UNIVERSAL STANDARD MEDICAL LABORATORIES INC, DEF 14A, 1998-06-08

UNIVERSAL STANDARD MEDICAL LABORATORIES INC
DEF 14A, 1998-06-08
MEDICAL LABORATORIES

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<PAGE> 1

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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

UNIVERSAL STANDARD HEALTHCARE, INC.
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(Name of Registrant as Specified in Its Charter)

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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of filing fee (Check the appropriate box):

[X] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(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 party 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 filing.

(1) Amount Previously Paid:

- --------------------------------------------------------------------------------

(2) Form, Schedule or Registration Statement No.:

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(3) Filing Party:

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(4) Date Filed:

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<PAGE> 2

[UNIVERSAL STANDARD HEALTHCARE, INC. LOGO]

June 3, 1998

To Our Shareholders:

You are invited to attend the 1998 Annual Meeting of Shareholders which
will take place at the offices of Dykema Gossett PLLC, 400 Renaissance Center,
Detroit, Michigan on Monday, June 29, 1998. The meeting will start promptly at
8:30 a.m., local time.

The attached notice of the meeting and Proxy Statement describe the items
of business to be transacted: (i) the election of two directors, (ii) the
approval of an amendment to the Company's Articles of Incorporation to increase
the number of shares of Common Stock authorized from 20,000,000 to 40,000,000,
(iii) the approval of an amendment to the Company's Articles of Incorporation to
authorize for issuance by the Board of Directors up to 10,000,000 shares of
Preferred Stock, and (iv) such other business as may properly come before the
meeting or any adjournment thereof. After the formal business session, there
will be a report to the shareholders on the progress of the Company along with a
discussion period.

I look forward to seeing you at the Annual Meeting and hope you will make
plans to attend. Whether or not you plan to attend the meeting, I urge you to
sign, date and return your proxy in the addressed envelope enclosed for your
convenience so that as many shares as possible may be represented at the
meeting. No postage is required if the envelope is mailed in the United States.
Returning the proxy will not affect your right to attend the meeting or your
right to vote in person.

Sincerely,

/s/ EUGENE E. JENNINGS
EUGENE E. JENNINGS
Chairman of the Board,
President and Chief Executive Officer
<PAGE> 3

[UNIVERSAL STANDARD HEALTHCARE, INC. LOGO]

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD ON JUNE 29, 1998

Southfield, Michigan
June 3, 1998

To the Shareholders of Universal Standard Healthcare, Inc.:

Notice is hereby given that the Annual Meeting of Shareholders of Universal
Standard Healthcare, Inc. will be held at the Dykema Gossett PLLC, 400
Renaissance Center, Detroit, Michigan on Monday, June 29, 1998, at 8:30 a.m.,
local time, for the following purposes:

1. To elect two directors of the Company to hold office until the 2001
Annual Meeting of Shareholders or until their successors are elected and
qualified;

2. To approve an amendment to the Company's Articles of Incorporation to
increase the number of shares of Common Stock authorized for issuance
from 20,000,000 to 40,000,000;

3. To approve an amendment to the Company's Articles of Incorporation to
authorize for issuance, from time to time, up to 10,000,000 shares of
Preferred Stock, without par value, in such amounts, in one or more
classes or series, and with such designations, preferences, limitations
and relative rights for each class or series as the Board of Directors
of the Company shall determine and to make certain related changes; and

4. To transact such other business as may properly come before the meeting
or any adjournment thereof.

Shareholders of record on May 4, 1998, will be eligible to vote at this
meeting. The stock transfer books of the Company will not be closed, but only
shareholders of record at the close of business on such date will be entitled to
notice of and to vote at the meeting.

By order of the Board of Directors,

/s/ THOMAS S. VAUGHN
THOMAS S. VAUGHN
Secretary
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YOUR VOTE IS IMPORTANT. PLEASE DATE, SIGN AND MAIL THE ENCLOSED FORM OF PROXY IN
THE ACCOMPANYING ADDRESSED ENVELOPE AT YOUR EARLIEST OPPORTUNITY.
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<PAGE> 4

[UNIVERSAL STANDARD HEALTHCARE, INC. LOGO]

PROXY STATEMENT

This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Universal Standard Healthcare, Inc. (the
"Company") to be used at the Annual Meeting of Shareholders, and at any
adjournment thereof, to be held on Monday, June 29, 1998, at the offices of
Dykema Gossett PLLC, 400 Renaissance Center, Detroit, Michigan beginning at 8:30
a.m., local time. The address of the principal executive offices of the Company
is 26500 Northwestern Highway, Southfield, Michigan 48076. This Proxy Statement
and the accompanying form of proxy, which is being solicited by the Board of
Directors, will be first sent or given to shareholders on or about June 8, 1998.

Only holders of record of the Company's Common Stock at the close of
business on May 4, 1998 (the "Record Date") will be entitled to notice of and to
vote at the Annual Meeting or any adjournment thereof. Shareholders of record on
the Record Date are entitled to one vote per share on any matter that may
properly come before the Annual Meeting. As of the Record Date, a total of
6,569,513 shares of Common Stock were issued and outstanding and entitled to
vote at the Annual Meeting. The presence, either in person or by properly
executed proxy, of the holders of a majority of the outstanding shares of Common
Stock is necessary to constitute a quorum at the Annual Meeting.

A proxy may be revoked at any time before it is exercised by delivering
written notice to the Secretary of the Company, executing and delivering a later
dated proxy or voting in person at the Annual Meeting. Unless revoked, the
shares represented by each duly executed, timely delivered proxy will be voted
in accordance with the specifications made. IF NO SPECIFICATIONS ARE MADE, SUCH
SHARES WILL BE VOTED FOR THE ELECTION OF DIRECTORS AND FOR EACH OF THE
AMENDMENTS TO THE ARTICLES OF INCORPORATION AS PROPOSED IN THIS PROXY STATEMENT.
The Board of Directors does not intend to present any other matters at the
Annual Meeting. However, should any other matters properly come before the
Annual Meeting, it is the intention of the persons named in the accompanying
form of proxy to vote the proxy in accordance with their best judgment. For
purposes of determining the number of votes cast with respect to the election of
directors, only those cast "for" are included. Abstentions and withheld votes
are counted only for purposes of determining whether a quorum is present at the
Annual Meeting and broker non-votes are not counted for any purpose. Abstentions
and broker non-votes will have the effect of a vote against the two proposals to
amend the Company's Articles of Incorporation and will have no effect on the
election of directors.

All costs of solicitation of proxies will be borne by the Company. In
addition to solicitation by mail, the officers and employees of the Company, who
will receive no extra compensation therefor, may solicit proxies personally or
by telephone. The Company will reimburse brokerage houses, custodians, nominees
and fiduciaries for their expense in mailing proxy material to principals.
<PAGE> 5

INFORMATION ON SECURITIES

The following table set forth information as of April 1, 1998, unless
otherwise indicated, with respect to the beneficial ownership of Common Stock by
each director and nominee, each executive officer named in the Summary
Compensation Table under "Proposal 1 -- Nominees for Election as
Directors -- Executive Compensation," all current directors and executive
officers as a group and all other persons known by the Company to beneficially
own more than 5% of the outstanding shares of Common Stock (each, a "5% Owner").

<TABLE>
<CAPTION>
NUMBER PERCENT
NAME(a) OF SHARES(b) OF CLASS(c)
------- ------------ -----------
<S> <C> <C>
Eduardo Bohorquez.................................. 2,480,515(d) 37.3
Anthony A. Bonelli................................. 37,747(e) *
Robert P. DeCresce................................. 45,747(f) *
Thomas R. Donahue.................................. 0 --
Thomas W. Gorman................................... 584,899(g) 8.9
P. Thomas Hirsch................................... 25,000(h) *
Eugene E. Jennings................................. 173,750(i) 2.6
Joseph J. Vadapalas................................ 2,480,515(d) 37.3
Lou Gorga.......................................... 30,000(j) *
Alan S. Ker........................................ 55,078(k) *
Perry C. McClung................................... 139,863(l) 2.1
Anixter International, Inc......................... 774,899(m) 11.8
The Kaufmann Fund, Inc............................. 1,842,857(n) 23.9
Portfolio Investment Company Limited............... 2,178,223(o) 33.2
WestSphere Capital, Inc............................ 2,480,515(d) 37.3
WestSphere Capital Associates, L.P................. 2,480,515(d) 37.3
All current directors and executive officers as a
group (12 persons)............................... 3,547,599(p) 50.6
</TABLE>

- -------------------------
* Less than one percent

(a) The address of each of WestSphere Capital Associates, L.P. ("WCA"), 55 E.
59th Street, 13th Floor, New York, New York 10017, WestSphere Capital, Inc.
("WCI") and Messrs. Bohorquez, Vadapalas and Donahue in c/o WCA, 55 E. 59th
Street, 13th Floor, New York, New York 10017. The address of Portfolio
Investment Company Limited ("PICL") is P.O. Box 309, 63 SMB, Grand Cayman,
Cayman Islands, B.W.I. The address of Mr. Gorman and Signal Capital
Corporation is 55 Ferncroft Road, Danvers, Massachusetts 01923. The address
of Anixter International, Inc. is Two North Riverside Plaza, Chicago,
Illinois 60606. The address of The Kaufmann Fund, Inc. is 140 E. 45th
Street, 43rd Floor, New York, New York 10017.

