<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
AMPACE CORPORATION
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
AMPACE CORPORATION
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[ ] 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:
- --------------------------------------------------------------------------------
<PAGE> 2
[AMPACE CORPORATION LETTERHEAD]
April 7, 1997
To Our Stockholders:
You are cordially invited to attend the 1997 Annual Meeting of
Stockholders of Ampace Corporation (the "Company") to be held at the SunTrust
Bank Financial Center, Main Floor Conference Room, 9950 Kingston Pike,
Knoxville, Tennessee on Thursday, May 15, 1997, at 9:00 a.m. Eastern Standard
Time. I hope you will be able to attend this Meeting.
We will review the Company's results of operations for fiscal 1996 and
report on other matters of interest. There will be an opportunity following
the formal Meeting for informal questions and discussions.
On behalf of the Board of Directors and management of Ampace Corporation,
we thank you for your continued support and confidence in the Company.
Sincerely,
/s/ Jay N. Taylor
Jay N. Taylor
President and CEO
<PAGE> 3
AMPACE CORPORATION
130 MABRY HOOD ROAD
KNOXVILLE, TENNESSEE 37922
_______________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 15, 1997
_______________
TO: THE STOCKHOLDERS OF
AMPACE CORPORATION
You are hereby notified that the Annual Meeting of Stockholders of Ampace
Corporation will be held at SunTrust Bank Financial Center, Main Floor
Conference Room, 9950 Kingston Pike, Knoxville, Tennessee, on May 15, 1997 at
9:00 a.m., Eastern Standard Time, for the purpose of reviewing the Company's
1996 financial results. The Company will not consider any business at this
year's Annual Meeting of Stockholders requiring a stockholder's vote.
Therefore, the Company is not soliciting stockholder proxies and the purpose of
this year's Proxy Statement is strictly to provide general information about
the Company, its Board of Directors and executive officers.
The Board of Directors has fixed the close of business on March 24, 1997,
as the record date for determining the stockholders entitled to notice of the
Annual Meeting. The transfer books will not be closed. A list of such
stockholders will be maintained at the Company's offices, 130 Mabry Hood Road,
Suite 220, Knoxville, Tennessee, during the ten-day period prior to the date of
the meeting and will be available for inspection during ordinary business hours
by stockholders of the Company.
All stockholders are cordially invited to attend the meeting.
The annual report of the Company for the year ended December 31, 1996 is
being mailed to all stockholders of record and accompanies this Proxy
Statement.
By order of the Board of Directors
/s/ Bruce W. Jones
Bruce W. Jones, Secretary
Knoxville, Tennessee
April 7, 1997
<PAGE> 4
AMPACE CORPORATION
130 MABRY HOOD ROAD, SUITE 220
KNOXVILLE, TENNESSEE 37922
(423) 691-5799
_______________
PROXY STATEMENT
April 7, 1997
_______________
1997 ANNUAL MEETING OF STOCKHOLDERS
_______________
GENERAL INFORMATION
This Proxy Statement is provided as general information by Ampace
Corporation, a Delaware corporation (the "Company"), to the stockholders of the
Company in connection with notice of the Company's Annual Meeting of
Stockholders (the "Annual Meeting") to be held at SunTrust Bank Financial
Center, Main Floor Conference Room, 9950 Kingston Pike Knoxville, Tennessee at
9:00 a.m., Eastern Standard Time, on Thursday, May 15, 1997. As there will not
be any business conducted at the Annual Meeting requiring a vote of the
stockholders, the Company's Board of Directors is not soliciting proxies. A
copy of the notice of meeting and annual report accompany this Proxy Statement.
It is anticipated that the mailing of this proxy statement will commence on or
about April 7, 1997.
The expense of preparing, printing and mailing this Proxy Statement will
be borne by the Company. The Company will also request brokerage firms,
nominees, custodians and fiduciaries to forward the Proxy Statement to the
beneficial owners of shares of Common Stock as of the record date and will
provide reimbursement for the cost of forwarding the Proxy Statement in
accordance with customary practice.
