<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
AASCHE TRANSPORTATION SERVICES, INC.
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
AASCHE TRANSPORTATION SERVICES, INC.
- -------------------------------------------------------------------------------
(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)(4) 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:
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<PAGE> 2
AASCHE TRANSPORTATION SERVICES INC.
April 10, 1998
Dear Stockholder:
It is my pleasure to invite you to the 1998 Annual Meeting of Stockholders
of Aasche Transportation Services, Inc. The meeting will be held at the Best
Western Clock Tower Resort and Conference Center, 7801 East State Street,
Rockford, Illinois 61108 on Wednesday, May 13, 1998, at 10:00 A.M. Central
Standard Time.
The accompanying Notice of Annual Meeting of Stockholders and Proxy
Statement describes the items of business which will be discussed during the
meeting. It is important that you vote your shares whether or not you plan to
attend the meeting. To be sure your vote is counted, we urge you to carefully
review the Proxy Statement and to vote your choices. PLEASE SIGN, DATE AND
RETURN THE ENCLOSED PROXY CARD IN THE ACCOMPANYING ENVELOPE AS SOON AS POSSIBLE.
If you attend the meeting and wish to vote in person, the ballot that you submit
at the meeting will supersede your proxy.
I look forward to seeing you at the meeting. On behalf of the management
and directors of Aasche Transportation Services, Inc., I want to thank you in
advance for your continued support and confidence in 1998.
Sincerely,
LARRY L. ASCHE
Larry L. Asche
Chairman of the Board and
Chief Executive Officer
<PAGE> 3
AASCHE TRANSPORTATION SERVICES, INC.
10214 NORTH MT. VERNON ROAD
SHANNON, ILLINOIS 61078
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 13, 1998
To the Stockholders of Aasche Transportation Services, Inc.:
The Annual Meeting of Stockholders of Aasche Transportation Services, Inc.,
a Delaware corporation (the "Company"), will be held at the Best Western Clock
Tower Resort and Conference Center, 7801 East State Street, Rockford, Illinois
61108, on Wednesday, May 13, 1998, at 10:00 A.M. Central Standard Time for the
following purposes, as more fully described in the accompanying Proxy Statement:
1. To elect four directors to serve a term of 3 years or until their
respective successors are elected and qualified;
2. To approve amendments to the Stock Option Plan which include a proposed
increase of 225,000 in the number of shares subject to the Plan and a change to
allow participation in the Plan by any officer or director of the Company; and
3. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Stockholders of record of the Company's Common Stock, par value $0.0001 per
share, at the close of business on March 24, 1998, the record date fixed by the
Board of Directors, are entitled to notice of, and to vote at, the meeting, as
more fully described in the Proxy Statement.
Stockholders who cannot attend are urged to sign, date and otherwise
complete the enclosed proxy card and return it promptly in the envelope
provided. Any stockholder giving a proxy has the right to revoke it at any time
before it is voted.
The annual report of the Company for the fiscal year ended December 31,
1997 is being mailed to all Stockholders of record and accompanies this Proxy
Statement.
By order of the Board of Directors,
DIANE L. ASCHE
Diane L. Asche
Secretary
Shannon, Illinois
April 10, 1998
<PAGE> 4
AASCHE TRANSPORTATION SERVICES, INC.
10214 NORTH MT. VERNON ROAD
SHANNON, ILLINOIS 61078
PROXY STATEMENT
------------------------
APPROXIMATE DATE PROXY MATERIAL
FIRST SENT TO STOCKHOLDERS:
APRIL 10, 1998
------------------------
The following information is provided in connection with the solicitation
of proxies for the 1998 Annual Meeting of Stockholders of Aasche Transportation
Services, Inc., a Delaware corporation ("Aasche" or the "Company"), to be held
on May 13, 1998, and adjournments thereof (the "Annual Meeting"), for the
purposes stated in the Notice of Annual Meeting of Stockholders preceding this
Proxy Statement.
VOTING OF SHARES
This Proxy Statement and the accompanying proxy card are being mailed to
stockholders, beginning on or about April 10, 1998, in connection with the
solicitation of proxies on behalf of the Board of Directors of Aasche (the
"Board") for the Annual Meeting. Proxies are solicited to give all stockholders
of record on March 24, 1998 (the "Record Date") an opportunity to vote on
matters to be presented at the Annual Meeting. Shares can be voted at the
meeting only if the stockholder is present or represented by proxy.
Each share of the Company's common stock, par value $0.0001 per share (the
"Common Stock"), represented at the Annual Meeting is entitled to one vote on
each matter properly brought before the meeting. Please specify your choices by
marking the appropriate boxes on the enclosed proxy card and signing it.
Directors are elected by a plurality of the votes cast by the shares entitled to
vote at a meeting at which a quorum is present. A plurality means that the
nominees with the largest number of votes are elected as directors up to the
maximum number of directors to be chosen at the meeting. Any other matters that
may be submitted at the meeting shall be determined by a majority of the votes
cast. Shares represented by proxies that are marked "withhold authority" with
respect to the election of one or more nominees for election as directors, and
proxies which are marked to deny discretionary authority on other matters will
not be counted in determining whether a majority vote was obtained in such
matters. If no directions are given and the signed card is returned, the persons
named in the proxy card will vote the shares in favor of the election of all
listed nominees, and at their discretion, on any other matter that may properly
come before the meeting in accordance with their best judgment. Absentions and
broker non-votes are counted for purposes of determining the presence or absence
of a quorum for the transaction of business. Abstentions are counted in
tabulations of the votes cast on proposals presented to stockholders, whereas
broker non-votes are not counted for purposes of determining whether a proposal
has been approved. Stockholders voting by proxy may revoke that proxy at any
time before it is voted at the meeting by delivering to the Company a proxy
bearing a later date or by attending in person and casting a ballot.
YOUR VOTE IS IMPORTANT. PLEASE RETURN YOUR MARKED AND SIGNED PROXY CARD
PROMPTLY SO YOUR SHARES CAN BE REPRESENTED, EVEN IF YOU PLAN TO ATTEND THE
MEETING IN PERSON.
