ASTROSYSTEMS, INC.
6 Nevada Drive
Lake Success, New York 11042
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
____________________ , 1995
To the Stockholders of
Astrosystems, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of
Stockholders (the "Meeting") of ASTROSYSTEMS, INC., a Delaware
corporation (the "Company"), will be held at the Marriott Hotel at
Nassau Coliseum, 101 James Doolittle Blvd., Uniondale, New York on
____________, 1995 at 10:00 A.M. for the following purposes:
(1) To act upon a proposal to approve the adoption of a Plan
of Complete Liquidation and Dissolution.
(2) To elect a board of five Directors.
(3) To ratify the appointment of Richard A. Eisner &
Company, LLP as the Company's independent auditors for the fiscal year
ending June 30, 1996.
(4) To transact such other business as may properly come
before the Meeting.
Only stockholders of record at the close of business on
__________, 1995 are entitled to notice of, and to vote at, the
Meeting or any adjournment or adjournments thereof.
Elliot J. Bergman,
Secretary
Lake Success, New York
__________, 1995
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE VOTE,
DATE AND SIGN THE ENCLOSED PROXY, WHICH IS SOLICITED BY THE
BOARD OF DIRECTORS OF THE COMPANY, AND RETURN IT IN THE
PRE-ADDRESSED ENVELOPE PROVIDED FOR THAT PURPOSE. ANY
STOCKHOLDER MAY REVOKE HIS PROXY AT ANY TIME BEFORE THE
MEETING BY WRITTEN NOTICE TO SUCH EFFECT, ATTN: CORPORATE
SECRETARY, BY SUBMITTING A SUBSEQUENTLY DATED PROXY OR BY
ATTENDING THE MEETING AND VOTING IN PERSON.
<PAGE>
ASTROSYSTEMS, INC.
6 Nevada Drive
Lake Success, New York 11042
PROXY STATEMENT
This Proxy Statement is being mailed on or about __________,
1995 to all stockholders of record of Astrosystems, Inc. (the
"Company") at the close of business on ___________, 1995 in connection
with the solicitation by the Board of Directors of Proxies to be voted
at the Annual Meeting of Stockholders (the "Meeting") to be held on
_______________, 1995 or any adjournment thereof.
All Proxies duly executed and received will be voted on all
matters presented at the Meeting in accordance with the specifications
made in such Proxies. In the absence of specified instructions,
Proxies so received will be voted for the named nominees to the
Company's Board of Directors (the "Board") and in favor of each of the
other proposals indicated on the Proxy.
The business to be conducted at the Meeting includes the
approval of a Plan of Complete Liquidation and Dissolution of the
Company (the "Plan"), a copy of which is attached as Exhibit A to this
Proxy Statement. Pursuant to the Plan, the Company will sell such of
its assets as are not to be distributed in kind to its stockholders
and, subject to paying or providing for all claims, obligations and
expenses of the Company, will be completely liquidated (i) by cash and
in-kind distributions to stockholders pro rata and (ii) if required by
the Plan or deemed necessary by the Board of Directors, by a final
liquidating distribution of its then remaining assets to a liquidating
trust established for the benefit of the then stockholders. The Board
may, in its discretion, also distribute assets to any such liquidating
trust, from time to time, as an interim distribution of assets.
Should the Board determine that a liquidating trust is required by the
Plan or is otherwise necessary, appropriate or desirable, approval of
the Plan will constitute stockholder approval of the appointment by
the Board of one or more liquidating trustees and the execution of a
liquidating trust agreement with the trustees on such terms and
conditions as the Board, in its absolute discretion, shall determine.
In addition, approval of the Plan will constitute stockholder approval
of any and all sales of assets of the Company approved by the Board
or, if applicable, the trustees of any liquidating trust. See
"Proposed Plan of Complete Liquidation and Dissolution" for a complete
description of the Plan.
The Board does not know of any other matters that may be
brought before the Meeting nor does it foresee or have reason to
believe that Proxy holders will have to vote for substitute or
alternate nominees. In the event that any other matter should come
before the Meeting or any nominee is not available for election, the
persons named in the enclosed Proxy will have discretionary authority
to vote all Proxies not marked to the contrary with respect to such
matters in accordance with their best judgment. A Proxy may be
revoked at any time before being voted by written notice to such
effect received by the Company at the address set forth above, attn:
Corporate Secretary, by delivery of a subsequently dated Proxy or by a
vote cast in person at the Meeting. The Company will pay the entire
expense of soliciting Proxies, which solicitation primarily will be by
use of the mails, but certain Directors, officers and employees of the
Company may solicit Proxies in person or by telephone, telecopier or
telegram, without special compensation.
The total number of shares of Common Stock of the Company
outstanding and entitled to vote as of ___________, 1995 was
4,588,732. The shares of Common Stock are the only class of
securities of the Company entitled to vote, each share being entitled
to one noncumulative vote. A majority of the shares outstanding and
entitled to vote as of _______________, 1995, or 2,294,367 shares,
must be present at the Meeting in person or by Proxy in order to
constitute a quorum for the transaction of business. Only
stockholders of record as of the close of business on _______________,
1995 will be entitled to vote. With regard to the election of
Directors, votes may be cast in favor or withheld; votes that are
withheld will have no effect as Directors shall be elected by a
plurality of the votes cast in favor. Abstentions and broker
non-votes will be counted for purposes of determining the presence or
absence of a quorum for the transaction of business. Abstentions are
counted as present in the tabulation of the votes cast on the
proposals presented to stockholders. Since the approval and adoption
of the proposed Plan requires the approval of a majority of the
outstanding shares, abstentions will have the effect of a negative
vote. Broker non-votes are not counted as present for purposes of
determining whether a particular proposal has been approved.
Accordingly, they will also have the effect of a negative vote with
respect to the adoption and approval of the Plan. Since the proposed
ratification of the appointment of Richard A. Eisner & Company, LLP as
the Company's independent auditors for the fiscal year ending June 30,
1996 requires the approval of a majority of the shares present and
voting at the Meeting, abstentions will have the effect of a negative
vote while broker non-votes will have no effect.
A list of stockholders entitled to vote at the Meeting will
be available for examination by any stockholder, for any purpose
germane to the Meeting, during ordinary business hours, at the
Company's offices, 6 Nevada Drive, Lake Success, New York, for a
period of ten days prior to the Meeting and will also be available at
the Meeting. The Company's telephone number is (516) 328-1600.
PROPOSED PLAN OF COMPLETE LIQUIDATION AND DISSOLUTION
General
The Company is proposing a Plan of Complete Liquidation and
Dissolution for approval by the stockholders at the Meeting. A copy
of the Plan is attached as Exhibit A to this Proxy Statement. Certain
material features of the Plan are summarized below; these summaries do
not purport to be complete and are subject in all respects to the
provisions of, and are qualified in their entirety by reference to,
the Plan. STOCKHOLDERS ARE URGED TO READ THE PLAN IN ITS ENTIRETY.
Background and Reasons for the Plan; Directors' Recommendations
In furtherance of the Company's objective to maximize values
realized by its stockholders, the Board of Directors of the Company
has reviewed and considered the potential liquidation value of the
Company in relation to the current and historical market trading
values of its Common Stock, as well as the Company's financial
condition and results of operations. Although the Company has not
received any report, opinion or appraisal from an outside party
related to its liquidation, it is the view of the Board that the
Company's Common Stock historically has traded at a discount from the
net value of the Company's assets. This view is based upon a
comparison of the historical and present market value of the Company's
Common Stock with the value of the Company's assets. In this
connection, management has estimated the asset values of its three
operating divisions, as well as the value of the Company's investment
securities, cash and other tangible and intangible assets. The values
were established using Company data and informal consultations with
financial advisors.
