ATEC GROUP, INC.
90 Adams Avenue
Hauppauge, New York 11788
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 15, 1998
To the Stockholders of ATEC Group, Inc.:
You are cordially invited to attend the Annual Meeting of Stockholders of
ATEC Group, Inc. ("Company"), a Delaware corporation, to be held at the
Huntington Hilton, Melville, New York on Tuesday, December 15, 1998, at 10:00
a.m. local time, for the following purposes:
1. To elect four members to the Board of Directors of the Company to
serve until their respective successors are elected and qualified;
2. To ratify the selection by the Company of Weinick Sanders
Leventhal & Co., LLP, independent public accountants, to audit the
financial statements of the Company for the year ending June 30, 1999;
3. To increase the number of authorized shares issuable pursuant to
the Company's 1997 Stock Option Plan; and
4. To transact such other matters as may properly come before the
meeting or any adjournment thereof.
Only stockholders of record at the close of business on November 16, 1998
(the "Record Date"), are entitled to notice of and to vote at the meeting.
A proxy statement and proxy are enclosed herewith. If you are unable to
attend the meeting in person you are urged to sign, date and return the enclosed
proxy promptly in the enclosed addressed envelope which requires no postage if
mailed within the United States. If you attend the meeting in person, you may
withdraw your proxy and vote your shares. Also enclosed herewith is the
Company's 1998 Annual Report for the fiscal year ended June 30, 1998.
By Order of the Board
of Directors
Ashok Rametra, Secretary
East Northport, New York
November ___, 1998
<PAGE>
PRELIMINARY PROXY STATEMENT
ATEC GROUP, INC.
90 Adams Avenue
Hauppauge, New York 11788
INTRODUCTION
This proxy statement is furnished in connection with the solicitation of
proxies for use at the annual meeting (the "Annual Meeting") of stockholders of
ATEC Group, Inc. ("Company"), to be held on Tuesday, December 15, 1998, and at
any adjournments thereof. The accompanying proxy is solicited by the Board of
Directors of the Company and is revocable by the stockholder by notifying the
Company's secretary at any time before it is voted, or by voting in person at
the Annual Meeting. This proxy statement and accompanying proxy will be
distributed to stockholders beginning on or about November 20, 1998. The
principal executive offices of the Company are located at 90 Adams Avenue,
Hauppauge, New York 11788, telephone (516) 231-2831.
OUTSTANDING SHARES AND VOTING RIGHTS
Only stockholders of record at the close of business on November 16, 1998,
are entitled to receive notice of, and vote at the Annual Meeting. As of
November 16, 1998, the number and class of stock outstanding and entitled to
vote at the meeting was _____________ shares of Common Stock, par value $.01 per
share ("Common Stock"), ______ shares of Series A Preferred Stock, ______ shares
of Series B Preferred Stock and ________ shares of Series C Preferred Stock. The
Company's Common Stock and Preferred Stock are hereinafter collectively referred
to as the Shares. Each share of Common Stock and each share of Preferred Stock
is entitled to one vote on all matters. Accordingly, as of the record date the
Company has securities representing _____________ votes outstanding. No other
class of securities will be entitled to vote at the meeting. There are no
cumulative voting rights.
The nominees receiving the highest number of votes cast by the holders of
the Shares will be elected as the Company's directors and constitute the entire
Board of Directors of the Company. The affirmative vote of at least a majority
of the Shares represented and voting at the Annual Meeting at which a quorum is
present (which shares voting affirmatively also constitute at least a majority
of the required quorum) is necessary for approval of Proposal Nos. 2 and 3. A
quorum is representation in person or by proxy at the Annual Meeting of a
majority of the outstanding Shares of the Company.
<PAGE>
PROPOSALS TO SHAREHOLDERS
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Each nominee to the Board of Directors will serve until the next Annual
Meeting of stockholders, or until his earlier resignation, removal from office,
death or incapacity.
Unless otherwise specified, the enclosed proxy will be voted in favor of
the election of Surinder Rametra, Ashok Rametra, George D. Eagan and David C.
Reback. Information is furnished below with respect to all nominees.