As of March 24, 1997, the Company had outstanding 3,075,000 shares of its
common stock, par value $.0001 per share (the "Common Stock"), and there were
no outstanding shares of any other class of stock. Only stockholders of record
at the close of business on March 24, 1997, will be entitled to notice of the
Annual Meeting.
<PAGE> 5
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth, as of March 24, 1997, the number and
percentage of shares of Ampace Common Stock beneficially owned by any person
who is the beneficial owner of more than five percent of the total outstanding
Ampace Common Stock, by each director of Ampace, by each named executive
officer of Ampace and by all directors and executive officers of Ampace as a
group. Information as to beneficial ownership is based upon statements
furnished to Ampace by such persons. Each person has sole voting and
investment power with respect to the shares shown, except as noted.
<TABLE>
<CAPTION>
Name and Address Amount and Nature of
of Beneficial Owner Beneficial Ownership Percent of Class
- ----------------------------------- ------------------------- ----------------
<S> <C> <C>
Bruce W. Jones
130 Mabry Hood Road, Suite 220
Knoxville, Tennessee 37922......... 354,350(1) 11.3
Jay N. Taylor
130 Mabry Hood Road, Suite 220
Knoxville, Tennessee 37922......... 354,350(1) 11.3
David C. Freeman
130 Mabry Hood Road, Suite 220
Knoxville, Tennessee 37922......... 354,350(1) 11.3
Douglas M. Harper
806 Moss Creek Plantation
Duluth, Georgia 30155.............. 5,000(2) *
David A. Lyman
10891 Coronel Road
Santa Ana, California 92705........ 6,430(2) *
All Directors and Executive
Officers
as a group (5 persons)............. 1,074,480(1)(2)(3) 32.8
</TABLE>
* Less than one percent
(1) Includes options to purchase 64,350 shares of Ampace Common Stock
currently exercisable pursuant to his employment and stock option
agreement, which grants an option to purchase up to 107,250 shares of
Ampace Common Stock, as adjusted for a 43% stock dividend in 1995.
(2) Includes options to purchase 5,000 shares of Ampace Common Stock pursuant
to the Non-Employee Directors and Advisors Plan.
(3) Excludes (i) the 42,900 shares of Ampace Common Stock underlying options,
as adjusted for a 43% stock dividend in 1995, that are not currently
exercisable pursuant to the employment and stock option agreements between
Ampace and each of Messrs. Taylor, Jones and Freeman; and (ii) warrants
held by the underwriters of Ampace's initial public offering for the
purchase of 120,000 shares of Ampace Common Stock exercisable after
February 16, 1996.
2
<PAGE> 6
BOARD OF DIRECTORS
The By-laws of the Company provide that the number of directors of the
Company shall be not less than 5 nor more than 10 and will be determined from
time to time by resolution of the Board of Directors. The number of directors
is currently set at 5. The By-laws of the Company provide for a classified
Board of Directors presently consisting of 2 classes elected to hold office for
terms of 3 years or until their successors are elected and qualified. Listed
below are the directors of the Company and when their terms expire.
<TABLE>
<CAPTION>
Positions with Company, Business, Age and Other
Name Age Positions
- ---- --- ---------
<S> <C> <C>
A. TERMS EXPIRING IN 1998:
Jay N. Taylor 48 Mr. Taylor has served as President
and Chief Executive Officer of the
Company since August 1995. Prior
to that he was the Company's Chief
Operating Officer from November
1994. From 1988 to 1989, Mr.
Taylor served as Senior Vice
President of Country Wide
Transport, a publicly-traded
truckload carrier. From 1987 to
1988 he was Senior Vice President,
Operations and Marketing of
Tri-State Motor Transit, a
publicly-traded specialized
carrier. Prior to that time, he
served as a member of the executive
management team at Schneider
National, Inc., where he led
business development and planning
for eight years, Mr. Taylor started
his career with Union Pacific
Railroad as a financial analyst.
From 1990 to 1995 he was a
Principal in the Beta Group, Inc.,
an analytical and crisis management
company specializing in the
transportation services industry.