The Board explored various alternatives to the liquidation of
the Company, including the possibility of the Company continuing its
operations. Since its inception, the Company's primary business has
been in defense electronics. The Company's revenues in this area have
been declining since fiscal year 1992 and, due to a continuing decline
in defense budgets, severe price competition from low cost
geographical areas and corporate consolidations, the prospects for the
Company' defense business are not promising. In addition, high
fixed overhead costs necessitated by defense contracts, coupled with a
declining business base, have been tending to make the Company non-
competitive. Although the prospects for some of the Company's
commercial products are promising, the revenues would not be
sufficient in the near future to sustain the Company.
The Board believes that it is in the best interests of the
Company's stockholders to distribute to them the Company's net assets
primarily through cash distributions. Certain assets may be
distributed in kind, either directly or via a liquidating trust. The
Board believes that the liquidation value per share of the Company's
Common Stock is likely to exceed its probable trading value in the
foreseeable future absent the proposed liquidation. No assurances can
be given as to the foregoing. In addition, no assurances can be given
that, as a consequence of the liquidation, holders of the Company's
Common Stock will receive aggregate value which exceeds the prices at
which the Company's Common Stock has generally traded.
In adopting the Plan, the Board recognized that stockholders,
depending on the tax basis in their shares, may be required to
recognize gain for tax purposes upon receipt of distributions in
liquidation and upon the transfer of the assets to a liquidating
trust. See "Certain Federal Income Tax Consequences".
The high and low sale prices of a share of the Company's
Common Stock on _____________, the date preceding the public
announcement of the proposed Plan, were $_________ and $_________,
respectively.
BASED UPON THE FOREGOING, THE BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" APPROVAL OF THE PLAN.
CERTAIN MEMBERS OF THE BOARD OF DIRECTORS MAY BE DEEMED TO HAVE A
POTENTIAL CONFLICT OF INTEREST IN RECOMMENDING APPROVAL OF THE PLAN.
SEE "POTENTIAL CONFLICT OF INTEREST OF CERTAIN MEMBERS OF THE BOARD OF
DIRECTORS."
If the Plan is not approved by the stockholders, the Board of
Directors will explore the alternatives then available for the future
of the Company.
Potential Conflict of Interest of Certain Members of the Board of
Directors
In connection with their employment as executive officers of
the Company, three Directors (Messrs. Barth, Bergman and G. Steinberg)
are parties to employment agreements (the "Employment Agreements")
which do not have fixed termination dates and which require that the
Company give three years' notice of termination. Depending on the
final date of liquidation, these directors may be entitled to payments
of up to approximately $2,245,000 in the aggregate over such three
year period notwithstanding that their responsibilities in liquidating
and dissolving the Company may be less than their present
responsibilities. Hence, these members of the Board of Directors may
be deemed to have a potential conflict of interest with respect to
approval of the Plan. See "Executive Compensation and Certain
Transactions-Employment Agreements."
Principal Provisions of the Plan; Abandonment or Amendment
The Plan provides for the following:
(a) The Company will distribute to its stockholders in kind
or sell or otherwise dispose of all its property and assets. The
determination of which assets will be sold and which will be
distributed to the Company's stockholders in kind will be based upon
management's judgment as to whether the sale or distribution of a
particular asset will result in realization of the highest possible
value to the Company's stockholders. Sales of the Company's assets
will be made on such terms as are approved by the Board. Unsold
assets, if any (other than property distributed in kind to
stockholders) may be transferred to a liquidating trust at any time in
the discretion of the Board. Unsold and undistributed assets must be
transferred to a liquidating trust by the fourth anniversary of the
approval of the Plan by the Company's stockholders and thereafter
would be sold or otherwise disposed of on terms approved by its
trustees. No further stockholder votes will be solicited with respect
to approval of specific terms of sales of assets approved by the Board
of Directors or, if applicable, the trustees of any such liquidating
trust.
(b) Subject to payment or provision for payment of the
Company's indebtedness and other obligations, including tax
liabilities, the cash proceeds of any such sales, together with other
available cash, will be distributed from time to time pro rata to the
holders of the Company's Common Stock on record dates selected by the
Board for such distributions. The Company has no current or long-term
indebtedness. The Company may establish a contingency reserve in an
amount determined by the Board to be sufficient to satisfy the
liabilities, expenses and obligations of the Company not otherwise
paid, provided for or discharged (the "Contingency Reserve"). The net
balance, if any, of any such Contingency Reserve remaining after
payment, provision or discharge of all such liabilities, expenses and
obligations (including interest earned on cash in the Contingency
Reserve), also will be distributed to the Company's stockholders pro
rata or to the liquidating trust. No assurances can be given that
available cash, amounts received on the sale of assets and interest
income will be adequate to provide for the Company's obligations,
liabilities, expenses and claims and to make cash distributions to
stockholders. Furthermore, the Company may, as authorized by the
Board of Directors, repurchase shares of Common Stock from
stockholders in open market purchases. Such purchases would decrease
amounts distributable to remaining stockholders if the Company
were to pay amounts in excess of the per share values ultimately
distributable in respect of the shares purchased and would increase
amounts distributable to remaining stockholders if the Company were to
pay amounts less than the per share values ultimately distributable in
respect of such shares. See "Liquidating Distributions" and
"Contingent Liabilities; Contingency Reserve; Liquidating Trust"
below.
(c) As indicated above, if all the Company's assets are not
sold or distributed prior to the fourth anniversary of the approval of
the Plan by the Company's stockholders, the Company must transfer the
assets not sold or distributed (including any Contingency Reserve) to
a liquidating trust. Prior to the fourth anniversary of the approval
of the Plan by the Company's stockholders, the Company may, in its
discretion, transfer such of its assets as have not been previously
sold or distributed (including the Contingency Reserve) to such a
liquidating trust. In the event a liquidating trust is established,
the Company would distribute pro rata to the holders of its Common
Stock beneficial interests in such liquidating trust ("Interests").
It is anticipated that the Interests will not be freely transferable;
hence, although the recipients of the Interests will be treated for
tax purposes as having received their pro rata share of property
transferred to the liquidating trust and will thereafter take into
account for tax purposes their allocable portion of any income,
expense, gain or loss realized by such trust, the recipients of the
Interests will not realize the value thereof unless and until such
trust distributes cash or other assets to them, which will be solely
in the discretion of the trustee.
(d) The Company will close its transfer books on the earlier
to occur of the final liquidating distribution or the dissolution of
the Company under Delaware law, and thereafter will not record any
further transfers of its Common Stock nor issue any new stock
certificates, other than replacement certificates. See "Listing and
Trading of the Common Stock and Interests in the Liquidating Trust"
and "Final Record Date" below.
(e) A Certificate of Dissolution will be filed with the
State of Delaware completing the liquidation and dissolution process.
Except for compliance with applicable rules and regulations of the
Securities and Exchange Commission (the "SEC") in connection with
distribution by the Company to its stockholders of securities held by
the Company, no federal or state regulatory requirements must be
complied with or approvals obtained in connection with the
liquidation.
Under the Plan, if the Board of Directors determines that
liquidation and dissolution are not in the best interests of the
Company or its stockholders, the Board may direct that the Plan be
abandoned. The Company nevertheless may cause the performance,
without further stockholder approval, of any contract for the sale of
assets theretofore executed which the Board of Directors deems to be
in the best interests of the Company. The Board also may amend or
modify the Plan if it determines such action to be in the best
interests of the Company or its stockholders, without the necessity of
further stockholder approval.