The following information with respect to the principal occupation or
employment of the nominees, the name and principal business of the corporation
or other organization in which such occupation or employment is carried on and
other affiliations and business experience during the past five years has been
furnished to the Company by the respective nominees:
SURINDER RAMETRA was appointed the Chief Executive Officer and Chairman of the
Board of the Company in June 1994, and President in February 1998. From 1982 to
June 1994, Mr. Rametra has been the chief executive officer of one of the
Company's subsidiaries, engaged in the sale of computer hardware and software
primarily to business users. Mr. Rametra received a Bachelor of Science Degree
from the Punjab Engineering College, India and a Masters of Science Degree in
Engineering from the University of I.I.T., India in 1965 and 1969 respectively.
In 1976 Mr. Rametra received a Masters of Business Administration Degree in
Finance from New York University. Mr. Rametra and Ashok Rametra are brothers.
ASHOK RAMETRA was appointed Treasurer, Chief Financial Officer and Director of
the Company in June 1994. From June 1994 to March 1995 Mr. Rametra also served
as the Company's president. From 1987 to the present, Mr. Rametra has been the
president of a subsidiary of the Company, engaged in the retail sale of computer
hardware and software primarily to business users. Mr. Rametra received a
Bachelor of Science Degree from St. Johns University in accounting in 1980. Mr.
Rametra and Surinder Rametra are brothers.
GEORGE D. EAGAN has been nominated as a Director by the Board of Directors.
Since 1996, Mr. Eagan has been President of Eagan Associates, Ltd. and, from
1996 to 1997, a Vice President of Sales for Bluestone Capital Partners, both
venture capital firms. From 1995 to 1996, Mr. Eagan served as Director of Sales
at Mosaic Information Technologies. From 1994 to 1995, Mr. Eagan was Vice
President at Fidelity Investments in Boston, Massachusetts. From 1991 to 1994,
Mr. Eagan was an investment representative with Alex, Brown & Sons, and from
1981 to 1991 he was assistant vice president at Merrill Lynch Pierce Fenner &
Smith. Mr. Eagan graduated with a Bachelor of Science in Business
Administration/Management from Alfred University, and an MBA in Finance from
McGill University.
DAVID C. REBACK has been nominated as a Director by the Board of Directors.
Since 1969, Mr. Reback is a partner with Reback & Potash, LLP, a law firm
specializing in litigation, appellate matters and real estate. In 1963, Mr.
Reback received a B.A. from Syracuse University, and in 1965 he received a law
degree from Syracuse University College of Law.
2
<PAGE>
THE BOARD OF DIRECTORS DEEMS PROPOSAL NO. 1 TO BE IN THE BEST INTERESTS OF THE
COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS A VOTE "FOR" ALL FOUR OF THE
ABOVE-NAMED NOMINEE DIRECTORS OF THE COMPANY.
3
<PAGE>
MANAGEMENT
The following table sets forth the names and ages of all current and
nominated officers and directors of the Company and the position in the Company
held or to be held by them:
Name Age Position
- ---- --- --------
Surinder Rametra 58 Chairman of the Board
Chief Executive Officer and President
Ashok Rametra 44 Treasurer, Chief Financial Officer
and Director
George Eagan 41 Director
David C. Reback 56 Director
SURINDER RAMETRA was appointed the Chief Executive Officer and Chairman of the
Board of the Company in June 1994 and President in February 1998. From 1982 to
June 1994, Mr. Rametra has been the chief executive officer of one of the
Company's subsidiaries, engaged in the sale of computer hardware and software
primarily to business users. Mr. Rametra received a Bachelor of Science Degree
from the Punjab Engineering College, India and a Masters of Science Degree in
Engineering from the University of I.I.T., India in 1965 and 1969 respectively.
In 1976 Mr. Rametra received a Masters of Business Administration Degree in
Finance from New York University. Mr. Rametra and Ashok Rametra are brothers.
ASHOK RAMETRA was appointed Treasurer, Chief Financial Officer and Director of
the Company in June 1994. From June 1994 to March 1995 Mr. Rametra also served
as the Company's president. From 1987 to the present, Mr. Rametra has been the
president of a subsidiary of the Company, engaged in the retail sale of computer
hardware and software primarily to business users. Mr. Rametra received a
Bachelor of Science Degree from St. Johns University in accounting in 1980. Mr.
