HEIST C H CORP, DEFS14A, 2000-02-10

HEIST C H CORP
DEFS14A, 2000-02-10
HELP SUPPLY SERVICES

Previous: HEICO CORP, SC 13G/A, 2000-02-10

Next: HERLEY INDUSTRIES INC /NEW, SC 13G/A, 2000-02-10

<PAGE> 1

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

SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [ ]

Check the appropriate box:

<TABLE>
<S> <C>
[ ] 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 Rule 14a-11(c) or Rule 14a-12.
</TABLE>

C. H. HEIST CORP.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

XXXXXXXXXXXXXXXX
(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> 2

C. H. HEIST CORP.
810 NORTH BELCHER ROAD
CLEARWATER, FLORIDA 33765

February 10, 2000

Dear Shareholder:

C. H. Heist Corp. (the "Company") will hold a special meeting of its
shareholders on March 6, 2000, to consider and vote on proposals to approve the
sale of its industrial maintenance business and to reincorporate in the State of
Delaware. I have recommended these proposals to the Board of Directors, which
has unanimously approved them. The Board and I recommend that you vote in favor
of each proposal.

We believe the timing is right for the sale of the industrial maintenance
business. The sale will allow management to concentrate attention and financial
resources on our growing staffing services business. We believe that this
proposal will allow investors to better evaluate the staffing services business,
enhancing the likelihood that it will achieve appropriate market recognition for
its performance over time. Furthermore, we believe the sale could facilitate the
expansion of the staffing services business by providing the Company with access
to the capital markets and with a "pure-play" publicly-held stock to use in
possible future acquisitions.

We also believe that it is in the best interests of our shareholders to
reincorporate the Company in Delaware. Currently, the Company is incorporated in
New York. We believe that there are significant advantages to reincorporating in
Delaware. These advantages are discussed in the accompanying proxy statement.
Finally, as part of the reincorporation, the name of the Company will be changed
to Ablest Inc.

The special meeting will begin promptly at 10:00 a.m. at the Hyatt Regency
Westshore, 6200 Courtney Campbell Causeway, Tampa, Florida 33607. The official
notice of meeting, proxy statement and form of proxy are included with this
letter.

The vote of every shareholder is particularly important for this special
meeting.

Please sign, date and promptly mail your proxy. Your cooperation will be
greatly appreciated.

Sincerely,

Charles H. Heist, Chairman
<PAGE> 3

C. H. HEIST CORP.
810 NORTH BELCHER ROAD
CLEARWATER, FLORIDA 33765

February 10, 2000

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

A special meeting of shareholders of C. H. Heist Corp. will be held at the
Hyatt Regency Westshore, 6200 Courtney Campbell Causeway, Tampa, Florida 33607,
on March 6, 2000, at 10:00 a.m., for the following purposes:

1. To consider and vote upon the proposed sale of the Company's
industrial maintenance business; and

2. To consider and vote upon the proposed reincorporation of the
Company in Delaware.

Holders of record of common stock of the Company at the close of business
on February 8, 2000, are entitled to notice of and to vote at the special
meeting or any adjournment thereof.

No business other than the above proposals will be considered at the
special meeting or any adjournment thereof.

By Order of the Board of Directors

W. David Foster
President

YOUR VOTE IS IMPORTANT

WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, PLEASE SIGN AND DATE THE
ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENVELOPE PROVIDED, WHICH REQUIRES NO
POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE> 4

TABLE OF CONTENTS

<TABLE>
<S> <C>
The Special Meeting......................................... 8

The Asset Sale Proposal..................................... 9

Pro Forma Condensed Consolidated Financial Information...... 17

The Reincorporation Proposal................................ 23

Stock Ownership............................................. 28

Market Information.......................................... 30

Independent Auditors........................................ 31

Shareholder Proposals....................................... 31

Available Information....................................... 31

Certain Historical Financial Information.................... 32
</TABLE>

i
<PAGE> 5

C. H. HEIST CORP.

PROXY STATEMENT

This proxy statement is being furnished to shareholders of C.H. Heist Corp.
(the "Company") in connection with the solicitation of proxies on behalf of its
Board of Directors to be used at a special meeting to be held on March 6, 2000,
at 10:00 a.m. at the Hyatt Regency Westshore, 6200 Courtney Campbell Causeway,
Tampa, Florida 33607 (the "Special Meeting") and any adjournment thereof.

This proxy statement is being mailed to the Company's shareholders on or
about February 10, 2000.

Only shareholders of record as of the close of business on February 8,
2000, are entitled to notice of, and to vote at, the Special Meeting or any
adjournment thereof. On January 31, 2000, the Company had 2,881,678 common
shares outstanding. Each share is entitled to one vote. Shares cannot be voted
at the Special Meeting unless the holder thereof is present or represented by
proxy.

Any shareholder executing the accompanying form of proxy has the power to
revoke it at any time prior to its exercise. Such revocation may be made in
person at the Special Meeting or by written notification to the Secretary of the
Company. Every properly signed proxy will be voted unless previously revoked if
the proxy is returned to the Company properly executed and in sufficient time to
permit the necessary examination and tabulation before a vote is taken.

At the Special Meeting, shareholders will be asked to vote on two
proposals:

1. The proposed sale of the Company's industrial maintenance business;
and

2. The proposed reincorporation of the Company in Delaware.

The Company's address is 810 North Belcher Road, Clearwater, Florida 33765,
and its telephone number is (727) 461-5656.

1
<PAGE> 6

SUMMARY

This summary is qualified by the more detailed information set forth
elsewhere in this proxy statement, including the financial information set forth
herein.

THE SPECIAL MEETING

Date, Time and Place. The Special Meeting of shareholders of the Company
will be held at the Hyatt Regency Westshore, 6200 Courtney Campbell Causeway,
Tampa, Florida 33607, on March 6, 2000, at 10:00 a.m.

Purpose. The Special Meeting is being held to consider and vote on
proposals to sell the Company's industrial maintenance business to Onyx
Industrial Services, Inc. (the "Asset Sale") and to reincorporate in the State
of Delaware and change the Company's name to Ablest Inc. following the sale of
the industrial maintenance business (the "Reincorporation").

Recommendation of the Company's Board. The Board of Directors of the
Company has unanimously approved the Asset Sale and the Reincorporation and
recommends that shareholders vote FOR these proposals. For a description of the
reasons for each proposal, see "The Asset Sale Proposal -- Reasons for the Asset
Sale" and "The Reincorporation Proposal -- Reasons for Reincorporation."

Record Date. February 8, 2000 (the "Special Meeting Record Date").

Voting. At the Special Meeting, each holder of record of common shares as
of the Special Meeting Record Date will be entitled to one vote for each share
held as of such date. The Company is seeking approval of each proposal by the
holders of at least two-thirds of the outstanding common shares. Under New York
law, it is not clear whether sale of the industrial maintenance business would
constitute a sale of "substantially all assets" and thus require shareholder
approval. Consequently, if the Asset Sale is approved by the holders of less
than two-thirds of such shares, but is approved by the holders of a majority of
such shares, the Company may request a court to rule that shareholder approval
is not required and in such case will consummate the Asset Sale if a favorable
ruling is obtained. As of January 31, 2000, Charles H. Heist, Chairman and Chief
Executive Officer of the Company, owned 278,877 shares, representing
approximately 9.6% of the outstanding common shares, and certain trusts of which
Mr. Heist is a trustee owned 1,041,925 shares, representing approximately 36.5%
of the outstanding common shares. Mr. Heist has informed the Company that he
intends to vote such shares in favor of the Asset Sale and the Reincorporation
and has entered into an agreement with Onyx Industrial Services on behalf of
himself and the trusts to vote all of such shares in favor of the Asset Sale.

THE ASSET SALE

Assets to be Sold. The Company will sell substantially all assets related
to its United States industrial maintenance business and all outstanding stock
of its wholly-owned subsidiary C.H. Heist, Ltd., which operates the Company's
industrial maintenance business in Canada.

Purchaser. The purchaser of the Company's industrial maintenance business
will be Onyx Industrial Services, Inc., a Delaware corporation ("Onyx")
headquartered at 1980 North Highway 146, LaPorte, Texas 77571 (telephone number:
(713) 307-2100). Onyx is engaged in the industrial maintenance business in the
United States and Canada, and is a subsidiary of CGEA-Onyx, a French waste
service company with worldwide operations.

Sale Price. The Company will sell the assets of its U.S. industrial
maintenance business to Onyx for $10,000,000 and the stock of C.H. Heist, Ltd.
for $10,000,000. Onyx will assume approximately $2,600,000 of liabilities
related to the U.S. industrial maintenance business.

Reasons for the Asset Sale. The Company has limited resources and each of
the industries that it is engaged in (industrial maintenance and staffing
services) is highly competitive and in a consolidating mode. The sale of the
industrial maintenance business will allow management to concentrate attention
and financial resources on its

2
<PAGE> 7

staffing services business. The Company believes that of its two businesses the
staffing services business offers more promise for the future and more
opportunities for growth.

Possible Escrow of Funds. If the Company is unable to obtain the consent of
E. I. du Pont de Nemours and Company ("DuPont") to the assignment of the master
service contract between the Company and DuPont prior to the Closing, the
Company will place $6,000,000 of the Purchase Price in escrow for one year. All
or part of the escrow will be released to the Company at the end of the year
depending on the ability of Onyx to retain business with DuPont at locations
where Heist and Onyx performed services for DuPont in fiscal 1999. Similarly, if
the Company is unable to obtain, prior to the Closing, the consent of C&K
Industrial Services, Inc. ("C&K") to the assignment of the Company's service
contract with C&K, the Company will place $300,000 of the Purchase Price in
escrow for one year, to be released to the Company in whole or in part depending
on the ability of Onyx to retain business with C&K comparable to that
experienced by Heist in fiscal 1999. In addition to the foregoing, in the event
that the Company is unable to obtain, prior to the Closing, consents of
customers (other than DuPont and C&K) with contracts representing $2 million or
less in revenues for fiscal 1999, the Company will place up to $700,000 in
escrow for one year, to be released in whole or in part depending on the ability
of Onyx to retain business with such customers comparable to that experienced by
the Company in fiscal 1999. The Company believes that it will be able to obtain
the DuPont consent and all other customer consents with the possible exception
of C&K's consent.

Retention of Certain Liabilities. The Company will retain all liabilities
arising out of or relating to the conduct of the United States industrial
maintenance business prior to the closing, other than the specific liabilities
to be assumed by Onyx. The Company does not expect any of the retained
liabilities to have a material adverse effect on its future results of operation
or financial condition.

Certain Environmental Matters. The Company has agreed to pay for certain
environmental studies and possible remediation at three of its sites in the
United States and three of its sites in Canada. All of these sites will be sold
to Onyx. The Company's maximum obligation to Onyx for the Canadian sites is
$1,000,000. The Company cannot estimate at this time the potential costs of the
remediation of the Canadian sites, but based on studies performed to date by
Onyx's environmental consultant, these costs could be in the range of $600,000.
There is no limit to the Company's obligation to remediate the sites in the
United States, but the Company believes that the costs involved will not be
material.

Non-Competition Agreements. In connection with the Asset Sale, the Company
and two of its senior executive officers will agree not to compete with Onyx in
the industrial maintenance business in the United States and Canada for a period
of five years after the closing.

Representations, Warranties and Covenants. The agreement governing the
Asset Sale (the "Sale Agreement") contains representations, warranties and
covenants of the Company and Onyx customary in transactions similar to the Asset
Sale.

Conditions to Closing. The Sale Agreement contains conditions to closing
customary in transactions similar to the Asset Sale, including approval of the
shareholders of the Company.

Termination of Sale. The Company and Onyx each have the right to terminate
the Sale Agreement under certain circumstances customary to transactions similar
to the Asset Sale.

Indemnification. Under the Sale Agreement, the Company and Onyx have agreed
to indemnify each other with respect to breaches in their respective
representations, warranties and agreements. The Company has also agreed to
indemnify Onyx with respect to any matters pending at or arising after the
closing relating to the operation of the industrial maintenance business in the
United States and Canada prior to the closing, including certain pending
litigation. The Company believes that the costs involved in indemnifying Onyx in
connection with currently pending litigation will not be material to the
Company's results of operations or financial condition following the closing.
The Company does not expect that any of the other matters for which it has
agreed to indemnify Onyx will have a material adverse effect on the Company's
results of operations or financial condition following the closing.
3
<PAGE> 8

Accounting Treatment. The Asset Sale will be accounted for as a
discontinued operation as primarily specified in Opinion No. 30 of the
Accounting Principles Board.

U.S. Tax Consequences. The Company does not expect that there will be any
material tax consequence to it as a result of the Asset Sale.

Governing Law. The Sale Agreement and the Asset Sale are governed by the
laws of the State of New York.

Closing. The closing of the sale will take place as soon as practicable
following the Special Meeting provided that the Asset Sale is approved by the
shareholders.

Possible Appraisal Rights. Shareholders of the Company who do not vote for
the Asset Sale and who comply with the procedures required by the New York
Business Corporation Law may have the right to receive payment for the fair
value of their shares.

THE REINCORPORATION

Reincorporation. The Reincorporation will be effected by having the Company
merge into Ablest Inc., a Delaware corporation formed for the Reincorporation.
The Company and Ablest have entered into an Agreement and Plan of Merger dated
as of February 4, 2000, (the "Merger Agreement") to effect the Reincorporation.
As a result of the Reincorporation, the Company's name will be changed to Ablest
Inc.

Business of the Company following Reincorporation. Following the
Reincorporation, the Company will be engaged in the staffing services business
through its wholly-owned subsidiary Ablest Service Corp. The Reincorporation
will effect no change in the nature of this business.

Reasons for Reincorporation. Delaware has long been the leading state in
implementing comprehensive and flexible corporate laws in response to the legal
and business needs of corporations. The Company believes that reincorporation in
Delaware will give it greater certainty regarding how its affairs should be
conducted in order to comply with applicable laws as well as comfort resulting
from the responsiveness of Delaware's legislature and courts to the needs of
corporations organized in Delaware. See "The Reincorporation Proposal -- Reasons
for Reincorporation."

New Charter and Bylaws. Following the Reincorporation, the Company will be
governed by a new charter and new bylaws. Approval of the Reincorporation will
constitute approval of the new charter and the new bylaws. The principal
differences between the new charter and bylaws and the Company's existing
charter and bylaws are discussed at "The Reincorporation Proposal -- Comparison
of Charters and Bylaws."

New Governing Law. Following the Reincorporation, the Company will be
governed by Delaware corporation law. New York corporation law, which currently
governs the Company's corporate affairs, differs in a number of respects from
Delaware corporation law. The principal differences between the two laws are
discussed in "The Reincorporation Proposal -- Comparison of Rights of
Shareholders Under New York and Delaware Corporation Laws."

Anti-Takeover Implications. There are certain anti-takeover implications to
the Reincorporation. For a discussion of those implications, see "The
Reincorporation Proposal -- Anti-Takeover Implications."

Appraisal Rights. Under New York law, shareholders who vote against the
Reincorporation shall not be entitled to appraisal rights.

Certain Tax Consequences. The Reincorporation will constitute a tax-free
reorganization of the Company under federal tax law. No gain or loss will be
recognized by the holders of common shares of the Company pursuant to the
Reincorporation for federal tax purposes, nor will the Company recognize gain or
loss for federal tax purposes as a result of the Reincorporation. See "The
Reincorporation Proposal -- Certain Federal Income Tax Consequences of the
Reincorporation."

4
<PAGE> 9

Stock Certificates. No exchange of stock certificates will be required in
connection with the Reincorporation. After the Reincorporation, the Company's
outstanding stock certificates will remain outstanding and will represent shares
of common stock of the Company as reincorporated in Delaware under the name
Ablest Inc.

Market for Stock. After the Asset Sale and the Reincorporation, the common
shares will continue to be traded on the American Stock Exchange (the
"Exchange") under the symbol "HST" until the shares receive a new symbol. The
Company has applied to the Exchange for the new symbol "ABI".

FORWARD LOOKING INFORMATION

This proxy statement contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. Pro forma information
contained within this proxy statement, to the extent it is predictive of
financial condition and results of operations that would have occurred on the
basis of certain stated assumptions, may also be characterized as
forward-looking statements. Although forward-looking statements are based on
assumptions made and information believed by management to be reasonable, no
assurance can be given that such statements will prove to be correct. Such
statements are subject to certain risks, uncertainties and assumptions. Should
one or more of these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially from those
results anticipated, estimated, projected or expected.

CERTAIN RECENT DEVELOPMENTS

Fourth Quarter Charge. On December 29, 1999, the Company announced that it
had re-evaluated certain intangible assets and as a result would take a one-time
charge of up to $5.5 million for the fourth quarter of fiscal 1999, subject to
final evaluation.

The charge relates to goodwill and other intangible assets attributable to
previous acquisitions of information technology staffing services businesses.
The Company has determined that these assets have diminished in value and that
the projected growth rate used in evaluating these acquisitions has not been
achieved. Additionally, the Company believes that there is not a strong
likelihood of achieving projected cash flows from the acquired businesses in
future periods.

The re-evaluation of goodwill falls within the Company's historical policy
of evaluating events and circumstances which have occurred that indicate the
carrying value of intangible assets may warrant revisions. The re-evaluation is
consistent with the approach used in Financial Accounting Standards Board Rule
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of." The Company is evaluating the value and the life of
the intangible assets and anticipates making the necessary revisions in its
fiscal 1999 financial statements. The one-time, pre-tax charge will be reflected
as an "impairment of assets" in the fourth-quarter and full-year statements of
operations for fiscal 1999.

Resignation of Executive. On December 31, 1999, John L. Rowley, Vice
President and Chief Financial Officer of the Company, resigned to pursue other
endeavors. Charles H. Heist, Chairman and Chief Executive Officer, has assumed
the duties of Chief Financial Officer.

Administrative Relocation. In conjunction with the sale of its industrial
maintenance business, the Company is relocating its administrative and support
offices, currently located in Buffalo, New York, to the Tampa, Florida area. The
Tampa area is currently the location of the Company's executive and human
resources offices, and the relocation is designed to bring all support services
of the Company together in one location. The Company has signed a new six year
lease for office space that should be available in the second quarter of the
current year and intends to sell its current executive office building and not
renew its existing lease for its human resource offices.

Liquidation of Insulation Business. The Company is liquidating its
commercial insulation business, which is headquartered in Charlotte, North
Carolina. The Company does not expect the liquidation to have a material adverse
effect on its financial condition or results of operations.
5
<PAGE> 10

SUMMARY HISTORICAL AND PRO FORMA
CONSOLIDATED FINANCIAL INFORMATION

SELECTED HISTORICAL FINANCIAL DATA

The following is a summary of certain consolidated financial information
that has been derived from the consolidated financial statements of C.H. Heist
Corp and subsidiaries. This summary should be read in conjunction with the
related consolidated financial statements and notes thereto included elsewhere
in this proxy statement. See "Certain Historical Financial Information".

C.H. HEIST CORP. AND SUBSIDIARIES

(In thousands, except share data)

<TABLE>
<CAPTION>
THIRTY-NINE
WEEKS ENDED YEAR ENDED
SEPT. 26, 1999 DEC. 27, 1998
-------------- -------------
<S> <C> <C>
SELECTED INCOME STATEMENT DATA:
Net service revenue........................................ $111,218 135,647
Operating income........................................... 259 2,429
Net earnings (loss)........................................ (4) 1,294
Basic and diluted net earnings (loss) per common share..... -- .45
</TABLE>

<TABLE>
<CAPTION>
SEPT. 26, 1999
--------------
<S> <C> <C>
SELECTED BALANCE SHEET DATA:
Working capital............................................ $ 18,341
Total assets............................................... 55,856
Long-term debt............................................. 16,873
</TABLE>

PRO FORMA CONSOLIDATED (UNAUDITED) FINANCIAL DATA

The following pro forma consolidated (unaudited) financial information
should be read in conjunction with the Pro Forma Consolidated (Unaudited)
Financial Information included elsewhere herein, including the assumptions for
such presentation, and the separate historical financial statements of C.H.
Heist Corp. and subsidiaries and notes thereto included elsewhere in this proxy
statement. See "Certain Historical Financial Information".

The pro forma consolidated (unaudited) financial data are not necessarily
indicative of the operating results that would have been achieved had the Asset
Sale and discontinuation of industrial maintenance operations been effective
during the periods presented or the results that may be obtained in the future.
Nonrecurring charges resulting directly from the Asset Sale and discontinuation
of industrial maintenance operations and other nonrecurring fourth quarter
charges as noted under "Certain Recent Developments" are excluded from the Pro
Forma Selected Income Statement Data.

6
<PAGE> 11

SUMMARY PRO FORMA CONSOLIDATED FINANCIAL INFORMATION

(In thousands)

<TABLE>
<CAPTION>
YEAR
THIRTY-NINE ENDED
WEEKS ENDED DEC. 27,
SEPT. 26, 1999 1998
-------------- --------
<S> <C> <C> <C>
SELECTED INCOME STATEMENT DATA:
Net service revenue............................. $ 70,376 78,471
Operating income................................ 1,153 1,893
Net earnings.................................... 761 1,265
</TABLE>

<TABLE>
<CAPTION>
SEPT. 26, 1999
--------------
<S> <C> <C> <C>
SELECTED BALANCE SHEET DATA:
Working capital................................. $ 9,620
Total assets.................................... 33,720
Long-term debt.................................. --
Total shareholders' equity...................... 24,621
</TABLE>

COMPARATIVE PER SHARE DATA

The following table sets forth certain historical per share data of C.H.
Heist Corp. and subsidiaries and per share data on a pro forma basis after
giving effect to the Asset Sale and discontinuation of industrial maintenance
operations. Nonrecurring charges resulting directly from the Asset Sale and
discontinuation of industrial maintenance operations and other nonrecurring
fourth quarter charges, as noted under "Certain Recent Developments", are
excluded from the pro forma earnings and per share amounts.

<TABLE>
<CAPTION>
YEAR
THIRTY-NINE ENDED
WEEKS ENDED DEC. 27,
SEPT. 26, 1999 1998
-------------- --------
<S> <C> <C> <C>
C. H. HEIST CORP. -- HISTORICAL:
Basic and diluted net earnings (loss) per common
share......................................... $ -- .45
Book value per common share..................... 9.93 9.78
PRO FORMA:
Basic and diluted net earnings per common
share......................................... $ .26 .44
Book value per common share..................... 8.55 N/A
</TABLE>

7
<PAGE> 12

THE SPECIAL MEETING

PURPOSE

The Special Meeting is being held to consider and vote on the Asset Sale
and the Reincorporation.

The Board of Directors of the Company has unanimously approved the Asset
Sale and the Reincorporation and recommends that shareholders vote FOR each of
these transactions. For a description of the reasons for the Asset Sale, see
"The Asset Sale Proposal -- Reasons for the Asset Sale." For a description of
the reasons for the Reincorporation, see "The Reincorporation
Proposal -- Reasons for Reincorporation".

VOTING INFORMATION AND REQUIREMENTS

Only holders of record of common shares at the close of business on the
Special Meeting Record Date will be entitled to notice of and to vote at the
Special Meeting or any adjournment thereof. As of the Special Meeting Record
Date, there were 2,881,678 common shares outstanding. Holders of such shares are
entitled to one vote per share on each proposal.

The Company believes that under New York law a vote of shareholders is not
required in connection with the Asset Sale. New York law requires the approval
of the holders of at least two-thirds of a corporation's outstanding voting
shares for a sale, lease, exchange or other disposition of all or substantially
all of the assets of a corporation. The Company believes that the Asset Sale is
not a sale, lease, exchange or other disposition of all or substantially all of
its assets. Although the Company believes that shareholder approval is not
required, the Company is seeking such approval because the issue of what
constitutes "substantially all" assets has not been settled under New York law.
Thus, the Company is seeking approval of the Asset Sale by the holders of at
least two-thirds of the outstanding common shares. If the Asset Sale is approved
by the holders of less than two-thirds of such outstanding shares, but is
approved by the holders of a majority of such shares, the Company may request a
court to rule that shareholder approval of the Asset Sale is not required. In
such event, if such a favorable ruling is obtained, the Company will consummate
the Asset Sale.

As of January 31, 2000, Charles H. Heist, Chairman and Chief Executive
Officer of the Company, owned 278,877 shares, representing approximately 9.6% of
the outstanding common shares. As of such date, certain trusts of which Mr.
Heist is a trustee owned 1,041,925 shares, representing approximately 36.5% of
the outstanding common shares. Mr. Heist has informed the Company that he
intends to vote such shares in favor of the Asset Sale and the Reincorporation
and has entered into an agreement with Onyx Industrial Services to vote such
shares in favor of the Asset Sale.

Under New York law, the affirmative vote of the holders of at least
two-thirds of the Company's outstanding shares is required to approve the
Reincorporation.

Abstentions and broker non-votes will be counted as shares present for
determination of a quorum at the Special Meeting. For purposes of determining
whether the Asset Sale and the Reincorporation are approved, abstentions and
broker non-votes will have the same effect as votes against such proposals.

All shares that are represented by properly executed proxies received
before or at the Special Meeting and not revoked will be voted in accordance
with the instructions indicated on such proxies. If no instructions are
indicated on the executed proxies, shares represented by such proxies will be
voted FOR approval of each proposal. No other matters will be considered at the
Special Meeting or any adjournment thereof.

Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before it is voted. Such revocation may be made in person
at the Special Meeting or by written notification to the Secretary of the
Company.

The Company will pay the cost of all proxy solicitation. The Company may
retain the services of CIC Corp. to solicit proxies from shareholders. In such
event, the Company will pay a service fee of $5,000 to CIC Corp. and a
solicitation fee of $4.00 per shareholder contacted. The Company will also
reimburse CIC Corp. for the reasonable expenses it incurs in connection with the
proxy solicitation. Officers and other employees of the Company may solicit
proxies by personal interview or by telephone or facsimile equipment, in
addition to the use
8
<PAGE> 13

of the mails. None of these individuals will receive special compensation for
such services, which will be performed in addition to their regular duties, and
some of them may not necessarily solicit proxies. The Company has also made
arrangements with brokerage firms, banks, nominees and other fiduciaries to
forward proxy solicitation materials for shares held of record by them to the
beneficial owners of such shares. The Company will reimburse these record
holders for their reasonable out-of-pocket expenses.

THE ASSET SALE PROPOSAL

BACKGROUND OF THE ASSET SALE

Over the past several years, the industrial maintenance industry in the
United States has undergone a wave of consolidation with the number of smaller
companies declining as a number of regional and national companies have acquired
larger market shares. The industrial maintenance industry has also seen a trend
among customers to demand cost controls, competitive pricing, and extensive
training, safety and employee retention programs. There is also an increasing
need to invest in highly automated equipment to achieve efficiencies as a result
of customer demands. Additionally, the industry has recently experienced a trend
toward the formation of national strategic alliances between service providers
and their customers, particularly larger customers such as British Petroleum,
DuPont, Stelco Steel, Bayer, and Motiva. These large companies have adopted
sophisticated bid processes or single or dual preferred provider systems that
give preference to industrial maintenance companies that have offices and
equipment in numerous geographic locations throughout the United States. Many of
these companies will not entertain bids from companies that cannot service all
of their geographic locations. Furthermore, the industrial maintenance business
is highly capital intensive, with capital needed to open new offices in
geographic areas to serve regional or national-based customers, and to purchase
new automated equipment to service customer locations. As a consequence of the
foregoing, the industrial maintenance industry has become extremely competitive
in the pricing of services as larger regional and national companies have put
significant pressure on service providers to achieve greater efficiencies and
reduce prices.

Given these forces and trends in the industry, the Company has come to the
conclusion that in order for it to remain competitive, it would have to grow its
industrial maintenance business to a significant extent internally or through
acquisition. Such growth would require substantial additional resources and
investment in new equipment and new offices. Moreover, the Company would have to
invest in expanding training, safety and employee retention programs. The
Company does not believe that it has the financial or human resources to
implement the expansion that would be required to compete with ever larger
companies which have and will continue to have greater resources than the
Company.

At the same time the Company is faced with these challenges in the
industrial maintenance business, its staffing services business faces similar
challenges. The staffing services industry has grown and changed substantially
in the past several years in the United States, also undergoing a wave of
consolidation. Moreover, the industry has also experienced the formation of
strategic alliances among regional or national service providers and large,
geographically diverse customers such as IBM, Texas Instruments, American
Express, Nortel, and DuPont. While it has those things in common with the
industrial maintenance industry, the staffing services industry is not as
capital intensive or as risk-related as the industrial maintenance industry.
While revenues of the Company's staffing services business have been increasing
over the past five years, those of its industrial maintenance business have
remained relatively flat over that period. Moreover, over the past five years,
the Company's industrial maintenance business has not been as profitable as its
staffing services business.

Considering the trends in the two industries and the Company's operating
results in each, the Company has concluded that it does not have sufficient
financial and human resources to remain in both businesses. Consequently, the
Company has decided to sell the industrial maintenance business and focus on the
staffing services business, where it believes it can be more successful in
achieving growth and maintaining profitability.

The possible sale of the industrial maintenance business was discussed by
the Company's Board at various meetings held between late 1998 and early 2000.
The Company engaged its financial advisor in the fourth quarter of 1998 and
authorized it to search for a party interested in acquiring the industrial
maintenance business in the United States and Canada. This search yielded two
interested parties, one of which was Onyx Industrial Services.

9
<PAGE> 14

After reviewing proposals from each party, on October 20, 1999, the Board
authorized management to negotiate exclusively with Onyx for the sale of the
industrial maintenance business. The Board rejected the proposal of the other
bidder for a number of reasons, including the lower purchase price offered by
this bidder, certain costs that this bidder's proposal would have imposed on the
Company that the proposal of Onyx Industrial Services did not include, and the
unwillingness of this bidder to assume certain of the Company's collective
bargaining agreements.

Subsequent to the Board's action on October 20, 1999, and following further
discussions and negotiations, the Company and Onyx entered into a letter of
intent, and the Company announced the proposed sale of the business to Onyx on
November 2, 1999. Following more detailed negotiations and additional due
diligence by Onyx, on January 18, 2000, the Company's Board of Directors
reviewed the definitive agreement for the sale of the business and authorized
management to finalize and execute it. The parties then entered into a
definitive purchase and sale agreement on January 21, 2000.

REASONS FOR THE ASSET SALE

The Board of Directors of the Company believes that it is in the best
interests of the Company and its shareholders to sell the industrial maintenance
business and focus the operations of the Company solely on its staffing services
business, which the Company believes has more potential for growth. The Board's
belief is based on a number of factors, such as the lack of growth in the
Company's industrial maintenance business over the past five years, the
operating losses experienced by such business over the past five years, and the
intense competition and customer pricing pressure within the industrial
maintenance industry that have resulted in reductions in profit margins.

