SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
[Amendment No. _________]
Filed by the Registrant _X_
Filed by a Party other than the Registrant ___
Check the appropriate box:
___ Preliminary Proxy Statement
___ Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
_X_ Definitive Proxy Statement
___ Definitive Additional Materials
___ Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
ASHA CORPORATION
(Name of Registrant as Specified in Its Charter)
ASHA CORPORATION
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
_X_ $125 per Exchange Act Rules 0-11(c)(l)(ii), 14a-6(I)(l), 14a-6(I)(2)
or Item 22(a)(2) of Schedule 14A.
___ $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(I)(3).
___ Fee computed on table below per Exchange Act Rules 14a-6(I)(4) and O-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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___ 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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ASHA CORPORATION
600 C WARD DRIVE
SANTA BARBARA, CALIFORNIA 93111
(805) 683-2331
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 26, 1996
TO THE SHAREHOLDERS OF ASHA CORPORATION:
NOTICE HEREBY IS GIVEN that the Annual Meeting of Shareholders of ASHA
Corporation, a Delaware corporation, will be held at the Four Seasons
Biltmore, Coral Casino, 1260 Channel Drive, Santa Barbara, California, on
Friday, April 26, 1996, at 2:00 p.m., Pacific Time, and at any and all
adjournments thereof, for the purpose of considering and acting upon the
following matters.
1. The election of five (5) Directors of the Company to serve until the
next Annual Meeting of Shareholders and until their successors have been duly
elected and qualified.
2. Ratification of the selection of McDirmid, Mikkelsen and Secrest,
P.S. as the Company's independent accountants for the fiscal year ending
September 30, 1996.
3. The approval of an amendment to the Company's 1994 Stock Option Plan
to increase the number of shares issuable upon the exercise of options granted
under the Plan from 240,000 shares to 750,000 shares.
4. The transaction of such other business as may properly come before
the meeting or any adjournment thereof.
Only holders of the $.00001 par value Common Stock of the Company of
record at the close of business on March 15, 1996, will be entitled to notice
of and to vote at the Meeting or at any adjournment or adjournments thereof.
The proxies are being solicited by the Board of Directors of the Corporation.
All shareholders, whether or not they expect to attend the Annual Meeting
of Shareholders in person, are urged to sign and date the enclosed Proxy and
return it promptly in the enclosed postage-paid envelope which requires no
additional postage if mailed in the United States. The giving of a proxy will
not affect your right to vote in person if you attend the Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
JOHN C. McCORMACK, PRESIDENT
Santa Barbara, California
March 15, 1996
ASHA CORPORATION
600 C WARD DRIVE
SANTA BARBARA, CALIFORNIA 93111
(805) 683-2331
______________________________
PROXY STATEMENT
______________________________
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 26, 1996
GENERAL INFORMATION
The enclosed Proxy is solicited by and on behalf of the Board of
Directors of ASHA Corporation, a Delaware corporation (the "Company"), for use
at the Company's Annual Meeting of Shareholders to be held at the Four Seasons
Biltmore, Coral Casino, 1260 Channel Drive, Santa Barbara, California, on
Friday, April 26, 1996, at 2:00 p.m., Pacific Time, and at any adjournment
thereof. It is anticipated that this Proxy Statement and the accompanying
Proxy will be mailed to the Company's shareholders on or about March 22, 1996.
Any person signing and returning the enclosed Proxy may revoke it at any
time before it is voted by giving written notice of such revocation to the
Company, or by voting in person at the Meeting. The expense of soliciting
proxies, including the cost of preparing, assembling and mailing this proxy
material to shareholders, will be borne by the Company. It is anticipated
that solicitations of proxies for the Meeting will be made only by use of the
mails; however, the Company may use the services of its Directors, Officers
and employees to solicit proxies personally or by telephone, without
additional salary or compensation to them. Brokerage houses, custodians,
nominees and fiduciaries will be requested to forward the proxy soliciting
materials to the beneficial owners of the Company's shares held of record by
such persons, and the Company will reimburse such persons for their reasonable
out-of-pocket expenses incurred by them in that connection.
All shares represented by valid proxies will be voted in accordance
therewith at the Meeting.