Rametra and Surinder Rametra are brothers.
GEORGE D. EAGAN was appointed a Director by the Board of Directors in June 1997.
Since 1996, Mr. Eagan has been President of Eagan Associates, Ltd. and, from
1996 to 1997, Vice President of Sales for Bluestone Capital Partners, both
venture capital firms. From 1995 to 1996, Mr. Eagan served as Director of Sales
at Mosaic Information Technologies. From 1994 to 1995, Mr. Eagan was Vice
President at Fidelity Investments in Boston, Massachusetts. From 1991 to 1994,
Mr. Eagan was an investment representative with Alex, Brown & Sons, and from
1981 to 1991 he was assistant vice president at Merrill Lynch Pierce Fenner &
Smith. Mr. Eagan graduated with a Bachelor of Science in Business
Administration/Management from Alfred University, and an MBA in Finance from
McGill University.
DAVID C. REBACK was appointed a Director by the Board of Directors in June 1997.
Since 1969, Mr. Reback is a partner with Reback & Potash, LLP, a law firm
specializing in litigation, appellate matters and real estate. In 1963, Mr.
Reback received a B.A. from Syracuse University, and in 1965 he received a law
degree from Syracuse University College of Law.
4
<PAGE>
INFORMATION CONCERNING BOARD MEETINGS
The Board of Directors met six times during the last fiscal year. All of
the incumbent directors attended at least 75% of such meetings.
INFORMATION CONCERNING COMMITTEES OF THE BOARD
The Board of Directors has established an Audit Committee, an Operation
and Control Committee and a Stock Option Committee. The Audit Committee is
comprised of George Eagan and David Reback. The Operations Control Committee is
comprised of Ashok Rametra. Mr. Rametra has appointed Irvin Gulati to assist him
in improving existing operations on behalf of the Company. The Stock Option
Committee is also comprised of Ashok Rametra. James Charles, a company
consultant provides advisory services to this committee. The committee
formulates stock option programs.
The above mentioned committees met six times during the last fiscal year.
All of the committee members attended at least 75% of such meetings.
5
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION
The Company's Summary Compensation Table for the years ended June 30,
1998, 1997 and 1996 is provided herein. This table provides compensation
information on behalf of the Company's existing officers and directors.
SUMMARY COMPENSATION TABLE
For the Years Ended June 30, 1998, 1997 and 1996
Annual Compensation Awards Payouts
<TABLE>
<CAPTION>
Year Compen- Options/ LTIP
Name Position Ended Salary($) Bonus($) sation($) SARs Payouts
- ---- -------- ----- --------- -------- --------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Surinder Rametra CEO and 6/30/98 $170,020 14,430(1) NONE NONE
President 6/30/97 $160,680 6,737(4) NONE NONE
6/30/96 $156,000 5,680(7) NONE NONE
Ashok Rametra CFO 6/30/98 $170,000 14,077(2) NONE NONE
6/30/97 $150,020 19,372(5) NONE NONE
6/30/96 $150,020 6,508(8) NONE NONE
Balwinder Singh
Bathla President(11) 6/30/98 $170,000 11,221(3) NONE NONE
6/30/97 $158,216 20,806(6) 100,000(10) NONE
6/30/96 $135,000 51,723(9) NONE NONE
</TABLE>
(1) Major Medical $6,372, Leased Auto $8,058
(2) Major Medical $4,380, Leased Auto $9,697
(3) Major Medical $5,196, Leased Auto $6,025
(4) Major Medical $6,737
(5) Major Medical $4,727, Leased Auto $4,645, Interest Income 10,000
(6) Major Medical $4,776, Life Insurance $6,600, Rent Income $5,400, Interest
Income $4,030
(7) Major medical $5,680
(8) Major medical $3,799, Leased Auto $2,710
(9) Major medical $4,465, Leased Auto $9,000, Interest income $38,258
(10) In December 1996, the Company issued to Mr. Bathla options to purchase an
aggregate of 100,000 shares of common stock exercisable at $3.75 per share
through December 2006.
(11) Mr. Bathla resigned as President in February 1998, and as a director in
August 1998.
