<PAGE>
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
MONARCH AVALON, INC.
- -----------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- -----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c) (1) (ii), 14a-6(i) (1), or 14a-6(j) (2),
/ / $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i) (3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i) (4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11:1
(4) Proposed maximum aggregate value of transaction:
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a) (2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party:
(4) Date Filed:
- ----------
<PAGE>
MONARCHAVALON, INC.
4517 Harford Road
Baltimore, Maryland 21214
August 30, 1996
Dear Stockholder:
Your Company cordially invites you to attend the 1996 Annual Meeting of
Stockholders which will be held at 3:00 P.M. on Friday, October 4, 1996, at
the Center Club, U.S.F.&G. Building, 100 Light Street, Baltimore, Maryland.
The Notice of Annual Meeting and Proxy Statement accompanying this
letter describes the business to be transacted at the Annual Meeting. A copy
of the Annual Report to Stockholders is also enclosed herewith.
Whether you plan to attend or not, we urge you to sign, date and return
the enclosed proxy card in the postage-paid envelope provided, in order that
as many shares as possible may be represented at the Annual Meeting.
Returning your proxy does not deprive you of your right to attend the Annual
Meeting and vote your shares in person.
A majority of the outstanding shares of Common Stock must be represented
at the Annual Meeting in order to transact business, and accordingly, the
vote of every stockholder is important. Your cooperation in returning your
executed proxy promptly will be appreciated.
Sincerely,
/s/ JACKSON Y. DOTT
Jackson Y. Dott,
President
<PAGE>
Notice of Annual Meeting of Stockholders
to be held October 4, 1996
To the Stockholders of
Monarch Avalon, Inc.
Notice is hereby given that the Annual Meeting of the Stockholders of
Monarch Avalon, Inc. (the "Company") will be held on Friday, October 4, 1996
at 3:00 P.M., prevailing local time, at the Center Club, U.S.F.&G. Building,
100 Light Street, Baltimore, Maryland for the following purposes:
(1) To elect a Board of four Directors to hold office for the ensuing
year and until their successors are elected and qualified.
(2) To consider and approve the grant of stock options to certain
directors of the Company.
(3) To ratify the appointment of Deloitte & Touche L.L.P. as the
Company's independent accountants for the fiscal year ending April 30, 1997.
(4) To transact such other business as may properly be brought before
the Annual Meeting.
Stockholders of record at the close of business on August 26, 1996 are
the only stockholders entitled to notice of and to vote at the Annual Meeting
of Stockholders.
By Order of the Board of
Directors
/s/ STEVEN M. SZEKELY
Steven M. Szekely,
Secretary
August 30, 1996
STOCKHOLDERS ARE URGED TO COMPLETE, DATE AND EXECUTE THE ENCLOSED PROXY AND MAIL
IT PROMPTLY IN THE ENCLOSED ENVELOPE. SHOULD YOU DESIRE TO VOTE YOUR SHARES IN
PERSON AT THE ANNUAL MEETING, YOU MAY DO SO EVEN THOUGH YOU HAVE PREVIOUSLY
RETURNED THE ENCLOSED PROXY.
<PAGE>
MONARCHAVALON, INC.
4517 Harford Road
Baltimore, Maryland 21214
PROXY STATEMENT
for the Annual Meeting of Stockholders
to be held October 4, 1996 at 3:00 p.m.
at the Center Club, U.S.F.&G. Building,
100 Light Street, Baltimore, Maryland
INFORMATION CONCERNING THE SOLICITATION
This proxy statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of Monarch Avalon, Inc. (the
"Company") to be voted at the Company's Annual Meeting of Stockholders to be
held October 4, 1996 at 3:00 p.m., prevailing local time, and any
adjournments and postponements thereof (the "Annual Meeting"). A stockholder
may revoke his proxy at any time prior to its use by execution of another
proxy bearing a later date or by notifying the Secretary of the Company in
writing. The proxy materials are being mailed to stockholders on or about
August 30, 1996.
The cost of preparing, assembling and mailing the proxy materials and of
reimbursing brokers, nominees and fiduciaries for the out-of-pocket and
clerical expense of transmitting copies of the proxy materials to the
beneficial owners of shares held of record by such persons will be borne by
the Company. The Company does not intend to solicit proxies otherwise than by
use of the mails, but certain officers and regular employees of the Company
may, without additional compensation, use their personal efforts, by
telephone or otherwise, to obtain proxies.
