<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:
<TABLE>
<S> <C>
[ ] 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
</TABLE>
KRUG INTERNATIONAL CORP.
--------------------------------------------------------------------------------
(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:
<PAGE> 2
KRUG INTERNATIONAL CORP.
900 CIRCLE 75 PARKWAY, SUITE 1300
ATLANTA, GEORGIA 30339
November 3, 2000
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders
which will be held at 3:00 p.m., on Friday, December 1, 2000, at the Sheraton
Suites Galleria, 2844 Cobb Parkway S.W., Atlanta, Georgia 30339.
The accompanying Notice of the Annual Meeting and Proxy Statement
contain detailed information concerning the matters to be considered and acted
upon at the Meeting. The Corporation's 2000 Annual Report to Shareholders is
also enclosed.
We hope you will be able to attend the Meeting.
Whether or not you plan to attend the Annual Meeting, please execute
and return the enclosed proxy card at your earliest convenience. That way you
will be sure to be represented at the Meeting. If you later find you can attend
the Meeting, you may then withdraw your proxy and vote in person. If you have
questions or need assistance regarding your shares, please call our proxy
solicitor, Georgeson Shareholder Communications, Inc., at (800) 223-2064.
Sincerely,
/s/ ROBERT M. THORNTON, JR.
ROBERT M. THORNTON, JR.
Chairman
<PAGE> 3
KRUG INTERNATIONAL CORP.
900 CIRCLE 75 PARKWAY, SUITE 1300
ATLANTA, GEORGIA 30339
------------
NOTICE OF 2000 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 1, 2000
------------
To the Shareholders of KRUG INTERNATIONAL CORP.:
The Annual Meeting of Shareholders of KRUG INTERNATIONAL CORP. will be
held at 3:00 p.m., Eastern Standard Time, on Friday, December 1, 2000, at the
Sheraton Suites Galleria, 2844 Cobb Parkway S.W., Atlanta, Georgia 30339, for
the purpose of considering and voting upon:
Election of directors:
- three directors for election to terms of office expiring at
the 2001 Annual Meeting,
and
- four directors for election to terms of office expiring at the
2002 Annual Meeting.
Such other business as may properly come before the meeting or any
adjournment thereof.
Whether or not you expect to be present, please mark, sign, date and
return the enclosed proxy promptly in the envelope provided. Giving the proxy
will not affect your right to vote in person if you attend the meeting.
By order of the Board of Directors
/s/ JAMES J. MULLIGAN
JAMES J. MULLIGAN
Secretary
November 3, 2000
<PAGE> 4
KRUG INTERNATIONAL CORP.
900 CIRCLE 75 PARKWAY, SUITE 1300
ATLANTA, GEORGIA 30339
------------
PROXY STATEMENT
FOR 2000 ANNUAL MEETING OF SHAREHOLDERS
------------
This proxy statement is furnished in connection with the solicitation
by the Board of Directors of KRUG INTERNATIONAL CORP., an Ohio corporation (the
"Corporation"), of proxies to be used at the Annual Meeting of Shareholders to
be held on Friday, December 1, 2000 and any adjournment thereof. The close of
business on October 26, 2000 has been fixed as the record date for the
determination of the holders of Common Shares entitled to vote at the meeting
and each such shareholder is entitled to one vote per share. There were
4,976,340 Common Shares outstanding at the close of business on October 26,
2000.
All shares represented by properly executed proxies received by the
Board of Directors pursuant to this solicitation will be voted in accordance
with the shareholder's directions specified on the proxy. If no directions have
been specified by marking the appropriate places on the accompanying proxy card,
the shares will be voted in accordance with the Board's recommendations which
are FOR the election of James J. Mulligan, Ronald J. Vannuki and Dr. Steven
Baileys, as directors of the Corporation for a one-year term and FOR the
election of Karen B. Brenner, C. Michael Ford, Robert M. Thornton, Jr. and
Howard E. Turner, as directors of the Corporation for a two-year term. A
shareholder signing and returning the accompanying proxy has power to revoke it
at any time prior to its exercise by delivering to the Corporation a later dated
proxy or by giving notice to the Corporation in writing or in open meeting but
without affecting any vote previously taken.
The presence, in person or by properly executed proxy, of the holders
of a majority of the Corporation's outstanding shares is necessary to constitute
a quorum at the Annual Meeting. Shares represented by proxies received by the
Corporation will be counted as present at the Annual Meeting for the purpose of
determining the existence of a quorum, regardless of how or whether such shares
are voted on a specific proposal. Abstentions will be treated as votes cast on a
particular matter as well as shares present at the Annual Meeting. Where nominee
shareholders do not vote on specific issues because they did not receive
specific instructions on such issues from the beneficial owners of such shares
("Broker Nonvotes"), such Broker Nonvotes will not be treated as either votes
cast or shares present.
This proxy statement and the accompanying proxy card were first mailed
to shareholders on or about November 3, 2000.
<PAGE> 5
ELECTION OF DIRECTORS
The Corporation's Board of Directors is presently comprised of seven
persons and is divided into two classes, with one class having three members and
the other class four members. One class of directors is normally elected at each
Annual Meeting of Shareholders for a term of two years. However, at this year's
Annual Meeting, both classes of directors will be elected because, as explained
below, the 1999 Annual Meeting was not held.
In early November 1999, a shareholder filed a lawsuit seeking to enjoin
the Corporation from soliciting or using proxies for the 1999 Annual Meeting on
the grounds that the Corporation's proxy statement and proxy violated the
Federal securities laws because they did not contain information about the
shareholder's proposed slate of directors. The Corporation responded that it was
not obligated to disclose information about the opposition slate because, among
other things, the shareholder had failed to comply with the Corporation's Code
of Regulations which sets forth the procedure to be followed by a shareholder
who wishes to nominate candidates for election as directors of the Corporation.
In late November, 1999, the U.S. District Court for the Central District of
California issued a preliminary injunction which forbade the Corporation from
holding the 1999 Annual Meeting until it had amended its proxy statement and
proxy to include the shareholder's slate of nominees. The Corporation appealed
and in late August 2000 the Ninth Circuit Court of Appeals reversed the lower
Court, vacated the injunction and remanded the case to the lower Court for
further proceedings holding that the shareholder had not complied with the
procedure to be followed in nominating candidates for election as directors.
Accordingly, there is no longer any legal impediment to the Corporation
holding the 1999 Annual Meeting of Shareholders. However, the Corporation does
not believe it is appropriate to hold the 1999 Meeting at this time to elect
three directors for terms ending at the 2001 Annual Meeting and shortly
thereafter hold the 2000 Annual Meeting to elect four directors for terms ending
at the 2002 Annual Meeting. Therefore, the Corporation has decided to hold one
meeting (the 2000 Annual Meeting) for the election of seven directors, three for
terms ending at the 2001 Annual Meeting and four for terms ending at the 2002
Annual Meeting.
The Board of Directors has nominated Mr. Mulligan and Mr. Vannuki, who
are presently directors of the Corporation, and Dr. Baileys, who is not
presently a director, for election to terms of office expiring at the 2001
Annual Meeting and Mr. Thornton, Ms. Brenner, Mr. Turner and Mr. Ford, who are
presently directors of the Corporation, for election to terms of office expiring
at the 2002 Annual Meeting.
It is the intention of the proxy agents named in the proxy, unless
otherwise directed, to vote such proxy for the election of the above-mentioned
nominees. Should any of them be unable to accept the office of director, an
eventuality which is not anticipated, proxies may be voted with discretionary
authority for a substitute nominee or nominees designated by the Board of
Directors. The three nominees and four nominees, respectively, receiving the
highest number of votes cast will be elected directors.
2
<PAGE> 6
The following table sets forth certain information about the nominees
for election.
<TABLE>
<CAPTION>
NAME AND OFFICES COMMON SHARES
PRESENTLY HELD WITH CORPORATION BENEFICIALLY OWNED AS OF 10/26/00(1)
------------------------------- -----------------------------------------------
DIRECTOR
NOMINEES FOR TERM OF OFFICE EXPIRING IN 2001: SINCE NUMBER % OF CLASS
-------------------------------------------- -------- ------ ----------
<S> <C> <C> <C>
James J. Mulligan 1966 32,085 (2) (8)
Director and Secretary
Ronald J. Vannuki 1998 190,875 (3) 3.7
Director
Dr. Steven Baileys N/A 715,198 (4) 14.1
Nominee
NOMINEES FOR TERM OF OFFICE EXPIRING IN 2002:
--------------------------------------------
Robert M. Thornton, Jr. 1996 220,024 (5) 4.4
Director, Chairman, President,
Chief Executive Officer and
Chief Financial Officer
Karen B. Brenner 1996 827,348 (6) 16.3
Director
C. Michael Ford 1999 (8)
Director 3,000
Howard E. Turner 1999 119,537 (7) 2.4
Director
</TABLE>
----------------
(1) These columns show the number of Common Shares beneficially owned as of
October 26, 2000, as confirmed by each beneficial owner, and the
percentage of class represented thereby, and includes, where
applicable, shares owned by members of the individual's household.
Unless otherwise indicated, each individual has voting power and
investment power which are exercisable solely by such individual or are
shared by such individual with members of his or her household.
(2) Includes 5,380 shares that may be acquired upon exercise of warrants.
(3) These shares (which include 151,557 shares which may be acquired upon
the exercise of warrants) are beneficially owned by Fortuna Investment
Partners, L.P. Mr. Vannuki is the president of its general partner,
Fortuna Capital Management, Inc.
(4) Dr. Baileys shares investment power over all of these shares (which
include 102,982 shares which may be acquired upon the exercise of
warrants) with Ms. Brenner.
(5) Includes 37,540 shares that may be acquired upon exercise of warrants
and 10,000 shares that may be acquired upon the exercise of options
within 60 days of October 26, 2000.
(6) Includes 815,228 shares (which include 110,882 shares which may be
acquired upon the exercise of warrants) over which Ms. Brenner, as a
registered investment advisor and sole shareholder of Fortuna Asset
Management, LLC, has shared investment power. Ms. Brenner shares
investment power over 715,198 shares (which include 102,982 shares
which may be acquired upon the exercise of warrants) with Dr. Baileys.
(7) Includes 12,685 shares that may be acquired upon the exercise of
warrants.
(8) Less than 1%
3
<PAGE> 7
Certain information concerning each person listed in the above table,
including his or her principal occupation for at least the last five years, is
set forth below.
James J. Mulligan, 78, became Secretary of the Corporation in 1966. Mr.
Mulligan has been a member of the law firm of Mulligan & Mulligan since January
1993. He was a member of the law firm of Smith & Schnacke from 1953 to 1989 and
a member of the law firm of Thompson Hine & Flory LLP from 1989 until his
retirement in 1991. Mulligan & Mulligan is general counsel to the Corporation
and received $78,681 for legal services rendered during the Corporation's fiscal
year ended March 31, 2000.
Ronald J. Vannuki, 60, has been a registered investment adviser with
Strome Securities, L.P., a broker and investment adviser, since 1995. From 1988
to 1995, Mr. Vannuki was Managing Director of Drake Capital Securities, Inc., a
registered broker-dealer, and from 1990 to 1995 was a Director and Portfolio
Manager of Drake Capital Advisers, Inc., a registered investment adviser.
Dr. Steven Baileys, 46, has been Chairman of the Board of Directors of
SafeGuard Health Enterprises, Inc., a public dental care benefits company, since
1995, Chief Executive Officer from 1995 to February 2000, President from 1981
until 1997 and Chief Operating Officer from 1981 until 1995. Dr. Baileys is
licensed to practice dentistry in the State of California.
Robert M. Thornton, Jr., 51, has been Chairman and Chief Executive
Officer of the Corporation since September 10, 1998, President since July 16,
1996 and Chief Financial Officer since July 18, 1997. From October 1994 to the
present, Mr. Thornton has been a private investor and, since March 1995,
Chairman and Chief Executive Officer of CareVest Capital, LLC, a private
investment and management services firm. Mr. Thornton was President, Chief
Operating Officer, Chief Financial Officer and a director of Hallmark Healthcare
Corporation ("Hallmark") from November 1993 until Hallmark's merger with
Community Health Systems, Inc. in October 1994. From October 1987 until November
1993, Mr. Thornton was Executive Vice President, Chief Financial Officer,
Secretary, Treasurer and a director of Hallmark.
Karen B. Brenner, 47, has been President of Fortuna Asset Management,
LLC, an investment advisory firm located in Newport Beach, California, since
2000. Fortuna Asset Management, LLC succeeded to the business of Fortuna
Advisors, Inc., which Ms. Brenner formed and operated from 1993 to 2000. Ms.
Brenner is also a director of Creative Bakeries, Inc.
C. Michael Ford, 61, has been the owner and Chairman of the Board of
Montpelier Corporation, a venture capital and real estate holding company, since
October 1990. Mr. Ford served as Vice President of Development of Columbia/HCA
Healthcare Corporation from September 1994 to September 1997, and was Vice
President of Marketing of Meditrust Corp. from October 1993 to September 1994.
Mr. Ford was employed by Charter Medical Corporation from 1976 to 1990 in a
variety of positions, which included Secretary and Treasurer, Chief Financial
Officer and a member of the Board of Directors. Mr. Ford has been the Chairman
of the Board of In Home Health, Inc., since February 2000, and the Interim Chief
Executive Officer since February 2000, except for the period June 27 through
July 7, 2000.
Howard E. Turner, 58, has been a partner in the law firm of Smith,
Gambrell & Russell, LLP, since 1971, where he heads one of the firm's corporate
sections. Mr. Turner has represented numerous healthcare companies in corporate
governance matters, mergers, acquisitions, dispositions, and in structuring
public and private equity and debt financing; and has represented special
committees and boards of directors of large public companies. Mr. Turner has
served as a director of Avlease, Ltd., a lessor of large commercial aircraft,
and currently serves as an officer and director of HSR, Ltd. Mr. Turner provides
legal services to the Corporation through the law firm, Smith, Gambrell &
Russell, LLP, as requested by the Corporation.
4
<PAGE> 8
INFORMATION CONCERNING THE BOARD OF DIRECTORS
The Board of Directors held nine meetings during fiscal 2000. The Board
has an Executive Committee, an Audit Committee and an Executive Compensation
Committee, but no nominating committee. The Executive Committee took action by
unanimous written consent one time in fiscal 2000. The Audit Committee held two
meetings and the Executive Compensation Committee held one meeting in fiscal
2000.
The Executive Committee is empowered to exercise all of the authority
of the Board of Directors except as to matters not delegable to a committee
under the General Corporation Law of Ohio. The members of the Committee are
Messrs. Thornton (Chairman) and Turner and Ms. Brenner.
The Audit Committee meets with Corporation personnel and
representatives of the Corporation's independent public accountants to review
internal accounting controls, internal auditing procedures and matters relating
to the annual audit of the Corporation's financial statements. The Committee
reports its findings and recommendations to the Board of Directors. The members
of the Committee are Messrs. Ford (Chairman) and Turner and Ms. Brenner.
The Executive Compensation Committee acts in an advisory capacity to
the Board of Directors with respect to compensation of the Corporation's
executives. The members of the Committee are Ms. Brenner (Chairperson) and Mr.
Mulligan.
Each non-employee director receives a monthly fee of $700 for services
as a director. In addition, he or she receives $850 for attendance at a meeting
of the Board of Directors, $500 for attending an Executive Compensation or Audit
Committee meeting, $400 for participating in telephone meetings and a monthly
fee of $500 if he or she serves on the Executive Committee.
5
<PAGE> 9
PRINCIPAL HOLDERS OF COMMON SHARES
Set forth below is certain information concerning the entities known by
the Board of Directors of the Corporation to be the beneficial owners of more
than 5% of the outstanding Common Shares of the Corporation as of October 26,
2000.
<TABLE>
<CAPTION>
COMMON SHARES BENEFICIALLY OWNED
AS OF 10/26/00 (1)
------------------------------------
NAME AND ADDRESS SHARES % OF CLASS
--------------------------------- ------ ----------
<S> <C> <C>
FORTUNA ASSET MANAGEMENT, LLC (2) 815,228 (4) 16.0
1300 Bristol Street North
Suite 100
Newport Beach, CA 92660
KAREN B. BRENNER (2) 827,348 (5) 16.2
1300 Bristol Street North
Suite 100
Newport Beach, CA 92660
BAILEYS FAMILY TRUST (3) 378,649 (2)(6) 7.5
C/O Karen Brenner
P.O. Box 9109
Newport Beach, CA 92658-9109
STEVEN BAILEYS (3) 715,198 (2)(7) 14.1
C/O Karen Brenner
P.O. Box 9109
Newport Beach, CA 92658-9109
DIMENSIONAL FUND ADVISORS 268,129 5.4
1299 Ocean Avenue
Eleventh Floor
Santa Monica, CA 90401
WESTSIDE CAPITAL PARTNERS, L.P. 275,700 5.5
575 Lexington Avenue
Seventh Floor
New York, NY 10022
</TABLE>
-----------------------------
(1) Under applicable Securities and Exchange Commission regulations, shares
are treated as "beneficially owned" if a person has or shares voting or
investment power with respect to the shares or has a right to acquire
the shares within 60 days of October 26, 2000. Unless otherwise
indicated, sole voting power and sole investment power are exercised by
the named entity. In calculating "% of Class" for an entity, shares
which may be acquired by the entity within such 60-day period are
treated as owned by the entity and as outstanding shares.
6
<PAGE> 10
(2) The business of Fortuna Asset Management, LLC is to provide
discretionary investment management services to clients and Karen B.
Brenner is President of Fortuna Asset Management, LLC. Ms. Brenner also
serves as a director of the Corporation. Ms. Brenner has shared
investment power over all shares reported as beneficially owned by the
Baileys Family Trust and Steven Baileys.
(3) Baileys Family Trust is a private investor. Steven Baileys is a private
investor, the Trustee of Baileys Family Trust, and a nominee for
election as a director.
(4) Includes 110,662 shares that may be acquired upon exercise of warrants.
(5) Includes 110,882 shares that may be acquired upon exercise of warrants.
(6) Includes 52,041 shares that may be acquired upon exercise of warrants.
(7) Includes 102,982 shares that may be acquired upon exercise of warrants.
The parties listed above in this section (excluding Dimensional Fund
Advisors and Westside Capital Partners, L.P.), together with Ronald J. Vannuki,
have filed with the Securities and Exchange Commission, as a group, a Schedule
13D and amendments thereto under the Securities and Exchange Act of 1934
relating to their beneficial ownership of shares of the Corporation. The
information set forth herein with respect to beneficial ownership of shares of
the Corporation was obtained from Amendment No. 6 to Schedule 13D dated October
22, 1998 and filed April 1, 1999, as supplemented by members of the group. The
parties listed above, except Dimensional Fund Advisors and Westside Capital
Partners, L.P., are sometimes referred to as the Fortuna Group. As a group, the
Fortuna Group beneficially owns 1,018,223 shares (including warrants to purchase
262,439 shares) or 19.4% of the outstanding shares of the Corporation.
COMMON SHARES OWNED BY MANAGEMENT
The following table sets forth the number of Common Shares of the
Corporation beneficially owned as of October 26, 2000 by each named executive
listed in the Summary Compensation Table and by all directors, nominees and
executive officers of the Corporation as a group.
<TABLE>
<CAPTION>
COMMON SHARES BENEFICIALLY
NAME OWNED AS OF 10/26/00
----------------------------------------------- --------------------------
NUMBER % OF CLASS
-------- ----------
<S> <C> <C>
Robert M. Thornton, Jr. 220,024 (1) 4.4
Chairman, President, Chief Executive Officer
and Chief Financial Officer
Marshall Cooper 0 0
Managing Director, Beldray Limited
Directors, Nominees and Executive Officers 1,475,770 (2) 27.7
as a Group (11 persons)
</TABLE>
(1) Includes 37,540 shares that may be acquired upon the exercise of
warrants and 10,000 shares that may be acquired upon the exercise of
options within 60 days of October 26, 2000.
(2) Includes 325,889 shares that may be acquired upon the exercise of
warrants and 31,000 shares that may be acquired upon the exercise of
options within 60 days of October 26, 2000.
7
<PAGE> 11
EXECUTIVE COMPENSATION
The following sections of this Proxy Statement set forth compensation
information relating to the Chief Executive Officer and the other executive
officer of the Corporation at March 31, 2000, whose salary and bonus for fiscal
year 2000 exceeded $100,000.
SUMMARY COMPENSATION TABLE
The following table presents, for the three fiscal years ended March
31, 2000, the compensation of the Chief Executive Officer during the year ended
March 31, 2000 and the other executive officer at March 31, 2000 whose salary
and bonus during fiscal 2000 exceeded $100,000.