(b) The column sets forth shares of Common Stock which are deemed to be
"beneficially owned" by the persons named in the table under Rule 13d-3 of
the Securities and Exchange Commission ("SEC"), including shares issuable
under options or warrants exercisable currently or within 60 days of April
1, 1998 or upon conversion of the Company's 8.25% Convertible Subordinated
Debentures Due 2006 ("Debentures"). Each of the persons named in the table
has sole voting and investment power with respect to all shares beneficially
owned by them, except as described in the following footnotes.

(c) For purposes of calculating the percentage of Common Stock beneficially
owned, the shares issuable to such person under stock options or warrants
exercisable currently or within 60 days of April 1, 1998 or upon conversion
of Debentures owned by such person are considered outstanding and added to
the shares of Common Stock actually outstanding.

(d) Information is based on a Schedule 13D filed by PICL and certain related
entities on September 30, 1996. Amount includes 2,178,223 shares owned by
PICL, as well as 219,175 shares and a currently exercisable warrant for
83,117 shares which shares and warrants are owned by certain other
affiliates of WCA and WCI. Pursuant to certain management agreements, WCA
has the authority to direct the

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<PAGE> 6

voting power of the shares of the Company owned by these entities. WCI is
the general partner of WCA and therefore may also be deemed to be the
beneficial owner of such shares. WCA and WCI disclaim this beneficial
ownership. Messrs. Bohorquez and Vadapalas are principals of WCA and
directors of WCI and therefore may be deemed to be beneficial owners of such
shares. Messrs. Bohorquez, Donahue and Vadapalas disclaim beneficial
ownership of these shares. A pledge of 219,175 of these shares was made to a
bank as security for the Company's line of credit.

(e) Includes 37,747 shares which may be acquired pursuant to stock options.

(f) Includes 42,747 shares which may be acquired pursuant to stock options and
3,000 shares owned by Dr. DeCresce's minor sons as to which shares Dr.
DeCresce disclaims beneficial ownership.

(g) Includes 584,899 shares owned by Signal Capital Corporation for which Mr.
Gorman is a senior investment manager. Excludes 190,000 shares owned by
Anixter International, Inc., the parent corporation of Signal Capital
Corporation. Mr. Gorman disclaims beneficial ownership of all such shares.
See note (m).

(h) Includes 25,000 shares which may be acquired pursuant to stock options.

(i) Includes 168,750 shares which may be acquired pursuant to stock options.

(j) Includes 30,000 shares which may be acquired pursuant to stock options. All
such options have since expired due to Mr. Gorga's termination of
employment.

(k) Includes 47,713 shares which may be acquired pursuant to stock options and
7,365 shares as to which Mr. Ker shares beneficial ownership with his
spouse.

(l) Includes 37,500 shares which may be acquired pursuant to stock options.

(m) Information regarding Anixter International, Inc. is based on the Schedule
13D filed by Anixter International, Inc. on or about January 31, 1995.
Amount includes 190,000 shares owned directly and 584,899 shares owned by
its subsidiary, Signal Capital Corporation.

(n) Information regarding The Kaufmann Fund, Inc. is based on the Schedule 13G
filed by the Fund as of December 31, 1995. Includes 1,142,857 shares which
may be acquired upon conversion of Debentures.

(o) Such shares are subject to a management agreement with WCA. See note (d).
All of such shares are also pledged to secure certain obligations of PICL.

(p) Includes a total of 447,574 shares which may be acquired pursuant to options
and warrants. See also footnotes (d) through (l) above. None of the
directors or executive officers beneficially own any Debentures.

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<PAGE> 7

PROPOSAL 1

NOMINEES FOR ELECTION AS DIRECTORS

The Company's Articles of Incorporation divide the Company's directors into
three classes, the terms of which expire as set forth below. At each annual
meeting, the shareholders of the Company will elect to three-year terms
directors to replace those directors whose terms expire at that annual meeting.
The term of office of directors elected at this year's Annual Meeting will
continue until the 2001 Annual Meeting.

The following sets forth information as to each nominee for election at the
Annual Meeting and each director continuing in office, including his age,
present principal occupation, other business experience during the last five
years, directorships in other publicly held companies, membership on committees
of the Board of Directors and period of service as a director of the Company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE NOMINEES FOR ELECTION.
The election of directors requires a plurality of the votes cast.

If any nominee at the time of election is unable to serve, or otherwise is
unavailable for election, and if other nominees are designated, the persons
named in the accompanying form of proxy will have discretionary authority to
vote or refrain from voting in accordance with their judgment on such other
nominees. If any nominees are substituted by the Board of Directors, the persons
named in the accompanying form of proxy intend to vote for such nominees.
Management is not aware of the existence of any circumstance which would render
any nominee named hereunder unavailable for election. All nominees are currently
directors of the Company.

NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS FOR A TERM EXPIRING IN 2001

EDUARDO BOHORQUEZ, PH.D, 51 Dr. Bohorquez has been a director of the
Company since its organization. He has been the President and Chief Executive
Officer of WCI and the Chief Executive Officer of WCA, each an investment firm,
since their organization in 1989. From August 1986 to May 1989, he was employed
by Ehrlich Bober and Co., Inc., an investment banking company, as a Managing
Director, and from January 1980 to July 1986 he was employed by The Chase
Investment Bank, the investment banking subsidiary of The Chase Manhattan Bank,
N.A., as a Managing Director of the Corporate Finance Group. Dr. Bohorquez holds
a Ph.D in Finance from the University of Wisconsin.

JOSEPH J. VADAPALAS, 43 Mr. Vadapalas has been a director of the Company
since its organization. He has been an Executive Vice President of WCI and a
Managing Director of WCA since their organization in 1989. From August 1986 to
May 1989, he was employed by Ehrlich Bober & Co., Inc. as a director. From
September 1982 to August 1986, he was employed by The Chase Investment Bank, the
investment banking subsidiary of The Chase Manhattan Bank, N.A., as a director.

DIRECTORS WHOSE TERMS EXPIRE IN 1999

ANTHONY A. BONELLI, 47 Mr. Bonelli has been a director of the Company since
June 1992. In January 1998, Mr. Bonelli was appointed Chief Operating Officer of
Vita Quest International, Inc. ("Vita Quest"), a custom developer, manufacturer
and marketer of vitamins and nutritional supplements, and was appointed
President of Vita Quest's Garden State Nutritional Division and President of
Windmill Consumer Products Division. Previously, he served as President and
Chief Operating Officer of Neuman Distributors, Inc., a wholesale distributor of
pharmaceutical products, from August 1995 until December 1997. Mr. Bonelli
served as President and Chief Operating Officer for Copley Pharmaceutical, Inc.,
a worldwide developer and manufacturer of off-patent generic prescription and
over the counter pharmaceuticals, from June 1993 until November 1994. From
September 1989 until June 1993, Mr. Bonelli was Vice President, Institutional
Health Care Strategic Business Unit, for Parke-Davis, a division of the
Warner-Lambert Company, a worldwide pharmaceutical and consumer products
corporation, and prior to that served as Director of Marketing of Parke-Davis
from August 1987 until September 1989. From February 1986 to August 1987, Mr.
Bonelli held various positions with Schering-Plough Corporation, a
pharmaceutical manufacturer, including Director, Trade Development. Mr. Bonelli
holds a law degree from the University of San Francisco and an M.B.A. from
Rutgers University.

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<PAGE> 8

ROBERT P. DECRESCE, M.D., 48 Dr. DeCresce has been a director of the
Company since June 1992. He has been the Director of Clinical Laboratories for
Rush-Presbyterian/St. Luke's Medical Center in Chicago, Illinois since July
1991. From 1987 to 1991, he was the Chief of Pathology of Humana
Hospital-Michael Reese in Chicago, Illinois. From 1983 to 1987, he was Vice
President for MetPath Incorporated, a division of Corning, Inc. Dr. DeCresce
received an M.D. from Columbia University College of Physicians and Surgeons in
1975 and an M.B.A. from Columbia University in 1977.

THOMAS W. GORMAN, 38 Mr. Gorman has been a director of the Company since
November 1992. He has been a senior investment manager at Signal Capital
Corporation, a Massachusetts-based investment firm since April 1991. Mr. Gorman
also served as an investment manager at Signal from January 1990 to April 1991
and as Assistant Treasurer at Signal from May 1988 to January 1990. From June
1987 to May 1988, Mr. Gorman served as Manager, Corporate Finance, at General
Motors Corporation.

WCI and its affiliates and certain of the Company's other shareholders have
agreed to vote their shares for the election of Mr. Gorman at the request of
Signal Capital Corporation pursuant to a certain Stockholders Agreement dated
June 28, 1991. Such right of Signal Capital Corporation expires upon the earlier
to occur of June 27, 2001 and the date on which Signal Capital Corporation no
longer holds at least 5% of the Common Stock.