Liquidating Distributions
Although the Board has not established a firm timetable for
distributions to stockholders if the Plan is approved, the Board will,
subject to exigencies inherent in winding up the Company's business,
make such distributions as promptly as practicable. The Company
anticipates making the first cash distribution in 1996. The Board is,
however, currently unable to predict the precise amount of any
distributions of cash pursuant to the Plan. The actual amount and
timing of, and record date for, all distributions will be determined
by the Board of Directors, in its sole discretion, and will depend in
part upon the Board's determination as to whether particular assets
are to be distributed in kind or otherwise disposed of, and the
amounts deemed necessary by the Board to pay or provide for all the
Company's liabilities and obligations. The Company does not plan to
satisfy all of its liabilities and obligations prior to making
distributions to its stockholders, but instead will reserve assets
deemed by management to be adequate to provide for satisfying such
liabilities and obligations. See "Contingent Liabilities; Contingency
Reserve; Liquidating Trust." Management believes that the Company has
sufficient cash to pay its current and accrued obligations without the
sale of any of its assets. Uncertainties as to the net value of
assets and the ultimate amount of liabilities make it impracticable to
predict the aggregate net values ultimately distributable to
stockholders. Claims, liabilities and expenses from operations
(including operating costs, salaries, income taxes, payroll, local
taxes and miscellaneous office expenses) will continue to accrue
following approval of the Plan, and the Company anticipates that
expenses for professional fees and other expenses of liquidation will
be significant. These expenses will reduce the amount of assets
available for ultimate distribution to stockholders. While the
Company does not believe that a reliable estimate of those expenses
can presently be made, management believes that available cash,
interest income and the amounts which will be received on the sale of
assets will be adequate to provide for the Company's obligations,
liabilities, expenses and claims (including contingent liabilities)
and to make cash distributions to stockholders. However, no
assurances can be given as to the foregoing.
If securities held by the Company are distributed to
stockholders, applicable rules and regulations of the SEC will be
complied with.
Disposition of Certain Assets
The Plan gives to the Board of Directors of the Company the
power to sell all the assets of the Company. As of the date hereof,
no sale of any assets of the Company has been consummated and no
definitive agreement has been entered into. See, however, "Operating
Divisions and Subsidiary" below for a discussion of a letter of intent
entered into by the Company with respect to the sale of one of its
divisions. Any sale will only be made after the Board of Directors
has determined that such sale is in the best interest of the
stockholders.
Following are the principal assets of the Company, together
with a brief description of the Company's current plans to sell or
distribute them.
Marketable Securities
As of ___________________, the Company had $___________ in
marketable securities. These are primarily short and intermediate
term liquid instruments such as U.S. Treasury Notes which will be sold
or held to maturity to maximize stockholder value, as determined by
the Board of Directors.
Operating Divisions and Subsidiary
The Company's two operating divisions, Defense Electronics
Division and Industrial Automation Division ("Industrial"), and
wholly- owned subsidiary, Behlman Electronics, Inc. ("Behlman"), will
be offered for sale individually or in combination. If a sales price
is not obtained which, in the opinion of the Board of Directors and
its financial advisors, maximizes stockholder value, the Board may, in
its sole discretion, decide to liquidate the divisions and subsidiary
over a period of time which maximizes stockholder value.
The Company has engaged OEM Capital ("OEM") as its exclusive
financial advisor with respect to the possible sale of the divisions
and Behlman and has agreed to pay OEM a graduated percentage (ranging
between 5% and 1%) of the sales consideration.
The Company has entered into a letter of intent with regard
to the sale of Industrial. Revenues for Industrial were 13.8% of the
Company's consolidated revenues for the fiscal year ended June 30,
1995. The consummation of the transaction contemplated by the letter
of intent is subject to a number of conditions, including the
execution of a definitive purchase agreement. No assurances can be
given that the transaction will be completed. The consummation of the
sale of Industrial is not contingent upon stockholder approval of the
Plan.
There are no arrangements in place with respect to the sale
of the Defense Electronics Division or Behlman.
AstroPower, Inc.
The Company currently owns 32.3% of the Common Stock of
AstroPower, Inc. ("AstroPower"). Assuming certain convertible
Preferred Stock is converted into Common Stock by stockholders of
AstroPower other than the Company, the Company's interest in
AstroPower would be reduced to 22.8%. The Company has a zero basis in
its AstroPower Common Stock. As there is currently no public market
for the AstroPower Common Stock and there are certain restrictions on
the transferability of such shares, the Board, in its sole
discretion, will consider placing the Company's AstroPower Common
Stock into a liquidating trust or will seek such alternate method or
methods of sale, disposition or distribution as will maximize
stockholder value.
Solar Cell License
In 1983, the Company acquired a 16-year license (the
"License") from the University of Delaware covering a new process for
the manufacture of solar cells. In connection with the acquisition of
the License, the Company issued a $20,000,000 nonrecourse note (the
"Note"), originally due in 1993 and bearing interest at the rate of
14% per year. The Note is secured by the Company's rights under the
License and is to be paid prior to its due date solely on the basis of
4% of sales of products developed by this process, subject to certain
minimum quarterly payments of $11,250 to $12,500. An amendment to the
license agreement (the "License Agreement") extended its term to 2006;
concurrently, the due date of the Note was extended to May 1999. As
consideration for the amendment, the Company paid $115,000 in cash,
which was charged to operations for the year ended June 30, 1994, and
transferred 35,000 shares of Common Stock of AstroPower to the
University of Delaware. The Company, for financial reporting
purposes, has not recorded the Note and charges operations with any
payments.
The Board will consider alternate methods of maximizing the
value of the License for the benefit of the Company's stockholders.
At June 30, 1995, $8,240,000 of deferred taxes relating to
the License Agreement was classified as a long-term liability. The
Company will retain an amount in the Contingency Reserve necessary to
satisfy deferred taxes which will fluctuate based on any royalty
payments under the License, as well as the future taxable income of
the Company. See "Contingent Liabilities; Contingency Reserve;
Liquidating Trust".
Conduct of the Company Following Adoption of the Plan
It is anticipated that the present Directors and executive
officers of the Company will continue to serve in such capacities
following adoption of the Plan. Such Directors and officers will
receive compensation for the duties then being performed as determined
by the Board of Directors. The Board of Directors has not established
specific guidelines for determination of the compensation to be paid
to Directors and officers of the Company following adoption of the
Plan. Such compensation will be determined by evaluation of all
relevant factors, including, without limitation, the efforts of such
individuals in successfully implementing the Plan and compensation
payable in the financial community to individuals exercising similar
authority and bearing similar responsibilities. Pursuant to the Plan,
the Company may, in the absolute discretion of the Board, pay to the
Company's officers, Directors, employees, agents and representatives,
or any of them, compensation or additional compensation above their
regular compensation, in money or other property, in recognition of
the extraordinary efforts they, or any of them, will be required to
undertake, or actually undertake, in connection with the
implementation of the Plan. Approval of the Plan shall also
constitute the approval by the Company's stockholders of the payout of
any such compensation. See "Potential Conflict of Interest of Certain
Members of the Board of Directors" with respect to certain Employment
Agreements in effect between the Company and certain executive
officers, and certain termination notice provisions therein.
Following adoption of the Plan by the Company's stockholders,
the Company's activities will be limited to winding up its affairs and
taking such action as may be necessary to preserve the value of its
assets. The Company will seek to liquidate all of its assets in such
manner and upon such terms as the Board of Directors determines to be
in the best interests of the Company's stockholders. The prices at
which the Company will be able to sell its various assets depend
largely on factors beyond the Company's control, including, without
limitation, the rate of inflation, changes in interest rates, the
condition of financial markets, the availability of financing to
prospective purchasers of the assets and governmental regulatory
approvals. The Company may not obtain as high a price for a
particular property as it might secure if the Company were not in
liquidation.
Pursuant to the Plan, the Company shall indemnify its
officers, Directors, employees, agents and representatives for actions
taken in connection with the Plan and the winding up of the affairs of
the Company. The Company's obligation to indemnify such persons may
also be satisfied out of assets of any liquidating trust established.
Contingent Liabilities; Contingency Reserve; Liquidating Trust
Under Delaware law, the Company is required, in connection
with its dissolution, to pay or provide for payment of all of its
liabilities and obligations. Following approval of the Plan by the
Company's stockholders, the Company will pay, or set aside as a
Contingency Reserve, assets which it believes to be adequate for
payment of all expenses and fixed and other known liabilities. The
Company is currently unable to estimate with precision the extent of
any Contingency Reserve which may be required, but any such sum (in
addition to any assets contributed to a liquidating trust, if one is
utilized) will be deducted before the determination of amounts
available for distribution to stockholders. See "Disposition of
Certain Assets-Solar Cell License" for a discussion of a certain
deferred tax liability of the Company.
The actual size of the Contingency Reserve will be based upon
estimates and opinions of management derived from consultations with
outside experts and review of the Company's estimated operating
expenses, including, without limitation, anticipated compensation
payments, estimated investment banking, legal and accounting fees,
rent, payroll and other taxes payable, miscellaneous office expenses
and accrued expenses. There can be no assurance that the Contingency
Reserve will be sufficient. Subsequent to its establishment, the
Company will distribute to its stockholders any portions of the
Contingency Reserve which it deems no longer to be required. After
the liabilities, expenses and obligations for which the Contingency
Reserve had been established have been satisfied in full, the Company
will distribute to its stockholders any remaining portion of the
Contingency Reserve.
If necessary for any reason in order to complete the
liquidation and distribution of the Company's assets to the Company's
stockholders, the Company may at any time transfer to a liquidating
trust, as a final liquidating distribution or from time to time prior
to a final liquidating distribution, any assets of the Company. If
all the Company's assets are not sold or distributed prior to the
fourth anniversary of the adoption of the Plan by the Company's
stockholders, pursuant to the provisions of the Plan, the Company must
transfer the assets not sold or distributed (including the Contingency
Reserve) to such a liquidating trust. The sole purpose of the trust
will be to liquidate on terms satisfactory to the liquidating trustees
and distribute the proceeds of the assets formerly owned by the
Company, after paying any remaining liabilities of the Company, to the
Company's stockholders. The liquidating trust will be obligated to
pay any expenses and liabilities of the Company which remain
unsatisfied. If the Contingency Reserve transferred to the
liquidating trust is exhausted, such expenses and liabilities will be
satisfied out of the liquidating trust's other unsold assets.
The Plan authorizes the Board of Directors to appoint one or
more individuals or corporate persons to act as trustee or trustees of
the liquidating trust and to cause the Company to enter into a
liquidating trust agreement with such trustee or trustees on such
terms and conditions as the Board of Directors determines. Approval
of the Plan will constitute the approval by the Company's stockholders
of any such appointment and liquidating trust agreement.
In the event the Company fails to create an adequate
Contingency Reserve for payment of its expenses and liabilities, or
should such Contingency Reserve and the assets held by the liquidating
trust be exceeded by the amount ultimately found payable in respect of
expenses and liabilities, each stockholder could be held liable for
the payment to creditors of such stockholder's pro rata share of such
excess, limited to the amounts theretofore received by such
stockholder from the Company or the liquidating trust.
If a court holds at any time that the Company has failed to
make adequate provision for its expenses and liabilities or if the
amount ultimately required to be paid in respect of such liabilities
exceeds the amount available from the Contingency Reserve and the
assets of the liquidating trust, a creditor of the Company could seek
an injunction against the making of distributions under the Plan on
the ground that the amounts to be distributed are needed to provide
for the payment of the Company's expenses and liabilities. Any such
action could delay or substantially diminish the cash distributions to
be made to stockholders and/or holders of Interests under the Plan.
Final Record Date
The stock transfer books of the Company will be closed on the
earlier to occur of (i) the close of business on the record date fixed
by the Board for the final liquidating distribution or (ii) the date
on which the Company ceases to exist under Delaware law (following any
post-dissolution continuation period), and thereafter no further
transfers will be recorded on the Company's books, and no further
stock certificates will be issued, other than replacement
certificates. It is anticipated that no further trading of the
Company's shares will occur after such date (the "Final Record Date").
See "Listing and Trading of the Common Stock and Interests in the
Liquidating Trust" below. All liquidating distributions from the
Company on or after the Final Record Date will be made to stockholders
according to their stockholdings as of the Final Record Date. Prior
or subsequent to the Final Record Date, the Company may, at its
election, require stockholders to surrender certificates representing
their shares of the Company's Common Stock in order to receive
subsequent distributions. Stockholders should not forward their stock
certificates before receiving instructions to do so. If surrender of
stock certificates should be required, all distributions otherwise
payable by the Company or the liquidating trust, if any, to
stockholders who have not surrendered their stock certificates may be
held in trust for such stockholders, without interest, until the
surrender of their certificates (subject to escheat pursuant to the
laws relating to unclaimed property).
Listing and Trading of the Common Stock and Interests in the
Liquidating Trust
The Company currently intends to close its transfer books on
the Final Record Date and at such time cease recording stock transfers
and issuing stock certificates (other than replacement certificates).
Accordingly, it is expected that trading in the shares will cease on
such date.
No determination has yet been made whether the Interests in
the liquidating trust, if any, will be transferable. Such
determination will be made by the Board of Directors of the Company
prior to the transfer of assets to the liquidating trust and will be
based on, among other things, the Board's estimate of the value of the
assets being transferred to the liquidating trust, tax matters and the
impact of compliance with applicable securities laws. If the
Interests are not transferable, ownership may be assigned only by
operation of law or upon death.
As stockholders will be deemed to have received a liquidating
distribution equal to their pro rata share of the value of the net
assets distributed to an entity which is treated as a liquidating
trust for tax purposes (see "Certain Federal Income Tax
Consequences--The Liquidating Trust"), the distribution to the trust
of assets could result in immediate tax liability to the holders of
Interests without their being readily able to realize the value of
such Interests to pay such taxes or otherwise. Should the Interests
be transferable, the Company plans to distribute an information
statement with respect to the liquidating trust at the time of the
transfer of assets and the liquidating trust may be required to comply
with the periodic reporting and proxy requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). The costs of
compliance with such requirements would reduce the amount which
otherwise could be distributed to holders of Interests. Even if
transferable, the Interests are not expected to be listed on a
national securities exchange or quoted through NASDAQ and the extent
of any trading market therein cannot be predicted. Moreover, the
Interests may not be accepted by commercial lenders as security for
loans as readily as more conventional securities with established
trading markets.
Absence of Appraisal Rights
Under Delaware law, the stockholders of the Company are not
entitled to appraisal rights for their shares of the Company's stock
in connection with the transactions contemplated by the Plan or to any
similar rights of dissenters under Delaware law.
Certain Federal Income Tax Consequences
The following discussion is a summary of material Federal
income tax consequences to the Company's stockholders relevant to the
Plan, but does not purport to be a complete analysis of all the
potential tax effects. The discussion is based upon the Internal
Revenue Code of 1986, as amended (the "Code"), Treasury Regulations,
Internal Revenue Service (the "IRS") rulings, and judicial decisions
now in effect, all of which are subject to change at any time; any
such changes may be applied retroactively. The following discussion
has no binding effect on the IRS or the courts and assumes that the
Company will liquidate substantially in accordance with the Plan.
Distributions pursuant to the Plan may occur at various times and in
more than one tax year. No assurances can be given that the tax
treatment described herein will remain unchanged at the time of such
distributions.
Consequences to the Company
After the adoption of the Plan and until the winding up of
its affairs is completed and the Company ceases to exist, the Company
will continue to be subject to tax on its taxable income. The Company
will generally recognize gain or loss on sales of its property
pursuant to the Plan. Upon any distribution of property to
stockholders or to a liquidating trust pursuant to the Plan, the
Company will generally recognize gain or loss as if such property was
being sold to the stockholders at its fair market value.
