<PAGE>
================================================================================
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Athanor Group, 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):
$125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $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 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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<PAGE>
ATHANOR GROUP, INC.
921 East California Avenue
Ontario, California 91761
(909) 467-1205
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 11, 1997
11:00 a.m.
To the Shareholders of ATHANOR GROUP, INC.
You are cordially invited to attend the Annual Meeting of Shareholders of
Athanor Group, Inc., a California corporation (the "Company"), which will be
held at Alger Manufacturing Co., Inc., 5644 North 53rd Avenue, Glendale, Arizona
to consider and act upon the following matters, all as more fully described in
the accompanying Proxy Statement which is incorporated herein by this reference:
1. To elect a board of five (5) directors to serve until the next annual
meeting of the Company's shareholders and until their successors have
been elected and qualify;
2. To approve the Company's 1997 Stock Option Plan; and
3. To transact such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
Shareholders of record of the Company's Common Stock at the close of
business on March 4, 1997, the Record Date fixed by the Board, are entitled to
notice of and to vote at, the Meeting.
THOSE WHO CANNOT ATTEND ARE URGED TO SIGN, DATE, AND OTHERWISE COMPLETE THE
ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. ANY SHAREHOLDER
GIVING A PROXY HAS THE RIGHT TO REVOKE IT AT ANY TIME BEFORE IT IS VOTED.
By order of the Board of Directors
/s/ Duane L. Femrite
----------------------------------
Duane L. Femrite
President
Ontario, California
March 11, 1997
<PAGE>
ATHANOR GROUP, INC.
921 East California Avenue
Ontario, California 91761
(909) 467-1205
- --------------------------------------------------------------------------------
PROXY STATEMENT
---------------
Approximate Date Proxy Material First Sent To Shareholders:
March 11, 1997
- --------------------------------------------------------------------------------
The following information is provided in connection with the solicitation
of proxies for the Annual Meeting of Shareholders of Athanor Group, Inc. (the
"Company") to be held on April 11, 1997, and any adjournment or adjournments
thereof (the "Meeting"), for the purposes stated in the Notice of Annual Meeting
of Shareholders accompanying this Proxy Statement.
SOLICITATION AND REVOCATION OF PROXIES
A form of proxy is being furnished by the Company to each common
shareholder, and, in each case, is solicited on behalf of the Board of Directors
(the "Board") of the Company for use at the Meeting. The entire cost of
soliciting these proxies will be borne by the Company. The Company may pay
persons holding shares in their names or the names of their nominees for the
benefit of others, such as brokerage firms, banks, depositories, and other
fiduciaries, for costs incurred in forwarding soliciting material to their
principals. Members of the management of the Company may solicit some
shareholders in person, or by telephone, or by telegraph, following
solicitations of this Proxy Statement, but will not be separately compensated
for such solicitation services.
Proxies duly executed and returned by common shareholders and received by
the Company before the Meeting and not revoked will be voted: FOR the election
of all five (5) of the nominee-directors specified herein unless contrary
choices are specified, and FOR approval of the Company's 1997 Stock Option Plan.
Where a specification is indicated as provided in the proxy, the shares
represented by the proxy will be voted and cast in accordance with the
specification made. As to other matters, if any, to be voted upon, the persons
designated as proxies will take such actions as they, in their discretion, may
deem advisable. The persons named as proxies were selected by the Board of the
Company.
If any shareholder gives notice at the Meeting prior to commencement of
voting that the shareholder intends to cumulate his or her votes, then the
directors shall be elected by the cumulative voting method. In such event, the
shareholders shall have the right to cast that
2
<PAGE>
number of votes equal to the number of shares which they hold multiplied by the
number of directors to be elected by them; i.e., for the purpose of this
election, five votes for each share. Each shareholder may cast the whole number
of votes for one candidate, or distribute them among two or more candidates. The
persons named in the accompanying proxy will have discretionary authority to
cumulate votes in the election of directors in favor of one or more candidates.
Your execution of the enclosed proxy will not affect your rights as a
shareholder to attend the Meeting and to vote in person. Any shareholder giving
a proxy has a right to revoke it at any time by either (a) a later-dated proxy,
(b) a written revocation sent to and received by the Secretary of the Company
prior to the Meeting, or (c) attendance at the Meeting and voting in person.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The Company had outstanding 1,468,934 shares of common stock (the "Common
Stock") as of the close of business on March 4, 1997 (the "Record Date"). Only
holders of Common stock of record on the books of the Company at the close of
business on the Record Date will be entitled to vote at the Meeting. Each
holder of Common Stock is entitled to one (1) vote for each share of Common
Stock held by him/her, except that in the selection of directors, each holder of
Common Stock has cumulative voting rights. Voting on all matters, other than
election of directors, submitted for approval by the shareholders at the Meeting
will be on a noncumulative basis.
There are no other classes of voting securities of the Company other than
the Common Stock. Representation at the Meeting by the holders of the majority
of the outstanding shares of Common Stock of the Company, either by personal
attendance or by proxy, will constitute a quorum.
3
<PAGE>
The following table sets forth, as of the Record Date, information
concerning: (a) beneficial ownership of voting securities of the Company by
persons who are known by the Company to own beneficially more than five percent
(5%) of the Company's Common Stock; (b) beneficial ownership of voting
securities of the Company by each director, nominee for director, and by all
directors and officers as a group; and (c) the percentage of the total votes
held by each person or group described in subparagraphs (a) and (b) immediately
above.
<TABLE>
<CAPTION>
Amount and Percentage of
Beneficial Ownership
------------------------
Title Name and Address of Number of Percent of
of Class Beneficial Owner Shares Class
- ------------------------------------------------------------------------
<S> <C> <C> <C>
Common Gregory J. Edwards 11,000 .7%
Stock 3109 Rolling Stone Road
Oklahoma City, Oklahoma 73120
Common Duane L. Femrite 189,544 12.9%
Stock 921 E. California Ave.
Ontario, California 91761
Common William H. Harris, Jr. (2) 51,050 3.5%
Stock 302 Las Palmaritas
Phoenix, Arizona 85021
Common Richard A. Krause 256,983 17.5%
Stock 921 E. California Ave.
Ontario, California 91761
Common Robert W. Miller (1) 164,752 11.2%
Stock 921 E. California Ave.
Ontario, California 91761
Common All Officers and Directors 673,082 45.8%
Stock as a Group (5 persons)
</TABLE>
- ----------------------
(Footnotes on next page)
All shares are owned either directly or beneficially by the owner named in
the table except as otherwise indicated in a footnote below.
Percentages of class are based on the number of shares of Common Stock
outstanding on December 31, 1996. There were 1,468,934 shares of Common Stock
outstanding on December 31, 1996.
None of the officers or directors of the Company has options to acquire any
shares of Common Stock of the Company. Messrs. Femrite, Krause and Miller are
the only persons known to the Company to beneficially own more than five percent
(5%) of its Common Stock.
4
<PAGE>
The Company knows of no contractual arrangements which may at a subsequent
date result in a change in control of the Company.
- ----------------------
(Footnotes)
(1) Does not include 24,000 shares of Common Stock owned by Mr. Miller's
father as to which Mr. Miller disclaims beneficial ownership.
(2) Includes 41,050 shares of Common Stock owned by The Harris Family
Irrevocable Trust.
NOMINATION AND ELECTION OF DIRECTORS
The Company's directors are to be elected at each annual meeting of
shareholders. The Company's Bylaws authorize between three (3) and seven (7)
directors, the exact amount to be determined by the Board. At this Meeting FIVE
(5) directors, making up the entire membership of the Board of the Company, are
to be elected to serve until the next annual meeting of shareholders and until
their successors are elected and qualify. The nominees for election as
directors at this Meeting are set forth in the table below and are all
recommended by management of the Company. Each of the nominees has consented to
serve as a director if elected.
In the event that any of the nominees for director should become unable to
serve if elected, it is intended that shares represented by proxies which are
executed and returned will be voted for such substitute nominee(s) as may be
recommended by the Company's existing Board.
The FIVE nominee-directors receiving the highest number of votes cast at the
Meeting will be elected as the Company's directors to serve until the next
annual meeting of shareholders and until their successors are elected and
qualify. Subject to certain exceptions specified below, holders of Common Stock
of record on the Record Date are entitled to cumulate their votes in the
election of the Company's directors (i.e., they are entitled to the number of
votes as determined by multiplying the number of shares held by them times the
number of directors to be elected) and may cast all of their votes as they so
determine for one person or spread their votes among two or more persons as they
see fit. No shareholder shall be entitled to cumulate votes for a given
candidate for director unless such candidate's name has been placed in
nomination prior to the vote and the shareholder has given notice at the
Meeting, prior to the voting, of the shareholder's intention to cumulate his/her
votes. If any one shareholder has given such notice, all shareholders may
cumulate their votes for candidates in nomination. Discretionary authority to
cumulate votes is hereby solicited by the Board. Accordingly, the person named
in the accompanying proxy will have discretionary authority to cumulate votes in
the election of directors in favor of one or more candidates.
5
<PAGE>
The following tables list the nominees for election as directors and shows
certain information concerning each nominee, including the number of shares of
Common Stock of the Company beneficially owned, directly or indirectly, by such
nominee as of the Record Date:
<TABLE>
<CAPTION>
Principal Director
Name Occupation Age Since
- -----------------------------------------------------------------------------------
<S> <C> <C> <C>
Gregory J. Edwards Director 52 1990
Duane L. Femrite President, Chief Executive Officer, 52 1985
Chief Financial Officer
of the Company
William H. Harris, Jr. Director 52 1986
Richard A. Krause Vice President of the Company 61 1992
President, Alger Manufacturing
Company, Inc.
Robert W. Miller Chairman of the Board, 54 1976
Secretary of the Company
- -----------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Number of Shares Percent
of of
Nominee (1) Common Stock (2) Class
- ------------------------------------------------------------
<S> <C> <C>
Gregory J. Edwards 11,000 .7%
Duane L. Femrite 189,544 12.9%
William H. Harris, Jr. 51,050 (3) 3.5%
Richard A. Krause 256,983 17.5%
Robert W. Miller 164,752 (4) 11.2%
- ------------------------------------------------------------
</TABLE>
(Footnotes on next page)
6
<PAGE>
- ----------------------
(Footnotes)
(1) The Company has a nominating committee for directors of the Board.
Management's nominees for election as directors at the Meeting were
recommended by the Nominating Committee and approved by the Board of the
Company.
(2) All shares are owned directly by the director named in the table except as
otherwise indicated in a footnote below.
(3) Includes 41,050 shares of Common Stock owned by The Harris Family
Irrevocable Trust.
(4) Does not include 24,000 shares of Common Stock owned by Mr. Miller's
father as to which Mr. Miller disclaims beneficial ownership.
Listed below are descriptions of the business experience for at least the past
five years for each director and officer listed in the preceding table. Unless
otherwise described below, none of the following persons (i) is related in any
way, or (ii) has been involved in certain legal proceedings in the past five
years.
GREGORY J. EDWARDS President and Chief Executive Officer of CASS Corp. ("CASS")
since January 1993. CASS owns several manufacturing
companies: Nelco Mfg. Corp., a manufacturer of portable
shotblasting equipment; Milamar Coatings, Inc., a producer
of epoxy coating products used in the industrial and
commercial seamless floor coating business; Berry Corp., a
manufacturer of equipment for the maintenance and marking of
pavement services, specializing in designing and
manufacturing joint/crack sealers and thermoplastic melting
equipment; and Government Services Division (formerly known
as R. T. Nelson Painting Service, Inc.), a government
contractor involved with surface preparation and re-coating
for U.S. Naval ships and portable landing mats. Between
July 1991 and January 1993, Mr. Edwards was self-employed as
a financial consultant and investor. Previously, he was an
investment banker with Stephens, Inc. of Little Rock,
Arkansas from mid-1990 to July 1991.
DUANE L. FEMRITE President, Chief Executive Officer of the Company since
April 1995, Chief Operating Officer from January 1987 to
April 1995, and Chief Financial Officer since December 1982.
Secretary of the Company from October 1984 to April 1995 and
Director of the Company since December 1985. Chairman of the
Board and Chief Executive Officer of Alger Manufacturing
Co., Inc. since September 1986 and October 1987
respectively.
7
<PAGE>
Director of Core Software Technology from November
1993 to March 1995. Mr. Femrite is a Certified Public
Accountant.
WILLIAM H. HARRIS, JR. Account executive with Dean Witter Reynolds, Inc. in
Phoenix, Arizona since October 1992. President of Sun
Rental and Sales, Inc. a construction equipment sales
and rental company located in Yuma, Arizona from July
1978 to September 1992.
RICHARD A. KRAUSE Director and Vice President of the Company since
December 1992. President and Chief Operating Officer
of Alger Manufacturing Company, Inc. since 1987.
ROBERT W. MILLER Chairman of the Board since 1976, Chief Executive
Officer of the Company from 1976 to April 1995,
Corporate Secretary since April 1995, Director and
Vice President of Alger Manufacturing Co., Inc. since
1986. Director of Image Data Corporation since 1988
and Chief Operating Officer from May 1990 to July
1992. Elected Chief Executive Officer of Image Data
Corporation on January 7, 1993. Director of Core
Software Technology since September 1991. Director of
OneCard International since 1988 and elected Chairman
and Chief Executive Officer of this company in
September 1992.
In March 1992 Image Data Corporation filed a
bankruptcy petition. Its Plan of Reorganization was
confirmed in April 1993 and became effective in 1994.
Directors of the Company are elected annually. The present term of office of
each director will expire at the next annual meeting of shareholders of the
Company or at such time as his successor is duly elected and qualifies.
