<SUBMISSION>
<ACCESSION-NUMBER>0000792987-01-500012
<TYPE>10-K
<PUBLIC-DOCUMENT-COUNT>5
<PERIOD>20001231
<FILING-DATE>20010323
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>ASTEC INDUSTRIES INC
<CIK>0000792987
<ASSIGNED-SIC>3531
<IRS-NUMBER>620873631
<STATE-OF-INCORPORATION>TN
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>10-K
<ACT>34
<FILE-NUMBER>000-14714
<FILM-NUMBER>1578140
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>4101 JEROME AVE
<CITY>CHATTANOOGA
<STATE>TN
<ZIP>37407
<PHONE>4238674210
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>PO BOX 72787
<STREET2>4101 JEROME AVE
<CITY>CHATTANOOGA
<STATE>TN
<ZIP>37407
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>a10k00.htm
<TEXT>

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<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 WIDTH=714>
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<P ALIGN="CENTER"><FONT FACE="Arial" SIZE=2>FORM 10-K</FONT></TD>
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<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">SECURITIES AND EXCHANGE COMMISSION</FONT></TD>
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<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">Washington, D.C.</FONT></TD>
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<FONT FACE="Wingdings" SIZE=5><P>&yacute;</FONT><FONT FACE="Arial" SIZE=5> </FONT><FONT FACE="Arial" SIZE=2>&#9;ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 &#9;For the fiscal year ended <U>December 31, 2000</U>
</FONT></TD>
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<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">OR</FONT></TD>
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<FONT FACE="Wingdings" SIZE=5><P>o</FONT><FONT FACE="Arial" SIZE=5> </FONT><FONT FACE="Arial" SIZE=2>TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 <BR>
&#9;For the transition period from <U>____________________</U> to <U>____________________</U></FONT></TD>
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<FONT FACE="Arial" SIZE=2><P>Commission file number <U>0-14714</U></FONT></TD>
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<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">ASTEC INDUSTRIES, INC.</FONT></TD>
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<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">(Exact name of registrant as specified in its charter)</FONT></TD>
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<U><FONT FACE="Arial" SIZE=2><P>Tennessee </U>&#9; <BR>
(State or other jurisdiction of incorporation or organization)&#9; </FONT></TD>
<TD WIDTH="50%" VALIGN="TOP" HEIGHT=46>
<U><FONT FACE="Arial" SIZE=2><P>62-0873631 <BR>
</U>(I.R.S. Employer Identification No.)</FONT></TD>
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<U><FONT FACE="Arial" SIZE=2><P>P. O. Box 72787, 4101 Jerome Avenue, Chattanooga, Tennessee</U> &#9; <U>37407 <BR>
</U>(Address of principal executive offices) &#9;(Zip Code)</FONT></TD>
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<FONT FACE="Arial" SIZE=2><P>Registrant's telephone number, including area code: <U>(423) 867-4210</U></FONT></TD>
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<FONT FACE="Arial" SIZE=2><P>Securities registered pursuant to Section 12(b) of the Act: <U>NONE</U></FONT></TD>
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<FONT FACE="Arial" SIZE=2><P>Securities registered pursuant to Section 12(g) of the Act:</FONT></TD>
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<U><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">Common Stock, $.20 par value</U></FONT></TD>
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<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">(Title of class)</FONT></TD>
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<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. <BR>
Yes X&#9;&#9;No ____<U> </U></FONT></TD>
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<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">(Form 10-K Cover Page - Continued)</FONT></TD>
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<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]</FONT></TD>
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<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">The aggregate market value of the voting stock held by non-affiliates of the registrant was approximately $187,698,000 based upon the closing sales price reported by the NASDAQ National Market on March 15, 2001, using beneficial
ownership of stock rules adopted pursuant to Section 13 of the Securities Exchange Act of 1934 to exclude voting stock owned by all directors and executive officers of the registrant, some of whom may not be held to be affiliates upon judicial determination
 .</FONT></TD>
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<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">(APPLICABLE ONLY TO CORPORATE REGISTRANTS)</FONT></TD>
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<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date:</FONT></TD>
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<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">As of March 15, 2001</FONT></TD>
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<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">Common Stock, par value $.20 - 19,331,567 shares</FONT></TD>
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<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">DOCUMENTS INCORPORATED BY REFERENCE</FONT></TD>
</TR>
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<FONT FACE="Arial" SIZE=2><P>&#9;Portions of the following documents have been incorporated by reference into the Parts of this Annual Report on Form 10-K indicated:</FONT></TD>
</TR>
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<FONT FACE="Arial" SIZE=2><P>&#9;&#9;<U>Document</U>&#9;&#9;&#9; <BR>
Proxy Statement relating to Annual Meeting of Shareholdersto be held on April 25, 2001&#9;&#9;&#9;&#9;&#9;</FONT></TD>
<TD WIDTH="50%" VALIGN="TOP" HEIGHT=81>
<FONT FACE="Arial" SIZE=2><P>&#9;<U>Form 10-K</U> <BR>
&#9;Part III</FONT></TD>
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<B><U><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">ASTEC INDUSTRIES, INC.</B></U></FONT></TD>
</TR>
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<B><U><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">2000 FORM 10-K ANNUAL REPORT</B></U></FONT></TD>
</TR>
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<U><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">TABLE OF CONTENTS</U></FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P>PART I</U></FONT></TD>
<TD WIDTH="50%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">Page</U></FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Item 1. Business</FONT></TD>
<TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">1</FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Item 2. Properties</FONT></TD>
<TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">16</FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Item 3. Legal Proceedings</FONT></TD>
<TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">18</FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Item 4. Submission of Matters to a Vote of Security Holders</FONT></TD>
<TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">18</FONT></TD>
</TR>
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<FONT FACE="Arial" SIZE=2><P>Executive Officers of the Registrant</FONT></TD>
<TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">19</FONT></TD>
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<U><FONT FACE="Arial" SIZE=2><P>&nbsp;</P>
<P>PART II</U></FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Item 5. Market for Registrant's Common Equity and Related Shareholder Matters</FONT></TD>
<TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">20</FONT></TD>
</TR>
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<FONT FACE="Arial" SIZE=2><P>Item 6. Selected Financial Data</FONT></TD>
<TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">21</FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations</FONT></TD>
<TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">21</FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Item 7A. Quantitative and Qualitative Disclosures About Market Risk</FONT></TD>
<TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">21</FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Item 8. Financial Statements and Supplementary Data</FONT></TD>
<TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">21</FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure</FONT></TD>
<TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">21</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=2>
<U><FONT FACE="Arial" SIZE=2><P>&nbsp;</P>
<P>PART III</U></FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Item 10. Directors and Executive Officers of the Registrant</FONT></TD>
<TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">21</FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Item 11. Executive Compensation</FONT></TD>
<TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">21</FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Item 12. Security Ownership of Certain Beneficial Owners and Management</FONT></TD>
<TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">21</FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Item 13. Certain Relationships and Related Transactions</FONT></TD>
<TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">22</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=2>
<U><FONT FACE="Arial" SIZE=2><P>&nbsp;</P>
<P>PART IV</U></FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K</FONT></TD>
<TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">22</FONT></TD>
</TR>
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<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Appendix A</FONT></TD>
<TD WIDTH="50%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">A-1</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>Signatures</FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">-iii- <BR>
<B><U>&nbsp;</P>
<P ALIGN="CENTER">PART I</P>
<P ALIGN="CENTER">Item 1</U>. <U>BUSINESS <BR>
</B>General</P>
</U><P ALIGN="JUSTIFY">&#9;Astec Industries, Inc. (the "Company") is a Tennessee corporation, which was incorporated in 1972. The Company designs, engineers, manufactures, markets, and finances equipment and components used primarily in road building and
related construction activities. The Company's products are used in each phase of road building, from quarrying and crushing the aggregate to application of the road surface. In addition, the Company is partner in a joint venture that makes testing and
sampling equipment for the asphalt mix and aggregate processing industries. The Company also manufactures certain equipment and components unrelated to road construction, including trenching, auger boring, directional drilling, environmental remediation
and industrial heat transfer equipment. The Company holds 89 United States and 69 foreign patents, has 50 patent applications pending, and has been responsible for many technological and engineering innovations in the industry. The Company's products are
marketed both domestically and internationally. In addition to plant and equipment sales, the Company manufactures and sells replacement parts for equipment in each of its product lines. The distribution and sale of replacement parts is an integral part
of the Company's business.</P>
<P ALIGN="JUSTIFY">The Company's fourteen manufacturing subsidiaries are: (i) Breaker Technology Ltd., which designs, manufactures and markets rock breaking and processing equipment and utility vehicles for mining; (ii) Johnson Crushers International,
Inc., which designs, manufactures and markets portable and stationary aggregate and ore processing equipment; (iii) Kolberg-Pioneer, Inc., which designs, manufactures and markets aggregate processing equipment for the crushed stone, manufactured sand,
recycle, top soil and remediation markets; (iv) Osborn Engineered Products SA (Pty) Ltd., which designs, manufactures and markets crushers, vibratory screening equipment and turnkey plants and mills; (v) Production Engineered Products, Inc., which
designs, manufactures and markets high-frequency vibrating screens for sand and gravel and asphalt operations; (vi) Superior Industries of Morris, Inc., which designs, manufactures and markets conveyors and idlers; (vii) Telsmith, Inc., which designs,
manufactures and markets aggregate processing equipment for the production and classification of sand, gravel, and crushed stone for road and other construction applications; (viii) Astec, Inc., which designs, manufactures and markets hot-mix asphalt
plants, soil purification and related components; (ix) CEI Enterprises, Inc., which designs, manufactures and markets heat transfer equipment and polymer and rubber blending systems for the hot-mix asphalt industry; (x) Heatec, Inc., which designs,
manufactures and markets thermal fluid heaters, asphalt heaters, polymer and rubber blending systems and other heat transfer equipment used in the Company's asphalt mixing plants and in other industries; (xi) American Augers, Inc., which designs,
manufactures and markets auger boring and directional drilling equipment; (xii) Trencor, Inc., which designs, manufactures and markets chain and wheel trenching equipment and excavating equipment; (xiii) Carlson Paving Products, Inc., which designs,
manufacturers and markets asphalt paver screeds; and (xiv) Roadtec, Inc., which designs, manufactures and markets milling machines used to recycle asphalt and concrete, asphalt paving equipment and material transfer vehicles.</P>
<P ALIGN="JUSTIFY">&#9;Astec Financial Services, Inc. ("AFS") was formed in June 1996 as a wholly owned subsidiary of the Company to provide a wide range of financing products for leasing or acquiring the Company's equipment. AFS, a captive finance
company, is dedicated to working with the Company's subsidiaries and their customers in arranging financing for the Company's equipment. AFS provides loans, operating leases, floor plans for dealers, fleet rental plans, and other financing plans to meet
the needs of the industry.</P>
<P ALIGN="JUSTIFY">Astec Systems, Inc. was formed late in 2000 in response to market demand for a new generation of modular aggregate processing plants. Astec Systems is not a manufacturing entity but designs and markets modular systems using the
engineering capabilities of and equipment manufactured by the Aggregate and Mining Group and the construction expertise of Astec, Inc. As of December 31, 2000, three modular aggregate processing plants were under construction.</P>
<P ALIGN="JUSTIFY">&#9;The Company is a 50% shareholder of Pavement Technology, Inc. ("PTI"). PTI manufactures innovative testing and sampling equipment and sells complete asphalt mix design laboratories assembled from PTI and third-party equipment. The
pavement analyzer technology has captured the interest of state departments of transportation, universities and contractors as a new standard for measuring pavement performance of hot-mix asphalt. The pavement technology product line enhances the services
and equipment the Company is able to provide to its customers. </P>
<P ALIGN="JUSTIFY">&#9;The Company's strategy is to be the low-cost producer in each of its product lines while continuing to develop innovative new products and provide first class service for its customers. Management believes that the Company is the
technological innovator in the markets in which it operates and is well positioned to capitalize on the need to rebuild and enhance roadway infrastructure, both in the United States and abroad.</P>
<U><P ALIGN="CENTER">Segment Reporting</P>
</U><P ALIGN="JUSTIFY">&#9;In 1998, the Company adopted SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information, which changed the way the Company reported information about its operating segments. The information below conforms
to current presentation requirements. </P>
<P ALIGN="JUSTIFY">The Company's business units have separate management teams and offer different products and services. The business units have been aggregated into four reportable business segments based upon the nature of the product or services
produced, the type of customer for the products and the nature of the production process. The reportable business segments are (i) Asphalt Group, (ii) Aggregate and Mining Group, (iii) Mobile Asphalt Paving Group and (iv) Underground Group. All remaining
companies are included in the "Other Business Units" category for reporting. </P>
<P ALIGN="JUSTIFY">Financial information in connection with the Company's financial reporting for segments of a business under SFAS 131 is included in Note 12 to "Notes to Consolidated Financial Statements - Operations by Industry Segment and Geographic
Area," appearing at Page A-20 of this report.</P>
<B><U><P ALIGN="JUSTIFY">Asphalt Group</P>
</B></U><P ALIGN="JUSTIFY">&#9;The Asphalt Group segment is made up of three business units, Astec, Inc., Heatec, Inc. and CEI Enterprises, Inc. These business units design, manufacture and market a complete line of asphalt plants and related components,
heating and heat transfer processing equipment and storage tanks for the asphalt paving and other non-related industries.</P>
<U><P ALIGN="JUSTIFY">Products</P>
</U><P ALIGN="JUSTIFY">Astec, Inc. designs, engineers, manufactures and markets a complete line of portable, stationary and relocatable hot-mix asphalt plants and related components under the ASTEC&reg; trademark. An asphalt mixing plant typically
consists of heating and storage equipment for liquid asphalt (manufactured by Heatec), cold feed bins for storing aggregates, a drum mixer for drying, heating and mixing, a baghouse composed of air filters and other pollution control devices, hot storage
bins or silos for temporary storage of hot-mix asphalt and a control house. The Company introduced the concept of plant portability in 1979. Its current generation of portable asphalt plants is marketed as the Six Pack<SUP>TM </SUP>and consists of six portable components, which can be disassembled, moved to the construction site and reassembled, which reduces relocation expenses. Plant portability represents an industry innovation developed and successfully marketed by
the Company. In 1996, an improved version of the Six Pack<SUP>TM</SUP> plant was developed, making it considerably easier to assemble and capable of being separated into movable parts for transport without the use of a crane. This design eliminated the use of cranes for disassembly or erection. The enhanced
version of the Six Pack<SUP>TM</SUP><I>, </I>known as the Turbo Six Pack<SUP>TM</SUP>, is a highly portable plant which is especially useful in less populated areas where plants must be moved from job to job.</P>
<P ALIGN="JUSTIFY">&#9;The components in Astec's asphalt mixing plants are fully automated and use microprocessor-based control systems for efficient operation. The plants are manufactured to meet or exceed federal and state clean air standards.</P>
<P ALIGN="JUSTIFY">&#9;The Company has also developed specialized asphalt recycling equipment for use with its hot-mix asphalt plants. Many of its existing products are suited for blending, vaporizing, drying and incinerating contaminated products. As a
result, Astec has developed a line of thermal purification equipment for the remediation of petroleum-contaminated soil.</P>
<P ALIGN="JUSTIFY">Heatec, Inc. designs, engineers, manufactures and markets a variety of thermal fluid heaters, process heaters, waste heat recovery equipment, liquid storage systems and polymer and rubber blending systems under the HEATEC&reg;
trademark. For the construction industry, Heatec manufactures a complete line of asphalt heating and storage equipment to serve the hot-mix asphalt industry and water heaters for concrete plants. In addition, Heatec builds a wide variety of industrial
heaters to fit a broad range of applications, including equipment for emulsion plants, roofing material plants, refineries, chemical processing, rubber plants and the agribusiness. Heatec has the technical staff to custom design heating systems and has
systems operating as large as 50,000,000 BTU's per hour.</P>
<P ALIGN="JUSTIFY">CEI Enterprises, Inc. ("CEI"), designs, engineers, manufactures and markets heating equipment and storage tanks for the asphalt paving industry and rubber and polymer blending systems. CEI's heating equipment uses hot oil, direct fired
or electric heating processes. CEI's equipment includes portable and stationary tank models with capacities up to 35,000 gallons each.</P>
<U><P ALIGN="JUSTIFY">Marketing</P>
</U><P ALIGN="JUSTIFY">The Company markets its hot-mix asphalt and heat transfer products both domestically and internationally. The principal purchasers of asphalt and related equipment include highway contractors and foreign and domestic governmental
agencies. Asphalt equipment is sold directly to its customers with domestic and international sales departments. Outside dealers are not used to market hot-mix asphalt products, but agents are used to market asphalt plants and their components
internationally.</P>
<P ALIGN="JUSTIFY">Heatec equipment is marketed through both direct sales and dealer sales. Manufacturers' representatives sell heating products for applications in industries other than the asphalt industry. CEI equipment is marketed only through direct
sales. Direct sales employees are paid salaries and are generally entitled to commissions after obtaining certain sales quotas. </P>
<U><P ALIGN="JUSTIFY">Raw Materials</P>
</U><P ALIGN="JUSTIFY">Raw materials used in the manufacture of products include carbon steel and various types of alloy steel, which are normally purchased from distributors. Raw materials for manufacturing are readily available. Some steel is delivered
on a "just-in-time" arrangement from the supplier to reduce inventory requirements at the manufacturing facilities.</P>
<U><P ALIGN="JUSTIFY">Competition</P>
</U><P ALIGN="JUSTIFY">This industry segment faces strong competition in price, service and product performance and competes with both large publicly held companies with resources significantly greater than those of the Company and with various smaller
manufacturers. Hot-mix asphalt plant competitors include CMI Corporation; Cedarapids, Inc., a subsidiary of Terex Corporation; and Gencor Industries, Inc. The market for the Company's heat transfer equipment is diverse because of the multiple applications
for such equipment. Competitors for heating equipment include Gencor/Hyway Heat Systems, American Heating, Gentec and GTS Energy Systems. </P>
<U><P ALIGN="JUSTIFY">Employees</P>
</U><P ALIGN="JUSTIFY">At December 31, 2000, the Asphalt Group segment employed 1,114 individuals, of which, 913 were engaged in manufacturing, 80 in engineering and 121 in selling, general and administrative functions.</P>
<U><P ALIGN="JUSTIFY">Backlog</P>
</U><P ALIGN="JUSTIFY">The backlog for the hot-mix asphalt and heat transfer equipment at December 31, 2000 and 1999 was approximately $41,203,000 and $59,350,000, respectively.</P>
<B><U><P ALIGN="JUSTIFY">Aggregate and Mining Group</P>
</B></U><P ALIGN="JUSTIFY">&#9;The Company's Aggregate and Mining Group is comprised of eight business units focused on the aggregate, metallic mining and recycle markets. Seven of the subsidiaries achieve their strength by distributing products into
niche markets and drawing on the advantages of brand recognition in the global market. These business units are Breaker Technology Ltd., Johnson Crushers International, Inc., Kolberg-Pioneer, Inc., Osborn Engineered Products, SA (Pty) Ltd., Production
Engineered Products, Inc., Superior Industries of Morris, Inc., and Telsmith, Inc. The eighth subsidiary, Astec Systems, Inc., designs and markets aggregate processing systems comprised of equipment manufactured by the other seven subsidiaries in this
segment and from selected equipment of the Asphalt Group.</P>
<U><P ALIGN="JUSTIFY">Products</P>
</U><P ALIGN="JUSTIFY">&#9;Founded in 1906, Telsmith, Inc. is the oldest subsidiary of the group. The primary markets served under the TELSMITH&reg; trade name are the aggregate and metallic mining industries. Telsmith's core products are cone (Gyrasphere
</FONT><FONT FACE="Symbol" SIZE=2>&acirc;</FONT><FONT FACE="Arial" SIZE=2> ), jaw and impact crushers, which are recognized for their reliability. A wide range of vibrating feeders for primary crushing operations are complemented with large vibrating screens for
the difficult scalping applications and sizing screens to handle the most rigorous specifications of finished aggregate products. Telsmith offers all their products as portables that are easily relocated to quarry sites to minimize the costs of
transporting crushed stone. Equipment furnished by Telsmith can be purchased as individual components, as portable plants for flexibility or as completely engineered systems for both portable and stationary applications.</P>
<P ALIGN="JUSTIFY">&#9;The stringent demands for quality aggregate to meet the specifications of the "Superpave" asphalt mixes has led to Telsmith's development of the <I>Silver Bullet&trade;</I> narrow band cone crusher, which provides unparalleled
results in producing a cubical product, as well as enhancing overall machine productivity.</P>
<P ALIGN="JUSTIFY">&#9;In metallic mining operations, TELSMITH&reg; equipment is used in primary crushing stages after the material has been blasted from the deposit. Secondary and tertiary crushing equipment, as well as vibrating screens, are employed
in systems to reduce the material down to sizes for grinding mill feed or leech bed processes.</P>
<P ALIGN="JUSTIFY">&#9;In 1994, Telsmith received ISO 9001 certification, the international standard of quality assurance in the design, development, production, installation and servicing of their products. This designation is recognition of the quality
of Telsmith products and services in the worldwide marketplace.</P>
<P ALIGN="JUSTIFY">&#9;Kolberg-Pioneer, Inc. ("KPI") designs, manufactures and supports a complete line of aggregate processing equipment for the sand and gravel, mining, quarrying and concrete recycling markets. KPI manufactures the well-known Pioneer<I>
&reg;</I> and Kolberg<I>&reg;</I> product lines.</P>
<P ALIGN="JUSTIFY">&#9;Pioneer<I>&reg; </I>products include a complete line of primary, secondary, tertiary and quaternary crushers, including jaws, cones, horizontal shaft impactors, vertical shaft impactors and roll crushers. Kolberg-Pioneer rock
crushers are used by mining, quarrying and sand and gravel producers to crush oversized aggregate to salable size. Vibrating feeders are used to convey aggregate to the primary crusher operations. The incorporation of vibrating grizzly feeders and
vibrating scalpers allows small material to bypass the primary crusher. </P>
<P ALIGN="JUSTIFY">&#9;Kolberg<I>&reg; </I>sand classifying and washing equipment is relied upon to clean, segregate and re-blend deposits to meet the size specifications for critical applications. The product line includes fine and coarse material
washers, log washers, blade mills and sand classifying tanks. Screening plants are available in both stationary and highly portable models, and are complemented by a full line of radial stacking and overland belt conveyors.</P>
<P ALIGN="JUSTIFY">&#9;Kolberg-Pioneer manufactures belt conveyors designed to move or store aggregate and other bulk materials, typically in radial cone-shaped stockpiles. Models offered include road portable, telescoping stationary and overland styles.
</P>
<P ALIGN="JUSTIFY">&#9;In addition, Kolberg-Pioneer manufactures pugmills, which are highly efficient homogenous mixing chambers consisting of twin shafts with timed, overlapping paddles used for soil remediation, cement-treated base and cold-mix
asphalt. Pugmills are typically combined with either a bulk storage silo for introducing dry additives or with a pump for liquids.</P>
<P ALIGN="JUSTIFY">&#9;Production Engineered Products, Inc. ("PEP") designs, manufactures and markets high-frequency vibrating screens for sand and gravel customers, as well as customers engaged in asphalt production. In addition, they incorporate the
high-frequency screens into portable crushing and screening plants servicing the aggregate and industrial markets. High-frequency screens are adept in separating out small mesh particles where conventional screens are not ideally suited. </P>
<P ALIGN="JUSTIFY">PEP's latest product development, the highly successful "Fold'n Go" plant, incorporates features that allow aggregate producers to efficiently manufacture asphalt chips and manufactured sand. This unit, with its on-plant stockpiling
conveyors and its own power source, is totally self-contained.</P>
<P ALIGN="JUSTIFY">&#9;Johnson Crushers International, Inc. ("JCI") designs, manufactures and distributes portable and stationary aggregate and ore processing equipment. This equipment is used in the aggregate, mining and recycle industries. JCI's
principal products are cone crushers, three-shaft horizontal screens, portable plants, and replacement parts for competitive equipment. JCI offers completely re-manufactured cone crushers and screens from its service repair facility.</P>
<P ALIGN="JUSTIFY">&#9;JCI<I>&trade;</I> cone crushers are used primarily in secondary and tertiary crushing applications, and come in both manual and remotely adjusted models. Horizontal screens are low-profile machines for use primarily in portable
applications. They are used to separate aggregate materials by sizes. Portable plants combine various configurations of cone crushers, horizontal screens and conveyors mounted on tow-away chassis. Because transportation costs are high, producers use
portable equipment to operate nearer to their job sites. Portable plants allow the aggregate producers to quickly and efficiently move their equipment from one location to another.</P>
<P ALIGN="JUSTIFY">&#9;Superior Industries of Morris, Inc. designs and manufactures a complete line of portable and stationary conveyors. Its portable line includes 150-foot telescoping stacking conveyors, patented FD series axle assemblies and
stationary conveyor systems for all types of bulk material handling, including stockpiling and overland transfer. Superior's product line also includes screening plants, wash plants, fine material washers and custom-built crushing plants. Superior's
component division builds a complete line of conveyor idlers and maintains ISO 9001 certification for quality assurance.</P>
<P ALIGN="JUSTIFY">&#9;Breaker Technology Ltd. ("BTL") designs, manufactures and markets hydraulic rock breaker systems for the aggregate, mining and recycling industries. They also design and manufacture a complete line of four-wheel drive articulated
utility vehicles for underground mines and quarries.</P>
<P ALIGN="JUSTIFY">In addition to the quarry and mining industries, BTL designs, manufactures and markets a complete line of hydraulic attachments for the North American construction and demolition markets. These attachments are sold on a variety of
equipment including excavators, backhoe loaders, wheel loaders, and skid steer loaders. They include hydraulic breakers and compactors for the construction market and include crushers, pulverizers, shears and multi-processors for the demolition market. </P>
<P ALIGN="JUSTIFY">BTL offers an extensive aftermarket sales and service program through a highly qualified and trained dealer network.</P>
<P ALIGN="JUSTIFY">Osborn Engineered Products, SA (Pty) Ltd. ("Osborn") designs, manufactures and markets a complete line of bulk material handling and minerals processing plants and equipment. This equipment is used in the aggregate, mineral mining,
metallic mining and recycle industries. Osborn has been a licensee of Telsmith's technology for over fifty years. In addition to the Telsmith line of equipment, Osborn offers rotary and roll crushers, mills, portable crushing and screening plants,
conveyor systems and idlers, and a line of IFE screens.</P>
<P ALIGN="JUSTIFY">Astec Systems, Inc. was formed late in 2000 in response to market demand for a new generation of modular aggregate processing plants. Astec Systems is not a manufacturing entity but designs and markets modular systems using the
engineering capabilities of and equipment manufactured by the Aggregate and Mining Group and the construction expertise of Astec, Inc. As of December 31, 2000, three modular aggregate processing plants were under construction.</P>
<U><P ALIGN="JUSTIFY">Marketing</P>
</U><P ALIGN="JUSTIFY">&#9;Aggregate processing and mining equipment is marketed by 122 direct sales employees, approximately 516 independent domestic distributors and approximately 74 independent international distributors. The principal purchasers of
aggregate processing equipment include highway and heavy equipment contractors, open mine operators, quarry operators and foreign and domestic governmental agencies.</P>
<U><P ALIGN="JUSTIFY">Raw Materials</P>
</U><P ALIGN="JUSTIFY">&#9;Raw materials used in the manufacture of products include carbon steel and various types of alloy steel, which are normally purchased from distributors. Raw materials for manufacturing are readily available. Breaker Technology
purchases rock breakers under a long-term purchasing contract from a Japanese supplier and also purchases crushers from an Italian supplier. Both the Japanese and Italian suppliers have sufficient capacity to meet the Company's anticipated demand;
however, alternative suppliers exist for both of these components should any supply disruptions occur.</P>
<U><P ALIGN="JUSTIFY">Competition</P>
</U><P ALIGN="JUSTIFY">The Aggregate and Mining Group faces strong competition in price, service and product performance. Aggregate processing and mining equipment competitors include Metso (Nordberg); Svedala Industri AB; Cedarapids, Inc.; Powerscreen
and Finley, subsidiaries of Terex Corporation; Deister; Eagle Iron Works; and other smaller manufacturers, both domestic and international.</P>
<U><P>Employees</P>
</U><P ALIGN="JUSTIFY">At December 31, 2000, the Aggregate and Mining Group segment employed 1,444 individuals, of which 988 were engaged in manufacturing, 128 in engineering and support functions, and 328 in selling, general and administrative functions.
</P>
<U><P ALIGN="JUSTIFY">Backlog</P>
</U><P ALIGN="JUSTIFY">At December 31, 2000 and 1999, the backlog for the Aggregate and Mining Group was approximately $43,882,000 and $33,034,000, respectively. The 1999 backlog is restated for the acquisition of Osborn.</P>
<B><U><P>Mobile Asphalt Paving Group</P>
</B></U><P ALIGN="JUSTIFY">&#9;The Mobile Asphalt Paving Group is comprised of Roadtec, Inc. and Carlson Paving Products, Inc. ("Carlson"). Roadtec designs, engineers, manufactures and markets asphalt pavers, material transfer vehicles and milling
machines. Carlson designs and manufactures asphalt paver screeds that attach to the asphalt paver to control the width and depth of the asphalt as it is applied to the roadbed.</P>
<U><P ALIGN="JUSTIFY">Products</P>
</U><P ALIGN="JUSTIFY">&#9;Roadtec's patented Shuttle Buggy&reg; is a mobile, self-propelled material transfer vehicle which allows continuous paving by separating truck unloading from the paving process while remixing the asphalt. A typical asphalt
paver must stop paving to permit truck unloading of asphalt mix. By permitting continuous paving, the Shuttle Buggy&reg; allows the asphalt paver to produce a smoother road surface. As a result of the pavement smoothness achieved with this machine,
certain states are now requiring the use of the Shuttle Buggy&reg;. Recent studies using infrared technology have revealed problems caused by differential cooling of the hot-mix during hauling. The Shuttle Buggy&reg;<SUP> </SUP>remixes the material to a uniform temperature and gradation, thus eliminating these problems.</P>
<P ALIGN="JUSTIFY">Asphalt pavers are used in the application of hot-mix asphalt to the road surface. Roadtec pavers have been designed to minimize maintenance costs while exceeding road surface smoothness requirements. Roadtec also manufactures a paver
model that is designed for use with the material transfer vehicle described above.</P>
<P ALIGN="JUSTIFY">&#9;Roadtec milling machines are designed to remove old asphalt from the road surface before new asphalt mix is applied. They are manufactured with a simplified control system, wide conveyors, direct drives and a wide range of
horsepower and cutting capabilities to provide versatility in product application. Additional upgrades and options are available to enhance the products and their capabilities.</P>
<P ALIGN="JUSTIFY">&#9;Carlson's patented screeds are part of the asphalt paving machine that lays asphalt on the roadbed at a desired thickness and width, while smoothing and compacting the surface. Carlson screeds can be configured to fit many types of
asphalt paving machines. A Carlson screed uses a hydraulic powered generator to electrify elements that heat a screed plate so that asphalt will not stick to it while paving. The generator is also available to power tools or lights for night paving.
Available options allow extended paving widths and the addition of a curb on the road edge.</P>
<U><P ALIGN="JUSTIFY">Marketing</P>
</U><P ALIGN="JUSTIFY">&#9;Mobile Asphalt Paving equipment is marketed both domestically and internationally to highway and heavy equipment contractors, utility contractors and foreign and domestic governmental agencies. Mobile construction equipment is
marketed both directly and through dealers. This segment employs 22 direct sales staff, 29 foreign independent distributors and 1 domestic independent distributor.</P>
<U><P ALIGN="JUSTIFY">Raw Materials</P>
</U><P ALIGN="JUSTIFY">Raw materials used in the manufacture of products include carbon steel and various types of alloy steel, which are normally purchased from steel mills and other sources. Raw materials for manufacturing are readily available. </P>
<U><P ALIGN="JUSTIFY">Competition</P>
</U></FONT><P ALIGN="JUSTIFY">&#9;<FONT FACE="Arial" SIZE=2>The Mobile Asphalt Paving Group segment faces strong competition in price, service and performance. Paving equipment and screed competitors include Caterpillar Paving Products, Inc., a
subsidiary of Caterpillar, Inc.; Blaw-Knox Construction Equipment Company, a subsidiary of Ingersoll-Rand Company; Cedarapids, Inc., a subsidiary of Terex Corporation; and Dynapac, a subsidiary of Svedala. The segment's milling machine equipment
competitors include CMI Corporation; Caterpillar, Inc.; and Wirtgen America, Inc.</P>
<U><P ALIGN="JUSTIFY">Employees</P>
</U><P ALIGN="JUSTIFY">At December 31, 2000, the Mobile Asphalt Paving Group segment employed 331 individuals, of which, 237 were engaged in manufacturing, 21 in engineering and support functions, and 73 in selling, general and administrative functions.</P>

<U><P ALIGN="JUSTIFY">Backlog</P>
</U><P ALIGN="JUSTIFY">The backlog for the Mobile Asphalt Paving Group segment at December 31, 2000 and 1999 was approximately $2,131,000 and $1,925,000, respectively. The 1999 backlog is restated for the acquisition of Carlson.</P>
<B><U><P>Underground Group</P>
</B></U><P ALIGN="JUSTIFY">&#9;The Underground Group segment consists of Trencor, Inc. and American Augers, Inc. This segment combines the marketing of the American Augers and Trencor products to be the innovative leader in both trenchless and trencher
technology to install utilities and pipeline worldwide. In the previous year, Trencor and American Augers were included in the Other Business Units segment.</P>
<U><P ALIGN="JUSTIFY">Products</P>
</U><P ALIGN="JUSTIFY">&#9;Trencor, Inc. designs, engineers, manufactures and markets chain and wheel trenching equipment, canal excavators, rock saws, material processors and road miners. </P>
<P ALIGN="JUSTIFY">&#9;With the ability to cut a trench through solid rock in a single pass, Trencor trenching equipment is among the toughest in the world. Utilizing a unique mechanical power train, Trencor machines are used to trench pipelines, lay
fiber optic cable, cut irrigation ditches, insert highway drainage materials, and more. Trencor also makes foundation trenchers used in areas where drilling and blasting are prohibited. Trencor recently redesigned their line of hydrostatic side-shift
trenchers to complement the heavy-duty hydrostatic rock saws used to install the rapidly growing worldwide network of fiber optic cable.</P>
<P ALIGN="JUSTIFY">&#9;Trencor canal excavators are used to make finished and trimmed trapezoidal canal excavations within close tolerances primarily for irrigation systems. The rock saw is used to lay water and gas lines, fiber optic cable, and for
constructing highway drainage systems, among other applications.</P>
<P ALIGN="JUSTIFY">&#9;Four Road Miner&reg; models are available with an attachment that allows them to cut a path up to twelve and a half feet wide and five feet deep on a single pass. The Road Miner&reg; has applications in the road construction
industry and in mining and aggregate processing operations.</P>
<P ALIGN="JUSTIFY">&#9;American Augers, Inc. designs, manufactures, markets and sells a wide range of trenchless equipment. Today, American Augers is one of the largest manufacturers of auger boring machines in the world, designing and engineering
state-of-the-art boring machines, directional drills and fluid/mud systems used in the underground construction or trenchless market. Augers plans to introduce three new directional drills during 2001, along with several new fluid/mud systems, giving it
one of the broadest product lines in the industry. American Augers has over 2,000 customers throughout the world that operate in the sewer, power, fiber-optic telecommunication, electric, oil and gas, and water industries.</P>
<U><P ALIGN="JUSTIFY">Marketing</P>
</U><P ALIGN="JUSTIFY">&#9;Trencor and American Augers market their products domestically through direct sales representatives and internationally through both direct sales and independent dealers and sales agents. </P>
<U><P ALIGN="JUSTIFY">Raw Materials</P>
</U><P ALIGN="JUSTIFY">&#9;American Augers maintains excellent relationships with its suppliers and has experienced minimal turnover. The purchasing group has developed partnering relationships with many of the company's key vendors to improve
just-in-time delivery and thus lower inventory. Steel is the predominant raw material used to manufacture Trencor's and American Augers' products. Components used are engines, hydraulic motors and pumps, gearboxes, power transmissions and electronics
systems. </P>
<U><P>Competition</P>
</U><P ALIGN="JUSTIFY">&#9;Competition for sales of trenching, excavating, auger boring, directional drilling, and fluid/mud equipment includes Charles Machine Works (Ditch Witch); J.I. Case; Vermeer and other smaller custom manufacturers. </P>
<U><P ALIGN="JUSTIFY">Employees</P>
</U><P ALIGN="JUSTIFY">At December 31, 2000, the Underground Group segment employed 368 individuals, of which, 264 were engaged in manufacturing, 35 in engineering and 69 in selling, general and administrative functions.</P>
<U><P ALIGN="JUSTIFY">Backlog</P>
</U><P ALIGN="JUSTIFY">The backlog for the Underground Group segment at December 31, 2000 and 1999 was approximately $2,336,000 and $2,263,000, respectively.</P>
<B><U><P>Other Business Units</P>
</B></U><P ALIGN="JUSTIFY">&#9;This category consists of the Company's three other business units that do not meet the requirements for separate disclosure as an operating segment. These other operating units include Astec Financial Services, Inc., Astec
Transportation, Inc. and the parent company Astec Industries, Inc. Revenues in this category are derived predominantly from operating leases and other financial products offered by Astec Financial Services, Inc., the Company's finance subsidiary.</P>
<U><P ALIGN="JUSTIFY">Competition</P>
</U><P ALIGN="JUSTIFY">&#9;Competitors of the captive finance company include General Electric Credit Corporation; The CIT Group; Associates First Capital Corporation; Safeco Credit Company, Inc. and local financial institutions.</P>
<U><P ALIGN="JUSTIFY">Employees</P>
</U><P ALIGN="JUSTIFY">At December 31, 2000, the Other Business Units segment employed 44 individuals, 10 of which were engaged in manufacturing operations and 34 in selling, general and administrative functions.</P>
<B><U><P ALIGN="JUSTIFY">Common to All Operating Segments</P>
</B></U><P ALIGN="JUSTIFY">Although the Company has four reportable business segments, the following information applies to all operating segments of the Company.</P>
<U><P ALIGN="JUSTIFY">Government Regulations</P>
</U><P ALIGN="JUSTIFY">&#9;None of the Company's operating segments operate within highly regulated industries. However, air pollution control equipment manufactured by the Company, principally for hot-mix asphalt plants, must comply with certain
performance standards promulgated by the federal Environmental Protection Agency under the Clean Air Act applicable to "new sources" or new plants. Management believes that the Company's products meet all material requirements of such regulations and of
applicable state pollution standards and environmental protection laws.</P>
<P ALIGN="JUSTIFY">&#9;In addition, due to the size and weight of certain equipment the Company manufactures, the Company and its customers sometimes confront conflicting state regulations on maximum weights transportable on highways and roads. This
problem occurs most frequently in the movement of portable asphalt mixing plants. Also, some states have regulations governing the operation of asphalt mixing plants and most states have regulations relating to the accuracy of weights and measures, which
affect some of the control systems manufactured by the Company.</P>
<P ALIGN="JUSTIFY">&#9;Compliance with these government regulations has no material effect on capital expenditures, earnings, or the Company's competitive position within the market.</P>
<U><P ALIGN="JUSTIFY">Employees</P>
</U><P ALIGN="JUSTIFY">&#9;At December 31, 2000, the Company and its subsidiaries employed 3,301 individuals, of which 2,402 were engaged in manufacturing operations, 264 in engineering, including support staff, and 635 in selling, administrative and
management functions. </P>
<P ALIGN="JUSTIFY">Telsmith, Inc. has a labor agreement, which covers approximately 190 employees, that expires on October 13, 2001. None of Telsmith's other employees are covered by a collective bargaining agreement. </P>
<P ALIGN="JUSTIFY">On February 1, 2001, Trencor and the United States Steelworkers of America, AFL-CIO, and CLC entered into a collective bargaining agreement that covers approximately 90 of Trencor's employees. This agreement expires on January 31,
2004. None of Trencor's other employees are covered by a collective bargaining agreement.</P>
<P>Other than Telsmith and Trencor, there are no other collective bargaining agreements.</P>
<P>The Company considers its employee relations to be good.</P>
<U><P>Manufacturing</P>
</U><P ALIGN="JUSTIFY">&#9;The Company manufactures many of the component parts and related equipment for its products while several large components of their products are purchased "ready for use"; such items include engines, axles, tires and
hydraulics. In many cases, the Company designs, engineers and manufactures custom component parts and equipment to meet the particular needs of individual customers. Manufacturing operations during 2000 took place at twenty-one separate locations. The
Company's manufacturing operations consist primarily of fabricating steel components and the assembly and testing of its products to ensure quality control standards have been achieved.</P>
<P>&#9;</P>
<U><P>Seminars and Technical Bulletins</P>
</U><P ALIGN="JUSTIFY">&#9;The Company periodically conducts technical and service seminars, which are primarily for contractors, employees and owners of asphalt mixing plants. In 2000, approximately 390 representatives of contractors and owners of
hot-mix asphalt plants attended seminars held by the Company in Chattanooga, Tennessee. These seminars, which are taught by Company management and employees, cover a range of subjects including technological innovations in the hot-mix asphalt, aggregate
processing, paving, milling, and recycle markets in which the Company manufactures products.</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">&#9;The Company also sponsors executive seminars for the management of the customers of Astec, Inc. Primarily the management of the Company teaches the seminars, but outside speakers are also utilized. In 2000, approximately 160
participants attended the executive seminars at the Company's state-of-the-art training center. </P>
<P ALIGN="JUSTIFY">The Company sponsors Paving Professionals workshops at its training center for customers or potential customers of Roadtec, Inc. In 2000, approximately 350 participants attended these classroom sessions. Actual equipment application
experience was provided at the Roadtec facility. In addition, service training seminars were also held at the Roadtec facility for approximately 450 customer service representatives.</P>
<P ALIGN="JUSTIFY">&#9;Also during 2000, Telsmith had technical seminars for 97 customer representatives at Telsmith's facility in Wisconsin. </P>
<P ALIGN="JUSTIFY">In addition to seminars, the Company publishes a number of technical bulletins detailing various technological and business issues relating to the asphalt industry.</P>
<U><P>Patents and Trademarks</P>
</U><P ALIGN="JUSTIFY">The Company seeks to obtain patents to protect the novel features of its products. The Company and its subsidiaries hold 89 United States patents and 69 foreign patents. There are 50 United States and foreign patent applications
pending. </P>
<P ALIGN="JUSTIFY">The Company and its subsidiaries have approximately 71 trademarks registered in the United States including logos for Astec, Telsmith, Roadtec and Trencor, and the names ASTEC, TELSMITH, HEATEC, ROADTEC, TRENCOR, KOLBERG, JCI and
PIONEER. Eighteen trademarks are also registered in foreign countries, including Canada, Great Britain, Mexico, New Zealand and Indonesia. The Company has 13 United States and foreign trademark applications pending.</P>
<P ALIGN="JUSTIFY">The Company and its subsidiaries also license their technology to other manufacturers.</P>
<U><P ALIGN="JUSTIFY">Engineering and Product Development</P>
</U><P ALIGN="JUSTIFY">&#9;The Company dedicates substantial resources to engineering and product development. At December 31, 2000, the Company and its subsidiaries had 264 full-time individuals employed domestically in engineering and design capacities.
</P>
<U><P ALIGN="CENTER">Seasonality and Backlog</P>
</U><P ALIGN="JUSTIFY">&#9; During 1999, the Company's business volume became less seasonal, due mainly to growth through acquisitions and internal growth in the paving segment during the early part of the year.</FONT><FONT FACE="Arial"> </FONT><FONT
FACE="Arial" SIZE=2>During the first two quarters of 2000, the Company's business volume followed the normal seasonal trend with the second quarter being stronger than the first. The third and fourth quarters of 2000 were significantly impacted by the economic factors
discussed in the following paragraphs and therefore did not follow the normal seasonal trend. </P>
<P ALIGN="JUSTIFY">&#9;As of December 31, 2000, the Company had a backlog for delivery of products at certain dates in the future of approximately $89,552,000. At December 31, 1999, the total backlog, restated to include Carlson Paving Products, Inc. and
Osborn Engineered Products SA (Pty) Ltd., was approximately $96,572,000.</P>
<P ALIGN="JUSTIFY">&#9;The Company's contracts reflected in the backlog are not, by their terms, subject to termination. Management believes that the Company is in substantial compliance with all manufacturing and delivery timetables.</P>
<U><P ALIGN="JUSTIFY">Competition</P>
</U><P ALIGN="JUSTIFY">&#9;Each business segment operates in domestic markets that are highly competitive regarding price, service and product quality. While specific competitors are named within each business segment discussion, imports do not generally
constitute significant competition for the Company in the United States. However, in international sales, the Company generally competes with foreign manufacturers that may have a local presence in the market the Company is attempting to penetrate. </P>
</FONT><P ALIGN="JUSTIFY">&#9;</P>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">In addition, asphalt and concrete are generally considered competitive products as a surface choice for new roads and highways. A portion of the interstate highway system is paved in concrete, but over 90% of
all surfaced roads in the United States are paved with asphalt. Although concrete is used for some new road surfaces, asphalt is used for virtually all resurfacing, even the resurfacing of most concrete roads. Management does not believe that concrete, as
a competitive surface choice, materially impacts the Company's business prospects.</P>
<B><P>Risk Factors</P>
<P>A decrease or delay in government funding of highway construction and maintenance may cause our revenues and profits to decrease.</P>
</B><P>&#9;Many of our customers depend substantially on government funding of highway construction and maintenance and other infrastructure projects. Any decrease or delay in government funding of highway construction and maintenance and other
infrastructure projects could cause our revenues and profits to decrease. Federal government funding of infrastructure projects is usually accomplished through bills, which establish funding over a multi-year period. The most recent spending bill was
signed into law in June of 1998 and covers federal spending through 2003. This legislation may be revised in future congressional sessions and federal funding of infrastructure may be decreased in the future, especially in the event of an economic
recession. In addition, Congress could pass legislation in future sessions, which would allow for the diversion of highway funds for other national purposes or could restrict funding of infrastructure projects unless states comply with certain federal
policies. </P>
<B><P>An increase in the price of oil or decrease in the availability of oil could reduce demand for our products.</P>
</B><P>&#9;A significant portion of our revenues relates to the sale of equipment that produces asphalt mix. A major component of asphalt is oil, and asphalt prices correlate with the price and availability of oil. A rise in the price of oil or a
material decrease in the availability of oil would increase the cost of producing asphalt, which would likely decrease demand for asphalt, resulting in decreased demand for our products. This would likely cause our revenues and profits to decrease. In
fact, rising gasoline, diesel fuel and liquid asphalt prices significantly increased the operating and raw material costs of our contractor and aggregate producer customers, reducing their profits and causing delays in some of their capital equipment
purchases. These delays, coupled with rising interest rates in 2000, and a general slowdown in the U.S. economy, decreased demand for several key categories of products. We expect the market conditions experienced during the second half of 2000 to persist
for at least the next several quarters and to continue to negatively impact revenues and margins during 2001.</P>
<B><P>Downturns in the general economy or the commercial construction industry may adversely affect our revenues and operating results.</P>
</B><P>&#9;General economic downturns, including any downturns in the commercial construction industry, could result in a material decrease in our revenues and operating results. Demand for many of our products, especially in the commercial construction
industry, is cyclical. Sales of our products are sensitive to the states of the U.S., foreign and regional economies in general, and in particular, changes in commercial construction spending and government infrastructure spending. In addition, many of
our costs are fixed and cannot be quickly reduced in response to decreased demand. We could face a downturn in the commercial construction industry based upon a number of factors, including:</P>

<UL>
<LI>rising interest rates; </LI>
<LI>a decrease in the availability of funds for construction; </LI>
<LI>labor disputes in the construction industry causing work stoppages; </LI>
<LI>rising gas and fuel oil prices; </LI>
<LI>energy or building materials shortages; and </LI>
<LI>inclement weather.</LI></UL>

<B><P>Acquisitions that we have made in the past and future acquisitions involve risks that could adversely affect our future financial results.</P>
</B><P>We have completed ten acquisitions since 1994 and plan to acquire additional businesses in the future. We may be unable to achieve the benefits expected to be realized from our acquisitions. In addition, we may incur additional costs and our
management's attention may be diverted because of unforeseen expenses, difficulties, complications, delays and other risks inherent in acquiring businesses, including the following: </P>

<UL>
<LI>we may have difficulty integrating the financial and administrative functions of acquired businesses </LI>
<LI>acquisitions may divert management's attention from our existing operations </LI>
<LI>we may have difficulty in competing successfully for available acquisition candidates, completing future acquisitions or accurately estimating the financial effect of any businesses we acquire </LI>
<LI>we may have delays in realizing the benefits of our strategies for an acquired business </LI>
<LI>we may not be able to retain key employees necessary to continue the operations of the acquired business </LI>
<LI>acquisition costs may deplete significant cash amounts or may decrease our operating income </LI>
<LI>we may choose to acquire a company that is less profitable than we are or has lower profit margins than we do </LI>
<LI>future acquired companies may have unknown liabilities that could require us to spend significant amounts of additional capital</LI></UL>

<B><P>Competition could reduce revenue from our products and services and cause us to lose market share.</P>
</B><P>&#9;We currently face strong competition in product performance, price and service. Some of our national competitors have greater financial, product development and marketing resources than we have. If competition in our industry intensifies or if
our current competitors enhance their products or lower their prices for competing products, we may lose sales or be required to lower the prices we charge for our products. This may reduce revenue from our products and services, lower our gross margins
or cause us to lose market share. In fact, some key competitors slashed prices in 2000 in an effort to make sales as demand in our industry slowed. As a result, we experienced price erosion and lower gross margins.</P>
<B><P>We may face product liability claims or other liabilities due to the nature of our business. If we are unable to obtain or maintain insurance or if our insurance does not cover liabilities, we may incur significant costs which could reduce our
profitability.</P>
</B><P>&#9;We manufacture heavy machinery, which is used by our customers at excavation and construction sites and on high-traffic roads. Any defect in, or improper operation of, our equipment can result in personal injury and death, and damage to or
destruction of property, any of which could cause product liability claims to be filed against us. The amount and scope of our insurance coverage may not be adequate to cover all losses or liabilities we may incur in the event of a product liability
claim. We may not be able to maintain insurance of the types or at the levels we deem necessary or adequate or at rates we consider reasonable. Any liabilities not covered by insurance could reduce our profitability or have an adverse effect on our
financial condition.</P>
<B><P>If we become subject to increased governmental regulation, we may incur significant costs. </P>
</B><P>&#9;Our hot-mix asphalt plants contain air pollution control equipment that must comply with performance standards promulgated by the Environmental Protection Agency. These performance standards may increase in the future. Changes in these
requirements could cause us to undertake costly measures to redesign or modify our equipment or otherwise adversely affect the manufacturing processes of our products. Such changes could have a material adverse effect on our operating results. </P>
<P>&#9;Also, due to the size and weight of some of the equipment that we manufacture, we often are required to comply with conflicting state regulations on the maximum weight transportable on highways and roads. In addition, some states regulate the
operation of our component equipment, including asphalt mixing plants and soil remediation equipment, and most states regulate the accuracy of weights and measures, which affect some of the control systems that we manufacture. We may incur material costs
or liabilities in connection with the regulatory requirements applicable to our business. </P>
<B><P>If we are unable to protect our proprietary technology from infringement or if our technology infringes technology owned by others, then the demand for our products may decrease or we may be forced to modify our products that could increase our costs
 .</P>
</B><P>We hold numerous patents covering technology and applications related to many of our products and systems, and numerous trademarks and trade names registered with the U.S. Patent and Trademark Office and in foreign countries. Our existing or
future patents or trademarks may not adequately protect us against infringements, and pending patent or trademark applications may not result in issued patents or trademarks. Our patents, registered trademarks and patent applications, if any, may not be
upheld if challenged, and competitors may develop similar or superior methods or products outside the protection of our patents. This could reduce demand for our products and materially decrease our revenues. If our products are deemed to infringe upon
the patents or proprietary rights of others, we could be required to modify the design of our products, change the name of our products or obtain a license for the use of some of the technologies used in our products. We may be unable to do any of the
foregoing in a timely manner, upon acceptable terms and conditions, or at all, and the failure to do so could cause us to incur additional costs or lose revenues.</P>
<B><P>Our success depends on key members of our management and other employees.</P>
</B><P>&#9;Dr. J. Don Brock, our Chairman and President, is of significant importance to our business and operations. The loss of his services may adversely affect our business. In addition, our ability to attract and retain qualified engineers, skilled
manufacturing personnel and other professionals, either through direct hiring, or acquisition of other businesses employing such professionals, will also be an important factor in determining our future success.</P>
<B><P>Difficulties in managing and expanding in international markets could divert management's attention from our existing operations.</P>
</B><P>&#9;In 2000, international sales represented approximately 12% of our total sales. We plan to continue to increase our presence in international markets. In connection with any increase in international sales efforts, we will need to hire, train
and retain qualified personnel in countries where language, cultural or regulatory barriers may exist. Any difficulties in expanding our international sales may divert management's attention from our existing operations. In addition, international
revenues are subject to the following risks:</P>

<UL>
<LI>fluctuating currency exchange rates which can reduce the profitability of foreign sales; </LI>
<LI>the burden of complying with a wide variety of foreign laws and regulations; </LI>
<LI>dependence on foreign sales agents; </LI>
<LI>political and economic instability of governments; and </LI>
<LI>the imposition of protective legislation such as import or export barriers.</LI></UL>

<B><P>Our quarterly operating results are likely to fluctuate, which may decrease our stock price.</P>
</B><P>&#9;Our quarterly revenues, expenses and operating results have varied significantly in the past and are likely to vary significantly from quarter to quarter in the future. As a result, our operating results may fall below the expectations of
securities analysts and investors in some quarters, which could result in a decrease in the market price of our common stock. The reasons our quarterly results may fluctuate include:</P>

<UL>
<LI>general competitive and economic conditions; </LI>
<LI>delays in, or uneven timing in the delivery of, customer orders; </LI>
<LI>the introduction of new products by us or our competitors; </LI>
<LI>product supply shortages; and </LI>
<LI>reduced demand due to adverse weather conditions.</LI></UL>

<P>&#9;Period to period comparisons of such items are not necessarily meaningful and, as a result, should not be relied on as indications of future performance.</P>
<B><P>Our Articles of Incorporation, Bylaws, Rights Agreement and Tennessee law may inhibit a takeover, which could delay or prevent a transaction in which shareholders might receive a premium over market price for their shares. </P>
</B><P>Our charter, bylaws and Tennessee law contain provisions that may delay, deter or inhibit a future acquisition, or an attempt to obtain control, of Astec. This could occur even if our shareholders are offered an attractive value for their shares
or if a substantial number or even a majority of our shareholders believe the takeover is in their best interest. These provisions are intended to encourage any person interested in acquiring us or obtaining control of us to negotiate with and obtain the
approval of our Board of Directors in connection with the transaction. Provisions that could delay, deter or inhibit a future acquisition, or an attempt to obtain control, of us include the following:</P>

<UL>
<LI>a staggered Board of Directors; </LI>
<LI>requiring a two-thirds vote of the total number of shares issued and outstanding to remove directors other than for cause; </LI>
<LI>requiring advanced notice of actions proposed by shareholders for consideration at shareholder meetings; </LI>
<LI>limiting the right of shareholders to call a special meeting of shareholders; </LI>
<LI>requiring that all shareholders entitled to vote on an action provide written consent in order for shareholders to act without holding a shareholders meeting; and </LI>
<LI>the Tennessee Control Share Acquisition Act.</LI></UL>

<P>In addition, the rights of holders of our common stock will be subject to, and may be adversely affected by, the rights of the holders of our preferred stock that may be issued in the future and that may be senior to the rights of holders of our
common stock. On December 22, 1995, our Board of Directors approved a Shareholder Protection Rights Agreement, which provides for one preferred stock purchase right in respect of each share of our common stock. These rights become exercisable upon a
person or group of affiliated persons acquiring 15% or more of our then-outstanding common stock by all persons other than an existing 15% shareholder. This Rights Agreement also could discourage bids for the shares of common stock at a premium and could
have a material adverse effect on the market price of our shares.</P>
<B><P ALIGN="CENTER">&nbsp; <BR>
&nbsp; <BR>
&nbsp; <BR>
FORWARD-LOOKING STATEMENTS</P>
</B><P ALIGN="JUSTIFY">Some of the statements contained in this Annual Report on Form 10-K are forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. They include statements concerning:</P>

<UL>
<P ALIGN="JUSTIFY"><LI>our growth and operating strategy; </LI></P>
<P ALIGN="JUSTIFY"><LI>liquidity and capital expenditures; </LI></P>
<P ALIGN="JUSTIFY"><LI>pending acquisitions; </LI></P>
<P ALIGN="JUSTIFY"><LI>our financing plans; and </LI></P>
<P ALIGN="JUSTIFY"><LI>industry trends. </LI></P></UL>