The principal executive offices of the Company are located at 4517
Harford Road, Baltimore, Maryland 21214.
OWNERSHIP OF VOTING SECURITIES
Only stockholders of outstanding Common Stock of the Company of record
at the close of business on August 26, 1996 are entitled to notice of and to
vote at the Annual Meeting. On August 26, 1996, 1,620,170 shares of Common
Stock were outstanding, each of which is entitled to one vote. There is no
provision for cumulative voting.
As set forth below under "Directors and Officers," Mr. A. Eric Dott and
Mr. Jackson Y. Dott are the only beneficial owners as of August 26, 1996 of
more than 5% of the Company's outstanding Common Stock who are known to the
Company.
DIRECTORS AND OFFICERS
The address of each of the Directors and Officers of the Company is
c/o Monarch Avalon, Inc., 4517 Harford Road, Baltimore, MD 21214.
<TABLE>
<CAPTION>
Name, Age, Principal Occupation(s) Common Stock
and Business Experience Director Beneficially Owned Percent
During Past 5 Years Since on August 26, 1996(1) of Class(2)
<S> <C> <C> <C>
A. Eric Dott, Age 69 1970 457,190(3) 23.8%
Chairman of the Board at the Company since
1990; President and Chief Executive Officer
at the Company from 1949 to 1990. Mr. Dott
is the father of Jackson Y. Dott, President
of the Company.
Jackson Y. Dott, Age 38 1987 467,529(4) 28.2%
President, Treasurer and Chief Executive
Officer at the Company since 1990; Secretary
of the Company from 1984 to 1990; Operations
Manager of Microcomputer Games, Inc. from
1981 to 1991. Mr. Dott is the son of A. Eric
Dott, Chairman of the Company.
David F. Gonano, Age 49 1996 -0- -0-
Certified Public Account Partner in tax
department of Wolpoff and Company, LLP since
1992, Personal Financial Specialist
1
<PAGE>
Name, Age, Principal Occupation(s) Common Stock
and Business Experience Director Beneficially Owned Percent
During Past 5 Years Since on August 26, 1996(1) of Class(2)
Helen Delich Bentley, Age 72 1995 43,080(4) 2.6%
President of Helen Bentley and Associates,
Inc. since 1995; Consultant for The Port
of Baltimore since 1995; Member of the U.S.
House of Representatives from 1985-1995.
Steven M. Szekely, Age 72 N/A N/A N/A
Executive Vice President of the Company
since 1979 and Secretary of the Company
since 1990.
Marshall Chadwell, Age 56 N/A N/A N/A
Chief Financial Officer of the Company
since 1996. Controller of the Company since
1995. Prior to joining the Company,
Mr. Chadwell served as Business Manager
of Wesley, Inc. from 1991 to 1995.
All Directors and Executives Officers as N/A 977,852(5) 60.3%
a Group (6 persons)
</TABLE>
(1) Unless otherwise indicated, all shares are held with sole voting and
investment power.
(2) The calculation of percent of class is based on the number of shares of
Common Stock outstanding as of August 26, 1996 assuming exercise of the options
held by such nominee.
(3) Includes 300,000 shares purchasable upon the exercise of an option. Such
option can only be exercised in the event of the following: an individual or
entity acquires the Company's Common Stock to the extent in which they have
greater than twenty percent of the total number of outstanding shares of the
Company's Common Stock; an individual or entity makes a tender offer for thirty
percent or more of the Company's outstanding Common Stock; or an individual or
entity proposes the election of a director or slate of directors opposed to any
directors or slate of directors proposed by the management of the Company. Mr.
Dott may only exercise the option within sixty days following any of the above
events.
(4) Includes 40,000 shares purchasable upon the exercise of an option.
(5) Included in the shares beneficially owned are 380,000 shares purchasable by
the directors and executive officers as a group upon exercise of options held by
them.
PROPOSAL ONE: ELECTION OF DIRECTORS
The Board of Directors of the Company has fixed the number of directors
at four. Mr. A. Eric Dott, Mr. Jackson Y. Dott, Mr. David F. Gonano and Mrs.