The Company has a Compensation Committee, Audit Committee, and a Nominating
Committee. The Compensation Committee consists of William H. Harris, Gregory
Edwards, and Robert W. Miller. The Compensation Committee reviews and makes
recommendations for the compensation of the Company's officers. The Audit
Committee consists of William H. Harris and Gregory Edwards. The Audit Committee
works with the Company's auditors in the preparation of the Company's annual
financial statements and report. The Nominating Committee consists of Duane L.
Femrite, William H. Harris, and Richard A. Krause. The Nominating Committee
reviews and makes recommendations to the Board for director nominees. Outside
directors who are members of these committees will receive $50 for each
committee meeting attended which takes place on a day on which the full board
does not meet. During 1996 each committee held one (1) meeting.
8
<PAGE>
APPROVAL OF THE 1997 STOCK OPTION PLAN
The Board of Directors is requesting that the Company's shareholders approve
the Company's 1997 Stock Option Plan (the "1997 Plan"), which was adopted by the
Board of Directors on January 18, 1997. The purposes of the 1997 Plan are to
attract, reward and retain the best available officers, directors, employees and
consultants for the Company and to promote the success of the Company's
business. The following discussion is intended only as a summary of the material
provisions of the 1997 Plan. Shareholders are encouraged to review the 1997
Plan, included herein as Exhibit A, in its entirety before voting on this
proposal.
The 1997 Plan provides only for grants of "non-qualified stock options" which
are not qualified for treatment under Section 422 of the Internal Revenue Code
of 1986, as amended. A total of 220,340 shares of Common Stock have been
reserved for issuance under the 1997 Plan upon the exercise of stock options
which may be granted to employees, officers, directors and consultants of the
Company. Because the officers, directors, employees and consultants of the
Company who may participate in the 1997 Plan and the amount of their options
will be determined by the Board of Directors or its committee in its discretion,
it is not possible to state the names or positions of, or the number of options
that may be granted to, the Company's officers, directors, employees and
consultants. No person may receive options under the 1997 Plan for more than
30,000 shares in any one fiscal year.
The Board of Directors may administer the 1997 Plan or the administration of
the 1997 Plan may be delegated to a Committee of the Board of Directors (the
"Committee"). In addition to determining who will be granted options, the Board
or Committee will have the authority and discretion to determine when options
will be granted and the number of options to be granted. The Board or Committee
also may determine the time or times when each option becomes exercisable, the
duration of the exercise period for options and the form or forms of the
instruments evidencing options granted under the 1997 Plan, and is empowered to
make all other determinations deemed necessary or advisable for the
administration of the 1997 Plan.
The term of each option granted under the 1997 Plan will be established by
the Board or Committee at the time of the grant. An option granted under the
1997 Plan may be exercised at such times and under such conditions as determined
by the Board or Committee. Except as otherwise provided by the Board or
Committee at the time an option is granted, no option granted under the 1997
Plan is transferable other than at death, and each option is exercisable during
the life of the optionee only by the optionee. In the event of the death of a
person who has received an option, the option generally may be exercised by a
person who acquired the option by bequest or inheritance to the extent that such
option was exercisable at the date of death.
The exercise price may not be less than the fair market value of the Common
Stock on the date of grant. The consideration to be paid upon exercise of an
option, including the method of payment, will be determined by the Board or
Committee and may consist entirely of cash, check, shares of Common Stock, such
other consideration and method of payment permitted by applicable law or any
combination of such methods of payment as permitted by the Board or Committee.
The Board or Committee has the authority to reset the price of any stock option
after the original grant and before exercise. In the event of stock dividends,
splits, and similar capital changes, the 1997 Plan provides for appropriate
adjustments in the number of shares available for option and the number and
option prices of shares subject to outstanding options.
9
<PAGE>
In the event of a proposed sale of all or substantially all of the assets of
the Company, or a merger of the Company with and into another corporation,
outstanding options shall be assumed or equivalent options shall be substituted
by such successor corporation, unless the Board or Committee provides all option
holders with the right to immediately exercise all of their options, whether
vested or unvested. In the event of a proposed dissolution or liquidation of the
Company, outstanding options will terminate immediately prior to the
consummation of such proposed action, unless otherwise provided by the Board or
Committee. In such a situation, the Board or Committee is authorized to give
option holders the right to immediately exercise all of their options, whether
vested or unvested.
The 1997 Plan will continue in effect until April 1, 2007, unless earlier
terminated by the Board of Directors, but such termination will not affect the
terms of any options outstanding at that time. The Board of Directors may
amend, terminate or suspend the 1997 Plan at any time. Amendments to the 1997
Plan must be approved by shareholders if required by applicable tax, securities
or other law or regulation.
The issuance of shares of Common Stock upon the exercise of options may be
subject to registration with the Securities and Exchange Commission of the
shares reserved by the Company under the 1997 Plan.
FEDERAL INCOME TAX CONSEQUENCES
The federal income tax discussion set forth below is included for general
information only. Optionees are urged to consult their tax advisors to
determine the particular tax consequences applicable to them, including the
application and effect of foreign, state and local income and other tax laws.
Options authorized to be granted under the 1997 Plan will be treated as non-
qualified stock options for federal income tax purposes. Under federal income
tax law presently in effect, no income is realized by the grantee of a non-
qualified stock option pursuant to the 1997 Plan until the option is exercised.
At the time of exercise of a non-qualified stock option, the optionee will
realize ordinary compensation income in the amount by which the market value of
the shares subject to the option at the time of exercise exceeds the exercise
price. Upon the sale of shares acquired upon exercise of a non-qualified stock
option, the excess of the amount realized from the sale over the market value of
the shares on the date of exercise will be taxable as a capital gain. The
Company will recognize a deduction at the time of exercise of a non-qualified
stock option on the difference between the option price and the fair market
value of the shares on the date of grant.
BOARD RECOMMENDATION
The Board of Directors unanimously recommends a vote FOR approval of the
Company's 1997 Stock Option Plan. This proposal must be approved by the
affirmative vote of a majority of the shares of Common Stock present in person
or by proxy at the Annual Meeting, and no options may be granted under the 1997
Plan if this proposal is not approved. PROXIES SOLICITED BY THE BOARD WILL BE
VOTED FOR APPROVAL OF THE 1997 STOCK OPTION PLAN UNLESS A VOTE AGAINST THE
PROPOSAL OR ABSTENTION IS SPECIFICALLY INDICATED.
10
<PAGE>
TRANSACTIONS WITH MANAGEMENT
Loans and Investments in Core Software Technology (CORE) and Image Data
- -----------------------------------------------------------------------
Corporation (IDC)
- -----------------
The Company is currently the single largest shareholder of Core Software
Technology, a California corporation ("Core"), owning 3,132,570 shares of the
issued and outstanding common stock of Core, representing approximately 27.8% of
the issued and outstanding shares of Core's capital stock (assuming the options
to purchase additional shares of the capital stock of Core owned by the Company
and others are not exercised). As a condition to a closing of a private
placement of the common stock of Core for gross proceeds to Core of $4,705,000
which closing occurred during April and May 1994 (the "Core Private Placement"),
the original shareholders of Core agreed to deposit certain shares of the common
stock of Core owned by them into escrow. Accordingly, an aggregate of 1,426,150
of the 3,132,570 shares of the common stock of Core owned by the Company are
currently held in an escrow account. All of the escrowed shares will be released
from escrow if Core meets a certain minimum pretax income requirement in 1997.
