As filed with the Securities and Exchange Commission on March 5, 1998
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------
FORM S-8
REGISTRATION STATEMENT
Under the Securities Act of 1933
ATEC GROUP INC.
(Exact name of registrant as specified in its charter)
Delaware 5045 13-3679659
(State or other jurisdiction (Primary Standard (I.R.S. Employer
of incorporation or Industrial Classification Identification No.)
organization) Code Number)
90 Adams Street
Hauppauge, New York 11716
(516) 231-2832
(Address and Telephone Number of Registrant's
Principal Executive Office)(Zip Code)
ATEC GROUP INC.
1997 EMPLOYEE STOCK OPTION PLAN
(1,200,000 shares of Common Stock)
(full title of the plan)
Surinder Rametra, Chief Executive Officer
ATEC Group Inc.
90 Adams Street
Hauppauge, New York 11716
(516) 231-2832
(Name, Address & Telephone number, including area code, of agent for service)
-----------------
Copies to:
Silverman, Collura, Chernis & Balzano, P.C.
381 Park Avenue South - Suite 1601
New York, New York 10016
(212) 779-8600
<PAGE>
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
Proposed Proposed
Title of Amount maximum maximum Amount of
securities to to be offering price aggregate registration
be registered registered(2) per share (1) offering price (1) fee
- --------------------------------------------------------------------------------
Common Stock(1) 1,200,000 3.9375 4,725,000 $1,431.82
- --------------------------------------------------------------------------------
(1) Calculated in accordance with 457(h)(1) using the average of the closing
price for the Common Stock as reported on the NASDAQ SmallCap Market System on
March 2, 1998.
(2) Adjusted to give effect to the Company's December 1997 one for five reverse
stock split.
2
<PAGE>
PART 1 - INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The documents containing information specified in Part 1 (plan information
and registrant information) will be sent or given to employees as specified by
Rule 428(b)(1). Such documents need not be filed with the Securities and
Exchange Commission either as part of this registration statement or as
prospectuses or prospectus supplements pursuant to Rule 424. These documents and
the documents incorporated by reference in this registration statement pursuant
to Item 3 of Part 2 of this form taken together constitute a prospectus that
meets the requirements of Section 10(a) of the Securities Act of 1933, as
amended.
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ATEC GROUP INC.
Cross-Reference Sheet Showing Location in Prospectus
of Information Required by Items of Form S-8
Form S-8 Items and Heading Location in Prospectus
- -------------------------- ----------------------
1. Forepart of the Registration Statement
and Outside Front Cover Page of Prospectus....... Front cover Page
2. Inside Front And Outside Back Cover.............. Inside Front cover Page
3. Summary Information, Risk Factors and Ratio
of Earnings to Fixed Charges..................... The Company
4. Use of Proceeds.................................. Not Applicable
5. Determination of Offering Price.................. Not Applicable
6. Dilution......................................... Not Applicable
7. Selling Security Holders......................... Selling Stockholders
8. Plan of Distribution............................. Plan of Distribution
9. Description of Securities to be Registered ..... Description of Securities
10. Interest of Named Experts and Counsel............ Legal Matters
11. Material Changes................................. Not Applicable
12. Incorporation of Certain Information by
Reference........................................ Incorporation of
Certain Documents by
Reference
13. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities...................................... Indemnification of
Directors and Officers
4
<PAGE>
RE-OFFER PROSPECTUS
ATEC GROUP INC.
90 Adams Avenue
Hauppauge, New York 11788
A Maximum of 1,200,000 Shares of Common Stock
This Prospectus relates to offers and sales by certain officers, directors
and shareholders of ATEC Group Inc., a Delaware corporation (the "Company"),
named herein or to be named supplementally, who may be deemed to be "affiliates"
of the Company as defined in Rule 405 under the Securities Act of 1933, as
amended, (the "Securities Act") and certain employees of the Company (the
certain officers, directors, shareholders and employees together are hereafter
collectively referred to as the "Selling Stockholders"), of shares of the
Company's Common Stock, $.01 par value (the "Common Stock"), that have been
and/or may be acquired by such persons upon exercise of stock options granted to
them or purchased by them pursuant to the Company's 1997 Employee Stock Option
Plan (the "Plan"). The shares that have been and/or may be so acquired by such
persons pursuant to the Plan who are employees of the Company who are not
affiliates are herein referred to as the "Option Shares" and the shares acquired
by officers, directors and/or shareholder of the Company who are affiliates are
herein referred to as the "Restricted Shares". All references to shares of the
Company's Common Stock in this Prospectus have been adjusted to give effect to
the Company's one for five November 1997 reverse stock split.
