<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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.
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(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
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[LETTERHEAD OF ATHANOR GROUP, INC.]
- ------------------------------------------------------------------------------
Notice Of Annual Meeting Of Shareholders
To Be Held On May 6, 1999
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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 Ontario Airport Marriott Hotel, 2200 East Holt Boulevard, Ontario,
California on May 6, 1999, at 2:00 p.m., 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 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 12, 1999, 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
Duane L. Femrite
President
Ontario, California
March 26, 1999
<PAGE>
[LETTERHEAD OF ATHANOR GROUP, INC.]
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PROXY STATEMENT
---------------
Approximate Date Proxy Material First Sent To Shareholders:
March 26, 1999
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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 May 6, 1999, 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. 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
sharholders shall have the right to cast that number of votes equal to the
number of shares which they hold multiplied by the n umber of directors to be
elected by them; i.e., for the purpose of this election, five votes for each
share.
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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 1,458,854 shares of common stock (the "Common
Stock") as of the close of business on March 12, 1999 (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.
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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 (3) 19,000 1.3%
Stock 2208 Faircloud Lane
Edmond, Oklahoma 73034
Common Duane L. Femrite (3) 195,544 13.3%
Stock 921 East California Avenue
Ontario, California 91761
Common Edmund R. Knauf, Jr. (3) 81,680 5.6%
Stock 1516 North 2nd Street
Sheboygan, Wisconsin 53081
Common Richard A. Krause (2)(3) 262,983 18.0%
Stock 921 East California Avenue
Ontario, California 91761
Common Robert W. Miller (1)(3) 170,752 11.7%
Stock 921 East California Avenue
Ontario, California 91761
Common All Officers and Directors (3) 729,959 49.3%
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, 1998, adjusted for shares subject to options as set
forth in Footnote (3) below. There were 1,458,854 shares of Common Stock
outstanding on December 31, 1998.
None of the officers or directors of the Company, except as noted in the
Remuneration of Officers and Directors section set forth below, has options to
acquire any shares of Common Stock of the Company. Messrs. Femrite, Knauf,
Krause and Miller are the only persons known to the Company to beneficially own
more than five percent (5%) of its Common Stock.
4
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The Company knows of no contractual arrangements that 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 256,983 shares of Common Stock owned by The Krause Family
Irrevocable Trust.
(3) Includes shares of common stock that can be acquired by exercise of
vested and exercisable stock options within 60 days of October 31, 1998,
as follows: Gregory J. Edwards 3,000 shares, Duane L. Femrite 6,000
shares, Edmund R. Knauf, Jr. 2,000 shares, Richard A. Krause 6,000
shares, Robert W. Miller 6,000 shares; all Officers and Directors as a
group 23,000 shares.
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
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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.
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 54 1990
Duane L. Femrite President, Chief Executive Officer, 54 1985
Chief Financial Officer
of the Company
Edmund R. Knauf, Jr. Director 56 1997
Richard A. Krause Vice President of the Company 63 1992
President, Alger Manufacturing
Company, Inc.
Robert W. Miller Chairman of the Board, 56 1976
Secretary of the Company
=====================================================================================
</TABLE>
<TABLE>
<CAPTION>
Number of Shares Percent
of of
Nominee (1) Common Stock (2)(5) Class
- -----------------------------------------------------------------------------
<S> <C> <C>
Gregory J. Edwards 19,000 1.3%
Duane L. Femrite 195,544 13.3%
Edmund R. Knauf, Jr. 81,680 5.6%
Richard A. Krause 262,983 (4) 18.0%
Robert W. Miller 170,752 (3) 11.7%
</TABLE>
==============================================================================
(Footnotes on next page)
6
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(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) Does not include 24,000 shares of Common Stock owned by Mr. Miller's
father as to which Mr. Miller disclaims beneficial ownership.
(4) Includes 256,983 shares of Common Stock owned by The Krause Family
Irrevocable Trust.
(5) Includes shares of common stock that can be acquired by exercise of vested
and exercisable stock options within 60 days of October 31, 1998, as
follows: Gregory J. Edwards 3,000 shares, Duane L. Femrite 6,000 shares,
Edmund R. Knauf, Jr. 2,000 shares, Richard A. Krause 6,000 shares,
Robert W. Miller 6,000 shares; all Officers and Directors as a group
23,000 shares.