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-----------------------------------
AWARDS PAYOUTS
-----------------------------------
ANNUAL COMPENSATION
--------------------------------------------
LONG-TERM
OTHER RESTRICTED SECURITIES INCENTIVE
ANNUAL STOCK UNDERLYING PLAN ALL OTHER
NAME AND SALARY BONUS COMPENSATION AWARDS OPTIONS PAYOUT COMPENSATION
PRINCIPAL POSITIONS YEAR ($) ($) ($) ($) (#) ($) ($)
----------------------- ---- -------- -------- ------------ ---------- ---------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Robert M. Thornton, Jr 2000 $210,000 $49,544 $ 0 $ 0 0 $ 0 $ 0
Chairman, President, 1999 196,700 0 0 0 20,000 0 0
Chief Executive Officer 1998 159,500 35,000 (2) 0 0 0 0 4,785 (3)
and Chief Financial
Officer (1)
Marshall Cooper 2000 $104,754 $ 0 $ 0 $ 0 0 $ 0 $ 0
Managing Director, 1999 83,642 0 0 0 0 0 0
Beldray Ltd. (4) 1998 77,994 4,310 0 0 0 0 0
</TABLE>
----------------------------
(1) Mr. Thornton was elected Chairman and Chief Executive Officer on
September 10, 1998.
(2) This bonus was for services performed in fiscal 1997 and fiscal 1998.
(3) This amount was contributed by the Corporation under the 401(k) plan
for the benefit of the named executive.
(4) Mr. Cooper was appointed Managing Director of Beldray Limited in
November 1998 and was Sales Director of Beldray Limited from December
1990 until November 1998.
OPTION GRANTS IN LAST FISCAL YEAR
The following table shows, for the named executive officers, additional
information about option grants for the fiscal year ended March 31, 2000.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-----------------------------------------------------
POTENTIAL REALIZABLE VALUE
NUMBER OF % OF TOTAL AT ASSUMED ANNUAL RATES
SHARES OPTIONS OF STOCK PRICE
UNDERLYING GRANTED TO APPRECIATION FOR OPTION
OPTIONS EMPLOYEES EXERCISE OR TERM
GRANTED IN FISCAL BASE PRICE EXPIRATION --------------------------
NAME (#) YEAR ($/SHARE) DATE 0%($) 5%($) 10%($)
----------------------- ---------- ---------- ----------- ---------- ----- ----- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert M. Thornton, Jr. 0 N/A N/A N/A N/A N/A N/A
Marshall Cooper 0 N/A N/A N/A N/A N/A N/A
</TABLE>
8
<PAGE> 12
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table shows information about stock option exercises
during fiscal 2000 and unexercised stock options at March 31, 2000 for the named
executive officers.
<TABLE>
<CAPTION>
NUMBER OF SHARES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL IN-THE-MONEY OPTIONS AT
SHARES YEAR-END FISCAL YEAR-END
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (#) REALIZED ($) UNEXERCISABLE (#) UNEXERCISABLE ($)
----------------------- ------------ ------------ ---------------------- -----------------------
<S> <C> <C> <C> <C>
Robert M. Thornton, Jr. 0 $0 5,000/20,000 $0/$0
Marshall Cooper 0 N/A N/A N/A
</TABLE>
LONG TERM INCENTIVE PLANS - AWARDS IN LAST FISCAL YEAR
The following table shows for the named executive officers, additional
information about awards during the fiscal year ended March 31, 2000 under
long-term incentive plans.
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS UNDER
NUMBER OF PERFORMANCE OR NON-STOCK PRICE-BASED PLANS
SHARES, UNITS OTHER PERIOD -----------------------------------
OR OTHER UNTIL MATURATION THRESHOLD TARGET MAXIMUM
NAME RIGHTS (#) OR PAYOUT ($ OR #) ($ OR #) ($ OR #)
----------------------- ------------- ---------------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Robert M. Thornton, Jr. 0 N/A N/A N/A N/A
Marshall Cooper 0 N/A N/A N/A N/A
</TABLE>
OTHER
Mr. Thornton, Chairman, President, Chief Executive Officer and Chief
Financial Officer, is currently employed by the Corporation under the terms of
an Employment Agreement effective August 1, 1998. The initial term of the
Agreement expired July 31, 1999, but the Agreement continues in force until
either Mr. Thornton or the Corporation provides four months written notice
terminating the Agreement. The Agreement provides for an annual base salary of
$210,000, plus any increases that may be granted from time to time by the
Corporation. Mr. Thornton is also eligible to receive a bonus equal to
twenty-five percent of his annual base salary if certain goals, agreed to by the
parties to the Agreement, are met for the current and future fiscal years.
During the term of his employment, Mr. Thornton is also eligible to participate
in any stock option or compensation plan adopted for officers and shall receive
the fringe benefits extended by the Corporation to its most highly compensated
executives.
The Agreement also provides for severance payments in the event Mr.
Thornton ceases to be employed by the Corporation (whether voluntarily by Mr.
Thornton or otherwise) within one year after a change in control of the
Corporation (as defined in the Agreement). In such event, the Corporation is
required to pay Mr. Thornton an amount equal to one year's base salary. In
addition, any stock options held by Mr. Thornton on the date the Agreement is
terminated become immediately exercisable and may be exercised by Mr. Thornton
within ninety days of the termination of the Agreement, but only if Mr. Thornton
terminates the Agreement. While Mr. Thornton is receiving payments pursuant to
the Agreement, he is prohibited from competing with the Corporation.
9
<PAGE> 13
PERFORMANCE GRAPH
The following graph compares the cumulative total shareholder return on
the Corporation's Common Shares for its last five fiscal years with the
cumulative total return of the American Stock Exchange Market Index, an American
Stock Exchange listed peer group index over the same period with market
capitalization between $20 million and $40 million ("AMEX I"), and an American
Stock Exchange listed peer group index over the same period with market
capitalization between $0 and $20 million ("AMEX II") assuming investments of
$100 in each vehicle on March 31, 1995 and reinvestment of all dividends. The
AMEX I peer group index is comprised of 621 companies and includes all
non-financial American Stock Exchange companies with a market capitalization of
between $20 and $40 million, which were publicly traded throughout the five-year
period. The AMEX II peer group index is comprised of 658 companies and includes
all non-financial American Stock Exchange companies with a market capitalization
of between $0 and $20 million which were publicly traded throughout the
five-year period. Due to the fact that the Corporation's shares have been
trading at lower levels, the Corporation believes it is appropriate to compare
its return with that of companies with the lower market capitalization of the
AMEX II peer group. The peer group indexes were developed by an independent
agency. The Corporation is not aware of any appropriate industry or
line-of-business index with which to compare itself because of the diversity of
the Corporation's businesses and, therefore, it believes a market capitalization
index is appropriate.
[CHART]
10
<PAGE> 14
PERFORMANCE DATA
<TABLE>
<CAPTION>
1995 1996 1997 1998 1999 2000
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
KRUG International Corp. 100 93.3 136.7 150.0 40.0 36.7
$20M - $40M Capitalization Group 100 116.5 106.2 108.3 60.6 55.0
$0M - $20M Capitalization Group 100 103.5 80.5 83.9 41.0 33.1
AMEX Market Index 100 120.9 122.1 159.5 150.9 213.4
</TABLE>
The companies which comprise the AMEX I and AMEX II peer groups are listed on
Appendix 1 and Appendix 2, respectively, of this Proxy Statement.
EXECUTIVE COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Executive Compensation Committee of the Board of Directors
currently is comprised of two directors who are not employees or former
employees of the Corporation. The Committee's stated function is to act in an
advisory capacity to the Board with respect to compensation of executives of the
Corporation. Except as specifically authorized by the Board, the Committee does
not have the authority to fix the compensation of any employee, officer or
director of the Corporation. However, since the Committee's creation in 1977,
the Board has only on rare occasions not completely adopted the recommendations
of the Committee and on those occasions only minor changes were made.
The goal of the Committee has been to adopt a compensation approach
that is basically simple, internally equitable and externally competitive, and
that attracts, motivates and retains qualified people capable of contributing to
the growth, success and profitability of the Corporation, thereby contributing
to long-term shareholder value. Given the size of the Corporation and the
limited number of its executive officers, the Committee has traditionally chosen
to evaluate each executive individually and on a subjective basis, without
resort to mathematical performance formulas. The principle followed is to
provide what the Committee believes is suitable compensation based on its
subjective evaluation of the executive's contribution to the profitability of
the Corporation.
The three key elements of executive compensation are base salary,
short-term incentives and long-term incentives.
The Corporation's base salaries are intended to be consistent with its
understanding of competitive practices, levels of responsibility, qualifications
necessary for the particular position, and experience. Salary increases reflect
the Committee's belief as to competitive trends, the performance of the
individual and the overall financial performance of the Corporation.
The short-term incentive for an executive is the opportunity to earn an
annual cash bonus. In line with the Corporation's normally discretionary
approach, the Committee considers all relevant facts and circumstances in
evaluating an executive. The Committee considers performance over a period of
time, not merely performance in the most recent year. However, in general, the
most important consideration is how well the executive has met his individual
goals as set forth in the most recent operating plan. Generally, the second most
important consideration is the Corporation's overall financial performance in
the most recent year. The Committee also considers factors beyond the
executive's control, such as general economic conditions, industry trends,
inflation, changes in government policies, etc., which may have had a material
effect (positive or negative) on an
11
<PAGE> 15
individual's overall performance. After considering all of these factors, the
Committee recommends whether or not a particular executive should be awarded a
bonus and, if so, the amount.
While salary and short-term incentives are primarily designed to
compensate current and past performance, the main purpose of the long-term
incentive compensation program is to directly link management compensation with
the long-term interests of shareholders. The Corporation currently is using, as
it has for many years, stock options to provide that link. Options are intended
to provide strong incentives for superior long-term future performance.
In November 1998, the Directors adopted the recommendation of the
Committee and authorized the execution of an Employment Agreement with Mr.
Thornton, which is described under the heading "Other." Under the Agreement, Mr.
