<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
Amerilink Coporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(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 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:
------------------------------------------------------------------------
1
<PAGE>
AMERILINK CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 4, 1998
Notice is hereby given that the Annual Meeting of Shareholders of
AmeriLink Corporation will be held at The Worthington Inn, located at 649 High
Street, Worthington, Ohio, on Tuesday, August 4, 1998, at 11:00 a.m. (local
time), for the following purposes:
1. To elect three Directors, each to serve until the 2000 Annual Meeting and
until their successors are duly elected and qualified;
2. To approve the adoption of amendments to the 1994 Stock Incentive Plan;
and
3. To transact such other business as may properly come before the meeting
or any adjournment or adjournments thereof.
Only shareholders of record at the close of business on June 5, 1998,
will be entitled to notice of and to vote at the meeting or any adjournment
thereof.
By Order of the Board of Directors.
LARRY R. LINHART
Chairman of the Board
of Directors, President and
Chief Executive Officer
July 6, 1998
SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING IN PERSON ARE URGED
TO DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED POSTAGE PAID
ENVELOPE.
AMERILINK CORPORATION
1900 E. Dublin-Granville Road
Columbus, Ohio 43229
PROXY STATEMENT
GENERAL INFORMATION
AMERILINK CORPORATION (the "Corporation") is furnishing this Proxy
Statement to its shareholders in connection with the solicitation of proxies for
use in voting at the annual meeting of shareholders to be held on Tuesday,
August 4, 1998 (the "Annual Meeting"). The enclosed proxy is solicited by the
Board of Directors of the Corporation. This Proxy Statement, together with the
Corporation's Annual Report to Shareholders for the fiscal year ended March 29,
1998 ("fiscal 1998"), is being mailed on or about July 6, 1998.
The close of business on June 5, 1998, has been fixed as the date of
record for those shareholders entitled to vote at the Annual Meeting. The stock
transfer books of the Corporation will not be closed. As of June 5, 1998, the
Corporation had outstanding and entitled to vote 4,258,344 common shares without
par value ("Common Shares"), each of which is entitled to one vote. The
Corporation has no other class of capital stock outstanding.
The presence of holders of a majority of the outstanding Common Shares in
person or by proxy is necessary to constitute a quorum of shareholders for all
matters to be considered at the Annual Meeting.
- 1 -
<PAGE>
Votes, whether in person or by proxy, will be counted and tabulated by
inspectors of election appointed by the Board of Directors of the Corporation.
With respect to all matters to be considered, abstentions and broker non-votes
will not be counted as votes either "for" or "against" any matters coming before
the Annual Meeting. Since the proposal to amend the 1994 Stock Incentive Plan
requires the affirmative vote of a majority of the Common Shares voting in
person or by proxy at the Annual Meeting, abstentions and broker non-votes will
have the same effect as votes against such proposal. Under Ohio law, the
nominees for election as Directors at the Annual Meeting receiving the greatest
number of votes shall be elected.
Any shareholder giving the enclosed proxy has the power to revoke it at
any time before it is voted if notice of revocation is given to the Secretary of
the Corporation in writing or at the Annual Meeting. The shares represented by
the enclosed proxy will be voted as specified by the shareholders. If no choice
is specified, the proxy will be voted for the election as Directors of the
nominees named herein.
The cost of soliciting proxies and preparing the proxy materials will be
borne by the Corporation. In addition, the Corporation will request securities
brokers, custodians, nominees, and fiduciaries to forward solicitation material
to the beneficial owners of Common Shares held of record and will reimburse them
for their reasonable out-of-pocket expenses in forwarding such solicitation
material. Proxies may be solicited personally or by telephone or telegram by
Directors, officers and employees of the Corporation without additional
compensation to them.
NOMINATION AND ELECTION OF DIRECTORS
On June 9, 1998, the Board of Directors fixed the number of Directors at
seven in order to appoint Robert D. Setzer to fill the vacancy created by the
increase and provided that the number of Directors would automatically decrease
from seven to six as of the date of the Annual Meeting. The Board of Directors
will be divided into two classes of three members each when the number of
directors is reduced to six. The members of the two classes are elected to
serve for staggered terms of two years.
At the Annual Meeting, three Directors will be elected, each to hold
office for a term of two years and until his successor is elected and qualified.
William H. Largent, George R. Manser and Robert D. Setzer are nominees
(collectively, the "Nominees") for election as Directors at the Annual Meeting,
each to hold office for a term of two years until the Annual Meeting of
Shareholders to be held in 2000.
The terms of Larry R. Linhart, Robert L. Powelson and Richard W.
Rubenstein (collectively, the "Continuing Directors") expire in 1999.
All the Nominees have indicated a willingness to stand for election and
to serve if elected. It is intended that the shares represented by the enclosed
proxy will be voted for the election of the Nominees. Although it is
anticipated that each Nominee will be available to serve as a Director, should
any nominee be unavailable to serve, the proxies may be voted by the proxy
holders in their discretion for another person designated by the Board of
Directors.
Listed below are the names of each Nominee and Continuing Director, their
ages, the year in which each first became a Director, their principal
occupations during the past five years and other directorships in companies with
a class of equity securities registered pursuant to the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), or otherwise subject to its periodic
reporting requirements. See "Security Ownership of Certain Beneficial Owners
and Management" for information regarding such persons' holdings of equity
securities of the Corporation.
- 2 -
<PAGE>
<TABLE>
<CAPTION>
Director
Name Age Since Principal Occupation for the Past Five Years
---- --- ----- --------------------------------------------
<S> <C> <C> <C>
Larry R. Linhart (1) 52 1984 (2) Chairman of the Board of Directors, President
and Chief Executive Officer of the Corporation
since 1994; President, Treasurer and Chief
Executive Officer of the Operating Company
since 1986.
Robert L. Powelson (1) 56 1981 (2) Secretary of the Corporation since 1994;
Consultant to the Operating Company from 1987
through 1994; Co-Founder of the Operating
Company.
Robert D. Setzer (3) 50 1998 Chairman of the Board of Directors, President
and Chief Executive Officer of Capital-Plus,
Inc. since 1992; President and Director of
Liebert Corporation from 1989 to 1991.