The Company's Annual Report on Form 10-K is being simultaneously mailed
to the Company's shareholders, but does not constitute part of these proxy
soliciting materials.
SHARES OUTSTANDING AND VOTING RIGHTS
All voting rights are vested exclusively in the holders of the Company's
$.00001 par value Common Stock. Each share of Common Stock entitles the
holder to one (1) vote. Only shareholders of record at the close of business
on March 15, 1996, are entitled to notice of and to vote at the Meeting or any
adjournment thereof. On March 15, 1996, the Company had 7,074,367 shares of
its $.00001 par value Common Stock outstanding. Cumulative voting in the
election of Directors is not permitted.
A majority of the Company's outstanding Common Stock represented in
person or by proxy shall constitute a quorum at the Meeting.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the number and percentage of shares
entitled to vote owned beneficially, as of March 15, 1996, by any person, who
is known to the Company to be the beneficial owner of 5% or more of the
Company's Common Stock, and, in addition, by each Director of the Company and
by all Directors and Officers of the Company as a group. Information as to
beneficial ownership is based upon statements furnished to the Company by such
persons.
Name and Address Amount of Beneficial Percentage
of Beneficial Owner Ownership of Class
- ------------------------- -------------------- ----------
Alain J-M Clenet 2,011,464 28.4%
600 C Ward Drive
Santa Barbara, CA 93111
Sheila R. Ronis 38,596(1) 0.5%
640 Rolling Green Circle
Rochester Hills, MI 48309
Robert J. Sinclair 36,177(1) 0.5%
1025 North Ontare Road
Santa Barbara, CA 93103
Lawrence Cohen 25,000(2) 0.4%
3311 NE 26th Avenue
Lighthouse Point, FL 33064
Neil McCarthy 25,000(2) 0.4%
15th Floor
10900 Wilshire Boulevard
Los Angeles, CA 90024
Brian Chang 1,217,113 17.2%
1 Chatworth Road, No. 2421
Singapore 1024
All Directors and Executive 2,195,933(3) 30.3%
Officers as a Group (5 persons)
__________________
(1) Includes 25,000 shares underlying stock options held by such person.
(2) Represents shares underlying stock options held by these persons.
(3) Includes shares beneficially owned by the following persons who are
Executive Officers of the Company; 40,786 shares underlying stock options held
by John C. McCormack; 5,598 shares held by Theo E. Shaffer; and 13,312 shares
underlying options held by Kenneth R. Black.
ELECTION OF DIRECTORS
The Bylaws currently provide for a Board of Directors of five (5)
members. The Board of Directors recommends the election as Directors of the
five (5) nominees listed below, to hold office until the next Annual Meeting
of Shareholders and until their successors are elected and qualified or until
their earlier death, resignation or removal. Each member of the present Board
of Directors has been nominated for reelection. The persons named as
"Proxies" in the enclosed form of Proxy will vote the shares represented by
all valid returned proxies in accordance with the specifications of the
shareholders returning such proxies. If at the time of the Meeting any of the
nominees named below should be unable to serve, which event is not expected to
occur, the discretionary authority provided in the Proxy will be exercised to
vote for such substitute nominee or nominees, if any, as shall be designated
by the Board of Directors.
The following table sets forth the name and age of each nominee for
Director, indicating all positions and offices with the Company presently
held, and the period during which each person has served as a Director:
Positions and Offices Held
Name Age and Term as a Director
- ---------------- --- -----------------------------------------------
Alain J-M Clenet 51 Chairman of the Board, Chief Executive Officer
and Director since August 1996
Sheila R. Ronis 45 Director since September 1993
Robert J. Sinclair 63 Director since April 1994
Neil McCarthy 46 Director since January 1995
Lawrence Cohen 51 Director since January 1995
There is no family relationship between any Director or Executive Officer
of the Company.
The Company has no audit or nominating committees, but does have a
Compensation Committee which consists of Robert J. Sinclair, Sheila R. Ronis
and John C. McCormack.