In reaching a decision to recommend the Asset Sale to the Company's
shareholders, the Board considered, among other factors, the following: (i) the
respective financial condition, results of operations, capital resources,
capital requirements, risk profiles, management teams, growth, and prospects of
the industrial maintenance business and the staffing services business; (ii) the
economic and competitive environments in which the two businesses operate; (iii)
conditions and trends in the industrial maintenance industry and the staffing
services industry; (iv) the fact that the Asset Sale will enable the Company to
operate as a focused, pure-play company; (v) the possibility that the Asset Sale
could facilitate the expansion of the Company's staffing services business by
providing it with access to the capital markets and with a pure-play
publicly-held stock to use in possible future acquisitions; (vi) the fact that
the Asset Sale will improve the ability of the Company to offer stock plans and
other such incentives to its staffing services executives and employees that are
tied more directly to the results of their efforts and are unaffected by the
performance of the industrial maintenance business; and (vii) the potential
beneficial effect of the Asset Sale on investors' ability to evaluate the
performance and investment characteristics of the Company.

SALE AGREEMENT

General Information. The Board of Directors has approved the sale of the
Company's industrial maintenance services business to Onyx Industrial Services
pursuant to the Sale Agreement. The consummation of the Asset Sale (the
"Closing") is expected to occur as soon as practicable after approval by the
shareholders at the Special Meeting.

Sale Price. On January 18, 2000, the Company's Board of Directors approved
the Asset Sale, and on January 21, 2000, the parties executed the Sale
Agreement. Pursuant to the Sale Agreement, the Company will sell the assets of
the U.S. industrial maintenance business and the stock of C. H. Heist, Ltd. to
Onyx, and Onyx will assume and agree to pay, perform or discharge when due
certain obligations and liabilities of the Company relating to the U.S.
industrial maintenance business. Onyx will, at the Closing, pay to the Company a
total of $20 million for such assets and stock (subject to certain possible
escrow requirements described below) and assume approximately $2.6 million in
liabilities, based on a balance sheet date of August 22, 1999.

Assets. The assets to be sold to Onyx include real and personal property,
inventory, machinery, equipment, furnishings, motor vehicles, accounts
receivable, licenses and permits, intellectual property, other intangible

10
<PAGE> 15

assets, the name "C.H. Heist Corp.", customer service contracts, leases, and the
stock of C.H. Heist, Ltd. The Company will retain certain assets, including
books and records, insurance policies, bonds and reserves, and certain leasehold
interests in real property.

Assumed Liabilities. Onyx will assume customer service contracts, certain
leases, and certain collective bargaining agreements. Onyx will also assume
accounts payable, accrued wages and related payroll taxes, and accrued real
estate and personal property taxes of the U.S. operations, all of which
approximate $2.6 million in the aggregate, based on a balance sheet date of
August 22, 1999.

Retained Liabilities. The Company will retain liabilities arising out of or
relating to the conduct of the industrial maintenance business prior to the
Closing other than those liabilities assumed by Onyx. The Company will remain
responsible for all litigation or claims pending at or arising after the Closing
relating to operation of the industrial maintenance business in the United
States and Canada prior to the Closing.

Noncompetition. The Company has agreed that it will not compete with Onyx
in the industrial maintenance business in the United States or Canada for a
period of five years after the Closing. Charles H. Heist III, Chairman and Chief
Executive Officer of the Company, and W. David Foster, President and Chief
Operating Officer of the Company, have also agreed to enter into agreements with
Onyx prohibiting their competition in the industrial maintenance business in the
United States or Canada for a period of five years after the Closing. Neither
Mr. Heist nor Mr. Foster is receiving separate consideration for his agreement
not to compete.

Uncollected Accounts Receivable. All accounts receivable not collected by
Onyx within the 180-day period following the Closing will be reassigned to the
Company in return for the Company's payment to Onyx of the face amount of such
receivables. The Company does not believe that it will be required to repurchase
a material amount (if any) of such receivables.

Use of Sale Proceeds. After payment of expenses related to the Asset Sale,
the Company intends to use the proceeds of the Asset Sale for working capital
and general corporate purposes, including the reduction of outstanding
indebtedness.

Possible Escrow of Funds. If the Company is unable to obtain the consent of
DuPont to the assignment of the master service contract between the Company and
DuPont prior to the Closing, the Company will place $6,000,000 of the Purchase
Price in escrow for one year. All or part of the escrow will be released to the
Company at the end of the year depending on the ability of Onyx to retain
business with DuPont at locations where Heist and Onyx performed services for
DuPont in fiscal 1999. Similarly, if the Company is unable to obtain prior to
the Closing the consent of C&K Industrial Services, Inc. ("C&K") to the
assignment of the Company's service contract with C&K, the Company will place
$300,000 of the Purchase Price in escrow for one year, to be released to the
Company in whole or in part depending on the ability of Onyx to retain business
with C&K comparable to that experienced by Heist in fiscal 1999. In addition to
the foregoing, in the event that the Company is unable to obtain prior to the
Closing consents of customers (other than DuPont and C&K) with contracts
representing $2 million or less in revenues for fiscal 1999, the Company will
place up to $700,000 in escrow for one year, to be released in whole or in part
depending on the ability of Onyx to retain business with such customers
comparable to that experienced by the Company in fiscal 1999. The Company
believes that it will be able to obtain the DuPont consent and all other
customer consents with the possible exception of C&K's consent.

Representations and Warranties. The Sale Agreement contains representations
and warranties of the Company and Onyx customary for transactions of the type
contemplated by the Asset Sale, including representations and warranties
concerning such matters as necessary consents and approvals, title to and
condition of assets, content of financial statements, absence of material
adverse changes in the business, environmental matters pertaining to real
property owned or leased, condition of inventories, collectability of accounts
receivables, warranty claims, relations with customers and suppliers, and
employee and employee benefit matters.

11
<PAGE> 16

Covenants. The Sale Agreement contains covenants of the Company and Onyx
customary for transactions of the type contemplated by the Asset Sale, including
the covenant of the Company to carry on the industrial maintenance business in
the ordinary course consistent with past practice through the Closing Date.

Company's Indemnification Obligations. The Company has agreed to indemnify
Onyx with respect to any breach of its representations or warranties (subject to
a $100,000 deductible) or any breach of any covenant of the Company contained in
the Sale Agreement. The Company has also agreed to indemnify Onyx with respect
to claims or actions pending at or arising after the Closing Date that relate to
the operation of the industrial maintenance business prior to that date, that
relate to any condition existing on that date or that relate to the ownership by
Heist Canada of certain real estate sold during 1999.

Buyer's Indemnification Obligations. Onyx has agreed to indemnify the
Company with respect to any breach of its representations or warranties (subject
to a $100,000 deductible) or any breach of any covenant of Onyx contained in the
Sale Agreement.

Closing Contingencies. The consummation of the Asset Sale is subject to
certain conditions, including consents to assignment of substantially all
customer service contracts, accuracy in all material respects of representations
and warranties, performance in all material respects of covenants and other
obligations, delivery of customary closing documents, and approval of the
shareholders of the Company.

Termination and Amendment. The Sale Agreement may be amended or terminated
by the mutual consent of the Company and Onyx at any time. In addition, if the
Closing has not occurred on or before May 31, 2000, or if the failure to close
results from a default by the Company or Onyx, then the nondefaulting party may
terminate its obligations under the Sale Agreement. Thus, the Board of Directors
has rights under certain circumstances to terminate the Asset Sale after
approval of the transaction by the Company's shareholders.

"No-Shop" Provision. Under the Sale Agreement, the Company is not permitted
to initiate, solicit, negotiate, or encourage any proposal or offer to acquire
all or any substantial part of the industrial maintenance business, whether by
merger, purchase of assets, tender offer or otherwise.

Dilution. The consideration to be received by the Company from Onyx is less
than the net book value of the assets being sold and liabilities being assumed.
Consequently, shareholders of the Company will experience dilution of $1.35 per
share in the book value of their shares.

CERTAIN TAX CONSEQUENCES OF ASSET SALE

U.S. Tax Consequences. Although the Asset Sale is a taxable transaction,
the Company does not expect to incur any material additional tax in the year of
the Asset Sale as a result of the Asset Sale.

Shareholder Tax Consequences. The holders of common shares of the Company
will not recognize any gain or loss on the Asset Sale.

OPINION OF FINANCIAL ADVISOR

The Company has retained McDonald Investments Inc., a KeyCorp Company, to
act as exclusive financial advisor in the sale of its industrial maintenance
business (the "Industrial Maintenance Segment") and in the event of a sale to
deliver an opinion to the Board of Directors as to the fairness, from a
financial point of view, to the shareholders of the Company, of the
consideration to be received in connection with such a transaction (the
"Opinion"). As set forth in its Opinion, McDonald assumed and relied upon,
without independent verification, the accuracy and completeness of the
information reviewed by it for the purposes of its Opinion.

On January 24, 2000, McDonald rendered its written opinion to the Board to
the effect that, as of that date, the acquisition consideration was fair, from a
financial point of view, to the shareholders of Heist. McDonald's written
opinion is attached as Appendix 1 to this proxy statement and is incorporated
herein by reference. The description of the opinion set forth herein is
qualified in its entirety by reference to Appendix 1. Shareholders are

12
<PAGE> 17

urged to read the opinion in its entirety for a description of the procedures
followed, assumptions and qualifications made, matters considered, and
limitations undertaken by McDonald.

MCDONALD'S OPINION IS DIRECTED TO THE BOARD OF DIRECTORS OF THE COMPANY AND
ADDRESSES ONLY THE FAIRNESS, FROM A FINANCIAL POINT OF VIEW, TO THE COMPANY
SHAREHOLDERS OF THE ACQUISITION CONSIDERATION. THE OPINION WAS PROVIDED SOLELY
FOR THE INFORMATION AND ASSISTANCE OF THE BOARD OF DIRECTORS IN CONNECTION WITH
ITS CONSIDERATION OF THE TRANSACTION CONTEMPLATED BY THE SALE AGREEMENT. THE
OPINION DOES NOT CONSTITUTE A RECOMMENDATION AS TO HOW THE COMPANY 'S
SHAREHOLDERS SHOULD VOTE WITH RESPECT TO THE ASSET SALE.

In connection with the opinion, McDonald reviewed, among other things, the
following:

- The Sale Agreement, including the exhibits and schedules to the Sale
Agreement;

- Publicly available information concerning the Company, including its
annual reports to shareholders and Form 10-Ks for each of the last
four fiscal years and its Form 10-Qs for the past four quarters;

- Other internal information, primarily financial in nature, including
management's projections, concerning the business and operations of
the Industrial Maintenance Segment;

- Publicly-available information with respect to certain other companies
that McDonald believes to be comparable to the Industrial Maintenance
Segment and the trading markets for such other companies' securities;
and

- Publicly available information concerning the nature and terms of
certain other transactions that McDonald considered relevant to its
inquiry.

McDonald also held discussions with the Company's officers and employees
regarding the rationale for the Asset Sale and the Industrial Maintenance
Segment's past and current business operations, financial condition and future
prospects. In preparing its Opinion, McDonald performed a variety of financial
and comparative analyses and made assumptions in conjunction with the Company
with respect to assets, financial conditions and other matters, many of which
are beyond the Company 's control. McDonald's estimates of value are based on
these analyses. The valuation results determined from any particular analysis
are not necessarily indicative of actual values or predictive of future results
or values, and are inherently subject to substantial uncertainty.

The following paragraphs summarize the analyses performed by McDonald in
arriving at its Opinion.

Selected Comparable Public Company Analysis. The comparable public company
analysis involves an analysis of publicly traded companies considered by
McDonald to be comparable to the Industrial Maintenance Segment with regard to
industry, operations, performance and/or markets served. This analysis is
predicated on the theory that the market value of a company can be estimated by
deriving market multiples from publicly-traded companies that relate their stock
prices to earnings, cash flows or other measures of the target company. No
company used as a comparison in this analysis is identical to the Industrial
Maintenance Segment.

After screening applicable SIC codes and other relevant criteria, McDonald
selected public companies that in its estimation were reasonably similar in
scope of operations. These comparable companies included Matrix Service Company,
MPW Industrial Services, Safety-Kleen Corp., and Shaw Group Inc. This group
includes companies with market capitalizations of $56 million to $673 million.

The data and ratios McDonald compared included, among other things:

- enterprise value to latest twelve months EBITDA;

- equity market value to estimated fiscal year 2000 earnings per share,
and

- equity market value to book value.

Enterprise value is defined as current stock price multiplied by shares
outstanding, plus debt and preferred securities, less cash. Equity market value
is defined as current stock price multiplied by shares outstanding.

An analysis of enterprise value to latest twelve months EBITDA yielded a
range of (10.1x) to 9.8x with a mean, excluding the high and low, of 6.5x and a
median of 6.5x. An analysis of equity market value to estimated

13
<PAGE> 18

fiscal year 2000 earnings per share yielded a range of 4.6x to 12.4x with a
mean, excluding the high and low, of 6.1x and a median of 7.7x. An analysis of
equity market value to book value yielded a range of 0.5x to 2.1x with a median,
excluding the high and low, of 1.0x and a median of 1.3x. McDonald applied the
valuation multiples, reflecting the average of the comparable companies mean,
excluding the high and low, and median multiples. This method implied an
enterprise value of $18.8 million, as compared to the sale price of $20 million.

Discounted Cash Flow Analysis. McDonald performed a discounted cash flow
analysis to calculate the Industrial Maintenance Segment's implied present value
based on management's projections through fiscal year 2001, and projections for
fiscal years 2002 through 2004 derived by McDonald in association with the
Company management following discussions regarding the future business prospects
of the Industrial Maintenance Segment. Using this information, McDonald
calculated the free cash flows the Industrial Maintenance Segment could generate
through fiscal year 2004. McDonald also calculated an estimated terminal value
of the Industrial Maintenance Segment at the end of year 2004 based on a 6.0x
EBIT multiple. These future cash flows and terminal values were discounted using
a discount rate of 13%. In deriving the discount rate, McDonald calculated a
weighted average cost of capital for the Industrial Maintenance Segment
utilizing the Capital Asset Pricing Model. McDonald also reviewed management's
projections and the assumptions on which they were based and analyzed future
cash flows and the risks associated with the achievement of such future cash
flows. The sum of the present value of the free cash flows and terminal value
less outstanding debt plus existing cash as of November 30, 1999, yielded an
implied enterprise value of $19.2 million, as compared to the sale price of $20
million.

Inherent in any discounted cash flow valuation are the use of a number of
assumptions, including the accuracy of management's projections, and the
subjective determination of an appropriate terminal value and discount rate to
apply to the projected cash flows of the entity under examination. Variations in
any of these assumptions or judgments could significantly alter the results of a
discounted cash flow analysis.

Comparable Merger and Acquisition Analysis. McDonald analyzed information
related to the selected acquisition transactions for which public information
was available. This analysis was conducted to determine relevant valuation
multiples for transactions considered similar to the Asset Sale. After screening
applicable SIC codes and other relevant criteria, McDonald selected recent
transactions that in its estimation were reasonably similar in scope of
operations. These comparable transactions included Laidlaw Environmental
Services' purchase of Safety-Kleen Corp. on March 16, 1998 and HydroChem
Industrial Services Inc.'s purchase of Valley Systems Inc. on January 5, 1999.
No transaction used as a comparison in this analysis is identical to the Asset
Sale. McDonald identified transactions of companies and industries related to
the Industrial Maintenance Segment, including providers of industrial
maintenance services and recycling and waste services. After review of the
transactions where financial information was available, McDonald applied an
average of the transactions' multiples to the Industrial Maintenance Segment LTM
EBITDA figures to derive a valuation for the Industrial Maintenance Segment. A
range of 8.2x to 10.3x latest twelve months EBITDA with an average of 9.2x was
used to calculate an implied value for the Industrial Maintenance Segment. This
methodology implied an enterprise value of $20.8 million, as compared to the
sale price of $20 million.

Leveraged Buyout Analysis. McDonald analyzed a leveraged buyout transaction
to determine the price a typical leveraged buyer could afford to pay under
prevailing market conditions. For purposes of this analysis, McDonald used
management's financial projections for fiscal years 2000 and 2001, and
projections for fiscal years 2002 through 2004 derived by McDonald in
association with the Company Management following discussions regarding the
future business prospects of the Industrial Maintenance Segment, and McDonald's
judgment with regard to capitalization. The analysis was based on the following
assumptions:

- market rates of interest on senior and subordinated debt of 8.75%;

- senior debt of approximately 7.0 times latest twelve months EBITDA;
and

- expected internal rates of return of approximately 30% to 40% or
greater for equity investors;

This methodology implied an enterprise value of $18.3 million, as compared
to the sale price of $20 million.

14
<PAGE> 19

Solicitation Process. In rendering its opinion, McDonald also considered
the results of a process in which interest in acquiring the company was
solicited from 59 potential strategic and financial buyers that McDonald and the
Board determined could reasonably be expected to have an interest in acquiring
the Industrial Maintenance Segment.

The preparation of a fairness opinion is a complex process and is not
necessarily susceptible to partial analysis or summary description. Selecting
portions of the analyses or of the summary, without considering the whole
analysis, could create an incomplete view of the processes underlying the
Opinion. In arriving at its fairness determination, McDonald considered the
results of all of these analyses and did not attribute particular weight to any
analysis or factor considered by it. Rather, McDonald made its determination as
to the fairness on the basis of its experience and professional judgment after
considering the results of all such analyses.

No company or transaction used in the above analyses as a comparison is
identical to the Industrial Maintenance Segment or the contemplated transaction.
The analyses were prepared solely for the purposes of McDonald providing its
Opinion to the Board of Directors as to the fairness of the sale price, from a
financial point of view, to the Company's shareholders. As such, these analyses
do not purport to be appraisals or necessarily reflect the prices at which
businesses or securities actually may be sold. Analyses based upon forecasts of
future results are not necessarily indicative of actual future results, which
may be significantly more or less favorable than suggested by such analyses.
Because such analyses are inherently subject to uncertainty, being based upon
numerous factors or events beyond the control of the parties or their respective
advisors, neither the Company nor McDonald or any other person assumes
responsibility if future results are materially different from those forecasted.
The Opinion was one of many factors taken into consideration by the Board of
Directors in making its determination to approve the Sale Agreement and Asset
Sale.

McDonald, as part of its investment banking business, is continually
engaged in the valuation of businesses and their securities in connection with
mergers and acquisitions, underwritings, competitive biddings, secondary
distributions of listed and unlisted securities, private placements and
valuations for estate, corporate and other purposes. The Company selected
McDonald as its financial advisor because McDonald is a nationally recognized
investment banking firm that has substantial experience in transactions similar
to the merger.

McDonald provides a full range of financial, advisory and brokerage
services and in the course of its normal trading activities may from time to
time effect transactions and hold positions in the securities of the Company or
Vivendi, Onyx's ultimate parent company, for its own account or for the accounts
of customers.

Pursuant to a letter agreement dated October 9, 1998, the Company's Board
of Directors engaged McDonald as its exclusive financial advisor in the sale of
the Industrial Maintenance Segment and in the event of a sale to undertake a
study to enable it to render its Opinion to the Board of Directors as to the
fairness, from a financial point of view, of the consideration to be received by
the Company's shareholders pursuant to the Agreement. As consideration for its
services, the Company paid McDonald $50,000 upon execution of the engagement
letter and agreed to pay McDonald a fee of $250,000 for its Opinion, which was
to be paid at the time McDonald rendered its Opinion. McDonald is also entitled
to receive a fee of approximately $218,000, contingent upon completion of the
transaction. The Company also has agreed to indemnify McDonald against certain
expenses and liabilities, including liabilities under the federal securities
laws, relating to or arising out of services performed by McDonald as financial
advisor to Heist.

APPRAISAL RIGHTS

If, under New York law, the Asset Sale constitutes a sale, lease, exchange
or other disposition of all or substantially all of the assets of the Company,
shareholders of the Company who fulfill the requirements of Section 623 of the
New York Business Corporation Law will be entitled to dissent from the Asset
Sale and receive payment for the fair value of their common shares on the terms
and conditions described below.

As indicated, the Company does not believe that the Asset Sale is a sale,
lease, exchange or other disposition of all or substantially all of the assets
of the Company under New York law and, accordingly, does not believe that
dissenters' rights to payment arise by reason of the Asset Sale. If, contrary to
the Company's belief, such rights of dissent and payment are available, Section
623 sets forth the rights of shareholders of the Company who

15
<PAGE> 20

object to the Asset Sale. Any shareholder of the Company who does not vote in
favor of the Asset Sale may be able to obtain payment in cash of the fair value
of his or her shares by complying with the requirements of Section 623. The
dissenting shareholder must file with the Company, before shareholders vote on
the Asset Sale, a written objection including a notice of election to dissent,
the dissenting shareholder's name and residence address, the number of Company
shares as to which the objection applies and a demand for payment of the fair
value of such shares if the Asset Sale is effected. Such objection is not
required from any shareholder to whom the Company did not give proper notice of
the Special Meeting. Within 10 days after the vote of shareholders approving the
Asset Sale, the Company must give written notice of such authorization to each
such dissenting shareholder who filed written objection or from whom written
objection was not required and who did not vote in favor of the Asset Sale.
Within 20 days after the giving of such notice, any shareholder from whom
written objection was not required and who elects to dissent from the proposed
Asset Sale must file with the Company a written notice of such election, stating
the dissenting shareholder's name and residence address, the number of shares of
the Company as to which the notice applies and a demand for payment of the fair
value of such shares.

Shareholders may not dissent as to less than all of their shares. A nominee
or fiduciary may not dissent on behalf of any beneficial owner as to less than
all of the shares of such owner as to which such nominee or fiduciary has a
right to dissent that are held of record by such nominee or fiduciary. At the
time of filing the notice of election to dissent, or within one month
thereafter, the shareholder must submit the certificates representing the shares
to the Company or its transfer agent for notation thereon of the election to
dissent, after which the certificates will be returned to the shareholder.
Failure to submit the certificates for notation may result in the loss of
dissenters' rights. Within 15 days after the expiration of the period within
which shareholders may file their election to dissent, or within 15 days after
consummation of the Asset Sale, whichever is later (but not later than 90 days
after the shareholders' vote authorizing the Asset Sale), the Company must make
a written offer (which, if the Asset Sale has not been consummated, may be
conditioned upon such consummation) to each shareholder who has filed such
notice of election to pay for the Company shares at a specified price which the
Company considers to be their fair value. The dissenting shareholder has a
period of 30 days within which to accept such written offer. A shareholder may
withdraw the notice of election to dissent at any time before accepting in
writing the Company's offer, but in no case more than 60 days after the later of
the date of the consummation of the Asset Sale and the date the Company makes
its written offer (as described above). Thereafter, withdrawal will require the
written consent of the Company. The Company may request a court to determine the
rights of dissenting shareholders and to fix the fair value of their Company
shares. If the Company does not institute such a proceeding, any dissenting
shareholder may do so.

The foregoing summary does not purport to be a complete statement of the
provisions of Sections 910 and 623 of the New York Business Corporation Law and
is qualified in its entirety by reference to those Sections, copies of which are
attached as Appendix 2 hereto.

BOARD RECOMMENDATION

The Board of Directors has evaluated the terms of the Asset Sale and has
determined they are fair to the Company and its shareholders. The Board's
determination is based primarily upon the present condition of and prospects for
the industrial maintenance business, the book value and earning power of the
assets of the industrial maintenance business, the price for which the Board
believes the assets could be sold if the industrial maintenance business were
discontinued and such assets sold separately, and the opinion of its financial
advisor.

The Board believes that the Asset Sale is fair to and in the best interests
of the Company and its shareholders and unanimously recommends that shareholders
vote FOR the Asset Sale.

16
<PAGE> 21

PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
As of September 26, 1999

The following unaudited pro forma condensed consolidated balance sheet
gives effect to the proposed Asset Sale and discontinuation of industrial
maintenance operations of C.H. Heist Corp. and subsidiaries assuming the Asset
Sale and discontinuation of industrial maintenance operations was consummated as
of September 26, 1999. The pro forma data reflects an allocation of the purchase
price of $10,000,000 to the sale of the common stock of C. H. Heist, Ltd.,
$10,000,000 to the sale of selective assets of C. H. Heist Corp. and the
assumption of certain liabilities of C. H. Heist Corp.

The pro forma adjustments described in the accompanying notes to the pro
forma condensed consolidated balance sheet should be read in conjunction with
the pro forma condensed consolidated balance sheet. The pro forma statement
should also be read in conjunction with C.H. Heist Corp. and subsidiaries
consolidated financial statements and notes set forth elsewhere herein. See
"Certain Historical Financial Information". Nonrecurring charges resulting
directly from the Asset Sale and discontinuation of industrial maintenance
operations and other nonrecurring fourth quarter charges, as noted under
"Certain Recent Developments," are excluded from the pro forma condensed
consolidated balance sheet.

The following pro forma condensed consolidated balance sheet information is
presented for illustrative purposes only and is not necessarily indicative of
the financial position that would have been reported had the Asset Sale and
discontinuation of industrial maintenance operations been consummated as of
September 26, 1999 or of the future financial position of C.H. Heist Corp. and
subsidiaries which will result from consummation of the Asset Sale and
discontinuation of industrial maintenance operations.

17
<PAGE> 22

C.H. HEIST CORP. AND SUBSIDIARIES

PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

SEPTEMBER 26, 1999 -- UNAUDITED

(In thousands)

<TABLE>
<CAPTION>
BUSINESS
SOLD/ PRO FORMA
CONSOLIDATED DISCONTINUED ADJUSTMENTS PRO FORMA
ASSETS ------------ ------------ ----------- ---------
<S> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents................ $ 2,512 (2,055) 3,677(1) 4,134
Receivables.............................. 20,768 (8,466) 12,302
Services in progress..................... 1,303 (1,296) 7
Income taxes receivable.................. 371 170(2) 541
Parts and supplies....................... 1,109 (1,109) --
Prepaid and other expenses............... 768 (436) 332
Deferred income taxes.................... 628 (345) 283
------- ------- ------- ------
Total current assets............. 27,459 (13,707) 3,847 17,599
Net property, plant and equipment.......... 17,992 (15,666) 2,326
Deferred income taxes...................... 152 (152) 519(3) 519
Intangible assets, net..................... 10,147 (14) 10,133
Other assets............................... 106 (62) 44
Net assets of discontinued operations...... 2,125 974(3) 3,099
------- ------- ------- ------
$55,856 (27,476) 5,340 33,720
======= ======= ======= ======

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current installments of long-term debt... $ 255 (255) --
Accounts payable......................... 2,428 (2,145) 283
Accrued expenses......................... 6,435 (803) 2,064(3) 7,696
Income taxes payable..................... -- (170) 170(2) --
------- ------- ------- ------
Total current liabilities........ 9,118 (3,373) 2,234 7,979
Long-term debt, excluding current
installments............................. 16,873 (773) (16,100)(1) --
Deferred incentive compensation............ 1,120 1,120
Deferred income taxes...................... 137 (137)(3) --
------- ------- ------- ------
Total liabilities................ 27,248 (4,146) (14,003) 9,099
------- ------- ------- ------
Stockholders' equity:
Common stock............................. 158 158
Additional paid-in capital............... 4,284 4,284
Retained earnings........................ 27,172 (5,770)(3) 21,402
Accumulated other comprehensive losses... (1,783) 1,783(3) --
Less cost of common stock in treasury.... (1,223) (1,223)
------- ------- ------- ------
Total stockholders' equity....... 28,608 -- (3,884) 24,621
------- ------- ------- ------
$55,856 (4,146) (17,887) 33,720
======= ======= ======= ======
</TABLE>

See notes to pro forma condensed consolidated balance sheet.
18
<PAGE> 23

Notes to the Pro Forma Condensed Consolidated Balance Sheets (Unaudited)

The following adjustments have been made to reflect the pro forma effect of
the Asset Sale and discontinuation of industrial maintenance operations as if
those transactions were consummated as of the September 26, 1999 pro forma
balance sheet date (in thousands):

1. To reflect the net proceeds from the sale and its use to pay off the
Company's long-term debt as follows:

<TABLE>
<S> <C>
Purchase price.............................................. $ 20,000
Plus: Cash on hand -- C.H. Heist, Ltd....................... 2,047
Less: Net worth adjustment.................................. (1,070)
Estimated escrow....................................... (300)
Transaction costs...................................... (900)
--------
Net proceeds................................................ 19,777
Payment of long-term debt................................... (16,100)
--------
$ 3,677
========
</TABLE>

2. To reflect the reclassification of income taxes receivable for financial
statement presentation purposes as a result of the net tax loss from the
transaction.

3. To reflect the net loss on the sale and its related tax effect as
follows:

<TABLE>
<S> <C>
Net proceeds................................................ $ 19,777
Less: Net book value of assets/liabilities.................. (23,230)
Elimination of accumulated other comprehensive
losses.................................................... (1,783)
Reserves recorded...................................... (2,064)
--------
Pre-tax loss................................................ (7,241)
Deferred income tax benefit................................. 1,630
--------
Net loss.................................................... $ (5,770)
========
</TABLE>

19
<PAGE> 24

PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the Thirty-Nine Week Period Ended September 26, 1999 and the Year Ended
December 27, 1998 (Unaudited)

The following unaudited pro forma condensed consolidated statements of
operations give effect to the proposed Asset Sale and discontinuation of
industrial maintenance operations of C.H. Heist Corp. and subsidiaries assuming
the Asset Sale and discontinuation of industrial maintenance operations was
consummated as of December 29, 1997. The pro forma data reflects an allocation
of the purchase price of $10,000,000 to the sale of the common stock of C. H.
Heist, Ltd., $10,000,000 to the sale of selective assets of C. H. Heist Corp.
and the assumption of certain liabilities of C. H. Heist Corp.

The following unaudited pro forma condensed consolidated statements of
operations include pro forma adjustments to the audited consolidated statements
of operations contained elsewhere herein and to the unaudited consolidated
statement of operations contained elsewhere herein, of a recurring nature which
give effect to the consummation on or prior to the Closing as if it had occurred
on December 29, 1997. The pro forma adjustments are described in the
accompanying notes to the pro forma condensed consolidated statements of
operations and should be read in conjunction with such pro forma condensed
consolidated statements of operations. Such pro forma statements should also be
read in conjunction with C.H. Heist Corp. and subsidiaries consolidated
financial statements and notes set forth elsewhere herein. Nonrecurring charges
resulting directly from the Asset Sale and discontinuation of industrial
maintenance operations and other nonrecurring fourth quarter charges as noted
under "Certain Recent Developments" are excluded from the pro forma condensed
consolidated statements of operations. See "Certain Historical Financial
Information".

The following pro forma condensed consolidated statements of operations do
not purport to be indicative of the actual results that would have occurred had
the transaction been consummated December 29, 1997 or of future results of
operations which will be obtained as a result of the consummation of the
transaction.

C.H. HEIST CORP. AND SUBSIDIARIES

PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THIRTY-NINE WEEKS ENDED SEPTEMBER 26, 1999 -- UNAUDITED

(In thousands, except share data)

<TABLE>
<CAPTION>
BUSINESS
SOLD/ PRO FORMA
CONSOLIDATED DISCONTINUED ADJUSTMENTS PRO FORMA
------------ ------------ ----------- ---------
<S> <C> <C> <C> <C>
Net service revenues....................... $111,218 40,842 70,376
Cost of services........................... 81,713 27,401 54,312
-------- ------ ----- ------
Gross profit........................ 29,505 13,441 -- 16,064
Selling, general and administrative
expenses................................. 28,698 14,853 523(1) 14,368
Amortization of intangible assets.......... 548 5 543
-------- ------ ----- ------
Operating income (loss)............. 259 (1,417) (523) 1,153
-------- ------ ----- ------
Other income (expense):
Interest income.......................... 51 51 63(2) 63
Interest expense......................... (848) (409) 439(2) --
Gain (loss) on disposal of property,
plant and equipment, net.............. 11 (17) (6)
Miscellaneous, net....................... 504 336 168
-------- ------ ----- ------
Total other income (expense),
net............................ (282) (5) 502 225
-------- ------ ----- ------
Earnings (loss) before income
taxes............................ (23) (1,422) (21) 1,378
Income taxes (benefit)..................... (19) (644) (8)(3) 617
-------- ------ ----- ------
Net earnings (loss)................. $ (4) (778) (13) 761
======== ====== ===== ======
Basic and diluted net earnings (loss) per
share $ -- (.27) -- .26
======== ====== ===== ======
</TABLE>

See notes to pro forma condensed consolidated statements of operations.
20
<PAGE> 25

C.H. HEIST CORP. AND SUBSIDIARIES

PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEAR ENDING DECEMBER 27, 1998 -- UNAUDITED

(In thousands, except share data)

<TABLE>
<CAPTION>
BUSINESS
SOLD/ PRO FORMA
CONSOLIDATED DISCONTINUED ADJUSTMENTS PRO FORMA
------------ ------------ ----------- ---------
<S> <C> <C> <C> <C>
Net service revenues....................... $135,647 57,176 78,471
Cost of services........................... 97,658 37,599 60,059
-------- ------ ----- ------
Gross profit........................ 37,989 19,577 -- 18,412
Selling, general and administrative
expenses................................. 35,036 19,909 886(1) 16,013
Amortization of intangible assets.......... 524 18 506
-------- ------ ----- ------
Operating income (loss)............. 2,429 (350) (886) 1,893
-------- ------ ----- ------
Other income (expense):
Interest income.......................... 85 83 200(2) 202
Interest expense......................... (892) (442) 450(2) --
Gain (loss) on disposal of property,
plant and equipment, net.............. 24 19 5
Miscellaneous, net....................... 491 341 150
-------- ------ ----- ------
Total other income (expense),
net............................ (292) 1 650 357
-------- ------ ----- ------
Earnings (loss) before income
taxes............................ 2,137 (349) (236) 2,250
Income taxes (benefit)..................... 843 (236) (94)(3) 985
-------- ------ ----- ------
Net earnings (loss)................. $ 1,294 (113) (142) 1,265
======== ====== ===== ======
Basic and diluted net earnings (loss) per
share.................................... $ .45 (.04) (.05) .44
======== ====== ===== ======
</TABLE>

See notes to pro forma condensed consolidated statements of operations.
21
<PAGE> 26

Notes to the Pro Forma Condensed Consolidated Statements of Operations
(Unaudited)

The following adjustments have been made to reflect the pro forma recurring
effect of the transaction directly attributable to the Asset Sale and
discontinuation of industrial maintenance operations as if the transaction were
consummated on December 29, 1997 (in thousands).

1. To reflect expenses allocated to the business segment sold that would
not have been eliminated as a result of the sale.

<TABLE>
<CAPTION>
THIRTY-NINE
WEEKS
ENDED
SEPT. 26, YEAR ENDED
1999 DEC. 27, 1998
----------- -------------
<S> <C> <C>
Information technology systems.................... $142 274
Executive costs................................... 147 360
Other overhead costs.............................. 234 252
---- ---
$523 886
==== ===
</TABLE>

2. To reflect the reduction of interest expense incurred and recognize
interest income earned as a result of the use of net proceeds to pay
off outstanding long-term debt and the short-term investment of any
excess funds at an interest rate of 4% for the thirty-nine week
period ended September 26, 1999 and for the year ended December 27,
1998. Each 1/8% change in the interest rate will not have a material
effect on net earnings.

3. To reflect the estimated income tax effects of the expense items
noted in footnotes 1 and 2 above.

22
<PAGE> 27

THE REINCORPORATION PROPOSAL

The Board of Directors believes that the best interests of the Company and
its shareholders will be served by changing the Company's state of incorporation
from New York to Delaware (the "Reincorporation"). Shareholders are urged to
read carefully the following sections of this proxy statement, including the
related appendices, before voting on the Reincorporation. Throughout this proxy
statement, the term "Company" refers to the existing New York corporation and
the term "Delaware Company" refers to Ablest Inc., a newly formed Delaware
corporation, which is a wholly-owned subsidiary of the Company. The Delaware
Company has been formed by the Company for the purpose of the Reincorporation.

The Reincorporation will be effected by merging the Company into the
Delaware Company (the "Merger"), in accordance with the terms of an Agreement
and Plan of Merger (the "Merger Agreement"). Upon completion of the Merger, (i)
the Company will cease to exist, (ii) the Delaware Company will continue to
operate the business of the Company under the name "Ablest Inc.," (iii) the
shareholders of the Company will automatically become the stockholders of the
Delaware Company, (iv) the shareholders will have rights as stockholders of the
Delaware Company and no longer as shareholders of the Company and will be
governed by Delaware law and the Delaware Company's charter and bylaws rather
than by New York law and the existing charter and bylaws of the Company, (v)
options to purchase common shares of the Company automatically will be converted
into options to acquire an equal number of shares of the Delaware Company's
common stock, and (vi) no change will occur in the physical location, business,
management, assets, liabilities or net worth of the Company as such exist
immediately following consummation of the Asset Sale. The shareholders' approval
of the Reincorporation will constitute their approval of all of the provisions
of the Delaware Company's charter and bylaws.

Each outstanding common share of the Company, $.05 par value, automatically
will be converted pro-rata into one share of the Delaware Company common stock,
$.05 par value, when the Merger becomes effective. Each stock certificate
representing issued and outstanding common shares of the Company will represent
after the Merger the same number of shares of common stock of the Delaware
Company. It will not be necessary for shareholders to exchange their existing
Company stock certificates for stock certificates of the Delaware Company.

The Reincorporation has been approved unanimously by the Company's Board of
Directors. If approved by the shareholders, the Reincorporation will become
effective upon the filing of the Merger Agreement and related documentation in
Delaware and New York (the "Effective Date"). The Board of Directors intends
that the Reincorporation be consummated as soon as practicable following the
Special Meeting and the consummation of the Asset Sale. Nonetheless, the Merger
Agreement allows for the Board of Directors to abandon or postpone the
Reincorporation or to amend the Merger Agreement (except that the principal
terms may not be amended without shareholder approval) either before or after
the shareholders' approval has been obtained and before the Effective Date, if
circumstances arise causing the Board of Directors to deem either action
advisable.

REASONS FOR REINCORPORATION

The Company believes that reincorporation in the State of Delaware has many
distinct advantages. For many years, Delaware has followed a policy of
encouraging incorporation under its jurisdiction. In furtherance of that policy,
Delaware has long been the leading state in adopting, construing and
implementing comprehensive and flexible corporate laws in response to the legal
and business needs of corporations. As a result, Delaware's General Corporation
Law has become widely regarded as the most extensive and well-defined body of
corporate law in the United States. Because of Delaware's prominence as the
state of incorporation for many major corporations, both the legislature and
courts in Delaware have demonstrated an ability and a willingness to act quickly
and effectively to meet changing business needs. Moreover, the Delaware courts
have rendered a substantial number of decisions interpreting and explaining
Delaware law. The Reincorporation accordingly will be beneficial to the Company
in that it will give the Company a greater degree of predictability and
certainty regarding how the Company's affairs should be conducted in order to
comply with applicable laws and the comfort and security resulting from the
Company's awareness of the responsiveness of Delaware's Secretary of State and
its legislature and courts to the needs of corporations organized under
Delaware's jurisdiction. For these

23
<PAGE> 28

reasons, many American corporations that have initially chosen their home state
for their state of incorporation have subsequently changed their corporate
domicile to Delaware.

For the foregoing reasons, the Company's Board of Directors believes that
it is in the best interests of the Company and its shareholders to reincorporate
in Delaware.

ANTI-TAKEOVER IMPLICATIONS

Delaware, like many other states, permits a corporation to adopt a number
of measures designed to reduce a corporation's vulnerability to unsolicited
takeover attempts. The Board of Directors believes that unsolicited takeover
attempts may be unfair or disadvantageous to the Company and its shareholders
because: (a) a non-negotiated takeover bid may be timed to take advantage of
temporarily depressed stock prices; (b) a non-negotiated takeover bid may be
designed to foreclose or minimize the possibility of more favorable competing
bids; and (c) a non-negotiated takeover bid may involve the acquisition of only
a controlling interest in the Company's stock, without affording all
shareholders the opportunity to receive the same economic benefits.

By contrast, in a transaction in which an acquirer must negotiate with an
independent board of directors, that board can and should take account of the
underlying and long-term values of the Company's assets, the possibilities for
alternative transactions on more favorable terms, the possible advantages of a
tax-free reorganization, the anticipated favorable developments in the Company's
business not yet reflected in the stock price, and the equality of treatment of
all the Company's shareholders.

Although the Reincorporation proposal is not being proposed in order to
prevent any known attempt by any party to acquire control of the Company, obtain
representation on the Board of Directors or take any significant action
affecting the Company, the Company believes that the added flexibility afforded
under Delaware law to adopt anti-takeover measures could enhance the ability of
the Board of Directors to negotiate with an unsolicited bidder. Although
"anti-takeover" measures may be implemented under New York law that are
comparable to those that may be implemented under Delaware law, the Company
believes that substantially more judicial precedents exist in the Delaware
courts than in the New York courts as to the legal principles applicable to
defensive measures and as to the conduct of the Board of Directors under the
business judgment rule with respect to unsolicited takeover attempts. In the
context of any future unsolicited takeover event, the Company believes that such
precedents will give the Board of Directors greater assurance and confidence
that the defensive strategies and conduct of the Board of Directors are in full
compliance with applicable laws and will be effective under the circumstances.

The Reincorporation may be disadvantageous to the extent that it has the
effect of discouraging a future takeover attempt that is not approved by the
Board of Directors but may be deemed by shareholders to be in their best
interests (because, for example, the possible takeover could cause shareholders
to receive a substantial premium for their shares over their then current market
value or over the shareholders' cost basis in such shares). As a result of such
effects of the Reincorporation, shareholders who might wish to participate in a
tender offer may not have an opportunity to do so. In addition, to the extent
that the Reincorporation will enable the Board of Directors to better resist a
takeover or a change in control of the Company, the Reincorporation could make
it more difficult to change the existing Board of Directors and management.

As a result of the Reincorporation, the Company's charter and bylaws will
be replaced with a new charter and new bylaws that will contain various
provisions which could be used to frustrate or avert a potential takeover,
including prohibition of cumulative voting for directors; a provision permitting
the removal of directors only for cause; limits on the calling of special
meetings; and authorization of preferred stock. The Company's current charter
prohibits cumulative voting for directors and does not permit removal of
directors without cause. See "Asset Sale Proposal -- Comparison of Charters and
Bylaws".

Management does not have any knowledge of any specific effort to accumulate
the Company's stock or to obtain control of the Company by means of a merger,
tender offer, solicitation in opposition to management, or otherwise.

Certain members of the family of the founder of the Company currently hold
in the aggregate approximately 58% of the outstanding common shares. As long as
these shares are controlled directly or through trusts by
24
<PAGE> 29

Charles H. Heist, Chairman and Chief Executive Officer of the Company, and
family members, any future takeover attempt of the Company would require the
support of the Heist family regardless of the state of incorporation of the
Company.

CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE REINCORPORATION

The Reincorporation will constitute a tax-free reorganization under federal
tax laws. No gain or loss will be recognized by holders of common shares
pursuant to the Reincorporation. The tax basis of the common stock of the
Delaware Company held by each shareholder will be the same as the aggregate tax
basis of the common shares of the Company held by such shareholder at the time
of the Reincorporation. The holding period of the common stock of the Delaware
Company held by such shareholder will include the period for which such
shareholder held the common shares of the Company, provided that the Company's
common shares were held by such shareholder as a capital asset at the time of
the Reincorporation.

Each shareholder is urged to consult his or her own tax advisor as to the
specific tax consequences of the Reincorporation with respect to such
shareholder, including the applicability of federal, state, local or foreign tax
laws. State, local or foreign income tax consequences to shareholders may vary
from the federal tax consequences described above.

The Company should not recognize gain or loss for federal tax purposes as a
result of the Reincorporation, and the Delaware Company should succeed, without
adjustment, to the federal income tax attributes of the Company.

SHAREHOLDERS' RIGHTS OF APPRAISAL

Under New York Law, shareholders of the Company who oppose the
Reincorporation will not be entitled to appraisal rights in connection with the
Reincorporation.

COMPARISON OF RIGHTS OF SHAREHOLDERS UNDER NEW YORK AND DELAWARE CORPORATION
LAWS

As a result of the Reincorporation, shareholders of the Company, whose
rights are governed by New York law, will have their rights governed by Delaware
law. The statutes and court decisions with respect to rights of shareholders of
New York and Delaware corporations reflect various differences. The following
discussion is intended only to highlight certain statutory differences between
the rights of shareholders of New York corporations and those of shareholders of
Delaware corporations. The discussion does not purport to constitute a detailed
comparison of the provisions of New York law and Delaware law. Shareholders are
referred to those laws for further information.

Shareholder Vote for Mergers. Corporations incorporated under Delaware law
must obtain the affirmative vote (except as indicated below) of the holders of a
majority of the outstanding shares of the corporation entitled to vote thereon
to approve a merger of the corporation into another corporation, the sale of
substantially all of the corporation's assets or the voluntary dissolution of
the corporation. In the same situations, New York law requires the approval of
two-thirds of the outstanding shares entitled to vote thereon.

Delaware law does not require a shareholder vote of the surviving
corporation in a merger if (i) the merger agreement does not amend the existing
charter, (ii) each outstanding share of the surviving corporation before the
merger is unchanged, and (iii) the number of shares to be issued in the merger
does not exceed 20% of the shares outstanding immediately prior to such
issuance. New York law has none of these exceptions.

Appraisal Rights. Generally, New York law gives appraisal rights in more
situations than does Delaware law. Both Delaware law and New York law provide
such rights to shareholders entitled to vote in merger transactions (except as
indicated below). New York law also provides for such rights in a sale of assets
requiring shareholder approval, whereas Delaware law does not. Subject to
certain exceptions, Delaware law does not recognize dissenters' rights of
appraisal in a merger or consolidation if the shares of the corporation are
either listed on a national securities exchange or held of record by more than
2,000 stockholders unless stockholders are required to accept for their shares
in the merger or consolidation anything other than common stock of the

25
<PAGE> 30

surviving or resulting corporation or of another corporation that is so listed
or held. If the corporation is the surviving corporation and no vote of its
stockholders is required, Delaware law does not provide for dissenter's rights
of appraisal.

Inspection of Shareholders' List. New York law and Delaware law allow any
stockholder of record to inspect the stockholders' list and the books of the
corporation for a purpose reasonably related to such person's interest as a
stockholder.

Payment of Dividends. Under New York law dividends can only be paid out of
surplus, while under Delaware law a corporation may pay dividends out of the
corporation's net profits for the fiscal year in which the dividend is declared
or for the preceding fiscal year, even if the corporation has no available
surplus.

Loans to Directors. New York law prohibits loans to directors unless
authorized by shareholder vote. Delaware law permits the Board of Directors,
without stockholder approval, to authorize loans to corporate directors who are
also officers or employees.

Corporate Action Without a Shareholders' Meeting. A shareholders' meeting
to authorize corporate action may be dispensed with by a New York corporation
only upon the written consent of all shareholders. Delaware law permits
corporate action without a meeting of stockholders upon the written consent of
the holders of that number of shares necessary to authorize the proposed
corporate action, unless the charter expressly provides otherwise. The charter
and bylaws of the Company after the Reincorporation will prohibit action by
written consent.

Rights and Options. New York law requires shareholder approval of any plan
pursuant to which rights or options are to be granted to directors, officers or
employees. Delaware law does not require stockholder approval of such plans
although various other applicable legal requirements may make stockholder
approval of rights or option plans necessary or desirable.

Consideration for Shares. New York law provides that obligations of a
subscriber for future payments or future services shall not constitute payment
or part payment for shares of a corporation. Furthermore, under New York law
certificates for shares may not be issued until the full amount of the
consideration therefor has been paid. Delaware law provides that shares of stock
may be issued, and shall be deemed to be fully paid and nonassessable, if the
corporation receives consideration having a value not less than the par value of
such shares and the corporation receives a binding obligation of the subscriber
to pay the balance of the subscription price.

Regulation of Business Combinations. New York Law contains certain
anti-takeover provisions that prohibit any "business combination" between a
"domestic corporation" and an "interested shareholder" for five years after the
date that the interested shareholder became an interested shareholder unless
prior to that date the board of directors of the domestic corporation approved
the business combination or the transaction that resulted in the interested
shareholder becoming an interested shareholder. After five years, such a
business combination is permitted only if (i) it is approved by a majority of
the shares not owned by, or by an affiliate of, the interested shareholder or
(ii) certain statutory fair price requirements are met. New York Law defines
"domestic corporation" as any corporation that (x) is incorporated in New York,
(y) has its principal executive offices and significant business operations in
New York or has at least 250 or 25% of its employees in New York (including
employees of its 80% subsidiaries) and (z) has at least 10% of its stock
beneficially owned by New York residents. The Company believes it is currently a
New York "domestic corporation" under this definition. An "interested
shareholder" is any person who beneficially owns, directly or indirectly 20% or
more of the outstanding voting stock of the corporation.

Delaware Law contains certain anti-takeover provisions that prohibit any
business combination between a Delaware corporation and an "interested
shareholder" for three years following the date that the interested shareholder
became an interested shareholder unless (i) prior to that date the board
approved the business combination or the transaction that resulted in the
interested shareholder becoming an interested shareholder, (ii) upon
consummation of the transaction that resulted in the interested shareholder
becoming an interested

26
<PAGE> 31

shareholder, the interested shareholder held at least 85% of the outstanding
voting stock of the corporation (not counting shares owned by officers and
directors), or (iii) on or subsequent to such date the business combination is
approved by the board and at least two-thirds of the outstanding shares of
voting stock not owned by the interested shareholder. The Delaware statute
defines "interested shareholder" as any person who beneficially owns, directly
or indirectly, 15% or more of the outstanding voting stock of the corporation.
Unlike New York, Delaware does not require that the corporation's principal
executive offices or significant operations or employees be located in Delaware
in order to enjoy the protection of the law.

Regulation of a Corporation's Stock Repurchases. Under New York law, a
corporation may not pay more than market value to any shareholder for the
repurchase of more than 10% of the corporation's stock without board and
shareholder approval. Delaware has no similar statutory restriction but its
courts have imposed certain restrictions on stock repurchases.

COMPARISON OF CHARTERS AND BYLAWS

As a result of the Reincorporation, the Company will be governed by a new
charter and new bylaws. The material differences between the Company's charter
and bylaws and the new charter and new bylaws are described below. Certain
changes altering the rights of shareholders and powers of management could be
implemented in the future by amendment to the charter following shareholder
approval, and certain of such changes could be implemented by amendment of the
bylaws of the Delaware Company without shareholder approval. For a discussion of
such changes, see "Comparison of Rights of Shareholders Under New York and
Delaware Corporation Laws." The new charter and the new bylaws are attached as
Appendix 3 and Appendix 4, respectively.

Authorized Capital Stock. The new charter will authorize the issuance of
7,500,000 shares of common stock and 500,000 shares of preferred stock. The
Company's current charter authorizes the issuance of 8,000,000 common shares and
no preferred shares. The new charter will authorize the Board of Directors to
establish series of preferred stock and to determine, with respect to any such
series, among other things, the dividend rates, liquidation and dividend
preferences, provisions respecting redemptions, conversion rights, and voting
rights.

Preferred Stock. The new charter authorizes 500,000 shares of preferred
stock, while the current charter does not authorize any preferred stock.
Preferred stock may be issued by the Company following the Reincorporation for a
variety of purposes, including raising capital. Authorizing preferred shares may
have the effect of making more difficult or of discouraging a merger, tender
offer, or proxy contest, the assumption of control by a holder of a large block
of the Company's stock, or the removal of incumbent management, even if these
transactions were favorable to the interests of stockholders. For example,
preferred shares could be issued in a private placement transaction to a third
party whom the Board of Directors of the Company favors in the event competing
bidders are seeking to acquire control of the Company.

Cumulative Voting. The current charter does not provide for cumulative
voting. Likewise, the new charter will not provide for cumulative voting. As a
result, the holder or holders of a majority of the shares entitled to vote in an
election of directors will be able to elect all directors then being elected,
and holders of a substantial minority of the outstanding shares may not have
enough voting power to elect any directors.

Election of Directors. All of the Company's directors are and will continue
to be elected annually.

Special Meetings of Shareholders. The current bylaws of the Company provide
that a special meeting of shareholders may be called at any time by the
President, a majority of the members of the Board of Directors or the holders of
one-third or more of the outstanding common shares. The new bylaws will provide
that a special meeting of stockholders may be called only by the Chairman of the
Board or the President or at the request of a majority of the Board of
Directors.

Shareholder Consent to Action Without Meeting. Any action currently
required or permitted to be taken at a meeting of shareholders of the Company
may be taken without a meeting, but only with the written consent of all

27
<PAGE> 32

shareholders entitled to vote with respect to the subject matter thereof. The
new charter will prohibit stockholder consent to action without a meeting.

Advance Notice Provisions. The current bylaws contain no advance notice
provisions if a shareholder intends to propose business or make a nomination for
the election of directors at an annual meeting. The new bylaws will provide, in
general, that if a stockholder intends to propose business or make a nomination
for the election of directors at an annual meeting, the Company must receive
written notice of such intention not less than 90 days nor more than 120 days
prior to the first anniversary of the preceding year's annual meeting. The
notice must include all information relating to the proposed nominee required by
law to be disclosed in solicitations of proxies for election of directors, or,
in the case of a proposal, a brief description of the proposal, and why it
should be raised at the meeting, and any material interest of the stockholder or
beneficial owner, if any, in the proposal. The notice also must include the name
and address of both the stockholder giving the notice and the beneficial owner,
if any, on whose behalf the nomination or proposal is made and the class and
number of shares that are owned beneficially and of record by such stockholder
and beneficial owner.

Amendments to Bylaws. Under the current charter, the Board of Directors by
majority vote or the holders of a majority of outstanding shares may amend or
repeal the bylaws of the Company. Under the new charter, the Board of Directors
will be able to amend or repeal the bylaws of the Company by a majority vote.
Under the new charter, stockholders would need the affirmative vote of the
holders of not less than two-thirds of the total number of voting shares to
amend or repeal the new bylaws.

Directors' Liability. Under the current and new charters, a director of the
Company shall not be personally liable to the Company or its stockholders for
monetary damages for any breach of fiduciary duty as a director.

Indemnification Rights. Indemnification and expense advancement rights of
directors and officers under the new charter will be substantially the same as
those under the current charter.

Evaluation of Tender Offers. The new charter, unlike the current charter,
will provide that the directors, when evaluating any tender or exchange offer or
offer of merger or consolidation or acquisition of substantially all assets of
the Company, shall give consideration to the effect that such transaction would
have on the integrity, character and quality of the Company's operations, to the
long-term as well as short-term interests of the Company and its stockholders,
and to the social, legal and economic effects on the Company's employees,
customers, suppliers and creditors and on the communities and geographical areas
in which the Company operates.

Removal of Directors. Under the current and new charters, directors may not
be removed from office without cause.

RECOMMENDATION OF THE BOARD

The Board of Directors unanimously recommends a vote FOR the proposal to
change the state of incorporation of the Company from New York to Delaware by
means of a merger of the Company with and into a wholly-owned Delaware
subsidiary. Unless marked to the contrary, proxies received from stockholders
will be voted in favor of this proposal.

STOCK OWNERSHIP

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

The following table sets forth certain information with respect to
beneficial owners of five percent or more of the outstanding common shares of
the Company as of January 31, 2000. For purposes of this proxy statement,
beneficial ownership has the meaning given under the rules of the Securities and
Exchange Commission and does

28
<PAGE> 33

not necessarily indicate economic interest. The information presented in the
table is based upon information furnished by each person or contained in filings
made with the Securities and Exchange Commission.

<TABLE>
<CAPTION>
AMOUNT AND NATURE PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNERSHIP OF CLASS
- ---------------- ----------------------- --------
<S> <C> <C>
C.H. Heist Trust............................................ 657,445(1) 22.8%
c/o Isadore Snitzer,
Charles H. Heist and Clydis D. Heist, Trustees
710 Statler Building
Buffalo, New York 14202
Charles H. Heist............................................ 313,037(2) 10.7%
c/o C.H. Heist Corp.
810 North Belcher Road
Clearwater, Florida 34625
Heist Grandchildren Trusts.................................. 384,480(3) 13.4%
c/o Charles H. Heist
810 North Belcher Road
Clearwater, Florida 34625
Victoria Hall............................................... 190,543(3)(4) 6.6%
c/o C.H. Heist Corp.
810 North Belcher Road
Clearwater, Florida 34625
Dixie Lea Clark............................................. 177,520(3)(4) 6.2%
c/o C.H. Heist Corp.
810 North Belcher Road
Clearwater, Florida 34625
The Burton Partnership...................................... 272,500(5) 9.5%
Post Office Box 4643
Jackson, Wyoming 83001
</TABLE>

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

(1) The shares indicated are held of record in a trust created by the founder of
the Company, Mr. C.H. Heist, for the benefit of his family prior to his
death in February 1983. The three trustees of the trust are his wife, Clydis
D. Heist, his son, Charles H. Heist, who is Chairman and Chief Executive
Officer of the Company, and Isadore Snitzer, Esq. Each of the trustees may
be deemed to be the beneficial owner of the shares held in the trust. The
trust will continue until the death of Mrs. Heist and the children of Mr.
and Mrs. Heist. Mr. Snitzer is also the beneficial and record owner of 2,022
shares (less than 1%). Mr. Heist and Mr. Snitzer disclaim beneficial
ownership of the shares held by the Trust.

(2) The shares indicated are owned directly by Mr. Heist, except for 7,803
shares owned by Mr. Heist's wife. Mr. Heist disclaims beneficial ownership
of the shares owned by his wife. The shares shown in the table also include
26,357 shares underlying presently exercisable options.

(3) The Trusts indicated were created for the benefit of the children of Charles
H. Heist and his sisters, Victoria Hall and Dixie Lea Clark. Mr. Heist and
his sisters are trustees of the trusts. Each of the trustees disclaims
beneficial ownership of such shares.

(4) The shares indicated are owned directly and do not include the shares owned
by the C.H. Heist Trust or the shares of the trusts for the grandchildren.

(5) The Burton Partnership is a limited partnership controlled by Donald W.
Burton, who is deemed to be the beneficial owner of the shares held by this
partnership.

29
<PAGE> 34

SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS

As of January 31, 2000, the directors, individually, and all directors and
officers of the Company, as a group, owned beneficially the following amounts of
the outstanding common shares of the Company:

<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OF CLASS
------------------------ -------------------- ----------------
<S> <C> <C>
Charles H. Heist.......................................... 313,037(1)(2)(3) 10.7%
W. David Foster........................................... 56,093(3)(4) 1.1%
Charles E. Scharlau....................................... 305 (5)
Ronald K. Leirvik......................................... 100 (5)
Richard W. Roberson....................................... 500 (5)
Donna R. Moore............................................ -0- -0-
All officers and directors (10 persons)................... 1,485,822(6) 48.9%
</TABLE>

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

(1) Does not include 657,445 shares held by the C.H. Heist Trust. Includes
26,357 shares underlying presently exercisable options.

(2) Does not include 386,480 shares held in various trusts for grandchildren.

(3) Executive officer of the Company.

(4) Amount indicated includes 55,123 shares underlying presently exercisable
options.

(5) Represents less than 1%.

(6) Includes 154,219 shares underlying presently exercisable options and 657,445
shares and 386,480 shares held in the trusts described above.

MARKET INFORMATION

The Company's common shares are traded on the American Stock Exchange under
the symbol "HST." The Company has applied to the Exchange for the new symbol
"ABI". The prices at which common shares trade after the Asset Sale and the
Reincorporation will be determined by the marketplace and may be influenced by
many factors, including, among others, investor perception of the effects of the
Asset Sale, future results of operations and financial condition, and general
economic and market conditions. As of January 31, 2000, the number of
shareholders of record was 570.

The following table sets forth, for the fiscal periods indicated, the high
and low sale prices per share of the Company's common shares as reported on the
American Stock Exchange.

<TABLE>
<CAPTION>
FISCAL YEAR HIGH LOW
----------- ---- ---
<S> <C> <C> <C>
1997: First Quarter................................... 7 3/4 6 3/4
Second Quarter.................................. 7 3/8 6 3/4
Third Quarter................................... 7 3/8 6 1/2
Fourth Quarter.................................. 8 6 15/16
1998: First Quarter................................... 8 5/8 6 1/2
Second Quarter.................................. 8 1/2 6 7/8
Third Quarter................................... 7 5/8 6 3/4
Fourth Quarter.................................. 6 15/16 6 1/4
1999: First Quarter................................... 7 1/4 6 1/4
Second Quarter.................................. 6 3/4 6 3/8
Third Quarter................................... 6 5/8 6 1/8
Fourth Quarter.................................. 6 5/8 5 5/8
</TABLE>

30
<PAGE> 35

On October 29, 1999, the last day on which the Company's common shares were
traded before the announcement of the proposed Asset Sale, the high and low sale
prices of a common share were $5 3/4 and $5 5/8, respectively. On January 25,
2000, the date the Company announced execution of the Sale Agreement, the high
and low sale prices of a common share were $5 3/4 and $5 3/4, respectively. On
February 4, 2000, the high and low sale prices of a common share were $6 and $6,
respectively.

The Company did not declare any dividends on its common shares during
fiscal 1998 or 1999. Under its credit agreement, the Company is not permitted to
pay cash dividends for any fiscal year in excess of $1 million in the aggregate.

INDEPENDENT AUDITORS

The consolidated financial statements and financial statement schedules of
the Company and its subsidiaries included or incorporated by reference in the
Company's Annual Report on Form 10-K for the year ended December 27, 1998, have
been audited by KPMG LLP, independent auditors, for the periods indicated in
their reports thereon. Representatives of KPMG LLP are not expected to be
present at the Special Meeting.

SHAREHOLDER PROPOSALS

Any shareholder proposal intended to be presented at the Company's 2000
annual meeting should have been received by the Company at its principal
executive offices by the close of business on December 3, 1999, in order to be
included in the Company's proxy statement and form of proxy for that meeting.

If a shareholder intends to raise at the Company's 2000 annual meeting, a
proposal that he or she has not sought to have included in the Company's proxy
statement, the shareholder must notify the Company of the proposal on or before
February 15, 2000. If the shareholder fails to notify the Company, the Company's
proxies will be permitted to use their discretionary voting authority with
respect to such proposal when and if it is raised at such annual meeting,
whether or not there is any discussion of such proposal in the proxy statement
for such meeting.