William H. Largent 42 1994 Senior Vice President of Operations and Chief
Financial Officer of Applied Innovation Inc.
since May 1997; Chief Financial Officer and
Director of Metatec Corporation, 1993 to May
1997; President of Liebert Capital Management
Corporation from 1990 to 1993.
Richard W. Rubenstein, Esq. (4) 54 1997 Director of United Retail Group, Inc.; Partner
of Squire, Sanders & Dempsey L.L.P. since 1994;
Partner of Schwartz, Kelm, Warren & Rubenstein
from before 1992 until 1994.
George R. Manser 67 1994 Chairman of the Board of Directors of UniGlobe
Travel (Capital Cities) Inc., a travel agency
franchiser; Director of Corporate Finance of
UniGlobe Travel USA since 1997; Advisory
Director to J.C. Bradford & Co. since 1994;
Director of Cardinal Health, Inc., a wholesale
pharmaceutical distributor; Director of State
Auto Financial Corporation, an insurance
holding company; Director of Hallmark Financial
Services, Inc., a nonstandard, Texas-only, auto
insurer; Director of Checkfree Corporation, a
business facilitating electronic commerce;
Prior to 1994, Chairman of North American
National Corporation
</TABLE>
- ----------------------------
(1) Messrs. Linhart, Powelson and E. Len Gibson are parties to a certain
Shareholders' Agreement pursuant to which they have agreed to cause each
other to be elected as Directors until August 19, 2004. Mr. Gibson has
decided for personal reasons not to stand for reelection and with the
consent of Messrs. Linhart and Powelson has designated Mr. Setzer to be
nominated for election as a Director in his place. See "Nomination and
Election of Directors -- Shareholders' Agreement."
(2) Year shown represents the year in which the named Director first became a
Director of AmeriLink Corp., the primary operating subsidiary of the
Corporation (the "Operating Company"). The named Director became a
Director of the Corporation in 1994 in connection with the formation of the
Corporation, the reorganization of the Operating Company as a wholly-owned
subsidiary of the Corporation and the initial public offering of the
Corporation's Common Shares.
- 3 -
<PAGE>
(3) On June 9, 1998, the Board of Directors increased the number of Directors
from six to seven and appointed Mr. Setzer to fill the vacancy created by
the increase. The Board of Directors also provided that the number of
Directors would automatically decrease from seven to six effective at the
Annual Meeting.
(4) Mr. Rubenstein is a partner of a law firm which the Corporation has
retained from time to time during the last fiscal year and proposes to
retain during the current year.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
A total of five meetings of the Directors of the Corporation were held
during fiscal 1998. Each of the incumbent Directors attended at least 75% of
the total number of meetings of the Directors, except Mr. Gibson, who is not
standing for reelection.
The Board of Directors has an Audit Committee, a Compensation Committee
and a Nominating Committee.
AUDIT COMMITTEE. The Audit Committee, which consists of Messrs. Largent
(committee chair), Manser and Powelson, is charged with the responsibility of
reviewing such financial information (both external and internal) about the
Corporation and its subsidiaries, so as to assure (i) that the overall audit
coverage of the Corporation and its subsidiary is satisfactory and appropriate
to protect the shareholders from undue risks and (ii) that an adequate system of
internal financial control has been implemented throughout the Corporation and
is being effectively followed. The Audit Committee held two meetings during
fiscal 1998. All members were in attendance at the meetings.
COMPENSATION COMMITTEE. The Compensation Committee, which consists of
Messrs. Linhart (committee chair), Powelson and Manser, considers and formulates
recommendations to the Board with respect to all aspects of compensation to be
paid to the executive officers of the Corporation (subject to the provisions of
the applicable employment agreements), undertakes such evaluations and makes
such reports as are required by then applicable rules of the Securities and
Exchange Commission, and performs and exercises such other duties and powers as
shall from time to time be designated by action of the Board of Directors. The
Compensation Committee held three meetings during fiscal 1998. All members were
in attendance at each meeting. See "Report of Compensation Committee."
NOMINATING COMMITTEE. The Nominating Committee, which currently consists
of Messrs. Linhart (committee chair) Rubenstein and Powelson, recommends to the
Board of Directors nominees for election or reelection as directors. The
Nominating Committee held one meeting during fiscal 1998 at which all members
were in attendance. The Nominating Committee will consider nominees recommended
by shareholders as set forth hereinafter under "Shareholder Proposals."
SHAREHOLDERS' AGREEMENT
Messrs. Gibson, Powelson and Linhart (collectively, the "Principal
Shareholders") and the Corporation have entered into a Shareholders' Agreement
dated as of August 19, 1994 (the "Shareholders' Agreement"). The Shareholders'
Agreement provides that the Principal Shareholders each (for so long as he owns
at least 100,000 Common Shares) shall vote all Common Shares owned by him in
favor of the election or removal of directors such that, among other things: (i)
until the tenth anniversary of the date of the Shareholders' Agreement, the
Principal Shareholders shall nominate or cause the Board of Directors to
nominate and recommend to the shareholders as proposed members of the Board of
Directors, each of the Principal Shareholders and such number of persons who
are not affiliates (as defined in the Shareholders' Agreement) of any of the
Principal Shareholders, named by the Nominating Committee and approved by the
Board of Directors ("Public Directors") as are necessary to fill any vacancies
on the Board of Directors; and (ii) the number of Directors constituting the
board of Directors of each subsidiary of the Corporation shall be fixed at three
and such Directors shall include Messrs. Linhart and Powelson and a third
individual selected by them.
- 4 -
<PAGE>
For personal reasons, Mr. Gibson has decided not to stand for
reelection. The Board of Directors, at Mr. Gibson's request, and with the
consent of Messrs. Linhart and Powelson, appointed Mr. Setzer as a Director to
fill the vacancy created by the increase in the number of Directors from six to
seven and nominated Mr. Setzer for election at the Annual Meeting. Since Mr.
Gibson has decided not to stand for reelection, the Board of Directors also
provided that the size of the Board of Directors would be reduced from seven
Directors to six Directors effective at the Annual Meeting. In connection with
his decision not to stand for reelection, Messrs. Gibson, Linhart and Powelson
executed a letter agreement amending the Shareholders' Agreement in which, among
other things, Messrs. Linhart and Powelson were released from their obligation
to support the nomination of Mr. Gibson as a Director until such time as Mr.
Gibson delivers notice of revocation of such release to them.
COMPENSATION OF DIRECTORS
In connection with the consummation of the Corporation's initial public
offering of its Common Shares in fiscal 1995, the Corporation, pursuant to its
1994 Stock Incentive Plan, granted to each non-employee Director an option to
purchase 1,875 Common Shares at $8.00 per share. The Corporation's 1994 Stock
Incentive Plan provides that beginning in fiscal 1996, the Corporation shall
grant to each non-employee Director on the date of each year's annual meeting of
shareholders an option to purchase that number of Common Shares equal to the
lesser of (i) 2,500, and (ii) the quotient derived from dividing $15,000 by the
fair market value of one Common Share on the date the option is granted. Each
such option vests or will vest over a four-year period and has or will have an
exercise price equal to the market price at the time of grant. In accordance
with such provisions of the 1994 Stock Incentive Plan, the Corporation granted
to each non-employee Director on August 19, 1997, options to purchase 784 Common
Shares at $19.125 per share. If the proposed amendments to the 1994 Stock
Incentive Plan are adopted, each non-employee Director will be granted an option
to purchase 2,000 Common Shares effective August 4, 1998. See "Approval of the
Adoption of Amendments to the 1994 Stock Incentive Plan." In addition, on
February 4, 1997, the Corporation granted 1,500 Common Shares each to William H.
Largent and George R. Manser (or a total of 3,000 Common Shares), as awards of
restricted stock, subject to the condition that such restricted stock awards
shall each become exercisable as to 500 Common Shares on each of the next three
anniversaries of the grant date, except that if the grantee shall cease to be a
Director at any time, any unvested portion of such restricted stock awards shall
be subject to forfeiture, and subject to certain other terms and conditions
contained in certain Restricted Stock Award Agreements between the Corporation
and each such grantee. Non-employee Directors also receive reimbursement for
travel expenses incurred in connection with attending meetings. Directors who
are employees do not receive any separate compensation for their services as
Directors. The Corporation has agreed to provide health insurance benefits to
Messrs. Powelson and Gibson on the same terms as provided to all other
participants in the Corporation's health care plan.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth information regarding the beneficial
ownership of Common Shares as of June 5, 1998, by each person known by the
Corporation to own beneficially more than five percent of the Corporation's
outstanding Common Shares, by each Nominee and Continuing Director, by each
executive officer named in the Summary Compensation table contained in
"Executive Compensation," and by all Directors and executive officers as a
group. As of June 5, 1998, there were 4,258,344 Common Shares issued and
outstanding and an aggregate of 320,010 Common Shares subject to options
exercisable within 60 days thereafter. Except as otherwise noted, each person
named in the table has sole voting and investment power with respect to all
shares shown as beneficially owned by him.
- 5 -
<PAGE>
<TABLE>
<CAPTION>
Percent of Shares
Name of Shares Beneficially Beneficially
Beneficial Owner Owned at June 5, 1998 Owned
---------------- --------------------- -----
<S> <C> <C>
Larry R. Linhart 628,808 (1) 14.0%
Robert L. Powelson 759,015 (2) 17.8%
E. Len Gibson 614,015 (2) 14.4%
Joseph L. Govern 51,014 (3) 1.2%
James W. Brittan 5,500 (4) *
Robert B. Horn 9,500 (5) *
William H. Largent 6,329 (2)(6) *
Richard W. Rubenstein, Esq. 200 *
Robert D. Setzer -0- *
George R. Manser 12,449 (2)(6) *
All Directors and Executive 2,086,830 (1)(2)(3) 45.8%
Officers as a group (10 Persons) (4)(5)(6)
</TABLE>
- ---------------------------
* Represents less than 1%.
(1) Share amount shown includes the following exercisable options to purchase
230,000 Common Shares: (i) exercisable options to purchase 200,000 Common
Shares pursuant to the 1991 Options and (ii) exercisable options to
purchase 30,000 Common Shares, representing 60% of the 50,000 Common Shares
subject to the options granted in fiscal 1995 to Mr. Linhart pursuant to
his employment agreement. See "Executive Compensation -- Stock Option
Exercises and Holdings" and "Executive Compensation -- Employment
Agreements."
(2) Share amount shown includes exercisable options to purchase 2,829 Common
Shares, representing the exercisable portion of the 6,469 Common Shares
subject to options granted to each non-employee Director of the
Corporation. See "Compensation of Directors."
(3) Share amount shown includes 2,414 shares of restricted stock, granted as
part of Mr. Govern's fiscal year 1998 bonus, and exercisable options to
purchase 48,600 Common Shares, representing 60% of the 81,000 Common Shares
subject to the options granted in fiscal 1995. See "Executive Compensation
- Stock Option Exercises and Holdings" and "Executive Compensation -
Employment Agreements".
(4) Share amount shown includes exercisable options to purchase 5,500 Common
Shares, representing the exercisable portion of the 22,000 Common Shares
subject to options granted to Mr. Brittan. See "Executive Compensation --
Stock Option Exercises and Holdings".
(5) Share amount shown includes exercisable options to purchase 1,500 Common
Shares, representing the exercisable portion of the 8,500 Common Shares
subject to options granted to Mr. Horn. See "Executive Compensation --
Stock Option Exercises and Holdings".
- 6 -
<PAGE>
(6) Share amount shown includes 1,500 Common Shares granted to each of William
H. Largent and George R. Manser in fiscal 1997 as awards of restricted
stock. See "Compensation of Directors".