Core failed to meet this minimum pretax income requirement in 1994, 1995 and
1996, and there can be no assurance that Core will meet this pretax income
requirement in the future. If such minimum pretax income requirements are not
reached by April 30, 1998, all shares held in the escrow account will be
canceled and returned to Core and the Company shall have no further rights with
respect to those shares.
Core is the developer and marketer of an on-line geospatial (image,
cartographic, & demographic) information indexing and distribution system and
service, known as ImageNet. Core develops and distributes proprietary client-
server and application software but primarily uses its software products as a
delivery vehicle for ImageNet services. Through the global implementation of
ImageNet, Core seeks to control the channel for distribution of geospatial
information products worldwide. As a single source access vehicle for such
information, the value and utility of ImageNet is a function of content.
Core is attempting to build, a worldwide, on-line database and
distribution infrastructure consisting of commercial and public data providers,
existing international distributors, satellite ground receiving stations, and
value added companies. ImageNet addresses the information access requirements
of an international public policy movement to maximize the benefits of existing
scientific and geographic information and analysis tools.
The Company has also provided a portion of the working capital
requirements of Core during fiscal 1996, in the form of a series of loans to
Core in the aggregate principal amount of $149,739. The Company accounts for its
investment in Core using the equity method of accounting which requires the
Company to record its share of Core's earnings or losses. During fiscal 1996,
the Company reduced the loans to zero because of losses incurred by Core.
Robert W. Miller, the Chairman of the Board of the Company, has served
on the Board of Directors of Core since its formation and on the Board of
Directors of Image Data Corporation ("IDC"), Core's predecessor, since 1988.
Until July 1992 Mr. Miller was the Chief Operating Officer of IDC. Mr. Miller
is currently serving as Chief Executive Officer of IDC.
11
<PAGE>
Duane L. Femrite, the President and Chief Executive Officer of the Company,
served on the Board of Directors of Core from November 1993 to March 1995. Mr.
Miller as a director of Core, and Mr. Femrite during his tenure, were entitled
to receive $500 per month and $1000 per board meeting attended and each
committee meeting not held in conjunction with a board meeting. In addition,
they were to be reimbursed for all business related expenses associated with
their duties as a director of Core. During 1995 and 1996, all director fees
payable to Mr. Miller and Mr. Femrite from Core was deferred.
Mr. Miller has entered into a consulting agreement with Core, effective
January 1, 1995, wherein Mr. Miller has agreed to provide services to Core
relating to financial, investor, capital raising and general business matters
arising out of Core's on-going restructuring, recapitalization and financing
efforts. In exchange for Mr. Miller's services, Core has agreed to pay Mr.
Miller a fixed fee of $50,000 for the calendar year 1995 and $5,000 per month
commencing January 1, 1996. None of the foregoing amounts has been paid. All
amounts due pursuant to the consulting agreement will be paid, if at all, only
from proceeds raised in any major refinancing of Core or profits, if any,
generated in connection with Core's future business operations. Additionally,
Mr. Miller will receive a commission of one-half of one percent of any funds
raised for the company through his personal activities. There are currently no
commissions due to Mr. Miller for fundraising activities. Mr. Miller has
assigned the right to receive said fees and commissions to R & D Financial a
California general partnership of which Messrs. Miller and Femrite are the
general partners.
Mr. Miller was to have received $4,000 per month from IDC with respect
to his services rendered to IDC in accordance with IDC's confirmed Plan of
Reorganization, commencing in April 1993, but has received no compensation to
date. Such compensation may be paid to Mr. Miller in the future.
Mr. Femrite and Mr. Miller have a beneficial ownership interest in
242,986 shares of the common stock of Core owned by R&D. In addition, R&D holds
stock options entitling it to purchase an additional 122,000 shares of Core
common stock at a price of $1 per share. Mr. Miller has a beneficial ownership
interest in 23,929 additional shares of the common stock of Core as well as
options to purchase 46,887 shares of the common stock of Core at $1 per share.
The Internal Revenue Service ("IRS") has served Mr. Miller personally
with a Notice of Levy with respect to approximately $400,000 in taxes and
penalties purportedly owed by IDC. In connection therewith, the IRS has
collected approximately $36,000 from Mr. Miller and currently collects $500 per
month from Mr. Miller. Mr. Miller has advised the Company that he disputes the
IRS levy and responsibility for payment of IDC's taxes. In connection with
Core's previous acquisition of the assets of IDC, Core agreed to indemnify and
hold Mr. Miller harmless from and against any liabilities relating to or arising
out of IDC's business, including, without limitation, taxes and penalties owed
by IDC to the IRS. Mr. Miller is seeking indemnification against Core arising
out of the IRS Notice of Levy against Mr. Miller for taxes and penalties
purportedly owed to the IRS by IDC.
On September 7, 1995, the Company made a loan to Mr. Miller in the
principal amount of $25,000. During 1996 the loan was increased to $40,000.
The loan bears interest at the rate of 10% per annum and is secured by 25,000
shares of the common stock of Registrant. The loan is due and payable, together
with accrued interest thereon in March 1997.
12
<PAGE>
REMUNERATION OF OFFICERS AND DIRECTORS
Executive Compensation
- ----------------------
The following table sets forth all plan and non-plan compensation
awarded to, earned by, or paid to the Company's four most highly compensated
executive officers, each of whose annual salary and bonus was in excess of
$100,000 and to the Company's Chief Executive Officer regardless of compensation
level, for services to the Company during the three fiscal years ended October
31, 1996.
ANNUAL COMPENSATION
-------------------
<TABLE>
<CAPTION>
Name and Principal
Position Year Salary Bonus Other (1)
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Duane L. Femrite 1996 $133,308 $44,000 $2,162
President, Chief Executive 1995 129,038 10,000 3,826
Officer and Chief Financial 1994 125,000 24,000 3,124
Officer
Richard A. Krause 1996 $145,308 $52,328 $3,750
Vice President and 1995 141,673 41,066 4,748
President of Alger 1994 125,000 48,283 3,732
Manufacturing Co., Inc.
Robert W. Miller 1996 $136,498 $44,000 $1,432
Chairman of the Board 1995 125,000 10,000 1,250
Corporate Secretary 1994 125,000 24,000 1,250
</TABLE>
(Footnotes)
(1) Other compensation includes contributions made to the Company's 401-K
Plan. Does not include use of automobile paid for by the Company.