Set forth below are the names of all Directors, Nominees for Director and
Executive Officers of the Company, all positions and offices with the Company
held by each such person, the period during which he has served as such, and
the principal occupations and employment of such persons during at least the
last five years:
ALAIN J-M CLENET. Mr. Clenet has served as President and a Director of
ASHA Enterprises, Inc. since its inception in June, 1986, and became President
and Chairman of the Board of Directors of ASHA Corporation on the date of the
acquisition of ASHA Enterprises, Inc. Mr. Clenet is President and a Director
of CAMI, Inc. He has also served as President and a Director of
Stehrenberger/Clenet, Inc. (S/C), an automotive design company, since its
inception in February 1983. S/C employed approximately 15 people in design,
engineering and fabricating trades. S/C was liquidated in early 1988 at the
formation of ASHA Corporation.
From 1983 until the sale of the business in November 1986, Mr. Clenet
also served as President and a Director of Wood, Ltd., a Michigan corporation
which manufactures automotive wood components. From July 1976 until September
1981, he served as President and a Director of Clenet Coachworks, Inc., a
company which designed, manufactured and sold approximately 500 Clenet
automobiles, until it filed for bankruptcy under Chapter 7 in September 1981.
Mr. Clenet founded Clenet Coachworks in 1976, created the products and the
tools and built it up to 185 employees at its peak. The 1979-1981 economic
downturn and very high interest rates as well as a dispute between Mr. Clenet
and the company's single financial backer resulted in the liquidation of
the company under Chapter 7 in 1982. The company was reactivated independent
of Mr. Clenet in Carpinteria, California, and is no longer in existence. From
1965 until 1975, Mr. Clenet conducted automotive design, research and
development in France and the United States. Mr. Clenet received a CAFAS
Degree from the Ecole des Beaux Arts, Angers, France in 1963 and an E.N.S.A.D.
Degree from the National Superior School of Design of Paris in 1965.
JOHN C. MCCORMACK. Mr. McCormack has served as President and Chief
Operations Officer of ASHA since February 1, 1995, and as Secretary and
Treasurer since January 31, 1996. Mr. McCormack helped start American Honda
Motor Company in 1959 and he has been described as the driving force in its
rise to prominence in the U.S. motorcycle market. He was co-founder of U.S.
Suzuki Motor Corporation in 1964, and by 1967 this company was second in the
U.S. market for motorcycles, behind Honda. He served as President and CEO of
McCormack International Motors, Inc. from 1969 until 1975. McCormack
International Motors was the first to bring a wide range of motorized
recreational vehicles under one label, and it established some 925 dealers and
10 overseas distributors. From 1975 until 1980, he was a founder and
President of Jacwall Corporation. Mr. McCormack was a founder and served as
President and COO of Hirsch Electronics Corporation from 1980 to 1985, where
he guided product development to successful completion at less than budgeted
costs. These systems are now in use in the White House, Pentagon, IBM,
General Motors, FBI, British Secret Service, as well as many other secure
government and business installations around the world. He was a co-founder
and he served as President and CEO of the Napa Valley Railroad and the Napa
Valley Wine Train from 1985 until April 1991. From April 1991 until April
1994, he served as Vice President of Marketing and Sales for Mission
Industries, an industrial laundry business, and from April 1994 until January
1995, he was engaged in general business consulting under the name McCormack
and McCormack Consulting.
THEO E. SHAFFER. Mr. Shaffer was appointed to Executive Vice President
of ASHA Corporation in April of 1994. Prior to this appointment, Mr. Shaffer
was ASHA Corporation's Vice-President of Research and Development from April
of 1991, served as director of Research and Development from 1989, and
performed prototype design and fabrication functions from September 1986. For
the ten years prior to arriving at ASHA, he was Chief Designer for Tracy
Design, a California industrial design firm, and performed contract design and
prototype assignments with Toyota's California Design Studio, Catty Design.
Mr. Shaffer has also held general manager positions at a Jaguar service center
and a California residential/commercial construction company.
KENNETH R. BLACK. Mr. Black has served as the Company's Vice President
of Sales and Marketing since July 1992 after having served as the Sales
Director since January 1991. From 1985 until December 1990, he served as
President of Technologies International Ltd., a company he founded and which
was involved in market development and technology licensing for various
domestic and foreign clients. From 1979 until 1985, he served as a Director
of New Business Development for the Paint, Plastics and Vinyl Division of Ford
Motor Company.
