ALFA LEISURE INC, DEF 14A, 1997-03-04

ALFA LEISURE INC
DEF 14A, 1997-03-04
MISCELLANEOUS TRANSPORTATION EQUIPMENT

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<PAGE> 1

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:
[ ] Preliminary Proxy Statement
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12

Alfa Leisure, Inc.
- -----------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

Registrant
- ------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)

Payment of Filing Fee (Check the appropriate box):
[ X ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.

1) Title of each class of securities to which transaction applies:

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

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 0-11:1

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

4) Proposed maximum aggregate value of transaction:

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

[ ] 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.:

_________________________________________

3) Filing Party:

__________________________________________

4) Dated Filed:

__________________________________________

____________________

1 Set forth the amount on which the filing fee is calculated and
state how it was determined.
<PAGE> 2

ALFA LEISURE, INC.
5163 "G" STREET
CHINO, CALIFORNIA 91710

_______________

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 1, 1997
12:00 P.M.

_______________

Notice is hereby given that the Annual Meeting of Shareholders of Alfa
Leisure, Inc. will be held at its corporate office, 5163 "G" Street, Chino,
California, 91710 on Tuesday, April 1, 1997, at 12:00 p.m. to consider and vote
upon:

1. Election of a Board of Directors consisting of three (3)
directors. The Proxy Statement which accompanies this Notice
includes the names of the nominees to be presented by the
Board of Directors for election;

2. Approval of the Alfa Leisure, Inc. 1997 Stock Option Plan; and

3. The transaction of such other business as may properly come
before the Annual Meeting.

The Board of Directors has fixed the close of business on February 21,
1997 as the record date for determination of shareholders entitled to notice
of, and to vote, at the Annual Meeting. TO ASSURE THAT YOUR SHARES WILL BE
REPRESENTED AT THE ANNUAL MEETING, PLEASE MARK, SIGN, DATE AND PROMPTLY RETURN
THE ACCOMPANYING PROXY CARD IN THE ENCLOSED ENVELOPE. YOU MAY REVOKE YOUR
PROXY AT ANY TIME BEFORE IT IS VOTED.

Shareholders are cordially invited to attend the meeting in person.
Please indicate on the enclosed proxy whether you plan to attend the meeting.
Shareholders may vote in person if they attend the meeting even though they
have executed and returned a proxy.

By Order Of The Board Of Directors,

Carol Smith
Secretary

Dated: March 4, 1997

<PAGE> 3

ALFA LEISURE, INC.

PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS

____________________

INTRODUCTION

This Proxy Statement is furnished by the Board of Directors of Alfa
Leisure, Inc., a Texas corporation, (the "Company") in connection with the
solicitation of proxies for use at the Annual Meeting of Shareholders to be
held on April 1, 1997 and at any adjournments thereof. The Annual Meeting has
been called to consider and vote upon the election of three (3) persons to the
Board of Directors; to consider and vote upon the approval of the Alfa Leisure,
Inc. 1997 Stock Option Plan; and to consider such other business as may
properly come before the Annual Meeting. This Proxy Statement and the
accompanying Proxy are being sent to shareholders on or about March 4, 1997.

PERSONS MAKING THE SOLICITATION

The Proxy is solicited on behalf of the Board of Directors of the
Company. The original solicitation will be by mail. Following the original
solicitation, the Board of Directors expects that certain individual
shareholders may be further solicited through telephone or other oral
communications from the Board of Directors. The Board of Directors does not
intend to use specially engaged employees or paid solicitors. The Board of
Directors intends to solicit proxies for shares which are held of record by
brokers, dealers, banks or voting trustees, or their nominees, and may pay the
reasonable expenses of such record holders for completing the mailing of
solicitation materials to persons for whom they hold shares. All solicitation
expenses will be borne by the Company.

TERMS OF THE PROXY

The enclosed Proxy indicates the matters to be acted upon at the
Annual Meeting and provides boxes to be marked to indicate the manner in which
the shareholder's shares are to be voted with respect to such matter. By
appropriately marking the boxes, a shareholder may specify whether the proxy
holder shall vote for or against or shall be without authority to vote the
shares represented by the Proxy. The Proxy also confers upon the proxy holder
discretionary voting authority with respect to such other business as may
properly come before the Annual Meeting.

If the Proxy is executed properly and is received by the proxy holder
prior to the Annual Meeting, the shares represented by the Proxy will be voted.
Where a shareholder specifies a choice with respect to the matter to be acted
upon, the shares will be voted in accordance with such specification. Any
Proxy which is executed in such a manner as not to withhold authority to vote
for the election of the specified nominees as directors or approval of the Alfa
Leisure, Inc. 1997 Stock Option Plan shall be deemed to confer such authority.
A Proxy may be revoked at any time prior to its exercise by giving written
notice of the revocation thereof to Carol Smith, Secretary, Alfa

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Leisure, Inc., 5163 "G" Street, Chino, California 91710, by attending the
meeting and electing to vote in person, or by a duly executed proxy bearing a
later date.

VOTING RIGHTS AND REQUIREMENTS

VOTING SECURITIES

The securities entitled to vote at the Annual Meeting consist of all
of the issued and outstanding shares of the Company's common stock, no par
value per share. The close of business on February 21, 1997 has been fixed by
the Board of Directors of the Company as the record date. Only shareholders of
record as of the record date may vote at the Annual Meeting. As of the record
date, there were 3,050,000 issued and outstanding shares of the Company's
common stock to vote at the Annual Meeting and approximately 400 holders of
record of the Company's common stock.

CUMULATIVE VOTING

Each shareholder of record as of the record date will be entitled to
one vote for each share of the Company's common stock held as of the record
date. Cumulative voting is permitted in the election of directors under Texas
law and also under California law which applies to the company as a result of
the percentage of its operations and percentage of its common stock owned by
residents of the State of California. Every shareholder complying with certain
conditions set forth below may cumulate votes and give one candidate a number
of votes equal to the number of directors to be elected (three) multiplied by
the number of votes to which the shareholder's shares are normally entitled, or
distribute the shareholder's votes on the same principle among the candidates
as the shareholder thinks fit. A shareholder can cumulate votes only if the
candidate's names have been placed in nomination prior to the voting and the
shareholder has given notice at the meeting prior to voting of the
shareholders' intention to cumulate the shareholder's votes. If any one
shareholder has given such notice, all shareholders may cumulate their votes
for candidates in nomination.

Discretionary authority to invoke cumulative voting and to cumulate
votes represented by Proxies are solicited by the Board of Directors because,
in the event nominations are made in opposition to the nominees of the Board of
Directors, it is the intention of the person named as proxy holder in the
enclosed Proxy to cumulate votes represented by Proxies for individual nominees
in accordance with their best judgment allocated among as many of the three
nominees of the Board of Directors as possible, unless such authority is
withheld as to any nominee. In that event, those votes will be cumulated for
the remaining nominees of the Board of Directors.

If cumulative voting is invoked by any shareholder in accordance with
Texas or California law, shareholders who attend the meeting and vote in person
will be entitled to personally exercise their right to cumulate votes among the
nominees for director. However, because a shareholder who votes by Proxy
grants the proxy holder discretionary authority to cumulate votes, the proxy
holder and not the shareholder who has executed a Proxy will have the sole
authority to cumulate votes, unless the shareholder revokes the Proxy and votes
in person at the meeting.

QUORUM

The presence at the Annual Meeting of the holders of a number of
shares of the Company's common stock and proxies representing the right to vote
shares of the Company's common stock

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in excess of one-half of the number of shares of the Company's common stock
outstanding as of the record date will constitute a quorum for transacting
business.

COMMON STOCK OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information, as of February 21, 1997,
with respect to the ownership of the Company's common stock by: (i) each person
known by the Company to be the beneficial owner of more than 5% of the
Company's common stock; (ii) by each director; (iii) by each nominee for
director; and (iv) by all officers and directors of the Company as a group.

<TABLE>
<CAPTION>
Name and Address of Amount and Nature of Percent
Beneficial Owner(1) Beneficial Ownership(2) of Class(3)
---------------- -------------------- --------
<S> <C> <C> <C>
Johnnie R. Crean 2,281,430(4) 74.8%

Carol Smith 9,600(5) 0.3%

Robert A. Rudolph 8,364(5) 0.3%

Timothy J. Igo 2,400 0.008%

All directors and
officers as a group
(five persons) 2,301,794 75.5%
</TABLE>

_______________

(1) The address of each named person, other than Robert A. Rudolph, is
5163 "G" Street, Chino, California 91710. Mr. Rudolph's address is
3700 N. Industry Avenue #102, Lakewood, California 90712.

(2) Unless otherwise indicated, each person has sole voting and investment
power over the common stock shown as beneficially owned, subject to
community property laws where applicable and the information contained
in footnotes to this table.

(3) Based on 3,050,000 shares of common stock issued and outstanding.

(4) Includes 2,238,230 shares held in a living trust, over which Mr. Crean
has sole voting and investment power, and includes 43,200 shares held
by trusts for the benefit of the children of Mr. Crean of which Mr.
Crean is co-trustee.

(5) Ms. Smith shares investment power over 9,600 shares with her adult
daughter.

(6) Mr. Igo shares investment power of 2,400 shares with his former
spouse.