6
<PAGE>
Year End Option Table. The following table sets forth certain information
regarding the stock options held as of June 30, 1998 by the individuals named in
the above Summary Compensation Table.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUE
<TABLE>
<CAPTION>
Securities Underlying Value of Unexercised
Unexercised Options at In-the-Money-Options
Fiscal Year End(#) at Fiscal Year End (4)
Shares Acquired Value ---------------------------------------------------------------
Name on exercise (#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
- ---- --------------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balwinder Singh
Bathla (1) 0 0 124,000 0 $61,690 0
Surinder Rametra (2) 0 0 507,000 0 $5,233 0
Ashok Rametra (3) 0 0 10,000 0 $7,475 0
</TABLE>
(1) Represents options to acquire: (I) 100,000 shares at $3.75 per share
exercisable through December 19, 2006; and (ii) 24,000 shares at $3.44 per
share exercisable through August 8, 2007. Mr. Bathla resigned as President
in February 1998 and as a director of the Company in August 1998.
(2) Represents options to acquire: (I) 500,000 shares at $5.00 per share
exercisable through March 2008; and (ii) 7,000 shares at $3.44 per share
exercisable through August 8, 2007.
(3) Represents options to acquire 10,000 shares at $3.44 per share exercisable
through August 8, 2007.
(4) Computation based on $4.1875 which was the June 30, 1998 closing price for
the Common Stock.
Option Grant Table. The following table sets forth certain information
regarding the stock options granted during the fiscal year ended June 30, 1998
by the Company to the individuals named in the above Summary Compensation Table.
OPTION GRANTS IN LAST FISCAL YEAR
% of Total
Options
Granted to
Employees in Exercise Price Expiration
Name Granted (#) Fiscal Year $ / Share Date
- ---- ----------- ----------- --------- ----
Balwinder Singh
Bathla 24,000 < 1% $3.44 2007
Surinder Rametra 500,000 7.7% $5.00 2008
Surinder Rametra 7,000 < 1% $3.44 2007
Ashok Rametra 10,000 < 1% $3.44 2007
7
<PAGE>
Compensation of Directors
Directors do not receive compensation for attendance at meetings of the
Board of Directors. All directors are entitled to reimbursement of reasonable
travel and lodging expenses related to attending meetings of the Board of
Directors.
401(K) Plan
The Company has a 401(k) deferred compensation plan to which the Company
may make discretionary contributions. The Company made a contribution to its
plan amounting to approximately $30,000 for the year ended June 30, 1998.
8
<PAGE>
9
<PAGE>
PERFORMANCE GRAPH
Total Shareholder Returns - Dividends Reinvested
Annual Return Percentages
Years Ending
Company/Index Name June 93 June 94 June 95 June 96 June 97
================================================================================
ATEC GROUP INC. (44.83) (77.35) (86.20) (8.72) (46.63)
S&P SMALLCAP 600 INDEX 2.54 1.87 20.36 26.01 21.69
PEER GROUP (7.38) 2.83 69.26 48.27 (18.16)
Indexed\Cumulative Returns
Years Ending
Base
Period Return Return Return Return Return
Company/Index Name 2/12/93 June 93 June 94 June 95 June 96 June 97
================================================================================
ATEC GROUP INC. 100 55.17 12.50 1.72 1.57 0.84
S&P SMALLCAP 600 INDEX 100 102.54 104.45 125.72 158.43 192.79
COMPUTER (SOFTWARE & 100 92.62 95.24 161.20 239.02 195.62
SVCE) - SMALL
Please note that S&P has added a history to the Computer (Software &
Services) Small Index starting in 1995. The periods ending 1993 and 1994 are
calculated using the peer group population.
================================================================================
10
<PAGE>
Security Ownership of
Certain Beneficial Owners and Management
The following table sets forth as of September 30, 1998 certain
information with respect to the beneficial ownership of the Company's voting
securities by (I) any person (including any "group" as that term is used in
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") known by the Company to be the beneficial owner of more than 5%
of the Company's voting securities, (ii) each director of the Company, (iii)
each executive officer named in the Summary Compensation table appearing herein,
and (iv) all executive officers and directors of the Company as a group. The
table also sets forth the respective general voting power of such persons taking
into account the voting power of the Common Stock and the Preferred Stock
combined.