SHEILA R. RONIS, PH.D. Dr. Sheila Ronis has served as a Director of ASHA
since 1989. She has been President of The University Group, Inc., a technical
and managerial services company since 1988. She is also an adjunct professor
at the University of Detroit where she teaches Strategic Management and
Business Policy in the M.B.A program. Her B.S. is in Physics and Mathematics.
She received an M.A. and Ph.D. degree in Organizational Behavior from Ohio
State University in 1976. Dr. Ronis consults for many organizations as
diverse as General Motors, Amertech, The White House, USCAR and the Center for
Strategic and International Studies in Washington.
ROBERT J. SINCLAIR. Mr. Sinclair has served as a Director of the Company
since April 1994. Mr. Robert J. Sinclair is retired Chairman and Chief
Executive Officer of Saab Cars USA, Inc. Early in his automotive career he
served as advertising manager and public relations manager of Saab, before
joining Volvo North America where he rose to President of Volvo's Western US
organization. He rejoined Saab as President in 1979, retiring as Chairman and
CEO in 1991. Mr. Sinclair consults for many organizations.
LAWRENCE COHEN. Mr. Cohen has served as a Director of the Company since
January 20, 1995. Mr. Cohen is Chairman of BioTime, Inc. He is the founder
and board member of Apollo Genetics, a research and development company
engaged in creating compounds to prevent brain cells from dying. Mr. Cohen's
experience includes 13 years as a corporate finance consultant specializing
in private placements, public offerings and mergers and acquisitions.
NEIL MCCARTHY. Mr. McCarthy has served as a Director of the Company
since January 20, 1995. Mr. McCarthy is a private consultant to Falcon Cable
and other companies in the U.S. and other countries. He was previously vice
president of Falcon Cable. Mr. McCarthy also served as executive vice
president of North American operations for Capitol-EMI Music Inc. He also has
held senior level finance positions at Orion Pictures Corporation, The Walt
Disney Company and Marriott Corporation. A certified public accountant he
holds a Masters degree in Business Administration from St. John's University
and a Bachelors degree in Marketing from Villanova University. He is a
member of the Board of Directors of Phoenix House of California.
The Company's Board of Directors held three (3) meetings during the year
ended September 30, 1995, and the Compensation Committee held two (2)
meetings. Each Director attended at least 75% of the aggregate number of
meetings held by the Board of Directors and the Compensation Committee during
the time each such Director was a member of the Board or of the Compensation
Committee.
The Company's executive officers hold office until the next annual
meeting of directors of the Company, which currently is scheduled for April
26, 1996. There are no known arrangements or understandings between any
director or executive officer and any other person pursuant to which any
of the above-named executive officers or directors was selected as an officer
or director of the Company.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Based solely on a review of Forms 3 and 4 and amendments thereto
furnished to the Company during its most recent fiscal year, and Forms 5 and
amendments thereto furnished to the Company with respect to its most recent
fiscal year and certain written representations, no persons who were
either a director, Officer or beneficial owner of more than 10% of the
Company's Common Stock, failed to file on a timely basis reports required by
Section 16(a) of the Exchange Act during the most recent fiscal year, except
as follows:
Kenneth R. Black filed one Form 4 reporting the grant of a stock option
late; Theo E. Shaffer filed one Form 4 reporting the sale of stock and one
Form 4 reporting the grant of a stock option late; Lawrence Cohen and Neil
McCarthy did not report that they held stock options in their initial reports
on Form 3, and subsequently amended such reports to include such options.
EXECUTIVE COMPENSATION
The following table sets forth information regarding the executive
compensation for the Company's President and each other executive officer who
received compensation in excess of $100,000 for the fiscal years ended
September 30, 1995, 1994 and 1993:
<TABLE>
<CAPTION>
Summary Compensation Table
Long Term Compensation
------------------------------
Annual Compensation Awards Payouts
----------------------- --------------------- -------
Securities
Other Underlying All
Annual Restricted Options/ Other
Name and Principal Compen- Stock SARs LTIP Compen-
Position Year Salary Bonus sation Award(s) (Number) Payouts sation
- ------------------ ---- -------- ----- ------ ---------- ---------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Alain J-M Clenet, 1995 $152,500 -0- -0- -0- -0- -0- $3,035*
Chief Executive 1994 $152,500 -0- -0- -0- -0- -0- -0-
Officer 1993 $139,156 -0- -0- -0- -0- -0- -0-
____________________
</TABLE>
*Includes $981 in medical expense reimbursements for Mr. Clenet and his
family, $857 paid for premiums on a $5 million umbrella liability insurance
policy for Mr. Clenet, and other expenses paid on his behalf.
In April 1995, the Company entered into an Amended and Restated
Employment Agreement with Alain J-M Clenet, the Company's Chairman of the
Board and Chief Executive Officer, pursuant to which he receives a base annual
salary of $152,500. Mr. Clenet's base salary is subject to cost-of-living
adjustments and may be increased by the Board of Directors. The initial term
is through April 20, 2000, and will be automatically extended for additional
two year terms unless either party notifies the other at least six months in
advance. Mr. Clenet is entitled to participate in all insurance plans and
benefits of the Company and to also be reimbursed for all of his and his
family's medical and dental expenses not paid for under such programs. Mr.
Clenet also receives a $5 million umbrella liability insurance policy paid for
by the Company.
No other Executive Officers have employment agreements with the Company.
John C. McCormack, the Company's President and Chief Operations Officer,
presently receives a salary of $90,000 per year; Theo E. Shaffer, the
Company's Executive Vice President, presently receives a salary of $90,000 per
year; and Kenneth R. Black, the Company's Vice President of Sales and
Marketing, receives a salary of $85,000 per year. Each of these persons have
also received a $10,000 bonus during the fiscal year ending September 30,
1996.
Effective during the fiscal year ended September 30, 1995, the Company's
Directors do not receive fees for their attendance at Board or committee
meetings, but they have received options under the Company's 1994 Stock Option
Plan. Directors are also reimbursed for their reasonable expenses in
attending meetings of the Board of Directors and any committees thereof.
STOCK OPTION PLANS
1994 STOCK OPTION PLAN
On December 20, 1994, the Board of Directors approved the Company's 1994
Stock Option Plan. As approved by the Company's shareholders in April 1995,
240,000 shares of Common Stock were reserved for issuance upon the exercise of
options under the plan. In November 1995, the Board approved an increase in
the number of reserved shares to 750,000 subject to shareholder approval. The
purpose of this plan is two-fold. First, the plan will further the interests
of the Company and its shareholders by providing incentives in the form of
stock options to employees who contribute materially to the success and
profitability of the Company. Second, the plan will provide the Company
flexibility and the means to reward directors and consultants who render
valuable contributions to the Company. The Board has the power to determine
at the time the option is granted whether the option will be an incentive
stock option (an option which qualifies under Section 422 of the Internal
Revenue Code of 1986) or an option which is not an incentive stock option.
However, incentive stock options will only be granted to persons who are
employees of the Company. Vesting provisions are determined by the Board at
the time options are granted. The option price must be satisfied by the
payment of cash. The Board of Directors may amend the plan at any time,
provided that the Board may not amend the plan to materially increase the
number of shares available under the plan to materially change the eligible
class of employees without shareholder approval.
On December 20, 1994, the Board of Directors granted incentive stock
options to purchase an aggregate of 75,745 shares of Common Stock. These
options were exercisable at $4.00 per share and are fully vested. They expire
three years after the date of grant. Included in the options granted on
December 20, 1994, were incentive stock options granted to Theo E. Shaffer and
Kenneth R. Black, Officers of the Company, to purchase 3,098 and 2,788 shares,
respectively. Mr. Shaffer exercised his option on June 21, 1995. In
addition, non-qualified stock options were granted to Lawrence Cohen and Neil
McCarthy, Directors of the Company, each to purchase up to 25,000 shares of
Common Stock.
On October 31, 1995, the Board of Directors granted incentive stock
options to 16 employees of the Company to purchase an aggregate of 72,092
shares of Common Stock. These options are exercisable at $4.125 per share,
are fully vested, and expire three years after the date of grant.
On November 1, 1995, incentive stock options were granted to John C.
