
Committee will be eligible to participate in the
Plan provided they have a minimum period of
continuous service with the Company or a
Subsidiary, such period to be determined by the
Committee from time to time, but in all events not
to exceed two years, subject to the additional
limitations imposed herein (each such employee is
referred to as an "Eligible Employee").
(b) Any provision of this Plan to the
contrary notwithstanding, no employee shall be
granted an option:
(i) if, immediately after the grant,
such employee would own, and/or hold
outstanding options to purchase stock
possessing 5% or more of the total combined
voting power or value of all classes of stock
of the Company or of any parent or subsidiary
of the Company within the meaning of Section
423 of the Code; or
(ii) which permits the employee's
rights to purchase Stock under all employee
stock purchase plans, as defined in Section
423 of the Code, of the Company and its
subsidiaries to accrue at a rate which
exceeds $25,000 of Fair Market Value of the
Stock (determined at the time such option is
granted) for each calendar year in which such
stock option is outstanding at any time; or
(iii) if the employee's customary
employment does not meet certain requirements
for length of employment determined by the
Committee from time to time; provided,
however, that any such requirement for length
of employment shall comply with Section 423
of the Code.
<PAGE>
4. Offerings. The Committee may make one or
more annual offerings to Eligible Employees to purchase
Stock under this Plan (each an "Offering"). The term
of any Offering, except the first Offering, shall be
for a period of 12 months' duration. The first
Offering shall be for a period of six 6 months'
duration, commencing July 1, 1998 and ending January 1,
1999. No Eligible Employee shall be granted an option
to purchase a number of shares of the Company in excess
of $25,000 divided by 100% of the Fair Market Value of
a share of Stock on the date immediately preceding the
Effective Date of the Offering (as defined in Paragraph
12 hereof).
5. Participation. An Eligible Employee on the
Effective Date of the Offering may participate in such
Offering by completing and forwarding a payroll
deduction authorization form to the appropriate payroll
location before August 1st of the offering period
(September 1 for the first offering period). An
Eligible Employee who submits such authorization is
referred to as a "Participant." The form will
authorize a regular payroll deduction from the
Participant's pay.
6. Deductions. The Company will maintain
payroll deduction accounts for all Participants. A
Participant may purchase shares of Stock under this
Plan solely by means of payroll deduction. Payroll
deductions, as designated by the Participant pursuant
to Paragraph 5, shall be a whole percentage of the
Participant's Compensation (as defined in Paragraph 12
hereof) but not less than one percent (1%) nor more
than ten percent (10%).
7. Deduction Changes. A Participant may
increase or decrease the applicable payroll deduction
by filing a new payroll deduction authorization form
before August 1st of the offering period (September 1
for the first offering period). The change may not
become effective sooner than the next pay period after
receipt of the form. A payroll deduction may be
increased or decreased only once during the term of any
offering period.
8. Withdrawal From Participation in an Offering.
A Participant may, at any time and for any reason,
withdraw from participation in an Offering under this
Plan, upon advance written notice to the Committee. As
soon as reasonably practicable thereafter, payroll
deductions shall cease and the entire amount credited
to the Participant's payroll deduction account under
this Plan shall be refunded to the Participant in cash
(partial refunds are not permitted). Any Participant
who withdraws from an Offering under this Plan may not
resume participation in such Offering.
9. Purchase of Shares.
(a) Each Participant will be entitled to
purchase as many whole shares of Stock as can be
purchased with the total payroll deductions
credited to the Participant's account during the
specified offering periods in the manner and on
the terms herein provided.
(b) The purchase price for a share of Stock
under any Offering will be the lower of either:
(i) the Offering Price of 85% of the
Fair Market Value of a share of Stock on the
Effective Date of the Offering; or
(ii) the Alternative Offering Price of
85% of the Fair Market Value of a share of
Stock on the day one year (6 months for the
first offering period) from the Effective
Date of the Offering.
(c) As of the date one year (6 months for
the first offering period) from the Effective Date
of the Offering, the account of each Participant
shall be totaled and the Alternative Offering
Price determined. If a Participant shall have
sufficient funds in the Participant's account to
purchase one or more full shares at the lower of
either the Offering Price or the Alternative
Offering Price as of that date, the Participant
shall be deemed to have exercised the
Participant's option to purchase such share or
shares at such lower price, the Participant's
account shall be charged for the amount of the
purchase, and a stock certificate shall
<PAGE>
be issued
to the Participant as of such day. The balance of
any payroll deductions credited to his account
during the Offering shall be refunded to the
Participant in cash.
10. Interest. Interest will not accrue on any
employee payroll deduction accounts.
11. Registration of Certificates. Certificates
will be registered only in the name of the Participant.
If a Participant makes written request to the
Committee, the Committee may cause the certificates to
be issued in the Participant's name jointly with a
member of his family with right of survivorship.
12. Definitions.
(a) "Compensation" means the total
compensation paid in cash to a Participant
including salaries, wages, overtime pay or
commission, but excluding bonuses, moving or
relocation allowances, car allowances, imputed
income attributable to cars, life insurance or
other benefits, or other items as determined by
the Committee.
(b) "Effective Date of the Offering" shall
be the date established by the Committee in making
any Offering under this Plan.
(c) "Fair Market Value" shall be the closing
price of the common stock of the Company as quoted
on the NASDAQ National Market System
("NASDAQ/NMS") as reported in the Midwest Edition
of The Wall Street Journal on the applicable
valuation date hereunder, or if no sale of common
stock of the Company is quoted on the NASDAQ/NMS
on any such date, then the closing price of the
common stock of the Company on the next preceding
day on which a sale was made.
(d) "Subsidiary" means any corporation of
which the Company or a Subsidiary owns 50% or more
of the combined voting power of all classes of
stock unless the Board determines that such
corporation shall not be a "Subsidiary" for
purposes hereof. Only subsidiaries that satisfy
the requirements of Section 424(f) of the Code
shall be entitled to participate in the Plan.
13. Rights as a Shareholder. None of the rights
or privileges of a shareholder of the Company shall
exist with respect to shares purchased under this Plan
unless and until such full shares shall have been duly
issued.
14. Rights on Retirement, Death or Termination of
Employment. In the event of a Participant's
retirement, death, or termination of employment, no
payroll deduction shall be taken from any pay due and
owing to such Participant at such time and the balance
in such Participant's account shall be paid to such
Participant or, in the event of such Participant's
death, to such Participant's estate. Transfer of a
Participant from the Company to a Subsidiary or vice
versa shall not constitute termination of employment.
15. Rights Not Transferable. Rights under this
Plan are not transferable by a Participant, other than
by will or the laws of descent and distribution, and
are exercisable, during the Participant's lifetime,
only by the Participant.
16. Application of Funds. All funds received or
held by the Company under this Plan may be used for any
corporate purpose and need not be segregated.
17. Adjustment in Case of Changes Affecting the
Common Stock of the Company. In the event of any stock
dividend, split-up, recapitalization, merger,
consolidation, combination or exchange of shares, or
the like, as a result of which shares of any class
shall be issued in respect of the outstanding Stock, or
the Stock shall be changed into the same or a different
number of the same or another class of stock, or into
securities of another person, cash or other property
(not including a cash dividend), the total number of
shares authorized to be offered in accordance with
Paragraph 1, the number of shares subject to each
outstanding option, the option price applicable to each
such option, and/or the consideration to be received
upon exercise of each such option shall be adjusted in
a
<PAGE>
fair and reasonable manner by the Committee. In
addition, the Committee shall, in its sole discretion,
have authority to provide, in appropriate cases, for
(i) acceleration of the exercise date of outstanding
options or (ii) the conversion of outstanding options
into cash or other property to be received in certain
of the transactions specified in the preceding sentence
upon effectiveness of such transactions.
18. Amendment of the Plan. The Board or the
Committee may at any time, or from time to time, amend
this Plan in any respect; provided, however, that no
amendment shall be made without the approval of the
shareholders of the Company if shareholder approval is
required for such amendment under applicable tax,
securities or other law. Any action taken by the
Board, or the Committee pursuant hereto that is
otherwise inconsistent with the terms and conditions
hereof shall be given effect and be deemed to be an
amendment hereof as related to such action, to the
extent allowed by this Paragraph 18, so as to make such
terms and conditions consistent with such action.
19. Termination of the Plan.
(a) This Plan and all rights of Participants
under any offering hereunder shall terminate:
(i) on the day that Participants become
entitled to purchase a number of shares equal
to or greater than the number of shares
remaining available for purchase. If the
number of shares so purchasable is greater
than the shares remaining available, the
available shares shall be allocated by the
Committee among such Participants in such
manner as it deems fair and consistent with
Section 423 of the Code; or
(ii) at any time, at the discretion of
the Board or the Committee.
(b) Upon termination of this Plan, all
amounts in the accounts of Participants shall be
promptly refunded.
20. Governmental Regulations. The obligation to
sell and deliver shares of the Stock under this Plan is
subject to the approval of any governmental authority
required in connection with the authorization, issuance
or sale of such stock.
21. Indemnification of Committee. In addition to
such other rights of indemnification as they may have
as directors or as members of the Committee, the
members of the Committee shall be indemnified by the
Company against the reasonable expenses, including
attorneys' fees, actually and necessarily incurred in
connection with the defense of any action, suit or
proceeding, or in connection with any appeal therein,
to which they or any of them may be a party by reason
of any action taken or failure to act under or in
connection with the Plan or any option granted
thereunder, and against all amounts paid by them in
settlement thereof (provided such settlement is
approved by independent legal counsel selected by the
Company) or paid by them in satisfaction of a judgment
in any such action, suit or proceeding, except in
relation to matters as to which it shall be adjudged in
such action, suit or proceeding, that such Committee
member is liable for gross negligence or willful
misconduct in the performance of his duties; provided
that within 60 days after the institution of any such
action, suit or proceeding, a Committee member shall in
writing offer the Company the opportunity, at its own
expense, to handle and defend the same.
22. Approval of Shareholders. The Plan has been
adopted by the Board but is subject to approval of the
shareholders of the Company at the next annual or
special meeting of shareholders.
<PAGE>
Preliminary Copies
Proxy Card
ADVANTAGE LEARNING SYSTEMS, INC.
This Proxy is Solicited on Behalf of the Board of
Directors
The undersigned appoints Michael H. Baum and John
R. Hickey, and each of them, as proxies, each with the
power to appoint his substitute, and authorizes each of
them to represent and to vote, as designated below, all
of the shares of stock of Advantage Learning Systems,
Inc. held of record by the undersigned on March 1, 1999
at the 1999 Annual Meeting of Shareholders of Advantage
Learning Systems, Inc. to be held on April 14, 1999 or
at any adjournment thereof.
This proxy when properly executed will be voted in
the manner directed herein by the undersigned
shareholder. If no direction is made, this proxy will
be voted "FOR" the election of all nominees for
directors, "FOR" the approval of the Employee Stock
Purchase Plan and "FOR" the approval of an amendment to
the Amended and Restated Articles of Incorporation.
(Detach below and return using the envelope provided.)
<PAGE>
Advantage Learning Systems, Inc. 1999 Annual Meeting
<TABLE>
<S> <C> <C> <C>
1.ELECTION OF DIRECTORS:
(To serve until the 2000 1-Judith A. Paul [ ] FOR all nominees [ ] WITHHOLD AUTHORITY
Annual Meeting and until 2-Terrance D. Paul listed to the left to vote for all
their successors are 3-Michael H. Baum (except as specified nominees listed
elected and qualified) 4-John R. Hickey below). to the left.
5-Timothy P. Welch
6-Perry S. Akins
7-John H. Grunewald
(Instructions: To withhold authority to vote for
any indicated nominee, write the number(s) of the
nominee(s) in the box provided to the right.
2.PROPOSAL TO APPROVE THE EMPLOYEE STOCK PURCHASE PLAN:
[ ] FOR approval of the Employee Stock Purchase Plan.
[ ] AGAINST approval of the Employee Stock Purchase Plan.
[ ] ABSTAIN from voting on the Employee Stock Purchase Plan.
3.PROPOSAL TO APPROVE AN AMENDMENT TO THE AMENDED AND
RESTATED ARTICLES OF INCORPORATION:
[ ] FOR approval of an amendment to the Amended and
[ ] Restated Articles of Incorporation.
[ ] AGAINST approval of an amendment to the Amended
and Restated Articles of Incorporation.
[ ] ABSTAIN from voting on an amendment to the Amended
and Restated Articles of Incorporation.
4.IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO
VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME
BEFORE THE MEETING.
No. of Shares ________ Date:______________________
Check appropriate box
Indicate changes below: __________________________
(Signature of Shareholder)
Address Change? [ ] Name Change? [ ] _________________________
(Signature of Shareholder -
if held jointly)
Please sign exactly as
name appears hereon.
When shares are held by
joint tenants, both
should sign. When
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
authorized person.
</TABLE>