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MATTERS TO BE ACTED UPON

ITEM 1: ELECTION OF DIRECTORS

DIRECTORS

The Company's Bylaws provide that the authorized number of directors
is three directors. Three (3) directors are to be elected at the Annual
Meeting to be held on April 1, 1997. The directors so elected will serve until
the next Annual Meeting of Shareholders. All of the nominees are currently
directors of the Company. The Board knows of no reason why any nominee for
director would be unable to serve as a director. In the event that any of them
should become unavailable prior to the Annual Meeting, the proxy will be voted
for a substitute nominee or nominees designated by the Board of Directors, or
the number of directors may be reduced accordingly.

The following table sets forth the name and age of each nominee for
director, the year he was first elected a director and his position(s) with the
Company.

<TABLE>
<CAPTION>
NAME AGE DIRECTOR SINCE POSITION(S) HELD
---- --- -------------- ----------------
<S> <C> <C> <C>
Johnnie R. Crean 47 1986 Chairman of the Board and
President

Carol Smith 57 1986 Secretary and Director

Robert A. Rudolph 63 1986 Director
</TABLE>

JOHNNIE R. CREAN has been Chairman of the Board, President and a
director of the Company since December 29, 1986. Mr. Crean founded Alfa
Leisure, Inc., a California corporation ("Alfa-California") in March 1975 and
served as President and a director of Alfa-California from that time until its
merger into the Company on December 29, 1986. Mr. Crean also served as
President and a director of Alfa Leisure of Louisiana, Inc., a California
corporation ("Alfa-Louisiana"), from its organization in October 1985 to the
time of its merger into the Company of December 29, 1986, and as general
partner of Alfa-Louisiana's predecessor, Alfa Louisiana, Ltd., a California
limited partnership, from September 1983 until October 1985. Prior to their
merger into the Company, Alfa-California and Alfa Louisiana, and its
predecessor were engaged in the manufacture and sale of recreational vehicles.

CAROL SMITH has been the Secretary and a director of the Company since
December 29, 1986. Prior to her association with the Company, Ms. Smith had
been employed by Alfa-California since June 1977. From July 1981 to May 1984,
Ms. Smith served as Sales Manager of Alfa- California and from May 1984 to
November 1986, she served as Plant Manager. Ms. Smith currently serves as
National Director of Marketing of the Company, a position she held at
Alfa-California from November 1986 to December 29, 1986, at which time
Alfa-California was merged into the Company.

ROBERT A. RUDOLPH has served as director of the company since December
29, 1986. Mr. Rudolph is Vice President and Secretary of Bates Industries,
Inc., a privately-held manufacturer and wholesaler of motorcycle apparel, and
has served in such positions since 1962.

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<PAGE> 7
OTHER EXECUTIVE OFFICERS

TIMOTHY P. IGO, age 48, has been the Vice President of the Company
since 1986. Mr. Igo was previously employed in various capacities by Alfa
Leisure, Inc., a California corporation (Alfa-California") from 1973 until
December 29, 1986, when Alfa-California was merged into the Company. Prior to
its merger into the Company, Alfa-California was engaged in the manufacture and
sale of recreational vehicles. From June 1981 to April 1984, Mr. Igo served as
Secretary, Treasurer and a director of Alfa-California, and as Vice President
and a director from April 1984 to December 1986.

PAUL B. DETTOR, age 57, is the Chief Financial Officer of the Company.
Mr. Dettor was the Chief Financial Officer of Velie Circuits, Inc., a
manufacturer of printed circuit boards, from May 1995 through May 1996. Prior
and subsequent thereto, Mr. Dettor was a certified public accountant in private
practice. From 1971 to 1984, Mr. Dettor was the Vice President of Finance,
Secretary and Treasurer of Revcon, Inc., a manufacturer of motor homes and
commercial vehicles. From 1968 to 1971, Mr. Dettor was an accountant with the
firm of Deloitte & Touche, then Deloitte, Haskins & Sells. Mr. Dettor earned
a bachelors degree in accounting from the University of Notre Dame. Mr. Dettor
has completed the course work for a Masters of Business Administration degree
from Pepperdine University.

BOARD OF DIRECTORS MEETINGS AND COMMITTEES

During the fiscal year ended April 30, 1996, there were three (3)
meetings of the Board of Directors. No director was absent from more than one
meeting. In addition, some actions were taken with the unanimous written
consent of the directors. The Board of Directors has no standing audit,
compensation or nominating committees or any other committees serving similar
functions.

EXECUTIVE COMPENSATION AND OTHER INFORMATION

EXECUTIVE COMPENSATION

The following table sets forth the compensation (cash and non cash),
for the Chief Executive Officer and all the executive officers who earned in
excess of $100,000 per annum during any of the Company's last three fiscal
years.

<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation Awards
-------------------------------- -------------------------
Securities
Restricted Underlying
Stock Stock
Name and Fiscal Other Annual Awards Options LTIP All Other
Principal Position Year Salary Bonus($) Compensation($) ($) (#) Payouts($) Compensation
- ----------------------- ------ -------- -------- --------------- ----------- ------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Johnnie R. Crean 1996 $226,404 $ 74,985 --- --- --- --- ---
Chairman of the Board 1995 $226,404 $ 82,487 --- --- --- --- ---
and President 1994 $220,875 $166,568 --- --- --- --- ---
</TABLE>

OPTIONS

There were no options granted in or outstanding at the end of fiscal
1996.

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<PAGE> 8
DIRECTOR COMPENSATION

Directors, other than Johnnie R. Crean, receive compensation of $500
for each meeting of the Board of Directors which they attend.

EMPLOYMENT AGREEMENT

Mr. Crean is employed as President of the Company pursuant to an
employment agreement entered into as of December 1, 1986 (the "Employment
Agreement"). The Employment Agreement renews automatically for successive
twelve-month periods unless terminated by either party by the prior October 31.
The Employment Agreement provides for a base salary of $180,000 per year,
subject to annual cost of living adjustments. The current adjusted annual base
salary is approximately $227,000. Mr. Crean is also entitled to a quarterly
cash bonus in an amount equal to 10% of pre-tax income of the Company. In
addition, Mr. Crean is entitled under his Employment Agreement to purchase up
to two travel trailers manufactured by the Company each fiscal year for an
amount equal to the Company's manufacturing cost. Mr. Crean did not purchase
travel trailers from the Company during the fiscal year ended April 30, 1996.

OTHER MANAGEMENT TRANSACTIONS WITH THE COMPANY

The Company leases its manufacturing facilities and executive offices
from Hercules Land Holding, Inc., a California corporation of which Mr. Crean
is the sole shareholder. The Company pays monthly rent of $12,932 pursuant to
a five (5) year lease with three (3) options to extend for three (3) years
each. The lease provides the Company with the option to acquire the property
and facilities at any time during the lease term at the market value as
determined by appraisal by an MAI certified appraiser. Based on an informal
market survey, the Company believes that the monthly rental rate for the
property and facilities is consistent with local market rates. Prior to
acquiring the property and facilities, Mr. Crean had leased the property and
facilities for $8,324 per month pursuant to a December 19, 1980 lease. During
the fiscal year ended April 30, 1996, the Company paid lease payments of
$11,977 per month to Mr. Crean and from May 1, 1997 until January 22, 1998, the
Company paid lease payments of $12,932 per month to Mr. Crean.

During the fiscal year ended April 30, 1996, the highest amount of
money which Mr. Crean owed to the Company was $515,038. A protion of the
obligation is represented by a promissory note ($402,390) and bears interest at
the rate of nine percent (9%) per annum. It is anticipated that the amount of
the indebtedness will fluctuate during fiscal year 1997.

The Company has collateralized Mr. Crean's personal indebtedness of
$184,000 to a third party lender with a deed of trust on a 1.4 acre lot which
is one of the lots on which the Company's Chino, California manufacturing
facility is located.

Mr. Crean has personally guaranteed the Company's $2,000,000 line of
credit.

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COMPENSATION PHILOSOPHY

The executive compensation philosophy of the Company is to (i) attract
and retain qualified management to run the business efficiently and guide the
Company's growth in both existing and new markets throughout the country, (ii)
establish a link between management compensation and the achievement of the
Company's annual and long-term performance goals, and (iii) recognize and
reward individual initiative and achievement.

BASE SALARIES. Base salaries for new management employees are based
primarily on the responsibilities of the position and the experience of the
individual, with reference to the competitive marketplace for management
talent, which is measured in terms of executive compensation offered by
comparable companies in related businesses.

STOCK OPTIONS. The Company intends to grant stock options to its
management employees. Because the amount of compensation which will be
realized from these options is directly related to the price of the Company's
stock, this form of compensation is directly related to the performance of the
Company and the results of its operations.

CONCLUSION. Through the options described above, a portion of the
Company's management compensation will be linked directly to Company
performance. The Company's President receives bonus compensation based on the
Company's pre-tax income. The Board of Directors will continually review all
compensation practices and make changes as appropriate.