<P ALIGN="JUSTIFY">You can identify these statements by forward-looking words such as "expect," "believe," "goal," "plan," "intend," "estimate," "may," "will" and similar words. These forward-looking statements involve known and unknown risks,
uncertainties and other factors, including those described in the "Risk Factors" section and elsewhere in this prospectus, that could cause our actual results to differ materially from those suggested by these forward-looking statements.</P>
<B><U><P>Item 2</U>. <U>PROPERTIES <BR>
</B></U>&#9;The location, approximate square footage, acreage occupied and principal function of the properties owned or leased by the Company are set forth below:</P></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 WIDTH=943>
<TR><TD WIDTH="20%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=33>
<P ALIGN="JUSTIFY"><U><FONT FACE="Arial" SIZE=2>Location</U></FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=33>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">Approximate Square Footage</U></FONT></TD>
<TD WIDTH="21%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=33>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">Approximate Acreage</U></FONT></TD>
<TD WIDTH="44%" VALIGN="BOTTOM" HEIGHT=33>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">Principal Function</U></FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="BOTTOM" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Chattanooga, Tennessee</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">424,000</FONT></TD>
<TD WIDTH="21%" VALIGN="BOTTOM" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">59</FONT></TD>
<TD WIDTH="44%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>Corporate and subsidiary offices, manufacturing - Astec</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="BOTTOM" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Chattanooga, Tennessee</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">---</FONT></TD>
<TD WIDTH="21%" VALIGN="BOTTOM" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">63</FONT></TD>
<TD WIDTH="44%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>Storage yard - Astec</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="BOTTOM" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Cleveland, Tennessee</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">28,400</FONT></TD>
<TD WIDTH="21%" VALIGN="BOTTOM" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">3</FONT></TD>
<TD WIDTH="44%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>Offices and manufacturing - Astec</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="BOTTOM" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Rossville, Georgia</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">40,500</FONT></TD>
<TD WIDTH="21%" VALIGN="BOTTOM" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">3</FONT></TD>
<TD WIDTH="44%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>Manufacturing - Astec</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="BOTTOM" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Chattanooga, Tennessee</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">84,200</FONT></TD>
<TD WIDTH="21%" VALIGN="BOTTOM" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">5</FONT></TD>
<TD WIDTH="44%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>Offices, manufacturing - Heatec</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="BOTTOM" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Chattanooga, Tennessee</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">135,000</FONT></TD>
<TD WIDTH="21%" VALIGN="BOTTOM" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">15</FONT></TD>
<TD WIDTH="44%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>Offices, manufacturing - Roadtec</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="BOTTOM" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Chattanooga, Tennessee</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">51,200</FONT></TD>
<TD WIDTH="21%" VALIGN="BOTTOM" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">7</FONT></TD>
<TD WIDTH="44%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>Manufacturing and parts warehouse - Roadtec</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="BOTTOM" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Chattanooga, Tennessee</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">5,000</FONT></TD>
<TD WIDTH="21%" VALIGN="BOTTOM" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">2</FONT></TD>
<TD WIDTH="44%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>Offices - Astec Financial Services</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="BOTTOM" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Mequon, Wisconsin</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">203,000</FONT></TD>
<TD WIDTH="21%" VALIGN="BOTTOM" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">30</FONT></TD>
<TD WIDTH="44%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>Offices and manufacturing - Telsmith</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="BOTTOM" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Sterling, Illinois</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">32,000</FONT></TD>
<TD WIDTH="21%" VALIGN="BOTTOM" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">8</FONT></TD>
<TD WIDTH="44%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>Offices and manufacturing - PEP</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="BOTTOM" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Grapevine, Texas</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">176,000</FONT></TD>
<TD WIDTH="21%" VALIGN="BOTTOM" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">52</FONT></TD>
<TD WIDTH="44%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>Offices, manufacturing - Trencor</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="BOTTOM" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Lakeville, Massachusetts</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">800</FONT></TD>
<TD WIDTH="21%" VALIGN="BOTTOM" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">---</FONT></TD>
<TD WIDTH="44%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>Leased sales and service office - Telsmith</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="BOTTOM" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>Libertyhill, Texas</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">700</FONT></TD>
<TD WIDTH="21%" VALIGN="BOTTOM" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">---</FONT></TD>
<TD WIDTH="44%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>Leased sales and service office - Telsmith</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="BOTTOM" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Eugene, Oregon</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">130,000</FONT></TD>
<TD WIDTH="21%" VALIGN="BOTTOM" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">8</FONT></TD>
<TD WIDTH="44%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>Offices and manufacturing - Johnson Crushers International</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="BOTTOM" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Eugene, Oregon</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">25,600</FONT></TD>
<TD WIDTH="21%" VALIGN="BOTTOM" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">---</FONT></TD>
<TD WIDTH="44%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>Leased offices, manufacturing - Johnson Crushers International</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="BOTTOM" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Odessa, Texas</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">4,100</FONT></TD>
<TD WIDTH="21%" VALIGN="BOTTOM" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1</FONT></TD>
<TD WIDTH="44%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>Leased to a third party</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="BOTTOM" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">Inman, South Carolina</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">13,600</FONT></TD>
<TD WIDTH="21%" VALIGN="BOTTOM" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">8</FONT></TD>
<TD WIDTH="44%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>Leased to a third party until September 30, 2000 with option to buy</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="BOTTOM" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>Albuquerque, New Mexico</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">110,700</FONT></TD>
<TD WIDTH="21%" VALIGN="BOTTOM" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">14</FONT></TD>
<TD WIDTH="44%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>Offices and manufacturing - CEI <BR>
(partially leased to a third party)</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="BOTTOM" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>Yankton, South Dakota</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">252,000</FONT></TD>
<TD WIDTH="21%" VALIGN="BOTTOM" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">50</FONT></TD>
<TD WIDTH="44%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>Offices and manufacturing - Kolberg-Pioneer</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="BOTTOM" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>West Salem, Ohio</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">100,000</FONT></TD>
<TD WIDTH="21%" VALIGN="BOTTOM" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">29</FONT></TD>
<TD WIDTH="44%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>Offices and manufacturing - American Augers</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="BOTTOM" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>Thornbury, Ontario, Canada</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">55,000</FONT></TD>
<TD WIDTH="21%" VALIGN="BOTTOM" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">12</FONT></TD>
<TD WIDTH="44%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>Offices and manufacturing - Breaker Technology Ltd.</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="BOTTOM" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>Riverside, California</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">18,000</FONT></TD>
<TD WIDTH="21%" VALIGN="BOTTOM" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">---</FONT></TD>
<TD WIDTH="44%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>Leased offices and manufacturing - Breaker Technology, Inc.</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="BOTTOM" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>Solon, Ohio</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">5,700</FONT></TD>
<TD WIDTH="21%" VALIGN="BOTTOM" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">---</FONT></TD>
<TD WIDTH="44%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>Leased offices and manufacturing - Breaker Technology, Inc.</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="BOTTOM" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>Morris, Minnesota</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">152,000</FONT></TD>
<TD WIDTH="21%" VALIGN="BOTTOM" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">30</FONT></TD>
<TD WIDTH="44%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>Offices and manufacturing - Superior</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="BOTTOM" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>Covington, Georgia</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">11,000</FONT></TD>
<TD WIDTH="21%" VALIGN="BOTTOM" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">6</FONT></TD>
<TD WIDTH="44%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>Offices and manufacturing - Pavement Technology</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="BOTTOM" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>Tacoma, Washington</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">41,000</FONT></TD>
<TD WIDTH="21%" VALIGN="BOTTOM" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">5</FONT></TD>
<TD WIDTH="44%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>Offices and manufacturing - Carlson Paving Products</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="BOTTOM" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>Cape Town, South Africa</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">400</FONT></TD>
<TD WIDTH="21%" VALIGN="BOTTOM" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">---</FONT></TD>
<TD WIDTH="44%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>Leased sales office and warehouse - Osborn</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="BOTTOM" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>Durban, South Africa</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">300</FONT></TD>
<TD WIDTH="21%" VALIGN="BOTTOM" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">---</FONT></TD>
<TD WIDTH="44%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>Leased sales office and warehouse - Osborn</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="BOTTOM" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>Witbank, South Africa</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">500</FONT></TD>
<TD WIDTH="21%" VALIGN="BOTTOM" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">---</FONT></TD>
<TD WIDTH="44%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>Leased sales office and warehouse - Osborn</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="BOTTOM" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>Welkom, South Africa</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">300</FONT></TD>
<TD WIDTH="21%" VALIGN="BOTTOM" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">---</FONT></TD>
<TD WIDTH="44%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>Leased sales office and warehouse -Osborn</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="BOTTOM" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>Bethal, South Africa</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">---</FONT></TD>
<TD WIDTH="21%" VALIGN="BOTTOM" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">11</FONT></TD>
<TD WIDTH="44%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>Vacant lot - Osborn</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="BOTTOM" COLSPAN=2>
<FONT FACE="Arial" SIZE=2><P>Johannesburg, South Africa</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=4>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">156,100</FONT></TD>
<TD WIDTH="21%" VALIGN="BOTTOM" COLSPAN=3>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">18</FONT></TD>
<TD WIDTH="44%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>Offices and manufacturing - Osborn</FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">&#9; <BR>
Management believes that each of the Company's facilities provides office or manufacturing space suitable for its current needs and considers the terms under which it leases facilities to be reasonable. </P>
<P ALIGN="CENTER"><BR>
<B><U>Item 3</U>. <U>Legal Proceedings</P>
</B></U><P ALIGN="JUSTIFY">Management has reviewed all claims and lawsuits and, upon the advice of counsel, has made provision for any estimable losses; however, the Company is unable to predict the ultimate outcome of the outstanding claims and lawsuits.
</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<B><U><P ALIGN="JUSTIFY">Item 4</U>. <U>Submission of Matters to a Vote of Security Holders</P>
</B></U><P ALIGN="JUSTIFY">&#9;None.</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<U><P ALIGN="JUSTIFY">Executive Officers of the Registrant</P>
</U><P ALIGN="JUSTIFY">&#9;The name, title, ages and business experience of the executive officers of the Company are listed below.</P>
<P>&#9;<I>J. Don Brock, Ph.D., P.E.,</I> has been President and a Director of the Company since its incorporation in 1972 and assumed the additional position of Chairman of the Board in 1975. He was the Treasurer of the Company from 1972 until 1994. From
1969 to 1972, Dr. Brock was President of the Asphalt Division of CMI Corporation. He earned his Ph.D. degree in mechanical engineering from the Georgia Institute of Technology. Dr. Brock and Thomas R. Campbell, President of Roadtec, are first cousins. He
is 62. </P>
<P>&#9;<I>Richard W. Bethea, Jr.</I>, became Executive Vice President on January 1, 2001 and has served as the Company's Secretary since 1997. He served as Vice President and Corporate Counsel from 1997 to 2000. Mr. Bethea has been a practicing lawyer
since 1978. He has an undergraduate degree in accounting and a law degree from the University of Georgia. Before joining the Company, Mr. Bethea was a member (stockholder) and partner with the law firm Stophel &amp; Stophel, P. C., in Chattanooga,
Tennessee. He has served as the Company's litigation counsel since 1983. He is 48. </P>
<P>&#9;<I>F. McKamy Hall</I>, a Certified Public Accountant, became Chief Financial Officer during 1998 and has served as Vice President and Treasurer since 1997. He has served as Corporate Controller of the Company since 1987. From 1985 to 1987, Mr.
Hall was Vice President of Finance at Quadel Management Corporation, a company engaged in<I> </I>real estate management<I>. </I>Mr. Hall has an undergraduate degree in accounting and a Master of Business Administration degree from the University of Tennessee at Chattanooga. He is 58<I>. </P>
</I><P>&#9;<I>W. Norman Smith</I> was appointed Group Vice President-Asphalt in 1998 and has served as the President of Astec, Inc. since 1994. He formerly served as President of Heatec, Inc. from 1977 to 1994. From 1972 to 1977, Mr. Smith was a Regional
Sales Manager with the Company. From 1969 to 1972, Mr. Smith was an engineer with the Asphalt Division of CMI Corporation. Mr. Smith has also served as a director of the Company since 1972. He is 61. </P>
<P>&#9;<I>Robert G. Stafford</I> was appointed Group Vice President-Aggregate in 1998. Prior to that time he served as President of Telsmith, Inc. since 1991. Between 1987 and 1991, Mr. Stafford served as President of Telsmith, Inc., a subsidiary of
Barber-Greene. From 1984 until the Company's acquisition of Barber-Greene in December 1986, Mr. Stafford was Vice President - Operations of Barber-Greene and General Manager of Telsmith. He became a director of the Company in March 1988. He is 62. </P>
<P>&#9;<I>Thomas R. Campbell</I> has served as President of Roadtec, Inc. since 1988. From 1981 to 1988 he served as Operations Manager of Roadtec. Mr. Campbell and J. Don Brock, President of the Company, are first cousins. He is 51. </P>
<P>&#9;<I>James G. May </I>has served as President of Heatec, Inc. since 1994. From 1984 until 1994 he served as Vice President of Engineering of Astec, Inc. He is 56. </P>
<P>&#9;<I>Albert E. Guth</I> has been President of Astec Financial Services, Inc. since 1996. He served as Chief Financial Officer of the Company from 1987 through 1996, as Senior Vice President from 1984 to 1997, Secretary of the Company from 1972 to
1997, and Treasurer from 1994 to 1997. Mr. Guth, who has been a director since 1972, was Vice President of the Company from 1972 until 1984. From 1969 to 1972, Mr. Guth was the Controller of the Asphalt Division of CMI Corporation. He is 61. </P>
<P>&#9;<I>Richard A. Patek</I> became President of Kolberg-Pioneer, Inc. in 1997. From 1995 to 1997, he served as Director of Materials of Telsmith, Inc. From 1992 to 1995, Mr. Patek was Director of Materials and Manufacturing of the former Milwaukee
plant location. From 1978 to 1992, he held various manufacturing management positions at Telsmith. Mr. Patek is a graduate of Milwaukee School of Engineering. He is 44. </P>
<I><P>&#9;Robert R. Hoitt </I>has been the President of Johnson Crushers International, Inc., which was acquired by the Company on November 1, 1998, since 1995. From 1966 through 1995 he served in various management positions, including General Manager
and Vice President of Cedarapids, Inc. in its Eljay division. He is 57. </P>
<P>&#9;<I>Frank D. Cargould</I> became President of Breaker Technology Ltd. and Breaker Technology, Inc. on October 18, 1999. The Breaker Technology companies were formed on August 13, 1999 when the Company purchased substantially all of the assets of
Teledyne Specialty Equipment's Construction and Mining business unit from Allegheny Teledyne Inc. From 1994 to 1999, he was Director of Sales - East for Teledyne CM Products, Inc. He is 58. </P>
<P>&#9;<I>Roger K. Eve</I> has been President of American Augers, Inc., which was acquired by the Company on October 29, 1999, since 1991. He was also appointed President of Trencor, Inc., in 1999. From 1981 to 1991, Mr. Eve served as President of
J.C.B., Inc. and J.C.B. Excavators Ltd. He is 55. </P>
<P>&#9;<I>Neil E. Schmidgall</I> has been President of Superior Industries of Morris, Inc., which was acquired by the Company on November 1, 1999, since 1972. Since 1992, Mr. Schmidgall has been a director and partner of First Federal Savings Bank of
Morris. He is 55. </P>
<P>&#9;<I>Timothy Gonigam</I> was appointed President of Production Engineered Products, Inc. on October 1, 2000. From 1995 to 2000 Mr. Gonigam held the position of Sales Manager for Production Engineered Products, Inc. He is 38. </P>
<P>&#9;<I>Lawrence Raymond</I> has been President of Carlson Paving Products, Inc., which was acquired by the Company on October 2, 2000, since 1986. He is 48. </P>
<P>&#9;<I>Alan L. Forsyth</I> has been Managing Director of Osborn Engineered Products SA (Pty) Ltd. since 1999. The Company purchased the materials handling and processing products division of the Boart-Longyear Division of Anglo Operations Limited on
September 29, 2000. From 1998 to 1999, Mr. Forsyth was Deputy Managing Director and served as Divisional Director from 1987 to 1998. He is 48. </P>
<P>&#9; <BR>
<B><U>PART II <BR>
Item 5</U>. <U>Market for Registrant's Common Equity and Related Shareholder Matters <BR>
</B></U>&#9;The Company's Common Stock is traded in the NASDAQ Stock Market under the symbol "ASTE." The Company has never paid any cash dividends on its Common Stock. <BR>
&#9;The high and low sales prices of the Company's Common Stock as reported on the NASDAQ Stock Market for each quarter during the last two fiscal years are as follows:</P></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 WIDTH=288>
<TR><TD VALIGN="TOP">
<P ALIGN="JUSTIFY"><FONT FACE="Arial" SIZE=2>&#9;<U>Price Per Share</U></FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">&#9;<U>2000</U>&#9; <U>High</U>&#9; <U>Low</U></FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">&#9;1st Quarter&#9;28-1/16&#9;16-3/4</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">&#9;2nd Quarter&#9;29-7/8&#9;22-13/16</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">&#9;3rd Quarter&#9;25-1/2&#9;22-13/16</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">&#9;4th Quarter&#9;14-3/8&#9; 8-3/8</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">&#9;<U>Price Per Share</U></FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">&#9;<U>1999</U>&#9; <U>High</U>&#9;<U>Low</U></FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">&#9;1st Quarter&#9;35-5/16&#9;20-7/8</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">&#9;2nd Quarter&#9;43-3/4&#9;29-3/4</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">&#9;3rd Quarter&#9;41-5/8&#9;20-1/4</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="JUSTIFY">&#9;4th Quarter&#9;29-3/8&#9;14-3/4</FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">&nbsp;</P>
<P>As of March 15, 2001 there were approximately 6,100 holders of the Company's Common Stock. </P>
<P><BR>
<B><U>Item 6</U>. <U>Selected Financial Data <BR>
</B></U>&#9;Selected financial data appear on page A-1 of this Report. </P>
<B><U><P>Item 7</U>. <U>Management's Discussion and Analysis of Financial Condition and Results of Operations <BR>
</B></U>&#9;Management's discussion and analysis of financial condition and results of operations appears on pages A-2 to A-5 of this Report. </P>
<B><U><P>Item 7A. Quantitative and Qualitative Disclosures About Market Risk <BR>
</B></U>&#9;Information appearing under the caption "Market Risk and Risk Management Policies" appears on page A-5 of this report. </P>
<B><U><P>Item 8</U>. <U>Financial Statements and Supplementary Data <BR>
</B></U>&#9;Financial statements and supplementary financial information appear on pages A-6 to A-23 of this Report. </P>
<B><U><P>Item 9.</U> <U>Changes In and Disagreements with Accountants on Accounting and Financial Disclosure <BR>
</B></U>&#9;None. </P>
<B><U><P>PART III </P>
<P>Item 10.</U> <U>Directors and Executive Officers of the Registrant <BR>
</B></U>&#9;Information regarding the Company's directors included under the caption "Election of Directors - Certain Information Concerning Nominees and Directors" in the Company's definitive Proxy Statement to be delivered to the shareholders of the
Company in connection with the Annual Meeting of Shareholders to be held on April 25, 2001, is incorporated herein by reference. Information regarding compliance with Section 16(a) of the Exchange Act is also included under Section 16(a) "Filing
Requirements" in the Company's definitive Proxy Statement, which is incorporated herein by reference. </P>
<B><U><P>Item 11</U>. <U>Executive Compensation <BR>
</B></U>&#9;Information included under the caption, "Executive Compensation" in the Company's definitive Proxy Statement to be delivered to the shareholders of the Company in connection with the Annual Meeting of Shareholders to be held on April 25,
2001, is incorporated herein by reference. </P>
<B><U><P>Item 12.</U> <U>Security Ownership of Certain Beneficial Owners and Management <BR>
</B></U>&#9;Information included under the captions "Election of Directors - Certain Information Concerning Nominees and Directors," "Common Stock Ownership of Management" and "Common Stock Ownership of Certain Beneficial Owners" in the Company's
definitive Proxy Statement to be delivered to the shareholders of the Company in connection with the Annual Meeting of Shareholders to be held on April 25, 2001, is incorporated herein by reference. </P>
<B><U><P>Item 13.</U> <U>Certain Relationships and Related Transactions <BR>
</B></U>&#9;On December 14, 1998, Edna F. Brock, the mother of Dr. J. Don Brock, Chairman of the Board and President of the Company, loaned $85,000 to the Company to supplement its working capital revolving credit facility. The Company executed a demand
note payable to Mrs. Brock in connection with this loan bearing interest at a rate equal to that paid to Bank One N.A. under the Company's unsecured revolving line of credit. At the time Mrs. Brock loaned these funds to the Company, the Company's
outstanding balance under its $70,000,000 revolving credit facility was approximately $26,000,000. The Company is making quarterly interest payments to Mrs. Brock. In June of 2000, Mrs. Brock loaned the Company an additional $29,670, which bears the same
interest rate as the previous note. At the time these funds were loaned to the Company, the Company's outstanding balance under its $150,000,000 revolving credit facility was $95,325,000. </P>
<B><U><P>PART IV </P>
<P>Item 14</U>. <U>Exhibits, Financial Statement Schedules, and Reports on Form 8-K <BR>
</B></U>&#9;(a)(1) The following financial statements and other information appear in Appendix "A" to this Report and are filed as a part hereof: <BR>
&#9;<B>.</B>&#9;Selected Consolidated Financial Data. <BR>
&#9;<B>.</B>&#9;Management's Discussion and Analysis of Financial Condition and Results of Operations. <BR>
&#9;<B>.</B>&#9;Report of Independent Auditors. <BR>
&#9;<B>.</B>&#9;Consolidated Balance Sheets at December 31, 2000 and 1999. <BR>
&#9;<B>.</B>&#9;Consolidated Statements of Income for the Years Ended December 31, 2000, 1999 and 1998. <BR>
&#9;<B>.</B>&#9;Consolidated Statements of Cash Flows for the Years Ended December 31, 2000, 1999 and 1998. <BR>
&#9;<B>.</B>&#9;Consolidated Statements of Shareholders' Equity for the Years Ended December 31, 2000, 1999 and 1998. <BR>
&#9;<B>.</B>&#9;Notes to Consolidated Financial Statements. </P>
<P>&#9;(a)(2) Other than as described below, Financial Statement Schedules are not filed with this Report because the Schedules are either inapplicable or the required information is presented in the Financial Statements or Notes thereto. The following
Schedules appear in Appendix "A" to this Report and are filed as a part hereof: </P><DIR>
<DIR>

<P>&#9;Schedule II - Valuation and Qualifying Accounts.</P></DIR>
</DIR>

<P>&#9;(a)(3) The following Exhibits* are incorporated by reference into or are filed with this Report: </P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=828>
<TR><TD WIDTH="9%" VALIGN="TOP">
<P><FONT FACE="Arial" SIZE=2>3.1</FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Restated Charter of the Company (incorporated by reference from the Company's Registration Statement on Form S-1, effective June 18, 1986, File No. 33- 5348).</FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="91%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>3.2</FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Articles of Amendment to the Restated Charter of the Company, effective September 12, 1988 (incorporated by reference from the Company's Annual Report on Form 10-K for the year ended December 31, 1988, File No. 0-14714). </FONT>
</TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="91%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>3.3</FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Articles of Amendment to the Restated Charter of the Company, effective June 8, 1989 (incorporated by reference from the Company's Annual Report on Form 10-K for the year ended December 31, 1989, File No. 0-14714). </FONT></TD>

</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="91%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>3.4</FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Articles of Amendment to the Restated Charter of the Company, effective January 15, 1999 (incorporated by reference from the Company Quarterly Report on Form 10-Q for the period ended June 30, 1999, File No. 0-14714). </FONT>
</TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="91%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>3.5</FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Amended and Restated Bylaws of the Company, adopted March 14, 1990 (incorporated by reference from the Company's Annual Report on Form 10-K for the year ended December 31, 1989, File No. 0-14714). </FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="91%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>4.1</FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Trust Indenture between City of Mequon and Firstar Trust Company, as Trustee, dated as of February 1, 1994 (incorporated by reference from the Company's Annual Report on Form 10-K for the year ended December 31, 1993, File
No. 0-14714).</FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="91%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>4.2</FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Indenture of Trust, dated April 1, 1994, by and between Grapevine Industrial Development Corporation and Bank One, Texas, NA, as Trustee (incorporated by reference from the Company's Annual Report on Form 10-K for the year
ended December 31, 1993, File No. 0-14714). </FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="91%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>4.3</FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Shareholder Protection Rights Agreement, dated December 22, 1995 (incorporated by reference from the Company's Current Report on Form 8-K dated December 22, 1995, File No. 0-14714). </FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="91%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>10.1</FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Loan Agreement between City of Mequon, Wisconsin and Telsmith, Inc. dated as of February 1, 1994 (incorporated by reference from the Company's Annual Report on Form 10-K for the year ended December 31, 1993, File No. 0-14714).
</FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="91%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>10.2</FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Credit Agreement by and between Telsmith, Inc. and M&amp;I Marshall &amp; Ilsley Bank, dated as of February 1, 1994 (incorporated by reference from the Company's Annual Report on Form 10-K for the year ended December 31,
1993, File No. 0-14714). </FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="91%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>10.3</FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Security Agreement by and between Telsmith, Inc. and M&amp;I Marshall &amp; Ilsley Bank, dated as of February 1, 1994 (incorporated by reference from the Company's Annual Report on Form 10-K for the year ended December 31,
1993, File No. 0-14714). </FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="91%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>10.4</FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Mortgage and Security Agreement and Fixture Financing Statement by and between Telsmith, Inc. and M&amp;I Marshall &amp; Ilsley Bank, dated as of February 1, 1994 (incorporated by reference from the Company's Annual Report on
Form 10-K for the year ended December 31, 1993, File No. 0-14714). </FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="91%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>10.5</FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Guarantee of Astec Industries, Inc. in favor of M&amp;I Ilsley Bank, dated as of February 1, 1994 (incorporated by reference from the Company's Annual Report on Form 10-K for the year ended December 31, 1993, File No. 0-14714).
 </FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="91%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>10.6</FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Loan Agreement dated as of April 1, 1994, between Grapevine Industrial Development Corporation and Trencor, Inc. (incorporated by reference from the Company's Annual Report on Form 10-K for the year ended December 31, 1994,
File No. 0-14714). </FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="91%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>10.7</FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Letter of Credit Agreement, dated April 1, 1994, between First Chicago NBD and Trencor, Inc. (incorporated by reference from the Company's Annual Report on Form 10-K for the year ended December 31, 1994, File No. 0-14714).
</FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="91%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>10.8</FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Guaranty Agreement, dated April 1, 1994, between Astec Industries, Inc. and Bank One, Texas, NA, as Trustee (incorporated by reference from the Company's Annual Report on Form 10-K for the year ended December 31, 1994, File
No. 0-14714). </FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="91%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>10.9</FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Astec Guaranty, dated April 29, 1994, of debt of Trencor, Inc. in favor of First Chicago NBD (incorporated by reference from the Company's Annual Report on Form 10-K for the year ended December 31, 1994, File No. 0-14714).
</FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="91%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>10.10</FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Supplemental Executive Retirement Plan, dated February 1, 1996 to be effective as of January 1, 1995 (incorporated by reference from the Company's Annual Report on Form 10-K for the year ended December 31, 1995, File No.
0-14714). * </FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="91%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>10.11</FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Trust under Astec Industries, Inc. Supplemental Retirement Plan, dated January 1, 1996 (incorporated by reference from the Company's Annual Report on Form 10-K for the year ended December 31, 1995, File No. 0-14714). * </FONT>
</TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="91%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>10.12</FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Astec Industries, Inc. 1998 Long-Term Incentive Plan (incorporated by reference from Appendix A of the Company's Proxy Statement for the Annual Meeting of Shareholders held on April 23, 1998). * </FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="91%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>10.13</FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Astec Industries, Inc. Executive Officer Annual Bonus Equity Election Plan (incorporated by reference from Appendix B of the Company's Proxy Statement for the Annual Meeting of Shareholders held on April 23, 1998). * </FONT>
</TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="91%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>10.14</FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Astec Industries, Inc. Non-Employee Directors' Stock Incentive Plan incorporated by reference from the Company's Annual Report on Form 10-K for the year ended December 31, 1999, File No. 0-14714). * </FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="91%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>10.15</FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Second Amended and Restated Credit Agreement dated November 27, 1997 between the Company, Astec Financial Services, Inc. and First Chicago NBD (incorporated by reference from the Company's Annual Report on Form 10-K for the
year ended December 31, 1997, File No. 0-14714). </FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="91%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>10.16</FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>First Amendment, dated October 30, 1998, to the Second Amended and Restated Credit Agreement dated November 24, 1997, by and between the Company and Astec Financial Services, Inc. and The First National Bank of Chicago
(incorporated by reference from the Company's Annual Report on Form 10-K for the year ended December 31, 1999, File No. 0-14714). </FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="91%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>10.17</FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Second Amendment, dated June 3, 1999, to the Second Amended and Restated Credit Agreement dated November 24, 1997, by and between the Company and Astec Financial Services, Inc. and The First National Bank of Chicago
(incorporated by reference from the Company's Quarterly Report on Form 10-Q for the period ended June 30, 1999, File No. 0-14714). </FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="91%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>10.18</FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Third Amendment, dated August 11, 1999, to the Second Amended and Restated Credit Agreement dated November 24, 1997, by and between the Company and Astec Financial Services, Inc. and The First National Bank of Chicago
(incorporated by reference from the Company's Quarterly Report on Form 10-Q for the period ended September 30, 1999, File No. 0-14714). </FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="91%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>10.19</FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Revolving Line of Credit Note dated December 2, 1997 between Kolberg-Pioneer, Inc. and Astec Holdings, Inc. (incorporated by reference from the Company's Annual Report on Form 10-K for the year ended December 31, 1997, File
No. 0-14714). </FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="91%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>10.20</FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Guaranty Joinder Agreement dated December 1997 between Kolberg-Pioneer, Inc. and Astec Holdings, Inc. in favor of the First National Bank of Chicago. (incorporated by reference from the Company's Annual Report on Form 10-K
for the year ended December 31, 1997, File No. 0-14714). </FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="91%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>10.21</FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Loan Agreement between the City of Yankton, South Dakota and Kolberg Pioneer, Inc. dated August 11, 1998 for variable/fixed rate demand Industrial Development Revenue Bonds, Series 1998 (incorporated by reference from the
Company's Annual Report on Form 10-K for the year ended December 31, 1998, File No. 0-14714). </FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="91%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>10.22</FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Letter of Credit Agreement dated August 12, 1998 between the First National Bank of Chicago and Astec Industries, Inc., Astec Financial Services, Inc. and Kolberg-Pioneer, Inc. (incorporated by reference from the Company's
Annual Report on Form 10-K for the year ended December 31, 1998, File No. 0-14714). </FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="91%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>10.23</FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Promissory Note dated December 14, 1998 between Astec Industries, Inc. and Edna F. Brock (incorporated by reference from the Company's Annual Report on Form 10-K for the year ended December 31, 1998, File No. 0-14714). </FONT>
</TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="91%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>10.24</FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Waiver for December 31, 1998, dated March 9, 1999, with respect to the Second Amended and Restated Credit Agreement, dated November 24, 1997 by and between the Company and The First National Bank of Chicago (incorporated by
reference from the Company's Annual Report on Form 10-K for the year ended December 31, 1998, File No. 0-14714). </FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="91%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>10.25</FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Guaranty of Astec Industries, Inc., dated February 23, 1998, of debt of Pavement Technology, Inc. in favor of Tucker Federal Bank (incorporated by reference from the Company's Annual Report on Form 10-K for the year ended
December 31, 1998, File No. 0-14714). </FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="91%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>10.26</FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Purchase Agreement dated October 30, 1998, effective October 31, 1998, between Astec Industries, Inc. and Johnson Crushers International, Inc. (incorporated by reference from the Company's Annual Report on Form 10-K for the
year ended December 31, 1998, File No. 0-14714). </FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>10.27</FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Term Loan in the amount of $15,000,000 dated August 13, 1999 by and between Astec Industries, Inc. and Bank One, NA (incorporated by reference from the Company's Quarterly Report on Form 10-Q for the period ended September
30, 1999, File No. 0-14714). </FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="91%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>10.28</FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Asset Purchase and Sale Agreement, dated August 13, 1999, by and among Teledyne Industries Canada Limited, Teledyne CM Products Inc. and Astec Industries, Inc. (incorporated by reference from the Company's Quarterly Report on
Form 10-Q for the period ended September 30, 1999, File No. 0-14714). </FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="91%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>10.29</FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Stock Purchase Agreement, dated October 31, 1999, by and among American Augers, Inc. and Its Shareholders and Astec Industries, Inc. (incorporated by reference from the Company's Annual Report on Form 10-K for the year ended
December 31, 1999, File No. 0-14714). </FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="91%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>10.30</FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Stock Purchase Agreement, dated November 1, 1999, by and among SIMCO, LLC and the Superior Industries of Morris, Inc. Employee Stock Ownership Plan and Astec Industries, Inc. (incorporated by reference from the Company's
Annual Report on Form 10-K for the year ended December 31, 1999, File No. 0-14714). </FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="91%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>10.31</FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Amended and Restated Master Note in the amount of $15,000,000 dated December 29, 1999 by and between Astec Industries, Inc. and Bank One, NA (incorporated by reference from the Company's Annual Report on Form 10-K for the
year ended December 31, 1999, File No. 0-14714).</FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="91%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>10.32</FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Amended and Restated Master Note in the amount of $20,000,000 dated December 29, 1999 by and between Astec Industries, Inc. and Bank One, NA (incorporated by reference from the Company's Annual Report on Form 10-K for the
year ended December 31, 1999, File No. 0-14714). </FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="91%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>10.33</FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Sale of Business Agreement, dated September 29, 2000, between Anglo Operations Limited and High Mast Properties 18 Limited and Astec Industries, Inc. for the purchase of the materials handling and processing products division
of the Boart-Longyear Division of Anglo Operations Limited. </FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="91%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>10.34</FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Acquisition Agreement, dated October 2, 2000, by and among Larry Raymond, Carlson Paving Products, Inc. and Astec Industries, Inc. </FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="91%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>10.35</FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Collective Bargaining Agreement, dated February 1, 2001, by and between Trencor, Inc. and the United States Steelworkers of America, AFL-CIO and CLC. </FONT></TD>
</TR>
</TABLE>


<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=835>
<TR><TD WIDTH="9%" VALIGN="TOP">
<P><FONT FACE="Arial" SIZE=2>22</FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Subsidiaries of the Registrant</FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="91%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>23</FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Consent of Independent Auditors </FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="91%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<B><FONT FACE="Arial" SIZE=2><P>*</B></FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Management contract or compensatory plan or arrangement.</FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>(b)</FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>No reports on Form 8-K were filed in the fourth quarter.</FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>(c)</FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>The Exhibits to this Report are listed under Item 14(a)(3) above.</FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>(d)</FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>The Financial Statement Schedules to this Report are listed under Item 14(a)(2) above. </FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="91%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="91%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
</TABLE>

<U><FONT FACE="Arial" SIZE=2><P>&#9;&#9; <BR>
</U>*The Exhibits are numbered in accordance with Item 601 of Regulation S-K. Inapplicable Exhibits are not included in the list. <BR>
&nbsp; <BR>
&nbsp;</P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=691>
<TR><TD VALIGN="TOP" COLSPAN=2>
<P ALIGN="CENTER"><B><FONT FACE="Arial" SIZE=2>APPENDIX "A"</B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=2>
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">To</B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=2>
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">ANNUAL REPORT ON FORM 10-K</B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=2>
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">ITEMS 8 and 14(a)(1) and (2), (c) and (d)</B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=2>
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">INDEX TO FINANCIAL STATEMENTS AND</B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=2>
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">FINANCIAL STATEMENT SCHEDULES</B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=2>
<B><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">ASTEC INDUSTRIES, INC.</B></FONT></TD>
</TR>
<TR><TD WIDTH="85%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P>Contents</U> </FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">Page</U></FONT></TD>
</TR>
<TR><TD WIDTH="85%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Selected Consolidated Financial Data</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">A-1</FONT></TD>
</TR>
<TR><TD WIDTH="85%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Management's Discussion and Analysis of Financial Condition and Results of Operations</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">A-2</FONT></TD>
</TR>
<TR><TD WIDTH="85%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Consolidated Balance Sheets at December 31, 2000 and 1999</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">A-6</FONT></TD>
</TR>
<TR><TD WIDTH="85%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Consolidated Statements of Income for the Years Ended December 31, 2000, 1999 and 1998</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">A-7</FONT></TD>
</TR>
<TR><TD WIDTH="85%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Consolidated Statements of Cash Flows for the Years Ended December 31, 2000, 1999 and 1998</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">A-8</FONT></TD>
</TR>
<TR><TD WIDTH="85%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Consolidated Statements of Shareholders' Equity for the Years Ended December 31, 2000, <BR>
1999 and 1998</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">A-10</FONT></TD>
</TR>
<TR><TD WIDTH="85%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Notes to Consolidated Financial Statements</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">A-11</FONT></TD>
</TR>
<TR><TD WIDTH="85%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Report of Independent Auditors</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">A-24</FONT></TD>
</TR>
<TR><TD WIDTH="85%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Schedule II - Valuation and Qualifying Accounts</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">A-25</FONT></TD>
</TR>
</TABLE>

<FONT FACE="Arial" SIZE=2><P>&nbsp; <BR>
&nbsp; </P>
</FONT><B><FONT FACE="Times,Times New Roman" SIZE=2><P>SELECTED CONSOLIDATED FINANCIAL DATA<BR>
</B>(in thousands, except as noted*)</P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=739>
<TR><TD WIDTH="44%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<P></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=4 HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">2000</B></FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=4 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">1999</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">1998</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=5 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">1997</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">1996</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=19 HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P>Consolidated Income Statement Data</B></FONT></TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Net sales</FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$&nbsp;520,688</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$&nbsp;449,627</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$&nbsp;363,945</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$&nbsp;265,365</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$&nbsp;221,413</FONT></TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Selling, general and</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=4 HEIGHT=13><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=4 HEIGHT=13><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=13><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=5 HEIGHT=13><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=13><P></P></TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>administrative expenses</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=4 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">69,011</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=4 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">56,280</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">46,796</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=5 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">36,125</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">35,346</FONT></TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Research and development</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=4 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">6,726</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=4 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">5,356</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">4,681</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=5 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">3,707</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">5,868</FONT></TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Income from operations</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=4 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">47,138</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=4 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">52,521</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">40,427</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=5 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">24,661</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">8,051</FONT></TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Interest expense</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=4 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">8,652</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=4 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">4,253</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">2,709</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=5 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">2,398</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,656</FONT></TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Net income </FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=4 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">26,281</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=4 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">31,712</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">24,436</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=5 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">13,809</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">4,345</FONT></TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Earnings per common share*(1)</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=4 HEIGHT=13><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=4 HEIGHT=13><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=13><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=5 HEIGHT=13><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=13><P></P></TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Basic</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=4 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1.37</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=4 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1.66</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1.30</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=5 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">.72</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">.22</FONT></TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Diluted</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=4 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1.33</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=4 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1.59</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1.26</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=5 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">.71</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">.21</FONT></TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP" COLSPAN=2 HEIGHT=13><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=4 HEIGHT=13><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=4 HEIGHT=13><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=13><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=5 HEIGHT=13><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=13><P></P></TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P>Consolidated Balance Sheet Data</B></FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=4 HEIGHT=13><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=4 HEIGHT=13><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=13><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=5 HEIGHT=13><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=13><P></P></TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Working capital</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=4 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 155,736</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=4 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 127,569</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 81,865</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=5 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 71,459</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 69,884</FONT></TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Total assets</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=4 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">402,306</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=4 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">355,437</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">248,320</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=5 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">192,243</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">167,853</FONT></TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Total short-term debt</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=4 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,986</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=4 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">596</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">646</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=5 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">500</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">2,051</FONT></TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Long-term debt, less current <BR>
&nbsp;&nbsp;maturities</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=4 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">118,511</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=4 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">102,685</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">47,220</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=5 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">35,230</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">30,497</FONT></TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Shareholders' equity</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=4 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">194,623</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=4 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">167,258</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">132,658</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=5 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">105,612</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">99,393</FONT></TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Book value per common</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=4 HEIGHT=13><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=4 HEIGHT=13><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=13><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=5 HEIGHT=13><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=13><P></P></TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>share at year-end*(1)</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=4 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">10.07</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=4 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">8.75</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">7.44</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=5 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">6.12</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">5.37</FONT></TD>
</TR>
</TABLE>

<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=608>
<TR><TD WIDTH="48%" VALIGN="TOP" COLSPAN=3 HEIGHT=13>
<P ALIGN="JUSTIFY"><B><FONT FACE="Times,Times New Roman" SIZE=2>Quarterly Financial Highlights</B> </FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">First</B></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Second</B></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Third</B></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Fourth</B></FONT></TD>
</TR>
<TR><TD WIDTH="48%" VALIGN="TOP" COLSPAN=3 HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P>(Unaudited)</B></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Quarter</B></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Quarter</B></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Quarter</B></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Quarter</B></FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=13><P></P></TD>
<TD WIDTH="37%" VALIGN="TOP" COLSPAN=2 HEIGHT=13><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13><P></P></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P>2000</B></FONT></TD>
<TD WIDTH="37%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Net sales</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 140,872</B></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 159,726</B></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 103,036</B></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 117,054</B></FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=13><P></P></TD>
<TD WIDTH="37%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Gross profit</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">33,758</B></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">40,858</B></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">24,608</B></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">23,651</B></FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=13><P></P></TD>
<TD WIDTH="37%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Net income</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">8,627</B></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">12,719</B></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">3,407</B></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,528</B></FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=13><P></P></TD>
<TD WIDTH="37%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Earnings per common share* </FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13><P></P></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=13><P></P></TD>
<TD WIDTH="37%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Basic</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">.45</B></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">.66</B></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">.18</B></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">.08</B></FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=13><P></P></TD>
<TD WIDTH="37%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Diluted</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">.44</B></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">.64</B></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">.17</B></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">.08</B></FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=13><P></P></TD>
<TD WIDTH="37%" VALIGN="TOP" COLSPAN=2 HEIGHT=13><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13><P></P></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P>1999</B></FONT></TD>
<TD WIDTH="37%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Net sales</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 112,478</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 119,958</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 106,886</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 110,305 </FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=13><P></P></TD>
<TD WIDTH="37%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Gross profit</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">28,009</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">33,839</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">27,779</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">24,549</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=13><P></P></TD>
<TD WIDTH="37%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Net income</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">8,567</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">11,155</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">7,915</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">4,075</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=13><P></P></TD>
<TD WIDTH="37%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Earnings per common share*</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13><P></P></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=13><P></P></TD>
<TD WIDTH="37%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Basic</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">.45</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">.59</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">.41</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">.21</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=13><P></P></TD>
<TD WIDTH="37%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Diluted</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">.43</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">.55</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">.40</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">.21</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=13><P></P></TD>
<TD WIDTH="37%" VALIGN="TOP" COLSPAN=2 HEIGHT=13><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13><P></P></TD>
</TR>
<TR><TD WIDTH="48%" VALIGN="TOP" COLSPAN=3 HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P>Common Stock Price*</B></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13><P></P></TD>
</TR>
<TR><TD WIDTH="48%" VALIGN="TOP" COLSPAN=3 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>2000 High</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 28.06</B></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 29.88</B></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 25.50</B></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 14.38</B></FONT></TD>
</TR>
<TR><TD WIDTH="48%" VALIGN="TOP" COLSPAN=3 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>2000 Low</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">16.75</B></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">22.81</B></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">9.94</B></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">8.38</B></FONT></TD>
</TR>
<TR><TD WIDTH="13%" VALIGN="TOP" COLSPAN=2 HEIGHT=13><P></P></TD>
<TD WIDTH="35%" VALIGN="TOP" HEIGHT=13><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13><P></P></TD>
</TR>
<TR><TD WIDTH="48%" VALIGN="TOP" COLSPAN=3 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>1999 High</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">35.31</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">43.75</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">41.63</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">29.38</FONT></TD>
</TR>
<TR><TD WIDTH="48%" VALIGN="TOP" COLSPAN=3 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>1999 Low</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">20.88</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">29.75</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">20.25</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">14.75</FONT></TD>
</TR>
<TR><TD WIDTH="13%" VALIGN="TOP" COLSPAN=2 HEIGHT=13><P></P></TD>
<TD WIDTH="35%" VALIGN="TOP" HEIGHT=13><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13><P></P></TD>
</TR>
</TABLE>

<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P>The Company's common stock is traded on the National Association of Securities Dealers Automated Quotation (NASDAQ) National Market under the symbol ASTE. Prices shown are the high and low bid prices as announced by NASDAQ. The Company has never paid
any dividends on its common stock. </P>
<P>The number of common shareholders is approximately 6,100.</P>
<OL>

<LI>Restated for 1998 and prior to retroactively reflect the two-for-one stock split effected in the form of a dividend on January 18, 1999.</LI></OL>

<P>&nbsp;</P>
<B><P>MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL<BR>
CONDITION AND RESULTS OF OPERATIONS</P>
<P>Results of Operations; 2000 vs. 1999</P>
</B><P>Net income for 2000 was $26,281,000, or $1.33 per diluted share, a decrease of $5,431,000, or 17.1%, compared to net income of $31,712,000, or $1.59 per diluted share in 1999. The weighted average number of common shares outstanding at December
31, 2000 was 19,721,288 compared to 19,930,376 at December 31, 1999.</P>
<P>Net sales for 2000 were $520,688,000, an increase of $71,061,000, or 15.8%, compared to 1999. The 2000 domestic sales increased from $403,832,000 to $464,313,000, or $60,481,000, a 15.0% increase. Domestic sales are primarily from equipment purchases
made by customers for use in construction for privately funded infrastructure development and public sector spending on infrastructure development. Public sector spending at the federal, state and local levels is driven in large part by federal spending
under the six-year federal-aid highway program, the Transportation Equity Act for the 21st Century ("TEA-21") enacted in June 1998. TEA-21 authorized the appropriation of $217 billion in federal aid for road, highway and bridge construction, repair and
improvement and other federal highway and transit projects for federal fiscal years October 1, 1998 through September 30, 2003. During 2000, domestic sales were negatively impacted by rising interest rates, volatile and rising gas and oil prices, the
beginning stages of a general economic slowdown and delays in public sector highway projects. Most of this negative impact was felt in the second half of the year. The increase in total sales is attributed primarily to 1999 acquisitions accounting for
sales of $90,800,000 (with a full year of operations in 2000), offset by a $19,739,000, or 4.3% decline in internally generated sales.</P>
<P>International sales in 2000 increased $17,704,000, or 38.7%, to approximately $63,499,000 compared to 1999 international sales of $45,795,000. Increased sales in Central America, Africa and Australia comprise most of the increase over 1999. Asphalt
plant equipment and underground equipment accounted for the increase in Australia. The increase in Africa and Central America was due to aggregate equipment sales.</P>
<P>Parts sales increased from $73,946,000 to $83,960,000, or 13.5%.</P>
<P>Gross profit was 23.6% in 2000 compared to 25.4% in 1999. Gross profit declines in asphalt and aggregate equipment accounted for most of the reduction. The erosion in both cases resulted from competitive price pressure and a lack of utilization of
capacity primarily due to lower sales volumes.</P>
<P>In 2000, selling, general and administrative expenses increased to 13.3% of net sales from 12.5% of net sales in 1999. The primary reason for the dollar increase in SG&amp;A is related to acquisitions in 1999 and 2000. The percentage is impacted by
lower than expected sales while being staffed and equipped for much larger volume. </P>
<P>Research and development expenses increased by $1,370,000, or 25.7%, from $5,356,000 in 1999 to $6,726,000 in 2000. Excluding 1999 and 2000 acquisitions, research and development increased 9.7% as the Company continued developing innovative products.</P>

<P>Interest expense for 2000 increased to 1.7% of net sales from 0.9% of sales for 1999. The increase in dollars related primarily to borrowings required for acquisitions in 1999 and 2000 plus increased working capital.</P>
<P>Income tax expense for 2000 was $16,441,000 compared to $19,819,000 for 1999, or 38.5% of pre-tax income for both years. </P>
<P>The backlog at December 31, 2000 was $89,552,000 compared to $96,572,000 at December 31, 1999 (restated for acquisitions). The backlog for asphalt plant orders decreased significantly from 1999, while aggregate orders, primarily related to South
Africa and aggregate systems business, increased from the prior year. The impact of TEA-21 has been felt incrementally in 1999 and 2000, but the full impact of the spending of appropriated funds may not be felt until 2001 or after. In this regard, the
American Road and Transportation Builders Association's economists project highway construction growth from 9.0% to 10.8% in 2001. The Company expects the extremely challenging market and economic conditions that were prevalent during the second half of
2000 to persist for at least the next several quarters. The Company is unable to determine whether this backlog effect was experienced by the industry as a whole. We are unable to assess the amount of the impact attributable to the TEA-21 legislation
which became effective in October 1998. While the backlog reflects a decline, <BR>
management believes that this is reflective of the current economic conditions in the United States and the current hesitancy of Astec customers to commit to capital equipment purchases. The hesitancy is a result of our customers awaiting improvement of
economic conditions or the awarding of new contracts for jobs. The total spending on highway construction declined slightly in 2000 but is expected to rise slightly in 2001. The number of contracts put in place in 2000 declined, but the average size
increased. Some contracts are multi-year contracts.</P>
<P>Asphalt Group: This segment had a decrease in sales of $4,703,000, or 2.4%, and a segment profit decrease of $7,452,000, or 29.3%, compared to 1999. The primary reasons for the decrease in sales are instability of gas and oil prices, delay of public
sector construction projects and increasing interest rates. Competitive price pressure and lack of utilization of capacity significantly impacted gross profits and segment income.</P>
<P>Aggregate and Mining Group: The 2000 sales for this segment increased $35,731,000, or 23.0%, over 1999, primarily due to the acquisitions of Superior Industries of Morris, Inc. and Breaker Technology Ltd. in late 1999 and Osborn Engineered Products SA
(Pty) Ltd. in late 2000. Segment profit increased $168,000, or 0.9% over 1999. Competitive price pressure and lack of utilization of capacity impacted gross profits and segment income. </P>
<P>Mobile Asphalt Paving Group: The 2000 sales in this segment decreased $4,107,000, or 6.1% versus 1999. Segment profit also decreased $2,856,000, or 25.5%. The decrease in sales was present in all product lines. There was some competitive price
pressure, but there was less gross profit percent impact than in other segments.</P>
<P>Underground Group: The 2000 sales in this segment increased by $44,238,000, or 140.4%, over 1999, primarily from sales by American Augers, Inc., a November 1, 1999 acquisition, which were included for the full year of 2000. The directional drilling
business of American Augers grew in connection with the optical fiber cable and other utility industries. The addition of American Augers' volume required reporting of this new segment under the provisions of FAS 131.</P>
<B><P>Results of Operations; 1999 vs. 1998</P>
</B><P>Net income for 1999 was $31,712,000, or $1.59 per diluted share, an increase of $7,226,000, or 29.8%, compared to net income of $24,436,000, or $1.26 per share diluted, in 1998, restated to reflect the two-for-one stock split that took effect on
January 18, 1999. </P>
<P>Net sales for 1999 were $449,627,000, an increase of $85,682,000, or 23.5%, compared to 1998. The 1999 domestic sales increased from $294,430,000 to $403,832,000, or $109,402,000, for a 37.2% increase from 1998. The increase in domestic sales is
attributed to increased sales in all product lines. A strong domestic economy and spending under the new six-year highway bill, TEA-21, which authorizes $217 billion in federal investment through 2003 for road repair, improvement and other federal highway
and transit projects are the primary reasons for the increase in domestic sales. Approximately 46% of the sales growth was generated internally, while 54% was from acquisitions.</P>
<P>International sales for 1999 decreased $23,720,000, or 34.1%, to approximately $45,795,000 compared to 1998 international sales of $69,515,000. Sales in South America decreased 85% in 1999 from 1998 levels, with approximately 53% of the decrease
attributable to a decrease in sales of trenching equipment and the remaining decrease split between decreased demand for asphalt equipment and aggregate processing equipment. International sales represented 10.2% and 19.1% of net sales in 1999 and 1998,
respectively. </P>
<P>Gross profit was 25.4% in 1999 compared to 25.3% in 1998. Through September 30, 1999, the gross profit had improved to 26.4%; however, in the fourth quarter the gross profit was impacted by costs relating to the move of one aggregate company to a new
facility, by the costs of interruptions and delays associated with a computer installation in another company and the loss of international sales.</P>
<P>In 1999, selling, general and administrative expenses decreased to 12.5% of net sales from 12.9% of net sales in 1998. The volume increase in net sales is the primary factor responsible for the decreased percentage. Approximately 58% of the increase
in dollars related to expenses of acquired operations.</P>
<P>Although research and development expenses increased $675,000, the percentage of net sales decreased to 1.2% in 1999 from 1.3% in the prior year. The increase in sales volume is the primary reason for the reduction in the percentage.</P>
<P>Interest expense for 1999 increased to 0.9% of sales from 0.7% of sales for 1998. The increase in dollars related primarily to borrowings required for acquisitions.</P>
<P>Income tax expense for 1999 was $19,819,000, or 38.5% of pre-tax income, compared to $15,126,000 for 1998, or 38.2% of pre-tax income. The increase is the result of the Company's decreased international sales and the mix of revenue by state.</P>
<P>The backlog at December 31, 1999 was $94,827,000 compared to $99,461,000 at December 31, 1998 (restated for acquisitions). The backlog contains a significant increase for asphalt plant orders and a reduction for aggregate orders. The impact of TEA-21
was felt incrementally in 1998 and 1999. </P>
<P>Asphalt Group: This segment had increases in sales of $29,291,000, or 17.9%, and segment profit of $3,884,000, or 18.0%, over 1998. The primary reason for the increase in sales was a strong economy accompanied by the impact of TEA-21. International
sales in this segment decreased $9,490,000, or 35.3%, versus 1998.</P>
<P>Aggregate and Mining Group: The 1999 sales in this segment increased $42,494,000, or 37.7%, over 1998, primarily due to the acquisition of Johnson Crushers International, Inc., Superior Industries of Morris, Inc. and Breaker Technology Ltd. Segment
profit increased $5,237,000, or 40.4% over 1998. International sales in this segment decreased $1,508,000, or 8.2% versus 1998. </P>
<P>Mobile Asphalt Paving Group: The 1999 sales in this segment increased $7,050,000, or 11.7% over 1998. Segment profit also increased $1,310,000, or 13.2%. The primary increase in sales resulted from an increase in sales of our patented material
transfer vehicle, the Shuttle Buggy. International sales in this segment decreased $2,850,000, or 36.5% versus 1998.</P>
<B><P>Liquidity and Capital</P>
</B><P>During 2000, the Company continued to maintain a strong financial position while funding capital projects, working capital needs and two business combinations with cash provided by operations, bank borrowings and low interest rate industrial
revenue bonds. At December 31, 2000, working capital totaled $155,736,000 compared to $127,569,000 at December 31, 1999. The working capital increase was primarily the result of a $10,323,000 increase in finance receivables at Astec Financial Services
("AFS") and a $17,816,000 increase in inventories, excluding 2000 acquisitions. Approximately $4,255,000 of the increase in working capital was the result of the two acquisitions completed in 2000. </P>
<P>The Company has an unsecured $150,000,000 revolving credit loan agreement with a bank which expires on November 22, 2002. At December 31, 2000, the Company was utilizing $98,700,000 of the amount available under the credit facility for borrowing and
an additional $18,440,000 to support outstanding letters of credit (primarily for industrial revenue bond issues). Principal covenants under the loan agreement include (i) the maintenance of minimum levels of net worth and compliance with minimum net
worth, leverage and interest coverage ratios, (ii) a limitation on capital expenditures and rental expense, (iii) a prohibition against the payment of dividends, and (iv) a prohibition on large acquisitions except upon the consent of the lenders. The
Company was in compliance with all financial covenants related to the credit facility at December 31, 2000.</P>
<P>The bank revolving credit facility provides for a segregated portion of up to $50,000,000 for use by the Company's captive finance subsidiary, AFS. Advances under this portion of the loan agreement are limited to the "Eligible Receivables" of AFS as
defined in the loan agreement. At December 31, 2000, AFS borrowings represented $20,075,000 of the total $98,700,000 outstanding under the loan agreement.</P>
<P>In addition to the bank revolving credit facility, the Company's South African subsidiary, Osborn Engineered Products SA (Pty) Ltd., has a credit facility available of $1,975,000 to finance short-term working capital needs and an additional $1,975,000
available to cover the short-term establishment of performance guarantee requirements.</P>
<P>The Company considers the unused portion of its bank revolving credit facility, coupled with cash expected to be generated by operations, adequate to meet its foreseeable funding needs, including planned 2001 capital expenditures of approximately
$12,600,000 (excluding expenditures for equipment leased to others). There is a provision in the loan agreement allowing the borrowing of $10,000,000 from any source for needs beyond the revolver provisions. Capital expenditures (excluding those for
equipment leased to others) were $20,791,000 in 2000 and $28,385,000 in 1999.</P>
<P>For additional information on current and long-term debt, see Note 6 to the Consolidated Financial Statements.</P>
<B><P>Market Risk and Risk Management Policies</P>
</B><P>The Company is exposed to changes in interest rates, primarily from its long-term debt arrangements. Under its current policies, the Company uses interest rate derivative instruments to manage exposure to interest rate changes for a portion of its
debt arrangements. Taking into account the effects of interest rate derivatives designated as hedges, a hypothetical 100 basis point adverse move (increase) in interest rates would adversely affect interest expense by approximately $875,000 for the year
ended December 31, 2000. The Company's earnings and cash flows are also subject to fluctuations due to changes in foreign currency exchange rates; however, these fluctuations would not be significant to the Company's consolidated operations.</P>
<B><P>Contingencies</P>
</B><P>See Note 9 to Consolidated Financial Statements for information on certain pending litigation and contingent liabilities arising from recourse financing arrangements.</P>
<B><P>Environmental Matters</P>
</B><P>Based on information available, management believes the Company has adequately reserved for potential environmental liabilities and does not believe the potential liability will materially impact the future financial position of the Company.</P>
<B><P>Goodwill</P>
</B><P>At December 31, 2000, goodwill totaled $37,208,000, which is 19.1% of shareholders' equity and 9.2% of total assets.</P>
<B><P>CONSOLIDATED BALANCE SHEETS</P></B></FONT>
<TABLE BORDER CELLSPACING=1 WIDTH=601>
<TR><TD WIDTH="64%" VALIGN="BOTTOM">
<P>&nbsp;</TD>
<TD WIDTH="36%" VALIGN="BOTTOM" COLSPAN=2>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">December 31, </FONT></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="BOTTOM" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P>Assets</B></FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">2000</B></FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">1999</B></FONT></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P>Current assets:</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P>Cash and cash equivalents </FONT><FONT FACE="Times,Times New Roman" SIZE=1>Note 1</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$&nbsp;&nbsp;&nbsp;7,053,328</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$&nbsp;&nbsp;&nbsp;3,725,070 </FONT></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Trade receivables less allowance for doubtful accounts of $2,105,000 &nbsp;&nbsp;&nbsp;in 2000 and $1,966,000 in 1999</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">55,500,511</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">60,093,938</FONT></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P>Finance receivables </FONT><FONT FACE="Times,Times New Roman" SIZE=1>Note 13</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">23,011,883</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">9,631,998</FONT></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P>Notes and other receivables</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">4,647,572</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">11,639,809</FONT></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P>Inventories </FONT><FONT FACE="Times,Times New Roman" SIZE=1>Notes 1, 3</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">126,307,828</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">104,841,923</FONT></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P>Prepaid expenses</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">3,595,524</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">4,308,596</FONT></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P>Refundable income taxes</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">3,893,629</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,858,886</FONT></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P>Deferred tax asset </FONT><FONT FACE="Times,Times New Roman" SIZE=1>Note 8</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">7,824,451</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">6,931,749</FONT></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P>Other current assets</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">159,059</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">319,358</FONT></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="BOTTOM">
<FONT SIZE=2><P>&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Total current assets</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">231,993,785</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">203,351,327</FONT></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P>Property and equipment, net </FONT><FONT FACE="Times,Times New Roman" SIZE=1>Note 4</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">126,927,532</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">109,388,156</FONT></TD>
</TR>
<TR><TD VALIGN="BOTTOM" COLSPAN=3>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Other assets:</FONT></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P>Goodwill</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">37,207,924</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">36,299,808</FONT></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P>Finance receivables </FONT><FONT FACE="Times,Times New Roman" SIZE=1>Note 13</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">3,500,180</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">4,273,936</FONT></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P>Notes receivable</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">362,138</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">493,352</FONT></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P>Other</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">2,314,260</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,630,452</FONT></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="BOTTOM">
<FONT SIZE=2><P>&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Total other assets</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">43,384,502</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">42,697,548</FONT></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Total assets</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 402,305,819 </FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 355,437,031 </FONT></TD>
</TR>
<TR><TD VALIGN="BOTTOM" COLSPAN=3>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P><BR>
Liabilities and Shareholders' Equity</B></FONT></TD>
</TR>
<TR><TD VALIGN="BOTTOM" COLSPAN=3>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Current liabilities:</FONT>&nbsp;</TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P>Current maturities of long-term debt </FONT><FONT FACE="Times,Times New Roman" SIZE=1>Note 6</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$&nbsp;&nbsp;&nbsp;1,986,424</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;595,635</FONT></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P>Accounts payable</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">35,585,181</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">36,430,028</FONT></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P>Customer deposits</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">6,463,715</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">7,040,785</FONT></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P>Accrued product warranty</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">4,441,845</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">4,075,358</FONT></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P>Accrued payroll and related liabilities</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">14,019,935</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">14,579,479</FONT></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P>Other accrued liabilities</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">13,760,679</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">13,061,524</FONT></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="BOTTOM">
<FONT SIZE=2><P>&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Total current liabilities</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">76,257,779</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">75,782,809</FONT></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P>Long-term debt, less current maturities </FONT><FONT FACE="Times,Times New Roman" SIZE=1>Note 6</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">118,510,887</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">102,685,470</FONT></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P>Deferred tax liability </FONT><FONT FACE="Times,Times New Roman" SIZE=1>Note 8</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">7,933,378</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">5,495,869</FONT></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P>Deferred retirement costs </FONT><FONT FACE="Times,Times New Roman" SIZE=1>Note 7</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,648,226</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,332,746</FONT></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P>Other</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">2,884,421</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">2,882,561</FONT></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P>Total liabilities</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">207,234,691</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">188,179,455</FONT></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P>Minority interest</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">448,188</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<P>.</TD>
</TR>
<TR><TD VALIGN="BOTTOM" COLSPAN=3>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Shareholders' equity: </FONT><FONT FACE="Times,Times New Roman" SIZE=1>Notes 1, 10</FONT>&nbsp;</TD>
</TR>
<TR><TD VALIGN="BOTTOM" COLSPAN=3 HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Preferred stock - authorized 4,000,000 shares of $1.00 par value;<BR>
&nbsp;&nbsp;&nbsp;none issued</FONT>&nbsp;</TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P>Common stock - authorized 40,000,000 shares of $.20 par value;<BR>
&nbsp;&nbsp;&nbsp;issued and outstanding</FONT> <FONT FACE="Times,Times New Roman" SIZE=2>19,319,746 in 2000 and 19,121,062 in 1999</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">3,863,949</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">3,824,227</FONT></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P>Additional paid-in capital</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">48,440,594</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">46,918,852</FONT></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P>Accumulated other comprehensive income </FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(210,298)</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">266,888</FONT></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P>Retained earnings</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">142,528,695</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">116,247,609</FONT></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P>Total shareholders' equity</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">194,622,940</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">167,257,576</FONT></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P>Total liabilities and shareholders' equity</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 402,305,819</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 355,437,031 </FONT></TD>
</TR>
</TABLE>

<FONT FACE="Times,Times New Roman" SIZE=2><P>See Notes to Consolidated Financial Statements.</P>
<B><P>CONSOLIDATED STATEMENTS OF INCOME</P></B></FONT>
<TABLE BORDER CELLSPACING=1 WIDTH=595>
<TR><TD WIDTH="43%" VALIGN="BOTTOM" HEIGHT=13>
<P></TD>
<TD WIDTH="57%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Year Ended December 31,</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="BOTTOM" HEIGHT=13><P></P></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">2000</B></FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">1999</B></FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">1998</B></FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Net sales</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$520,687,851</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 449,627,457</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 363,945,191</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Cost of sales</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">397,813,019</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">335,471,243</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">272,040,941</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Gross profit</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">122,874,832</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">114,156,214</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">91,904,250</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Selling, general and administrative expenses</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">69,011,339</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">56,279,937</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">46,796,409</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Research and development expenses</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">6,725,884</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">5,355,736</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">4,681,019</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Income from operations</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">47,137,609</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">52,520,541</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">40,426,822</FONT></TD>
</TR>
<TR><TD VALIGN="BOTTOM" COLSPAN=4 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Other income (expense):</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="BOTTOM" HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Interest expense</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(8,652,339)</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(4,253,219)</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(2,708,981)</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="BOTTOM" HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Interest income</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">2,239,786</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,136,777</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">101,208</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="BOTTOM" HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Other income - net</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">2,201,579</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">2,121,228</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,668,869</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Equity in (loss) income of joint venture</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(195,781)</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">6,096</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">74,578</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Income before income taxes</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">42,730,854</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">51,531,423</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">39,562,496</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Income taxes </FONT><FONT FACE="Times,Times New Roman" SIZE=1>Note 8</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">16,441,440</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">19,819,145</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">15,126,381</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Income before minority interest</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">26,289,414</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">31,712,278</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">24,436,115</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Minority interest</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">8,328</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<P>.</TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<P>.</TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Net income</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 26,281,086</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 31,712,278</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 24,436,115</FONT></TD>
</TR>
<TR><TD VALIGN="BOTTOM" COLSPAN=4 HEIGHT=20>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P>Earnings per Common Share</B> </FONT><FONT FACE="Times,Times New Roman" SIZE=1>Note 1</FONT></TD>
</TR>
<TR><TD VALIGN="BOTTOM" COLSPAN=4 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Net income:</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="BOTTOM" HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Basic</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 1.37</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 1.66</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 1.30</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="BOTTOM" HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Diluted</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1.33</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1.59</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1.26</FONT></TD>
</TR>
<TR><TD VALIGN="BOTTOM" COLSPAN=4 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Weighted average number of common shares<BR>
outstanding</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="BOTTOM" HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Basic</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">19,221,754</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">19,064,516</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">18,799,063</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="BOTTOM" HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Diluted</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">19,721,288</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">19,930,376</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">19,441,184</FONT></TD>
</TR>
</TABLE>

<FONT FACE="Times,Times New Roman" SIZE=2><P>&nbsp;</P>
<P>See Notes to Consolidated Financial Statements.</P>
<B><P>CONSOLIDATED STATEMENTS OF CASH FLOWS</P></B></FONT>
<TABLE BORDER CELLSPACING=1 WIDTH=675>
<TR><TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=13>
<P></TD>
<TD WIDTH="47%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Year Ended December 31,</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=13><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">2000</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">1999</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">1998</FONT></TD>
</TR>
<TR><TD VALIGN="BOTTOM" COLSPAN=4 HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P>Cash Flows from Operating Activities</B></FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Net income</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 26,281,086</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 31,712,278</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 24,436,115</FONT></TD>
</TR>
<TR><TD VALIGN="BOTTOM" COLSPAN=4 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Adjustments to reconcile net income to net cash<BR>
&nbsp;&nbsp;&nbsp;provided by operating activities</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Depreciation and amortization</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">15,379,703</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">11,695,862</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">8,129,585</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Provision for doubtful accounts</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">807,569</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">425,557</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,092,185</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Provision for inventory reserves</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,437,610</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,265,120</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,289,740</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Provision for warranty</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,308,058</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,466,176</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">4,048,899</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Gain on sale of fixed assets</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(94,261)</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(146,268)</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(341,575)</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Gain on sale of equipment on operating lease</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(2,142,119)</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(969,845)</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(956,271)</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Gain on sale of finance receivables</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(438,010)</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(215,730)</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(278,824)</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Equity in loss (income) of joint venture</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">195,781</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(6,096)</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(74,578)</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Minority interest in earnings of subsidiary</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(8,328)</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<P>.</TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<P>.</TD>
</TR>
<TR><TD VALIGN="BOTTOM" COLSPAN=4 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>(Increase) decrease in:</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Receivables</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">8,155,450</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(6,011,492)</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(11,352,173)</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Inventories</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(18,901,256)</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(11,136,071)</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(3,717,271)</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Prepaid expenses </FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">230,183</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(1,683,262)</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(703,735)</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Deferred tax asset</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">494,685</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,229,527</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(723,156)</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Other assets</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">459,650</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">135,646</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(444,725)</FONT></TD>
</TR>
<TR><TD VALIGN="BOTTOM" COLSPAN=4 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Increase (decrease) in:</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Accounts payable</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(3,675,821)</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">2,025,578</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">2,664,949</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Customer deposits</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(575,633)</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(4,171,065)</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">4,094,466</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Accrued product warranty</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(1,249,472)</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(2,090,771)</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(3,828,493)</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Income taxes payable</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(984,131)</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(329,480)</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(817,515)</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Other accrued liabilities</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(3,272,367)</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">4,113,914</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">5,977,639</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Foreign currency transaction (gain) loss</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(120,257)</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">27,293</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<P>.</TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Net cash provided by operating activities</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">23,288,120</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">27,336,871</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">28,495,262</FONT></TD>
</TR>
<TR><TD VALIGN="BOTTOM" COLSPAN=4 HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P>Cash Flows from Investing Activities</B></FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Proceeds from sale of property and equipment - net</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">319,789</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">266,601</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">992,841</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Expenditures for property and equipment</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(21,535,875)</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(28,384,787)</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(18,465,257)</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Proceeds from sale of equipment on operating lease</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">48,920,688</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">29,748,064</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">22,609,684</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Expenditures for equipment on operating lease</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(53,882,130) </FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(25,216,820)</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(28,015,599)</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Additions to finance receivables</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(74,134,723) </FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(37,820,908)</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(18,398,321)</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Collections of finance receivables</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">32,368,390</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">390,450</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">365,514</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Proceeds from sale of finance receivables</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">38,554,353</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">28,093,482</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">9,820,384</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Additions to notes receivable</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(52,000) </FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(1,421,804)</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(12,386)</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Repayments on notes receivable</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">115,773</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">898,811</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">229,454</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Cash payments in connection with business<BR>
&nbsp;&nbsp;&nbsp;combinations, net of cash acquired</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(7,468,669) </FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(52,448,406) </FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(8,506,458)</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Net cash used by investing activities</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(36,794,404)</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(85,895,317)</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(39,380,144)</FONT></TD>
</TR>
<TR><TD VALIGN="BOTTOM" COLSPAN=4 HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P>Cash Flows from Financing Activities</B></FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Proceeds from issuance of common stock</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 1,005,502</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 1,364,275</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 1,350,510</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Net borrowings under revolving credit loan</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">16,285,337</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">55,788,775</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">3,290,000</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="TOP" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Principal repayments of industrial bonds, loans and notes payable</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(2,932,513)</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(503,057)</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">( 614,183)</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Proceeds from debt and notes payable</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">2,833,145</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">41,189</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">9,285,000</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Net cash provided by financing activities</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">17,191,471</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">56,691,182</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">13,311,327</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Effect of exchange rates on cash </FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(356,929)</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">239,595</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<P>.</TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Increase (decrease) in cash and cash equivalents</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">3,328,258 </FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(1,627,669)</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">2,426,445</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Cash and cash equivalents, beginning of period</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">3,725,070</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">5,352,739</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">2,926,294</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Cash and cash equivalents, end of period</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 7,053,328</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 3,725,070</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 5,352,739</FONT></TD>
</TR>
<TR><TD VALIGN="BOTTOM" COLSPAN=4 HEIGHT=33>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P>Supplemental Cash Flow Information</B></FONT></TD>
</TR>
<TR><TD VALIGN="BOTTOM" COLSPAN=4 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Cash paid during the year for:</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Interest</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 8,499,094</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 4,425,526</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 2,778,422</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Income taxes</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 17,934,641</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 20,472,411</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 16,545,127</FONT></TD>
</TR>
<TR><TD VALIGN="BOTTOM" COLSPAN=4 HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Tax benefits related to stock options:</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Refundable income taxes</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 555,962 </FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 856,000</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 1,159,925</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Deferred tax asset</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<P>.</TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<P>.</TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">99,422</FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Additional paid-in capital</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(555,962)</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(856,000)</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(1,259,347)</FONT></TD>
</TR>
<TR><TD VALIGN="BOTTOM" COLSPAN=4 HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Non-cash business combination: </FONT></TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Investment in subsidiary</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 1,576,844</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 1,556,523</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<P>.</TD>
</TR>
<TR><TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Accrued liability</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(1,576,844)</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(1,556,523)</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<P>.</TD>
</TR>
</TABLE>

<FONT FACE="Times,Times New Roman" SIZE=2><P>See Notes to Consolidated Financial Statements.</P>
<P>&nbsp;</P>
<B><P>CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY<BR>
</B>For the Years Ended December 31, 2000, 1999 and 1998</P></FONT>
<TABLE BORDER CELLSPACING=1 WIDTH=686>
<TR><TD WIDTH="22%" VALIGN="TOP" HEIGHT=13>
<P>.</TD>
<TD WIDTH="24%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Common Stock <BR>
Shares &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amount</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Additional Paid-in Capital</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Retained Earnings</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Accumulated Other Comprehensive Income</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Total Shareholders Equity</FONT></TD>
</TR>
<TR><TD WIDTH="22%" VALIGN="BOTTOM" HEIGHT=20>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P>Balance <BR>
December 31, 1997</B></FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">18,641,160</B></FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$3,728,232</B></FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=20>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$41,787,534</B></FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=20>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$60,099,216</B></FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=20>
<P>.</TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=20>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$105,614,982</B></FONT></TD>
</TR>
<TR><TD WIDTH="22%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Net and Comprehensive &nbsp;&nbsp;&nbsp;income</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<P>.</TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<P>.</TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=20>
<P>.</TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">24,436,115</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=20>
<P>.</TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">24,436,115</FONT></TD>
</TR>
<TR><TD WIDTH="22%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Exercise of stock options, &nbsp;&nbsp;&nbsp;including tax benefit</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">326,072</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">65,214</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">2,544,643</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=20>
<P>. </TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=20>
<P>.</TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">2,609,857</FONT></TD>
</TR>
<TR><TD WIDTH="22%" VALIGN="BOTTOM" HEIGHT=20>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P>Balance <BR>
December 31, 1998</B></FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">18,967,232</B></FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">3,793,446</B></FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=20>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">44,332,177</B></FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=20>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">84,535,331</B></FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=20>
<P>.</TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=20>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">132,660,954</B></FONT></TD>
</TR>
<TR><TD WIDTH="22%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Net income</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<P>.</TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<P>.</TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=20>
<P>.</TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">31,712,278</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=20>
<P>.</TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">31,712,278</FONT></TD>
</TR>
<TR><TD WIDTH="22%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Other comprehensive income:</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<P>.</TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<P>.</TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=20>
<P>.</TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=20>
<P>.</TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=20>
<P>.</TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=20>
<P>.</TD>
</TR>
<TR><TD WIDTH="22%" VALIGN="BOTTOM" HEIGHT=20>
<FONT SIZE=2><P>&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Foreign currency &nbsp;&nbsp;&nbsp;translation adjustment</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<P>.</TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<P>.</TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=20>
<P>.</TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=20>
<P>.</TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$266,888</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=20>
<U><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">266,888</U></FONT></TD>
</TR>
<TR><TD WIDTH="22%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Comprehensive <BR>
&nbsp;&nbsp;income</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<P>.</TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<P>.</TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=20>
<P>.</TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=20>
<P>.</TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=20>
<P>.</TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">31,979,166</FONT></TD>
</TR>
<TR><TD WIDTH="22%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Exercise of stock options, &nbsp;&nbsp;&nbsp;including tax benefit</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">139,609</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">27,922</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">2,189,534</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=20>
<P>.</TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=20>
<P>.</TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">2,217,456</FONT></TD>
</TR>
<TR><TD WIDTH="22%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Stock issued in business &nbsp;&nbsp;combination</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">14,296</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">2,859</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">397,141</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=20>
<P>.</TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=20>
<P>.</TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">400,000</FONT></TD>
</TR>
<TR><TD WIDTH="22%" VALIGN="BOTTOM" HEIGHT=20>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P>Balance <BR>
December 31, 1999</B></FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">19,121,137</B></FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">3,824,227</B></FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=20>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">46,918,852</B></FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=20>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">116,247,609</B></FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=20>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">266,888</B></FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=20>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">167,257,576</B></FONT></TD>
</TR>
<TR><TD WIDTH="22%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Net income</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<P>. </TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<P>. </TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=20>
<P>.</TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">26,281,086</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=20>
<P>.</TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">26,281,086</FONT></TD>
</TR>
<TR><TD WIDTH="22%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Other comprehensive <BR>
&nbsp;&nbsp;income:</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<P>.</TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<P>. </TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=20>
<P>.</TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=20>
<P>. </TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=20>
<P>.</TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=20>
<P>.</TD>
</TR>
<TR><TD WIDTH="22%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Foreign currency &nbsp;&nbsp;&nbsp;translation adjustment</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<P>.</TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<P>.</TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=20>
<P>.</TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=20>
<P>.</TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(477,186)</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(477,186)</FONT></TD>
</TR>
<TR><TD WIDTH="22%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Comprehensive <BR>
&nbsp;&nbsp;income</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<P>.</TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<P>.</TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=20>
<P>.</TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=20>
<P>.</TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=20>
<P>.</TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">25,803,900</FONT></TD>
</TR>
<TR><TD WIDTH="22%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Exercise of stock options, &nbsp;&nbsp;&nbsp;including tax benefit </FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">198,609</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">39,722</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,521,742</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=20>
<P>.</TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=20>
<P>.</TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,561,464</FONT></TD>
</TR>
<TR><TD WIDTH="22%" VALIGN="BOTTOM" HEIGHT=20>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P>Balance <BR>
December 31, 2000</B></FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">19,319,746</B></FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$3,863,949</B></FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=20>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$48,440,594</B></FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=20>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$142,528,695</B></FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=20>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$(210,298)</B></FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=20>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$194,622,940</B></FONT></TD>
</TR>
</TABLE>

<FONT FACE="Times,Times New Roman" SIZE=2><P>&nbsp;</P>
<P>See Notes to Consolidated Financial Statements.</P>
<B><P>&nbsp;</P>
<P>&nbsp;</P>
<P>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
</B>For the Years Ended December 31, 2000, 1999 and 1998</P>
<B><P>1. Summary of Significant Accounting Policies</P>
</B><P>Basis of Presentation - The consolidated financial statements include the accounts of Astec Industries, Inc. and its subsidiaries. The Company's wholly-owned or consolidated subsidiaries at December 31, 2000 are as follows:</P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=601>
<TR><TD WIDTH="51%" VALIGN="TOP" HEIGHT=13>
<P><FONT FACE="Times,Times New Roman" SIZE=2>American Augers, Inc.</FONT></TD>
<TD WIDTH="49%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Johnson Crushers International, Inc.</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Astec, Inc.</FONT></TD>
<TD WIDTH="49%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Kolberg-Pioneer, Inc.</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Astec Financial Services, Inc.</FONT></TD>
<TD WIDTH="49%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Osborn Engineered Products SA (Pty) Ltd. (88%)</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Astec Systems, Inc.</FONT></TD>
<TD WIDTH="49%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Production Engineered Products, Inc.</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Breaker Technology, Inc.</FONT></TD>
<TD WIDTH="49%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Roadtec, Inc.</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Breaker Technology Ltd.</FONT></TD>
<TD WIDTH="49%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Superior Industries of Morris, Inc.</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Carlson Paving Products, Inc.</FONT></TD>
<TD WIDTH="49%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Telsmith, Inc.</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>CEI Enterprises, Inc.</FONT></TD>
<TD WIDTH="49%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Trencor, Inc.</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Heatec, Inc.</FONT></TD>
<TD WIDTH="49%" VALIGN="TOP" HEIGHT=13><P></P></TD>
</TR>
</TABLE>

<FONT FACE="Times,Times New Roman" SIZE=2><P>All significant intercompany transactions have been eliminated in consolidation.</P>
<P>The Company's investment in a 50% owned joint venture, Pavement Technology, Inc., is accounted for on an equity basis.</P>
<B><P>Use of Estimates</B> - The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results could differ from those estimates.</P>
<B><P>Cash Equivalents</B> - The Company considers all highly liquid instruments purchased with a maturity of less than three months to be cash equivalents. </P>
<B><P>Inventories</B> - Inventories (excluding used equipment) are stated at the lower of first-in, first-out cost or market. Used equipment inventories are stated at the lower of specific unit cost or market.</P>
<B><P>Property and Equipment</B> - Property and equipment is stated at cost. Depreciation is calculated for financial reporting purposes using the straight-line method based on the estimated useful lives of the assets as follows: buildings (40 years) and
equipment (3 to 10 years). Both accelerated and straight-line methods are used for tax reporting purposes.</P>
<B><P>Goodwill</B> - Goodwill represents the excess of cost over the fair value of net identifiable assets acquired. Goodwill amounts are being amortized using the straight-line method over 20 years. Accumulated goodwill amortization was approximately
$5,104,000 and $3,071,000 at December 31, 2000 and 1999, respectively. </P>
<B><P>Impairment of Long-lived Assets</B> - In the event that facts and circumstances indicate that the carrying amounts of long-lived assets may be impaired, an evaluation of recoverability would be performed. If an evaluation is required, the estimated
future undiscounted cash flows associated with the asset would be compared to the asset's carrying amount to determine if a writedown is required. If this review indicates that the assets will not be recoverable, the carrying value of the Company's assets
would be reduced to their estimated market value. </P>
<B><P>Revenue Recognition</B> - A portion of the Company's equipment sales represents equipment produced in the Company's plants under short-term contracts for a specific customer project or equipment designed to meet a customer's specific requirements.
Equipment revenues are recognized in compliance with the terms and conditions of each contract, which is ordinarily at the time the equipment is shipped. Certain contracts include terms and conditions through which the Company recognizes revenues upon
completion of equipment production which is subsequently stored at the Company's plant at the customer's request. Revenue is recorded on such contracts upon the customer's assumption of title and all risks of ownership. The Company has a limited number of
sales accounted for as multiple-element arrangements; related revenue on each product is recognized when it is shipped, and the related service revenue is recognized when the service is performed.</P>
<B><P>Advertising Expense</B> - The cost of advertising is expensed as incurred. The Company incurred approximately $3,478,000, $3,964,000, and $3,052,000 in advertising costs during 2000, 1999 and 1998, respectively.</P>
<B><P>Stock-based Compensation</B> - The Company grants stock options for a fixed number of shares to employees with an exercise price equal to the fair value of the shares at the date of grant. The Company accounts for employee stock options in
accordance with APB Opinion No. 25, Accounting for Stock Issued to Employees, and, accordingly, recognizes no compensation expense for the stock option grants. The Company adopted SFAS No. 123, Accounting for Stock-based Compensation, in 1996 and is
utilizing the disclosure only option permitted by the statement for employee stock options. See Note 10.</P>
<B><P>Earnings Per Share</B> - Basic and diluted earnings per share are calculated in accordance with SFAS No. 128, Earnings per Share. Basic earnings per share is based on the weighted average number of common shares outstanding, and diluted earnings
per share includes potential dilutive effects of options, warrants and convertible securities. </P>
<P>The following table sets forth the computation of basic and diluted earnings per share:</P></FONT>
<TABLE BORDER CELLSPACING=1 WIDTH=601>
<TR><TD WIDTH="39%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="61%" VALIGN="TOP" COLSPAN=3>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Year Ended December 31,</FONT></TD>
</TR>
<TR><TD WIDTH="39%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="20%" VALIGN="TOP">
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">2000</B></FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">1999</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">1998</FONT></TD>
</TR>
<TR><TD WIDTH="39%" VALIGN="TOP">
<FONT FACE="Times,Times New Roman" SIZE=2><P>.Numerator:<BR>
</FONT><FONT SIZE=2>&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Net income</FONT></TD>
<TD WIDTH="20%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 26,281,086</FONT></TD>
<TD WIDTH="20%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 31,712,278</FONT></TD>
<TD WIDTH="20%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 24,436,115</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=4>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Denominator:</FONT>&nbsp;</TD>
</TR>
<TR><TD WIDTH="39%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Denominator for basic <BR>
&nbsp;&nbsp;earnings per share</FONT></TD>
<TD WIDTH="20%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">19,221,754</FONT></TD>
<TD WIDTH="20%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">19,064,516</FONT></TD>
<TD WIDTH="20%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">18,799,063</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=4>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Effect of dilutive securities:</FONT>&nbsp;</TD>
</TR>
<TR><TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Employee stock options</FONT></TD>
<TD WIDTH="20%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">499,534</FONT></TD>
<TD WIDTH="20%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">865,860</FONT></TD>
<TD WIDTH="20%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">642,121</FONT></TD>
</TR>
<TR><TD WIDTH="39%" VALIGN="TOP">
<FONT FACE="Times,Times New Roman" SIZE=2><P>Denominator for diluted</FONT> <BR>
e<FONT FACE="Times,Times New Roman" SIZE=2>arnings per share</FONT></TD>
<TD WIDTH="20%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">19,721,288 </FONT></TD>
<TD WIDTH="20%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">19,930,376 </FONT></TD>
<TD WIDTH="20%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">19,441,184</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=4>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Earnings per common share: </FONT>&nbsp;</TD>
</TR>
<TR><TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Basic</FONT></TD>
<TD WIDTH="20%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 1.37</FONT></TD>
<TD WIDTH="20%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 1.66</FONT></TD>
<TD WIDTH="20%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 1.30</FONT></TD>
</TR>
<TR><TD WIDTH="39%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Diluted</FONT></TD>
<TD WIDTH="20%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 1.33</FONT></TD>
<TD WIDTH="20%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 1.59</FONT></TD>
<TD WIDTH="20%" VALIGN="BOTTOM">
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 1.26</FONT></TD>
</TR>
</TABLE>

<B><FONT FACE="Times,Times New Roman" SIZE=2><P>Derivatives and Hedging Activities</B> - In June 1998, the Financial Accounting Standards Board issued SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, which was amended by SFAS
Nos. 137 and 138, and is now required to be adopted by the Company effective January 1, 2001. Because of the Company's minimal use of derivatives, management does not anticipate that the adoption of the new statement will have a significant effect on the
Company's earnings or financial position.</P>
<B><P>Shipping and Handling Fees and Cost</B> - The Company records the cost of shipping and handling as a reduction of the fees charged for shipping and handling. These amounts are included in net sales. Revenues and expenses were $11,857,000 and
$12,719,000 for 2000, $9,169,000 and $8,706,000 for 1999 and $9,139,000 and $9,122,000 for 1998, respectively.</P>
<B><P>Reclassifications</B> - Certain amounts for 1999 and 1998 have been reclassified to conform with the 2000 presentation.</P>
<B><P>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</P>
<P>2.&#9;Business Combinations&#9;</P>
</B><P>The Company's acquisitions have been accounted for using the purchase method of accounting, and accordingly, the operating results of the acquired businesses are included in the Company's consolidated financial statements from the respective
acquisition dates. The assets acquired and liabilities assumed were recorded at estimated fair value as determined by management. That portion of the purchase price in excess of the fair market value of the net identifiable assets acquired is recorded as
goodwill and is being amortized using the straight-line method over 20 years.</P>
<P>On August 13, 1999, the Company acquired substantially all of the assets of Teledyne Specialty Equipment's Construction and Mining business unit from Allegheny Teledyne, Inc. for approximately $18,900,000 in cash. The acquired business unit, having
operations in both the United States and Canada, operates as Breaker Technology, Inc. in the U.S. and as Breaker Technology Ltd. in Canada ("BTI"). On October 29, 1999, the Company purchased the operating assets and liabilities of American Augers, Inc.
for approximately $15,500,000 in cash and repayment of approximately $6,200,000 of debt. On November 1, 1999, the Company acquired the operating assets and liabilities of Superior Industries of Morris, Inc. ("Superior") for $17,000,000 in cash.</P>
<P>On October 2, 2000, the Company acquired the operating assets and liabilities of Carlson Paving Products Company, Inc. ("Carlson") for $4,170,000 cash and 144,162 shares of the Company's stock valued at approximately $1,577,000. On September 30, 2000,
the Company purchased substantially all of the assets and liabilities of Osborn MMD, a Boart Longyear group operation, from Anglo Operations Limited for approximately $3,200,000 in cash. The acquired business is located in South Africa and operates as
Osborn Engineered Products SA (Pty) Ltd.</P>
<P>A summary of the net assets acquired is as follows:</P></FONT>
<TABLE BORDER CELLSPACING=1 WIDTH=595>
<TR><TD WIDTH="24%" VALIGN="TOP" HEIGHT=20>
<P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">BTI</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">AMERICAN AUGERS</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">SUPERIOR</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">OSBORN</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">CARLSON</FONT></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Current assets </FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$12,218,333</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$10,826,332</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 6,446,529</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$7,634,984</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$2,229,110</FONT></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Property, plant and &nbsp;&nbsp;equipment</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,847,523</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">2,950,450</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">9,256,214</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,843,815</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">715,884</FONT></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Other assets </FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<P>.</TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">573,505</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">109,038</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">48,809</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">19,005</FONT></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Current liabilities </FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(6,159,326)</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(5,796,498)</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(1,865,435) </FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(4,667,809)</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(640,400) </FONT></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Other liabilities </FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=20>
<P>.</TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(6,208,004)</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(1,189,218) </FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=20>
<P>.</TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(964,365)</FONT></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Goodwill </FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">11,025,239</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">11,700,858</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">2,548,938</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(1,194,292)</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">4,385,025</FONT></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Less:&nbsp;&nbsp;Minority interest</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<P>.</TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<P>.</TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<P>.</TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(439,861)</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<P>.</TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Net assets acquired excluding cash </FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">18,931,769</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">14,046,643</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">15,306,066</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">3,225,646</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">5,744,259</FONT></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Cash </FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<P>.</TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,445,543</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,693,934</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<P>.</TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">2,585</FONT></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Net assets acquired </FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$18,931,769</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$15,492,186</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$17,000,000</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$3,225,646</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$5,746,84</FONT></TD>
</TR>
</TABLE>

<FONT FACE="Times,Times New Roman" SIZE=2><P>The following unaudited pro forma summary presents the consolidated results of operations as if the acquisitions had occurred at the beginning of each year presented. The unaudited pro forma results have been
prepared for comparative purposes only and include certain adjustments, such as goodwill amortization expense and interest expense on acquisition debt. They do not purport to be indicative of the results that would have occurred had the acquisitions taken
place at the beginning of the periods presented or of results which may occur in the future.</P></FONT>
<TABLE BORDER CELLSPACING=1 WIDTH=602>
<TR><TD WIDTH="61%" VALIGN="BOTTOM" HEIGHT=13>
<P></TD>
<TD WIDTH="40%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">December 31, </FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="BOTTOM" HEIGHT=13><P></P></TD>
<TD WIDTH="20%" VALIGN="BOTTOM" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">2000</B></FONT></TD>
<TD WIDTH="20%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">1999</FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Net sales</FONT></TD>
<TD WIDTH="20%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 549,524,000</FONT></TD>
<TD WIDTH="20%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 555,781,000</FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Income from operations</FONT></TD>
<TD WIDTH="20%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">54,138,000</FONT></TD>
<TD WIDTH="20%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">67,727,000</FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Net income</FONT></TD>
<TD WIDTH="20%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">26,655,000</FONT></TD>
<TD WIDTH="20%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">35,542,000</FONT></TD>
</TR>
<TR><TD WIDTH="101%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Per common share outstanding:</FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="BOTTOM" HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Basic</FONT></TD>
<TD WIDTH="20%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 1.39</FONT></TD>
<TD WIDTH="20%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 1.86</FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="BOTTOM" HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Diluted</FONT></TD>
<TD WIDTH="20%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 1.35</FONT></TD>
<TD WIDTH="20%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 1.78</FONT></TD>
</TR>
</TABLE>

<FONT SIZE=2><P>&nbsp;</P>
</FONT><B><FONT FACE="Times,Times New Roman" SIZE=2><P>3. Inventories</P></B></FONT>
<TABLE BORDER CELLSPACING=1 WIDTH=602>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=13>
<P><FONT FACE="Times,Times New Roman" SIZE=2>Inventories consisted of the following:</FONT></TD>
<TD WIDTH="38%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">December 31, </FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=13><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">2000</B></FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">1999</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Raw materials and parts</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 41,783,985</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 45,640,440</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Work-in-process</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">27,520,881</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">15,884,177</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Finished goods</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">39,574,507</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">31,606,965</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Used equipment</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">17,428,455</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">11,710,341</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Total</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 126,307,828 </FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 104,841,923</FONT></TD>
</TR>
</TABLE>

<FONT SIZE=2><P>&nbsp;</P>
</FONT><B><FONT FACE="Times,Times New Roman" SIZE=2><P>4. Property and Equipment</P></B></FONT>
<TABLE BORDER CELLSPACING=1 WIDTH=595>
<TR><TD WIDTH="63%" VALIGN="TOP" ROWSPAN=2 HEIGHT=13>
<P><FONT FACE="Times,Times New Roman" SIZE=2>Property and equipment consisted of the following:</FONT></TD>
<TD WIDTH="38%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">December 31,</FONT></TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">2000</B></FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">1999</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Land, land improvements and buildings</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 72,799,811</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 62,976,860</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Equipment</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">101,544,216</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">87,918,504</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Less accumulated depreciation</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(55,543,607)</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(44,012,938)</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Land, buildings and equipment - net</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">118,800,420</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">106,882,426</FONT></TD>
</TR>
<TR><TD WIDTH="101%" VALIGN="TOP" COLSPAN=3 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Rental property:</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Equipment</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">9,036,202</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">2,996,026</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Less accumulated depreciation</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(909,090)</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(490,296)</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Rental property - net</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">8,127,112</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">2,505,730</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Total</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 126,927,532 </FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 109,388,156</FONT></TD>
</TR>
</TABLE>

<FONT FACE="Times,Times New Roman" SIZE=2><P>Depreciation expense was approximately $13,347,000, $10,664,000 and $7,577,000 for the years ended December 31, 2000, 1999 and 1998, respectively.</P>
<B><P>5.&#9;Leases&#9;</P>
</B><P>The Company leases certain land, buildings and equipment that are used in its operations. Total rental expense charged to operations under operating leases was approximately $4,054,000, $3,329,000 and $2,597,000 for the years ended December 31,
2000, 1999 and 1998, respectively.</P>
<P>Minimum rental commitments for all noncancelable operating leases at December 31, 2000 are as follows:</P></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 WIDTH=288>
<TR><TD WIDTH="60%" VALIGN="TOP" HEIGHT=13>
<P><FONT FACE="Times,Times New Roman" SIZE=2>2001</FONT></TD>
<TD WIDTH="40%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 3,142,000</FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>2002</FONT></TD>
<TD WIDTH="40%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">2,493,000</FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>2003</FONT></TD>
<TD WIDTH="40%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,755,000</FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>2004</FONT></TD>
<TD WIDTH="40%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,247,000</FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>2005</FONT></TD>
<TD WIDTH="40%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">60,000</FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Thereafter</FONT></TD>
<TD WIDTH="40%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">--&nbsp;&nbsp;&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<FONT SIZE=2><P ALIGN="RIGHT">&nbsp;</P>
</FONT><B><FONT FACE="Times,Times New Roman" SIZE=2><P>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</P>
</B><P>The Company also leases equipment to customers under contracts generally ranging from 36 to 48 months. Rental income under such leases was $3,908,000, $2,467,000 and $1,994,000 for the years ended December 31, 2000, 1999 and 1998, respectively.</P>

<P>Minimum rental payments to be received for equipment leased to others at December 31, 2000 are as follows:</P></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 WIDTH=533>
<TR><TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<P><FONT FACE="Times,Times New Roman" SIZE=2>2001</FONT></TD>
<TD WIDTH="31%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>$ 491,852</FONT></TD>
<TD WIDTH="28%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>2004</FONT></TD>
<TD WIDTH="22%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>$ 267,547</FONT></TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>2002</FONT></TD>
<TD WIDTH="31%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>&nbsp;&nbsp;337,047</FONT></TD>
<TD WIDTH="28%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>2005</FONT></TD>
<TD WIDTH="22%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>&nbsp;&nbsp;280,473</FONT></TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>2003</FONT></TD>
<TD WIDTH="31%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>&nbsp;&nbsp;267,547</FONT></TD>
<TD WIDTH="28%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Thereafter</FONT></TD>
<TD WIDTH="22%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>&nbsp;&nbsp;266,646</FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<FONT SIZE=2><P ALIGN="CENTER">&nbsp;</P>
</FONT><B><FONT FACE="Times,Times New Roman" SIZE=2><P>6.&#9;Long-term Debt</P></B></FONT>
<TABLE BORDER CELLSPACING=1 WIDTH=606>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=13>
<P><FONT FACE="Times,Times New Roman" SIZE=2>Long-term debt consisted of the following:</FONT></TD>
<TD WIDTH="38%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">December 31,</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=13><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">2000</B></FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">1999</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="BOTTOM" HEIGHT=33>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Revolving credit loan of $150,000,000 at December 31, 2000, available &nbsp;&nbsp;through November 22, 2002, at interest rates from 7.44% to 9.25% at &nbsp;&nbsp;December 31, 2000, and at interest rates from
6.31% to 8.25% at &nbsp;&nbsp;December 31, 1999</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=33>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 98,700,000</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=33>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 47,369,835</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="BOTTOM" HEIGHT=24>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Industrial Development Revenue Bonds payable in annual installments &nbsp;&nbsp;through 2006 at weekly negotiated interest rates</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=24>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">3,000,000</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=24>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">3,500,000</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="BOTTOM" HEIGHT=24>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Industrial Development Revenue Bonds due in 2019 at weekly &nbsp;&nbsp;negotiated interest rates</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=24>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">8,000,000</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=24>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">8,000,000</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="BOTTOM" HEIGHT=24>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Industrial Development Revenue Bonds due in 2028 at weekly &nbsp;&nbsp;negotiated interest rates</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=24>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">9,200,000</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=24>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">9,200,000</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="BOTTOM" HEIGHT=24>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Term loan dated August 13, 1999 at the corporate base rate or 1.25% &nbsp;&nbsp;plus the Eurodollar rate due on January 2, 2001</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=24>
<P>.</TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=24>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">15,000,000</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="BOTTOM" HEIGHT=24>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Term loan dated October 29, 1999 at the corporate base rate or 1.25% &nbsp;&nbsp;plus the Eurodollar rate due on January 2, 2001</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=24>
<P>.</TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=24>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">20,000,000</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Other current notes payable</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,597,311</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">211,270</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Total long-term debt</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">120,497,311</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">103,281,105</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Less current maturities</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,986,424</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">595,635</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Long-term debt less current maturities</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 118,510,887</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 102,685,470</FONT></TD>
</TR>
</TABLE>

<FONT FACE="Times,Times New Roman" SIZE=2><P>The Company has an unsecured $150,000,000 revolving line of credit. The agreement contains borrowing sub-limits which allow the Company and its subsidiary, Astec Financial Services, Inc., to borrow up to
$130,000,000 and $50,000,000 respectively, not to exceed the total commitment amount. Advances under Astec Financial's sub-limit are limited to eligible receivables as defined in the agreement. Amounts outstanding under the agreement bear interest, at the
Company's option, at a rate from .25% below prime to prime plus .50%, or from .75% to 2.00% above the London Interbank Offering Rate. The interest rate applied to borrowings is based on a leverage ratio, calculated quarterly, as defined by the credit
agreement. The credit agreement contains certain restrictive covenants relative to operating ratios and capital expenditures and also restricts the payment of dividends. The Company was in compliance with all financial covenants related to the above loan
agreement at December 31, 2000.</P>
<P>The aggregate of all maturities of long-term debt in each of the next five years is as follows:</P></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 WIDTH=468>
<TR><TD WIDTH="25%" VALIGN="BOTTOM" HEIGHT=13>
<P><FONT FACE="Times,Times New Roman" SIZE=2>2001</FONT></TD>
<TD WIDTH="25%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 1,986,424</FONT></TD>
<TD WIDTH="25%" VALIGN="BOTTOM" HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>2004</FONT></TD>
<TD WIDTH="25%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 510,635</FONT></TD>
</TR>
<TR><TD WIDTH="25%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>2002</FONT></TD>
<TD WIDTH="25%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">99,245,768</FONT></TD>
<TD WIDTH="25%" VALIGN="BOTTOM" HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>2005</FONT></TD>
<TD WIDTH="25%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">510,635</FONT></TD>
</TR>
<TR><TD WIDTH="25%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>2003</FONT></TD>
<TD WIDTH="25%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">522,578</FONT></TD>
<TD WIDTH="25%" VALIGN="BOTTOM" HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Thereafter</FONT></TD>
<TD WIDTH="25%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">17,721,271</FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">For 2000, the weighted average interest rate on short-term borrowings, which includes current maturities of Industrial Revenue Bonds, was 3.52%.</P>
<B><P>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</P>
<P>7. Retirement Benefits</P>
</B><P>The Company sponsors a defined benefit pension plan that covers all employees of its Kolberg-Pioneer subsidiary. Benefits paid under this plan are based on years of service multiplied by a monthly amount. In addition, the Company also sponsors two
post-retirement medical and life insurance plans covering the employees of its Kolberg-Pioneer and Telsmith subsidiaries and retirees of its former Barber-Greene subsidiary. The Company's funding policy for all plans is to make the minimum annual
contributions required by applicable regulations.</P>
<P>The following provides information regarding benefit obligations, plan assets and the funded status of the plans:</P></FONT>
<TABLE BORDER CELLSPACING=1 WIDTH=648>
<TR><TD WIDTH="49%" VALIGN="BOTTOM" HEIGHT=13>
<P></TD>
<TD WIDTH="25%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Pension Benefits</FONT></TD>
<TD WIDTH="26%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Other Benefits</FONT></TD>
</TR>
<TR><TD WIDTH="49%" VALIGN="BOTTOM" HEIGHT=13><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">2000</B></FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">1999</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">2000</B></FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">1999</FONT></TD>
</TR>
<TR><TD VALIGN="BOTTOM" COLSPAN=6 HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P>Change in benefit obligation</B></FONT></TD>
</TR>
<TR><TD WIDTH="49%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Benefit obligation at beginning of year</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 6,307,948 </FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 6,948,914</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 1,390,967</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 1,463,502</FONT></TD>
</TR>
<TR><TD WIDTH="49%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Service cost</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">351,320</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">329,864</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">86,027</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">80,326</FONT></TD>
</TR>
<TR><TD WIDTH="49%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Interest cost</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">504,384</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">449,209</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">103,596</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">82,311</FONT></TD>
</TR>
<TR><TD WIDTH="49%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Actuarial (gain) loss</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">368,022</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(1,077,018)</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">211,149</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(200,982)</FONT></TD>
</TR>
<TR><TD WIDTH="49%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Participant contributions</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<P>.</TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<P>.</TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">367,665</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">125,109</FONT></TD>
</TR>
<TR><TD WIDTH="49%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Benefits paid</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(322,371)</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(343,021)</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(503,904)</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(159,299)</FONT></TD>
</TR>
<TR><TD WIDTH="49%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Benefit obligation at end of year</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 7,209,303</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 6,307,948</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 1,655,500</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 1,390,967</FONT></TD>
</TR>
<TR><TD VALIGN="BOTTOM" COLSPAN=6 HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P>Change in plan assets</B></FONT></TD>
</TR>
<TR><TD WIDTH="49%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Fair value of plan assets at beginning of year</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">6,992,158</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">6,607,594</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=13>
<P>.</TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<P>.</TD>
</TR>
<TR><TD WIDTH="49%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Actual return on plan assets</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(296,982)</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">727,585</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=13>
<P>.</TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<P>.</TD>
</TR>
<TR><TD WIDTH="49%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Benefits paid</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(322,371)</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(343,021)</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=13>
<P>.</TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<P>.</TD>
</TR>
<TR><TD WIDTH="49%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Fair value of plan assets at end of year</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 6,372,805 </FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 6,992,158</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=13>
<P>.</TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<P>.</TD>
</TR>
<TR><TD WIDTH="49%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Funded status (underfunded)</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(836,498)</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">684,210</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(1,655,500)</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(1,390,967)</FONT></TD>
</TR>
<TR><TD WIDTH="49%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Unrecognized net actuarial (gain) loss</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">383,049</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(897,149)</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">460,723</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">271,160</FONT></TD>
</TR>
<TR><TD WIDTH="49%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Prepaid (accrued) benefit cost</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ (453,449) </FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ (212,939)</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$(1,194,777)</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$(1,119,807)</FONT></TD>
</TR>
<TR><TD VALIGN="BOTTOM" COLSPAN=6 HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P>Weighted-average assumptions as of December 31</B></FONT></TD>
</TR>
<TR><TD WIDTH="49%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Discount rate </FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">7.75%</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">6.75%</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">7.75%</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">7.42%</FONT></TD>
</TR>
<TR><TD WIDTH="49%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Expected return on plan assets</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">9.00%</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">9.00%</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<P>.</TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=13>
<P>.</TD>
</TR>
<TR><TD WIDTH="49%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Rate of compensation increase</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">4.00%</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">4.00%</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<P>.</TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=13>
<P>.</TD>
</TR>
</TABLE>

<FONT FACE="Times,Times New Roman" SIZE=2><P>The weighted average annual assumed rate of increase in per capita health care costs is 12.0% for 2001 and is assumed to decrease gradually to 5.0% for 2008 and remain at that level thereafter. A 1% increase
or decrease in the medical inflation rate would not have a significant effect on either the benefit obligation or the aggregate service and interest cost components of net periodic benefit cost.</P>
<P>Net periodic benefit cost for 2000, 1999 and 1998 included the following components:</P></FONT>
<TABLE BORDER CELLSPACING=1 WIDTH=700>
<TR><TD WIDTH="35%" VALIGN="TOP" HEIGHT=13>
<P></TD>
<TD WIDTH="30%" VALIGN="TOP" COLSPAN=4 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Pension Benefits</FONT></TD>
<TD WIDTH="36%" VALIGN="TOP" COLSPAN=8 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Other Benefits</FONT></TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP" HEIGHT=13><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">2000</B></FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">1999</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">1998</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=3 HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">2000</B></FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">1999</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">1998</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=13 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Components of net periodic benefit cost</FONT></TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Service cost</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 351,320</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 329,864</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 315,111</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 86,027</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 80,326</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 74,681</FONT></TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Interest cost</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">504,384</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">449,209</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">647,654</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">103,596</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">82,311</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">87,419</FONT></TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Expected return on plan assets</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(614,194)</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(592,008)</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(797,619)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<P>.</TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=13>
<P>.</TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3 HEIGHT=13>
<P>.</TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Amortization of prior service cost</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=13>
<P>.</TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=13>
<P>.</TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">19,614</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<P>.</TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=13>
<P>.</TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3 HEIGHT=13>
<P>.</TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Amortization of transition obligation</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=13>
<P>.</TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=13>
<P>.</TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<P>.</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">33,700</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">33,700</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">33,700</FONT></TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Recognized net actuarial (gain) loss</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=13>
<P>.</TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=13>
<P>.</TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<P>.</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(12,164)</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(11,180)</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(205)</FONT></TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Curtailment/settlement loss</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=13>
<P>. </TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=13>
<P>.</TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,136,000</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<P>.</TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=13>
<P>.</TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3 HEIGHT=13>
<P>.</TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Net periodic benefit cost</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 241,510 </FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 187,065</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$1,320,760</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 211,159 </FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 185,157</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 195,595</FONT></TD>
</TR>
</TABLE>

<FONT SIZE=2><P>&nbsp;</P>
</FONT><B><FONT FACE="Times,Times New Roman" SIZE=2><P>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</P>
<P>8.&#9;Income Taxes</P>
</B><P>For financial reporting purposes, income before income taxes includes the following components:</P></FONT>
<TABLE BORDER CELLSPACING=1 WIDTH=612>
<TR><TD WIDTH="47%" VALIGN="BOTTOM" HEIGHT=13>
<P></TD>
<TD WIDTH="54%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Year Ended December 31,</FONT></TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="BOTTOM" HEIGHT=13><P></P></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">2000</B></FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">1999</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">1998</FONT></TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>United States</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 41,692,857</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 51,836,482</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 39,318,695</FONT></TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Foreign</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,037,997</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(305,059)</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">243,801</FONT></TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Income before income taxes</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 42,730,854</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 51,531,423</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 39,562,496</FONT></TD>
</TR>
<TR><TD VALIGN="BOTTOM" COLSPAN=4 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>The provision for income taxes consisted of the following:</FONT></TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="BOTTOM" HEIGHT=13><P></P></TD>
<TD WIDTH="54%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Year Ended December 31,</FONT></TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="BOTTOM" HEIGHT=13><P></P></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">2000</B></FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">1999</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">1998</FONT></TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Current</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 15,803,033</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 19,188,853</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 15,849,539</FONT></TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Deferred provision (benefit)</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">638,407 </FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">630,292</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(723,158)</FONT></TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Total provision for income taxes</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 16,441,440</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 19,819,145</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 15,126,381</FONT></TD>
</TR>
<TR><TD VALIGN="BOTTOM" COLSPAN=4 HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P>A reconciliation of the provision for income taxes at the statutory Federal rate to the amount provided is as follows:</FONT></TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="BOTTOM" HEIGHT=13><P></P></TD>
<TD WIDTH="54%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Year Ended December 31,</FONT></TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="BOTTOM" HEIGHT=13><P></P></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">2000</B></FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">1999</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">1998</FONT></TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Tax at statutory rates</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 14,934,626</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 18,035,999</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 13,846,874</FONT></TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Benefit from foreign sales corporation</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(516,982) </FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(241,012)</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(620,000)</FONT></TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>State taxes, net of federal income tax benefit</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,389,290 </FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,578,250</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,377,000</FONT></TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Income taxes of other countries</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">66,030 </FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(4,000)</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">11,000</FONT></TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Other items</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">568,476</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">449,908</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">511,507</FONT></TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Income taxes</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 16,441,440</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 19,819,145</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 15,126,381</FONT></TD>
</TR>
</TABLE>

<FONT FACE="Times,Times New Roman" SIZE=2><P>Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial statement purposes and the amounts used for income tax purposes.</P>

<P>Significant components of the Company's deferred tax liabilities and assets are as follows:</P></FONT>
<TABLE BORDER CELLSPACING=1 WIDTH=601>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" HEIGHT=13>
<P></TD>
<TD WIDTH="36%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Year Ended December 31,</FONT></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" HEIGHT=13><P></P></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">2000</B></FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">1999</FONT></TD>
</TR>
<TR><TD WIDTH="101%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Deferred tax assets:</FONT></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Inventory reserves</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 2,581,700 </FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 2,253,400</FONT></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Warranty reserves</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,381,700</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,262,100</FONT></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Bad debt reserves</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">774,300</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">781,200</FONT></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Other accrued expenses</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">4,250,000</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">3,758,900</FONT></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Total deferred tax assets</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">8,987,700</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">8,055,600</FONT></TD>
</TR>
<TR><TD WIDTH="101%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Deferred tax liabilities:</FONT></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Property and equipment</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">7,933,400</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">6,024,200</FONT></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Other</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">64,400</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">595,400</FONT></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Total deferred tax liabilities</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">7,997,800</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">6,619,600</FONT></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Net deferred tax asset</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 989,900 </FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 1,436,000</FONT></TD>
</TR>
</TABLE>

<FONT SIZE=2><P>&nbsp;</P>
</FONT><B><FONT FACE="Times,Times New Roman" SIZE=2><P>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</P>
<P>9. Contingencies&#9;</P>
</B><P>Management has reviewed all claims and lawsuits and, upon the advice of counsel, has made adequate provision for any estimable losses. However, the Company is unable to predict the ultimate outcome of the outstanding claims and lawsuits.</P>
<P>Certain customers have financed purchases of the Company's products through arrangements in which the Company is contingently liable for customer debt aggregating approximately $18,816,000 and $11,776,000 at December 31, 2000 and 1999, respectively.
These obligations average five years in duration and have minimal risk. Astec Financial Services, Inc. sold both finance and operating leases with limited recourse, generally not exceeding 15% of the purchase price, subject to elimination of recourse
responsibilities through remarketing of equipment. </P>
<P>Other - The Company is contingently liable under letters of credit of approximately $18,440,000 primarily related to Industrial Revenue Bonds.</P>
<B><P>10. Shareholders' Equity&#9;</P>
</B><P>The Company has elected to follow Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (APB 25) and related interpretations in accounting for its employee stock options because, as discussed below, the alternative
fair value accounting provided for under SFAS No. 123, Accounting for Stock-based Compensation, requires use of option valuation models that were not developed for use in valuing employee stock options. Under APB 25, when the exercise price of the
Company's employee stock options equals or exceeds the market price of the underlying stock on the date of grant, no compensation expense is generally recognized.</P>
<P>Under terms of the Company's stock option plans, officers and certain other employees may be granted options to purchase the Company's common stock at no less than 100% of the market price on the date the option is granted. The Company has reserved
shares of common stock for exercise of outstanding non-qualified options and incentive options of officers and employees of the Company and its subsidiaries at prices determined by the Board of Directors. In addition, a Non-employee Directors Stock
Incentive Plan has been established to allow non-employee directors to have a personal financial stake in the Company through an ownership interest. Directors may elect to receive their compensation in common stock, deferred stock or stock options.
Options granted under the Non-employee Directors Stock Incentive Plan and the Executive Officer Annual Bonus Equity Election Plan vest and become fully exercisable immediately. All other options outstanding vest over 12 months. All stock options have a
ten-year term. The shares reserved under the various stock option plans are as follows: (1) 1992 Stock Option Plan - 436,556, (2) 1998 Long-term Incentive Plan - 1,716,750, (3) Executive Officer Annual Bonus Equity Election Plan - 13,156 and(4) 1998
Non-employee Director Stock Plan -- 6,572.</P>
<P>Pro forma information regarding net income and earnings per share is required by SFAS No. 123, and has been determined as if the Company had accounted for its employee stock options under the fair value method of that Statement. The fair value for
these options was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions for 1998, 1999, and 2000, respectively; risk-free interest rates of 4.70% , 5.58% and 5.25%, volatility factors of
the expected market price of the Company's common stock of .329, .381 and .444; and a weighted-average expected life of the option of four years.</P>
<P>The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options which have no vesting restrictions and are fully transferable. In addition, option valuation models required the input of highly subjective
assumptions, including the expected stock price volatility. Because the Company's employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially
affect the fair value estimate, in management's opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options.</P>
<P>For purposes of pro forma disclosures, the estimated fair value of the options is amortized to expense over the options' vesting period. The Company's pro forma information follows.</P></FONT>
<TABLE BORDER CELLSPACING=1 WIDTH=590>
<TR><TD WIDTH="46%" VALIGN="BOTTOM" HEIGHT=13>
<P></TD>
<TD WIDTH="54%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Year Ended December 31,</FONT></TD>
</TR>
<TR><TD WIDTH="46%" VALIGN="BOTTOM" HEIGHT=13><P></P></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">2000</B></FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">1999</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">1998</FONT></TD>
</TR>
<TR><TD WIDTH="46%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Pro forma net income</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 23,156,686</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 30,466,266</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 23,179,000</FONT></TD>
</TR>
<TR><TD VALIGN="BOTTOM" COLSPAN=4 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Pro forma earnings per share:</FONT></TD>
</TR>
<TR><TD WIDTH="46%" VALIGN="BOTTOM" HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Basic</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 1.20</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 1.60</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 1.23</FONT></TD>
</TR>
<TR><TD WIDTH="46%" VALIGN="BOTTOM" HEIGHT=13>
<FONT SIZE=2><P>&nbsp;&nbsp;</FONT><FONT FACE="Times,Times New Roman" SIZE=2>Diluted</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 1.17</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 1.53</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 1.19</FONT></TD>
</TR>
</TABLE>

<FONT FACE="Times,Times New Roman" SIZE=2><P>&nbsp;</P>
<P>A summary of the Company's stock option activity and related information for the years ended December 31, 2000, 1999 and 1998 follows:</P></FONT>
<TABLE BORDER CELLSPACING=1 WIDTH=642>
<TR><TD WIDTH="27%" VALIGN="TOP" HEIGHT=16>
<P></TD>
<TD WIDTH="74%" VALIGN="TOP" COLSPAN=6 HEIGHT=16>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Year Ended December 31,</FONT></TD>
</TR>
<TR><TD WIDTH="27%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="25%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">2000</B></FONT></TD>
<TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">1999</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">1998</FONT></TD>
</TR>
<TR><TD WIDTH="27%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=16>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Options</B></FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=16>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Weighted Avg.<BR>
Exercise Price</B></FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=16>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Options</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=16>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Weighted Avg.<BR>
Exercise Price</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=16>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Options</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=16>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Weighted Avg.<BR>
Exercise Price</FONT></TD>
</TR>
<TR><TD WIDTH="27%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Options outstanding, <BR>
&nbsp;&nbsp;beginning of year</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,866,730</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 17.23</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,389,800</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 10.91</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,052,000</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 4.64</FONT></TD>
</TR>
<TR><TD WIDTH="27%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Options granted</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">580,348</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 25.58</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">620,161</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 29.74</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">663,800</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 17.53</FONT></TD>
</TR>
<TR><TD WIDTH="27%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Options forfeited</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">78,800</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 18.59</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">3,895</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 29.59</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<P>.</TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<P>.</TD>
</TR>
<TR><TD WIDTH="27%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Options exercised</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">195,244</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 5.12</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">139,336</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 9.77</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">326,000</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 4.31</FONT></TD>
</TR>
<TR><TD WIDTH="27%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Options outstanding, <BR>
&nbsp;&nbsp;end of year</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">2,173,034</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 20.53</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,866,730</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 16.29</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,389,800</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 10.87</FONT></TD>
</TR>
</TABLE>

<FONT FACE="Times,Times New Roman" SIZE=2><P>The weighted average fair value of options granted whose exercise price was equal to the market price of the stock on the grant date was $25.58, $10.75 and $5.71 for the years ended December 31, 2000, 1999 and
1998. The weighted average fair value of options granted whose exercise price exceeded the market price of the stock on the grant date was $28.05 and $12.04 for the years ended December 31, 2000 and 1999. The range of exercise prices for options
outstanding and exercisable as of December 31, 2000 are as follows: 436,556 options from $1.63 to $7.43 and 1,736,478 options from $17.38 to $36.00. </P>
<P>The Company has adopted a Shareholder Protection Rights Agreement and declared a distribution of one right (the "Right") for each outstanding share of Company common stock, par value $0.20 per share (the "Common Stock"). Each Right entitles the
registered holder to purchase from the Company one one-hundredth of a share (a "Unit") of Series A Participating Preferred Stock, par value $1.00 per share (the "Preferred Stock"), at a purchase price of $18.00 per Unit, subject to adjustment. The rights
currently attach to the certificates representing shares of outstanding Company Common Stock, and no separate Rights certificates will be distributed. The Rights will separate from the Common Stock upon the earlier of ten business days (unless otherwise
delayed by the Board) following the (i) public announcement that a person or group of affiliated or associated persons (the "Acquiring Person") has acquired, obtained the right to acquire, or otherwise obtained beneficial ownership of 15% or more of the
then outstanding shares of Common Stock, or (ii) commencement of a tender offer or exchange offer that would result in an Acquiring Person beneficially owning 15% or more of the then outstanding shares of Common Stock. The Board of Directors may terminate
the Rights without any payment to the holders thereof at any time prior to the close of business ten business days following announcement by the Company that a person has become an Acquiring Person. The Rights, which do not have voting power and are not
entitled to dividends, expire on December 21, 2005. In the event of a merger, consolidation, statutory share exchange or other transaction in which shares of Common Stock are exchanged, each Unit of Preferred Stock will be entitled to receive the per
share amount paid in respect of each share of Common Stock.</P>
<B><P>11. Financial Instruments</P>
<P>Credit Risk</B> - The Company sells products to a wide variety of customers. The Company performs ongoing credit evaluations of its customers and generally does not require collateral. The Company maintains an allowance for doubtful accounts at a
level which management believes is sufficient to cover potential credit losses. As of December 31, 2000, concentrations of credit risk with respect to receivables are limited due to the wide variety of customers.</P>
<B><P>Fair Value of Financial Instruments</B> - The book value of the Company's financial instruments approximates their fair value. Financial instruments include cash, accounts receivable, finance receivables, accounts payable, long- and short-term debt
and one interest rate swap agreement. Substantially all of the Company's short and long-term debt is floating rate debt and, accordingly, book value approximates its fair value.</P>
<B><P>Interest Rate Swap Agreement</B> - In order to mitigate exposure to interest rate fluctuations, the Company's captive finance subsidiary, Astec Financial Services,Inc. ("AFS") entered into an interest rate swap agreement on April 6, 2000, to fix
interest rates on variable rate debt. The swap agreement is effective for five years with a notional amount of $7,500,000. At December 31, 2000, the fair value of the swap agreement was ($363,000).</P>
<B><P>12. Operations by Industry Segment and Geographic Area</P>
</B><P>The Company has four reportable operating segments. These segments are combinations of business units that offer different products and services. The business units are each managed separately because they manufacture and distribute distinct
products that require different marketing strategies. A brief description of each segment is as follows:</P>
<B><P>Asphalt Group</B> - This segment consists of three operating units that design, manufacture and market a complete line of portable, stationary and relocatable hot-mix asphalt plants and related components and a variety of heaters, heat transfer
processing equipment and thermal fluid storage tanks. The principal purchasers of these products are asphalt producers, highway and heavy equipment contractors and foreign and domestic governmental agencies.</P>
<B><P>Aggregate and Mining Group</B> - This segment consists of eight operating units that design, manufacture and market a complete line of rock crushers, feeders, conveyors, screens and washing equipment. The principal purchasers of these products are
open mine and quarry operators. </P>
<B><P>Mobile Asphalt Paving Group</B> - This segment consists of two operating units that design, manufacture and market asphalt pavers, asphalt material transfer vehicles, milling machines and paver screeds . The principal purchasers of these products
are highway and heavy equipment contractors and foreign and domestic governmental agencies.</P>
<B><P>Underground Group</B> - This segment consists of two companies that design, manufacture and market auger boring machines, directional drills, fluid/mud systems, chain and wheel trenching equipment, rock saws, road miners and material processing
equipment. The principal purchasers of these products are pipeline and utility contractors.</P>
<B><P>All Others</B> - This category consists of the Company's three other business units, including the parent company, Astec Industries, Inc., that do not meet the requirements for separate disclosure as an operating segment. Revenues in this category
are derived primarily from operating leases owned by the Company's finance subsidiary.</P>
<P>The Company evaluates performance and allocates resources based on profit or loss from operations before federal income taxes and corporate overhead. The accounting policies of the reportable segments are the same as those described in the summary of
significant accounting policies. </P>
<P>Intersegment sales and transfers are valued at prices comparable to those for unrelated parties. For management purposes, the Company does not allocate Federal income taxes or corporate overhead (including interest expense related to the Company's
revolving line of credit) to its business units.</P></FONT>
<TABLE BORDER CELLSPACING=1 WIDTH=695>
<TR><TD WIDTH="23%" VALIGN="BOTTOM" HEIGHT=26>
<P></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=26>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Asphalt Group</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=26>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Aggregate<BR>
and Mining<BR>
Group</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=26>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Mobile Asphalt<BR>
Paving Group</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=26>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Underground<BR>
Group</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=26>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">All Others</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=26>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Total</FONT></TD>
</TR>
<TR><TD WIDTH="23%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Revenues from external &nbsp;&nbsp;&nbsp;customers</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$187,823,335</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$190,931,429</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 63,268,136</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 75,748,060</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 2,916,891</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$520,687,851</FONT></TD>
</TR>
<TR><TD WIDTH="23%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Intersegment revenues</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">13,427,266</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">21,024,808</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">120,618</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">504,963</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">3,051,983</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">38,129,638</FONT></TD>
</TR>
<TR><TD WIDTH="23%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Interest expense</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">4,742</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">769,003</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">175,634</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">340,583</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">7,362,378</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">8,652,340</FONT></TD>
</TR>
<TR><TD WIDTH="23%" VALIGN="BOTTOM" HEIGHT=16>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Depreciation and &nbsp;&nbsp;amortization</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=16>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">4,774,154</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=16>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">5,078,301</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=16>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,629,792</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=16>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">2,082,141</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=16>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,815,315</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=16>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">15,379,703</FONT></TD>
</TR>
<TR><TD WIDTH="23%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Segment profit</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">17,996,985</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">18,367,234</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">8,343,809</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">6,835,885</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(25,515,926)</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">26,027,987</FONT></TD>
</TR>
<TR><TD WIDTH="23%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Segment assets</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">167,042,229</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">202,701,018</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">58,826,228</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">59,934,607</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">262,897,237</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">751,401,319</FONT></TD>
</TR>
<TR><TD WIDTH="23%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Capital expenditures</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">8,562,340</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">6,819,029</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,602,651</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">3,336,470</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">470,534</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">20,791,024</FONT></TD>
</TR>
</TABLE>


<TABLE BORDER CELLSPACING=1 WIDTH=695>
<TR><TD WIDTH="23%" VALIGN="BOTTOM" HEIGHT=13>
<P><FONT FACE="Times,Times New Roman" SIZE=2>Segment information for 1999</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Asphalt Group</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Aggregate<BR>
and Mining<BR>
Group</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Mobile Asphalt<BR>
Paving Group</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Underground<BR>
Group</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">All Others</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Total</FONT></TD>
</TR>
<TR><TD WIDTH="23%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Revenues from external &nbsp;&nbsp;&nbsp;customers</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$192,525,695</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$155,199,535</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 67,374,684</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 31,510,153</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 3,017,390</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$449,627,457</FONT></TD>
</TR>
<TR><TD WIDTH="23%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Intersegment revenues</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">8,947,300</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">10,636,735</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<P>.</TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">936,882</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">2,643,437</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">23,164,354</FONT></TD>
</TR>
<TR><TD WIDTH="23%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Interest expense</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">57,447</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">683,404</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">93,875</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">289,569</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">3,128,924</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">4,253,219</FONT></TD>
</TR>
<TR><TD WIDTH="23%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Depreciation and amortization</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">4,153,143</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">3,049,886</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,274,471</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">995,609</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">2,222,753</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">11,695,862</FONT></TD>
</TR>
<TR><TD WIDTH="23%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Segment profit</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">25,449,090</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">18,198,871</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">11,200,103</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">988,904</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(25,299,553)</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">30,537,415</FONT></TD>
</TR>
<TR><TD WIDTH="23%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Segment assets</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">150,032,995</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">184,015,782</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">43,619,752</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">52,280,067</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">238,563,925</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">668,512,521</FONT></TD>
</TR>
<TR><TD WIDTH="23%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Capital expenditures</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">8,962,862</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">10,883,070</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">3,442,706</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">2,155,055</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">5,435,997</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">30,879,690</FONT></TD>
</TR>
</TABLE>


<TABLE BORDER CELLSPACING=1 WIDTH=695>
<TR><TD WIDTH="23%" VALIGN="BOTTOM" HEIGHT=20>
<P><FONT FACE="Times,Times New Roman" SIZE=2>Segment information for 1998</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Asphalt Group</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Aggregate<BR>
and Mining<BR>
Group</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Mobile Asphalt<BR>
Paving Group</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Underground<BR>
Group</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">All Others</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Total</FONT></TD>
</TR>
<TR><TD WIDTH="23%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Revenues from external &nbsp;&nbsp;&nbsp;customers</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$163,234,857</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 112,705,508</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 60,324,759</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 29,590,375</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ (1,910,308)</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$363,945,191</FONT></TD>
</TR>
<TR><TD WIDTH="23%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Intersegment revenues</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">11,316,496</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">7,039,559</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">662,270</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<P>.</TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">7,952,842</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">26,971,167</FONT></TD>
</TR>
<TR><TD WIDTH="23%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Interest expense</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">10,397</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">333,186</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">38,698</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">342,748</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,983,952</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">2,708,981</FONT></TD>
</TR>
<TR><TD WIDTH="23%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Depreciation and &nbsp;&nbsp;&nbsp;amortization</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">3,236,621</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,662,560</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,019,281</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">874,428</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,336,695</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">8,129,585</FONT></TD>
</TR>
<TR><TD WIDTH="23%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Segment profit</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">21,565,578</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">12,961,727</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">9,890,188</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">2,039,242</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(20,839,063)</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">25,617,672</FONT></TD>
</TR>
<TR><TD WIDTH="23%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Segment assets</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">129,794,248</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">115,980,822</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">35,649,089</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">22,702,313</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">166,343,381</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">470,469,853</FONT></TD>
</TR>
<TR><TD WIDTH="23%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Capital expenditures</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">10,899,368</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">4,930,963</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">2,347,673</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">841,040</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">358,697</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">19,377,741</FONT></TD>
</TR>
</TABLE>

<FONT SIZE=2><P>&nbsp;</P>
</FONT><B><FONT FACE="Times,Times New Roman" SIZE=2><P>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</P>
</B><P>Reconciliations of the reportable segment totals for revenues, profit or loss, assets, interest expense, depreciation and amortization and capital expenditures to the Company's consolidated totals are as follows:</P></FONT>
<TABLE BORDER CELLSPACING=1 WIDTH=600>
<TR><TD WIDTH="51%" VALIGN="BOTTOM" HEIGHT=13>
<P>&nbsp;</TD>
<TD WIDTH="49%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Year Ended December 31,</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="BOTTOM" HEIGHT=13>
<P>&nbsp;</TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">2000</B></FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">1999</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">1998</FONT></TD>
</TR>
<TR><TD VALIGN="BOTTOM" COLSPAN=4 HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P>Sales:</B></FONT>&nbsp;</TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Total external sales for reportable segments</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 517,770,960</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 446,610,067</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 365,855,499</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Intersegment sales for reportable segments</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">35,077,655</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">20,520,917</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">19,018,325</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Other sales</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">5,968,874</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">5,660,827</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">6,042,534</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Elimination of intersegment sales </FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(38,129,638)</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(23,164,354)</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(26,971,167)</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Total consolidated sales</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 520,687,851 </FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 449,627,457</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 363,945,191</FONT></TD>
</TR>
<TR><TD VALIGN="BOTTOM" COLSPAN=4 HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P>Profit</B>:</FONT>&nbsp;</TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Total profit for reportable segments</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 51,543,913 </FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 55,836,968</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 46,456,735</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Other (loss)</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(25,515,926)</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(25,299,553)</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(20,839,063)</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Equity in (loss) income of joint venture</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(195,781)</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">6,096</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">74,578</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Minority interest in earnings of subsidiary</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(8,328)</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<P>.</TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<P>.&nbsp;</TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Elimination of intersegment profit</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">457,208</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,168,767</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(1,256,135)</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Total consolidated net income</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 26,281,086 </FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 31,712,278</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 24,436,115</FONT></TD>
</TR>
<TR><TD VALIGN="BOTTOM" COLSPAN=4 HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P>Assets</B>:</FONT>&nbsp;</TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Total assets for reportable segments</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 488,504,082</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 429,948,596</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 304,126,472</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Other assets</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">262,897,237</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">239,460,432</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">166,343,381</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Elimination of intercompany profit in inventory and &nbsp;&nbsp;leased equipment</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(246,280) </FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(1,241,297)</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(2,410,064)</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Elimination of intercompany receivables</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(144,200,101)</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(172,653,814)</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(118,730,950)</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Elimination of investment in subsidiaries</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(141,254,918)</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(118,643,805)</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(84,228,341)</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Other eliminations</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(63,394,201) </FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(21,433,081)</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">(16,780,222)</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Total consolidated assets</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 402,305,819</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 355,437,031</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 248,320,276</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="BOTTOM" HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P>Interest expense: </B></FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<P>&nbsp;.</TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<P>&nbsp;.</TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<P>&nbsp;.</TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Total interest expense for reportable segments</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 1,289,962</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 1,124,295</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 725,029</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Other interest expense</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">7,362,378</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">3,128,924</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,983,952</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Total consolidated interest expense</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 8,652,340</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 4,253,219</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 2,708,981</FONT></TD>
</TR>
<TR><TD VALIGN="BOTTOM" COLSPAN=4 HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P>Depreciation and amortization:</B></FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Total depreciation and amortization for reportable &nbsp;&nbsp;segments</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 13,564,388</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 9,473,109</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 6,792,890</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Other depreciation and amortization</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,815,315</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">2,222,753</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,336,695</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Total consolidated depreciation and amortization</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 15,379,703</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 11,695,862</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 8,129,585</FONT></TD>
</TR>
<TR><TD VALIGN="BOTTOM" COLSPAN=4 HEIGHT=13>
<B><FONT FACE="Times,Times New Roman" SIZE=2><P>Capital expenditures:</B></FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Total capital expenditures for reportable segments</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 20,320,490 </FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 25,443,693</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 19,019,044</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Other capital expenditures</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">470,534</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">5,435,997</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">358,697</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Total consolidated capital expenditures (excluding &nbsp;&nbsp;those for equipment leased to others)</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 20,791,024 </FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 30,879,690</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=20>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 19,377,741</FONT></TD>
</TR>
</TABLE>

<FONT SIZE=2><P>&nbsp;</P>
</FONT><FONT FACE="Times,Times New Roman" SIZE=2><P>International sales by domestic subsidiaries by major geographic region were as follows:</P></FONT>
<TABLE BORDER CELLSPACING=1 WIDTH=601>
<TR><TD WIDTH="43%" VALIGN="TOP" HEIGHT=13>
<P></TD>
<TD WIDTH="57%" VALIGN="TOP" COLSPAN=3 HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Year Ended December 31,</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" HEIGHT=13><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">2000</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">1999</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">1998</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Asia</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 1,589,937 </FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 2,814,288</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 5,363,481</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Southeast Asia</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">2,824,572</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">808,771</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">2,214,930</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Europe</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">7,137,599</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">7,148,982</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">3,471,656</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>South America</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">2,984,187</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">4,280,998</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">20,712,903</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Canada</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">14,950,621</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">12,694,606</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">12,072,217</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Australia</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">6,598,660</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">962,743</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,467,738</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Africa</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">8,044,463</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,434,304</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">2,668,923</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Central America</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">15,557,104</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">9,995,037</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">11,893,005</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Middle East</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">205,300</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,080,697 </FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">6,164,493</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>West Indies</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">3,018,152</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">4,365,563</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">3,176,713</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Other</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">588,325</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">209,208</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">308,542</FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Total</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$63,498,920</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$45,795,197</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$69,514,601</FONT></TD>
</TR>
</TABLE>

<FONT SIZE=2><P>&nbsp;</P>
</FONT><B><FONT FACE="Times,Times New Roman" SIZE=2><P>13.&#9;Finance Receivables&#9;</P>
</B><P>Finance receivables are receivables of Astec Financial Services, Inc. Contractual maturities of outstanding receivables at December 31, 2000 were:</P></FONT>
<TABLE BORDER CELLSPACING=1 WIDTH=590>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=13>
<P><FONT FACE="Times,Times New Roman" SIZE=2>Amounts Due In</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Financing Leases </FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Notes</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="CENTER">Total</FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>2001</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 7,646,289</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 11,894,736</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$ 19,541,025</FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>2002</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">817,038</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">981,998</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,799,036</FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>2003</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">686,751</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">758,896</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,445,647</FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>2004</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">477,679</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">321,115</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">798,794</FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>2005</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">454,840</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">208,223</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">663,063</FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Thereafter</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">1,980,000</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">284,498</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">2,264,498</FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P>Total</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$12,062,597</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$14,449,466</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=13>
<FONT FACE="Times,Times New Roman" SIZE=2><P ALIGN="RIGHT">$26,512,063</FONT></TD>
</TR>
</TABLE>

<FONT FACE="Times,Times New Roman" SIZE=2><P>Receivables may be paid prior to contractual maturity generally by payment of a prepayment penalty. At December 31, 2000, there were no impaired loans or leases. Recognition of income on finance receivables is
suspended when management determines that collection of future income is not probable. Accrual is resumed if the receivable becomes contractually current and collection doubts are removed. Previously suspended income is recognized at that time.</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>REPORT OF INDEPENDENT AUDITORS</P>
<P>The Board of Directors and Shareholders<BR>
Astec Industries, Inc. </P>
<P>We have audited the accompanying consolidated balance sheets of Astec Industries, Inc. and subsidiaries as of December 31, 2000 and 1999 and the related consolidated statements of income, shareholders' equity and cash flows for each of the three years
in the period ended December 31, 2000. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.</P>
<P>We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.</P>
<P>In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Astec Industries, Inc. and subsidiaries at December 31, 2000 and 1999 and the consolidated results
of their operations and their cash flows for each of the three years in the period ended December 31, 2000, in conformity with accounting principles generally accepted in the United States.</P>
<P>&nbsp;</P>
<P>/s/ Ernst &amp; Young LLP</P>
<P>Chattanooga, Tennessee<BR>
February 23, 2001</P>
</FONT><FONT FACE="Arial" SIZE=2><P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P><BR>
<B><U>REPORT OF INDEPENDENT AUDITORS <BR>
</B></U>&nbsp;The Board of Directors and Shareholders <BR>
Astec Industries, Inc. </P>
<P><BR>
&nbsp;We have audited the accompanying consolidated balance sheets of Astec Industries, Inc. and subsidiaries as of December 31, 2000 and 1999 and the related consolidated statements of income, shareholders' equity, and cash flows for each of the three
years in the period ended December 31, 2000. Our audits also included the financial statement schedule listed in the Index at Item 14(a). These financial statements and schedule are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements and schedule based on our audits. </P>
<P>We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence supporting amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. </P>
<P>In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Astec Industries, Inc. and subsidiaries at December 31, 2000 and 1999, and the consolidated
results of their operations and their cash flows for each of the three years in the period ended December 31, 2000, in conformity with accounting principles generally accepted in the United States. Also, in our opinion, the related financial statement
schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein. <BR>
&nbsp; <BR>
&nbsp; <BR>
&nbsp; <BR>
&nbsp; <BR>
&nbsp; <BR>
/s/ Ernst &amp; Young, LLP <BR>
Chattanooga, Tennessee <BR>
February 23, 2001 </P>
<P>&nbsp; </P>
<P ALIGN="CENTER">A-24</P>
<P>&nbsp;</P>
<P><BR>
<B><U>&nbsp; <BR>
ASTEC INDUSTRIES, INC. AND SUBSIDIARIES <BR>
</B></U>SCHEDULE (II) <BR>
VALUATION AND QUALIFYING ACCOUNTS <BR>
<U>FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998</P></U></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 WIDTH=698>
<TR><TD WIDTH="17%" VALIGN="BOTTOM"><DIR>

<P ALIGN="JUSTIFY"><FONT FACE="Arial" SIZE=2>&nbsp; <BR>
&nbsp; <BR>
&nbsp; <BR>
DESCRIPTION</DIR>
</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">&nbsp; <BR>
BEGINNING <BR>
BALANCE</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">ADDITIONS <BR>
CHARGES TO <BR>
COSTS &amp; <BR>
EXPENSES</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">&nbsp; <BR>
OTHER <BR>
ADDITIONS</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">&nbsp; <BR>
&nbsp; <BR>
DEDUCTIONS</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">&nbsp; <BR>
ENDING <BR>
BALANCE</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=6>
<B><FONT FACE="Arial" SIZE=2><P>December 31, 2000</B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=6>
<FONT FACE="Arial" SIZE=2><P>Reserves deducted from assets to which they apply:</FONT></TD>
</TR>
<TR><TD WIDTH="17%" VALIGN="BOTTOM"><DIR>

<FONT FACE="Arial" SIZE=2><P>Allowance for doubtful accounts</DIR>
</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>&nbsp; <BR>
$<U>1,966,251</U></FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>&nbsp; <BR>
$<U>807,569</U></FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>&nbsp; <BR>
$<U>105,000</U> <SUP>(3)</SUP></FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>&nbsp; <BR>
<U>$773,820</U> <SUP>(1)</SUP></FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>&nbsp; <BR>
$<U>2,105,000</U></FONT></TD>
</TR>
<TR><TD WIDTH="17%" VALIGN="BOTTOM"><DIR>

<FONT FACE="Arial" SIZE=2><P>Reserve for inventory</DIR>
</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>$<U>5,131,175</U></FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>$<U>1,437,610</U></FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM">
<U><FONT FACE="Arial" SIZE=2><P>$830,000 </U><SUP>(3)</SUP></FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>$<U>1,135,029</U></FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>$<U>6,263,756</U></FONT></TD>
</TR>
<TR><TD WIDTH="17%" VALIGN="BOTTOM"><DIR>

<FONT FACE="Arial" SIZE=2><P>Other Reserves: <BR>
Product warranty</DIR>
</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>&nbsp; <BR>
<U>$4,075,358</U></FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>&nbsp; <BR>
<U>$1,308,058</U></FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>&nbsp; <BR>
<U>$322,871</U> <SUP>(3)</SUP></FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>&nbsp; <BR>
<U>$1,264,442</U> <SUP>(2)</SUP></FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>&nbsp; <BR>
<U>$4,441,845</U></FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">&nbsp;&nbsp;</P></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 WIDTH=698>
<TR><TD VALIGN="TOP" COLSPAN=6>
<P><B><FONT FACE="Arial" SIZE=2>December 31, 1999</B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=6>
<FONT FACE="Arial" SIZE=2><P>Reserves deducted from assets to which they apply:</FONT></TD>
</TR>
<TR><TD WIDTH="16%" VALIGN="BOTTOM"><DIR>

<FONT FACE="Arial" SIZE=2><P>Allowance for doubtful accounts</DIR>
</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>&nbsp; <BR>
$<U>1,460,000</U></FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>&nbsp; <BR>
$<U>425,557</U></FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>&nbsp; <BR>
$<U>287,854</U> <SUP>(3)</SUP></FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>&nbsp; <BR>
<U>$207,160</U> <SUP>(1)</SUP></FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>&nbsp; <BR>
$<U>1,966,251</U></FONT></TD>
</TR>
<TR><TD WIDTH="16%" VALIGN="BOTTOM"><DIR>

<FONT FACE="Arial" SIZE=2><P>Reserve for inventory</DIR>
</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>$<U>3,683,292</U></FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>$<U>1,265,120</U></FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM">
<U><FONT FACE="Arial" SIZE=2><P>$1,639,600 </U><SUP>(3)</SUP></FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>$<U>1,456,837</U></FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>$<U>5,131,175</U></FONT></TD>
</TR>
<TR><TD WIDTH="16%" VALIGN="BOTTOM"><DIR>

<FONT FACE="Arial" SIZE=2><P>Other Reserves: <BR>
Product warranty</DIR>
</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>&nbsp; <BR>
<U>$3,624,252</U></FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>&nbsp; <BR>
<U>$1,466,176</U></FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>&nbsp; <BR>
<U>$1,075,700</U> <SUP>(3)</SUP></FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>&nbsp; <BR>
<U>$2,090,770</U> <SUP>(2)</SUP></FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>&nbsp; <BR>
<U>$4,075,358</U></FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">&nbsp; </P></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 WIDTH=683>
<TR><TD VALIGN="BOTTOM" COLSPAN=6>
<P><B><FONT FACE="Arial" SIZE=2>December 31, 1998: </B></FONT></TD>
</TR>
<TR><TD VALIGN="BOTTOM" COLSPAN=6>
<FONT FACE="Arial" SIZE=2><P>Reserves deducted from assets to which they apply:</FONT></TD>
</TR>
<TR><TD WIDTH="16%" VALIGN="BOTTOM"><DIR>

<FONT FACE="Arial" SIZE=2><P>Allowance for doubtful accounts</DIR>
</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>&nbsp; <BR>
$<U>1,553,237</U></FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>&nbsp; <BR>
$<U>1,092,185</U></FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>&nbsp; <BR>
$ 0</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>&nbsp; <BR>
$<U>1,185,422 </U><SUP>(1)</SUP></FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>&nbsp; <BR>
$<U>1,460,000</U></FONT></TD>
</TR>
<TR><TD WIDTH="16%" VALIGN="BOTTOM"><DIR>

<FONT FACE="Arial" SIZE=2><P>Reserve for inventory</DIR>
</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>$<U>4,328,170</U></FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>$<U>1,289,740</U></FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>$ 0</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>$<U>1,934,618</U></FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>$<U>3,683,292</U></FONT></TD>
</TR>
<TR><TD WIDTH="16%" VALIGN="BOTTOM"><DIR>

<FONT FACE="Arial" SIZE=2><P>Other Reserves: <BR>
Product warranty</DIR>
</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>&nbsp; <BR>
$<U>3,206,372</U></FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>&nbsp; <BR>
$<U>4,048,899</U></FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>&nbsp; <BR>
$ 0</FONT></TD>
<TD WIDTH="19%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>&nbsp; <BR>
$<U> 3,631,019</U> <SUP>(2)</SUP></FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>&nbsp; <BR>
$<U>3,624,252</U></FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<SUP><P>(1)</SUP>&#9;Uncollectible accounts written off, net of recoveries. <BR>
<SUP>(2)</SUP>&#9;Warranty costs charged to the reserve. <BR>
<SUP>(3)</SUP>&#9;Represents reserve balances of subsidiaries acquired in the year. <BR>
&nbsp; </P>
<P>&nbsp;</P>
<P ALIGN="CENTER"><BR>
Schedule (II) <BR>
A-25</P>
<P>&nbsp;</P>
<P ALIGN="CENTER"><BR>
<U>&nbsp; <BR>
SIGNATURES</P>
<P><BR>
</U>&#9;Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Astec Industries, Inc. has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.</P></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 WIDTH=638>
<TR><TD VALIGN="TOP">
<P ALIGN="RIGHT"><FONT FACE="Arial" SIZE=2>ASTEC INDUSTRIES, INC.</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">BY: <U>/s/ J. Don Brock </U></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" HEIGHT=60>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">J. Don Brock, Chairman of the Board and <BR>
President (Principal Executive Officer)</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">BY: <U>/s/ F. McKamy Hall </U></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" HEIGHT=60>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">F. McKamy Hall, Chief Financial Officer, <BR>
Vice President, and Treasurer (Principal <BR>
Financial and Accounting Officer)</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">Date: March 23, 2001</FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">&#9;Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by a majority of the Board of Directors of the Registrant on the dates indicated:</P></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=657>
<TR><TD WIDTH="33%" VALIGN="TOP">
<P ALIGN="CENTER"><U><FONT FACE="Arial" SIZE=2>SIGNATURE</U></FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">TITLE</U></FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">DATE</U></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=3>
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="BOTTOM" HEIGHT=30>
<U><FONT FACE="Arial" SIZE=2><P>/s/ J. Don Brock&#9; <BR>
</U>J. Don Brock&#9;</FONT></TD>
<TD WIDTH="33%" VALIGN="BOTTOM" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P>Chairman of the Board and President</FONT></TD>
<TD WIDTH="33%" VALIGN="BOTTOM" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P>March 23, 2001</FONT></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="BOTTOM" HEIGHT=30>
<U><FONT FACE="Arial" SIZE=2><P>/s/ Albert E. Guth&#9; <BR>
</U>Albert E. Guth&#9;&#9; </FONT></TD>
<TD WIDTH="33%" VALIGN="BOTTOM" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P>President, Astec Financial Services, Inc. and Director</FONT></TD>
<TD WIDTH="33%" VALIGN="BOTTOM" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P>March 23, 2001</FONT></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="BOTTOM" HEIGHT=60>
<U><FONT FACE="Arial" SIZE=2><P>/s/ W. Norman Smith&#9; <BR>
</U>W. Norman Smith&#9;&#9;</FONT></TD>
<TD WIDTH="33%" VALIGN="BOTTOM" HEIGHT=60>
<FONT FACE="Arial" SIZE=2><P>President - Astec, Inc. and Director, Group Vice President Asphalt - </FONT></TD>
<TD WIDTH="33%" VALIGN="BOTTOM" HEIGHT=60>
<FONT FACE="Arial" SIZE=2><P>March 23, 2001</FONT></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="BOTTOM" HEIGHT=30>
<U><FONT FACE="Arial" SIZE=2><P>/s/ Robert G. Stafford&#9; <BR>
</U>Robert G. Stafford&#9;&#9;</FONT></TD>
<TD WIDTH="33%" VALIGN="BOTTOM" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P>Vice President, Aggregates Processing Group and Director</FONT></TD>
<TD WIDTH="33%" VALIGN="BOTTOM" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P>March 23, 2001</FONT></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="BOTTOM" HEIGHT=30>
<U><FONT FACE="Arial" SIZE=2><P>/s/ J. Wade Gilley&#9;</U>&#9; <BR>
J. Wade Gilley</FONT></TD>
<TD WIDTH="33%" VALIGN="BOTTOM" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P>Director</FONT></TD>
<TD WIDTH="33%" VALIGN="BOTTOM" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P>March 23, 2001</FONT></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="BOTTOM" HEIGHT=30>
<U><FONT FACE="Arial" SIZE=2><P>/s/ William B. Sansom&#9; <BR>
</U>William B. Sansom</FONT></TD>
<TD WIDTH="33%" VALIGN="BOTTOM" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P>Director</FONT></TD>
<TD WIDTH="33%" VALIGN="BOTTOM" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P>March 23, 2001</FONT></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="BOTTOM" HEIGHT=30>
<U><FONT FACE="Arial" SIZE=2><P>/s/ Ronald W. Dunmire&#9; <BR>
</U>Ronald W. Dunmire</FONT></TD>
<TD WIDTH="33%" VALIGN="BOTTOM" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P>Director</FONT></TD>
<TD WIDTH="33%" VALIGN="BOTTOM" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P>March 23, 2001</FONT></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="BOTTOM" HEIGHT=30>
<U><FONT FACE="Arial" SIZE=2><P>/s/ Robert H. West&#9; <BR>
</U>Robert H. West</FONT></TD>
<TD WIDTH="33%" VALIGN="BOTTOM" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P>Director</FONT></TD>
<TD WIDTH="33%" VALIGN="BOTTOM" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P>March 23, 2001</FONT></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="BOTTOM" HEIGHT=30>
<U><FONT FACE="Arial" SIZE=2><P>/s/ William D. Gehl&#9; <BR>
</U>William D. Gehl</FONT></TD>
<TD WIDTH="33%" VALIGN="BOTTOM" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P>Director</FONT></TD>
<TD WIDTH="33%" VALIGN="BOTTOM" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P>March 23, 2001</FONT></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="BOTTOM" HEIGHT=30>
<U><FONT FACE="Arial" SIZE=2><P>/s/ Daniel K. Frierson&#9; <BR>
</U>Daniel K. Frierson</FONT></TD>
<TD WIDTH="33%" VALIGN="BOTTOM" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P>Director</FONT></TD>
<TD WIDTH="33%" VALIGN="BOTTOM" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P>March 23, 2001</FONT></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="BOTTOM" HEIGHT=30>
<U><FONT FACE="Arial" SIZE=2><P>/s/ Robert Dressler&#9;<BR>
R</U>obert Dressler</FONT></TD>
<TD WIDTH="33%" VALIGN="BOTTOM" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P>Director</FONT></TD>
<TD WIDTH="33%" VALIGN="BOTTOM" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P>March 23, 2001</FONT></TD>
</TR>
</TABLE>

<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">&nbsp; <BR>
&nbsp;</P></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=657>
<TR><TD VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">Commission File No. 0-14714</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">SECURITIES AND EXCHANGE COMMISSION</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">Washington, D.C. 20549</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">EXHIBITS FILED WITH ANNUAL REPORT</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">ON FORM 10-K</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">ASTEC INDUSTRIES, INC.</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">4101 Jerome Avenue</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">Chattanooga, Tennessee 37407</FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">&nbsp; </P>
<P>&nbsp;</P>
<P ALIGN="CENTER"><BR>
<B>ASTEC INDUSTRIES, INC. <BR>
FORM 10-K <BR>
INDEX TO EXHIBITS </P></B></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=775>
<TR><TD WIDTH="15%" VALIGN="TOP">
<P><U><FONT FACE="Arial" SIZE=2>Exhibit Number</U></FONT></TD>
<TD WIDTH="85%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P>Description</U></FONT></TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>10.33</FONT></TD>
<TD WIDTH="85%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Sale of Business Agreement, dated September 29, 2000, between Anglo Operations Limited and High Mast Properties 18 Limited and Astec Industries, Inc. for the purchase of the materials handling and processing products division
of the Boart-Longyear Division of Anglo Operations Limited. </FONT></TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>10.34</FONT></TD>
<TD WIDTH="85%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Acquisition Agreement, dated October 2, 2000, by and among Larry Raymond, Carlson Paving Products, Inc. and Astec Industries, Inc. </FONT></TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>10.35</FONT></TD>
<TD WIDTH="85%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Collective Bargaining Agreement, dated February 1, 2001, by and between Trencor, Inc. and the United States Steelworkers of America, AFL-CIO and CLC. </FONT></TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Exhibit 22</FONT></TD>
<TD WIDTH="85%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Subsidiaries of the registrant. </FONT></TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Exhibit 23</FONT></TD>
<TD WIDTH="85%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Consent of independent auditors. </FONT></TD>
</TR>
</TABLE>

<P>&nbsp; </P></BODY>
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<TYPE>EX-10
<SEQUENCE>2
<FILENAME>osborn.htm
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<B><FONT SIZE=5><P ALIGN="CENTER">EXHIBIT 10.33&nbsp;</P></B></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 WIDTH=624>
<TR><TD VALIGN="BOTTOM">
<FONT FACE="Arial" SIZE=2><P>Sale of Business Agreement, dated September 29, 2000, between Anglo Operations Limited and High Mast Properties 18 Limited and Astec Industries, Inc. for the purchase of the materials handling and processing products division
of the Boart-Longyear Division of Anglo Operations Limited. </FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">SALE OF BUSINESS AGREEMENT</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">between:</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">ANGLO OPERATIONS LIMITED</P>
<P ALIGN="CENTER">(Osborn MMD division)</P>
<P ALIGN="CENTER">(Registration No: 01/06730/06)</P>
<P ALIGN="CENTER">(the "Seller")</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">and</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">HIGH MAST PROPERTIES 18 (PROPRIETARY) LIMITED</P>
<P ALIGN="CENTER">(Registration No: 2000/015019/07)</P>
<P ALIGN="CENTER">(the "Purchaser")</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">and </P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">ASTEC INDUSTRIES, INC.</P>
<P ALIGN="CENTER">(a Tennessee corporation)</P>
<P ALIGN="CENTER">("Astec")</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P><DIR>
<DIR>

<P>&#9;<U>Introduction</P></DIR>
</DIR>

</U><P>&#9;The seller carries on the business of manufacturing and distributing a range of bulk materials handling and processing equipment and plant for the mining, construction and allied industries, with the emphasis on crushing, screening, feeding,
milling and conveying equipment and turnkey plant, as a going concern and as a separate division under the name and style "Osborn MMD" ("the business").</P>
<P>&#9;Upon and subject to the terms and conditions of this agreement, the purchaser</P>
<P>wishes to purchase, and the seller wishes to sell, the business as a going concern on the basis that:</P><DIR>
<DIR>

<P>1.2.1&#9;notwithstanding the date of signature of this agreement by the party last to</P></DIR>
</DIR>

<P>sign ("signature date"), the sale will take effect on and be with effect from 23h59 South African time on 29 September 2000 ("the effective date");</P>
<P>1.2.2&#9;the purchaser will acquire all of the assets of the seller used in the conduct of the business including but not limited to:</P><DIR>
<DIR>
<DIR>
<DIR>

<P>&#9;the plant, machinery, equipment and motor vehicles of the business</P><DIR>
<DIR>
<DIR>
<DIR>

<P>listed in the document data pack, headed Depreciation Report - Summary by Assets type 31/07/00 initialed by the parties for identification purposes ("the data pack") ("the equipment");</P>
<P>&#9;the furniture and fittings utilized in the conduct of the business listed in the data pack ("the furniture and fittings");</P></DIR>
</DIR>
</DIR>
</DIR>

<P>&#9;the immovable properties listed in annexure A ("the immovable</P><DIR>
<DIR>

<P>properties");</P>
<P>&#9;the inventory of the business as at the effective date being raw</P><DIR>
<DIR>

<P>materials, finished goods, work in progress, consumable spares, packaging and goods in transit (being inventory purchased by the seller prior to the effective date but not yet delivered by that date) ("the inventory");</P>
<P>&#9;all the trade debtors/receivables of the business at the effective date as reflected in the effective date certificate (as defined in 6.4 w) ("the receivables");</P>
<P>&#9;the whole of the goodwill of the seller in the business as at the effective date, including its trade connections, trade secrets, confidential information and other intangible assets listed in annexure B used in connection with the operation of
the business and its rights to the names "Osborn" and "Hadfields"("the goodwill");</P></DIR>
</DIR>
</DIR>
</DIR>

<P>&#9;prepayments and deposits made by the seller in relation to the</P><DIR>
<DIR>
<DIR>
<DIR>

<P>business as at the effective date and in the ordinary cause of business ("the prepayments and deposits"), collectively "the assets");</P></DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>

<P>1.2.3&#9;the seller will cede and assign to the purchaser all the seller's rights, title,</P></DIR>
</DIR>

<P>interests and Obligations in and to all contracts of whatsoever nature in respect of the business to which the seller shall, at the effective date, be a party, including without limitation all leases and suspensive sale agreements but excluding
employment contracts with employees of the seller and contracts in respect of the excluded assets and the excluded liabilities ("the contracts") </P>
<P>1.2.4&#9;the purchaser will assume all the trade and non trade payables/liabilities of the business or the seller in respect of the business at the effective date including, without limitation, any liability in respect of leave pay, outstanding
unpresented cheques as at the effective date and provisions made for claims under product warranties, as reflected in the effective date certificate (as defined in 6.4 below) ("the assumed liabilities") but excluding the following liabilities ("the
excluded liabilities"):</P><DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>

<P>&#9;the liability of the seller to pay any post retirement medical benefits to pensioners of the business at the effective date;</P></DIR>
</DIR>
</DIR>
</DIR>

<P>&#9;any amount owing by the seller to the Boart Longyear Corporate</P><DIR>
<DIR>
<DIR>
<DIR>

<P>division of the seller in respect of the business; and any liability in respect of taxation which relates to any period prior to the effective date. "Taxation" means normal corporate tax attributable to any income or profits earned by the business
during this period</P>
<P>&#9;any liability in respect of taxation which relates to any period prior to the effective date. "<U>Taxation</U>" means normal corporate tax attributable to any income or profits earned by the business during this period;</P>
<P>&#9;any amount owing by the seller relating to the business in respect of any bank overdraft.</P></DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>

<P>1.2.5&#9;the sale excludes:</P><DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>

<P>&#9;any amount owing to the seller by the Boart Longyear Corporate division of the seller in respect of the business; and</P></DIR>
</DIR>
</DIR>
</DIR>

<P>&#9;any credit bank balances and cash on hand as at the effective date; </P><DIR>
<DIR>
<DIR>
<DIR>

<P>&#9;any claims/credits in respect of taxation, whether current or deferred, if any;</P></DIR>
</DIR>
</DIR>
</DIR>

<P>&#9;retained earnings of the business as at the effective date; and</P><DIR>
<DIR>
<DIR>
<DIR>

<P>&#9;any provision made for bad and/or doubtful receivables, </P>
<P>(collectively referred to as "the excluded assets").</P></DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>

<P>1.2.6&#9;the sale herein recorded is subject to and conditional upon the fulfillment of the suspensive conditions in 2 below;</P><DIR>
<DIR>

<P>1.2.7&#9;on the signature date all prior agreements, understandings and negotiations</P></DIR>
</DIR>

<P>(whether oral, written or otherwise), including without limitation, the matters dealt with in Part A of the letter of understanding between the parties dated 18 August 2000, concerning the proposed sale shall terminate, be of no further force or
effect and shall not give rise to any claims of whatsoever nature between the parties and the sale shall be governed solely by the terms, conditions, warranties and provisions of this agreement;</P><DIR>
<DIR>

<P>1.2.8&#9;the sale of the assets, the cession and assignment of the contracts and the</P></DIR>
</DIR>

<P>assumption of the assumed liabilities constitute one indivisible transaction;</P>
<P>1.2.9&#9;the closing date of the sale will be the later of 29 September 2000 or the date on which the last of the suspensive conditions in clause 2 below is met or waived ("the closing date").</P>
<P>&#9;<U>Suspensive Conditions</P>
</U><P>&#9;This agreement (save for the provisions of this clause 2, and clauses 19, 20.4 and 23 by which the parties shall be bound from the signature date) is subject in its entirety to and conditional upon the fulfillment of the following suspensive
conditions ("the suspensive conditions"):</P>
<P>2.1.1&#9;the board of directors of the purchaser and Astec each passing a resolution unconditionally approving the sale set out in this agreement and the purchaser delivering a certified copy thereof to the seller on or before 2 October 2000;</P>
<P>2.1.2&#9;the seller delivers to the purchaser on or before the signature date, a certified copy of a resolution of the board of directors of the seller authorizing executives of the seller to conclude this agreement on behalf of the seller;</P>
<P>2.1.3&#9;the transaction envisaged in this agreement is, if applicable, approved in writing by the Competition Board or the authorities established in terms of the Competition Act 89 of 1999, as amended, on or before 30 November 2000 either
unconditionally or subject to such conditions as the parties may accept and undertake in writing to comply with.</P>
<P>2.1.4&#9;each of Philip Dring, Brian Easton, Alan Forthsythe, Cyril McKechnie, Roy Frampton and David Steele entering into written employment contracts with the purchaser on or before 2 October 2000;</P>
<P>2.1.5&#9;the purchaser and Boart Longyear (Zimbabwe) Limited ("BLZ") concluding an addendum to the sublicence agreement between BLZ and the seller dated 24 January 1995 incorporating, as a minimum, the terms and conditions in annexure H, on terms and
conditions acceptable to BLZ, the seller and the purchaser on or before 6 October 2000;</P>
<P>2.1.6&#9;the Boart Longyear Pension Fund ("the BL Fund") obtaining unconditional written approval (or conditional approval, acceptable to the purchaser and the</P>
<P>seller) from the Financial Services Board and other appropriate authorities to effect the transfers in clause 11.5 below on or before 15 December 2000.</P>
<P>&#9;The parties undertake to use their respective reasonable endeavours to procure the fulfillment of the suspensive conditions as soon as possible after the signature date and not to deliberately frustrate the fulfillment of the suspensive conditions.
</P>
<P>&#9;If all of the suspensive conditions are not fulfilled or waived by the seller and the purchaser on or before the respective time periods in 2.1 above or by such later date as the parties may in writing agree to prior to such dates, this agreement
shall lapse and have no further force or effect and the parties shall be restored as near as may be possible to the positions in which they would have been had this agreement not been entered into. No party shall have any claims against the other should
this agreement lapse by reason of the non-fulfillment of any of the suspensive conditions save to the extent that a party may have breached any of the provisions of 2.2 above.</P>
<P>&#9;Each of the parties undertakes to use its best endeavours to procure that all the</P>
<P>requisite regulatory approvals for the implementation of the sale in this agreement be secured, including, if necessary, the approval of the sale contemplated in this agreement by the relevant Competition Authorities, whose decision and any
pre-emptive order made by them shall be binding on the parties, shall be carried into effect and shall not itself give rise to any claim for damages by any party against the other.</P>
<P>&#9;<U>Sale and Assumption of Liabilities</P>
</U><P>&#9;The seller sells to the purchaser which purchases the business as a going concern,</P>
<P>which sale:</P><DIR>
<DIR>

<P>3.1.1&#9;shall take effect on and be with effect from the effective date;</P>
<P>3.1.2&#9;shall encompass the acquisition by the purchaser of the assets and the</P><DIR>
<DIR>

<P>cession and assignments of the contracts;</P><DIR>
<DIR>

<P>3.1.3&#9;shall encompass the assumption by the purchaser of the assumed liabilities.</P>
<P>&nbsp;</P></DIR>
</DIR>
</DIR>
</DIR>

<P>&#9;Notwithstanding the signature date:</P><DIR>
<DIR>
<DIR>
<DIR>

<P>3.2.1&#9;possession and effective control of the business shall be given to the purchaser on the closing date; and</P>
<P>3.2.2&#9;ownership and risk in and benefit of the business shall pass to the purchaser on the effective date.</P></DIR>
</DIR>
</DIR>
</DIR>

<P>&#9;The purchaser shall be responsible for all the assumed liabilities and the purchaser</P></DIR>
</DIR>

<P>undertakes to pay all the assumed liabilities on due date. The purchaser agrees to reimburse the seller in respect of any outstanding/unpresented cheques as at the effective date if and when such cheques are paid out of the sellers bank account. The
purchaser indemnifies the seller against any and all claims which may be made against the seller arising out of or in connection with the assumed liabilities.</P>
<P>&#9;The purchaser will not assume the excluded liabilities and the seller undertakes to</P>
<P>discharge all the excluded liabilities. The seller indemnifies the purchaser against any and all claims which may be made against the business or the purchaser arising out of or in connection with the excluded liabilities. </P>
<P>&#9;<U>The Contracts</P>
</U><P>&#9;The seller and the purchaser undertake to use their best endeavours to procure that</P>
<P>any other party ("third party") to the contracts shall consent, with effect from the effective date, to the assignment by the seller to the purchaser of all rights and obligations under the contracts.</P>
<P>&#9;To the extent that the seller and the purchaser: </P>
<P>4.2.1&#9;obtain the consent of any third party as contemplated in 4.1 above, the seller shall be deemed to have assigned to the purchaser, who shall be deemed to have accepted, the assignment and delegation of all the seller's rights, title, interest
and obligations in terms of the contracts with effect from the effective date;</P>
<P>4.2.2&#9;are unable to obtain the consent of any third party for the purpose contemplated in 4.1 above, then the seller and the purchaser agree that, with effect from the effective date, they will procure, as between them, that the rights and
obligations under any such contract shall be for the benefit and account of the purchaser and accordingly:</P><DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>

<P>&#9;the purchaser shall be responsible for carrying out and completing any uncompleted work as subcontractor or sub-lessee to the seller on the basis that the profit and loss under such contract shall be for the purchaser's account;</P>
<P>&#9;any payment received by the seller arising out of such contracts where the right to receive such payment arises on and/or after the effective date shall be paid forthwith to the purchaser on receipt thereof; and </P>
<P>&#9;the purchaser shall be responsible for all payments to be made by the seller under such contracts, where the obligation to make such payment arises on and/or after the effective date.</P></DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>

<P>&#9;The purchaser indemnifies the seller against all claims which may be made against the seller arising out of or in connection with the contracts, the cause of action in</P>
<P>respect of which claims arose solely after the effective date.</P>
<P>&#9;The seller indemnifies the purchaser against all claims, other than claims arising out of or in connection with the assumed liabilities, which may be made against the purchaser arising out of or in connection with the contracts, the cause of
action in respect of which claims arose solely before the effective date. The following terms shall apply to the aforementioned indemnity insofar as it relates to any product warranty claims:</P>
<P>4.4.1&#9;the indemnity shall apply only to the extent that the product warranty claims exceed the provision made for product warranty claims in the effective date</P>
<P>certificate;</P>
<P>4.4.2&#9;the indemnity shall only apply to products manufactured and/or sold and services rendered before the effective date and for the periods specified in annexure 1; and</P>
<P>4.4.3&#9;at the end of the period in 4.4.2(ii) above, the purchaser will pay the seller the unutilised portion of the provision.</P>
<P>4.5&#9;As soon as possible after the effective date, the purchaser shall use its best endeavours to procure the release of the seller or its holding company or subsidiaries ("the sureties") from the guarantees, suretyships or indemnities given by the
sureties detailed in annexure C (collectively "the guarantees") and the purchaser (or its holding company or Astec) shall tender its own guarantees if that is necessary to procure such release. To the extent that the purchaser may be unable to procure a
release of the sureties the purchaser indemnifies the sureties against any claims that may be brought against the sureties in respect of the guarantees where such claims are in respect of the assumed liabilities and/or the contracts and where the cause of
action of such claims arose on or after the effective date. </P>
<P>&#9;<U>Delivery</P>
</U><P>&#9;On the closing date and provided payment of the purchase price has been made in terms of 7.1 below, the seller shall:</P>
<P>5.1.1&#9;place the purchaser in possession, occupation and control of the business and the assets at the premises of the business;</P>
<P>5.1.2&#9;deliver to the purchaser all documents, records, customer lists, contracts, and other documentation relating to the business which has not already been delivered to the purchaser.</P>
<P>&#9;Transfer and delivery of the immovable properties shall be effected in the manner set out in clause 12 below.</P>
<P>&#9;The parties shall sign such documents and do all such things as may be necessary or desirable to enable the assets of the business capable of registration to be registered in the name of the purchaser, at the purchaser's cost, and shall sign
separate cessions and assignments for transfer of the contracts and goodwill as part of the sale, if so required by the purchaser.</P>
<P>&#9;The seller shall, from the signature date and up to and including the closing date, act with due and proper care and diligence in relation to its conduct of the business, and</P>
<P>shall apply the same standard of care and expertise as it applied prior to the effective date. Without limiting the generality of the aforegoing the seller shall not take any steps or omit to take any step other than in the ordinary course of the
conduct of the business, without the prior written consent of the purchaser. </P>
<P>&#9;<U>Purchase Price</P><DIR>
<DIR>

<P>purchase price</P></DIR>
</DIR>

</U><P>&#9;The purchase price payable by the purchaser to the seller for the business shall be</P>
<P>R26,000,000.00 ("purchase price"), subject to such adjustment(s) as may be required to be made thereto in accordance with the provisions of clauses 6.2 - 6.9 ("the purchase price adjustments").</P>
<P>&#9;&#9;<U>effective date adjustment</P>
</U><P>&#9;The purchase price shall be adjusted at the closing date as follows:</P><DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>

<P>&#9;if the net operating assets of the business at the effective date are less than R35,598,000.00, the purchase price will be adjusted downward by the amount of the difference in the purchase price and 73% of the net operating assets of the business
as at the effective date;*</P>
<P>&#9;if the net operating assets of the business as at the effective date exceed R35,598,000.00 the purchase price shall be increased by the amount of the excess.</P></DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>

<P>&#9;For the purposes of determining and calculating "the net operating assets of the</P>
<P>business at the effective date" and hence the adjustment, if any, to be made to the purchase price in terms of 6.2:</P>
<P>6.3.1&#9;the equipment, the furniture and fittings and the immovable properties ("the fixed assets"), the inventory and the receivables shall be brought into account at their respective book values recorded in the effective date certificate (as
defined below) in conformity with the principles, procedures, practices and methods used in the preparation of previous financial statements and accounts of the business; and</P>
<P>6.3.2&#9;the assumed liabilities shall be brought into account in such valuation in the amount ascribed thereto in the effective date certificate (as defined below) in conformity with the principles, procedures, practices and methods used in the
preparation of previous financial statements and accounts of the business, it being agreed that the amount by which the total value of the fixed assets, the inventory and the receivables exceeds the total value of the assumed liabilities shall comprise
the net operating assets of the business at the effective date.</P>
<P>&#9;For the purposes of 6.3 above, the "effective date certificate" means accounts of the seller in respect of the business for the trading period 1 June 2000 to the effective date which accounts shall be prepared and certified by the seller's
auditors, Deloitte &amp; Touche ("D&amp;T"), at the seller's cost, in conformity with generally accepted accounting principles, procedures, practices and methods as applied by the South African Institute of Chartered Accountants and, subject to the
aforegoing, in conformity with the principles practices and methods used in the preparation of previous financial statements and accounts of the seller in respect of the business.</P>
<P>&#9;The net operating assets of the business as at the effective date and the adjustments in 6.2 shall be calculated in accordance with the provisions of 6.2, 6.3 and 6.4 by D&amp;T, at the seller's cost, and upon such calculation being completed the
amount of the net operating assets and the adjustments in 6.2 as so calculated and the closing date certificate shall be forwarded to the purchaser and Ernst &amp; Young ("E&amp;Y") for review within 30 (thirty) days of the effective date. The purchaser,
in conjunction with E&amp;Y, shall be entitled to review and verify the effective date certificate and the calculation of the net operating assets and should:</P>
<P>6.5.1&#9;the purchaser confirm the correctness of the effective date certificate and the calculation and the amount of the net operating assets as at the effective date and the adjustments in 6.2, such calculation shall be final and binding on the
seller and purchaser;</P>
<P>6.5.2 any dispute arise between the seller and the purchaser or D&amp;T and E&amp;Y, such dispute shall be resolved in accordance with the provisions of 21.13 below and the parties agree to be bound by a determination in accordance with 21.13 below.</P>

<U><P>31 December 2000 adjustment</P>
</U><P>&#9;The purchase price will be adjusted as at 31 December 2000 as follows:</P><DIR>
<DIR>

<P>6.6.1&#9;the first R1,300,000.00 or part thereof of the net income before tax of the</P></DIR>
</DIR>

<P>business shall be credited to the purchaser;</P>
<P>6.6.2&#9;the second R1,300,000.00 or part thereof of the net income before tax of the business shall be credited to the seller;</P><DIR>
<DIR>

<P>6.6.3&#9;where the net income before tax of the business exceeds R2,600,000.00,</P></DIR>
</DIR>

<P>four sevenths thereof shall be credited to the seller and the remaining three sevenths shall be credited to the purchaser.</P>
<P>&#9;For the purposes of clause 6.6, the "net income before tax of the business" shall</P>
<P>mean the before tax profit of the business for the period 1 June 2000 to 31 December 2000 as reflected in the effective date certificate and the 31 December certificate. For the purpose of this agreement, the "31 December certificate" shall mean the
accounts of the purchaser in respect of the business for the trading period 30 September 2000 to 31 December 2000 which accounts shall be prepared and certified by E&amp;Y, at the purchaser's cost, in conformity with</P>
<P>generally accepted accounting principles, procedures, practices and methods as applied by the South African Institute of Chartered Accountants and, subject to the aforegoing, in conformity with the principles, procedures, practises and methods used by
the seller in the preparation of previous financial statements and accounts of the seller in respect of the business provided that in determining and calculating the net income before tax as aforesaid: (i) the costs of retrenchment for the period 1 June
2000 to 31 December 2000 shall not exceed R600,000.00; and (ii) the</P>
<P>inventory will be determined and accounted for on the same basis and applying the same criteria as were applied by the seller as at 31 December 1999 and 30 May 2000; and (iii) any extraordinary bonuses, incentives or payments, paid to employees of the
business for the period in question which are not consistent with the bonuses, incentives and payments to employees made by the seller for the same period in the previous year, shall be excluded. </P>
<P>&#9;The net income before tax of the business as at 31 December 2000 and the</P>
<P>adjustments in 6.6 above shall be calculated in accordance with the provisions of 6.6 and 6.7 above by E&amp;Y, at the purchaser's cost, and upon such calculation being completed, the amount of the net income before tax and adjustments in 6.6 above.
as so calculated and the 31 December certificate shall be forwarded to the seller and D&amp;T for review within 30 (thirty) days of 31 December 2000. The seller, in conjunction with D&amp;T, shall be entitled to review and verify the 31 December
certificate and calculation of the net income before tax of the business and the adjustment in terms of 6.6 and should:</P><DIR>
<DIR>

<P>6.8.1&#9;the seller confirm the correctness of the 31 December certificate and the</P></DIR>
</DIR>

<P>calculation and amount of the net income before tax of the business and the adjustments in 6.6 above, the calculation shall be final and binding on the purchaser and the seller;</P>
<P>6.8.2 &#9;any dispute arising between the purchaser and the seller or D&amp;T and E&amp;Y, such dispute shall be resolved in accordance with the provisions of 21.13 below and the parties agree to be bound by a determination in accordance with 21.13
below.</P><DIR>
<DIR>

<P>&#9;The purchase price adjustments as aforesaid shall be determined on or before</P></DIR>
</DIR>

<P>15 February 2001. The purchase price adjustments shall be set off against each other and shall be remitted and disbursed pursuant to 7.3 below. An example of the 31 December 2000 adjustment is set out in annexure D.</P>
<P>&nbsp;</P>
<P>&#9;The parties agree that:</P>
<P>6.10.1&#9;they shall use their respective best endeavors to procure that D&amp;T and E&amp;Y, as the case may be, complete the preparation of the accounts, calculations and reviews in terms of the aforegoing provisions of this clause as soon as
possible after they are instructed to do so but in all events on or before 15 February 2001 for the purposes of this agreement;</P>
<P>6.10.2&#9;they shall use their best endeavors to procure that they review and verify the accounts and calculations within 14 days after receipt of the same so that they are finalized on or before 15 February 2001.</P>
<U><P>allocation of purchase price</P>
</U><P>&#9;The parties agree that the purchase price shall be allocated as follows:</P><DIR>
<DIR>

<P>6.11.1&#9;as to the receivables and the prepayments and deposits, their respective</P></DIR>
</DIR>

<P>values as reflected in the closing date certificate;</P><DIR>
<DIR>

<P>6.11.2&#9;as to the assumed liabilities, their value as reflected in the closing date</P></DIR>
</DIR>

<P>certificate;</P><DIR>
<DIR>

<P>6.11.3&#9;the balance of the purchase price shall be allocated as to the fixed assets</P></DIR>
</DIR>

<P>(comprising the equipment, the furniture and fittings and the immovable properties) and to the inventory only and such allocations shall be determined by E&amp;Y, acting as experts and not as arbitrators and whose decision shall be final and binding
on the parties.</P>
<P>&#9;<U>Payment of the Purchase Price</P>
</U><P>&#9;The purchase price shall be paid by the purchaser in cash, free of exchange and</P>
<P>without deduction on the effective date, as follows:</P>
<P>7.1.1&#9;R5,200,000.00 ("the retained portion") to First National Bank Limited to be deposited in an interest bearing account in terms of clause 7.3 below ("escrow agent"). The purchaser shall against such payment provide the seller with a letter from
the escrow agent in terms of which the escrow agent unconditionally agrees to release the retained portion pursuant to clause 7.3 below; and</P>
<P>7.1.2&#9;the balance of the purchase price of R20,800,000.00 to the seller in terms of 7.4 below.</P>
<P>&#9;If the purchaser fails to pay the purchase price referred to in 7.1 above on due date, the purchase price shall bear interest until payment is made at the annual compounded monthly rate of 14%, calculated with effect from the closing date. </P>
<P>&#9;In regard to the retained portion, the seller and purchaser agree that:</P><DIR>
<DIR>

<P>7.3.1&#9;the escrow agent shall hold the retained portion in escrow in an interest</P></DIR>
</DIR>

<P>bearing account acceptable to the seller and purchaser and shall disburse the retained portion as provided below;</P><DIR>
<DIR>

<P>7.3.2&#9;the fees and expenses of the escrow agent shall be borne and paid by the</P></DIR>
</DIR>

<P>seller and the purchaser equally;</P><DIR>
<DIR>

<P>7.3.3&#9;the retained portion shall be disbursed by the escrow agent on 15 February</P></DIR>
</DIR>

<P>2001 in the following manner:</P><DIR>
<DIR>
<DIR>
<DIR>

<P>&#9;the amount of any purchase price adjustment due to the purchaser</P><DIR>
<DIR>

<P>shall be paid to the purchaser; and</P></DIR>
</DIR>

<P>&#9;the remainder of the retained portion shall be paid to the seller,</P><DIR>
<DIR>
<DIR>
<DIR>

<P>it being agreed that the interest earned on the retained portion shall be paid to the seller and/or the purchaser, as the case may be, pro rata based on the amount of the retained portion paid to the party concerned;</P></DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>

<P>7.3.4&#9;if the retained portion is insufficient to cover the purchase price adjustment, the difference shall be paid by the purchaser or the seller, as the case may be,</P>
<P>to the other party on 15 February 2001.</P>
<P>&#9;All payments to be made in terms of this agreement shall be paid free of exchange, set off and other deductions at the address of the parties recorded in 23.1.1 below</P>
<P>by way of a bank guaranteed cheque, electronic transfer or other method mutually</P>
<P>acceptable to the parties.</P>
<P>&#9;<U>Inventory</P>
</U><P>&#9;On the effective date representatives of the parties shall conduct a physical count of the inventory located at any manufacturing facility, warehouse or other place of storage where the business is conducted.</P>
<P>&#9;In conducting the physical count of the inventory:</P>
<P>8.2.1&#9;the representatives of the parties shall distinguish between current stock, work in progress, obsolete stock, project inventories, stock in transit and items of stock which are damaged or defective and stocks of raw materials, furnished goods
and packaging material and shall be entitled to verify the same, it being recorded that damaged, unmerchantable and obsolete stock will be determined and accounted for on the same basis and applying the same criteria as were applied by the seller as at 31
December 1999 and 30 May 2000; and </P>
<P>8.2.2&#9;all stock shall be valued at the lower of cost or net realizable value, it being agreed that work in progress shall be valued to include the actual cost of materials, labor and a proportionate share of production overhead expenditure, on the
same basis and applying the same criteria as were applied by the seller as at 31 December 1999 and 30 May 2000.</P><DIR>
<DIR>

<P>&#9;Should any stock in trade not then be on hand but be in transit, the parties</P></DIR>
</DIR>

<P>representatives shall prepare a schedule of all such stock in transit accompanied by copies of the orders under which such stock in transit was bought by the business. </P>
<P>&#9;After the stock has been physically counted and stock sheets have been written up</P>
<P>and completed, the stock sheets shall be signed by the parties' representatives and once so signed shall be evidence of the quantities and values of the various classes of the inventory of the business. The parties shall calculate the value
attributable to the stock in accordance with the provisions of this clause 8.</P>
<P>&#9;Should any dispute arise between the parties in relation to any matter set out in this clause 8, such dispute shall be determined in accordance with the provisions of</P>
<P>clause 21 below.</P>
<P>&#9;For the purposes of clauses 8.2.1, 8.2.2 and 6.7, in the event of a dispute between</P>
<P>the criteria as at 31 December 1999 and 30 May 2000, the former will prevail.</P>
<P>&#9;<U>Notice in Terms of the Insolvency Act</P>
</U><P>&#9;It is recorded that the parties have agreed to dispense with the publication of the</P>
<P>notices referred to in Section 34(1) of the Insolvency Act, No 2 of 1936, as amended.</P>
<P>&#9;Should any third party seek to attach or attach any of the assets pursuant to any claim which such third party may allege it has against the seller, the purchaser shall notify the seller in writing and the seller undertakes to take all steps
necessary to release the assets from any attachment and return them to the purchaser within a reasonable time. Should the seller fail to do so, the purchaser may, at its election and without prejudice to any other remedies which it may have in terms of
this agreement, discharge the liability owing to the third party concerned and to claim and recover any such amount(s) so paid from the seller.</P>
<P>&#9;<U>Value Added Tax</P>
</U><P>&#9;The parties record and agree that:</P><DIR>
<DIR>

<P>10.1.1&#9;the business is disposed of as a going concern on the basis that both the</P></DIR>
</DIR>

<P>seller and the purchaser will, as at the effective date, be or deemed to be registered as vendors in terms of the provisions of the Value Added Tax Act, 1991, as amended ("the VAT Act");</P>
<P>10.1.2&#9;the purchase price includes value added tax payable in terms of the VAT Act as a rate of 0% (zero percent) in accordance with the provisions of Section 11(l)(e) of the VAT Act;</P>
<P>10.1.3&#9;the business is, as of the signature date, and will be, as of the effective date, an income earning enterprise and activity capable of separate operation;</P>
<P>10.1.4&#9;all of the assets necessary to carry on an enterprise as envisaged in the VAT Act are disposed of by the seller to the purchaser in terms of this Agreement.</P>
<P>&#9;Should value added tax be or become payable on the purchase price at a rate</P>
<P>different to the rate in 10.1.2, the purchase price shall ipso facto be deemed to have been increased by such an amount and the purchaser shall be liable to make payment to the seller of such increased amount against delivery to the purchaser of a
value added tax invoice therefor.</P>
<P>&#9;The purchaser warrants that it shall on the effective date be deemed to be</P>
<P>registered as a vendor in terms of the VAT Act. The seller warrants that it shall on the effective date be registered as a vendor in terms of the VAT Act. </P>
<P>&#9;<U>Employees</P>
</U><P>&#9;It is agreed that Section 197(2) of the Labour Relations Act 1995 is applicable to the seller in terms of this agreement and that accordingly the employment of each employee of the seller employed in regard to the business will continue in
force with the purchaser as the new employer.</P>
<P>&#9;The seller shall use reasonable endeavours to procure that each of its employees</P>
<P>listed in annexure E ("the employees") enters into a fresh agreement of employment with the purchaser. The seller indemnifies the purchaser subject to a maximum of R200,000.00 for any claims brought against the purchaser arising out of the current
CCMA disputes brought against the seller by C De Villiers and P. P Mhlongo prior to the effective date.</P>
<P>&#9;The seller warrants and undertakes that the employees of the seller employed in</P>
<P>regard to the business are identified in annexure E.</P>
<P>&#9;The seller shall, in compliance with prevailing labour law, advise the entire workforce of the business of the transaction contemplated by this agreement, after the</P>
<P>consultation with and after having obtained the approval of the purchaser as to the manner in which such advice shall be communicated, forthwith after the signature date.</P>
<P>&#9;It is agreed that all employees of the business belonging to the BL Fund as at the</P>
<P>effective date will, subject to the rules of the BL Fund, be transferred to another pension, provident fund or similar fund offered by the purchaser. The transfer of funds will be the actuarial reserve value of the BL Fund, in respect of the employees
(being no less than R43,585,724.00 as at 30 September 2000), plus the current asset value of additional voluntary contributions within the BL Fund, in respect of the portion applicable to the employees (being an amount of no less than R2,660,971.65 as at
30 September 2000), plus an amount of R16,000,000.00 representing surplus, that being a total of no less than R62,246,696.00. The </P>
<P>purchaser indemnifies and holds the seller harmless against any and all claims from or obligation to pay, the employees in respect of any post retirement medical aid benefits.</P>
<P>&#9;Should the purchaser at any time after the closing date terminate the employment of any of the employees for any reason whatsoever, the purchaser hereby indemnifies and holds the seller harmless in respect of any claim of whatever nature and
however arising which any such employee may have or assert against the seller and/or the purchaser, whether in respect of any period prior to the effective date or thereafter.</P>
<P>&#9;<U>Transfer of the Immovable Properties</P>
</U><P>&#9;Transfer of the immovable properties will be undertaken by conveyancers appointed by the seller ("conveyancers").</P>
<P>&#9;The risk and profit and loss in respect of the immovable properties shall pass to the purchaser on the effective date and ownership of the immovable properties shall pass to the purchaser on registration of transfer of the immovable properties to
the purchaser. </P>
<P>&#9;The purchaser shall pay the rates, taxes and other charges in relation to the immovable properties with effect from the effective date. </P>
<P>&#9;Occupation of the immovable properties shall be given to the purchaser on the closing date.</P>
<P>&#9;The purchaser shall be liable for the legal costs of and incidental to the transfer of the immovable properties to the purchaser, including any duties, if applicable, save for any costs relating to the cancellation of existing mortgage bonds over
the immovable properties.</P>
<P>&#9;Transfer of the immovable properties -shall be given as soon as possible after the closing date. The parties shall, within 7 days of being called upon to do so by the conveyancers, sign all documents required to be signed, and furnish all
documents required to be furnished, by the parties to enable transfer of the immovable properties to be given to the purchaser.</P>
<P>&#9;<U>Receivables</P>
</U><P>&#9;The seller hereby cedes to the purchaser, who hereby accepts such cession, with effect from the effective date, all the seller's right, title and interest in and to the receivables and the purchaser shall collect, for its own account, the
receivables.</P>
<P>&#9;In the event that any debtor of any receivable ceded in terms of 13.1 makes payment, in part or in full, of such debt to the seller after the effective date, the seller shall, within 7 (seven) days after receiving such payment pay the same to the
purchaser in cash, free of the cost of the transfer of monies and without any deduction or set-off of whatsoever nature.</P>
<P>&#9;In the event of the purchaser not being able to collect any of the receivables in full within 120 (one hundred and twenty) days of the closing date, the purchaser shall be entitled, within a period of 60 (sixty) days thereafter, to notify the
seller of the failure of the debtor(s) concerned and in such notice shall give details of the name of the debtor and. the amount not paid. Upon receipt of such notice, the seller shall purchase and take cession of the purchaser's claim against the debtor
for the unpaid receivable(s) in an amount equal to 73% of the face value of the unpaid receivable(s) and the seller shall pay such amount to the purchaser within 14 (fourteen) days of such recession. </P>
<P>&#9;All payments received in respect of any receivables shall be allocated to the oldest debt due to the business by the debtor in question unless the debtor concerned otherwise nominates, other than at the request of the purchaser. The purchaser
undertakes to use its best endeavours to collect the receivables.</P>
<P>&#9;<U>Warranties</P>
</U><P>&#9;The following warranties are, unless otherwise stated in respect of any warranty, (in which case the specified period shall apply), given as at the effective date. The seller warrants to the purchaser that except as disclosed in annexure F and
the documents referred to in annexure F which were made available to the purchaser:</P><DIR>
<DIR>

<P>14.1.1&#9;<U>Assets</P><DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>

</U><P>14.1.1.1&#9;the seller owns the assets and has good and marketable title thereto, and except for agreements entered into in the ordinary course of business, no other person has any rights to or in respect of the assets;</P>
<P>14.1.1.2&#9;the purchaser shall be entitled to have the same use and enjoyment of the assets as that which the seller had prior to the effective date of this agreement;</P>
<P>14.1.1.3&#9;the seller is unaware of any material defects in the assets or any material facts or material circumstances which may cause any of the assets to break down after the effective date, save for any breakdowns in the ordinary course. Save as
provided herein, all the assets are sold voetstoots and in the condition they are in on the effective date. Subject to the aforegoing, the seller agrees to maintain the assets in the condition they are in on the signature date until the closing date, fair
wear and tear excepted;</P>
<P>14.1.1.4&#9;the seller has maintained a register of the assets in accordance with general accepted and sound accounting practice;</P>
<P>14.1.1 .5&#9;none of the assets are subject to any mortgage, debenture or notarial bond, cession or pledge or any other encumbrance, or have been purchased under any hire-purchase or suspensive sales agreement or are subject to any lease;</P>
<P>14.1.1.6&#9;none of the assets is subject to any option or right of first refusal of any person;</P>
<P>14.1.1.7&#9;the seller is the true and lawful owner of the immovable properties and the improvements thereon and is and will be entitled to dispose of all of the immovable properties to the purchaser in terms of this agreement;</P>
<P>14.1.1.8&#9;the immovable properties are suitable for the purposes for which they are used, are used in the conduct of the business and are sufficient for the conduct of the business;&#9;</P>
<P>14.1.1.9&#9;the immovable properties are served by all utilities required for the&#9;conduct of the business;</P>
<P>14.1.1.10&#9;the immovable properties will comply. in every respect with all Government, Provincial and Local Authority requirements affecting them or relating to them and with the requirements in the conditions of title;</P>
<P>14.1.1.11&#9;the seller has not been called upon, by any Government, Provincial, Local or other competent authority and will not be under any obligation, to make any alterations, repairs or additions to the immovable properties;</P>
<P>14.1.1.12&#9;the immovable properties will only be subject to the servitudes, restrictions and encumbrances referred to in the title deeds thereof and which may apply by operation of law;</P></DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>

<P>14.1.2&#9;<U>Goodwill and Scope of Business</U> </P></DIR>
</DIR>

<P>at the effective date the seller will not have done or omitted to do anything which has or will:</P><DIR>
<DIR>
<DIR>
<DIR>

<P>14.1.2.1&#9;materially prejudice the goodwill;</P>
<P>14.1.2.2&#9;reduce the scope of the business;</P></DIR>
</DIR>

<P>14.1.3&#9;<U>The Contracts</P><DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>

</U><P>14.1.3.1&#9;all the contracts have been entered into under normal credit terms and are subject to payment in accordance with those terms;</P>
<P>14.1.3.2&#9;there is no single contract with a customer or supplier which is of longer duration than 12 months, and the seller is not party to any unusual agreement; </P>
<P>14.1.3.3&#9;the seller is not party to any contract with any of its directors or employees requiring more than one month's notice of termination, or entitling any of them to unusual compensation on termination of employment, or to participation in or
entitlement to a commission on profit;</P>
<P>14.1.3.4&#9;the seller is not party to any agreement which has not been entered into on an arms-length basis and on terms which are normal having regard to the nature of its business;</P>
<P>14.1.3.5&#9;copies of all contracts and other documents submitted to the purchaser in connection with this agreement fully and correctly reflect all the terms and conditions thereof, are not subject to any claims for rectification, and have not been
amended in any respect;</P>
<P>14.1.3.6&#9;the contracts are in full force and effect and the seller is not in breach of any contract entered into between it and any other person and has complied in all material respects with its obligations under such contract. To the best of the
seller's knowledge and belief, the other party(ies) to the contracts are not in default of any material obligations under such contracts;</P>
<P>14.1.3.7&#9;the seller is not aware of any facts, matters or circumstances which may give rise to the cancellation of any of the contracts to which the seller is bound as a result of any breach thereof by the seller; </P>
<P>14.1.3.8&#9;the transaction provided for in this agreement does not constitute a breach of any of the seller's contractual obligations in respect of the business nor will it entitle any person to terminate any contract to which the seller is a party
in respect of the business;</P></DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>

<P>14.1.4&#9;<U>Intellectual Property Rights</P><DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>

</U><P>14.1.4.1&#9;to the best of the seller's knowledge, the business conducted by the seller does not infringe any patent, copyright, trade mark or other industrial property rights or any other rights of any other person and no person is entitled to an
order requiring the seller to change its name or its trading style, or any of the marks and designs applied by it to its products; and</P>
<P>14.1.4.2&#9;the seller has the right to use the patents and trademarks listed in annexure B;</P></DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>

<P>14.1.5&#9;<U>Laws, Regulations, Consents, Licenses and Permits</P><DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>

</U><P>14.1.5.1&#9;the condition of the premises from which the business is conducted satisfies the requirements of all relevant authorities for the grant of the same trade licenses as are presently held by the seller in respect of the business on terms
at least as favourable as those which apply to the seller;</P>
<P>14.1.5.2&#9;all instructions which have, from time to time, been issued by any inspector appointed in terms of the Factories Act have been carried out in respect of the premises;</P>
<P>14.1.5.3&#9;the seller is in possession of all consents, permits and licenses necessary for the conduct of its business and affairs, and the seller is not aware of any facts which may give rise to the cancellation of, or failure to renew, any such
licenses, permits or consents or to their only being renewed subject to the imposition of onerous conditions not presently applicable thereto;</P></DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>

<P>14.1.6&#9;<U>Labour Laws, Regulations, Determinations, Agreements and Disputes</P><DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>

</U><P>14.1.6.1&#9;the seller has complied with all wage determinations and industrial conciliation agreements which apply to it, its business and its employees;</P>
<P>14.1.6.2&#9;the seller has complied with the grievance procedures agreed to by it with regard to grievances of and relations with its employees;</P>
<P>14.1.6.3&#9;the seller has complied with the labour union recognition agreement (if any) to which it is a party;</P>
<P>14.1.6.4&#9;the seller is not party to any labour disputes and is not obliged by law, agreement, judgment or order of court, to reinstate employees that have been dismissed or will be dismissed;</P>
<P>&nbsp;</P></DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>

<P>14.1.7&#9;<U>Insurance</P><DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>

</U><P>14.1.7.1&#9;the seller carries insurance cover in respect of the business and the&#9; assets (including the motor vehicles) against the loss arising from accident, fire, earthquake, flood, burglary, theft, employer's liability, workmen's
compensation, public liability, storm damage, civil commotion, riot or political risk and loss of profits, and such insurance will continue to be effective for a period terminating not earlier than 30 days after the effective date (after which time the
purchaser shall take out insurance in respect of the business); all premiums due in respect of such insurance have been paid and the seller has complied with all of the conditions to which the liability of the insurers under the policies of insurance will
be subject;</P>
<P>14.1.7.2&#9;the seller is not aware of any facts, matters or circumstances which may give rise to the cancellation of the policies of insurance referred to in clause 14.1.7.1 or the repudiation of any claims thereunder or to such policies not being
renewed in the future or only being renewed subject to the imposition of onerous conditions not presently applicable;</P></DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>

<P>14.1.8&#9;<U>Employment, Leave, Remuneration and Pension</P><DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>

</U><P>14.1.8.1&#9;no employee or official of the seller is entitled to any exceptional leave privileges, accumulated leave, payment in lieu of leave, pension or the like and none of the terms on which any employee of the business is employed (including
without limitation any terms relating to compensation or benefits payable to than employee upon his retrenchment or redundancy) will have been changed since 30 May 2000;</P>
<P>14.1.8.2&#9;on the closing date the seller will not in any material respect have improved the terms of employment of or remuneration payable to any of its employees from that prevailing at the signature date;</P>
<P>14.1.8.3&#9;the actuarial reserve value of the BL Fund, in respect of the employees, and as at 30 September 2000, is no less than R43,585,724.00;</P>
<P>14.1.8.4&#9;the current asset value of additional voluntary contributions within the BL Fund, in respect of the employees, and as at 30 September 2000 is no less than R2,660,971.65.</P></DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>

<P>14.1.9&#9;<U>Restraint of Trade</P><DIR>
<DIR>

</U><P>the seller is not bound by any restraint of trade agreement</P>
<P>14.1.10 <U>Warranties Regarding Books of Account</U> </P>
<P>the books and records of the business are up-to-date and have been properly kept according to law and will be capable of being written up within a reasonable time;</P></DIR>
</DIR>

<P>14.1.11 <U>Environmental Warranties</P><DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>

</U><P>14.1.11.1&#9;the seller complies with all conditions, limitations, obligations, prohibitions and requirements contained in any environmental legislation or regulations, by-laws, or ordinances ("environmental legislation") and the seller is not
aware of any facts or circumstances which may lead to any breach of any environmental legislation including without limitation the Environmental Conservation Act and the Water Act;</P>
<P>14.1.11.2&#9;no poisonous, noxious, hazardous, polluting, dangerous or environmentally harmful substances or articles have been produced, treated, kept at or deposited at the premises where the seller carries on business, or have been released or
discharged from such premises and in particular no matter or thing been discharged into any public sewer or into any drain or sewer connecting the public sewer and has not contaminated the land surrounding the premises or any water;</P>
<P>14.1.11.3&#9;there are no deficiencies in the waste disposal arrangements carried on at or in respect of the premises which may lead to a failure by the seller to comply with any existing environmental legislation, including without limitation, the
Environmental Conservation Act and the Water Act or which will harm the environment;</P>
<P>14.1.11.4&#9;there have been no disputes, claims or investigations or other proceedings pending or threatened regarding the use of the seller's premises, or the release of any substances from such premises;</P>
<P>14.1.11.5&#9;there are no environmental claims, investigations or other proceedings pending or threatened against the seller in respect of the business and there is no actual or contingent liability of the seller to make good, repair, reinstate or
clean up any property;</P>
<P>14.1.11.6&#9;no water, whether surface or ground water, has been contaminated, polluted or the quality thereof altered in such a way that the provisions of any water law whether common law or statutory law will have been breached.</P></DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>

<P>14.1.12 <U>Other Warranties</P><DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>

</U><P>14.1.12.1&#9;the audited financial statements of the business as of 31 December, 1999 and unaudited financial statements of the business as of 31 May, 2000 and the related statements of income for the period then ended (the "financial statements")
were prepared in accordance with the business' historic accounting practices, consistently applied, and were derived in all material respects from the books and records of the business and are complete and accurate in all material respects. The financial
statements fairly present the financial position and results of operations of the business for the periods therein indicated;</P>
<P>14.1.12.2&#9;annexure G sets forth the aggregate product warranty claims paid by the seller for each of the past three complete fiscal years;</P>
<P>14.1.12.3&#9;except as set forth on annexure F, there is to the best of the seller's knowledge and belief, no governmental or private litigation, proceeding, claim, suit or audit of any kind whatsoever pending before any court or quasi-judicial or
administrative agency of any jurisdiction or before any arbitrator or, to the knowledge of the seller, threatened against the seller, nor any outstanding injunction, judgement, order, decree, ruling or, to the knowledge of the seller, investigation which
relates to the business or any of the assets;</P>
<P>14.1.12.4&#9;save as provided in annexure F or annexure I, the seller has not granted any customer any product warranty which exceeds 12 (twelve) months.</P>
<P>&nbsp;</P></DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>

<P>14.1.13 <U>Disclosure</P></DIR>
</DIR>

</U><P>All facts and circumstances material to this transaction and not known to the purchaser, or which would be material or would be reasonably likely to be material to a purchaser of the business have been disclosed to the purchaser. The
representations and warranties in this agreement, or in any certificate delivered in connection herewith or therewith shall survive the closing date provided that no claim may be brought against the seller where the cause of action arises on or after the
third anniversary of the effective date.</P>
<P>&#9;The purchaser shall only be entitled to terminate this agreement pursuant to a breach of any of the warranties if such breach is material and causes loss or damage to the purchaser and such loss or damage is not paid or made good by the seller. </P>

<P>&#9;The seller indemnifies and holds the purchaser harmless from and against any loss, damages, claims, actions, liabilities, costs or expenses (including attorneys fees and expenses) of any nature whatsoever and howsoever incurred, which are suffered
or sustained by the purchaser pursuant to any breach by the seller of any of the warranties contained in this agreement. Notwithstanding the aforegoing or anything to the contrary contained in this, agreement, the seller shall not be liable for any
consequential damages, and the amount of loss, damages, liabilities, costs or expenses the purchaser shall be entitled to claim from the seller arising out of or attributable to the failure of the seller to discharge any of its obligations under this
agreement, any breach of any warranty, undertaking or representation in this agreement or the failure to comply with any indemnity, shall be limited to and shall not exceed the total purchase price actually paid by the purchaser to the seller in terms of
this agreement. </P>
<P>&#9;In the event of a breach by the seller of any warranty under this agreement that also gives rise to a claim for indemnity in terms of this agreement, the purchaser shall not be entitled to claim both in respect of such breach of warranty and in
respect of such indemnity.</P>
<P>&#9;The purchaser shall notify the seller of any claim which may be made against the</P>
<P>seller in respect of any matters referred to in this clause 14 within a reasonable time of the purchaser becoming aware thereof, to enable the seller to take steps to contest such claim. The seller shall be entitled to contest the claim concerned and
shall be entitled to control the proceedings in regard thereto, provided that:</P>
<P>14.5.1&#9;the seller indemnifies the purchaser against all party and party and attorney and own client costs which may be incurred as a 'consequence of such steps</P>
<P>and the purchaser shall be entitled to require the seller to give reasonable security against such costs;</P>
<P>14.5.2&#9;the purchaser shall render reasonable assistance to the seller (at the expense of the seller) in regard to the steps taken by the seller.</P>
<P>&nbsp;</P>
<P>&#9;<U>Restraint</P>
</U><P>&#9;The seller acknowledges that:</P>
<P>15.1.1&#9;with effect from the effective date, the purchaser will carry on the business;</P><DIR>
<DIR>

<P>15.1.2&#9;it has acquired knowledge of and have been privy to the confidential</P></DIR>
</DIR>

<P>information (as defined in 15.3.2 below), trade secrets and know-how relating to the business;</P><DIR>
<DIR>

<P>15.1.3&#9;the use or disclosure of the trade secrets, know-how and confidential</P></DIR>
</DIR>

<P>information referred to in this clause 15.1 would be of significant benefit to any competitor of the purchaser and the business and the purchaser will suffer prejudice if they or any third party makes the trade secrets, know-how or confidential
information available to competitors of the purchaser or the business or if they carry on business in competition with the business.</P><DIR>
<DIR>

<P>&#9;In the circumstances, the seller acknowledges that the confidentiality and restraint</P></DIR>
</DIR>

<P>undertakings referred to in this clause 15 are necessary to protect the proprietary and legitimate interests of the purchaser in the business.</P>
<P>&#9;For the purposes of this clause 15 the following words and phrases shall bear the</P>
<P>meanings assigned to them in this sub-clause: </P>
<P>15.3.1&#9;"<U>competitive activity</U>" means any activity which is the same as the business;</P><DIR>
<DIR>

<P>15.3.2&#9;"<U>confidential information</U>" means:</P><DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>

<P>15.3.2.1&#9;any information in respect of know-how, processes, systems, business methods, marketing methods, promotional plans, financial models, inventions, long term plans and any other information of the business, in whatever form it may be;</P></DIR>

</DIR>
</DIR>
</DIR>
</DIR>
</DIR>

<P>15.3.2.2&#9;all internal control systems of the business;</P><DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>

<P>15.3.2.3&#9;details of the business' financial structure and operating results;</P></DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>

<P>15.3.2.4&#9;customer and supplier lists of the business;</P><DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>

<P>15.3.2.5&#9;the contractual and financial arrangements between the business and others with whom it has business arrangements of whatsoever nature.</P></DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>

<P>15.3.3&#9;"<U>entity</U>" includes any association, business, close corporation, company,</P><DIR>
<DIR>
<DIR>
<DIR>

<P>concern, enterprise, firm, partnership, person, sole proprietorship, trust, undertaking, voluntary association or similar entity;</P></DIR>
</DIR>
</DIR>
</DIR>

<P>15.3.4&#9;"<U>the restraint period</U>" means a period of 5 (five) years calculated from the</P></DIR>
</DIR>

<P>effective date;</P><DIR>
<DIR>

<P>15.3.5&#9;"<U>the territory</U>" means any territory in the world.</P></DIR>
</DIR>

<P>&#9;To protect the purchaser's interests in the business, the seller agrees that it shall</P>
<P>not, subject to 15.7 below:</P>
<P>15.4.1&#9;during the restraint period be interested or engaged, directly or indirectly, in any capacity (including but not limited to advisor, agent, consultant, director, employee, financier, manager, member of a close corporation, member of a
voluntary association, partner, proprietor, shareholder, trustee) in any entity directly or indirectly engaged or interested in any competitive activity in the territory;</P><DIR>
<DIR>

<P>15.4.2&#9;at any time disclose any confidential information other than to entities</P></DIR>
</DIR>

<P>connected with the business or the purchaser who are entitled to know such confidential information or as may be required in this agreement or by law. </P>
<P>&nbsp;</P><DIR>
<DIR>

<P>&#9;The seller acknowledges and agrees that:</P></DIR>
</DIR>

<P>15.5.1&#9;the restraints imposed upon it in terms of this clause (interpreted in their widest sense as contemplated in 15.6 below) are reasonable as to subject matter, period and territory;</P><DIR>
<DIR>

<P>15.5.2&#9;the provisions of 15.4 above shall be construed as imposing separate,</P></DIR>
</DIR>

<P>severable and independent restraints in respect of:</P><DIR>
<DIR>
<DIR>
<DIR>

<P>15.5.2.1&#9;each of the years falling within the restraint period; </P><DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>

<P>15.5.2.2&#9;each state, province, division or council area, municipal area, magisterial district, town and locality falling within the territory;</P>
<P>15.5.2.3&#9;each activity falling within the ambit of a competitive activity; </P>
<P>15.5.2.4&#9;each capacity in relation to the competitive activity which they are prohibited from undertaking in terms of this clause.</P></DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>

<P>&#9;The restraints set out in 15.4 shall be given the widest possible interpretation and</P></DIR>
</DIR>

<P>invalidity or unenforceability of any one or combination of restraints referred to above (including the restraints interpreted in their widest cumulative senses aforesaid) shall not affect the validity and enforceability of the other restraints
referred to in 15.4 or any combination of such restraints.</P>
<P>&#9;The purchaser acknowledges that BLZ carries on the same or a similar business as</P>
<P>the business, under a separate division known as the "Samuel Osborn" division ("the Samuel Osborn business"). Notwithstanding anything to the contrary contained in this agreement, the purchaser hereby agrees that the restraint undertakings in this
clause 15 will not apply to BLZ or the Samuel Osborn business provided it limits its activities to the territory where it conducts its business pursuant to the sublicence agreement (as amended) referred to in clause 2.1.5 above.</P>
<P>&#9;<U>Boart Longyear Zimbabwe</P>
</U><P>&#9;It is recorded that:</P><DIR>
<DIR>

<P>16.1.1&#9;BLZ carries on the Samuel Osborn business;</P></DIR>
</DIR>

<P>16.1.2&#9;the purchaser wishes to consider acquiring the Samuel Osborn business from BLZ.</P>
<P>&#9;If at any time during the period from the closing date to 28 September 2002, BLZ</P>
<P>wishes to dispose of the Samuel Osborn business, the seller agrees to notify the purchaser thereof. Subject to the prior consent of all of the shareholders of BLZ, the seller will endeavour to procure that BLZ offers to sell the Samuel Osborn business
to the purchaser on and subject to terms and conditions and at a purchase price agreed between the purchaser and BLZ.</P>
<P>&#9;<U>Name</P>
</U><P>Save as provided in 15.7, the seller shall cease using the trading name "Osborn" after the closing date.</P>
<P>&#9;<U>Suretyship</P>
</U><P>&#9;Astec hereby binds itself to the seller as surety for and co-principal debtor in solidurn with the purchaser, for the due and proper performance by the purchaser of all of the obligations of the purchaser in terms of this agreement.</P>
<P>&#9;<U>Costs</P>
</U><P>&#9;Each of the parties shall be responsible for the payment of their own legal and other costs incurred in connection with this agreement. The seller and the purchaser shall pay any fees or costs incurred in obtaining any approvals pursuant to
2.1.3 and/or 2.4 above in equal shares.</P>
<P>&#9;Any costs, including attorney and own client costs, incurred by either party arising out of the breach by the other party of any of the provisions of this agreement shall</P>
<P>be borne by the party in breach.</P>
<P>&#9;<U>Co-operation and Confidentiality</P>
</U><P>The parties undertake:</P>
<P>&#9;to co-operate and ensure that the sale and take over of the business, the assets and the ceded contracts in terms of this agreement will be effected with as little disruption as possible;</P>
<P>&#9;to do all such things and sign all such documents as may be necessary to give effect to the intent of this agreement;</P>
<P>&#9;to use their best endeavours to ensure that the good relationship which has existed between the seller and its clients and the purchaser and its clients will not be adversely affected by the implementation of this agreement;</P>
<P>&#9;to treat the negotiations, the content and substance of this agreement, and all other matters relating to this agreement in the strictest of confidence and not to make disclosure thereof to any party, except insofar as may be necessary to give
effect to the intent of this agreement or as mutually agreed in writing.</P>
<P>&#9;<U>Disputes</P>
</U><P>&#9;Any difference or dispute arising out of this agreement including (but without limiting the generality of the aforegoing):</P><DIR>
<DIR>

<P>21.1.1&#9;the interpretation thereof;</P>
<P>21.1.2&#9;the rectification thereof;</P>
<P>21.1.3&#9;the effect thereof;</P>
<P>21.1.4&#9;the parties' respective rights or obligations thereunder;</P>
<P>21.1.5&#9;a breach thereof;</P>
<P>&#9;</P>
<P>21.1.6&#9;the termination thereof;</P>
<P>21.1.7&#9;any matter arising out of the termination thereof;</P></DIR>
</DIR>

<P>shall be submitted to and decided by arbitration in the manner set out in this paragraph 21.</P>
<P>&#9;The arbitration referred to in 21.1 shall be held in Johannesburg in a summary</P>
<P>manner, namely, on the basis that it shall not be necessary to observe or carry out either the strict rules of evidence or the usual formalities or procedure, that is to say, in the absence of agreement between the parties, the procedure to be
followed shall be laid down by the arbitrator.</P>
<P>&#9;The parties shall use their best endeavours to procure that the arbitration shall be</P>
<P>held and concluded within 15 days after it is demanded.</P>
<P>&#9;The arbitrator shall be, if the question in issue is:</P>
<P>21.4.1 primarily an accounting matter, an independent accountant associated with an internationally recognized accounting firm of not less than 5 years' standing; or</P>
<P>21.4.2&#9;primarily a legal matter or any other matter, a practicing attorney of not less than 5 years' standing;</P><DIR>
<DIR>

<P>agreed upon between the parties and, failing agreement, appointed on the application of either party, in the case of 21.4.1 being applicable, by the President for the time being of the South African Institute of Chartered Accountants, or in the case
of 21.4.2 being applicable, by the President for the time being of the Transvaal Law Society.</P></DIR>
</DIR>

<P>&#9;If agreement cannot be reached within 3 days after the arbitration has been</P>
<P>demanded as to whether the question in issue falls under 21.4.1 or 21.4.2, then the matter shall be deemed to fall under 21.4.2.</P><DIR>
<DIR>

<P>&#9;The arbitrator shall be entitled to consult such persons as he may deem necessary</P></DIR>
</DIR>

<P>to reach a just and equitable conclusion and the parties to the dispute shall have no right to be present during such consultation or to be made aware thereof. The arbitrator shall be entitled to investigate or cause to be investigated any matter,
fact or things which he considers necessary or desirable in connection with any matter referred to him for decision, and for that purpose shall have the widest possible powers of investigating all the books and records of the parties affected by the
dispute, including the right to the fullest inspection of the same by him or by his duly authorized representative(s) and the right to take copies or make extracts therefrom and to have the same produced and/or delivered to any reasonable place required
by him for the aforesaid purpose and shall have the right to interview and question under oath any affected party or their directors or officers or employees or agents and/or to call for written submissions by any affected party and/or their directors or
officers or employees or agents.</P>
<P>&#9;The arbitrator shall not be bound to follow strict principles of law, but may decide the matters submitted to him according to what he considers just and equitable in the circumstances, and, therefore, the strict rules of law need not be observed
or be taken into account by him in arriving at his decision.</P>
<P>&#9;The arbitrator shall be entitled to make such award, including an award for specific damages and the costs of the arbitration or to grant such interdict, damages or penalty or penalties or otherwise as he in his discretion may deem fit and
appropriate.</P>
<P>&#9;&#9;The arbitrator's decision shall be final and binding on all parties affected thereby,</P>
<P>shall be carried into effect and may be made an order of any competent court to whose jurisdiction any of the parties to the dispute is subject.</P>
<P>&#9;Notwithstanding the reference in this paragraph 21 to an "arbitrator," any such</P>
<P>arbitrator shall act as an expert and not as an arbitrator and shall not, therefore, be bound by the provisions of any arbitration laws for the time being in force.</P>
<P>&#9;This paragraph 21 shall constitute the irrevocable consent of the parties hereto to</P>
<P>the arbitration proceedings in terms hereof, and neither party shall be entitled to withdraw therefrom or to claim any such arbitration proceedings that it is not bound by this paragraph.</P>
<P>&#9;This paragraph 21 is severable from the rest of this agreement and shall therefore</P>
<P>remain in effect even if this agreement is terminated.</P>
<P>&#9;Notwithstanding the aforegoing provisions of this 21, if any dispute may arise</P>
<P>between D&amp;T and E&amp;Y (or the purchaser and the seller) in respect of the matters contemplated in clause 6: </P><DIR>
<DIR>

<P>21.13.1 the parties shall procure that D&amp;T and E&amp;Y shall refer such dispute to an</P></DIR>
</DIR>

<P>independent chartered accountant agreed to by the seller and the purchaser (or if the seller and the purchaser fail to agree, by an independent chartered accountant appointed by the President for the time being of the South African Institute of
Chartered Accountants), within 7 days after the dispute arises on the basis that such independent chartered accountant, in consultation with</P>
<P>D&amp;T and E&amp;Y, shall endeavour to resolve the dispute within a reasonable time;</P>
<P>21.13.2 any decision reached by the independent chartered accountant (who shall act as an expert and not as an arbitrator) shall be final and binding on the parties and shall be carried into effect forthwith.</P>
<P>&#9;Nothing contained in this paragraph 21 shall preclude either party from obtaining</P>
<P>urgent relief in a court of competent jurisdiction where urgent relief is applicable.</P>
<P>&#9;<U>Breach</P>
</U><P>Either party shall be entitled, without prejudice to its rights to claim specific performance or to claim damages, to cancel this agreement as a consequence of any material breach by the other party of any of the material provisions of this
agreement and provided that such breach is incapable of being remedied by the payment of compensation or, if it is capable of being remedied by compensation, the defaulting party fails to pay the same after the amount of such payment has been finally
determined, and 30 days written notice demanding such payment shall have been delivered to the defaulting party.</P>
<P>&nbsp;</P>
<P>&#9;<U>Miscellaneous matters</P><DIR>
<DIR>

</U><P>&#9;Addresses and Notices</P></DIR>
</DIR>

<P>23.1.1&#9;For the purposes of this agreement, including the giving of notices and the serving of legal process, the parties choose domicilium citandi et executandi ("domicilium") as follows:</P>
<P>&nbsp;</P><DIR>
<DIR>

<U><P>the seller</U>:</P>
<U><P>physical address</U>:&#9;Boart Longyear Corporate &#9;</P><DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>

<P>4th Floor, Boart Longyear Place </P><DIR>
<DIR>

<P>20 Fredman Drive </P>
<P>Sandton, 2196 </P>
<P>South Africa </P>
<P>Attention: Mr. Norman Gibson</P></DIR>
</DIR>

<P>telefax no: 783-2411</P></DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>

<U><P>the purchaser</U>:</P>
<U><P>physical address</U>: &#9;57 Jansen Road </P><DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>

<P>Elandsfontein, 1406 </P>
<P>South Africa</P>
<P>telefax no: 388-1136</P></DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>

<U><P>Astec</U>:</P>
<U><P>physical address</U>:&#9;4101 Jerome Avenue </P><DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>

<P>Chattanooga, Tennessee 37407 </P>
<P>USA </P>
<P>Attention:_______________________</P>
<P>telefax no: 423 827 1818</P></DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>

<P>23.1.2&#9;A party may at any time change that party's domicilium by notice in writing to each of the other parties, provided that the new domicilium is in the Republic</P>
<P>of South Africa and consists of, or includes, a physical address at which process can be serviced, such new address being effective on receipt by the addressee of such written notice.</P><DIR>
<DIR>

<P>23.1.3&#9;Any notice given in connection with this agreement shall:</P><DIR>
<DIR>

<P>23.1.3.1 be delivered by hand; or</P><DIR>
<DIR>

<P>23.1.3.2 be sent by overnight courier; or</P></DIR>
</DIR>

<P>23.1.3.3 be sent by telefax (if the domicilium includes a telefax number),</P></DIR>
</DIR>
</DIR>
</DIR>

<P>to the domicilium chosen by the party concerned.</P>
<P>23.1.4 A notice given as set out above shall be deemed to have been duly given:</P><DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>

<P>23.1.4.1 if delivered, on the date of delivery;</P>
<P>23.1.4.2 if sent by telefax, on the day that the telefax is transmitted.</P></DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>

<P>&#9;Entire Contract</P>
<P>This agreement constitutes the entire contract between the parties with regard to the matters dealt with in this agreement and no representations, terms, conditions or warranties not contained in this agreement shall be binding on the parties.</P>
<P>&#9;Variation and Cancellation</P>
<P>No agreement varying, adding to, deleting from or canceling this agreement, shall be effective unless reduced to writing and signed by or on behalf of the parties.</P>
<P>&#9;Indulgences</P>
<P>No indulgence granted by a party shall constitute a waiver of any of that party's rights under this agreement; accordingly, that party shall not be precluded, as a consequence of having granted such indulgence, from exercising any rights against the
other which may have arisen in the past or which may arise in the future.</P>
<P>&#9;Governing Law</P>
<P>&#9;This agreement shall be governed by and construed and interpreted in accordance with the laws of the Republic of South Africa and the parties irrevocably consent to a non-exclusive jurisdiction of the Witwatersrand Local Division of the High Court
of South Africa. In the event of any conflict or inconsistency between the laws applicable in the various Provinces of the Republic of South Africa, the law as applied in the Province of Gauteng will prevail.</P>
<P>&#9;Assignment</P>
<P>Neither party shall be entitled to cede or assign its rights or obligations under this agreement without the prior written consent of the other party.</P>
<P>&#9;Terms Excluded</P>
<P>To the extent permissible by law, no party shall be bound by any express or implied term, representation, warranty, promise or the like not recorded herein, whether it induced the contract and/or whether it was negligent or not.</P>
<P>&#9;Interpretation</P>
<P>In this agreement, unless inconsistent with the context:</P>
<P>23.8.1 words referring to one gender shall include a reference to the other genders;</P><DIR>
<DIR>

<P>23.8.2 words importing the singular shall include the plural and vice versa;</P>
<P>23.8.3 words referring to natural persons shall include companies and vice versa.</P></DIR>
</DIR>

<P>Signed at __________________________ on _________________ ______, 2000.</P>
<P>&nbsp;</P>
<P>As witness:&#9;&#9;&#9;&#9;&#9;</P>
<P>___________________________&#9;&#9;______________________________________</P>
<P>&#9;&#9;&#9;&#9;&#9;&#9;for and on behalf of ANGLO OPERATIONS</P>
<P>&#9;&#9;&#9;&#9;&#9;&#9;LIMITED (Osborn MMD division), duly </P>
<P>&#9;&#9;&#9;&#9;&#9;&#9;authorized</P>
<P>Signed at __________________________ on _________________ ______, 2000.</P>
<P>&nbsp;</P>
<P>As witness:&#9;&#9;&#9;&#9;&#9;</P>
<P>___________________________&#9;&#9;______________________________________</P>
<P>&#9;&#9;&#9;&#9;&#9;&#9;for and on behalf of HIGH MAST </P>
<P>&#9;&#9;&#9;&#9;&#9;&#9;PROPERTIES 18 (PROPRIETARY)</P>
<P>&#9;&#9;&#9;&#9;&#9;&#9;LIMITED, duly authorized </P>
<P>&#9;&#9;&#9;&#9;&#9;&#9;</P>
<P>&nbsp;</P>
<P>Signed at __________________________ on _________________ ______, 2000.</P>
<P>&nbsp;</P>
<P>As witness:&#9;&#9;&#9;&#9;&#9;</P>
<P>___________________________&#9;&#9;______________________________________</P>
<P>&#9;&#9;&#9;&#9;&#9;&#9;for and on behalf of ASTEC INDUSTRIES,&#9;&#9;&#9;&#9;&#9;&#9;&#9;&#9;INC., duly authorized</P>
<P>&nbsp;</P>
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<B><FONT SIZE=5><P ALIGN="CENTER">EXHIBIT 10.34<BR>
</P></B></FONT>
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<FONT FACE="Arial" SIZE=2><P>Acquisition Agreement, dated October 2, 2000, by and among Larry Raymond, Carlson Paving Products, Inc. and Astec Industries, Inc. </FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER"><BR>
<BR>
ACQUISITION OF<BR>
<BR>
<BR>
CARLSON PAVING PRODUCTS, INC.<BR>
<BR>
<BR>
BY<BR>
<BR>
<BR>
ASTEC INDUSTRIES, INC.<BR>
<BR>
OCTOBER 2, 2000</P>
<P><BR>
<BR>
<B>TABLE OF CONTENTS<BR>
<BR>
<U>Headings</U>&#9;&#9;&#9;&#9;&#9;&#9;&#9;&#9;&#9;&#9; <U>Page No.<BR>
</B></U><BR>
ARTICLE 1:&#9;DEFINITIONS&#9;<A HREF="#_Toc492201344">*</A><BR>
Section 1.1&#9;<U>Specific Definitions.</U>&#9;<A HREF="#_Toc492201345">*</A><BR>
Section 1.2&#9;<U>Other Terms.</U>&#9;<A HREF="#_Toc492201346">*</A><BR>
Section 1.3&#9;<U>Other Definitional Provisions</U>.&#9;<A HREF="#_Toc492201347">*</A><BR>
<BR>
ARTICLE 2:&#9;PURCHASE AND SALE OF SHARES AND THE PREMISES&#9;<A HREF="#_Toc492201348">*</A><BR>
Section 2.1&#9;<U>Purchase and Sale of Shares and the Premises.</U>&#9;<A HREF="#_Toc492201349">*</A><BR>
Section 2.2&#9;<U>Purchase Price and Payment Terms.</U>&#9;<A HREF="#_Toc492201350">*</A><BR>
Section 2.3&#9;<U>Purchase Price Adjustment</U>.&#9;<A HREF="#_Toc492201351">*</A><BR>
Section 2.4&#9;<U>Closing; Delivery and Payment.</U>&#9;<A HREF="#_Toc492201352">*</A><BR>
<BR>
ARTICLE 3:&#9;REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SHAREHOLDER&#9;<A HREF="#_Toc492201353">*</A><BR>
Section 3.1&#9;<U>Organization and Authority of Company.</U>&#9;<A HREF="#_Toc492201354">*</A><BR>
Section 3.2&#9;<U>Capitalization of Company.</U>&#9;<A HREF="#_Toc492201355">*</A><BR>
Section 3.3&#9;<U>Financial Statements.</U>&#9;<A HREF="#_Toc492201356">*</A><BR>
Section 3.4&#9;<U>Absence of Certain Changes, Events or Liabilities.</U>&#9;<A HREF="#_Toc492201357">*</A><BR>
Section 3.5&#9;<U>Litigation.</U>&#9;<A HREF="#_Toc492201358">*</A><BR>
Section 3.6&#9;<U>Compliance with Law; Permits.</U>&#9;<A HREF="#_Toc492201359">*</A><BR>
Section 3.7&#9;<U>Consents and Approvals.</U>&#9;<A HREF="#_Toc492201360">*</A><BR>
Section 3.8&#9;<U>Tax Matters.</U>&#9;<A HREF="#_Toc492201361">*</A><BR>
Section 3.9&#9;<U>Material Contracts.</U>&#9;<A HREF="#_Toc492201362">*</A><BR>
Section 3.10&#9;<U>Labor Matters.</U>&#9;<A HREF="#_Toc492201363">*</A><BR>
Section 3.11&#9;<U>Benefit Plans.</U>&#9;<A HREF="#_Toc492201364">*</A><BR>
Section 3.12&#9;<U>Environmental Matters.</U>&#9;<A HREF="#_Toc492201365">*</A><BR>
Section 3.13&#9;<U>Brokers and Finders.</U>&#9;<A HREF="#_Toc492201366">*</A><BR>
Section 3.14&#9;<U>Tangible Assets.</U>&#9;<A HREF="#_Toc492201367">*</A><BR>
Section 3.15&#9;<U>Intangible Assets.</U>&#9;<A HREF="#_Toc492201368">*</A><BR>
Section 3.16&#9;<U>Employees.</U>&#9;<A HREF="#_Toc492201369">*</A><BR>
Section 3.17&#9;<U>Insurance.</U>&#9;<A HREF="#_Toc492201370">*</A><BR>
Section 3.18&#9;<U>Inventory.</U>&#9;<A HREF="#_Toc492201371">*</A><BR>
Section 3.19&#9;<U>Completeness of Statements; Effect of Representations and Warranties.</U>&#9;<A HREF="#_Toc492201372">*</A><BR>
<BR>
ARTICLE 4:&#9;REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER&#9;<A HREF="#_Toc492201373">*</A><BR>
Section 4.1&#9;<U>Brokers and Finders.</U>&#9;<A HREF="#_Toc492201374">*</A><BR>
Section 4.2&#9;<U>Real Property.</U>&#9;<A HREF="#_Toc492201375">*</A><BR>
Section 4.3&#9;<U>Environmental Matters.</U>&#9;<A HREF="#_Toc492201376">*</A><BR>
Section 4.4&#9;<U>Legal Proceedings.</U>&#9;<A HREF="#_Toc492201377">*</A><BR>
Section 4.5&#9;<U>Consents and Approvals.</U>&#9;<A HREF="#_Toc492201378">*</A><BR>
Section 4.6&#9;<U>Completeness of Statements; Effect of Representations and Warranties.</U>&#9;<A HREF="#_Toc492201379">*</A><BR>
<BR>
ARTICLE 5:&#9;REPRESENTATIONS AND WARRANTIES OF BUYER&#9;<A HREF="#_Toc492201380">*</A><BR>
Section 5.1&#9;<U>Organization and Authority of Buyer.</U>&#9;<A HREF="#_Toc492201381">*</A><BR>
Section 5.2&#9;<U>Legal Proceedings.</U>&#9;<A HREF="#_Toc492201382">*</A><BR>
Section 5.3&#9;<U>SEC Documents; Absence of Changes</U>.&#9;<A HREF="#_Toc492201383">*</A><BR>
Section 5.4&#9;<U>Consents and Approvals.</U>&#9;<A HREF="#_Toc492201384">*</A><BR>
<BR>
ARTICLE 6: ASTEC STOCK AND LOCK-UP AGREEMENT&#9;<A HREF="#_Toc492201385">*</A><BR>
Section 6.1&#9;<U>Astec Stock Not Registered</U>.&#9;<A HREF="#_Toc492201386">*</A><BR>
Section 6.2&#9;<U>Legend</U>.&#9;<A HREF="#_Toc492201387">*</A><BR>
Section 6.3&#9;<U>Removal of Legend</U>.&#9;<A HREF="#_Toc492201388">*</A><BR>
Section 6.4&#9;Examination and Investment Representation.&#9;<A HREF="#_Toc492201389">*</A><BR>
Section 6.5&#9;<U>Lock-Up</U>.&#9;<A HREF="#_Toc492201390">*</A><BR>
<BR>
ARTICLE 7:&#9;TAX MATTERS&#9;<A HREF="#_Toc492201391">*</A><BR>
Section 7.1&#9;<U>Tax Indemnification.</U>&#9;<A HREF="#_Toc492201392">*</A><BR>
Section 7.2&#9;<U>Tax Returns.</U>&#9;<A HREF="#_Toc492201393">*</A><BR>
Section 7.3&#9;<U>Contest Provisions.</U>&#9;<A HREF="#_Toc492201394">*</A><BR>
Section 7.4&#9;<U>Assistance and Cooperation.</U>&#9;<A HREF="#_Toc492201395">*</A><BR>
Section 7.5&#9;<U>Transfer Taxes.</U>&#9;<A HREF="#_Toc492201396">*</A><BR>
Section 7.6&#9;<U>Survival of Obligations.</U>&#9;<A HREF="#_Toc492201397">*</A><BR>
<BR>
ARTICLE 8:&#9;CERTAIN COVENANTS AND AGREEMENTS OF SELLERS&#9;<A HREF="#_Toc492201398">*</A><BR>
Section 8.1&#9;<U>Access and Information.</U>&#9;<A HREF="#_Toc492201399">*</A><BR>
Section 8.2&#9;<U>Registrations, Filings and Consents.</U>&#9;<A HREF="#_Toc492201400">*</A><BR>
Section 8.3&#9;<U>Conduct of Business.</U>&#9;<A HREF="#_Toc492201401">*</A><BR>
Section 8.4&#9;<U>Best Efforts.</U>&#9;<A HREF="#_Toc492201402">*</A><BR>
Section 8.5&#9;<U>Retention of Books and Records.</U>&#9;<A HREF="#_Toc492201403">*</A><BR>
Section 8.6&#9;<U>Further Assurances.</U>&#9;<A HREF="#_Toc492201404">*</A><BR>
<BR>
ARTICLE 9:&#9;CONDITIONS TO THE PURCHASE AND SALE&#9;<A HREF="#_Toc492201405">*</A><BR>
Section 9.1&#9;<U>General Conditions to the Purchase and Sale Relating to Parties.</U>&#9;<A HREF="#_Toc492201406">*</A><BR>
Section 9.2&#9;<U>Conditions to Purchase by Buyer.</U>&#9;<A HREF="#_Toc492201407">*</A><BR>
Section 9.3&#9;<U>Conditions to Sale by the Shareholder</U>.&#9;<A HREF="#_Toc492201408">*</A><BR>
<BR>
ARTICLE 10: INDEMNIFICATION&#9;<A HREF="#_Toc492201409">*</A><BR>
Section 10.1&#9;<U>Survival; Rights and Remedies Not Affected by Knowledge.</U>&#9;<A HREF="#_Toc492201410">*</A><BR>
Section 10.2&#9;<U>Indemnification and Payment of Damages By The Shareholder.</U>&#9;<A HREF="#_Toc492201411">*</A><BR>
Section 10.3&#9;<U>Indemnification By Buyer.</U>&#9;<A HREF="#_Toc492201412">*</A><BR>
Section 10.4&#9;<U>Indemnity Claims.</U>&#9;<A HREF="#_Toc492201413">*</A><BR>
Section 10.5&#9;<U>No Liability of Company.</U>&#9;<A HREF="#_Toc492201414">*</A><BR>
<BR>
ARTICLE 11: TERMINATION&#9;<A HREF="#_Toc492201415">*</A><BR>
Section 11.1&#9;<U>Termination.</U>&#9;<A HREF="#_Toc492201416">*</A></P>
<P>ARTICLE 12: MISCELLANEOUS&#9;<A HREF="#_Toc492201417">*</A><BR>
Section 12.1&#9;<U>Expenses.</U>&#9;<A HREF="#_Toc492201418">*</A><BR>
Section 12.2&#9;<U>Best Efforts; Further Assurances.</U>&#9;<A HREF="#_Toc492201419">*</A><BR>
Section 12.3&#9;<U>Public Disclosure.</U>&#9;<A HREF="#_Toc492201420">*</A><BR>
Section 12.4&#9;<U>Assignment.</U>&#9;<A HREF="#_Toc492201421">*</A><BR>
Section 12.5&#9;<U>Amendments and Waivers.</U>&#9;<A HREF="#_Toc492201422">*</A><BR>
Section 12.6&#9;<U>Entire Agreement.</U>&#9;<A HREF="#_Toc492201423">*</A><BR>
Section 12.7&#9;<U>Schedules.</U>&#9;<A HREF="#_Toc492201424">*</A><BR>
Section 12.8&#9;<U>Notices.</U>&#9;<A HREF="#_Toc492201425">*</A><BR>
Section 12.9&#9;<U>Governing Law.</U>&#9;<A HREF="#_Toc492201426">*</A><BR>
Section 12.10&#9;<U>Severability.</U>&#9;<A HREF="#_Toc492201427">*</A><BR>
Section 12.11&#9;<U>Section Headings.</U>&#9;<A HREF="#_Toc492201428">*</A><BR>
Section 12.12&#9;<U>Counterparts.</U>&#9;<A HREF="#_Toc492201429">*</A><BR>
Section 12.13&#9;<U>Representation By Counsel; Interpretation.</U>&#9;<A HREF="#_Toc492201430">*</A><BR>
Section 12.14&#9;<U>Arbitration Clause.</U>&#9;<A HREF="#_Toc492201431">*</A></P>
<B><U><P>ACQUISITION AGREEMENT<BR>
<BR>
</B></U><BR>
<BR>
THIS ACQUISITION AGREEMENT (this "Agreement") is made and entered into by and among Lawrence Raymond (the "Shareholder"), Carlson Paving Products, Inc., a Washington corporation (the "Company"), and Astec Industries, Inc., a Tennessee corporation (the
"Buyer").<BR>
<BR>
<BR>
<B><U>R E C I T A L S:<BR>
</B></U><BR>
<BR>
<B>WHEREAS</B>, the Shareholder owns all of the issued and outstanding shares of capital stock of the Company (the "Shares"); and <BR>
<BR>
<B>WHEREAS, </B>the Shareholder desires to sell and transfer to Buyer, and Buyer desires to purchase from the Shareholder, the Shares, as more specifically provided herein; and<BR>
<BR>
<B>&#9;WHEREAS</B>, the Shareholder owns real property and improvements located in Tacoma, Washington, which constitutes all the real property and improvements used in connection with the business operations of the Company (the "Premises"); and<BR>
<BR>
<B>WHEREAS</B>, the Shareholder desires to sell and transfer the Premises to the Company, as more specifically provided herein.<BR>
<BR>
<B>NOW, THEREFORE, </B>in consideration of the mutual covenants and undertakings contained herein, and subject to and on the terms and conditions herein set forth, the parties intending to be legally bound hereby agree as follows:<BR>
<BR>
<BR>
<A NAME="_Toc492201344"><B>ARTICLE :&#9;DEFINITIONS</A><BR>
</B><BR>
<A NAME="_Toc492201345"><B>Section &#9;<U>Specific Definitions.</A><BR>
</B></U><BR>
As used in this Agreement and any Exhibits, Schedules, or certificates delivered pursuant hereto, the following terms shall have the following meanings:<BR>
<BR>
<B>"Agreement" </B>means this Agreement and all Exhibits and Schedules.<BR>
<BR>
<B>"Affiliate" </B>means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with, such other Person. For the purposes of this definition, "control" of a Person means the power, direct
or indirect, to direct or cause the direction of the management and policies of such Person, whether by ownership of securities, contract, law or otherwise and the terms "controlling" and "controlled" shall have meanings correlative to the foregoing.<BR>
<BR>
<B>"Astec SEC Documents"</B> has the meaning set forth in Section 5.3.</P>
<B><P>"Astec Stock" </B>means the shares of Buyer's common stock, par value $.20 per share, that are to be received by the Shareholder as part of the Purchase Price.<BR>
<BR>
<B>"Baseline Net Worth"</B> has the meaning set forth in Section 2.3.<BR>
<BR>
<B>"Benefit Plans" </B>has the meaning set forth in Section 3.11.<BR>
<BR>
<B>"Breach"</B> has the meaning set forth in Section 10.2.<BR>
<BR>
<B>"Buyer"</B> means Astec Industries, Inc., a Tennessee corporation. <BR>
<BR>
<B>"Buyer's Indemnitees"</B> has the meaning set forth in Section 10.2.<BR>
<BR>
<B>"Claim"</B> has the meaning set forth in Section 10.4.<BR>
<BR>
<B>"Claim Notice" </B>has the meaning set forth in Section 10.4.<BR>
<BR>
<B>"Closing" </B>has the meaning set forth in Section 2.4.<BR>
<BR>
<B>"Closing Date" </B>means the date of the Closing.<BR>
<BR>
<B>"Code"</B> means the Internal Revenue Code of 1986, as amended to the date hereof.<BR>
<BR>
<B>"Company"</B> means Carlson Paving Products, Inc., a Washington corporation.<BR>
<BR>
<B>"Damages"</B> means debts, obligations, losses, claims, damages (including incidental and consequential damages), liabilities, deficiencies, proceedings, demands, assessments, orders, judgments, writs, decrees, costs and other expenses (including
costs of investigation and defense and reasonable attorneys' fees) or diminution of value, whether or not involving a third-party claim, of any nature and of any kind whatsoever that exceed or could reasonably be expected to exceed One Thousand Dollars
($1,000) in value. Provided, however, that Damages shall not be recoverable by an Indemnitee under this Agreement unless, and then only to the extent that, the aggregate Damages recoverable by the respective Indemnitee exceed Ten Thousand Dollars ($10,000).<BR>
<BR>
<B>"EEOC"</B> has the meaning set forth in Section 3.10.<BR>
<BR>
<B>"Encumbrances"</B> means any charges, claims, community property interests, conditions, equitable interests, liens, mortgages, easements, rights-of way, options, pledges, security interests, rights of first refusal or restrictions of any kind,
including any restrictions on use, voting, transfer, receipt of income or exercise of any other attribute of ownership.<BR>
<BR>
<B>"Environmental Laws" </B>has the meaning set forth in Section 3.12.&#9;<FONT FACE="Arial"><BR>
</FONT><B><BR>
"ERISA" </B>means the Employee Retirement Income Security Act of 1974, as amended.<BR>
<B><BR>
"Financial Statements" </B>has the meaning set forth in Section 3.3.<BR>
<BR>
<B>"GAAP"</B> means generally accepted accounting principles in the United States of America, as in effect from time to time.<BR>
<BR>
<B>"Hazardous Activity"</B> means the distribution, generation, handling, importing, management, manufacturing, processing, production, refinement, release, storage, transfer, transportation, treatment, or use (including any withdrawal or other use of
groundwater) of Hazardous Materials in, on, under, about, or from the Premises or any part thereof into the environment, and any other act, business, operation, or a thing that increases the danger, or a risk of danger, or poses an unreasonable risk of
harm to persons or property on or off the Premises, or that may affect the value of the Premises or the Company.<BR>
<BR>
<B>"Hazardous Materials"</B> means any waste or other substance that is listed, defined, designated, or classified as, or otherwise determined to be, hazardous, radioactive, or toxic or a pollutant or a contaminate under or pursuant to any Environmental
Law, including any mixture or solution thereof, and specifically including petroleum and all derivatives thereof or synthetic substance therefor and asbestos or asbestos-containing materials.<BR>
<BR>
<B>"Indemnitee"</B> has the meaning set forth in Section 10.4.<BR>
<BR>
<B>"Indemnifying Party" </B>has the meaning set forth in Section 10.4.<BR>
<BR>
<B>"Interim Financial Statements"</B> has the meaning set forth in Section 3.3. <BR>
<BR>
<B>"IRS"</B> means the Internal Revenue Service.<BR>
<BR>
<B>"Material Adverse Effect" </B>means an adverse effect on the business, operations, properties, assets, prospects or condition (financial or otherwise) of Company, taken as a whole, the Premises, or on any Seller's ability to perform any of their
obligations under this Agreement and consummate the transactions contemplated hereby, the subject matter of which exceeds (or could be reasonably expected to exceed) Ten Thousand Dollars ($10,000) in value on an individual basis or Fifty Thousand Dollars
($50,000) in the aggregate.<BR>
<BR>
<B>"Material Contracts" </B>has the meaning set forth in Section 3.9.<BR>
<B><BR>
"NLRB " </B>has the meaning set forth in Section 3.10.<BR>
<BR>
<B>"Pension Plan" </B>has the meaning set forth in Section 3.11.<BR>
<BR>
<B>"Person"</B> means an individual, corporation, partnership, trust or unincorporated organization or government or any agency or political subdivision thereof.<BR>
<BR>
<B>"Premises"</B> has that meaning set forth in the recitals.<BR>
<BR>
<B>"Premises Consideration"</B> has the meaning set forth in Section 2.2(a).<BR>
<BR>
<B>"Purchase Price"</B> has the meaning set forth in Section 2.2.<BR>
<BR>
<B>"Securities Act" </B>means the Securities Act of 1933, as amended.<BR>
<BR>
<B>"Sellers"</B> has that meaning set forth in Section 8.1.<BR>
<BR>
<B>"Shareholder"</B> has the meaning set forth in the recitals.<BR>
<BR>
<B>"Shareholder Indemnitees"</B> has the meaning set forth in Section 10.4.<BR>
<BR>
<B>"Share Consideration"</B> has the meaning set forth in Section 10.4.<BR>
<BR>
<B>"Shares"</B> has the meaning set forth in the recitals.<BR>
<BR>
<B>"Tax" or "Taxes"</B> means any federal, state, local or foreign income, gross receipts, windfall profits, severance, property, production, sales, use, stock transfer, conveyance, intangible, stamp, duty, transfer, reporting, recording, license,
excise, franchise or similar taxes, together with any interest, additions or penalties with respect thereto and any interest in respect of such additions or penalties.<BR>
<B><BR>
"Tax Returns" </B>means all federal, state, local and foreign Tax returns, Tax reports, and declarations of estimated Tax, including without limitation federal income tax returns that include the Company.<BR>
<BR>
<B>"Third Party Claim"</B> has the meaning set forth in Section 10.4.<BR>
<BR>
<B>"UCC"</B> means the Uniform Commercial Code as in effect on the date hereof in the State of Washington.<BR>
<BR>
<A NAME="_Toc492201346"><B>Section &#9;<U>Other Terms.</A><BR>
</B></U><BR>
Other terms may be defined elsewhere in the text of this Agreement and shall have the meanings indicated throughout this Agreement.<BR>
<BR>
<A NAME="_Toc492201347"><B>Section &#9;<U>Other Definitional Provisions</U>.</A><BR>
</B><BR>
For all purposes of this Agreement, except as otherwise expressly provided:<BR>
<BR>
&#9;All accounting terms not otherwise defined herein having the meanings assigned under GAAP;<BR>
<BR>
&#9;The use herein of the word "include" or "including", when following any general statement, term or matter, shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to
similar items or matters, whether or not nonlimiting language (such as "without limitation" or "but not limited to" or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that fall
within the broadest possible scope of such general statement, term or matter;<BR>
<BR>
&#9;For the purposes of this Agreement, "knowledge" means actual knowledge or knowledge that would exist upon reasonable inquiry. A Person's knowledge shall specifically include the actual knowledge of any officer or trustee thereof, if applicable, or
knowledge that would exist upon reasonable inquiry by any officer or trustee thereof, if applicable. The terms "known" and "knowing" and other words incorporating the concept of "knowledge" shall be construed consistent with this Section.<BR>
<BR>
&#9;For purposes of this Agreement, the term "ordinary course of business" shall mean an action that is consistent with the past practices of the applicable party and is taken in the ordinary course of the normal day-to-day operations of the applicable
party, is not required to be authorized by the board of directors or similar governing body of the applicable party and is similar in nature and magnitude to actions customarily taken without any authorization by the board of directors of a corporation in
the same line of business as the applicable party. <BR>
<B><BR>
<BR>
<A NAME="_Toc492201348">ARTICLE :&#9;PURCHASE AND SALE OF SHARES AND THE PREMISES</A><BR>
</B><BR>
<A NAME="_Toc492201349"><B>Section &#9;<U>Purchase and Sale of Shares and the Premises.</A></U><BR>
<BR>
</B>&#9;Upon the terms and subject to the conditions of this Agreement, Buyer agrees to purchase from the Shareholder, and the Shareholder agrees to sell, transfer and assign to Buyer, the Shares for the Share Consideration determined pursuant to Section
2.2.<BR>
<BR>
&#9;Upon the terms and subject to the conditions of this Agreement, Buyer and Shareholder agree that Shareholder shall transfer, sell and assign the Premises to Company and Buyer shall pay the Premises Consideration determined pursuant to Section 2.2 to
Shareholder for such transfer, sale and assignment.<BR>
<BR>
<A NAME="_Toc492201350"><B>Section &#9;<U>Purchase Price and Payment Terms.</A></U><BR>
</B><BR>
Subject to the adjustment as set forth below, the total purchase price for the Shares and the Premises shall be Nine Million Four Hundred Thousand Dollars ($9,400,000) (the "Purchase Price") payable as follows: <BR>
<BR>
&#9;At Closing Buyer shall pay to Shareholder Two Million Eight Hundred Thirty Thousand Dollars ($2,830,000) (the "Premises Consideration") in immediately available funds pursuant to wire transfer instructions delivered to Buyer prior to Closing.<BR>
<BR>
&#9;At Closing Buyer shall pay to Shareholder Four Million One Hundred Seventy Thousand Dollars ($4,170,000) in immediately available funds pursuant to wire transfer instructions delivered to Buyer prior to Closing. <BR>
<BR>
&#9;As soon as reasonably possible following the completion of the post-closing adjustment set forth in Section 2.3, Buyer shall issue to Shareholder shares of the common stock of Buyer representing the remaining Purchase Price, if any, owed to
Shareholder. Buyer shall retain such shares pursuant to the terms and conditions of the Stock Lock-Up and Pledge Agreement to be executed at Closing and attached in the form of <U>Exhibit A</U> hereto. For the purpose of calculating the appropriate number of shares to be issued to Shareholder, the shares shall be deemed to have a value equal to the market price of Buyer's common stock as of the close of the NASDAQ market on the
trading day prior to Closing. If the post-closing adjustment results in the Purchase Price being adjusted downward by more than Two Million Four Hundred Thousand Dollars ($2,400,000), then the Shareholder shall pay the excess in immediately available
funds to the Buyer within ten (10) days after the final determination of the post-closing adjustment. The aggregate amount paid pursuant to Section 2.2(b) and (c) shall be referred to as the "Share Consideration."<BR>
<BR>
<A NAME="_Toc492201351"><A NAME="_Toc461593342"><A NAME="_Toc461591983"><B>Section &#9;<U>Purchase Price Adjustment</U>.</A></A></A> <BR>
</B><BR>
&#9;The Purchase Price will be adjusted downward if (i) the net worth of the Company determined as of the Closing Date calculated in accordance with GAAP (including, without limitation, GAAP standards for contingent sales) and subject to a confirming
inventory observed by the Buyer and conducted in a manner acceptable to the Buyer (the "Baseline Net Worth") <U>is less than</U> (ii) Two Million Five Hundred Thousand Dollars ($2,500,000). The Purchase Price will be adjusted upward if (i) the Baseline Net Worth <U>is greater than</U> (ii) Two Million Five Hundred Thousand Dollars ($2,500,000). Prior to the time
such inventory is conducted, Shareholder and Company shall have disposed of or moved to a separate area any inventory determined to be valueless or obsolete during the May 31, 2000 inventory conducted by the Company. The Baseline Net Worth shall be
calculated by the Shareholder with the participation of Buyer's representatives and such calculation shall be delivered to Buyer as soon as practicable, but in no event later than forty-five (45) days after the Closing Date. The Buyer shall have thirty
(30) days from receipt of the Shareholder's calculation of the Baseline Net Worth to review, analyze, audit and propose changes to the Baseline Net Worth. If any changes are proposed, Buyer and the Shareholder shall in good faith as soon as reasonably
possible reach agreement on the Baseline Net Worth and determine the adjustment, if any, to the Purchase Price. If they are unable to do so, the specific matters in dispute shall be submitted to Arthur Andersen's Seattle, Washington office or to another
national, independent accounting firm (other than Ernst &amp; Young, L.L.P.) approved by the Shareholder and Buyer. As expeditiously as possible, and in any event within ten (10) days of submission, Arthur Andersen (or such other independent accounting
firm) will deliver to the Shareholder and Buyer its determination of the specified matters in dispute, which determination shall be final and binding on the parties hereto. The fees and expenses of Arthur Andersen (or such other independent accounting
firm) shall be borne one-half by the Shareholder and one-half by Buyer.<BR>
<BR>
<A NAME="_Toc492201352"><B>Section &#9;<U>Closing; Delivery and Payment.</A></U><BR>
<BR>
</B>The closing of the sale and purchase of the Shares and the Premises contemplated herein (the "Closing")<B> </B>shall take place at the offices of Roller, Vernon, Powers &amp; Larson, 1001 S. 38<SUP>th</SUP> Street, Tacoma, Washington 98418 at 10:00
a.m. on October 2, 2000, or at such other time or place as is mutually agreed to by the parties hereto.<BR>
<BR>
<BR>
<A NAME="_Toc492201353"><B>ARTICLE :&#9;REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SHAREHOLDER</A><BR>
</B><BR>
The Company and the Shareholder jointly and severally represent and warrant to Buyer as follows:<BR>
<BR>
<A NAME="_Toc492201354"><B>Section &#9;<U>Organization and Authority of Company.</A></U><BR>
</B><BR>
The Company is duly formed and validly existing as a corporation under the laws of the State of Washington. Company has all necessary corporate power, capacity and authority to execute, deliver and perform this Agreement. This Agreement has been duly
authorized by all requisite corporate action on the part of the Company, executed and delivered by the Company and constitutes the valid and binding obligation of the Company, enforceable in accordance with its terms, except as enforcement may be limited
by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws affecting creditors' rights generally and by general principles of equity. Neither the execution and delivery by the Company of this Agreement nor consummation of
the transactions contemplated hereby will violate any provision of the articles or certificate of incorporation or bylaws of the Company; or any contract provision, license, franchise or permit to which Company is a party or by which it is bound; or any
law, statute or regulation or any injunction, order or decree of any government agency or authority or court to which the Company is subject except to the extent, in each case, that such a violation would not prohibit or materially impair the Company's
ability to perform its obligations under this Agreement.<BR>
<BR>
<A NAME="_Toc492201355"><B>Section &#9;<U>Capitalization of Company.</A><BR>
</B></U><BR>
The authorized capital stock of Company consists of 50,000 shares of $1.00 par value common stock of which 500 shares are outstanding. The Shareholder is the only shareholder of the Company and owns, beneficially and of record, 500 shares which, at the
Closing, will be free and clear of any Encumbrances. The Shares are duly authorized, validly issued, fully paid and nonassessable. Except as set forth on <U>Schedule 3.2</U>, there are no outstanding options, warrants or other rights to subscribe for or purchase from the Company, or any plans, contracts, or commitments providing for the issuance of, or the granting of rights to acquire, any capital stock
of the Company or securities convertible into or exchangeable for capital stock of the Company and there are no shares of capital stock reserved for issuance by the Company. There are no unsatisfied preemptive rights in respect of capital stock of the
Company. Immediately after the sale of the Shares by the Shareholder pursuant to this Agreement, upon the registration of the Shares in the name of Buyer in the stock records of the Company and assuming that Buyer does not have any "notice" of any
"adverse claim" to the Shares (as such terms are defined in the UCC), Buyer shall be a "protected purchaser" (as such term is defined in the UCC).<BR>
<B><BR>
<A NAME="_Toc492201356">Section &#9;<U>Financial Statements.</A><BR>
</B></U><BR>
Company or the Shareholder have heretofore furnished to Buyer copies of the following financial statements: unaudited balance sheets of the Company as at May 31 in each of the years 1995 through 2000, and the related unaudited statements of income and
changes in stockholders' equity for each of the fiscal years then ended, and an unaudited balance sheet of the Company as at May 31, 2000 and the related unaudited statements of income and changes in stockholders' equity as at such date, including in each
case the notes thereto (the "Interim Financial Statements"; all of those items in (a) and (b) above are referred to herein collectively as the "Financial Statements")<B>. </B>The Financial Statements represent actual, bona fide transactions, and the results of operations and changes in stockholders' equity of the Company for such periods are consistent with the books and records of the Company and do not contain any
items of special or material non-recurring nature. Such Financial Statements fairly present in all material respects the financial position of the Company as at the respective date thereof and the results of operations and cash flows of the Company for
the periods then ended.<BR>
<BR>
<A NAME="_Toc492201357"><B>Section &#9;<U>Absence of Certain Changes, Events or Liabilities.</A></U><BR>
</B><BR>
&#9;&#9;Except as set forth on <U>Schedule 3.4(a)</U>, since May 31, 2000, and restated again through the Closing Date, the Company has not:<BR>
<BR>
&#9;&#9;&#9;issued, sold, purchased or redeemed any stock, bonds, debentures, notes or other corporate securities, or issued, sold or granted any option, warrant or right to acquire any thereof;<BR>
<BR>
&#9;&#9;&#9;waived or released any debts, claims or rights of value or suffered any extraordinary loss or written down the value of any inventories or other assets or written down or off any receivable in excess of the amounts reflected in the Interim
Financial Statements;<BR>
<BR>
&#9;&#9;&#9;except as reflected in the Interim Financial Statements, made any capital expenditures or capital commitments in excess of $20,000 for any single transaction or any series of related transactions or in excess of $50,000 in the aggregate;<BR>
<BR>
&#9;&#9;&#9;made any change in the business or operations or the manner of conducting business or operations of the Company, other than changes in the ordinary course of business, none of which has, and which in the aggregate have not had, a Material
Adverse Effect;<BR>
<BR>
&#9;&#9;&#9;terminated, placed on probation, disciplined, or warned any officer or supervisory employee of the Company;<BR>
<BR>
&#9;&#9;&#9;experienced any resignations of, or had any disputes involving the employment or agency relationship with any of, the employees or agents of the Company which could have a Material Adverse Effect;<BR>
<BR>
&#9;&#9;&#9;suffered any casualty, damage, destruction or loss to any of its assets or properties in excess of $25,000 for any one event or in excess of $100,000 in the aggregate;<BR>
<BR>
&#9;&#9;&#9;declared, set aside or paid any dividends or distributions in respect of the Shares (except as reflected on the Interim Financial Statements);<BR>
<BR>
&#9;&#9;&#9;paid or obligated itself to pay any bonuses or extraordinary compensation to, or made any increase (except increases in the ordinary course of business) in the compensation payable (or to become payable by it) to, any of its directors,
officers, employees, agents or other representatives of the Company (except as reflected on the Interim Financial Statements);<BR>
<BR>
&#9;&#9;&#9;terminated or amended or suffered the termination or amendment of any contract, lease, agreement, license or other instrument to which it is or was a party which could have a Material Adverse Effect;<BR>
<BR>
&#9;&#9;&#9;adopted, modified or amended any plan or agreement so as to increase the benefits due the employees of the Company under any such plan or agreement;<BR>
<BR>
&#9;&#9;&#9;made any loan or advance to any person (except normal travel or other reasonable expense advances to its officers and employees);<BR>
<BR>
&#9;&#9;&#9;suffered a Material Adverse Effect;<BR>
<BR>
&#9;&#9;&#9;subjected any of its assets or properties to any Encumbrances;<BR>
<BR>
&#9;&#9;&#9;paid any funds to any of its officers or directors, or to any family member of any of them, or any person in which any of the foregoing has any direct or indirect interest, except for the payment of installments of annual salaries and the
bonuses reflected on the Interim Financial Statements; <BR>
<BR>
&#9;&#9;&#9;disposed of or agreed to dispose of any of its properties or assets other than in the ordinary course of business;<BR>
<BR>
&#9;&#9;&#9;entered into any transactions other than in the ordinary course of business;<BR>
<BR>
&#9;&#9;&#9;made any change in accounting principles, methods or practices;<BR>
<BR>
&#9;&#9;&#9;entered into any agreement, contract, lease or license (or series of related agreements, contracts, leases or licenses) involving more than $25,000 or made outside the ordinary course of business;<BR>
<BR>
&#9;&#9;&#9;delayed or postponed the payment of any accounts payable or other liabilities outside the ordinary course of business;<BR>
<BR>
&#9;&#9;&#9;been a party to any other occurrence, event, action, failure to act, or transaction outside the ordinary course of business involving the Company; or<BR>
<BR>
&#9;&#9;&#9;entered into any agreement or commitment (whether or not in writing) to do any of the above. <BR>
<BR>
&#9;&#9;Except as set forth on <U>Schedule 3.4(b)</U>, since May 31, 2000, and restated again through the Closing Date, the Company has:<BR>
<BR>
&#9;&#9;&#9;used its reasonable best efforts to preserve the business and organization of the Company, and to keep available, without entering into any binding agreement, the services of the Company's employees, and to preserve the goodwill of the
Company's customers and others having business relationships with the Company; and<BR>
<BR>
&#9;&#9;&#9;continued its business and maintained its operations and equipment, books of account, records and files in the ordinary course of business.<BR>
<BR>
&#9;Except as set forth on <U>Schedule 3.4(c)</U>, the Company does not have any liabilities of a material nature of the type required to be reflected as known liabilities on a balance sheet prepared in accordance with GAAP, whether accrued or unaccrued,
absolute or contingent or otherwise, except such liabilities that are reflected or disclosed in the financial statements referred to in Section 3.3 or were incurred after May 31, 2000 in the ordinary course of business. <BR>
<BR>
<A NAME="_Toc492201358"><B>Section &#9;<U>Litigation.</A><BR>
</B></U><BR>
Except as set forth in <U>Schedule 3.5</U>, there are no actions, suits, proceedings or investigations pending or, to the best of the Company's and the Shareholder's knowledge, overtly threatened against Company at law, in equity or otherwise in, before,
or by, any court or governmental agency or authority.<BR>
<BR>
<A NAME="_Toc492201359"><B>Section &#9;<U>Compliance with Law; Permits.</A></U><BR>
</B><BR>
&#9;The Company has conducted its business in compliance with the requirements of all applicable laws, rules, regulations and orders of any governmental authority, noncompliance with which would have a Material Adverse Effect.<BR>
<BR>
&#9;<B>&#9;The Company has all permits, governmental licenses, registrations and approvals necessary or required by law or rules or regulations of any governmental entity having jurisdiction over the Company to carry on its business as presently
conducted, except for such permits, governmental licenses, registrations and approvals the lack of which has not had and will not have a Material Adverse Effect.</P>
</B><P><BR>
<A NAME="_Toc492201360"><B>Section &#9;<U>Consents and Approvals.</A><BR>
</B></U><BR>
Except as set forth in <U>Schedule 3.7</U>, the execution, delivery and performance of this Agreement by the Shareholder and the Company will not require any consent, waiver, authorization or approval of, or the making of any filing with or giving of
notice to, any person, entity or governmental authority.<BR>
<B><BR>
<A NAME="_Toc492201361">Section &#9;<U>Tax Matters.</A><BR>
</B></U><BR>
The Company or the Shareholder has provided true and complete copies of the Company's Tax Returns filed for the period ending May 31, 1999. Except as set forth in<U> Schedule 3.8</U>, all Tax Returns that are required to be filed on or before the Closing
Date by or with respect to the Company have been filed, all Taxes shown to be due on the Tax Returns referred to in clause (i) have been paid in full, any deficiencies asserted or assessments made as a result of any examinations of the Tax Returns
referred to in clause (i) by the IRS or the relevant state, local or foreign taxing authority have been paid in full, no issues that have been raised by the relevant taxing authority in connection with any such examination of any of the Tax Returns
referred to in clause (i) are currently pending, no waivers of statutes of limitations have been given or requested by or with respect to any Taxes of the Company, no event has taken place that would cause termination of the Company's S Corporation
election, and the Company is not and has not been required to make any payments under Code Section 444 because the Company qualifies for the natural business year exception to the requirements of Code Section 444.<BR>
<BR>
<A NAME="_Toc492201362"><B>Section &#9;<U>Material Contracts.</A><BR>
</B></U><BR>
<U>Schedule 3.9</U> lists all contracts or arrangements of the Company which obligate the Company to pay more than $50,000 in any fiscal year or entitle the Company to receive more than $50,000 in any fiscal year, in each case including arrangements
under which the Company would be obligated to purchase or sell pursuant to a purchase order; financing documents, loan agreements, capital leases or agreements providing for the guaranty of such obligations of any party other than the Company (in each
case in excess of $50,000); distributorship, dealer or sales representative agreements or other agreements of the Company resulting in the marketing of products or services which individually involved the distribution of more than $50,000 of products or
services in fiscal 1999 or the payment of more than $50,000 in commissions in fiscal 1999, respectively, or may be reasonably expected to do so in fiscal 2000; and employment or consulting contracts pursuant to which the Company paid more than $50,000 in
fiscal 1999, or may be reasonably expected to do so in fiscal 2000, or which include change in control provisions (all of the foregoing are collectively referred to herein as the "Material Contracts").<B> </B>The Company is not in default under, or in violation of, any Material Contract, except to the extent such violation or default would not reasonably be expected to have a Material Adverse Effect. True, correct and complete copies of all of the
Material Contracts have been made available to Buyer.<BR>
<BR>
<A NAME="_Toc492201363"></P>
<B><P>Section &#9;<U>Labor Matters.</A><BR>
</B></U><BR>
The Company is in compliance in all material respects with all applicable federal and state laws respecting employment and employment practices, terms and conditions of employment, wages and hours, and is not engaged in any unfair labor or employment
practice. Except as set forth in <U>Schedule 3.10 </U>there is no: (a) unlawful employment practice discrimination charge pending before the Equal Employment Opportunity Commission (the "EEOC") or any EEOC recognized state "referral agency" or, to the best of Company's and the
Shareholder's knowledge, threatened against or involving or affecting the Company; (b) unfair labor practice charge or complaint against the Company pending before the National Labor Relations Board (the "NLRB") or, to the best of Company's and the
Shareholder's knowledge, threatened against or involving or affecting the Company; (c) labor strike, dispute, slow down or stoppage actually pending or, to the best of Company's and the Shareholder's knowledge, threatened against or involving or affecting
the Company and no NLRB representation question exists respecting any of the employees of the Company; (d) grievance or arbitration proceeding pending and no written claim therefor exists; or (e) collective bargaining agreement that is binding on the
Company. To the best of Company's and the Shareholder's knowledge, no organizational efforts are presently being made involving any of the Company's employees and, for the past five years, none have been made. No union or other collective bargaining unit
has been certified or recognized by the Company as representing any of the Company's employees during the past five years. During the past five years, no union or collective bargaining unit has sought such certification or recognition, and, to the best of
Company's and the Shareholder's knowledge, no union or collective bargaining unit is seeking or currently contemplating seeking such certification or recognition. <BR>
<B><BR>
<A NAME="_Toc492201364">Section &#9;<U>Benefit Plans.</A><BR>
</B></U><BR>
&#9;<U>Schedule 3.11 </U>lists each "employee benefit pension plan", as such term is defined in Section 3(2) of ERISA (a "Pension Plan")<B>, </B>and each "employee welfare benefit plan", as such term is defined in Section 3(1)<FONT FACE="Arial"> </FONT>
of ERISA (together with the Pension Plans, the "Benefit Plans"),<B> </B>which is maintained by or contributed to by the Company and which is subject to ERISA. Each Benefit Plan has been from its inception and remains in compliance in all material respects with such Plan's terms and, where applicable, with ERISA and
the Code. All informational and tax filings required with respect to all such Benefit Plans have been timely made.<BR>
<BR>
&#9;Except as set forth in <U>Schedule 3.11</U>, the Company has no incentive compensation, bonus, deferred compensation, stock option, stock ownership, stock bonus, stock purchase, savings, retirement, pension, profit-sharing, severance or other similar
plan or arrangement with or for the benefit of any officer or employee.<BR>
<BR>
&#9;Each Pension Plan that is intended to be qualified under Section 401(a) of the Code has received a favorable determination letter from the IRS that it is a qualified plan for purposes of Section 401(a) of the Code, and there has been no amendment to
any Pension Plan subsequent to the determination letter which would reasonably be expected to materially adversely affect such Plan's qualified status. To the best of the Company's and the Shareholder's knowledge, nothing has occurred during the
administration of any Pension Plan that would materially adversely affect such Plan's qualified status.<BR>
<BR>
&#9;All contributions required to be made to any Benefit Plan have been timely made or reflected in the Financial Statements in all material respects. No Pension Plan has an "accumulated funding deficiency", as such term is defined in Section 302 of
ERISA and Section 412 of the Code (whether or not waived).<BR>
<BR>
&#9;The Company has not incurred any liability to the Pension Benefit Guaranty Corporation under Title IV of ERISA, other than for the payment of premiums, if any, all of which have been paid when due.<BR>
<BR>
&#9;The Company has never contributed or been required to contribute to any "multiemployer plan", as such term is defined in Section 3(37) of ERISA.<BR>
<BR>
&#9;The Company has not engaged in any "prohibited transaction", as such term is defined in Section 4975 of the Code, or a transaction prohibited by Section 406 of ERISA, for which a statutory or administrative exemption is not available and that would
result in a material tax or a material penalty under Section 4975 of the Code or Section 502(i) of ERISA.<BR>
<B><BR>
<A NAME="_Toc492201365">Section &#9;<U>Environmental Matters.</A><BR>
</B></U><BR>
Except as set forth in <U>Schedule 3.12</U>: (a) the Company is in compliance with all applicable federal, state, foreign and local laws and regulations relating to pollution or protection of human health or the environment (including, without
limitation, ambient air, surface water, ground water, land surface or sub-surface strata) (collectively, "Environmental Laws"),<B> </B>except for instances of non-compliance that individually or in the aggregate do not, and would not reasonably be expected to, have a Material Adverse Effect; (b) the Company has not received written notice of and is not the subject of, any
actions, causes of actions, claims, investigations, demands or notices by any person or entity alleging liability or non-compliance with any Environmental Law; (c) there are no conditions existing which would reasonably be expected to form the basis of a
claim against the Company for the violation or non-compliance with any Environmental Law which would have a Material Adverse Effect; and (d) there are no circumstances which would reasonably be expected to prevent or interfere in the future with the
Company's material compliance with all Environmental Laws. <BR>
<BR>
<A NAME="_Toc492201366"><B>Section &#9;<U>Brokers and Finders.</A><BR>
</B></U><BR>
The Company has not employed any broker, finder, consultant or intermediary in connection with the transactions contemplated by this Agreement who would be entitled to a broker's, finder's or similar fee or commission in connection therewith or upon the
consummation thereof.</P>
<P><BR>
<A NAME="_Toc492201367"><B>Section &#9;<U>Tangible Assets.</A><BR>
</B></U><BR>
The Company has valid leasehold interests in (in the case of leasehold interests in real or personal property), or good and marketable title to (in the case of all other personal property), all of their respective properties and assets reflected in the
Financial Statements free and clear of all liens, security interests and other encumbrances, except liens, security interests and other encumbrances that: are reflected in the Financial Statements, are not material in amount, are incurred or made in the
ordinary course of business and which do not materially adversely impair the usefulness of such properties or assets in the conduct of the business of the Company; constitute statutory liens of landlords, carriers, warehousemen, mechanics, repairman,
workmen and materialmen and other liens imposed by law, in each case in the ordinary course of business; are liens for taxes, assessments, water or sewer rents or governmental charges or claims which are not yet delinquent or can be paid without penalty
or are being contested in good faith and by appropriate proceedings; are covenants, easements, rights of ways, restrictions, encroachments and other imperfections or defects in title, in each<BR>
case which do not interfere in any material respect with the ordinary conduct of the business of the Company or result in a material diminution in value of such assets; or are set forth on <U>Schedule 3.14</U>.<BR>
<BR>
<A NAME="_Toc492201368"><B>Section &#9;<U>Intangible Assets.</A><BR>
</B></U><BR>
The Company owns, or holds adequate licenses or other rights to use, all trademarks, service marks, tradenames, copyrighted material, patents, and other intangible personal property (including the tradenames set forth on <U>Schedule 3.15</U>) necessary
to the conduct of its business as presently conducted, and such use does not infringe or violate any rights of any third parties. <BR>
<BR>
<A NAME="_Toc492201369"><B>Section &#9;<U>Employees.</A><BR>
<BR>
</B></U>&#9;<U>Schedule 3.16</U> is a true and complete list of all officers and employees of the Company including the amount of the current annual salary or hourly rate, date of birth, job title, vacation accrued, along with a description of any
commitments to such officers and employees with respect to compensation payable hereafter. The Company has not, because of past practices or previous commitments with respect to the Company's officers or employees, established any rights or expectations
on the part of such officers or employees to receive additional compensation inconsistent with past practices with respect to any period after the date hereof. Except as set forth in <U>Schedule 3.16</U>, none of the Company's officers or employees has given notice to the Company that he or she intends to leave the Company's employment. Except as set forth on the schedule, the Company has no reason to believe that any of the Company's
officers or employees shall leave such employment. Set forth on <U>Schedule 3.16</U> is a description of all claims made against the Company by officers or employees of the Company within the last twelve (12) months.<BR>
<BR>
&#9;&#9;Except as set forth in <U>Schedule 3.16</U>, the Company is not a party to or bound by any oral or written:<BR>
<BR>
&#9;&#9;&#9;employee collective bargaining agreement, employment agreement (other than employment agreements terminable by the Company without premium or penalty on notice of thirty (30) days or less under which the only monetary obligation of the
Company is to make current wage or salary payments and provide current employee benefits), consulting, advisory or service agreement, deferred compensation agreement, confidentiality agreement or covenant not to compete; or<BR>
<BR>
&#9;&#9;&#9;contract or agreement with any officer or employee (other than employment agreements disclosed in response to clause (i) or excluded from the scope of clause (i)), agent, or attorney in fact of the Company; or<BR>
<BR>
&#9;&#9;&#9;obligation to provide, presently or in the future, retiree medical insurance coverage, retiree life insurance coverage, and other benefits for retired employees or directors of the Company, or their dependents.<BR>
<BR>
&#9;&#9;No officer, employee or director of the Company is a party to, or is otherwise bound by, any agreement or arrangement, including any confidentiality, noncompetition, or proprietary rights agreement, between such officer, employee or director and
any other Person that in any way has or will have a Material Adverse Effect.<BR>
<U><BR>
<A NAME="_Toc492201370"></U><B>Section &#9;<U>Insurance.</A><BR>
<BR>
</B></U>As of the Closing the following information will have been provided by the Company with respect to each insurance policy (including policies providing property, casualty, liability, and workers' compensation coverage and bond and surety
arrangements) to which the Company has been a party, a named insured, or otherwise the beneficiary of coverage at any time within the past three (3) years:<BR>
<BR>
&#9;&#9;the name, address, and telephone number of the agent;<BR>
<BR>
&#9;&#9;the name of the insurer, the name of the policyholder, and the name of each covered insured;<BR>
<BR>
&#9;&#9;the policy number and the period of coverage;<BR>
<BR>
&#9;&#9;the scope (including an indication of whether the coverage was on a claims made, occurrence, or other basis) and amount (including a description of how deductibles and ceilings are calculated and operate) of coverage; and<BR>
<BR>
&#9;&#9;description of any retroactive premium adjustments or other loss sharing arrangements.<BR>
<BR>
With respect to each such insurance policy which is in force as of the Closing: (1) the policy is legal, valid, binding, enforceable, and in full force and effect; (2) the policy shall continue to be legal, valid, binding, enforceable, and in full force
and effect on identical terms following the consummation of the contemplated transactions under this Agreement; (3) to the best of Company's and the Shareholder's knowledge, the policy has been issued by an insurer that is financially sound and reputable;
(4) the Company is not in breach or default (including with respect to the payment of premiums or the giving of notices), and to the best of Company's and the Shareholder's knowledge, no event has occurred which, with notice or the lapse of time, would
constitute such a breach or default, or permit termination, modification, or acceleration, under the policy; (5) the policy does not provide for any retrospective premium adjustment or other experience-based liability on the part of the Company; (6) to
the best of Company's and the Shareholder's knowledge, the policies collectively provide adequate insurance coverage for the assets and the operations of the Company; and (7) to the best of Company's and the Shareholder's knowledge, no party to the policy
has repudiated any provision thereof. To the best of Company's and the Shareholder's knowledge, the Company has been covered during the past five (5) years by insurance in scope and amount customary and reasonable for the businesses in which it has
engaged during the aforementioned period.<BR>
<BR>
<A NAME="_Toc492201371"><B>Section &#9;<U>Inventory.</A></U><BR>
<BR>
</B>All inventory of the Company, whether or not reflected in the Interim Financial Statements, consists of a quality and quantity usable and salable in the ordinary course of business, except for obsolete items and items of below-standard quality which
have been written off or written down to net realizable value in the Interim Financial Statements. All inventories not written off have been priced at the lower of average cost or net realizable value. To the best of Company's and the Shareholder's
knowledge, the quantities of each item of inventory (whether raw materials, work-in-process, or finished goods) are not excessive, but are reasonable in the present circumstances of the Company. The inventory obsolescence policies of the Company are
appropriate for the nature of the products sold and the marketing methods used by the Company, the reserve for inventory obsolescence contained in the Interim Financial Statements fairly reflects the amount of obsolete inventory as of the date of the
Interim Financial Statements and the reserve for inventory obsolescence to be contained in the accounting records of the Company as of the Closing Date shall fairly reflect the amount of obsolete inventory as of the Closing Date. No items included in the
inventories are pledged as collateral or held by the Company on consignment from another.<BR>
<BR>
<A NAME="_Toc492201372"><B>Section &#9;<U>Completeness of Statements; Effect of Representations and Warranties.</A></U><BR>
</B><BR>
&#9;To the best of Company's and the Shareholder's knowledge, no representation or warranty of the Company or the Shareholder in the Agreement contains any untrue statement of a material fact, omits any material fact necessary to make such representation
or warranty, under the circumstances which it was made, not misleading, or contains any misstatement of a material fact. The Company and the Shareholder have made due inquiry and investigation concerning the matters to which the representations and
warranties of the Company and the Shareholder under this Agreement pertain and neither the Company nor the Shareholder know of any facts, events or circumstances which have not been disclosed to Buyer which are material to the Company or its business.<BR>
<B><BR>
<BR>
<A NAME="_Toc492201373"></P>
<P>ARTICLE :&#9;REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER</A><BR>
</B><BR>
&#9;The Shareholder represents and warrants to Buyer as follows:<BR>
<BR>
<A NAME="_Toc492201374"><B>Section &#9;<U>Brokers and Finders.</A><BR>
</B></U><BR>
Shareholder has not employed any broker, finder, consultant or intermediary in connection with the transactions contemplated by this Agreement who would be entitled to a broker's, finder's or similar fee or commission in connection therewith or upon the
consummation thereof<BR>
<BR>
<A NAME="_Toc492201375"><B>Section &#9;<U>Real Property.</A><BR>
</B></U><BR>
&#9;The attached <U>Schedule 4.2</U> lists and describes briefly the Premises that is or will be owned by the Shareholder as of the date of Closing (the "Premises") and any rights that Shareholder may have in adjacent real property. With respect to the
real property comprising the Premises:<BR>
<BR>
&#9;&#9;The Shareholder has, or will have as of the date of Closing, good and marketable title to the Premises, free and clear of any Encumbrances, except as set forth on <U>Schedule 4.2</U>, except for installments of special assessments not yet
delinquent and recorded easements, covenants, and other restrictions, none of which individually or together impair the current use, occupancy, value or marketability of title of the property subject thereto;<BR>
<BR>
&#9;&#9;there are no pending, or to the best of the Shareholder's knowledge, threatened, condemnation proceedings relating to the Premises or other matters affecting the current use, occupancy, or value thereof;<BR>
<BR>
&#9;&#9;the legal description for the Premises contained in the deed thereof describes the Premises fully and adequately, the buildings and improvements are located within the boundary lines of the described parcels of land, are not in violation of
applicable setback requirements, zoning laws, and ordinances (and none of the properties or buildings or improvements thereon are subject to "permitted nonconforming use" or "permitted nonconforming structure" classifications), and do not encroach on any
easement which may burden the land, and the land does not serve any adjoining property for any purpose inconsistent with the use of the land, and the Premises is not located within any flood plain or subject to any similar type restriction for which any
permits or licenses necessary to the use thereof have not been obtained;<BR>
<BR>
&#9;&#9;all properties and facilities have received all licenses, permits, consents, titles or registrations required in connection with the ownership or operation thereof and have been operated and maintained in accordance with all applicable federal,
state, local, municipal, foreign, international, multinational or other administrative orders, constitutions, laws, ordinances, principles of common law, regulations, statutes or treaties;<BR>
<BR>
&#9;&#9;except as set forth in <U>Schedule 4.2</U>, there are no leases, subleases, licenses, concessions, or other agreements, written or oral, granting to any party or parties the use or occupancy of any portion of the Premises;<BR>
<BR>
&#9;&#9;there are no outstanding options or rights of first refusal to purchase the Premises, or any portion thereof or interest therein;<BR>
<BR>
&#9;&#9;there are no parties (other than the Shareholder or the Company) in possession of the Premises, other than tenants under any leases disclosed in the schedule who are in possession of space to which they are entitled;<BR>
<BR>
&#9;&#9;all facilities located on the Premises are supplied with utilities and other services necessary for the operation of such facilities, including gas, electricity, water, telephone, sanitary sewer, and storm sewer, all of which services are
adequate in accordance with all applicable laws, ordinances, rules, and regulations and are provided via public roads or via permanent, irrevocable, appurtenant easements benefiting the Premises; and<BR>
<BR>
&#9;&#9;Premises abuts on and has direct vehicular access to a public road, or has access to a public road via a permanent, irrevocable, appurtenant easement benefiting the Premises, and access to the property is provided by paved public right-of-way
with adequate curb cuts available.<BR>
<BR>
<A NAME="_Toc492201376"><B>Section &#9;<U>Environmental Matters.</A></U> <BR>
</B><BR>
Except as set forth in <U>Schedule 4.3</U>, with respect to the Premises: (a) the Shareholder is in compliance with all applicable Environmental Laws,<B> </B>except for instances of non-compliance that individually or in the aggregate does not, and would
not reasonably be expected to, have a Material Adverse Effect; (b) the Shareholder has not received written notice of and is not the subject of, any actions, causes of actions, claims, investigations, demands or notices by any person or entity alleging
liability or non-compliance with any Environmental Law; (c) there are no conditions existing which would reasonably be expected to form the basis of a claim against the Shareholder for the violation or non-compliance with any Environmental Law which would
have a Material Adverse Effect; and (d) there are no circumstances which would reasonably be expected to prevent or interfere in the future with the Company's material compliance with all Environmental Laws. <BR>
<BR>
<A NAME="_Toc492201377"><B>Section &#9;<U>Legal Proceedings.</A><BR>
</B></U><BR>
There are no actions, suits, proceedings or investigations pending or, to the best of the Shareholder's knowledge, overtly threatened against the Shareholder at law, in equity or otherwise in, before, or by, any court or governmental agency or authority
which individually or in the aggregate would reasonably be expected to have a Material Adverse Effect.<BR>
<BR>
<A NAME="_Toc492201378"><B>Section &#9;<U>Consents and Approvals.</A><BR>
</B></U><BR>
Except as set forth in <U>Schedule 4.5</U> annexed hereto, the execution, delivery and performance of this Agreement by the Shareholder will not require any consent, waiver, authorization or approval of, or the making of any filing with or giving of
notice to, any Person, entity or governmental authority, except for such consent, waivers, authorizations or approvals which the failure to obtain would not reasonably be expected to have a Material Adverse Effect.<BR>
<BR>
<A NAME="_Toc492201379"><B>Section &#9;<U>Completeness of Statements; Effect of Representations and Warranties.</A></U><BR>
</B><BR>
&#9;To the best of the Shareholder's knowledge, no representation or warranty of the Shareholder in the Agreement contains any untrue statement of a material fact, omits any material fact necessary to make such representation or warranty, under the
circumstances which it was made, not misleading, or contains any misstatement of a material fact. The Shareholder has made due inquiry and investigation concerning the matters to which the representations and warranties of the Shareholder under this
Agreement pertain and the Shareholder does not know of any facts, events or circumstances which have not been disclosed to Buyer which are material to the Premises.<BR>
<BR>
<BR>
<A NAME="_Toc492201380"><B>ARTICLE :&#9;REPRESENTATIONS AND WARRANTIES OF BUYER</A><BR>
</B><BR>
&#9;Buyer represents and warrants to the Shareholder and the Company as follows:<BR>
<BR>
<A NAME="_Toc492201381"><B>Section &#9;<U>Organization and Authority of Buyer.</A></U><BR>
</B><BR>
Buyer has been duly incorporated and is validly existing under the laws of Tennessee, with the corporate power and authority to enter into this Agreement and perform its obligations hereunder. This Agreement has been duly authorized, executed and
delivered by Buyer and constitutes a legal, valid and binding obligation of Buyer, enforceable in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws
affecting creditors' rights generally and to general principles of equity. No other proceedings on the part of Buyer are necessary to authorize this Agreement and the consummation of transactions contemplated hereby. Neither the execution and delivery of
this Agreement nor compliance by Buyer with its terms and provisions will violate any provision of the charter or bylaws of Buyer; or any contract provision, license, franchise or permit to which Buyer is a party or by which it is bound; or any law,
statute or regulation or any injunction, order or decree of any government agency or authority or court to which Buyer is subject except to the extent, in each case, that such a violation would not have a Material Adverse Effect.<BR>
<BR>
<A NAME="_Toc492201382"><B>Section &#9;<U>Legal Proceedings.</A><BR>
</B></U><BR>
There are no actions, suits, proceedings or investigations pending or, to Buyer's knowledge, overtly threatened against Buyer at law, in equity or otherwise in, before, or by, any court or governmental agency or authority which individually or in the
aggregate would reasonably be expected to have a Material Adverse Effect.</P>
<P><BR>
<A NAME="_Toc492201383"><B>Section &#9;<U>SEC Documents; Absence of Changes</U>.</A> <BR>
</B><BR>
&#9;Buyer has delivered to the Shareholder Buyer's Quarterly Report on Form 10-Q for the quarter ended [June 30, 2000], its Annual Report on Form 10-K for the fiscal year ended December 31, 1999 and its Proxy Statement with respect to its 2000 Annual
Meeting of Stockholders (collectively, the "Astec SEC Documents"). The Astec SEC Documents were true and complete in all material respects as at their respective dates, did not contain any untrue statement of a material fact nor omit to state any material
fact required to be stated therein or necessary to make the statements contained therein, in light of the circumstances in which they were made, not misleading. Since the filing of its Quarterly Report on Form 10-Q for the quarter ended [June 30, 2000],
there has not been any material adverse change in Buyer's business condition (financial or otherwise), results of operations or liabilities not reflected in the Astec SEC Documents.<BR>
<BR>
<A NAME="_Toc492201384"><B>Section &#9;<U>Consents and Approvals.</A><BR>
</B></U><BR>
Except as set forth in <U>Schedule 5.4</U>, the execution, delivery and performance of this Agreement by Buyer will not require any consent, waiver, authorization or approval of, or the making of any filing with or giving of notice to, any Person, entity
or governmental authority, except for such consent, waivers, authorizations or approvals which the failure to obtain would not have a Material Adverse Effect.<BR>
<BR>
<BR>
<A NAME="_Toc492201385"><B>ARTICLE : ASTEC STOCK AND LOCK-UP AGREEMENT</A><BR>
<BR>
<A NAME="_Toc492201386">Section &#9;<U>Astec Stock Not Registered</U>.</A> <BR>
</B><BR>
&#9;The Shareholder acknowledges that the issuance of Astec Stock has not been registered under the Securities Act or any state securities laws and cannot be sold, transferred, pledged or otherwise distributed by the Shareholder unless a registration
statement registering such Astec Stock has been filed and becomes effective or unless the Astec Stock is sold or distributed in a transaction in respect of which Buyer has previously received an opinion of counsel, reasonably satisfactory to Buyer, as the
issuer of such Astec Stock, stating that such transaction is exempt from the registration requirement of the Securities Act.<BR>
<BR>
<A NAME="_Toc492201387"><B>Section &#9;<U>Legend</U>.</A> <BR>
</B><BR>
&#9;Any certificate or certificates representing Astec Stock will bear the following legend unless and until removal thereof is permitted pursuant to the terms of this Agreement:<BR>
<BR>
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER ANY APPLICABLE STATE SECURITIES LAW AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT FOR THESE SHARES, OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO ASTEC INDUSTRIES, INC. THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER OR UNDER APPLICABLE
STATE SECURITIES LAWS. SUCH SECURITIES ARE SUBJECT TO THE RESTRICTIONS SPECIFIED IN THE LOCK-UP AGREEMENT DATED AS OF OCTOBER 2, 2000 BETWEEN ASTEC INDUSTRIES, INC. AND THE INITIAL HOLDER OF THE SECURITIES NAMED THEREIN, A COPY OF WHICH WILL BE FURNISHED
WITHOUT CHARGE TO THE HOLDER HEREOF UPON WRITTEN REQUEST, AND THE HOLDER OF THIS CERTIFICATE AGREES TO BE BOUND THEREBY.<BR>
<BR>
<A NAME="_Toc492201388"><B>Section &#9;<U>Removal of Legend</U>.</A> <BR>
</B><BR>
&#9;Upon any transfer permitted by Section 6.1 above, which transfer does not require the legend in Section 6.2 above, Buyer agrees to cause the removal of such legend for any Astec Stock so transferred upon its reissuance to the transferee.<BR>
<BR>
<A NAME="_Toc492201389"><B>Section &#9;Examination and Investment Representation.</A> <BR>
</B><BR>
&#9;The Shareholder represents and warrants to Buyer that it:<BR>
<BR>
&#9;&#9;is acquiring the Astec Stock for his own account for investment within the contemplation of the Securities Act and not with a view to the transfer or resale thereof, except to the extent otherwise expressly permitted by the Securities Act;<BR>
<BR>
&#9;&#9;has been advised by counsel of the legal implications and effect of the foregoing Sections 6.1, 6.2 and 6.3 under the Securities Act and of the circumstances under which he or she may dispose of his or her Astec Stock under the Securities Act;<BR>

<BR>
&#9;&#9;has examined Buyer's Annual Report on Form 10-K for the year ended December 31, 1999, including the financial statements contained therein, and its most recent quarterly report on Form 10-Q.<BR>
<BR>
&#9;&#9;prior to signing this Agreement, was given access to and information regarding Buyer and the Astec Stock to the extent the Shareholder believes is necessary in connection with the Shareholder's decision to invest in the Astec Stock and was given
the opportunity to ask detailed questions and receive satisfactory answers concerning (i) the terms and conditions of this Agreement pursuant to which Buyer is offering to sell Astec Stock to the Shareholder, and (ii) Buyer, its business and the risks
associated with Buyer and an investment in the Astec Stock. All such questions have been answered to the Shareholder's satisfaction, and the Shareholder has been supplied with all additional information and documents requested and deemed necessary by the
Shareholder to make an investment decision with respect to the Astec Stock being acquired pursuant to this Agreement; and<BR>
&#9;&#9;prior to signing this Agreement, the Shareholder had the opportunity to consult with Shareholder's legal counsel or other advisors to the extent desired by the Shareholder as to the Shareholder's investment in the Astec Stock.<BR>
<A NAME="_Toc492201390"><B>Section &#9;<U>Lock-Up</U>.</A> <BR>
</B><BR>
&#9;The Shareholder agrees that he will not sell, transfer, pledge, or otherwise dispose of the Astec Stock (or any derivative security thereof) included in the Purchase Price except in compliance with Section 144 of the Securities Act of 1933 and in no
event earlier than one (1) year from the Closing.<BR>
<A NAME="_Toc492201391"><B>ARTICLE :&#9;TAX MATTERS</A><BR>
</B><BR>
<A NAME="_Toc492201392"><B>Section &#9;<U>Tax Indemnification.</A><BR>
</B></U><BR>
&#9;Except to the extent disclosed on <U>Schedule 3.8</U>, or as otherwise provided for in the Financial Statements, the Shareholder shall be liable for, indemnify and hold the Buyer harmless against any Taxes imposed on the Company (including, without
limitation, any Taxes imposed on the Company in connection with any Benefit Plans) or the Premises for any taxable year or period (or portion thereof) that ends on or before the Closing Date to the extent such Taxes in the aggregate exceed the aggregate
reserve amounts for Taxes shown on the Interim Financial Statements, which shall be a good faith estimate of such Tax liabilities of the Company as of the Closing Date, prepared in accordance with GAAP; <U>provided</U>, <U>however</U>, that the Shareholder shall not be liable for, and shall not indemnify Buyer or the Company for, any Taxes resulting from any actual or deemed election pursuant to Section 338 of the Code in connection with the purchase of
the Shares. The Shareholder shall be entitled to any refund of Taxes of the Company that are allocable to such periods.<BR>
&#9;Buyer shall be liable for, indemnify and hold the Shareholder harmless against any Taxes imposed on the Company that are allocable or attributable to any taxable year or period that begins after the Closing Date and, with respect to any taxable year
or period beginning before and ending after the Closing Date, the portion of such taxable year or period beginning after the Closing Date. Buyer shall be entitled to any refund of such Taxes that are allocable to such periods.<BR>
<BR>
&#9;For purposes of paragraphs (a) and (b) of this Section 7.1, in order to apportion appropriately any Taxes relating to any taxable year or period that begins before and ends after the Closing Date, the parties hereto shall, to the extent permitted by
applicable law, elect with the relevant taxing authority to treat for all purposes the Closing Date as the end of the taxable year of the Company. In any case where applicable law does not permit the Company to treat the Closing Date as the end of a
taxable year of the Company, then whenever it is necessary to determine the liability of the Company for Taxes for a portion of a taxable year or period that begins before and ends after the Closing Date, the determination of the Taxes of the Company for
the portion of the year or period ending on, and the portion of the year or period beginning after, the Closing Date shall be determined by assuming that the Company had a taxable year or period which ended with the Closing Date, except that exemptions,
allowances or deductions that are calculated on an annual basis, such as the deduction for depreciation, shall be apportioned on a time basis.<BR>
<BR>
<A NAME="_Toc492201393"><B>Section &#9;<U>Tax Returns.</A><BR>
</B></U><BR>
Tax Returns that are required to be filed by or with respect to the Company shall be filed as follows:<BR>
<BR>
&#9;&#9;The Shareholder shall file or cause to be filed when due (taking into account extensions) all Tax Returns that are required to be filed by or with respect to the Company for taxable years or periods ending on or before the Closing Date. Except as
otherwise agreed, such Tax Returns shall be completed in a manner consistent with past practice and filed only after they have been approved by King Copler of Ernst &amp; Young's Chattanooga office (or such other person identified in writing by Buyer).<BR>
<BR>
&#9;&#9;Buyer shall file or cause to be filed when due (taking into account extensions) all Tax Returns that are required to be filed by or with respect to the Company for taxable years or periods ending after the Closing Date. Except as otherwise
agreed, such Tax Returns shall be completed in a manner consistent with past practice.<BR>
<BR>
<A NAME="_Toc492201394"><B>Section &#9;<U>Contest Provisions.</A><BR>
</B></U><BR>
Buyer shall promptly notify the Shareholder in writing upon receipt by Buyer, the Company or any of their respective Affiliates of notice of any pending or threatened federal, state, local or foreign audits or assessments which may materially affect the
liabilities for Taxes of the Company for which the Shareholder would be required to indemnify Buyer pursuant to Section 7.1; <U>provided</U> that failure to comply with this provision shall not affect Buyer's right to indemnification hereunder except to the extent the Shareholder is prejudiced by such failure. The Shareholder shall have the sole right to represent the interests
of the Company in any such audit or administrative or court proceeding relating to taxable periods for which they may be required to indemnify Buyer pursuant to Section 7.1, and to employ counsel of their choice at their expense. Neither Buyer nor Company
may agree to settle any such claim for the portion of a taxable year or period which may be the subject of indemnification by the Shareholder under Section 7.1 without the prior written consent of the Shareholder, which consent shall not be unreasonably
withheld.<BR>
<BR>
<A NAME="_Toc492201395"><B>Section &#9;<U>Assistance and Cooperation.</A><BR>
</B></U><BR>
After the Closing Date, each of the Shareholder and Buyer shall:<BR>
<BR>
&#9;assist (and cause their respective affiliates to assist) the other party in preparing any Tax Returns which such other party is responsible for preparing and filing;<BR>
<BR>
&#9;cooperate fully in preparing for any audits of, or disputes with taxing authorities regarding, any Tax Returns of the Company;<BR>
<BR>
&#9;make available to the other and to any taxing authority as reasonably requested all information, records, and documents relating to Taxes of the Company;<BR>
<BR>
&#9;provide timely notice to the other in writing of any pending or threatened tax audits or assessments of the Company for taxable periods for which the other may have a liability under Section 7.1; and<BR>
<BR>
&#9;furnish the other with copies of all correspondence received from any taxing authority in connection with any tax audit or information request with respect to any such taxable period.<BR>
<BR>
<A NAME="_Toc492201396"><B>Section &#9;<U>Transfer Taxes.</A><BR>
</B></U><BR>
Buyer shall be liable for any sales, use, stock transfer, conveyance, intangible, stamp, duty, transfer, reporting, recording and similar fees, charges and Taxes applicable in connection with the transfer of the Shares or the Premises, together with any
interest or penalties thereon.<BR>
<BR>
<A NAME="_Toc492201397"><B>Section &#9;<U>Survival of Obligations.</A><BR>
</B></U><BR>
The obligations of the parties set forth in this Article 7 shall remain in effect until the expiration of the applicable statute of limitations (including any waivers thereof).<BR>
<BR>
<BR>
<A NAME="_Toc492201398"><B>ARTICLE :&#9;CERTAIN COVENANTS AND AGREEMENTS OF SELLERS</A><BR>
</B><BR>
<A NAME="_Toc492201399"><B>Section &#9;<U>Access and Information.</A><BR>
</B></U><BR>
The Shareholder and Company (the "Sellers") shall permit Buyer and its representatives after the date of execution of this Agreement to have reasonable access, during regular business hours and upon reasonable advance notice, to any financial and
operating data and other information that is available with respect to the business and assets of the Company, the Shares and the Premises as Buyer shall from time to time reasonably request. In the event of the termination of this Agreement, Buyer shall
promptly deliver (without retaining any copies thereof) to all applicable parties, or (at such parties' option) certify to such parties that it has destroyed, all documents, workpapers and other material obtained by Buyer or on its behalf from the Sellers
or from any of their respective advisors, agents, employees or representatives as a result hereof or in connection with the matters contemplated by this Agreement, and all documents, workpapers and other materials prepared by Buyer or its advisors,
agents, employees or representatives in connection with the matters contemplated by this Agreement, in each case whether so obtained or prepared before or after the execution hereof. Buyer shall at all times prior to the Closing Date, and in the event of
termination of this Agreement, cause any information so obtained or prepared to be kept confidential and will not use, or permit the use of, such documents, workpapers and other materials in its business or in any other manner or for any other purpose
except as contemplated hereby. <B><BR>
</B><BR>
<A NAME="_Toc492201400"><B>Section &#9;<U>Registrations, Filings and Consents.</A></U><BR>
</B><BR>
Prior to the Closing, the Sellers and Buyer shall cooperate and use their respective best efforts to make all registrations, filings and applications, to give all notices and to obtain any governmental or other consents, transfers, approvals, orders,
qualifications and waivers necessary or desirable for the consummation of the transactions contemplated hereby.<BR>
<B><BR>
<A NAME="_Toc492201401">Section &#9;<U>Conduct of Business.</A><BR>
</B></U><BR>
Prior to the Closing, and except as otherwise contemplated by this Agreement or consented to or approved by Buyer, the Shareholder covenants and agrees that the Shareholder shall cause the Company:<BR>
<BR>
&#9;&#9;To operate its business in the ordinary course consistent with past practices and to use its commercially reasonable best efforts to preserve the business and goodwill of customers and suppliers;<BR>
<BR>
&#9;&#9;Not to change or amend its articles or certificates of incorporation or bylaws, issue, sell or redeem any shares of its capital stock, or issue or sell any securities convertible into, or options with respect to, or warrants to purchase or rights
to subscribe to, any shares of its capital stock or enter into any agreement obligating it to do any of the foregoing, enter into any amendment of any Material Contract which materially adversely affects the rights of the Company thereunder or enter into
any new, or make any amendment to any existing, collective bargaining agreement or Benefit Plan which materially adversely affects the rights of the Company thereunder, except as required by law, in which case the Shareholder shall give prompt notice to
Buyer; and<BR>
<BR>
&#9;&#9;Not to make, or enter into any agreement to make, any acquisition or sale of property or assets (tangible or intangible) other than in the ordinary course of business consistent with past practices.<BR>
<BR>
<A NAME="_Toc492201402"><B>Section &#9;<U>Best Efforts.</A><BR>
</B></U><BR>
Prior to Closing, each of the parties hereto shall use its commercially reasonable best efforts to fulfill or obtain the fulfillment of the conditions to Closing, including, without limitation, the execution and delivery of all agreements or other
documents contemplated hereunder to be so executed and delivered.<BR>
<B><BR>
<A NAME="_Toc492201403">Section &#9;<U>Retention of Books and Records.</A></U><BR>
</B><BR>
After the Closing Date, Buyer shall cause the Company to retain all books, records and other documents pertaining to the Company in existence on the Closing Date and to make the same available after the Closing Date for inspection and copying by the
Shareholder or their agents at such parties' expense, upon reasonable request and upon reasonable notice, for a period of three years after the Closing Date. No such books, records or documents shall be destroyed by Buyer or the Company without first
advising the Shareholder in writing and giving the Shareholder a reasonable opportunity to obtain possession thereof.<BR>
<BR>
<A NAME="_Toc492201404"></P>
<B><P>Section &#9;<U>Further Assurances.</A><BR>
</B></U><BR>
At any time after the Closing Date, the Shareholder and Buyer shall, and Buyer shall cause the Company to, promptly execute, acknowledge and deliver any other assurances or documents reasonably requested by Buyer or the Shareholder, as the case may be,
and necessary for Buyer or the Shareholder, as the case may be, to satisfy its obligations hereunder.<BR>
<BR>
<BR>
<A NAME="_Toc492201405"><B>ARTICLE :&#9;CONDITIONS TO THE PURCHASE AND SALE</A><BR>
</B><BR>
<A NAME="_Toc492201406"><B>Section &#9;<U>General Conditions to the Purchase and Sale Relating to Parties.</A></U><BR>
</B><BR>
The obligations of the parties to consummate the sale and purchase of the Shares and the Premises at the Closing as contemplated by this Agreement shall be subject to the satisfaction or waiver by the parties on or prior to the Closing Date of the
following conditions:<BR>
<BR>
&#9;No action or proceeding shall have been instituted and remain pending on the Closing Date before any court or governmental body or authority pertaining to the acquisition by Buyer of the Shares, or the result of which could prevent or make illegal
the consummation of such acquisition.<BR>
<BR>
&#9;Any required consents of third parties disclosed on <U>Schedule 3.7</U>, <U>Schedule 4.5</U>, and <U>Schedule 5.4</U> annexed hereto shall have been obtained.<BR>
<BR>
<A NAME="_Toc492201407"><B>Section &#9;<U>Conditions to Purchase by Buyer.</A></U><BR>
</B><BR>
The obligation of Buyer to consummate the purchase of the Shares and the Premises at the Closing as contemplated by this Agreement shall be subject to the satisfaction or waiver by Buyer on or prior to the Closing Date of each of the following conditions:
<BR>
<BR>
&#9; Each of the representations and warranties of the Sellers contained in this Agreement shall be true in all material respects when made and as of the Closing Date, with the same effect as though such representations and warranties had been made on
and as of the Closing Date (except representations and warranties that are made as of a specific date need be true in all material respects only as of such date); each of the covenants and agreements of the Sellers in this Agreement to be performed on or
prior to the Closing Date shall have been duly performed in all material respects; and Buyer shall have received at the Closing a certificate of a duly authorized officer of the Company as to the satisfaction of the Company's conditions set forth in
clause (i) and clause (ii) of this Section 9.2, dated as of the Closing Date.<BR>
<BR>
&#9;During the period from the date hereof to the Closing Date, no event or condition shall have occurred which results in a Material Adverse Effect.<BR>
<BR>
&#9;Buyer shall have received certificates representing the Shares duly endorsed in blank for transfer or accompanied by duly signed stock powers in blank.<BR>
<BR>
&#9;Buyer shall have had delivered to it warranty deeds conveying to the Company good and marketable fee simple title to the Premises effective as of the Closing Date in form reasonably acceptable to Buyer.<BR>
<BR>
&#9;At least ten (10) days prior to the Closing Date, Buyer shall have had delivered to it a real estate title abstract or a commitment for an owner's title insurance policy in an amount acceptable to Buyer issued by a title insurance company acceptable
to Buyer covering the Premises and containing only exceptions which would not adversely affect the use or marketability of the Premises.<BR>
<BR>
&#9;The Shareholder shall have entered into a Stock Lock-Up and Pledge Agreement in the form of <U>Exhibit A</U> hereto.<BR>
<BR>
&#9;Buyer shall have received a certified copy of resolutions of the board of directors of the Company approving the transaction set forth in and execution of this Agreement.<BR>
<BR>
&#9;The directors of the Company shall have tendered their written resignations effective as of the Closing Date.<BR>
<BR>
&#9;The Company shall have entered into employment agreements with Lawrence Raymond substantially in the form of <U>Exhibit B</U> attached hereto, Ray Erickson substantially in the form of <U>Exhibit C</U> attached hereto, David Nolan substantially in
the form of <U>Exhibit D</U> attached hereto and Jeffrey Cartwright substantially in the form of Exhibit E attached hereto.<BR>
<BR>
&#9;Buyer shall have received evidence satisfactory to Buyer that either Nancy Raymond has approved this transaction in accordance with that certain Stock Pledge Agreement between her and Shareholder dated December 18, 1997 or such approval is unnecessary.
 <BR>
<BR>
&#9;The Company shall have terminated its 401(k) plan effective as of the day prior to Closing, and all amounts properly owed to participants under such 401(k) plan shall have been accurately accrued on the books of the Company.&#9;<BR>
<BR>
&#9;&#9;Buyer shall have received an opinion from legal counsel to the Company in form and substance satisfactory to the Buyer and its counsel.<BR>
<BR>
&#9;&#9;Buyer shall have received a reasonable analysis and explanation of the condition whereby the Company's accounts payable are out of balance, and the accounts payable computer system shall have been corrected so that it will operate in a manner
reasonably acceptable to Buyer.<BR>
<BR>
&#9;&#9;Buyer shall have received such other documents as may be reasonably necessary to effect the Closing as anticipated in this Agreement.<BR>
<BR>
<A NAME="_Toc492201408"><B>Section &#9;<U>Conditions to Sale by the Shareholder</U>.</A><BR>
</B><BR>
The obligation of the Shareholder to consummate the sale of the Shares and the Premises at the Closing as contemplated by this Agreement shall be subject to the satisfaction or waiver by the Shareholder on or prior to the Closing Date of each of the
following conditions:<BR>
<BR>
&#9; Each of the representations and warranties of Buyer contained in this Agreement shall be true in all material respects when made and as of the Closing Date, with the same effect as though such representations and warranties had been made on and as
of the Closing Date (except representations and warranties that are made as of a specific date need be true in all material respects only as of such date); each of the covenants and agreements of Buyer in this Agreement to be performed on or prior to the
Closing Date shall have been duly performed in all material respects; and the Shareholder shall have received at the Closing a certificate of a duly authorized officer of Buyer as to the satisfaction of the conditions set forth in clause (i) and clause
(ii) of this Section 8.3, dated as of the Closing Date.<BR>
<BR>
&#9;The Shareholder shall have received certified copies of resolutions of the executive committee of the board of directors of the Buyer approving the transaction set forth in and execution of this Agreement.<BR>
<BR>
&#9;The Shareholder shall have received the cash portion of the Purchase Price as set forth in Section 2.2(a).<BR>
<BR>
&#9;&#9;The Shareholder shall have received an opinion from legal counsel to Buyer in form and substance satisfactory to the Shareholder and their counsel.<BR>
<BR>
&#9;&#9;The Shareholder shall have received such other documents as may be reasonably necessary to effect the Closing as anticipated in this Agreement.<BR>
<BR>
<BR>
<A NAME="_Toc492201409"><B>ARTICLE : INDEMNIFICATION</A><BR>
</B><BR>
<A NAME="_Toc492201410"><B>Section &#9;<U>Survival; Rights and Remedies Not Affected by Knowledge.</A></U> <BR>
</B><BR>
The representations and warranties in this Agreement, the Schedules, any supplements to the Schedules, any other certificate or document delivered pursuant to this Agreement and any other Closing Document will survive the Closing. The rights to
indemnification and payment of Damages and all other rights or remedies provided herein, including those relating to any representations, warranties, covenants and obligations, will not be affected by any investigation conducted with respect to, or any
knowledge acquired at any time, whether before or after the execution and delivery of this Agreement or the Closing Date, with respect to the accuracy or inaccuracy of or compliance with, any such representation, warranty, covenant or obligation. The
waiver of any condition based on the accuracy of any representation or warranty, or on the performance of or compliance with any covenant or obligation, will not affect the right to indemnification, payment of Damages or other remedy based on such
representations, warranties, covenants and obligations.<BR>
<BR>
<A NAME="_Toc492201411"><B>Section &#9;<U>Indemnification and Payment of Damages By The Shareholder.</A></U> <BR>
</B><BR>
&#9;The Shareholder shall indemnify and hold the Company, Buyer and their respective officers, directors, governors, members, managers, Affiliates, successors and assigns ("Buyer Indemnitees") harmless for, and shall pay to the Buyer Indemnitees the
amount, to the extent not covered by insurance, of all Damages arising, directly or indirectly, from or in connection with:<BR>
<BR>
&#9;&#9;any breach or nonfulfillment of or failure to comply with in any respect ("Breach") any representation or warranty made by the Sellers;<BR>
<BR>
&#9;&#9;any Breach by the Sellers of any covenant, agreement or obligation of the Sellers;<BR>
<BR>
&#9;&#9;any Damages arising out of the ownership, use or conduct of the business or operations of the Company on or prior to the Closing Date or any act, omission, transaction, circumstance, fact, agreement, or other condition relating to the Company,
known to the Sellers, which existed on or prior to the Closing Date and was not fully and properly disclosed to Buyer in the Financial Statements, the Schedules, the Exhibits or any other part of the Agreement; <BR>
<BR>
&#9;&#9;(i)(A) the ownership, operation, or condition at any time on or prior to the Closing Date of any properties (including without limitation the Premises) and assets (whether real, personal, or mixed and whether tangible or intangible) in which the
Company or the Shareholder have or had an interest, or (B) any Hazardous Materials or other contaminants (including any tanks, equipment or other personal property or materials relating thereto) that were at any time prior to the Closing Date or are as of
the Closing Date present on such properties or assets (including without limitation the Premises); or (ii)(A) any Hazardous Materials or other contaminants (and including any tanks, equipment or other personal property or materials relating thereto),
wherever located, that were, or were allegedly, generated, transported, stored, treated, released or otherwise handled by the Company or the Shareholder or by any other Person for whose conduct the Company or the Shareholder are or may be held responsible
at any time on or prior to the Closing Date, or (B) any Hazardous Activities that were, or were allegedly, conducted by the Company or the Shareholder or by any other Person for whose conduct the Company or the Shareholder are or may be held responsible; or<BR>
<BR>
&#9;&#9;any bodily injury (including illness, disability, and death, and regardless of when any such bodily injury occurred, was incurred, or manifested itself), personal injury, property damage (including trespass, nuisance, wrongful eviction, and
deprivation of the use of real property), or other damage of or to any Person, including any employee or former employee of the Company or the Shareholder or any other Person for whose conduct the Company or the Shareholder are or may be held responsible,
in any way arising from or allegedly arising from any Hazardous Activity conducted or allegedly conducted with respect to the Premises or properties or other assets of or leased or subleased or used or operated by the Company or the operations of the
Company prior to the Closing Date, or from Hazardous Material that was (1) present or suspected to be present on or before the Closing Date on or at such Premises or properties (or present or suspected to be present on any other property, if such
Hazardous Material emanated or allegedly emanated from any of such Premises or properties and was present or suspected to be present on any of such Premises or properties on or prior to the Closing Date) or (2) released or allegedly released by the
Shareholder or the Company or any other Person for whose conduct the Company or the Shareholder are or may be held responsible, at any time on or prior to the Closing Date.<BR>
<BR>
&#9;Buyer will be entitled to control any cleanup costs or corrective action, including any investigation, cleanup, removal, containment, or other remediation or response action, any related proceeding, and any other proceeding with respect to which
indemnity may be sought under this Section 10.2. <BR>
<B><BR>
<A NAME="_Toc492201412">Section &#9;<U>Indemnification By Buyer.</A></U> <BR>
</B><BR>
&#9;Buyer shall indemnify and hold the Shareholder and their successors and assigns ("Shareholder Indemnitees") harmless for, and will pay to the Shareholder Indemnitees the amount of, all Damages, to the extent not covered by insurance, arising directly
or indirectly from or in connection with:<BR>
<BR>
&#9;&#9;any Breach of any representation or warranty made by Buyer;<BR>
<BR>
&#9;&#9;any Breach by Buyer of any covenant, agreement or obligation of the Buyer;<BR>
<BR>
&#9;&#9;any Damages arising out of the ownership, use or conduct of the business or operations of the Company after the Closing Date or any act, omission, transaction, circumstance, fact, agreement, or other condition relating to the Company which exists
after the Closing Date.<BR>
<BR>
<A NAME="_Toc492201413"><B>Section &#9;<U>Indemnity Claims.</A></U> <BR>
</B><BR>
&#9;&#9;<U>Claims</U>. In the event that any claim ("Claim") is hereafter asserted by a party hereto as to which such party may be entitled to indemnification hereunder, such party ("Indemnitee") shall notify the party required by the terms of this
Agreement to indemnify the Indemnitee ("Indemnifying Party") thereof ("Claim Notice") within 30 days after (1) receipt of notice of commencement of any third-party litigation against such Indemnitee, (2) receipt by such Indemnitee of written notice of any
third-party claim pursuant to an invoice, notice of claim or assessment, against such Indemnitee, or (3) such Indemnitee becomes aware of the existence of any other event in respect of which indemnification may be sought from the Indemnifying Party. The
Claim Notice shall describe the Claim and the specific facts and circumstances in reasonable detail, shall include a copy of the Notice referred to in (1) and (2), above, shall indicate the amount, if known, or an estimate, if possible, of Damages that
have been or may be incurred or suffered.<BR>
<BR>
&#9;&#9;<U>Defense of Third Party Claim by Indemnifying Party</U>. The Indemnifying Party may elect to defend or compromise any Claim by a third party ("Third Party Claim"), at its or his own expense and by its or his own counsel, who shall be reasonably
acceptable to the Indemnitee. The election by the Indemnifying Party to defend or compromise a claim shall constitute an avowal by the Indemnifying Party that the Indemnifying Party is obligated to indemnify the Indemnitee with respect to such claim. The
Indemnitee may participate, at its or his own expense, in the defense of any Claim assumed by the Indemnifying Party. Without the approval of the Indemnitee, which approval shall not be unreasonably withheld or delayed, the Indemnifying Party shall not
agree to any compromise of a Claim defended by the Indemnifying Party which would require the Indemnitee to perform or take any action or to refrain from performing or taking any action.<BR>
<BR>
&#9;&#9;<U>Assumption of Defense by Indemnitee</U>. Notwithstanding the foregoing, if an Indemnitee determines in good faith that there is a reasonable probability that a proceeding may adversely affect it or its Affiliates other than as a result of
monetary damages for which it would be entitled to indemnification under this Agreement, the Indemnitee may, by notice to the Indemnifying Party, assume the exclusive right to defend, compromise, or settle such proceeding, but the Indemnifying Party will
not be bound by any determination of a proceeding so defended or any compromise or settlement effected without its consent (which may not be unreasonably withheld or delayed).<BR>
<BR>
&#9;&#9;<U>Defense of Claim by Indemnitee</U>. If, within thirty (30) days of the Indemnifying Party's receipt of a Claim Notice involving a Third Party Claim, the Indemnifying Party shall not have notified the Indemnitee of its or his election to assume
the defense, the Indemnitee shall have the right to assume control of the defense or compromise of such Claim, and the costs and expenses of such defense, including costs of investigation and reasonable attorneys' fees, shall be added to the Claim. The
Indemnitee shall have the right to compromise such Claim without the consent of the Indemnifying Party.<BR>
<BR>
&#9;&#9;<U>Cooperation of Parties</U>. The party assuming the defense of any Claim shall keep the other party reasonably informed at all times of the progress and development of the party's defense of and compromise efforts with respect to such Claim and
shall furnish the other party with copies of all relevant pleading, correspondence and other papers. In addition, the parties to this Agreement shall cooperate with each other, and make available to each other and their representatives all available
relevant records or other materials required by them for their use in defending, compromising or contesting any Claim. The failure to timely notify the Indemnifying Party of the commencement of such actions in accordance with Section 10.4(a) shall relieve
the Indemnifying Party from the obligation to indemnify but only to the extent the Indemnifying Party establishes by competent evidence that it is has been materially and adversely prejudiced thereby.<BR>
<BR>
<A NAME="_Toc492201414"><B>Section &#9;<U>No Liability of Company.</A></U> <BR>
</B><BR>
&#9;In the event a Claim is made against the Shareholder, for Buyer's Damages, the Shareholder, shall not, nor shall they be entitled to, maintain, assert or make a claim against the Company, or the directors, officers, affiliates, successor or assigns
of the Company for contribution, indemnity or for any other recovery, it being the intention of the parties hereto that after the Closing, the Company shall have no liability, obligation or responsibility for any Breach of the representations, warranties,
covenants or obligations of the Sellers made in this Agreement.<BR>
<BR>
<BR>
<A NAME="_Toc492201415"></P>
<B><P>ARTICLE : TERMINATION</A><BR>
</B><BR>
<A NAME="_Toc492201416"><B>Section &#9;<U>Termination.</A><BR>
</B></U><BR>
&#9;Notwithstanding anything herein to the contrary, this Agreement shall terminate if the Closing does not occur on or before November 1, 2000, unless extended by mutual written agreement of the parties to this Agreement.<BR>
<BR>
&#9;This Agreement may be terminated by the mutual written consent of the parties to this Agreement, (x) by Buyer, if there has been a material misrepresentation or other material breach by Sellers of any of their representations, warranties, covenants
and agreements set forth herein and there shall not have occurred and be continuing a breach or violation by Buyer, in any material respect, of any of its representations, warranties, covenants and agreements set forth herein and (y) by any of the Sellers
if there has been a material misrepresentation or other material breach by Buyer of any of its representations, warranties, covenants and agreements set forth herein and there shall not have occurred and be continuing a breach or violation by any of the
Sellers, in any material respect, of any of their representations, warranties, covenants and agreements set forth herein; <U>provided</U>, however, that if the breach by the non-terminating party is susceptible to cure, such party shall have 30 business days after receipt of written notice from the other party of its intention to terminate this Agreement in which to cure
such breach, and by any party hereto, on or after October 2, 2000, by written notice to the other parties, if (A) the Closing shall then not have occurred for any reason other than the breach or violation by the notifying party, in any material respect,
of any of its representations, warranties, covenants and agreements set forth in this Agreement and (B) there shall not have occurred and be continuing a breach or violation by the notifying party, in any material respect, of any of such representations,
warranties, covenants and agreements.<BR>
<BR>
&#9;If this Agreement is terminated pursuant to Section 11.1, this Agreement, other than with respect to the obligations under Sections 8.1, 12.1 and 12.3 hereof, shall thereafter have no effect, except that termination of this Agreement will not relieve
either party of any liability for breach of any covenants or agreements set forth herein occurring prior to such termination.<BR>
<BR>
<BR>
<A NAME="_Toc492201417"><B>ARTICLE : MISCELLANEOUS</A><BR>
</B><BR>
<A NAME="_Toc492201418"><B>Section &#9;<U>Expenses.</A><BR>
</B></U><BR>
Unless otherwise indicated, the parties shall bear their own respective expenses (including, but not limited to, all compensation and expenses of counsel, financial advisors, consultants, actuaries and independent accountants) incurred in connection with
the preparation and execution of this Agreement and consummation of the transactions contemplated hereby.<BR>
<B><BR>
<A NAME="_Toc492201419">Section &#9;<U>Best Efforts; Further Assurances.</A></U><BR>
</B><BR>
&#9;<U>Commitment to Best Efforts.</U> Subject to the rights of any Seller or the Buyer, as the case may be, under Section 11.1, each party hereto shall use its best efforts to cause all conditions to its obligations hereunder to be timely satisfied and
to perform and fulfill all obligations on its part to be performed and fulfilled under this Agreement, to the end that the transactions contemplated by this Agreement shall be effected substantially in accordance with its terms as soon as reasonably
practicable, each party shall cooperate with the other party in such actions and in securing requisite consents and each party shall execute and deliver such further documents and take such other actions as may be necessary or appropriate to consummate or
implement the transactions contemplated hereby or to evidence such events or matters.<BR>
<BR>
&#9;<U>Limitation.</U> As used in this Agreement, the term "best efforts" shall not mean efforts which require the performing party to do any act that is commercially unreasonable under the circumstances, to make any capital contribution or to expend any
funds other than in payment of reasonable out-of-pocket expenses incurred in satisfying obligations hereunder, including but not limited to the fees, expenses and disbursements of its accountants, counsel and other professional advisors.<BR>
<BR>
&#9;<U>Exclusive Dealing.</U> Until the Closing Date or the earlier termination of this Agreement, the Sellers will not, nor will any of them permit any officers, directors, employees or other advisors or representatives to (i) solicit, initiate or
encourage submission of any proposal to purchase the Shares, the Premises or any of the Company's assets, other than in the ordinary course of business; or (ii) enter into any agreement with respect to any such proposal.<BR>
<BR>
<A NAME="_Toc492201420"><B>Section &#9;<U>Public Disclosure.</A><BR>
</B></U><BR>
Prior to the Closing Date, none of the parties will make any public release of information regarding any matters contemplated herein without the consent of the other parties, except for press releases issued by Buyer as required by law.<BR>
<BR>
<A NAME="_Toc492201421"><B>Section &#9;<U>Assignment.</A><BR>
</B></U><BR>
This Agreement may not be assigned by either party, by operation of law or otherwise.<BR>
<B><BR>
<A NAME="_Toc492201422">Section &#9;<U>Amendments and Waivers.</A><BR>
</B></U><BR>
The provisions of this Agreement may not be amended, supplemented or changed orally, but only by writing signed by Buyer and Sellers and making specific reference to this Agreement.<BR>
<BR>
<A NAME="_Toc492201423"><B>Section &#9;<U>Entire Agreement.</A><BR>
</B></U><BR>
This Agreement constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, among the parties, with respect to the subject matter hereof, except as otherwise contemplated herein; and is not intended to
confer upon any other persons any rights or remedies hereunder.<BR>
<BR>
<A NAME="_Toc492201424"><B>Section &#9;<U>Schedules.</A><BR>
</B></U><BR>
The inclusion of any matter in any Schedule or Exhibit to this Agreement shall be deemed to be an inclusion for all purposes of this Agreement, including each representation to which it may relate.<BR>
<BR>
<A NAME="_Toc492201425"><B>Section &#9;<U>Notices.</A></U><BR>
</B><BR>
All notices, requests, demands or other communications herein required or permitted to be given shall be in writing and may be personally served, telecopied, telexed or sent by United States mail and shall be deemed to have given when delivered in
person, upon receipt of telecopy or telex (with confirmed answerback) or five business days after deposit in the United States mail, registered or certified, postage prepaid and properly addressed to the party's address as set forth on the signature pages
hereof. Any party may change the address to which notices are to be addressed by giving the other party written notice in the manner herein set forth.<BR>
<BR>
<A NAME="_Toc492201426"><B>Section &#9;<U>Governing Law.</A><BR>
</B><BR>
</U>&#9;This Agreement shall be governed by, and construed in accordance with, the laws of the State of Tennessee, without regard to conflicts of law principles. However, the sale, transfer and assignment of the Premises to Buyer shall be governed by and
construed in accordance with the laws and local practice of Washington.<BR>
<BR>
<A NAME="_Toc492201427"><B>Section &#9;<U>Severability.</A></U><BR>
</B><BR>
In case any provision in this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.<BR>
<BR>
<A NAME="_Toc492201428"><B>Section &#9;<U>Section Headings.</A><BR>
</B></U><BR>
The section and paragraph headings contained in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.<BR>
<BR>
<A NAME="_Toc492201429"><B>Section &#9;<U>Counterparts.</A><BR>
</B></U><BR>
This Agreement and any amendments hereto may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which shall be considered one and the same instrument.</P>
<P><BR>
<A NAME="_Toc492201430"><B>Section &#9;<U>Representation By Counsel; Interpretation.</A></U><BR>
</B><BR>
Each party acknowledges that such party has been represented by counsel in connection with this Agreement and the transactions contemplated by this Agreement. Accordingly, any rule of law, or any legal decision that would require interpretation of any
claimed ambiguities in this Agreement against the party that drafted it has no application and is expressly waived. The provisions of this Agreement shall be interpreted in a reasonable manner to effect the intent of the parties.<BR>
<BR>
<A NAME="_Toc492201431"><B>Section &#9;<U>Arbitration Clause.</A><BR>
</B></U><BR>
Any dispute pertaining to this Agreement or the matters addressed herein shall be referred to arbitration at the request of any party before a single arbitrator. In any arbitration the parties shall be entitled to be legally represented. This matter
shall be arbitrated pursuant to Title 9 United States Code, the Federal Arbitration Act. The Arbitration Rules of the Center for Public Resources, New York, New York for Non-Administered Arbitration of Business Disputes, as they exist on the date of this
Agreement, are adopted as the rules governing this arbitration. Interpretation and enforcement of this instrument and all of this Agreement and all questions, issues or claims regarding the performance of the parties hereunder shall be controlled and
governed by the law of the State of Tennessee except as otherwise specifically stated to the contrary in this Agreement. The arbitration shall take place in Tacoma, Washington, at a mutually agreeable site.<B><BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
[Signatures on Following Page]</P>
<P>IN WITNESS WHEREOF</B>, the parties hereto have caused this Agreement to be duly executed and delivered by their respective officers therein duly authorized as of the 2 day of October, 2000.<BR>
<BR>
<BR>
<BR>
BUYER:&#9;&#9;&#9;&#9;&#9;&#9;COMPANY:<BR>
<B><BR>
</B>ASTEC INDUSTRIES, INC.&#9;&#9;&#9;&#9;CARLSON PAVING PRODUCTS, INC. <BR>
<BR>
<BR>
By: F. McKamy Hall&#9;&#9;&#9;&#9;&#9;By: Lawrence Raymond<BR>
<BR>
Title: CFO, Vice President&#9;&#9;&#9;&#9;Title: President<BR>
<BR>
<BR>
<BR>
SHAREHOLDER:<BR>
<BR>
<BR>
<BR>
Lawrence Raymond</P></BODY>
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<B><FONT SIZE=5><P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
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<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">EXHIBIT 10.35</P>
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<FONT FACE="Arial" SIZE=2><P>Collective Bargaining Agreement, dated February 1, 2001, by and between Trencor, Inc. and the United States Steelworkers of America, AFL-CIO and CLC. </FONT></TD>
</TR>
</TABLE>
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<B><P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
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<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">EXHIBIT 10.35</P><DIR>
<DIR>
<DIR>

</B><P ALIGN="CENTER">Collective Bargaining Agreement, dated February 1, 2001, by and between Trencor, Inc. and the United States Steelworkers of America, AFL-CIO and CLO.</P></DIR>
</DIR>
</DIR>

<P ALIGN="JUSTIFY"><BR>
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<BR>
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<BR>
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<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=638>
<TR><TD VALIGN="TOP">
<P ALIGN="CENTER"><B>LABOR AGREEMENT</B></TD>
</TR>
<TR><TD VALIGN="TOP">
<B><P ALIGN="CENTER">Between</B></TD>
</TR>
<TR><TD VALIGN="TOP">
<B><P ALIGN="CENTER">TRENCOR, INC.</B></TD>
</TR>
<TR><TD VALIGN="TOP">
<B><P ALIGN="CENTER">and</B></TD>
</TR>
<TR><TD VALIGN="TOP">
<B><P ALIGN="CENTER">UNITED STEELWORKERS OF AMERICA, AFL-CIO, CLC</B></TD>
</TR>
</TABLE>
</CENTER></P>

<P ALIGN="JUSTIFY">This AGREEMENT is entered into as of the 1st day of February, 2001, by and between Trencor, Inc. (the "Company" or "Employer"), located at 1400 East Highway 26, Grapevine, Texas 76051, and the United Steelworkers of America, AFL-CIO,
CLC ("Union"). In consideration of the mutual covenants herein contained, it is agreed as follows:</P>
<P ALIGN="JUSTIFY">This Agreement covers only those matters specifically contained herein and supersedes all prior agreements between the Company and the Union, including, without limitation, any interim or contingent agreements, letters of
interpretation, verbal understandings, arbitration awards, and/or past practices.</P>
<B><P ALIGN="CENTER">SCOPE AND RECOGNITION</P>
</B><P ALIGN="JUSTIFY">The Company recognizes the Union as the sole and exclusive bargaining representative for all Employees covered herein as to wages, hours and working conditions. The term "Employees" as used in this Agreement, shall only include all
designated production and maintenance employees employed by the Employer at its facility at 1400 East Highway 26, Grapevine, Texas 76051. Excluded are all office clerical employees, sales persons, field service technicians, professional employees,
leadmen, supervisors and guards as defined in the National Labor Relations Act. </P>
<B><P ALIGN="CENTER">TERM OF AGREEMENT</P>
</B><P ALIGN="JUSTIFY">This Agreement shall be effective as of 12:01 a.m., February 1, 2001, and shall continue in full force and effect through Midnight, January 31, 2004. This Agreement shall be automatically renewed from year to year after January 31,
2004 upon all the terms and conditions then in effect unless either party terminates this Agreement effective Midnight, January 31, 2004, or the Midnight of any ensuing anniversary, on not less than 60 days prior written notice to the other party.</P>
<B><P ALIGN="CENTER">COMPLETE AGREEMENT AND SAVINGS CLAUSE</P>
</B><P ALIGN="JUSTIFY">The parties hereto acknowledge that, during the negotiations which resulted in this Agreement, each had the unlimited right and opportunity to make demands and proposals with respect to all proper subjects of collective bargaining,
all such subjects have been discussed and negotiated upon, and the agreements contained in this Agreement were arrived at after the free exercise of such rights and opportunities. Therefore, the Company and Union, for the life of this Agreement, each
voluntarily and unqualifiedly waive the right, and each agrees that the other shall not be obligated, to bargain collectively with respect to any subject matter not specifically referred to or covered in this Agreement, even though such subject or matter
may not have been within the knowledge or contemplation of either or both of the parties at the time they negotiated or signed this Agreement.</P>
<B><P ALIGN="CENTER">PROBATIONARY PERIOD</P>
</B><P ALIGN="JUSTIFY">Each new and re-hired Employee shall be considered a probationary Employee for the first ninety (90) calendar days of employment. During the probationary period, the Company shall have sole and exclusive right to discipline or
terminate an Employee with or without cause and neither the probationary Employee nor the Union shall have the right to grieve, arbitrate or otherwise contest the action of the Company.</P>
<B><P ALIGN="CENTER">CONFLICT OF INTEREST</P>
</B><P ALIGN="JUSTIFY">All Employees are prohibited from engaging in any activity, practice or act which conflicts with the interests of the Company or its customers. No Employee shall accept full-time, part-time or temporary employment for any
competitor of Company without the consent of the Company, and no Employee shall do contract work in the heavy equipment manufacturing industry. Similar situations which create an actual conflict of loyalty or interest or the appearance of such a conflict,
or which are disruptive of the stable work environment which the Company seeks to maintain, must be avoided. An Employee's failure to abide by this paragraph shall be subject to discipline up to and including discharge.</P>
<B><P ALIGN="CENTER">NO DISCRIMINATION</P>
</B><P ALIGN="JUSTIFY">The Company and the Union, in their respective areas, agree there shall be no discrimination against any Employee, or applicant for employment or union membership, because of race, creed, color, age, sex, place of national origin,
veteran status, disability (provided the disability does not impair the person's ability to perform the required work) or any other classification as defined in Presidential Executive Orders, Federal and State legislation.</P>
<P ALIGN="JUSTIFY">Wherever the masculine gender is used in this Agreement, it shall be construed to mean either sex.</P>
<B><P ALIGN="CENTER">UNION WAIVER UNDER AMERICANS WITH DISABILITIES ACT</P>
</B><U><P ALIGN="JUSTIFY">Section 1</U>&#9;Both the Company and the Union agree to fully comply with the provisions and terms of the Americans with Disabilities Act.</P>
<U><P ALIGN="JUSTIFY">Section 2</U>&#9;Subject to the provisions in this Article, the Company shall have the right, in its sole discretion, to take whatever action it deems necessary to comply with the Americans with Disabilities Act, including but not
limited to discussing reasonable accommodations directly with affected Employees.</P>
<U><P ALIGN="JUSTIFY">Section 3</U>&#9;The Company shall have no obligation to disclose to the Union and/or any employee any information concerning the disability of any applicant and/or Employee (within or outside the bargaining unit). The Company shall
have no obligation to disclose to the Union and/or any Employee any information concerning any action taken pursuant to Section 2 of this Article which the Company deems necessary to comply with the Americans with Disabilities Act, except to the extent
that a proposed or implemented accommodation adversely impacts the rights of another employee within the collective bargaining unit. In such a case, the Company will notify and consult with the Union concerning such proposed or implemented accommodation.</P>
<U><P ALIGN="JUSTIFY">Section 4</U>&#9;In reviewing a grievance by an employee other than the employee requesting any accommodation under the ADA challenging an accommodation decision, the arbitrator shall consider the needs of the disabled employee, and
shall have no authority to reverse an accommodation made for purposes of complying with the ADA, except to the extent that another employee's rights under the contract are substantially adversely impacted. In such a case, the arbitrator may order
prospective modification or reinstatement of the grievant's rights only. In recognition of the difficult issues raised by accommodation requests, no back pay or other retroactive relief against the company may be ordered.</P>
<B><P ALIGN="CENTER">WORKING CONDITIONS</P>
</B><U><P ALIGN="JUSTIFY">Section 1</U>&#9;Forty (40) hours actually worked at straight time shall constitute a week's work. A scheduled work day may include as many as ten (10) hours. The provisions of this Article are intended merely to provide a basis
for determining the number of hours of work for which an Employee shall be paid at overtime rates, and nothing herein shall be construed as a guarantee by the Company of a specified number of hours of work per day or per week or as a limitation on the
hours of work per day or per week.</P>
<U><P ALIGN="JUSTIFY">Section 2</U>&#9;The Company shall have the sole and exclusive right to establish and, from time to time, change the hours for the commencement or cessation of work as well as the daily and weekly work schedules for all Employees,
for different job classifications, or for individual Employees within each job classification. Consistent with production requirements, the Company will make a good faith effort to schedule an Employee's work week over five consecutive days.</P>
<U><P ALIGN="JUSTIFY">Section 3</U>&#9;A thirty (30) minute unpaid lunch period shall be provided on each shift. The Company shall designate the time of said break period, and the time shall be between 11 a.m. and 1 p.m. or at such other time as the
parties may agree, except in cases of emergency.</P>
<U><P ALIGN="JUSTIFY">Section 4</U>&#9;Nothing contained herein shall limit the amount of work to be performed by an Employee during a normal work day/work week. The establishment of the amount of work to be performed is the sole and exclusive right of
management. The Company will consider equipment and work flow limitations when setting and evaluating the amount of work to be performed.</P>
<U><P ALIGN="JUSTIFY">Section 5</U>&#9;Where an Employee is specifically directed by the Company to work in excess of forty (40) hours in any week, such Employee shall be paid for such work in excess of forty (40) hours, one and one-half (1-1/2) times
the employee's normal rate of pay. Paid holiday time, vacation time, and jury duty time used by an Employee will count as hours worked (up to a maximum of eight (8) hours per day) for purposes of calculating overtime.</P>
<U><P ALIGN="JUSTIFY">Section 6</U>&#9;The Company shall schedule requirements for weekend overtime as soon as practical, but no later than two hours before the end of the normal work week, except in cases of emergency or customer service requirements.
The Company shall schedule requirements for daily overtime as soon as practical, but no later than one hour before the end of the normal work shift, except in cases of emergency or customer service requirements. The Company reserves the right to post or
otherwise inform Employees of requirements for overtime at a later time if the Management believes that circumstances warrant the late posting.</P>
<U><P ALIGN="JUSTIFY">Section 7</U>&#9;Except when overtime is required to complete an operation already underway or when an entire department is scheduled for overtime, overtime opportunities will be made available on the following basis: Qualified
employees will first be asked to volunteer using the "low-man" concept, as outlined in Section 8 of this Article. This means that the qualified man currently within the job classification needed to work overtime who has the lowest amount of overtime hours
will get the first opportunity to be scheduled for overtime. A Union representative within each designated department will maintain the overtime list (by department, classification, and shift) that will be used to allocate overtime using the "low-man"
concept, and will provide the Company with an immediate response to a request for overtime made under the "low-man" concept. The Company will schedule qualified employees for overtime if the needed overtime cannot be filled by "low man" volunteers.</P>
<U><P ALIGN="JUSTIFY">Section 8</U>&#9;In using the "Low Man Concept" for voluntary overtime distribution the overtime list will be maintained by using the following principles.</P>

<UL>
<P ALIGN="JUSTIFY"><LI>A Union representative within each designated department will maintain the overtime list by department, classification and shift.</LI></P>
<P ALIGN="JUSTIFY"><LI>The supervisor within each designated department will tell the union representative the number of employees needed to accomplish the overtime task. The union representative will then make a determination of which individuals will
be canvassed for the overtime and then accompany the supervisor who will make the overtime request to the designated employee(s). The employees acceptance or denial will then be recorded in order to maintain the future integrity of the overtime list. Any
questions regarding the proper person(s) being asked will be the responsibility of the Local Union.</LI></P>
<P ALIGN="JUSTIFY"><LI>All overtime opportunities will be charged on the overtime list when offered and not accepted or when the employee is not otherwise available.</LI></P></UL>

<P ALIGN="JUSTIFY">These are the basic guidelines to be used in determining voluntary overtime distribution for bargaining unit employees. There is no prohibition for improvements made by mutual consent by the parties vested with the responsibility of
implementation.</P>
<B><P ALIGN="CENTER">BULLETIN BOARDS</P>
</B><P ALIGN="JUSTIFY">The bulletin board located inside the break room for plant employees is designated as a Company bulletin board for posting official Company announcements and will contain official Company announcements, required postings, and other
things.</P>
<P ALIGN="JUSTIFY">There are other bulletin boards in various areas of the facility where employees may, subject to approval by the Company's Personnel Department, post personal notices.</P>
<P ALIGN="JUSTIFY">The bulletin board located on the wall of the central shop office is designated as a Union bulletin board where Union members may, subject to approval by the Company's Personnel Department, post Union announcements and other things.
All union-related postings will be posted at this location.</P>
<B><P ALIGN="CENTER">PERSONAL LEAVE POLICY</P>
</B><P ALIGN="JUSTIFY">Requests for unpaid leaves of absence not to exceed five (5) working days for personal family reasons not covered under the Family and Medical Leave Act, Texas Government Code Ann. 431.005-006 (concerning military leaves of
absence) and personal days off, including requests to attend Union conferences for educational or training purposes, will be considered on an individual basis for regular full-time employees and will be based on the employee's needs and Company's needs.
Except for emergency situations, a request for personal leave must be submitted to the immediate supervisor in writing at least two/weeks prior to the proposed start date or as soon as practical. The request must explain the reason for the leave and
indicate the expected date of return. Management will not arbitrarily withhold permission to take a leave of absence under this section.</P>
<P ALIGN="JUSTIFY">It is understood that when approved leaves begin on Monday and end on the following Friday, the individual will not be required to work the weekend before or the weekend after the leave except in cases of emergency or customer service
requirements that arose during the employees leave.</P>
<P ALIGN="JUSTIFY">Employees must continue to pay their portion of any benefits that are normally payroll deducted during their leave.</P>
<B><P ALIGN="CENTER">EMPLOYEE PRODUCTION AND CONDUCT</P>
</B><U><P ALIGN="JUSTIFY">Section 1</U>&#9;The Union recognizes and acknowledges that the Company has the duty of maintaining good discipline among its Employees because the Company is responsible for the efficient, safe and orderly operation of its
business.</P>
<U><P ALIGN="JUSTIFY">Section 2</U>&#9;The Company shall have the right to discipline and/or discharge Employees for cause.</P>
<U><P ALIGN="JUSTIFY">Section 3</U>&#9;In the case of any offense for which an Employee may be discharged, the Company may, in its sole discretion, impose a lesser penalty. The imposition of a lesser penalty may not be used as evidence of discriminatory
treatment in any arbitration proceeding under this Agreement.</P>
<U><P ALIGN="JUSTIFY">Section 4</U>&#9;The following shall constitute cause for immediate discharge not subject to the Grievance and Arbitration provisions of this Agreement:</P><DIR>
<DIR>
<DIR>
<DIR>

<P ALIGN="JUSTIFY">(a) &#9;Fighting on Company property, where it is undisputed that the Employee initiated physical contact with another Employee;</P>
<P ALIGN="JUSTIFY">(b)&#9;Possessing non-prescription intoxicants or illegal drugs on Company property;</P>
<P ALIGN="JUSTIFY">(c)&#9;Sale of drugs on Company property, while on duty, or to other Employees;</P>
<P ALIGN="JUSTIFY">(d)&#9;A positive laboratory test result establishing the presence in the Employee's bodily system of illegal drugs, controlled substances, alcohol or the presence of lawful over-the-counter or prescription drugs (at a level higher
than the manufacturer's or doctor's recommended dosage);</P>
<P ALIGN="JUSTIFY">(e)&#9;Drinking intoxicants, using illegal drugs, or misusing legal drugs off Company property and then returning to work <U>or</U> working "under the influence";</P>
<P ALIGN="JUSTIFY">(f)&#9;Being convicted of a felony, not including traffic violations, unless such traffic violations may result in a jail sentence; or</P>
<P ALIGN="JUSTIFY">(g)&#9;The possession of guns, knives (except for pocket knives), illegal weapons of any kind on Company property or while the Employee is on duty and/or representing the Company, whether on or off Company property.</P></DIR>
</DIR>
</DIR>
</DIR>

<U><P ALIGN="JUSTIFY">Section 5</U>&#9;The following shall constitute cause for discipline, up to and including immediate discharge, expressly subject to the Grievance and Arbitration provisions of this Agreement, and the enumeration here is by way of
illustration and shall not be deemed to exclude or restrict the Company's right to discipline or discharge its Employees for any other cause:</P><DIR>
<DIR>
<DIR>
<DIR>

<P ALIGN="JUSTIFY">(a) &#9;Fighting on Company property, where it is disputed that the Employee initiated physical contact with another;</P>
<P ALIGN="JUSTIFY">(b)&#9;Incompetence or inefficiency;</P>
<P ALIGN="JUSTIFY">(c)&#9;Unexcused absence and/or tardiness;</P>
<P ALIGN="JUSTIFY">(d)&#9;Breach of this Agreement;</P>
<P ALIGN="JUSTIFY">(e)&#9;Refusal to execute any work received from or destined to another Company whose Employees are locked out or on strike;</P>
<P ALIGN="JUSTIFY">(f)&#9;Misconduct on Company property;</P>
<P ALIGN="JUSTIFY">(g)&#9;Violation of Company rules, including safety rules;</P>
<P ALIGN="JUSTIFY">(h)&#9;Disparagement of the Company or any Company official whether this occurs on or off Company property;</P>
<P ALIGN="JUSTIFY">(i)&#9;Disloyalty;</P>
<P ALIGN="JUSTIFY">(j)&#9;Dishonesty;</P>
<P ALIGN="JUSTIFY">(k)&#9;Working for any company that competes in any way with the Company, without the Company's written approval;</P>
<P ALIGN="JUSTIFY">(l)&#9;Working for any other employer or becoming self-employed if doing so interferes with the Employee's satisfactory performance for the Company;</P>
<P ALIGN="JUSTIFY">(m)&#9;Insubordination which shall be defined as a refusal of an Employee to follow orders, a refusal to perform work as assigned or the use of abusive, profane and/or inflammatory language (exclusive of "shop talk") when directed to
any Company executive, manager or supervisor;</P>
<P ALIGN="JUSTIFY">(n)&#9;Substantial misstatement or omission in the Employee's application for employment or other document used or prepared during the course of employment;</P>
<P ALIGN="JUSTIFY">(o)&#9;Substantial false statement or willful misstatement regarding Company business;</P>
<P ALIGN="JUSTIFY">(p)&#9;Refusal to use the materials or equipment received from or delivered by another Company whose Employees are locked out or on strike;</P>
<P ALIGN="JUSTIFY">(q)&#9;Misuse of Company material, facilities or equipment; or</P>
<P ALIGN="JUSTIFY">(r)&#9;Willful neglect of duty.</P></DIR>
</DIR>
</DIR>
</DIR>

<U><P ALIGN="JUSTIFY">Section 6</U>&#9;To the fullest extent permitted by law, the Company shall have the right to require of any Employee at any time a physical examination by a physician of its choosing to determine said Employee's physical and mental
ability to perform his job assignment efficiently and safely. To the fullest extent permitted by law, the Company shall have the right to evaluate the ability of the Employee to perform his job assignment efficiently and safely, and the Company may
promote, demote, lay off, transfer or discharge said Employees as a result of such evaluation. It is understood that the Company may only act with just and proper cause and that its actions shall be subject to the Grievance and Arbitration provision of
this Agreement.</P>
<U><P ALIGN="JUSTIFY">Section 7</U>&#9;The Company shall have the right to conduct job studies and to use that information to evaluate the work performance of the Employees covered by this Agreement. It is understood that the Company may only act with
just and proper cause and that its actions shall be subject to the Grievance and Arbitration provision of this Agreement. </P>
<U><P ALIGN="JUSTIFY">Section 8</U>&#9;With respect to this Article, the Company's or Union's failure to exercise any right, prerogative, or function hereby reserved to it, or the Company's or Union's exercise of any such right, prerogative, or function
in a particular way, shall not be considered a waiver of the Company's or Union's right to exercise such right, prerogative, or function or preclude it from exercising the same in some other way not to conflict with the express provisions of this Agreement.</P>
<U><P ALIGN="JUSTIFY">Section 9</U>&#9;There shall be no restriction placed upon the amount of work performed by any individual or group of individuals, nor shall production be limited in any manner.</P>
<U><P ALIGN="JUSTIFY">Section 10</U>&#9;Subject to the regular hours of work established hereunder, the Company retains the sole right to determine the extent to which its plant or any part thereof shall be operated or shutdown or production reduced or
increased. No shutdown or reduction because of the lack of sales, shortage of material or other similar causes shall be deemed a lockout (within the meaning of this Agreement). The right to establish posting standards and the scheduling of operations and
the choice of equipment for various jobs shall be vested exclusively in the Company.</P>
<B><P ALIGN="CENTER">SUB-CONTRACTING</P>
</B><P ALIGN="JUSTIFY">Both parties recognize and agree that contracting out is an essential part of maintaining an efficient and competitive business. The Company will refrain from contracting out any work normally performed by the bargaining unit
employees unless there is no other cost-effective alternative. It is understood that some tasks cannot be accomplished through any other method.</P>
<P ALIGN="JUSTIFY">The Company maintains the right to decide whether there is a cost-effective alternative to subcontracting, based on, but not limited to, business needs, customer demand, availability of product, equipment expectations, and manpower.</P>

<B><P ALIGN="CENTER">RIGHTS OF PARTIES</P>
</B><U><P ALIGN="JUSTIFY">Section 1</U>&#9;The Union has the exclusive right and duty to bargain collectively and process grievances for and on behalf of all of the employees in the Bargaining Unit. Otherwise, the Union does not have or claim any right
to participate in or interfere with the management or the operation of the business of the Company or the determination of the operating policies of the Company or the selection, supervision or direction of the Employees of the Company.</P>
<U><P ALIGN="JUSTIFY">Section 2</U>&#9;Except to the extent expressly abridged by a specific provision of this Agreement, the Employer reserves and retains solely and exclusively all of its normal, inherent, and common law rights to manage the business,
as such rights existed prior to the execution of this Agreement, and it is agreed that the Employer alone shall have the authority to determine and correct policies, modes and methods of operating its business, without interference by the Union. The sole
and exclusive rights of Management which are not specifically abridged by this Agreement include, without limitation, the following: </P>
<OL TYPE="a">
<OL TYPE="a">

<P ALIGN="JUSTIFY"><LI>To determine the methods, materials and processes to be employed;</LI></P>
<P ALIGN="JUSTIFY"><LI>To introduce improved methods and equipment to reduce cost for the production and sale of its services;</LI></P>
<P ALIGN="JUSTIFY"><LI>To change, discontinue or automate processes or operations;</LI></P>
<P ALIGN="JUSTIFY"><LI>To determine the qualifications of new Employees;</LI></P>
<P ALIGN="JUSTIFY"><LI>To hire, select and to determine the number and type of Employees required; </LI></P>
<P ALIGN="JUSTIFY"><LI>To determine the size and composition of its work forces;</LI></P>
<P ALIGN="JUSTIFY"><LI>To determine and select the equipment, machinery, products and supplies to be used, operated, manufactured, handled, processed, sold, or distributed;</LI></P>
<P ALIGN="JUSTIFY"><LI>To hire, select and determine the number and type of Employees required;</LI></P>
<P ALIGN="JUSTIFY"><LI>To promote, transfer, layoff, terminate, or otherwise relieve Employees from duty for lack of work or other reasons in accordance with the terms of this Agreement;</LI></P>
<P ALIGN="JUSTIFY"><LI>To reprimand, suspend, discharge, or otherwise discipline employees for just cause or other reasons in accordance with this Agreement;</LI></P>
<P ALIGN="JUSTIFY"><LI>To determine job content and the types of work needed;</LI></P>
<P ALIGN="JUSTIFY"><LI>To establish work and quality standards;</LI></P>
<P ALIGN="JUSTIFY"><LI>To assign work;</LI></P>
<P ALIGN="JUSTIFY"><LI>To determine the hours and dates to be worked on each job and each shift;</LI></P>
<P ALIGN="JUSTIFY"><LI>To establish shifts, to set the hours of work and the number of Employees for such shifts, and from time to time to change the shifts and the hours and Employees of the shifts;</LI></P>
<P ALIGN="JUSTIFY"><LI>To set the standards of productivity, the products to be produced and/or the services to be rendered;</LI></P>
<P ALIGN="JUSTIFY"><LI>To discontinue, transfer, assign, all or any part of its business operations;</LI></P>
<P ALIGN="JUSTIFY"><LI>To determine the fact of lack of work;</LI></P>
<P ALIGN="JUSTIFY"><LI>To expand, reduce, alter, combine, transfer, assign, establish or cease any job, job classification or operation;</LI></P>
<P ALIGN="JUSTIFY"><LI>To control, regulate, change, or discontinue the use of supplies, machinery, tools and equipment, vehicles or other property owned, used, processed or leased by the Employer; </LI></P>
<P ALIGN="JUSTIFY"><LI>To select new equipment for its operations, including equipment for new operations;</LI></P>
<P ALIGN="JUSTIFY"><LI>To adopt and enforce safety rules and rules of conduct, policies and practices; and</LI></P>
<P ALIGN="JUSTIFY"><LI>To introduce new, different or improved methods, means and processes of transportation, production, maintenance, service and operation and otherwise generally to manage the operations of the Employer and to direct the work forces.
</LI></P></OL>
</OL>

<U><P ALIGN="JUSTIFY">Section 3</U>&#9;As a condition of entering employment, or after a thirty (30) day absence for any reason, the Company reserves the right to require a medical examination and a certificate from a qualified and mutually acceptable
medial doctor as to the Employee's fitness and physical ability.</P>
<U><P ALIGN="JUSTIFY">Section 4</U>&#9;The Company shall have the sole and exclusive right to require of any Employee at any time a physical examination by a physician of its choosing to determine said Employee's physical and mental ability to perform
his job assignment efficiently and safely. To the fullest extent permitted by law, the Company shall have the sole and exclusive right to evaluate the ability of the Employee to perform his job assignment efficiently and safely, and the Company may
promote, lay off, or discharge said Employees as a result of such evaluation.</P>
<U><P ALIGN="JUSTIFY">Section 5</U>&#9;The Company shall have the sole and exclusive right to administer a policy governing the use, possession and/or sale of drugs and/or alcohol; to require Employees to submit to testing for the presence of drugs
and/or alcohol; to discipline Employees for violations of policies governing drugs and alcohol. Information concerning the nature of the random testing procedure used at the Company will be obtained by the Company from the independent third-party company
responsible for directing the random testing procedure and disclosed to the Union.</P>
<U><P ALIGN="JUSTIFY">Section 6</U>&#9;With respect to this Article, the Company's failure to exercise any right, prerogative or function hereby reserved to it or the Company's exercise of any such right, prerogative, or function in a particular way,
shall not be considered a waiver of the Company's right to exercise such right, prerogative, or function or preclude it from exercising the same in some other way not in conflict with the express provisions of this Agreement.</P>
<B><P ALIGN="CENTER">TEMPORARY EMPLOYEES - TEMPORARY AGENCIES</P>
</B><P ALIGN="JUSTIFY">The Company has the right to, in its sole discretion, use employees of temporary agencies to perform Bargaining Unit work for periods of up to ninety (90) days per such employee. During this temporary period under which the
employee is still employed by the temporary agency, the Company shall have the sole and exclusive right to discipline or terminate the employee's services with or without cause and neither the employee nor the Union shall have the right to grieve,
arbitrate, or otherwise contest the action of the Company. If, at the conclusion of the ninety (90) day period or earlier, the Company hires the employee as a full-time employee of the Company to work in the Bargaining Unit, the Company will recognize the
Union as the employee's sole and exclusive bargaining representative pursuant to the Scope and Recognition article of this Agreement and the employee will commence working as a new employee pursuant to the Probationary Period article of this Agreement.</P>
<B><P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">BARGAINING UNIT WORK</P>
</B><P ALIGN="JUSTIFY">Other than leadmen and field service technicians, who may perform Bargaining Unit work, persons whose regular jobs are not in the Bargaining Unit will not work on any job for which rates are established by the Agreement, except for
the following purposes:</P>
<OL TYPE="a">
<OL TYPE="a">

<P ALIGN="JUSTIFY"><LI>Bona fide training of employees;</LI></P>
<P ALIGN="JUSTIFY"><LI>Protection of life and property under emergency conditions;</LI></P>
<P ALIGN="JUSTIFY"><LI>Development of new equipment and techniques critical to the operation of the Plant;</LI></P>
<P ALIGN="JUSTIFY"><LI>Training of management or supervisory personnel for managerial duties;</LI></P>
<P ALIGN="JUSTIFY"><LI>De minimus activities that do not result in the loss of pay or work opportunities for bargaining unit employees; </LI></P>
<P ALIGN="JUSTIFY"><LI>Occasional adjustments of machinery or materials or taking measurements necessary for evaluation of operations; or </LI></P>
<P ALIGN="JUSTIFY"><LI>Other cases of emergency or customer service requirements requiring work of two hours or less per day.</LI></P></OL>
</OL>

<P ALIGN="JUSTIFY">&#9;But for these exceptions, no Employee will be deprived of work or pay because of substitution by excluded personnel. If a management or supervisory employee performs Bargaining Unit work in violation of this Section and the
Bargaining Unit employee who otherwise would have performed the work can be reasonably identified, the Company shall pay that employee the applicable standard hourly wage rate for the time involved.</P>
<B><P ALIGN="CENTER">LAYOFFS, RECALL AND JOB BIDDING</P>
</B><U><P ALIGN="JUSTIFY">Section 1</U>&#9;The Company shall have the right to lay off and recall Employees. When making these determinations, the Company shall determine the affected job classification, specific job performed, and number of employees it
needs and then select Employees for layoff or recall using the following criteria in the order noted:</P>
<P ALIGN="JUSTIFY">&#9;</P><DIR>
<DIR>
<DIR>
<DIR>

<P ALIGN="JUSTIFY">(a)&#9;The comparative skills and abilities of the Employees within the affected job classification(s); </P>
<P ALIGN="JUSTIFY">(b)&#9;The comparative plant seniority and comparative performance of the Employees within the affected job classification(s);</P><DIR>
<DIR>

<P ALIGN="JUSTIFY">(1)&#9;Plant seniority shall be calculated from each individual employee's date of employment in the Bargaining Unit of the Company. An Employee's continuous service shall be deemed to be broken and seniority lost if he or she is
discharged for just cause, he or she voluntarily quits, he or she fails to return to work after a layoff within five (5) working days after notification is mailed by Certified Mail (unless extenuating circumstances as determined by the Company prevent the
Employee from doing so), he or she has been laid off for six (6) months or absent due to a work related injury or illness for twelve (12) months or more, he or she is absent for more than three (3) consecutive working days without just cause or without
notifying the Company, he or she is absent from work for any reason (other than a work related injury or illness for twelve (12) months or more, as discussed above) for six (6) months or more.</P>
<P ALIGN="JUSTIFY">(2)&#9;Comparative performance will be assessed by the Company's managers and supervisors using the criteria set out in the Company's performance appraisal forms, as they may exist from time to time and will be distributed to the
bargaining unit, with the understanding that the Company will consult with the Union before making any material change to the performance appraisal form.</P></DIR>
</DIR>
</DIR>
</DIR>

<P ALIGN="JUSTIFY">(c)&#9;The comparative discipline, attendance, and tardiness records of the Employees.</P></DIR>
</DIR>

<U><P ALIGN="JUSTIFY">Section 2</U>&#9;The Company shall have the right to promote, transfer, or fill new or vacant positions within the Bargaining Unit. When making these determinations, the Company shall determine the needed job classification,
specific job that will be performed, and number of employees it needs. The Company will then post information concerning the position on the plant bulletin boards for a period of five (5) workdays, and any Bargaining Unit employee may request in writing
to be considered for the position by applying to the Company manager of the department posting such notice. The Company will then select Employees using the following criteria in the order noted: </P><DIR>
<DIR>
<DIR>
<DIR>

<P ALIGN="JUSTIFY">(a)&#9;Comparative skills and abilities to perform the new job, and performance in the current job; </P>
<P ALIGN="JUSTIFY">(b)&#9;Comparative plant seniority; and</P>
<P ALIGN="JUSTIFY">(c)&#9;Comparative discipline, attendance, and tardiness records.</P></DIR>
</DIR>
</DIR>
</DIR>

<P ALIGN="JUSTIFY">Where applicable, when making non-promotion determinations concerning filling vacant positions, preference will be given to employees who previously held the vacant classification but were laid off in the preceding six months and have
applied for recall. No employee will be promoted, transferred, or asked to fill a position who does not possess the qualifications and ability to satisfactorily perform the job. If no bargaining unit employee has the qualifications and ability to
satisfactorily perform the duties of any new position or vacancy, the Company will have the right to fill the position or vacancy from the outside.</P>
<B><P ALIGN="CENTER">NO STRIKES/NO LOCKOUTS</P>
</B><U><P ALIGN="JUSTIFY">Section 1</U>&#9;It is the intent of the parties to this Agreement that the procedure herein shall serve as a means for peaceable settlement of all strike or lockout disputes that may arise between them.</P>
<U><P ALIGN="JUSTIFY">Section 2</U>&#9;The Company agrees that, during the life of this Agreement, it will not lock out its employees.</P>
<U><P ALIGN="JUSTIFY">Section 3</U>&#9;The Union agrees that, during the life of this Agreement, there shall be no strikes (including but not limited to sympathy, unfair labor practice, or wildcat strikes), sit-downs, slow-downs, work stoppages,
boycotts, any acts honoring a picket line or any other acts that interfere with the Company's operations or the production or sale of its products or services during the term of this Agreement by the Union, its officers, agents and members. It is
understood that the foregoing proscriptions are specifically intended to include, but are in no way limited to, the following:</P><DIR>
<DIR>
<DIR>
<DIR>

<P ALIGN="JUSTIFY">(a)&#9;The honoring of a picket line, or any other concerted activity, of either a sister or affiliate local of the Union, of any other organized unit at the Company, or of any other union, group or individual; and</P>
<P ALIGN="JUSTIFY">(b)&#9;The participation in or support or encouragement of any consumer boycott, advertising boycott, or information picketing, of either a sister or affiliate local of the Union; or of any other organized unit at the Company or of any
other union, group or individual.</P></DIR>
</DIR>
</DIR>
</DIR>

<U><P ALIGN="JUSTIFY">Section 4</U>&#9;The Union agrees that it will not authorize, ratify, or condone any strike or any other activity described herein. In the event of any strike or any other proscribed activity not authorized, ratified, or condoned by
the Union, the Union and its officers, agents, and representatives will make every good faith effort to end such activity. Such good faith efforts must include, but are in no way limited to, the following:</P><DIR>
<DIR>
<DIR>
<DIR>

<P ALIGN="JUSTIFY">(a)&#9;The Union will notify all Employees immediately in the event of a strike, or other proscribed activity, that the activity is unauthorized and in violation of the Agreement, and that they shall cease such unauthorized activities.
The Union will send a copy of such notice to the Company;</P>
<P ALIGN="JUSTIFY">(b)&#9;The Union will inform all Employees who participate in the strike or other proscribed activity that it is their individual responsibility per (a) above.</P></DIR>
</DIR>
</DIR>
</DIR>

<U><P ALIGN="JUSTIFY">Section 5</U>&#9;Any or all Employees participating in any activity proscribed herein may be subject to disciplinary action, including discharge.</P>
<U><P ALIGN="JUSTIFY">Section 6</U>&#9;The Parties shall have direct recourse to the National Labor Relations Board or the courts for a violation of this Article. The Company and the Union do hereby expressly agree that for purposes solely of injunction
by a court of competent jurisdiction any strike or other proscribed activity is and shall be deemed to be over a dispute with the Company by an Employee or group of Employees involving the interpretation or effect of this Article and shall be immediately
enjoined by any court of competent jurisdiction. Should the National Labor Relations Board or the court find the Union has violated this Article, the Union agrees to be jointly and severally liable for compensatory damages, for punitive damages, and for
all of the Company's costs, including attorney's fees, incurred in halting the strike and/or in collecting damages.</P>
<U><P ALIGN="JUSTIFY">Section 7</U>&#9;The obligations, rights, and provisions of this Article shall be completely independent of and shall not be affected or limited by the inclusion or absence of any other provision of this Agreement, including any
grievance and/or arbitration provisions. The obligations, rights, and provisions of this Article are not subject to the grievance and/or arbitration provisions of this Agreement. Nothing in this Article, however, will limit the ability of an individual
employee subjected to disciplinary action by the Company for participating in any activity proscribed herein to grieve and/or arbitrate such action on the basis of "mistaken identity." The arbitrator's rights when deciding such issues shall be limited to
deciding the issue of mistaken identity and the arbitrator will not be permitted to otherwise modify the disciplinary action at issue.</P>
<B><P ALIGN="CENTER">NOTICES</P>
</B><P ALIGN="JUSTIFY">Any notice that is required to be given or may appropriately be given by one party (Union or Company) to the other hereunder, shall be in writing and shall be given by personal delivery or sent by prepaid delivery service or
certified or registered mail. Notices to the Company shall be addressed as Attention: (name) (address). Notices to the Union shall be addressed as Attention: (name) (address). Any mailed or wired notices shall be deemed given at the time of dispatch in
the mail or by delivery. Notices personally delivered shall be delivered to the aforesaid persons. Either party may change its address for notices hereunder by giving written notice to the other party in accordance herewith.</P>
<B><P ALIGN="CENTER">GRIEVANCE AND ARBITRATION</P>
</B><U><P ALIGN="JUSTIFY">Section 1</U>&#9;A "grievance" is a dispute, complaint or controversy of any kind arising between the Company and the Union concerning the interpretation, application, performance or alleged breach of any of the specific terms
and conditions of this Agreement, unless such provision is specifically excluded from the grievance and arbitration provisions. A Grievance shall be processed only in accordance with the provisions of this Article.</P>
<U><P ALIGN="JUSTIFY">Section 2</P><DIR>
<DIR>

</U><P ALIGN="JUSTIFY">Step 1: A grievance shall be first discussed by the Shop Steward designated by the Union and a Supervisor designated by the Company within five (5) working days of an occurrence, or knowledge thereof giving rise to the grievance.</P>

<P ALIGN="JUSTIFY">Step 2: If the grievance is not resolved within five (5) working days after the Step 1 meeting, the grievance shall be reduced to writing and presented to the Company by the Shop Steward. If the Union does not submit a written
grievance to the Company within ten (10) working days after the Step 1 meeting, it is deemed waived. The Company shall then have five (5) working days to respond to the written grievance. The Company's failure to respond shall not be used against it in
any way.</P>
<P ALIGN="JUSTIFY">Step 3: If the grievance cannot be resolved by Step 2, the matter may be appealed by either party, within five (5) working days after receipt of the Step 2 answer or, if the Company does not respond, within five (5) working days of the
date the Company's response was due. The request for arbitration must be made in writing. The parties will make a good faith effort to select and mutually agree upon a single arbitrator within ten (10) days following receipt of the answer. If agreement
cannot be reached, either patty may request a seven person panel list from the Federal Mediation and Conciliation Service ("FMCS") and then select the arbitrator pursuant to Section 3 of this clause. It is expressly understood that this Section 1 covers
grievances which were processed and handled in accordance with the grievance procedure described within Steps 1 and 2 above. The provisions of the no-strike provision are specifically excluded from arbitration under the provisions of this Article, as are
those Articles and/or Sections which specifically exclude arbitration.</P></DIR>
</DIR>

<U><P ALIGN="JUSTIFY">Section 3</U>&#9;The Arbitrator shall be selected from a seven person panel list supplied by the FMCS for the Midwest Region and shall be limited to arbitrators who are members in good standing of the National Academy of
Arbitrators. The arbitrator will be selected by mutual agreement or by striking. The person striking first is to be decided by the flip of a coin and thereafter alternated between the parties.</P>
<U><P ALIGN="JUSTIFY">Section 4</U>&#9;Jurisdiction of the arbitrator selected shall be limited to:</P><DIR>
<DIR>
<DIR>
<DIR>

<P ALIGN="JUSTIFY">(a)&#9;Adjudication of the issues which, under the express terms of this Agreement and/or any Submission Agreement, is entered into between the parties hereto; and</P>
<P ALIGN="JUSTIFY">(b)&#9;Interpretation of the specific terms of this Agreement, which are applicable to the particular issue presented to the arbitrator; such jurisdiction shall not give the arbitrator authority to supplement or modify this Agreement
by reference to any industry practice or custom or any so-called "common law of the shop"; and</P>
<P ALIGN="JUSTIFY">(c)&#9;The rendition of a decision or award which in no way modifies, adds to, subtracts from, changes, or amends any term or condition of this Agreement or conflicts with the provisions of this Agreement; and</P>
<P ALIGN="JUSTIFY">(d)&#9;The rendition of a decision or award which is not retroactive to a date preceding the date of the written grievance, upon which the decision or award is based, except for decisions or awards of back pay, which may be retroactive
to the date of the incident giving rise to the back pay claim if the arbitrator determines that all applicable legal requirements for awarding back pay retroactively have been met; and</P>
<P ALIGN="JUSTIFY">(e)&#9;The rendition of a decision or award which does not grant relief extending beyond the termination date of this Agreement, except as otherwise mutually agreed upon by the parties hereto; and</P>
<P ALIGN="JUSTIFY">(f)&#9;The rendition of a decision or award in a discharge or disciplinary layoff case which adjudicates only the guilt or innocence of the Employee(s) involved and which in no way modifies or amends the penalty imposed, provided that
if the arbitrator finds that the Employee(s) was not discharged or disciplined for cause, any award of back wages shall be limited to the amount of regular straight-time wages the Employee would otherwise have earned from his employment with the Company
during the period limited by subparagraphs (d) and (e) above. The issue of whether any damage award will reflect an offset for unemployment compensation and/or compensation for personal services that he/she may have received or be entitled to from any
source during such period or any compensation or assistance from any state or federal governmental agency will be decided by the arbitrator; and</P>
<P ALIGN="JUSTIFY">(g)&#9;The rendition of a decision or award in writing which shall include a statement of the reasons and grounds upon which such decision or award is based; and</P>
<P ALIGN="JUSTIFY">(h)&#9;The rendition of a decision or award based solely on the evidence the arguments presented to the arbitrator by the respective parties in the presence of each other and the arguments presented in the written briefs of the parties;
 and</P>
<P ALIGN="JUSTIFY">(i)&#9;The rendition of a decision or award within thirty (30) calendar days of the date of presentation of written briefs by the parties.</P></DIR>
</DIR>
</DIR>
</DIR>

<U><P ALIGN="JUSTIFY">Section 5</U>&#9;Any dispute which arises under the Agreement but which is based on events that occur before or after its termination is expressly excluded from the jurisdiction of the arbitrator.</P>
<U><P ALIGN="JUSTIFY">Section 6</U>&#9;No one arbitrator shall have more than one (1) grievance submitted to him and under consideration by him at any one time unless the parties hereto otherwise agree in writing. A grievance shall be deemed under
consideration by an arbitrator until the arbitrator has rendered his decision and award in writing.</P>
<U><P ALIGN="JUSTIFY">Section 7</U> The decision of the arbitrator within the limits herein described shall be final and binding upon the Company, the Union, and the Employee(s) affected, subject to judicial review.</P>
<U><P ALIGN="JUSTIFY">Section 8</U>&#9;Only grievances, which involve an alleged violation by the Company of a specific section or provision in this Agreement and which are processed in the manner and within the time limits herein provided shall be
subject to arbitration. Notwithstanding any other provision of this Agreement, no grievance shall be arbitrable and no right of action shall accrue to the Union or any Employee under this Agreement with respect to:</P><DIR>
<DIR>
<DIR>
<DIR>

<P ALIGN="JUSTIFY">(a)&#9;Any matter involving the administration, interpretation, or application of any insurance plans or any other fringe benefit mentioned or not mentioned in this Agreement in which Employees covered by this Agreement are eligible to
participate;</P>
<P ALIGN="JUSTIFY">(b)&#9;The Supervisor's judgment of an Employee's competency; or</P>
<P ALIGN="JUSTIFY">(c)&#9;Those matters noted in Article 11 of the part of this Agreement entitled "Employee Production and Conduct."</P></DIR>
</DIR>
</DIR>
</DIR>

<U><P ALIGN="JUSTIFY">Section 9</U>&#9;In addition to the grounds provided by law for vacating and/or correcting an arbitration decision or award, upon petition by either party to a court of competent jurisdiction, any arbitration decision or award
hereunder shall be vacated and/or corrected upon any of the following grounds:</P><DIR>
<DIR>
<DIR>
<DIR>

<P ALIGN="JUSTIFY">(a)&#9;That the arbitrator exceeded his jurisdiction or authority under this Agreement and/or under the Submission Agreement;</P>
<P ALIGN="JUSTIFY">(b)&#9;That the arbitrator's decision or award is not supported by substantial evidence; or</P>
<P ALIGN="JUSTIFY">(c)&#9;That the arbitrator's decision or award is based upon an error of law.</P></DIR>
</DIR>
</DIR>
</DIR>

<U><P ALIGN="JUSTIFY">Section 10</U>&#9;Arbitrator's fees and expenses and the costs incidental to the hearing shall be divided equally between the Union and the Company. The cost of a transcript will be paid by the party requesting the transcript. If
both parties request a transcript, the cost of a transcript will be divided equally between the Union and the Company. Each party shall bear the expense of its own representation, witnesses and associated costs.</P>
<U><P ALIGN="JUSTIFY">Section 11</U>&#9;Any deadline in this Article may be extended by mutual agreement of the parties if in writing and signed by the parties.</P>
<B><P ALIGN="CENTER">UNION DUES AND INITIATION FEES</P>
<P ALIGN="JUSTIFY">&#9;</B>The Company agrees that it will implement and maintain a check-off procedure for the collection of Union dues and initiation fees.</P>
<P ALIGN="JUSTIFY">&#9;<U>Section 1</U>&#9;The Union shall furnish the Company with voluntary authorization cards it has in its possession which will form the legal basis for deducting Union fees and dues from the wages of employees who have signed such
cards.</P>
<P ALIGN="JUSTIFY">&#9;<U>Section 2</U>&#9;The Company will perform the required deduction calculations and make the required deductions every other payday. </P>
<P ALIGN="JUSTIFY">&#9;<U>Section 3</U>&#9;Once calculated, the aforesaid membership dues and fees shall be remitted by the Company within thirty (30) days to the International Secretary/Treasurer of the United Steelworkers of America (or its successor),
5 Gateway Center, Pittsburgh, PA 15222.</P>
<P ALIGN="JUSTIFY">&#9;<U>Section 4</U>&#9;The Union will indemnify and hold the Company harmless from any liability, demand, cost, expense, loss, claim, or attorney's fee arising from or concerning the deduction of Union fees and dues from the wages of
its employees.</P>
<P ALIGN="JUSTIFY">&#9;<U>Section 5</U>&#9;The Union will conduct initial educational training for each employee who signs a voluntary authorization card to deduct Union fees and dues, and will thereafter use its best efforts to educate each such
employee as to the following information, which efforts will include, without limitation, distributing in writing to each employee a written statement providing the following information: (1) that the voluntary authorization card is a legal and binding
contract between the employee and the Union, (2) that by executing the voluntary authorization card, the employee is authorizing the deduction of Union fees and dues from the employee's paycheck, (3) that the Union, not the Company, has established the
amount of Union fees and dues that will be deducted from the employee's paycheck, (4) that Union fees and dues will be deducted from the employee's paycheck for the duration of the contract whether the employee maintains membership in the Union or not,
(5) that the Union, not the Company, has established the minimum one-year duration of the contract, (6) that the Union, not the Company, has prescribed the process by which the employee may discontinue the deduction process, and (7) that the Union has
agreed to assume all responsibility for resolving employee complaints concerning the deduction of Union fees and dues.</P>
<B><P ALIGN="CENTER">ECONOMICS </P>
</B><U><P ALIGN="JUSTIFY">Section 1</U>&#9;Shift Differential: The Company will pay to all hourly-rated employees of the bargaining unit on the second and third shifts their base salary rate plus 25 cents per hour.</P>
<P ALIGN="JUSTIFY">&#9;</P>
<U><P ALIGN="JUSTIFY">Section 2</U>&#9;Overtime: The Company will pay overtime in accordance with the proposal signed by the Union and the Company during noneconomic bargaining. </P>
<P ALIGN="JUSTIFY">&#9;</P>
<U><P ALIGN="JUSTIFY">Section 3</U>&#9;Vacations: All regular full-time employees of the bargaining unit will earn vacation time as follows: </P>
<P ALIGN="JUSTIFY">On a First Anniversary: 40 hours per year;</P>
<P ALIGN="JUSTIFY">On Second through Ninth Anniversaries: 80 hours per year;</P>
<P ALIGN="JUSTIFY">On Tenth Anniversary through Twentieth Anniversaries: 120 hours per year;</P>
<P ALIGN="JUSTIFY">On a Twenty-First Anniversary and thereafter: 160 hours per year.</P>
<P ALIGN="JUSTIFY">Vacation days cannot be used until they have accumulated on your anniversary date. Vacation days may not be sold back to the Company. No employee may accumulate more than 20 days of vacation. Once 20 days of vacation have accumulated,
the employee will not receive any more vacation time. Vacation time may be taken in full day or half day increments. The bargaining unit may not have more than 10% of its work force off at any given time for vacations.</P>
<P ALIGN="JUSTIFY">Vacation must be approved by your supervisory and submitted to the Personnel Department allowing as much notice as possible. If there is a conflict with two or more employees requesting the same vacation date, supervisors will make the
decision. To request vacation, submit a completed vacation request form (no copied forms, please) with your supervisor's approval to the Personnel Department prior to the requested vacation date. The Personnel Department will provide the necessary
information and approvals and return your copy and your supervisor's copy. Paid time off for vacation will count as hours worked for the purpose of computing overtime. Paid time off for vacation will be reflected in the paycheck for which the time as
taken. Vacation pay will not be advanced.&#9;</P>
<U><P ALIGN="JUSTIFY">Section 4</U>&#9;Sick Leave: All bargaining unit employees will receive four days of sick leave on the date on which this Agreement commences and thereafter on January 1 of each subsequent year under this Agreement. All bargaining
unit employees using a sick day will receive 8 hours pay at the regular straight-time rate, excluding any shift differential. All bargaining unit employees must present the Company with a signed doctor's note to receive sick day compensation under this
policy. Sick leave days will not count towards the calculation of overtime pay, may not be carried over to the next year, may not be sold back to the Company, and accrued unused sick leave days are not subject to reimbursement upon termination of employment
 .</P>
<U><P ALIGN="JUSTIFY">Section 5</U>&#9;Holidays: All bargaining unit employees will receive 8 hours pay at the regular straight-time rate, including any shift differential, for the following holidays: New Years Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, Day after Thanksgiving Day, Christmas Eve, and Christmas Day. Additionally, the Company typically shuts down production for 3-5 days between Christmas and New Year's Day to do physical inventory. Employees
who are not required to work during this week will receive the time off without pay unless vacation time is taken.</P>
<P ALIGN="JUSTIFY">To be eligible for holiday pay, employees must work their last scheduled workday before the holiday and their first scheduled day after the holiday, unless your absence on either of these days is due to a scheduled vacation. Should any
of these holidays fall on a Saturday or Sunday, the Company will observe either the previous Friday or the following Monday as the holiday. You will be given advance notice so that you may make your holiday plans. If a recognized holiday occurs during an
employee's vacation, an additional day may be added to the vacation period to compensate for the holiday. Employees who are required to work on a scheduled holiday will receive their eight hours holiday pay plus pay for the hours they actually worked.
Holiday pay will be calculated for hourly employees based on the straight-time rate for eight hours. Salaried employees will receive their regular salary during the week in which the holiday occurs. Paid time off for holidays will count as hours worked
for the purpose of computing overtime.</P>
<U><P ALIGN="JUSTIFY">Section 6</U>&#9;Trencor Group Insurance Options and Premiums: All bargaining unit employees will be provided with the same insurance options and insurance premium obligations as other nonmanagement Trencor employees under Trencor's
group medical plan, as such options and obligations may exist and change from time to time. All language in the "Medical Insurance" and the "Life, Accidental Death and Dismemberment, Short and Long Term Disability Policies" sections of the Employee
Handbook, as it may exist from time to time, are applicable. The bargaining unit will be represented on any committee of Company employees which may be formed to participate in Company efforts to reduce health care costs and/or raise awareness of
insurance costs to all employees.</P>
<U><P ALIGN="JUSTIFY">Section 7</U>&#9;Work Boots and Prescription Glasses Allowances: All bargaining unit employees will be reimbursed $75 per year for the purchase of new workboots. All bargaining unit employees will be provided with up to one pair of
prescription single vision eyeglasses per year from a Company-designated supplier. The additional cost of bifocal lenses or other employee-determined changes will be paid for by the bargaining unit employee. </P>
<U><P ALIGN="JUSTIFY">Section 8</U>&#9;Wage Raises and Wage Band Raises: All bargaining unit employees will be paid in accordance with the Company's most recent Pay Scale proposal (except employees whose pay exceeds their applicable pay ranges, who will
be grandfathered in at their current rate of pay). Bargaining unit employees (other than employees grandfathered in at a rate of pay exceeding their applicable pay range) will receive a 4.0% across the board raise during the first year of this Agreement,
a 3.0% across the board raise during the second year of this Agreement, and a 3.0% across the board raise during the third year of this Agreement. Additionally, the minimum and maximum per hour wage ranges in the Pay Scale will be raised 3.0% during each
of the second and third years of this Agreement.</P>
<U><P ALIGN="JUSTIFY">Section 9</U>&#9;401K Plan Participation: All bargaining unit employees will be provided with the same 401K plan options as other nonmanagement employees under Trencor's 401K plan.</P>
<U><P ALIGN="JUSTIFY">Section 10</U>&#9;Jury and Witness Duty Leave: All bargaining unit employees will receive Jury/Witness duty leave in accordance with the "Jury/Witness Duty Leave" section of the current Employee Handbook, as it may exist from time
to time.</P>
<B><P ALIGN="CENTER">JOB DESCRIPTIONS, CLASSIFICATIONS, AND PAY SCALES</P>
</B><U><P ALIGN="JUSTIFY">Section 1</U>&#9;Any bargaining unit employee with a minimum of 2 1/2 years experience at his/her job description classification will be paid no less than the midpoint of the pay scale corresponding with their job description.</P>

<U><P ALIGN="JUSTIFY">Section 2</U>&#9;Each bargaining unit employee will have his/her job description classification reconfirmed by their supervisor at their appraisal interview.</P>
<U><P ALIGN="JUSTIFY">Section 3</U>&#9;The Company encourages all of its bargaining unit employees to explore their full potential.</P>
<U><P ALIGN="JUSTIFY">Section 4</U>&#9;Questions about job descriptions, classification or reclassification, or pay scales should be directed to the Company's Plant Manager, then to the Company's Vice President of Manufacturing.</P>
<U><P ALIGN="JUSTIFY">Section 5</U>&#9;Upon request, after the bargaining unit employee's appraisal interview, the Plant Manager and/or the Vice President of Manufacturing will meet with the employee to discuss objectives for the employee to identify and
meet in order to be classified in an "advanced" job description. The Company will thereafter make reasonable efforts to give the employee work and training opportunities relating to the employee's objectives. Training opportunities will include providing
the employee with internal training opportunities and programs and/or reimbursing the employee for successfully completing outside training and/or educational programs pursuant to the Company's Tuition Reimbursement Policy, as stated in the current
Employee Handbook, as it may exist from time to time.</P>
<U><P ALIGN="JUSTIFY">Section 6</U>&#9;The Company reserves the right to determine, in its sole discretion, whether any bargaining unit employee has met any objectives and whether the bargaining unit employee should be classified or reclassified in an
"advanced" job description.</P>
<U><P ALIGN="JUSTIFY">Section 7</U>&#9;The following Job Descriptions will be used during the duration of this Agreement. The Pay Scales corresponding with the Job Descriptions will be used during the first year of this Agreement and thereafter will be
modified in accordance with this Agreement.</P>
<P ALIGN="JUSTIFY">&#9;&#9;&#9;&#9;&#9;</P>
<B><P ALIGN="JUSTIFY">Advanced Shipping/Receiving ($ 9.79 - $11.85)</P>
</B><P ALIGN="JUSTIFY">Assembles orders, stores received items and issues to production. Has working knowledge of computerized shipping, receiving and parts issuing system. Responsible for verifying all receipts against purchase orders and all shipments
against shipment documentation. Responsible for all shipping documentation required to ship complete machines and spare parts. Performs any regular stockroom work assigned to insure proper storage, receipt, shipment and issuing of parts. Demonstrates
continuous effort to improve operations. Demonstrates continuous effort to improve operations. Instructs less capable shipping and receiving personnel in safe and effective warehouse and shipping procedures. Works with little supervision. </P>
<B><P ALIGN="JUSTIFY">Shipping/Receiving ($ 8.24 - $9.79)</P>
</B><P ALIGN="JUSTIFY">Builds boxes and or crates as required. Packs parts for shipment. Loads, unloads and moves material within or near warehouse, plant or worksite. Able to read and understand computer documentation for the movement of materials.
Loads and unloads materials onto or from trucks, pallets, trays, racks and shelves by hand or forklift. Moves materials to or from storage or worksite to designated area. Requires general supervision.</P>
<B><P ALIGN="JUSTIFY">Maintenance ($ 12.36 - $14.94)</P>
</B><P ALIGN="JUSTIFY">Performs a wide variety of plant, office and yard maintenance work. Work involves electrical installation and maintenance and some of the following: carpentry, painting, pipe fitting, masonry, plumbing, steam fitting and sheet
metal work. May perform minor new construction. Works with minimum supervision and work may require the planning and installation of new wiring, rearrangement of equipment, etc.</P>
<B><P ALIGN="JUSTIFY">Advanced Burn Table Operator ($ 12.36 - $15.45)</P>
</B><P ALIGN="JUSTIFY">Capable of operating all three computer controlled burn tables on various thicknesses of steel. Able to download templates and nest for maximum use of material as well as utilize nests prepared by engineering. Ability to understand
scheduling work orders for use in identifying and organizing burned pieces. Instructs less capable burn table operators in safe and effective set up and operation techniques. Demonstrates continuous effort to improve operations. Works with little or no
supervision.</P>
<B><P ALIGN="JUSTIFY">Burn Table Operator ($ 10.82 - $12.88)</P>
</B><P ALIGN="JUSTIFY">Ability to operate at least one of the three computer controlled burn tables. Capable of using nests created by others. Ability to understand scheduling work orders for use in identifying and organizing burned pieces. Requires some
supervision to set up and maintain burn table.</P>
<B><P ALIGN="JUSTIFY">Advanced Track Torch Operator ($ 12.36 - $15.45)</P>
</B><P ALIGN="JUSTIFY">Able to use blueprints to manually set up track torch to burn complex parts with various thicknesses and burn angles. Ability to understand scheduling work orders for identifying and organizing burned pieces. Instructs less capable
track torch operators in safe and effective set up and operation techniques. Demonstrates continuous effort to improve operations. Works with little or no supervision.</P>
<B><P ALIGN="JUSTIFY">Track Torch Operator ($ 10.82 - $12.88)</P>
</B><P ALIGN="JUSTIFY">Able to use blueprints to manually set up track torch to burn simple parts of various thicknesses. Ability to understand scheduling work orders for identifying and organizing burned pieces. Requires some supervision.</P>
<B><P ALIGN="JUSTIFY">Advanced Fitter Welder ($ 13.39 - $16.48)</P>
</B><P ALIGN="JUSTIFY">Works from drawings to plan, layout, fit up and weld out large, complex weldments. Performs complex arc and acetylene welding. Able to weld and fabricate metals in vertical, horizontal and overhead positions for high strength
requirements. Instructs less capable fitter welders in safe and effective fit up and welding techniques. Demonstrates continuous effort to improve operations. Able to complete projects with little or no supervision.</P>
<B><P ALIGN="JUSTIFY">Fitter Welder ($ 10.82 - $13.91)</P>
</B><P ALIGN="JUSTIFY">Works from drawings to layout, fit up and/or weld out weldments. Sometimes helps with complex weldments. Performs arc and acetylene welding. Able to weld in vertical and horizontal positions. Requires some supervision.</P>
<B><P ALIGN="JUSTIFY">Advanced Press Operator ($ 13.39 - $16.48)</P>
</B><P ALIGN="JUSTIFY">Ability to use engineering drawings to layout and bend complex metal parts to the required shapes. Can develop bend templates for use in bending of repetitive parts. Instructs less capable press operators in safe and effective set
up and operation techniques. Demonstrates continuous effort to improve operations. Works with little or no supervision.</P>
<B><P ALIGN="JUSTIFY">Press Operator ($ 10.82 - $13.91)</P>
</B><P ALIGN="JUSTIFY">Ability to use engineering drawings to layout and bend simple metal parts to the required shapes. Uses bend template developed by others to bend and shape repetitive parts. Needs supervision.</P>
<B><P ALIGN="JUSTIFY">Advanced Layout Technician ($ 13.39 - $16.48)</P>
</B><P ALIGN="JUSTIFY">Ability to use engineering drawings to layout locations for further drilling, cutting, bending or machining parts. Must be detail oriented and accurate to close tolerances. Knowledgeable of all types of measuring equipment to
layout parts. Capable of producing accurate templates for use in repetitive layout parts. Utilize shop work orders to collect, organize and direct parts to subsequent operations. Instructs less capable layout technicians in safe and effective layout
techniques. Demonstrates continuous effort to improve operations. Works with little or no supervision.</P>
<B><P ALIGN="JUSTIFY">Layout Technician ($ 10.82 - $13.39)</P>
</B><P ALIGN="JUSTIFY">Ability to use engineering drawings to make simple layouts for further drilling, cutting, bending or machining. Uses layout templates for repetitive parts. Utilizes shop work orders to collect, organize and direct parts to
subsequent operations. Needs supervision and help from colleagues.</P>
<B><P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">Advanced Painter ($ 11.33 - $13.39)</P>
</B><P ALIGN="JUSTIFY">Sprays machines or a variety of parts with primer or finish paint and operates permatex-lining equipment under minimal supervision. Has ability and knowledge to perform spot repairs and blended repairs on previously painted
equipment and parts. Uses brush to touch up any imperfections. Mixes paint and adds thinner for proper consistency. May do other work in </P>
<P ALIGN="JUSTIFY">department when necessary. Responsible for understanding and complying with all EPA and local policies and procedures. Demonstrates continuous effort to improve operations. Instructs less capable painters in safe and effective painting
and priming techniques.</P>
<B><P ALIGN="JUSTIFY">Painter ($ 9.79 - $11.85)</P>
</B><P ALIGN="JUSTIFY">Sprays machines or a variety of parts with primer or finish paint, under supervision. Uses brush to touch up any imperfections. Mixes paint and adds thinner for proper consistency. May do other work in department when necessary.
Responsible for understanding and complying with all EPA and local policies and procedures.</P>
<B><P ALIGN="JUSTIFY">Advanced Assembly Mechanic ($ 12.36 - $15.45)</P>
</B><P ALIGN="JUSTIFY">Ability to complete mechanical assembly on all trencher subassemblies and final assembly of the machine. Works with engineering drawings to assemble close tolerance machine parts into working mechanical components. Ability to
adjust and align to close tolerances to maintain required fit of all mechanical components. Diversified to plan or help plan assembly procedure. Demonstrates continuous effort to improve operations. Familiar with all hydraulics and electrical components.
Instructs less capable assembly mechanics in safe and effective assembly procedures. Works with little or no supervision.</P>
<B><P ALIGN="JUSTIFY">Assembly Mechanic ($ 10.30 - $12.88)</P>
</B><P ALIGN="JUSTIFY">Generally work with Advanced assembly Mechanics to complete mechanical assembly of subassemblies and final assembly of the machine. Utilizes drawings and/or verbal instruction to complete simple assemblies. Helps to install
trencher components to complete assembly of the trencher.</P>
<B><P ALIGN="JUSTIFY">Assembly Welder ($ 12.36 - $15.45)</P>
</B><P ALIGN="JUSTIFY">Works with Advanced Assembly Mechanics to help erect and assemble machine. Utilizes welding skills to add to, modify or complete weldments for final assembly of the machine. Must be able to weld in vertical, horizontal and overhead
positions. Helps with mechanical assembly when not using welding skills. Requires verbal direction and some supervision.</P>
<B><P ALIGN="JUSTIFY">Advanced Electrician ($ 12.36 - $15.45)</P>
</B><P ALIGN="JUSTIFY">Ability to use electrical schematics and specifications to completely wire up a machine. Must have full understanding of electrical and electronics circuitry and controls. Familiar with the electrical requirements of computerized
components. Offers recommendations to engineering for improvements in electrical and electronic design. Must be able to check out, inspect and trouble shoot all electrical and electronic systems on the machine. Helps as an assembly mechanic when required.
Instructs less capable electricians in safe and effective electrical techniques. Demonstrates continuous effort to improve operations. Works with little or no supervision.</P>
<B><P ALIGN="JUSTIFY">Electrician ($ 10.30 - $12.88)</P>
</B><P ALIGN="JUSTIFY">Generally works with Advanced Electrician to wire up machines. Must be able to read electrical schematics and have some idea of electrical circuitry. Helps to check out and inspect electrical systems. Helps as an assembly mechanic
when required. Requires some supervision.</P>
<B><P ALIGN="JUSTIFY">Advanced Hydraulic Technician ($ 12.36 - $15.45)</P>
</B><P ALIGN="JUSTIFY">Full and complete understanding of both open and closed hydraulic schematics and circuits. Able to build good quality hoses as specified by the engineering drawings and bills of material. Responsible for installing hydraulics
components and hoses as required. Has the ability to logically trouble shoot hydraulic systems to determine causes and solutions of problems. Responsible for setting and checking proper pressure in the system as specified by engineering. Aids field
service personnel as required. Helps as an assembly mechanic when required. Instructs less capable hydraulic technicians in safe and effective hydraulic system techniques. Demonstrates continuous effort to improve operations. Works with little or no
supervision.</P>
<B><P ALIGN="JUSTIFY">Hydraulic Technician ($ 10.30 - $12.88)</P>
</B><P ALIGN="JUSTIFY">Working knowledge of hydraulic schematics and circuits. Builds good quality hoses as specified by the engineering drawings and bills of material. Able to install hydraulic components and hoses. Helps as an assembly mechanic when
required. Requires general supervision.</P>
<B><P ALIGN="JUSTIFY">Advanced CNC Machinist (</B>$ 14.42 - 16.48)</P>
<P ALIGN="JUSTIFY">Able to utilize engineering drawings to program CNC functions to produce complicated, close tolerance machine parts in the least amount of time. Knowledge of different programming languages required. Ability to set up and run complex
parts on various CNC machines. Instructs less capable CNC machinists in safe and effective set up and CNC operation techniques. Demonstrates continuous effort to improve operations. Works with little or no supervision.</P>
<B><P ALIGN="JUSTIFY">CNC Machinist ($ 12.36 - $14.94)</P>
</B><P ALIGN="JUSTIFY">Working knowledge of at least one CNC programming language. Able to program CNC functions to produce parts efficiently. Ability to set up and run parts on at least one CNC machine. Requires general supervision.</P>
<B><P ALIGN="JUSTIFY">Advanced Machinist ($ 12.36 - $15.45)</P>
</B><P ALIGN="JUSTIFY">Ability to set up and operate a wide range of manual machines such as lathes, boring mills, mills, gear cutters, etc. unassisted. Adjust feeds and speeds to improve quality and achieve maximum efficiency with minimal tool wear.
Ability to measure work carefully using precision measuring instruments to assure conformance to tolerances. Demonstrates continuous effort to improve operations. Instructs less capable machinists in safe and effective set up and operation techniques.
Works with little or no supervision.</P>
<B><P ALIGN="JUSTIFY">Machinist ($ 10.30 - $12.36)</P>
</B><P ALIGN="JUSTIFY">Ability to set up and operate a wide range of manual machines such as lathes, boring mills, mills, gear cutters, etc. Knowledge of the required feed and speeds to produce the part. Ability to measure work carefully using precision
measuring instruments to assure conformance to tolerances. Requires some supervision.</P>
<B><P ALIGN="JUSTIFY">Advanced Drill Press Operator ($ 11.33 - $14.94)</P>
</B><P ALIGN="JUSTIFY">Ability to make precise layouts of holes to be drilled. Able to set up and operate drill press to drill manually laid out holes or to use drill jig. Selects proper speeds and feed to achieve maximum efficiency with minimum drill
wear. Demonstrates continuous effort to improve operations. Instructs less capable drill press operators in safe and effective set up and drilling techniques. Works with little or no supervision.</P>
<B><P ALIGN="JUSTIFY">Drill Press Operator ($ 9.27 - $11.85)</P>
</B><P ALIGN="JUSTIFY">Ability to set up and drill holes using drill jig or hole location laid out by others. Selects proper speeds and feed to produce required hole. Requires general supervision.</P>
<B><P ALIGN="JUSTIFY">Saw Operator ($ 9.27 - $11.85)</P>
</B><P ALIGN="JUSTIFY">Able to set up and operate metal cutting saw on various shapes of structural steel including angle, flat bar, round bar, beams, channels, etc. Ability to measure and cut to specified length as per the engineering drawing or work
order requirements. Uses crane and other lifting devices to load and unload saw. Familiar with inventory procedures requiring remarking of remaining material to return to inventory. Must be able to mark cut pieces according to the work order requirements.
Requires some supervision.</P>
<B><P ALIGN="JUSTIFY">Deburr Operator ($ 9.27 - $11.85)</P>
</B><P ALIGN="JUSTIFY">Ability to inspect and remove all burrs from machined parts as required. Must handle parts carefully to avoid any damage to close tolerance parts. Help out in other areas as required.</P>
<B><P ALIGN="JUSTIFY">Quality Inspector ($ 10.30 - $13.39)</P>
</B><P ALIGN="JUSTIFY">Ability to read and interpret all drawings. Works with all types of measuring instruments to check dimensions as shown on drawings. Detail oriented. Familiar with all types of welded and mechanical assemblies. Prepares inspection
reports as required.</P>
<U><P ALIGN="JUSTIFY">Section 8</U>&#9;The Company reserves the right to give additional wage raises on the basis of merit to bargaining unit employees in such amounts as management in its sole discretion determines to be appropriate. Any increased wage
will not exceed the maximum of the pay scale corresponding with the employee's job description.</P></BODY>
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<B>EXHIBIT 22<BR>
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<P ALIGN="CENTER">LIST OF SUBSIDIARIES</P>
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<P>EXHIBIT 22 <BR>
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Subsidiaries of the Registrant </P></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=588>
<TR><TD VALIGN="TOP" COLSPAN=3>
<P ALIGN="CENTER"><U><FONT FACE="Arial" SIZE=2>LIST OF SUBSIDIARIES</U></FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P>Name</U></FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">Percentage O<U>wned</U></FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<U><FONT FACE="Arial" SIZE=2><P>Jurisdiction of Incorporation</U></FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P>American Augers, Inc.</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">100</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P>Delaware</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P>Astec, Inc.</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">100</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P>Tennessee</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P>Astec Financial Services, Inc.</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">100</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P>Tennessee</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Astec Holdings, Inc.</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">100</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Tennessee</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Astec Systems, Inc.</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">100</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Tennessee</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Astec Transportation, Inc.</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">100</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Tennessee</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Breaker Technology, Inc.</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">100</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Tennessee</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Breaker Technology Ltd.</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">100</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Ontario, Canada</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P>Carlson Paving Products, Inc.</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">100</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P>Washington</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P>CEI Enterprises, Inc.</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">100</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P>Tennessee</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P>Heatec, Inc.</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">100</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P>Tennessee</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P>Johnson Crushers International, Inc.</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">100</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P>Tennessee</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P>Kolberg-Pioneer, Inc.</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">100</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P>Tennessee</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P>Pavement Technology, Inc.</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">50</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P>Georgia</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P>Production Engineered Products, Inc.</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">100</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P>Nevada</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P>Roadtec, Inc.</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">100</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P>Tennessee</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P>Osborn Engineered Products SA (Pty) Ltd.</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">88</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP" HEIGHT=30>
<FONT FACE="Arial" SIZE=2><P>South Africa</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Superior Industries of Morris, Inc.</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">100</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Minnesota</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Telsmith, Inc.</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">100</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Delaware</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Trencor, Inc.</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">100</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT FACE="Arial" SIZE=2><P>Texas</FONT></TD>
</TR>
</TABLE>

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<B><P ALIGN="CENTER">EXHIBIT 23 <BR>
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CONSENT OF INDEPENDENT AUDITORS<BR>
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EXHIBIT 23 <BR>
<U>CONSENT OF INDEPENDENT AUDITORS </P>
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&#9;We consent to the incorporation by reference in the Registration Statements (Forms S-8 No. 33-14738 and 0-14714) pertaining to the Astec Industries, Inc. 1986 and 1992 Stock Option Plans, and to the 1998 Long-Term Incentive Stock Plan of our report
dated February 23, 2001, with respect to the consolidated financial statements and schedule of Astec Industries, Inc. included in the Annual Report (Form 10-K) for the year ended December 31, 2000. <BR>
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ERNST &amp; YOUNG LLP <BR>
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&nbsp; /s/ Ernst &amp; Young LLP<BR>
Chattanooga, Tennessee <BR>
March 23, 2001 </P><DIR>
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