SHAREHOLDERS' AGREEMENT
Pursuant to the Shareholders' Agreement (see "Nomination and Election of
Directors -- Shareholders' Agreement"), the Principal Shareholders each have the
right ("Demand Registration Right") on one occasion to require the Corporation
to prepare and file a registration statement under the Securities Act of 1933,
as amended (the "Securities Act"), with respect to an underwritten public
offering of Common Shares that he holds ("Demand Registration"). The
Corporation is required to bear the expenses (except for underwriting discounts
and underwriting commissions and fees and expenses of counsel to the selling
shareholders) of Demand Registrations. Further, under the terms of the
Shareholders' Agreement, in the event that the Corporation proposes to register
any of its securities under the Securities Act for its own account (subject to
certain exceptions), or pursuant to the exercise of a Demand Registration Right,
the other Principal Shareholders are entitled to include shares in such
registration, subject to the right of the underwriters of any such offering to
limit the number of shares included in such registration.
Pursuant to the Shareholders' Agreement, the Principal Shareholders have
agreed that they will not sell or transfer any of their Common Shares except (i)
pursuant to a Demand Registration Right, (ii) to the Corporation, (iii) pursuant
to Rule 144 promulgated under the Securities Act, (iv) to heirs or family
members who agree to be bound by the Shareholders' Agreement, (v) by bona fide
gift to a charity or (vi) by pledge to secure indebtedness to a financial
institution. The Shareholders' Agreement contains certain non-competition and
non-solicitation provisions which prohibit each of the Principal Shareholders
from engaging in certain conduct during certain restricted periods and for three
years thereafter. The restricted period applicable to Mr. Linhart is the term
of his employment with the Corporation and the restricted period applicable to
Messrs. Gibson and Powelson is the period during which he is a Director or the
owner of not less than Common Shares possessing not less than 10% of the
combined voting power of all voting securities of the Corporation.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's Directors and executive officers, and persons who own more than
ten percent of a registered class of the Corporation's equity securities, to
file initial statements of beneficial ownership (Form 3), and statements of
changes in beneficial ownership (Forms 4 and 5), of Common Shares of the
Corporation with the Securities and Exchange Commission. Executive officers,
Directors and greater than ten-percent shareholders are required to furnish the
Corporation with copies of all such forms they file.
To the Corporation's knowledge, based solely on its review of the copies
of such forms received by it, or written representations from certain reporting
persons that no additional forms were required, all filing requirements
applicable to its executive officers, Directors and greater than ten-percent
shareholders were complied with in fiscal 1998, except that one report covering
the exercise of a stock option and disposition of Common Shares was filed late
by Mr. Linhart and one report covering the sale of Common Shares was filed late
by Mr. Gibson.
- 7 -
<PAGE>
EXECUTIVE OFFICERS
The following table and biographies set forth information concerning the
executive officers of the Corporation, who are elected by the Board of
Directors:
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Larry R. Linhart 52 Chairman of the Board of Directors,
President and Chief Executive Officer
Joseph L. Govern 40 Senior Vice President - Operations
Robert B. Horn 49 Vice President - Human Resources
James W. Brittan 39 Treasurer and Vice President - Finance
Robert L. Powelson 56 Secretary
</TABLE>
- -------------------------
LARRY R. LINHART is the Chairman of the Board of Directors, President and
Chief Executive Officer of the Corporation. Mr. Linhart has been the President,
Treasurer and Chief Executive Officer of the Operating Company since 1986 and a
Director of the Operating Company since 1984. From 1984 to 1986, Mr. Linhart
served as Executive Vice President and General Counsel of the Operating Company.
Mr. Linhart was previously a partner in the Columbus law firm of Murphey, Young
and Smith (currently, Squire, Sanders & Dempsey), which he joined in 1971.
JOSEPH L. GOVERN is the Senior Vice President - Operations of the
Corporation. Mr. Govern has been Senior Vice President - Operations of the
Operating Company since 1992. From 1991 to 1992, Mr. Govern served as the
Operating Company's Vice President of Finance and Director of Operations.
From 1986 to 1991, Mr. Govern was the Vice President of Finance and
Administration for the Operating Company. He is a Certified Public Accountant
and from 1980 through 1985 was employed by Coopers & Lybrand.
ROBERT B. HORN is the Vice President - Human Resources of the
Corporation. Mr. Horn was hired as Vice President - Human Resources in February,
1997. From 1993 to 1997, Mr. Horn was the Vice President of Human Resources of
Damon's International, Inc., a 110 unit casual dining restaurant chain. From
1985 to 1993, Mr. Horn owned and operated five restaurants, co-owned and
operated an international meeting planning firm and served as a management
development consultant to various small companies and trade associations. From
1974 to 1985, Mr. Horn was employed by RAX Restaurants, Inc. and served as
Executive Vice President - Operations.
JAMES W. BRITTAN is the Treasurer and Vice President - Finance of the
Corporation. Mr. Brittan has been Treasurer and Vice President - Finance of the
Operating Company since May, 1994. Mr. Brittan served as the Operating
Company's Controller from 1986 to May, 1994. From 1984 to 1986, Mr. Brittan was
employed by The Limited, Inc., a national fashion retailer, as Senior
Accountant. Mr. Brittan is a Certified Public Accountant and from 1981 through
1984 was employed by Coopers & Lybrand.
ROBERT L. POWELSON is a Director of the Corporation. Mr. Powelson has
been a Director of the Operating Company since 1981 and was a co-founder of the
Operating Company with E. Len Gibson. From 1987 to 1994, Mr. Powelson has
served as a consultant for the Operating Company.
- 8 -
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information concerning the annual
and long-term compensation of the chief executive officer of the Corporation and
other executive officers (together, the "Named Executives"), whose total salary
and bonus for the last completed fiscal year exceeded $100,000.
<TABLE>
<CAPTION>
Long Term Compensation
-------------------------------
Annual Compensation Awards
------------------------------------------ ------
Other Restricted Stock
Name and Fiscal Annual Stock Award Options
Principal Position Year Salary ($) Bonus ($) Comp.(1) ($) Granted (#)
------------------ ---- --------- -------- ------- ------- ----------
<S> <C> <C> <C> <C> <C> <C>
Larry R. Linhart, 1998 $ 372,673 $ 115,229 $ 4,750 $ -0- -0-
President and Chief 1997 361,818 105,089 1,365 -0- -0-
Executive Officer 1996 352,306 -0- 2,250 -0- -0-
Joseph L. Govern, 1998 $ 115,000 $ 86,250 $ 2,980 $ 40,435 (2) -0-
Senior Vice President - 1997 105,000 37,991 1,718 -0- -0-
Operations 1996 100,000 -0- 1,680 -0- -0-
James W. Brittan, 1998 $ 80,000 $ 60,692 $ 2,886 $ -0- 5,000
Vice President - 1997 73,500 15,193 1,428 -0- 5,000
Finance, Treasurer 1996 64,770 -0- 1,764 -0- 7,500
Robert B. Horn, 1998 $ 75,000 $ 37,500 $ -0- $ -0- 2,500
Vice President - 1997 (3)
Human Resources
</TABLE>
(1) Includes the Named Executive's share of the Operating Company's
contribution under the Operating Company's 401(k) plan and, in the case of
Mr. Govern's and Mr. Brittan's compensation, $705 and $264, respectively,
earned in each such year under the Operating Company's Phantom Stock Plan.
(2) Represents 2,414 restricted shares granted to Mr. Govern on May 15, 1998,
as part of his fiscal 1998 bonus. The shares are subject to annual vesting
of 805 shares on May 15, 1999, 805 shares on May 15, 2000, and 804 shares
on May 15, 2001, contingent upon Mr. Govern's continued employment through
the years then ended. None of the named executives held restricted stock
at March 29, 1998.
(3) Mr. Horn joined the Company in February 1997 and earned cash compensation
of $11,500 during fiscal year 1997.
STOCK OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information regarding stock option grants
to the Named Executives during the 1998 fiscal year. All options were awarded
at exercise prices that were equal to the market price of the Corporation's
stock on the date of grant and are subject to vesting at a rate of 20% per year
from the date of grant. Any unexercised shares lapse on the earliest of 10
years from the grant date or 90 days after termination of employment with the
Company.
- 9 -
<PAGE>
<TABLE>
<CAPTION>
Potential Realizable Value
Number % of Total at Assumed Annual Rates
of Securities Options Granted of Stock Price Appreciation
Underlying to Employees Exercise for Option Term
Options in Fiscal Price Expiration ---------------
Name Granted (#) Year ($/Share) Date 5% ($) 10% ($)
---- ---------- ---- ------- ---- ----- ------
<S> <C> <C> <C> <C> <C> <C>
James W. Brittan 5,000 8.7% $ 19.125 August 19, $ 60,138 $ 152,402
2007
Robert B. Horn 2,500 4.3% $ 19.125 August 19, $ 30,069 $ 76,201
2007
</TABLE>
AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUE TABLE
The following table sets forth certain information concerning stock
options exercised during fiscal year 1998 and the value of unexercised stock
options held as of March 29, 1998, by the Named Executives.
<TABLE>
<CAPTION>
Value of Unexercised
Shares Unexercised Options In-The-Money Options
Acquired at Fiscal Year End (#) at Fiscal Year End ($)(1)
Name and on Value --------------------- ------------------------
Principal Position Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
- ------------------ ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Larry R. Linhart 160,000 $ 2,897,170 230,000 20,000 $ 4,180,000 $ 300,000
Joseph L. Govern -0- -0- 40,500 40,500 822,555 822,555
James W. Brittan 3,000 59,250 5,500 16,500 93,750 225,875
Robert B. Horn -0- -0- 1,500 8,500 25,875 118,187
</TABLE>
(1) Amount shown represents the difference between the fair market value of the
Common Shares underlying the options based on the closing price of the Common
Shares of $25.000 on March 28, 1998, the last trading day prior to the end of
fiscal 1998, and the exercise price of the options.
LARRY R. LINHART. Prior to the reorganization and recapitalization of
the Corporation in August 1994 (the "Recapitalization"), Messrs. Powelson and
Gibson each granted to Mr. Linhart options to purchase Common Shares of the
Operating Company owned by them (the "1987 and 1991 Stock Options"). The terms
of the 1987 and 1991 Stock Options were originally set forth in a certain Stock
Purchase and Close Corporation Agreement dated January 15, 1987, as amended,
among the Operating Company and the Principal Shareholders (the "Stock Purchase
Agreement"). In connection with the Recapitalization, the Stock Purchase
Agreement was canceled and Messrs. Powelson and Gibson each transferred to a
newly-formed Ohio corporation specifically formed to implement the
Recapitalization ("Interim Holding Company") all of their Common Shares of the
Operating Company, including the shares subject to the 1987 and 1991 Stock
Options. Interim Holding Company, in turn, assumed the obligations of Messrs.
Powelson and Gibson under the 1987 and 1991 Stock Options and, pursuant to the
merger of Interim Holding Company with and into the Corporation, the Corporation
assumed and agreed to perform such obligations. In connection therewith, the
Corporation and Mr. Linhart entered into a restated option agreement pursuant to
which the Corporation granted Mr. Linhart the option to purchase from the
Corporation 135,000 Common Shares for a purchase price of $4.00 per share (the
"1987 Options") and 225,000 Common Shares for a purchase price of $6.35 per
share (the "1991 Options"), of which 135,000 and 25,000, respectively, were
exercised during the fiscal year ended March 29, 1998. The terms and conditions
of the restated option agreement are substantially the same as those contained
in the Stock Purchase Agreement. The 1991 Options shall
- 10 -
<PAGE>
remain effective until the later of the termination of Mr. Linhart's employment
or, in the event Mr. Linhart's employment is terminated by his death, one year
after Mr. Linhart's death. See "Executive Compensation -- Employment
Agreements."
JOSEPH L. GOVERN. The Operating Company granted, effective as of May 1,
1994, Mr. Govern the option to purchase from the Operating Company an amount of
its Common Shares, at a price per share, which, upon consummation of the
Recapitalization, was converted to an option to purchase 81,000 Common Shares at
a price of $4.69 per Common Share. Options to purchase fifty percent of the
shares became exercisable on April 1, 1997 and the remaining options will become
exercisable, on a cumulative basis, at the rate of 10% per year commencing on
April 1, 1998.
EMPLOYMENT AGREEMENTS
LARRY R. LINHART. Larry R. Linhart has entered into an employment
agreement with the Corporation pursuant to which he has agreed to serve as
Chairman of the Board of Directors, President and Chief Executive Officer of the
Corporation for five years with automatic three-year extensions thereafter
unless terminated by either party. Mr. Linhart receives a base annual salary
which is subject to annual cost of living adjustments. Mr. Linhart's base
annual salary for fiscal 1998 was $372,673. Mr. Linhart also receives incentive
compensation equal to 5% of annual operating income (excluding Mr. Linhart's
compensation and any expense related to the exercise by or grant to Directors or
employees of stock options) in excess of an established amount (the "Target
Amount") which is subject to annual adjustments for inflation (the fiscal 1998
Target Amount was $1,728,439); provided, however, that Mr. Linhart's incentive
compensation for any fiscal year can not exceed an established amount which is
subject to adjustment based upon inflation. Since the Corporation's operating
income exceeded the Target Amount, Mr. Linhart received incentive compensation
for fiscal 1998 in the amount of $115,229, which was also the maximum amount
allowable.
In the event Mr. Linhart's employment is terminated for cause, the
Corporation will pay Mr. Linhart the compensation (including a pro rata share of
any incentive compensation) and benefits due under his employment agreement
through the date of such termination. In the event the Corporation terminates
Mr. Linhart's employment because of his disability, the Corporation shall
continue to pay him his compensation (including a pro rata share of any
incentive compensation) and benefits for a period of six months. In the event
Mr. Linhart's employment is terminated by the Corporation other than for cause,
disability or death, or if Mr. Linhart voluntarily terminates his employment
with the Corporation for good reason, the Corporation will be obligated to pay
severance equal to three times Mr. Linhart's then current base salary and
incentive compensation, plus all accrued incentive compensation previously
deferred. Mr. Linhart's employment agreement contains certain non-competition
and non-solicitation provisions which prohibit him from competing with the
Corporation during his employment by the Corporation and for a period of three
years after termination of his employment.
Pursuant to Mr. Linhart's employment agreement, on August 12, 1994, the
Corporation granted to Mr. Linhart the right to purchase 50,000 Common Shares at
$10.00 per share, subject to vesting 20% per year over five years. These
options expire August 19, 2004, and are subject to the terms and conditions of
the Corporation's 1994 Stock Incentive Plan, which among other things provide
that the options will lapse upon the earlier of one year after the termination
of the employee's employment due to death or disability or 90 days after the
termination of the employee's employment for any other reason. Mr. Linhart's
employment agreement also grants to Mr. Linhart the 1987 Stock Options and the
1991 Stock Options. See "Executive Compensation -- Stock Option Exercises and
Holdings."
JOSEPH L. GOVERN. The Operating Company and Joseph L. Govern are
parties to an employment agreement pursuant to which Mr. Govern is serving as
Senior Vice President - Operations of the Operating Company. The employment
agreement renews every two years and may be terminated by the Operating
Company for cause or in the event of Mr. Govern's disability. In the event
the Corporation terminates Mr. Govern's employment other than for cause (as
defined in the agreement), the Corporation will be obligated to pay Mr.
Govern his base salary over the remaining term of his employment. Mr.
Govern's employment agreement contains certain non-competition and
non-solicitation provisions which prohibit him from competing with the
Operating Company
- 11 -
<PAGE>
during his employment and for a period of three years after termination of his
employment. Mr. Govern's salary for fiscal 1998 was $115,000. With respect to
fiscal 1998, Mr. Govern was eligible to receive a bonus, payable in cash and
restricted stock, based upon the operating profitability of the Company. Mr.
Linhart determined the formula to be used to compute such bonus, which formula
was approved by the Compensation Committee. Pursuant to such formula, Mr. Govern
was paid a cash bonus for fiscal 1998 in the amount of $86,250 and was granted
2,414 shares of restricted stock with a value of $40,435.
RETIREMENT PLAN
Effective as of August 19, 1994, the Corporation adopted, subject to
certain amendments, the Retirement Plan and Trust of the Operating Company (the
"Retirement Plan"). The Retirement Plan is a profit sharing plan, containing a
qualified cash and deferred arrangement under Section 401(k) of the Code, which
permits participants to accumulate retirement benefits on a tax deferred basis.
REPORT OF COMPENSATION COMMITTEE
COMPENSATION POLICIES
The Corporation's compensation program adopted by the Compensation
Committee in August 1994 is designed to attract and retain highly qualified
executive officers and managers and to motivate them to maximize the
Corporation's earnings and shareholder returns. The Corporation's executive
compensation consists of two principal components: (i) cash compensation,
consisting of a base salary and a bonus which is based upon Corporation
operating performance, and (ii) stock options. The Corporation's policy is
to make cash bonus awards to executive officers and key management personnel
based upon a percentage of annual operating income in excess of established
targets. During fiscal 1998, 75 officers and managers participated in the
program. The Corporation also makes annual stock option grants or awards to
executive officers and other eligible employees. See "Executive Compensation
- - Stock Option Grants in Last Fiscal Year." Stock options are intended to
encourage key employees to remain employed by the Corporation providing them
with a long-term interest in the Corporation's overall performance as
reflected by the performance of the market for the Corporation's Common
Shares.
CEO COMPENSATION
The cash compensation of Larry R. Linhart, President and Chief Executive
Officer, was based solely on the provisions of his employment agreement which
provides for a base salary plus annual cost of living adjustments and certain
incentive compensation based upon the Corporation's operating income. See
"Executive Compensation -- Employment Agreements."
Larry R. Linhart (Chair)
Robert L. Powelson
George R. Manser
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Linhart is Chairman of the Board of Directors, President and Chief
Executive Officer of the Corporation and Mr. Powelson is Secretary of the
Corporation. Mr. Manser is not an officer or employee of the Corporation. Mr.
Linhart has and intends to continue to abstain from participating in any actions
of the Compensation Committee affecting his compensation. Mr. Powelson is not
compensated for his services as Secretary of the Corporation.
- 12 -
<PAGE>
PERFORMANCE GRAPH
The following graph compares the cumulative total shareholder return on
the Corporation's Common Shares from August 12, 1994 (the date the Corporation
became a public company), until March 29, 1998, with the cumulative total return
of (a) the NASDAQ Stock Market-US Index and (b) the NASDAQ Telecommunications
Index. The graph assumes the investment of $100 in the Corporation's Common
Shares, the NASDAQ Stock Market-US Index and the NASDAQ Telecommunications Index
and reinvestment of dividends. The 1994 initial public offering price of the
Corporation's Common Shares was $8.00 per share.
<TABLE>
<CAPTION>
Cumulative Total Return
------------------------------------------
8/12/94 4/2/95 3/31/96 3/30/97 3/29/98
<S> <C> <C> <C> <C> <C>
AmeriLink Corporation 100 112 103 76 303
NASDAQ Stock Market (U.S.) 100 113 153 170 258
NASDAQ Telecommunications Index 100 100 132 119 241
</TABLE>
APPROVAL OF THE ADOPTION OF AMENDMENTS TO THE 1994 STOCK INCENTIVE PLAN
GENERAL
Prior to the completion of the Corporation's initial public offering in
1994, the Board of Directors of the Corporation adopted the 1994 Stock Incentive
Plan (the "Plan") which was approved by the Corporation's then sole shareholder.
The purpose of the Plan is to advance the long-term interests of the Corporation
by (i) motivating executive and other personnel by means of long-term incentive
compensation; (ii) furthering the identity of interests of participants with
those of the shareholders of the Corporation through the ownership and
performance of the Common Shares of the Corporation; and (iii) permitting the
Corporation to attract and retain Directors and executive personnel upon whose
judgment the successful conduct of the business of the Corporation largely
depends.
- 13 -
<PAGE>
The maximum number of Common Shares with respect to which awards may be
granted under the Plan is 350,000 and the maximum number of Common Shares which
may be awarded during any calendar year may not exceed 10% of the total number
of issued and outstanding Common Shares of the Corporation. As of June 5, 1998,
the total number of Common Shares either subject to outstanding awards or
purchased by participants pursuant to the terms of awards previously granted was
240,500 leaving 109,500 available for future grants. Awards may be granted
under the Plan until May 31, 2004.
PROPOSED AMENDMENTS TO THE PLAN
INCREASE IN NUMBER OF SHARES AVAILABLE FOR FUTURE GRANTS
The Board of Directors believes that the granting of awards under the
Plan has been an extremely effective and valuable tool in accomplishing the
purposes of the Plan. Since only 109,500 Common Shares are currently available
for future grants, the proposed amendments would increase the number of Common
Shares with respect to which awards may be granted under the Plan from 350,000
to 950,000. The Board of Directors believes that the additional Common Shares
will permit the Corporation to continue to attract, retain and motivate key
executive and other personnel in order to maximize the Corporation's earnings
and shareholder returns.
OUTSIDE DIRECTOR STOCK OPTIONS
The Plan currently provides for the grant to Directors of the Corporation
who are not employees of the Corporation or any of its subsidiaries (the
"Outside Directors") of options to purchase Common Shares ("Outside Director
Stock Options"). See "Compensation of Directors". As a result of the increase
in the fair market value of the Common Shares to $19.125 per share, each Outside
Director was granted options to purchase 784 Common Shares on August 19, 1997 in
accordance with the provisions of the Plan. Outside Directors do not receive
any additional compensation for their services other than reimbursement for
travel expenses incurred in connection with attending meetings. The Board of
Directors believes that the current formula is not adequate to compensate the
Outside Directors for their contribution to the Corporation's success since the
number of shares granted has been significantly reduced as the fair market value
of the Common Shares has increased. The Board of Directors concluded that it
was in the best interests of the Corporation and the shareholders to provide for
the grant to Outside Directors of a fixed number of Common Shares on an annual
basis rather than retain the current formula. Accordingly, the Board of
Directors has approved, subject to the approval of the shareholders, an
amendment to the Plan pursuant to which each Outside Director who is initially
elected or appointed to serve as a Director of the Corporation and who is not a
Director on August 4, 1998, may be granted an option to purchase up to 5,000
Common Shares as determined by the Board of Directors in its sole discretion.
At each year's Annual Meeting of Shareholders of the Corporation, commencing at
the 1998 annual meeting, there shall be granted automatically to each Outside
Director the option to purchase 2,000 Common Shares.
The Plan also currently provides that options granted to Directors will
become exercisable in four equal annual installments on the first through fourth
anniversaries of the date of the grant. The Board of Directors concluded that
it was in the best interests of the Corporation and the shareholders to provide
that all options granted to Directors will become exercisable on the first
anniversary of the date of the grant.
Finally, the proposed amendments to the Plan eliminate the requirement
that an Outside Director Stock Option must be held for six months after the date
of grant before a retiring Director may exercise such option. That provision
was designed to comply with the requirements of Rule 16b-3 under the Securities
Exchange Act of 1934 which were in effect at the time the Plan was adopted. The
six-month holding period is no longer mandatory under Rule 16b-3 as amended.
No other changes to the Plan are proposed. The text of the proposed
amendments to the Plan is included in this Proxy Statement as Exhibit A.
Approval of the proposed amendments to the Plan requires the affirmative vote of
the holders of a majority of the Common Shares voting in person or by proxy at
the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE AMENDMENTS.
- 14 -
<PAGE>
INDEPENDENT PUBLIC ACCOUNTANTS
Ernst & Young LLP has acted as independent certified public
accountants of the Corporation during fiscal 1998. Ernst & Young LLP is
expected to have a representative present at the annual meeting of
shareholders who may make a statement, if desired, and will be available to
answer appropriate questions.
SHAREHOLDER PROPOSALS
In order for shareholder proposals to be considered for presentation at
the 1999 Annual Meeting of Shareholders, such proposals must be received by the
Corporation at its principal executive offices not later than March 7, 1999.