DIRECTORS WHOSE TERMS EXPIRE IN 2000

THOMAS R. DONAHUE, 36 Mr. Donahue has been a director of the Company since
its organization. He has been a principal of WCA since November 1992 and was a
director of WCA from the time of its organization in 1989 until November 1992.
Mr. Donahue has served as Executive Vice President of WestSphere Equity
Investors, L.P., an affiliate of WCA, since January 1996. From July 1988 to May
1989, he was employed by Ehrlich Bober & Co. Inc., an investment banking firm,
as a Senior Associate.

P. THOMAS HIRSCH, 47 Mr. Hirsch has been a director of the Company since
October 1994. Mr. Hirsch has served as President and Chief Executive Officer of
Path Lab, Inc., a New England hospital-based clinical laboratory company, since
June 1984. From October 1985 until June 1994, Mr. Hirsch was also the President
and Chief Executive Officer of Diagnostic Laboratory Services, Inc., a clinical
laboratory company based in Hawaii. Mr. Hirsch has over 18 years of managerial
experience in the health care industry.

EUGENE E. JENNINGS, 44 Mr. Jennings has been Chairman of the Board,
President and Chief Executive Officer since April 1996. From November 1991 to
March 1996, Mr. Jennings served in various managerial capacities for AMSCO
International, Inc., a manufacturer of medical and industrial infection control
and surgical care equipment and provider of biomedical services, and most
recently as Corporate Vice President -- International and Bio-Technology and
Pharmaceutical Businesses. Mr. Jennings served as Vice President and General
Manager of Stryker Corporation, a manufacturer of endoscopic medical devices,
during 1990 and 1991 and has more than 16 years of senior executive managerial
experience in the health care industry.

DIRECTOR COMPENSATION

During 1997, the non-employee directors were not paid any cash compensation
for their services as members of the Company's Board of Directors and were only
reimbursed for travel and related expenses.

The Directors Stock Option Plan (the "Directors Plan") provides for the
making of stock option grants to directors who are not employees of the Company
or its subsidiaries and who are not 5% Owners or employees, officers or
affiliates of a 5% Owner. Eligible directors who are first elected to the Board
after March 1995 will receive an initial grant of an option to purchase 15,000
shares in addition to annual grants during the term of the Directors Plan at an
exercise price equal to the fair market value per share of the Common Stock on
the grant date (as calculated under the Directors Plan). In addition, on the
date of each annual meeting during the term of the Directors Plan, each eligible
director will receive an option to purchase 10,000 shares at a price equal to
the fair market value per share of the Common Stock on the grant date (as
calculated under the Directors Plan). Messrs. Bonelli and Hirsch and Dr.
DeCresce each received an option to purchase 10,000 shares at $3.61 per share
during 1997 under the Directors Plan. All options granted under the Directors
Plan

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become exercisable in equal annual installments on each of the first four
anniversaries of the grant date or immediately upon a "change of control" or
"involuntary removal" from the Board of Directors (as such terms are defined in
Directors Plan).

BOARD COMMITTEES AND ATTENDANCE

The Company's Board of Directors has an Audit Committee, a Compensation
Committee and a Stock Option Committee. The Audit Committee, which met three
times during 1997, oversees actions taken by the Company relating to its
financial matters and its independent auditors, recommends the engagement of
auditors and reviews the Company's financial statements. The members of the
Audit Committee are Messrs. Donahue and Bonelli and Dr. DeCresce. The
Compensation Committee, which met two times during 1997, approves the
compensation of executives of the Company and makes recommendations to the Board
of Directors with respect to standards for setting compensation levels. The
members of the Compensation Committee are Messrs. Vadapalas and Hirsch and Drs.
Bohorquez and DeCresce. The Stock Option Committee, which met three times during
1997, administers the 1992 Stock Option Plan, Employee Stock Purchase Plan and
the Directors Stock Option Plan. The members of the Stock Option Committee are
Dr. DeCresce and Mr. Hirsch. See "Proposal 1 -- Nominees for Election as
Directors -- Executive Compensation" for the report of the Compensation
Committee on executive compensation practices and policies. In addition to
formal meetings, from time to time the Compensation Committee and the Stock
Option Committee informally discuss issues or matters under consideration and
take formal action by unanimous written consent. The Company's Board of
Directors met six times during 1997. Except for Mr. Bonelli and Dr. Bohorquez,
each director attended 75% or more of the total number of meetings of the Board
and committees of which he was a member in 1997.

EXECUTIVE OFFICERS

The executive officers of the Company as of the date of this Proxy
Statement are listed and described below. Executive officers serve at the
discretion of the Board of Directors.

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Eugene E. Jennings................... 44 Chairman of the Board, President, Chief Executive
Officer and Director
Robert J. Helbling................... 52 Vice President and Chief Operating Officer of Universal
Diagnostics
Alan S. Ker.......................... 46 Vice President, Finance, Chief Financial Officer,
Treasurer and Assistant Secretary
Perry C. McClung..................... 61 Executive Vice President and President of Universal
Standard Healthcare of Delaware, Inc.
Imtiaz H. Sattaur.................... 35 Vice President -- Chief Information Officer
</TABLE>

Mr. Jennings' business experience is described under "Directors Whose Terms
Expire in 2000."

Mr. Helbling has been Vice President and Chief Operating Officer of
Universal Diagnostics, the Company's laboratory division, since February 1998.
Prior to joining the Company, Mr. Helbling served as Vice President,
Distribution, of St. Jude Medical, Inc., a medical device company, from January
1996 to December 1997 and as President of Cardiac Assist, a division of St. Jude
Medical, Inc., from May 1992 to December 1995. Mr. Helbling was employed by
Surgitek, a division of Bristol-Myers Squibb, as President from 1986 to 1992 and
as Vice President of Operations from 1984 to 1986. Surgitek sells implantable
surgical devices to urologists and plastic surgeons.

Mr. Ker has served as Vice President, Finance, and Chief Financial Officer
of the Company since July 1991 and was appointed Assistant Secretary in March
1995. Mr. Ker was appointed Treasurer of the Company in June 1992. Prior to
joining the Company, Mr. Ker had been the Western Regional Controller of Damon
Corporation, a nationally-based clinical laboratory, since January 1985. From
1980 through December 1984,

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<PAGE> 10

Mr. Ker was the Controller for the United States operations of MDS Health Group,
Inc., a worldwide clinical laboratory.

Mr. McClung has been Executive Vice President of the Company and President
of the Company's principal managed care subsidiary since June 1991. Prior to
joining the Company, Mr. McClung served as Vice President of Marketing of MML,
Inc., the Company's predecessor, from 1984 to May 1991. From 1968 to 1983, Mr.
McClung served in various positions, including Vice President of Auto National
Marketing, with Michigan Blue Cross/Blue Shield.

Mr. Sattaur has been Vice President -- Chief Information Officer of the
Company since joining the Company in May 1997. Prior to joining the Company, Mr.
Sattaur was employed by RiskAlert, Inc., a national risk/quality software and
information consulting company and a subsidiary of the Aon Corporation, an
insurance brokerage company, as President, from January 1993 to January 1997 and
as Vice President/ National Director from February 1991 through January 1993.

COMPENSATION COMMITTEE INTERLOCKS AND CERTAIN TRANSACTIONS

Joseph Vadapalas, Eduardo Bohorquez, Robert DeCresce and Thomas Hirsch
served on the Compensation Committee of the Board of Directors of the Company
during 1997. None of these individuals was an employee of the Company during
1997.

Pursuant to the terms of a management advisory and consulting agreement
between WCA and the Company which terminated in December 1992, the Company has
an outstanding obligation to WCA in the amount of approximately $395,000. In
addition, in March 1998, 219,175 shares of Common Stock beneficially owned by
affiliates of WCA and WCI were pledged to a bank as security for the Company's
bank line of credit in connection with an amendment of the bank line of credit
agreement. WCA is a 5% Owner and is controlled by WCI. Dr. Bohorquez is the
chief executive officer of WCA and Mr. Vadapalas is a managing director of WCA.

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<PAGE> 11

EXECUTIVE COMPENSATION

SUMMARY

The following table provides summary information for the periods indicated
concerning compensation paid or accrued by the Company and its subsidiaries to
the Company's Chief Executive Officer and its three other executive officers
serving as such as of December 31, 1997 who earned more than $100,000 in salary
and bonus during 1997 (the "Named Officers").