Consequences to Stockholders
Stockholders will recognize gain or loss equal to the
difference between (i) the sum of the amount of cash distributed to
them and the fair market value (at the time of distribution) of
property distributed to them, and (ii) their tax basis for their
shares of the Company's Common Stock. A stockholder's tax basis in
his or her shares will depend upon various factors including the
method of acquisition of such shares and the amount and nature of any
distributions received with respect thereto.
Gain or loss will be computed on a "per share" basis. The
Company expects to make more than one liquidating distribution, each
of which will be allocated proportionately to each share of stock
owned by a stockholder. Gain will be recognized by reason of a
liquidating distribution only to the extent that the aggregate value
of such distribution and any prior liquidating distribution(s)
received by a stockholder with respect to a share exceeds his or her
tax basis for that share. Any loss will generally be recognized only
when the final distribution from the Company has been received and
then only if the aggregate value of the liquidating distribution with
respect to a share is less than the stockholder's tax basis for that
share, as adjusted for prior distributions. Gain or loss recognized
by a stockholder will be capital gain or loss provided the shares are
held as capital assets.
Upon any distribution of property, the stockholder's tax
basis in such property will be the fair market value of such property
at the time of distribution. The gain or loss recognized upon a
future sale of that property will be measured by the difference
between the stockholder's tax basis in the property at the time of
such sale and the sales proceeds.
After the close of its taxable year, the Company will provide
stockholders and the IRS with a statement of the amount of cash
distributed to the stockholders and its best estimate as to the value
of the property distributed to them during that year. In the case of
property which consists of stock or other securities which are traded
in a public market, the fair market value will be based on the prices
at which such stocks or securities are so traded at the time of
distribution. In the case of other property, the fair market value
will be determined by the Board of Directors. In making such
determination, the Board may rely upon reports by independent
appraisers. There is no assurance that the IRS would not challenge
such valuation. As a result of such a challenge, the amount of gain
or loss recognized by stockholders (as well as the Company) might be
changed.
The Liquidating Trust
If a liquidating trust is used, stockholders will be treated
for tax purposes at the time of transfer as having received their pro
rata share of property transferred to the liquidating trust, reduced
by the amount of known liabilities assumed by the liquidating trust or
to which the property transferred is subject. The liquidating trust
itself should not be subject to tax. After formation of the trust,
the stockholders must take into account for Federal income tax
purposes their allocable portion of any income, expense, gain or loss
recognized by the trust. As a result of the transfer of property to
the trust and the ongoing operations of the trust, stockholders should
be aware that they may be subject to tax, whether or not they have
received any actual distributions from the liquidating trust with
which to pay such tax.
Taxation of Non-United States Stockholders
Foreign corporations or persons who are not citizens or
residents of the United States should consult their tax advisors with
respect to the U.S. and non-U.S. tax consequences of the Plan.
State and Local Income Tax
Stockholders may also be subject to liability for state and
local taxes with respect to the receipt of liquidating distributions
and their Interests in the liquidating trust.
THE COMPANY RECOMMENDS THAT EACH STOCKHOLDER CONSULT HIS OR
HER OWN TAX ADVISOR REGARDING THE TAX CONSEQUENCES OF THE PLAN.
Recommendation and Vote
Approval of the Plan requires the affirmative vote of the
holders of a majority of the outstanding shares of Common Stock of the
Company.
THE BOARD OF DIRECTORS OF THE COMPANY, AFTER CAREFUL REVIEW
AND CONSIDERATION OF THE TERMS OF THE PLAN, BELIEVES THAT THE
LIQUIDATION IS IN THE BEST INTEREST OF THE COMPANY'S STOCKHOLDERS AND
UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE IN FAVOR OF APPROVAL OF
THE ADOPTION OF THE PLAN. CERTAIN MEMBERS OF THE BOARD OF DIRECTORS
MAY BE DEEMED TO HAVE A POTENTIAL CONFLICT OF INTEREST IN RECOMMENDING
APPROVAL OF THE PLAN. SEE "POTENTIAL CONFLICT OF INTEREST OF CERTAIN
MEMBERS OF THE BOARD OF DIRECTORS."
ELECTION OF DIRECTORS
Five Directors are to be elected at the Annual Meeting of
Stockholders to serve for a term of one year or until their respective
successors have been elected and have qualified.
The following table sets forth the positions and offices
presently held with the Company by each nominee for election as
Director, his age, and the number of shares of Common Stock of the
Company beneficially owned by him, as of September 30, 1995. Proxies
not marked to the contrary will be voted in favor of their election.
Positions Common Stock
and Offices Beneficially
Presently Year Owned and Approxi-
Held with Became a mate Percentage
Name Age the Company Director of Class (1)
___________________ ___ ___________ _________ ___________________
Seymour Barth 67 President and 1959 1,494,973(2)(3)
Director 29.5%(2)(3)
Gilbert H. Steinberg 64 Vice President, 1964 1,135,868(2)(4)
Treasurer and 22.4%(2)(4)
Director
Elliot J. Bergman 69 Vice President, 1964 1,035,431(2)(5)
Secretary and 20.4%(2)(5)
Director
Walter A. Steinberg 68 Director 1989 -0-
Elliot D. Spiro 66 Director 1994 10,400
*
______________
* Less than 1%
(1) For purposes of the above table, the number of shares of Common
Stock owned and outstanding for a particular person is deemed to
include options held by such person which are exercisable currently
or within sixty days and shares issuable through September 30, 1995
pursuant to the Company's 401(k) Plan as discussed below.
(2) Includes for each of Messrs. Barth, G. Steinberg and Bergman
130,854 shares over which they have voting power as trustees under
the Company's 401(k) Plan (including 6,084, 5,612 and 5,612 shares
allocated to the accounts of Messrs. Barth, G. Steinberg and
Bergman, respectively).
(3) Includes 471,607 shares issuable pursuant to options which are
currently exercisable. Also includes 250,000 shares held in trust
for the benefit of Mr. Barth's family, as to which trust Mr. Barth
serves as co-trustee. Excludes 110,000 shares held in trust for
the benefit of Mr. Barth's children, as to which shares Mr. Barth
disclaims any beneficial interest.
(4) Includes 474,769 shares issuable pursuant to options which are
currently exercisable.
(5) Includes 490,921 shares issuable pursuant to options which are
currently exercisable. Also includes 225,000 shares held in
various trusts for the benefit of Mr. Bergman's family, as to which
trusts Mr. Bergman serves as co-trustee.
Seymour Barth has served as President of the Company
since 1964 and as a Director of the Company since its inception in
1959.
Gilbert H. Steinberg has served as a Director, Vice
President and Treasurer of the Company since 1964.
Elliot J. Bergman has served as a Director, Vice
President and Secretary of the Company since 1964.
Walter A. Steinberg has been an independent engineering
consultant for more than the past five years.
Elliot D. Spiro has served as Chairman and Chief
Executive Officer of Branch Insurance Agency, a property/casualty
and financial services insurance agency, for more than the past
five years.
The Board held four meetings during the fiscal year ended
June 30, 1995 ("Fiscal 1995"). Each incumbent Director who then
served on the Board attended all four meetings. The Board also
acted on one occasion during Fiscal 1995 by unanimous written
consent in lieu of a meeting.
The Audit Committee of the Board is charged with the
review of the activities of the Company's independent auditors,
including the fees, services, and scope of such audit. The
Committee is composed of Messrs. G. Steinberg, W. Steinberg and
Spiro. Such Committee did not meet during Fiscal 1995.
The Stock Option Committee of the Board reviews and
implements appropriate action with respect to all matters
pertaining to stock options granted under the Company's Amended and
Restated 1981 Stock Option Plan (which expired by its terms in
April 1991, but under which options are still outstanding) and 1991
Stock Option Plan. The Committee, which is currently composed of
Messrs. W. Steinberg and Spiro, did not meet during Fiscal 1995.
The Company has neither a nominating committee, charged
with the search for and recommendation to the Board of potential
nominees for Board positions, nor a compensation committee, charged
with periodically reviewing the compensation of the Company's
officers and employees. These functions are performed by the Board
as a whole. The Board will consider stockholder recommendations
for Board positions which are made in writing to the Company's
President.
Messrs. W. Steinberg and Spiro are entitled to receive
$5,000 per year for their services as a Director. No other
Directors receive compensation for their services as such.
There is no family relationship among any of the executive
officers and Directors of the Company.
To the Company's knowledge, based solely on a review of
the copies of Forms 5 furnished to the Company and written
representations that no other reports were required during Fiscal
1995, all Section 16(a) filing requirements applicable to the
Company's officers, Directors and 10% stockholders were complied
with, except that Messrs. Barth, G. Steinberg and Bergman did not
file their respective Forms 5 timely. Each Form 5 reported the
acquisition of shares of Common Stock of the Company pursuant to
its 401(k) Plan.
EXECUTIVE COMPENSATION AND CERTAIN TRANSACTIONS
Summary Compensation Table
The following table sets forth the compensation paid by
the Company during Fiscal 1995, 1994 and 1993 to each executive
officer of the Company:
Annual
Compensation Long-Term Compensation
Awards Payouts
Name and Shares
Principal Underlying All Other
Position Year Salary Bonus Options Compensation
Seymour Barth 1995 $309,518 0 0 $4,686 (1)
President 1994 $304,116 0 100,000 $4,571 (2)
1993 $304,116 $5,848 0 $2,716 (3)
Elliot Bergman 1995 $217,830 0 0 $4,357 (1)
Vice President & 1994 $214,008 0 100,000 $3,209 (2)
Secretary 1993 $214,008 $4,116 0 $3,205 (3)
Gilbert Steinberg 1995 $217,830 0 0 $4,357 (1)
Vice President & 1994 $214,008 0 100,000 $3,209 (2)
Treasurer 1993 $214,008 $4,116 0 $3,205 (3)
______________________
(1) Represents 1,079, 1,030 and 1,030 shares contributed by the
Company to the accounts of Messrs. Barth, Bergman and G. Steinberg,
respectively, for Fiscal 1995 pursuant to the terms of its 401(k)
Plan.
(2) Represents 1,071, 752 and 752 shares contributed by the Company
to the accounts of Messrs. Barth, Bergman and G. Steinberg, respec-
tively, for Fiscal 1994 pursuant to the terms of its 401(k) Plan.
(3) Represents 673, 779 and 779 shares contributed by the Company
to the accounts of Messrs. Barth, Bergman and G. Steinberg,
respectively, for Fiscal 1993 pursuant to the terms of its 401(k)
Plan.
Option Grants
No options were granted to Mr. Barth, Mr. Bergman or Mr.
G. Steinberg during Fiscal 1995.
Fiscal Year End Option Value Table
The following table sets forth information concerning the
values of unexercised options held by each executive officer of the
Company as of June 30, 1995:
Value of Unexercised
Number of Unexercised In-the-Money Options
Options at June 30, 1995 at June 30, 1995
Exercisable/ Exercisable/
Name Unexercisable Unexercisable
_________________ ________________________ ____________________
Seymour Barth 371,607/100,000 $538,430/56,300
Elliot Bergman 390,921/100,000 $626,541/56,300
Gilbert Steinberg 374,769/100,000 $552,838/56,300
No options were exercised by Mr. Barth, Mr. Bergman or
Mr. G. Steinberg during Fiscal 1995.
Stock Retirement Agreement
The Company and Messrs. Barth, G. Steinberg and Bergman
are parties to a Stock Retirement Agreement which requires the
Company, upon the death of any of such persons, to purchase 30% of
all shares of Common Stock of the Company included in the gross
estate of the deceased stockholder at a price equal to the greater
of the average market price of such shares over the six months
preceding the date of death or the book value thereof. At June 30,
1995, the Company carried term life insurance in the amounts of
$2,000,000, $1,250,000 and $1,000,000 upon the lives of Messrs.
Barth, G. Steinberg and Bergman, respectively.
Employment Agreements
The Company has entered into Employment Agreements with
each of Messrs. Barth, G. Steinberg and Bergman which provide for,
among other things, the following: (i) minimum annual compensation
of $304,116 for Mr. Barth and $214,008 for each of Messrs. G.
Steinberg and Bergman (effective September 5, 1994, the annual
compensation payable to Messrs. Barth, G. Steinberg and Bergman was
increased to $310,807, $218,716 and $218,716, respectively); (ii)
a term ending upon the earliest to occur of the following: (a) the
employee's death or incapacity; (b) "cause", as defined in the
Employment Agreement; (c) at the election of the Company, upon not
less than three years prior written notice to the employee; or (d)
at the election of the employee, upon not less than six months
prior written notice to the Company; and (iii) in the event the
employee's employment shall terminate as a result of death or
incapacity, the Company shall be obligated to make annual payments
to the employee or his estate or representative for a period of
three years in an amount equal to 50% of the compensation paid or
payable to the employee with respect to the fiscal year immediately
preceding the fiscal year in which his employment terminated.
PRINCIPAL STOCKHOLDERS
The following table sets forth, to the knowledge of the
Company, certain information regarding the Company's outstanding
Common Stock beneficially owned as of September 30, 1995 (i) by
each person who is known by the Company to own beneficially or
exercise voting or dispositive control over more than 5% of the
Company's Common Stock, (ii) by each of the Company's Directors,
and (iii) by all executive officers and Directors as a group:
Name and Number of Shares Approximate
Address of and Nature of Percentage of
Beneficial Owner Beneficial Ownership Outstanding Shares(1)
________________________ ____________________ _____________________
Seymour Barth........... 1,494,973(2)(3) 29.5%(2)(3)
6 Nevada Drive
Lake Success, New York
Gilbert H. Steinberg.... 1,135,868(2)(4) 22.4%(2)(4)
6 Nevada Drive
Lake Success, New York
Elliot J. Bergman....... 1,035,431(2)(5) 20.4%(2)(5)
6 Nevada Drive
Lake Success, New York
Morris Barth, trustee of
various trusts for the
benefit of the descendants
of Seymour Barth........ 300,000 6.5%
c/o Astrosystems, Inc.
6 Nevada Drive
Lake Success, New York
Elliot D. Spiro......... 10,400 *
71 South Central Avenue
Valley Stream, New York
All executive officers
and Directors as a group 3,414,964(2)(3) 56.7%(2)(3)
(5 persons) (4)(5) (4)(5)
__________________
* Less than 1%
(1) For purposes of the above table, the number of shares of Common
Stock owned and outstanding for a particular person is deemed to
include options held by such person which are exercisable currently
or within sixty days and shares issuable through September 30, 1995
pursuant to the Company's 401(k) Plan as discussed below.
(2) Includes for each of Messrs. Barth, G. Steinberg and Bergman
130,854 shares over which they have voting power as trustees under
the Company's 401(k) Plan (including 6,084, 5,612 and 5,612 shares
allocated to the accounts of Messrs. Barth, G. Steinberg and
Bergman, respectively).
(3) Includes 471,607 shares issuable pursuant to options which are
currently exercisable. Also includes 250,000 shares held in trust
for the benefit of Mr. Barth's family, as to which trust Mr. Barth
serves as co-trustee. Excludes 110,000 shares held in trust for
the benefit of Mr. Barth's children, as to which shares Mr. Barth
disclaims any beneficial interest.
(4) Includes 474,769 shares issuable pursuant to options which are
currently exercisable.
(5) Includes 490,921 shares issuable pursuant to options which are
currently exercisable. Also includes 225,000 shares held in various
trusts for the benefit of Mr. Bergman's family, as to which trusts
Mr. Bergman serves as co-trustee.
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has selected the firm of Richard
A. Eisner & Company, LLP to serve as the Company's independent
auditors for the fiscal year ending June 30, 1996 and proposes
ratification by the stockholders of the selection. Such firm has
acted as independent auditors of the Company's accounts since 1967.
If the stockholders do not ratify the reappointment of
Richard A. Eisner & Company, LLP, the selection of independent
auditors will be reconsidered by the Board.
It is anticipated that a representative of Richard A.
Eisner & Company, LLP will attend the Meeting. Such representative
will be afforded the opportunity to make a statement if he so
desires and will be available to respond to appropriate questions.
Recommendation and Vote
Ratification of the selection of Richard A. Eisner &
Company, LLP as the Company's independent auditors for the fiscal
year ending June 30, 1996 requires the affirmative vote of the
holders of a majority of the Common Stock present in person or by
Proxy at the Meeting.
The Board recommends a vote FOR the ratification of the
selection of such firm.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the
Company's next Annual Meeting of Stockholders pursuant to the
provisions of Rule 14a-8 of the SEC, promulgated under the
Securities Exchange Act of 1934, as amended, must be received by
the Company at its principal executive offices by ________, 1996
for inclusion in the Company's Proxy Statement and form of Proxy
relating to such meeting.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
This Proxy Statement is accompanied by a copy of the
Company's Annual Report to Stockholders for Fiscal 1995.
The Company hereby incorporates by reference into this
Proxy Statement the Company's Form 10-KSB for the fiscal year ended
June 30, 1995, as filed with the SEC pursuant to Section 13 or
15(d) of the Securities Exchange Act.
FORM 10-KSB
A copy of the Company's Form 10-KSB for the fiscal year
ended June 30, 1995, as filed with the SEC (excluding exhibits),
will be forwarded, without charge, to any stockholder of the
Company entitled to vote at the Meeting, upon written request to
the Company at 6 Nevada Drive, Lake Success, New York 11042,
Attention: Treasurer.
Elliot J. Bergman,
Secretary
Lake Success, New York
______________, 1995
<PAGE>
EXHIBIT A
PLAN OF COMPLETE LIQUIDATION AND DISSOLUTION OF
ASTROSYSTEMS, INC.
This Plan of Complete Liquidation and Dissolution (the
"Plan") of Astrosystems, Inc., a Delaware corporation (the "Company"),
is intended to accomplish the complete liquidation and dissolution of
the Company in accordance with the Delaware General Corporation Law
and Section 331 of the Internal Revenue Code of 1986, as amended (the
"Code"), as follows:
1. The Board of Directors of the Company has adopted this
Plan and called a meeting of the Company's stockholders to take action
on this Plan. If at said meeting of the Company's stockholders a
majority of the outstanding Common Stock, par value $.10 per share
(the "Common Stock"), of the Company votes for the adoption of this
Plan, the Plan shall constitute the adopted Plan of the Company as of
the date on which such stockholder approval is obtained (the "Adoption
Date").
2. After the Adoption Date, the Company shall not engage
in any business activities except to the extent necessary to preserve
the values of its assets, wind up its business and affairs, and
distribute its assets in accordance with this Plan.
No later than thirty (30) days following the Adoption Date,
the Company shall file Form 966 with the Internal Revenue Service.
3. From and after the Adoption Date, the Company shall
complete the following corporate actions:
(a) The Company shall collect, sell, exchange or
otherwise dispose of all of its property and assets in
one or more transactions upon such terms and conditions
and for such consideration, which may consist in whole
or in part of money or other property, as the Board of
Directors, in its absolute discretion, deems expedient
and in the best interests of the Company and its
stockholders. In connection with such collection,
sale, exchange and other disposition, the Company shall
marshall its assets and collect or make provision for
the collection of all accounts receivable, debts and
claims owing to the Company. As part of the foregoing,
the Company shall cause its wholly-owned subsidiaries
to liquidate and dissolve in a manner consistent with
this Plan.
(b) The Company shall pay or, as determined by the
Board of Directors, make reasonable provision to pay,
all claims and obligations of the Company, including
all contingent, conditional or unmatured claims known
to the Company and all claims which are known to the
Company but for which the identity of the claimant is
unknown.
(c) The Company shall distribute pro rata to the
Company's stockholders all its remaining property and
assets, including the proceeds of any sale, exchange or
disposition, except such property or assets as are
required for paying or making provision for the claims
and obligations of the Company. Such distribution may
occur all at once or in a series of distributions and
may be in cash or in kind, in such manner, and at such
time or times, as the Board of Directors, in its
absolute discretion, may determine. If and to the
extent deemed necessary, appropriate or desirable by
the Board of Directors, in its absolute discretion, the
Company may establish and set aside a reasonable amount
(the "Contingency Reserve") to satisfy claims against
the Company (other than claims of a stockholder in its
capacity as such), including, without limitation, tax
obligations, and all expenses of the sale of the
Company's property and assets, of the collection and
defense of the Company's property and assets, and of
the liquidation and dissolution provided for in this
Plan. The Contingency Reserve may consist of cash
and/or property.
4. The distributions to the Company's stockholders
pursuant to Section 3 hereof shall be in complete redemption and
cancellation of all of the outstanding Common Stock of the Company.
As a condition to receipt of any distribution to the Company's
stockholders, the Board of Directors, in its absolute discretion, may
require stockholders to (i) surrender their certificates evidencing
the Common Stock to the Company or its agent for recording of such
distributions thereon or (ii) furnish the Company with evidence
satisfactory to the Board of Directors of the loss, theft or
destruction of their certificates evidencing the Common Stock,
together with such surety bond or other security or indemnity as
may be required by and satisfactory to the Board of Directors
("Satisfactory Evidence and Indemnity"). As a condition to receipt of
any final distribution to the Company's stockholders, the Board of
Directors, in its absolute discretion, may require stockholders to (i)
surrender their certificates evidencing the Common Stock to the
Company or its agent for cancellation or (ii) furnish the Company with
Satisfactory Evidence and Indemnity.
The Company will finally close its stock transfer books and
discontinue recording transfers of Common Stock on the earlier to
occur of (i) the close of business on the record date fixed by the
Board of Directors for the final liquidating distribution, or (ii) the
date on which the Company ceases to exist under the Delaware General
Corporation Law (following any post-dissolution continuation period
thereunder), and thereafter certificates representing Common Stock
will not be assignable or transferable on the books of the Company
except by will, intestate succession, or operation of law.
5. If any distribution to a stockholder cannot be made,
whether because the stockholder cannot be located, has not surrendered
its certificates evidencing the Common Stock as required hereunder or
for any other reason, the distribution to which such stockholder is
entitled (unless transferred to the Trust established pursuant to
Section 6 hereof) shall be transferred, at such time as the final
liquidating distribution is made by the Company, to the official of
such state or other jurisdiction authorized by applicable law to
receive the proceeds of such distribution. The proceeds of such
distribution shall thereafter be held solely for the benefit of and
for ultimate distribution to such stockholder as the sole equitable
owner thereof and shall be treated as abandoned property and escheat
to the applicable state or other jurisdiction in accordance with
applicable law. In no event shall the proceeds of any such
distribution revert to or become the property of the Company.
6. If deemed necessary, appropriate or desirable by the
Board of Directors, in its absolute discretion, in furtherance of the
liquidation and distribution of the Company's assets to the Company's
stockholders, as a final liquidating distribution or from time to
time, the Company shall transfer to one or more liquidating trustees,
for the benefit of the Company's stockholders (the "Trustees"), under
a trust (the "Trust"), any assets of the Company which are (i) not
reasonably susceptible to distribution to the Company's stockholders,
including assets held on behalf of the Company's stockholders (a) who
cannot be located or who do not tender their certificates evidencing
the Common Stock to the Company or its agent as hereinabove required
or (b) to whom distributions may not be made based upon restrictions
under contract or law, including, without limitation, restrictions of
the federal securities laws and regulations promulgated thereunder or
(ii) held as the Contingency Reserve.
The Board of Directors is hereby authorized to appoint one
or more individuals, corporations, partnerships or other persons, or
any combination thereof, including, without limitation, any one or
more officers, directors, employees, agents or representatives of the
Company, to act as the Trustee or Trustees for the benefit of the
Company's stockholders and to receive any assets of the Company. Any
Trustees appointed as provided in the preceding sentence shall succeed
to all right, title and interest of the Company of any kind and
character with respect to such transferred assets and, to the extent
of the assets so transferred, shall assume all of the liabilities and
obligations of the Company, including, without limitation, any
unsatisfied claims and unascertained or contingent liabilities.
Further, the Trustees shall have the full power to liquidate, deal
with, give receipt for and manage all of the property and assets
conveyed to the Trustees by the Company, to the exclusion of the
Company and its officers and directors, and any conveyance of assets
to the Trustees shall be deemed to be a distribution of property and
assets by the Company to its stockholders for the purposes of Section
3 of this Plan. Any such conveyance to the Trustees shall be in trust
for the stockholders of the Company (who shall be considered the
owners of the Trust within the meaning of Subpart E of Subchapter J of
the Code) and not for the use or benefit of the Trustees or any other
person and any assumption of liabilities and obligations of the
Company by the Trustees shall be solely in their capacity as Trustee.
The Company, subject to this Section 6 and as authorized by the Board
of Directors, in its absolute discretion, may enter into a liquidating
trust agreement with the Trustees, on such terms and conditions as the
Board of Directors, in its absolute discretion, may deem necessary,
appropriate or desirable. Adoption of this Plan by a majority of the
outstanding Common Stock shall constitute the approval of the
Company's stockholders of any such appointment and any such
liquidating trust agreement as their act and as a part hereof as if
herein written.
7. Whether or not a Trust shall have been established
pursuant to Section 6, in the event it should not be feasible for the
Company to make the final distribution to stockholders of all assets
and properties of the Company prior to the date which is four years
after the Adoption Date, then, on or before such date, the Company
shall be required to establish a Trust pursuant to Section 6 and
transfer any remaining assets and properties (including, without
limitation, any uncollected claims, contingent assets and the
Contingency Reserve) to the Trustees as set forth in Section 6.
8. After the Adoption Date, the officers of the Company
shall, at such time as the Board of Directors, in its absolute
discretion, deems necessary, appropriate or desirable, obtain any
certificates required from the Delaware tax authorities and, upon
obtaining such certificates, the Company shall file with the Secretary
of State of the State of Delaware a certificate of dissolution (the
"Certificate of Dissolution") in accordance with Section 275 of the
Delaware General Corporation Law.
9. Adoption of this Plan by a majority of the outstanding
Common Stock shall constitute the approval of the Company's
stockholders of the sale, exchange or other disposition in liquidation
of all of the property and assets of the Company not otherwise
distributed to the stockholders in kind, whether such sale, exchange
or other disposition occurs in one transaction or a series of
transactions, and shall constitute ratification of all contracts for
sale, exchange or other disposition which are conditioned on adoption
of this Plan.
10. In connection with and for the purpose of implementing
and assuring completion of this Plan, the Company may, in the absolute
discretion of the Board of Directors, pay any brokerage, agency,
professional and other fees and expenses of persons rendering services
to the Company in connection with the collection, sale, exchange or
other disposition of the Company's property and assets and the
implementation of this Plan.
11. In connection with and for the purpose of implementing
and assuring completion of this Plan, the Company may, in the absolute
discretion of the Board of Directors, pay to the Company's officers,
directors, employees, agents and representatives, or any of them,
compensation or additional compensation above their regular
compensation, in money or other property, in recognition of the
extraordinary efforts they, or any of them, will be required to
undertake, or actually undertake, in connection with the
implementation of this Plan. Adoption of this Plan by a majority of
the outstanding Common Stock shall constitute the approval of the
Company's stockholders of the payment of any such compensation.
12. The Company shall continue to indemnify its officers,
directors, employees, agents and representatives in accordance with
its certificate of incorporation, as amended, and by-laws and any
contractual arrangements, for actions taken in connection with this
Plan and the winding up of the affairs of the Company. The Company's
obligation to indemnify such persons may be satisfied out of the
assets of the Trust. The Board of Directors and the Trustees, in
their absolute discretion, are authorized to obtain and maintain
insurance as may be necessary to cover the Company's obligations
hereunder.
13. Notwithstanding authorization or consent to this Plan
and the transactions contemplated hereby by the Company's
stockholders, the Board of Directors may modify, amend or abandon this
Plan and the transactions contemplated hereby without further action
by the Company's stockholders to the extent permitted by the Delaware
General Corporation Law.
14. The Board of Directors of the Company is hereby
authorized, without further action by the Company's stockholders, to
do and perform or cause the officers of the Company, subject to
approval of the Board of Directors, to do and perform, any and all
acts, and to make, execute, deliver or adopt any and all agreements,
resolutions, conveyances, certificates and other documents of every
kind which are deemed necessary, appropriate or desirable, in the
absolute discretion of the Board of Directors, to implement this Plan
and the transactions contemplated hereby, including, without limiting
the foregoing, all filings or acts required by any state or federal
law or regulation to wind up its affairs.
<PAGE>
ASTROSYSTEMS, INC.
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints SEYMOUR BARTH and ELLIOT J.
BERGMAN as Proxies, each with the power to appoint his substitute, and
hereby authorizes them, and each of them, to represent and vote, as
designated below, all the Common Stock of Astrosystems, Inc. (the
"Company") held of record by the undersigned at the close of business
on ___________________, 1995 at the Annual Meeting of Stockholders to
be held on __________________, 1995 or any adjournment thereof.
1. Proposal to approve the adoption of a Plan of Complete
Liquidation and Dissolution.
_____ FOR _____ AGAINST _____ ABSTAIN
2. Election of Directors
FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the to vote for all nominees
contrary below). _____ listed below. _____
(INSTRUCTION: To withhold authority to vote for any individual
nominee, strike such nominee's name from the list below.)
SEYMOUR BARTH GILBERT H. STEINBERG ELLIOT J. BERGMAN
WALTER A. STEINBERG ELLIOT D. SPIRO
3. Proposal to ratify the appointment of Richard A. Eisner &
Company, LLP as the Company's independent auditors for the fiscal year
ending June 30, 1996.
_____ FOR _____ AGAINST _____ ABSTAIN
4. In their discretion, the Proxies are authorized to vote upon
such other business as may properly come before the meeting.
(Continued and to be signed
on next page)
<PAGE>
This Proxy, when properly executed, will be voted in the manner
directed herein by the undersigned stockholder. If no direction is
made, this Proxy will be voted for Proposals 1, and 2 and 3 and in
favor of any proposal to adjourn the meeting in order to allow the
Company additional time to obtain sufficient Proxies with regard
thereto.
DATED:.........................,199_
Please sign exactly as name appears
below. 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 the President or
other authorized officer. If a
partnership, please sign in full
partnership name by authorized
person.
____________________________________
Signature
____________________________________
Signature, if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY
PROMPTLY USING THE ENCLOSED ENVELOPE