ITEM 2: APPROVAL OF 1997 STOCK OPTION PLAN

On February 18, 1997, the Board of Directors of the Company adopted,
subject to obtaining stockholder approval, the Alfa Leisure, Inc. 1997 Stock
Option Plan (the "1997 Plan"). The 1997 Plan provides for the grant to
employees, officers, directors, consultants and independent contractors of
non-qualified stock options as well as for the grant of stock options to
employees that qualify as incentive stock options under Section 422 of the
Internal Revenue Code of 1986 ("Code"). Although the Company has approximately
250 employees technically eligible to participate in the 1997 Plan, it is
anticipated the stock options will be granted only to a limited number of
management level personnel. The 1997 Plan terminates on February 17, 2007.
The purpose of the 1997 Plan is to enable the Company to attract and retain
qualified persons as employees, officers and directors and others whose
services are required by the Company, and to motivate such persons by providing
them with an equity participation in the Company. The 1997 Plan reserved
300,000 shares of the Company's common stock for issuance pursuant to the 1997
Plan.

The 1997 Plan is administered by a committee made up of the members of
the Board of Directors (the "Committee"), which has, subject to specified
limitations, the full authority to grant options and establish the terms and
conditions under which they may be exercised. The exercise price of incentive
stock options granted under the 1997 Plan is required to be not less than the
fair market value of the common stock on the date of grant (110% in the case of
a greater than 10% stockholder). The exercise price of non-qualified stock
options can be no less than 85% of the fair market value on the date of grant.
Options may be granted for terms of up to ten (10) years (five (5) years in the
case of incentive stock options granted to greater than 10% stockholders). No
optionee may be granted incentive stock options such that the fair market value
of the options which first become exercisable in any one calendar year exceeds
$100,000. If an optionee ceases to be employed by, or ceases to have a
relationship with the Company, such optionee's options expire six (6) months
after termination of the employment or consulting relationship by reason of

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<PAGE> 10
death, one (1) year after termination by reason of permanent disability,
immediately upon termination for cause and three (3) months after termination
for any other reason.

In order to exercise an option granted under the 1997 Plan, the
optionee must pay the full exercise price of the shares being purchased.
Payment may be made either: (i) in cash; (ii) at the discretion of the
Committee, by delivering shares of common stock already owned by the optionee
and having a fair market value equal to the applicable exercise price; or (iii)
such other consideration as may be determined by the Committee and permitted by
applicable law.

Subject to the foregoing, the Committee has broad discretion to
describe the terms and conditions applicable to options granted under the 1997
Plan. The Committee may at any time discontinue granting options under the
1997 Plan or otherwise suspend, amend or terminate the 1997 Plan and may, with
the consent of an optionee, make such modification of the terms and conditions
of such optionee's option as it shall deem advisable; except that the Committee
shall have no authority to make any amendment or modifications to the 1997 Plan
or any outstanding option which would: (i) increase the maximum number of
shares which may be purchased pursuant to options granted under the 1997 Plan,
either in the aggregate or by an optionee; (ii) change the designation of the
class of employees eligible to receive qualified options; (iii) extend the term
of the 1997 Plan or the maximum option period thereunder; (iv) decrease the
minimum qualified option price or permit reductions of the price at which
shares may be purchased for qualified options granted under the 1997 Plan; or
(v) cause qualified stock options issued under the 1997 Plan to fail to meet
the requirements of incentive stock options under Section 422 of the Code. Any
such amendment or modification shall be effective immediately, subject to
stockholder approval thereof within twelve (12) months before or after the
effective date. No option may be granted during any suspension or after
termination of the 1997 Plan.

The 1997 Plan is designed to meet the requirements of an incentive
stock option plan as defined in Code Section 422. As a result, an optionee
will realize no taxable income, for federal income tax purposes, upon either
the grant of an incentive stock option under the 1997 Plan or its exercise. If
no disposition of the shares acquired upon exercise is made by the optionee
within two (2) years from the date of grant or within one (1) year from the
date the shares are transferred to him, any gain realized upon the subsequent
sale of the shares will be taxable as capital gain. In such case, the Company
will be entitled to no deduction for federal income tax purposes in connection
with either the grant or the exercise of the option. If, however, the optionee
disposes of the shares within the period mentioned above, the optionee will
realize earned income in an amount equal to the excess of the fair market value
of the shares on the date of exercise (or the amount realized on disposition if
less) over the exercise price, and the Company will be allowed a deduction for
a corresponding amount.

The Company adopted a similar plan in 1987 which expires on December
15, 1997. There are no options outstanding under this prior plan and the Board
of Directors of the Company does not intend to grant any options under such
plan.

VOTE REQUIRED

The approval of the 1997 Plan will require the affirmative vote of
the holders of at least a majority of the outstanding shares of the Company's
common stock present or represented at the meeting.

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<PAGE> 11
ITEM 3: OTHER MATTERS

Except for the matters referred to in the accompanying Notice of
Annual Meeting, management does not intend to present any matter for action at
the Annual Meeting and knows of no matter to be presented at the meeting that
is a proper subject for action by the shareholders. However, if any other
matters should properly come before the meeting, it is intended that votes will
be cast pursuant to the authority granted by the enclosed Proxy in accordance
with the best judgment of the person or persons acting under the Proxy.

INDEPENDENT PUBLIC ACCOUNTANTS

The Company's independent public accountant is Coopers & Lybrand,
L.L.P. No representative of that firm is expected to be present at the
meeting. If a representative is present, the representative will have the
opportunity to make a statement if the representative desires to do so and may
respond to appropriate questions. Coopers & Lybrand, L.L.P. has been selected
as the Company's independent public accountants for the fiscal year ending
April 30, 1997.

ANNUAL REPORT

The annual report to shareholders covering the Company's fiscal year
ended April 30, 1996 is being mailed to shareholders with this Proxy Statement.
The annual report includes the Company's annual report on Form 10-K under the
Securities Exchange Act of 1934 for the year ended April 30, 1996, including
the financial statements and schedules thereto, which the Company has filed
with the Securities and Exchange Commission. The annual report does not form
any part of the material for the solicitation of the Proxy.

SHAREHOLDER PROPOSALS

All shareholder proposals that are intended to be presented at the
1997 Annual Meeting of Shareholders and to be included in the proxy materials
for that meeting must be received by the Company's Secretary not later than
November 27, 1997.

REQUEST TO RETURN PROXIES PROMPTLY

A Proxy is enclosed for your use. Please mark, date, sign and return
the Proxy at your earliest convenience. The Proxy requires no postage if
mailed in the United States in the postage-paid envelope provided. A prompt
return of your Proxy will be appreciated.

By Order of the Board of Directors,

Carol Smith
Secretary
Chino, California
March 4, 1997

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<PAGE> 12
Appendix 1 to Alfa Leisure, Inc. Proxy Statement

ALFA LEISURE, INC.

1997 STOCK OPTION PLAN

1. PURPOSE. The purpose of the Alfa Leisure, Inc. 1997 Stock Option
Plan (the "Plan") is to strengthen Alfa Leisure, Inc., a Texas corporation
("Corporation"), by providing to employees, officers, directors, consultants
and independent contractors of the Corporation or any of its subsidiaries
(including dealers, distributors, and other business entities or persons
providing services on behalf of the Corporation or any of its subsidiaries)
added incentive for high levels of performance and unusual efforts to increase
the earnings of the Corporation. The Plan seeks to accomplish this purpose by
enabling specified persons to purchase shares of the common stock of the
Corporation, thereby increasing their proprietary interest in the Corporation's
success and encouraging them to remain in the employ or service of the
Corporation.

2. CERTAIN DEFINITIONS. As used in this Plan, the following words
and phrases shall have the respective meanings set forth below, unless the
context clearly indicates a contrary meaning:

2.1 "Board of Directors": The Board of Directors of the
Corporation.

2.2 "Committee": The Committee which shall administer
the Plan shall consist of all of the members of the Board of Directors.

2.3 "Fair Market Value Per Share": The fair market value
per share of the Shares as determined by the Committee in good faith. The
Committee is authorized to make its determination as to the fair market value
per share of the Shares on the following basis: (i) if the Shares are traded
only otherwise than on a securities exchange and are not quoted on the National
Association of Securities Dealers' Automated Quotation System ("NASDAQ"), but
are quoted in the "pink sheets" published by the National Daily Quotation

<PAGE> 13
Bureau, the greater of (a) the average of the mean between the average daily
bid and average daily asked prices of the Shares during the thirty (30) day
period preceding the date of grant of an Option, as quoted in the "pink sheets"
published by the National Daily Quotation Bureau, or (b) the mean between the
average daily bid and average daily asked prices of the Shares on the date of
grant, as published in such "pink sheets;" (ii) if the Shares are traded only
otherwise than on a securities exchange and are quoted on NASDAQ, the greater
of (a) the average of the mean between the closing bid and closing asked prices
of the Shares during the thirty (30) day period preceding the date of grant of
an Option, as reported by the Wall Street Journal and (b) the mean between the
closing bid and closing asked prices of the Shares on the date of grant of an
Option, as reported by the Wall Street Journal; (iii) if the Shares are
admitted to trading on a securities exchange, the greater of (a) the average of
the daily closing prices of the Shares during the ten (10) trading days
preceding the date of grant of an Option, as quoted in the Wall Street
Journal, or (b) the daily closing price of the Shares on the date of grant of
an Option, as quoted in the Wall Street Journal; or (iv) if the Shares are
traded only otherwise than as described in (i), (ii) or (iii) above, or if the
Shares are not publicly traded, the value determined by the Committee in good
faith based upon the fair market value as determined by completely independent
and well qualified experts.

2.4 "Option": A stock option granted under the Plan.