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 Chairman and Chief Executive Officer of CASS Holdings,
L.L.C. ("CASS") since January 1993. CASS owns several
manufacturing and service companies: CASS Polymers, Inc. (a
subsidiary of CASS) owns Ad-Tech Plastic Systems Corp., a
producer of polymer systems for the aerospace, automotive,
construction and marine industries and owns Milamar
Coatings, L.L.C., a producer of epoxy coating products used
in the industrial and commercial seamless floor coating
business; CASS Services, L.L.C., a government contractor
involved with surface preparation and re-coating for U.S.
Naval ships and portable landing mats; CASS Financial, L. L.
C., an equipment leasing company. 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. Director of
Core Software Technology from November 1993 to March 1995.
Mr. Femrite is a Certified Public Accountant.
7
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EDMUND R. KNAUF, JR. Currently self-employed as a consultant and investor. From
1972 to August 1997 worked in various positions for Ametek
Inc, a global manufacturer of electrical and electronic
products engineered for niche markets, including Vice
President of Business Development for the Filtration Group
from April 1996 to August 1997 and as Corporate Vice
President and General Manager of several Ametek Divisions
from 1990 to 1996.
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 of Core Software
Technology from September 1991 to April 1998. Director of
OneCard International since 1988 and elected Chairman and
Chief Executive Officer of this company in September 1992.
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.
8
<PAGE>
Transactions With Management
The Company is currently the single largest shareholder of Core Software
Technology, a California corporation ("Core"), owning 462,567 shares of the
issued and outstanding common stock of Core, representing approximately 16.9% 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).
Core is the developer and marketer of an on-line geospatial (image,
cartographic, and 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 made outstanding loans in the principal amount of $685,622
to Core through October 31, 1998. All but $35,000 of the outstanding balance,
which was advanced during 1998, plus accrued interest of approximately $29,000
through October 31, 1998, has been reserved.
Mr. Miller entered into a consulting agreement with Core and assigned the
consulting fees to R&D Financial (R&D), a California general partnership of
which Messrs. Miller and Femrite are the general partners. The consulting
agreement began on January 1, 1995, wherein Mr. Miller agreed to provide
services to Core relating to financial, investor, capital raising, litigation
and general business matters arising out of Core's on-going restructuring,
recapitalization and financing efforts. As of December 31, 1998, Core owes
$42,745 to R&D in connection with said consulting agreement. No fees were paid
by Core to R&D during 1998.
Mr. Miller served as Secretary and a Director of Core until April 1998,
when he resigned. Mr. Miller has a beneficial ownership interest in 8,813
additional shares of the common stock of Core as well as options to purchase
4,180 shares of the common stock of Core at exercise prices ranging from $5.50
to $8.25 per share. Mr. Femrite has a beneficial ownership interest in 33,347
additional shares of the common stock of Core as well as options to purchase
3,697 shares of the common stock of Core at $5.50 per share. The above
beneficial stock ownership takes into account stock that was previously owned by
R&D.
Mr. Miller was to have received $4,000 per month from Image Data
Corporation (IDC), the previous parent of Core, with respect to his services
rendered to IDC in accordance with IDC's confirmed Plan of Reorganization, but
has received no compensation to date. IDC has no sources of revenue other than
a small receivable from Core. The likelihood that Mr. Miller will receive any
appreciable amount of the compensation is remote.
9
<PAGE>
During 1998, the Company made a $100,000 loan to Fluid Light Technologies,
Inc. (FLT). FLT is in the business of developing, manufacturing and marketing
systems to control the motion or flow of light through neon glass tubes. FLT is
a developmental stage company and has no revenues or earnings. This loan was
converted to 208,200 shares of common stock representing an ownership interest
of approximately 3.6% that the Company acquired at the closing of FLT's Private
Placement in July 1998. Mr. Miller is a director of FLT.
Over the last few years, the Company has made investments totaling
$146,000, as a limited partner, in California South Pacific Investors (CSPI) a
California Limited Partnership. CSPI, through its wholly owned companies, has
developed and patented biochemical product-identifying barcodes for detecting
harmful bacterial pathogens in meats, poultry and dairy products. Mr. Femrite
is one of five General Partners in CSPI.
In January 1996 the Internal Revenue Service ("IRS") served Mr. Miller
with a Notice of Federal Tax Lien with respect to approximately $400,000 in
taxes and penalties purportedly owed by IDC. In connection therewith, the IRS
has collected approximately $29,000 from Mr. Miller and currently collects $500
per month. 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 taxes and
penalties owed by IDC to the IRS. In connection with such indemnity, Core
reimbursed Mr. Miller in the approximate amount of $23,000 during 1997. Mr.
Miller anticipates that any additional funds collected by the IRS, in
conjunction with such levy, will ultimately be reimbursed by Core.
The Company has made a loan to Mr. Miller, in previous years, in the
principal amount of $40,000. The loan was renewed as of October 1997 on the
condition that Mr. Miller make a principal reduction plus accrued interest
payment or assign an interest, to the company, in certain cash distributions
from R&D. Mr. Miller did not make the required payments and the Company decided
not to accept the assignment of potential cash distributions from R&D. During
1998 the Company decided to renew the original note plus accrued interest and
made additional advances of $8,375. The total outstanding loan to Mr. Miller in
the amount of $57,415 is due December 11, 1999. The Company received an
additional 10,000 shares of Mr. Miller's common stock in the Company, for a
total of 35,000 shares that the Company holds as collateral for the loan to Mr.
Miller.
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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, 1998.
Annual Compensation
-------------------
<TABLE>
<CAPTION>
Name and Principal
Position Year Salary Bonus Other (1)
- ----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Duane L. Femrite 1998 $149,615 25,000 4,000
President, Chief Executive 1997 144,192 25,000 2,949
Officer and Chief Financial 1996 133,308 44,000 2,162
Officer
Richard A. Krause 1998 $161,615 44,985 3,329
Vice President and 1997 156,423 35,063 3,750
President of Alger 1996 145,308 52,328 3,750
Manufacturing Co., Inc.
Robert W. Miller 1998 $150,066 25,000 1,600
Chairman of the Board 1997 144,270 25,000 1,500
Corporate Secretary 1996 136,498 44,000 1,432
</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 Richard A. Krause as President and
Chief Operating Officer. Each of the employment agreements is identical as to
its terms except for the description of the duties that 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, Duane L. Femrite and Richard A. Krause were automatically
renewed on January 1, 1999, for an additional year.
11
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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 an annual honorarium of $5,000 per year and
$600 per meeting attended. The Board has a Nominating Committee that 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 $100 for each meeting attended
when such committee meetings are held on a day that the full Board does not
meet. The Audit Committee, Nominating Committee, and Compensation Committee met
once in 1998.
Stock Option Plan
- -----------------
The Company's 1997 Stock Option Plan (the "1997 Plan"), was set up 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.
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. As of the date hereof, options under the 1997 Plan have been
granted as set forth in the chart below. 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
12
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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.
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 on the
shares reserved by the Company under the 1997 Plan.
13
<PAGE>
Option/SAR Grants in Last Fiscal Year
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Name Number of % of Exercise Exercise
Securities Total or Date
Underlying Options/SARs Base **/
Options/SARs Granted Price
Granted to Employees */
In FY98
- ------------------- --------------------- --------------------- --------------------- -----------------------
<S> <C> <C> <C> <C>
Richard Krause 30,000 18% $ 1.66 May 7, 2006
Duane Femrite 30,000 18% $ 1.66 May 7, 2006
Robert Miller 30,000 18% $ 1.66 May 7, 2006
Gregory Edwards 15,000 9% $ 1.66 May 7, 2006
Edmund Knauf 10,000 6% $ 1.66 May 7, 2006
</TABLE>
*/ Equals the closing market price for the underlying security on the date of
the grant of options.
**/ The date of grant for each of the options was May 8, 1998. No option could
be exercised, in whole or in part, during the first six (6) months from the
date of grant. Thereafter, 20% of each of the options was exercisable on
November 7, 1998; 20% is exercisable on May 7, 1999; 30% is exercisable on
May 7, 2000; and 30% is exercisable on May 7, 2001.
In addition to the forgoing grants, 55,000 stock option grants were issued
to non-director, non-executive employees of Alger during the fiscal year 1998.
None of the foregoing option grants was exercised during the fiscal year
ended October 1998.
14
<PAGE>
Shareholder Proposals
Shareholders who wish to present proposals for action at the 2000
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 2000
Annual Meeting (a) must be received by the Secretary no later than December 21,
1999, 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, 1998 (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 that
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, 1998, 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 26, 1999
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>
PROXY ATHANOR GROUP, INC.
921 East California Avenue
Ontario, California 91761
THIS PROXY IS SOLICTED 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 12, 1999 at the Annual Meeting of
Shareholders to be held on May 6, 1999. 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:
[_]FOR all nominees listed below [_]WITHHOLD AUTHORITY to vote
(except as marked to the contrary below)
for all nominees listed below
(INSTRUCTION: to withhold authority to vote for any individual
nominee, mark the box next to the nominee's name below.)
[_] Gregory J. Edwards [_] Duane L. Femrite [_] Edmund R. Knauf,
Jr. [_] Richard A. Krause [_] Robert W. Miller
2. 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.
Dated:___________, 1999
-----------------------
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
