<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[x] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted
[ ] Definitive Proxy Statement by Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
United Financial Banking Companies, Inc.
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(Name of Registrant as Specified in its Charter)
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(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)(4) and 0-11.
1. Title of each class of securities to which transaction applies:
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2. Aggregate number of securities to which transaction applies:
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3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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4. Proposed maximum aggregate value of transaction:
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5. Total Fee Paid:
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[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1. Amount Previously Paid:
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2. Form, Schedule or Registration Statement No.:
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3 Filing Party:
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4. Date Filed:
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<PAGE>
UNITED FINANCIAL BANKING COMPANIES, INC.
8399 LEESBURG PIKE
VIENNA, VIRGINIA 22182
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 22, 1997
TO THE SHAREHOLDERS OF UNITED FINANCIAL BANKING COMPANIES, INC.
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
"Meeting") of United Financial Banking Companies, Inc., a Virginia corporation
(the "Company"), will be held on Monday, December 22, 1997 at The Business Bank,
8399 Leesburg Pike, Vienna, Virginia, in the bank lobby, at 5:30 p.m. for the
following purposes:
1. To consider and vote upon an amendment to Article Three of the Articles
of Incorporation of the Company to effect a one-for-five reverse split
of the outstanding shares of the Company's Common Stock; and
2. To transact such other business as may properly come before the meeting
or any adjournment or postponement thereof.
Shareholders of record as of the close of business on November 5, 1997 are
entitled to notice of and to vote at the Meeting or any adjournment or
postponement thereof.
By Order of the Board of Directors
/s/ KAREN L. LAUGHLIN
Karen L. Laughlin, Secretary
November 22, 1997
PLEASE SIGN, DATE AND RETURN YOUR PROXY PROMPTLY, WHETHER OR NOT YOU PLAN
TO ATTEND THE MEETING IN PERSON. NO POSTAGE IS REQUIRED IF MAILED IN THE
UNITED STATES IN THE ENCLOSED ENVELOPE. IF YOU ATTEND THE MEETING, YOU
MAY, IF YOU DESIRE, REVOKE YOUR PROXY AND VOTE IN PERSON.
<PAGE>
UNITED FINANCIAL BANKING COMPANIES, INC.
8399 Leesburg Pike
Vienna, Virginia 22182
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SPECIAL MEETING OF SHAREHOLDERS
PROXY STATEMENT
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INTRODUCTION
This Proxy Statement is furnished to shareholders of United Financial
Banking Companies, Inc., a Virginia corporation (the "Company"), in connection
with the solicitation of proxies by the Board of Directors of the Company for
use at a Special Meeting of Shareholders to be held at 5:30 p.m. on Monday,
December 22, 1997 (the "Meeting"), and at any adjournment or postponement
thereof, for the purposes of (1) considering and voting upon an amendment (the
"Amendment") to Article Three of the Articles of Incorporation of the Company to
effect a one-for-five reverse split of the outstanding shares of the Company's
common stock, par value $1.00 per share; and (2) transacting such other business
as may properly come before the Meeting or any adjournment or postponement
thereof.
The Meeting will be held in the bank lobby at The Business Bank, 8399
Leesburg Pike, Vienna, Virginia.
This Proxy Statement and the accompanying form of proxy are first being
sent to shareholders of the Company on or after November 22, 1997.
The cost of this proxy solicitation is being borne by the Company. In
addition to the use of the mail, proxies may be solicited personally or by
telephone by officers, regular employees or directors of the Company or its
subsidiary, The Business Bank, who will not be compensated for any such
services. The Company may also reimburse brokers, custodians, nominees and
other fiduciaries for their reasonable out-of-pocket and clerical costs for
forwarding proxy materials to their principals.
VOTING RIGHTS AND PROXIES
VOTING RIGHTS
Only shareholders of record of the Company's common stock, par value $1.00
per share (the "Common Stock"), at the close of business on November 5, 1997
will be entitled to notice of and to vote at the Meeting or any adjournment or
postponement thereof. On that date, the Company had outstanding 2,808,201
shares of Common Stock, constituting the only class of voting securities
outstanding, held by approximately 404 shareholders of record. Each share of
Common Stock is entitled to one vote on all matters submitted to a vote of the
shareholders. The presence, in person or by proxy, of not less than a majority
of the total number of outstanding shares of Common Stock is necessary to
constitute a quorum at the Meeting. Members of the Board of Directors, and
family members thereof, having the power to vote or direct the voting of 25.94%
of the outstanding shares of Common Stock have indicated their intention to vote
in favor of the proposed Amendment.
PROXIES
Shares represented by proxies received by the Company in time to be voted
at the Meeting will be voted in accordance with the instructions contained
therein. Shares represented by proxies for which no instruction is given will
be voted FOR the Amendment, and in the discretion of the holders of the proxies
on all other matters properly brought before the Meeting and any adjournment or
postponement thereof. The inspectors of election appointed by the Board of
Directors for the Meeting will determine the presence of a quorum and will
tabulate the votes cast at the Meeting. Abstentions will be treated as present
for purposes of determining a quorum, but as unvoted for purposes of determining
the approval of any matter submitted to the vote of shareholders. If a broker
indicates that he or she does not have discretionary authority to vote any
shares of Common Stock as to a particular matter, such shares will be treated as
present for general quorum purposes, but will not be considered as present or
voted with respect to such matter.
<PAGE>
Shareholders are requested to sign, date, mark and return promptly the
enclosed proxy in the postage paid envelope provided for this purpose in order
to assure that their shares are voted. A proxy may be revoked at any time prior
to the voting thereof at the Meeting through the granting of a later proxy with
respect to the same shares, by written notice to Karen L. Laughlin, Secretary of
the Company, at the address noted on the proxy reply envelope, at any time prior
to the voting thereof, or by voting in person at the Meeting. Attendance at the
Meeting will not, in itself, revoke a proxy.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
SECURITIES OWNERSHIP OF DIRECTORS, OFFICERS AND CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information as of October 12, 1997
concerning the number and percentage of shares of the Company's Common Stock and
Series A Preferred Stock beneficially owned by its directors, certain executive
officers, and by its directors and all executive officers as a group, as well as
information regarding each other person known by the Company to own in excess of
five percent of any outstanding class of equity security of the Company. Except
as otherwise indicated, all shares are owned directly, and the named person
possesses sole voting and sole investment power with respect to all such shares.
Except as set forth below, the Company knows of no other person or persons, who
beneficially own in excess of five percent of any class of equity securities of
the Company.
<TABLE>
<CAPTION>
Number of Shares Percent of Outstanding
Number of Shares Percent of Outstanding of Series A Series A
Name of Common Stock(1) Common Stock (1) Preferred Stock (1) Preferred Stock (1)
- -------------------------------- ------------------ ---------------------- ------------------- ----------------------
<S> <C> <C> <C> <C>
Directors:
William J. McCormick, Jr. 92,667/(2)/ 3.29% 33.33 4.17%
Dennis I. Meyer 94,782/(3)/ 3.37% --- ---
Edward H. Pechan 45,333/(4)/ 1.60% 66.67 8.33%
Harold C. Rauner 104,246/(5)/ 3.60% --- ---
Sharon A. Stakes 36,000/(6)/ 1.27% --- ---
Jeffery T. Valcourt 393,113/(7)/ 13.58% 400 50.00%
Suite 200
1001 North Highland Street
Arlington, VA 22201
All Directors and Executive 780,741 25.43% 500 62.50%
Officers as a group (7 persons)
Five Percent Shareholders:
Manuel V. Fernandez 328,194/(8)/ 11.49% 166.67 20.83%
650 Water Street, SW
Washington, DC 20024
James K. Jeanblanc 269,832/(9)/ 9.51% --- ---
Suite 400
1730 M Street, NW
Washington, DC 20036
Robert F. Long 296,853 10.57% --- ---
300 Belvedere Street
Carlisle, PA 17013
Rita M. Meyer 215,466/(10)/ 7.66% 100 12.50%
6307 Olmi Landreth Drive
Alexandria, VA 22307
</TABLE>
(footnotes appear on the following page)
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<PAGE>
(footnotes from prior page)
(1) For purposes hereof, a person is deemed to be the beneficial owner of
shares as to which he has or shares voting or investment power. Percentage
ownership is based on 2,808,201 shares of Common Stock and 800 shares of Series
A Preferred Stock outstanding as of the record date. In calculating the
percentage of shares owned for warrant and option holders, the total number of
shares outstanding is deemed to include the number of shares receivable upon the
exercise of such person's warrants and options exercisable within sixty days of
the record date, and for all directors and executive officers as a group, the
total number of shares outstanding is deemed to include the number of shares
receivable upon the exercise of all of such persons' warrants and options
exercisable within sixty days of the record date.
(2) Includes 80,000 shares and warrants to purchase 6,667 shares owned by a
company of which Mr. McCormick is the owner and President. Also includes options
to purchase 6,000 shares of Common Stock pursuant to the Company's 1996
Nonqualified Stock Option Plan for Non-Employee Directors (the "Directors
Plan").
(3) Includes 877 shares owned by each of Mr. Meyer's five children (4,385
shares in the aggregate), 1,199 share owned by Mr. Meyer and 83,198 shares owned
by Rinnis Associates, Inc., of which Mr. Meyer is President and a director. Also
included are options to purchase 6,000 shares of Common Stock pursuant to the
Directors Plan. Does not include 215,466 shares of Common Stock and 100 shares
of Series A Preferred Stock beneficially owned by his spouse, Rita M. Meyer, as
to which Mr. Meyer disclaims beneficial ownership.
(4) Includes options to purchase 6,000 shares of Common Stock pursuant to
the Directors Plan. Also included are warrants to purchase 18,333 shares of
Common Stock owned by a retirement trust, of which Mr. Pechan is a trustee.
(5) Mr. Rauner is President of the Company and the Bank. Includes options to
purchase 84,246 shares of Common Stock pursuant to the Company's 1990 Executive
Stock Plan.
(6) Ms. Stakes is Vice President of the Company and Bank. Includes options
to purchase 35,000 shares of Common Stock pursuant to the Company's 1990
Executive Stock Plan.
(7) Includes 307,113 shares and warrants to purchase 86,000 shares of Common
Stock.
(8) Includes warrants to purchase 48,333 shares of Commons Stock.
(9) Includes warrants to purchase 30,000 shares of Common Stock. Does not
include an aggregate of 2,738 shares owned by Mr. Jeanblanc's minor children and
of which he is custodian.
(10) Includes warrants to purchase 5,000 shares of Common Stock. Does not
include 877 shares owned by each of Mrs. Meyer's five children (4,385 shares in
the aggregate), 1,119 shares owned by Mr. Meyer, and 83,198 shares owned by
Rinnis Associates, Inc., of which Mr. Meyer is President and a director. Mrs.
Meyer disclaims beneficial ownership with respect to all of such shares.
AMENDMENT TO THE ARTICLES OF INCORPORATION
The Board of Directors has approved an Amendment to the Articles of
Incorporation and has directed that the proposed Amendment be submitted to the
shareholders for their consideration and approval. If adopted, the Amendment
would effect a reverse split of the Common Stock on the basis of one new share
of Common Stock for each five shares of presently outstanding Common Stock. The
full text of the Amendment is set forth in Exhibit A, attached hereto and made a
part hereof. The authorized number of shares of Common Stock would not be
reduced as a result of the Amendment, and as such, the Amendment would
effectively increase the number of shares of Common Stock authorized and
available for issuance. As of November 5, 1997, there were 2,808,201 shares of
Common Stock issued and outstanding 691,799 shares authorized but unissued, and
523,410 shares of Common Stock reserved for issuance upon the exercise of
outstanding options and warrants to purchase Common Stock. No fractional shares
or scrip for fractional shares will be issued as a result of the reverse split.
Fractional shares to which shareholders would otherwise be entitled will be
accumulated and the resulting whole shares sold in the open market in public or
private transactions, and persons entitled to receive fractional shares will
receive cash in lieu thereof based on the amount received for such shares.
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<PAGE>
Recommendation of the Board of Directors
The Board of Directors believes that the proposed Amendment is in the best
interests of the Company and recommends that shareholders vote "FOR" adoption of
the proposed Amendment.
Reasons for the Proposed Amendment
The Board of Directors believes that it is desirable to approve the
Amendment in order to permit the Company to have additional available shares of
Common Stock for issuance in capital raising transactions. Additionally, the
Board of Directors believes that the reverse split and the theoretical increase
in the market price of the Common Stock resulting from the reverse split, may
increase the acceptability of the Common Stock to potential investors.
The Company presently has only 168,389 shares of authorized, unissued and
unreserved Common Stock available for issuance. The Board of Directors believes
that this number of shares is not sufficient to fulfill the Company's
anticipated capital needs in the future. As such, the Board of Directors
believes that the number of shares available for issuance, and the aggregate
amount of capital which may be raised by the sale thereof, must be increased. As
discussed further below, the Board of Directors believes that the opportunity to
increase the acceptability of the Common Stock to potential investors increases
the attractiveness of combining shares and theoretically increasing the market
price of the Common Stock through the reverse split, rather than merely
increasing the number of shares of authorized Common Stock.
The existence of the additional shares of Common Stock will also enable the
Company to meet possible contingencies or opportunities in which the issuance of
shares of Common Stock may be advisable, such as in the case of acquisition or
financing transactions. Shares of Common Stock could be issued to shareholders
of another institution enabling the Company to acquire such other institution
without the expenditure of any cash. Shares of Common Stock also could be sold
in a public or private transaction to enable the Company to engage in
acquisition activity, to expand the Company's ability to engage in lending
activities, or for other corporate purposes. Having additional shares of Common
Stock available for issuance would give the Company greater flexibility than it
presently has in such situations, in that it would be able to avoid the expense
and delay of calling a meeting of shareholders at the time the contingency or
opportunity arises. Any issuance of Common Stock could have a dilutive effect
on the existing holders of Common Stock. The Company has no current agreements
or commitments pursuant to which it would issue any additional shares of Common
Stock, except for options and warrants to purchase an aggregate of 523,410
shares of Common Stock presently outstanding. The Board of Directors
anticipates, however, that it will effect an issuance of shares of Common Stock
in a private placement transaction in the first quarter of 1998. The terms upon
which such shares of Common Stock may be issued, including the price at which
such shares may be issued, and the identity of the persons who may purchase
shares of Common Stock in such private placement, have not been definitively
determined as of this date. Members of the Board of Directors or their
affiliates may be purchasers in any such private placement.
The existence of additional shares of Common Stock could have the effect of
rendering more difficult or discouraging hostile takeover attempts or of
facilitating a negotiated acquisition of the Company. Shares of Common Stock
could be issued to a third party seeking to acquire control of the Company as a
means of facilitating such attempt. Alternatively, such shares could be issued
to the Company's shareholders or to a third party in an attempt to frustrate or
render more expensive a hostile acquisition of the Company. The Company is not
aware of any existing or planned effort on the part of any person to accumulate
material amounts of voting stock for the purpose of acquiring the Company, or to
acquire the Company by means of a merger, tender offer, solicitation of proxies
in opposition to management, or otherwise, to change the Company's management,
or to acquire substantially all of the assets of the Company.
The Board of Directors further believes that the present market price of
the Common Stock, between $1.50 and $2.00 per share in recent trades of which
the Company is aware, impairs the acceptability of the stock by portions of the
financial community and the investing public. Theoretically, the price of the
Common Stock and the number of shares outstanding should not, by itself, affect
the marketability of the stock, the type of investor who acquires it or a
-4-
<PAGE>
company's reputation, but in practice this is not necessarily the case, as many
investors look upon low priced stock as unduly speculative in nature and, as a
mater of policy, avoid investment in such stocks. The Board of Directors also
believes that the current per share price of the Common Stock has reduced the
effective marketability of the Common Stock because of the reluctance of
brokerage firms to follow or recommend low priced stocks. Some policies and
practices of brokerage firms may function to make the handling of low priced
stocks unattractive to brokers from an economic standpoint. In addition, the
structure of trading commissions also tends to have an adverse impact upon
holders of low priced stocks because the brokerage commission on a sale of low
priced stock generally represents a higher percentage of the sales price than
the commission on higher priced issues.
Although there can be no assurance that the price of the Common Stock after
the reverse split will actually increase in an amount proportionate to the
decrease in the number of outstanding shares, the proposed reverse stock split
is intended to result in a price level for the Common Stock that is more likely
to attract interest by investors in the Common Stock.
Principal Effects of the Amendment
The principal effects of the proposed reverse stock split to be effected by
the Amendment are expected to be the following:
Based upon 2,808,201 shares of Common Stock outstanding on November 5,
1997, the proposed one-for-five reverse stock split would decrease the number of
outstanding shares of Common Stock by 80%, and thereafter approximately 561,640
shares of Common Stock would be outstanding (subject to reduction to reflect
elimination of fractional shares), held by approximately 404 shareholders of
record. The proposed reverse split would not affect the proportionate equity
interest in the Company of any holder of Common Stock, except as may result from
the provisions for the elimination of fractional shares as described below.
Each of the outstanding options and warrants to acquire shares of Common Stock
would automatically adjust into options or warrants to acquire, at the same
aggregate exercise price, one-fifth of the number of shares of Common Stock.
The per share exercise price of options and warrants would increase to five
times the pre-reverse split exercise price. The reverse split will not affect
the Company's status as a reporting company under the Securities Exchange Act of
1934.
The reverse split may leave certain shareholders with one or more "odd
lots" of Common Stock, i.e., stock in amounts of less than 100 shares. These
shares may be more difficult to sell, or require a greater commission per share
to sell, than shares in even multiples of 100.
Effectiveness of the Amendment
Assuming the proposed Amendment is approved and the reverse split effected,
the Articles of Amendment amending the Articles of Incorporation as set forth in
Exhibit A to this Proxy Statement will be filed with the Virginia State
Corporation Commission as promptly as practicable after the Meeting. The
Amendment and the proposed reverse stock split would become effective upon the
date of filing of the Articles of Amendment (the "Effective Date").
The Board of Directors reserves the right to abandon the Amendment at any
time prior to filing of the Articles of Amendment with the Virginia State
Corporation Commission, notwithstanding the receipt of shareholder approval.
Exchange of Stock Certificates and Elimination of Fractional Share Interests
As soon as possible after the Effective Date, holders of Common Stock will
be notified and requested to surrender their present Common Stock certificates
for new certificates representing the number of whole shares of Common Stock
into which such shares have been converted as a result of the reverse split.
Until so surrendered, each current certificate representing shares of Common
Stock will be deemed for all corporate purposes after the Effective Date to
evidence ownership of Common Stock in the appropriately reduced whole number of
shares.
No scrip or fractional share certificates for Common Stock will be issued
in connection with the reverse split,
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<PAGE>
but in lieu thereof, the aggregate number of whole shares resulting from the
combination of all fractional shares otherwise issuable will be sold by the
Company in public or private transactions as soon as practicable after the
Effective Date on the basis or prevailing market prices of the Common Stock at
the time of sale. After the Effective Date, the Company will pay shareholders
entitled to receive a fractional share, cash in lieu of their fractional
interests upon surrender of their stock certificates. No service charges or
brokerage commissions will be payable by shareholders in connection with the
sale of fractional interests, all of which costs will be borne by the Company.
Shareholders will not be entitled to receive cash for any whole new shares of
Common Stock into which their current shares are converted.
Federal Income Tax Consequences
The following is a general discussion of certain federal income tax
consequences of the proposed reverse split of Common Stock. This discussion
does not purport to deal with all aspects of federal income taxation that may be
relevant to holders of Common Stock and is not intended to be applicable to all
categories of investors, some of which, such as dealers in securities, banks,
insurance companies, tax-exempt organizations and foreign persons, may be
subject to special rules. Furthermore, the following discussion is based on
current provisions of the Internal Revenue Code of 1986, as amended (the
"Code"), and administrative and judicial interpretations as of the date hereof,
all of which are subject to change. Holders of Common Stock are advised to
consult their own tax advisors regarding the federal, state, local and foreign
tax consequences of the proposed reverse stock split.
The proposed reverse stock split will be a tax-free recapitalization for
the Company and its shareholders.
The new shares of Common Stock in the hands of a shareholder will have an
aggregate basis for computing gain or loss equal to the aggregate basis of
shares of Common Stock held by that shareholder immediately prior to the
proposed reverse stock split reduced by the amount of proceeds, if any, received
from the sale of fractional interests and increased by any gain recognized on
that sale.
A shareholder's holding period for the new shares of Common Stock will be
the same as the holding period for the shares of Common Stock exchanged
therefor.
Shareholders who receive cash for all of the holdings (as a result of
owning fewer than five shares) will recognize a gain or loss for federal income
tax purposes as a result of the disposition of their shares of Common Stock.
Although the tax consequences to shareholders who receive cash for some of their
holdings are not entirely certain, those shareholders in all likelihood will
recognize a gain or loss for federal income tax purposes as a result of the
disposition of a portion of their shares of Common Stock, if the shares are held
as a capital asset. Shareholders who do not receive any cash as a result of the
reverse split will not recognize any gain or loss for federal income tax
purposes as a result of the proposed reverse stock split.
Vote Required
Approval of the proposed Amendment requires the affirmative vote of the
holders of at least a majority of the Common Stock entitled to vote. Directors
of the Company and their affiliates having the power to vote or direct the
voting of 25.94% of the Common Stock outstanding as of the record date have
indicated that they intend to vote in favor of the proposed Amendment.
The Board of Directors recommend that the shareholders vote "FOR" the
proposed Amendment.
No Dissenter's Rights of Appraisal
Dissenters' rights of appraisal will not be available under Virginia law
with respect to the proposed Amendment.
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<PAGE>
OTHER MATTERS
The Board of Directors of the Company is not aware of any other matters to
be presented for action by shareholders at the Meeting. If, however, any other
matters not now known are properly brought before the meeting or any adjournment
thereof, the persons named in the accompanying proxy will vote such proxy in
accordance with their judgment on such matters.
By Order of the Board of Directors
/s/ KAREN L. LAUGHLIN
Karen L. Laughlin, Secretary
November 22, 1997
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<PAGE>
EXHIBIT A
PROPOSED AMENDMENT TO THE ARTICLES OF INCORPORATION
The first paragraph of Article Three of the Articles of Incorporation of
the Company is proposed to be restated to read in its entirety as follows:
"The aggregate number of shares of capital stock which the Corporation
shall have authority to issue shall be 3,500,000 shares of Common Stock,
par value $1 per share, and 5,000,000 shares of Preferred Stock, without
par value. At the effective time of this Amendment to the Articles of
Incorporation of the Corporation, each five (5) issued and outstanding
shares of Common Stock of the Corporation shall automatically and without
further action be combined and converted into one (1) share of validly
issued, fully paid and nonassessable Common Stock of the Corporation. No
fractional shares or scrip for fractional shares shall be issued by reason
of this conversion."
A-1
<PAGE>
REVOCABLE PROXY
UNITED FINANCIAL BANKING COMPANIES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby makes, constitutes and appoints Harold C. Rauner,
Jeffery T. Valcourt and Dennis I. Meyer, and each of them (with the power of
substitution), proxies for the undersigned to represent and to vote, as
designated below, all shares of common stock of United Financial Banking
Companies, Inc. (the "Company ") which the undersigned would be entitled to vote
if personally present at the Company's Special Meeting of Shareholders to be
held on December 22, 1997 and at any adjournment or postponement thereof.
PROPOSAL TO AMEND THE ARTICLES OF INCORPORATION
The proposal to amend Article Three of the Articles of Incorporation of the
Company to effect a one-for-five reverse split of the outstanding shares of
the Company's Common Stock.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder. If no direction is made, this proxy will be
voted FOR the proposal set forth above. In addition, this proxy will be voted
at the discretion of the proxy holder(s) upon any other matter which may
properly come before the Meeting or any adjournment or postponement thereof.
Important: Please date and sign your name as addressed, and return this proxy
in the enclosed envelope. When signing as executor, administrator, trustee,
guardian, etc., please give full title as such. If the shareholder is a
corporation, the proxy should be signed in the full corporate name by a duly
authorized officer whose title is stated.
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Signature of Shareholder
--------------------------------------------
Signature of Shareholder
Dated: , 1997
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PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
I plan , do not plan , to attend the Special Meeting of
------ ------
Shareholders.