2.5 "Incentive Stock Option": An Option intended to
qualify for treatment as an incentive stock option under Code Sections 421 and
422, and designated as an Incentive Stock Option.

2.6 "Nonqualified Option": An Option not qualifying as
an Incentive Stock Option.

2.7 "Optionee": The holder of an Option.

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<PAGE> 14
2.8 "Option Agreement": The document setting forth the
terms and conditions of each Option.

2.9 "Shares": The shares of common stock of the
Corporation.

2.10 "Code": The Internal Revenue Code of 1986, as
amended.

2.11 "Subsidiary": Any corporation of which fifty percent
(50%) or more of total combined voting power of all classes of stock of such
corporation is owned by the Corporation or another Subsidiary (as so defined).

3. ADMINISTRATION OF PLAN.

3.1 In General. This Plan shall be administered by the
Committee. Any action of the Committee with respect to administration of the
Plan shall be taken pursuant to (i) a majority vote at a meeting of the
Committee (to be documented by minutes), or (ii) the unanimous written consent
of its members.

3.2 Authority. Subject to the express provisions of this
Plan, the Committee shall have the authority to: (i) construe and interpret
the Plan, decide all questions and settle all controversies and disputes which
may arise in connection with the Plan and to define the terms used therein;
(ii) prescribe, amend and rescind rules and regulations relating to
administration of the Plan; (iii) determine the purchase price of the Shares
covered by each Option and the method of payment of such price, individuals to
whom, and the time or times at which, Options shall be granted and exercisable
and the number of Shares covered by each Option; (iv) determine the terms and
provisions of the respective Option Agreements (which need not be identical);
(v) determine the duration and purposes of leaves of absence which may be
granted to participants without constituting a termination of their employment
for purposes of the Plan; and (vi) make all other determinations necessary or
advisable to the administration of the Plan. Determinations of the Committee
on matters referred to in this Section 3 shall be conclusive and binding on

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<PAGE> 15
all parties howsoever concerned. With respect to Incentive Stock Options, the
Committee shall administer the Plan in compliance with the provisions of Code
Section 422 as the same may hereafter be amended from time to time. No member
of the Committee shall be liable for any action or determination made in good
faith with respect to the Plan or any Option.

4. ELIGIBILITY AND PARTICIPATION.

4.1 In General. Only officers, employees and directors
who are also employees of the Corporation or any Subsidiary shall be eligible
to receive grants of Incentive Stock Options. Officers, employees and
directors (whether or not they are also employees) of the Corporation or any
Subsidiary, as well as consultants, independent contractors or other service
providers of the Corporation or any Subsidiary shall be eligible to receive
grants of Nonqualified Options. Within the foregoing limits, the Committee,
from time to time, shall determine and designate persons to whom Options may be
granted. All such designations shall be made in the absolute discretion of the
Committee and shall not require the approval of the stockholders. In
determining (i) the number of Shares to be covered by each Option, (ii) the
purchase price for such Shares and the method of payment of such price (subject
to the other sections hereof), (iii) the individuals of the eligible class to
whom Options shall be granted, (iv) the terms and provisions of the respective
Option Agreements, and (v) the times at which such Options shall be granted,
the Committee shall take into account such factors as it shall deem relevant in
connection with accomplishing the purpose of the Plan as set forth in Section
1. An individual who has been granted an Option may be granted an additional
Option or Options if the Committee shall so determine. No Option shall be
granted under the Plan after December 19, 2006, but Options granted before such
date may be exercisable after such date.

4.2 Certain Limitations. In no event shall Incentive
Stock Options be granted to an Optionee such that the sum of (i) aggregate fair
market value (determined at the time the Incentive Stock Options are granted)
of the Shares subject to all Options granted under the Plan which are
exercisable for the first time during the same calendar

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<PAGE> 16
year, plus (ii) the aggregate fair market value (determined at the time the
options are granted) of all stock subject to all other incentive stock options
granted to such Optionee by the Corporation, its parent and Subsidiaries which
are exercisable for the first time during such calendar year, exceeds One
Hundred Thousand Dollars ($100,000). For purposes of the immediately preceding
sentence, fair market value shall be determined as of the date of grant based
on the Fair Market Value Per Share as determined pursuant to Section 2.3.

5. AVAILABLE SHARES AND ADJUSTMENTS UPON CHANGES IN
CAPITALIZATION.

5.1 Shares. Subject to adjustment as provided in Section
5.2 below, the total number of Shares to be subject to Options granted pursuant
to this Plan shall not exceed 300,000 Shares. Shares subject to the Plan may
be either authorized but unissued shares or shares that were once issued and
subsequently reacquired by the Corporation; the Committee shall be empowered to
take any appropriate action required to make Shares available for Options
granted under this Plan. If any Option is surrendered before exercise or
lapses without exercise in full or for any other reason ceases to be
exercisable, the Shares reserved therefore shall continue to be available under
the Plan.

5.2 Adjustments. As used herein, the term "Adjustment
Event" means an event pursuant to which the outstanding Shares of the
Corporation are increased, decreased or changed into, or exchanged for a
different number or kind of shares or securities, without receipt of
consideration by the Corporation, through reorganization, merger,
recapitalization, reclassification, stock split, reverse stock split, stock
dividend, stock consolidation or otherwise. Upon the occurrence of an
Adjustment Event, (i) appropriate and proportionate adjustments shall be made
to the number and kind of shares and exercise price for the shares subject to
the Options which may thereafter be granted under this Plan, (ii) appropriate
and proportionate adjustments shall be made to the number and kind of and
exercise price for the shares subject to the then outstanding Options granted
under this Plan, and (iii) appropriate amendments to the Option Agreements
shall be executed by the

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<PAGE> 17
Corporation and the Optionees if the Committee determines that such an amendment
is necessary or desirable to reflect such adjustments. If determined by the
Committee to be appropriate, in the event of an Adjustment Event which involves
the substitution of securities of a corporation other than the Corporation, the
Committee shall make arrangements for the assumptions by such other corporation
of any Options then or thereafter outstanding under the Plan. Notwithstanding
the foregoing, such adjustment in an outstanding Option shall be made without
change in the total exercise price applicable to the unexercised portion of the
Option, but with an appropriate adjustment to the number of shares, kind of
shares and exercise price for each share subject to the Option. The
determination by the Committee as to what adjustments, amendments or
arrangements shall be made pursuant to this Section 5.2, and the extent thereof,
shall be final and conclusive. No fractional Shares shall be issued under the
Plan on account of any such adjustment or arrangement.

6. TERMS AND CONDITIONS OF OPTIONS.

6.1 Intended Treatment as Incentive Stock Options.
Incentive Stock Options granted pursuant to this Plan are intended to be
"incentive stock options" to which Code Sections 421 and 422 apply, and the
Plan shall be construed and administered to implement that intent. If all or
any part of an Incentive Stock Option shall not be an "incentive stock option"
subject to Sections 421 or 422 of the Code, such Option shall nevertheless be
valid and carried into effect. All Options granted under this Plan shall be
subject to the terms and conditions set forth in this Section 6 (except as
provided in Section 5.2) and to such other terms and conditions as the
Committee shall determine to be appropriate to accomplish the purpose of the
Plan as set forth in Section 1.

6.2 Amount and Payment of Exercise Price.

6.2.1 Exercise Price. The exercise price per Share
for each Share which the Optionee is entitled to purchase under a Nonqualified
Option shall be determined by the Committee but shall not be less than
eighty-five percent (85%) of the Fair

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<PAGE> 18
Market Value Per Share on the date of the grant of the Nonqualified Option.
The exercise price per Share for each Share which the Optionee is entitled to
purchase under an Incentive Stock Option shall be determined by the Committee
but shall not be less than the Fair Market Value Per Share on the date of the
grant of the Incentive Stock Option; provided, however, that the exercise price
shall not be less than one hundred ten percent (110%) of the Fair Market Value
Per Share on the date of the grant of the Incentive Stock Option in the case of
an individual then owning (within the meaning of Code Section 424(d)) more than
ten percent (10%) of the total combined voting power of all classes of stock of
the Corporation or of its parent or Subsidiaries.

6.2.2 Payment of Exercise Price. The consideration
to be paid for the Shares to be issued upon exercise of an Option, including
the method of payment, shall be determined by the Committee and may consist of
promissory notes, shares of the common stock of the Corporation or such other
consideration and method of payment for the Shares as may be permitted under
applicable state and federal laws.

6.3 Exercise of Options.

6.3.1 Each Option granted under this Plan shall be
exercisable at such times and under such conditions as may be determined by the
Committee at the time of the grant of the Option and as shall be permissible
under the terms of the Plan; provided, however, in no event shall an Option be
exercisable after the expiration of ten (10) years from the date it is granted,
and in the case of an Optionee owning (within the meaning of Code Section
424(d)), at the time an Incentive Stock Option is granted, more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Corporation or of its parent or Subsidiaries, such Incentive Stock Option shall
not be exercisable later than five (5) years after the date of grant.

6.3.2 An Optionee may purchase less than the total
number of Shares for which the Option is exercisable, provided that a partial
exercise of an Option may not be for less than One Thousand (1,000) Shares and
shall not include any fractional shares.