As of the Record Date, 4,539,735 shares of Common Stock were issued and
outstanding.
<PAGE> 5
BOARD OF DIRECTORS
GENERAL
The business affairs of the Company are managed under the direction of the
Board. Members of the Board are kept informed through various reports and
documents sent to them on a regular basis, through operating and financial
reports routinely presented at Board and committee meetings by the Chief
Executive Officer and other officers, and through other means.
The Board had seven meetings in 1997. Except for the absence of two
directors at one meeting, the attendance of all directors at Board meetings was
100%.
Biographical information on the director nominees and the directors serving
unexpired terms is set forth herein under the caption "Item No. 1 -- Election of
Directors."
COMMITTEES
The Board has formed the standing Audit Committee and the Compensation
Committee to assist the Board in carrying out its duties.
The AUDIT COMMITTEE has three members, two of whom are independent,
nonemployee directors. Members of this committee are Dennis D. Wilson, James A.
Jalovec and Leon M. Monachos, who is Chief Financial Officer of the Company. The
Audit Committee considers the adequacy of the internal controls of the Company
and the objectivity and integrity of financial reporting and meets with the
independent certified public accountants and appropriate Company financial
personnel about these matters.
The COMPENSATION COMMITTEE has three members, two of whom are independent,
nonemployee directors. Members of the committee are Messrs. Wilson and Jalovec
and Larry L. Asche, who is the Chief Executive Officer of the Company. This
committee monitors and makes recommendations to the Board with respect to
compensation programs for directors and officers and administers compensation
plans for executive officers. The Company's Stock Option Plan is administered by
a Stock Option Plan Committee which is a subcommittee of the Compensation
Committee and consists of Messrs. Wilson and Jalovec.
DIRECTOR COMPENSATION
Directors are reimbursed for travel expenses incurred in connection with
attending board and committee meetings. Directors are not entitled to additional
fees for serving on committees of the Board of Directors. Pursuant to the terms
of the formula program of the Company's Stock Option Plan, each director of the
Company who was not otherwise employed by the Company on April 12, 1995, and at
the adjournment of each annual meeting, was granted an option to purchase 5,000
shares of Common Stock at an exercise price per share equal to 125% of the
closing price of the Common Stock on the date of grant. All options are
immediately exercisable. Effective for options granted on or after May 15, 1996,
a director who is not otherwise employed by the Company when he becomes a
director automatically will be granted an option to purchase 5,000 shares of
Common Stock upon his initial election to the Board of Directors. All options
granted on or after May 15, 1996 will have an exercise price equal to the fair
market value of the Common Stock on the date of grant.
ITEM NO. 1 -- ELECTION OF DIRECTORS
The Board, pursuant to the Company's Certificate of Incorporation and
By-laws, has determined that the number of directors of the Company shall be
eight. The four employee directors on the Board are the Company's Chief
Executive Officer, President, Chief Financial Officer and Vice President and
Secretary. The Board is divided into three classes with staggered terms so that
the term of one class expires at each annual meeting of stockholders. Directors
are elected by a plurality of the votes cast.
The following nominees have been selected and approved by the Board for
submission to the stockholders: Larry L. Asche, Leon M. Monachos, Dennis D.
Wilson and Gary I. Goldberg, each to serve a
2
<PAGE> 6
three-year term expiring at the 2001 Annual Meeting. Except as otherwise
specified in the proxy, proxies will be voted for election of these nominees.
If a nominee becomes unable or unwilling to serve, proxies will be voted
for election of such person as shall be designated by the Board; however,
management knows of no reason why any nominee should be unable or unwilling to
serve.
A summary description of each nominee and each director serving an
unexpired term follows.
NOMINEES FOR ELECTION AT THIS
MEETING TO TERMS EXPIRING IN 2001:
LARRY L. ASCHE, age 46, has served as Chairman and Director of the Company
since July 1994 and as Chief Executive Officer since November 1996. Mr. Asche
also served as Chief Operating Officer from July 1994 to November 1996. Mr.
Asche has served as President and Director of Asche Transfer, Inc. ("Asche
Transfer") since its incorporation in February 1983. He also serves as Chairman
of the Board of AG Carriers, Inc. ("AG Carriers") and Vice President and
Director of Specialty Transportation Services, Inc. ("STS"). Mr. Asche acquired
the business from Clarence Asche, Mr. Asche's uncle, in 1973 and operated Asche
Transfer for ten years as a sole proprietorship. Mr. Asche is the husband of
Diane L. Asche.
LEON M. MONACHOS, age 46, has served as a Director of the Company since
March 1996 and as Chief Financial Officer since May 1996. Since September 1996,
Mr. Monachos has served as Vice-President -- Finance of Asche Transfer and AG
Carriers. He also serves as Vice-President -- Finance and Director of STS. From
October 1995 to May 1996, Mr. Monachos had been an advisor to the president and
founder of a privately-held transportation services company. From June 1986 to
September 1995, he was employed at Ernst & Young LLP, a public accounting firm,
most recently as Senior Manager. Mr. Monachos has a B.S. degree from the
University of Illinois and is a certified public accountant.
GARY I. GOLDBERG, age 54, has served as Vice President of the Company since
February 1998 and a Director since July, 1996. Mr. Goldberg is President and
Director of STS. From 1977 to 1997, Mr. Goldberg served as Executive Vice
President of Jack Gray Transport, Inc. ("JGT"). Prior to joining JGT, he was
employed by Material Service Corporation and Vulcan Materials Company as
controller for eight years. Mr. Goldberg has a B.A. degree in commerce from
DePaul University.
DENNIS D. WILSON, age 46, has served as a Director of the Company since
November 1997. Mr. Wilson serves as Chief Accounting Officer and Director of
Schawk, Inc. Prior to that, he served as a principal of Wilson Financial
Services, Crete, Illinois and Chief Financial Officer of Family Services Center,
Matteson, Illinois from 1992 to 1994. Mr. Wilson is a Certified Public
Accountant.
THE BOARD RECOMMENDS A VOTE "FOR" THESE NOMINEES
DIRECTOR WHOSE TERM
CONTINUES UNTIL 1999:
RICHARD S. BAUGH, age 51, has served as President of AG Carriers and a
Director since May 1995. Mr. Baugh served as President and Chief Operating
Officer of AG Carriers, Inc. from 1982 to May 1995. Prior to 1982, Mr. Baugh
served as Vice President and General Manager of AG Carriers, Inc. Mr. Baugh
presently serves on the Board of Directors of the Florida Trucking Association.
JAMES A. JALOVEC, age 41, has served as a Director of the Company since
February 1998. Mr. Jalovec serves as President and Director of A & J Cartage,
Inc. ("A & J"), a privately held transportation services company and has been
associated with A & J since 1978. Mr. Jalovec is also an investor in other
privately held companies.
3
<PAGE> 7
DIRECTORS WHOSE TERMS
CONTINUE UNTIL 2000:
KEVIN M. CLARK, age 42, has served as President and Director of the Company
since July 1994. Mr. Clark also served as Chief Executive Officer from July 1994
to November 1996. Since May 1987, Mr. Clark has served as Vice President of
Asche Transfer. He also serves as Vice-President of AG Carriers and
Vice-President of STS. Prior to joining Asche Transfer, Mr. Clark served for
over two years as a management consultant to Asche Transfer. From 1982 to 1984,
Mr. Clark was Vice President and Director of Batt Trucking, Inc., Caldwell,
Idaho, a refrigerated trucking company. From 1980 to 1984, Mr. Clark was the
founder and President of National Traffic Services Corporation, Boise, Idaho, a
management consulting firm providing regulatory compliance assistance to
regional and national transportation companies. Prior to that time, Mr. Clark
served as the Transportation Auditor, Acting Director, Idaho Public Utilities
Commission, Boise, Idaho and prior thereto, he was a transportation specialist
with Consolidated Freightways, Boise, Idaho. Mr. Clark has a B.S. degree in
business from Ottawa University, Phoenix, Arizona. Mr. Clark has also received a
Transportation Practitioner Degree from the College of Advanced Traffic,
Chicago, Illinois and has been admitted to practice before the Interstate
Commerce Commission and Federal Maritime Commission. Mr. Clark has served as
Chairman of the Advisory Board of Directors of the University of Georgia
Trucking Profitability Strategies Conference. He is also the author of three
books in the transportation and business fields and has been a frequent speaker
for various national organizations.
DIANE L. ASCHE, age 44, has served as Vice President, Secretary and
Director of the Company since July 1994. Mrs. Asche has served as Vice
President, Secretary and Director of Asche Transfer since its incorporation in
February 1983 and in addition, serves as Secretary of AG Carriers and STS. From
the time Larry L. Asche and Mrs. Asche acquired the business, she has controlled
and directed the administration of the Company. Mrs. Asche is the wife of Larry
L. Asche.
BOARD OF DIRECTORS REPORT
ON EXECUTIVE COMPENSATION
Although neither the Board of Directors nor the Compensation Committee has
adopted a formal compensation policy applicable to the Company's executive
officers, the purpose of the Company's executive compensation is to enable the
Company to attract, retain and motivate qualified executives to ensure the long-
term success of the Company and its business strategies. The Compensation
Committee intends to review the compensation policy for the Company's executive
officers in order to align executive compensation with the business objectives
and performance of the Company and to place greater emphasis on incentive
compensation.
Executive compensation has generally consisted of two principal components:
base salary and bonus. At the time of the Company's initial public offering in
1994, the Company entered into a five-year employment and stock option agreement
with Larry L. Asche, its Chief Executive Officer. Under the agreement, Mr. Asche
received a base salary of $200,000 in 1997. In addition, Mr. Asche is eligible
to receive a cash and/or stock bonus following the end of each fiscal year as
the Compensation Committee, in its sole discretion, deems appropriate, after
taking into consideration the Company's achievement of revenue and operating
goals and financial performance for the fiscal year then ended and the
executive's contribution thereto. No bonuses have been paid to Mr. Asche with
respect to any fiscal year ended after the date of the agreement. The employment
and stock option agreement with Mr. Asche is described in the section captioned
"Employment and Stock Option Agreements."
As part of Mr. Asche's employment and stock option agreement, Mr. Asche was
granted an option to purchase 26,000 shares of Common Stock vesting (i) 5,000
shares on January 1, 1995 at an exercise price of $8.75 per share; (ii) 6,000
shares on January 1, 1996 at an exercise price of $9.00; (iii) 7,000 shares on
January 1, 1997 at an exercise price of $9.25 per share; and (iv) 8,000 shares
on January 1, 1998 at an exercise price of $9.50 per share. These options, which
were granted with an exercise price greater than the fair market value per share
of the Common Stock on the date of grant, are intended to encourage the creation
of
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<PAGE> 8
stockholder value over the long-term by aligning the financial interests of Mr.
Asche with those of the Company's stockholders.
The salary, bonus and stock options paid or granted by the Company to the
Chief Executive Officer and the other most highly compensated executive officer
of the Company in 1997 is set forth in the tables following this report. The
Board of Directors believes that the present executive officers of the Company
are dedicated to increasing profitability and stockholder value and that the
compensation to be paid to the executives of the Company will contribute to this
focus.
THE BOARD OF DIRECTORS
<TABLE>
<S> <C>
Larry L. Asche Richard S. Baugh
Kevin M. Clark Gary I. Goldberg
Diane L. Asche Dennis D. Wilson
Leon M. Monachos James A. Jalovec
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
The Compensation Committee is presently composed of Dennis D. Wilson, James
A. Jalovec and Larry L. Asche. Except for Mr. Asche, none of the members of the
Compensation Committee is or was formerly an officer or employee of the Company.
