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)
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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 20, 1999
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, 1260 Channel Drive, Santa Barbara, California, on Tuesday, April 20,
1999, 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 seven (7) 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 Arthur Andersen LLP as the Company's
independent accountants for the fiscal year ending September 30, 1999.
3. The approval of amendments 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 1,400,000 shares to 2,000,000 shares.
4. The approval of an amendment to the Company's Articles of
Incorporation to change the name of the Company to "McLaren Automotive Group,
Inc."
5. 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 2, 1999, 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 12, 1999
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ASHA CORPORATION
600 C WARD DRIVE
SANTA BARBARA, CALIFORNIA 93111
(805) 683-2331
______________________________
PROXY STATEMENT
______________________________
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 20, 1999
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, 1260 Channel Drive, Santa Barbara, California, on Tuesday, April 20,
1999, 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 18, 1999.
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-KSB 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 2, 1999, are entitled to notice of and to vote at the Meeting or any
adjournment thereof. On March 2, 1999, the Company had 8,979,174 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.
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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 2, 1999, 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 and Executive
Officer of the Company and by all Directors and Executive 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 AND NATURE OF PERCENT
OF BENEFICIAL OWNERS BENEFICIAL OWNERSHIP OF CLASS
- -------------------------- -------------------- --------
John C. McCormack 205,800 (1) 2.2%
600 C Ward Drive
Santa Barbara, CA 93111
Robert J. Sinclair 88,377 (2) 1.0%
1025 North Ontare Road
Santa Barbara, CA 93105
Lawrence Cohen 494,406 (3) 5.3%
3311 NE 26th Avenue
Lighthouse Point, FL 33064
Nick P. Bartolini 23,840 (4) 0.3%
1026 Santa Barbara Street
Santa Barbara, CA 93101
Erick A. Reickart 6,250 (5) 0.1%
5128 Woodland Drive
Bloomfield Hills, MI 48302
David D. Jones -0- --
100 Seahorse Drive
Waukegan, IL 60085
Wiley R. McCoy 76,250 0.8%
32233 West Eight Mile Road
Livonia, MI 48152
Kenneth R. Black 134,943 (5) 1.5%
600 C Ward Drive
Santa Barbara, CA 93111
Steven E. Sanderson 18,281 (5) 0.2%
600 C Ward Drive
Santa Barbara, CA 93111
Brian Chang 1,217,113 13.6%
1 Chatworth Road, No. 2421
Singapore 1024
2
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Greenmotors, L.L.C. 1,118,652 12.5%
277 Park Avenue, 27th Floor
New York, NY 10172
All Directors and Executive 1,048,147 10.8%
Officers as a Group (9 persons)
__________________
(1) Represents shares underlying currently exercisable stock options held by
Mr. McCormack.
(2) Represents 13,377 shares held directly and 75,000 shares underlying
currently exercisable stock options held by Mr. Sinclair.
(3) Represents 219,406 shares held by Mr. Cohen's wife and 275,000 shares
underlying currently exercisable stock options held by Mr. Cohen.
(4) Represents 11,340 shares held directly and 12,500 shares underlying
currently exercisable stock options held by Mr. Bartolini.
(5) Represents shares underlying currently exercisable stock options.
ELECTION OF DIRECTORS
The Board of Directors is currently set at seven (7) members. The Board
of Directors recommends the election as Directors of the seven (7) 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
- ---------------- --- -----------------------------------------------
John C. McCormack 67 Vice Chairman of the Board, President, Chief
Executive Officer, and Director since January
1998
Robert J. Sinclair 66 Director since April 1994
Lawrence Cohen 54 Chairman of the Board and Director since
January 1995
Nick P. Bartolini 62 Director since October 1997
Erick A. Reickert 63 Director since October 1997
David D. Jones 55 Director since January 1998
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Wiley R. McCoy 59 Director since February 1999
There is no family relationship between any Director or Executive
Officer of the Company.