Thornton received an annual base salary of $210,000 during the 1999 fiscal year
and also during the 2000 fiscal year. The Committee believes that this base
salary is at the low end for positions requiring similar competence, dedication,
creativity, experience and leadership qualities. The Agreement also provides
that Mr. Thornton will receive a bonus equal to 25% of his annual base salary if
goals agreed to by the Corporation and Mr. Thornton are met. No bonus was
payable for fiscal 1999 because the agreed goals were not met. For fiscal 2000
it was agreed that Mr. Thornton would be paid a bonus equal to 0.6% of the
amount or value received, or paid out, by the Corporation in connection with
"significant transactions" (i.e., those determined to be significant by the
Committee, including the disposition or acquisition of significant amounts of
assets or the repatriation of cash from the U.K.) consummated during fiscal
2000. The reason for choosing these goals was to encourage and reward the
accomplishment of actions which would help position the Corporation to enter the
healthcare industry - its primary strategic objective. During fiscal 2000, the
Corporation consummated two transactions which the Committee deemed significant
and upon which Mr. Thornton received the bonus amount which is reflected in the
"Summary Compensation Table": the sale of the Corporation's equity interest in
Wyle Laboratories, Inc. for $4,125,000 in cash and the repatriation of
$4,132,000 in cash from the U.K.
This report has been submitted by the Executive Compensation Committee:
Karen B. Brenner James J. Mulligan
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Executive Compensation Committee are Ms. Brenner
(Chairperson) and Mr. Mulligan. Ms. Brenner was the sole shareholder and
President of Fortuna Advisors, Inc. From April 1, 1998 until its termination on
November 30, 1999, Fortuna Advisors, Inc. had a Consulting Agreement with the
Corporation. The Consulting Agreement provided for a fee to Fortuna Advisors,
Inc. of $5,000 per month to prepare short-term and intermediate-term acquisition
plans and investigate and evaluate potential acquisitions for the Corporation.
Mr. Mulligan is Secretary to the Corporation and a member of the law firm of
Mulligan & Mulligan, general counsel to the Corporation. Mulligan & Mulligan
received $78,681 for legal services rendered during the Corporation's fiscal
year 2000.
12
<PAGE> 16
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires directors
and certain officers of the Corporation and owners of more than 10% of the
Corporation's Common Shares to file an initial ownership report with the
Securities and Exchange Commission and a monthly or annual report listing any
subsequent change in their ownership of any of the Corporation's equity
securities. The Corporation believes, based on information provided to the
Corporation by the persons required to file such reports, that all filing
requirements applicable to such persons during the period from April 1, 1999
through March 31, 2000 have been met.
INDEPENDENT PUBLIC ACCOUNTANTS
Deloitte & Touche LLP has performed an audit of the Corporation's
financial statements annually since 1962. It is anticipated that representatives
of Deloitte & Touche LLP will be present at the Annual Meeting of Shareholders
to respond to appropriate questions and to make a statement if such
representatives so desire.
The Board of Directors of the Corporation annually appoints the
independent public accountants for the Corporation after receiving the
recommendation of its Audit Committee.
OTHER BUSINESS
The Board of Directors does not intend to present, and has no knowledge
that others will present, any other business at the meeting. However, if any
other matters are properly brought before the meeting, it is intended that the
holders of proxies in the enclosed form will vote thereon in their discretion.
COST OF SOLICITATION
The cost of solicitation of proxies will be borne by the Corporation.
In addition to the use of the mails, proxy solicitations may be made by
directors, officers and employees of the Corporation, personally or by telephone
or other means of communication, without receiving additional compensation. It
is also anticipated that banks, brokerage houses and other custodians, nominees
and fiduciaries will be requested to forward soliciting material to their
principals and to obtain authorization for the execution of proxies. The
Corporation will reimburse banks, brokerage houses and other custodians,
nominees and fiduciaries for their out-of-pocket expenses. The Corporation has
also engaged Georgeson Shareholder Communications, Inc. for a fee not to exceed
$25,000 to assist in the solicitation of proxies.
13
<PAGE> 17
SHAREHOLDER PROPOSALS
A proposal by a shareholder intended for inclusion in the Corporation's
proxy statement and form of proxy for the 2001 Annual Meeting of Shareholders
must, in accordance with applicable regulations of the Securities and Exchange
Commission, be received by the Corporation at 900 Circle 75 Parkway, Suite 1300,
Atlanta, Georgia 30339, Attention: Secretary, on or before March 15, 2001 in
order to be eligible for such inclusion.
By order of the Board of Directors
/s/ JAMES J. MULLIGAN
JAMES J. MULLIGAN
Secretary
Dayton, Ohio
November 3, 2000
14
<PAGE> 18
APPENDIX 1
FISCAL 2000 AMEX $20 TO $40 MILLION CAPITALIZATION PEER GROUP
The peer group is comprised of American Stock Exchange non-financial
companies with a market value between $20 and 40 million. The only companies
meeting this criteria for fiscal 2000 are the following:
<TABLE>
<S> <C> <C>
5TH AVENUE CHANNEL CORP AVTEAM INC CL A CARBIDE/GRAPHITE GRP INC
ABLE TELECOM HOLDING CP AXCESS INC CARDIMA INC
ACME ELECTRIC CORP AZCO MINING INC CARIBINER INTERNAT INC
ACRODYNE COMMUNICATIONS BALDWIN PIANO & ORGAN CO CARMEL CONTAINER SYSTEM
ACTIONPOINT INC BALDWIN TECHNOLOGY INC A CARRINGTON LABS INC
ADAM.COM INCORPORATED BALLANTYNE OF OMAHA INC CASH TECHNOLOGIES INC
ADAMS GOLF INC BAYOU STEEL CORP CASTLE ENERGY CORPORATN
ADVANCED MACHINE VSN CP BEAUTICONTROL COSMETICS CATALINA LIGHTING INC
ADVANCED PHOTONIX CL A BELL INDUSTRIES INC CAVALIER HOMES INC
ADVANCED TECHNICAL PROD. BENGUET CORP CL B CELLULAR TECHNICAL SVCS
ADVANTAGE MARKETING SYS BENIHANA INC CL A CEM CORP
AEROSONIC CORP BERNARD CHAUS INC CENTRAL EUROPEAN MEDIA
AEROVOX INC BIGMAR INC CENTURY CASINOS INC
AFFINITY TECHNOLOGY GRP BIO-LOGIC SYSTEMS CORP CFC INTERNATIONAL INC
AIR METHODS CORP BIO-VASCULAR INC CFI PROSERVICES INC
ALCIDE CORP BIONUTRICS INC CHAMPION INDUSTRIES INC
ALDILA INC BIONX IMPLANTS INC CHECK TECHNOLOGY CORP
ALLIED HEALTHCARE PROD BIORELIANCE CORP CHENIERE ENERGY INC
ALLIED PRODUCTS CORP BIRMINGHAM UTILITIES INC CHICAGO RIVET & MACHINE
ALLIED RESEARCH CORP BLACK HAWK GAM & DEV CO CHILDREN'S COMPREHEN SVC
ALPHANET SOLUTIONS INC BLUE DOLPHIN ENERGY CO CHILDTIME LEARNING CTR
ALTERNATIVE RESOURCES BLUEFLY INC CHINA YUCHAI INT LTD
AMERICAN BIO MEDICA CORP BOLT TECHNOLOGY CORP CLEAN HARBORS INC
AMERICAN HEALTHWAYS INC BON-TON STORES INC CLINICHEM DEV INC CLA
AMERICAN HOMESTAR CORP BOSTON BIOMEDICA INC COBRA ELECTRONICS CORP