Employment Agreements
- ---------------------
Effective January 1, 1991, the Company entered into written employment
agreements with Robert W. Miller, as Chairman of the Board and Chief Executive
Officer, and Duane L. Femrite, as President, Chief Operating Officer, Chief
Financial Officer, and Secretary of the Company. Effective January 1, 1993,
Alger entered into a written agreement with
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<PAGE>
Richard A. Krause as President and Chief Operating Officer. Each of the
employment agreements are identical as to their terms except for the description
of the duties which each employee is to provide.
Each agreement is for an initial term of five (5) years, renewable
automatically for additional one (1) year periods unless either the employee,
the Company, or Alger wishes to terminate it. The employment agreements for
Robert W. Miller and Duane L. Femrite were automatically renewed on January 1,
1997, for an additional year.
The agreements provide that the salaries of the employees shall be determined
by the Board of Directors but may not be less than the salary paid in the
preceding year. Each employee shall be entitled to the use of an automobile at
the Company's expense and shall be entitled to all benefits and perquisites
available to the Company's other employees.
If the agreement terminates because of the death of the employee, then the
employee's heirs and/or successors shall continue to receive the employee's
salary, monthly, for a period of twelve (12) months. If the agreement should
terminate for any reason other than cause or death of the employee, including,
without limitation, employee's voluntary termination, the Company shall pay the
employee a lump sum payment equal to employee's then monthly salary multiplied
by the number of years during which the employee was employed by the Company, or
Alger, as the case may be, prorated for any partial year of employment. Payment
is limited to twenty-four (24) years of employment.
The agreements permit the employee to engage in other employment or business
opportunities provided that such outside activities do not interfere with
employee carrying out his duties to the Company, are not competitive with the
Company, and do not result in employee breaching any of his fiduciary
obligations to the Company or its shareholders.
Directors' Remuneration
- -----------------------
Outside Directors are to receive fees of $300 per month and $500 per meeting
attended. In 1994 the Board established a Nominating Committee, which Committee
is charged with the responsibility of nominating a slate of candidates to serve
as directors of the Company. Outside directors on the Compensation Committee,
Audit Committee, and Nominating Committee receive $50 for each meeting attended
when such committee meetings are held on a day which the full Board does not
meet. The Audit Committee, Nominating Committee, and Compensation Committee met
once in 1996.
Non-employee directors of Alger receive directors' fees for serving as
directors and for meetings attended. Certain directors of the Company are also
directors of Alger.
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<PAGE>
SHAREHOLDER PROPOSALS
Shareholders who wish to present proposals for action at the 1998
Annual Meeting should submit their proposals in writing to the Secretary of the
Company at the address of the Company set forth on the first page of this Proxy
Statement. Proposals of shareholders intended to be presented at the 1998
Annual Meeting (a) must be received by the Secretary no later than December 20,
1997, for inclusion in next year's proxy statement and proxy card, and (b) must
satisfy the applicable conditions established by the Securities and Exchange
Commission for shareholder proposals.
COMPLIANCE WITH SECTION 16 (a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16 (a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than ten
percent of the Company's Common Stock to file with the Securities Exchange
Commission initial reports of stock ownership and reports of changes in stock
ownership. To the Company's best knowledge, all the Company's directors,
executive officers, and persons owning more than 10% of the Company's Common
Stock filed all required reports required by section 16 (a) on a timely basis.
ANNUAL REPORT TO SHAREHOLDERS
The Company's Annual Report to shareholders for the fiscal year ended
October 31, 1996 (the "Annual Report"), which includes audited financial
statements and schedules thereto, is being mailed with this Proxy Statement to
stockholders as of the Record Date. The Annual Report to the shareholders is
not incorporated in this Proxy Statement and is not deemed to be a part of the
proxy solicitation material.
OTHER MATTERS
The Management of the Company does not know of any other matters which
are to be presented for action at the Meeting. Should any other matters come
before the Meeting or any adjournment thereof, the persons named in the enclosed
proxy will have the discretionary authority to vote all proxies received with
respect to such matters in accordance with their judgments.
15
<PAGE>
FORM 10-KSB AND EXHIBITS TO FORM 10-KSB
Copies of the Company's Form 10-KSB and the exhibits to the Company's Form
10-KSB for the fiscal year ended October 31, 1996, as filed with the Securities
and Exchange Commission, will be furnished to any person from whom the
accompanying proxy is solicited upon written request to the Company's Secretary
at Athanor Group, Inc., 921 East California Avenue, Ontario, California 91761.
A copying charge of $.25 per page will be made for each page of the exhibits
requested.
BY ORDER OF THE BOARD OF DIRECTORS
Duane L. Femrite
President
Ontario, California
March 11, 1997
SHAREHOLDERS ARE URGED TO SPECIFY THEIR CHOICES, DATE, SIGN, AND RETURN THE
ENCLOSED PROXY IN THE ENCLOSED ENVELOPE. PROMPT RESPONSE IS HELPFUL AND
YOUR COOPERATION WILL BE APPRECIATED.
16
<PAGE>
ATHANOR GROUP, INC. (the "Company")
1997 STOCK OPTION PLAN (the "Plan")
1. PURPOSES OF THE PLAN
The purpose of this 1997 Stock Option Plan is to place the Company in a
position to attract, reward and retain the best available officers, directors,
employees and consultants, and to promote the success of the Company's business.
Options granted hereunder shall only be "Nonqualified Stock Options," as defined
below.
2. DEFINITIONS
As used herein, the following definitions shall apply:
(a) "Administrator" shall mean the Board or any of its Committees as shall
be administering the Plan, in accordance with Section 4 of the Plan.
(b) "Board" shall mean the Board of Directors of the Company.
(c) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(d) "Committee" shall mean a committee appointed by the Board in
accordance with Section 4.(a) of the Plan.
(e) "Common Stock" shall mean the Common Stock of the Company.
(f) "Company" shall mean Athanor Group, Inc.
(g) "Consultant" shall mean any person who is engaged by the Company or
its Subsidiary to render consulting services and is compensated for
such consulting services.
(h) "Director" shall mean a member of the Board of the Company or its
Subsidiary.
(i) "Employee" shall mean any person, including Officers and Directors,
employed by the Company or its Subsidiary.
(j) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(k) "Nonqualified Stock Option" shall mean an Option not intended to
qualify as an incentive stock option within the meaning of Section 422
of the Code.
(l) "Notice of Grant" shall mean a written notice evidencing certain terms
and conditions of an individual Option grant. The Notice of Grant is
part of the Option Agreement.
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<PAGE>
(m) "Officer" shall mean a person who is an officer of the Company or its
Subsidiary within the meaning of Section 16 of the Exchange Act and
the rules and regulations promulgated thereunder.
(n) "Option" shall mean a stock option granted pursuant to the Plan.
(o) "Option Agreement" shall mean a written agreement between the Company
and an Optionee evidencing the terms and conditions of an individual
Option grant. The Option Agreement is subject to the terms and
conditions of the Plan.
(p) "Optioned Stock" shall mean the Common Stock subject to an Option.
(q) "Optionee" shall mean an Officer, Director, Employee or Consultant who
receives an Option.
(r) "Plan" shall mean this 1997 Stock Option Plan.
(s) "Rule 16b-3" shall mean Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3, as in effect when discretion is being
exercised with respect to the Plan.
(t) "Share" shall mean a share of the Common Stock, as adjusted in
accordance with Section 11 of the Plan.
(u) "Subsidiary" shall mean a "Alger Manufacturing Company, Inc."
3. STOCK SUBJECT TO THE PLAN
Subject to the provisions of Section 11 of the Plan, the maximum aggregate
number of Shares which may be optioned under the Plan is 220,340 shares of
Common Stock. The Shares shall be authorized, but unissued, Common Stock.
If an Option should expire or become unexercisable for any reason without
having been exercised in full, the unpurchased Shares which were subject thereto
shall, unless the Plan shall have been terminated, become available for future
Option grants under the Plan; provided, however, that Shares that have actually
been issued under the Plan shall not be returned to the Plan and shall not
become available for future distribution under the Plan.
4. ADMINISTRATIVE OF THE PLAN
(a) PROCEDURE.
(i) ADMINISTRATION WITH RESPECT TO DIRECTORS AND OFFICERS SUBJECT TO
SECTION 16(b). With respect to Option grants made to Officers or Directors
subject to Section 16(b) of the Exchange Act, the Plan shall be administered by
(A) the Board, if the Board may administer the
2
<PAGE>
Plan in compliance with the rules governing a plan intended to qualify as a
discretionary plan under Rule 16b-3, or (B) a Committee designated by the Board
to administer the Plan, which Committee shall be constituted to comply with the
rules, if any, governing a plan intended to qualify as a discretionary Plan
under Rule 16b-3. Once appointed, such Committee shall continue to serve in its
designated capacity until otherwise directed by the Board. From time to time the
Board may increase the size of the Committee and appoint additional members,
remove members (with or without cause) and substitute new members, fill
vacancies (however caused), and remove all members of the Committee and
thereafter directly administer the Plan, all to the extent permitted by the
rules governing a plan intended to qualify as a discretionary plan under Rule
16b-3. With respect to persons subject to Section 16 of the Exchange Act,
transactions under the Plan are intended to comply with all applicable
conditions of Rule 16b-3. To the extent any provision of the Plan or action by
the Administrator fails to so comply, it shall be deemed null and void, to the
extent permitted by law and deemed advisable by the Administrator.
(ii) ADMINISTRATION WITH RESPECT TO OTHER PERSONS. With respect to Option
grants made to Employees or Consultants who are neither Directors nor Officers
of the Company, the Plan shall be administered by (A) the Board or (B) a
Committee designated by the Board, which Committee shall be constituted to
satisfy the legal requirements relating to the administration of stock option
plans under applicable corporate and securities laws. Once appointed, such
Committee shall serve in its designated capacity until otherwise directed by the
Board. The Board may increase the size of the Committee and appoint additional
members, remove members (with or without cause) and substitute new members, fill
vacancies (however caused), and remove all members of the Committee and
thereafter directly administer the Plan, all to the extent permitted by the
legal requirements relating to the administration of stock option plans under
state corporate and securities laws.
(b) POWERS OF THE ADMINISTRATOR. Subject to the provisions of the Plan, and in
the case of a Committee, subject to the specific duties delegated by the Board
to such Committee, the Administrator shall have the authority, in its
discretion:
(i) to grant Nonqualified Stock Options;
(ii) to determine, upon review of relevant information and in accordance
with Section 8.(b) of the Plan, the fair market value of the Common
Stock;
(iii) to determine the exercise price per Share of Options to be granted,
which exercise price shall be determined in accordance with Section 8.(a) of
the Plan;
(iv) to determine the Officers, Directors, Employees or Consultants to
whom, and the time or times at which, Options shall be granted and the number
of Shares to be represented by each Option;
(v) to interpret the Plan;
(vi) to prescribe, amend and rescind rules and regulations relating to
the Plan;
3
<PAGE>
(vii) to determine the terms and provisions of each Option granted (which
need not be identical) and, with the consent of the holder thereof, modify or
amend each Option;
(viii) to accelerate or defer (with the consent of the Optionee) the
exercise date of any Option;
(ix) to accelerate or defer (with the consent of the Optionee) the
vesting restrictions applicable to Options granted under the Plan;
(x) to authorize any person to execute on behalf of the Company any
instrument required to effectuate the grant of an Option previously granted or
authorized by the Board;
(xi) to determine the restrictions on transfer, vesting restrictions,
repurchase rights, or other restrictions applicable to Shares issued under the
Plan;
(xii) to effect, at any time and from time to time, with the consent of
the affected Optionees, the cancellation of any or all outstanding Options
under the Plan and to grant in substitution therefor new Options under the
Plan covering the same or different numbers of Shares, but having an Option
price per Share consistent with the provisions of Section 8 of this Plan as of
the date of the new Option grant;
(xiii) to establish, on a case-by-case basis, different terms and
conditions pertaining to exercise or vesting rights upon termination of
employment, whether at the time of an Option grant or thereafter;
(xiv) to approve forms of agreement for use under the Plan;
(xv) to reduce the exercise price of any Option to the then current fair
market value if the fair market value of the Common Stock covered by such
Option shall have declined since the date the Option was granted;
(xvi) to determine whether and under what circumstances an Option may be
settled in cash under subsection 9(f) instead of Common Stock; and
(xvii) to make all other determinations deemed necessary or advisable for
the administration of the Plan.
(c) EFFECT OF ADMINISTRATOR'S DECISION. All decisions, determinations and
interpretations of the Administrator shall be final and binding on all Optionees
and any other holders of any Options granted under the Plan.
4
<PAGE>
5. ELIGIBILITY
(a) PERSONS ELIGIBLE. Options may be granted to Officers, Directors, Employees
and Consultants. An Officer, Director, Employee or Consultant who has been
granted an Option may, if he or she is otherwise eligible, be granted an
additional Option or Options.
(b) NO RIGHT TO CONTINUED EMPLOYMENT. The Plan shall not confer upon any
Optionee any right with respect to continuation of an employment or a consulting
relationship with the Company, nor shall it interfere in any way with his or her
right or the Company's right to terminate his or her employment or consulting
relationship at any time, with or without cause.
(c) OTHER LIMITATIONS. The following limitations shall apply to grants of
options to employees:
(i) No Person eligible hereunder shall be granted, in any fiscal year of
the Company, Options to purchase more than 30,000 Shares.
(ii) The foregoing limitation shall be adjusted proportionately in
connection with any change in the Company's capitalization as described in
Section 11.
(iii) If an Option is canceled in the same fiscal year of the Company in
which it was granted (other than in connection with a transaction described in
Section 11), the canceled Option shall be counted against the limits set forth
in subsections (i) and (ii) above. For this purpose, if the exercise price of
an Option is reduced, the transaction will be treated as a cancellation of the
Option and the grant of a new Option.
6. TERM OF PLAN
The Plan shall be come effective upon the earlier to occur of its adoption by
the Board or its approval by the stockholders of the Company as described in
Section 17 of the Plan. It shall continue in effect for a term of ten (10)
years, unless sooner terminated under Section 13 of the Plan.
7. TERM OF OPTION
The term of each Option shall be stated in the Notice of Grant.
8. EXERCISE PRICE AND CONSIDERATION
(a) Exercise Price. The per-Share exercise price for the Shares to be issued
--------------
pursuant to exercise of an Option shall be such price as is determined by
the Administrator, but shall not be less than the fair market value of the
common stock on the date of grant.
(b) Fair Market Value. The fair market value per Share shall be determined by
-----------------
the Administrator in its discretion; provided, however, that where there is a
public market for the Common Stock, the fair market value per Share shall be the
closing bid price of the Common Stock
5
<PAGE>
for the last market trading day prior to the date of grant of the Option as
reported in The Wall Street Journal (or, if not so reported, as otherwise
reported by the National Association of Securities Dealers Automated Quotation
(NASDAQ) System) or, in the event the Common Stock is listed on a stock
exchange, the fair market value per Share shall be the closing price on such
exchange for the last market trading day prior to the date of grant of the
Option as reported in The Wall Street Journal.
(c) Consideration. The consideration to be paid for the Shares to be issued
-------------
upon exercise of an Option, including the method of payment, shall be determined
by the Administrator. Such consideration may consist of:
(i) cash;
(ii) check;
(iii) transfer to the Company of Shares which
(A) in the case of Shares acquired upon exercise of an Option, have
been owned by the Optionee for more than six months on the date of
surrender, and
(B) have a fair market value on the date of surrender equal to the
aggregate exercise price of the Shares to be acquired;
(iv) delivery of a properly executed exercise notice together with
irrevocable instructions to a broker to promptly deliver to the Company
the amount of sale or loan proceeds required to pay the exercise price;
(v) delivery of instructions to the Company to withhold from the Shares
that would otherwise be issued on the exercise that number of Shares
having a fair market value at the time of such exercise equal to the
Option exercise price;
(vi) such other consideration and method of payment for the issuance of
Shares to the extent permitted by legal requirements relating to the
administration of stock option plans and issuances of capital stock under
applicable corporate and securities laws, or
(vii) any combination of the foregoing methods of payment.
If the fair market value of the number of whole Shares transferred or the
number of whole Shares surrendered is less than the total exercise price of the
Option, the shortfall must be made up in cash or by check.
9. EXERCISE OF OPTION
(a) PROCEDURE FOR EXERCISE; RIGHTS AS A STOCKHOLDER. Any Option granted
hereunder shall be exercisable at such times and under such conditions as
determined by the Administrator,
6
<PAGE>
including performance criteria with respect to the Company and/or the Optionee,
and as shall be permissible under the terms of the Plan.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice of such exercise
has been given to the Company in accordance with the terms of the Option by the
person entitled to exercise the Option and full payment for the Shares with
respect to which the Option is exercised has been received by the Company. Full
payment may, as authorized by the Administrator, consist of any consideration
and method of payment allowable under the Option Agreement and Section 8.(c) of
the Plan. Each Optionee who exercises an Option shall, upon notification of the
amount due (if any) and prior to or concurrent with delivery of the certificate
representing the Shares, pay to the Company amounts necessary to satisfy
applicable federal, state and local tax withholding requirements. An Optionee
must also provide a duly executed copy of any stock transfer agreement then in
effect and determined to be applicable by the Administrator. Until the issuance
(as evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company) of the stock certificate evidencing
such Shares, no right to vote or receive dividends or any other rights as a
stockholder shall exist with respect to the Optioned Stock represented by such
stock certificate, notwithstanding the exercise of the Option. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the stock certificate was issued, except as provided in Section 11 of
the Plan.
Exercise of an Option in any manner shall result in a decrease in the number
of Shares which thereafter may be available, both for purposes of the Plan and
for sale under the Option, by the number of Shares as to which the Option is
exercised.
(b) DEATH OF OPTIONEE. In the event of the death of an Optionee, the Option
may be exercised at any time within twelve (12) months following the date of
death (but in no event later than the expiration of the term of such Option as
set forth in the Notice of Grant), by the Optionee's estate or by a person who
acquired the right to exercise the Option by bequest or inheritance, but only to
the extent that the Optionee was entitled to exercise the Option at the date of
death. If, at the time of death, the Optionee was not entitled to exercise his
or her entire Option, the Shares covered by the unexercisable portion of the
Option shall revert to the Plan. If, after death, the Optionee's estate or a
person who acquired the right to exercise the Option by bequest or inheritance
does not exercise the Option within the time specified therein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.
(c) RULE 16B-3. Options granted to persons subject to Section 16(b) of the
Exchange Act must comply with Rule 16b-3 and shall contain such additional
conditions or restrictions as may be required thereunder to qualify for the
maximum exemption from Section 16 of the Exchange Act with respect to Plan
transactions.
(d) BUYOUT PROVISIONS. The Administrator may at any time offer to buy out for
a payment in cash or Shares, an Option previously granted, based on such terms
and conditions as the Administrator shall establish and communicate to the
Optionee at the time that such offer is made.
7
<PAGE>
10. NONTRANSFERABILITY OF OPTIONS
Except as otherwise specifically provided in the Option Agreement, an Option
may not be sold, pledged, assigned, hypothecated, transferred or disposed of in
any manner other than by will, or by the laws of descent and distribution, and
may be exercised during the lifetime of the Optionee only by the Optionee or, if
incapacitated, by his or her legal guardian or legal representative.
11. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER
(a) CHANGES IN CAPITALIZATION; Subject to any required action by the
stockholders of the Company, the number of shares of Common Stock covered by
each outstanding Option and the number of shares of Common Stock which have been
authorized for issuance under the Plan but as to which no Options have yet been
granted or which have been returned to the Plan upon cancellation or expiration
of an Option, as well as the price per share of Common Stock covered by each
such outstanding Option, shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock resulting from a stock
split, reverse stock split, stock dividend, combination or reclassification of
the Common Stock, or any other increase or decrease in the number of issued
shares of Common Stock effected without receipt of consideration by the Company;
provided, however, that conversion of any convertible securities of the Company
shall not be deemed to have been "effected without receipt of consideration."
such adjustment shall be made by the Administrator, whose determination in that
respect shall be final, binding and conclusive. Except as expressly provided
herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of common stock subject to an Option.
(b) DISSOLUTION OR LIQUIDATION. In the event of the proposed dissolution or
liquidation of the Company, each outstanding Option will terminate immediately
prior to the consummation of such proposed action, unless otherwise provided by
the Administrator. The Administrator may, in the exercise of its sole discretion
in such instances, declare that any Option shall terminate as of a date fixed by
the Board and give each Optionee the right to exercise his or her Option as to
all or any part of the Optioned Stock, including shares as to which the Option
would not otherwise be exercisable.
