SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the registrant [x]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[ ] Confidential, for Use of the Commission Only (as
permitted by Rule 14a-6(e)(2))
[x] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or
Rule 14a-12
Strategia Corporation
(Name of Registrant as Specified in Its Charter)
Strategia Corporation
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[x] No fee required
(1) Title of each class of securities to which
transactions applies:
(2) Aggregate number of securities to which transaction
applies:
(3) Per unit price of other underlying value of transaction
computer pursuant to Exchange Act Rule 0-11 (Set forth
the amount on which the filing fee is calculated and
state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided
by Exchange Act Rule 0-11(a)(2) and identify the filing
for which the offsetting fee was paid previously. Identify
the previous filing by registration statement number, or the
form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party:
(4) Date filed:
STRATEGIA CORPORATION
Notice of Annual Meeting of Shareholders
To Be Held September 16, 1998
NOTICE IS HEREBY GIVEN that the Annual Meeting of
Shareholders of Strategia Corporation (the "Corporation"),
will be held at the Corporation's offices at 10301 Linn
Station Road, Louisville, Kentucky, on Wednesday,
September 16, 1998, at 10:00 a.m., local time, for the
purposes of:
(1) Electing four directors.
(2) Transacting such other business as may properly be
brought before the meeting or any adjournments thereof.
All shareholders are cordially invited to attend the
meeting, but whether or not you expect to attend the
meeting in person, please sign and date the enclosed
proxy form and return it promptly so that your shares
may be voted.
By Order of the Board of Directors
Richard W. Smith
President
Louisville, Kentucky
August 25, 1998
YOUR VOTE IS IMPORTANT
Please date, sign and promptly return the enclosed
proxy card in the accompanying postage paid envelope.
STRATEGIA CORPORATION
6040 Dutchmans Lane, Suite 400
Louisville, Kentucky 40205
PROXY STATEMENT FOR ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD SEPTEMBER 16, 1998
This Proxy Statement is furnished in connection with
the solicitation by the Board of Directors of Strategia
Corporation (the "Corporation"), a Kentucky corporation, of
the accompanying proxy card for use at the Annual Meeting
of Shareholders to be held on September 16, 1998, and at any
adjourned meeting thereof (the "Annual Meeting").
The close of business on July 10, 1998, has been
fixed as the record date for the determination of shareholders
entitled to notice of and to vote at the Annual Meeting
(the "Record Date"). On the Record Date, the Corporation
had 4,667,677 shares of Common Stock outstanding. A majority
of the shares entitled to vote, represented in person or
by proxy, will constitute a quorum for the Annual Meeting.
This Proxy Statement and enclosed proxy card are
first being sent or given to shareholders on or about
August 25, 1998.
ACTION TO BE TAKEN BY PROXIES
When the enclosed proxy card is properly executed
and returned in the envelope provided, the shares
represented by the proxy card will be voted at the Annual
Meeting in accordance with the shareholder's instructions.
If no instructions are specified, such shares will be voted
in favor of management's nominees to the Board of Directors
and in management's discretion on such other
matters as may be properly brought before the Annual Meeting.
Each shareholder has one vote per share on all matters
coming before the Annual Meeting, but in the election of
directors, each shareholder may vote in the aggregate the
number of shares held by him on the Record Date multiplied
by the number of directors to be elected at the election.
A shareholder may cast all his votes for one nominee, or
he may distribute his votes among as many nominees as he
chooses. The Board of Directors is soliciting discretionary
authority for the proxy holders to cumulate votes in this
fashion.
A shareholder may revoke a proxy card at any time
before its exercise by filing a written notice of
revocation or a duly executed proxy card bearing a later
date with the Secretary of the Corporation. The powers
of proxy holders will be suspended if the person executing
the proxy card attends the Annual Meeting in person and
so requests. Attendance at the Annual Meeting will not
in itself constitute a revocation of the proxy appointment.
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information
as of July 10, 1998 with respect to the shares of Common
Stock owned (i) by each person known to the Corporation to
own beneficially more than 5% of the outstanding shares of
Common Stock (ii) by each of the Corporation's directors and
executive officers, and (iii) by all directors and officers
as a group. As of July 10, 1998, there were 4,667,677
outstanding shares of Common Stock, which is the Company's
only class of voting shares.
Directors and Executive Officers Number of Shares
Percent of Class(2)
<TABLE>
<CAPTION>
Directors and Number Percent
Executive Officers of Shares(1) of Class(2)
<S> <C> <C>
John P. Snyder
EPI Corporation
9707 Shelbyville Rd.
Louisville, KY 40223 1,404,437(3) 29.1%
Richard W. Smith
6040 Dutchmans Lane, Suite 400
P. O. Box 37144
Louisville, KY 40233 198,354(4) 4.2%
James P. Buren
1402 Northwind Road
Louisville, KY 40207 132,202(5) 2.8%
John A. Brenzel
3501 Graham Rd.
Louisville, KY 40207 78,939(6) 1.7%
James A. Huguenard
6040 Dutchmans Lane, Suite 400
P. O. Box 37144
Louisville, KY 40233 11,767(7) *
Roland Esnis
Twinsys Dataguard SA
Tour Mirabeau
39/43, Quai Andre Citroen
75015 PARIS 15,000(8) *
Paul E. Phillips, Jr.
6040 Dutchmans Lane, Suite 400
P.O. Box 37144
Louisville, KY 40233 -0-(9) *
All current directors
and officers as a
group (7 persons) 1,840,699(10) 36.7%
5% Beneficial Owners
TSF Investment Group LLC
9707 Shelbyville Road
Louisville, KY 40223 279,780(11) 5.9%
EPI Corporation
9707 Shelbyville Rd.
Louisville, KY 40223 1,364,903(12) 28.3%
EPI Corporation,
John P. Snyder,
Max G. Baumgardner,
James E. Buchart,
J. Ben Cress,
Robert H. Loeffler,
Henry A. Schumpf,
Grace W. Wilkins
9707 Shelbyville Rd.
Louisville, KY 40223 1,589,645(13) 32.8%
* Indicates less than 1%.
</TABLE>
(1) Based on information furnished to the Corporation by the named
person, and information contained in filings with the Securities and
Exchange Commission (the "Commission"). Under the rules of the
Commission, a person is deemed to beneficially own shares over which
the person has or shares voting or investment power or has the right
to acquire beneficial ownership within 60 days. Except as otherwise
noted, each person or entity named in the table has sole voting and
investment power with respect to all shares of Common Stock shown as
beneficially owned.
(2) Shares of Common Stock subject to options or warrants that are or
will become exercisable within 60 days have been deemed outstanding
for computing the percentage of class of the listed person or the
group, but are not deemed outstanding for computing the percentage of
class for any other person.
(3) Includes 1,364,903 shares of Common Stock beneficially owned by EPI
Corporation. (See footnote 12.) Mr. Snyder is President, a director,
and largest single shareholder of EPI Corporation. Mr. Snyder shares
voting and investment power with respect to, and disclaims beneficial
ownership of, the shares owned by EPI Corporation, which are included
once in the shares beneficially owned by all directors and officers
as a group. Mr. Snyder's total also includes 4,500 shares subject to
currently exercisable stock options, and 7,885 shares issuable upon the
exercise of warrants.
(4) Includes 101,666 shares subject to currently exercisable stock options,
3,710 shares issuable upon the conversion of warrants, and 500 shares
owned individually by Mr. Smith's wife.
(5) Includes 35,693 shares subject to currently exercisable stock options,
and 3,710 shares issuable upon the exercise of warrants.
(6) Includes 4,500 shares subject to currently exercisable stock options,
and 1,855 shares issuable upon the exercise of warrants.
(7) Includes 11,667 shares subject to currently exercisable stock options.
(8) Includes 15,000 shares subject to currently exercisable stock options.
(9) Does not include 15,000 shares subject to stock options not
currently exercisable.
(10) Includes 173,026 shares subject to currently exercisable stock options
and 170,430 shares issuable upon the exercise of warrants.
(11) Includes 45,403 shares issuable upon exercise of warrants.
(12) Includes 153,271 shares issuable upon the exercise of warrants.
(13) Includes 1,364,903 shares of Common Stock beneficially owned by EPI
Corporation, for which the named individuals, as directors of EPI
Corporation, share voting and investment power. The individual
members of this group together own the majority of shares of EPI
Corporation. Also includes 20,294 shares issuable upon the exercise of
warrants, and 4,500 shares issuable upon the exercise of options,
respectively, held by group members other than EPI Corporation. Also
includes 7,500 shares held by members of the immediate family of two
of the group members for which beneficial ownership is disclaimed.
ELECTION OF DIRECTORS
The Corporation's Board of Directors consists of
four members, all of whose terms expire at the Annual
Meeting. The Corporation's four present directors,
John A. Brenzel, James P. Buren, Richard W. Smith,
and John P. Snyder, have been nominated for reelection
as directors.
Article 4 of the Corporation's Articles of
Incorporation provides that the Board of Directors may
consist of four to nine directors, the exact number to
be fixed by the Board of Directors or the shareholders.
The term of any director elected by the Board to vacant
directorships, whether created by increasing the number
of directors or otherwise, between meetings of the
shareholders to elect directors will expire at the next
shareholders meeting at which the directors are elected. The Board
of Directors expects to increase the membership of the Board by adding
one or more independent directors before the 1999 Annual Meeting.
If any named nominee should refuse or be unable to
serve, the Board of Directors believes the proxy holders
will vote the shares represented by the enclosed proxy
card for such substitute nominee, if any, as may be
proposed by the Board of Directors. No circumstances
are known, however, that would prevent any of the
nominees from serving. The four candidates receiving
the four highest vote totals under cumulative voting will
be elected as directors at the Annual Meeting.
Abstentions and broker non-votes will not be counted as
a vote for any candidate.
MANAGEMENT
The following information is furnished as of the
Record Date, with respect to each person nominated for
election as a director at the 1998 Annual Meeting and
each of the Corporation's executive officers who are
not directors. If elected, all directors will hold
office until the Corporation's next annual meeting
of shareholders to be held in 1999, and until their
successors are elected and qualified.
Directors: Age Position with the Corporation
John A. Brenzel 58 Director
James P. Buren 59 Director
Richard W. Smith 44 President and Director
John P. Snyder 59 Secretary and Director
Executive Officers:
Roland Esnis 32 Vice President-European Operations
Directeur Generale, Twinsys Dataguard SA
and Strategia Europe SAS
James A. Huguenard 44 Vice President and General Counsel
Paul E. Phillips, Jr. 54 Vice President and Chief Financial Officer
John A. Brenzel, a director of the Corporation since
November 1984, is a business consultant. From January
1991 until June 1994, Mr. Brenzel was President and
Chief Executive Officer of Commonwealth Bank & Trust
Company, Middletown, Kentucky. From 1984 to 1990,
he was Chairman and Chief Executive Officer of Shelby
County Trust Bank, Shelbyville, Kentucky.
James P. Buren has been a director of the Corporation
since its inception in September 1984. Mr. Buren, who
served as Executive Vice President - Technology of the
Corporation for thirteen years prior to his retirement
in October 1997, also provides consulting services to
the Corporation. From 1980 to 1984, Mr. Buren was
President and sole shareholder of Buren & Company, Inc.,
a data processing consulting firm.
Richard W. Smith has been President and a director of the
Corporation since its inception in September 1984. Mr.
Smith previously served as General Manager of PDW
Computer Systems, Inc., which markets computer systems.
John P. Snyder has been a director of the Corporation
since November 1984 and Secretary since 1985. During
the past five years, Mr. Snyder has served as President
and Chairman of EPI Corporation, which currently
operates a chain of nursing homes.
Roland Esnis has served as Vice President-European Operations
since December 1997 and Directeur Generale of both Twinsys
Dataguard SA ("Twinsys"), the Corporation's Paris,
France subsidiary since August 1995 and
Strategia Europe SAS (Strategia Europe)since it
was formed in 1997. Mr. Esnis joined
Twinsys in a marketing position when it was established
in February 1995. From July 1993 to February 1995 he
held a similar position with Twinsys SA, an unrelated
computer services firm whose operating assets were
acquired by Twinsys. Prior to July, 1993, Mr. Esnis held marketing
positions with Systar, a software company, and with the disaster
recovery division of Telesystemes, a computer services affiliate of
France Telecom.
James A. Huguenard has served as Vice President and
General Counsel of the Corporation since August 1997.
Prior to August 1997, Mr. Huguenard was a member of the
law firm Brown, Todd & Heyburn PLLC, where he had
practiced since 1983.
Paul E. Phillips, Jr. has served as Vice President and Chief Financial
Officer since July 6, 1998. From February, 1996 to March, 1998 Mr. Phillips
served as Vice President - Finance of Royal Ten Cate (USA), Inc., the U.S.
holding company for Royal Ten Cate NV, a Dutch company with operations in
textiles, plastics and rubber roller products, and its
wholly owned subsidiary, Nicolon Corporation, a company that principally
manufactures specialty textiles. From March, 1995 to December,
1995 Mr. Phillips served as President of National Fire Hose Corporation, a
wholly owned subsidiary of Royal Ten Cate (USA), Inc., and a manufacturer of
fire hoses for municipal and industrial fire suppression markets, and from
September, 1993 to February 1995 as Vice President - Finance and
Administration of National Fire Hose Corporation. Prior to September, 1993,
Mr. Phillips held senior financial and accounting positions with other
organizations.
Meetings and Committees
The Corporation's Board of Directors has three standing
committees, the Audit Committee, the Executive Compensation
Committee, and the Stock Option Committee. The members of
each of these committees are John A. Brenzel and John P.
Snyder. The Audit Committee had one meeting in 1997.
This committee reviews the audit plans and the results
of audits performed by its independent certified public
accountants. The Executive Compensation Committee, which
determines the compensation of the Corporation's executive
officers, met two times in 1997. The Stock Option Committee, which
administers the 1988 Stock Option Plan and the 1990 Stock Grant Plan,
did not meet in 1997.
The Corporation's Board of Directors had eight meetings
during 1997. All directors attended at least 75% of the total number of
meetings of the Board of Directors and the committee on which he served.
The Board of Directors considers the nomination of
directors but does not have a standing committee. The
following is the provision in the Corporation's Bylaws
regarding the nomination of directors by shareholders:
2.4 Nominations for election to the Board of
Directors may be made by the Board of Directors or by
any shareholder. Any shareholder who intends to nominate
or to cause to have nominated any candidate for election
to the Board of Directors (other than a candidate nominated
by the Board of Directors) shall deliver or mail written
notification of the nomination to the Secretary of the
Corporation not less than three days after the giving
of the notice of the meeting nor more than fifty days
before any meeting of shareholders held for the
election of directors. Any such notification shall
contain the following information to the extent known to
the notifying shareholder or shareholders:
(a) the name and address of each proposed nominee;
(b) the principal occupation of each proposed nominee;
(c) the total number of shares that to the knowledge of
the notifying shareholder or shareholders will be voted
for each proposed nominee;
(d) the name and residence address of each notifying
shareholder; and
(e) the number of shares owned by each notifying shareholder.
The chairman of any meeting of shareholders held for the
election of directors may in his discretion disregard any
votes cast for any nominee whose nomination was not made
in accordance with these nomination provisions.
EXECUTIVE COMPENSATION
The following table sets forth the cash compensation earned by the
Corporation's executive officers for each of the last three fiscal years.
<TABLE>
<CAPTION>
Annual Compensation Long-Term
Name and Other Annual Compensation Awards
Principal Position Year Salary Bonus Compensation Stock Underlying
**** Options (#)
<S> <C> <C> <C> <C> <C>
Richard W. Smith, 1997 $156,585 $ 33,182 $ 6,000 -
President (Chief 1996 117,000 - 6,000 75,664
Executive Officer) 1995 103,500 28,437 6,000 25,000
James P. Buren, 1997 $ 97,254 $ 20,452 32,146 -
Director and 1996 105,000 - 6,000 64,631
Consultant, 1995 93,000 14,788 6,000 17,500
Formerly, Executive
Vice President - Technology*
Roland Esnis 1997 $ 64,844 $ 42,647 $ - -
Directeur Generale, 1996 68,716 40,647 - 15,000
Twinsys Dataguard 1995 56,864 23,530 - -
SA and Strategia Europe SAS**
James A. Huguenard, 1997 $ 50,500 $ - $ - 35,000
Vice President and
General Counsel***
*(Mr. Buren retired as Executive Vice President - Technology in October
1997. Other Annual Compensation for 1997 includes $27,300 paid under a
consulting agreement.)
**(Mr. Esnis joined Twinsys on February 1, 1995.)
***(Mr. Huguenard joined Strategia Corporation in August 1997.)
****(Perquisites and other personal benefits paid to the named executive
officers did not exceed 10% of the total salary and bonus.)
</TABLE>
The Corporation currently does not have a retirement plan for its
officers and employees.
The following table sets forth as of December 31, 1997 the value of
unexercised options granted to the Corporation's executive officers named
in the summary compensation table pursuant to the Corporation's 1988 Stock
Option Plan (the "1988 Plan"). In 1997, no options were awarded to or
exercised by the named executive officers under the 1988 Plan. The average
of the closing bid and asked price of the Common Stock on December 31, 1997
was $7.625 per share.
<TABLE>
<CAPTION>
Number of Shares Subject Value of Unexercised
to Unexercised Options In-the-Money Options
Name Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C>
Richard W. Smith 101,667 8,333 $ 193,044 $ 55,082
James P. Buren 19,536 70,464 $ 109,529 $ 76,850
James A. Huguenard 0 35,000 $ - $ -
Roland Esnis 15,000 0 $ 9,375 $ -
</TABLE>
Director Compensation
The Strategia 1988 Stock Option Plan (as amended by stockholders in
1989 and 1997) provides automatic grants of stock options to the Company's
directors who are not employees. Beginning in the second quarter of 1997,
options to purchase 1,000 shares of common stock have been granted quarterly
to each nonemployee director. In addition, each nonemployee director who was
not a director on May 15, 1989 will automatically be granted an option for
2,500 shares of common stock on May 15 following his subsequent election.
Options for nonemployee directors are granted at the fair market value of
the common stock on the grant date and vest in one-third increments beginning
on the first anniversary of the grant date.
In 1997, Mr. Brenzel and Mr. Snyder each were granted options for 3,000
shares of Common Stock. The option exercise prices ranged
from $8.50 to $12.88 per share. No options were exercised in 1997.
In addition to the issuance of stock options, the Corporation paid its
Directors $750.00 per meeting for attendance at each board meeting and
committee meeting in 1997.
CERTAIN TRANSACTIONS
In 1992, EPI Corporation loaned $300,000 to the Corporation to finance the
Corporation's purchase of certain equipment to be installed in its computer
center. On January 17, 1995, EPI extended an additional $500,000 in credit
under the loan to assist in financing the organization of, and purchase of
certain assets by its French subsidiary. The annual interest rate paid on the
loan was 1.5% above the "prime rate" as published in The Wall Street Journal.
Each term of the loan was for 90 days, and the loan was renewed for additional
90-day terms through April 5, 1997. The loan was secured by a second
mortgage on the Corporation's real estate. The Corporation also issued 15,000
shares of Common Stock to EPI Corporation when the loan was originally made in
1992, and an additional 1,000 shares of common stock per $100,000 outstanding
principal balance upon each renewal of the loan for an additional 90-day term.
John P. Snyder, a director of the Corporation, is President, a director and the
largest shareholder of EPI Corporation. In March 1997, the Company paid off
this $800,000 note payable to EPI with proceeds from its Common Stock offering.
The Company called all of the outstanding shares of its Series AA Preferred
Stock for redemption on June 30, 1997. Holders of all of the Series AA
Preferred, which included directors of the Company, EPI Corporation and
certain directors of EPI Corporation, elected to convert their shares of
Common Stock, and a total of 258,184 shares of Common Stock were issued to
them as of June 30, 1997.
In September and October 1996, the Corporation issued a total of 500,000 units
comprised of one share of Common Stock and a warrant to purchase one share of
Common Stock at a price of $3.75 per share (the "1996 Warrants") in a private
placement. The offering price was $2.50 per unit, and placement proceeds
totaled $1,250,000. Directors, five percent beneficial owners of Common Stock
and their affiliates who purchased units in the placement included John P.
Snyder (5,097 units), EPI Corporation (126,106 units), directors of EPI
Corporation other than Mr. Snyder (12,409 units) and TSF Investment Group LLC
(37,967 units).
Effective as of July 1996, Twinsys began offering disaster recovery and other
services to users of Unix-based computer systems in France through Twin-X SA,
a newly organized subsidiary. Twinsys holds a 59.9% interest in Twin-X, and
Roland Esnis and Francois Domine, Directeur Generale and Sales Manager of
Twinsys, respectively, each holds an approximate 20% interest in Twin-X.
Twinsys and Messrs. Esnis and Domine made proportional cash contributions to
Twin-X for their respective interests in Twin-X.
James P. Buren, a director of the Corporation, entered into a consulting and
non-competition agreement with the Corporation upon his retirement as
Executive Vice President-Technology on October 24, 1997. The agreement
provides that Mr. Buren will provide consulting services to the Corporation,
including technical product development, quality control and marketing, for
a term through March 31, 2000. For his consulting services, Mr. Buren is paid
a fixed daily rate based on services actually performed, subject to minimum
weekly compensation based on his availability for service. The agreement
provides that an option for 64,631 shares granted to Mr. Buren in 1996 will
become exerciseable in eight equal installments from April 1998 to January
2000. Mr. Buren also agreed to certain restrictions on the timing of any
sale by him of shares of Common Stock currently subject to options and
warrants and is entitled to certain rights to have his shares registered in
an underwritten offering of Common Stock by the Company. Mr. Buren has
agreed to continue to serve as a director of the Corporation so long as he
is nominated and elected each year and to resign as a director upon the
request of the other members of the Board of Directors. The agreement also
contains certain non-competition and confidentiality covenants.
It is the Corporation's policy that all material affiliated transactions and
loans will be made or entered into on terms that are no less favorable to the
Corporation than those that can be obtained from unaffiliated third parties.
All future material affiliated transactions and loans must be approved by a
majority of the independent directors who do not have an interest in the
transactions.
INFORMATION CONCERNING INDEPENDENT AUDITORS
The firm of Ernst & Young LLP, Certified Public Accountants,
served as independent auditors for the Corporation in 1997. Representatives
of Ernst & Young LLP, will not be present at the 1998 Annual Meeting.
The Company filed a Form 8-K with the Securities and Exchange Commission on
April 30, 1998, as follows:
"On April 23, 1998, Ernst & Young LLP ("EY") informed the Corporation of its
resignation as the Corporation's auditor.
The reports of EY on the Corporation's financial statements for the past two
fiscal years did not contain an adverse opinion or a disclaimer of opinion and
were not qualified or modified as to uncertainty, audit scope, or accounting
principles. In connection with the audits of the Corporation's financial
statements for the years ended December 31, 1997 and 1996, and in the
subsequent interim period, there were no disagreements with EY on any matters
of accounting principles or practices, financial statement disclosure, or
auditing scope and procedures which, if not resolved to the satisfaction of EY
would have caused EY to make references to the mattter in their report.
In connection with the audit of the Corporation's financial statements for the
year ended December 31, 1997, EY informed the Corporation and its Audit
Committee of a material weakness in its policies, systems, procedures and
internal controls necessary to assure that revenues, costs and loss contracts
are properly recognized in the consolidated financial statements under the
percentage of completion method of accounting for Year 2000 compliance
consulting and program renovation services contracts. Management of the
Corporation agreed with EY's conclusion that there was a material weakness
in such policies, systems, procedures and internal controls. To address the
weakness identified by EY, management took measures to improve the
Corporation's internal controls, including enhanced record keeping with
respect to costs of completion of contract work and enhancements to the
Corporation's cost estimation methodologies. Management designed these
measures based in part on certain of the procedures performed at EY's request
to provide information to EY in the course of its audit engagement on behalf of
the Corporation. As a result of that audit engagement, EY issued an
unqualified opinion on the Corporation's financial statements for the year
ended December 31, 1997. EY advised us that, in completing its audit, it
considered the aforementioned material weakness in determining the nature,
timing and extent of procedures performed to enable it to issue the
unqualified opinion.
By letter dated April 30, 1998, the Corporation authorized and requested EY to
cooperate with, and provide full information to, the Corporation's successor
auditors pertaining to the material weakness identified by EY. The
Corporation has not yet identified successor auditors. A copy of the
April 30, 1998 letter to EY is filed as Exhibit 99 to this Form 8-K. The
Corporation has requested EY to furnish it a letter addressed to the Commission
stating whether it agrees with the above statements. A copy of that letter,
dated April 30, 1998, is filed as Exhibit 16 to this Form 8-K."
GENERAL
Proposals of Shareholders
Shareholders proposals to be presented at the 1999 Annual Meeting must be
received by the Secretary of the Corporation no later than April 16, 1999 to
be included in the Proxy Statement for the 1999 Annual Meeting. Any such
proposals and any nominations for candidates for election of directors must
comply with the bylaws of the Company and the requirements of Regulation A
under the Securities Exchange Act of 1934. The Company expects to exercise
discretionary voting authority granted under any proxy form which is properly
executed and returned to the Company on any matter that may properly come before
the 1999 Annual Meeting unless written notice of the matter is delivered to the
Company at its corporate offices, addressed to the Secretary of the Company, not
later than June 30, 1999.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the
Corporation's executive officers and directors and persons
who beneficially own more than 10% of the Corporation's
Common Stock (collectively, "Reporting Persons") to file
reports of ownership and changes in ownership of the Common
Stock with the Securities and Exchange Commission.
Reporting Persons are required by SEC regulations to furnish
the Corporation with copies of all Section 16(a) forms
that they file. Based solely on its review of the copies
of such forms received or written representations from certain
Reporting Persons that no Form 5s were required, the
Corporation believes that during fiscal 1997, all the
Reporting Persons complied with all applicable filing
requirements, except as noted below. James A. Huguenard and Christopher
A. Sailor (former Vice President and Chief Financial Officer)
filed a Form 3 report after the report was due.
Other Matters
All expenses of preparing, printing, mailing, and
delivering the proxy card and all materials used in the
solicitation of proxy cards will be borne by the Corporation.
In addition to the use of the mail, proxy cards may be
solicited by personal interview, telephone, and telegraph by
directors, officers, and other employees of the Corporation,
none of whom will receive additional compensation for such
services. The Corporation will also request brokerage
houses, custodians, and nominees to forward soliciting
materials to the beneficial owners of the Corporation's
Common Stock held of record by them and will pay reasonable
expenses of these persons for forwarding the soliciting
materials.
The officers and directors of the Corporation do not
know of any matters to be presented for shareholder
approval at the meeting other than those described in
this Proxy Statement. If any other matters should come
before the meeting, the Board of Directors intends that
the persons named in the enclosed proxy card, or their
substitutes, will vote the shares represented by the proxy
card in accordance with their best judgment on such matters.
By Order of the Board of Directors
John P. Snyder, Secretary
Louisville, Kentucky
August 25, 1998
STRATEGIA CORPORATION
Proxy Card for 1998 Annual Meeting of Shareholders
THIS PROXY CARD IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Holly Kratzenberg and
Leigh Ann Dauphinais or either of them (with full power
to act alone), as proxy, with the President of Strategia
Corporation (the "Corporation"), having the power to
appoint a proxy's substitute, to represent me and to vote
all of the shares of the Corporation held of record or
which I am otherwise entitled to vote, at the close of
business on July 10, 1998, at the 1998 Annual
Meeting of Shareholders to be held at the Corporation's
main offices at 10301 Linn Station Road, Louisville,
Kentucky, on Wednesday, September 16, 1998, at 10:00 a.m.,
local time, and at any adjournments thereof, with all
the powers the undersigned would possess if personally
present, as indicated herein.
THIS PROXY CARD IS SOLICITED BY THE BOARD OF
DIRECTORS AND WILL BE VOTED AS SPECIFIED AND IN
ACCORDANCE WITH THE ACCOMPANYING PROXY STATEMENT. IF
NO INSTRUCTION IS INDICATED, THE SHARES REPRESENTED
BY THIS PROXY CARD WILL BE VOTED "FOR" THE NOMINEES
LISTED IN ITEM 1 OR CUMULATIVELY, IN THE BOARD OF
DIRECTORS' DISCRETION, AND "FOR" ITEM 2.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
ALL OF THE NOMINEES LISTED IN ITEM 1, AND Please mark _______
"FOR" ITEM 2. your votes as
indicated in X
this example. _____
1. ELECTION OF DIRECTORS John A. Brenzel, James P. Buren,
Richard W. Smith, and John P.
Snyder
FOR all nominees WITHHOLD
(except otherwise AUTHORITY
indicated on the to vote for all nominees.
line at right). (INSTRUCTION: To withhold authority
_________ to vote for any individual nominee,
write the nominee's name on the line
below.)
______________
____________________________________
2. OTHER BUSINESS. In their discretion, the proxies are
authorized to act upon such other matters as may
properly be brought before the Annual Meeting or any
adjournment thereof.
FOR AGAINST ABSTAIN
______ ________ _________
Please sign exactly as name appears at left. When shares are
held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee, or guardian,
please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name
by authorized person.
Dated: __________________________, 1998
_______________________________________
Signature
_______________________________________
Additional signature, if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