STOCKHOLDER RETURN PERFORMANCE GRAPH
Set forth on the following page is a line graph comparing the percentage
change in the cumulative total stockholder return on the Company's Common Stock
against the Nasdaq Market Index and a Company-selected peer group of
transportation services companies (the "Peer Group"). The graph assumes that
$100 was invested on September 23, 1994 (the effective date of the Company's
initial public offering) at the initial public offering price of $7.00 per
share, in each of the Company's Common Stock, the Nasdaq Market Index and the
Peer Group, and that all dividends were reinvested.
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<PAGE> 9
TOTAL SHAREHOLDER RETURNS
PERFORMANCE GRAPH FOR AASCHE TRANSPORTATION SERVICES, INC.
Prepared by Media General Financial Services
Produced on 3/3/98 including data to 12/31/97
<TABLE>
<CAPTION>
AASCHE
Measurement Period Transportation Peer Group NASDAQ
(Fiscal Year Covered) Services, Inc. Index Market Index
<S> <C> <C> <C>
9/23/94 100.00 100.00 100.00
FYE 12/31/94 92.42 90.56 97.99
FYE 12/31/95 63.64 66.46 127.10
FYE 12/31/96 62.12 69.54 157.94
FYE 12/31/97 48.48 85.21 193.20
</TABLE>
- -------------------------
NOTES:
(a) Peer Group return is weighted by market capitalization.
(b) The Peer Group is comprised of the common stock of the following companies:
Frozen Food Express, Inc., KLLM Transport Services, Inc., Marten Transport,
Ltd. and Simon Transportation Services, Inc.
6
<PAGE> 10
EXECUTIVE COMPENSATION
GENERAL
The following table sets forth compensation awarded or earned by the
Company's Chief Executive Officer and the other most highly paid executive
officers during the last three fiscal years as of the end of 1997 (the "Named
Executive Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL LONG TERM COMPENSATION
COMPENSATION ---------------------------------
---------------- OTHER ANNUAL OPTIONS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION (NO. OF SHARES) COMPENSATION(1)
--------------------------- ---- ------ ----- ------------ --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Larry L. Asche(2).............. 1997 $200,000 0 0 26,000 4,750
Chief Executive Officer 1996 150,000 0 0 26,000 5,230
4,129
1995 108,507 0 0 26,000
Kevin M. Clark................. 1997 135,000 0 0 26,000 4,725
President 1996 135,000 0 0 26,000 4,624
4,129
1995 108,507 0 0 26,000
Leon M. Monachos(3)............ 1997 150,000 0 0 200,000 0
Chief Financial Officer 1996 120,000 0 0 200,000 0
</TABLE>
- -------------------------
(1) Represents matching payments under the Company's 401(k) Plan.
(2) Mr. Asche's annual salary was increased to $200,000 in August 1997.
(3) Mr. Monachos' annual salary was increased to $150,000 in August 1997.
EXECUTIVE OPTION GRANTS
No options to purchase shares of Common Stock were granted to the Named
Executive Officers during 1997.
OPTION EXERCISES AND HOLDINGS
The following table sets forth information concerning option holdings with
respect to each of the Named Executive Officers as of December 31, 1997. No
options were exercised by the Named Executive Officers in 1996.
OPTION VALUE AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
DECEMBER 31, 1997 DECEMBER 31, 1997(1)
--------------------------- ---------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Larry L. Asche................................. 18,000 8,000 0 0
Kevin M. Clark................................. 18,000 8,000 0 0
Leon M. Monachos............................... 120,000 80,000 $30,000 $20,000
</TABLE>
- -------------------------
(1) Assumes a stock price of $4 per share, the closing price of the common stock
reported on NASDAQ on December 31, 1997.
7
<PAGE> 11
EMPLOYMENT AGREEMENTS
On September 23, 1994, the Company entered into five-year Employment and
Stock Option Agreements with Messrs. Asche and Clark. Under each agreement,
Messrs. Asche and Clark currently receive an annual salary of $200,000 and
$135,000, respectively.
As part of their employment agreements, each of Messrs. Asche and Clark
have been granted an option to purchase 26,000 shares of the Company's Common
Stock beginning on the dates and at the prices set forth below: (i) up to 5,000
shares on January 1, 1995 at an option price of $8.75 per share; (ii) up to
6,000 shares on January 1, 1996 at an option price of $9.00 per share; (iii) up
to 7,000 shares on January 1, 1997 at an option price of $9.25 per share; and
(iv) up to 8,000 shares on January 1, 1998 at an option price of $9.50 per
share. These options shall expire on, and shall be exercised (if at all) prior
to, the first to occur of: (i) seven years after the date of grant of such
options; or (ii) the date as of which the executive shall cease, for any reason
or cause whatsoever and without regard for such reason or cause, to be an
officer of the Company. As of December 31, 1997, options to purchase 18,000
shares of the Company's Common Stock have become exercisable under each of their
respective employment agreements.
On May 15, 1996, the Company entered into a five-year Employment and Stock
Option Agreement with Leon M. Monachos. Under the agreement, Mr. Monachos
currently receives an annual salary of $150,000. As a part of the employment
agreement, Mr. Monachos has been granted an option to purchase 200,000 shares of
the Company's Common Stock at an option price of $3.75 per share, 100,000 of
which are currently exercisable and 20,000 of which are exercisable on each
anniversary date of such agreement. As of December 31, 1997, options to purchase
120,000 shares of the Company's Common Stock have become exercisable under Mr.
Monachos' employment agreement.
STOCK OPTION PLAN
The Board has adopted the Aasche Transportation Services, Inc. Stock Option
Plan (the "Stock Option Plan"), which was an amendment and restatement of the
Company's Key Employee Incentive Stock Option Plan ("Prior Plan") and reflected
(i) certain design changes to the Prior Plan, and (ii) the merger into the Prior
Plan of a number of plans and agreements maintained by the Company and certain
of its affiliates ("Other Prior Plans"). The purpose of the Stock Option Plan is
to promote the interests and enhance the value of the Company by linking the
personal interests of its employees and directors with those of its
stockholders, by inducing individuals of outstanding ability and potential to
join and remain with the Company and by providing the participating employees
and directors with an additional incentive to promote the success of the
Company. The restatement of the Prior Plan and the Other Prior Plans does not
affect the rights of individuals who participated in the Prior Plan and the
Other Prior Plans in accordance with their provisions. All matters relating to
eligibility for options and the number of options to which such individuals may
be entitled based upon events occurring prior to the adoption of the Stock
Option Plan, except as otherwise expressly provided therein, are determined in
accordance with the applicable provisions of the Prior Plan and the Other Prior
Plans.
The Stock Option Plan is administered by the Stock Option Committee (the
"Committee"). The Committee has discretion to determine which "key employees"
and "key non-employees" (i.e., non-employee directors, consultants or
independent contractors) will be recipients of options under the Stock Option
Plan, and to establish the terms, conditions and limitations of each option
(subject to the terms of the Stock Option Plan and the applicable provisions of
the Internal Revenue Code), including the type and amount of the options, the
number of shares of Common Stock to be subject to any option, the exercise price
of any options, and the date or dates upon which options become exercisable or
upon which any restrictions applicable to any option lapse. Other than formula
options, the members of the Committee must not have received any options
pursuant to the Stock Option Plan or any similar plan for one year prior to
being appointed to the Committee, or for such other time period necessary to
fulfill the then current Rule 16b-3 requirements under the Securities Exchange
Act of 1934, as amended. The Committee also has full power to construe and
interpret the Stock Option Plan and the options granted under the Stock Option
Plan, and to establish rules and regulations
8
<PAGE> 12
necessary or advisable for its administration. The determination of the
Committee with respect to any matter under the Stock Option Plan to be acted
upon by the Committee is conclusive and binding.
Options under the Stock Option Plan may be granted only to key employees
and key non-employees of the Company and its subsidiaries. The Committee
determines whether a particular employee or non-employee qualifies as a key
employee or key non-employee. Options may also be granted to a prospective
employee, conditioned upon such person becoming an employee. Members of the
Committee are not eligible for options while serving on the Committee, unless
the option is made pursuant to a formula that either states the amount and price
of the Common Stock to be awarded to the members of the Committee and specifies
the timing of the option, or sets a formula that determines the amount, price
and timing of the option using objective criteria.
The Committee may at any time and from time to time grant one or more
options to one or more key employees and may designate the number of Shares to
be subject to each option so granted, provided, however, that (i) each
participant receiving an incentive option must be a key employee of the Company
or of an affiliate at the time an incentive option is granted; (ii) no incentive
options shall be granted after the expiration of ten (10) years from the earlier
of the date of the adoption of the Stock Option Plan by the Company or the
approval of the Stock Option Plan by the stockholders of the Company; and (iii)
the fair market value of the Shares (determined at the time the option is
granted) as to which incentive options are exercisable for the first time by any
key employee during any single calendar year (under the Stock Option Plan and
under any other incentive option plan of the Company or an Affiliate) shall not
exceed $100,000.
In the event the Company pays a stock dividend or makes a distribution of
shares, or splits up, combines, reclassifies or substitutes other securities for
its outstanding shares of Common Stock, the Committee shall make an appropriate
adjustment to the number of shares subject to outstanding options and the
exercise prices thereof.
Options under the Stock Option Plan are also granted to directors and
advisors who are not employees of the Company. Each director and non-employee
advisor is automatically granted options to purchase 5,000 shares of the
Company's common stock on the date such director or advisor is first appointed
and at the adjournment of each annual meeting. The exercise price of each
option is equal to the closing price of the common stock on the date of grant.
An option may be exercised at any time within 10 years from the date of grant.
At December 31, 1997, 1996 and 1995, options to purchase 55,000, 40,000 and
25,000 shares, respectively, have been granted at prices ranging from $3.75 to
$10.94, of which 5,000 options were exercised at a price per share of $3.75 in
May 1997. No options were exercised in 1996 or 1995.
The Board may amend the Stock Option Plan in any respect, except that the
following changes may not be made without stockholder approval: (i) the maximum
number of shares available for options may not be increased (except upon stock
splits and dividends, combinations and similar events), (ii) the requirements as
to eligibility may not be materially modified, (iii) the cost of the Stock
Option Plan or benefits to participants may not be materially modified, (iv) the
period during which options may be granted or exercised may not be extended, (v)
the provisions of the Stock Option Plan regarding option price may not be
modified, and (vi) the class of employees eligible to receive incentive options
may not be modified.
The Board may terminate the Stock Option Plan at any time. However, no
termination or amendment will affect the rights of participants under options
previously granted without a participant's consent. Unless previously
terminated, the Stock Option Plan will terminate on June 1, 2006, and no options
shall be granted after that date.
The maximum number of Common Stock which may be issued and sold under the
Stock Option Plan, subject to adjustment, is 683,500 shares. As of the Record
Date, the Company had outstanding options to purchase an aggregate of 501,800
shares of Common Stock at per share exercise prices ranging from $3.75 to
$10.94.
401(K) PLAN
The Company currently maintains a 401(k) Retirement & Savings Plan (the
"401(k) Plan"). The 401(k) Plan is available to all full-time employees of the
Company who are at least 21 years of age and have been employed by the Company
for one year, including executive officers. In September 1994, the Company
amended and restated the 401(k) Plan to include as a part of the 401(k) Plan an
employee stock ownership plan for the benefit of all eligible employees of the
Company, including executive officers. The Company is required to provide a 50%
matching contribution of each participant's elective contributions to the plan
up to a maximum of 6% for each participant's annual compensation. Additionally,
the Company may also contribute a discretionary amount, as determined by the
Board of Directors. Contributions made by the Company to the
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<PAGE> 13
401(k) Plan were $104,000 and $97,000 for the years ended December 31, 1997 and
1996, respectively. See "Employee Stock Ownership Plan."
EMPLOYEE STOCK OWNERSHIP PLAN
On September 22, 1994, the Company amended and restated the 401(k) Plan to
include an employee stock ownership plan ("ESOP") for the benefit of all
eligible employees of the Company. The ESOP was subsequently amended on October
14, 1994, November 15, 1994 and August 10, 1995. The trustees of the ESOP are
Dennis D. Wilson and James A. Jalovec, directors of the Company (the
"Trustees"). Participants direct the Trustees as to the voting of the Company's
Common Stock allocated to their accounts. Participants are permitted to elect to
purchase the Company's Common Stock from funds invested in the 401(k) Plan.
The ESOP was funded by the sale of 75,000 shares of the Company's Common
Stock from the Principal Stockholders, which sale occurred on October 21, 1994.
The Company filed a Registration Statement on Form S-8 under the Securities Act
of 1933 to register such shares, which became effective on December 21, 1994.
The price of the shares sold to the ESOP was $8.275 per share, which was
determined by the Trustees with reference to the average trading price of the
Company's Common Stock during a period of time after the effective date of its
initial public offering. The purchase of the shares by the ESOP was initially
funded by a one-year loan in the principal amount of $620,625 (plus interest at
the prime rate) from Harris Trust and Savings Bank, Chicago, Illinois. The
remaining balance at December 31, 1996 of $244,000 has been refinanced by a
one-year loan from LaSalle National Bank, secured by 46,882 shares of the
Company's Common Stock and guaranteed by the Company, Asche Transfer, Inc. and
AG Carriers, Inc. The shares are held in escrow and are released by the lender
to participants' accounts in the ESOP as the loan is repaid. The ESOP expects to
repay the loan from future matching contributions by the Company and from
purchases of the Company's Common Stock by the participants as described below.
Participants in the ESOP are permitted to contribute a percentage of their
before-tax earnings to purchase the Company's Common Stock as well as other
investments currently permitted under the 401(k) Plan. The Company is required
to make annual matching contributions equal to 50% of the amount of salary
contributed by each employee, not to exceed 6% of each participant's annual
compensation. The matching contribution may be used by the ESOP to purchase the
Company's Common Stock for the account of the participant. The Company may also
contribute a discretionary amount, as determined by the Company's Board of
Directors. Further, any matching contributions under the 401(k) Plan may be used
to purchase the Company's Common Stock for the account of the participant. The
Company made no contributions to the ESOP in 1997, 1996 or 1995. See "401(k)
Plan."
EMPLOYEE STOCK PURCHASE PLAN
In December 1994, the Company implemented an Employee Stock Purchase Plan
("ESPP") for the benefit of all eligible employees of the Company. Participants
in the ESPP may contribute "after-tax" compensation through payroll deductions.
Prior to May 1, 1996, the Company was required to provide a 25% matching
contribution. After May 1, 1996, contributions are no longer subject to any
matching by the Company. The contributions are used to purchase the Company's
Common Stock from either the ESOP or on the open market. The Company made
contributions to the ESPP of $0 and $6,000 in 1997 and 1996, respectively. See
"Employee Stock Ownership Plan."
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company currently leases certain of its revenue equipment from related
parties. Payments to related parties on capital lease obligations in 1997, 1996
and 1995 were $817,000, $874,000 and $1,016,000, respectively.
In connection with the financing of the acquisition of the municipal solid
waste transport division of Jack Gray Transport, Inc., (the "Waste Transport
Business") the Company issued $2,125,000 of subordinated debt to Larry L. Asche,
Diane L. Asche, Kevin M. Clark, Richard S. Baugh, Gary I. Goldberg, Linda L.
Rockey
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<PAGE> 14
and Dr. Robert L. Rockey at interest rates ranging between 8.25% per annum and
14% per annum (which was equal to the interest rate that other investors who
were not affiliated with the Company or any of the officers and directors
received for like indebtedness). In addition, these same individuals were issued
warrants to purchase 362,500 shares of Common Stock at prices ranging from $3.49
to $4.20 per share, which was the fair market value of the stock on the date the
warrants were issued.
The Company does not intend to enter into any other type of transaction
with officers, directors, 5% stockholders, or affiliates, including making any
loans, unless the terms are no less favorable to the Company than those that
could be obtained from unrelated third parties and the transactions are
unanimously approved by the Company's independent directors.
STOCK OWNERSHIP OF DIRECTORS, EXECUTIVE
OFFICERS AND PRINCIPAL HOLDERS
The following table sets forth certain information regarding the beneficial
ownership of Common Stock as of March 24, 1998 by: (i) each person known by the
Company to own beneficially more than five percent of the outstanding shares of
Common Stock; (ii) each of the Company's directors; (iii) each of the Named
Executive Officers; and (iv) all directors and executive officers of the Company
as a group. (Each person named below has an address in care of the Company's
principal executive offices.) The Company believes that each person named below
has sole voting and investment power with respect to all shares of Common Stock
shown as beneficially owned by such holder, subject to community property laws
where applicable.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) CLASS
------------------------------------ ----------------------- ----------
<S> <C> <C>
Larry L. Asche................................... 538,011(2)(3) 11.5
Diane L. Asche................................... 536,442(2)(3) 11.5
Kevin M. Clark................................... 536,956(2) 11.5
Leon M. Monachos................................. 245,000(4) 5.1
Richard S. Baugh................................. 140,075(5) 3.1
Gary I. Goldberg................................. 285,000(6) 5.9
Dennis D. Wilson................................. 5,000(7) *
James A. Jalovec................................. 148,050(8) 3.2
All Directors and Executive Officers as a group
(9 persons).................................... 2,450,784(2)(4)(5)(6)(7)(8)(9) 43.6
</TABLE>
- -------------------------
* less than 1%
(1) Applicable percentage of ownership as of March 24, 1998 is based upon
4,539,735 shares of Common Stock outstanding. Beneficial ownership is
determined in accordance with the rules of the Securities and Exchange
Commission, and includes voting and investment power with respect to the
shares shown as beneficially owned. shares of Common Stock subject to
options currently exercisable or exercisable within 60 days after March 24,
1998 are deemed outstanding for computing the percentage ownership of the
person holding such options, but are not deemed outstanding for computing
the percentage ownership of any other person.
(2) Includes (i) options to purchase 26,000 shares of Common Stock currently
exercisable pursuant to his or her employment and stock option agreement and
(ii) warrants to purchase shares of Common Stock issued in connection with
the subordinated debt financing of the acquisition of the Waste Transport
Business. See "Certain Relationships and Related Transactions."
(3) Larry L. Asche and Diane L. Asche are husband and wife. Each of the Asches
disclaims beneficial interest in the Common Stock held in the name of his or
her spouse.
(4) Represents (i) options to purchase 120,000 shares of Common Stock currently
exercisable and options to purchase 20,000 shares of Common Stock
exercisable within 60 days pursuant to an employment and stock option
agreement between the Company and Mr. Monachos; (ii) options to purchase
5,000 shares
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<PAGE> 15
of Common Stock currently exercisable pursuant to the Stock Option Plan
granted to Mr. Monachos prior to his becoming Chief Financial Officer; and
(iii) options to purchase 100,000 shares of Common Stock granted in 1998
pursuant to the Stock Option Plan.
(5) Includes warrants to purchase 25,000 shares of Common Stock issued in
connection with the subordinated debt financing of the acquisition of the
Waste Transport Business. See "Certain Relationships and Related
Transactions."
(6) Represents (i) options to purchase 250,000 shares of Common Stock currently
exercisable pursuant to an employment and stock option agreement between the
Company and Mr. Goldberg; (ii) warrants to purchase 25,000 shares of Common
Stock issued in connection with the subordinated debt financing of the
acquisition of the Waste Transport Business; and (iii) options to purchase
10,000 shares of Common Stock pursuant to the Stock Option Plan. See
"Certain Relationships and Related Transactions."
(7) Represents options to purchase 5,000 shares of Common Stock pursuant to the
Stock Option Plan.
(8) Includes options to purchase 5,000 shares of Common Stock pursuant to the
Stock Option Plan and options to purchase 115,000 shares of Common Stock
issued in connection with the subordinated debt financing of the acquisition
of the Waste Transport Business. See "Certain Relationships and Related
Transactions."
(9) Includes options to purchase 16,250 shares of Common Stock currently
exercisable pursuant to the Stock Option Plan by the Chief Operating
Officer of the Company. Excludes (i) options to purchase 60,000 shares of
Common Stock not currently exercisable pursuant to an employment and stock
option agreement between the Company and Mr. Monachos; (ii) warrants held by
the underwriters of the Company's initial public offering for the purchase
of 53,125 shares of Common Stock, which are currently exercisable; (iii)
options to purchase 78,800 shares of Common Stock exercisable 18 months
after the date of grant, which were issued to the Company's nonexecutive
employees pursuant to the Stock Option Plan, as amended; (iv) Series B
warrants to purchase 965,805 shares of the Company's Common Stock issued to
the stockholders of Polar upon the merger with the Company; (v) options
to purchase 30,000 shares of the Company's Common Stock held by former
directors and advisor; (vi) options to purchase 110,000 shares of the
Company's Common Stock held by a former executive employee and a former
consultant of Polar; (vii) options to purchase 250,000 shares of Common
Stock not currently exercisable pursuant to an employment and stock option
agreement between the Company and Mr. Goldberg; (viii) warrants to purchase
108,126 shares of Common Stock issued to investors and the placement agent
in connection with the July 1997 private placement; (ix) warrants to
purchase 480,000 shares of Common Stock issued to investors (other than
Directors and Executive Officers of the Company) and the placement agent
in connection with the subordinated debt financing of the acquisition of the
Waste Transport Business; and (x) options to purchase 380,000 shares
granted to certain executive officers and managers of STS (other than
Mr. Goldberg).
ITEM NO. 2 -- AMENDMENT OF THE COMPANY'S STOCK OPTION PLAN
The Board of Directors of the Company has adopted, subject to stockholder
approval, the First Amendment to the Aasche Transportation Services, Inc. Stock
Option Plan (the "Stock Option Plan"). In the event that stockholder approval is
received, the Stock Option Plan would be amended as set forth in Appendix A.
DISCUSSION OF PROPOSAL
The main purpose for amending the Stock Option Plan is to increase the
number of shares available for grant thereunder and to amend the definition of
Key Employee to include any officer or director of the Company or its
affiliates.
Under the Stock Option Plan, a total of 683,500 shares of common stock have
currently been reserved for issuance. The Company has determined to make the
Stock Option Plan available to greater numbers of employees which will include
the officers and directors of the Company and its affiliates. The Company
further anticipates requiring flexibility in compensating its key employees in
the future and otherwise as
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<PAGE> 16
needed to attract and retain qualified employees and to sustain future growth in
the Company's operations. Accordingly, on March 24, 1998, the Board of Directors
adopted, subject to stockholder approval, an amendment to increase the aggregate
number of shares reserved for issuance under the Stock Option Plan to 908,500
and to amend the definition of Key Employee to include any officer or director
of the Company or its affiliates. As of March 24, 1998, the market value of the
225,000 additional shares proposed to be reserved for issuance under the Stock
Option Plan was $871,875. Cash payments received by the Company under the Stock
Option Plan will be used for general corporate purposes. See "Stock Option
Plan."
RECOMMENDATION AND VOTE REQUIRED
The affirmative vote of the holders of a majority of the shares of Common
Stock outstanding as of the Record Date will be required to adopt the amendment
to the Stock Option Plan. If stockholders do not approve the amendment to the
Stock Option Plan, the existing plan will continue in operation.
THE BOARD OF DIRECTORS RECOMMENDS APPROVAL OF THE AMENDMENT TO THE STOCK
OPTION PLAN AND PROXIES SOLICITED BY THE BOARD, WHICH ARE DULY EXECUTED AND
RETURNED, WILL BE VOTED IN FAVOR THEREOF UNLESS A STOCKHOLDER HAS INDICATED
OTHERWISE ON THE PROXY.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act requires the Company's
directors and executive officers, and any persons who own more than ten percent
of the Company's Common Stock, to file with the SEC initial reports of ownership
and reports of changes in ownership of Common Stock. Such persons are required
by SEC regulations to furnish the Company with copies of all Section 16(a) forms
they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the year ended December 31, 1997, all such Section
16(a) filing requirements were complied with except that Daniel Wright, Chief
Operating Officer, did not report until his year-end report on Form 5 that he
was granted options to purchase 20,000 shares of common stock on November 4,
1997, pursuant to his employment agreement with the Company.
STOCKHOLDER PROPOSALS FOR THE 1999 PROXY STATEMENT
Any stockholder satisfying the SEC requirements and wishing to submit a
proposal to be included in the Proxy Statement for the 1999 Annual Meeting of
Stockholders should submit the proposal in writing to Secretary, Aasche
Transportation Services, Inc., 10214 N. Mt. Vernon Rd., Shannon, Illinois 61078.
The Company must receive a proposal by January 2, 1999 in order to consider it
for inclusion in the Proxy Statement for the 1999 Annual Meeting of
Stockholders.
OTHER INFORMATION
The 1997 Annual Report to Stockholders of the Company which includes a copy
of the Company's Annual Report on Form 10-K for fiscal year 1997 is being mailed
to all stockholders of record and accompanies this Proxy Statement. Additional
copies of the Annual Report on Form 10-K as filed with the SEC (excluding
exhibits) will be furnished, without charge, by writing to Leon Monachos, Aasche
Transportation Services, Inc., 10214 N. Mt. Vernon Road, Shannon, Illinois
61078.
INDEPENDENT PUBLIC ACCOUNTANTS
Ernst & Young LLP, the Company's independent public accountants, has
examined the Company's financial statements for the fiscal year ended December
31, 1997. The Company expects representatives of
13
<PAGE> 17
Ernst & Young LLP to be available at the Annual Meeting to respond to
appropriate questions from stockholders.
OTHER MATTERS TO COME BEFORE MEETING
If any matter not described herein should properly come before the meeting,
the persons named in the proxy card will vote the shares in accordance with
their best judgment. At the same time this Proxy Statement went to press, the
Company knew of no other matters which might be presented for stockholder action
at the Annual Meeting.
The above Notice of Annual Meeting and Proxy Statement are sent by order of
the Company's Board of Directors.
DIANE L. ASCHE
DIANE L. ASCHE
Secretary
Shannon, Illinois
April 10, 1998
14
<PAGE> 18
APPENDIX A
TEXT OF AMENDMENT TO THE STOCK OPTION PLAN
FIRST AMENDMENT TO THE
AASCHE TRANSPORTATION SERVICES, INC.
STOCK OPTION PLAN
The Aasche Transportation Services, Inc. Stock Option Plan (the "Plan") is
hereby amended, effective March 24, 1998, as follows:
1. The aggregate number of Shares as to which Options may be granted
pursuant to Article II of the Plan shall be increased from 683,500 to 908,500.
2. The definition of Key Employee as set forth under Article I of the Plan
shall be amended to read as follows:
KEY EMPLOYEE means an employee of the Company or an Affiliate (including,
without limitation, an employee who also is serving as an officer or
director of the Company or of an Affiliate), designated by the Board or the
Committee as being eligible to be granted one or more Options under the
Plan.
IN WITNESS WHEREOF, Aasche Transportation Services, Inc. has caused this
Amendment to be executed by its officer hereto duly authorized this 24th day of
March, 1998.
AASCHE TRANSPORTATION SERVICES, INC.
By: /s/ Larry L. Asche
-----------------------------------------
Its: Chairman and Chief Executive Officer
-----------------------------------------
15
<PAGE> 19
- --------------------------------------------------------------------------------
AASCHE TRANSPORTATION SERVICES, INC.
10214 N. MT. VERNON ROAD, SHANNON, ILLINOIS 61076
PROXY
The undersigned hereby appoints Larry L. Asche and Leon M. Monachos and
each of them, with power of substitution, to represent and to vote on
behalf of the undersigned all of the shares of Aasche Transportation
Services, Inc. which the undersigned is entitled to vote at the Annual
Meeting of Stockholders to be held at the Best Western Clock Tower
Resort and Conference Center, 7801 East State Street, Rockford,
Illinois 61108 on Wednesday, May 13, 1998 at 10:00 a.m. (Central
Standard Time), and at any adjournment or adjournments thereof, hereby
revoking all proxies heretofore given with respect to such stock, upon
all subjects that may properly come before the meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2
1. ELECTION OF DIRECTORS
<TABLE>
<S> <C>
[ ] FOR the nominees listed below except as marked to [ ] WITHHOLD AUTHORITY to vote for the nominees
the contrary below listed below
</TABLE>
LARRY L. ASCHE, LEON M. MONACHOS, GARY I. GOLDBERG AND DENNIS D.
WILSON
----------------------------------------------------------------------
2. To approve amendments to the Stock Option Plan which include a proposed
increase of 225,000 in the number of shares subject to the Plan and a
change to allow participation in the Plan by any officer or director
of Aasche Transportation Services, Inc.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the proxies are authorized to vote upon such other
matters as may properly come before the meeting.
This Proxy is continued on the reverse side. Please sign on the
reverse side and return promptly.
- --------------------------------------------------------------------------------
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2.
Receipt is hereby acknowledged of the Notice of the Meeting and Proxy
Statement, as well as a copy of the 1997 Annual Report to
Stockholders.
Please sign exactly as your name
appears on your stock certificates.
When shares are held by joint
tenants, both should sign. When
signing as attorney, executor,
administrator, trustee, or
guardian, please give full title
as such. If a corporation,
please sign in full corporate
name by President or other
authorized officer. If a
partnership, please sign in
partnership name by authorized
person.
Signature
--------------------------------
--------------------------------
Signature if held jointly
Dated:
--------------------------------
(Please return in the enclosed
postage-paid envelope. I will [ ]
will not [ ] attend the meeting.)
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS.