AMERICAN SCIENCE & ENGR BOSTON CELTICS LP CODA MUSIC TECHNOLOGY
AMERICAN VANGUARD CORP BOWL AMERICA INC A COLUMBUS ENERGY CORP
AMERICAN WAGERING INC BOWLIN OUTDOOR ADV & TRA COMFORCE CORP
AMERIGON INC CL A BRANDERA.COM INC COMPUTER CONCEPTS CORP
AML COMMUNICATIONS INC BRASS EAGLE INC COMSHARE INC
AMPLIDYNE INC BRIDGESTREET ACCOMM INC CONGOLEUM CORP
AMSURG CORP CL B BROWN & SHARPE MFG CO A CONRAD INDUSTRIES INC
ANALYTICAL SURVEYS INC BUFETE INDUSTRIAL CONSOLIDTD WATER CO INC
ANDERSEN GROUP INC BUSINESS RESOURCE GROUP CONSORCIO G GRUPO DINA
AQUIS COMMUNICATIONS GRP C2 INC CONTINENTAL MATERIALS CP
ARI NETWORK SERVICES INC C3 INC CORRPRO COMPANIES
ARK RESTAURANTS CORP CABLETEL COMMUNICATIONS COVOL TECHNOLOGIES INC
ASI SOLUTIONS INC CACHE INC CRAFTMADE INTERNAT INC
ASTRO-MED INC CALTON INC CREDIT MNGMT SLTNS INC
ATEC GROUP INC CAMPBELL RESOURCES INC CRITICARE SYSTEMS INC
ATLANTIC PREMIUM BRANDS CANDIES INC CROSSWALK.COM INC
ATRION CORPORATION CANTEL MEDICAL CORP. CSP INC
AULT INC CANTERBURY INFO TECH INC CYANOTECH CORP
AUTOIMMUNE INC CANTERBURY PARK HLDG CP CYBEX INTERNAT
AVIATION GENERAL INC CAPITAL PACIFIC HOLDINGS D&K HEALTHCARE RES INC
DALLAS GOLD & SILVER EX ELLETT BROTHERS INC GART SPORTS COMPANY
DAOU SYSTEMS INC ELTEK LTD GENERAL BEARING CORP
DARLING INTERNATIONAL EMERITUS CORP GENERAL CHEMICAL GROUP
DATA DIMENSIONS INC EMERSON RADIO CORP GENERAL EMPLOYMENT ENT
DATA I/O CORP EMPIRE RESOURCES INC GENESEE CORP CL B
DATA RESEARCH ASSOCS INC ENDOREX CORPORATION GENESIS HEALTH VENTURES
DATA SYSTEMS & SOFTWARE ENERGY BIOSYSTEMS CORP GENSYM CORP
DATRON SYSTEMS INC ENERGY SEARCH INC GIGA-TRONICS INC
DECKERS OUTDOOR CORP ENERGY WEST INC GLACIER WATER SERVICES
DELIA'S INC ENGEL GENERAL DVLPRS LTD GLOBAL PAYMENT TECH INC
DELTA NATURAL GAS CO INC ENGINEERING MEASUREMENTS GLOBAL TECHNOVATIONS INC
DELTA PETROLEUM CORP ENLIGHTEN SOFTWARE SOL GOLDCORP INC CL B
DEPOMED INC EQUINOX SYSTEMS INC GOLDEN ENTERPRISES INC
DESIGNS INC EQUITY OIL CO GOLDEN STAR RESOURCES
DEVCON INTERNAT CORP ESCALADE INC GOODRICH PETROL CORP
DIEDRICH COFFEE ESENJAY EXPLORATION INC GOVERNMENT TECHNOL SVC
DIEHL GRAPHSOFT INC ESKIMO PIE CORP GRISTEDES FOODS INC
DIGITAL LAVA INC EUROPEAN MICRO HOLDINGS GROW BIZ INTERNAT INC
DISC GRAPHICS INC EVANS SYSTEMS INC GUNDLE/SLT ENVIRONMENTAL
</TABLE>
15
<PAGE> 19
<TABLE>
<S> <C> <C>
DISPATCH MANAGEMENT SRVC EVEREST MEDICAL CORP GZA GEOENVIRON TECH
DISPLAY TECHNOLOGIES INC EZCORP INC CL A H.T E. INC
DOCUMENT SCIENCES CORP FAMOUS DAVE'S OF AMERICA HALSEY DRUG CO
DOMINION HOMES INC FANSTEEL INC HAMPSHIRE GROUP LTD
DRUG EMPORIUM INC FARO TECHNOLOGIES INC HANSEN NATURAL CORP
DRYPERS CORP FEATHERLITE INC HASTINGS ENTERTAINMENT
DSG INTERNATIONAL LTD FIBERSTARS INC HATHAWAY CORP
DSI TOYS INC FIRST PRIORITY GROUP INC HAWKER PACIFIC AEROSPACE
DUNN COMPUTER CORP FIRSTWAVE TECHNOLOGIES HEALTH SYSTEMS DESIGN CP
DYNAMEX INC FISCHER IMAGING CORP HEALTHGRADES.COM INC
DYNAMIC HEALTHCARE TECH FLORSHEIM GROUP INC HECTOR COMMUNICATIONS
DYNAMIC OIL & GAS INC FOILMARK INC HI-TECH PHARMACAL CO INC
E COM VENTURES INC FOOD TECHNOLOGY SERVICE HOLIDAY RV SUPERSTORES
E-Z EM INC CL A FOODARAMA SUPERMARKETS HOLT'S CIGAR HLDINGS INC
EAGLE POINT SOFTWARE CP FRANKLIN TELECOMM CORP HOME STAKE OIL & GAS CO
EAGLE SUPPLY GROUP INC FRESH CHOICE INC HOMELAND HOLDING CORP
EASYRIDERS INC FRIEDMAN INDUSTRIES INC HOMETOWN AUTO RETAIL CLA
ECC INTERNATIONAL CORP FRIENDLY ICE CREAM CORP HORIZON HEALTH CORP
ECO SOIL SYSTEMS INC FRISBY TECHNOLOGIES INC HORIZON MEDICAL PRODUCTS
ECOGEN INC FRONTIER ADJUSTR OF AMER HOTELWORKS.COM
ECOLOGY & ENVIRONMENT A FUEL TECH N.V. HOWTEK INC
EDISON CONTROL CORP FURR'S RESTAURANTS INC HUFFY CORP
EFAX.COM G-III APPAREL GROUP INC HUNTCO INC CL A
EFTC CORPORATION GALAGEN INC HURCO COMPANIES INC
ELAMEX S.A. DE C.V. CL 1 GALEY & LORD INC I.I.S. INTELLIG INFO SYS
ELCOTEL INC GARDENBURGER INC IBS INTERACTIVE INC
ICO INC KMG CHEMICALS INC. MEDSTONE INTERNAT INC
ICTS INTERNATIONAL NV KOSS CORP MEDTOX SCIENTIFIC
IENTERTAINMENT NETWORK KUSHNER-LOCKE CO MEDWAVE INC
IFS INTERNATIONAL INC L.B. FOSTER CO CL A MER TELEMANAGEMENT SLTNS
IMAGE SENSING SYSTEMS LA BARGE INC MERCURY AIR GROUP INC
IMPRESO.COM INC. LACROSSE FOOTWEAR INC MERIT MEDICAL SYSTEMS
INDIVIDUAL INVESTOR GRP LANCER CORP MERRILL MERCHANTS BANCSH
INDUSTRIAL DISTR GRP INC LANDAIR CORPORATION MERRIMAC INDUSTRIES INC
INNODATA CORPORATION LASER POWER CORP METHODE ELECTRONICS CL B
INSIGHT HEALTH SERVICES LASER-PACIFIC MEDIA CORP METRETEK TECHOLOGIES INC
INSIGNIA SYSTEMS INC LASERSCOPE MFRI INC
INTEG INCORPORATED LECHTERS INC MICRONETICS WIRELESS INC
INTEGRATED SURGICAL SYS LEISUREPLANET HLDGS LTD MICROS-TO-MAINFRAMES INC
INTELLICORP INC LIFEMARK CORPORATION MINUTEMAN INTERNAT INC
INTELLIGENT SYSTEMS CORP LIFEWAY FOODS INC ML MACADAMIA ORCHARDS
INTERIORS INC CL A LIQUIDATION WORLD INC MOCON INC
INTERNAT AIRCRAFT INVS LJ INTERNAT INC MOMENTUM BUSINESS APPS A
INTERNAT ISOTOPES INC LMI AEROSPACE INC MONARCH DENTAL CORP
INTERWEST HOME MEDICAL LOGIC DEVICES INC MOORE MEDICAL CORP
INTRENET INC LOWRANCE ELECTRONICS INC MORTON INDUSTRIAL GP CLA
INVIVO CORPORATION LUMISYS INC MOSSIMO INC
IOMED INC LUND INTERNAT HOLDINGS MOTHERS WORK INC
ISCO INC LYNCH CORP MOTOR CARGO INDUSTRIES
ITEQ INC MAC-GRAY CORP MOUNTAIN PROVINCE MINING
J ALEXANDER'S CORP MADE2MANAGE SYSTEMS INC MULTIMEDIA GAMES INC
JACOBSON STORES INC MAGAL SECURITY SYSTEMS NAM CORPORATION
JANUS HOTELSANDRESORTS MAGELLAN PETROLEUM CORP NASTECH PHARMACEUTICALS
JENKON INTERNATIONAL INC MAIN STREET & MAIN INC NATHAN'S FAMOUS INC
JENNY CRAIG MAINE PUBLIC SERVICE CO NATIONAL HOME HLTH CARE
JLM INDUSTRIES INC MANATRON INC NATIONAL RESEARCH CORP
JOHN Q. HAMMONS HOTELS MANCHESTER EQUIPMENT CO NATIONAL SECURITY GROUP
JOHN SANFILIPPO & SON MANSUR INDUSTRIES INC NATIONAL TECHNICAL SYSTS
JOHNSTON INDUSTRIES INC MARGO CARIBE INC NEOGEN CORP
JOS A BANK CLOTHIERS MARKETING SPECIALISTS CP NESCO INCORPORATED
JPS INDUSTRIES INC MATEC CORP NETSMART TECHNOLOGIES
JUDGE.COM INCORPORATED MATHSOFT INC NETWORK COMPUTING DEVICE
K-TEL INTERNAT INC MAX & ERMA'S RESTAURANT NEW BRUNSWICK SCIENTIFIC
K-TRON INTERNAT INC MAXCO INC NEW WORLD COFF-MNHTN BGL
KCS ENERGY INC MAXICARE HEALTH PLANS NEXTHEALTH INC
KESTREL ENERGY INC MCCLAIN INDUSTRIES INC NEXUS TELOCATION SYSTEMS
KEVCO INC MCLAREN PERFORMANCED TEC NIAGARA CORPORATION
KEWAUNEE SCIENTIFIC CORP MECHANICAL DYNAMICS INC NMT MEDICAL INCORPORATED
KEY TECHNOLOGY INC MEDICAL ACTION IND INC NOBILITY HOMES INC
KEY TRONICS CORP MEDICAL ALLIANCE INC NOODLE KIDOODLE INC
KLLM TRANSPORT SVCS INC MEDICALCONTROL INC NORTH FACE INC (THE)
NORTHERN TECHNOLOGY POLYVISION CORP SCHUFF STEEL CO
NORTHSTAR COMPUTER FORMS POORE BROTHERS INC SECURITY ASSOC INTL INC
</TABLE>
16
<PAGE> 20
<TABLE>
<S> <C> <C>
NOTIFY TECHNOLOGY CORP POWERCERV CORPORATION SED INTERNAT HLDNGS INC
NOVATEL INC PPT VISION INC SEEC INC
ODWALLA INC PREMIUMWEAR INC SELAS CORP OF AMERICA
OEC COMPRESSION CORP PRIMESOURCE CORPORATION SENECA FOODS CORP CL B
OMNI ENERGY SERVICES CP PROFESSIONAL TRANSP GRP SENSORY SCIENCE CORP
OMTOOL LTD PROGEN INDUSTRIES LTD SENTO CORPORATION
ON-SITE SOURCING INC PROMEDCO MANAGEMENT CO SERACARE INC
ONE PRICE CLOTHING STORE PROVIDENCE & WORCESTR RR SHARED TECHNOL CELLULAR
OPINION RESEARCH CORP PROXYMED INC SHOLODGE INC
OPTA FOOD INGREDIENTS PRT GROUP INC SHONEY'S INC
OPTISYSTEMS SOLUTIONS PUBCO CORP SIFCO INDUSTRIES INC
ORBIT/FR INC PURE WORLD INC SIGA PHARMACEUTICALS INC
ORLEANS HOMEBUILDERS INC PVC CONTAINER CORP SIGNAL APPAREL COMPANY
ORYX TECHNOLOGY CORP Q.E.P. CO INC SILICOM LTD
OSTEX INTERNAT INC QUESTCOR PHARMACEUTICALS SILVER STANDARD RESOURCE
OUTLOOK GROUP CORP QUIPP INC SIMON TRANSPORT SVCS CLA
P & F INDUSTRIES CL A R&B INC SIMULA INC
PALATIN TECHNOLOGIES INC R.G. BARRY CORP SMARTIRE SYSTEMS INC
PALOMAR MEDICAL TECH RADA ELECTRONIC INDS LTD SMC CORP
PAMECO CORP RANDGOLD&EXP CO LTD ADS SOCRATES TECHS CORP
PAR TECHNOLOGY CORP RAYTEL MEDICAL CORP SONESTA INTERNAT HOTELS
PARAGON TECHNOLOGIES INC REEDS JEWELERS INC SONUS PHARM INC
PARALLEL PETROLEUM CORP REHABILICARE INC SOUND ADVICE INC
PARLUX FRAGRANCES INC RELIABILITY INC SPARTON CORP
PATHWAYS GROUP INC RF INDUSTRIES LTD SPINNAKER INDUSTRIES INC
PATRICK INDUSTRIES INC RGC RESOURCES INC SPORT CHALET INC
PAUL HARRIS STORES INC RICHMONT MINES INC SPORT SUPPLY GROUP INC
PAUL MUELLER COMPANY RIDDELL SPORTS INC SSE TELECOM INC
PEERLESS MANUFACTURING RIGHT START INC., THE STAKE TECHNOL LTD
PENDARIES PETROLEUM LTD RIVIERA HOLDINGS CORP STANDARD AUTOMOTIVE CORP
PENTACON INC ROCK OF AGES CORP STARCRAFT CORP
PERCEPTRON INC ROCKY SHOES & BOOTS INC STERILE RECOVERIES INC
PERMA-FIX ENVIRON SVC ROSS SYSTEMS INC STM WIRELESS INC CL A DE
PETROLEUM HELICOPTER NV ROTONICS MANUFACTURING STRATASYS INC
PETROLEUM HELICOPTER VTG ROY F. WESTON INC CL A STRATESEC INC
PHAR-MOR INC RURAL/METRO CORP STV GROUP
PHOENIX INTERNAT LTD INC S&K FAMOUS BRANDS INC SUNRISE INTERNAT LEASING
PHOTOELECTRON CORP SAF T LOK INC SUNSHINE MIN & REFIN
PICCADILLY CAFETERIAS SAMES CORPORATION SUNSOURCE INC
PIZZA INN INC SARATOGA BEVERAGE GRP A SUPER VISION INTERNAT A
PLC SYSTEMS INC SAUCONY INC CL A SUPREMA SPECIALTIES INC
PMR CORP SCHEID VINEYARDS INC CLA SURGE COMPONENTS INC
POLYDEX PHARMACEUTICALS SCHMITT INDUSTRIES INC SYMBOLLON CP CL A
TAB PRODUCTS CO TRANSPRO INC VENTURE CATALYST INC
TAG-IT PACIFIC INC TRANSWORLD HEALTHCRE INC VERAMARK TECHNOLOGIES
TAITRON COMPONENTS CL A TRAVIS BOATS&MOTORS INC VERMONT PURE HOLDINGS
TANDY BRANDS ACCESSORIES TRIDENT ROWAN GROUP INC VERMONT TEDDY BEAR CO
TANDYCRAFTS INC TRIMARK HOLDINGS INC VIDEO DISPLAY CORP
TATNEFT ADS TRIMEDYNE INC VIDEOLABS INC
TBA ENTERTAINMENT CORP TRM CORPORATION VIEW TECH INC
TCI INTERNAT INC TSR INC VIRTUALFUND.COM INC
TEAM AMERICA CORP U.S. ENERGY SYSTEMS INC VISION SCIENCES INC
TEAM INC U.S. LIME & MINERALS INC VITRAN CORPORATION
TEAMSTAFF INC U.S. PHYSICAL THERAPY VIZACOM INC
TECH-OPS SEVCON INC UBICS INC VULCAN INTERNAT CORP
TECHNICAL CHEM & PROD UNICOMP INC WACKENHUT CORP CL A, THE
TEKNOWLEDGE CORPORATION UNITED GUARDIAN INC WEBCO INDUSTRIES INC
TELEX CHILE SA ADS UNIVERSAL STAIN & ALLOY WEGENER CORP
TEXOIL INC UROCOR INC WESTERN PWR & EQUIPMENT
THOUSAND TRAILS INC US OFFICE PRODUCT CO WHITMAN EDUCATION GROUP
TII INDUSTRIES INC US WATS INC WILLIAMS CONTROLS INC
TITAN MOTORCYCLE OF AMER USA BIOMASS CORPORATION WILSHIRE OIL CO OF TX
TOKHEIM CORP USA DETERGENTS INC WISER OIL COMPANY, THE
TOP IMAGE SYSTEMS LTD USABANCSHARES.COM INC XATA CORP
TORCH ENERGY ROY TR USOL HOLDINGS INC XETEL CORPORATION
TOREADOR ROYALTY CORP UTILX CORP YORK GROUP INC., THE
TOTAL ENTERTAINMENT REST VALLEY MEDIA INC YORK RESEARCH CORP
TOWNE SERVICES INC VALLEY NATIONAL GASES ZEVEX INTERNAT INC
TOYMAX INTERNAT INC VARIFLEX INC ZINDART LIMITED ADR
TRANSPORTATION COMPONENT VDC COMMUNICATIONS INC ZMAX CORP
</TABLE>
17
<PAGE> 21
APPENDIX 2
FISCAL 2000 AMEX $0 TO $20 MILLION CAPITALIZATION PEER GROUP
The peer group is comprised of American Stock Exchange non-financial
companies with a market value between $0 and 20 million. The only companies
meeting this criteria for fiscal 2000 are the following:
<TABLE>
<S> <C> <C>
*3DSHOPPING.COM AQUIS COMMUNICATIONS GRP BOSTON CELTICS LP
5TH AVENUE CHANNEL CORP ARI NETWORK SERVICES INC BOWL AMERICA INC A
ABLE TELECOM HOLDING CP ARK RESTAURANTS CORP BOWLIN OUTDOOR ADV & TRA
*ACCESS PHARMACEUTICAL ASI SOLUTIONS INC BRANDERA.COM INC
ACME ELECTRIC CORP ASTRO-MED INC BRASS EAGLE INC
ACRODYNE COMMUNICATIONS ATEC GROUP INC BRIDGESTREET ACCOMM INC
ACTIONPOINT INC ATLANTIC PREMIUM BRANDS BROWN & SHARPE MFG CO A
*ACTIVEWORLDS.COM INC *ATLAS PIPELINE PRTNRS LP BUFETE INDUSTRIAL
ADAM.COM INCORPORATED ATRION CORPORATION BUSINESS RESOURCE GROUP
ADAMS GOLF INC AULT INC C2 INC
ADVANCED MACHINE VSN CP AUTOIMMUNE INC C3 INC
ADVANCED PHOTONIX CL A AVIATION GENERAL INC CABLETEL COMMUNICATIONS
ADVANCED TECHNICAL PROD. AVTEAM INC CL A CACHE INC
ADVANTAGE MARKETING SYS AXCESS INC CALTON INC
AEROSONIC CORP AZCO MINING INC CAMPBELL RESOURCES INC
AEROVOX INC BALDWIN PIANO & ORGAN CO CANDIES INC
AFFINITY TECHNOLOGY GRP BALDWIN TECHNOLOGY INC A CANTEL MEDICAL CORP.
AIR METHODS CORP BALLANTYNE OF OMAHA INC CANTERBURY INFO TECH INC
ALCIDE CORP BAYOU STEEL CORP CANTERBURY PARK HLDG CP
ALDILA INC BEAUTICONTROL COSMETICS *CAPITAL ENV. RESOURCE
ALLIED HEALTHCARE PROD BELL INDUSTRIES INC CAPITAL PACIFIC HOLDINGS
ALLIED PRODUCTS CORP BENGUET CORP CL B CARBIDE/GRAPHITE GRP INC
ALLIED RESEARCH CORP BENIHANA INC CL A CARDIMA INC
ALPHANET SOLUTIONS INC BERNARD CHAUS INC CARIBINER INTERNAT INC
ALTERNATIVE RESOURCES BIGMAR INC CARMEL CONTAINER SYSTEM
*AMERICAN ACCESS TECHNOLG *BIGSTAR ENTERTAINMENT CARRINGTON LABS INC
AMERICAN BIO MEDICA CORP BIO-LOGIC SYSTEMS CORP CASH TECHNOLOGIES INC
AMERICAN HEALTHWAYS INC BIO-VASCULAR INC CASTLE ENERGY CORPORATN
AMERICAN HOMESTAR CORP BIONUTRICS INC CATALINA LIGHTING INC
AMERICAN SCIENCE & ENGR BIONX IMPLANTS INC CAVALIER HOMES INC
AMERICAN VANGUARD CORP BIORELIANCE CORP CELLULAR TECHNICAL SVCS
AMERICAN WAGERING INC BIRMINGHAM UTILITIES INC CEM CORP
AMERIGON INC CL A *BIZNESSONLINE.COM INC CENTRAL EUROPEAN MEDIA
AML COMMUNICATIONS INC BLACK HAWK GAM & DEV CO CENTURY CASINOS INC
AMPLIDYNE INC BLUE DOLPHIN ENERGY CO CFC INTERNATIONAL INC
AMSURG CORP CL B BLUEFLY INC CFI PROSERVICES INC
ANALYTICAL SURVEYS INC BOLT TECHNOLOGY CORP CHAMPION INDUSTRIES INC
ANDERSEN GROUP INC BON-TON STORES INC CHECK TECHNOLOGY CORP
*ANTHONY & SYLVAN POOLS BOSTON BIOMEDICA INC CHENIERE ENERGY INC
CHICAGO RIVET & MACHINE DRUG EMPORIUM INC FIBERSTARS INC
CHILDREN'S COMPREHEN SVC DRYPERS CORP FIRST PRIORITY GROUP INC
CHILDTIME LEARNING CTR DSG INTERNATIONAL LTD FIRSTWAVE TECHNOLOGIES
CHINA YUCHAI INT LTD DSI TOYS INC FISCHER IMAGING CORP
*CLAIMSNET.COM INC DUNN COMPUTER CORP FLORSHEIM GROUP INC
CODA MUSIC TECHNOLOGY DYNAMEX INC FOILMARK INC
COLUMBUS ENERGY CORP DYNAMIC HEALTHCARE TECH FOOD TECHNOLOGY SERVICE
COMFORCE CORP DYNAMIC OIL & GAS INC FOODARAMA SUPERMARKETS
COMPUTER CONCEPTS CORP E COM VENTURES INC FRANKLIN TELECOMM CORP
COMSHARE INC E-Z EM INC CL A FRESH CHOICE INC
CONGOLEUM CORP EAGLE POINT SOFTWARE CP FRIEDMAN INDUSTRIES INC
CONRAD INDUSTRIES INC EAGLE SUPPLY GROUP INC FRIENDLY ICE CREAM CORP
CONSOLIDTD WATER CO INC EASYRIDERS INC FRISBY TECHNOLOGIES INC
CONSORCIO G GRUPO DINA ECC INTERNATIONAL CORP FRONTIER ADJUSTR OF AMER
CONTINENTAL MATERIALS CP ECO SOIL SYSTEMS INC FUEL TECH N.V.
*CONTINUUS SOFTWARE CP ECOGEN INC FURR'S RESTAURANTS INC
CORRPRO COMPANIES ECOLOGY & ENVIRONMENT A G-III APPAREL GROUP INC
COVOL TECHNOLOGIES INC EDISON CONTROL CORP GALAGEN INC
CRAFTMADE INTERNAT INC EFAX.COM GALEY & LORD INC
CREDIT MNGMT SLTNS INC EFTC CORPORATION GARDENBURGER INC
CRITICARE SYSTEMS INC ELAMEX S.A. DE C.V. CL 1 GART SPORTS COMPANY
CROSSWALK.COM INC ELCOTEL INC GENERAL BEARING CORP
CSP INC ELLETT BROTHERS INC GENERAL CHEMICAL GROUP
CYANOTECH CORP ELTEK LTD GENERAL EMPLOYMENT ENT
CYBEX INTERNAT EMERITUS CORP GENESEE CORP CL B
</TABLE>
18
<PAGE> 22
<TABLE>
<S> <C> <C>
D&K HEALTHCARE RES INC EMERSON RADIO CORP GENESIS HEALTH VENTURES
DALLAS GOLD & SILVER EX EMPIRE RESOURCES INC GENSYM CORP
DAOU SYSTEMS INC ENDOREX CORPORATION GIGA-TRONICS INC
DARLING INTERNATIONAL ENERGY BIOSYSTEMS CORP GLACIER WATER SERVICES
DATA DIMENSIONS INC ENERGY SEARCH INC GLOBAL PAYMENT TECH INC
DATA I/O CORP ENERGY WEST INC GLOBAL TECHNOVATIONS INC
DATA RESEARCH ASSOCS INC ENGEL GENERAL DVLPRS LTD GOLDCORP INC CL B
DATA SYSTEMS & SOFTWARE ENGINEERING MEASUREMENTS GOLDEN ENTERPRISES INC
DATRON SYSTEMS INC ENLIGHTEN SOFTWARE SOL GOLDEN STAR RESOURCES
DECKERS OUTDOOR CORP EQUINOX SYSTEMS INC GOODRICH PETROL CORP
DELIA'S INC EQUITY OIL CO GOVERNMENT TECHNOL SVC
DELTA NATURAL GAS CO INC ESCALADE INC GRISTEDES FOODS INC
DELTA PETROLEUM CORP ESENJAY EXPLORATION INC GROW BIZ INTERNAT INC
DEPOMED INC ESKIMO PIE CORP GUNDLE/SLT ENVIRONMENTAL
DESIGNS INC EUROPEAN MICRO HOLDINGS GZA GEOENVIRON TECH
DEVCON INTERNAT CORP EVANS SYSTEMS INC H.T E. INC
DIEDRICH COFFEE EVEREST MEDICAL CORP HALSEY DRUG CO
DIEHL GRAPHSOFT INC EZCORP INC CL A HAMPSHIRE GROUP LTD
DIGITAL LAVA INC FAMOUS DAVE'S OF AMERICA HANSEN NATURAL CORP
DISC GRAPHICS INC FANSTEEL INC HASTINGS ENTERTAINMENT
DISPATCH MANAGEMENT SRVC FARO TECHNOLOGIES INC HATHAWAY CORP
DISPLAY TECHNOLOGIES INC *FASHIONMALL.COM INC HAWKER PACIFIC AEROSPACE
DOCUMENT SCIENCES CORP *FASTNET CORPORATION HEALTH SYSTEMS DESIGN CP
DOMINION HOMES INC FEATHERLITE INC HEALTHGRADES.COM INC
HI-TECH PHARMACAL CO INC JOS A BANK CLOTHIERS MAXICARE HEALTH PLANS
HOLIDAY RV SUPERSTORES JPS INDUSTRIES INC MCCLAIN INDUSTRIES INC
HOLT'S CIGAR HLDINGS INC JUDGE.COM INCORPORATED MCLAREN PERFORMANCED TEC
HOME STAKE OIL & GAS CO K-TEL INTERNAT INC MECHANICAL DYNAMICS INC
HOMELAND HOLDING CORP K-TRON INTERNAT INC MEDICAL ACTION IND INC
HOMETOWN AUTO RETAIL CLA KCS ENERGY INC MEDICAL ALLIANCE INC
HORIZON HEALTH CORP *KEITH COMPANIES INC MEDICALCONTROL INC
HORIZON MEDICAL PRODUCTS KESTREL ENERGY INC MEDSTONE INTERNAT INC
HOTELWORKS.COM KEVCO INC MEDTOX SCIENTIFIC
HOWTEK INC KEWAUNEE SCIENTIFIC CORP MEDWAVE INC
HUFFY CORP KEY TECHNOLOGY INC MER TELEMANAGEMENT SLTNS
HUNTCO INC CL A KEY TRONICS CORP MERCURY AIR GROUP INC
HURCO COMPANIES INC KLLM TRANSPORT SVCS INC MERIT MEDICAL SYSTEMS
*I.D. SYSTEMS INC KMG CHEMICALS INC. MERRILL MERCHANTS BANCSH
I.I.S. INTELLIG INFO SYS KOSS CORP MERRIMAC INDUSTRIES INC
IBS INTERACTIVE INC KUSHNER-LOCKE CO *MET-COIL SYSTEMS CORP
ICO INC L.B. FOSTER CO CL A METHODE ELECTRONICS CL B
ICTS INTERNATIONAL NV LA BARGE INC METRETEK TECHOLOGIES INC
IENTERTAINMENT NETWORK LACROSSE FOOTWEAR INC MFRI INC
IFS INTERNATIONAL INC LANCER CORP MICRONETICS WIRELESS INC
*ILIFE.COM INCORPORATED LANDAIR CORPORATION MICROS-TO-MAINFRAMES INC
IMAGE SENSING SYSTEMS LASER POWER CORP MINUTEMAN INTERNAT INC
IMPRESO.COM INC. LASER-PACIFIC MEDIA CORP ML MACADAMIA ORCHARDS
INDIVIDUAL INVESTOR GRP LASERSCOPE MOCON INC
INDUSTRIAL DISTR GRP INC LECHTERS INC MOMENTUM BUSINESS APPS A
INNODATA CORPORATION LEISUREPLANET HLDGS LTD MONARCH DENTAL CORP
INSIGHT HEALTH SERVICES LIFEMARK CORPORATION MOORE MEDICAL CORP
INSIGNIA SYSTEMS INC LIFEWAY FOODS INC MORTON INDUSTRIAL GP CLA
INTEG INCORPORATED LIQUIDATION WORLD INC MOSSIMO INC
INTEGRATED SURGICAL SYS LJ INTERNAT INC *MOTHERNATURE.COM INC
INTELLICORP INC LMI AEROSPACE INC MOTHERS WORK INC
INTELLIGENT SYSTEMS CORP LOGIC DEVICES INC MOTOR CARGO INDUSTRIES
INTERIORS INC CL A LOWRANCE ELECTRONICS INC MOUNTAIN PROVINCE MINING
INTERNAT AIRCRAFT INVS LUMISYS INC *MULTI-LINK TELECOMM INC
INTERNAT ISOTOPES INC LUND INTERNAT HOLDINGS MULTIMEDIA GAMES INC
*INTERNAT SMART SOURCING LYNCH CORP NAM CORPORATION
INTERWEST HOME MEDICAL MAC-GRAY CORP NASTECH PHARMACEUTICALS
INTRENET INC MADE2MANAGE SYSTEMS INC NATHAN'S FAMOUS INC
INVIVO CORPORATION MAGAL SECURITY SYSTEMS NATIONAL HOME HLTH CARE
IOMED INC MAGELLAN PETROLEUM CORP NATIONAL RESEARCH CORP
ISCO INC MAIN STREET & MAIN INC NATIONAL SECURITY GROUP
ITEQ INC MAINE PUBLIC SERVICE CO NATIONAL TECHNICAL SYSTS
J ALEXANDER'S CORP MANATRON INC *NEMATRON CORPORATION
JACOBSON STORES INC MANCHESTER EQUIPMENT CO NEOGEN CORP
JANUS HOTELS AND RESORTS MANSUR INDUSTRIES INC NESCO INCORPORATED
JENKON INTERNATIONAL INC MARGO CARIBE INC *NETIVATION.COM INC
JENNY CRAIG MARKETING SPECIALISTS CP *NETRADIO CORPORATION
JLM INDUSTRIES INC MATEC CORP NETSMART TECHNOLOGIES
JOHN Q. HAMMONS HOTELS MATHSOFT INC NETWORK COMPUTING DEVICE
</TABLE>
19
<PAGE> 23
<TABLE>
<S> <C> <C>
JOHN SANFILIPPO & SON MAX & ERMA'S RESTAURANT NEW BRUNSWICK SCIENTIFIC
JOHNSTON INDUSTRIES INC MAXCO INC NEW WORLD COFF-MNHTN BGL
NEXTHEALTH INC PHOENIX INTERNAT LTD INC ROY F. WESTON INC CL A
NEXUS TELOCATION SYSTEMS PHOTOELECTRON CORP RURAL/METRO CORP
NIAGARA CORPORATION PICCADILLY CAFETERIAS S&K FAMOUS BRANDS INC
NMT MEDICAL INCORPORATED PIZZA INN INC SAF T LOK INC
NOBILITY HOMES INC PLC SYSTEMS INC *SALON.COM
NOODLE KIDOODLE INC PMR CORP SAMES CORPORATION
NORTH FACE INC (THE) *POLYAIR INTER PACK INC SARATOGA BEVERAGE GRP A
NORTHERN TECHNOLOGY POLYDEX PHARMACEUTICALS SAUCONY INC CL A
NORTHSTAR COMPUTER FORMS POLYVISION CORP SCHEID VINEYARDS INC CLA
NOTIFY TECHNOLOGY CORP *PONTOTOC PRODUCTION INC SCHMITT INDUSTRIES INC
NOVATEL INC POORE BROTHERS INC SCHUFF STEEL CO
ODWALLA INC POWERCERV CORPORATION SECURITY ASSOC INTL INC
OEC COMPRESSION CORP PPT VISION INC SED INTERNAT HLDNGS INC
OMNI ENERGY SERVICES CP PREMIUMWEAR INC SEEC INC
OMTOOL LTD PRIMESOURCE CORPORATION SELAS CORP OF AMERICA
ON-SITE SOURCING INC PROFESSIONAL TRANSP GRP SENECA FOODS CORP CL B
ONE PRICE CLOTHING STORE PROGEN INDUSTRIES LTD SENSORY SCIENCE CORP
OPINION RESEARCH CORP PROMEDCO MANAGEMENT CO SENTO CORPORATION
OPTA FOOD INGREDIENTS PROVIDENCE & WORCESTR RR SERACARE INC
*OPTICARE HEALTH SYSTEMS PROXYMED INC SHARED TECHNOL CELLULAR
OPTISYSTEMS SOLUTIONS PRT GROUP INC SHOLODGE INC
ORBIT/FR INC PUBCO CORP SHONEY'S INC
ORLEANS HOMEBUILDERS INC PURE WORLD INC SIFCO INDUSTRIES INC
ORYX TECHNOLOGY CORP PVC CONTAINER CORP SIGA PHARMACEUTICALS INC
OSTEX INTERNAT INC Q.E.P. CO INC SIGNAL APPAREL COMPANY
OUTLOOK GROUP CORP QUESTCOR PHARMACEUTICALS SILICOM LTD
P & F INDUSTRIES CL A QUIPP INC SILVER STANDARD RESOURCE
PALATIN TECHNOLOGIES INC R&B INC SIMON TRANSPORT SVCS CLA
PALOMAR MEDICAL TECH R.G. BARRY CORP SIMULA INC
PAMECO CORP RADA ELECTRONIC INDS LTD SMARTIRE SYSTEMS INC
PAR TECHNOLOGY CORP *RADWARE LTD SMC CORP
PARAGON TECHNOLOGIES INC RANDGOLD&EXP CO LTD ADS SOCRATES TECHS CORP
PARALLEL PETROLEUM CORP RAYTEL MEDICAL CORP SONESTA INTERNAT HOTELS
PARLUX FRAGRANCES INC REEDS JEWELERS INC SONUS PHARM INC
PATHWAYS GROUP INC REHABILICARE INC SOUND ADVICE INC
PATRICK INDUSTRIES INC RELIABILITY INC *SOURCINGLINK.NET INC
PAUL HARRIS STORES INC *RESOURCEPHOENIX.COM CL A SPARTON CORP
PAUL MUELLER COMPANY RF INDUSTRIES LTD SPINNAKER INDUSTRIES INC
PEERLESS MANUFACTURING RGC RESOURCES INC SPORT CHALET INC
PENDARIES PETROLEUM LTD RICHMONT MINES INC SPORT SUPPLY GROUP INC
PENTACON INC RIDDELL SPORTS INC SSE TELECOM INC
PERCEPTRON INC RIGHT START INC., THE STAKE TECHNOL LTD
PERMA-FIX ENVIRON SVC RIVIERA HOLDINGS CORP STANDARD AUTOMOTIVE CORP
PETROLEUM HELICOPTER NV ROCK OF AGES CORP STARCRAFT CORP
PETROLEUM HELICOPTER VTG ROCKY SHOES & BOOTS INC STERILE RECOVERIES INC
*PETROQUEST ENERGY INC ROSS SYSTEMS INC STM WIRELESS INC CL A DE
PHAR-MOR INC ROTONICS MANUFACTURING STRATASYS INC
STV GROUP TOTAL ENTERTAINMENT REST *VANGUARD AIRLINES INC
*SUNHAWK.COM CORPORATION TOWNE SERVICES INC VARIFLEX INC
SUNRISE INTERNAT LEASING *TOWNPAGESNET.COM PLC ADS *VARSITYBOOKS.COM INC.
SUNSHINE MIN & REFIN TOYMAX INTERNAT INC VDC COMMUNICATIONS INC
SUNSOURCE INC TRANSPORTATION COMPONENT VENTURE CATALYST INC
SUPER VISION INTERNAT A TRANSPRO INC VERAMARK TECHNOLOGIES
SUPREMA SPECIALTIES INC TRANSWORLD HEALTHCRE INC VERMONT PURE HOLDINGS
SURGE COMPONENTS INC TRAVIS BOATS&MOTORS INC VERMONT TEDDY BEAR CO
SYMBOLLON CP CL A TRIDENT ROWAN GROUP INC VIDEO DISPLAY CORP
TAB PRODUCTS CO TRIMARK HOLDINGS INC VIDEOLABS INC
TAG-IT PACIFIC INC TRIMEDYNE INC VIEW TECH INC
TAITRON COMPONENTS CL A TRM CORPORATION VIRTUALFUND.COM INC
TANDY BRANDS ACCESSORIES *TRUETIME INCORPORATED VISION SCIENCES INC
TANDYCRAFTS INC TSR INC VITRAN CORPORATION
TATNEFT ADS *TUMBLEWEED INC VIZACOM INC
TBA ENTERTAINMENT CORP U.S. ENERGY SYSTEMS INC VULCAN INTERNAT CORP
TCI INTERNAT INC U.S. LIME & MINERALS INC WACKENHUT CORP CL A, THE
TEAM AMERICA CORP U.S. PHYSICAL THERAPY WEBCO INDUSTRIES INC
TEAM INC UBICS INC WEGENER CORP
TEAMSTAFF INC UNICOMP INC WESTERN PWR & EQUIPMENT
</TABLE>
20
<PAGE> 24
<TABLE>
<S> <C> <C>
*TECH FLAVORS & FRAGRANCE UNITED GUARDIAN INC *WESTMORELAND COAL CO
TECH-OPS SEVCON INC UNIVERSAL STAIN & ALLOY WHITMAN EDUCATION GROUP
TECHNICAL CHEM & PROD UROCOR INC WILLIAMS CONTROLS INC
TEKNOWLEDGE CORPORATION US OFFICE PRODUCT CO WILSHIRE OIL CO OF TX
*TELEMATE.NET SOFTWARE *US SEARCH CORP.COM WISER OIL COMPANY, THE
TELEX CHILE SA ADS US WATS INC *WOMEN FIRST HEALTHCARE
TEXOIL INC USA BIOMASS CORPORATION XATA CORP
THOUSAND TRAILS INC USA DETERGENTS INC XETEL CORPORATION
TII INDUSTRIES INC USABANCSHARES.COM INC YORK GROUP INC., THE
TITAN MOTORCYCLE OF AMER USOL HOLDINGS INC YORK RESEARCH CORP
TOKHEIM CORP UTILX CORP ZEVEX INTERNAT INC
TOP IMAGE SYSTEMS LTD VALLEY MEDIA INC ZINDART LIMITED ADR
TORCH ENERGY ROY TR VALLEY NATIONAL GASES ZMAX CORP
TOREADOR ROYALTY CORP
</TABLE>
21
<PAGE> 25
KRUG INTERNATIONAL CORP.
ANNUAL MEETING OF SHAREHOLDERS
FRIDAY, DECEMBER 1, 2000
* FOLD AND DETACH HERE *
KRUG INTERNATIONAL CORP.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON FRIDAY, DECEMBER 1, 2000
The undersigned hereby constitutes and appoints Robert M. Thornton, Jr.
and Karen B. Brenner, and each of them, as attorneys-in-fact and proxies of the
undersigned, with full power of substitution, to appear at the Annual Meeting of
Shareholders of KRUG International Corp. ("KRUG") to be held on Friday, December
1, 2000 at 3:00 p.m., and at any postponement or adjournment thereof, and to
vote all of the shares of Common Stock of KRUG which the undersigned is entitled
to vote, with all the powers and authority the undersigned would possess if
personally present. The undersigned hereby directs that this proxy be voted as
follows:
ITEM 1(a) To elect three nominees listed below for terms ending in
2001, as described in the accompanying Proxy Statement.
James J. Mulligan, Ronald J. Vannuki and Dr. Steven Baileys
<TABLE>
<S> <C>
[ ] FOR all nominees listed above [ ] WITHHOLD AUTHORITY
to vote for all nominees listed above
</TABLE>
(To withhold authority to vote for any nominee(s) named above, check the "FOR"
box above and write the name of such nominee(s) on the line below.)
(b) To elect four nominees listed below for terms ending in
2002, as described in the accompanying Proxy Statement.
Robert M. Thornton, Jr., Karen B. Brenner, Howard E. Turner
and C. Michael Ford
<TABLE>
<S> <C>
[ ] FOR all nominees listed above [ ] WITHHOLD AUTHORITY
to vote for all nominees listed above
</TABLE>
(To withhold authority to vote for any nominee(s) named above, check the "FOR"
box above and write the name of such nominee(s) on the line below.)
ITEM 2 To transact such other business as may properly come before
the Annual Meeting or any postponement or adjournment thereof.
(Please date and sign on other side)
<PAGE> 26
* FOLD AND DETACH HERE *
(continued from other side)
THIS PROXY WILL,WHEN PROPERLY EXECUTED, BE VOTED AS DIRECTED. IF NO DIRECTIONS
TO THE CONTRARY ARE INDICATED IN THE BOXES PROVIDED, THE PERSONS NAMED HEREIN
INTEND TO VOTE "FOR"THE ELECTION OF THE NOMINEES LISTED.
THIS PROXY CONFERS CERTAIN DISCRETIONARY AUTHORITY DESCRIBED IN THE PROXY
STATEMENT. A MAJORITY OF SAID ATTORNEYS AND PROXIES PRESENT AT SAID MEETING (OR
IF ONLY ONE SHALL BE PRESENT, THEN THAT ONE) MAY EXERCISE ALL OF THE POWERS
HEREUNDER.
The undersigned hereby acknowledges receipt of Notice of said Annual Meeting,
the Proxy Statement relating thereto and KRUG's Annual Report to Shareholders
for fiscal year ended March 31, 2000.
Dated: , 2000
-------------------------
-------------------------------------
(Shareholder's Signature)
-------------------------------------
(Shareholder's Signature)
Please sign your name(s) exactly as shown
hereon and date your proxy in the blank. For
joint accounts, each joint owner should sign.
When signing as attorney, executor,
administrator, trustee or guardian, please
give your full title as such. If the signer
is a corporation or partnership, please sign
in full corporate or partnership name by a
duly authorized officer or partner.
PLEASE DATE AND SIGN THIS PROXY AND RETURN IT PROMPTLY IN THE
ENCLOSED ENVELOPE.