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<PAGE> 19
6.4 Nontransferability of Options. All Options granted
under this Plan shall be nontransferable, either voluntarily or by operation of
law, otherwise than by will or the laws of descent and distribution, and shall
be exercisable during the Optionee's lifetime only by such Optionee.

6.5 Effect of Termination of Employment or Other
Relationship. Except as otherwise determined by the Committee in connection
with the grant of Nonqualified Options, the effect of termination of an
Optionee's employment or other relationship with the Corporation on such
Optionee's rights to acquire Shares pursuant to the Plan shall be as follows:

6.5.1 Termination for Other than Disability, Cause,
or Death. If an Optionee ceases to be employed by, or ceases to have a
relationship with, the Corporation for any reason other than for disability,
cause, or death, such Optionee's Options shall expire not later than three (3)
months thereafter. During such three (3) month period and prior to the
expiration of the Option by its terms, the Optionee may exercise any Option
granted to him, but only to the extent such Options were exercisable on the
date of termination of his employment or relationship and except as so
exercised, such Options shall expire at the end of such three (3) month period
unless such Options by their terms expire before such date. The decision as to
whether a termination for a reason other than disability, cause or death has
occurred shall be made by the Committee, whose decision shall be final and
conclusive, except that employment shall not be considered terminated in the
case of sick leave or other bona fide leave of absence approved by the
Corporation.

6.5.2 Disability. If an Optionee ceases to be
employed by, or ceases to have a relationship with, the Corporation by reason
of disability (within the meaning of Code Section 22(e)(3)), such Optionee's
Options shall expire not later than one (1) year thereafter. During such one
(1) year period and prior to the expiration of the Option by its terms, the
Optionee may exercise any Option granted to him, but only to the extent such
Options were exercisable on the date the Optionee ceased to be employed by, or
ceased to have a relationship with, the Corporation by reason of disability and
except as so

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<PAGE> 20
exercised, such Options shall expire at the end of such one (1) year period
unless such Options by their terms expire before such date. The decision as
to whether a termination by reason of disability has occurred shall be made by
the Committee, whose decision shall be final and conclusive.

6.5.3 Termination for Cause. If an Optionee's
employment by, or relationship with, the Corporation is terminated for cause,
such Optionee's Option shall expire immediately; provided, however, the
Committee may, in its sole discretion, within thirty (30) days of such
termination, waive the expiration of the Option by giving written notice of
such waiver to the Optionee at such Optionee's last known address. In the
event of such waiver, the Optionee may exercise the Option only to such extent,
for such time, and upon such terms and conditions as if such Optionee had
ceased to be employed by, or ceased to have a relationship with, the
Corporation upon the date of such termination for a reason other than
disability, cause, or death. Termination for cause shall include termination
for malfeasance or gross misfeasance in the performance of duties or conviction
of illegal activity in connection therewith or any conduct detrimental to the
interests of the Corporation. The determination of the Committee with respect
to whether a termination for cause has occurred shall be final and conclusive.

6.5.4 Death of an Optionee. If the Optionee ceases
to be employed by, or ceases to have a relationship with, the Corporation by
reason of death, such Optionee's Options shall expire not later than six (6)
months thereafter. During such six (6) month period and prior to the
expiration of the Option by its terms, such Option may be exercised by his
executor or administrator or the person or persons to whom the Option is
transferred by will or the applicable laws of descent and distribution, but
only to the extent such Options were exercisable on the date Optionee ceased to
be employed by, or ceased to have a relationship with, the Corporation by
reason of death.

6.6 Withholding of Taxes. As a condition to the
exercise, in whole or in part, of any Options the Board of Directors may in its
sole discretion require the Optionee to pay, in addition to the purchase price
of the Shares covered by the Option an amount

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<PAGE> 21
equal to any Federal, state or local taxes that may be required to be withheld
in connection with the exercise of such Option.

6.7 No Rights to Continued Employment or Relationship.
Nothing contained in this Plan or in any Option Agreement shall obligate the
Corporation to employ or have another relationship with any Optionee for any
period or interfere in any way with the right of the Corporation to reduce such
Optionee's compensation or to terminate the employment of or relationship with
any Optionee at any time.

6.8 Time of Granting Options. The time an Option is
granted, sometimes referred to herein as the date of grant, shall be the day
the Corporation executes the Option Agreement; provided, however, that if
appropriate resolutions of the Committee indicate that an Option is to be
granted as of and on some prior or future date, the time such Option is granted
shall be such prior or future date.

6.9 Privileges of Stock Ownership. No Optionee shall be
entitled to the privileges of stock ownership as to any Shares not actually
issued and delivered to such Optionee. No Shares shall be purchased upon the
exercise of any Option unless and until, in the opinion of the Corporation's
counsel, any then applicable requirements of any laws or governmental or
regulatory agencies having jurisdiction and of any exchanges upon which the
stock of the Corporation may be listed shall have been fully complied with.

6.10 Securities Laws Compliance. The Corporation will
diligently endeavor to comply with all applicable securities laws before any
Options are granted under the Plan and before any Shares are issued pursuant to
Options. Without limiting the generality of the foregoing, the Corporation may
require from the Optionee such investment representation or such agreement, if
any, as counsel for the Corporation may consider necessary or advisable in
order to comply with the Securities Act of 1933 as then in effect, and may
require that the Optionee agree that any sale of the Shares will be made only
in such manner as is permitted by the Committee. The Committee in its
discretion may cause the Shares underlying the Options to be registered under
the Securities Act of 1933, as

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<PAGE> 22
amended, by the filing of a Form S-8 Registration Statement covering the
Options and Shares underlying such Options. Optionee shall take any action
reasonably requested by the Corporation in connection with registration or
qualification of the Shares under federal or state securities laws.

6.11 Option Agreement. Each Incentive Stock Option and
Nonqualified Option granted under this Plan shall be evidenced by the
appropriate written Stock Option Agreement ("Option Agreement") executed by the
Corporation and the Optionee in a form substantially the same as the
appropriate form of Option Agreement attached as Exhibit I or II hereto (and
made a part hereof by this reference) and shall contain each of the provisions
and agreements specifically required to be contained therein pursuant to this
Section 6, and such other terms and conditions as are deemed desirable by the
Committee and are not inconsistent with the purpose of the Plan as set forth in
Section 1.

7. PLAN AMENDMENT AND TERMINATION.

7.1 Authority of Committee. The Committee may at any
time discontinue granting Options under the Plan or otherwise suspend, amend or
terminate the Plan and may, with the consent of an Optionee, make such
modification of the terms and conditions of such Optionee's Option as it shall
deem advisable; provided that, except as permitted under the provisions of
Section 5.2, the Committee shall have no authority to make any amendment or
modification to this Plan or any outstanding Option thereunder which would:
(i) increase the maximum number of shares which may be purchased pursuant to
Options granted under the Plan, either in the aggregate or by an Optionee
(except pursuant to Section 5.2); (ii) change the designation of the class of
the employees eligible to receive Incentive Stock Options; (iii) extend the
term of the Plan or the maximum Option period thereunder; (iv) decrease the
minimum Incentive Stock Option price or permit reductions of the price at which
shares may be purchased for Incentive Stock Options granted under the Plan; or
(v) cause Incentive Stock Options issued under the Plan to fail to meet the
requirements of incentive stock options under Code Section 422. An amendment
or modification made pursuant to the provisions of this Section 7 shall be
deemed adopted as

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<PAGE> 23
of the date of the action of the Committee effecting such amendment or
modification and shall be effective immediately, unless otherwise provided
therein, subject to approval thereof (1) within twelve (12) months before or
after the effective date by stockholders of the Corporation holding not less
than a majority vote of the voting power of the Corporation voting in person or
by proxy at a duly held stockholders meeting when required to maintain or
satisfy the requirements of Code Section 422 with respect to Incentive Stock
Options, and (2) by any appropriate governmental agency. No Option may be
granted during any suspension or after termination of the Plan.

7.2 Ten (10) Year Maximum Term. Unless previously
terminated by the Committee, this Plan shall terminate on February 17, 2007,
and no Options shall be granted under the Plan thereafter.

7.3 Effect on Outstanding Options. Amendment, suspension
or termination of this Plan shall not, without the consent of the Optionee,
alter or impair any rights or obligations under any Option theretofore granted.

8. EFFECTIVE DATE OF PLAN. This Plan shall be effective as of
February 18, 19973 the date the Plan was adopted by the Board of Directors,
subject to the approval of the Plan by the affirmative vote of a majority of
the issued and outstanding Shares of common stock of the Corporation
represented and voting at a duly held meeting at which a quorum is present
within twelve (12) months thereafter. The Committee shall be authorized and
empowered to make grants of Options pursuant to this Plan prior to such
approval of this Plan by the stockholders; provided, however, in such event the
Option grants shall be made subject to the approval of this Plan and such
Option grants by the stockholders in accordance with the provisions of this
Section 8.

9. MISCELLANEOUS PROVISIONS.

9.1 Exculpation and Indemnification. The Corporation

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<PAGE> 24
shall indemnify and hold harmless the Committee from and against any and all
liabilities, costs and expenses incurred by such persons as a result of any
act, or omission to act, in connection with the performance of such persons'
duties, responsibilities and obligations under the Plan, other than such
liabilities, costs and expenses as may result from the gross negligence, bad
faith, willful conduct and/or criminal acts of such persons.

9.2 Governing Law. The Plan shall be governed and
construed in accordance with the laws of the State of California and the Code.

9.3 Compliance with Applicable Laws. The inability of
the Corporation to obtain from any regulatory body having jurisdiction
authority deemed by the Corporation's counsel to be necessary to the lawful
issuance and sale of any Shares upon the exercise of an Option shall relieve
the Corporation of any liability in respect of the non-issuance or sale of such
Shares as to which such requisite authority shall not have been obtained.

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<PAGE> 25

INCENTIVE STOCK OPTION AGREEMENT

THIS INCENTIVE STOCK OPTION AGREEMENT ("Agreement") is entered into as
of ____________________, by and between ALFA LEISURE, INC., a Texas corporation
("Corporation"), and _________________________ ("Optionee").

R E C I T A L S

A. On February 18, 1996, the Board of Directors of the
Corporation adopted, subject to the approval of the Corporation's shareholders,
the Alfa Leisure, Inc. 1997 Stock Option Plan (the "Plan").

B. Pursuant to the Plan, on _______________, _____, the Plan
Committee ("Committee") authorized granting to Optionee options to purchase
shares of the common stock of the Corporation ("Shares") for the term and
subject to the terms and conditions hereinafter set forth.

A G R E E M E N T

It is hereby agreed as follows:

1. CERTAIN DEFINITIONS. Unless otherwise defined herein, or the
context otherwise clearly requires, terms with initial capital letters used
herein shall have the meanings assigned to such terms in the Plan.

2. GRANT OF OPTIONS. The Corporation hereby grants to Optionee,
options ("Options") to purchase all or any part of __________ Shares, upon and
subject to the terms and conditions of the Plan, which is incorporated in full
herein by this reference, and upon the other terms and conditions set forth
herein.

EXHIBIT I
<PAGE> 26
3. OPTION PERIOD. The Options shall be exercisable at any time
during the period commencing on the following dates (subject to the provisions
of Section 17) and expiring on the date __________ (_____) years from the date
of grant, unless earlier terminated pursuant to Section 7:

<TABLE>
<CAPTION>
Number of Options Exercisable On or After
----------------- -----------------------
<S> <C>

</TABLE>

4. METHOD OF EXERCISE. The Options shall be exercisable by
Optionee by giving written notice to the Corporation of the election to
purchase and of the number of Shares Optionee elects to purchase, such notice
to be accompanied by such other executed instruments or documents as may be
required by the Committee pursuant to this Agreement, and unless otherwise
directed by the Committee, Optionee shall at the time of such exercise tender
the purchase price of the Shares he has elected to purchase. An Optionee may
purchase less than the total number of Shares for which the Option is
exercisable, provided that a partial exercise of an Option may not be for less
than One Thousand (1,000) Shares. If Optionee shall not purchase all of the
Shares which he is entitled to purchase under the Options, his right to
purchase the remaining unpurchased Shares shall continue until expiration of
the Options. The Options shall be exercisable with respect of whole Shares
only, and fractional Share interests shall be disregarded.

5. AMOUNT OF PURCHASE PRICE. The purchase price per Share for
each Share which Optionee is entitled to purchase under the Options shall be
$__________ per Share.

6. PAYMENT OF PURCHASE PRICE. At the time of Optionee's notice
of exercise of the Options, Optionee shall tender in cash or by certified or
bank cashier's check payable to the Corporation, the purchase price for all
Shares then being purchased. Provided, however, the Board of Directors may, in
its sole discretion, permit payment by

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<PAGE> 27
the Corporation of the purchase price in whole or in part with Shares. If the
Optionee is so permitted, and the Optionee elects to make payment with Shares,
the Optionee shall deliver to the Corporation certificates representing the
number of Shares in payment for new Shares, duly endorsed for transfer to the
Corporation, together with any written representations relating to title, liens
and encumbrances, securities laws, rules and regulatory compliance, or other
matters, reasonably requested by the Board of Directors. The value of Shares
so tendered shall be their Fair Market Value Per Share on the date of the
Optionee's notice of exercise.

7. EFFECT OF TERMINATION OF EMPLOYMENT. If an Optionee's
employment or other relationship with the Corporation (or a Subsidiary)
terminates, the effect of the termination on the Optionee's rights to acquire
Shares shall be as follows:

7.1 Termination for Other than Disability, Cause or
Death. If an Optionee ceases to be employed by, or ceases to have a
relationship with, the Corporation or a Subsidiary for any reason other than
for disability, cause or death, such Optionee's Options shall expire not later
than three (3) months thereafter. During such three (3) month period and prior
to the expiration of the Option by its terms, the Optionee may exercise any
Option granted to him, but only to the extent such Options were exercisable on
the date of termination of his employment or relationship and except as so
exercised, such Options shall expire at the end of such three (3) month period
unless such Options by their terms expire before such date. The decision as to
whether a termination for a reason other than disability, cause or death has
occurred shall be made by the Committee, whose decision shall be final and
conclusive, except that employment shall not be considered terminated in the
case of sick leave or other bona fide leave of absence approved by the
Corporation.

7.2 Disability. If an Optionee ceases to be employed by,
or ceases to have a relationship with, the Corporation or a Subsidiary by
reason of disability (within the meaning of Code Section 22(e)(3)), such
Optionee's Options shall expire not later than one (1) year thereafter.
During such one (1) year period and prior to the expiration of the Option by
its terms, the Optionee may exercise any Option granted to him, but only to the

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<PAGE> 28
extent such Options were exercisable on the date the Optionee ceased to be
employed by, or ceased to have a relationship with, the Corporation or
Subsidiary by reason of disability. The decision as to whether a termination
by reason of disability has occurred shall be made by the Committee, whose
decision shall be final and conclusive.

7.3 Termination for Cause. If an Optionee's employment
by, or relationship with, the Corporation or a Subsidiary is terminated for
cause, such Optionee's Option shall expire immediately; provided, however, the
Committee may, in its sole discretion, within thirty (30) days of such
termination, waive the expiration of the Option by giving written notice of
such waiver to the Optionee at such Optionee's last known address. In the
event of such waiver, the Optionee may exercise the Option only to such extent,
for such time, and upon such terms and conditions as if such Optionee had
ceased to be employed by, or ceased to have a relationship with, the
Corporation or a Subsidiary upon the date of such termination for a reason
other than disability, cause or death. Termination for cause shall include
termination for malfeasance or gross misfeasance in the performance of duties
or conviction of illegal activity in connection therewith or any conduct
detrimental to the interests of the Corporation or a Subsidiary. The
determination of the Committee with respect to whether a termination for cause
has occurred shall be final and conclusive.

7.4 Death of an Optionee. If an Optionee ceases to be
employed by, or ceases to have a relationship with, the Corporation by reason
of death, Optionee's Options shall expire not later than six (6) months
thereafter. During such six (6) month period and prior to the expiration of
the Option by its terms, such Options may be exercised by his executor or
administrator or the person or persons to whom the Option is transferred by
will or the applicable laws of descent and distribution, but only to the extent
such Options were exercisable on the date Optionee ceased to be employed by, or
ceased to have a relationship with, the Corporation or a Subsidiary by reason
of death.

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<PAGE> 29
8. NONTRANSFERABILITY OF OPTIONS. The Options shall not be
transferable, either voluntarily or by operation of law, otherwise than by will
or the laws of descent and distribution and shall be exercisable during the
Optionee's lifetime only by Optionee.

9. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. As used herein,
the term "Adjustment Event" means an event pursuant to which the outstanding
Shares of the Corporation are increased, decreased or changed into, or
exchanged for a different number or kind of shares or securities, without
receipt of consideration by the Corporation, through reorganization, merger,
recapitalization, reclassification, stock split, reverse stock split, stock
dividend, stock consolidation or otherwise. Upon the occurrence of an
Adjustment Event, (i) appropriate and proportionate adjustments shall be made
to the number and kind and exercise price for the shares subject to the
Options, and (ii) appropriate amendments to this Agreement shall be executed by
the Corporation and Optionee if the Committee determines that such an amendment
is necessary or desirable to reflect such adjustments. If determined by the
Committee to be appropriate, in the event of an Adjustment Event which involves
the substitution of securities of a corporation other than the Corporation, the
Committee shall make arrangements for the assumptions by such other corporation
of the Options. Notwithstanding the foregoing, any such adjustment to the
Options shall be made without change in the total exercise price applicable to
the unexercised portion of the Options, but with an appropriate adjustment to
the number of shares, kind of shares and exercise price for each share subject
to the Options. The determination by the Committee as to what adjustments,
amendments or arrangements shall be made pursuant to this Section 10, and the
extent thereof, shall be final and conclusive. No fractional Shares shall be
issued on account of any such adjustment or arrangement.

10. NO RIGHTS TO CONTINUED EMPLOYMENT OR RELATIONSHIP. Nothing
contained in this Agreement shall obligate the Corporation to employ or have
another relationship with Optionee for any period or interfere in any way with
the right of the Corporation to reduce Optionee's compensation or to terminate
the employment of or relationship with Optionee at any time.

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<PAGE> 30
11. TIME OF GRANTING OPTIONS. The time the Options shall be
deemed granted, sometimes referred to herein as the "date of grant," shall be
____________, _____.

12. PRIVILEGES OF STOCK OWNERSHIP. Optionee shall not be entitled
to the privileges of stock ownership as to any Shares not actually issued and
delivered to Optionee. No Shares shall be purchased upon the exercise of any
Options unless and until, in the opinion of the Corporation's counsel, any then
applicable requirements of any laws, or governmental or regulatory agencies
having jurisdiction, and of any exchanges upon which the stock of the
Corporation may be listed shall have been fully complied with.

13. SECURITIES LAWS COMPLIANCE. The Corporation will diligently
endeavor to comply with all applicable securities laws before any stock is
issued pursuant to the Options. Without limiting the generality of the
foregoing, the Corporation may require from the Optionee such investment
representation or such agreement, if any, as counsel for the Corporation may
consider necessary in order to comply with the Securities Act of 1933 as then
in effect, and may require that the Optionee agree that any sale of the Shares
will be made only in such manner as is permitted by the Committee. The
Committee may in its discretion cause the Shares underlying the Options to be
registered under the Securities Act of 1933 as amended by filing a Form S-8
Registration Statement covering the Options and the Shares underlying the
Options. Optionee shall take any action reasonably requested by the
Corporation in connection with registration or qualification of the Shares
under federal or state securities laws.

14. INTENDED TREATMENT AS INCENTIVE STOCK OPTIONS. The Options
granted herein are intended to be "incentive stock options" to which Sections
421 and 422 of the Internal Revenue Code of 1986, as amended from time to time
("Code") apply, and shall be construed to implement that intent. If all or any
part of the Options shall not be subject to Sections 421 and 422 of the Code,
the Options shall nevertheless be valid and carried into effect.

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<PAGE> 31
15. PLAN CONTROLS. The Options shall be subject to and governed
by the provisions of the Plan. All determinations and interpretations of the
Plan made by the Committee shall be final and conclusive.

16. SHARES SUBJECT TO LEGEND. If deemed necessary by the
Corporation's counsel, all certificates issued to represent Shares purchased
upon exercise of the Options shall bear such appropriate legend conditions as
counsel for the Corporation shall require.

17. CONDITIONS TO OPTIONS.

17.1 Compliance with Applicable Laws. THE CORPORATION'S
OBLIGATION TO ISSUE SHARES OF ITS COMMON STOCK UPON EXERCISE OF THE OPTIONS IS
EXPRESSLY CONDITIONED UPON THE COMPLETION BY THE CORPORATION OF ANY
REGISTRATION OR OTHER QUALIFICATION OF SUCH SHARES UNDER ANY STATE AND/OR
FEDERAL LAW OR RULINGS OR REGULATIONS OF ANY GOVERNMENTAL REGULATORY BODY, OR
THE MAKING OF SUCH INVESTMENT REPRESENTATIONS OR OTHER REPRESENTATIONS AND
UNDERTAKINGS BY THE OPTIONEE OR ANY PERSON ENTITLED TO EXERCISE THE OPTION IN
ORDER TO COMPLY WITH THE REQUIREMENTS OF ANY EXEMPTION FROM ANY SUCH
REGISTRATION OR OTHER QUALIFICATION OF SUCH SHARES WHICH THE COMMITTEE SHALL,
IN ITS SOLE DISCRETION, DEEM NECESSARY OR ADVISABLE. SUCH REQUIRED
REPRESENTATIONS AND UNDERTAKINGS MAY INCLUDE REPRESENTATIONS AND AGREEMENTS
THAT THE OPTIONEE OR ANY PERSON ENTITLED TO EXERCISE THE OPTION (i) IS NOT
PURCHASING SUCH SHARES FOR DISTRIBUTION AND (ii) AGREES TO HAVE PLACED UPON THE
FACE AND REVERSE OF ANY CERTIFICATES A LEGEND SETTING FORTH ANY REPRESENTATIONS
AND UNDERTAKINGS WHICH HAVE BEEN GIVEN TO THE COMMITTEE OR A REFERENCE THERETO.

17.2 SHAREHOLDER APPROVAL OF PLAN. IF THE OPTIONS GRANTED
HEREBY ARE GRANTED PRIOR TO APPROVAL OF THE PLAN BY THE SHAREHOLDERS

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<PAGE> 32
OF THE CORPORATION PURSUANT TO SECTION 8 OF THE PLAN, THE GRANT OF THE OPTIONS
MADE HEREBY IS EXPRESSLY CONDITIONED UPON AND SUCH OPTIONS SHALL NOT BE
EXERCISABLE UNTIL THE APPROVAL OF THE PLAN BY THE SHAREHOLDERS OF THE
CORPORATION IN ACCORDANCE WITH THE PROVISIONS OF SECTION 8 OF THE PLAN.

17.3 Maximum Exercise Period. Notwithstanding any
provision of this Agreement to the contrary, the Options shall expire no later
than ten years from the date hereof or five years if, as of the date hereof,
the Optionee owns or is considered to own by reason of Code Section 424(d) more
than 10% of the total combined voting power of all classes of stock of the
Corporation or any Subsidiary or parent corporation of the Corporation.

18. MISCELLANEOUS.

18.1 Binding Effect. This Agreement shall bind and inure
to the benefit of the successors, assigns, transferees, agents, personal
representatives, heirs and legatees of the respective parties.

18.2 Further Acts. Each party agrees to perform any
further acts and execute and deliver any documents which may be necessary to
carry out the provisions of this Agreement.

18.3 Amendment. This Agreement may be amended at any time
by the written agreement of the Corporation and the Optionee.

18.4 Syntax. Throughout this Agreement, whenever the
context so requires, the singular shall include the plural, and the masculine
gender shall include the feminine and neuter genders. The headings and
captions of the various Sections hereof are for convenience only and they shall
not limit, expand or otherwise affect the construction or interpretation of
this Agreement.

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<PAGE> 33
18.5 Choice of Law. The parties hereby agree that this
Agreement has been executed and delivered in the State of California and shall
be construed, enforced and governed by the laws thereof. This Agreement is in
all respects intended by each party hereto to be deemed and construed to have
been jointly prepared by the parties and the parties hereby expressly agree
that any uncertainty or ambiguity existing herein shall not be interpreted
against either of them.

18.6 Severability. In the event that any provision of this
Agreement shall be held invalid or unenforceable, such provision shall be
severable from, and such invalidity or unenforceability shall not be construed
to have any effect on, the remaining provisions of this Agreement.

18.7 Notices. All notices and demands between the parties
hereto shall be in writing and shall be served either by registered or
certified mail, and such notices or demands shall be deemed given and made
forty-eight (48) hours after the deposit thereof in the United States mail,
postage prepaid, addressed to the party to whom such notice or demand is to be
given or made, and the issuance of the registered receipt therefor. If served
by telegraph, such notice or demand shall be deemed given and made at the time
the telegraph agency shall confirm to the sender, delivery thereof to the
addressee. All notices and demands to Optionee or the Corporation may be given
to them at the following addresses:

If to Optionee:

If to Corporation: Alfa Leisure, Inc.
5163 "G" Street
Chino, California 91710

Such parties may designate in writing from time to time such other place or
places that such notices and demands may be given.

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<PAGE> 34
18.8 Entire Agreement. This Agreement constitutes the
entire agreement between the parties hereto pertaining to the subject matter
hereof, this Agreement supersedes all prior and contemporaneous agreements and
understandings of the parties, and there are no warranties, representations or
other agreements between the parties in connection with the subject matter
hereof except as set forth or referred to herein. No supplement, modification
or waiver or termination of this Agreement shall be binding unless executed in
writing by the party to be bound thereby. No waiver of any of the provisions
of this Agreement shall constitute a waiver of any other provision hereof
(whether or not similar) nor shall such waiver constitute a continuing waiver.

18.9 Attorneys' Fees. In the event that any party to
this Agreement institutes any action or proceeding, including, but not limited
to, litigation or arbitration, to preserve, to protect or to enforce any right
or benefit created by or granted under this Agreement, the prevailing party in
each respective such action or proceeding shall be entitled, in addition to any
and all other relief granted by a court or other tribunal or body, as may be
appropriate, to an award in such action or proceeding of that sum of money
which represents the attorneys' fees reasonably incurred by the prevailing
party therein in filing or otherwise instituting and in prosecuting or
otherwise pursuing or defending such action or proceeding, and, additionally,
the attorneys' fees reasonably incurred by such prevailing party in negotiating
any and all matters underlying such action or proceeding and in preparation for
instituting or defending such action or proceeding.

IN WITNESS WHEREOF, the parties have entered into this Agreement
as of the date first set forth above.

"CORPORATION"

ALFA LEISURE, INC.,
a Texas corporation

By:________________________________

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<PAGE> 35

"OPTIONEE"

___________________________________

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<PAGE> 36
NON-QUALIFIED STOCK OPTION AGREEMENT

THIS NON-QUALIFIED STOCK OPTION AGREEMENT ("Agreement") is entered
into as of _______________, by and between ALFA LEISURE, INC., a Texas
corporation ("Corporation"), and _________________________ ("Optionee").

R E C I T A L S

A. On February 18, 1997, the Board of Directors of the
Corporation adopted, subject to the approval of the Corporation's shareholders,
the Alfa Leisure, Inc. 1997 Stock Option Plan (the "Plan").

B. Pursuant to the Plan, on _______________ the Plan Committee
("Committee") authorized granting to Optionee of options to purchase shares of
the common stock of the Corporation ("Shares") for the term and subject to the
terms and conditions hereinafter set forth.

A G R E E M E N T

It is hereby agreed as follows:

2. GRANT OF OPTIONS. The Corporation hereby grants to Optionee,
options ("Options") to purchase all or any part of _______________ Shares, upon
and subject to the

EXHIBIT II
<PAGE> 37
terms and conditions of the Plan, which is incorporated in full herein by this
reference, and upon the other terms and conditions set forth herein.

3. OPTION PERIOD AND PURCHASE PRICE. The Options shall be
exercisable at the following purchase prices and at any time during the period
commencing on the following dates, and shall expire on ____________________
unless earlier terminated pursuant to Section 7:

<TABLE>
<CAPTION>
Number of Options Exercisable On or After
----------------- -----------------------
<S> <C>

</TABLE>

5. AMOUNT OF PURCHASE PRICE. The purchase price per Share for
each Share which Optionee is entitled to purchase under the Options shall be
that amount set forth in Section 3 above.

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<PAGE> 38
6. PAYMENT OF PURCHASE PRICE. At the time of Optionee's notice of
exercise of the Options, Optionee shall tender in cash or by certified or bank
cashier's check payable to the Corporation, the purchase price for all Shares
then being purchased. Provided, however, the Board of Directors may, in its
sole discretion, permit payment by the Corporation of the purchase price in
whole or in part with Shares. If the Optionee is so permitted, and the
Optionee elects to make payment with Shares, the Optionee shall deliver to the
Corporation certificates representing the number of Shares in payment for new
Shares, duly endorsed for transfer to the Corporation, together with any
written representations relating to title, liens and encumbrances, securities
laws, rules and regulatory compliance, or other matters, reasonably requested
by the Board of Directors. The value of Shares so tendered shall be their Fair
Market Value Per Share on the date of the Optionee's notice of exercise.

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<PAGE> 39
7.2 Disability. If an Optionee ceases to be employed by,
or ceases to have a relationship with, the Corporation or a Subsidiary by
reason of disability (within the meaning of Code Section 22(e)(3)), such
Optionee's Options shall expire not later than one (1) year thereafter. During
such one (1) year period and prior to the expiration of the Option by its
terms, the Optionee may exercise any Option granted to him, but only to the
extent such Options were exercisable on the date the Optionee ceased to be
employed by, or ceased to have a relationship with, the Corporation or
Subsidiary by reason of disability. The decision as to whether a termination
by reason of disability has occurred shall be made by the Committee, whose
decision shall be final and conclusive.

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<PAGE> 40
exercisable on the date Optionee ceased to be employed by, or ceased to have a
relationship with, the Corporation or a Subsidiary by reason of death.

8. NONTRANSFERABILITY OF OPTIONS. The Options shall not be
transferable, either voluntarily or by operation of law, otherwise than by will
or the laws of descent and distribution and shall be exercisable during the
Optionee's lifetime only by Optionee.

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<PAGE> 41
Corporation to reduce Optionee's compensation or to terminate the employment of
or relationship with Optionee at any time.

11. TIME OF GRANTING OPTIONS. The time the Options shall be
deemed granted, sometimes referred to herein as the "date of grant," shall be
____________________.

14. INTENDED TREATMENT AS NON-QUALIFIED STOCK OPTIONS. The
Options granted herein are intended to be non-qualified stock options described
in U.S. Treasury Regulation ("Treas. Reg.") Section 1.83-7 to which Sections
421 and 422 of the Internal Revenue Code of 1986, as amended from time to time
("Code") do not apply, and shall be construed to implement that intent. If all
or any part of the Options shall not be described

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<PAGE> 42
in Treas. Reg. Section 1.83-7 or be subject to Sections 421 and 422 of the
Code, the Options shall nevertheless be valid and carried into effect.

15. PLAN CONTROLS. The Options shall be subject to and governed
by the provisions of the Plan. All determinations and interpretations of the
Plan made by the Committee shall be final and conclusive.

17. CONDITIONS TO OPTIONS.

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<PAGE> 43
17.2 SHAREHOLDER APPROVAL OF PLAN. IF THE OPTIONS GRANTED
HEREBY ARE GRANTED PRIOR TO APPROVAL OF THE PLAN BY THE SHAREHOLDERS OF THE
CORPORATION PURSUANT TO SECTION 8 OF THE PLAN, THE GRANT OF THE OPTIONS MADE
HEREBY IS EXPRESSLY CONDITIONED UPON AND SUCH OPTIONS SHALL NOT BE EXERCISABLE
UNTIL THE APPROVAL OF THE PLAN BY THE SHAREHOLDERS OF THE CORPORATION IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 8 OF THE PLAN.

18. MISCELLANEOUS.

18.1 Binding Effect. This Agreement shall bind and inure
to the benefit of the successors, assigns, transferees, agents, personal
representatives, heirs and legatees of the respective parties.

18.2 Further Acts. Each party agrees to perform any
further acts and execute and deliver any documents which may be necessary to
carry out the provisions of this Agreement.

18.3 Amendment. This Agreement may be amended at any time
by the written agreement of the Corporation and the Optionee.

18.5 Choice of Law. The parties hereby agree that this
Agreement has been executed and delivered in the State of California and shall
be construed, enforced and governed by the laws thereof. This Agreement is in
all respects intended by each party hereto to be deemed and construed to have
been jointly prepared by the parties and the

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<PAGE> 44
parties hereby expressly agree that any uncertainty or ambiguity existing
herein shall not be interpreted against either of them.

If to Optionee: __________________________

__________________________

If to Corporation: Alfa Leisure, Inc.
5163 "G" Street
Chino, California 91710

Such parties may designate in writing from time to time such other place or
places that such notices and demands may be given.

18.8 Entire Agreement. This Agreement constitutes the
entire agreement between the parties hereto pertaining to the subject matter
hereof, this Agreement supersedes all prior and contemporaneous agreements and
understandings of the parties, and there are no warranties, representations or
other agreements between the parties in

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<PAGE> 45
connection with the subject matter hereof except as set forth or referred to
herein. No supplement, modification or waiver or termination of this Agreement
shall be binding unless executed in writing by the party to be bound thereby.
No waiver of any of the provisions of this Agreement shall constitute a waiver
of any other provision hereof (whether or not similar) nor shall such waiver
constitute a continuing waiver.

18.9 Attorneys' Fees. In the event that any party to this
Agreement institutes any action or proceeding, including, but not limited to,
litigation or arbitration, to preserve, to protect or to enforce any right or
benefit created by or granted under this Agreement, the prevailing party in
each respective such action or proceeding shall be entitled, in addition to any
and all other relief granted by a court or other tribunal or body, as may be
appropriate, to an award in such action or proceeding of that sum of money
which represents the attorneys' fees reasonably incurred by the prevailing
party therein in filing or otherwise instituting and in prosecuting or
otherwise pursuing or defending such action or proceeding, and, additionally,
the attorneys' fees reasonably incurred by such prevailing party in
negotiating any and all matters underlying such action or proceeding and in
preparation for instituting or defending such action or proceeding.

IN WITNESS WHEREOF, the parties have entered into this Agreement
as of the date first set forth above.

"CORPORATION"

ALFA LEISURE, INC.,
a Texas corporation

By: __________________________________

"OPTIONEE"

______________________________________

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<PAGE> 46
ALFA LEISURE, INC. PROXY - 1996 ANNUAL MEETING

SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING APRIL 1,
1997

The undersigned, a shareholder of Alfa Leisure, Inc., a Texas corporation,
appoints Johnnie R. Crean or his designee as such shareholder's true and lawful
agent and proxy, with full power of substitution, to vote all the shares of
stock that the undersigned would be entitled to vote if personally present at
the Annual Meeting of Shareholders of Alfa Leisure, Inc. to be held at its
corporate office, 5163 "G" Street, Chino, California 91710, on Tuesday, April
1, 1997, at 12:00 p.m., and any adjournment thereof, with respect to the
following mattes which are more fully explained in the Proxy Statement of the
Company dated March 4, 1997 receipt of which is acknowledged by the
undersigned:

ITEM 1: ELECTION OF DIRECTORS.

______ FOR all nominees ______ WITHHOLD AUTHORITY
(Except as listed below.) (As to all nominees.)

NOMINEES: JOHNNIE R. CREAN, CAROL SMITH AND ROBERT A. RUDOLPH

INSTRUCTION: To withhold authority to vote for any individual nominee(s),
write that nominee's name in the space provided below.

_____________________________________________

ITEM 2: APPROVAL OF 1997 STOCK OPTION PLAN

______ FOR ______ AGAINST ______ ABSTAIN

ITEM 3: OTHER MATTERS. The Board of Directors at present knows of no
other matters to be brought before the Annual Meeting.

This proxy will be voted in accordance with the instructions given. If no
direction is made, the shares represented by this proxy will be voted FOR the
election of the directors nominated by the Board of Directors and will be voted
in accordance with the discretion of the proxies upon all other matters which
may come before the Annual Meeting.

DATED:____________________________, 1997

____________________________________________
Signature of Shareholder

PLEASE SIGN AS YOUR NAME APPEARS ON THE PROXY
Trustees, Guardians, Personal and other Representatives, please indicate full
titles.

IMPORTANT: PLEASE VOTE, DATE, SIGN AND RETURN THE PROXY CARD