Helen Delich Bentley have been nominated for a term of one year and until
their successors are elected and qualified. Each of the nominees is a member
of the present Board of Directors. Proxies solicited hereby cannot be voted
for a greater number of persons than the number of nominees named. If at the
time of the Annual Meeting any of the nominees should be unable or decline to
serve, the discretionary authority provided in the proxy may be exercised to
vote for a substitute or substitutes. The Board of Directors has no reason to
believe that any substitute nominee or nominees will be required.
The Board of Directors recommends that stockholders vote FOR the
election of each of the nominees.
It is intended that unless contrary instructions are given, the persons
named in the accompanying proxy will vote all proxies in favor of the
nominees listed above to serve for the coming year and until their successors
are elected and qualified.
COMMITTEES OF THE BOARD OF DIRECTORS AND MEETING ATTENDANCE
The Board of Directors met four times during the last fiscal year. The
Board has a standing Audit Committee, but does not have nominating or
compensation committees.
2
<PAGE>
The Audit Committee consists of David F. Gonano and Helen Delich
Bentley. The Committee met with the Company's independent accountants once
during the last fiscal year. The Audit Committee recommends engagement of the
Company's independent accountants, reviews the arrangements and scope of the
audit and the performance of the independent accountants, reviews the
financial statements, considers comments made by the independent accountants
with respect to the Company's system of internal accounting control and
reviews non-audit services provided by the Company's independent accountants.
No director attended less than 75% of the aggregate number of meetings of
the Board of Directors and any Board committee on which such director served.
The Company's Directors receive no cash compensation for their services as
Directors. As compensation for their services as directors of the Company, on
July 19, 1994 Jackson Y. Dott was granted an option to purchase 40,000 shares
of Common Stock for $2.00 per share. As compensation for her services as a
director of the Company, on April 5, 1995 Helen Delich Bentley was granted an
option to purchase 40,000 shares of the Company's Common Stock for $2.00 per
share.
Mr. Dott's and Mrs. Bentley's options will expire on September 30, 1996.
CERTAIN TRANSACTIONS
Mr. A. Eric Dott is the joint owner with his wife of certain real
property located in Baltimore, Maryland comprising approximately 32,000
square feet and utilized as offices and plant by the Company under a lease
expiring in 1999. The lease calls for an annual net rental of $107,131.20
through June, 1997. The management of the Company believes that the terms of
its lease with the Dotts are comparable to those which would be obtainable in
leases with non-affiliated parties.
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid or allocated to the
chief executive officer for services rendered to the Company in all
capacities during the years ended April 30, 1994, 1995 and 1996. Compensation
paid to each other executive officer of the Company did not exceed $100,000
in any such year.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation Awards
Securities
Salary Bonus Underlying
Name and Principal Position Year ($) ($) Options
<S> <C> <C> <C> <C>
Jackson Y. Dott 1996 43,100 -- --
Chief Executive Officer 1995 41,600 -- --
1994 41,600 -- 40,000(1)
</TABLE>
(1) This option will expire on September 30, 1996.
3
<PAGE>
STOCK OPTION EXERCISES AND HOLDINGS
The following table includes the number of shares covered by all
remaining unexercised stock options as of April 30, 1996, segregated on both
an exercisable and unexercisable basis. Finally, also reported is the value
for "in-the-money" options which represents the difference between the
exercise price of any such remaining unexercised options and the year-end
market price of the Common Stock.
<TABLE>
<CAPTION>
EXERCISES IN FISCAL YEAR
ENDED APRIL 30, 1996
AND FISCAL YEAR-END VALUES
Value of
Number of Unexercised Unexercised In-the-Money
Options at FY-End Options at FY-End (2)
Shares
Acquired on Value
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Jackson Y. Dott 0 0 40,000(1) 0 $0 $0
</TABLE>
(1) This option will expire on September 30, 1996.
(2) Based on the closing price of the Common Stock on the NASDAQ National Market
as of April 30, 1996.
PROPOSAL TWO: GRANT OF STOCK OPTIONS
The options proposed to be approved for Helen Delich Bentley, David F.
Gonano, each a Director of the Company, and Jackson Y. Dott, President,
Treasurer, Chief Executive Officer and Director of the Company are each in
respect of 40,000 shares, and are exercisable, subject to stockholder
approval, at an exercise price of $2.00 per share. The options terminate on
September 30, 1997. The resolution of the Board of Directors setting forth
the terms of such options is attached hereto as Annex A.
The following is a brief summary of the federal income tax consequences,
under the Internal Revenue Code of 1986, as amended and as currently in
effect, with respect to the options. No taxable income would be realized by
the optionees upon the grant of the options or upon their expiration without
exercise. On exercise, the excess of the fair market value of the shares of
Common Stock at the time of exercise over the exercise price of such shares
would be treated as compensation. Any amounts taxable as compensation
(a) would be taxable at ordinary income tax rates in the year of exercise,
(b) would be subject to withholding for federal income tax purposes, and
(c) would generally be an allowable deduction to the Company. The Company
may withhold, or may require the optionees to remit to the Company, an amount
sufficient to satisfy any federal, state and local withholding tax
requirements. The Company may permit the optionees to satisfy a tax
withholding requirement on exercise of an option by delivery to the Company
of shares of its Common Stock owned by such optionees, including shares that
the optionees are entitled to receive upon exercise of the options. The
optionees' tax basis for shares of Common Stock acquired upon exercise would
be equal to the option price paid for the shares. If an optionee were to
hold shares acquired pursuant to the exercise of an option for more than one
year after the exercise of such option and were to sell the shares for more
than their basis, the optionee would be generally entitled to long-term
capital gain treatment on the difference.
The Board of Directors concluded that the grant of these options was
desirable as part of its efforts to promote the long-term growth and
profitability of the Company by providing directors and certain officers of
the Company with incentives to improve stockholder value and contribute to
the success of the Company and to enable the Company to attract, retain and
reward the best available persons for positions of substantial responsibility.
The Board of Directors recommends a vote FOR the approval of the grant of
these options.
NEW PLAN BENEFITS
<TABLE>
<CAPTION>
Number of
Shares of
Common Stock
Dollar Value Underlying
Name and Position Options ($)(1) Options
<S> <C> <C>
Jackson Y. Dott, President and Director $0 40,000
All current executive officers as a group 0 40,000
All current directors who are not executive officers as a group 0 80,000
All employees, excluding executive officers, as a group 0 0
</TABLE>
(1) Dollar value determined based on the difference between the closing price
on the Nasdaq National Market of the Common Stock underlying the options on
August 2, 1996 of $1 7/8, and the exercise price of the options.
PROPOSAL THREE: RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
Subject to ratification by the stockholders, and on the recommendation
of the Audit Committee, the Board of Directors has appointed Deloitte &
Touche L.L.P. as independent accountants to audit the financial statements
for the year ending April 30, 1997. Representatives of Deloitte & Touche
L.L.P.are expected to be present at the Annual Meeting, will have the
opportunity to make a statement if they desire to do so, and will be
available to respond to appropriate questions.
4
<PAGE>
The Board of Directors recommends that stockholders vote FOR ratification of
Deloitte & Touche L.L.P. as independent accountants.
VOTE REQUIRED TO APPROVE MATTERS
A quorum for the meeting requires the presence in person or by proxy of
holders of a majority of the outstanding shares of Common Stock. The election
of each director requires a plurality of the votes present and entitled to
vote. The approval of each other proposal requires the affirmative vote of
the holders of a majority of the shares represented at the meeting and
entitled to vote.
Votes cast by proxy or in person at the Annual Meeting will be tabulated by
the Teller of Elections appointed for the Annual Meeting and will determine
whether or not a quorum is present. Where, as to any matter submitted to the
stockholders for a vote, proxies are marked as abstentions (or stockholders
appear in person but abstain from voting), such abstentions will be treated as
shares that are present and entitled to vote for purposes of determining the
presence of a quorum but as unvoted for purposes of determining the approval of
any matter submitted to the stockholders for a vote. If a broker indicates on
the proxy that it does not have discretionary authority as to certain shares to
vote on a particular matter, those shares will not be considered as present and
entitled to vote with respect to that matter; however, such shares will be
considered present for purposes of a quorum.
Section 2.10 of Article II of the Company's Bylaws requires compliance
with a procedure under which a stockholder may nominate a candidate for
election as director at an annual meeting. The nomination is required to be
(i) written )ii) delivered to, or mailed and received at, the executive
offices of the Company not less than 60 days nor more than 90 days prior to
the date of the scheduled annual meeting and (iii) accompanied by (A) the
name, age, business address and residence of the stockholder and each person
whom the stockholder proposes to nominate for election or re-election as a
director, (B) the principal occupation or employment of such persons, (C) the
number of shares of Company stock which are beneficially owned by such
persons that is required to be disclosed in solicitations of proxies with
respect to nominees for election as directors, pursuant to Regulation 14A
under the Securities Exchange Act of 1934, as amended, and (E) the name and
address, as they appear on the Company's books, of the stockholder making the
nomination and any other stockholder known by such stockholder to support
such nomination, and the number of shares of Company stock beneficially owned
by all such stockholders. If notice or public disclosure of the date of the
annual meeting occurs less than 70 days prior to the date of the annual
meeting, stockholders must deliver to the Company, or mail and have received
at the Company, the nomination and the required attendant information not
later than the close of business on the tenth day following the earlier of
(i) the day on which such notice of the date of the annual meeting was mailed
or (ii) the day on which such public disclosure was made. This discussion is
intended to summarize Section 2.10 of Article II of the Company's Bylaws, and
is qualified in its entirety by reference to the Company's Bylaws.
As the notice of the 1996 Annual Meeting of Stockholders is being mailed
on or about August 30, 1996, the nomination and the required attendant
information must be received at the Company by the close of business on
September 11, 1996.
DATE FOR SUBMISSION OF STOCKHOLDER PROPOSALS
Stockholders' proposals intended to be presented at the 1997 Annual
Meeting of Stockholders must be received by the Company no later than May 3,
1997 to be considered for inclusion in the Company's proxy statement and form
of proxy for that meeting. Proposals should be sent to the Secretary of the
Company at the executive offices of the Company. For details concerning
eligibility, extent and limitations respecting the right to include
proposals, stockholders should consult the proxy regulations for the
Securities and Exchange Commission.
OTHER MATTERS
As of the date of this proxy statement, the Board of
Directors is not aware of any matters, other than those stated above, that
may be brought before the Annual Meeting. The persons named in the enclosed
form of proxy or their substitutes will vote said proxy in respect of any
such business in accordance with their best judgment.
By Order of the Board of Directors
/s/ STEVEN M. SZEKELY
Steven M. Szekely,
August 30, 1996 Secretary
5
<PAGE>
The Board of Directors recommends that stockholders vote FOR ratification of
Deloitte & Touche L.L.P. as independent accountants.
VOTE REQUIRED TO APPROVEMATTERS
A quorum for the meeting requires the presence in person or by proxy of
holders of a majority of the outstanding shares of Common Stock. The election
of each director requires a plurality of the votes present and entitled to
vote. The approval of each other proposal requires the affirmative vote of
the holders of a majority of the shares represented at the meeting and
entitled to vote.
Votes cast by proxy or in person at the Annual Meeting will be tabulated
by the Teller of Elections appointed for the Annual Meeting and will
determine whether or not a quorum is present. Where, as to any matter
submitted to the stockholders for a vote, proxies are marked as abstentions
(or stockholders appear in person but abstain from voting), such abstentions
will be treated as shares that are present and entitled to vote for purposes
of determining the presence of a quorum but as unvoted for purposes of
determining the approval of any matter submitted to the stockholders for a
vote. If a broker indicates on the proxy that it does not have discretionary
authority as to certain shares to vote on a particular matter, those shares
will not be considered as present and entitled to vote with respect to that
matter; however, such shares will be considered present for purposes of a
quorum.
Section 2.10 of Article II of the Company's Bylaws requires compliance
with a procedure under which a stockholder may nominate a candidate for
election as director at an annual meeting. The nomination is required to be
(i) written )ii) delivered to, or mailed and received at, the executive
offices of the Company not less than 60 days nor more than 90 days prior to
the date of the scheduled annual meeting and (iii) accompanied by (A) the
name, age, business address and residence of the stockholder and each person
whom the stockholder proposes to nominate for election or re-election as a
director, (B) the principal occupation or employment of such persons, (C) the
number of shares of Company stock which are beneficially owned by such
persons that is required to be disclosed in solicitations of proxies with
respect to nominees for election as directors, pursuant to Regulation 14A
under the Securities Exchange Act of 1934, as amended, and (E) the name and
address, as they appear on the Company's books, of the stockholder making the
nomination and any other stockholder known by such stockholder to support
such nomination, and the number of shares of Company stock beneficially owned
by all such stockholders. If notice or public disclosure of the date of the
annual meeting occurs less than 70 days prior to the date of the annual
meeting, stockholders must deliver to the Company, or mail and have received
at the Company, the nomination and the required attendant information not
later than the close of business on the tenth day following the earlier of
(i) the day on which such notice of the date of the annual meeting was mailed
or (ii) the day on which such public disclosure was made. This discussion is
intended to summarize Section 2.10 of Article II of the Company's Bylaws, and
is qualified in its entirety by reference to the Company's Bylaws.
As the notice of the 1996 Annual Meeting of Stockholders is being mailed
on or about August 30, 1996, the nomination and the required attendant
information must be received at the Company by the close of business on
September 11, 1996.
DATE FOR SUBMISSION OF STOCKHOLDER PROPOSALS
Stockholders' proposals intended to be presented at the 1997 Annual
Meeting of Stockholders must be received by the Company no later than May 3,
1997 to be considered for inclusion in the Company's proxy statement and form
of proxy for that meeting. Proposals should be sent to the Secretary of the
Company at the executive offices of the Company. For details concerning
eligibility, extent and limitations respecting the right to include
proposals, stockholders should consult the proxy regulations for the
Securities and Exchange Commission.
OTHER MATTERS
As of the date of this proxy statement, the Board of Directors is not
aware of any matters, other than those stated above, that may be brought
before the Annual Meeting. The persons named in the enclosed form of proxy or
their substitutes will vote said proxy in respect of any such business in
accordance with their best judgment.
By Order of the Board of Directors
/s/ STEVEN M. SZEKELY
Steven M. Szekely,
Secretary
August 30, 1996
6
<PAGE>
ANNEX A
FURTHER RESOLVED: That Helen D. Bentley, David F. Gonano and Jackson Y. Dott
are each hereby granted, effective October 4, 1996, subject to approval by a
majority of the votes cast on the issue at a meeting of stockholders, an
option to purchase 40,000 shares of the Company's Common Stock, $.25 par
value, for $2.00 per share (the "Stock Options"). Such option shall be
exercisable in whole or in part by written notice to the Company, and shall
expire to the extent unexercised, on September 30, 1997.
7
<PAGE>
MONARCH AVALON, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 4, 1996
The undersigned hereby appoints A. Eric Dott and David F. Gonano, and each of
them, with full power of substitution, as proxy, to vote all shares of the
Common Stock of Monarch Avalon, Inc. (the "Company") which the undersigned is
entitled to vote at the Annual Meeting of stockholders of the Company on
October 4, 1996 at 3:00 p.m., and at any adjournment or postponements thereof
(the "Annual Meeting"), on the following matters, each of which is fully
described in the proxy statement.
The Board of Directors recommends a vote FOR each of the items listed below.
1. FOR / / WITHHOLD / / The election of four persons to the Board of
Directors of the Company to serve until the next annual meeting of
stockholders and until their successors are elected and qualified (except as
marked to the contrary): A. Eric Dott, David F. Gonano, Jackson Y. Dott, and
Helen Delich Bentley (TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE STRIKE A LINE THROUGH THE NOMINEE'S NAME)
2. FOR / / AGAINST / / ABSTAIN / / Proposal to grant to each of Helen
Delich Bentley, David F. Gonano and Jackson Y. Dott an option to purchase
40,000 shares of the Common Stock of the Company.
3. FOR / / AGAINST / / ABSTAIN / / Proposal to ratify Deloitte &
Touche, LLP, as independent auditors of the Company for the fiscal year ending
April 30, 1997.
4. To act upon any other matter which may properly come before the Annual
Meeting.
THIS PROXY WILL BE VOTED ON EACH OF THE FOREGOING ITEMS AS SPECIFIED BY THE
PERSON SIGNING IT, BUT IF NO SPECIFICATION IS MADE, THE PROXY WILL BE VOTED
FOR THE ELECTION OF DIRECTORS AND FOR THE OTHER PROPOSALS.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
IT MAY BE REVOKED PRIOR TO ITS EXERCISE.
Receipt of notice of the Annual Meeting and proxy statement is hereby
acknowledged, and the terms of the notice and statement are hereby
incorporated by reference into this proxy. The undersigned hereby revokes all
proxies heretofore given for the Annual Meeting.
WITNESS the hand and seal of the undersigned, this day of
, 1996.
[SEAL]
[SEAL]
Please date and then sign exactly as name appears to the right.
If signing for trusts, estates or corporations, capacity or title
should be stated. If shares are jointly owned, both owners
should sign.
PLEASE DATE AND SIGN THIS PROXY AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE
