Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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
ETS International, Inc.
(Name of Registrant as Specified in its Charter)
John C. Mycock, Corporate Secretary
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
N/A
Payment of Filing Fee (Check the appropriate box):
(x) No fee required
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total Fee Paid:
( ) Fee paid previously with preliminary materials
( ) Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
September 29, 1997
Dear Fellow Shareholder:
The Fiscal 1998 Annual Shareholders' Meeting of ETS International, Inc.
("ETSI" or the "Company") will be held at 10:00 a.m, local time, on Friday,
October 24, 1997, at ETSI headquarters, 1401 Municipal Road, NW, Roanoke,
Virginia 14012. Enclosed you will find formal Notice of Annual Meeting,
Proxy and Proxy Statement, detailing the matters which will be acted upon.
Directors and Officers of the Company will be present to help host the
meeting and to respond to any questions from our shareholders. I hope you
will be able to attend.
Please remove the Proxy attached as the last two pages of the Proxy
Statement and sign, date and return the Proxy without delay in the enclosed
envelope. If you attend the Meeting, you may vote in person even if you have
previously mailed a Proxy by withdrawing your Proxy vote at the meeting.
The Company's Board of Directors believes that a favorable vote for
each matter described in the attached Notice of Annual Meeting and Proxy
Statement is in the best interest of the Company and its shareholders and
unanimously recommends a vote "FOR" each such matter. Accordingly, we urge
you to review the accompanying material carefully and to return the enclosed
Proxy promptly.
Thank you for your investment and continued interest in ETS
International, Inc.
Sincerely,
s/John D. McKenna
John D. McKenna, Ph.D.
President and Chairman of the Board
of Directors
<PAGE>
NOTICE OF FISCAL 1998 ANNUAL MEETING OF SHAREHOLDERS
TO THE SHAREHOLDERS OF ETS INTERNATIONAL, INC.:
NOTICE is hereby given that the Fiscal 1998 Annual Meeting of
Shareholders (the "Meeting") of ETS International, Inc. ("ETSI") will be held
at the ETSI headquarters, 1401 Municipal Road, NW, Roanoke, Virginia 24012 on
Friday, October 24, 1997, at 10:00 a.m., local time, for the following
purposes:
1. Election of Directors for the ensuing year.
2. Approval of the appointment of independent auditors for Fiscal Year
1998.
3. Approval of 1997 Nonstatutory Stock Option Plan.
4. Transaction of such other business as may properly come before the
Meeting, or any adjournments thereof.
Only shareholders of record at the close of business on September 29,
1997 are entitled to notice of and to vote at the Meeting or any adjournments
thereof.
Your attention is directed to the Proxy Statement accompanying this
notice for a more complete statement regarding matters proposed to be acted
upon at the Meeting.
TO ASSURE THAT YOUR SHARES ARE REPRESENTED AT THE MEETING, PLEASE
COMPLETE, DATE, SIGN AND MAIL PROMPTLY THE ENCLOSED PROXY, FOR WHICH A RETURN
ENVELOPE IS PROVIDED. YOUR PROXY IS REVOCABLE AT ANY TIME PRIOR TO ITS
EXERCISE.
BY ORDER OF THE BOARD OF DIRECTORS
s/John C. Mycock
John C. Mycock
Secretary to the Board of Directors
September 29, 1997
<PAGE>
PROXY STATEMENT
FOR FISCAL 1998 ANNUAL MEETING OF SHAREHOLDERS
ETS INTERNATIONAL, INC.
1401 Municipal Road, NW
Roanoke, Virginia
USA 24012-1309
Solicitation of the enclosed Fiscal 1998 proxy is made by and on behalf
of the Board of Directors (the "Board of Directors") of ETS International,
Inc. ("ETSI" or the "Company") to be used at the Fiscal 1998 Annual Meeting
of Shareholders to be held at ETSI headquarters, 1401 Municipal Road, NW,
Roanoke, Virginia 24012 on Friday, October 24, 1997, at 10:00 a.m., local
time, and at any adjournments thereof. The date on which this Proxy
Statement and the accompanying Proxy are first being mailed is September 29,
1997.
The cost of the solicitation of proxies will be borne by the Company.
Solicitations will be made only by use of the mails, except that, if
necessary, officers, directors and regular employees of ETSI, or its
subsidiaries, ETS, Inc. ("ETS"), ETS Analytical Services, Inc. ("ETSAS") and
ETS Water and Waste Management, Inc. ("ETSW"), may solicit proxies by
telephone, telegram, facsimile or by personal contact. It is contemplated
that brokerage houses and nominees may be requested to forward proxy
solicitation materials to the beneficial owners of the stock held of record
by such persons; and ETSI may reimburse them for their charges and expenses
in this connection.
All properly executed proxies delivered pursuant to this solicitation
will be voted at the Annual Meeting in accordance with the instructions
thereupon, or, in the absence of such instructions, in accordance with the
Board of Director's recommendations. Any person signing and mailing the
enclosed proxy may, nevertheless, revoke the proxy at any time prior to the
actual voting thereof by attending the Annual Meeting and voting in person,
by providing written notice of revocation of the proxy or by submitting a
signed proxy bearing a later date. Any written notice of revocation should
be sent to the attention of the Secretary of the Board at the address above.
A copy of the Company's Annual Report to Shareholders is being mailed
concurrently with this Proxy Statement, but should not be considered proxy
solicitation material.
ETSI has only one class of shares outstanding. The Company has fixed
the close of business on September 29, 1997 as the record date for
determination of shareholders entitled to notice of and to vote at the
Annual Meeting or any adjournments thereof. As of July 31, 1997, there were
outstanding 14,539,453 shares of common stock, without par value ("Shares of
Common Stock"), each share entitled to one vote on each matter to be voted on
at the Annual Meeting. The holders of a majority of shares entitled to vote
and represented in person or by proxy at the Annual Meeting will constitute a
quorum for the transaction of business at the Annual Meeting. In general,
Shares of Common Stock represented by a properly signed and returned proxy
will be counted as shares present and entitled to vote at the Meeting for
purposed of determining a quorum, without regard to whether the proxy
reflects abstentions (or is left blank) or reflects a broker non-vote on a
matter (i.e., a proxy returned by a broker because voting instructions have
not been received and the broker has no discretionary authority to vote).
Holders of Shares of Common Stock are not entitled to cumulative voting
rights.
<PAGE>
If a quorum is established, directors will be elected by a plurality of
the votes cast by shares entitled to vote at the Annual Meeting. Approval of
each of the other proposals requires the affirmative vote, at a meeting at
which a quorum is present, of a majority of the votes cast by the shares that
are entitled to votes. Votes that are withheld and broker shares that not
voted in the election of directors and/or in connection with the other
proposals will not be included in determining the number of votes cast.
<PAGE>
VOTING SECURITIES
Security Ownership of Management
and Certain Beneficial Owners
As of July 31, 1997, there were 14,539,453 Shares of Common Stock
outstanding and entitled to vote at the Annual Meeting. Each Share of Common
Stock is entitled to one vote on each of the matters to be voted on at the
Annual Meeting. The following table sets forth, as of July 31, 1997, the
beneficial ownership of (i) each current director; (ii) each executive
officer; (iii) the executive officers and directors as a group; and (iv) each
shareholder known to management of the Company to own beneficially more than
5% of the outstanding Common Stock. Unless otherwise indicated, the Company
believes that the beneficial owner set forth in the table has sole voting and
investment power.
<TABLE>
<CAPTION>
Name of Amount and Nature Percent
Beneficial Owner of Beneficial Ownership Class
<S> <C> <C>
Dr. John D. McKenna (2) 1,321,700 (1)(3) 8.9%
1401 Municipal Road, NW
Roanoke, VA 24012
John C. Mycock (2) 546,450 (1)(4) 3.7%
1401 Municipal Road, NW
Roanoke, VA 24012
Coleman S. Lyttle (2) 1,176,334 (1)(5)(13) 8.0%
2210 Belt Boulevard
Richmond, VA 23224
Navin D. Sheth (2) 652,208 (1)(6) 4.4%
2210 Belt Boulevard
Richmond, VA 23224
David F. Tompkins (2) 161,200 (1)(7) 1.1%
1401 Municipal Road, NW
Roanoke, VA 24012
Arthur B. Nunn (2) 263,000 (1)(8) 1.8%
1401 Municipal Road, NW
Roanoke, VA 24012
Thomas W. Marmon 1,958,417 (9)(12) 13.3%
4390 Airwest Drive, SE
Grand Rapids, MI 49512
Lee A. Raver 773,800 (10) 5.2%
1788 Hungary Road
Richmond, VA 23228
Roberta Greiner 1,077,900 7.4%
5515 Village Drive
Roanoke, VA 24014
Dr. Allen Kahn 1,940,668 (11) 13.0%
2125 Evans Road
Flossmore, IL 60422
Directors and Executives
Officers as a group (8 persons) 6,853,109 (14) 42.3%
</TABLE>
<PAGE>
(1) Pursuant to the rules of the Securities and Exchange Commission, shares
of Common Stock which are not outstanding but which a person has the
right to acquire within 60 days of July 31, 1997 are considered as
shares outstanding for purposes of computing the percentage of Shares
of Common Stock owned by such person, but such shares are not deemed
outstanding for the purposes of computing the percentage of Shares of
Common Stock owned by any other person
(2) An executive officer of the Company.
(3) Includes 260,000 shares issuable upon the exercise of options as
follows: 100,000 shares pursuant to the 1992 Nonstatutory Option Plan,
60,000 shares pursuant to the 1994 Nonstatutory Option Plan and 100,000
shares pursuant to the 1995 Nonstatutory Option Plan.
(4) Includes 210,000 shares issuable upon the exercise of options as
follows: 60,000 shares pursuant to the 1992 Nonstatutory Option Plan,
50,000 shares pursuant to the 1994 Nonstatutory Option Plan and 100,000
shares pursuant to the 1995 Nonstatutory Option Plan.
(5) Includes 120,000 shares issuable upon the exercise of options as
follows: 20,000 shares pursuant to the 1994 Nonstatutory Option Plan
and 100,000 shares pursuant to the 1995 Nonstatutory Option Plan.
(6) Includes 120,000 shares issuable upon the exercise of options as
follows: 20,000 shares pursuant to the 1994 Nonstatutory Option Plan
and 100,000 shares pursuant to the 1995 Nonstatutory Option Plan.
(7) Includes 160,000 shares issuable upon the exercise of options as
follows: 40,000 shares pursuant to the 1992 Incentive Stock Option
Plan, 20,000 shares pursuant to the 1994 Nonstatutory Option Plan and
100,000 shares pursuant to the 1995 Nonstatutory Option Plan.
(8) Includes 150,000 shares issuable upon the exercise of options as
follows: 150,000 shares pursuant to the 1994 Nonstatutory Option Plan.
(9) Includes 153,350 shares issuable upon the exercise of options and
warrants as follows: 20,000 shares pursuant to the 1994 Nonstatutory
Option Plan, 100,000 shares pursuant to the 1995 Nonstatutory Option
Plan and 33,350 shares pursuant to warrants.
(10) Includes 470,000 shares issuable upon the exercise of options as
follows: 350,000 shares pursuant to options issued in July 1993, 20,000
shares pursuant to the 1994 Nonstatutory Option Plan and 100,000 shares
pursuant to the 1995 Nonstatutory Option Plan.
(11) Includes 343,667 shares issuable upon the exercise of warrants.
(12) Includes shares registered in the name of Thomas W. Marmon Trust.
(13) Does not include shares in the name of the Estate of Stamie E. Lyttle,
of which Coleman Lyttle is executor, and certain trust created thereby
of which he is trustee. Mr. Lyttle is not a beneficiary of the estate
or the beneficial owner of Shares of Common Stock owned by the estate
or by any such trust.
(14) Includes 1,643,350 shares issuable upon the exercise of options and
warrants.
<PAGE>
EXECUTIVE COMPENSATION
----------------------
Summary Compensation Table
Unless the context otherwise requires, the term the "Company" as used
in connection with executive compensation refers to ETSI and its wholly owned
operating subsidiaries, ETS, ETSAS and ETSW. All employees are paid cash
compensation by the various subsidiaries and not by ETSI. The following
table provides information as to annual and other compensation paid by the
Company to its Chief Executive Officer and to each of the other named
executive officers of the Company who earned in excess of $100,000 per year
for services rendered in all capacities to the Company and/or its
subsidiaries.
<TABLE>
<CAPTION>
Annual
Compensation
------------
Name and Awards
Principal Position Year Salary ($) Options/SARs
- ------------------ ---- ---------- ------------
<S> <C> <C> <C>
John D. McKenna, 1997 79,333 140,000
President and 1996 93,783 0
Chairman of the Board 1995 100,301 20,000
of ETSI
Coleman S. Lyttle, 1997 115,337 100,000
President of 1996 150,943 0
ETSW and a 1995 127,603 20,000
Director of ETSI
</TABLE>
Option Grants in Last Fiscal Year
The following table provides information as to options granted to the
named executive officers during Fiscal 1997.
<TABLE>
<CAPTION>
Individual Grants Potential Realized
----------------- Value(1) at Assumed
% of Total Annual Rates of
Number of Options Market Stock Price
Securities Granted to Exercise Price on Appreciation for
Underlying Employees or Base Date of Option Term
Options in Fiscal Price Grant Expiration ----------------
Name Granted(#) Year ($/Share) (2) ($/Share) Date 5%($) 10%($)
- ----------------- ---------- ---- ------------- --------- ---- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
John D. McKenna 40,000 2.3% 0.75 0.75 July 24, 2001 38,288 48,315
100,000 5.8% 0.75 0.75 February 4, 2002 95,721 120,788
Coleman S. Lyttle 100,000 5.8% 0.75 0.75 February 4, 2002 95,721 120,788
- -----------------------
</TABLE>
<PAGE>
(1) The dollar amounts under these columns are the result of calculations
at the 5% and 10% rates set by the Securities and Exchange Commission
and therefore are not intended to forecast possible future
appreciation, if any, of the Company's stock price. Additionally,
these values do not take into consideration the provisions of the
options providing for nontransferability or termination of the options
following termination of employment. The Company did not use an
alternative formula for a grant date valuation, as it is not aware of
any formula which will determine with reasonable accuracy a present
value based on future unknown or volatile factors.
(2) The exercise price of the options granted is equal to the closing sales
price of the Company's common stock on the American Stock Exchange
Emerging Company Marketplace on the date of grant. Options generally
expire five years from the date of grant.
Board of Directors Report on Executive Compensation
The compensation of the Company's executive officers and key managers
("executives") is reviewed and approved annually by the Board of Directors.
In addition to reviewing and approving executive officers' salary and bonus
arrangements, the Board of Directors establishes policies and guidelines for
other benefits and administers the awards of stock options pursuant to the
Company's stock option plans.
General. Compensation of the Company's executives is intended to
attract, retain and award persons who are essential to the corporate
enterprise. The fundamental policy of the Company's executive compensation
program is to offer competitive compensation to executives that appropriately
rewards the individual executive's contribution to corporate performance.
The Board of Directors utilizes subjective criteria for evaluation of
individual performance and relies substantially on its key managers in doing
so. The Board focuses on two primary components of the Company's executive
compensation program, each of which is intended to reflect individual and
corporate performance: base salary compensation and long-term incentive
compensation.
Base Salary Compensation. Executives' base salaries are determined
primarily by reference to compensation packages for similarly situated
executives of companies of similar size or in comparable lines of business
with whom the Company expects to compete for executive talent. The Board
also assesses subjective qualitative factors to discern a particular
executive's relative value to the corporate enterprise in establishing base
salaries. Each year, base salaries of executives are increased by the
increases in an average of local and national cost of living indexes. In
fiscal 1997, each executive accepted decreases in salary as a result of the
operational losses. The Board awards year-end bonuses to executives, but
only in the event the Company is profitable. The total of all bonuses
generally is based on the Company's overall economic performance. Relative
bonuses are awarded pursuant to the Board's subjective analysis of each
executive's performance. No bonuses were paid in fiscal 1997.
<PAGE>
Long Term Incentive Compensation. It is the Board's philosophy that
significant stock ownership by management creates a powerful incentive for
executives to build long-term shareholder value. Accordingly, the Board
believes that an integral component of executive compensation is the award of
equity-based compensation, which is intended to align executives' long-term
interests with those of the Company's shareholders. Awards of stock options
to executives have historically been at then-current market prices and, in
keeping with the Company's objective to link pay with corporate loyalty,
generally vest over a period of one to five years. The Board believes that
option grants should be considered on an annual basis. In general, a fixed
minimum option grant is awarded to all executives and additional grants may
be awarded from time to time consistent with the relative pay levels of the
executives.
CEO John McKenna's Compensation. In reviewing and approving Dr.
McKenna's fiscal 1997 compensation, the Board of Directors considered the
same criteria detailed herein with respect to executives in general. Dr.
McKenna's base salary for fiscal 1997 (effective December 1, 1996) was
established at $100,726, which is below the midpoint of base compensation for
CEO's of comparable companies. This amount represented a 3% cost of living
increase over the base salary which was awarded to Dr. McKenna in fiscal
1996. The actual salary paid to Dr. McKenna was less due to the executive
salary decreases mentioned above.
Submitted by the Board of Directors of the Company:
John D. McKenna, John C. Mycock, Coleman S. Lyttle, Navin D. Sheth,
David F. Tompkins, Thomas W. Marmon, Lee A. Raver, Arthur B. Nunn
Compensation Committee Interlocks and Insider Participation
The Board of Directors makes decisions regarding compensation of
executive officers. Directors McKenna, Mycock, Lyttle, Sheth and Tompkins
are also executive officers of the Company and participate in deliberations
of the Company's Board of Directors concerning executive compensation.
Board of Directors And Committees
Audit Committee. The Audit Committee makes recommendations to the
Board of Directors with respect to the Company's financial statements and the
appointment of independent auditors, reviews significant audit and accounting
policies and practices, meets with the Company's independent public
accountants concerning, among other things, the scope of audits and reports,
and reviews the performance of the overall accounting and financial controls
of the Company. Members of the Audit Committee are John D. McKenna, John C.
Mycock and Lee A. Raver.
The Board of Directors does not have a standing compensation committee
and responsibility for reviewing and approving the salaries, bonuses and
other compensation and benefits of executive officers, reviewing and advising
management regarding benefits and other terms and conditions of compensation
of management and administering the Company's stock option plans are the
responsibility of the Board of Directors.
The Board of Directors does not have a standing nominating committee.
Nominations for election to the Board of Directors may be made by the Board
of Directors, or by any shareholder entitled to vote for the election of
directors. Nominations made by shareholders must be made by written notice
received by the Secretary of the Company by July 31 of the year preceding the
annual meeting or within ten days of the date on which notice of a special
meeting for the election of directors is first given to shareholders.
<PAGE>
The Board of Directors meets regularly on a quarterly basis. Special
meetings are held from time to time to consider matters for which approval of
the Board of Directors is desirable or required by law. Four meetings of
the Board of Directors were held during fiscal 1997. The Audit Committee
meet three times in fiscal 1997. Each incumbent director had an attendance
record of 75% or greater at meetings, including meetings of the Audit
Committee.
Remuneration of Directors
Outside directors do not received any fees for attending meetings of
the Board, but are reimbursed for their out-of-pocket expenses in connection
therewith. Directors are entitled to receive the base level of stock options
awarded to executives.
Performance Graph
The following graph compares the yearly percentage change and the
cumulative total of shareholder return on the Company's common stock with the
cumulative return on the index of companies which are trading on the
Emerging Company Marketplace of the American Stock Exchange and the service
sub-index of the American Stock Exchange (discontinued in 1996) for the five-
year period commencing May 31, 1993 and ending on May 31, 1997. These
comparisons assume the investment of $100 in the Company's common stock and
in each of the indices on May 31, 1993 and the reinvestment of dividends.
<TABLE>
<CAPTION>
5/31/93 5/31/94 5/31/95 5/31/96 5/31/97
<S> <C> <C> <C> <C> <C>
ETS International, Inc. $ 100 $ 97 $ 109 $ 158 $ 88
AMEX Market Value Index $ 100 $ 101 $ 113 $ 137 $ 135
AMEX Service Sub-Index $ 100 $ 101 $ 114 $ 126 NA
</TABLE>
(PERFORMANCE GRAPH APPEARS HERE)
TRANSACTIONS WITH MANAGEMENT
ETSI occupies approximately 45,000 square feet of office and laboratory
space in a modern commercial building in Roanoke, Virginia, under lease
agreements of its subsidiaries, ETS and ETSAS, effective as of February 1,
1991, which expire on December 31, 2000, from PDJ Associates, a partnership
in which John D. McKenna, President and Chairman of the Board of ETSI, and
Roberta Greiner, widow of Gary P. Greiner, a former officer and director of
ETSI, are partners. ETSI believes that the leases with PDJ Associates are on
terms as favorable as those which would have been available from a
non-affiliated third party.
On June 1, 1994, ETSW entered into a lease of its premises which are
owned by the Estate of Stamie E. Lyttle, of which Coleman S. Lyttle, a
director of the Company is executor, at $10,500 per month for two years. On
June 1, 1997, the lease was renewed for a one-year term with three one-year
renewal options. Rent expense under these operating leases approximated
$417,000, $405,000 and $399,000 for fiscal 1997, 1996 and 1995, respectively.
<PAGE>
The Company has other accounts receivable consisting primarily of
advances to officers, directors and other employees, including Mr. McKenna,
President and Chairman of the Board of ETSI. At May 31, 1997, the aggregate
amount of advances to all parties was $91,381.
The Company has notes receivable from officers of $408,846 and $391,799
as of May 31, 1997 and 1996, respectively. The notes bear interest at six
percent. As of May 31, 1997, $64,694 is due on demand and $344,152, which
includes notes payable to Coleman S. Lyttle, President of ETSW and a director
of ETSI, and Navin D. Sheth, Executive Vice President of ETSW and a director
of ETSI, is due in July 1998.
The Company has notes payable to affiliates of $490,617 and $348,625 as
of May 31, 1997 and 1996, respectively. These affiliates include Mr. Sheth,
family members of Mr. Lyttle and the Estate of Stamie S. Lyttle. The balance
at May 31, 1997 includes $289,159 classified as current. The remaining
balance of $201,458 is due in fiscal 1999. The notes bear interest at rates
between six and twenty percent.
In March 1997, the Company borrowed $2,000,000 from Thomas W. Marmon, a
director and shareholder of ETSI. The note is due March 17, 1999; however,
Mr. Marmon has the option to accelerate the entire principal and interest
owed and demand payment in full upon sixty days notice. The note bears
interest at fifteen percent, which is payable monthly. The Company may
borrow an additional $500,000 from Mr. Marmon at his discretion upon review
of the Company's financial condition and the value of the collateral. The
note is collateralized by accounts receivable, inventories and property and
equipment. At May 31, 1996, the Company had a note payable to Mr. Marmon of
$600,000, which was paid in full during fiscal 1997.
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
The Directors elected at the Annual Meeting will serve until the next
Annual Meeting of Shareholders and until their successors are elected and
qualified. The Board of Directors of ETSI has nominated John D. McKenna,
John C. Mycock, Coleman S. Lyttle, Navin D. Sheth, David F. Tompkins, Thomas
W. Marmon, Lee A. Raver and Arthur B. Nunn to serve as directors of the
Company for fiscal 1998. All nominees currently are members of the Board of
Directors.
JOHN D. MCKENNA (age 57) has been President of the ETSI since 1988, and
serves as Chief Executive Officer of ETS, ETSAS and ETSW. He was President
of ETS from 1978 to 1991 and has been a Director of ETS since its
incorporation in 1973. Dr. McKenna received his B.S. in Chemical Engineering
from Manhattan College in 1961. He received his M.S. in Chemical Engineering
from the New Jersey Institute of Technology in 1968 and his M.B.A. from Rider
University in 1974. In 1991, Dr. McKenna received his Ph.D. from Walden
University, Minneapolis, MN. Dr. McKenna's expertise in air and water
pollution control applications includes economic evaluation applications,
pilot plant and full scale studies of alternative pollution control
techniques. He has written two textbooks on air pollution technology and has
authored or coauthored 31 publications on the subject of air pollution
control. On May 1, 1992, Dr. McKenna was chosen by the Centennial Committee
to Select Outstanding Engineering Graduates of Manhattan College of
Engineering as one of Manhattan College's Outstanding Engineering Graduates.
He is a member of the Tau Beta Pi, the National Honor Society of Engineering;
the National Association of Environmental Professionals; and is listed in
Who's Who in Engineering, Environmental Registry, Finance and Industry, the
World and Science and Engineering. He is past Chairman of the State of
Virginia Advisory Board on Air Pollution. <PAGE>
JOHN C. MYCOCK (age 58) has been Secretary/Treasurer and Director of
ETSI since 1988 and serves as Secretary/Treasurer of ETS and Secretary of
ETSAS. He has been an Officer and Director of ETS since 1979. He has more
than twenty years experience in the field of air pollution control. Mr.
Mycock currently is responsible for all pre-contract sales and marketing
activities of ETS. He has been involved in start-up and testing of
scrubbers, precipitators and fabric filters. His experience has been heavily
oriented to utility boiler control systems for both particulate and sulfur
oxide emissions. He is the author of the handbook of air pollution control
engineering and technology and the author or coauthor of fifteen
publications, primarily on the subject of fabric filters and baghouses. Mr.
Mycock attended Mercer County Junior College and Trenton State College.
COLEMAN S. LYTTLE (age 44) has served as President of ETSW since June
1994. From 1982 to 1994, he was President of Stamie E. Lyttle Company, Inc.
and Lyttle Utilities, Inc. From 1975 to 1982, he was Senior Estimator and
Project Manager of Stamie E. Lyttle Company, Inc. Mr. Lyttle received his
B.S. in Business Administration from Virginia Polytechnic and State
University in 1975.
NAVIN D. SHETH (age 51) has served as Executive Vice-President of ETSW
since June 1994 and, since May 1996, also served as Chief Operating Officer.
From 1972 to May 1994, he was associated with Stamie E. Lyttle Company, Inc.
in the following capacities: from 1982 to 1994 - Vice President-Finance;
from 1979 to 1982 - Controller; from 1972 to 1979 - Operations Analyst. Mr.
Sheth was Assistant Professor, Virginia College, Lynchburg, Virginia, from
1971 to 1972. He received his B.S. in Chemistry in 1967 from Bombay
University and his MBA in 1971 from Atlanta University, Atlanta, Georgia.
DAVID F. TOMPKINS (age 49) has been President of ETSAS since its
formation in 1990. From 1978 to 1990, he was employed by Centec Analytical
Services, Inc., of which he served as President from 1985. In his positions
with ETSAS and, previously with Centec, he has been responsible for technical
administration of the Inorganic Analytical section, as well as strategy,
policy and financial planning and control of business operations. Mr.
Tompkins received his B.S. in Geology from Kent State University in 1971; his
B.A. in Chemistry from Kent State University in 1973 and his M.Ad. in
Business Management from Lynchburg College in 1985. He was appointed a
Director of the Company in 1992. He holds a patent and was the recipient of
an IR 100 Award in 1984 for a PCB Field Test Kit of which he was a co-
inventor.
THOMAS W. MARMON (age 65), a retired businessman, became a Director of
ETSI in 1992. He has, since 1990, served as a Director of Ceres, Inc., an
incentive motivation company. From 1989 to 1991, he was a Director of
Western Canada Water, Vancouver, B.C., a bottled water company. From 1971 to
1987, he was a partner in Darmon, and from 1973 to 1984, he was President and
a principal stockholder of Forest View Psychiatric Hospital, a provider of
inpatient and outpatient psychiatric services. From 1981 to 1987, he was
President and a principal stockholder of Comus, Inc., a consumer electronic
manufacturer and distributor. The assets of these Grand Rapids, Michigan-
based businesses were sold upon the retirement of the principals from active
participation.
<PAGE>
LEE A. RAVER (age 55) has served as a Director of ETSI since its
incorporation in 1987. His educational background includes a B.S. degree in
Business Administration from the University of Tennessee in 1966. For the
past fifteen years, Mr. Raver has acted principally as a venture capitalist
and private investor in multi-family real estate and emerging growth
companies. He presently is President of Raver Realty, Inc., a real estate
brokage firm located in Richmond, VA, and a director of Claycomb Press, Inc.,
a private publishing company located in Chevy Chase, Maryland.
ARTHUR B. NUNN (age 45), President of ETS, served as President of Air
Compliance, Inc. until the acquisition of its assets by ETS in April, 1995.
From 1981 to 1991, he was Vice President of Scott Environmental Technology,
Inc.; from 1978 to 1981, Department Manager, Environmental Engineering
Division of TRW, Inc.; from 1977 to 1978, Monitoring Engineer for the Fairfax
County Air Pollution Control Board; and from 1976 to 1977, Regional Chemist,
Northern Virginia for the Virginia State Air Pollution Control Board. Mr.
Nunn served in the Air Force from 1975 to 1976. His experience in the field
of air pollution control includes consulting, modeling, engineering,
permitting, regulatory development, sampling, analysis and impact evaluation.
He is the author of numerous articles in the field of air toxics management
and monitoring. Mr. Nunn received his B.S. in Chemistry from the Virginia
Military Institute in 1975 and his M.S. in Environmental Science from George
Washington University in 1978.
It is the intention of the persons named as proxies in the accompanying
proxy, unless instructed otherwise, to vote for the persons nominated by the
Board. If any nominee should become unavailable to serve, the proxy may be
voted for the election of such substitute nominee as may be designated by the
Board. The Board has no reason to believe that any of the nominees will be
unable to serve if elected.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE ABOVE-NAMED
NOMINEES.
PROPOSAL NO. 2 - APPROVING THE APPOINTMENT OF KPMG PEAT MARWICK LLP
INDEPENDENT AUDITORS FOR FISCAL 1998
The Board of Directors appointed KPMG Peat Marwick LLP as independent
public accountant to audit the financial statements for fiscal 1998 and has
determined that it would be desirable to request that the shareholders
approve such appointment. Shareholder approval is not required for the
appointment of KPMG Peat Marwick LLP since the Board of Directors has the
responsibility for selecting auditors. However, the appointment is being
submitted for the approval at the Annual Meeting. No determination has been
made as to what action the Board would take if shareholders do not approve
the appointment.
A representative of KPMG Peat Marwick LLP is expected to attend the
Annual Meeting with the opportunity to make a statement and/or respond to
appropriate questions from shareholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF KPMG PEAT MARWICK
LLP AS INDEPENDENT AUDITORS.
<PAGE>
PROPOSAL NO. 3 - APPROVAL OF 1997 NONSTATUTORY STOCK OPTION PLAN
The Company has adopted, subject to shareholder approval, a 1997
Nonstatutory Stock Option Plan (the "Plan"). The Plan is applicable to not
more than 2,000,000 shares of Company common stock. The text of the Plan is
attached to this Proxy Statement as Exhibit A. The description of the Plan
set forth below is qualified in its entirety by reference to Exhibit A.
Under the proposed Plan, the Company may grant stock options
("Options") to such employees, officers, directors and consultants of the
Company as may be selected from time to time by the Board of Directors (the
"Board") in its discretion. The Options do not meet the terms of Section
422A of the Internal Revenue Code and therefore result in taxable income to
the recipient at the time of exercise to the extent of the difference between
the exercise price and the fair market value of the stock at the time of
exercise. The Company will be entitled to a federal income tax deduction on
the transfer of stock to an optionee pursuant to the exercise of an Option,
if certain federal income tax withholding requirements are met. The amount
of the deduction will equal the annual compensation income recognized by the
optionee.
The exercise price under each Option will be established by the Board,
and may be more than, equal to, or less than the market price of the shares
of Company common stock on the date of grant. The exercise period of each
Option is determined by the Board at the time of the grant, but cannot be
more than ten years from the date of grant.
If an optionee is an employee and his employment terminates for any
reason other than death or for "cause," the optionee must exercise the Option
within thirty days after the date of termination of employment (unless a
longer period not in excess of three months is allowed by the Board). If
such termination of employment is involuntary on the part of the optionee, he
must exercise his Option within three months after the date of termination of
employment. In no event may an optionee exercise his Option at any time when
the Option would not be exercisable had the optionee remained an employee of
the Company or when the termination is for cause. If prior to the expiration
date of an Option, the optionee retires or resigns with the Company's
consent, the Option may be exercised in the same manner as if the optionee
had continued in the Company's employ; provided, however, that the Board may
terminate, at any time prior to exercise, all unexercised Options if it
determines that the retired or resigning optionee is engaged in any activity
detrimental to the Company's interest. If an optionee dies at a time when he
is entitled to exercise an Option, then at any time within one year after his
death (or such further period as the Board may allow), such Option may be
exercised, in whole or in part, by the optionee's executor or administrator
or the person or persons to whom the Option is transferred by will or the
applicable laws of descent and distribution. No Option can be exercised
after the expiration of the Option period.
The Board may grant Options under the Plan to eligible individuals on
the basis of criteria that it feels are in the best interest of the Company
and its subsidiaries. Further, the Board may impose such restrictions,
conditions, terms and timing upon the granting of Options as it deems
advisable for the Company. The Board may at any time discontinue granting
Options under the Plan or amend the Plan or outstanding Options. No Options
may be transferred by an optionee otherwise than by will or by the laws of
descent and distribution, and during an optionee's lifetime an Option may be
exercised only by the optionee.
<PAGE>
The Plan will be effective upon approval by the shareholders. If a
quorum is established, approval of the Plan requires the affirmative vote of
the majority of the votes cast by the shares that are entitled to vote at the
Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE 1997 NONSTATUTORY STOCK
OPTION PLAN
SECTION 16(a) BENEFICIAL OWNERSHIP COMPLIANCE
Section 16(a) of the Exchange Act required ETSI officers and directors,
and persons who own more than ten percent of a registered class of the ETSI's
equity securities, to file reports of ownership and changes in ownership with
the Securities and Exchange Commission. Officers, directors and greater than
ten percent shareholders are required by SEC regulation to furnish ETSI with
copies of all Section 16(a) forms they file.
Based solely on a review of the copies of such forms furnished to ETSI,
the Company believes that during fiscal 1997 all Section 16(a) filing
requirements applicable to its officers, directors and greater than ten
percent beneficial owners were complied with.
PROPOSALS OF SHAREHOLDERS
Proposals of shareholders intended to be presented at the Company's
Fiscal 1999 Annual Meeting must be received by the President of ETSI at its
office, 1401 Municipal Road, NW, Roanoke, VA 24012, no later than June 1,
1998, in order to be considered for inclusion in the Company's Proxy
Statement relating to that meeting.
OTHER MATTERS
The Board of Directors is not aware of any matter to be presented for
action at the meeting other than the matters set forth herein. Should any
other matters requiring a vote of shareholders arise, the proxies in the
enclosed form confer upon the person or persons entitled to vote the shares
represented by such proxies discretionary authority to vote the same in
accordance with their best judgement in the interest of the Company.
AVAILABILITY OF ANNUAL REPORT ON FORM 10-K
ETSI has filed with the Securities and Exchange Commission its Annual
Report on Form 10-K. Shareholders wishing to receive a copy of ETSI's 1997
Form 10-K may receive it without charge by writing ETS International, Inc.,
1401 Municipal Road, NW, Roanoke, Virginia 24012-1309.
BY ORDER OF THE BOARD OF DIRECTORS
s/John C. Mycock
John C. Mycock
Secretary to the Board
September 29, 1997
<PAGE>
Exhibit A
ETS INTERNATIONAL, INC.
1997 NONSTATUTORY STOCK OPTION PLAN
June 1, 1997
1. Purpose
The purpose of this Nonstatutory Stock Option Plan (hereinafter
referred to as the "1997 Nonstatutory Stock Option Plan"), is to provide a
special incentive to selected individuals who have made significant
contributions to the business and success of ETS INTERNATIONAL, INC.
(hereinafter referred to as the "Company"). The 1997 Nonstatutory Stock
Option Plan is designed to accomplish this purpose by offering such
individuals options ("Options") to purchase shares of the common stock of the
Company ("Shares") so that they will share in the Company's success.
2. Administration
The 1997 Nonstatutory Stock Option Plan shall be administered by the
board of directors of the Company or by an option committee to be established
by the board of directors of the Company. If an option committee administers
the 1997 Nonstatutory Stock Option Plan, it shall consist of three or more
members, at least one of whom shall be neither an officer nor an employee of
the Company. (The board of directors or an option committee shall be
referred to as the "Board" herein.)
The Board shall have authority, consistent with the 1997 Nonstatutory
Stock Option Plan,
(a) to determine which individuals shall be granted Options;
(b) to determine the time or times when Options shall be granted and
the number of Shares to be subject to each Option;
(c) to determine the exercise price of the Shares subject to each
Option and the method of payment of such price;
(d) to determine the time or times when each Option becomes
exercisable and the duration of the exercise period, subject to
the limitations contained in Paragraph 6(b);
(e) to prescribe the form or forms of the instruments evidencing any
Options granted under the 1997 Nonstatutory Stock Option Plan and
of any other instruments required under the 1997 Nonstatutory
Stock Option Plan and to change such forms from time to time;
(f) to adopt, amend and rescind rules and regulations for the
administration of the 1997 Nonstatutory Stock Option Plan and the
Options and for its own acts and proceedings; and
(g) to decide all questions and settle all controversies and disputes
which may arise in connection with the 1997 Nonstatutory Stock
Option Plan. All decisions, determinations and interpretations
of the Board shall be binding on all parties concerned.
<PAGE>
3. Participants
The Participants in the 1997 Nonstatutory Stock Option Plan shall be
employees, officers, directors, consultants of the Company or any other
parties who have made a significant contribution to the business and success
of the Company, as may be selected from time to time by the Board in its
discretion. In any grant of Options after the initial grant, Participants
who were previously granted Options or sold Shares under the 1997
Nonstatutory Stock Option Plan may be included or excluded.
4. Limitations
No Option shall be granted under the 1997 Nonstatutory Stock Option
Plan after December 31, 2002, but Options theretofore granted may extend
beyond that date. To the extent that any Option granted under the 1997
Nonstatutory Stock Option Plan shall expire or terminate unexercised or for
any reason become unexercisable as to any Shares subject thereto, such Shares
shall thereafter be available for further grants under the 1997 Nonstatutory
Stock Option Plan, within the limit specified above.
5. Shares to be Issued
Shares to be issued under the 1997 Nonstatutory Stock Option Plan shall
constitute an original issue of authorized Shares. The Board and the proper
officers of the Company shall take any appropriate action required for such
issuance. Subject to adjustment as provided in Section 8 of the 1997
Nonstatutory Stock Option Plan, the maximum number of Shares which may be
issued under the 1997 Nonstatutory Stock Option Plan is two million
(2,000,000) Shares.
6. Terms and Conditions of Options
All Options granted under the 1997 Nonstatutory Stock Option Plan shall
be subject to the following terms and conditions (except as provided in
Section 7) and to such other terms and conditions as the Board shall
determine to be appropriate to accomplish the purposes of the 1997
Nonstatutory Stock Option Plan:
(a) Exercise price. The exercise price under each Option shall be
determined by the Board and may be more, equal to or less than
the then current market price of the Shares as the Board may deem
to be appropriate; provided, however, that in the event the Board
shall determine to grant an Option at less than 85% of the then
current market price of the Shares, such Option shall not be
granted by the option committee without the prior approval of the
board of directors.
(b) Period of Options. The period of an Option shall not exceed ten
years from the date of grant.
(c) Exercise of Options.
(i) Each Option shall be made exercisable at such time or
times, whether or not in installments, as the Board shall
prescribe at the time the Option is granted.
<PAGE>
(ii) A person electing to exercise an Option shall give written
notice to the Company, as specified by the Board, of his
election and of the number of Shares he has elected to
purchase, such notice to be accompanied by such instruments
or documents as may be required by the Board, and shall at
the time of such exercise tender the purchase price of the
Shares he has elected to purchase.
(d) Payment for Issuance of Shares. Upon exercise of any Option
granted hereunder, payment in full shall be made at the time of
such exercise for all such Shares then being purchased.
The Company shall not be obligated to accept requests to exercise
an Option and/or to issue any Shares unless and until, in the
opinion of the Company's counsel, all applicable laws and
regulations have been complied with, nor, in the event the Shares
at the time are listed upon any stock exchange, unless and until
the Shares to be issued have been listed or authorized to be
added to the list upon official notice of issuance upon such
exchange, nor unless or until all other legal matters in
connection with the issuance and delivery of Shares have been
approved by the Company's counsel. Without limiting the
generality of the foregoing, the Company may require from the
Participant such investment representation or such agreement, if
any, as counsel for the Company may consider necessary in order
to comply with the Securities Act of 1933 as then in effect, and
may require that the Participant agree that any sale of the
Shares will be made only in such manner as is permitted by the
Board and that a Participant will notify the Company when he/she
intends to make any disposition of the Shares whether by sale,
gift or otherwise. The Participant shall take any action
reasonably requested by the Company in such connection. A
Participant shall have the rights of a stockholder only as to
Shares actually acquired by him/her under the 1997 Nonstatutory
Stock Option Plan.
(e) Transferability of Options. No Option may be transferred by the
Participant otherwise than by will or by the laws of descent and
distribution, and during the Participant's lifetime the Option
may be exercised only by the Participant.
(f) Termination of Employment. If the Participant is an employee and
his/her employment terminates for any reason other than his/her
death, the Participant may, unless discharged for cause,
thereafter exercise his/her Option as provided below, but only to
the extent the Participant was entitled to exercise the Option on
the date when his/her employment terminated. If such termination
of employment is voluntary on the part of the Participant, he/she
may exercise his/her Option only within 30 days after the date of
termination of employment (unless a longer period not in excess
of three months is allowed by the Board). If such termination of
employment is involuntary on the part of the Participant, he/she
may exercise his/her Option only within three months after the
date of termination of employment. In no event, however, may
such Participant exercise his/her Option at a time when the
Option would not be exercisable had the Participant remained an
employee or when the termination was for cause. For purposes of
<PAGE>
this section (f), a Participant's employment shall not be
considered terminated in the case of sick leave or other bona
fide leave of absence approved by the Company or a subsidiary, or
in the case of a transfer to the employment of a subsidiary or to
the employment of the Company. Anything herein to the contrary
notwithstanding, an Option may be exercised only to the extent
exercisable on the date of termination of employment by death or
otherwise.
(g) Retirement or Resignation. If prior to the expiration date of a
Participants' Option an optionee shall retire or resign with the
Company's consent such Option may be exercised in the same manner
as if the Optionee had continued in the Company's employ;
provided, however, the Board may terminate, at any time prior to
exercise, all unexercised Options if it shall determine that the
retired or resigning optionee has engaged in any activity
detrimental to the Company's interest.
(h) Death. If a Participant dies at a time when he/she is entitled
to exercise an Option, then at any time or times within one (1)
year after his/her death (or such further period as the Board may
allow) such Option may be exercised, as to all or any of the
Shares which the Participant was entitled to purchase immediately
prior to his/her death, by his/her executor or administrator or
the person or persons to whom the Option is transferred by will
or the applicable laws of descent and distribution, and except as
so exercised such Option shall expire at the end of such period.
In no event, however, may an Option be exercised after the
expiration of the Option period.
7. Replacement Options
The Company may grant Options under the 1997 Nonstatutory Stock Option
Plan on terms differing from those provided for in Section 6 where such
Options are granted in substitution for Options held by employees of other
corporations who concurrently become employees of the Company or a subsidiary
as the result of a merger, consolidation or other reorganization of the
employing corporation with the Company or subsidiary, or the acquisition by
the Company or a subsidiary of the business, property or stock of the
employing corporation. The Board may direct that the substitute Options be
granted on such terms and conditions as the Board considers appropriate in
the circumstances.
8. Changes in Stock
In the event of a stock dividend, stock split or recapitalization or
merger in which the Company is the surviving corporation, or other similar
capital change, the number and kind of shares of stock or securities of the
Company to be subject to the 1997 Nonstatutory Stock Option Plan and to
Options then outstanding or to be granted thereunder, the maximum number of
Shares or securities which may be issued or sold under the 1997 Nonstatutory
Stock Option Plan, the exercise price and other relevant provisions shall be
appropriately adjusted by the Board of the Company, the determination of
which shall be binding on all persons.
<PAGE>
9. Employment Rights
The adoption of the 1997 Nonstatutory Stock Option Plan or the granting
of an Option does not confer upon any individual any right to employment or
continued employment with the Company or a subsidiary, as the case may be,
nor does it interfere in any way with the right of the Company or a
subsidiary to terminate the employment of any of its employees at any time.
10. Amendment
The Board may at any time discontinue granting Options under the 1997
Nonstatutory Stock Option Plan. The Board of the Company may at any time or
times amend the 1997 Nonstatutory Stock Option Plan or amend any outstanding
Option or Options for the purpose of satisfying the requirements of any
changes in applicable laws or regulations or for any other purpose which may
at the time be permitted by law; provided, however, that, except to the
extent required or permitted under Section 8, no such amendment shall void or
diminish Options previously granted without the consent of the Participant,
nor shall any amendment increase or accelerate the conditions and actions
required for the exercise of an Option unless the Participant shall have been
discharged from the Company's employment for cause.
Adopted by the Board of Directors
on June 1, 1997
<PAGE>
PROXY
FISCAL 1998 ANNUAL MEETING OF SHAREHOLDERS
ETS INTERNATIONAL, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
OF THE CORPORATION
The undersigned Shareholder of ETS International, Inc., Roanoke,
Virginia, having received the Notice dated September 29, 1997, of the Fiscal
1998 Annual Meeting of Shareholders, hereby nominates, constitutes, appoints
and authorizes David F. Tompkins and Elizabeth H. Wirt, and each of them with
full power to act alone, as proxies with full power of substitution, for me
and in my name, place and stead, to vote all the common stock of said
corporation standing in my name on its books on September 29, 1997, at the
Fiscal 1998 Annual Meeting of Shareholders to be held at the ETSI
headquarters, 1401 Municipal Road, NW, Roanoke, Virginia 24012, at 10:00
a.m., Friday, October 24, 1997, or at any adjournments thereof, with all the
power the undersigned would possess if personally present, as follows:
1. The election of the eight (8) nominees for directors listed in
the Proxy Statement dated September 29, 1997, for terms of one year each and
until their successors are elected and qualify. CUMULATIVE VOTING IS NOT
PERMITTED.
IF YOU WISH YOUR VOTES TO BE CAST FOR ALL OF THE EIGHT (8) PERSONS
LISTED BELOW, PLACE AN "X" IN THIS BOX [ ].
IF YOU DO NOT WISH TO VOTE FOR ALL OF THE CANDIDATES, LINE OUT THE
NAMES OF PERSONS FOR WHOM YOU DO NOT CHOOSE TO VOTE:
DIRECTORS:
John D. McKenna
John C. Mycock
Coleman S. Lyttle
Navin D. Sheth
David F. Tompkins
Thomas W. Marmon
Lee A. Raver
Arthur B. Nunn
2. Approval of the appointment of KPMG Peat Marwick LLP as
independent auditors for fiscal year 1998.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. Approval of the 1997 Nonstatutory Stock Option Plan.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. Upon such other business as may be brought before the meeting or
any adjournments thereof.
THIS PROXY CONFERS AUTHORITY TO VOTE FOR ALL OF THE PERSONS LISTED EVEN
THOUGH THE BLOCK IN ITEM 1 IS NOT MARKED UNLESS THE NAMES OF ONE OR MORE
CANDIDATES ARE LINED OUT. THIS PROXY WILL BE VOTED "FOR" ITEMS 1, 2, AND 3
ABOVE UNLESS "AGAINST" OR "ABSTAIN" IS INDICATED. IF ANY OTHER BUSINESS IS
PRESENTED AT SAID MEETING, THIS PROXY SHALL BE VOTED IN ACCORDANCE WITH THE
RECOMMENDATIONS OF MANAGEMENT.
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND THE
COST OF SAME IS BORNE BY THE CORPORATION. THIS PROXY MAY BE REVOKED BY
WRITING THE SECRETARY TO THE BOARD, ETS INTERNATIONAL, INC., 1401 MUNICIPAL
ROAD, ROANOKE, VIRGINIA 24012-1309, OR IN PERSON AT THE FISCAL 1998 ANNUAL
MEETING OF SHAREHOLDERS, AT ANY TIME PRIOR TO ITS EXERCISE.
Date:
------------------------------------
Name:
------------------------------------
Beneficial Shareholder (Please Print)
Address:
------------------------------
------------------------------
Signature(s) (SEAL)
----------------------------------
(SEAL)
----------------------------------
(All Shareholders must sign)
NUMBER OF SHARES VOTING
---------
IF SHARES ARE NOT REGISTERED IN YOUR NAME, PLEASE GIVE THE NAME AND ADDRESS
OF WHOM THEY ARE REGISTERED IN.
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---------------------------------------
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(This must be completed if applicable)
Please date, fill in your complete name and address and sign above
exactly as your name or names appear hereon, and return this proxy promptly
in the enclosed envelope. When signing as attorney, executor, administrator,
trustee or guardian, please give full title. If there is more than one
fiduciary, all should sign. All joint owners must sign.
<PAGE>