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 and the rules and regulations promulgated thereunder and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission. Reports, proxy statements and other
information filed by the Company may be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549 and at the Regional Offices thereof at 7
World Trade Center, Suite 1300, New York, New York and at Northwestern Atrium
Center, Suite 1400, 500 West Madison Street, Chicago, Illinois. Copies of such
information can be obtained by mail from the Public Reference Section of the
Commission at 450 Fifth Street, N. W., Washington, D.C. 20549 at prescribed
rates. The Commission maintains a Web site at http:\\www.sec.gov containing
reports, proxy and information statements and other information regarding
registrants, including the Company, that file electronically. Reports and other
information concerning the Company can also be inspected at the offices of the
American Stock Exchange or at the Company's Web site at http:\\www.Heist.com.

31
<PAGE> 36

CERTAIN HISTORICAL FINANCIAL INFORMATION

C.H. HEIST CORP. AND SUBSIDIARIES

INDEX

<TABLE>
<S> <C>
Interim Financial Information
Condensed Consolidated Balance Sheets - September 26,
1999 -- (Unaudited) and December 27, 1998.............. F-1
Condensed Consolidated Statements of Operations and
Comprehensive Income -- (Unaudited) Thirteen and
thirty-nine week periods ended September 26, 1999 and
September 27, 1998..................................... F-2
Condensed Consolidated Statements of Cash Flows
-(Unaudited) Thirty-nine week periods ended September
26, 1999 and September 27, 1998........................ F-3
Notes to Condensed Consolidated Financial Statements...... F-4
Independent Auditors' Review Report....................... F-7
Management's Discussion and Analysis of Results of
Operations and Financial Condition for the Thirteen and
thirty-nine week periods ended September 26, 1999 and
September 27, 1998..................................... F-8
Audited Financial Information
Summary of Selected Financial Data........................ F-11
Management's Discussion and Analysis of Results of
Operations and Financial Condition for Fiscal Years
Ended December 27, 1998, December 28, 1997 and December
29, 1996............................................... F-12
Financial Statements:
Consolidated Balance Sheets as of December 27, 1998 and
December 28, 1997...................................... F-16
Consolidated Statements of Earnings and Comprehensive
Income for the years ended December 27, 1998, December
28, 1997 and December 29, 1996......................... F-17
Consolidated Statements of Stockholders' Equity for the
years ended December 27, 1998, December 28, 1997 and
December 29, 1996...................................... F-18
Consolidated Statements of Cash Flows for the years ended
December 27, 1998, December 28, 1997 and December 29,
1996................................................... F-19
Notes to Consolidated Financial Statements................ F-20
Independent Auditor's Report.............................. F-32
Quarterly Financial Data.................................. F-33
</TABLE>

32
<PAGE> 37

C.H. HEIST CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

<TABLE>
<CAPTION>
SEPTEMBER 26, DECEMBER 27,
1999 1998
------------- ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ 2,512 3,147
Receivables............................................... 20,768 19,653
Services in progress...................................... 1,303 1,017
Parts and supplies........................................ 1,109 1,174
Prepaid and other expenses................................ 1,139 317
Deferred income taxes..................................... 628 626
------- ------
Total current assets.............................. 27,459 25,934
------- ------
Property, plant and equipment, at cost...................... 60,510 56,350
Less accumulated depreciation............................. 42,518 38,996
------- ------
Net property, plant and equipment................. 17,992 17,354
------- ------
Deferred income taxes....................................... 152 144
Intangible assets, net...................................... 10,147 10,471
Other assets................................................ 106 118
------- ------
$55,856 54,021
======= ======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current installments of long-term debt.................... $ 255 5
Accounts payable.......................................... 2,428 3,030
Accrued expenses.......................................... 6,435 5,788
Income taxes payable...................................... -- 1
------- ------
Total current liabilities......................... 9,118 8,824
Long-term debt, excluding current installments.............. 16,873 16,050
Deferred incentive compensation............................. 1,120 869
Deferred income taxes....................................... 137 137
------- ------
Total liabilities................................. 27,248 25,880
------- ------
Stockholders' equity (note 3):
Common stock of $.05 par value. Authorized 8,000,000
shares; issued 3,167,092 shares........................ 158 158
Additional paid-in capital................................ 4,284 4,278
Retained earnings......................................... 27,172 27,176
Accumulated other comprehensive losses.................... (1,783) (2,235)
------- ------
29,831 29,377
Less cost of common stock in treasury: 285,804 and 288,754
shares for 1999 and 1998, respectively................. (1,223) (1,236)
------- ------
Total stockholders' equity........................ 28,608 28,141
------- ------
$55,856 54,021
======= ======
</TABLE>

See accompanying notes to condensed consolidated financial statements.

F-1
<PAGE> 38

C.H. HEIST CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(UNAUDITED)

(In thousands, except share and per share data)

<TABLE>
<CAPTION>
THIRTEEN THIRTEEN THIRTY-NINE THIRTY-NINE
WEEK PERIOD WEEK PERIOD WEEK PERIOD WEEK PERIOD
ENDED ENDED ENDED ENDED
SEPT. 26, SEPT. 27, SEPT. 26, SEPT. 27,
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net service revenues...................... $ 38,431 35,881 111,218 98,185
Cost of services.......................... 28,437 25,722 81,713 70,355
---------- ---------- ---------- ----------
Gross profit.................... 9,994 10,159 29,505 27,830
Selling, general and administrative
expenses................................ 9,445 8,730 28,698 25,542
Amortization of intangible assets......... 183 149 548 367
---------- ---------- ---------- ----------
Operating income................ 366 1,280 259 1,921
---------- ---------- ---------- ----------
Other income (expense):
Interest income...................... 15 17 51 64
Interest expense..................... (310) (259) (848) (643)
Gain (loss) on disposal of property,
plant and equipment, net........... (2) 69 11 33
Miscellaneous, net................... 466 295 504 410
---------- ---------- ---------- ----------
Total other income (expense),
net........................... 169 122 (282) (136)
---------- ---------- ---------- ----------
Earnings (loss) before income
taxes......................... 535 1,402 (23) 1,785
Income tax expense (benefit).............. 313 644 (19) 817
---------- ---------- ---------- ----------
Net earnings (loss)............. 222 758 (4) 968
========== ========== ========== ==========
Basic and diluted net earnings per
share................................... $ .08 .26 -- .34
========== ========== ========== ==========
Weighted average number of common shares
outstanding............................. 2,881,133 2,877,988 2,880,717 2,877,900
========== ========== ========== ==========
Net earnings (loss)............. $ 222 758 (4) 968
Other comprehensive income (loss), net of
tax:
Foreign currency translation
adjustments.......................... (35) (247) 452 (440)
---------- ---------- ---------- ----------
Comprehensive income............ $ 187 511 448 528
========== ========== ========== ==========
</TABLE>

See accompanying notes to condensed consolidated financial statements.

F-2
<PAGE> 39

C. H. HEIST CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

(In thousands)

<TABLE>
<CAPTION>
THIRTY-NINE WEEK THIRTY-NINE WEEK
PERIOD ENDED PERIOD ENDED
SEPT. 26, 1999 SEPT. 27, 1998
---------------- ----------------
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss)....................................... $ (4) 968
Adjustments to reconcile net earnings (loss) to net cash
provided by operating activities:
Depreciation of plant and equipment.................... 3,726 3,646
Amortization of intangible assets...................... 548 367
Gain on disposal of property, plant and equipment,
net.................................................. (11) (33)
Stock compensation awards.............................. 19 9
Changes in assets and liabilities (see below).......... (655) 25
-------- --------
Net cash provided by operating activities............ 3,623 4,982
-------- --------
Cash flows from investing activities:
Additions to property, plant and equipment................ (3,021) (4,318)
Proceeds from disposal of property, plant and equipment... 54 506
Acquisitions and earnout payments, net of cash acquired... (1,310) (6,257)
-------- --------
Net cash used in investing activities................ (4,277) (10,069)
-------- --------
Cash flows from financing activities:
Proceeds from bank line of credit borrowings.............. 19,250 19,250
Repayment of bank line of credit borrowings............... (19,200) (14,047)
Repayment of other long-term debt......................... (124) (28)
-------- --------
Net cash provided (used) by financing activities..... (74) 5,175
-------- --------
Effect of exchange rate changes on cash and cash
equivalents............................................... 93 (112)
-------- --------
Net decrease in cash and cash equivalents................... (635) (24)
Cash and cash equivalents at beginning of period............ 3,147 2,948
-------- --------
Cash and cash equivalents at end of period.................. $ 2,512 2,924
======== ========
Changes in assets and liabilities providing (using) cash:
Receivables............................................... $ (949) (1,661)
Services in progress...................................... (275) (730)
Income taxes receivable/payable, net...................... (375) (249)
Parts and supplies........................................ 69 117
Prepaid expenses.......................................... (448) (56)
Other assets.............................................. 12 4
Accounts payable.......................................... (644) 535
Accrued expenses.......................................... 1,708 1,930
Deferred incentive compensation........................... 247 135
-------- --------
Total............................................. $ (655) 25
======== ========
Supplemental schedule of non-cash investing and financing
activities:
Leases capitalized..................................... $ 1,148 --
======== ========
</TABLE>

See accompanying notes to condensed consolidated financial statements

F-3
<PAGE> 40

C. H. HEIST CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. In the opinion of management of C. H. Heist Corp. and Subsidiaries (the
"Company"), the accompanying condensed consolidated financial statements
contain all normal recurring adjustments necessary to fairly present the
Company's consolidated financial position as of September 26, 1999 and the
results of its operations for the thirteen and thirty-nine week periods
ended September 26, 1999 and September 27, 1998 and cash flows for the
thirty-nine week periods ended September 26, 1999 and September 27, 1998.
The financial statements have been prepared using the same accounting
policies used in preparation of the December 27, 1998 statements. The
financial statements included herein should be read in conjunction with
those statements and notes thereto.

2. The results of operations for the thirteen and thirty-nine week periods
ended September 26, 1999 are not necessarily indicative of the results to be
expected for the full year.

3. The changes in stockholders' equity for the thirty-nine week period ended
September 26, 1999 are summarized as follows (in thousands, except shares):

<TABLE>
<CAPTION>
ACCUMULATED
ADDITIONAL OTHER TOTAL
COMMON PAID-IN RETAINED COMPREHENSIVE TREASURY STOCK STOCKHOLDERS'
STOCK CAPITAL EARNINGS LOSSES SHARES AMOUNT EQUITY
------ ---------- -------- ------------- -------- ------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 27,
1998.................... $158 $4,278 $27,176 $(2,235) 288,754 $(1,236) $28,141
Net loss.................. -- -- (4) -- -- -- (4)
Foreign currency
translation
adjustment.............. -- -- -- 452 -- -- 452
Stock compensation
awards.................. -- 6 -- -- (2,950) 13 19
---- ------ ------- ------- ------- ------- -------
Balance at September 26,
1999.................... $158 $4,284 $27,172 $(1,783) 285,804 $(1,223) $28,608
==== ====== ======= ======= ======= ======= =======
</TABLE>

Accumulated other comprehensive losses consist solely of equity adjustments
from foreign currency translation.

4. For the thirty-nine week period ended September 26, 1999, 74,117 additional
stock options were granted and 3,812 options expired. As of September 26,
1999, the Company had exercisable options outstanding to employees to
purchase 162,276 common shares at prices ranging from $6.94 to $10.13 per
share.

5. In 1999, the Company announced its intention to terminate and settle the
obligations of its qualified noncontributory defined benefit pension plans
covering substantially all of its non-bargaining unit personnel in the
United States, and as such has frozen benefits. The Company has recognized
pre tax curtailment gains of $281,000 which are included in the accompanying
statement of operations for the thirteen and thirty-nine week periods ended
September 26, 1999. The actual settlement of the obligations is not expected
to be complete before the end of the current fiscal year. The net assets of
the plans will be allocated, as prescribed by ERISA and its related
regulations. At this time management does not foresee that the plans'
settlements will have a material adverse effect on the Company's financial
condition or liquidity.

6. The Company has two professional service segments: staffing and industrial
maintenance services. Staffing services are provided on a temporary and
contract basis to businesses in clerical, light industrial and technology
professional sectors throughout the eastern United States and select
southwestern U.S. markets. Industrial maintenance services a wide range of
industries by providing hydroblasting, painting, sandblasting,

F-4
<PAGE> 41
C. H. HEIST CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

and vacuuming of industrial wastes throughout the eastern United States and
Canada. Operating segment data is as follows (in thousands):

<TABLE>
<CAPTION>
THIRTEEN THIRTEEN THIRTY-NINE THIRTY-NINE
WEEK PERIOD WEEK PERIOD WEEK PERIOD WEEK PERIOD
ENDED ENDED ENDED ENDED
SEPT. 26, SEPT. 27, SEPT. 26, SEPT. 27,
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Staffing services:
Net revenues.......................... $25,432 21,381 70,376 55,879
Intersegment revenues................. 31 28 92 8
------- ------- -------- -------
Total revenues................ 25,463 21,409 70,468 55,961
Cost of services...................... 19,573 16,386 54,312 42,893
Selling, general & administrative:
Operations......................... 3,966 3,110 11,431 8,513
Allocated overhead................. 838 765 2,413 2,396
------- ------- -------- -------
Total selling general &
administrative.............. 4,804 3,875 13,844 10,909
Amortization.......................... 181 148 543 351
Operating income...................... 874 972 1,677 1,726
Depreciation.......................... 178 115 497 304
Assets................................ 26,079 23,068 26,079 23,068
Capital expenditures and
acquisitions....................... 146 143 2,034 6,751
======= ======= ======== =======
Industrial maintenance services:
Net revenues.......................... $12,999 14,500 40,842 42,306
Cost of services...................... 8,864 9,336 27,401 27,462
Selling, general & administrative:
Operations......................... 3,237 3,489 10,337 10,200
Overhead........................... 1,404 1,366 4,517 4,433
------- ------- -------- -------
Total selling general &
administrative.............. 4,641 4,855 14,854 14,633
Amortization.......................... 2 1 5 16
Operating income (loss)............... (508) 308 (1,418) 195
Depreciation.......................... 1,016 929 3,229 3,342
Assets................................ 28,763 28,637 28,763 28,637
Capital expenditures.................. $ 364 973 2,297 3,824
======= ======= ======== =======
Corporate assets........................ $ 1,014 1,317 1,014 1,317
======= ======= ======== =======
Consolidated:
Net revenues.......................... $38,431 35,881 111,218 98,185
Cost of services...................... 28,437 25,722 81,713 70,355
Selling, general & administrative..... 9,445 8,730 28,698 25,542
Amortization.......................... 183 149 548 367
Operating income...................... 366 1,280 259 1,921
Other expense, net.................... 169 122 (282) (136)
Earnings (loss) before income taxes... 535 1,402 (23) 1,785
Depreciation.......................... 1,194 1,044 3,726 3,646
Assets................................ 55,856 53,022 55,856 53,022
Capital expenditures and
acquisitions....................... $ 510 1,116 4,331 10,575
======= ======= ======== =======
</TABLE>

F-5
<PAGE> 42
C. H. HEIST CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

7. On April 13, 1998, Ablest Service Corp., a wholly owned subsidiary of C. H.
Heist Corp. acquired one hundred percent of the stock of Milestone
Technologies, Inc. ("Milestone") for approximately $6.6 million paid in cash
to the shareholders at closing and agreed to pay additional consideration
based on the achievement of certain pre-established earning targets for 1998.
Milestone provides information technology staffing services in the Phoenix,
Arizona metropolitan area and had fiscal 1997 revenues of approximately $9.0
million. The purchase price was determined through negotiations and has been
assigned to the fair value of the assets and liabilities acquired with the
excess being assigned to goodwill.

Pro Forma Condensed Combined Financial Information -- (Unaudited) thirteen
and thirty-nine week periods ended September 27, 1998.

The unaudited pro forma condensed combined financial information
reflects the pro forma results of operations of the Company for the
thirteen and thirty-nine week periods ended September 27, 1998 assuming
the acquisition of Milestone had been consummated as of the beginning of
the periods presented.

Management believes that the assumptions used in preparing this
unaudited pro forma condensed combined financial information provide a
reasonable basis of presenting all of the significant effects of the
acquisition of Milestone. The pro forma condensed combined financial
information does not purport to be indicative of the actual results that
would have occurred had the acquisition been consummated on or as of the
date assumed, and are not necessarily indicative of the future results
of operations which will be obtained as a result of the acquisition.

<TABLE>
<CAPTION>
THIRTEEN THIRTY-NINE
WEEK PERIOD WEEK PERIOD
ENDED ENDED
SEPT. 27, SEPT. 27,
1998 1998
----------- -----------
<S> <C> <C>
Net service revenues........................................ $35,881 101,024
Net earnings................................................ 758 1,028
Basic and diluted earnings per share........................ $ .26 .36
</TABLE>

8. Subsequent Events.

On November 2, 1999, the Company announced that it had entered into a letter
of intent to sell its industrial maintenance business to Onyx Industrial
Services, Inc., a subsidiary of CGEA-Onyx, a French waste service company
with worldwide operations. Management expects to fully analyze and account
for this segment as a discontinued operation in its fourth fiscal quarter.

Since the letter of intent is non-binding, no assurances can be given that a
sale will be consummated.

In 2000, the Company intends to relocate its Buffalo, New York administrative
offices to the Tampa, Florida area, the current location of its executive and
human resources offices. In the fourth quarter the Company will complete an
assessment of the cost of relocation, including the costs of any employee
programs.

F-6
<PAGE> 43

INDEPENDENT AUDITORS' REVIEW REPORT

The Board of Directors and Stockholders
C. H. Heist Corp:

We have reviewed the condensed consolidated balance sheet of C.H. Heist
Corp. and subsidiaries as of September 26, 1999 and the related condensed
consolidated statements of operations and comprehensive income and cash flows
for the thirteen and thirty-nine week periods ended September 26, 1999 and
September 27, 1998. These condensed consolidated financial statements are the
responsibility of the Company's management.

We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that
should be made to the condensed consolidated financial statements referred to
above for them to be in conformity with generally accepted accounting
principles.

We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of C.H. Heist Corp. and subsidiaries
as of December 27, 1998, and the related consolidated statements of earnings and
comprehensive income, stockholders' equity and cash flows for the year then
ended (not presented herein); and in our report dated February 12, 1999, we
expressed an unqualified opinion on those consolidated financial statements. In
our opinion, the information set forth in the accompanying condensed
consolidated balance sheet as of December 27, 1998, is fairly stated, in all
material respects, in relation to the consolidated balance sheet from which it
has been derived.

KPMG LLP

Buffalo, New York
October 22, 1999

F-7
<PAGE> 44

MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
RESULTS OF OPERATIONS AND FINANCIAL CONDITION

RESULTS OF OPERATIONS:

Net service revenue increased by $2.5 million or 7.1% to $38.4 million from
$35.9 million and by $13.0 million or 13.3% to $111.2 million from $98.2 million
for the current fiscal quarter and year to date periods, respectively.

Net service revenue in the Company's staffing services segment, Ablest
Service Corp., increased by $4.0 million or 18.9% to $25.4 million from $21.4
million during the current fiscal quarter and by $14.5 million or 25.9% to $70.4
million from $55.9 million during the current year to date period. Net service
revenue in this segment's commercial staffing division increased in the current
quarter by $4.4 million or 27.9% and for the year to date period by $10.4
million or 24.3%. Increased revenue from existing customers, greater market
penetration in established offices and new office openings in the current and
prior fiscal year, all contributed to this increase. Net service revenue in this
segment's information technology staffing (IT) division declined by $374,000 or
6.8% for the current fiscal quarter while still showing an increase of $4.1
million or 31.6% for the current fiscal year to date period. The decline in IT
in the current fiscal quarter is the result of an industry trend where customers
are delaying the development of new projects until the second quarter of next
year because of Y2K concerns. The increase in the year to date revenues for this
division is due to revenues generated for a full year from acquisitions, which
were included for only part of the prior fiscal year.

Net service revenues in the Company's industrial maintenance segment
declined by $1.5 million or 10.3% to $13.0 million from $14.5 million and by
$1.5 million or 3.5% to $40.8 million from $42.3 million for the current fiscal
quarter and year to date periods, respectively. The decline in service revenue
for both the current fiscal quarter and year to date periods resulted from lower
service revenues being generated from turnaround services as compared to the
prior fiscal year. Many refineries have postponed plant turnarounds and major
maintenance projects due to the strong demand and higher prices for gasoline and
other petroleum based products. Also contributing to this decline in service
revenues is a drop in revenues from this segment's insulation services division.
These declines are partially offset by increased revenue being generated by
conventional high-pressure water cleaning services and through the opening of
new service locations in the current and prior fiscal years.

Gross profit on a consolidated basis declined by $165,000 or 1.6% and
increased by $1.7 million or 6.0% for the current fiscal quarter and year to
date periods, respectively. Gross profit as a percentage of service revenue for
the current fiscal quarter declined to 26.0% from 28.3% and for year to date
period to 26.5% from 28.3%.

Gross profit dollars in the staffing services segment increased by $867,000
or 17.3% and by $3.1 million or 23.6% for the current fiscal quarter and year to
date periods, respectively. Gross profit as a percentage of staffing service
revenues declined to 23.0% from 23.4% for the current quarter and to 22.8% from
23.2% for year to date period. The increase in gross profit dollars is the
result of the increased service revenues coupled with the consistent margins in
the commercial staffing division. The decrease in percentage is due to the
decline in gross profit margin in the information technology staffing division
which is caused by competitive pressures on pricing.

Gross profit dollars in the Company's industrial maintenance segment
declined by $1.0 million or 19.9% and by $1.4 million or 9.5% for the fiscal
quarter and year to date periods, respectively. As a percentage of service
revenues, gross profit declined to 31.8% from 35.6% and to 32.9% from 35.1% for
the same respective periods.

Contributing to this decline in both gross profit dollars and percentages
is an increase in direct labor costs associated with the performance of our
services, including related payroll taxes and employee welfare funds.

Selling, general and administrative expenses, including amortization
expenses, increased on a consolidated basis by $749,000 or 8.4% and by $3.3
million or 12.9% for the current fiscal quarter and year to date periods,
respectively.

Selling, general and administrative expenses in the Company's staffing
service segment increased by $962,000 or 23.9% and by $3.1 million or 27.8% for
the current fiscal quarter and year to date periods,

F-8
<PAGE> 45

respectively. Contributing to this increase were costs and amortization expense
associated with prior year acquisitions and cost associated with new office
openings.

Selling, general and administrative expenses in the Company's industrial
maintenance segment decreased by $213,000 or 4.4% for the current fiscal quarter
and increased by $210,000 or 1.4% for the current fiscal year to date period.
The decline in the current fiscal quarter was primarily the result of the
closing of one branch office and three sub-offices in the current and prior
fiscal years. The increase in selling, general and administrative expenses for
the current year to date period is predominately due to the hiring of additional
sales and marketing associates in both the United States and Canada.

Contributing to the increase in other income for the current quarter and
partially offsetting other expense for the year to date period was a gain of
approximately $213,000 recognized on the final distribution of insurance
proceeds related to a 1998 fire at the Company's Rouyn-Noranda, Quebec facility.
In addition to the above, the Company has recognized a pre-tax gain of
approximately $281,000 related to the curtailment of its qualified non-
contributory defined benefit pension plans for all its non-bargaining unit
personnel in the United States. Reference is made to Footnote 5 of the Notes to
Condensed Consolidated Financial Statements, included herein.

These increases in other income were partially offset by an increase in
interest expense of $51,000 and $205,000 for the current fiscal quarter and year
to date periods, respectively. These increases were the result of the higher
level of borrowing associated with prior year acquisitions.

The effective tax rate for the current fiscal quarter is 58.5% and for the
fiscal year to date period is a benefit of 82.6%. The effective tax rate is the
result of the consolidation of effective tax rates from the various taxing
jurisdictions of the Company. Also affecting these effective rates is the impact
of the non-deductibility of certain intangible assets associated with
acquisitions that occurred in prior years.

FINANCIAL CONDITION:

The quick ratio held constant at 2.7 to 1 and the current ratio improved to
3.0 to 1 from 2.9 to 1 at September 26, 1999 and December 27, 1998,
respectively. Net working capital improved by $1.2 million of which $1.4 million
is attributable to an increase in accounts receivable and services in progress,
income taxes receivable of $371,000 and a decrease in accounts payable of
$602,000. These increases in working capital were partially offset by a decline
of $635,000 in cash and cash equivalents and an increase in accrued expenses of
$647,000. The increase in trade accounts receivable and services in progress
were primarily the result of the increased service revenue noted previously in
the staffing services segment while the increase in accrued expenses is
predominately payroll and incentive compensation related. Reference should be
made to the statement of cash flows, which details the sources and uses of cash.

Open credit commitments as of September 26, 1999 were approximately $8.9
million. The Company also has approximately $340,000 (the US dollar equivalent)
available for C. H. Heist, Ltd., the Company's Canadian subsidiary.

Capital expenditures for the current fiscal quarter were $679,000,
including $160,000 in capital leases. Of this amount, $227,000 was for additions
to the mobile equipment fleet, $182,000 was for computer software, hardware,
office automation and communication systems, $25,000 was for furniture and
fixtures, $33,000 was for new facilities and the remainder was for other
equipment.

IMPACT OF YEAR 2000 READINESS:

Items disclosed herein constitute "Y-2000 Readiness Disclosures" under the
Year 2000 Information Readiness Disclosure Act.

Throughout the past two years, the Company has undertaken an extensive
review of its internal systems and has completed an applications upgrade to its
integrated accounting programs and office automation systems that make them Y2K
ready. The term "Y2K ready" as used in this document means that the relevant
hardware, software, embedded chips or interfaces referenced herein will
correctly process, provide and receive date sensitive data within and between
the 20th and 21st centuries. The Company is also in the final phase of assessing

F-9
<PAGE> 46

and upgrading where necessary the operating systems at all of its remote
locations. The cost of the upgrades and/or equipment replacements have not had a
material impact on the financial position of the Company as they were part of
the normal maintenance and support fees that are incurred on an ongoing basis.
The Company is also in the final phase of assessing external and third party
compliance for those supplies of critical services that the Company relies on.

SUBSEQUENT EVENTS:

On November 2, 1999, the Company announced that it had entered into a
letter of intent to sell its industrial maintenance business to Onyx Industrial
Services, Inc., a subsidiary of CGEA-Onyx, a French waste service company with
worldwide operations. Management expects to fully analyze and account for this
segment as a discontinued operation in its fourth fiscal quarter.

Since the letter of intent is non-binding, no assurances can be given that
a sale will be consummated.

In 2000, the Company intends to relocate its Buffalo, New York
administrative offices to the Tampa, Florida area, the current location of its
executive and human resources offices. In the fourth quarter the Company will
complete an assessment of the cost of relocation, including the costs of any
employee programs.

F-10
<PAGE> 47

C. H. HEIST CORP. & SUBSIDIARIES

SUMMARY OF SELECTED FINANCIAL DATA

(In thousands, except per share earnings and percentages)

<TABLE>
<CAPTION>
FISCAL YEAR ENDED DECEMBER
----------------------------------------------------
1998 1997 1996 1995 1994
-------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net service revenues................... $135,647 119,516 106,515 102,659 102,572
Cost of service revenues............... 97,658 85,290 76,045 75,530 79,897
-------- ------- ------- ------- -------
Gross Profit......................... 37,989 34,226 30,470 27,129 22,675
Selling, general & administrative
expense.............................. 35,560 31,400 28,354 23,843 21,399
-------- ------- ------- ------- -------
Operating income..................... 2,429 2,826 2,116 3,286 1,276
Interest expense....................... (892) (729) (643) (541) (396)
Other income (expense)................. 600 (93) 36 166 172
-------- ------- ------- ------- -------
Earnings before taxes................ 2,137 2,004 1,509 2,911 1,052
Income taxes........................... 843 1,106 819 1,305 734
-------- ------- ------- ------- -------
Net earnings......................... $ 1,294 898 690 1,606 318
======== ======= ======= ======= =======
Effective tax rate..................... 39.4% 55.2% 54.3% 44.8% 69.8%
Net earnings per share................. $ 0.45 0.31 0.24 0.56 0.11
======== ======= ======= ======= =======
Canadian operations (U.S. $):
Net service revenues................. $ 16,149 16,300 14,877 14,483 12,673
Operating income..................... 612 1,525 923 1,118 549
Total assets................. $ 9,830 10,570 9,316 10,093 9,451
======== ======= ======= ======= =======
Other data:
Working capital...................... $ 17,110 16,559 14,661 15,738 14,356
Property, plant & equipment, net..... 17,354 16,839 17,406 17,642 14,964
Capital expenditures, including
acquisitions...................... 13,361 6,708 5,859 7,091 3,957
Depreciation and amortization........ 5,310 5,357 4,905 4,530 4,433
Cash flows from operations (1)....... 6,604 6,255 5,595 6,135 4,751
Total assets................. 54,021 44,086 40,797 39,548 36,756
Long-term debt....................... 16,050 8,755 6,492 6,980 5,121
Stockholders' equity................. $ 28,141 27,488 27,074 26,368 24,513
Return on beginning stockholders'
equity............................ 4.7% 3.3% 2.6% 6.6% 1.3%
Weighted average number of shares
outstanding....................... 2,878 2,877 2,873 2,872 2,872
======== ======= ======= ======= =======
</TABLE>

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

(1) Defined as net earnings plus depreciation and amortization.

F-11
<PAGE> 48

MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
RESULTS OF OPERATIONS AND FINANCIAL CONDITION

For the fiscal year ended December 27, 1998 compared to December 28, 1997

RESULTS OF OPERATIONS

Service revenues for the current fiscal year increased by $16.1 million or
13.5% to $135.6 million from $119.5 million.

Service revenues in the Company's staffing services segment, Ablest Service
Corp. (Ablest), increased by $15.2 million or 24.0% to $78.5 million from $63.3
million over the prior fiscal year. Internal growth accounted for 9.9% of this
increase in service revenues with the remainder resulting from two acquisitions
in the Information Technology staffing field: Milestone Technologies, Inc. in
April and SoftWorks International Consulting, Inc. in November of the current
fiscal year. Service revenues for information technology services accounted for
23.8% of total staffing service revenues for the current fiscal year.

Service revenues in the Company's industrial maintenance service segment
increased by approximately $1 million or 1.6% to $57.2 million from $56.2
million during the current fiscal year. Service revenues in this segment's
United States industrial maintenance operation increased by $1.0 million over
the prior year, fueled by a new office opening and increased market penetration
predominately in the southern region. Partially offsetting this increase was a
decrease in service revenue at this segments Canadian subsidiary, C. H. Heist,
Ltd. Service revenues for the Canadian operation actually increased by $1.5
million or 6.4% over the prior fiscal year when measured in its domestic,
Canadian currency. Upon conversion, due to the declining value of the Canadian
dollar in relationship to the United States dollar, the revenues decreased by
0.9%, period to period.

Gross profit on a consolidated basis increased by $3.8 million or 11.0% to
$38.0 million from $34.2 million, one year earlier. For the same period gross
profit as a percentage of service revenues decreased to 28.0% from 28.6%.

Year to year gross profit percentage for the Company's staffing services
segment increased to 23.5% from 23.0%, one year earlier. Contributing to this
increase were improved margins in commercial staffing services and growth in
this segment's information technology staffing services.

Gross profit dollars in the Company's industrial maintenance segment
decreased by $121,000 or 0.6% and as a percentage of sales decreased to 34.2%
from 35.0%, year to year. The decrease in gross margin dollars and percentage
was the result of reduced margins on painting and paint-related services in the
Company's Canadian subsidiary. Also contributing to this decline in gross profit
dollars is the impact of the decline in value of the Canadian dollar, as noted
above.

Starting in fiscal 1998, the Company reclassified branch expenses that are
not directly attributable to the services it performs from cost of services to
selling, general and administrative expense. Management believes that its
current presentation is generally consistent with industry practices.

Selling, general and administrative expenses, inclusive of amortization
expenses, increased by $4.2 million or 13.2% over the prior fiscal year.

Selling, general and administrative expense for the staffing services
segment increased by $2.5 million or 18.7% for the current fiscal year compared
to one year ago. Contributing to this increase are costs associated with new
office openings and acquisitions including increased amortization expense of
intangible assets. Partially offsetting this increase in costs was a reduction
in bad debt expenses of approximately $518,000 as compared to the prior fiscal
year. This relates directly to three large customer write-offs that were made
during 1997.

Selling, general and administrative expense for the Company's industrial
maintenance segment increased by $1.7 million or 9.4% over the prior fiscal
year. Contributing to this increase is this segment's ongoing strategic sales
and marketing planning initiative including the hiring of territorial sales
representatives. Also contributing to the increase is our continuing investment
in information technology and other support personnel in order to provide our
customers with more accurate and timely information. These increases were
partially offset by the

F-12
<PAGE> 49

allocation of proceeds received from the settlement of litigation in the
Company's Canadian division. See the heading "Litigation Settlement" below.

Other expense, net decreased by approximately $530,000 or 64.5% during the
current fiscal year, compared to one year ago. This improvement was primarily
attributable to costs associated with the planned spin-off and initial public
offering of Ablest, which were written off during the first fiscal quarter of
1997, and not repeated in the current year. The Company's Board of Directors
subsequently called off the spin-off and initial public offering. Also having a
major impact during the current fiscal year was the settlement of litigation in
the Company's Canadian subsidiary. See the heading "Litigation Settlement"
below. Partially offsetting these decreases in other expense, net was an
increase in interest expense due to the higher level of borrowing utilized to
fund acquisitions during 1998.

The effective tax rate for the current fiscal year is 39.4% as compared to
55.2% for the prior fiscal year. The reduced effective tax rate is the result of
a reallocation of various corporate expenses between reporting segments. This
reallocation resulted in the utilization of certain state tax net operating loss
carry-forwards which had been fully offset by a valuation allowance. Refer to
Footnote 8 of the Company's financial statements for a further explanation of
income taxes.

FINANCIAL CONDITION:

The quick ratio at December 27, 1998 was 2.7 to 1 as compared to 3.1 to 1
at December 28, 1997, and the current ratio was 2.9 to 1 as compared to 3.4 to
1, for the respective periods. Net working capital increased by $551,000 during
fiscal 1998. The increase in net working capital is attributable to increases in
cash and cash equivalents, accounts receivable and a decrease in income taxes
payable. These were partially offset by a decrease in prepaid expenses and
increases in accounts payable and accrued expenses. The increase in cash and
cash equivalents, as well as, the increase in accounts receivable are primarily
in the staffing services segment. These increases are predominately the result
of acquisitions made during 1998 and the strong sales growth that this segment
has achieved. Reference should be made to the Consolidated Statement of Cash
Flows, which details the sources and uses of cash.

Open credit commitments at the end of fiscal 1998 were approximately $9.0
million. The Company also has approximately $322,000 (the U. S. dollar
equivalent) available for C. H. Heist, Ltd., the Company's Canadian subsidiary.

Capital expenditures (excluding acquisitions) were approximately $6.1
million. Of this amount, $3.6 million was for additions to the mobile equipment
fleet, $1.2 million was for computer hardware, software, office automation and
communication systems, $344,000 was for new facilities and the balance was for
other equipment. Open commitments at December 27, 1998 were $434,000, of which
$308,000 is for new mobile equipment and the rest for other equipment. It is
anticipated that existing internally available funds, cash flows from operations
and available borrowings will be sufficient to cover working capital and capital
expenditure requirements in fiscal 1999.

ACQUISITIONS

On April 13, 1998, Ablest purchased 100% of the common stock of Milestone
Technologies, Inc., (Milestone) an information technology staffing provider in
the Phoenix, Arizona Metropolitan area.

On November 17, 1998, Ablest purchased certain assets from SoftWorks
International Consulting, Inc., (SoftWorks), an information technology staffing
services provider in the Denver, Colorado Metropolitan area.

Reference should be made to the Company's April 24, 1998 form 8-K filing
for Milestone and December 1, 1998, form 8-K filing for SoftWorks.

LITIGATION SETTLEMENT

During fiscal 1998, the Company's Canadian subsidiary successfully
negotiated a settlement of an outstanding lawsuit, which it had brought against
an international bridge authority in Sarnia, Ontario Canada. The

F-13
<PAGE> 50

suit alleged that the bridge authority and its engineering firm misrepresented
the total volume of steel that was to be sandblasted and painted on the
structure in fiscal 1993 and 1994. The settlement reached was for $661,000 in
Canadian dollars (approximately $430,000 in U. S. dollars). The allocation of
the proceeds from this settlement was first used to pay off an outstanding
receivable, and then to offset expenses incurred for legal and engineering
services utilized to prepare and present our case. The balance of approximately
$235,000 (U. S. dollars) was credited to miscellaneous other income and included
in fiscal 1998.

IMPACT OF YEAR 2000 READINESS

Items disclosed herein constitute "Y-2000 Readiness Disclosures" under the
Year 2000 Information and Readiness Disclosure Act.

Year 2000 problems, defined as computer programs and hardware have
date-sensitive software which may recognize a date using "00" as the year 1900
rather than the year 2000 (Y2K), this could result in a systems failure or
miscalculation causing disruptions of certain day to day accounting and
information handling systems. The Company has undertaken an extensive review of
its internal systems and has recently completed an applications upgrade to its
integrated accounting programs that make them Y2K ready. The term "Y2K ready" as
used throughout this document means that the relevant hardware, software,
embedded chips or interfaces specifically referenced herein will correctly
process, provide and receive date data within and between the 20th and 21st
centuries. The Company is currently upgrading operating systems at all of its
remote locations and anticipates being materially Y2K ready by the end of the
first quarter of 1999. The next phase of our plan is to assess external and
third party reliance for those suppliers of critical services that the Company
relies upon. It is anticipated that this final phase will be completed in the
first half of 1999. The upgrade to the various applications, which the Company
has undertaken, did not result in additional expense, as they were part of the
normal maintenance and support fees that are incurred on an ongoing basis. The
total cost associated with the Company's Y2K readiness program is not material
to the Company's operations. Although there can be no assurances, the Company
does not anticipate any foreseeable problems regarding date-sensitive computer
hardware or software applications that would have a material adverse effect on
the Company.

For the fiscal year ended December 28, 1997 compared to December 29, 1996

RESULTS OF OPERATIONS

Service revenues (net sales) for the current fiscal year increased by $13.0
million or 12.2% to $119.5 million from $106.5 million. Service revenues in the
Company's growing staffing services segment, Ablest Service Corp. (Ablest),
increased by $13.8 million or 27.8%, over the prior year. Ablest now represents
53% of the Company's consolidated service revenues. Started in 1978, Ablest
service revenues have grown at a compound annual growth rate of 21.6% since
1990. Between September '96 and June '97, three acquisitions of information
technology (IT) staffing companies were consummated adding $8.0 million in
service revenues. Revenues from these acquisitions represented 11.5% of total
service revenues for this segment in 1997. The commercial staffing division of
Ablest grew at approximately 15%, which is slightly above the industry growth
rate.

Service revenues in the Company's industrial maintenance segment, long the
bulwark of the Company, declined by $753,000 or 1.3% compared to the prior year.
After a slow first quarter in which service revenues were down by $3.2 million,
this segment showed solid growth with increases in three consecutive quarters.
Of particular note, service revenues increased in the fourth quarter by $1.7
million or 12.8%, over the same period of the prior year. Service revenue
increases, in the fourth quarter, were achieved in field service repair,
equipment related services, chemical cleaning, wet and dry vacuuming and waste
management services. The Company's Canadian industrial maintenance subsidiary
had increased service revenues for the year of $1.4 million, contributing
significantly to the service revenue improvement during the last 9 months of
1997.

Gross profit on a consolidated basis increased by $2.8 million, or 17.6%,
to $18.8 million from $16.0 million, one year earlier. Gross profit as a
percentage of service revenues increased to 15.8% from 15.0% in the prior fiscal
year. Gross profit percentage for the Company's staffing services segment
decreased to 16.8% from 17.4%, one year earlier. Costs associated with new
office openings, staffing existing offices to accommodate increased service
revenues and the increased competitive pressures on pricing within the staffing
industry
F-14
<PAGE> 51

contributed to this decline. Gross profit percentage for the industrial
maintenance segment improved to 14.6% in 1997 from 13.1% during the prior year.
The improvement in gross profit percentage was due to improved pricing in the
Company's industrial maintenance segment and reductions in insurance reserves
due to decreased claims for workers' compensation and the settlement of two
liability claims pending against the Company for less-than-reserved amounts. The
Company attributes the decreased workers' compensation claim level to continued
improvements in the Company's safety -- risk management program.

Selling, general and administrative expenses on a consolidated basis
increased by approximately $2.0 million or 14.3% in fiscal 1997, as compared to
fiscal 1996. Selling, general and administrative expenses for the staffing
services segment increased by $2.4 million or 46.2% for the current fiscal year,
compared with 1996. This increase is the result of costs associated with new
office openings and information technology staffing company acquisitions.
Additional increases were incurred to improve and expand support structures and
field operations to accommodate the growth that Ablest has achieved and to
position it for future growth. During the current year Ablest wrote-off
approximately $218,000 in accounts receivable for one customer over disputed
invoices on a short-term commercial staffing project. Additional write-offs were
made for two customers who have filed for protection under Chapter 11 of the
bankruptcy code. Selling, general and administrative expenses for the industrial
maintenance segment decreased by approximately $400,000 or 4.7% during 1997. The
decrease is primarily the result of streamlining and consolidations that were
made in the Company's support functions.

Over the past two years the Company has made a major investment in
information technology hardware, software and personnel, which also contributed
to the increase in selling, general and administrative expense. This investment
was made to provide management, and ultimately our customers, with more timely
and accurate information. The Company has wide- and local- area networks for
real-time communications throughout the geographically dispersed operating
offices, which makes timely and reliable dissemination of information possible.

Other expenses, net increased approximately $345,000, or 47.7%, during the
current fiscal year, as compared to 1996. Amortization of goodwill and other
assets associated with the technology staffing acquisitions contributed to this
increase. The three acquisitions completed in the past fifteen months were
financed by borrowing on the Company's line-of-credit and through long-term
earnouts with previous owners. This increased the level of borrowing, and thus
increased interest expense. Long-term debt reached $11.4 million during the year
and at year-end was $8.75 million.

The acquisitions were accretive to earnings and generated positive cash
flow, which was used to reduce debt. During the fourth quarter of 1997, the
Company consolidated and increased its line-of-credit facility to a total
availability of $25 million under more favorable terms and conditions than were
in effect prior to the termination of separate credit facilities for the
industrial maintenance services and staffing services segments. Also
contributing to the increase in other expenses was the write-off of costs
associated with the preparation of documents for the proposed spin-off and
initial public offering of Ablest Service Corp., which was terminated by the
Company's Board of Directors in the third quarter of 1997.

The effective tax rate for the current fiscal year was 55.2%. The effective
rates are affected by the multiple taxing jurisdictions in which the Company
operates, including higher foreign rates on earnings of the Company's Canadian
subsidiary. Please refer to Footnote 8 of the Company's financial statements for
a further explanation of income taxes.

F-15
<PAGE> 52

C. H. HEIST CORP. & SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

<TABLE>
<CAPTION>
YEAR ENDED
------------------------------
DEC. 27, 1998 DEC. 28, 1997
------------- -------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ 3,147 2,948
Receivables, less allowance for doubtful receivables of
$430 and $416 in 1998 and 1997, respectively........... 19,653 16,621
Services in progress...................................... 1,017 1,357
Parts and supplies........................................ 1,174 1,254
Prepaid expenses.......................................... 317 539
Deferred income taxes (note 8)............................ 626 806
------- -------
Total current assets.............................. 25,934 23,525
------- -------
Property, plant and equipment, at cost (note 2)............. 56,350 52,677
Less accumulated depreciation............................. 38,996 35,838
------- -------
Net property, plant and equipment................. 17,354 16,839
Deferred income taxes (note 8).............................. 144 176
Intangible assets, net (note 3)............................. 10,471 3,386
Other....................................................... 118 160
------- -------
$54,021 44,086
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current installments of long-term debt (note 5)........... $ 5 38
Accounts payable.......................................... 3,030 2,660
Accrued expenses (note 4)................................. 5,788 3,814
Income taxes payable...................................... 1 454
------- -------
Total current liabilities......................... 8,824 6,966
Long-term debt, excluding current installments (note 5)..... 16,050 8,755
Deferred incentive compensation (note 6).................... 869 479
Deferred income taxes (note 8).............................. 137 398
------- -------
Total liabilities................................. 25,880 16,598
------- -------
Stockholders' equity (notes 5, 7 and 8):
Common stock of $.05 par value. Authorized 8,000,000
shares; issued 3,167,092 shares for 1998 and 1997,
respectively........................................... 158 158
Additional paid-in capital................................ 4,278 4,274
Retained earnings......................................... 27,176 25,882
Accumulated other comprehensive losses.................... (2,235) (1,583)
------- -------
29,377 28,731
Less cost of common shares in treasury -- 288,754 and
290,269 shares for 1998 and 1997, respectively......... (1,236) (1,243)
------- -------
Total stockholders' equity........................ 28,141 27,488
------- -------
Commitments and contingencies (notes 9, 12, 13 and 14).... -- --
------- -------
$54,021 44,086
======= =======
</TABLE>

See accompanying notes to consolidated financial statements.

F-16
<PAGE> 53

C. H. HEIST CORP. & SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME

(In thousands, except share and per share data)

<TABLE>
<CAPTION>
YEAR ENDED
-----------------------------------------------
DEC. 27, 1998 DEC. 28, 1997 DEC. 29, 1996
------------- ------------- -------------
<S> <C> <C> <C>
Net service revenues................................. $ 135,647 119,516 106,515
Cost of services..................................... 97,658 85,290 76,045
---------- --------- ---------
Gross profit....................................... 37,989 34,226 30,470
Selling, general and administrative expenses......... 35,036 31,153 28,237
Amortization of intangible assets.................... 524 247 117
---------- --------- ---------
Operating income................................... 2,429 2,826 2,116
---------- --------- ---------
Other income (expense):
Interest expense................................... (892) (729) (643)
Interest income.................................... 85 78 62
Gain on disposal of property, plant and equipment,
net............................................. 24 14 11
Miscellaneous, net................................. 491 (185) (37)
---------- --------- ---------
Other expense, net................................. (292) (822) (607)
---------- --------- ---------
Earnings before income taxes....................... 2,137 2,004 1,509
Income taxes (note 8)................................ 843 1,106 819
---------- --------- ---------
Net earnings....................................... $ 1,294 898 690
========== ========= =========
Basic and diluted net earnings per common share...... $ 0.45 0.31 0.24
========== ========= =========
Weighted average number of common shares
outstanding........................................ 2,877,977 2,876,505 2,873,337
========== ========= =========
Reconciliation of Net Earnings to Comprehensive
Income
Net earnings......................................... $ 1,294 898 690
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments........... (652) (499) 2
---------- --------- ---------
Comprehensive income............................... $ 642 399 692
</TABLE>

See accompanying notes to consolidated financial statements.

F-17
<PAGE> 54

C. H. HEIST CORP. & SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS'S EQUITY

(In thousands, except share data)

<TABLE>
<CAPTION>
ACCUMULATED
ADDITIONAL OTHER TREASURY STOCK TOTAL
COMMON PAID-IN RETAINED COMPREHENSIVE ----------------- STOCKHOLDERS'
STOCK CAPITAL EARNINGS LOSSES SHARES AMOUNTS EQUITY
------ ---------- -------- ------------- ------- ------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balances at December 31,
1995........................... $158 4,254 24,294 (1,086) 292,419 (1,252) 26,368
Net earnings................... -- -- 690 -- -- -- 690
Exercised options.............. -- 14 -- -- -- -- 14
Foreign currency translation
adjustment................... -- -- -- 2 -- -- 2
---- ----- ------ ------ ------- ------ ------
Balances at December 29,
1996......................... 158 4,268 24,984 (1,084) 292,419 (1,252) 27,074
Net earnings................... -- -- 898 -- -- -- 898
Stock compensation awards...... -- 6 -- -- (2,150) 9 15
Foreign currency translation
adjustment................... -- -- -- (499) -- -- (499)
---- ----- ------ ------ ------- ------ ------
Balances at December 28,
1997......................... 158 4,274 25,882 (1,583) 290,269 (1,243) 27,488
Net earnings................... -- -- 1,294 -- -- -- 1,294
Stock compensation awards...... -- 4 -- -- (1,515) 7 11
Foreign currency translation
adjustment................... -- -- -- (652) -- -- (652)
---- ----- ------ ------ ------- ------ ------
Balances at December 27,
1998......................... $158 4,278 27,176 (2,235) 288,754 (1,236) 28,141
==== ===== ====== ====== ======= ====== ======
</TABLE>

See accompanying notes to consolidated financial statements.

F-18
<PAGE> 55

C. H. HEIST CORP. & SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

<TABLE>
<CAPTION>
YEAR ENDED
-----------------------------------------------
DEC. 27, 1998 DEC. 28, 1997 DEC. 29, 1996
------------- ------------- -------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings........................................ $ 1,294 898 690
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation of plant and equipment............ 4,786 5,110 4,788
Amortization of intangible assets.............. 524 247 117
Gain on disposal of property, plant and
equipment, net.............................. (24) (14) (11)
Deferred income taxes.......................... (340) 8 (64)
Stock compensation awards...................... 11 15 --
Changes in assets and liabilities (see
below)...................................... (309) (1,116) 238
-------- -------- -------
Net cash provided by operating activities... 5,942 5,148 5,758
-------- -------- -------
Cash flows from investing activities:
Additions to property, plant and equipment.......... (6,095) (4,804) (4,740)
Proceeds from disposal of property, plant and
equipment........................................ 525 210 225
Acquisitions and earnout payments, net of cash
acquired......................................... (7,266) (1,904) (1,119)
-------- -------- -------
Net cash used by investing activities....... (12,836) (6,498) (5,634)
-------- -------- -------
Cash flows from financing activities:
Proceeds from bank line of credit borrowings........ 24,597 17,000 8,700
Repayment of bank line of credit borrowings......... (17,297) (14,700) (9,150)
Repayment of acquisition note payable............... -- (500) --
Repayment of other long-term debt................... (38) (37) (37)
Exercised stock options............................. -- -- 14
-------- -------- -------
Net cash provided (used) by financing
activities................................ 7,262 1,763 (473)
Effect of exchange rate changes on cash and cash
equivalents......................................... (169) (157) --
-------- -------- -------
Net increase (decrease) in cash and cash
equivalents......................................... 199 256 (349)
Cash and cash equivalents at beginning of year........ 2,948 2,692 3,041
-------- -------- -------
Cash and cash equivalents at end of year.............. $ 3,147 2,948 2,692
======== ======== =======
Changes in assets and liabilities providing (using)
cash, excluding effects of acquisitions:
Receivables...................................... $ (2,123) (2,199) (256)
Services in progress............................. 600 (255) (128)
Parts and supplies............................... 75 345 566
Prepaid expenses................................. 220 (226) (136)
Accounts payable................................. 222 1,074 293
Accrued expenses................................. 874 (625) 316
Income taxes payable............................. (620) 267 (349)
Other assets..................................... 48 298 (344)
Deferred incentive compensation.................. 395 205 276
-------- -------- -------
Total....................................... $ (309) (1,116) 238
======== ======== =======
Supplemental disclosure of cash flow information:
Cash paid during year for:
Interest....................................... $ 871 692 458
Income taxes................................... $ 1,633 823 1,144
Non cash investing and financing activities:
Note issued in connection with acquisition..... $ -- -- 500
Liabilities assumed in acquisition
transactions................................ $ 760 -- --
======== ======== =======
</TABLE>

See accompanying notes to consolidated financial statements.

F-19
<PAGE> 56

C.H. HEIST CORP. & SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 27, 1998, DECEMBER 28, 1997 AND DECEMBER 29, 1996

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

C. H. Heist Corp. and subsidiaries (the Company) has two professional
service segments: staffing services and industrial maintenance services. The
Ablest Service Corp. (Ablest) staffing services subsidiary focuses on providing
temporary and contract staffing solutions to businesses in the clerical, light
industrial and technology professional sectors. The industrial maintenance
segment services a wide range of industries, such as chemical, petrochemical,
power generation, pulp and paper, mining and metallurgical plants. The
industrial services business includes hydroblasting, painting, sandblasting,
vacuuming of industrial wastes, turnaround services, chemical cleaning and
commercial insulation. These services are offered domestically and in Canada
through C. H. Heist Ltd., a wholly owned subsidiary. Many of these services are
rendered on a contract basis.

Significant accounting policies followed by the Company are summarized as
follows:

(a) Fiscal Year

The Company's fiscal year ends on the last Sunday of December. The
consolidated financial statements include 52 weeks for each of the years
ended December 27, 1998, December 28, 1997 and December 29, 1996.

(b) Principles of Consolidation

The consolidated financial statements include the accounts of the
Company and its subsidiaries, all of which are wholly-owned. All
significant intercompany balances and transactions have been eliminated in
consolidation.

All highly liquid investments with original maturities of three months
or less are considered cash equivalents.

(d) Revenue Recognition

The industrial maintenance segment operates primarily under
time-and-material contracts, and to a lesser extent under fixed contracts.
Time-and-material contract revenue and associated costs are recognized in
the period the services are provided. Revenue on fixed price contracts is
recognized on the percentage of completion method based on costs incurred
in relation to total estimated costs. The staffing services segment
recognizes revenue and associated costs in the period the services are
provided. Services in progress represents, for both segments, the revenue
for services provided but not yet billed. Costs associated with any
services in progress are reflected as expenses. Anticipated losses, if any,
are provided for in full.

(e) Parts and Supplies

Parts and supplies used in the industrial maintenance segment are
valued at the lower of cost (first-in, first-out) or market.

(f) Property, Plant and Equipment

Depreciation of plant and equipment is provided over the estimated
useful lives of the respective assets, principally on the straight-line
method. Leasehold improvements are amortized on the straight-line method
over the shorter of the lease term or estimated useful life of the asset.
Estimated useful lives generally range from 3 to 40 years.

F-20
<PAGE> 57
C.H. HEIST CORP. & SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

(g) Intangible Assets

The values ascribed to acquired intangibles, primarily goodwill,
covenants not-to-compete, customer and employee lists are being amortized
on the straight-line method primarily over periods of three to thirty
years. The Company regularly evaluates whether events and circumstances
have occurred that indicate the carrying amounts of intangible assets may
warrant revision or may not be recoverable. In the event of possible
impairment, the asset's value will be determined by projected net cash
flows of the related business.

(h) Income Taxes

Income taxes are accounted for by the asset and liability method.
Under the asset and liability method, deferred tax assets and liabilities
are recognized for the future tax consequences attributable to operating
loss and credit carryforwards and differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or settled.
The effect on deferred tax assets and liabilities of a change in tax rates
is recognized as income or expense in the period that includes the
enactment date.

(i) Earnings Per Share

Basic earnings per share is computed by using the weighted average
number of common shares outstanding. Diluted earnings per share is computed
by using the weighted average number of common shares outstanding plus the
dilutive effect, if any, of stock options. The dilutive effect of stock
options was not significant for any of the years presented.

(j) Foreign Currency Translation

The Canadian subsidiary utilizes the Canadian dollar as its functional
currency. Assets and liabilities are translated using rates of exchange as
of the balance sheet date and the statements of earnings are translated at
an average rate of exchange during the year. Gains and losses resulting
from translation are reported separately in stockholders' equity as
"Accumulated other comprehensive losses." Foreign currency transaction
gains and losses, if any, are reflected in operations.

(k) Use of Estimates

Management has made a number of estimates and assumptions in preparing
these financial statements to conform with generally accepted accounting
principles. Actual results could differ from those estimates.

(l) Methods and Development Costs

Methods and development costs amounted to $352,000, $338,000, and
$248,000 for the fiscal years 1998, 1997 and 1996, respectively.

(m) Accounting Standards Pronouncements

In 1999, the Company will adopt SFAS No. 133 "Accounting for
Derivative Instruments and Hedging Activities". Management believes that
the adoption of this standard will not have a material effect on the
reported operating results of the Company.

(n) Reclassification

The Company has reclassified 1997 and 1996 branch expenses that are
not directly attributable to the services it performs from cost of services
to selling, general and administrative expenses to conform to the

F-21
<PAGE> 58
C.H. HEIST CORP. & SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

1998 classification. The effect of these reclassifications was to lower
cost of services and increase selling, general and administrative expenses
by $15,397,000 and $14,453,000 for fiscal 1997 and 1996, respectively, as
compared to amounts previously reported. Management believes that its
current presentation is generally consistent with industry practice.

(2) PROPERTY, PLANT AND EQUIPMENT

A summary of property, plant and equipment, at cost, follows:

<TABLE>
<CAPTION>
YEAR ENDED
------------------------------
DEC. 27, 1998 DEC. 28, 1997
------------- -------------
(In thousands)
<S> <C> <C>
Land....................................................... $ 1,321 1,380
Buildings and improvements................................. 5,249 5,394
Machinery and equipment.................................... 27,126 25,092
Automotive equipment....................................... 14,852 14,276
Office furniture and equipment............................. 7,329 6,070
Leasehold improvements..................................... 473 465
------- -------
$56,350 52,677
======= =======
</TABLE>

(3) INTANGIBLE ASSETS

A summary of intangible assets follows:

<TABLE>
<CAPTION>
YEAR ENDED
------------------------------
DEC. 27, 1998 DEC. 28, 1997
------------- -------------
(In thousands)
<S> <C> <C>
Goodwill, less accumulated amortization of $263 and $68.... $ 8,908 2,413
Other intangible assets, less accumulated amortization of
$623 and $293............................................ 1,563 973
------- ------
$10,471 3,386
======= ======
</TABLE>

Intangible assets relate primarily to acquisitions in the staffing services
segment (note 12).

(4) ACCRUED EXPENSES

A summary of accrued expenses follows:

<TABLE>
<CAPTION>
YEAR ENDED
------------------------------
DEC. 27, 1998 DEC. 28, 1997
------------- -------------
(In thousands)
<S> <C> <C>
Payroll and other compensation............................. $2,474 1,353
Taxes, other than income................................... 155 150
Insurance.................................................. 1,277 1,535
Acquisition earnout costs (note 12)........................ 1,311 264
Other...................................................... 571 512
------ ------
$5,788 3,814
====== ======
</TABLE>

F-22
<PAGE> 59
C.H. HEIST CORP. & SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

(5) INDEBTEDNESS

A summary of long-term debt follows:

<TABLE>
<CAPTION>
YEAR ENDED
------------------------------
DEC. 27, 1998 DEC. 28, 1997
------------- -------------
(In thousands)
<S> <C> <C>
Notes payable, bank-revolving credit agreement............. $16,050 8,750
Mortgage note with interest at 9% payable in 1999.......... 5 43
------- ------
Total long-term debt............................. 16,055 8,793
Less current installments of long-term debt................ 5 38
------- ------
Long-term debt, excluding current installments........... $16,050 8,755
======= ======
</TABLE>

The Company has a $25,000,000 unsecured bank line of credit under a
revolving credit agreement. The interest rate on borrowings under the line of
credit is elected weekly by the Company and is either (i) the bank's prime rate
or (ii) the Secondary Market Certificate of Deposit (CD) Rate plus 3/4%. The
rate in effect at December 27, 1998 is 5.785%. On July 31, 2000, the Company has
the option of converting the then outstanding borrowings to a term loan, payable
in twenty equal quarterly installments, bearing interest at either (i) the
bank's prime rate plus 1/2% or (ii) the Secondary Market CD Rate plus 1 1/2%. If
converted, the company continues electing, on a weekly basis, the interest rate
to be charged. The revolving credit agreement contains working capital
requirements, and limits the amount of liabilities, capital expenditures and
payment of cash dividends. Under the most restrictive of these provisions,
$1,000,000 of retained earnings is free of dividend restrictions at December 27,
1998. The Company also pays a commitment fee of 1/4% per annum on the average
daily unused portion. Compensating balances, may be, but are not required to be
maintained.

The Company's Canadian subsidiary has an unsecured line of credit in the
U.S. dollar equivalent amount of $322,000 at December 27, 1998. Any borrowings
thereunder bear interest at the bank's prime rate. Commitment fees of 1/4% per
annum are payable on the average daily unused portion of the line of credit. No
compensating balances are required. No amounts were outstanding at December 27,
1998 and December 28, 1997.

Long-term debt matures as follows assuming conversion, on July 31, 2000, of
the amount due under the revolving credit agreement; $5,000 in 1999; $1,605,000
in 2000; $3,210,000 in 2001; $3,210,000 in 2002; $3,210,000 in 2003; and
$4,815,000 thereafter. The fair value of long-term debt approximates its
recorded value.

(6) DEFERRED INCENTIVE COMPENSATION

The Company has initiated an Economic Value Added (EVA((R))) Incentive
Remuneration Plan for officers and key employees. The purpose of the plan is to
provide incentive compensation in a form which relates the participants
incentive compensation to an increase in the economic value of the Company. The
participant is paid a portion of the declared bonus in the February following
the year in which the bonus was deemed earned and is reflected in accrued
expenses. The remaining portion of the bonus that is declared but unpaid may be
paid in succeeding years if performance targets are met. A participant may
forfeit any declared but unpaid bonus upon termination of employment other than
by reason of death, disability or retirement, at the discretion of the
Compensation Committee of the Board of Directors.

(7) STOCK OPTION PLANS

The Company has reserved 375,000 common shares for issuance in conjunction
with its Stock Option Plan (Plan). The Plan provides for the granting of
incentive stock options and/or non qualified options to officers and key
employees to purchase shares of common stock at a price not less than the fair
market value of the stock on the dates options are granted. Such options are
exercisable at such time or times as may be determined by the

F-23
<PAGE> 60
C.H. HEIST CORP. & SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

Compensation Committee of the Board of Directors and generally expire no more
than ten years after grant. Options vest and become fully exercisable six months
after the grant date. A summary of stock option activity follows:

<TABLE>
<CAPTION>
WEIGHTED OPTIONS
AVERAGE EXERCISABLE
EXERCISE AT YEAR
SHARES PRICE END
------- -------- -----------
<S> <C> <C> <C>
Outstanding Dec. 31, 1995............................ 189,700 $7.80 142,700
Exercised.......................................... (1,900) 7.48
Canceled or expired................................ (5,411) 8.06
------- ----- -------
Outstanding Dec. 29, 1996............................ 182,389 7.80 182,389
Canceled or expired................................ (12,905) 9.13
------- ----- -------
Outstanding Dec. 28, 1997............................ 169,484 7.70 169,484
Canceled or expired................................ (3,396) 7.98
------- ----- -------
Outstanding Dec. 27, 1998............................ 166,088 $7.69 166,088
======= ===== =======
</TABLE>

At December 27, 1998, the range of exercise prices and weighted average
contractual life of outstanding and exercisable options was $6.94 -- $10.13 and
5.4 years, respectively.

At December 27, 1998 there were 204,512 shares available for grant under
the Plan.

In May 1996, the Company's shareholders approved the adoption of a
Leveraged Stock Option plan (Leveraged Plan) for key employees. The Leveraged
Plan authorizes the issuance of options covering up to 375,000 shares of common
stock. Pursuant to the Leveraged Plan, 10% of a participant's annual EVA
incentive compensation payment will be used to purchase stock options, which
will be granted, following the end of the fiscal year. The number of options and
the exercise price will be based on the average market price per share of common
stock for the ten days prior to the calendar year end for which the option is
granted. The exercise price of the options will be subject to escalation at 8%
per year over the original option price. Options will vest after three years and
will be exercisable over a ten-year period from the date of grant. The
Compensation Committee of the Board of Directors establishes the percentage of
the compensation to be applied towards the options, and the escalation
percentage of the options. A summary of Leveraged Plan option activity follows:

<TABLE>
<CAPTION>
WEIGHTED
WEIGHTED AVERAGE
AVERAGE FAIR VALUE
EXERCISE OF OPTIONS
SHARES PRICE GRANTED
------ -------- ----------
<S> <C> <C> <C>
Outstanding Dec. 29, 1996.............................. -- $ -- $ --
Granted.............................................. 33,583 6.22 $2.59
------ ----- -----
Outstanding Dec. 28, 1997.............................. 33,583 6.22
Granted.............................................. 38,803 7.02 $2.54
------ ----- -----
Outstanding Dec. 27, 1998.............................. 72,386 $6.88
====== ===== =====
</TABLE>

At December 27, 1998, the range of exercise prices and weighted average
contractual life of outstanding and exercisable options was $6.72 -- $7.02 and
8.7 years, respectively. No options were exercisable as of December 27, 1998.

At December 27, 1998 there were 302,614 shares available for grant under
the Leveraged Plan. The per share weighted average fair value of stock options
granted was determined using the Black Scholes option-pricing

F-24
<PAGE> 61
C.H. HEIST CORP. & SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

model with the following weighted average assumptions for 1998 and 1997,
respectively: risk free interest rates of 6.4% and 5.6%; expected dividend
yield -- none for both years; expected life of ten years for both years; and
volatility of 28% and 24%, respectively.

Based on the fair value of all options at the grant date under the
disclosure provisions of SFAS No. 123, the Company's net earnings and earnings
per share would have been reduced to the pro forma amounts indicated below:

<TABLE>
<CAPTION>
YEAR ENDED
-----------------------------------------------
DEC. 27, 1998 DEC. 28, 1997 DEC. 29, 1996
------------- ------------- -------------
(In thousands, except per share data)
<S> <C> <C> <C>
Net earnings
As reported................................. $1,294 898 690
Pro forma................................... 1,261 884 598
Basic and diluted net earnings per share
As reported................................. $ 0.45 0.31 0.24
Pro forma................................... 0.44 0.31 0.21
</TABLE>

(8) INCOME TAXES

Income tax expense consists of:

<TABLE>
<CAPTION>
YEAR ENDED
-----------------------------------------------
DEC. 27, 1998 DEC. 28, 1997 DEC. 29, 1996
------------- ------------- -------------
(In thousands)
<S> <C> <C> <C>
Current expense (benefit):
Federal..................................... $ 655 (50) 150
State....................................... 75 257 295
Foreign..................................... 453 891 438
------ ----- -----
Total current....................... 1,183 1,098 883
------ ----- -----
Deferred expense (benefit):
Federal..................................... (167) 54 (29)
State....................................... (173) 10 (2)
Foreign..................................... 1 (56) (33)
------ ----- -----
Total deferred...................... (340) 8 (64)
------ ----- -----
$ 843 1,106 819
====== ===== =====
Earnings before income taxes consist of:
Domestic.................................... $1,161 348 426
Foreign..................................... 976 1,656 1,083
------ ----- -----
$2,137 2,004 1,509
====== ===== =====
</TABLE>

F-25
<PAGE> 62
C.H. HEIST CORP. & SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

Actual income taxes differ from the "expected" taxes (computed by applying
the U.S. Federal corporate tax rate of 34% to earnings before income taxes) as
follows:

<TABLE>
<CAPTION>
YEAR ENDED
-----------------------------------------------
DEC. 27, 1998 DEC. 28, 1997 DEC. 29, 1996
------------- ------------- -------------
(In thousands)
<S> <C> <C> <C>
Computed expected tax expense................. $ 727 681 513
Adjustments resulting from:
Effect of higher foreign tax rates.......... 123 272 167
State taxes net of Federal Tax benefit...... (65) 176 193
Expiration of excess foreign tax credits.... 403 -- --
Change in beginning of year valuation (403) -- (129)
allowance for deferred tax assets........
Goodwill amortization....................... 62 -- --
Meals & entertainment....................... 79 57 57
Other....................................... 83 (80) 18
----- ----- ----
$ 843 1,106 819
----- ----- ----
Effective tax rate............................ 39.4% 55.2% 54.3%
===== ===== ====
</TABLE>

The tax effects of temporary differences that give rise to the deferred tax
assets and liability are as follows:

<TABLE>
<CAPTION>
YEAR ENDED
------------------------------
DEC. 27, 1998 DEC. 28, 1997
------------- -------------
(In thousands)
<S> <C> <C>
Current deferred tax assets:
Allowance for doubtful receivables....................... $ 154 155
Accrued insurance expense................................ 429 543
Other.................................................... 43 108
----- -----
626 806
----- -----
Long-term deferred tax assets:
Accumulated depreciation of plant and equipment.......... 117 143
Deferred compensation.................................... 27 33
----- -----
144 176
----- -----
Long-term deferred tax liability, net:
Liabilities:
Accumulated depreciation of plant and equipment....... (692) (683)
Assets:
Operating loss and credit carryforwards............... 581 961
Accumulated amortization of other assets.............. 92 119
Deferred compensation................................. 324 162
Valuation allowance................................... (446) (959)
Other................................................. 4 2
----- -----
(137) (398)
----- -----
Net deferred tax assets............................. $ 633 584
===== =====
</TABLE>

In assessing the realizability of deferred tax assets, management
considers, within each taxing jurisdiction, whether it is more likely than not
that some portion or all of the deferred tax assets will not be realized.

F-26
<PAGE> 63
C.H. HEIST CORP. & SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

Management considers the scheduled reversal of deferred tax liabilities,
projected future taxable income, and tax planning strategies in making this
assessment. Based upon the level of historical taxable income and projections
for future taxable income over the years in which the deferred tax assets are
deductible, management has provided valuation allowances for those deferred tax
assets that are not expected to be realized.

Undistributed earnings of the Canadian subsidiary, which are intended to be
permanently reinvested in the business, are approximately $10,723,000 at
December 27, 1998. If such earnings were remitted to the domestic parent, taxes
based at the then current rates and subject to certain limitations would be
payable after reduction for any foreign taxes previously paid on such earnings.

(9) EMPLOYEE BENEFIT PLANS

The Company has qualified noncontributory defined benefit pension plans
covering substantially all of its non-bargaining unit personnel in the United
States. The benefits are based on years of service and the employee's average
compensation during employment. Pension costs are funded as required by
applicable regulations. Plan assets are invested in a diversified portfolio
which includes common stocks, bond and mortgage obligations, insurance contracts
and money market funds.

In 1998 the Company adopted SFAS No. 132, "Employers' Disclosures about
Pensions and Other Postretirement Benefits". The standard does not change any
accounting measurements, but requires additional disclosures of the beginning
and ending balances of the benefit obligation and the fair value of plan assets,
the funded status of the plan and the components of pension expense. The
following tables set forth the funded status of the plans at the October 1
measurement date and the components of pension expense:

<TABLE>
<CAPTION>
YEAR ENDED
------------------------------
DEC. 27, 1998 DEC. 28, 1997
------------- -------------
(In thousands)
<S> <C> <C>
Change in benefit obligation:
Benefit obligation at beginning of year.................. $3,593 3,339
Service cost.......................................... 467 411
Interest.............................................. 233 199
Actuarial loss........................................ 783 445
Benefits paid......................................... (32) (95)
Other................................................. -- (706)
------ ------
Benefit obligation at end of year........................ $5,044 3,593
====== ======
Change in plan assets:
Fair value of plan assets at beginning of year........... $3,806 3,513
Actual return on plan assets.......................... 137 387
Employer contributions................................ 242 726
Benefits paid......................................... (32) (95)
Other................................................. -- (725)
------ ------
Fair value of plan assets at end of year................. $4,153 3,806
====== ======
Reconciliation of funded status:
Funded status (underfunded)/overfunded................... $ (891) 212
Unrecognized net actuarial (gain)/loss................... 89 (887)
Unrecognized transition obligation....................... 9 12
Unrecognized prior service cost.......................... 562 624
------ ------
Accrued benefit cost..................................... $ (229) (39)
------ ------
</TABLE>

F-27
<PAGE> 64
C.H. HEIST CORP. & SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

<TABLE>
<CAPTION>
TS(Y13)]
<S> <C> <C>
Principal actuarial assumptions are:
Weighted average discount rate........................... 5.5% 6.5%
Weighted average return on plan assets................... 7.9% 7.8%
Rate of compensation increase............................ 3.9% 4.9%
</TABLE>

<TABLE>
<CAPTION>
YEAR ENDED
-----------------------------------------------
DEC. 27, 1998 DEC. 28, 1997 DEC. 29, 1996
------------- ------------- -------------
(IN THOUSANDS)
<S> <C> <C> <C>
Pension expense:
Service cost................................ $ 467 411 427
Interest cost............................... 232 199 172
Expected return on plan assets.............. (292) (242) (195)
Recognized net actuarial gain............... (39) (47) (26)
Amortization of transition obligation....... 3 3 3
Amortization of prior service costs......... 62 62 62
----- ---- ----
Total pension expense............... $ 433 386 443
===== ==== ====
</TABLE>

On January 15, 1999 the Company announced its intention to terminate its
qualified noncontributory defined benefit pension plans covering substantially
all of its non-bargaining unit personnel in the United States. The net assets of
the plans will be allocated, as prescribed by ERISA and its related regulations.
At this time management does not foresee that the Company's obligation for
funding deficiencies, if any, in benefits will have a material adverse effect on
the Company's financial condition or liquidity.

The Company maintains a deferred profit sharing plan covering all salaried
employees of its Canadian subsidiary that meet certain eligibility requirements.
Contributions to the plan are based on net earnings, as defined, subject to
certain limitations based on the salaries of the participants. Expenses under
the plan were $39,000 in 1998, $38,000 in 1997 and $35,000 in 1996.

In 1997, the Company initiated a qualified defined contribution plan
covering the non-bargaining unit employees of the United States. The Company
matches the contributions of participating employees, with a maximum
contribution limit, on the basis of the percentages specified in the plan. The
matching contributions were $47,000 in 1998 and $16,000 in 1997.

(10) INDUSTRY SEGMENTS

The Company has two professional service segments: staffing and industrial
maintenance services. Staffing services are provided on a temporary and contract
basis to businesses in clerical, light industrial and technology professional
sectors throughout the eastern United States and select south-western U.S.
markets. Industrial maintenance services a wide range of industries by providing
hydroblasting, painting, sandblasting, and vacuuming of industrial wastes
throughout the eastern United States and Canada.

The Company has adopted the provision of SFAS No. 131, "Disclosures about
Segments of an Enterprise and Related Information". In connection with the
adoption of this standard the Company has revised its allocation of various
corporate overhead expenses between its reporting segments. The effect of this
reclassification was to allocate $1,408,000 and $1,335,000 of additional
expenses for fiscal 1997 and 1996, respectively, to the Company's staffing
services segment as compared to the allocation previously reported. The
reallocation was made based on an assessment of actual corporate costs necessary
to serve each segment. Intersegment revenues, where applicable, are accounted
for on the same basis as sales to unaffiliated customers. Corporate assets not

F-28
<PAGE> 65
C.H. HEIST CORP. & SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

allocated include certificates of deposit. Operating segment data as of and for
each of the years ended December 27, 1998, December 28, 1997 and December 29,
1996 are as follows:

<TABLE>
<CAPTION>
YEAR ENDED
-----------------------------------------------
DEC. 27, 1998 DEC. 28, 1997 DEC. 29, 1996
------------- ------------- -------------
(In thousands)
<S> <C> <C> <C>
Staffing services:
Net revenues............................. $78,471 63,268 49,514
Intersegment revenues.................... 101 39 84
------- ------ ------
Total revenues...................... $78,572 63,307 49,598
Cost of services......................... 60,059 48,740 37,700
Selling, general & administrative:
Operations............................. 11,986 10,344 7,087
Allocated overhead..................... 3,141 2,616 2,716
------- ------ ------
Total selling general &
administrative.................... 15,127 12,960 9,803
Amortization............................. 506 215 93
Operating income......................... 2,779 1,353 1,918
Depreciation............................. 426 409 320
Assets................................... 25,603 12,555 9,212
Capital expenditures and acquisitions.... $ 8,039 2,581 1,374
------- ------ ------
Industrial maintenance services:
Net revenues............................. $57,176 56,248 57,001
Cost of services......................... 37,599 36,550 38,345
Selling, general & administrative:
Operations............................. 13,911 13,301 13,097
Overhead............................... 5,998 4,892 5,337
------- ------ ------
Total selling general &
administrative.................... 19,909 18,193 18,434
Amortization............................. 18 32 24
Operating income (loss).................. (350) 1,473 198
Depreciation............................. 4,360 4,701 4,468
Assets................................... 27,134 29,414 31,548
Capital expenditures..................... $ 5,322 4,127 4,485
------- ------ ------
Corporate assets............................ $ 1,284 2,117 37
======= ====== ======
</TABLE>

F-29
<PAGE> 66
C.H. HEIST CORP. & SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

(11) CANADIAN OPERATION

A summary of financial data (in U.S. dollars) relating to the Company's
Canadian industrial maintenance operation follows:

<TABLE>
<CAPTION>
YEAR ENDED
-----------------------------------------------
DEC. 27, 1998 DEC. 28, 1997 DEC. 29, 1996
------------- ------------- -------------
(In thousands)
<S> <C> <C> <C>
Identifiable assets........................... $ 9,830 10,570 9,316
Liabilities................................... 1,312 1,921 754
Net service revenues.......................... 16,149 16,300 14,877
</TABLE>

(12) ACQUISITIONS

On September 15, 1996, Ablest purchased certain assets from Tech Resource,
Inc., an information technology staffing services business in the Atlanta,
Georgia metropolitan area, and its shareholder. The aggregate purchase price,
including acquisition costs was approximately $1,619,000, of which approximately
$1,119,000 was paid in cash and $500,000 was in the form of a one-year
promissory note paid September 1997. Approximately $1,581,000 of the purchase
price has been allocated to various intangible assets, primarily goodwill.

On April 28, 1997, Ablest purchased certain assets from Solution Source,
Inc., an information technology staffing services business in the Atlanta,
Georgia metropolitan area, and its shareholders. The aggregate purchase price,
including acquisition costs, was approximately $1,429,000, paid in cash, of
which approximately $1,379,000 has been allocated to various intangible assets,
primarily goodwill. The acquisition agreement also provides that Ablest may be
required to pay additional consideration if certain performance criteria are met
in 1997, 1998 and 1999. Total additional payments of $489,000 have been paid or
accrued in 1997 and 1998.

On June 23, 1997, Ablest purchased certain assets from The Kelton Group,
Inc., an information technology staffing and documentation services provider in
the Raleigh, North Carolina metropolitan area, and its shareholder. The
aggregate purchase price, including acquisition costs, was approximately
$475,000, paid in cash, of which approximately $375,000 has been allocated to
various intangible assets, primarily goodwill.

On April 13, 1998, Ablest purchased 100% of the common stock of Milestone
Technologies, Inc., an information technology staffing services provider in the
Phoenix, Arizona metropolitan area, from its shareholders. The aggregate
purchase price, including acquisition costs, was approximately $6,848,000, paid
in cash, of which approximately $5,314,000 has been allocated to various
intangible assets, primarily goodwill. The acquisition agreement also provides
that Ablest may be required to pay additional consideration if certain
performance criteria are met in 1998. Total additional payments of $786,000 have
been accrued in 1998.

On November 17, 1998, Ablest purchased certain assets from SoftWorks
International Consulting, Inc., an information technology staffing services
provider in the Denver, Colorado metropolitan area, and its shareholders. The
aggregate purchase price, including acquisition costs, was approximately
$1,009,000, paid in cash, of which approximately $984,000 has been allocated to
various intangible assets, primarily goodwill. The acquisition agreement also
provides that Ablest may be required to pay up to an additional $800,000 over
the next two years if certain performance criteria are met in 1998 and 1999.
Total additional payments of $300,000 have been accrued in 1998. All
acquisitions were accounted for by the purchase method of accounting and
accordingly, the results of operations since the respective dates of acquisition
are included in the consolidated statements of earnings. The purchase prices
have been allocated to assets acquired and liabilities assumed based on their
fair values.

The following unaudited, pro forma, condensed, combined financial
information assumes the acquisitions occurred at the beginning of each fiscal
year presented. The results do not purport to be indicative of what would

F-30
<PAGE> 67
C.H. HEIST CORP. & SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

have occurred had the acquisitions been made at the beginning of each fiscal
year presented, or of the results that may occur in the future.

<TABLE>
<CAPTION>
YEAR ENDED
--------------------------------------------------
DEC. 27, 1998 DEC. 28, 1997 DEC. 29, 1996
-------------- -------------- --------------
(In thousands, except per share data, unaudited)
<S> <C> <C> <C>
Net service revenues.......................... $140,185 131,805 120,460
Net earnings.................................. 1,454 1,051 725
Basic and diluted net earnings per share...... $ 0.51 0.37 0.25
</TABLE>

(13) LEASE COMMITMENTS

The Company and its subsidiaries occupy certain facilities under
noncancelable operating lease arrangements. Expenses under such arrangements
amounted to $970,000, $941,000, and $786,000 in 1998, 1997 and 1996
respectively. Of these amounts $94,000, $93,000 and $92,000 applied to leases
with related persons in 1998, 1997, and 1996, respectively.

In addition, the Company leases certain automotive and office equipment
under noncancelable operating lease arrangements, which provide for minimum
monthly rentals. Expenses under such arrangements amounted to $924,000, $806,000
and $813,000 in 1998, 1997, and 1996, respectively. Management expects that in
the normal course of business, new leases will replace leases that expire. Real
estate taxes, insurance and maintenance expenses are obligations of the Company.

A summary of future minimum rental payments at December 27, 1998 under
operating leases follows:

<TABLE>
<CAPTION>
REAL PROPERTY
-------------
RELATED
YEAR PERSONS OTHER EQUIPMENT
---- ------------- ----- ---------
(In thousands)
<S> <C> <C> <C>
1999................................ $58 843 630
2000................................ 55 567 492
2001................................ -- 294 225
2002................................ -- 108 13
</TABLE>

(14) CONTINGENCIES

The Company is exposed to a number of asserted and unasserted potential
claims encountered in the normal course of business. In the opinion of
management, the resolution of such matters will not have a material adverse
effect on the Company's financial condition or liquidity.

F-31
<PAGE> 68

C. H. HEIST CORP. & SUBSIDIARIES

INDEPENDENT AUDITORS' REPORT

The Board of Directors
C. H. Heist Corp.:

We have audited the accompanying consolidated balance sheets of C. H. Heist
Corp. and subsidiaries as of December 27, 1998 and December 28, 1997, and the
related consolidated statements of earnings and comprehensive income,
stockholders' equity and cash flows for the years ended December 27, 1998,
December 28, 1997 and December 29, 1996. These consolidated financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits. We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.

An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of C. H. Heist
Corp. and subsidiaries as of December 27, 1998 and December 28, 1997, and the
results of their operations and their cash flows for the years ended December
27, 1998, December 28, 1997 and December 29, 1996, in conformity with generally
accepted accounting principles.

KPMG LLP

Buffalo, New York
February 12, 1999

F-32
<PAGE> 69

C. H. HEIST CORP. & SUBSIDIARIES

QUARTERLY FINANCIAL DATA
<TABLE>
<CAPTION>
(in thousands, except per share data and percentages)
QUARTER ENDED MARCH JUNE SEPT. DEC.
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Fiscal 1998:
Net revenues................................. $ 28,168 $ 34,136 $ 35,881 $ 37,462
Earnings (loss) before income taxes.......... (890) (3.2)% 1,273 3.7% 1,402 3.9% 352 0.9%
Income taxes (benefit)....................... (397) (44.6)% 570 44.8% 644 45.9% 26 7.4%
Net earnings (loss).......................... (493) (1.8)% 703 2.1% 758 2.1% 326 0.9%
Earnings (loss) per share.................... $ (.17) $ .24 $ .26 $ .11
EPS -- last 12 months........................ $ .43 $ .51 $ .55 $ .45
Stock price range............................ $8 5/8-6 1/2 $8 1/2-6 7/8 $7 5/8-6 3/4 $6 15/16-6 1/4
- ------------------------------------------------------------------------------------------------------------------------------
Fiscal 1997:
Net revenues................................. $ 24,961 $ 31,123 $ 31,258 $ 32,174
Earnings (loss) before income taxes.......... (1,212) (4.9)% 661 2.1% 1,181 3.8% 1,374 4.3%
Income taxes (benefit)....................... (369) (30.4)% 204 30.9% 551 46.7% 720 52.4%
Net earnings (loss).......................... (843) (3.4)% 457 1.5% 630 2.0% 654 2.0%
Earnings (loss) per share.................... $ (.29) $ .16 $ .22 $ 22
EPS -- last 12 months........................ $ (.03) $ .29 $ .31 $ .31
Stock price range............................ $7 3/4-6 3/4 $7 3/8-6 3/8 $7 7/8-6 1/2 $8 -6 15/16
- ------------------------------------------------------------------------------------------------------------------------------
Fiscal 1996:
Net revenues................................. $ 25,769 $ 25,781 $ 28,219 $ 26,746
Earnings (loss) before income taxes.......... (101) (.4)% (500) (1.9)% 878 3.1% 1,232 4.6%
Income taxes (benefit)....................... (39) (38.6)% (49) (9.8)% 305 34.7% 602 48.9%
Net earnings (loss).......................... (62) (.2)% (451) (1.8)% 573 2.0% 630 2.4%
Earnings (loss) per share.................... $ (.02) $ (.16) $ .20 $ .22
EPS -- last 12 months........................ $ .66 $ .35 $ .34 $ .24
Stock price range............................ $7 5/8-6 1/4 $7 7/8-6 1/2 $8 7/8-5 1/2 $8 5/8-7 3/4
- ------------------------------------------------------------------------------------------------------------------------------

<CAPTION>
(in thousands, except per share data and percentages)
QUARTER ENDED FULL YR.
- -----------------------------------------------------
<S> <C> <C>
Fiscal 1998:
Net revenues................................. $ 135,647
Earnings (loss) before income taxes.......... 2,137 1.6%
Income taxes (benefit)....................... 843 39.4%
Net earnings (loss).......................... 1,294 1.0%
Earnings (loss) per share.................... $ .45
EPS -- last 12 months........................ $ .45
Stock price range............................ $8 5/8-5 1/2
- -----------------------------------------------------
Fiscal 1997:
Net revenues................................. $ 119,516
Earnings (loss) before income taxes.......... 2,004 1.7%
Income taxes (benefit)....................... 1,106 55.2%
Net earnings (loss).......................... 898 .8%
Earnings (loss) per share.................... $ .31
EPS -- last 12 months........................ $ .31
Stock price range............................ $8 -6 3/8
- -----------------------------------------------------
Fiscal 1996:
Net revenues................................. $ 106,515
Earnings (loss) before income taxes.......... 1,509 1.4%
Income taxes (benefit)....................... 819 54.3%
Net earnings (loss).......................... 690 .6%
Earnings (loss) per share.................... $ .24
EPS -- last 12 months........................ $ .24
Stock price range............................ $8 7/8-5 1/2
- -----------------------------------------------------
</TABLE>

The percentages indicate the pre-tax margin (earnings before income taxes
/net revenues), the effective tax rate (provision for income taxes /earnings
before taxes) and after tax margin (net earnings /net revenues).

F-33
<PAGE> 70

Appendix 1

January 24, 2000

PERSONAL AND CONFIDENTIAL

Board of Directors
C.H. Heist Corp.
810 North Belcher Road
Clearwater, FL 33765

Ladies and Gentlemen:

You have requested our opinion as to the fairness, from a financial point
of view, to the shareholders of C.H. Heist Corp. (the "Company") of the
Consideration (as defined below) to be received by the Company pursuant to the
Purchase Agreement dated as of January 21, 2000 (the "Agreement") by and between
the Company and Onyx Industrial Services, Inc. ("Onyx").

Pursuant to the Agreement, and subject to the terms and conditions set
forth therein, Onyx will acquire (i) all of the assets of and assume certain
current liabilities associated with the Company's U.S. Industrial Maintenance
Segment and (ii) the issued and outstanding shares of common stock of C.H. Heist
Ltd. (together, the "Industrial Maintenance Segment") for an aggregate purchase
price of $20 million, payable in cash (the "Consideration").

McDonald Investments Inc., as part of its investment banking business, is
customarily engaged in the valuation of businesses and their securities in
connection with mergers and acquisitions, negotiated underwritings, competitive
biddings, secondary distributions of listed and unlisted securities, private
placements and valuations for estate, corporate and other purposes.

In connection with rendering this opinion, we have reviewed and analyzed,
among other things, the following: (i) the Agreement, including the exhibits and
schedules thereto; (ii) certain publicly available information concerning the
Company, including Annual Reports on Form 10-K of the Company for the years
ended December 31, 1995, December 29, 1996, December 28, 1997 and December 27,
1998 and the Quarterly Reports on Form 10-Q of the Company for the quarters
ended September 27, 1998, March 28, 1999, June 27, 1999 and September 26, 1999;
(iii) certain other internal information, primarily financial in nature,
including projections, concerning the business and operations of the Industrial
Maintenance Segment furnished to us by management for the purposes of our
analysis; (iv) certain publicly available information with respect to certain
other companies that we believe to be comparable to the Industrial Maintenance
Segment and the trading markets for certain of such other companies' securities;
and (v) certain publicly available information concerning the nature and terms
of certain other transactions that we consider relevant to our inquiry. We have
also met with certain officers and employees of the Company and the Industrial
Maintenance Segment to discuss the business and prospects of the Industrial
Maintenance Segment, as well as other matters we believe relevant to our
inquiry.

In our review and analysis and in arriving at our opinion, we have assumed
and relied upon the accuracy and completeness of all of the financial and other
information provided us or publicly available and have assumed and relied upon
the representations and warranties of the Company and Onyx contained in the
Agreement. We have not been engaged to, and have not independently attempted to,
verify any of such information. We have also relied upon the management of the
Company as to the reasonableness and achievability of the financial and
operating projections (and the assumptions and bases thereof) provided to us
and, with your consent, we have assumed that such projections reflect the best
currently available estimates and judgments of the Company's management. We have
not been engaged to assess the reasonableness or achievability of such
projections or the assumptions on which they were based and express no view as
to such projections or assumptions. In addition, we have not conducted a
physical inspection or appraisal of any of the assets, properties or facilities
of the Industrial Maintenance Segment nor have we been furnished with any such
evaluation or appraisal. We have also assumed that the conditions to the
transaction as set forth in the Agreement would be satisfied and that the
transaction would be consummated on a timely basis in the manner contemplated by
the Agreement.
<PAGE> 71
C.H. Heist Board of Directors
January 24, 2000
Page 2 of 2

It should be noted that this opinion is based on economic and market
conditions and other circumstances existing on, and information made available
as of, the date hereof and does not address any matters subsequent to such date.
In addition, our opinion is, in any event, limited to the fairness, as of the
date hereof, from a financial point of view, of the Consideration and does not
address the Company's underlying business decision to effect the transactions
contemplated by the Agreement or any other terms thereof.

We have acted as financial advisor to the Company in connection with the
transactions contemplated by the Agreement and will receive from the Company a
fee for our services, a significant portion of which is contingent upon the
consummation of the transactions contemplated thereby, as well as the Company's
agreement to indemnify us under certain circumstances. We will also receive a
fee for rendering this opinion.

In the ordinary course of our business, we may actively trade securities of
the Company and Vivendi, Onyx's ultimate owner, for our own account and for the
accounts of customers and, accordingly, may at any time hold a long or short
position in such securities.

It is understood that this opinion is directed to the Board of Directors of
the Company and may not be disclosed, summarized, excerpted from or otherwise
publicly referred to without our prior written consent. Our opinion does not
constitute a recommendation to any stockholder of the Company as to how such
shareholder should vote at the stockholders' meeting held in connection with
this Agreement.

Based upon and subject to the foregoing and such other matters as we
consider relevant, it is our opinion that as of the date hereof, the
Consideration is fair, from a financial point of view, to the shareholders of
the Company.

Very truly yours,

McDONALD INVESTMENTS INC.
<PAGE> 72

Appendix 2

PROCEDURE FOR DISSENTERS' RIGHTS

SECTION 623 OF THE NEW YORK
BUSINESS CORPORATION LAW

SECTION 623 PROCEDURE TO ENFORCE SHAREHOLDER'S RIGHT TO RECEIVE PAYMENT FOR
SHARES.

(a) A shareholder intending to enforce his right under a section of this
chapter to receive payment for his shares if the proposed corporate action
referred to therein is taken shall file with the corporation, before the meeting
of shareholders at which the action is submitted to a vote, or at such meeting
but before the vote, written objection to the action. The objection shall
include a notice of his election to dissent, his name and residence address, the
number and classes of shares as to which he dissents and a demand for payment of
the fair value of his shares if the action is taken. Such objection is not
required from any shareholder to whom the corporation did not give notice of
such meeting in accordance with this chapter or where the proposed action is
authorized by written consent of shareholders without a meeting.

(b) Within ten days after the shareholders' authorization date, which term
as used in this section means the date on which the shareholders' vote
authorizing such action was taken, or the date on which such consent without a
meeting was obtained from the requisite shareholders, the corporation shall give
written notice of such authorization or consent by registered mail to each
shareholder who filed written objection or from whom written objection was not
required, excepting any shareholder who voted for or consented in writing to the
proposed action and who thereby is deemed to have elected not to enforce his
right to receive payment for his shares.

(c) Within twenty days after the giving of notice to him, any shareholder
from whom written objection was not required and who elects to dissent shall
file with the corporation a written notice of such election, stating his name
and residence address, the number and classes of shares as to which he dissents
and a demand for payment of the fair value of his shares. Any shareholder who
elects to dissent from a merger under section 905 (Merger of subsidiary
corporation) or paragraph (c) of section 907 (Merger or consolidation of
domestic and foreign corporations) or from a share exchange under paragraph (g)
of section 913 (Share exchanges) shall file a written notice of such election to
dissent within twenty days after the giving to him of a copy of the plan of
merger or exchange or an outline of the material features thereof under section
905 or 913.

(d) A shareholder may not dissent as to less than all of the shares, as to
which he has a right to dissent, held by him of record, that he owns
beneficially. A nominee or fiduciary may not dissent on behalf of any beneficial
owner as to less than all of the shares of such owner, as to which such nominee
or fiduciary has a right to dissent, held of record by such nominee or
fiduciary.

(e) Upon consummation of the corporate action, the shareholder shall cease
to have any of the rights of a shareholder except the right to be paid the fair
value of his shares and any other rights under this section. A notice of
election may be withdrawn by the shareholder at any time prior to his acceptance
in writing of an offer made by the corporation, as provided in paragraph (g),
but in no case later than sixty days from the date of consummation of the
corporate action except that if the corporation fails to make a timely offer, as
provided in paragraph (g), the time for withdrawing a notice of election shall
be extended until sixty days from the date an offer is made. Upon expiration of
such time, withdrawal of a notice of election shall require the written consent
of the corporation. In order to be effective, withdrawal of a notice of election
must be accompanied by the return to the corporation of any advance payment made
to the shareholder as provided in paragraph (g). If a notice of election is
withdrawn, or the corporate action is rescinded, or a court shall determine that
the shareholder is not entitled to receive payment for his shares, or the
shareholder shall otherwise lose his dissenters' rights, he shall not have the
right to receive payment for his shares and he shall be reinstated to all his
rights as a shareholder as of the consummation of the corporate action,
including any intervening preemptive rights and the right to
<PAGE> 73

payment of any intervening dividend or other distribution or, if any such rights
have expired or any such dividend or distribution other than in cash has been
completed, in lieu thereof, at the election of the corporation, the fair value
thereof in cash as determined by the board as of the time of such expiration or
completion, but without prejudice otherwise to any corporate proceedings that
may have been taken in the interim.

(f) At the time of filing the notice of election to dissent or within one
month thereafter the shareholder of shares represented by certificates shall
submit the certificates representing his shares to the corporation, or to its
transfer agent, which shall forthwith note conspicuously thereon that a notice
of election has been filed and shall return the certificates to the shareholder
or other person who submitted them on his behalf. Any shareholder of shares
represented by certificates who fails to submit his certificates for such
notation as herein specified shall, at the option of the corporation exercised
by written notice to him within forty-five days from the date of filing of such
notice of election to dissent, lose his dissenter's rights unless a court, for
good cause shown, shall otherwise direct. Upon transfer of a certificate bearing
such notation, each new certificate issued therefor shall bear a similar
notation together with the name of the original dissenting holder of the shares
and a transferee shall acquire no rights in the corporation except those which
the original dissenting shareholder had at the time of transfer.

(g) Within fifteen days after the expiration of the period within which
shareholders may file their notices of election to dissent, or within fifteen
days after the proposed corporate action is consummated, whichever is later (but
in no case later than ninety days from the shareholders' authorization date),
the corporation or, in the case of a merger or consolidation, the surviving or
new corporation, shall make a written offer by registered mail to each
shareholder who has filed such notice of election to pay for his shares at a
specified price which the corporation considers to be their fair value. Such
offer shall be accompanied by a statement setting forth the aggregate number of
shares with respect to which notices of election to dissent have been received
and the aggregate number of holders of such shares. If the corporate action has
been consummated, such offer shall also be accompanied by (1) advance payment to
each such shareholder who has submitted the certificates representing his shares
to the corporation, as provided in paragraph (f), of an amount equal to eighty
percent of the amount of such offer, or (2) as to each shareholder who has not
yet submitted his certificates a statement that advance payment to him of an
amount equal to eighty percent of the amount of such offer will be made by the
corporation promptly upon submission of his certificates. If the corporate
action has not been consummated at the time of the making of the offer, such
advance payment or statement as to advance payment shall be sent to each
shareholder entitled thereto forthwith upon consummation of the corporate
action. Every advance payment or statement as to advance payment shall include
advice to the shareholder to the effect that acceptance of such payment does-not
constitute a waiver of any dissenters' rights. If the corporate action has not
been consummated upon the expiration of the ninety day period after the
shareholders' authorization date, the offer may be conditioned upon the
consummation of such action. Such offer shall be made at the same price per
share to all dissenting shareholders of the same class, or if divided into
series, of the same series and shall be accompanied by a balance sheet of the
corporation whose shares the dissenting shareholder holds as of the latest
available date, which shall not be earlier than twelve months before the making
of such offer, and a profit and loss statement or statements for not less than a
twelve month period ended on the date of such balance sheet or, if the
corporation was not in existence throughout such twelve month period, for the
portion thereof during which it was in existence. Notwithstanding the foregoing,
the corporation shall not be required to furnish a balance sheet or profit and
loss statement or statements to any shareholder to whom such balance sheet or
profit and loss statement or statements were previously furnished, nor if in
connection with obtaining the shareholders' authorization for or consent to the
proposed corporate action the shareholders were furnished with a proxy or
information statement, which included financial statements, pursuant to
Regulation 14A or Regulation 14C of the United States Securities and Exchange
Commission. If within thirty days after the making of such offer, the
corporation making the offer and any shareholder agree upon the price to be paid
for his shares, payment therefor shall be made within sixty days after the
making of such offer or the consummation of the proposed corporate action,
whichever is later, upon the surrender of the certificates for any such shares
represented by certificates.

2
<PAGE> 74

(h) The following procedure shall apply if the corporation fails to make
such offer within such period of fifteen days, or if it makes the offer and any
dissenting shareholder or shareholders fail to agree with it within the period
of thirty days thereafter upon the price to be paid for their shares:

(1) The corporation shall, within twenty days after the expiration of
whichever is applicable of the two periods last mentioned, institute a
special proceeding in the supreme court in the judicial district in which
the office of the corporation is located to determine the rights of
dissenting shareholders and to fix the fair value of their shares. If, in
the case of merger or consolidation, the surviving or new corporation is a
foreign corporation without an office in this state, such proceeding shall
be brought in the county where the office of the domestic corporation,
whose shares are to be valued, was located.

(2) If the corporation fails to institute such proceeding within such
period of twenty days, any dissenting shareholder may institute such
proceeding for the same purpose not later than thirty days after the
expiration of such twenty day period. If such proceeding is not instituted
within such thirty day period, all dissenter's rights shall be lost unless
the supreme court, for good cause shown, shall otherwise direct.

(3) All dissenting shareholders, excepting those who, as provided in
paragraph (g), have agreed with the corporation upon the price to be paid
for their shares, shall be made parties to such proceeding, which shall
have the effect of an action quasi in rem against their shares. The
corporation shall serve a copy of the petition in such proceeding upon each
dissenting shareholder who is a resident of this state in the manner
provided by law for the service of a summons, and upon each nonresident
dissenting shareholder either by registered mail and publication, or in
such other manner as is permitted by law. The jurisdiction of the court
shall be plenary and exclusive.

(4) The court shall determine whether each dissenting shareholder, as
to whom the corporation requests the court to make such determination, is
entitled to receive payment for his shares. If the corporation does not
request any such determination or if the court finds that any dissenting
shareholder is so entitled, it shall proceed to fix the value of the
shares, which, for the purposes of this section, shall be the fair value as
of the close of business on the day prior to the shareholders'
authorization date. In fixing the fair value of the shares, the court shall
consider the nature of the transaction giving rise to the shareholder's
right to receive payment for shares and its effects on the corporation and
its shareholders, the concepts and methods then customary in the relevant
securities and financial markets for determining fair value of shares of a
corporation engaging in a similar transaction under comparable
circumstances and all other relevant factors. The court shall determine the
fair value of the shares without a jury and without referral to an
appraiser or referee. Upon application by the corporation or by any
shareholder who is a party to the proceeding, the court may, in its
discretion, permit pretrial disclosure, including, but not limited to,
disclosure of any expert's reports relating to the fair value of the shares
whether or not intended for use at the trial in the proceeding and
notwithstanding subdivision (d) of section 3101 of the civil practice law
and rules.

(5) The final order in the proceeding shall be entered against the
corporation in favor of each dissenting shareholder who is a party to the
proceeding and is entitled thereto for the value of his shares so
determined.

(6) The final order shall include an allowance for interest at such
rate as the court finds to be equitable, from the date the corporate action
was consummated to the date of payment. In determining the rate of
interest, the court shall consider all relevant factors, including the rate
of interest which the corporation would have had to pay to borrow money
during the pendency of the proceeding. If the court finds that the refusal
of any shareholder to accept the corporate offer of payment for his shares
was arbitrary, vexatious or otherwise not in good faith, no interest shall
be allowed to him.

(7) Each party to such proceeding shall bear its own costs and
expenses, including the fees and expenses of its counsel and of any experts
employed by it. Notwithstanding the foregoing, the court may, in its
discretion, apportion and assess all or any part of the costs, expenses and
fees incurred by the corporation against any or all of the dissenting
shareholders who are parties to the proceeding, including any who have
withdrawn their notices of election as provided in paragraph (e), if the
court finds that their refusal to accept the corporate offer was arbitrary,
vexatious or otherwise not in good faith. The court may, in its discretion,

3
<PAGE> 75

apportion and assess all or any part of the costs, expenses and fees
incurred by any or all of the dissenting shareholders who are parties to
the proceeding against the corporation if the court finds any of the
following: (A) that the fair value of the shares as determined materially
exceeds the amount which the corporation offered to pay; (B) that no offer
or required advance payment was made by the corporation; (C) that the
corporation failed to institute the special proceeding within the period
specified therefor; or (D) that the action of the corporation in complying
with its obligations as provided in this section was arbitrary, vexatious
or otherwise not in good faith. In making any determination as provided in
clause (A), the court may consider the dollar amount or the percentage, or
both, by which the fair value of the shares as determined exceeds the
corporate offer.

(8) Within sixty days after final determination of the proceeding, the
corporation shall pay to each dissenting shareholder the amount found to be
due him, upon surrender of the certificates for any such shares represented
by certificates.

(i) Shares acquired by the corporation upon the payment of the agreed value
therefor or of the amount due under the final order, as provided in this
section, shall become treasury shares or be canceled as provided in section 515
(Reacquired shares), except that, in the case of a merger or consolidation, they
may be held and disposed of as the plan of merger or consolidation may otherwise
provide.

(j) No payment shall be made to a dissenting shareholder under this section
at a time when the corporation is insolvent or when such payment would make it
insolvent. In such event, the dissenting shareholder shall, at his option:

(1) Withdraw his notice of election, which shall in such event be
deemed withdrawn with the written consent of the corporation; or

(2) Retain his status as a claimant against the corporation and, if it
is liquidated, be subordinated to the rights of creditors of the
corporation, but have rights superior to the non-dissenting shareholders,
and if it is not liquidated, retain his right to be paid for his shares,
which right the corporation shall be obliged to satisfy when the
restrictions of this paragraph do not apply.

(3) The dissenting shareholder shall exercise such option under
subparagraph (1) or (2) by written notice filed with the corporation within
thirty days after the corporation has given him written notice that payment
for his shares cannot be made because of the restrictions of this
paragraph. If the dissenting shareholder fails to exercise such option as
provided, the corporation shall exercise the option by written notice given
to him within twenty days after the expiration of such period of thirty
days.

(k) The enforcement by a shareholder of his right to receive payment for
his shares in the manner provided herein shall exclude the enforcement by such
shareholder of any other right to which he might otherwise be entitled by virtue
of share ownership, except as provided in paragraph (e), and except that this
section shall not exclude the right of such shareholder to bring or maintain an
appropriate action to obtain relief on the ground that such corporate action
will be or is unlawful or fraudulent as to him.

(l) Except as otherwise expressly provided in this section, any notice to
be given by a corporation to a shareholder under this section shall be given in
the manner provided in section 605 (Notice of meetings of shareholders).

(m) This section shall not apply to foreign corporations except as provided
in subparagraph (e)(2) of section 907 (Merger or consolidation of domestic and
foreign corporations).

4
<PAGE> 76

SECTION 910 OF THE NEW YORK
BUSINESS CORPORATION LAW

SECTION 910 RIGHT OF SHAREHOLDER TO RECEIVE PAYMENT FOR SHARES UPON MERGER
OR CONSOLIDATION, OR SALE, LEASE, EXCHANGE OR OTHER DISPOSITION OF ASSETS, OR
SHARE EXCHANGE

(a) A shareholder of a domestic corporation shall, subject to and by
complying with section 623 (Procedure to enforce shareholder's right to receive
payment for shares), have the right to receive payment of the fair value of his
shares and the other rights and benefits provided by such section, in the
following cases:

(1) Any shareholder entitled to vote who does not assent to the taking
of an action specified in clauses (A), (B) and (C).

(A) Any plan of merger or consolidation to which the corporation is
a party; except that the right to receive payment of the fair value of
his shares shall not be available:

(i) To a shareholder of the parent corporation in a merger
authorized by section 905 (Merger of parent and subsidiary
corporations), or paragraph (c) of section 907 (Merger or
consolidation of domestic and foreign corporations); or

(ii) To a shareholder of the surviving corporation in a merger
authorized by this article, other than a merger specified in
subclause (i), unless such merger effects one or more of the changes
specified in subparagraph (b) (6) of section 806 (Provisions as to
certain proceedings) in the rights of the shares held by such
shareholder; or

(iii) Notwithstanding subclause (ii) of this clause, to a
shareholder for the shares of any class or series of stock, which
shares or depository receipts in respect thereof, at the record date
fixed to determine the shareholders entitled to receive notice of the
meeting of shareholders to vote upon the plan of merger or
consolidation, were listed on a national securities exchange or
designated as a national market system security on an interdealer
quotation system by the National Association of Securities Dealers,
Inc.

(B) Any sale, lease, exchange or other disposition of all or
substantially all of the assets of a corporation which requires
shareholder approval under section 909 (Sale, lease, exchange or other
disposition of assets) other than a transaction wholly for cash where
the shareholders' approval thereof is conditioned upon the dissolution
of the corporation and the distribution of substantially all of its net
assets to the shareholders in accordance with their respective interests
within one year after the date of such transaction.

(C) Any share exchange authorized by section 913 in which the
corporation is participating as a subject corporation; except that the
right to receive payment of the fair value of his shares shall not be
available to a shareholder whose shares have not been acquired in the
exchange or to a shareholder for the shares of any class or series of
stock, which shares or depository receipt in respect thereof, at the
record date fixed to determine the shareholders entitled to receive
notice of the meeting of shareholders to vote upon the plan of exchange,
were listed on a national securities exchange or designated as a
national market system security on an interdealer quotation system by
the National Association of Securities Dealers, Inc.

(2) Any shareholder of the subsidiary corporation in a merger
authorized by section 905 or paragraph (c) of section 907, or in a share
exchange authorized by paragraph (g) of section 913, who files with the
corporation a written notice of election to dissent as provided in
paragraph (c) of section 623.

Any shareholder, not entitled to vote with respect to a plan of merger or
consolidation to which the corporation is a party, whose shares will be
cancelled or exchanged in the merger or consolidation for cash or other
consideration other than shares of the surviving or consolidated corporation or
another corporation.

5
<PAGE> 77

Appendix 3

CERTIFICATE OF INCORPORATION
OF
ABLEST INC.

ARTICLE FIRST

The name of the corporation is Ablest Inc.

ARTICLE SECOND

The name and address of the corporation's registered office in the State of
Delaware is The Corporation Trust Company, Corporation Trust Center, 1209 Orange
Street, New Castle County, Wilmington, Delaware.

ARTICLE THIRD

The purpose of the corporation is to engage in any lawful act or activity
for which corporations may be organized under the General Corporation Law of the
State of Delaware.

ARTICLE FOURTH

The total number of shares which the corporation shall have authority to
issue shall be 8,000,000, divided into two classes, namely: 500,000 shares of
Preferred Stock, par value $.05 per share ("Preferred Stock"), and 7,500,000
shares of Common Stock, par value $.05 per share ("Common Stock").

The designation, relative rights, preferences and limitations of the shares
of each class and the authority of the Board of Directors of the corporation to
establish and to designate series of the Preferred Stock and to fix the
variations in the relative rights, preferences and limitations as between such
series, and the relative rights, preferences and limitations of each such
series, shall be as follows:

1. PREFERRED STOCK.

(a) The Board of Directors of the corporation is authorized, subject to the
limitations prescribed by law and the provisions of this Section 1 of this
Article FOURTH, to provide for the issuance of the Preferred Stock in series, to
establish or change the number of shares to be included in each such series and
to fix the designation, powers, rights, and preferences, and the qualifications,
restrictions or limitations, of the shares of each such series. The authority of
the Board of Directors of the corporation with respect to each series shall
include, but not be limited to, determination of the following:

(i) the number of shares constituting that series and the distinctive
designation of that series;

(ii) the dividend rate or rates on the shares of that series and/or
the method of determining such rate or rates, and whether dividends shall
be cumulative and, if so, from which date or dates;

(iii) whether and to what extent the shares of that series shall have
voting rights in addition to the voting rights provided by law, which might
include the right to elect a specified number of directors in any case or
if dividends on such series are not paid for a specified period of time;

(iv) whether the shares of that series shall be convertible into
shares of stock of any other series or class, and, if so, the terms and
conditions of such conversion, including the price or prices or the rate or
rates of conversion and the terms of adjustment thereof;

(v) whether or not the shares of that series shall be redeemable, and,
if so, the terms and conditions of such redemption, including the date or
dates upon or after which they shall be redeemable and the amount
<PAGE> 78

per share payable in case of redemption, which amount may vary under
different conditions and at different redemption dates;

(vi) the rights of the shares of that series in the event of
voluntary or involuntary liquidation, dissolution or winding up of the
corporation;

(vii) the obligation, if any, of the corporation to retire shares of
that series pursuant to a sinking fund; and

(viii) any other relative rights, preferences and limitations of the
Series.

(b) Subject to the designations, powers, rights, and preferences and the
limitations, qualifications and restrictions provided pursuant to Subsection
1(a) of this Article FOURTH, each share of Preferred Stock of a series shall be
of equal rank with each other share of Preferred Stock of such series.

(c) The number of authorized shares of Preferred Stock may be increased or
decreased (but not below the number of shares thereof then outstanding) by the
affirmative vote of the holders of a majority of the Common Stock, without a
vote of the holders of the Preferred Stock, or of any series thereof, unless a
vote of any such holders is required pursuant to the terms of the Preferred
Stock or any series thereof.

2. COMMON STOCK.

(a) DIVIDENDS. Subject to the express terms of the Preferred Stock
outstanding from time to time, such dividend or distribution as may be
determined by the Board of Directors of the corporation may from time to time be
declared and paid or made upon the Common Stock out of any source at the time
lawfully available for the payment of dividends.

(b) VOTING. Except as otherwise provided by law, each share of Common Stock
shall entitle the holder thereof to one vote in any matter which is submitted to
a vote of the holders of shares of Common Stock of the corporation.

(c) LIQUIDATION. The holders of Common Stock shall be entitled to share
ratably upon any liquidation, dissolution or winding up of the affairs of the
corporation (voluntary or involuntary) in all assets of the corporation, if any,
remaining after payment in full to the holders of Preferred Stock of the
preferential amounts, if any, to which they are entitled. Neither the
consolidation nor the merger of the corporation with or into any other
corporation or corporations, nor a reorganization of the corporation alone, nor
the sale or transfer by the corporation of all or any part of its assets, shall
be deemed to be a liquidation, dissolution or winding up of the corporation for
the purposes of this subparagraph (2)(c).

3. ISSUANCE OF CAPITAL STOCK. Shares of capital stock of the corporation
may be issued by the corporation from time to time in such amounts and
proportions and for such consideration (not less than the par value thereof in
the case of capital stock having par value) as may be fixed and determined from
time to time by the Board of Directors and as shall be permitted by law.

ARTICLE FIFTH

The business and affairs of the corporation shall be managed by or under
the direction of the Board of Directors. In addition to the powers and authority
expressly conferred upon them by statute or by the certificate of incorporation
or the by-laws of the Corporation, the directors are hereby empowered to
exercise all such powers and do all such acts and things as may be exercised or
done by the corporation.

Subject to the rights of the holders of any series of Preferred Stock to
elect additional directors under specified circumstances, the number of
directors shall be fixed from time to time exclusively by the board of directors
pursuant to a resolution adopted by a majority of the Whole Board. For purposes
of the certificate of incorporation of the corporation, the term "Whole Board"
shall mean the total number of authorized directors whether or not there exist
any vacancies in previously authorized directorships.

The directors, other than those who may be elected by the holders of any
series of Preferred Stock, or any other series or class of stock as set forth in
the certificate of incorporation of the corporation, shall be elected
2
<PAGE> 79

annually by the holders of common stock, and each director shall hold office
until his or her successor shall have been duly elected and qualified.

Advance notice of stockholder nominations for the election of directors and
of business to be brought by stockholders before any meeting of the stockholders
of the corporation shall be given in the manner provided in the by-laws of the
corporation.

The name and mailing address of the incorporator is as follows:

<TABLE>
<CAPTION>
NAME MAILING ADDRESS
- ---- ---------------
<S> <C>
William Appleton, Esq. Baker & Hastetler LLP
312 Walnut Street, Suite 2650
Cincinnati, Ohio 45202
</TABLE>

ARTICLE SIXTH

The corporation is to have perpetual existence.

ARTICLE SEVENTH

In furtherance and not in limitation of the power conferred by statute, the
Board of Directors of the corporation is expressly authorized to adopt, amend or
repeal the by-laws of the corporation. Any adoption, amendment or repeal of the
by-laws of the corporation by the board of directors shall require the approval
of a majority of the directors. The stockholders may adopt, amend or repeal
by-laws of the corporation only upon the affirmative vote of the holders of not
less than 66 2/3% of the total number of votes entitled to be cast generally in
the election of directors.

ARTICLE EIGHTH

Any action required or permitted to be taken by the holders of any class or
series of stock of the corporation entitled to vote generally in the election of
directors may be taken only by vote at an annual or special meeting at which
such action may be taken and may not be taken by written consent.

ARTICLE NINTH

1. Directors' Liability. To the fullest extent permitted by the General
Corporation Law of the State of Delaware as the same exists or may hereafter be
amended, a director of the corporation shall not be personally liable to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director. Any repeal or modification of this Article NINTH by the
stockholders of the corporation shall not adversely affect any right or
protection of a director of the corporation existing at the time of such repeal
or modification.

2. Right to Indemnification. Each person who was or is made a party or is
threatened to be made a party to or is otherwise involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she is or was a
director or officer of the corporation or is or was serving at the request of
the corporation as a director, officer, employee, member or agent of another
corporation (including a subsidiary of the corporation) or of a partnership,
limited liability company, joint venture, trust or other enterprise, including
service with respect to employee benefit plans (hereinafter an "indemnitee"),
whether the basis of such proceeding is alleged action in an official capacity
as such a director, officer, employee, trustee, member or agent or in any other
capacity while serving as such, shall be indemnified and held harmless by the
corporation to the fullest extent authorized by the General Corporation of the
State of Delaware, as the same exists or may hereafter be amended (but, in the
case of any such amendment, only to the extent that such amendment permits the
corporation to provide broader indemnification rights than such law permitted
the corporation to provide prior to such amendment), against all expense,
liability and loss (including, without limitation, attorneys' fees, judgments,
fines, ERISA excise taxes or penalties, and amounts paid in

3
<PAGE> 80

settlement) reasonably incurred or suffered by such indemnitee in connection
therewith, and such indemnification shall continue as to an indemnitee who has
ceased to be such a director, officer, employee, trustee, member or agent and
shall inure to the benefit of the indemnitee's heirs, executors and
administrators; provided, however, that, except as provided in section 3 of this
Article NINTH with respect to proceedings to enforce rights to indemnification,
the corporation shall indemnify any such indemnitee in connection with a
proceeding (or part thereof) initiated by such indemnitee only if such
proceeding (or part thereof) was authorized by the Board of Directors of the
corporation. The right to indemnification conferred in this section 2 shall be a
contract right and shall include the right to be paid by the corporation the
expenses incurred in defending any such proceeding in advance of its final
disposition (hereinafter an "advancement of expenses'); provided, however, that
if the General Corporation Law of the State of Delaware requires, an advancement
of expenses incurred by an indemnitee in his or her capacity as a director or
officer (and not in any other capacity in which service was or is rendered by
such indemnitee, including, without limitation, service to an employee benefit
plan) shall be made only upon delivery to the corporation of an undertaking, by
or on behalf of such indemnitee, to repay all amounts so advanced if it shall
ultimately be determined by final judicial decision from which there is no
further right to appeal that such indemnitee is not entitled to be indemnified
for such expenses under this section or otherwise (hereinafter an
"undertaking").

3. Right of Indemnitee to Bring Suit. If a claim for indemnification
pursuant to this Article NINTH is not paid in full by the corporation within
sixty days after a written claim has been received by the Corporation, except in
the case of a claim for an advancement of expenses, in which case the applicable
period shall be twenty days, the indemnitee may at any time thereafter bring
suit against the corporation to recover the unpaid amount of the claim. If
successful in whole or in part in any such suit or in a suit brought by the
Corporation to recover an advancement of expenses pursuant to the terms of an
undertaking, the indemnitee shall be entitled to be paid also the expense of
prosecuting or defending such suit. In any suit brought by the indemnitee to
enforce a right to indemnification hereunder (but not in a suit brought by the
indemnitee to enforce a right to an advancement of expenses), it shall be a
defense that the indemnitee has not met the applicable standard of conduct set
forth in the General Corporation Law of the State of Delaware. Similarly, in any
suit by the corporation to recover an advancement of expenses pursuant to the
terms of an undertaking, the corporation shall be entitled to recover such
expenses upon a final adjudication that the indemnitee has not met the
applicable standard of conduct set forth in the General Corporation Law of the
State of Delaware. Neither the failure of the corporation (including its Board
of Directors, independent legal counsel, or its stockholders) to have made a
determination prior to the commencement of such suit that indemnification of the
indemnitee is proper in the circumstances because the indemnitee has met the
applicable standard of conduct set forth in the General Corporation Law of the
State of Delaware nor an actual determination by the corporation (including its
Board of Directors, independent legal counsel, or its stockholders) that the
indemnitee has not met such applicable standard of conduct shall create a
presumption that the indemnitee has not met the applicable standard of conduct
or, in the case of such suit brought by the indemnitee, be a defense to such
suit. In any suit brought by the indemnitee to enforce a right hereunder, or by
the corporation to recover an advancement of expenses pursuant to the terms of
an undertaking, the burden of proving that the indemnitee is not entitled to be
indemnified or entitled to such advancement of expenses under this Article NINTH
or otherwise shall be on the corporation.

4. Non-Exclusivity of Rights. The rights to indemnification and advancement
of expenses conferred in this Article NINTH shall not be exclusive of any other
right that any person may have or hereafter acquire under any statute,
certificate of incorporation, by-law, agreement, vote of stockholders or
disinterested directors, or otherwise.

5. Insurance. The corporation may purchase and maintain insurance, at its
expense, to protect itself and any director, officer, employee, trustee, member
or agent of the corporation or another corporation, partnership, limited
liability company, joint venture, trust or other enterprise against any expense,
liability or loss, whether or not the corporation would have the power to
indemnify such person against such expense, liability or loss under the General
Corporation Law of the State of Delaware.

6. Indemnity Contracts. The corporation may enter into contracts from time
to time with such of its directors, officers, agents or employees and providing
for such indemnification, insurance, and advancement of expenses as the Board of
Directors determines to be appropriate.
4
<PAGE> 81

ARTICLE TENTH

The Board of Directors of the corporation, when evaluating any offer of
another party to make a tender or exchange offer for any equity security of the
corporation, to merge or consolidate the corporation with another corporation or
to purchase or otherwise acquire all or substantially all of the assets of the
corporation, shall, in connection with the exercise of its judgment in
determining what is in the best interests of the corporation and its
stockholders, give due consideration to the effect that such a transaction would
have on the integrity, character and quality of the corporation's operations,
all other relevant factors, including, without limitation, long-term as well as
short-term interests of the corporation and stockholders (including the
possibility that these interests may be best served by the continued
independence of the corporation), and the social, legal, and economic effects on
the employees, customers, suppliers, and creditors of the corporation and its
subsidiaries, on the communities and geographical areas in which the corporation
and its subsidiaries operate or are located, and on any of the businesses and
properties of the corporation or any of its subsidiaries, as well as such other
factors as the directors deem relevant.

ARTICLE ELEVENTH

Subject to the rights of the holders of any series of Preferred Stock then
outstanding, any directors, or the entire board of directors, may be removed
from office at any time, but only for cause and only by the affirmative vote of
the holders of at least two-thirds of the voting power of all of the
then-outstanding shares of capital stock of the corporation entitled to vote
generally in the election of directors, voting together as a single class.

ARTICLE TWELFTH

The corporation reserves the right to amend, alter, change or repeal any
provision contained in this Amended and Restated Certificate of Incorporation in
the manner now or hereafter prescribed herein and by the laws of the State of
Delaware, and all rights conferred upon stockholders herein are granted subject
to this reservation. Notwithstanding any other provision herein or any provision
of law that might otherwise permit a lesser vote or no vote, but in addition to
any vote of the holders of any class or series of the stock of the Corporation
required by law or by the Certificate of Incorporation, the affirmative vote of
the holders of at least two-thirds of the voting power of all of the
then-outstanding shares of the capital stock of the Corporation entitled to vote
generally in the election of directors, voting together as a single class, shall
be required to amend or repeal Articles FIFTH, SEVENTH, EIGHTH, NINTH, TENTH,
ELEVENTH AND TWELFTH.

5
<PAGE> 82

Appendix 4

BYLAWS OF ABLEST INC.
A DELAWARE CORPORATION

ARTICLE I
OFFICES

Section 1. Registered Office; Registered Agent. The registered office in
the State of Delaware shall be located at Corporation Trust Center, 1209 Orange
Street, Wilmington, Delaware, 19801. The name of the corporation's registered
agent at such address shall be The Corporation Trust Company.

Section 2. Other Offices. The corporation may also have offices at such
other places both within and without the State of Delaware as the board of
directors of the corporation (the "Board of Directors") may from time to time
determine or the business of the corporation may require.

ARTICLE II
STOCKHOLDERS

Section 1. Meetings of Stockholders. All meetings of the stockholders for
the election of directors shall be held at the registered office of the
corporation in Delaware, or at such other location within or without the State
of Delaware as may be set forth in the notice of call. Meetings of stockholders
for any other purpose may be held at such time and place, within or without the
State of Delaware, as shall be stated in the notice of call.

Section 2. Annual Meeting. The annual meeting of stockholders shall be held
each year at a time and place determined by the Board of Directors. At the
annual meeting, the stockholders shall elect directors by a plurality vote in
accordance with the corporation's Certificate of Incorporation and transact such
other business as may properly be brought before the meeting.

Section 3. Notice of Annual Meetings. Written notice of the annual meeting
shall be given to each stockholder entitled to vote thereat at least ten and not
more than sixty days before the date of the meeting.

Section 4. Stockholder List. The officer who has charge of the stock ledger
of the corporation shall make, at least ten days before every meeting of the
stockholders, a complete list of the stockholders entitled to vote at said
meeting, arranged in alphabetical order, showing the address of and the number
of shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten days prior to the
meeting, either at a place within the city where the meeting is to be held and
which place shall be specified in the notice of the meeting, or, if not
specified, at the place where said meeting is to be held. The list shall be
produced subject to the inspection of any stockholder who may be present.

Section 5. Special Meetings. Special meetings of the stockholders, for any
purpose or purposes, unless otherwise prescribed by the certificate of
incorporation, may only be called by the Chairman of the Board or the President
or by the Board of Directors acting pursuant to a resolution adopted by a
majority of the total number of authorized directors whether or not there exist
any vacancies in previously authorized directorships. Such request shall state
the purpose or purposes of the proposed meeting.

Section 6. Notice of Special Meetings. Written notice of a special meeting
of stockholders, stating the date, time, place and purpose or purposes thereof,
shall be given to each stockholder entitled to vote thereat, at least ten and
not more than sixty days before the date fixed for the meeting.

Section 7. Business Transacted At Special Meetings. Business transacted at
any special meeting of stockholders shall be limited to the purposes stated in
the notice.
<PAGE> 83

Section 8. Appointment of Inspectors of Election. The Board of Directors
shall, in advance of sending to the stockholders any notice of a meeting of the
holders of any class of shares, appoint one or more inspectors of election
("inspectors") to act at such meeting or any adjournment or postponement thereof
and make a written report thereof. The Board of Directors may designate one or
more persons as alternate inspectors to replace any inspector who fails to act.
If no inspector or alternate is so appointed or if no inspector or alternate is
able to act, the Chairman of the Board shall appoint one or more inspectors to
act at such meeting. The inspectors may be directors, officers or employees of
the corporation.

Section 9. Quorum; Adjournment. Except as otherwise required by law or the
certificate of incorporation, the holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business. If a quorum shall not be present or represented at any
meeting of the stockholders, the stockholders entitled to vote thereat, present
in person or represented by proxy, shall have the power to adjourn the meeting
to a later date without notice other than announcement at the meeting, until a
quorum shall be present or represented. If at such later date, a quorum shall be
present or represented, any business may be transacted which might have been
transacted at the meeting as originally notified. If the adjournment is for more
than thirty days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting.

Section 10. Voting Power. When a quorum is present at any meeting, the vote
of the holders of a majority of the stock having voting power present in person
or represented by proxy shall decide any question brought before such meeting,
unless the question is one upon which by express provision of the statutes or of
the certificate of incorporation a different vote is required, in which case
such express provision shall govern and control the decision of such question.

Section 11. Voting; Proxies. Except as otherwise provided by law or by the
certificate of incorporation and subject to these bylaws, each stockholder shall
at every meeting of the stockholders be entitled to one vote in person or by
proxy for each share of the capital stock having voting power held by such
stockholder, but no proxy shall be voted on after three years from its date,
unless the proxy provides for a longer period and, except where the transfer
books of the corporation have been closed or a date has been fixed as a record
date for the determination of its stockholders entitled to vote, no share of
stock shall be voted on at any election for directors which has been transferred
on the books of the corporation within twenty days next preceding such election
of directors.

Section 12. Ballots. The vote on any matter, including the election of
directors, shall be by written ballot. Each ballot shall be signed by the
stockholder voting, or by such stockholder's proxy, and shall state the number
of shares voted.

Section 13. Stock Ledger. The stock ledger of the corporation shall be the
only evidence as to who are the stockholders entitled (i) to examine the stock
ledger, any stockholder list required by these bylaws or the books of the
corporation, or (ii) to vote in person or by proxy at any meeting of
stockholders.

Section 14. Advance Notice of Stockholder-Proposed Business at Annual
Meeting. To be properly brought before an annual meeting, business must be
either (a) specified in the notice of meeting (or any supplement thereto) given
by or at the direction of the Board of Directors, (b) otherwise properly brought
before the meeting by or at the direction of the Board of Directors, or (c)
otherwise properly brought before the meeting by a stockholder. For business to
be properly brought before an annual meeting by a stockholder, the stockholder
must have given timely notice thereof in writing to the Secretary of the
corporation. To be timely, a stockholder's notice must be delivered to or mailed
and received at the principal executive offices of the corporation, not less
than ninety (90) nor more than one hundred and twenty (120) days prior to the
one year anniversary of the date of the annual meeting of the previous year. A
stockholder's notice to the Secretary shall set forth as to each matter the
stockholder proposes to bring before the annual meeting (i) a brief description
of the business desired to be brought before the annual meeting and the reasons
for conducting such business at the annual meeting, (ii) the name and address,
as they appear on the corporation's books, of the stockholder proposing such
business, (iii) the class and number of shares of the corporation that are
"beneficially owned" (as defined under Rule 13d-3 of the rules promulgated under
the Securities Exchange Act of 1934, as amended) by the stockholder, and (iv)
any
2
<PAGE> 84

material interest of the stockholder in such business. Notwithstanding anything
in these bylaws to the contrary, no business shall be conducted at an annual
meeting except in accordance with the procedures set forth in this Section 14,
provided, however, that nothing in this Section 14 shall be deemed to preclude
discussion by any stockholder of any business properly brought before the annual
meeting. The chairman of an annual meeting shall, if the facts warrant,
determine and declare to the meeting that business was not properly brought
before the meeting in accordance with the provisions of this Section 14 and if
he or she should so determine, he or she shall so declare to the meeting and any
such business not properly brought before the meeting shall not be transacted.

Section 15. Nomination of Directors; Advance Notice of Stockholder
Nominations. Only persons who are nominated in accordance with the procedures
set forth in this Section 15 shall be eligible for election as directors.
Nominations of persons for election to the Board of Directors of the corporation
at the annual meeting may be made by or at the direction of the Board of
Directors, by any nominating committee or person appointed for such purpose by
the Board of Directors, or by any stockholder of the corporation entitled to
vote for the election of directors at the meeting who complies with the notice
procedures set forth in this Section 15. Such nominations, other than those made
by, or at the direction of, or under the authority of the Board of Directors,
shall be made pursuant to timely notice in writing to the Secretary of the
corporation. To be timely, a stockholder's notice shall be delivered to or
mailed and received at the principal executive offices of the corporation not
less than ninety (90) nor more than one hundred and twenty (120) days prior to
the one year anniversary of the date of the annual meeting of the previous year.
Such stockholder's notice to the Secretary shall set forth (a) as to each person
whom the stockholder proposes to nominate for election or re-election as a
director, (i) the name, age, business address and residence address of the
person, (ii) the principal occupation or employment of the person, (iii) the
class and number of shares of capital stock of the corporation, if any, which
are beneficially owned by the person and (iv) any other information relating to
the person that is required to be disclosed in solicitations for proxies for
election of directors pursuant to Rule 14A under the Securities Exchange Act of
1934, as amended; and (b) as to the stockholder giving the notice (i) the name
and record address of the stockholder and (ii) the class and number of shares of
capital stock of the corporation which are beneficially owned by the
stockholder. The corporation may require any proposed nominee to furnish such
other information as may reasonably be required by the corporation to determine
the qualifications of such proposed nominee to serve as director of the
corporation. The chairman of the meeting shall, if the facts warrant, determine
and declare to the meeting that a nomination was not made in accordance with the
foregoing procedure and, if he or she should so determine, he or she shall so
declare to the meeting and the defective nomination shall be disregarded.

ARTICLE III
DIRECTORS

Section 1. Powers. The business of the corporation shall be managed by or
under the direction of its Board of Directors, which may exercise all such
powers of the corporation and do all such lawful acts and things as are not by
law, by the certificate of incorporation or by these bylaws directed or required
to be exercised or done by the stockholders.

Section 2. Number. Subject to the rights of the holders of any series of
Preferred Stock or any other series or class of stock as set forth in the
certificate of incorporation of the corporation to elect directors under
specified circumstances, the number of directors shall be fixed from time to
time as set forth in the corporation's Certificate of Incorporation.

Section 3. Filling of Vacancies. Vacancies and newly created directorships
may be filled by a majority of the directors then in office, though less than a
quorum, and each director so chosen shall hold office until a successor is duly
elected and qualified or his or her earlier resignation or removal. If there are
no directors in office, then an election of directors may be held in the manner
provided by the General Corporation Law of the State of Delaware. No decrease in
the number of directors constituting the Board of Directors shall shorten the
term of any incumbent director.

Section 4. Resignation. Any director may resign at any time upon written
notice to the corporation. Such written resignation shall take effect at the
time specified therein, and if no time be specified, at the time of its

3
<PAGE> 85

receipt by the Chairman of the Board or Secretary. The acceptance of a
resignation shall not be necessary to make it effective.

Section 5. Meetings of the Directors. The Board of Directors may hold
meetings, both regular and special, either within or without the State of
Delaware.

Section 6. Regular Meetings. Regular meetings, including the annual
meeting, of the Board of Directors may be held within or without the State of
Delaware at such time and at such place as shall from time to time be determined
by resolution of the Board of Directors.

Section 7. Special Meetings. Special meetings of the Board of Directors
shall be called by the Secretary or an Assistant Secretary on the request of the
Chairman of the Board, or on the request in writing of one-third of the whole
Board of Directors, stating the purpose or purposes of such meeting.

Section 8. Notice of Meetings. Notices of meetings shall be mailed to each
director, addressed to each director at such director's residence or usual place
of business, or the address where the director is known to be, not later than
three days before the day on which the meeting is to be held, or shall be sent
to either of such places by telegraph, by telecopy, by facsimile transmission or
be communicated to each director personally or by electronic mail or telephone,
not later than three hours before such meeting. Notice of any meeting of the
Board of Directors need not be given to any director who shall sign a written
waiver thereof either before or after the time stated therein for such meeting,
or who shall be present at the meeting and participate in the business
transacted thereat; and any and all business transacted at any meeting of the
Board of Directors shall be fully effective without any notice thereof having
been given, if all the members shall be present thereat. Unless limited by law,
the certificate of incorporation, the bylaws, or by the terms of the notice
thereof, any and all business may be transacted at any meeting without the
notice thereof having so specially enumerated the matters to be acted upon.

Section 9. Organization. The Chairman of the Board shall preside at all
meetings of the Board of Directors at which the Chairman of the Board is
present. If the Chairman of the Board shall be absent from any meeting of the
Board of Directors, the duties otherwise provided in this Section 9 to be
performed by the Chairman of the Board at such meeting shall be performed at
such meeting by one of the directors chosen by the members of the Board of
Directors present at such meeting. The Secretary of the corporation shall act as
the secretary at all meetings of the Board of Directors and in the Secretary's
absence a temporary secretary shall be appointed by the chairman of the meeting.

Section 10. Quorum; Voting; Adjournment. Except as otherwise required by
law or by the certificate of incorporation, at all meetings of the Board of
Directors, a majority of the whole Board of Directors shall constitute a quorum
for the transaction of business and the act of a majority of the directors
present at any meeting at which there is a quorum shall be the act of the Board
of Directors. If a quorum shall not be present at any meeting of the Board of
Directors, the directors who are present may adjourn the meeting from time to
time, without notice other than announcement at the meeting, until a quorum
shall be present.

Section 11. Action By Unanimous Written Consent. Unless otherwise
restricted by the certificate of incorporation or these bylaws, any action
required or permitted to be taken at any meeting of the Board of Directors or of
any committee thereof may be taken without a meeting, if prior to such action a
written consent thereto is signed by all members of the Board of Directors or of
such committee as the case may be, and such written consent is filed with the
minutes of proceedings of the Board of Directors or such committee.

Section 12. Participation in Meetings by Conference Telephone. Unless
otherwise restricted by the certificate of incorporation or these bylaws,
members of the Board of Directors, or any committee designated by the Board of
Directors, may participate in a meeting of the Board of Directors, or any
committee thereof, through the use of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and such participation in a meeting shall
constitute presence in person at the meeting.

Section 13. Committees of Directors. The Board of Directors may, by
resolution passed by a majority of the whole Board of Directors, designate one
or more committees, each committee to consist of two or more of the

4
<PAGE> 86

directors of the corporation, which, to the extent provided in the resolution,
shall have and may exercise the powers of the Board of Directors in the
management of the business and affairs of the corporation and may authorize the
seal of the corporation to be affixed to all papers which may require it. Such
committee or committees shall have such name or names as may be determined from
time to time by resolution adopted by the Board of Directors. The Board of
Directors may discontinue any such committee at its pleasure.

Section 14. Committee Members. Each member of any such committee shall hold
office until such member's successor is elected and has qualified, unless such
member sooner dies, resigns, or is removed. The number of directors which shall
constitute any committee shall be determined by the whole Board of Directors
from time to time. The Board of Directors may designate one or more directors as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of the committee.

Section 15. Committee Secretary. The Board of Directors may elect a
secretary of any such committee. If the Board of Directors does not elect such a
secretary, the committee shall do so. The secretary of each committee shall keep
regular minutes of the meetings of the committee, and shall provide copies of
the minutes to the Board of Directors.

Section 16. Committee Meetings. Meetings of committees of the Board of
Directors may be held at any place, within or without the State of Delaware, as
shall from time to time be designated by the Board of Directors or the committee
in question. Regular meetings of any committee shall be held at such times as
may be determined by resolution of the Board of Directors or the committee in
question and no notice shall be required for any regular meeting. A special
meeting of any committee shall be called by resolution of the Board of
Directors. Notices of special meetings shall be mailed to each member of the
committee in question no later than two days before the day on which the meeting
is to be held, or shall be sent by telegraph, by facsimile transmission or
telecopy, or be delivered to such member personally or by electronic mail or
telephone, no later than three hours before such meeting. Notices of any such
meeting need not be given to any such member, however, who shall sign a written
waiver thereof, whether before or after the meeting, or who shall be present at
the meeting and participate in the business transacted thereat; and any and all
business transacted at any meeting of any committee shall be fully effective
without any notice thereof having been given, if all the members of the
committee shall be present thereat. Unless limited by law, the certificate of
incorporation, these bylaws, or by the terms of the notice thereof, any and all
business may be transacted at any such special meeting without the notice
thereof having so specifically enumerated the matters to be acted upon.

Section 17. Action Without a Committee Meeting. Any action required or
permitted to be taken at any meeting of a committee of the Board of Directors
may be taken without a meeting, if all members of such committee consent thereto
in writing and such writing or writings are filed with the minutes of
proceedings of the committee.

Section 18. Executive Committee. The Board of Directors may, from time to
time, by resolution passed by a majority of the directors in office, create an
Executive Committee of three or more directors, the members of which shall be
elected by the Board of Directors to serve during the pleasure of the Board. If
the Board of Directors does not designate a chairman of the Executive Committee,
the Executive Committee shall elect a chairman from its own number. Except as
otherwise provided herein and in the resolution creating an Executive Committee,
such committee shall, during the intervals between the meetings of the Board of
Directors, possess and may exercise all of the powers of the Board of Directors
in the management of the business and affairs of the corporation, other than
that of filling vacancies among the directors or in any committee of the
directors. The Executive Committee shall keep full records and accounts of its
proceedings and transactions. All action by the Executive Committee shall be
reported to the Board of Directors at its meeting next succeeding such action
and shall be subject to control, revision and alteration by the Board of
Directors, provided that no rights of third persons shall be prejudicially
affected thereby. Vacancies in the Executive Committee shall be filled by the
Board of Directors, and the Board of Directors may appoint one or more Directors
as alternate members of the Executive Committee who may take the place of any
absent or disqualified member or members at any meeting.

Section 19. Executive Committee Meetings. Subject to the provisions of
these bylaws, the Executive Committee shall fix its own rules of procedure and
shall meet as provided by such rules or by resolutions of the Board of
Directors, and it shall also meet at the call of the Chairman of the Board, the
chairman of the Executive
5
<PAGE> 87

Committee or any two members of the Executive Committee. A majority of the
Executive Committee shall be necessary to constitute a quorum. The Executive
Committee may act in a writing without a meeting, but no such action of the
Executive Committee shall be effective unless concurred in by all members of the
committee.

Section 20. Compensation of Directors. Unless otherwise restricted by the
certificate of incorporation, the Board of Directors shall have the authority to
fix the compensation of directors by written resolution. The directors may be
paid their expenses, if any, of attendance at each meeting of the Board of
Directors or committee thereof. No such compensation or payment shall preclude
any director from serving the corporation in any other capacity and receiving
compensation therefor.

ARTICLE IV
NOTICES

Section 1. Notices. Except as otherwise specifically provided for in these
bylaws, notices to directors and stockholders shall be in writing and delivered
personally or mailed, or given by telephone, by telecopy, by telegram, by
facsimile transmission or by other similar means of communication, to the
directors or stockholders at their addresses appearing on the books of the
corporation. Notice by mail shall be deemed to be given at the time when the
same is mailed.

Section 2. Waiver. Whenever any notice is required to be given by law or by
the certificate of incorporation or these bylaws, a waiver thereof in writing,
signed by the person or persons entitled to said notice, whether before or after
the time stated therein, shall be deemed equivalent thereto. Any person who is
present at a meeting shall be conclusively presumed to have waived notice of
such meeting except when such person attends for the express purpose of
objecting at the beginning of the meeting to the transaction of any business
because the meeting is not lawfully called or convened. In the case of
directors, such member shall be conclusively presumed to have assented to any
action taken unless his or her dissent shall be entered in the minutes of the
meeting or unless his or her written dissent to such action shall be filed with
the person acting as the Secretary of the meeting before the adjournment thereof
or shall be forwarded by registered mail to the Secretary immediately after the
adjournment of the meeting. Such right to dissent shall not apply to any member
who voted in favor of such action.

ARTICLE V
OFFICERS

Section 1. General. The officers of the corporation shall be elected by the
Board of Directors and shall be a Chairman of the Board, a Chief Executive
Officer, a President, a Chief Financial Officer, one or more Vice Presidents, a
Secretary, and a Treasurer. The Board of Directors may also choose one or more
Assistant Secretaries and Assistant Treasurers. Two or more offices may be held
by the same person, with the exception of the offices of Chairman of the Board
and Secretary. The officers of the corporation need not be stockholders or
directors of the corporation.

Section 2. Election. The Board of Directors at its first meeting held after
each annual meeting of stockholders shall elect the officers of the corporation
who shall hold their offices for such terms and shall exercise such powers and
perform such duties as shall be determined from time to time by the Board of
Directors. Vacancies may be filled or new offices created and filled at any
meeting of the Board of Directors. Each officer shall hold office until a
successor is duly elected and qualified or until his or her earlier resignation
or removal as hereinafter provided.

Section 3. Other Officers and Agents. The Board of Directors may appoint
such other officers and agents as it shall deem necessary, who shall hold their
offices for such terms and shall exercise such powers and perform such duties as
shall be determined from time to time by the Board of Directors.

Section 4. Compensation. The compensation of all officers of the
corporation shall be fixed by the Board of Directors, acting directly or through
the Compensation Committee.

6
<PAGE> 88

Section 5. Removal. Any officer elected or appointed by the Board of
Directors may be removed at any time, with or without cause, by the affirmative
vote of a majority of the members of the Board of Directors. Any vacancy
occurring in any office of the corporation shall be filled by the Board of
Directors.

Section 6. Chairman of the Board. The Chairman of the Board shall be a
member of the Board of Directors and shall be an officer of the corporation. The
Chairman of the Board shall direct, coordinate and control the corporation's
business and activities and shall have general authority to exercise all powers
necessary thereto and shall perform such other duties and have such other powers
as shall be prescribed from time to time by the Board of Directors. The Chairman
of the Board shall preside at all meetings of the Board of Directors, and of the
stockholders, at which he or she is present. In the absence or disability of the
Chairman of the Board, the duties of the Chairman of the Board shall be
performed and his or her authority shall be exercised by the Chief Executive
Officer or in his or her absence or inability, by the President or one of the
Vice Presidents, as designated for this purpose by the Board of Directors.

Section 7. Chief Executive Officer. The Chief Executive Officer shall
perform such duties and have such powers as shall be prescribed from time to
time by the Board of Directors. The Chairman of the Board may be the Chief
Executive Officer of the Corporation.

Section 8. President. The President shall perform such duties as shall be
prescribed from time to time by the Chairman of the Board, the Chief Executive
Officer, or by the Board of Directors. If the Board of Directors so decides, the
President may also be designated as the Chief Operating Officer.

Section 9. Chief Financial Officer. The Chief Financial Officer of the
corporation shall be responsible for all financial and accounting matters and
shall have such other powers and perform such other duties as the Board of
Directors from time to time may prescribe.

Section 10. Vice Presidents. Each Vice President shall have such powers and
shall perform such duties as may be assigned to him or her by the President or
by the Board of Directors.

Section 11. Secretary. The Secretary shall maintain a record of all
meetings of the corporation and of the Board of Directors and shall have such
other powers and perform such other duties as the Board of Directors, the Chief
Executive Officer, or these bylaws may prescribe from time to time. Under the
supervision of the Chief Executive Officer, the Secretary shall give, or cause
to be given, all notices required to be given by these bylaws or by law.

Section 12. Assistant Secretaries. The Assistant Secretary, or if there be
more than one, the Assistant Secretaries, shall in the absence or disability of
the Secretary, perform the duties and exercise the powers of the Secretary and
shall perform such other duties and have such other powers as the Board of
Directors or the President may prescribe from time to time.

Section 13. Treasurer. The Treasurer shall, under the direction of the
Chief Financial Officer, have the custody of the corporate funds and securities;
shall keep full and accurate accounts of receipts and disbursements in books
belonging to the corporation; shall deposit all monies and other valuable
effects in the name and to the credit of the corporation as may be ordered by
the Board of Directors; shall cause the funds of the corporation to be disbursed
when such disbursements have been duly authorized, taking proper vouchers for
such disbursements; and shall render to the Chief Financial Officer and the
Board of Directors, at its regular meeting or when the Board of Directors so
requires, an account of the Treasurer's actions; shall have such other powers
and perform such other duties as the Board of Directors, the President or these
bylaws may prescribe from time to time.

Section 14. Assistant Treasurers. The Assistant Treasurer, or if there
shall be more than one, the Assistant Treasurers, shall, in the absence or
disability of the Treasurer, perform the duties and exercise the powers of the
Treasurer and shall perform such other duties and have such other powers as the
Board of Directors or the President may prescribe from time to time.

Section 15. Appointed Officers. The President may establish positions and
offices identified as a function, department or other organizational component
of the corporation, and may appoint individuals, who need not be employees of
the corporation, to occupy those positions, subject to approval of the Executive
Committee of the

7
<PAGE> 89

corporation. The individuals so appointed shall have such duties and powers as
the President may determine or as may be assigned by the President, the Board of
Directors or Executive Committee of the Board of Directors. The titles of such
individuals (herein referred to as "appointed officers") may be either
conventional corporate officer titles or titles designating a functional
activity, but in all cases shall contain, as an integral part of the title, a
reference to the function, organizational component or department within which
the position is established.

Section 16. Appointment, Removal and Term of Appointed Officers. Appointed
officers may be appointed by the Chairman of the Board. The Chairman of the
Board may, at any time, remove any appointed officer, without notice, or accept
such appointed officer's resignation. No term of office shall be established for
any appointed officer.

Section 17. Duties of Appointed Officers. An appointed officer shall
perform such duties (not including duties normally performed by an officer of
the corporation) as may, from time to time, be assigned to such appointed
officer by the officer of the corporation having management responsibility for
the organizational component or function to which such appointed officer is
assigned.

ARTICLE VI
CERTIFICATE OF STOCK

Section 1. Certificates of Stock. Every holder of stock in the corporation
shall be entitled to have a certificate, signed by, or in the name of the
corporation by, the Chairman of the Board, the Chief Executive Officer, or a
Vice President of the corporation and the Secretary or an Assistant Secretary of
the corporation, certifying the number of shares owned by such holder in the
corporation. All certificates of stock issued shall be numbered consecutively.

Section 2. Countersigned Certificates; Signature of Former Officers,
Transfer Agents or Registrars. Where a certificate is countersigned by (i) a
transfer agent other than the corporation or its employee, or (ii) a registrar
other than the corporation or its employee, any other signature on the
certificate may be a facsimile. In case any officer, transfer agent or registrar
who has signed or whose facsimile signature has been placed upon a certificate
shall have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the corporation with the same effect
as if he or she were such officer, transfer agent or registrar at the date of
issue.

Section 3. Lost, Stolen or Destroyed Certificates. The Board of Directors
may direct a new certificate or certificates to be issued in place of any
certificate theretofore issued by the corporation alleged to have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost, stolen or destroyed. When
authorizing such issue of a new certificate or certificates, the Board of
Directors may, in its discretion as a condition precedent to the issuance
thereof, require the owner of such lost, stolen or destroyed certificate or
certificates, or his or her legal representative, to advertise the same in such
manner as it shall require and/or give the corporation a bond in such sum as it
may direct as indemnity against any claim that may be made against the
corporation with respect to the certificate alleged to have been lost, stolen or
destroyed.

Section 4. Transfer of Stock. Upon surrender to the corporation or the
transfer agent of the corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.

Section 5. Closing of Transfer Books. The Board of Directors may close the
stock transfer books of the corporation for a period not exceeding sixty days
preceding the date of any meeting of stockholders or the date for payment of any
dividend or the date for the allotment of rights or the date when any change or
conversion or exchange of capital stock shall go into effect. In lieu of closing
the stock transfer books as aforesaid, the Board of Directors may fix in advance
a date, not exceeding sixty days preceding the date of any meeting of
stockholders, or the date for the payment of any dividend, or the date for the
allotment of rights, or the date when any change or conversion or exchange of
capital stock shall go into effect, as a record date for the determination of
the stockholders entitled to notice of, and to vote at, any such meeting, and
any adjournment thereof, or entitled to
8
<PAGE> 90

receive payment of any such dividend, or to any such allotment of rights, or to
exercise the rights in respect of any such change, conversion or exchange of
capital stock, or to give such consent, and in such case such stockholders and
only such stockholders as shall be stockholders of record on the date so fixed
shall be entitled to such notice of, and to vote at, such meeting and any
adjournment thereof or to receive payment of such dividend, or to receive such
allotment of rights, or to exercise such rights, as the case may be
notwithstanding any transfer of any stock on the books of the corporation after
any such record date fixed as aforesaid.

Section 6. Registered Stockholders. The corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner, and to hold liable
for calls and assessments a person registered on its books as the owner of
shares, and shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person or persons,
except as otherwise provided by the General Corporation Law of the State of
Delaware.

Section 7. Stock Subscriptions. Unless otherwise provided for in the
subscription agreement, subscriptions for shares shall be paid in full at such
time, or in such installments and at such times, as shall be determined by the
Board of Directors. Any call made by the Board of Directors for payment on
subscriptions shall be uniform as to all shares of the same class or as to all
shares of the same series. In case of default in the payment of any installment
or call when such payment is due, the corporation may proceed to collect the
amount due in the same manner as any debt due the corporation.

ARTICLE VII
GENERAL PROVISIONS

Section 1. Dividends. Dividends upon the capital stock of the corporation,
subject to the provisions of the certificate of incorporation, if any, may be
declared by the Board of Directors at any regular or special meeting, pursuant
to law. Dividends may be paid in cash, in property, or in shares of the capital
stock, subject to the provisions of the certificate of incorporation.

Section 2. Reserves. Before payment of any dividend, there may be set aside
out of any funds of the corporation available for dividends such sum or sums as
the directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the corporation, or for such other
purpose as the directors shall think conducive to the interest of the
corporation, and the directors may modify or abolish any such reserve in the
manner in which it is created.

Section 3. Checks. All checks or demands for money and notes of the
corporation shall be signed by such person or persons as shall be designated
from time to time by the Board of Directors or by such officer or officers of
the corporation as shall be appointed for that purpose by the Board of
Directors.

Section 4. Fiscal Year. The fiscal year of the corporation shall be fixed
by resolution of the Board of Directors.

Section 5. Seal. The corporate seal shall have inscribed thereon the name
of the corporation and shall be in such form as may be approved from time to
time by the Board of Directors. The seal may be used by causing it or a
facsimile thereof to be impressed or affixed or reproduced or otherwise.

Section 6. Inspection of Books and Records. Any stockholder of record, in
person or by attorney or other agent, shall, upon written demand under oath
stating the purpose thereof, have the right during the usual hours for business
to inspect for any proper purpose the corporation's stock ledger, a list of its
stockholders, and its other books and records, and to make copies or extracts
therefrom. A proper purpose shall mean any purpose reasonably related to such
person's interest as a stockholder. In every instance where an attorney or other
agent shall be the person who seeks the right to inspect, the demand under oath
shall be accompanied by a power of attorney or such other writing which
authorizes the attorney or other agent to so act on behalf of the stockholder.
The demand under oath shall be directed to the corporation at its registered
office in the State of Delaware or at its principal place of business.

9
<PAGE> 91

Section 7. Inconsistent Provisions; Titles. In the event that any provision
of these bylaws is or becomes inconsistent with any provision of the certificate
of incorporation, the General Corporation Law of the State of Delaware or any
other applicable law, the provision of these bylaws shall not be given any
effect to the extent of such inconsistency but shall otherwise be given full
force and effect. The section titles contained in these bylaws are for
convenience only and shall be without substantive meaning or content of any kind
whatsoever.

ARTICLE VIII
AMENDMENTS

Section 1. Amendments. These bylaws may be altered or repealed, and any
bylaws may be made, only (i) at any annual meeting of the stockholders, or at
any special meeting thereof if notice of the proposed alteration or repeal of
the bylaws to be made is contained in the notice of such meeting, by the
affirmative vote of the holders of at least 66 2/3% of the total number of votes
entitled to be cast generally in the election of directors, or (ii) by the
affirmative vote of a majority of the directors.

10
<PAGE> 92

SPECIAL SHAREHOLDERS MEETING

C.H. HEIST CORP.
MONDAY, MARCH 6, 2000
10:00 A.M. EASTERN STANDARD TIME

HYATT REGENCY WESTSHORE
6200 COURTNEY CAMBELL CAUSEWAY
TAMPA, FLORIDA 33607

-- FOLD AND DETACH HERE --

C.H. HEIST CORP.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints CHARLES H. HEIST and W. DAVID FOSTER as
Proxies, each with the power to appoint his substitute, and hereby
authorizes them to represent and to vote as designated below, all of the
common shares of C.H. HEIST CORP. held of record by the undersigned on
the record date of February 8, 2000.

1. Proposal to Approve the Sale of the Company's Industrial Maintenance
Business

[ ] FOR [ ] AGAINST [ ] ABSTAIN

2. Proposal to Approve Reincorporation of the Company in the State of
Delaware

[ ] FOR [ ] AGAINST [ ] ABSTAIN

(continued on the reverse side)
<PAGE> 93

-- FOLD AND DETACH HERE --

This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made, this
proxy will be voted FOR each of the Proposals.

DATE , ---------------------- 2000

SIGNATURE(S) ---------------------

When shares are held by joint
tenants, both should sign. When
signing as attorney, executor,
administrator, trustee or
guardian, please give full title
as such. If a corporation, please
sign in full corporate name by an
authorized officer. If a
partnership, please sign in
partnership name by an authorized
person.

PLEASE MARK, SIGN, DATE AND RETURN
THIS PROXY PROMPTLY.