-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, S4xmWlnpv0PDSfgXELveu6tyj87hy3OJO8CixT7MurYG3VHZgZ+HRMRK8bvQpZ5e xW9Sc0ucMEWCBdcPoAAYVw== 0000914317-98-000076.txt : 19980428 0000914317-98-000076.hdr.sgml : 19980428 ACCESSION NUMBER: 0000914317-98-000076 CONFORMED SUBMISSION TYPE: PRES14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980227 FILED AS OF DATE: 19980202 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ETHIKA CORP CENTRAL INDEX KEY: 0000029322 STANDARD INDUSTRIAL CLASSIFICATION: 6311 IRS NUMBER: 640440887 STATE OF INCORPORATION: MS FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: PRES14A SEC ACT: SEC FILE NUMBER: 000-03296 FILM NUMBER: 98519259 BUSINESS ADDRESS: STREET 1: 107 THE EXECUTIVE CENTER STREET 2: P O BOX 22587 CITY: HILTON HEAD ISLAND STATE: SC ZIP: 29928 BUSINESS PHONE: 8037857850 MAIL ADDRESS: STREET 1: 107 THE EXECUTIVE CENTER CITY: HILTON HEAD ISLAND STATE: SC ZIP: 29928 FORMER COMPANY: FORMER CONFORMED NAME: DIXIE NATIONAL CORP DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: MODERN DIXIE CORP DATE OF NAME CHANGE: 19700410 PRE 14A 1 SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 [ X ] Filed by the registrant [ ] Filed by a party other than the registrant Check the appropriate box: [ X ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) [ ] Definitive Proxy Statement [ ] Definitive Additional Materials [ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12 Ethika Corporaton (formerly known as Dixie National Corporation) - - -------------------------------------------------------------------------------- (Name of Registrant as Specified in Its Charter) ETHIKA CORPORATION 107 The Executive Center Hilton Head Island, South Carolina 29928 PROXY STATEMENT For the Special Meeting of Shareholders To be Held Friday, February 27, 1998 SOLICITATION The enclosed Proxy is being solicited by the Board of Directors of Ethika Corporation ("Corporation") for use at the Special Meeting of Shareholders of the Corporation to be held at The Sheraton Denver West Hotel, 360 Union Boulevard, Lakewood, Colorado, 80228 on Friday, February 27, 1998 at 10 a.m. (Mountain) and any adjournment or postponement thereof. Shareholders may revoke their Proxy by written notice to the Corporation at any time prior to the exercise thereof or by attendance at the meeting and voting their shares in person. The solicitation will be primarily by mail but may also be by telephone, telegraph, or oral communications by Officers or regular employees. The cost of soliciting Proxies will be borne by the Corporation. The term "Corporation," as used herein, includes the Corporation and the Corporation's subsidiaries as the context indicates. This Proxy Statement and accompanying Proxy Card are being mailed to Shareholders on or about February 10, 1998. Shares represented by a properly executed and returned Proxy Card will be voted at the Special Meeting in accordance with the instructions indicated thereon, or if no instructions are indicated, the Proxy will be voted FOR amendment of the Articles of Incorporation changing the par value of common stock to zero and to establish a class of preferred stock; FOR authorization of a 22.5 for 1 reverse stock split; FOR re-domicile the Corporation to Nevada; FOR the ratification of the acquisition of North American Digicom Corporation and its subsequent name change from Ethika Corporation to North American Digicom Corporation; and FOR the Board of Directors to consist of eight members and the election of the eight nominees of the Board of Directors to serve as Directors of the Corporation. VOTING SECURITIES Shareholders of record at the close of business on January 19, 1998 will be entitled to Notice of and to vote at the Special Meeting. On January 19, 1998 there were 20,455,725 shares of common stock of the Corporation outstanding and entitled to vote. Each outstanding share of common stock is entitled to one vote per share on each matter submitted to a vote at the Special Meeting except with respect to the election of Directors, in which Shareholders have cumulative voting rights. Cumulative voting means that each Shareholder will be entitled to cast as many votes as he or she has shares of common stock multiplied by the number of Directors to be elected, and all such votes may be cast for a single nominee or may be distributed among the Directors to be voted for as he/she sees fit. To exercise cumulative voting rights by Proxy, a Shareholder must clearly designate the number of votes to be cast for any given nominee. The presence in person or by Proxy of a majority of the outstanding shares shall constitute a quorum for the transaction of business at the Special Meeting. Abstentions will be counted for purposes of determining the presence or absence of a quorum. Abstentions are considered as a vote against any matter other than the election of Directors as to which a Shareholder may vote for a nominee or withhold authority to vote. "Broker non-votes" which occur when brokers are not permitted to exercise discretionary voting authority for beneficial owners who have not provided any voting instructions, are not counted for quorum purposes or any vote. To the extent that voting instructions are provided to brokers as to any proposal, the shares will be counted for purposes of determining a quorum and the outcome of the vote. The Chairman of the Board of the Corporation will appoint two inspectors of election. The inspectors will take charge of, and will count the votes and ballots cast at the Special Meeting and will make a written report on their determination. OWNERSHIP OF VOTING SECURITIES BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Security Ownership of Certain Beneficial Owners The following table sets forth pertinent information as to the beneficial ownership of the Corporation's common stock as of January 19, 1998 of persons known by the Corporation to be holders of 5% or more of the outstanding common stock. Information as to the number of shares beneficially owned has been furnished by the persons named in the table and by reference to documents filed with the Securities and Exchange Commission by holders of 5% or more of such common stock.
Shares Name and Address Beneficially Percent Of Beneficial Owner Owned of Class ------------------- ----- -------- Alfred Peeper 0 (1) 0% Calle Hamburg 22 Benidorm, Spain ALC 03500 Argere Holdings, S.A. 420,000 (1) 1.9% 18 Boulevard Royal L-2449 Luxembourg Eur-Am B.V. 461,100 (1) 2.1% Calle Hamburg 22 Benidorm, Spain ALC 03500 La Roche Holdings, S.A. 902,500 (1) 4.1% 18 Boulevard Royal L-2449 Luxembourg La Salle Investment, Ltd. 7,997,929 (1) 36.1% 35 Rue De Bains Geneva, Switzerland 1205 Rial Equity Group, S.A. 600,000 (1) 2.7% C/o SAGEM 35 Rue De Bains Geneva, Switzerland 1205 Directors and Officers 25,000 * As a Group * Less than 1%.
(1) Alfred Peeper is an investment manager headquartered and operating in Benidorm, Spain. Mr. Peeper holds a power of attorney for each Reporting Person which gives him authority to purchase, sell, and exercise all voting rights relating to each "Group Member." This Reporting Person represents 51% of the total outstanding shares of Ethika common stock. Security Ownership of Management The following table sets forth information as to the beneficial ownership of the Corporation's common stock as of January 31, 1998, by each Director, nominee; Executive Officer named in the Summary Compensation Table and by all DirectorsAnd Executive Officers as a group.
Shares Name of Beneficially Percent Beneficial Owner Owned (1) of Class ---------------- ----- --- -------- Russell C. Burk None 0% Dennis Brovarone None 0% Jeffrey Evensen None 0% Philip F. Grey None 0% W. Craig Nelson None 0% Dennis P. Nielsen None 0% William Peterson None 0% Directors, nominees, and Executive Officers as a group (8 persons)(2) 25,000 *
(1) Current Board Members who have no outstanding shares of Ethika common stock. See Item III for post acquisition share ownership. (2) Includes shares issueable upon exercise of vested stock options. * Represents less than 1%. I. APPROVE AMENDMENTS TO ARTICLES OF INCORPORATION The Board of Directors recommends that the Shareholders vote for amendments to the Articles of Incorporation affecting the capital stock of the Corporation by the following: a) Change the par value of all authorized shares of Ethika common stock to no par value. b) Establish as class of 10,000,000 shares of preferred stock, issuable in series whose rights and preferences may be set by the Board of Directors prior to issuance. The principal purpose for the recommended amendments is to give the Corporation greater flexibility in its financial affairs by eliminating the need to record a discount on common stock when stock is issued or sold, and by making available a different class of stock that may be used at such times as the Board of Directors considers appropriate whether in public or private offerings or in conjunction with merger and acquisitions or otherwise. The Corporation's Shareholders may or may not be given the opportunity to vote on such a transaction, depending on the nature of the transaction, applicable law, and the rules and policies applicable to the Nasdaq National Stock Market. The move of the domicile of the Corporation to Nevada is also being requested at this time. Vote Required for Approval A favorable vote of a majority of those shares voting in person or by Proxy is required to approve the amendments to the Articles of Incorporation. The Board recommends that you vote FOR the amendments to the Articles of Incorporation. II. AUTHORIZATION OF REVERSE SPLIT Authorize a reverse split of the outstanding shares of Ethika common stock, one new share for every twenty-two and one-half (22.5) currently outstanding shares, with each fractional share rounded to the next whole share, and each Shareholders' total share position rounded up to the next whole multiple of fifty (50). Vote Required for Approval A favorable vote of a majority of those shares voting in person or by Proxy is required to approve the Authorization of a Reverse Split. The Board recommends that you vote FOR the Authorization of a Reverse Split. III. RATIFICATION OF ACQUISITION OF NORTH AMERICAN DIGICOM CORPORATION On January 27, 1998 the Ethika Board of Directors unanimously approved the acquisition through a reverse merger of 100% of the outstanding common stock of North American Digicom Corporation (NAD) to be completed on or before March 6, 1998. NAD is a privately held corporation headquartered in Lakewood, Colorado. It was incorporated as a Colorado corporation on December 27, 1995. The company was initially formed to explore potential opportunities with, and arising from, the deregulation of the telecommunications industry. Since inception, the company has grown through internally generated sources as well as acquisitions in the areas of Pre-paid calling cards, Stand-alone travel cards, United Online internet provider, kidZtime TV violence-free television programming, and kidZtime Challenge program. At closing of this transaction, the Shareholders of NAD will exchange their common stock for Ethika common stock at the rate of three (3) shares of Ethika common stock for every four (4) shares of NAD stock. At the conclusion of this transaction, current Shareholders of NAD will receive approximately 19.6 million post-split shares of Ethika representing approximately 95% of the then-outstanding shares and will be in control of the Corporation. Five of the nominees for the Board of Directors are full-time Officers of NAD. Upon ratification of the transaction, the name of Ethika Corporation will be changed to North American Digicom Corporation. The following table sets forth information as to the beneficial ownership of the Corporation's common stock as it will exist if the acquisition of NAD is approved, for each Director, and nominee.
Shares Name of Beneficially Percent Beneficial Owner Owned of Class ---------------- ----- -------- Russell C. Burk None 0% Dennis Brovarone None 0% Jeffrey Evensen 750,000 3.7% Philip F. Grey 2,250,000 11.0% Wayne Johnson 2,250,000 11.0% W. Craig Nelson 463,161 2.3% William Peterson 463,161 2.3% Louis C. Scott 1,875,000 9.1%
Vote Required for Approval A favorable vote of a majority of those shares voting in person or by Proxy is required to approve the transaction with North American Digicom Corporation and to change the name of Ethika Corporation to North American Digicom Corporation. The Board recommends that you vote FOR the completion of the transaction with North American Digicom Corporation. IV. ELECTION OF DIRECTORS In addition to establishing the minimum and maximum number of Directors, Article III, Section 6 of the Bylaws of the Corporation also provides that the number of Directors shall be fixed annually by the Shareholders at each Annual or Special Meeting. The Board of Directors recommends that the Board of Directors of the Corporation for the ensuing year consist of eight Directors and further recommends the election of the nominees listed below. Each Director to hold office until the next Annual or Special Meeting of Shareholders or until his/her successor shall be duly elected and qualified. Shareholders may also nominate candidates for Director at any Meeting of Shareholders at which Directors are to be elected. Proxies will not be voted for more than eight nominees. Six nominees are members of the present Board and were elected thereto by the Board of Directors at Special Board of Directors' Meetings held on December 12, 1997 and January 27, 1998 to serve out the unexpired terms of resigning Directors. Management has no reason to believe that any substitute nominee or nominees will be required. The following table indicates the age; year first elected a Director, and principal occupation or employment for the past five years of each nominee. In addition, the table also indicates any Committee of the Board of Directors of the Corporation on which the nominee serves.
DENNIS BROVARONE Mr. Brovarone, 42, has been practicing corporate and securities law since 1986 and as a sole practitioner since 1990. He was elected to the Board in December 1997 and is Chairman of the Corporation's Board of Directors. Mr. Brovarone also serves as President Pro-tem and Chairman of the Executive Committee. Prior to 1990, Mr. Brovarone served as in- house counsel to R.B. Marich, Inc.; a Denver, Colorado based brokerage firm. Mr. Brovarone also serves as President (Chairman) of the Board of Directors of The Community Involved Charter School, a four- year old K-12 independently chartered public school located in Lakewood, Colorado. He also serves as a Director of Innovative Medical Services in San Diego, California. RUSSELL C. BURK Mr. Burk, 40, has been practicing corporate securities law since 1990 and as a sole practitioner since 1997. He was elected to the Board in December 1997. From 1993 to 1997, Mr. Burk was Vice President, General Counsel for RAF Financial Corporation, Denver, Co. JEFFREY J. EVENSEN Mr. Evensen, 52, is Chairman of the Board of North American Digicom Corporation. Since 1996, he has been self-employed as a consultant in the areas of strategic business planning for several corporations including World City Corp., New York, Storyline Concepts and Automated Artist, both located in Orlando, Florida. In 1995 and 1996, Mr. Evensen was Vice Chairman of Interactive Visions. He served in various capacities with The Walt Disney Company from 1992 to 1995. His most recent position with The Walt Disney Company was Vice President of Marketing and Strategic Planning. PHILIP F. GREY Mr. Grey, 45, has served as President, Chief Executive Officer, and Director of North American Digicom Corporation since its inception in December 1995. He also serves as Chairman of the Board of United Online, a wholly owned subsidiary of Digicom. Since 1994 Mr. Grey has served as President and CEO of Premier Financial Services, Inc., a Denver, Colorado-based business consulting firm. Since 1991, Mr. Grey has served as President and CEO of Phillips Energy Corporation. WAYNE JOHNSON Mr. Johnson, 40, is Chief Operating Officer of technical/delivery systems and a Director of North American Digicom Corporation. He has served as Director of Engineering for Key Communications Group and was Director of Installation at International Network Solutions. Mr. Johnson has owned and operated International Communications Consultants, Inc. W. CRAIG NELSON Mr. Nelson, 53, has served as Director and Vice President of Special Projects for North American Digicom Corporation since October 1997. In 1996 he served as Controller of Capital Funding & Financial Group; President of kidZtime TV Management Group, Inc. Prior to joining NAD, he was President of Community Interlink Corporation. WILLIAM D. PETERSON, Mr. Peterson, 49, has served as Director and House ESQ. Counsel of North American Digicom Corporation since October 1997. From August 1996 he served as House Counsel for kidZtime TV, Inc. and Capital Funding & Financial Group, Inc. He also serves as President and sole owner of William D. Peterson, P.C., and a Colorado law firm engaged in private practice for commercial and civil litigation. LOUIS C. SCOTTI Mr. Scotti, 42, has been Chief Financial Officer, Treasurer, and a Director of North American Digicom Corporation since 1996. He also serves as President and Chief Executive Officer of kidZtime TV, Inc. Mr. Scotti served as President and Managing Director of the Prometheus Group. From 1992 to 1995 he served as President of Carcharodon Acquisitions, Inc.
During fiscal year 1997, the Board of Directors of the Corporation held 13 meetings. Each member of the Board of Directors attended at least 85% of the meetings of the Board and appropriate Committee meetings. All Committees of the Board are appointed by the Chairman of the Board and ratified by the Board of Directors. Committees of the Board of Directors consist of the following: (1) Audit and Compliance Committee - Reviews audit plans, controls, and the Annual Report of the Corporation with independent auditors. Monitors regulatory compliance activities of the Corporation. During fiscal year 1997, the Audit and Compliance Committee held two meetings. (2) Executive Committee - Subject to statutory limitations, has concurrent authority of the Board of Directors. During fiscal year 1997, the Executive Committee of the Corporation held no meetings. (3) Nominating and Stockholder Relations Committee Serves as screening and nominating committee for Board of Directors and monitors Shareholder relations activities of the Corporation. A nominee for the Board of Directors recommended by a Shareholder should be submitted to this Committee. During fiscal year 1997, the Nominating and Stockholder Committee held two meetings. (4) Personnel and Compensation Committee - Reviews and approves compensation for all Corporate Officers and employee benefit plans of the Corporation. During fiscal year 1997, the Personnel and Compensation Committee held two meetings. (5) The Finance and Business Strategy Committee Reviews and approves financial reports of the Corporation and its operations. The Committee also reviews Management recommendations related to business strategies and acquisition proposals. During fiscal year 1997, the Finance and Business Strategy Committee held two meetings. Directors' Compensation Directors who are not employees of the Corporation are paid a monthly base fee of $400 and receive $250 per day per meeting attended. At the July 31, 1997 Board Meeting, the Directors approved the suspension of the monthly retainer fee of $400 and its subsequent reinstatement on March 31, 1998. As a group, the previous six non-employee Directors of the Corporation were paid $27,550 during fiscal year 1997. The current Directors received no compensation during fiscal year 1997. The Corporation was the subject of an investigation by the Securities and Exchange Commission ("SEC") which was resolved by means of a settlement. Pursuant to the settlement on March 9, 1994, the United States District Court for the District of Columbia entered final judgments of permanent injunction against the Corporation and Robert B. Neal, a former Director and former President of the Corporation. The judgments were entered on the basis of a complaint filed by the SEC. The Corporation and Mr. Neal each consented to the entry of final judgments of permanent injunction without admitting or denying the allegations contained in the SEC's complaint. The final judgments to which the Corporation and Mr. Neal consented enjoin them from violating or aiding and abetting future violations of sections of the Securities Act of 1933 and the Securities and Exchange Act of 1934 and certain rules thereunder. Executive Officers
Executive Officer Name Age Since ---- --- ----- Dennis Brovarone, 42 1997 Esq. Chairman, Chief Executive Officer, and President Pro tem David E. Williams 48 1996 Senior Vice President, Secretary, Treasurer, Chief Financial Officer, and Chief Operating Officer
Vote Required for Election Fixing the number of Directors at eight requires a favorable vote of a majority of those shares voting in person or by Proxy. The eight nominees receiving the highest number of votes shall be elected to the Board. The Board recommends that you vote FOR a Board consisting of eight Directors and FOR the election of each of the eight nominees to be Directors of the Corporation. EXECUTIVE COMPENSATION AND RELATED INFORMATION Summary Compensation Table The following Summary Compensation Table sets forth for each of the last three years ended December 31, 1997, information concerning the total compensation paid or awarded to the Corporation's Chief Executive Officer for services rendered in all capacities to the Corporation and its subsidiaries. The total compensation of none of the Corporation's Officers exceeded $100,000 in 1997.
Long-term Compensation -------------------- Annual Number of All Name and Compensation Securities Other Principal ------------------------ Underlying Compen- Position Year Salary Bonus Options sation -------- ---- ------ ----- ------- ------ S.L. Reed, Jr. 1997 $36,000 $0 50,000 $0 Chairman and CEO (2) 1996 $36,000 $0 50,000 $0 1995 $25,346 $0 50,000 $0 (1) Dennis Brovarone 1997 $ 0 $0 0 $0 Chairman and CEO (3)
(1) Commenced employment January 1995 (2) Resigned as Chairman and Director in December 1997 and CEO in January 1998 (3) Joined the Board and elected Chairman in December 1997. Appointed CEO in January 1998. Mr. Brovarone receives a fee of $5,000 per month starting January 1998 as compensation for his services. 0ption Grants in 1997 The following table sets forth information concerning options to purchase shares of common stock which were granted during 1997 to the individuals named in the Summary Compensation Table.
- - ------------------------------------------------------------------------------------------------------------------- Number of % of Total Securities Options Granted Underlying to Employees in Exercise Expiration Name Options Granted Fiscal Year Price Date 5% 10% ---- --------------- ----------- ----- ---- -- --- S.L. Reed, Jr. 50,000 (1) 40% $0.42 05/05/05 $48,052 $76,515
(1) These options would have begun vesting on May 30, 1998 at the rate of 20% per year for five years, however, this option was accelerated in accordance with the provisions of the Stock Option Plan since Mr. Reed's resignation was requested in conjunction with the settlement of the "Peeper Group" lawsuit. (See Certain Relationships and Related Transactions below for additional information). Fiscal Year End Option Value Table The following table sets forth information as of December 31, 1997 concerning the unexercised options held by Officers named in the Summary Compensation Table, none of whom exercised options in 1997. Options are "in-the-money" when the fair market of underlying common stock exceeds the exercise price of the option. The closing price of common stock on December 31, 1997 was $0.19 per share.
Number of Securities Underlying Value of Unexercised In-the-Money Unexercised Options at December 31, Options at Name 1996 December 31, 1996 - - -------------------- --------------------------------------- ---------------------------------------- Exercisable Unexercisable Exercisable Unexercisable ----------- ------------- ----------- ------------- S.L. Reed, Jr. 150,000 0 None None
Certain Relationships and Related Transactions On June 10, 1997 the Corporation acquired Legislative Information Systems Corporation (LIS) in a business combination accounted for as a pooling of interests. LIS became a wholly owned subsidiary of the Corporation through the exchange of 1,123,433 shares ($616,203) of the Corporation's common stock for all of the outstanding stock of LIS. Mr. Don Withrow, who was a 55% owner of LIS, received 617,888 shares of Ethika common stock. In addition, Mr. Withrow entered into a one-year employment contract at an annual salary of $80,000 plus bonus based upon performance. LIS is an electronic publishing company located in Annandale, Virginia specializing in federal aviation regulations, banking regulations, and custom service contracts. Ethika Corporation, in conjunction with settlement of a lawsuit filed in the United States District Court for the Southern District of Mississippi, Jackson Division, styled EURAM, B.V., Peeper, et al. vs. Ethika by certain plaintiffs against Ethika and its thenChairman, S.L. Reed, Jr., entered into a Subscription Agreement for the sale of 7,000,000 shares of its unregistered common stock to LaSalle Investment, Ltd., a party to the lawsuit for $0.09 per share. The Schedule 13-D filed with the SEC indicates that beneficial ownership of the "Reporting Persons" increased to 51% as a result of this transaction resulting in change of control of Ethika Corporation. On January 8, 1998 the Corporation entered into a Letter of Intent to acquire in a reverse merger 100% of the outstanding common stock of NAD. (See Item III for additional information). On January 27, 1998 the parties executed a Definitive Agreement to accomplish the acquisition on or before March 6, 1998. At closing, the shareholders of NAD will exchange their common stock for Ethika common stock at the rate of three (3) shares of Ethika common stock for every four (4) shares of NAD stock. The NAD shareholders will receive approximately 19.6 million post-split shares of Ethika, which will represent approximately 95% of the then-outstanding shares. NAD is a mass communications company which integrates retail and wholesale long-distance services including nationwide internet services, prepaid phone cards through its wholly-owned subsidiary, United Online, violence-free television programming distributed nationwide through its wholly-owned subsidiary, kidZtime TV, Inc., and other telecommunications services under one umbrella utilizing the most current technology in providing services to its customers. SHAREHOLDER PROPOSALS Any Shareholder desiring to have a proposal considered for inclusion in the Proxy Statement to be distributed in connection with the Corporation's 1998 Annual Meeting is requested to submit such proposal in writing to the Corporation, Attention: Corporate Secretary, no later than March 31, 1998. IV. OTHER MATTERS The Management of the Corporation knows of no other matters, which may come before the Meeting except for the approval of the Minutes of the last Annual Meeting of Shareholders. Copies of the Corporation's Annual Report for the year ended December 31, 1996 containing audited financial statements together with Forms 10-Q for the periods ending March 31, June 30, and September 31, 1997 and Form 8K filed by the Corporation on December 12, 1997 were mailed to all Shareholders of record as of January 19, 1998. The audit being conducted by our independent auditors, Price Waterhouse, LLP, for the year ended December 31, 1997 is currently being conducted with anticipated completion on or about March 31, 1998. Please date, sign, and return the enclosed Proxy Card to the Corporation promptly. February 10, 1998 David E. Williams Secretary -----END PRIVACY-ENHANCED MESSAGE-----