Name and Address Amount and Nature
of Beneficial of Beneficial Percentage of
Owner Ownership of Voting Stock
Outstanding Common Stock Outstanding(1)
- ----------- ------------ --------------
Ashok Rametra(2) 677,045 9.4%
1762 Central Avenue
Albany, NY 12205
Surinder Rametra(3) 1,212,801 15.9%
90 Adams Avenue
Hauppauge, NY 11788
George Eagan (4) 5,000 **
C/O 90 Adams Avenue
Hauppauge, NY 11788
David Reback (5) 5,000 **
C/O 90 Adams Avenue
Hauppauge, NY 11788
Balwinder Singh Bathla(6) 497,454 6.9%
143 West 29th Street
New York, NY 10001
Rajnish Rametra (7) 413,070 5.8%
90 Adams Avenue
Hauppauge, NY 11788
Frank Dozal(8) 793,800 10.1%
745 East Wiggins St.
Superior, CO 80027
11
<PAGE>
Rita Dozal(9) 793,800 10.1%
745 East Wiggins St.
Superior, CO 80027
Carl Jones(10) 1,574,200 18.3%
8288 South Jasmine Ct.
Englewood, CO 80112
All directors and (2)(3)(4)(5) 1,899,846 24.9%
executive/officers as
a group (4 persons)
- ----------------
** Less than 1%
(1) Computed based upon a total of 6,764,460 shares of Common Stock, 12,213
shares of Series A Preferred Stock, 1,458 shares of Series B Preferred
Stock and 330,731 shares of Series C Preferred Stock. Each share is Common
Stock and Preferred Stock possess one vote per share. Accordingly, the
foregoing represents an aggregate of 7,109,380 votes.
(2) Represents (i) 279,949 shares of common stock held by Mr. Rametra; (ii)
387,096 shares of common stock held by Mr. Rametra's spouse and children;
and (iii) stock options for the purchase of 10,000 shares of the common
stock. Mr. Rametra disclaims beneficial ownership of shares of the
Company's securities owned by other members of the Rametra family.
(3) Represents (i) 440,140 shares of common stock held by Mr. Rametra; (ii)
265,661 shares held by Mr. Rametra's spouse; and (iii) stock options for
the purchase of 507,000 shares of common stock. Mr. Rametra disclaims
beneficial ownership of shares of the Company's securities owned by other
members of the Rametra family including independent children.
(4) Represents stock options for the purchase of 5,000 shares of common stock.
(5) Represents stock options for the purchase of 5,000 shares of common stock.
(6) Represents (i) 272,744 shares of common stock held by Mr. Bathla; (ii)
60,000 shares held by American Century Mortgage of which Mr. Bathla is the
sole shareholder; (iii) 40,710 shares held by Charanjit Sidhu, his wife;
and (iv) stock options for the purchase of 124,000 shares of common stock.
Mr. Bathla disclaims beneficial ownership of shares of the Company owned
by other members of his family. Mr. Bathla resigned as an officer and
director of the Company in August 1998.
(7) Represents (i) 203,620 shares of common stock; (ii) an aggregate of
185,450 shares by his spouse and children; and (iii) stock options for the
purchase of 24,000 shares of common stock. Mr. Rametra disclaims
beneficial ownership of shares of the Company owned by other members of
the Rametra family.
(8) Represents (i) 56,700 shares of common stock; and (ii) stock options for
the purchase of 737,100 shares of common stock.
(9) Represents (i) 56,700 shares of common stock; and (ii) stock options for
the purchase of 737,100 shares of common stock.
(10) Represents (i) 100,000 shares of common stock; and (ii) stock options for
the purchase 1,474,200 shares of common stock.
12
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In June, 1996, the Company acquired 100% of the outstanding capital stock
of Innovative Business Micros, Inc. ("Innovative"), a computer integrator
located in Long Island. Innovative was formerly owned by Surinder Rametra and
Ashok Rametra, the Company's principal executive officer and principal financial
officer respectively, and Rajnish Rametra the brother of Surinder and Ashok. The
consideration for the acquisition was the issuance by the Company of an
aggregate of 4,900,000 shares of the Company's Common Stock to the former
shareholders of Innovative. The terms of the acquisition were not negotiated in
an arms-length manner and there can be no assurance that an unaffiliated company
would have paid less consideration for Innovative than paid by the Company. The
Acquisition was accounted for as a pooling of interest.
In January 1997, the Company issued options to purchase 700,000 shares of
Common Stock to the former shareholders of Cony Computer Systems, Inc. and
American Computer Systems, Inc., both wholly owned subsidiaries of the Company,
in consideration for amending certain purchase and employment agreements,
thereby eliminating any future performance payments.
All transactions between the Company and its subsidiaries were eliminated
through inter-company elimination on the Company's financial statements.
LOANS
6/30/98 6/30/97 6/30/96 Interest Maturity
Lender Amount Amount Amount Rate Date
- ------ ------- ------- ------- -------- --------
Balwinder Singh Bathla $2,967 $2,967 $228,322 10% 6/30/98
Rajnish Rametra $ -- $ -- $500,000 10% 6/30/98
Ashok Rametra $ -- $ -- $150,000 10% 6/30/98
During the year ended June 30, 1998, Balwinder Singh Bathla advanced the
Company $2,967. The advance bears interest at the rate of 10% per annum.
MCS's office located in Albany, New York, is leased pursuant to a lease
expiring in June 2003. The lease requires annual rental payments of
approximately $108,192 plus all expenses and taxes attributable to the operation
of the premises. This facility is leased from 1762 Central Avenue Realty
Associates (a partnership) controlled by Surinder Rametra and Ashok Rametra,
Officers and Directors of the Company.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Based solely upon a review of Forms 3, 4 and 5 furnished to the Company
during its most recent fiscal year, the Company believes that there were no
Section 16(a) reports filed untimely during the Company's year ended June 30,
1998.
13
<PAGE>
PROPOSAL NO. 2
RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors has appointed the firm of Weinick Sanders Leventhal
& Co., LLP ("WSL") as independent auditors of the Company for fiscal year 1999
subject to ratification by the stockholders. WSL has served as the Company's
independent auditors since April 18, 1996.
Audit services expected to be performed by WSL during fiscal year 1999
will consist of the audit of financial statements of the Company and its wholly
owned subsidiaries. It is anticipated that a representative of WSL will be
present at the Annual Meeting and will be given an opportunity to make a
statement if he so desires and to respond to appropriate questions.
The affirmative vote of at least a majority of the shares represented and
voting at the Annual Meeting at which a quorum is present (which shares voting
affirmatively also constitute at least a majority of the required quorum) is
necessary for approval of Proposal No. 2. Under Delaware law, there are no
rights of appraisal or dissenter's rights which arise as a result of a vote to
ratify the selection of auditor's.
THE BOARD OF DIRECTORS DEEMS PROPOSAL NO. 2 TO BE IN THE BEST INTERESTS OF THE
COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS A VOTE "FOR" APPROVAL THEREOF.
14
<PAGE>
PROPOSAL NO. 3
RATIFICATION OF INCREASE IN THE NUMBER OF
AUTHORIZED SHARES ISSUABLE PURSUANT TO THE
1997 STOCK OPTION PLAN
General
On November 13, 1998, the Board of Directors ("Board" or "Board of
Directors") of the Company approved an increase in the authorized number of
shares of common stock issuable pursuant to the 1997 Stock Option Plan ("Plan").
The Plan is intended to comply with the requirements of Section 422 of the
Internal Revenue Code of 1986, as amended. Approval of such an increase in the
Plan is subject to the ratification by the shareholders at the Annual Meeting.
The Plan currently provides for the issuance of up to 1,200,000 employee stock
options ("Stock Options" or "Options"). The Board approved an increase in
authorized number of shares of common stock to provide for the issuance of
2,500,000 employee stock options.
The class of employees eligible for participation in the Plan consist of
the Company's (including subsidiaries) employees, key consultants and
professionals, and non-employee directors. Once the Plan has been approved by
the Shareholders, the Board of Directors has the ability to allocate the Options
among the various eligible employees at the Board's discretion except to the
extent that the Company has previously entered into employment agreements with
such employees providing for the issuance of the Options.
The Plan provides for the grant of both incentive and non-statutory Stock
Options. Incentive Stock Options ("Incentive Stock Options") granted under the
Plan are intended to qualify as "Incentive Stock Options" within the meaning of
Section 422 of the Internal Revenue Code ("Code"). Non-statutory Stock Options
("Non-statutory Stock Options") granted under the Plan are not intended to
qualify as Incentive Stock Options under the Code. See "Federal Income Tax
Information" for a discussion of the tax treatment of Incentive and
Non-statutory Stock Options. The Plan also authorizes the issuance of stock
appreciation rights to eligible parties.
The Board of Directors believes that its ability to grant Options under
the Plan will advance the interests of the Company by strengthening its ability
to attract and retain in its employ people of desired training, experience and
ability, and to furnish additional incentives to its eligible employees upon
whose judgment, initiative and efforts the Company is largely dependent for the
successful conduct of its operations.
15
<PAGE>
STOCKHOLDERS' PROPOSALS
It is anticipated that the Company's 1999 Annual Meeting of Stockholders
will be held in December 1999. Stockholders who seek to present proposals at the
Company's next Annual Meeting of Stockholders must submit their proposals to the
Secretary of the Company on or before June 1, 1999.
GENERAL
Unless contrary instructions are indicated on the proxy, all shares of
Common Stock represented by valid proxies received pursuant to this solicitation
(and not revoked before they are voted) will be voted FOR Proposal Nos. 1, 2 and
3.
The Board of Directors knows of no business other than that set forth
above to be transacted at the meeting, but if other matters requiring a vote of
the stockholders arise, the persons designated as proxies will vote the shares
of Common Stock represented by the proxies in accordance with their judgment on
such matters. If a stockholder specifies a different choice on the proxy, his or
her shares of Common Stock will be voted in accordance with the specification so
made.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. WE URGE YOU TO FILL IN, SIGN
AND RETURN THE ACCOMPANYING FORM OF PROXY IN THE PREPAID ENVELOPE PROVIDED, NO
MATTER HOW LARGE OR SMALL YOUR HOLDINGS MAY BE.
By Order of the Board of Directors,
Ashok Rametra, Secretary
Hauppauge, New York
November ___, 1998
16
<PAGE>
ATEC GROUP, INC.
Annual Meeting of Stockholders -- Tuesday, December 15, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Surinder Rametra with power of
substitution, as proxy to represent the undersigned at the Annual Meeting of
Stockholders to be held at the Huntington Hilton, Melville, New York, on
Tuesday, December 15, 1998 at 10:00 a.m. local time and at any adjournment
thereof, and to vote the shares of stock the undersigned would be entitled to
vote if personally present, as indicted on the reverse side hereof.
The shares represented by the proxy will be voted as directed. If no
contrary instruction is given, the shares will be voted FOR Proposal Nos. 2, 3
and for the election of Surinder Rametra, Ashok Rametra, George Egan and David
C. Reback as directors.
Please mark boxes in blue or black ink.
1. Proposal No. 1 - Election of Directors.
Nominees: Surinder Rametra, Ashok Rametra, George Egan, and David C.
Reback.
AUTHORITY
FOR withheld
all as to all
nominees nominees
----- -----
| | | |
----- -----
For, except authority withheld as to the following nominee(s):
______________________________________________________________________
2. Proposal No. 2 for ratification of the selection of Weinick Sanders
Leventhal & Co., LLP as the independent auditors of the Company.
FOR AGAINST ABSTAIN
----- ----- -----
| | | | | |
----- ----- -----
3. Proposal No. 3 for the increase in authorized shares issuable pursuant to
the Company's 1997 Stock Option Plan.
FOR AGAINST ABSTAIN
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4. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
(Please date, sign as name appears at left, and return promptly. If the stock is
registered in the name of two or more persons, each should sign. When signing as
Corporate Officer, Partner, Executor,
<PAGE>
Administrator, Trustee, or Guardian, please give full title. Please note any
change in your address alongside the address as it appears in the Proxy.
Dated:__________________
_________________________________
(Signature)
_________________________________
(Print Name)
SIGN, DATE AND RETURN PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE