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:
JOHN C. McCORMACK. Mr. McCormack has served as President of ASHA since
February 1, 1995, as Chief Executive Officer and a Director since January 8,
1998, and as Vice Chairman of the Board since March 1, 1999. He also served
as Chairman of the Board from January 1998 to February 1999. Mr. McCormack
helped start American Honda Motor Company in 1959, and served as its General
Manager until 1964. 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. 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.
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, and has been Chairman of the Board since March 1, 1999. Mr.
Cohen is currently acting as Chairman and CEO of Bristol Retail Solutions,
Inc. ("Bristol"), and has served in various capacities since its inception in
April 1996. Bristol is a publicly-held company in the business of providing
retail automation products and services such as point of sale systems. From
November 1990 to September 1996, Mr. Cohen served as Chairman of the Board of
BioTime, Inc. ("BioTime"), a publicly-held biotechnology company engaged in
the artificial plasma business. Mr. Cohen has also served as a director of
Apollo Genetics Inc., a company founded by Mr. Cohen which is engaged in the
genetic pharmaceutical business, from January 1993 to the present. He has
also served as a director of Registry Magic Inc., a company founded by Mr.
Cohen which develops voice recognition equipment, from November 1995 to
present; and as a director of Kaye Knotts Associates, Inc., from April 1995 to
present.
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NICK P. BARTOLINI. Mr. Bartolini has served as a Director of the Company
since October 1997. Since 1994, Mr. Bartolini has been Principal of Bartolini
Associates with offices in Santa Barbara, California. Bartolini Associates
has provided process re-engineering new product and business development and
sales consultant services to automotive suppliers in the United States and
Europe. It also engages in venture investments and pro bono association with
RAND. Mr. Bartolini was previously employed by the Ford Motor Company for
over 30 years, and retired from the position of Vice President, Ford Parts and
Service Operations for Ford in Europe from 1989 to 1994. Prior to that time,
he held senior operation positions in sales, new product and business
development in Ford's Asia-Pacific and European operations. Mr. Bartolini was
also a Director of several foreign subsidiaries of Ford Motor Company in Asia
and Europe, including the Supervisory Board of Ford Werke AG. Mr. Bartolini
received a B.S. Degree from the University of Notre Dame, and a MBA Degree
from the University of Detroit.
ERICK A. REICKERT. Mr. Reickert has served as a Director of the Company
since October 1997. Mr. Reickert is currently retired. From September 1992
to January 1996 he was President and CEO of New Venture Gear, Inc. which is
jointly owned by Chrysler Corp. and General Motors Corp., and is a licensee of
the Company's GERODISC technology. From 1984 to 1992, Mr. Reickert was
employed by Chrysler Corporation, and served as Chairman and Chief Executive
Officer of Chrysler De Mexico from May 1987 to January 1990, and Acustar, Inc.
from May 1990 to April 1991. In addition, he was Vice President of Powertram
Operations for Chrysler from April 1991 to December 1992 where he was
responsible for 12 manufacturing plants producing engines, transmission and
automotive parts. From 1965 to 1984 Mr. Reickert worked for Ford Motor
Company in various capacities. He received a B.S. Degree in Electrical
Engineering from Northwestern University and a MBA Degree from Harvard
Business School.
DAVID D. JONES. Mr. Jones has been a Director since January 1998. Since
September 1997, Mr. Jones has served as President and Chief Executive Officer
and a Director of Outboard Marine Corporation, which manufactures and markets
outboard marine engines, boats and marine parts with annual sales of
approximately $1 billion. Outboard Marine Corp. is privately owned but has
publicly-held debt and files reports under the Securities Exchange Act of
1934. From 1990 through August 1997, he served as president of the Mercury
Marine Division of the Brunswick Corporation, a manufacturer of boats,
outboard motors, stern drives and other recreational products. Mr. Jones is
also a Director of National Exchange Bank, Fond du Lac, Wisconsin.
WILEY R. McCOY. Mr. McCoy has been a Director of the Company since
February 26, 1999. Since December 1993, he has served as President and Chief
Operating Officer of McLaren Engines, Inc. ("McLaren"). Previously, Mr. McCoy
served as Executive Vice President and Chief Operating Officer of McLaren
since 1982. Mr. McCoy came to McLaren in 1976 as an Engineering Program
Manager of turbocharged racing programs. BMW had partnered with McLaren at
that time to develop a turbocharged engine package for road racing and Formula
One Grand Prix. Mr. McCoy ran this program until its conclusion and by 1980
was helping to move McLaren into the Detroit main stream as an engineering
consulting firm in powertrain. Since that time, McLaren has developed a wide
base of OEM and Tier I clients in all areas of powertrain from design to
emissions certification. Mr. McCoy has served as both program manager for
various projects as well as Chief Operations Officer. Before he came to
McLaren, Mr. McCoy was involved in various high performance and engine
development programs for most of the previous 20 years.
5
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KENNETH R. BLACK. Mr. Black (age 52) 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. He also served as a Director of the
Company from January 1998 to July 1998. 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.
STEVEN E. SANDERSON. Mr. Sanderson (age 46) has served as Chief
Financial Officer since March 1997. He also served as Controller of the
Company from January 1997 to January 1998. From 1991 until December 1996, he
served as the President and owner of Sanderson Investments, Inc., a consulting
company which prepared financial analyses encompassing productivity,
variances, standard costs and production bonus plans, time studies, rate of
return, and risk management. From 1985 until 1991, he served as Controller for
the Systems Division of Computer Products Inc., a public company, where he was
responsible for the accounting and management information systems group for
two manufacturing facilities. From 1981 until 1985, he served as Controller
of Southeastern Public Service Company, a public company, where he had
complete responsibility for the accounting and management information systems
functions for this multi-state business. From 1977 to 1981, he was employed
by the Solid State Division of RCA where his last position was cost accounting
supervisor. Mr. Sanderson received a B.B.A. Degree in Accounting from Florida
Atlantic University in 1977.
The standing committees of the Board of Directors are the Audit Committee
and the Compensation Committee.
The Audit Committee presently consists of David Jones and Nick Bartolini,
each of whom is an independent Director, and John C. McCormack. The Audit
Committee's function is to review and report to the Board of Directors with
respect to the selection and the terms of engagement of the Company's
independent public accountants, and to maintain communications among the Board
of Directors, such independent public accountants, and the Company's internal
accounting staff with respect to accounting and audit procedures, the
implementation of recommendations by such independent public accountants, the
adequacy of the Company's internal controls and related matters. The Audit
Committee also reviews certain related party transactions and any potential
conflict of interest situations involving officers, directors or stockholders
beneficially owning more than 10% of an equity security of the Company.
The Compensation Committee presently consists of Robert Sinclair,
Lawrence Cohen and John C. McCormack. The Compensation Committee's function
is to review and approve annual salaries and bonuses for all executive
officers and review, approve and recommend to the Board of Directors the terms
and conditions of all employee benefit plans or changes thereto, including the
granting of stock options pursuant to the Company's 1994 Option Plan.
The Company's Board of Directors held four (4) meetings during the year
ended September 30, 1998, the Audit Committee held two (2) meetings, and the
Compensation Committee held one (1) meeting. Each Director attended at least
75% of the aggregate number of meetings held by the Board of Directors and the
Committees thereof during the time each such Director was a member of the
Board or any Committee thereof.
The Company's executive officers hold office until the next annual
meeting of directors of the Company, which currently is scheduled for April
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20, 1999. 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.
SECTION 16(a) BENEFICIAL REPORTING COMPLIANCE
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:
Alain J-M Clenet (a former Officer and Director) filed one Form 4
reporting one transaction three days late; Robert J. Sinclair filed a Form 5
one day late reporting one exempt stock option grant; David D. Jones filed a
Form 3 three days late; Nick P. Bartolini reported five Form 4 transactions
late in a Form 5; and Erick A. Reickert filed a Form 5 reporting one exempt
stock option grant late.
EXECUTIVE COMPENSATION
The following table sets forth information regarding the executive
compensation for the Company's Chief Executive Officer and each other
Executive Officer who received compensation in excess of $100,000 for the
fiscal years ended September 30, 1998, 1997 and 1996:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG-TERM COMPENSATION
-----------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
--------------------------- -------------------- --------------
SECURI-
TIES
UNDERLY-
OTHER RE- ING ALL
ANNUAL STRICTED 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, 1998 $ 38,125 -0- -0- -0- 11,450 -0- $33,926
Officer<FN1> <FN2>
1997 $152,500 $ -0- -0- -0- 8,278 -0- $ 5,953
<FN3>
1996 $152,500 $73,000 -0- -0- -0- -0- $ 7,819
<FN4> <FN5>
John C. McCormack, 1998 $123,603 -0- -0- -0- 49,414 -0- $ 1,250
President <FN6> <FN7>
1997 $ 90,000 -0- -0- -0- 106,386 -0- $ -0-
1996 $ 90,000 $10,000 -0- -0- 65,786 -0- $ 504
<FN8>
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Kenneth R. Black, 1998 $119,167 -0- -0- -0- 17,374 -0- -0-
Vice President <FN9>
of Sales and 1997 $ 90,000 -0- -0- -0- 104,257 -0- -0-
Marketing 1996 $100,592 $10,000 -0- -0- 10,524 -0- -0-
<FN10>
Steven E. 1998 $104,418 -0- -0- -0- 9,781 -0- -0-
Sanderson, <FN11>
Chief Financial 1997 $ 51,468 -0- -0- -0- 10,000 -0- -0-
Officer
Theo E. Shaffer, 1996 $ 92,025 $19,373 -0- -0- -0- -0- -0-
Executive Vice
President<FN12>
- -------------------
<FN>
<FN1>
Mr. Clenet resigned as an Officer and Director of the Company on January 8, 1998.
<FN2>
Represents automobile purchased for $28,000 for Mr. Clenet as part of termination
agreement, legal expenses of $5109 in connection to termination, and $816 for additional
medical expenses.
<FN3>
Represents contractual employment agreement for estate and trust planning for Mr. Clenet
and his family of $2,600, premiums of $371 on a $5 million umbrella liability insurance
policy and $2,982 for additional medical expenses paid on his Chief Executive behalf.
<FN4>
Of this amount, $88,958 was paid during the fiscal year ended September 30, 1996, and the
remainder was deferred until January 1997.
<FN5>
Represents medical expense reimbursements for Mr. Clenet and his family.
<FN6>
Effective January 1, 1998 Mr. McCormack's compensation was increased from $90,000 per year
to $140,000 per year.
<FN7>
Represents amounts paid by the Company as a matching amount to a 401(k) plan contribution.
<FN8>
Represents amounts paid by the Company as a matching amount to a 401 (k) plan
contribution.
<FN9>
Effective January 1, 1998 Mr. Black's compensation was increased from $90,000 per year to
$130,000 per year.
<FN10>
Includes $15,592 paid to Mr. Black in settlement of unused vacation time.
<FN11>
Mr. Sanderson was hired on January, 1997 as Controller and Chief Financial Officer
effective March, 1997. Effective January 1, 1998 his annual salary increased from $85,000
per year to $110,000 per year.
<FN12>
Mr. Shaffer resigned on October 1, 1996.
</FN>
</TABLE>
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OPTION/SAR GRANTS IN LAST FISCAL YEAR
Individual Grants
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARs
UNDERLYING GRANTED TO EXERCISE
OPTIONS/SARs EMPLOYEES IN OR BASE EXPIRATION
NAME GRANTED(#) FISCAL YEAR PRICE($/SH) DATE
- ----------------- ------------ ------------ ---------- ----------
Alain J-M Clenet 11,450 3.2% $5.4375 12/16/00
John C. McCormack 49,414 13.7% 5.4375 12/16/00
Kenneth R. Black 17,374 4.8% 5.4375 12/16/00
Steven E. Sanderson 9,781 2.7% 5.4375 12/16/00
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
SECURITIES UNDER- VALUE OF UNEXER-
SHARES LYING UNEXER- CISED-IN-THE
ACQUIRED CISED OPTIONS MONEY\OPTIONS/
ON SARS AT FY-END SARS AT FY-END
EXERCISE VALUE EXERCISABLE/ EXERCISABLE/
NAME (NUMBER) REALIZED UNEXERCISABLE UNEXERCISABLE
- ----------------- -------- -------- ----------------- ----------------
Alain J-M Clenet -- - 19,728 / 0 $2,587 / 0
John C. McCormack -- - 221,586 / 0 $1,996 / 0
Kenneth R. Black -- - 134,943 / 0 $1,330 / 0
Steven E. Sanderson -- - 19,781 / 0 $2,500 / 0
EMPLOYMENT AGREEMENTS
In April 1995, the Company entered into an Amended and Restated
Employment Agreement with Alain J-M Clenet, who was then the Company's
Chairman of the Board and Chief Executive Officer, pursuant to which he
received a base annual salary of $152,500. Mr. Clenet was 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 received a $5 million umbrella
liability insurance policy paid for by the Company. On January 8, 1998, Mr.
Clenet resigned as an officer and Director of the Company, and this employment
agreement was terminated by mutual agreement.
On March 1, 1997, the Company entered into employment agreements with
Jack McCormack and Ken Black. Each of the Employment Agreements expired as of
February 28, 1999, however, Mr. Black's agreement was automatically renewed
for an additional two year term. Mr. Black's agreement provides for cost of
living adjustments and participation in all fringe benefits available to other
executive officers. Effective January 1, 1998, Mr. McCormack's salary
increased to $140,000 per year and Mr. Black's salary increased to $130,000
per year. On January 1, 1999, Mr. Black's salary increased to $136,500.
DIRECTORS' COMPENSATION
Effective during the fiscal year ended September 30, 1998, the Company's
Directors receive fees of $1,250 per meeting for their attendance at Board or
committee meetings, and receive 12,500 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.
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During the fiscal year ended September 30, 1997, the Company's Directors
received 25,000 options under the Company's 1994 Stock Option Plan in lieu of
cash fees.
In addition, in July 1997, Lawrence Cohen was granted a stock option to
purchase 200,000 shares of Common Stock at $4.375 per share.
In December 1997, the Company's Directors were granted options as
follows: Sheila Ronis, Robert Sinclair and Lawrence Cohen each received
options to purchase 25,000 shares of Common Stock; Nick Bartolini received
options to purchase 12,500 shares; and Erick Reickert received options to
purchase 6,250 shares. These options are exercisable at $5.4375 per share.
In October 1998, stock options to purchase 12,500 shares each were
granted to Robert J. Sinclair, Lawrence Cohen, Nick Bartolini, Erick Reickert
and David D. Jones. These options are contingent on shareholder approval of
the October 1998 amendment to the Company's 1994 Stock Option Plan. These
options will be exercisable at $3.25 per share.
Certain of the Company's Directors receive fees for consulting services
to the Company in addition to the fees they receive as Directors. During the
fiscal year ended September 30, 1998, the Company paid Lawrence Cohen $52,174
and Nick Bartolini $7,900 for such consulting services.
STOCK OPTION PLANS
1994 STOCK OPTION PLAN
The 1994 Stock Option Plan provides for the grant of options to purchase
up to 750,000 shares of Common Stock to employees, officers, directors and
consultants of the Company. 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 July 1, 1997, the Company's Board of Directors adopted amendments to
the 1994 Stock Option Plan to increase the number of shares of Common Stock
which may be subject to options granted under the plan to 1,000,000; to allow
the exercise price of options to be paid by means other than cash; and to
allow options to be granted with reload option provisions. On December 16,
1997, the Company's Board of Directors adopted an additional amendment to
increase the number of shares of Common Stock which may be subject to options
granted under the plan to 1,400,000. These amendments were approved by the
Company's shareholders on April 3, 1998. On October 28, 1998, the Board of
Directors adopted an additional amendment to increase the number of shares of
Common Stock which may be subject to options granted under the plan to
1,800,000, and on December 29, 1998, the Board of Directors adopted an
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additional amendment to increase the number of shares of Common Stock which
may be subject to options granted under the plan to 2,000,000.
As of September 30, 1998, there were 1,146,556 options outstanding under
the plan with exercise prices ranging from $3.69 to $6.28.
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. During the
fiscal year ended September 30, 1997 and 1998, the Company made $5,030 and
$8,231, respectively, in matching contributions under this plan.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On January 8, 1998, the Company was a party to two agreements in which
Alain Clenet, who was the Company's Chairman of the Board and Chief Executive
Officer, sold a total of 1,677,978 shares of the Company's common stock. In
one agreement Mr. Clenet sold 1,118,652 shares to Greenmotors LLC, which as a
result of this purchase, now owns 12.9% of the Company's shares outstanding.
In the other agreement, Mr. Clenet sold a total of 559,326 to four investors,
including the wife of Lawrence Cohen, one of the Company's Directors, who
purchased 219,406 shares. Simultaneously with the closing of these two
transactions, the Company and Mr. Clenet entered into a Separation Agreement
pursuant to which Mr. Clenet agreed to resign as an Officer and Director of
the Company, effective immediately.
On August 11, 1994, the Company 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 to exploit the Company's ABC technology in the China
and Southeast Asia markets.
ASHA/TAISUN, through its 85%-owned subsidiary, Jiaxing Independent Auto
Design and Development Co., Ltd., is developing an automobile manufacturing
facility in Jiaxing, China. ASHA/TAISUN has also contracted with the Company
for automobile design work. During the years ended September 30, 1997 and
1998, the Company invested $870,323 and $534,467, respectively, in the joint
venture.
In March 1994, Brian Chang purchased 235,294 shares of the Company's
Common Stock for $1,000,000 in cash. On November 2, 1995, Mr. Chang purchased
an additional 181,818 shares of ASHA Common Stock from the Company 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
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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 1,400,000, subject to adjustment
in the event of certain recapitalizations, reorganizations and similar
transactions. Options may be exercisable by the payment of cash or by other
means as authorized by the Board of Directors. During 1997, the 1994 Plan was
amended to allow the grant of options with reload option provisions.
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 AMENDMENTS
On October 28, 1998, the Board of Directors voted, subject to shareholder
approval, to increase the number of shares of Common Stock subject to options
under the Plan to 1,800,000, and on December 29, 1998, the Board of Directors
adopted an additional amendment, subject to shareholder approval, to increase
the number of shares of Common Stock subject to options under the Plan to
2,000,000. The Board of Directors believes that the proposed amendments are
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 outstanding stock options granted under the 1994 Plan
to purchase approximately 1,683,577 shares of Common Stock, including 587,137
options which are contingent on shareholder approval of the amendments to the
1994 Plan. Options to purchase 249,698 shares of Common Stock under the 1994
Plan have been exercised to date.
If approved by the shareholders, the amendments to the 1994 Stock Option
Plan would increase the number of shares of Common Stock that may be issued
upon the exercise of the options granted under the plan from 1,400,000 to
2,000,000. The Company has granted options to purchase up to 312,137 of these
additional shares at an exercise price of $3.25 per share and 200,000 of these
shares at $4.125 per share. The options to purchase 200,000 shares at $4.125
per share were granted to Lawrence Cohen, who is now Chairman of the Board,
and include reload and cashless exercise features. The following table sets
forth the number of shares of the Company's Common Stock that may be issued
upon the exercise of these options by certain executive officers and groups of
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individuals. The options on these shares will be exercisable only if
shareholders approve the amendment to the 1994 Stock Option Plan.
NUMBER OF SHARES
EXECUTIVE OFFICER / GROUP OF INDIVIDUALS SUBJECT TO OPTION GRANT
---------------------------------------- -----------------------
John C. McCormack 38,440
Kenneth R. Black 41,589
Steven E. Sanderson 37,096
All executive officers as a group (3
persons) 117,125
All Directors, other than executive
officers, as a group (6 persons) 262,500
All employees, other than executive
officers, as a group (29 persons) 207,512
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 Arthur Andersen LLP audited the
financial statements of the Company for the year ended September 30, 1998, 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 Arthur
Andersen LLP, the appointment of auditors will be reconsidered by the Board of
Directors.
It is expected that representatives of Arthur Andersen LLP will be
present at the meeting and will be given an opportunity to make a statement if
they desire to do so. It is also expected that the representatives will be
available to respond to appropriate questions from shareholders.
AMENDMENT TO ARTICLES OF
INCORPORATION CONCERNING NAME CHANGE
The Board of Directors has approved an amendment to the Articles of
Incorporation to change the name of the Company to "McLaren Automotive Group,
Inc." The new name is being proposed to better reflect the business of the
Company, since the Company acquired McLaren Engines, Inc. in January 1999.
McLaren Engines, Inc. was founded in 1969 and is currently involved in
designing, developing and fabricating engines and powertrain related products.
The Company plans to share automotive product development and engineering
activities with this newly acquired subsidiary. Management believes that the
McLaren name has achieved wide recognition in the automotive industry and will
benefit the Company.
An affirmative vote of a majority of the shares of Common Stock
outstanding will be required to approve the proposed amendment to the
Company's Articles of Incorporation. The Board of Directors recommends
approval of the amendment.
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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-KSB for the year ending September
30, 1998, 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 2000
Any proposal by a shareholder intended to be presented at the Company's
Annual Meeting of Shareholders to be held in April 2000 must be received at
the offices of the Company, 600 C Ward Drive, Santa Barbara, California 93111,
on or before November 9, 1999, in order to be included in the Company's proxy
statement and proxy relating to that meeting.
Shareholders intending to bring any business before the Annual Meeting of
Shareholders to be held in April 2000 that is not to be included in the
Company's proxy statement and proxy related to that meeting must notify the
Company, in writing, prior to February 1, 2000, of the business to be
presented. Any such notices received after said date will be considered
untimely under Rule 14a(c)(1) under the Securities Exchange Act of 1934, as
amended.
JOHN C. McCORMACK, PRESIDENT
Santa Barbara, California
March 12, 1999
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P R O X Y
ASHA CORPORATION
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints John C. McCormack 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 2, 1999, at the Annual Meeting of
Shareholders to be held on April 20, 1999, or any adjournment thereof.
1. The election of seven (7) 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:
John C. McCormack David D. Jones
Robert J. Sinclair Lawrence Cohen
Nick P. Bartolini Erick A. Reickert
Wiley R. McCoy
[INSTRUCTION: To withhold authority to vote for any individual nominee, cross
out that nominee's name above.]
2. The ratification of the appointment of Arthur Andersen, LLP as the
Company's independent accountants for the fiscal year ending September 30,
1999;
___ FOR ___ AGAINST ___ ABSTAIN
3. The approval of amendments 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 1,400,000 shares to 2,000,000 shares.
___ FOR ___ AGAINST ___ ABSTAIN
4. The approval of an amendment to the Company's Articles of
Incorporation to change the name of the Company to "McLaren Automotive Group,
Inc."
___ FOR ___ AGAINST ___ ABSTAIN
5. 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)
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, 3 AND 4.
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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: ______________, 1999 _______________________________________
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.