(c) MERGER OR ASSET SALE. In the event of a proposed sale of all or
substantially all of the assets of the Company, or the merger of the Company
with or into another corporation, each outstanding option shall be assumed or an
equivalent Option shall be substituted by such successor corporation or a parent
or subsidiary of such successor corporation, unless the Administrator
determines, in the exercise of its sole discretion and in lieu of such
assumption or substitution, that the Optionee shall have the right to exercise
the Option as to all of the optioned stock, including shares as to which the
Option would not otherwise be exercisable. If the administrator makes an option
fully exercisable in lieu of assumption or substitution in the event of a merger
or sale of assets, the Administrator shall notify the Optionee that the Option
shall be fully exercisable for a period of thirty (30) days from the date of
such notice or such shorter period as the Administrator may specify in the
notice, and the Option will terminate upon the expiration of such period. For
the purposes of this paragraph, the Option shall be considered assumed if,
following
8
<PAGE>
the merger or sale of assets, the Option confers the right to purchase, for each
Share of Optioned Stock subject to the Option immediately prior to the merger or
sale of assets, the consideration (whether stock, cash, or other securities or
property) received in the merger or sale of assets by holders of Common Stock
for each Share held on the effective date of the transaction (and if holders
were offered a choice of consideration, the type of consideration chosen by the
holders of a majority of the outstanding Shares); provided, however, that if
such consideration received in the merger or sale of assets was not solely
common stock of the successor corporation or its parent, the Administrator may,
with the consent of the successor corporation and the Optionee, provide for the
consideration to be received upon the exercise of the Option, for each Share of
Optioned Stock subject to the Option, to be solely common stock of the successor
corporation or its parent equal in fair market value to the per share
consideration received by holders of Common Stock in the merger or sale of
assets.
12. TIME OF GRANTING OPTIONS
The date of grant of an Option shall, for all purposes, be the date on which
the Administrator makes the determination granting such Option. Notice of the
determination shall be given to each Optionee within a reasonable time after the
date of such grant.
13. AMENDMENT OF TERMINATION OF THE PLAN.
(a) AMENDMENT AND TERMINATION. The Plan will continue in effect until April 1,
2007, provided, however, that the Board may amend or terminate the Plan from
time to time as the Board may deem advisable.
(b) STOCKHOLDER APPROVAL. The Company shall obtain stockholder approval of any
Plan amendment to the extent necessary and desirable to comply with Rule 16b-3
(or any successor rule or statute or other applicable law, rule or regulation,
including the requirements of any exchange or quotation system on which the
Common Stock is listed or quoted). Such stockholder approval, if required, shall
be obtained in such a manner and to such a degree as is required by the
applicable law, rule or regulation.
(c) EFFECT OF AMENDMENT OR TERMINATION. Any such amendment or termination of
the plan shall not affect Options already granted, and such Options shall remain
in full force and effect as if this Plan had not been amended or terminated,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
14. CONDITIONS UPON ISSUANCE OF SHARES
Shares shall not be issued pursuant to the exercise of an Option unless the
exercise of such Option and the issuance and delivery of such Shares pursuant
thereto shall comply with all relevant provisions of law, including, without
limitation, the Securities Act of 1933, as amended, applicable state securities
laws, the Exchange Act, the rules and regulations promulgated thereunder, and
the requirements of any stock exchange (including NASDAQ) upon which the Shares
may then be listed, and shall be further subject to the approval of counsel for
the Company with respect to such compliance.
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<PAGE>
15. RESERVATION OF SHARES
The Company, during the term of this Plan, will at all times reserve and keep
available such number of Shares as shall be sufficient to satisfy the
requirements of the Plan.
16. LIABILITY OF COMPANY.
(a) INABILITY TO OBTAIN AUTHORITY. Inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company's counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect
of the failure to issue such Shares as to which such requisite authority shall
not have been obtained.
As a condition to the exercise of an Option, the Company may require the
person exercising such Option to represent and warrant at the time of any such
exercise that the Shares are being purchased only for investment and without any
present intention to sell or distribute such Shares if, in the opinion of
counsel for the Company, such a representation is required by any of the
aforementioned relevant provisions of law.
(b) GRANTS EXCEEDING ALLOTTED SHARES. If the Optioned Stock covered by an
Option exceeds, as of the date of grant, the number of Shares which may be
issued under the Plan without additional stockholder approval, such Option shall
be void with respect to such excess Optioned Stock, unless stockholder approval
of an amendment sufficiently increasing the number of Shares subject to the Plan
is timely obtained in accordance with Section 13 of the Plan.
17. STOCKHOLDER APPROVAL
Continuance of the Plan shall be subject to approval by the stockholders of
the Company within twelve (12) months before or after the date the Plan is
adopted. Such stockholder approval shall be obtained in the manner and to the
degree required under applicable federal and state law.
10
<PAGE>
PROXY ATHANOR GROUP, INC.
921 East California Avenue
Ontario, California 91761
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Duane L. Femrite as Proxy, with the power to
appoint his substitute and with full power to act alone, and hereby authorizes
him to represent and vote as designated below, all the shares of Common Stock
of Athanor Group, Inc. held of record by the undersigned on March 4, 1997 at
the Annual Meeting of Shareholders to be held on April 11, 1997. If authority
to vote the shares is granted by the undersigned, the shares may be voted
cumulatively by the proxy holder for less than all the nominees for director.
1. ELECTION OF DIRECTORS: [_] WITHHOLD AUTHORITY to vote for
[_] FOR all nominees listed below all nominees listed below
(except as marked to the
contrary below)
(INSTRUCTION: to withhold authority to vote for any individual nominee mark the
box next to the nominee's name below.)
<TABLE>
<S> <C> <C> <C> <C>
[_] Robert W. Miller [_] Duane L. Femrite [_] Richard A. Krause [_] Gregory J. Edwards [_] William H. Harris, Jr.
</TABLE>
2. APPROVAL of 1997 Stock Option Plan:
[_] FOR [_] AGAINST [_] ABSTAIN
3. In his discretion, the Proxy is authorized to vote upon such other business
as may properly come before the meeting.
(PLEASE SIGN AND DATE ON REVERSE SIDE)
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER FOR THE ELECTION OF THE NOMINEES FOR
DIRECTORS LISTED IN PROPOSAL 1 AND FOR APPROVAL OF 1997 STOCK OPTION PLAN
LISTED IN PROPOSAL 2.
Dated: __________________, 1997
_______________________________
Signature
_______________________________
Signature if held jointly
Please sign exactly as name
appears to the left. When
shares are held by joint
tenants, both should sign.
When signing as attorney,
executor, administrator,
trustee, or guardian, please
give full title as such. If a
corporation, please sign in
full corporate name by
President or other authorized
officer. If a partnership,
please sign in partnership
name by authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE
