<PAGE>
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
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
GATEWAY ENERGY CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
[LOGO]
GATEWAY ENERGY CORPORATION
July 28, 1997
Dear Stockholder:
You are cordially invited to attend the 1997 Annual Meeting of
Stockholders of Gateway Energy Corporation to be held at the Hotel Sofitel,
425 N. Sam Houston Pkwy. E., Houston, Texas on September 4, 1997, at 10:00
a.m. local time. The Notice of Annual Meeting and Proxy Statement
accompanying this letter describes the business to be transacted at the
meeting.
During the meeting the Board of Directors will report to you on the
Company's progress during this past year and will discuss plans for the
current year. We welcome this opportunity to share our progress with you and
look forward to your comments and questions.
The Board of Directors appreciates and encourages stockholder
participation in the Company's affairs and we hope you can attend in person.
Whether or not you plan to attend the meeting, it is important that your
shares be represented. Therefore, please sign, date, and mail the enclosed
proxy in the envelope provided at your earliest convenience.
Sincerely,
/s/ L. J. Horbach
-------------------------
L. J. Horbach
CHAIRMAN OF THE BOARD,
PRESIDENT AND CHIEF
EXECUTIVE OFFICER
<PAGE>
GATEWAY ENERGY CORPORATION
10842 OLD MILL ROAD, SUITE 5
OMAHA, NEBRASKA 68154
__________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
SEPTEMBER 4, 1997
To the Stockholders of Gateway Energy Corporation:
The Annual Meeting of Stockholders of Gateway Energy Corporation (the
"Company") will be held at the Hotel Sofitel, 425 N. Sam Houston Pkwy. E.,
Houston, Texas on September 4, 1997, at 10:00 a.m. local time for the following
purposes:
1. To elect a Board of Directors to serve until the next annual meeting
of stockholders.
2. To ratify the appointment of Grant Thornton LLP as independent public
accountants.
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Stockholders of record at the close of business on July 15, 1997, the
Record Date fixed by the Board of Directors, are entitled to notice of and to
vote at the Annual Meeting.
It is important that your shares be represented at the Annual Meeting
regardless of the number of shares you hold and whether or not you are
personally able to attend. Accordingly, please sign the enclosed proxy and
return it as soon as possible in the enclosed envelope provided for your
convenience.
By Order of the Board of Directors
/s/ Donald L. Anderson
----------------------------------
Donald L. Anderson
SECRETARY
Omaha, Nebraska
July 28, 1997
<PAGE>
GATEWAY ENERGY CORPORATION
10842 OLD MILL ROAD, SUITE 5
OMAHA, NEBRASKA 68154
__________________
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
SEPTEMBER 4, 1997
_______________
GENERAL INFORMATION
This Proxy Statement is furnished to the holders of the Common Stock, $.25
par value per share ("Common Stock") in connection with the solicitation of
proxies by the Board of Directors of Gateway Energy Corporation (the "Company")
for use at the Annual Meeting of Stockholders to be held on September 4, 1997,
or any adjournment thereof. The first mailing of the proxy material to the
holders of the Common Stock will be made on August 4, 1997.
The cost of the solicitation of proxies will be borne by the Company. In
addition to the use of the mails, proxies may be solicited personally, or by
telephone or electronic media by regular employees of the Company. The Company
will reimburse brokers and other custodians, nominees or fiduciaries for their
expenses in forwarding proxy material to security owners and obtaining their
proxies.
Stockholders of record at the close of business on July 15, 1997, are
entitled to vote on matters to come before the meeting. On that date there were
outstanding and entitled to vote 14,338,500 shares of Common Stock.
Any proxy may be revoked by a stockholder at any time before it is
exercised by giving written notice to that effect to the Secretary of the
Company or by signing a later-dated proxy. Stockholders who attend the annual
meeting may revoke any proxy previously granted and vote in person.
All properly executed proxies will be voted in accordance with the
instructions contained thereon, and if no choice is specified, the proxies will
be voted for the election of the seven directors named elsewhere in the Proxy
Statement and in favor of each other proposal set forth in the Notice of Annual
Meeting. Abstentions do not constitute a vote "FOR" or "AGAINST" any matter
listed in the accompanying Notice of Annual Meeting, but will be included in
determining the number of shares outstanding for purposes of the meeting. Also
broker "non-votes" (i.e. proxies from brokers or nominees indicating that such
persons have not received instructions from the beneficial or other persons
entitled to vote shares on a particular matter with respect to which the brokers
or nominees do not have discretionary power) will be treated the same as
abstentions. If any other business is brought before the Annual Meeting, the
shares represented by proxies will be voted in accordance with the judgment and
discretion of the persons voting them.
1
<PAGE>
BENEFICIAL OWNERSHIP OF VOTING SECURITIES
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS. There are no persons who
are known to the Company to be beneficial owners of more than five percent (5%)
of the Company's voting stock.
PROPOSAL 1
ELECTION OF DIRECTORS
Following is a list of the names and ages of the seven nominees, four of
whom are presently serving as Directors. Included is the past five-year
business history of each Director nominee and any public company directorships
held by such persons, the year in which each became a Director of the Company
and the number and percentage of outstanding shares of Common Stock of the
Company beneficially owned by each as of June 30, 1997.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE
SEVEN NOMINEES LISTED BELOW.
<TABLE>
<CAPTION>
Director No. of
Name Age Employment History Since Shares %
---- --- ------------------ -------- ------ ---
<S> <C> <C> <C> <C> <C>
Larry J. Horbach 56 President and CEO since June 1990 24,605 .17%
1990. Owner of L. J. Horbach &
Associates; Director of Regency
Affiliates, Inc.
Charles A. Holtgraves 32 Secretary from June 1988 to 1995; 1988 138,075 .96%
Treasurer from 1988 to 1994; Vice
President of First Mortgage
Investment Co.
Donald L. Anderson 65 Vice President since 1992; Secretary 1993 89,092 .62%
in 1996; for past five years, has
served as a private consultant to
investment banking community.
John B. Ewing 75 In-house counsel for Company from 1988 22,835 .16%
June 1988 to 1995. He has been in
private practice for the past five years.
Nicholas J. Pilger 61 Registered representative of the 69,797 .49%
National Association of Securities
Dealers and has represented emerging
corporations in the securities markets
for the last five years.
Abe Yeddis 80 President and CEO of Promotional 62,004 .43%
Headwear Int'l since 1970; President
of Advanced Project Financing; Director
NT Realty Company.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Director No. of
Name Age Employment History Since Shares %
---- --- ------------------ -------- ------ ---
<S> <C> <C> <C> <C> <C>
Michael T. Fadden 56 President of Abtech Resources, Inc. None -
since September 1993.* Executive
Vice President of American Oil and Gas
Corporation from January 1990 to
August 1993.
</TABLE>
* Abtech Resources, Inc. is currently providing management consulting services
to the Company. See "Certain Relationships and Related Transactions"
The above, as a group (7 persons) own 303,198 shares or 2.1% of the
outstanding common shares.
ADDITIONAL INFORMATION CONCERNING BOARD OF DIRECTORS
THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD OF DIRECTORS
The business of the Company is managed under the direction of the Board
of Directors. There were six meetings in the fiscal year ending February 28,
1997. There were also three occasions in which matters were decided using a
Consent of Directors. During the last fiscal year, all directors attended
all of the meetings of the Board of Directors. The Board of Directors has
established an Audit Committee, a Compensation Committee and a Stock Option
Committee. Presently the Board of Directors does not have a Nominating
Committee.
AUDIT COMMITTEE
This committee reviews the independent audit of the Company and meets
with independent auditors as necessary to discuss matters pertaining to the
audit and any other matters which the Audit Committee or the auditors may
wish to discuss. Messrs, Holtgraves and Ewing comprise the Audit Committee.
The committee met two times during the fiscal year ending February 28, 1997.
COMPENSATION COMMITTEE
This committee recommends to the Board of Directors compensation for the
executive officers for each upcoming year. The committee consists of Messrs.
Holtgraves and Ewing. The committee met two times during the fiscal year ending
February 28, 1997.
STOCK OPTION COMMITTEE
This committee administers the Incentive and Non-Qualified Stock Option
Plan and approves the issuance of stock options and stock appreciation rights in
accordance with the plan. Mr. Holtgraves is currently the only member of the
Stock Option Committee; the Company will appoint additional members after the
election of directors.
COMPENSATION OF NON-MANAGEMENT DIRECTORS
Non-management members of the Board of Directors currently receive $500 per
day for attending regular board and committee meetings. All directors are
reimbursed for reasonable travel and lodging expenses incurred while attending
Board of Directors or Committee meetings.
3
<PAGE>
LIST OF CURRENT EXECUTIVE OFFICERS OF THE COMPANY
The following is a list of the names and ages of the current executive
officers of the Company, their business history for the past five years and the
year in which each person became an Officer of the Company.
<TABLE>
<CAPTION>
Name Age Position and Principal Occupation for last five years Officer Since
----- --- ----------------------------------------------------- -------------
<S> <C> <C> <C>
Larry J. Horbach 56 President and CEO since June 1990. Owner of 1990
L. J. Horbach & Associates; Director of Regency
Affiliates, Inc., Templeton Savings Bank, and
Seilon Capital Corporation.
Neil A. Fortkamp 51 Executive Vice President, Treasurer and CFO January 1994
1996 to present; Vice President, Treasurer and CFO
January 1994 to January 1996; previously President
of Data Duplicating Corporation from August 1991 to
December 1993.
Donald L. Anderson 65 Vice President since 1992 and Secretary since July 1996. 1992
Previously, a private consultant to the investment
banking community for the past five years.
</TABLE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE. Individual executive officer compensation for
the fiscal year ending February 28, 1997, includes base salary, certain expense
allowances provided by the Company and matching contributions of the Company to
its 401(k) savings plan. As of February 28, 1997 the Company had no bonus or
long-term incentive programs in effect and no bonuses were payable for the year
ended. The following Summary Compensation Table includes compensation paid in
cash:
<TABLE>
<CAPTION>
Long-Term
Compensation
Securities Underlying
Name and Principal Position Year Salary Other Bonus Options/SARs (#)
- --------------------------- ---- ------ ----- ------- ---------------------
<S> <C> <C> <C> <C> <C>
Larry J. Horbach 1995 $ 95,933 $11,300 $ 0 7,000 (2)
President and CEO 1996 108,137 11,400 10,600 0
1997 110,800 14,200 0 0
Neil A. Fortkamp 1995 66,667 5,500 0 6,500 (1)(2)
Executive Vice President, 1996 76,250 8,700 8,000 0
Treasurer and CFO 1997 82,500 8,700 0 0
Donald L. Anderson 1997 48,000(3) 0 0 0
Vice President and Secretary
</TABLE>
(1) As part of 1995 compensation, Mr. Fortkamp received warrants to purchase
500 shares of common stock exercisable at $1.19 per share through February 28,
2000.
(2) On December 1, 1994, Messrs. Horbach and Fortkamp were granted incentive
stock options coupled with tandem stock appreciation rights under the Company's
1994 Incentive and Nonqualified Stock Option Plan. Messrs. Horbach and Fortkamp
4
<PAGE>
were granted options and tandem stock appreciation rights on 7,000 shares and
6,000 shares, respectively, each at an exercise price of $6.25 per share. The
options vest at the rate of 50% per year commencing December 1, 1994. Under the
stock appreciation rights, holders may exercise such SARs for cash, Common Stock
or any combination thereof in an amount equal to the difference between the
market price of the Company's Common Stock on the date of exercise and the
option price at the date of grant.
(3) Mr. Anderson was named Secretary in July 1996 and became a salaried officer
at that time. Mr. Anderson has a four-year employment agreement with the
Company.
OPTION/SAR GRANTS IN LAST FISCAL YEAR. The Company made no grants of stock
options or stock appreciation rights during the year ended February 28, 1997.
AGGREGATE OPTION/SARS EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END VALUES.
No executive officers exercised options during the fiscal year ended February
28, 1997. The following table sets forth the year-end value of unexercised
options/SARs for officers of the Company.
<TABLE>
<CAPTION>
Number of Securities
underlying unexercised Value of unexercised
options/SARs in-the-money options.SARs
at year-end: (#) at year-end: ($)
Name exercisable/unexercisable exercisable/unexercisable (1)
- -------------------- ------------------------- -----------------------------
<S> <C> <C>
Larry J. Horbach 7,000/0 0/0
Neil A. Fortkamp (2) 6,500/0 0/0
</TABLE>
(1) As of February 28, 1997, the fair market value of the Company's Common
Stock is less than the exercise price of the exercisable stock options and
warrants.
(2) Includes warrants to purchase 500 shares of Company Common Stock as
described in Footnote 1 to the Summary Compensation Table.
LONG-TERM INCENTIVE PLAN. The Company currently does not have any long-term
incentive plans for any of its executive officers.
EMPLOYMENT CONTRACT. The Company has an employment agreement with Mr. Donald L.
Anderson which expires July 1, 2000. Mr. Anderson is to receive $6,000 per
month for the term of the agreement. In the event employment is terminated as a
result of death or permanent disability or because of a sale or change in
control of the Company, Mr. Anderson or his estate shall be entitled to all
remaining salary under the agreement reduced to present value at a discount rate
of 8%. Mr. Anderson has the right to participate in group insurance, retirement
plans or other benefit programs established by the Company. The agreement
provides that Mr. Anderson may perform the services specified in the agreement
in Palm Desert, CA unless otherwise agreed to by both parties.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In fiscal year 1992, the Company entered into an agreement with Pipeline
Capital, Inc. ("PCI") (which was subsequently amended several times) whereby
PCI, through a sponsorship arrangement, was to raise up to $50,000,000 for the
Company over five years of which $20,291,000 was raised. Donald L. Anderson was
a shareholder of PCI and had a one-third interest in the capital and in all
profits and losses of PCI.
5
<PAGE>
The parties had several ongoing disagreements regarding the proper
interpretation of various sections of the agreement. In an attempt to settle
these, the parties terminated all prior agreements and entered into a Settlement
and Purchase Agreement ("Agreement") effective May 6, 1996. In summary, the
Agreement provided for the following:
- The Company issued to PCI, one share of non-voting Series O Preferred
Stock and which had no dividend rights. Upon the following described
events, the following payments were to be made to PCI: (i) PCI was
entitled to receive 10% of the consideration paid in the event of a
merger of the Company, the sale of all, or substantially all of its
assets or the sale or exchange of a majority or more of the
outstanding Common Stocks; (ii) in the event of liquidation and
dissolution of the Company, after payment of all debts senior to
Series O, PCI was to receive a payment equal to 10% of the remaining
assets of the Company; (iii) if neither event above occurred by July
1, 2000, PCI was to receive an amount equal to 10% of the fair market
value appraisal of the Company, said appraisal to be done by an
investment banking or appraisal firm.
- The Company repurchased the 56.3 shares of Series C Preferred Stock
owned by PCI, representing its right to receive the above referenced
payments for $480,000 represented by a promissory note requiring
payments of $10,000 per month commencing July 1, 1996 and ending June
1, 2000.
- PCI executed a promissory note in the amount of $278,728 plus interest
at 7% representing all advances to PCI to the date of the Agreement.
All principal and interest on this note was to be offset against the
amounts which were payable to PCI upon a payment event described
above.
- In the event the Company pays less than $5,000 on any monthly payment
under the $480,000 promissory note described above, and has failed to
pay any remaining amount within thirty (30) days, PCI may accelerate
all remaining amounts under the note.
- The Company entered into the Employment Agreement with Donald L.
Anderson as described above.
In the Recapitalization, PCI exchanged its one share of Series O Preferred Stock
for 213,977 shares which represented 10% of the fully diluted shares outstanding
at the time the Information Statements were first mailed to Stockholders. The
$480,000 promissory note remains a legal obligation of the Company and the
Company continues to pay $10,000 per month to PCI as provided in the note. As
part of the Recapitalization, the Company canceled the $278,728 promissory note
from PCI.
The following table sets forth the cash payments, excluding amounts with respect
to the 10% net operating income and stock issued to PCI during the periods
indicated:
2/28/95 2/29/96 2/28/97
------- ------- -------
Cash $630,000 $231,400 $167,500
Common Stock 19,600 Shares 4,800 Shares 9,000 Shares
On March 17, 1997, the Company entered into a Memorandum of Understanding
("Memorandum") with Abtech Resources, Inc. ("Abtech"). Mr. Fadden, a director
nominee, is an officer and owner of Abtech. The Memorandum provides for, among
other things, Abtech, through the services of Mr. Fadden, to provide operating
management and other services to Gateway on an interim basis for a fee of $6,875
per month. The Memorandum also provides that Mr. Fadden will become an officer
of Gateway at a salary of $10,000 per month upon an acceptable resolution of
6
<PAGE>
management, operation, and ownership issues with respect to certain joint
ventures.
As an inducement for Mr. Fadden to undertake and fulfill the responsibilities of
the Memorandum, Gateway issued warrants directly to Mr. Fadden to purchase
50,000 shares of Common Stock, exercisable at any time for ten years from date
of issue at an exercise price of $1.19 per share, the quoted market price of the
common stock on the date of the issue of the warrant. Further, Gateway will
issue warrants or options in an amount equal to 1.5% of the fully diluted common
shares, including the 50,000 shares originally issued, at the time Mr. Fadden
becomes an officer of the Company. Such warrants will also be exercisable for a
ten year period at an exercise price equal to the quoted market price on the
date of issue or grant.
OTHER TRANSACTIONS
In 1997, in connection with the sale of Castex Energy, Inc. ("CEI") and closing
of the Gateway Pipeline Company Houston office, the Company cancelled notes
payable to officers and directors of those entities which were issued in
connection with the acquisition of CEI, certain producing properties and
furniture and fixtures.
In May 1996, Mr. Horbach advanced the Company $35,000 for working capital
purposes which was repaid in December 1996. In August 1996, Mr. Horbach
advanced $50,000 for working capital. This advance was subsequently repaid in
October 1996. Mr. Horbach is currently a personal guarantor of up to $75,000 on
an operating line of credit with a major bank.
During fiscal 1997, the Company paid Donald L. Anderson $6,400 as fees for
administrative services performed in connection with the private placement of
the Company's securities.
PROPOSAL 2
RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
The board of directors has appointed Grant Thornton LLP, independent public
accountants, to examine the financial statements of Gateway Energy Corporation
for the year ending February 28, 1998, and to perform other audit and accounting
related activities as may be requested from time to time by management or the
Board of Directors.
The Board has directed that the appointment of Grant Thornton LLP be
submitted to the stockholders for approval. The affirmative vote of a majority
of the shares of Common Stock present or represented and entitled to vote on the
proposal at the Annual Meeting is required for approval. If the stockholders do
not approve, the Audit Committee and the Board will reconsider the appointment.
Representatives of Grant Thornton LLP are expected to be present at the
Annual Meeting. They will be available to respond to appropriate questions and
will have an opportunity to make a statement if they so desire.
The Board of Directors recommends a vote FOR the approval of the
appointment of Grant Thornton LLP as independent accountants.
OTHER BUSINESS
Management does not intend to bring any business before the Annual Meeting
other than the matters referred to in the accompanying notice and at this date
has not been informed of any matters that may be presented to the Annual Meeting
by others. If, however, any other matters properly come before the Annual
7
<PAGE>
Meeting, it is intended that the person named in accompanying proxy will vote
pursuant to the proxy in accordance with their best judgment on such matters.
ANNUAL REPORT
The Company's Annual Report, including the Form 10-KSB for the year ended
February 28, 1997, is being mailed to all stockholders concurrently herewith.
The Annual Report is not a part of the proxy solicitation material. Additional
copies of the Annual Report which includes the Form 10-KSB for the year ended
February 28, 1997, will be provided, without charge, upon written request from
any stockholder to: Gateway Energy Corporation, 10842 Old Mill Road, Suite 5,
Omaha, Nebraska 68154.
COMPLIANCE WITH SECTION 16 (a) OF THE EXCHANGE ACT
Section 16 (a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's officers and directors and persons who
own more than 10% of the registered class of the Company's equity securities to
file reports of ownership on Form 3 and changes in ownership on Form 4 or Form 5
with the Securities and Exchange Commission (the "SEC"). Such officers,
directors, and 10% stockholders are also required by the SEC rules to furnish
the Company with copies of all Section 16 (a) forms they file.
STOCKHOLDER PROPOSALS FOR 1998
Stockholders may submit proposals on matters appropriate for stockholder
action at the Company's annual meeting, consistent with regulations adopted by
the Securities and Exchange Commission. Proposals to be considered for
inclusion in the Proxy Statement for the 1998 Annual Meeting must be received by
the Company not later than February 15, 1998. Proposals should be directed to
the attention of the Secretary, Gateway Energy Corporation, 10842 Old Mill Road,
Suite 5, Omaha, Nebraska 68154.
REGARDLESS OF THE NUMBER OF SHARES YOU OWN, IT IS IMPORTANT THAT THEY BE
REPRESENTED AT THE ANNUAL MEETING. YOU ARE RESPECTFULLY REQUESTED TO SIGN, DATE
AND RETURN THE ACCOMPANYING PROXY AT YOUR EARLIEST CONVENIENCE.
By Order of the Board of Director
/s/ Donald L. Anderson
---------------------------------
Donald L. Anderson
SECRETARY
8
<PAGE>
GATEWAY ENERGY CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS SEPTEMBER 4, 1997
The undersigned hereby constitutes and appoints Larry J. Horbach and
Donald L. Anderson, or either of them, with full power to act alone, or any
substitute appointed by either of them, the undersigned's agents, attorneys
and proxies to vote the number of shares the undersigned would be entitled to
vote if personally present at the annual meeting of Stockholders of Gateway
Energy Corporation, to be held at the Hotel Sofitel, 425 N. Sam Houston Pkwy
East, Houston, TX on the 4th day of September, 1997 at 10:00 a.m., or any
adjournments as indicated on the reverse.
(TO BE SIGNED ON REVERSE SIDE)
<PAGE>
PLEASE DATE, SIGN AND MAIL YOUR PROXY CARD BACK AS SOON AS POSSIBLE!
/X/ Please mark your
votes as in this
example.
1. Election of Directors. Nominees: Larry J. Horbach, Donald L. Anderson,
Charles A. Holtgraves, John B. Ewing, Nicholas J. Pilger, Abe Yeddis and
Michael T. Fadden.
FOR WITHHOLD
/ / / /
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THE NOMINEE'S NAME ON THE SPACE PROVIDED BELOW.
---------------------------------------------------------------
2. APPROVE ratification of the appointment of Grant Thornton LLP as
Independent Pubic Accountants.
FOR AGAINST ABSTAIN
/ / / / / /
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR THE SELECTION OF ALL NOMINEES FOR DIRECTOR AND WITH
DISCRETIONARY AUTHORITY ON ALL OTHER MATTERS.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS 1 AND 2.
SIGNATURE(S): __________________________________________________
DATE: _______________________________________________
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME APPEARS HEREON. WHEN SIGNING AS
ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN-CONSERVATOR, GIVE FULL
TITLE. ALL JOINT TENANTS MUST SIGN.