Bruce W. Jones 49 Mr. Jones has served as Chairman of
the Board of Directors and Chief
Financial Officer of the Company
since August 1995. Prior to that
he was Chief Executive Officer from
November 1994. From 1986 to 1991
he was Executive Vice President and
Chief Financial Officer of J. B.
Hunt Transport, Inc., the largest
publicly-traded truckload carrier.
From 1976 to 1985, he was Corporate
Controller of Schneider National,
Inc., the largest privately held
truckload carrier. Mr. Jones is a
Certified Public Accountant. From
1991 to 1993, he was the President
and Chief Operating Officer of
Family Vision Center, Inc., a
privately-held optical retail and
manufacturing company with 170
retail locations in Wal-Mart, Sam's
Club and Sears.
</TABLE>
3
<PAGE> 7
David C. Freeman 50 Mr. Freeman has served as
Executive Vice President and Chief
Operating Officer since August
1995. Prior to that, he was
Executive Vice President,
Operations and has served as a
director since November, 1994.
From 1983 to 1989, Mr. Freeman was
Group Vice President of Leaseway
Transportation ("Leaseway") and led
the start-up of a non-union, less
than truckload operation for
Leaseway. From 1971 to 1982, he
was President of Midwestern
Distribution, Inc. a large
publicly-traded trucking company,
which was acquired by Leaseway in
1982. From 1990 to 1995, he was a
Principal in the Beta Group, Inc.
B. TERMS EXPIRING IN 1999:
David A. Lyman 49 Mr. Lyman has served as a Director
of the Company since September
1995. Since late 1996, Mr. Lyman
has been the Chief Operating
Officer of Peabody's Coffee, Inc.
Prior to that, he served as a
director of The Synectics Group, a
financial and management consulting
organization providing strategic
funding solutions to growth
companies. From August 1992 to
August 1993, Mr. Lyman was Vice
President of Operations of Family
Vision Center. From May 1991 to
August 1992, he was a principal of
the Beta Group. From March 1989 to
May 1991, Mr. Lyman served as Vice
President of Human Resources and
Administration of Capitol-EMI
Music, Inc., a music company with
record labels, a manufacturing
plant and a sales and distribution
organization. From September 1985
to September 1989, he was President
of Organizational Perspectives
Inc., a consulting practice
focusing on organizational
performance in turnaround and
growth firms. Prior to that, Mr.
Lyman served as Vice President of
Human Resources at Godfathers Pizza
and prior to that, he served in
various positions at PepsiCo Inc.
4
<PAGE> 8
Douglas M. Harper 49 Mr. Harper has been the Regional
Manager for the Packaging Division
of Georgia-Pacific Corporation
since 1992 and is responsible for
the manufacturing, distribution,
sales and administrative operations
of all corrugated container
facilities in the Eastern Region.
Mr. Harper has held a variety of
positions within Georgia-Pacific
Corporation since 1984. Prior to
that, Mr. Harper has also served as
Vice President, Sales for The Grow
Group as well as having held a
number of positions for the former
Peterson/Puritan, Inc. He has a BA
from the University of Illinois and
a MS from Eastern Illinois
University.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
In February 1995 the Board of Directors established the following standing
committees of the Board of Directors, whose present members are as identified
below:
The Audit Committee consists of Messrs. Jones, Harper and Lyman and is
responsible for monitoring the financial policies and control procedures of the
Company and generally reviewing the scope and results of the audit engagement
of the Company's independent auditors. During the fiscal year ended December
31, 1996, this committee met two times.
The Compensation Committee of the Board of Directors consists of Messrs.
Taylor, Harper and Lyman. This committee of the Board has the general
responsibility for establishing compensation programs for the executive
officers of the Company. All executive officers who serve on the Board abstain
from voting on compensation affecting those executive officers who are Board
members. During the fiscal year ended December 31, 1996, this committee met
three times.
During the fiscal year ended December 31, 1996, the Board of Directors met
five times. In addition, one meeting has been held thus far in 1997. No
member of the Board of Directors attended fewer than 75% of the total number of
meetings held by the Board of Directors and the committees on which he served.
SUMMARY COMPENSATION TABLE
The following table sets forth all compensation paid and payable by the
Company for services rendered during the last three fiscal years ended December
31, 1996 and 1995 to its Chief Executive Officer and the Chief Financial
Officer, respectively (the "Named Executive Officers"). No other executive
officers of the Company received more than $100,000 in total compensation
during the last fiscal year.
5
<PAGE> 9
SUMMARY COMPENSATION TABLE AND LONG-TERM COMPENSATION AWARDS
Annual Compensation Long-term Compensation
<TABLE>
Restricted
Stock Options/ LTIP
Name and Principal Salary Other Annual Award(s) SARs Payouts All Other
Position Year ($)(1) Bonus ($) Compensation ($) ($) (#)(1) ($) Compensation ($)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Jay N. Taylor, 1996 50,000 -
President & CEO 1995 45,455 - - - 107,250 -
- -----------------------------------------------------------------------------------------------------------------
Bruce W. Jones, 1996 100,000 -
Chairman & CFO 1995 45,455 116,000 - - 107,250 -
=================================================================================================================
</TABLE>
(1) See "Employment and Stock Option Agreements."
STOCK OPTIONS
No options to purchase shares of Common Stock were granted to the Named
Executive Officers during 1996.
AGGREGATED OPTION/SAR EXERCISED IN 1996 AND YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Shares Value Options/SARs at FY-End in-the-Money Options/SARs
Acquired on Realized (#) Exercisable/ ($) Exercisable/
Name Exercise (#) ($) Unexercisable Unexercisable
<S> <C> <C> <C> <C>
Jay N. Taylor - - 64,350/42,900 0/0
- -------------------------------------------------------------------------------------------
Bruce W. Jones - - 64,350/42,900 0/0
===========================================================================================
</TABLE>
EMPLOYMENT AND STOCK OPTION AGREEMENTS
On February 16, 1995, the Company entered into a five-year Employment and
Stock Option Agreement with Jay N. Taylor and Bruce W. Jones. For the period
ended December 31, 1996, Messrs. Taylor and Jones received $50,000 and
$100,000, respectively. Commencing January 1, 1997 and in each year
thereafter, the amount of compensation will be subject to such amount as
determined by the Compensation Committee. In addition, each executive is
entitled to participate in certain benefits including health insurance
coverage, and other benefits customarily provided to executive employees.
As part of their employment agreements, Messrs. Taylor and Jones have each
been granted an option to purchase 75,000 shares of the Company's Common Stock.
The outstanding options and option exercise prices were subsequently adjusted
on a pro rata basis for the effects of a 43% stock dividend in 1995. The
options are exercisable in equal annual installments of 21,450 shares beginning
February 16, 1995 at an initial price of 125% of the initial offering price, as
adjusted for the stock dividend, for the first installment. Future installment
prices increase $.50 per share at each installment exercise date. The options
expire seven years after the options are granted.
6
<PAGE> 10
The employment agreements further provide that the executives will be
entitled to a severance payment equal to the greater of one (1) year's salary
or $100,000 in the event such executive is terminated for any reason other than
"cause." For purposes of the employment agreements, "cause" is defined as (i)
the commission of a felony or a crime involving moral turpitude or the
commission of any other act involving dishonesty, disloyalty or fraud with
respect to the Company or any of its subsidiaries, (ii) conduct tending to
bring the Company or any of its subsidiaries into substantial public disgrace
or disrepute, (iii) willful disregard of significant management
responsibilities directed by the Board, (iv) gross negligence or willful
misconduct with respect to the Company or any of its subsidiaries or (v) any
other material breach of this Agreement that is not cured within 15 days after
written notice thereof to the Executive.
The employment agreements further provide that upon the termination of an
executive's employment with the Company, that such executive will not engage in
a business that is in competition with the Company for a period of twelve (12)
months following termination.
KEY EMPLOYEE INCENTIVE STOCK OPTION PLAN
The Company has adopted an incentive stock option plan for certain key
employees of the Company except Messrs. Jones, Taylor and David C. Freeman (the
"Key Employee Incentive Stock Option Plan"). The Key Employee Incentive Stock
Option Plan will be construed, interpreted and administered by the Compensation
Committee. The Compensation Committee has the discretion to determine the
individuals to whom options are granted, the number of shares subject to the
options, the exercise price of the options, the period over which the options
become exercisable, the term of the options and certain other provisions
relating to the options.
Under the Key Employee Incentive Stock Option Plan, the Compensation
Committee is authorized to grant options to purchase up to 150,000 shares of
the Company's Common Stock to key employees except Messrs. Jones, Taylor and
Freeman. Shares of Common Stock underlying options that expire unexercised
will be available for future option grants under the Key Employee Incentive
Stock Option Plan.
The number of shares available for grant of options under the Key Employee
Incentive Stock Option Plan and the number of shares included in each
outstanding option are subject to adjustment upon recapitalizations, stock
splits or other similar events that cause changes in the Company's Common
Stock. The Company must retain sufficient authorized but unissued shares of
Common Stock to assure itself of its ability to perform its obligations under
the Key Employee Incentive Stock Option Plan.
The Key Employee Incentive Stock Option Plan provides for the grant of
incentive stock options within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"). The exercise price of each
option under the Key Employee Incentive Stock Option Plan must be at least
equal to the fair market value of the Common Stock on the date the incentive
stock option is granted. No income is recognized for federal income tax
purposes when an option under the Key Employee Incentive Stock Option Plan is
exercised and no deduction is available to the Company.
The maximum term of options granted under the Key Employee Incentive Stock
Option Plan generally will be ten years. Subject to that limitation, the
Compensation Committee has discretion to decide the period over which options
may be vested and exercised. In addition, the Compensation Committee may
specify that an option will terminate prior to the end of its stated terms upon
termination of employment (which includes for this purpose termination of a
consulting relationship in the case of a consultant), disability or death.
Options which contain vesting schedules ordinarily will become fully
exercisable in the event of disability or death.
7
<PAGE> 11
Options are not transferable, except by will or pursuant to the laws of
descent and distribution, and are exercisable only by the option holder during
his lifetime or, in the event of disability or death, by the option holder's
guardian or legal representative and only within thirty (30) days of
termination of employment.
The vesting of options will be accelerated upon a "Change in Control" of
the Company. A Change in Control is deemed to have occurred if (a) a person
(as such term is used in Section 13(d) of the Exchange Act) becomes the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, in one or more transactions, of shares of Common Stock of the
Company representing 50 percent or more of the total number of votes that may
be cast by all stockholders of the Company voting as a single class, without
the approval or consent of the Company's Board of Directors, (b) there is a
consolidation or merger of the Company in which the Company is not the
surviving corporation, or (c) a plan or proposal for the liquidation or
dissolution of the Company is adopted.
As of December 31, 1996, options to purchase 10,000 shares of Common Stock
were outstanding under the Key Employee Incentive Stock Option Plan.
NON-EMPLOYEE DIRECTORS AND ADVISORS PLAN
The Company has adopted a stock option plan for the benefit of directors
and advisors to the Board of Directors who are not salaried employees of the
Company or full-time consultants to the Company (the "Non-Employee Directors
and Advisors Plan") pursuant to which 60,000 shares of Common Stock have been
reserved for issuance upon exercise of such options. The purpose of the
Non-Employee Directors and Advisors Plan is to advance the interests of the
Company by affording eligible directors and advisors of the Company the
opportunity to acquire equity interests or increase their equity interests in
the Company. Each eligible director and advisor in office at the effective
date of the initial public offering of the Company and at adjournment of each
annual meeting held after the effective date of the initial public offering
will automatically be granted an option to purchase 5,000 shares of the
Company's Common Stock at an exercise price per share not less than 125% of the
closing price of the Common Stock on the date of grant. An option may be
exercised at any time within ten years from the date of grant. The number of
shares which may be purchased upon exercise of an option is subject to
adjustment in certain circumstances.
Generally, for federal income tax purposes, options granted under the
Non-Employee Directors and Advisors Plan will not result in any taxable income
to the optionee at the time of grant. The optionee will generally realize
ordinary income, however, at the time of exercise of the option, in an amount
measured by the excess of the fair market value of the optioned shares at the
time of exercise over the option price, regardless of whether the option price
is paid in cash or shares. Options granted under the Non-Employee Directors
and Advisors Plan are not transferable other than by will or the laws of
descent and distribution, and in the event of disability or death, an option
may be exercised by the optionee's guardian or legal representative and only
within thirty (30) days after the optionee is no longer a director or advisor
to the Board of Directors.
As of December 31, 1996, options to purchase 10,000 shares were
outstanding under the Non-Employee Directors and Advisors Plan.
401(K) PLAN
Effective January 1, 1997 the MDX 401(k) program was terminated. This was
the only Company 401(k) plan in effect.
8
<PAGE> 12
DIRECTORS' COMPENSATION
Directors are reimbursed for reasonable travel expenses incurred in
connection with attending meetings. All Directors are eligible to receive a fee
of $1,000 per meeting for serving as a director and for serving on committees
of the Board of Directors. Non-employee directors are also eligible to receive
options to acquire shares of Common Stock as described above under the
Non-Employee Directors and Advisors Plan.
COMPLIANCE WITH SECTION 16(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and persons who own more than 10% of a registered class of
the Company's equity security, to file with the Securities and Exchange
Commission ("SEC") and Nasdaq reports of ownership and changes in ownership of
common stock and other equity securities of the Company. Officers, directors
and greater than 10% stockholders are required by SEC regulation to furnish the
Company with copies of all Section 16(a) forms they file.
Based solely on a review of the copies of such reports furnished to the
Company or written representations that no other reports were required, the
Company believes that, during the 1996 fiscal year, all filing requirements
applicable to its officers, directors and greater than 10% beneficial owners
were completed with the exception of one late report filed. David A. Lyman,
Director, did not report until his year-end report on Form 5 that he owned
1,430 shares of Common Stock on August 25, 1995, the date on which the
reporting person became a director.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Transactions with affiliates of the Company are subject to approval by a
majority of the Board of Directors, including a majority of the disinterested
members of the Board of Directors, and will be made on terms no less favorable
to the Company than could be obtained from unaffiliated third parties.
STOCKHOLDER PROPOSALS FOR 1997 ANNUAL MEETING
Stockholder proposals for the 1998 Annual Meeting of Stockholders of the
Company must be received no later than January 2, 1998 at the Company's
principal executive offices, 130 Mabry Hood Road, Suite 220, Knoxville,
Tennessee, directed to the attention of the Secretary, in order to be
considered for inclusion in next year's annual meeting proxy material.
INDEPENDENT PUBLIC ACCOUNTANTS
KPMG Peat Marwick LLP, the Company's independent public accountants, has
examined the Company's financial statements for the fiscal year ended December
31, 1996. The Company expects representatives of KPMG Peat Marwick LLP to be
available during the Annual Meeting to respond to appropriate questions from
stockholders.
OTHER MATTERS
The Board of Directors knows of no other matters to be brought before the
Annual Meeting. Since proxies are not being solicited for the meeting, no
action will be conducted at the Annual Meeting requiring the vote of the
Stockholders.
9
<PAGE> 13
EXPENSES OF SOLICITATION
All expenses incident to the distribution of the Proxy Statement by the
Company will be paid by the Company. The Company will reimburse brokerage
houses and other custodians, nominees and fiduciaries for reasonable
out-of-pocket expenses incurred in forwarding copies of the Proxy Statement to
beneficial owners of Common Stock held of record by such persons.
By order of the Board of Directors
/s/ Bruce W. Jones
__________________________________
Bruce W. Jones, Secretary
Knoxville, Tennessee
April 7, 1997
10