McCormack and Kenneth R. Black, Officers of the Company, to purchase 15,786
and 10,524 shares, respectively. These options are exercisable at $4.625 per
share, are fully vested, and expire three years from the date of grant. In
addition, non-qualified stock options were granted to Sheila R. Ronis and
Robert J. Sinclair, Directors of the Company, each to purchase up to 25,000
shares of Common Stock. These options are exercisable at $4.625 per share,
are fully vested, and expire five years from the date of grant.
Also on November 1, 1995, the Company granted non-qualified stock options
to John C. McCormack to purchase 25,000 shares at $4.5625 per share. Upon
approval of the amendment to the 1994 Stock Option Plan, the options will be
fully vested and will expire three years from the date of grant.
1993 STOCK OPTION PLAN
On August 12, 1993, the Company's Board of Directors approved a
non-qualified stock option plan in which any employee, officer, director or
consultant that the Board, in its sole discretion, designates is eligible to
participate. During the year ended September 30, 1993, options to purchase
64,706 shares of the Company's Common Stock at $1.28 per share were granted
to three officers. Theo E. Shaffer received an option of 23,530 shares. This
option was exercised on June 21, 1995. Kenneth R. Black exercised the option
he received for 17,648 shares on March 30, 1994. Valarie Valencia, former
Secretary/Treasurer of the Company, exercised 50% of her original option to
purchase 23,530 shares in February 1995, pursuant to a provision in the plan
that if the holder of the option terminates employment with the Company, the
option is reduced by one-half and expires two months after the termination of
employment.
Prior to the grant of the above options, had granted the same three
officers options to purchase 64,706 shares of his Common Stock at $1.28 per
share. The Board of Directors determined it was more appropriate for the
Corporation to recognize and reward the services of its officers and the
shareholder options were canceled upon grant of options by the Company.
1988 STOCK INCENTIVE PLAN
The Board of Directors approved a stock incentive plan during December
1988. This plan has reserved 47,059 shares of Common Stock for issuance to
participants under the plan, defined as any person or firm providing services
to the Company. The stock will be granted at the discretion of the management
and a cash payment equal to twenty percent of the value of the stock granted
will be paid to the participant. Granting of stock under this plan is
intended to encourage a continued relationship and services by the participant
and to reward creative or noteworthy efforts of the participant. The stock is
100% forfeitable if the services of the participant are terminated within two
years of the grant of the stock and 50% forfeitable if services are terminated
after two years but less than three years from the grant of the stock. The
stock incentive plan originally was scheduled to terminate on September 30,
1994. On September 2, 1994, the Company's Board of Directors approved
reserving an additional 11,765 shares of Common Stock for granting to
participants under this plan, for the year ending September 30, 1995. A
balance of 45,523 shares are available for issuance under this plan.
The plan was renewed for one year ending September 30, 1995, at
substantially the same terms. A total of 3,290 shares valued at $33,466 were
issued during 1989 under this plan to five individuals. A total of 10,012
shares valued at $25,530 were issued during 1990 under this plan to twelve
individuals. No shares were issued during 1991, 1992, 1993 and 1994 under
this plan.
401(K) PLAN
Effective October 1, 1995, the Company implemented a 401(K) Plan pursuant
to which all eligible employees may contribute up to 15% of their
compensation. The Company matches contributions in the amount of 10% of all
elective deferrals, and, at the Company's option, may contribute annually up
to 15% of the total compensation of all eligible employees. Executive
Officers of the Company are eligible to participate in this plan.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In August 1993, the Company loaned $53,000 to Valarie Valencia, who was
then an Officer of the Company, with principal and interest of 6% due on
February 15, 1994, collateralized by a second deed of trust on her personal
residence. Her debt to the Company has been reduced to $32,485, with
principal and interest of 6% due April 2, 1996, collateralized by a second
deed of trust on her personal residence and a pledge of 7,200 shares of the
Company's Common Stock.
On August 11, 1994, ASHA Corporation entered into a joint venture with
TAISUN Automotive of which Mr. Brian Chang is 85% shareholder. Mr. Chang is a
principal shareholder of the Company. The joint venture was formed as a
Singapore corporation named ASHA/TAISUN PTE LTD. ("ASHA/TAISUN"). The purpose
of this joint venture is for the licensing of the GERODISC technology in China
and Malaysia and also for the development of an automotive industry for China
and Southeast Asia. The Company, by entering into a licensing agreement,
received an initial credit of $100,000 for its investment in ASHA/TAISUN
during the year ended September 30, 1994. On February 23, 1995, the Company
invested an additional $900,000 in cash in ASHA/TAISUN.
ASHA/TAISUN, through its 60%-owned subsidiary, Jiaxing Independent Auto
Design and Development Co., Ltd., is developing automobile manufacturing
facilities in Jiaxing, China. ASHA/TAISUN has also contracted with the
Company for automobile design work. The Company was paid $705,000 during the
year ended September 30, 1995, for design work. Additional fees earned of
$110,000 were offset against capital investment requirements of the Company to
ASHA/TAISUN. Subsequent to September 30, 1995, design work fees of $185,000,
as earned, will be offset against the Company's capital investment
requirements.
In March 1994, Brian Chang purchased 235,924 shares of the Company's
Common Stock for $1,000,000 in cash. Mr. Chang in July of 1994 purchased
800,000 shares of ASHA Common Stock from a principal shareholder. On November
2, 1995, Mr. Chang purchased an additional 181,818 shares of ASHA Common Stock
for $750,000 in cash.
AMENDMENT TO 1994 STOCK OPTION PLAN
DESCRIPTION OF THE PLAN
In December 1994, the Company's Board of Directors approved the
establishment of a Stock Option Plan (the "1994 Plan") and the Company's
shareholders approved the 1994 Plan in April 1995. The Board of Directors
believes that the 1994 Plan advances the interests of the Company by
encouraging and providing for the acquisition of an equity interest in the
success of the Company by employees, officers, directors and consultants, and
by providing additional incentives and motivation toward superior Company
performance. The Board believes it also enables the Company to attract
and retain the services of key employees, officers, directors and consultants,
and by providing additional incentives and motivation toward superior Company
performance. The Board believes it also enables the Company to attract and
retain the services of key employees, officers, directors and consultants upon
whose judgment, interest and special effort the successful conduct of its
operations is largely dependent.
The 1994 Plan allows the Board to grant stock options from time to time
to employees, officers and directors of the Company and consultants to the
Company. The Board has the power to determine at the time the option is
granted whether the option will be an Incentive Stock Option (an option which
qualifies under Section 422 of the Internal Revenue Code of 1986) or an option
which is not an Incentive Stock Option. However, Incentive Stock Options may
only be granted to persons who are key employees of the Company. Vesting
provisions are determined by the Board at the time options are granted. Prior
to the proposed amendment, the total number of shares of Common Stock subject
to options under the 1994 Plan may not exceed 240,000, subject to adjustment
in the event of certain recapitalizations, reorganizations and similar
transactions. The option price must be satisfied by the payment of cash.
The Board of Directors may amend the 1994 Plan at any time, provided that
the Board may not amend the 1994 Plan to materially increase the number of
shares available under the 1994 Plan, materially increase the benefits
accruing to Participants under the 1994 Plan, or materially change the
eligible class of employees without shareholder approval.
PROPOSED AMENDMENT
In November 1995, the Board of Directors voted, subject to shareholder
approval, to increase the number of shares of Common Stock subject to options
under the 1994 Plan from 240,000 to 750,000. The Board of Directors believes
that the proposed increase is necessary in order for the Company to have
sufficient flexibility to provide the amounts and types of incentives to its
officers, employees, directors and consultants which are deemed necessary to
encourage the Company's success.
There are currently stock options granted under the 1994 Plan to purchase
up to 233,892 shares of Common Stock. (See "Executive Compensation" for
additional information concerning these options.) Of these options, options
to purchase 25,000 shares of Common Stock are contingent on the approval of
the amendments to the 1994 Plan.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Approval of the amendment to the 1994 Plan requires the affirmative vote
of a majority of the shares of Common Stock represented at the meeting. The
Board of Directors recommends a vote FOR approval of the amendment to the 1994
Plan.
APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The independent accounting firm of McDirmid, Mikkelsen & Secrest, P.S.
audited the financial statements of the Company for the year ended September
30, 1995, and has been selected in such capacity for the current fiscal year.
At the direction of the Board of Directors, this appointment is being
presented to the shareholders for ratification or rejection at the Annual
Meeting of Shareholders. If the shareholders do not ratify the appointment of
McDirmid, Mikkelsen & Secrest, P.S., the appointment of auditors will be
reconsidered by the Board of Directors.
It is not expected that a representative of McDirmid, Mikkelsen &
Secrest, P.S. will be present at the meeting.
OTHER BUSINESS
As of the date of this Proxy Statement, management of the Company was not
aware of any other matter to be presented at the Meeting other than as set
forth herein. However, if any other matters are properly brought before the
Meeting, the shares represented by valid proxies will be voted with respect to
such matters in accordance with the judgment of the persons voting them. A
majority vote of the shares represented at the meeting is necessary to approve
any such matters.
ANNUAL REPORT
The Company's Annual Report on Form 10-K for the year ending September
30, 1995, accompanies this Proxy Statement. The Annual Report is not
incorporated into this Proxy Statement and is not to be considered part of the
solicitation material.
DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS
FOR THE ANNUAL MEETING TO BE HELD IN APRIL 1997
Any proposal by a shareholder intended to be presented at the Company's
Annual Meeting of Shareholders to be held in April 1996 must be received at
the offices of the Company, 600 C Ward Drive, Santa Barbara, California 93111,
on or before November 16, 1996, in order to be included in the Company's proxy
statement and proxy relating to that meeting.
JOHN C. McCORMACK, PRESIDENT
Santa Barbara, California
March 15, 1996
P R O X Y
ASHA CORPORATION
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Alain J-M Clenet with the power to
appoint his substitute, and hereby authorizes him to represent and to vote as
designated below, all the shares of common stock of ASHA Corporation held of
record by the undersigned on March 15, 1996, at the Annual Meeting of
Shareholders to be held on April 26, 1996, or any adjournment thereof.
1. The election of five (5) Directors of the Company to serve until the
next Annual Meeting of Shareholders and until their successors have been duly
elected and qualified:
___ FOR all nominees listed below (except as marked to the
contrary).
___ WITHHOLD authority to vote for all the nominees listed below:
Alain J-M Clenet Robert J. Sinclair
Sheila R. Ronis Lawrence Cohen
Neil McCarthy
[INSTRUCTION: To withhold authority to vote for any individual nominee, cross
out that nominee's name above.]
2. The ratification of the appointment of McDirmid, Mikkelsen &
Secrest, P.S. as the Company's independent accountants for the fiscal year
ending September 30, 1996;
___ FOR ___ AGAINST ___ ABSTAIN
3. The approval of an amendment to the Company's 1994 Stock Option Plan
to increase the number of shares issuable upon the exercise of options granted
under the plan from 240,000 shares to 750,000 shares.
___ FOR ___ AGAINST ___ ABSTAIN
4. The transaction of such other business as may properly come before
the meeting or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF ASHA
CORPORATION. PLEASE SIGN AND RETURN THIS PROXY IN THE ENCLOSED PRE-ADDRESSED
ENVELOPE. THE GIVING OF A PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON
IF YOU ATTEND THE MEETING.
(To be signed on the other side)
ASHA CORPORATION
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 PROPOSALS 1, 2 AND 3.
SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AT THE MEETING IN ACCORDANCE
WITH THE SHAREHOLDER'S SPECIFICATIONS ABOVE. THIS PROXY CONFERS DISCRETIONARY
AUTHORITY IN RESPECT TO MATTERS NOT KNOWN OR DETERMINED AT THE TIME OF THE
MAILING OF THE NOTICE OF THE ANNUAL MEETING OF SHAREHOLDERS TO THE
UNDERSIGNED.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of
Shareholders, Proxy Statement and Annual Report.
Dated: ______________, 1996 _______________________________________
Signature(s) of Shareholder(s)
_______________________________________
Signature(s) of Shareholder(s)
Signature(s) should agree with the name(s) stenciled hereon. Executors,
administrators, trustees, guardians and attorneys should indicate when
signing. Attorneys should submit powers of attorney.
(ps323.nam)