The Corporation's Regulations provide that shareholder nominations for
election as Directors may be made in compliance with certain advance notice,
informational and other applicable requirements. In order to be considered, a
shareholder's notice of Director nomination must be delivered to or mailed and
received by the Secretary of the Corporation at 1900 E. Dublin-Granville Road,
Columbus, Ohio, 43229, not less than 60 or more than 90 days prior to the
Corporation's Annual Meeting; provided, however, that in the event that less
than 75 days notice or prior public disclosure of the date of the meeting is
given or made to shareholders, notice by the shareholder to be timely must be so
received not later than the close of business on the 15th day following the
earlier of the day on which such notice of the date of the meeting was mailed or
such public disclosure was made. A shareholder's notice of Director nominations
must contain certain information required by the Regulations and must be
accompanied by the written consent of each proposed nominee to serve as a
Director of the Corporation, if elected. Copies of the Regulations are
available upon request made to the Secretary of the Corporation at the above
address. The requirements described above do not supersede the requirements or
conditions established by the Securities and Exchange Commission for shareholder
proposals to be included in the Corporation's proxy materials for a meeting of
shareholders.
OTHER MATTERS
As of the date of this statement, the Board of Directors knows of no
other business that will come before the Annual Meeting. Should any other
matter requiring the vote of the shareholders arise, the enclosed proxy confers
upon the proxy holders discretionary authority to vote the same in respect to
the resolution of such other matters as they, in their best judgment, believe to
be in the best interest of the Corporation.
SHAREHOLDERS ARE URGED TO FORWARD THEIR PROXIES WITHOUT DELAY. A PROMPT
RESPONSE WILL BE GREATLY APPRECIATED.
By Order of the Board of Directors
LARRY R. LINHART
Chairman of the Board of Directors,
President and Chief Executive Officer
July 6, 1998
- 15 -
<PAGE>
EXHIBIT A
AMERILINK CORPORATION
1994 STOCK INCENTIVE PLAN
Section 5(a) of the Plan is amended in its entirety to read as follows:
Section 5. Shares Available
(a) Shares of Common Stock available for issuance under the Plan
may be authorized and unissued shares or treasury shares.
Subject to the adjustments provided for in Sections 18 and 19
hereof, the maximum number of shares of Common Stock available
for grant of Awards under the Plan is 950,000 shares.
Notwithstanding the foregoing, at no time shall the number of
shares of Common Stock deemed to be available for grant in any
calendar year exceed ten percent of the total number of issued
and outstanding shares of Common Stock of the Company.
Sections 13(a), 13(e) and 13(g) of the Plan is amended in their entireties to
read as follows:
Section 13. Directors' Stock Options
(a) GRANTS. Awards may be granted to non-employee Directors only in
the form of stock options satisfying the requirements of this
Section 13. Each Outside Director who is initially elected or
appointed to serve as a Director of the Corporation and who is not
a Director on August 4, 1998, may be granted an option to
purchase up to 5,000 Common Shares as determined by the Board of
Directors in its sole discretion. At each year's annual meeting
of the shareholders of the Corporation commencing at the 1998
annual meeting, there shall be granted automatically to each
Outside Director the option to purchase 2,000 Common Shares All
stock options granted under this Section 13 shall be nonqualified
stock options.
(b) OPTION PERIOD. Options granted under this Section 13 will become
exercisable on the first anniversary of the date of the grant. No
such options shall be exercisable later than 10 years from the
date of the grant.
(c) LIMITATIONS ON EXERCISE. Directors' Stock Options shall become
exercisable to the extent of 100% of the optioned shares on the
first anniversary of the date of the grant. To the extent that an
option is not otherwise exercisable at the date of the Director's
retirement as a Director as required under any plan or policy of
the Company, it shall become fully exercisable upon such
retirement. Upon such retirement such options shall be
exercisable for a period of three years, subject to any shorter
original term thereof. Options not otherwise exercisable at the
time of the death of a Director during continued service with the
Company shall become fully exercisable upon his death. Upon the
death of a Director while in service as a Director, such options
shall remain exercisable for a period of one year after the date
of death. To the extent an option is exercisable on the date a
Director ceases to be a Director (other than by reason of death or
retirement as a Director under any plan or policy of the Company),
the option shall continue to be exercisable (subject to the
original term of the option) for a period of ninety (90) days
thereafter.
- 16 -
<PAGE>
AMERILINK CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF SHAREHOLDERS
AUGUST 4, 1998
The undersigned hereby acknowledges receipt of the notice of Annual
Meeting of Shareholders and the Proxy Statement and, revoking any proxy
heretofore given, hereby appoints Larry R. Linhart and Robert L. Powelson, and
each of them, as Proxies, each with the power to appoint his substitute, and
hereby authorizes each of them to represent and to vote, as designated on the
reverse, all the shares of common stock of AmeriLink Corporation held of record
by the undersigned on June 5, 1998, at the Annual Meeting of Shareholders of
AmeriLink Corporation to be held on August 4, 1998 and at all adjournments
thereof.
[X] A. Please mark your votes as in this example.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE FOLLOWING PROPOSALS.
1. ELECTION OF DIRECTORS
<TABLE>
<S> <C> <C>
FOR all nominees listed at right [ ] WITHHOLD AUTHORITY [ ] NOMINEES:
to vote for all WILLIAM H. LARGENT
nominees listed at right GEORGE R. MANSER
ROBERT D. SETZER
</TABLE>
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, strike
nominee's name from the list at right.)
2. AMENDMENTS TO THE 1994 STOCK INCENTIVE PLAN
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the Annual Meeting or any
adjournment thereof.
THIS PROXY WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSAL 1 AND PROPOSAL 2.
IF ANY OTHER BUSINESS IS PRESENTED AT THE ANNUAL MEETING, THIS PROXY WILL BE
VOTED BY THE BOARD OF DIRECTORS IN THEIR BEST JUDGMENT. AT THE PRESENT TIME THE
BOARD OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE ANNUAL
MEETING.
Please mark, sign, date and return promptly in the enclosed envelope.
Date: , 1998
---------------
- ------------------------------
(Signature)
- ------------------------------
(Signature - If held jointly.)
Important: Please sign exactly as name appears above. When shares are held by
Joint Tenants, each should sign. When signing as Attorney, Executor,
Administrator, Trustee or Guardian, please give full title as such. When
executed by a Corporation, the Proxy should be signed by a duly authorized
Officer, indicating title as such. If a Partnership, please sign in Partnership
name by authorized person.