<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
------------
ANNUAL COMPENSATION SECURITIES
------------------- UNDERLYING ALL OTHER
NAME AND SALARY BONUS OPTIONS/SARS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) (#) ($)(a)
------------------ ---- ------ ----- ------------ ------------
<S> <C> <C> <C> <C> <C>
Eugene Jennings......................... 1997 $256,450 $ -- 75,000 $88,643
Chairman of the Board, President 1996 174,452 93,750 300,000 17,930
and Chief Executive Officer(b)
Perry McClung........................... 1997 156,197 -- 40,000 75,854
Executive Vice President 1996 145,455 -- 85,000(c) 842
1995 133,890 -- 10,000 540
Alan Ker................................ 1997 141,911 -- 20,000 553
Vice President, Finance, 1996 133,600 -- 120,000(c) 548
Treasurer and Chief 1995 130,703 -- 10,000 122
Financial Officer
Lou Gorga............................... 1997 127,026 -- -- 489
Former Vice President 1996 123,273 -- 80,000(c) 321
and Chief Operating Officer(d) 1995 46,406 -- 60,000 13,000
</TABLE>

- -------------------------
(a) Amounts in 1997 represent premiums paid by the Company for term life
insurance policies purchased for such officers. Mr. Jennings' amount also
includes $87,948 in reimbursements for temporary housing, real estate
commissions, moving expenses and the loss on the sale of his former home
incurred in connection with his relocation to Michigan. In addition, Mr.
McClung received a payment of $75,000 in connection with a covenant not to
compete contained in his June 1996 employment agreement and continued in his
June 1997 employment agreement.

(b) Mr. Jennings joined the Company as Chairman of the Board, President and
Chief Executive Officer in April 1996.

(c) Amounts include 40,000, 85,000 and 80,000 options held by Messrs. Gorga,
McClung and Ker, respectively, granted prior to 1996 and repriced during
1996.

(d) No longer an executive officer of the Company effective January 19, 1998.

8
<PAGE> 12

The following table sets forth information concerning stock option grants
during 1997 to the Named Officers.

OPTION/SAR GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
--------------------------------------------------------------- ANNUAL RATES OF
NUMBER OF % OF TOTAL STOCK PRICE
SECURITIES OPTIONS/SARS APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OR OPTION TERM(a)
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION --------------------------
NAME GRANTED(#) FISCAL YEAR ($/SH) DATE 5% 10%
---- ------------ ------------ ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Eugene Jennings...... 75,000(b) 31% 3.94 3/12/07 $ 481,338 $ 766,451
Perry McClung........ 40,000(c) 17% 3.14 5/14/07 $ 204,589 $ 325,774
Alan Ker............. 20,000(d) 8% 3.10 11/11/07 $ 100,991 $ 160,812
Lou Gorga............ -- -- -- -- -- --
</TABLE>

- -------------------------

(a) Represents the value of such option at the end of its 10 year term (without
discounting to present value), assuming the market price of the Common Stock
appreciates from the exercise price beginning on the grant date at an
annually compounded rate of 5% or 10%. These amounts represent assumed rates
of appreciation only. Actual gains, if any, will be dependent on overall
market conditions and on the future performance of the Common Stock. There
can be no assurance that the amount reflected in this table will be
achieved. On April 1, 1998, the closing market price of the Common Stock was
$2.50 which was below the respective prices of all the options indicated in
the table. Hence, if exercised as of April 1, 1998, none of such options
would have any value.

(b) These options were granted under the 1992 Stock Option Plan and become
exercisable in cumulative annual installments of 25% on each of the first
four anniversaries of the grant date, subject to Mr. Jennings' continued
employment with the Company.

(c) One half of the options were Turn-Around Incentive Options and one half were
High Growth Incentive Options. The terms of the Turn-Around Incentive
Options were as follows: one-third were to vest based upon the achievement
of corporate goals, one-third upon achievement of divisional goals and
one-third upon achievement of individual goals, provided that none would
vest if the optionee did not achieve his individual goals, unless the Stock
Option Committee otherwise approved of such vesting. The terms of the High
Growth Incentive Options were as follows: The High Growth Incentive Options
would have vested December 31, 1997 if the Company achieved the 1997
operating plan approved by the Board of Directors as follows: the number of
High Growth Incentive Options equal to the number of Turn-Around Incentive
Options which vested June 30, 1997 would vest, or if no Turn-Around
Incentive Options vested because the optionee failed to achieve his
individual goals by June 30, 1997, then one half of the High Growth
Incentive Options would vest if the optionee had met his individual goals by
December 31, 1997. Vested options would have become exercisable in four
equal annual installments beginning one year from their vesting date. Six
thousand of the Turn-Around Incentive Options vested June 30, 1997 and are
exercisable in annual increments of 25% beginning June 30, 1998. The
remaining 34,000 options expired in 1997.

(d) These options, which were granted November 11, 1997, vest and become
exercisable in four equal annual installments beginning one year from the
grant date, subject to Mr. Ker's continued employment with the Company.

9
<PAGE> 13

The following table provides information with respect to unexercised
options held as of the end of 1997 by the Named Officers. There were no options
exercised by the Named Officers during 1997.

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION/SAR VALUES

<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS
FISCAL YEAR-END(#) AT FISCAL YEAR-END($)(a)
---------------------------- ----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Eugene Jennings................................ 75,000 300,000 0 0
Perry McClung.................................. 37,500 43,500 0 0
Alan Ker....................................... 47,713 63,500 0 0
Lou Gorga...................................... 30,000 30,000 0 0
</TABLE>

- -------------------------
(a) Represents the total gain which would have been realized if all options were
exercised at December 31, 1997. The closing market price at December 31,
1997 was $2.13.

EMPLOYMENT AGREEMENTS

The Company has employment agreements with each of the Named Officers.
These agreements are described below.

The employment agreement of Mr. Jennings expires on March 12, 1999 and
provides for an annual salary (subject to adjustment for inflation) of $250,000.
In connection with the commencement of his employment, the Company also agreed
to reimburse Mr. Jennings for certain costs and expenses relating to his
relocation to the State of Michigan, including temporary housing, travel, moving
expenses, real estate commission and real estate closing costs, and for taxes
imposed on such reimbursements. Mr. Jennings' employment agreement also provides
for a performance bonus plan for the years 1996 through 1998. For a description
of Mr. Jennings' 1997 performance bonus plan, see "Compensation Committee and
Stock Option Committee Report -- Annual Cash Incentive Opportunities." Under the
1998 performance bonus plan, Mr. Jennings will be eligible to earn up to 100% of
his base salary for each such year as a bonus upon the achievement of certain
performance objectives for 1998. The potential bonus earned under the bonus plan
for 1998 is a direct function of the percentage of the Company's operating plan
achieved during the plan year. The operating plan for 1998 is the Company's
operating plan for such year as mutually agreed upon by the Board of Directors
and Mr. Jennings. The term of the Employment Agreement will extend automatically
for successive terms of one year unless, at least six months prior to the then
current expiration date, the Company gives notice of its intent not to extend
the term. Upon termination of employment by the Company without cause, Mr.
Jennings generally will be entitled to receive his salary and certain benefits
for a period of twelve months. Upon termination of employment by the Company for
cause or as a result of Mr. Jennings' death, incapacity or violation of the
terms of the agreement, the Company's obligation to pay Mr. Jennings' salary
will cease.

The employment agreement of Mr. Gorga was to expire on December 31, 1998
and provided for an annual salary (subject to adjustment for inflation) of
$125,000. Upon commencement of his employment in September 1995, Mr. Gorga also
received a payment of $13,000 in connection with his relocation to the State of
Michigan. The contract term was to extend automatically for successive terms of
one year unless, at least six months prior to the then current expiration date,
the Company gave notice of its intent not to extend the term. Upon termination
of employment by the Company without cause, Mr. Gorga generally would have been
entitled to receive his salary and certain benefits for a period of the lesser
of six months following the date of his termination or the remaining term of the
employment agreement at the rate in effect as of the date of termination. Upon
termination of employment by the Company for cause or as a result of Mr. Gorga's
death, incapacity or violation of the terms of the agreement, the Company's
obligation to pay Mr. Gorga's salary would have ceased. Mr. Gorga's employment
terminated on January 19, 1998, and Mr. Gorga will be paid six months of salary
and certain benefits.

10
<PAGE> 14

The employment agreement of Mr. McClung expires no later than December 31,
2000 and provides that during the first year of the employment period, which
began June 28, 1997 and ended December 31, 1997, Mr. McClung would receive a pro
rata portion of an annual salary equal to $159,000; during 1998, Mr. McClung
will receive an annual salary of $159,000; during 1999, Mr. McClung will receive
an annual salary of $134,000; and during 2000, Mr. McClung will receive a
mutually agreed upon annual salary. If the Company and Mr. McClung are unable to
agree on Mr. McClung's salary during 2000, Mr. McClung's employment with the
Company shall terminate, effective January 1, 2000, and Mr. McClung shall
instead serve as a consultant to the Company during 2000 and shall receive a
monthly consulting fee based upon managed care revenue which will not exceed
$6,222. During the employment period (but not the consulting period), Mr.
McClung is eligible to participate in the same benefit plans as other executive
officers. Mr. McClung participated in the Executive and Key Manager Compensation
Plan for 1997 and is eligible to receive a one-time bonus during the employment
period if managed care revenue from certain accounts exceeds stated thresholds.
In addition, as consideration for his covenant not to compete with the Company
for five years after termination of employment, Mr. McClung will receive
$125,000 (part of which was paid in January 1997 and the remainder of which was
due on or before January 1, 1998 but has not been paid). Upon termination of
employment without cause during the employment period, Mr. McClung, is entitled
to receive his salary (reduced by earnings from subsequent employment or
otherwise) for nine months after termination of employment or until the end of
the employment period, whichever is less. Except for the bonus and non-compete
payment, the Company has no obligation to make further payments if employment is
terminated for cause or due to death, disability or resignation.

The employment agreement of Mr. Ker expires on December 31, 1999 and
provides for an annual salary (subject to adjustment for inflation) of $153,000.
Mr. Ker is eligible to participate in the same benefit and bonus plans as other
executive officers. Upon termination of employment by the Company without cause,
Mr. Ker generally will be entitled to receive his salary and benefits for a
period of nine months. Upon termination of employment by the Company for cause
or as a result of Mr. Ker's death, incapacity or violation of the terms of the
agreement, the Company's obligation to pay Mr. Ker's salary will cease.

In addition, the stock option agreements with Messrs. Jennings, McClung,
Ker and Gorga provide that such options become immediately exercisable in full
upon a change of control of the Company and, in certain cases, upon termination
without cause.

COMPENSATION COMMITTEE AND STOCK OPTION COMMITTEE REPORT

The Compensation Committee of the Board of Directors is responsible for
oversight and administration of the Company's executive compensation program.
The Stock Option Committee of the Board of Directors is responsible for the
administration of the Company's stock option programs.

The Company believes that its long-term success depends on its ability to
attract, retain and motivate top quality executives. The Compensation Committee
and the Stock Option Committee recognize that the Company's executive
compensation program is an essential element in that process. The Company's
executive compensation program reflects the Company's philosophy that executive
compensation should be directly linked to the Company's performance. The program
has been designed to link executive compensation to Company performance through
at-risk compensation opportunities, both short-term and long-term, in order to
adequately reward executives who contribute to the Company's success.

The Company's executive compensation program consists of base salary,
annual cash incentive opportunities and long-term incentives represented by
stock options. The salary, bonus and other compensation terms for new executive
officers are established by the Compensation Committee and Stock Option
Committee based upon each executive's qualifications, position and level of
responsibility.

BASE SALARY

The Compensation Committee reviews base salary levels of the Company's
executive officers at least annually and, if appropriate, adjusts base salary
levels consistent with the terms of employment agreements

11
<PAGE> 15

with the Company's senior executive officers. Similarly, the President and Chief
Executive Officer reviews base salary levels of the Company's other senior
management annually and, if appropriate, adjusts such levels.

During 1997, Eugene Jennings, Chairman of the Board, President and Chief
Executive Officer of the Company received a cost of living increase in his
annual base salary of 2.0%, as required by the terms of his employment
agreement. For a more detailed description of the terms and conditions of Mr.
Jennings' employment with the Company, see "Proposal 1 -- Nominees for Election
as Directors -- Executive Compensation -- Employment Agreements."

Two other executive officers received an increase in their annual base
salaries during 1997 of approximately 6%. These increases in annual base
salaries reflected additional compensation to offset the impact of the
elimination of the Company's practice of providing executives with leased
automobiles, cost of living increases and the efforts of these executives with
respect to the growth of the Company's managed care operations and the
reengineering and cost reduction initiatives implemented during 1996.

The terms of the employment agreements with the Named Officers are
described under "Proposal 1 -- Nominees for Election as Directors -- Executive
Compensation -- Employment Agreements."

ANNUAL CASH INCENTIVE OPPORTUNITIES

The Compensation Committee endeavors to institute cash incentive
opportunities which will provide significant reward to the Company's senior
executive officers for performance which enhances shareholder value, but which
will result in little or no reward for performance that does not enhance
shareholder value.

Annual cash incentive opportunities have in the past consisted of two
separate components: (i) bonus arrangements based upon the achievement of
individual performance goals, and (ii) bonus arrangements based upon the
achievement of Company and divisional performance goals.

The Compensation Committee established a performance bonus plan for Mr.
Jennings for 1997. Under this plan, Mr. Jennings was eligible to earn between
25% and 100% of his 1997 annual base salary upon the achievement of between 90%
and 130% of the net income levels set forth in the Company's Operating Plan for
1997 as approved by the Board of Directors of the Company (the "1997 Operating
Plan"). The Company did not achieve 90% of the 1997 Operating Plan, and so Mr.
Jennings did not earn any bonus for 1997 under this plan.

Under the performance bonus program for 1997 established by the
Compensation Committee for the executive officers, other than Mr. Jennings, the
executive officers could earn between 8.5% and 52.5% of their 1997 annual base
salary upon achievement of between 90% and 130% of the 1997 Operating Plan and,
in the case of executives principally associated with one of the Company's
divisions (laboratory or managed care), between 90% and 100% of the Company's
operating plan for 1997 for that division. The Company did not achieve 90% of
the 1997 Operating Plan or 90% of the 1997 operating plan for either the
laboratory or the managed care divisions, and so the executive officers of the
Company did not earn any bonus under this program during 1997.

Based upon the Company's 1997 financial performance, the Compensation
Committee did not authorize the payment of any other bonuses to Mr. Jennings or
the other executive officers relating to 1997.

STOCK INCENTIVE OPPORTUNITIES

The Company's stock incentive opportunities consist of grants of stock
options under the Company's 1992 Stock Option Plan. The Company's stock option
program permits the executive officers to buy a specific number of shares of
Common Stock, in the future, at or above the fair market value of such shares on
the date an option is granted. Stock options gain value only to the extent the
stock price exceeds the option exercise price. As a result, options have no
value to the Company's executive officers unless the executive officers are able
to improve the Company's operating performance in a fashion which results in
stock price appreciation.

The Stock Option Committee believes that an essential element of the
Company's long-term success is a highly motivated executive team with a
significant financial interest in improving both the Company's
12
<PAGE> 16

short-term and long-term operating performance. As a result, in the Stock Option
Committee's view, significant stock-based incentive opportunities are a
necessary element of the Company's executive compensation program in order to
encourage the achievement of the Company's long-term operating goals and to
align the interests of the Company's executives with those of its shareholders.

In connection with the engagement of Mr. Jennings as Chairman of the Board,
President and Chief Executive Officer, the Compensation Committee, which
administered the Company's 1992 Stock Option Plan at the time, agreed to grant
Mr. Jennings options to purchase 75,000 shares of the Common Stock under the
1992 Stock Option Plan on the first anniversary of his employment with the
Company. These options become exercisable in four equal annual installments,
beginning one year from their date of grant, at an exercise price equal to the
fair market value of the Common Stock, as defined under the 1992 Stock Option
Plan, on the date of grant. These options were intended to attract Mr. Jennings
to the Company, encourage his continued employment with the Company and provide
incentive to improve Company performance.

In September 1996, the Stock Option Committee adopted an Incentive Stock
Option Award Program ("ISOAP"). The objective of the ISOAP was to direct and
reward behavior consistent with shareholder value creation. The ISOAP was
intended to provide incentives that encourage higher levels of individual
participation, achievement and commitment to both the Company's short-term and
long-term objectives. Under the ISOAP, participants were given the opportunity
to earn options to purchase Common Stock, and so obtain an equity position in
the Company, if they achieve short-term strategic objectives of the Company.
Further, the ISOAP was intended to encourage participants to remain with the
Company for extended periods by providing that options, once vested, become
exercisable over a four year period.

Under the ISOAP during 1996 and 1997, certain executive officers (other
than Mr. Jennings), officers and managers of the Company were granted options to
purchase shares of Common Stock pursuant to the 1992 Stock Option Plan. Options
to purchase a total of 80,000 and 50,000 shares of Common Stock were granted to
executive officers of the Company under the ISOAP during 1996 and 1997,
respectively, at an exercise price equal to the fair market value of the Common
Stock (as defined under the 1992 Stock Option Plan) on the date of grant.
Generally, one-half of the ISOAP options were to vest on June 30, 1997 (the
"Turn-around Incentive Options") as follows: one-third of the Turn-around
Incentive Options upon the achievement of corporate goals, one-third upon
achievement of divisional goals and one-third upon achievement of individual
goals, provided that none of an optionee's Turn-around Incentive Options would
vest if the optionee did not achieve his or her individual goals, unless the
Stock Option Committee otherwise approved of such vesting. Corporate and
divisional goals were based upon the 1997 Operating Plan. If the Company
achieved the 1997 Operating Plan, the other half of the ISOAP options held by an
optionee (the "High Growth Incentive Options") were to vest on December 31, 1997
as follows: a number of High Growth Incentive Options equal to the number of
Turn-around Incentive Options which vested on June 30, 1997 or, if no
Turn-around Incentive Options vested because the optionee failed to achieve his
or her individual goals by June 30, 1997, then one-half of the High Growth
Incentive Options if the optionee had met his or her individual goals by
December 31, 1997. Vested options become exercisable in four equal annual
installments beginning one year from their vesting date.

The Company did not achieve the 1997 Operating Plan or the operating plans
for 1997 relating to either the laboratory or managed care divisions and no
participant achieved all of his or her individual goals. As a result, none of
the Turn-around Incentive Options or the High Growth Incentive Options vested by
their terms. However, a number of the participants in the ISOAP met nearly all
of their individual goals and so the Stock Option Committee approved the vesting
of a portion of their Turn-around Incentive Options, including two executive
officers, each of whom vested in Turn-around Incentive Options to purchase 6,000
shares of Common Stock.

During 1997, the Stock Option Committee also granted two executive officers
of the Company options to purchase 20,000 shares of Common Stock each. These
options become exercisable in four equal annual installments, beginning one year
from their date of grant, at an exercise price equal to the fair market value of
the Common Stock, as defined under the 1992 Stock Option Plan, on the date of
grant. These options were granted to these executives in recognition of their
efforts in effectively managing the Company's cash

13
<PAGE> 17

resources during the turn-around of the Company and implementing improvements to
the Company's systems. In addition, these options, which become exercisable over
a four-year period, were intended to encourage the continued employment of these
key executives and to provide them with incentives to continue to improve
Company performance.

DEDUCTIBILITY OF EXECUTIVE COMPENSATION

The Compensation Committee and the Stock Option Committee annually review
the provisions of the Internal Revenue Code and related regulations of the
Internal Revenue Service which restrict deductibility of executive compensation
paid to any of the five most highly compensated executive officers at the end of
any fiscal year to the extent such compensation exceeds $1,000,000 in any year.

The Company's 1992 Stock Option Plan contains a restriction on the granting
of options so that compensation realized in connection with the exercise of
options would be exempt from the restriction on deductibility described above.
The 1992 Stock Option Plan restricts to 375,000 the number of shares of Common
Stock that may be subject to options granted to any salaried employee in any two
consecutive fiscal years. It is important to note that while this restriction
allows the Stock Option Committee continuing discretion in establishing
executive officer compensation, it does limit such discretion by restricting the
size of option awards which the Stock Option Committee may grant to any single
individual. The permitted size of the option awards to a single individual is
based on the Board of Directors' determination of the maximum number of option
shares which were required to be granted in a two-year period to attract and
retain a new chief executive officer to the Company.

The Compensation Committee and the Stock Option Committee do not believe
that other components of the Company's compensation program are likely to result
in payments to any executive officer in any year which would be subject to the
restriction on deductibility, and therefore have concluded that no further
action with respect to qualifying such compensation for deductibility is
necessary at this time. The Compensation Committee and the Stock Option
Committee will continue to evaluate the advisability of qualifying future
executive compensation programs for deductibility under the Internal Revenue
Code.

COMPENSATION COMMITTEE: STOCK OPTION COMMITTEE:

EDUARDO BOHORQUEZ, PH.D. ROBERT P. DECRESCE, M.D.
ROBERT P. DECRESCE, M.D. P. THOMAS HIRSCH
P. THOMAS HIRSCH
JOSEPH J. VADAPALAS

14
<PAGE> 18

SHAREHOLDER RETURN

Set forth below is a graph comparing the cumulative total return on the
Common Stock from December 31, 1992 through December 31, 1997 with the Standard
and Poor's 500 Stock Index (the "S&P 500") and a published industry index
comprised of over 30 companies having an SIC code of 8071 (medical
laboratories). The graph assumes that the value of the investment in the Common
Stock, the S&P 500, and the published industry index was $100 on December 31,
1992 and that all dividends were reinvested.

COMPARISON OF CUMULATIVE TOTAL RETURN
PERIOD SINCE DECEMBER 31, 1992

<TABLE>
<CAPTION>
MEASUREMENT PERIOD INDUSTRY S&P
(FISCAL YEAR COVERED) UHCI INDEX 500
<S> <C> <C> <C>
1992 100 100 100
1993 59.70 88.33 110.08
1994 25.37 81.14 111.54
1995 25.37 76.56 153.45
1996 17.16 59.31 188.69
1997 12.69 49.93 251.64
</TABLE>

15
<PAGE> 19

PROPOSAL 2

APPROVAL OF PROPOSAL TO AMEND THE COMPANY'S ARTICLES OF
INCORPORATION TO INCREASE THE NUMBER OF SHARES OF
COMMON STOCK AUTHORIZED FOR ISSUANCE

The Board of Directors has approved, and proposes and recommends to
shareholders for their approval, an amendment to the Articles of Incorporation
to increase the number of shares of Common Stock authorized for issuance from
20,000,000 to 40,000,000 shares.

As of May 4, 1998, there were 6,569,513 shares of the Company's Common
Stock issued and outstanding out of 20,000,000 authorized shares of Common
Stock. As of May 4, 1998, approximately 5,702,273 of the authorized shares of
Common Stock are reserved for issuance pursuant to the Company's stock option
plans, employee stock purchase plan, Debentures and outstanding warrants and
options to purchase Common Stock.

The increase in the number of authorized shares of Common Stock will
provide additional authorized and unissued shares which may be used by the
Company for any proper corporate purpose. Such purposes might include, without
limitation, issuance in public or private sales for cash as a means of obtaining
additional capital for use in the Company's business and operations, issuance as
part or all of the consideration required to be paid by the Company for
acquisition of other businesses or properties and possible distributions or
dividends to holders of the Common Stock. There are no transactions under
present review by the Board of Directors which would result in the issuance of
the additional shares of Common Stock being considered for authorization under
this proposal, although the Company does consider from time to time proposals or
transactions involving the issuance of additional shares of Common Stock or
instruments convertible into or exercisable for Common Stock.

Although the Board of Directors would authorize the issuance of additional
shares of Common Stock based on its judgment as to the best interests of the
Company and its shareholders, the issuance of additional authorized shares would
have the effect of diluting the voting power per share and could have the effect
of diluting the book value per share of the outstanding shares of Common Stock.
In addition, increasing the authorized shares of Common Stock could, in certain
instances, render more difficult or discourage a merger, tender offer, or proxy
contest and thus potentially have an "anti-takeover" effect, especially if
additional shares of Common Stock were issued in response to a potential
takeover. Such an effect could deter certain types of transactions that might be
proposed, whether or not such transactions were favored by the majority of the
shareholders, and could enhance the ability of officers and directors to retain
their positions.

If the amendment to the Articles of Incorporation described in this
Proposal 2 is approved by shareholders, but the amendment to the Articles of
Incorporation described in Proposal 3 is not approved by shareholders, the text
of Article III of the Company's Articles of Incorporation will be amended to
read in part as follows:

The total number of authorized shares of Common Stock (hereinafter
referred to as "Common Stock") which the corporation has authority to issue
is Forty Million (40,000,000) shares. A statement of all or any of the
designations and the powers, preferences and rights, and the
qualifications, limitations or restrictions of the Common Stock is as
follows:

1. The holders of Common Stock are entitled to receive such
dividends as may be declared from time to time by the Board of
Directors.

3. The holders of Common Stock shall have equal voting and other
rights consistent with the MBCA and each holder of Common Stock is
entitled to one (1) vote for each share so held with respect to all
matters voted on by the holders of the Common Stock of the corporation.

16
<PAGE> 20

If shareholders approve the amendments to the Articles of Incorporation
described in both Proposal 2 and Proposal 3, Article III and Article VIIIB of
the Company's Articles of Incorporation will be amended to read as set forth in
Annex A attached to this Proxy Statement.

The affirmative vote of a majority of the shares of Common Stock entitled
to vote at the Annual Meeting is required to authorize the proposed amendment to
the Articles of Incorporation described in Proposal 2. Consequently, abstentions
and broker non-votes will have the same effect as a vote against the proposal.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL.

17
<PAGE> 21

PROPOSAL 3

APPROVAL OF PROPOSAL TO AMEND THE COMPANY'S ARTICLES OF INCORPORATION
TO AUTHORIZE THE ISSUANCE OF PREFERRED STOCK

The Board of Directors has approved, and proposes and recommends to the
shareholders for their approval, an amendment to the Articles of Incorporation
to authorize the issuance of up to ten million (10,000,000) shares of preferred
stock (the "Preferred Stock"). The proposed amendment would also change
provisions of the Articles of Incorporation relating to confidentiality of
shareholder votes, the number of votes required to decide matters before the
shareholders and the shareholder meeting quorum requirement to reflect the
potential issuance of shares of Preferred Stock having voting rights and to
provide the same rights for holders of Preferred Stock as are provided for
holders of Common Stock on these matters. The number of authorized shares of
Common Stock would not be changed by the amendment. If shareholders approve the
amendments to the Articles of Incorporation described in both Proposal 2 and
Proposal 3, Article III and Article VIIIB of the Company's Articles of
Incorporation shall be amended to read as set forth in Annex A attached to this
Proxy Statement. In the event that the amendments to the Articles of
Incorporation described in Proposal 3 are approved by shareholders, but the
amendment to the Articles of Incorporation described in Proposal 2 is not,
Article III and Article VIIIB of the Company's Articles of Incorporation shall
be amended to read as set forth in Annex A attached to this Proxy Statement,
except that the number of authorized shares of Common Stock set forth in Annex A
will remain at the current number of Twenty Million (20,000,000), rather than
the Forty Million (40,000,000) set forth in Annex A.

If the proposed amendment is approved, the Board of Directors would be
empowered, without further shareholder approval (unless such action or
authorization is required in a specific case by applicable laws or regulations
or stock market rules), to issue the Preferred Stock from time to time in series
having such terms as may then be set by the Board of Directors by resolution.
Such terms will include dividend rates and liquidation rights and may include
sinking fund provisions, call rights, conversion rights, voting rights,
designations, preferences, limitations and other similar matters for each series
of Preferred Stock. The Preferred Stock will be entitled to a preference over
holders of the Common Stock as to the payment of dividends and distributions
upon the liquidation of the Company. Purchasers of Preferred Stock may require
special voting rights such as the right to approve any merger or sale of, or any
repurchase of Common Stock by, the Company. No preferred stock is presently
authorized by the Company's Articles of Incorporation. After December 31, 2003,
the Board of Directors will not have authority to issue any shares of Preferred
Stock, except (i) upon the exercise of warrants, options or other rights to
acquire the same issued or granted on or prior to December 31, 2003, (ii)
pursuant to the terms of Preferred Stock issued on or prior to December 31,
2003, or (iii) pursuant to the terms of any resolution authorizing the issuance
of Preferred Stock, and setting forth the rights, qualifications, limitations or
restrictions thereof, approved by the Board of Directors on or prior to December
31, 2003. All shares of Preferred Stock issued and outstanding at December 31,
2003 shall remain issued and outstanding in accordance with the rights,
qualifications, limitations or restrictions of such Preferred Stock approved by
the Board of Directors (as the same may be amended from time to time in
accordance with the terms of such Preferred Stock), provided that the Board of
Directors shall not have the authority to reissue such shares after December 31,
2003 except as set forth in the prior sentence.

The Preferred Stock will provide authorized and unissued shares which may
be used by the Company for any proper corporate purpose. Such purposes may
include, without limitation, issuance in public or private sales for cash as a
means of obtaining additional capital for use in the Company's business and
operations, and issuance as part or all of the consideration required to be paid
by the Company for the acquisition of other businesses or properties. The
Company is actively seeking a party willing to acquire capital stock of the
Company, which could include Preferred Stock, in a private placement on
negotiated terms and conditions. However, there are no specific transactions
currently under review by the Board of Directors which would result in the
issuance of the additional shares of Preferred Stock being considered for
authorization under this proposal.

The nature and amount of consideration which would be received by the
Company upon issuance of the authorized shares of Preferred Stock is not now
known, nor is it possible to state the precise effect of the
18
<PAGE> 22

authorization of the Preferred Stock upon the rights of the holders of the
Company's Common Stock until the Board of Directors determines the respective
preferences, limitations and relative rights of the holders of each series of
the Preferred Stock. Such effects, however, could include: (a) reduction of the
amount otherwise available for payment of dividends on Common Stock, to the
extent dividends are payable on any issued shares of Preferred Stock; (b)
restrictions on dividends on Common Stock; (c) dilution of the voting power per
share of the Common Stock to the extent that the Preferred Stock has voting
rights; (d) conversion into Common Stock at such prices as the Board determines,
which could include issuance at below fair market value or original issue price
of the shares of Common Stock and dilution of the book value per share of the
outstanding shares of Common Stock; and (e) the holders of Common Stock not
being entitled to share in the Company's assets upon liquidation until
satisfaction of any liquidation preference granted to the Preferred Stock.
Holders of Common Stock have no preemptive rights to participate in any issuance
of Preferred Stock.

Although the proposed amendment is not intended to be an anti-takeover
measure, shareholders should note that, under certain circumstances, the shares
of Preferred Stock could be used to make any attempt to gain control of the
Company or the Board of Directors more difficult or time-consuming. Any of the
shares of Preferred Stock could be privately placed with purchasers who might
side with the Board in opposing a hostile takeover bid. It is possible that such
shares could be sold with or without an option, on the part of the Company, to
repurchase such shares, or on the part of the purchaser, to put such shares to
the Company.

The amendment authorizing the issuance of Preferred Stock might be
considered to have the effect of discouraging an attempt by another person or
entity, through the acquisition of a substantial number of shares, to acquire
control of the Company, since the issuance of shares of Preferred Stock could be
used to dilute the stock ownership of a person or entity seeking to obtain
control and to increase the cost to a person or entity seeking to acquire a
majority of the voting power of the Company. If so used, the effect of the
authorized shares of Preferred Stock might be to deprive shareholders of an
opportunity to sell their stock at a temporarily higher price as a result of a
tender offer or the purchase of shares by a person seeking to obtain control of
the Company or to assist incumbent management in retaining their present
positions.

Section B of Article VIII of the Company's Articles of Incorporation is
being amended to provide that shares entitled to cast a majority of the votes at
a meeting of shareholders shall constitute a quorum at such meeting and the vote
of a majority of the shares entitled to vote at the meeting present in person or
represented by proxy and voting shall decide any question brought before the
meeting, except as otherwise provided by the Articles of Incorporation, Bylaws
or by law. Because the Articles of Incorporation currently only provide for
Common Stock, the Articles of Incorporation provide that a quorum shall be
deemed present at a meeting of the shareholders if a majority of the Common
Stock is present at such meeting and that the vote of holders of a majority of
the Common Stock present in person or by proxy and voting at the meeting shall
decide any question brought before the meeting, except as otherwise provided by
the Articles of Incorporation, Bylaws or by law. The provision is being revised
to reflect the authorization of the Preferred Stock. It is possible that shares
of Preferred Stock could be issued that would have voting rights and so should
be included in the determination of the shares required to constitute a quorum
at a meeting of shareholders where such shares are to be voted and the number of
shares required to be voted to decide any question brought before such meeting.

Section B of Article VIII of the Company's Articles of Incorporation is
also being amended to provide that all proxies, ballots, votes and tabulations
that identify the particular vote of holders of capital stock of the Company
shall be confidential. Because the Articles of Incorporation currently only
provide for Common Stock, the Articles of Incorporation provide such right of
confidentiality only for the Common Stock. The amendment is being proposed so as
to extend such right of confidentiality to the Preferred Stock.

The affirmative vote of holders of a majority of the outstanding shares of
Common Stock entitled to vote at the Annual Meeting is required for approval of
the proposed amendment to the Articles of Incorporation described in Proposal 3.
Consequently, abstentions and broker non-votes will have the same effect as a
vote against the proposal.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL.

19
<PAGE> 23

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's officers and directors, and persons who own more than 10%
of a registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
("SEC"). Officers, directors and greater than 10% shareholders are required by
SEC regulation to furnish the Company with copies of all Section 16(a) forms
they file. Based solely on its review of the copies of such forms received by it
since January 1, 1997, or written representations from certain reporting persons
that no Form 5 reports were required for those persons, the Company believes
that all filing requirements applicable to its officers, directors and greater
than 10% beneficial owners were complied with during 1997, except as previously
reported.

INDEPENDENT ACCOUNTANTS

The accounting firm of BDO Seidman LLP acted as independent accountants to
audit the financial statements of the Company and its consolidated subsidiaries
for 1996 and 1997. The Audit Committee has not yet completed its evaluation of
the 1997 audit process. As a result, the selection of the independent
accountants to audit the financial statements of the Company for 1998 will be
made by the Board of Directors at a later date. Representatives of BDO Seidman
LLP are expected to be present at the Annual Meeting and to be available to
respond to appropriate questions. Such representatives will have the opportunity
to make a statement if they desire to do so.

On December 31, 1996, the Audit Committee of the Board of Directors of the
Company determined not to retain the firm of Coopers & Lybrand LLP to audit the
Company's financial statements for the year ended December 31, 1996. Coopers &
Lybrand LLP had been the Company's principal accountants for the purpose of
auditing its financial statements since the organization of the Company.

The reports of Coopers & Lybrand LLP on the financial statements for the
years ended December 31, 1995 and 1994 contained no adverse opinion or
disclaimer of opinion, nor were they modified as to uncertainty, audit scope or
accounting principles, except as set forth below. An accountant's report of
Coopers & Lybrand LLP contained in a Form S-2 Registration Statement filed by
the Company with the Securities and Exchange Commission on December 8, 1995
contained a paragraph regarding uncertainty relating to the Company's tax
indemnification obligations to MML, Inc., the business of which was acquired by
the Company in 1991. Coopers & Lybrand LLP reissued this accountant's report on
January 16, 1996, in connection with Amendment No. 1 to such Registration
Statement without inclusion of the foregoing tax indemnification paragraph due
to a change in accounting standards, effective January 1, 1996, which permitted
the removal of this paragraph in Coopers & Lybrand LLP's accountant's report as
long as adequate disclosure regarding the same was contained in the financial
statements to which the accountant's report related. Since the Company's
financial statements relating to such accountant's report contained such
disclosure, Coopers & Lybrand LLP was no longer required to include the
foregoing tax indemnification paragraph in its accountant's report relating to
such financial statements.

The Company has had no disagreements with Coopers & Lybrand LLP on any
matter of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure which disagreements, if not resolved to the
satisfaction of Coopers & Lybrand LLP, would have caused it to make reference to
the subject matter of the disagreements in connection with its reports relating
to the auditing of the Company's financial statements for the years ended
December 31, 1995 and 1994 or during the period January 1, 1996 to December 31,
1996.

20
<PAGE> 24

SHAREHOLDER PROPOSALS

Proposals of shareholders intended to be presented at the 1999 Annual
Meeting of Shareholders must be received by the Secretary of the Company at the
Company's principal executive offices on or before February 2, 1999.
Shareholders who wish to submit proposals for action or nominees for election at
a meeting of shareholders must comply with certain notice and informational
requirements set forth in the Company's Bylaws.

SHAREHOLDERS WHO ARE PHYSICIANS

Pursuant to Federal and State law, physicians are prohibited from
referring, recommending or arranging for a referral of clinical laboratory
services for which payment may be made under Medicare to the Company if such
persons or any member of their immediate family has an investment, compensation
or other financial relationship with the Company, including the ownership of
Common Stock. All owners of Common Stock who are physicians or have physicians
in their immediate family must report the physician's name and I.D. number to
the Company.

By order of the Board of Directors,
Thomas S. Vaughn, Secretary

June 3, 1998

21
<PAGE> 25

ANNEX A

PROPOSED AMENDMENT TO ARTICLES OF INCORPORATION

RESOLVED, that Article III of the Company's Articles of Incorporation be
amended and restated to read as follows:

ARTICLE III

CAPITAL STOCK

The total authorized shares of stock which the corporation shall have
authority to issue is as set forth below. The shares of stock of the corporation
may be issued from time to time for such consideration as may be fixed from time
to time by the Board of Directors.

COMMON STOCK

The total number of authorized shares of Common Stock (hereinafter referred
to as "Common Stock") which the corporation has authority to issue is Forty
Million (40,000,000) shares. A statement of all or any of the designations and
the powers, preferences and rights, and the qualifications, limitations or
restrictions of the Common Stock is as follows:

1. The holders of Common Stock are entitled to receive such dividends
as may be declared from time to time by the Board of Directors, subject to
the prior and superior rights of any outstanding Preferred Stock of the
corporation.

2. In the event of any liquidation, dissolution, or winding up of the
corporation, the holders of Common Stock shall be entitled to receive all
of the remaining assets of the corporation available for distribution,
subject to the prior and superior rights of any outstanding Preferred Stock
of the corporation.

3. The holders of Common Stock shall have equal voting and other
rights consistent with the MBCA and each holder of Common Stock is entitled
to one (1) vote for each share so held with respect to all matters voted on
by the holders of the Common Stock of the corporation.

PREFERRED STOCK

The total number of authorized shares of Preferred Stock (hereinafter
referred to as "Preferred Stock") which the corporation has authority to issue
is Ten Million (10,000,000) shares. The Board of Directors of the corporation is
authorized to issue shares of Preferred Stock from time to time in one or more
series of such number of shares with such distinctive serial designations and
(a) may have such voting powers, full or limited, or may be without voting
powers; (b) may be subject to redemption at such time or times and at such
prices; (c) may be entitled to receive dividends (which may be cumulative or
non-cumulative) at such rate or rates, on such conditions, and at such times and
payable in preference to, or in such relation to, the dividends payable on any
other class or classes or series of shares; (d) may have such rights upon the
dissolution of, or upon any distribution of the assets of, the corporation; (e)
may be made convertible into, or exchangeable for, shares of the same or any
other class or classes, or of any other series of the same or any other class or
classes, of shares of the corporation, at such price or prices or at such rates
of exchange, and with such adjustments; and (f) may have such other relative,
participating, optional or other special rights, qualifications, limitations or
restrictions thereof, all as shall hereafter be stated and expressed in the
resolution or resolutions providing for the issue of each such series of
Preferred Stock from time to time adopted by the Board of Directors of the
corporation pursuant to authority so to do which is hereby expressly vested in
the Board of Directors. Such resolutions, when filed, shall constitute an
amendment to these Articles of Incorporation. Notwithstanding the foregoing, no
shares of Preferred Stock, may be issued by the Board of Directors after
December 31, 2003, except for shares of Preferred Stock issued (i) upon the
exercise of warrants, options or other rights to acquire Preferred Stock issued
or granted on or prior to December 31, 2003, (ii) pursuant to the terms of
Preferred Stock issued on or prior to December 31, 2003, or (iii) pursuant to
the terms of any resolution authorizing the
A-1
<PAGE> 26

issuance of Preferred Stock, and setting forth the rights, qualifications,
limitations or restrictions thereof, approved by the Board of Directors on or
prior to December 31, 2003. All shares of Preferred Stock issued and outstanding
at December 31, 2003 shall remain issued and outstanding in accordance with the
rights, qualifications, limitations or restrictions of such Preferred Stock
approved by the Board of Directors (as the same may be amended from time to time
in accordance with the terms of such Preferred Stock), provided that the Board
of Directors shall not have the authority to reissue such shares after December
31, 2003 except as set forth above in the prior sentence.

FURTHER RESOLVED, that Section B of Article VIII of the Company's Articles
of Incorporation be amended and restated to read as follows:

B. Special meetings of the shareholders of the corporation may be
called by the Board of Directors, such person or persons as may be
authorized to call a special meeting by the corporation's Bylaws, or
holders of a majority of the issued and outstanding shares of the Common
Stock. Shares entitled to cast a majority of the votes at a meeting of
shareholders shall constitute a quorum at such meeting of shareholders.
When a quorum is present or represented by proxy at any meeting, the vote
of the holders of a majority of shares entitled to vote at the meeting
present in person or represented by proxy and voting shall decide any
question brought before the meeting, except as otherwise provided by these
Articles of Incorporation, the Bylaws or by law. All proxies, ballots,
votes and tabulations that identify the particular vote of holders of
capital stock of the corporation shall be confidential and shall not be
disclosed except (i) to independent election inspectors appointed by the
corporation, who shall not be directors, officers, or employees of the
corporation, (ii) as required by law, or (iii) when expressly requested by
the voting shareholder.

A-2
<PAGE> 27
DETACH HERE

PROXY

UNIVERSAL STANDARD HEALTHCARE, INC.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF UNIVERSAL STANDARD HEALTHCARE, INC.

The undersigned hereby constitutes and appoints Eugene E. Jennings and
Thomas S. Vaughn, and each of them, attorneys, agents and proxies with power of
substitution, to vote all the shares of Common Stock of Universal Standard
Healthcare, Inc. (the "Company") that the undersigned is entitled to vote at
the Annual Meeting of Shareholders of the Company to be held at the offices of
Dykema Gossett PLLC, 400 Renaissance Center, Detroit, Michigan on June 29, 1998
at 8:30 a.m., local time, and at any adjournment thereof, upon the following
matters, all of which are proposed by the Company.

- ----------- -----------
SEE REVERSE SEE REVERSE
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
SIDE SIDE
- ----------- -----------

<PAGE> 28

DETACH HERE

[X] PLEASE MARK
VOTES AS IN
THIS EXAMPLE.

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED; IF
NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE NOMINEES NAMED BELOW
AND FOR EACH OF THE PROPOSALS.

<TABLE>
<S><C>
1. Election of Directors. 2. Approval of an amendment to FOR AGAINST ABSTAIN
Articles of Incorporation to increase [ ] [ ] [ ]
NOMINEES: Eduardo Bohorquez, Ph.D, Joseph J. Vadapalas the number of shares of Common
Stock authorized from 20,000,000
FOR WITHHELD to 40,000,000.
[ ] [ ] 3. Approval of an amendment to [ ] [ ] [ ]
Articles of Incorporation to authorize
10,000,000 shares of Preferred
MARK HERE Stock.
FOR ADDRESS [ ]
CHANGE AND In their discretion the proxies are also authorized to vote upon
[ ] NOTE BELOW such other matters as may properly come before the meeting including
---------------------------------------- the election of any person to the Board of Directors where a nominee
(INSTRUCTION: To withhold authority to vote named in the Proxy Statement dated June 3, 1998, is unable to serve
for any individual nominees, write that or, for good cause, will not serve.
nominee's name on the space provided above.)
The undersigned acknowledges receipt of the Notice of Annual
Meeting of Shareholders and the Proxy Statement dated June 3, 1998
and the 1997 Annual Report to Shareholders and ratifies all that the
proxies or either of them or their substitutes may lawfully do or
cause to be done by virtue hereof and revokes all former proxies.

NOTE: Please sign exactly as name(s) appear(s) on stock
records. When signing as attorney, administrator, trustee, guardian
or corporate officer, please so indicate.

Signature: Date: Signature: Date:
------------------------------- --------------- --------------------------------- ----------------

</TABLE>