The Option Shares and Restricted Shares may be offered hereby from time to
time by any and all of the Selling Stockholders, named herein or to be named
supplementally, for their own benefit. The Company will receive no portion of
the proceeds of sales made hereunder. All expenses of registration incurred in
connection with this offering are being borne by the Company, but all selling
and other expenses incurred by the Selling Stockholders will be borne by such
Selling Stockholders.
All or a portion of the shares of Common Stock offered hereby may be
offered for sale, from time to time, on the NASDAQ SmallCap Market System
("Nasdaq"), or otherwise as described herein, at prices and terms then
obtainable (see "Plan of Distribution"). All brokers' commissions, concessions
or discounts will be paid by the Selling Stockholders.
The Selling Stockholders and any broker executing selling orders on behalf
of the Selling Stockholders may be deemed to be an "underwriter" within the
meaning of the Securities Act, in which event commissions received by such
broker may be deemed to be underwriting commissions under the Securities Act.
The Common Stock is listed on Nasdaq under the symbol ATEC. On March 2,
1998, the last reported sale price of the Company's Common Stock on Nasdaq was
$3.9375.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is March __, 1998.
5
<PAGE>
TABLE OF CONTENTS
Page
----
Available Information...................................................... 7
The Company................................................................ 8
Risk Factors............................................................... 9
Selling Stockholders....................................................... 14
Transfer Agent and Registrar............................................... 16
Plan of Distribution....................................................... 16
Incorporation of Certain Documents by Reference............................ 16
Legal Matters.............................................................. 17
Experts.................................................................... 17
Indemnification of Directors and Officers.................................. 17
6
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No person is authorized to give any information or to make any
representation, other than those contained in this Prospectus, in connection
with the offering described herein, and, if given or made, such information or
representations must not be relied upon as having been authorized by the Company
or the Selling Stockholders. This Prospectus does not constitute an offer to
sell, or a solicitation of an offer to buy, nor shall there be any sale of these
securities by any person in any jurisdiction in which it is unlawful for such
person to make such offer, solicitation or sale. Neither the delivery of this
Prospectus nor any sale made hereunder shall under any circumstances create an
implication that the information contained herein is correct as of any time
subsequent to the date hereof.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and in accordance therewith, files
reports, proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements and other
information can be inspected and copied at the Commission at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
Commission's regional offices at Room 1204, Everett McKinley Dirksen Building,
219 South Dearborn Street, Chicago, Illinois 60604; and 7 World Trade Center,
Suite 1300, New York, New York 10048. Copies of such material can also be
obtained at prescribed rates from the Public Reference Section of the Commission
at its principal office at 450 Fifth Street, N.W., Washington, D.C. 20549.
This Prospectus does not contain all of the information set forth in the
Registration Statements of which this Prospectus is a part and which the Company
has filed with the Commission. For further information with respect to the
Company and the securities offered hereby, reference is made to the Registration
Statement, including the exhibits filed as a part thereof, copies of which can
be inspected at, or obtained at prescribed rates from the Public Reference
Section of the Commission at the address set forth above. Additional updating
information with respect to the Company may be provided in the future by means
of appendices or supplements to the Prospectus.
The Company hereby undertakes to provide without charge to each person to
whom a copy of this Prospectus is delivered, upon written or oral request of
such person, a copy of any and all of the information that has been or may be
incorporated herein by reference (other than exhibits to such documents unless
such exhibits are specifically incorporated by reference into such documents).
Requests should be directed to ATEC Group Inc., 90 Adams Avenue, Hauppauge, New
York 11788 (516) 231-2832.
7
<PAGE>
THE COMPANY
ATEC Group, Inc. (the "Company" or "ATEC"), is a leading system integrator
and provider of a full line of computer and information technology products and
services to business, professionals, government agencies and educational
institutions. The Company has experienced rapid growth over the past few years.
The Company focuses on core competencies including system design, high speed
data transmission, LAN/WAN, video conferencing and Internet/Intranet technology.
Some projects currently under review are Year 2000 Modifications and ATM
Re-Engineering of Fiber-Optic Backbone Networks.
ATEC offers a full spectrum of services and support which, it believes is
of critical importance in the current market environment to the Company's
customers. The integration of networks, multimedia, video conferencing, high
volume storage information and communication systems, has, in the Company's
opinion, necessitated technical support and continued client relations after the
initial purchase. In today's market, ATEC believes that most consumers and
business users do not possess the time to investigate and locate the various
computer components necessary to establish an integrated computer system. The
Company therefore strives to service all of its clients' technology needs in a
cost effective manner.
ATEC's marketing strategy is to educate business clients as to the
Company's ability to provide a "one-stop solution" to all computer needs from
the initial purchase and installation processes through required service and
maintenance and future expansion requirements. The Company's subsidiaries are
authorized sales and service dealers for all major manufacturers. The company
sells to its customers an extensive selection of computer products at a
competitive combination of price and service. The Company offers over 10,000
computer products from over 500 manufactures including IBM, Compaq, Hewlett
Packard, Apple, DEC, Hughes Networks, Microsoft, Novell, Oracle, Sybase, Toshiba
and many more.
The Company's corporate headquarters are located at 90 Adams Avenue,
Hauppauge, New York 11788. The Company's telephone number is (516) 231-2832.
8
<PAGE>
RISK FACTORS
The securities offered hereby are speculative and involve a high degree of
risk, including, but not necessarily limited to, the risk factors described
below. Prospective investors must carefully consider, among other things, the
following factors in evaluating an investment in the Company's securities.
1. Microcomputer Industry Conditions. The microcomputer industry has been
characterized by intense price cutting among the major hardware and software
vendors which could materially adversely affect the Company's future operating
results. Given the Company's limited financial resources, its anticipated
expenses and the highly competitive environment in which the Company operates,
there can be no assurance that the Company's current rate of revenue growth will
continue in the future or that the Company's future operations will remain
profitable. The Company's future results of operations are dependent upon
continued demand for microcomputer products. This industry experienced rapid
growth until 1988 and thereafter has grown at a substantially slower rate.
Distributors in the microcomputer industry currently face a number of adverse
business conditions, including price and gross profit margin pressures and
market consolidation. During the past six years all major hardware vendors have
instituted extremely aggressive price reductions in response to lower component
costs and discount pricing by certain microcomputer manufacturers. The increased
price competition among major hardware vendors had resulted in declining gross
margins for many microcomputer distributors and may result in a reduction in
existing vendor subsidies. Management of the Company believes, however, that
these current conditions, which are forcing certain of the Company's direct
competitors out of business, may present the Company with opportunities to
expand its business. There can be no assurance that the Company will be able to
continue to compete effectively in this industry given the intense price
reductions and competition currently existing in the microcomputer industry.
2. Competition. The microcomputer market is highly competitive. The
Company is in direct competition with local, regional and national distributors
of microcomputer products and related services. Several of these competitors
offer most of the same basic products as the Company. In addition, the tri-state
Metropolitan New York area, to which the Company markets its products and
services, is particularly characterized by highly discounted pricing on
microcomputer products from various sources of competition. The Company faces
competition from microcomputer vendors that sell their products through direct
sales forces and from manufacturers and distributors that emphasize mail order
and telemarketing. The Company has an insignificant market share of sales in the
microcomputer industry and the service markets which the Company serves. Certain
of the Company's competitors on the regional and national level are
substantially larger, have more personnel and have materially greater financial
and marketing resources than the Company and operate within a larger geographic
area than does the Company. Accordingly, there can be no assurance the Company
will be able to continue to compete effectively in the marketplace.
9
<PAGE>
3. Dependence on Suppliers. The Company is an authorized dealer for
microcomputers and related products of more than twenty five manufacturers. The
Company's authorized dealer agreements with suppliers are typically subject to
periodic renewal and to termination on short notice or immediately upon the
occurrence of certain events. The dealer agreements also provide for periodic
audits by the supplier. A supplier could also terminate an authorized dealer
agreement for reasons unrelated to the Company's performance. In addition, the
Company competes with other suppliers to obtain products on the most favorable
contract terms, which are often available only to companies substantially larger
than the Company. The loss of a major supplier or the deterioration of the
Company's relationship with those major suppliers whose products are in demand,
or a change in current terms of its dealer agreements could have a material
adverse effect on the Company's business.
4. Proposed Expansion. The Company intends to continue to seek to expand
its current level of operations through acquisitions. While the Company has
grown during the last several years, there can be no assurance that the Company
will be able to further expand its operations successfully. Expansion of the
Company's operations will depend on, among other things, the continued growth of
the microcomputer industry, the Company's ability to withstand intense price
competition, its ability to obtain new clients, retain skilled technicians,
engineers, sales and other personnel in order to expand its technical and
marketing capabilities, secure adequate sources of products which are then in
demand on commercially reasonable terms, successfully manage growth (including
monitoring an expanded level of operations and controlling costs) and the
availability of adequate financing.
The Company seeks to expand its operations through potential acquisitions.
The Company previously reviewed various potential acquisitions and believes
there are numerous opportunities presently available. In June 1996, the Company
acquired Innovative Business Micros, Inc. ("Innovative"). There can be no
assurance that the Company will be able to effect any other acquisitions or
that, if the Company is able to effect any acquisitions, it will be able to
successfully integrate into its operations any acquired business and expand the
Company's operations. Moreover, the Innovative acquisition is a related party
transaction which was not negotiated on an arms-length basis. There can be no
assurance that the consideration paid by the Company for Innovative would not
have been at a more beneficial rate had the Company and Innovative not been
affiliated parties. The Company may use authorized but unissued Common Shares to
purchase businesses or assets of companies. In the event that the Company makes
an acquisition through a leveraged transaction, of which it has no present
intention, there can be no assurance that the Company will have sufficient
income to satisfy the interest payments. If the Company enters into a leveraged
transaction and does not have sufficient income to meet interest payments they
would have to be paid from proceeds of this offering.
5. Technological Change. The microcomputer products market is
characterized by rapid technological change and frequent introduction of new
products and product enhancements. The Company's ability to compete successfully
depends, in large part, on its ability to obtain products when needed and on
favorable terms from those suppliers and vendors which are able to adapt to
technological changes and advances in the microcomputer
10
<PAGE>
industry. The Company has access to state-of-the-art technical databases which
provide it with information concerning technological advances from major vendors
as soon as it is published. While this allows the Company the flexibility to
shift rapidly from one vendor to another, there can be no assurance that the
Company's current vendors and suppliers will be able to achieve the
technological advances necessary to remain competitive or that the Company will
be able to obtain authorizations from new vendors or for new products that gain
market acceptance. There can be no assurance that the Company will be able to
continue to keep pace with the technological demands of the marketplace to
successfully enhance its outsourced support services to be compatible with new
microcomputer products.
6. Dependence on Certain Vendors. The Company does not have any customers
which account for more than 5% of its sales revenues. However, for Fiscal 1997,
approximately 28% of the Company's purchases were from one vendor, Computerland,
Inc. The loss of a major vendor could be expected to have a material adverse
effect on the Company's operations during the short-term until the Company was
able to generate replacement sources, although there can be no assurance of
obtaining such sources.
7. Possible Need for Additional Financing. Depending upon the Company's
then current level of sales, the Company may require additional funds in order
to expand its activities. The Company anticipates, based on currently proposed
plans and assumptions relating to this operation, that projected cash flow from
operations and currently available financing arrangements, will be sufficient to
satisfy its contemplated cash requirements for at least the next 12 months. In
the event that the Company's plans change or its assumptions change or prove to
be inaccurate, or if the projected cash flow proves to be insufficient to fund
operations (due to unanticipated expenses, possible acquisitions, technical
problems or difficulties or otherwise), the Company may find it necessary or
advisable to seek additional funding and/or to reallocate some of the proceeds
or to use portions thereof for other purposes. There can be no assurance that
additional financing, whether debt or equity, will be available to the Company
on commercially reasonable terms, or at all.
Even if additional financing were available, the Company may not be able
to obtain any additional financing, since all of the Company's assets are
pledged to secure the outstanding bank indebtedness inventory financing and a
credit line, respectively. Any inability to obtain additional financing could
have a material adverse effect on the Company, including possibly requiring the
Company to significantly curtail its planned expansion.
8. Marketing Capability. Substantially all of the Company's marketing
activities are being conducted by its officers, directors and limited number of
salespersons. Management will continue to devote a substantial amount of time
developing and maintaining continuing personal relationships with the Company's
customers. The Company's growth prospects, however, will be largely dependent
upon the Company's ability to achieve greater penetration of the Microcomputer
industry. Achieving market penetration will require the Company to be able to
attract skilled marketing personnel.
11
<PAGE>
9. Lack of Patents and Proprietary Protection. The Company holds no
patents and has no trademarks or copyrights registered in the United States
Patent and Trademark Office or in any state. While such protection may become
important to the Company, it is not considered essential to the success of its
business. The Company relies on the know-how, experience and capabilities of its
management personnel. Without trademark and copyright protection, however, the
Company has no protection from other parties attempting to offer similar
services. The Company has access to state-of-the-art technical databases of
various leading vendors, which enables it to learn of technical breakthroughs as
soon as they are published; however, the Company has no proprietary right to
these databases.
10. Control by Current Management. The Company's officers and directors
currently possess voting rights representing approximately 34% of the Company's
outstanding voting securities. Accordingly, the Company's current management is
able to exercise substantial control over the Company including influencing the
election of the Company's directors, and generally directing the affairs of the
Company.
11. Dependence on Key Personnel. The success of the Company is largely
dependent on the personal efforts of Surinder Rametra and Ashok Rametra.
Although the Company has entered into employment agreements with Messrs. Rametra
and Rametra, the loss of their services could have a material adverse effect on
the Company's business and prospects. The Company does not maintain "key man"
life insurance on the lives of Messrs. Rametra and Rametra. The success of the
Company is also dependent upon its ability to hire and retain additional
qualified engineering, technical and marketing personnel. There can be no
assurance that the Company will be able to hire or retain such necessary
personnel in the future.
12. No Dividends. The Company has not paid any cash dividends on its
Common Shares and does not expect to declare or pay any cash or other dividends
in the foreseeable future.
13. Possible Volatility of Common Share Price. The market price for the
Company's securities has been and may at times continue to be highly volatile.
Factors such as the Company's financial results, introduction of new products in
the marketplace, status of compliance with certain regulations governing the
sale of its products and various factors affecting the computer industry
generally may have a significant impact on the market price of the Company's
securities. Additionally, in the last several years, the stock market has
experienced a high level of price and volume volatility and market prices for
many companies, particularly small and emerging growth companies, the common
stock of which trades in the over-the-counter-market, have experienced wide
price fluctuations which have not necessarily been related to the operating
performance of such companies.
14. Future Sales of Common Shares Under Rule 144 or Otherwise. Of the
approximately 5,821,462 shares of Common Stock issued and outstanding as of the
date of this Prospectus a significant number of such shares are "restricted
securities" as that term is defined under Rule 144 promulgated under the
Securities Act of 1933, as amended (the "Securities
12
<PAGE>
Act"). However, all restricted shares are currently eligible for sale under Rule
144. In general, under Rule 144, a person (or persons whose shares are
aggregate) who has satisfied a one-year holding period may sell "restricted
securities" within any three-month period limited to a number of shares which
does not exceed the greater of one percent of the then outstanding shares or the
average weekly trading volume during the four calendar weeks prior to such sale.
Rule 144 also permits the sale (without any quantity limitation) of "restricted
securities" by a person who is not an affiliate of the issuer and who has
satisfied a two-year holding period. The Company cannot predict the effect that
sales made under Rule 144, sales made pursuant to other exemptions under the
securities laws or under registration statements may have on any then prevailing
market price. Nevertheless, the possibility exists that the sale of any of these
shares may have a depressive effect on the price of the Company's securities in
any public trading market. See "Shares Eligible for Future Sale" and "Principal
Shareholders."
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SELLING STOCKHOLDERS
The Prospectus covers Option Shares and Restricted Shares that have been
or may be acquired upon exercise of options held by the Selling Stockholders,
named herein or to be supplementally named, as of January 13, 1998.
The following table sets forth the name of each Selling Stockholder, the
nature of his or her position, office, or other material relationship with the
Company, the number of shares (as adjusted to give effect to the Company's 1997
one for five reverse stock split) of Common Stock beneficially owned by each
Selling Stockholder prior to the offering, and the number of shares and (if one
percent or more) the percentage of the class to be beneficially owned by such
Selling Stockholder after the offering. Non-affiliate Selling Stockholders who
hold less than 1,000 shares of Common Stock issued under the Plans and not named
below may use this Prospectus for reoffers and resales of such Common Stock.
<TABLE>
<CAPTION>
Shares owned
After Offering
--------------
Shares Owned Number of Shares Percentage of
Name Prior to Offering(1) Offered Herein(2) Number Outstanding Shares(3)
- ---- -------------------- ----------------- ------ ---------------------
<S> <C> <C> <C> <C>
Balwinder Singh Bathla, Pres. 524,904 124,000 400,904 6.9%
Arvinder Gulati 205,861 28,000 177,861 3.1%
Patrick Hagerty 126,952 18,000 108,952 1.9%
Kenneth Bohacs 7,767 4,000 3,767 **
Pritam Singh Arora 18,255 2,300 14,255 **
Ranbir Singh 506 400 106 **
Paramjit Singh 41,088 1,000 40,088 **
Somkiran Singh Sodhi 14,295 1,750 13,895 **
Jagjit Singh 400 400 0
Angela Abrahams 712 500 212 **
Avnit Nanda 1,322 600 722 **
Arya Ranasinge 1,266 800 466 **
Avtar Singh Chera 400 400 0
Greg Deshields 542 500 42 **
Indu Singh 200 200 0
Ranjit Paniker 3,547 1,800 1,747 **
Prashath Vemuganti 3,088 1,500 1,588 **
Vijay Gupta 692 650 42 **
Zeyad Shahidy 400 400 0
Kuljit Singh Ahlauwalia 200 200 0
Nurpinder Bathla 4,686 2,560 2,162 **
Laurence Beaudoin 549 549 0
Steve Bolton 549 549 0
Scott Brown 549 549 0
Michael Chase 274 274 0
Wendy Gavert 549 549 0
Hira L. Gupta 823 823 0
Jaswant Mehta 549 549 0
Sumeet Murarka 713 713 0
Pamela Murarka 329 329 0
Avtar S. Chera 278 278 0
</TABLE>
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<TABLE>
<CAPTION>
Shares owned
After Offering
--------------
Shares Owned Number of Shares Percentage of
Name Prior to Offering(1) Offered Herein(2) Number Outstanding Shares(3)
- ---- -------------------- ----------------- ------ ---------------------
<S> <C> <C> <C> <C>
Avnit Nanda 1,139 417 722 **
Jagjit Singh 417 417 0
Ranbir Singh 523 417 106 **
Indu Singh 208 208 0
Satinder S. Talwar 1,390 1,390 0
Pritam S. Arora 16,339 2,084 14,255 **
Shoba Lakshmanan 2,995 2,084 911 **
Prashanth Vemuganti 2,978 1,390 1,588 **
Somkiran S. Sodhi 15,007 1,112 13,895 **
Ranjit Paniker 2,720 973 1,747 **
Vijay Gupta 1,015 973 42 **
Nurpinder Bathla 40,556 556 40,000 **
Arya Ranasinge 952 486 466 **
Greg Deshields 459 417 42 **
Alan Kaufman 278 278 0
Henry Cipriani 278 278 0
Ken Bohacs 4,767 1,000 3,767 **
Brent Sanders 1,000 1,000 0
Ramesh Mahajan 300 300 0
Alan Prefer 3,139 3,139 0
Sam Ruggeri 5,068 1,868 3,200 **
Traci Gillow 1,654 1,554 100 **
Rahul Rametra 25,339 1,001 24,338 **
Rhonda Garelli 279 239 40 **
Fred Wenze 583 523 60 **
Annie Ciavolella 1,620 1,420 200 **
Surjit Bhullar 1,057 957 100 **
Arlene Sander 264 224 40 **
Bir Singh 369 329 40 **
Gale Donofrio 404 344 60 **
Loiuse Geary 907 807 100 **
Vijay Rametra 88,243 2,391 85,852 1.5%
Surinder Rametra, Chairman 436,989 10,000 426,989 7.3%
Ashok Rametra, Vice President 290,076 10,000 280,076 4.8%
James Charles 20,000 10,000 10,000 **
Seema Wasil 96,129 10,000 86,129 1.5%
Rajnish Rametra 138,457 26,000 112,457 1.9%
</TABLE>
- ----------------------
** less than 1%
(1) For purposes of this table, a person is deemed to have "beneficial
ownership" of any shares of Common Stock when such person has the right to
acquire within 60 days of the date of this Prospectus. For purposes of
computing the percentage of outstanding shares of Common Stock held by
each person named above, any security which such person has the right to
acquire within such date is deemed to be outstanding but is not deemed to
be outstanding for the purpose of computing the percentage ownership of
any other person. Except as indicated in the footnotes to this table and
pursuant to applicable community property laws, the Company believes based
on information supplied by such persons, that the persons named in this
table have sole voting and investment power with respect to all shares of
Common Stock which they beneficially own.
(2) Issued pursuant to the 1997 Plan.
(3) Based on a total of 5,821,462 sharse of Common Stock outstanding.
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TRANSFER AGENT AND REGISTRAR
The Transfer Agent and Registrar for the Common Stock of the Company is
North American Transfer Co., 147 W. Merrick Road, Freeport, New York 11520.
PLAN OF DISTRIBUTION
The Selling Stockholders may sell shares of Common Stock in any of the
following ways (i) through dealers; (ii) through agents; or (iii) directly to
one or more purchasers in private transactions. The distribution of the shares
of Common Stock may be effected from time to time in one or more transactions
(which may involve crosses or block transactions) (A) on Nasdaq in transactions
which may include special offerings, exchange distributions and/or secondary
distributions pursuant to and in accordance with rules of such exchanges, (B) in
the over-the-counter market, or (C) in private transactions other than on such
exchanges or in the over-the-counter market, or a combination of such
transactions. Any such transaction may be effected at market prices prevailing
at the time of sale, at prices related to such prevailing market prices, at
negotiated prices or fixed prices. The Selling Stockholders may effect such
transactions by selling shares of Common Stock to or through broker-dealers, and
such broker-dealers may receive compensation in the form of discounts,
concessions, or commissions from Selling Stockholders and/or commissions from
purchasers of shares of Common Stock for whom they may act as agent. The Selling
Stockholders and any broker-dealers or agents that participate in the
distribution of shares of Common Stock by them might be deemed to be
underwriters, and any discounts, commissions or concessions received by any such
broker-dealers or agents might be deemed to be underwriting discounts and
commissions, under the Securities Act.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The documents listed below have been filed by the Company with the
Commission and are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K/A1 for its fiscal year ended
June 30, 1997;
(b) The Company's Quarterly Report on Form 10-Q for the quarterly period
ended December 31, 1997;
(c) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form S-1, Registration No. 333-2070 and on
Form SB-2, Registration No. 33-54356;
(d) All other reports filed by the Company pursuant to Section 13(a) and
15(d) of the Exchange Act since the Company's fiscal year ended June 30, 1997.
16
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All documents filed by the Company with the Commission pursuant to
sections 13, 14 or 15(d) of the Exchange Act subsequent hereto, but prior to the
termination of the offering of securities made by this Prospectus shall be
deemed to be incorporated by reference herein and to be part hereof from their
respective dates of filing.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus, to
the extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
LEGAL MATTERS
The legality of the shares offered hereby has been passed upon for the
Company by Silverman, Collura, Chernis & Balzano, P.C., 381 Park Avenue South,
Suite 1601, New York, New York 10016.
EXPERTS
The Company's consolidated financial statements incorporated by reference
in this Registration Statement, have been incorporated herein in reliance on the
reports of Weinick, Sanders Leventhal & Company, LLP, independent accountants,
given upon the authority of such firm as experts in accounting and auditing.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of the State of Delaware and
Article 7 of the Company's Articles of Incorporation contain provisions for
indemnification of officers, directors, employees and agents of the Company. The
Articles of Incorporation require the Company to indemnify such persons to the
full extent permitted by Delaware law. Each person will be indemnified in any
proceeding if he acted in good faith and in a manner which he reasonably
believed to be in, or not opposed to, the best interest of the Company.
Indemnification would cover expenses, including attorney's fees, judgments,
fines and amounts paid in settlement.
The Company's Articles of Incorporation also provided that the Company's
Board of Directors may cause the Company to purchase and maintain insurance on
behalf of any present or past director or officer insuring against any liability
asserted against such person incurred in the capacity of director or officer or
arising out of such status, whether or not the Company would have the power to
indemnify such person. The Company has acquired directors' and officers'
liability insurance.
17
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Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers, and controlling persons of the
Company, the Company has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expense
incurred or paid by a director, officer, or controlling person of the Company in
the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person of the Company in connection with the
securities being registered, the Company will, unless in the opinion of its
counsel the matter has been settled by a controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issues.
18
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PART II
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed with the Securities and Exchange Commission
(the "Commission") by ATEC Group, Inc., a Delaware corporation (the "Company")
are incorporated as to their respective dates in this Registration Statement by
reference:
(a) The Company's Annual Report on Form 10-K/A1 for its fiscal year ended
June 30, 1997;
(b) The Company's Quarterly Report on Form 10-Q for the quarterly period
ended December 31, 1997.
(c) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form S-1, Registration No. 333-2070 and on
Form SB-2, Registration No. 33-54356.
(d) All other reports filed by the Company pursuant to Section 13(a) and
15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") since the
Company's fiscal year ended June 30, 1997.
All documents filed by the Company with the Commission pursuant to
sections 13, 14 or 15(d) of the Exchange Act subsequent hereto, but prior to the
termination of the offering of securities made by this Registration Statement
shall be deemed to be incorporated by reference herein and to be part hereof
from their respective dates of filing.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Registration
Statement, to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES
Not Applicable.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL
The legality of the shares offered hereby has been passed upon for the
Company by Silverman, Collura, Chernis & Balzano, P.C., 381 Park Avenue South,
New York, New York 10016.
19
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ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of the State of Delaware and
Article 7 of the Company's Articles of Incorporation contain provisions for
indemnification of officers, directors, employees and agents of the Company. The
Articles of Incorporation require the Company to indemnify such persons to the
full extent permitted by Delaware law. Each person will be indemnified in any
proceeding if he acted in good faith and in a manner which he reasonably
believed to be in, or not opposed to, the best interest of the Company.
Indemnification would cover expenses, including attorney's fees, judgments,
fines and amounts paid in settlement.
The Company's Articles of Incorporation also provided that the Company's
Board of Directors may cause the Company to purchase and maintain insurance on
behalf of any present or past director or officer insuring against any liability
asserted against such person incurred in the capacity of director or officer or
arising out of such status, whether or not the Company would have the power to
indemnify such person. The Company has acquired directors' and officers'
liability insurance.
Insofar as indemnification for liabilities arising under the Securities
Act, as amended (the "Securities Act") may be permitted to directors, officers,
and controlling persons of the Company, the Company has been advised that in the
opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Company of expense incurred or paid by a director, officer, or
controlling person of the Company in the successful defense of any action, suit
or proceeding) is asserted by such director, officer or controlling person of
the Company in connection with the securities being registered, the Company
will, unless in the opinion of its counsel the matter has been settled by a
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issues.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8 EXHIBITS
4.1 1997 Employee Stock Option Plan
5.1 Opinion of Silverman, Collura, Chernis & Balzano, P.C.
23.1 Consent of Silverman, Collura, Chernis & Balzano, P.C. to be named
in the Registration Statement. Reference is made to Exhibit 5.1 to
this Registration Statement which includes such consent.
23.2 Consent of Weinick Sanders Leventhal & Co., LLP.
20
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ITEM 9. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes;
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to the Registration Statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in the Registration Statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration
Statement or any material change of such information in the
Registration Statement;
Provided however that paragraphs (a)(1)(i) and (a)(1)(ii) shall not apply
to information contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof
(3) To remove from registration by means of a post effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Exchange Act that is incorporated by reference in this Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered herein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions or otherwise, the registrant has
been advised that in the opinion of the Commission, such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification is against public policy
as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
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SIGNATURES
Pursuant to the requirement of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, therewith duly
authorized, in Hauppauge, New York on February 23, 1998.
ATEC GROUP INC.
By: /s/ Surinder Rametra
--------------------------------------------
Surinder Rametra, Chairman and CEO
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS,that each person whose signature appears
below, hereby constitutes and appoints Surinder Rametra, his true and lawful
attorney-in-fact, with full power of substitution and resubstitution, for his
and in his name, place and stead, in any and all capacities, to sign any or all
amendments or supplements to this Registration Statement and to file the same
with all exhibits thereto and other documents in connection therewith, with the
Commission, granting unto said attorney-in-fact full power and authority to do
and perform each and every act and thing necessary or appropriate to be done
with respect to this Registration Statement or any amendments or supplements
hereto and about the premises, as fully to all intents and purposes as he might
or could do in person, hereby ratifying and confirming all that said
attorney-in-fact, or his substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in their respective
capacities with ATEC Group, Inc. and on the dates indicated.
SIGNATURES
Signature Title Date
/s/ Surinder Rametra Chairman of the Board February 23, 1998
- ------------------------- of Directors and CEO
Surinder Rametra (Principal Executive Officer)
/s/ Ashok Rametra Chief Financial Officer February 23, 1998
- ------------------------- (Principal Financial
Ashok Rametra and Accounting Officer)
/s/ Balwinder Singh President and Director February 23, 1998
- -------------------------
Balwinder Singh
/s/ George Eagan Director February 23, 1998
- -------------------------
George Eagan
Director February __, 1998
_________________________
David Reback
22
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INDEX TO EXHIBITS
4.1 1997 Employee Stock Option Plan
5.1 Opinion of Silverman, Collura, Chernis & Balzano, P.C.
23.1 Consent of Silverman, Collura, Chernis & Balzano, P.C. (included in
Exhibit 5.1)
23.2 Consent of Weinick Sanders Leventhal & Co., LLP
23
EMPLOYEE STOCK OPTION PLAN
ATEC GROUP, INC.
1997 STOCK OPTION PLAN
1. Purpose
The purpose of the 1997 Stock Option Plan ("Plan") is to provide a method
whereby selected key employees, selected key consultants, professionals and non
employee directors of ATEC Group, Inc. (the "Corporation") and its subsidiaries
may have the opportunity to invest in shares of the Corporation's Common Stock
("Common Stock" or "Shares"), thereby giving them a proprietary and vested
interest in the growth and performance of the Corporation, and in general,
generating an increased incentive to contribute to the Corporation's future
success and prosperity, thus enhancing the value of the Corporation for the
benefit of shareholders. Further, the Plan is designed to enhance the
Corporation's ability to attract and retain individuals of exceptional
managerial talent upon whom, in large measure, the sustained progress, growth,
and profitability of the Corporation depends.
2. Administration
The Plan shall be administered by the Corporation's Board of Directors
("the Board") or if so designated by resolution of the Board by a Committee
composed of not less than two individuals ("Committee"). From time to time the
Board, or if so designated the Committee, may grant stock options ("Stock
Options" or "Options") to such eligible parties and for such number of Shares as
it in its sole discretion may determine. A grant in any year to an eligible
Employee (as defined in Section 3 below) shall neither guarantee nor preclude a
grant to such Employee in subsequent years. Subject to the provisions of the
Plan, the Board, shall be authorized to interpret the Plan, to establish, amend
and rescind any rules and regulations relating to the Plan, to determine the
terms and provisions of the Option agreements described in Section 5(h) thereof
to make all other determinations necessary or advisable for the administration
of the Plan. The Board, or if so designated the Committee, may correct any
defect, supply any omissions or reconcile any inconsistency in the Plan or in
any Option in the manner and to the extent it shall deem desirable. The
determinations of the Board in the administration of the Plan, as described
herein, shall be final and conclusive. The validity, construction, and effect of
Plan and any rules and regulations relating to the Plan shall be determined in
accordance with the laws of the State of Delaware.
3. Eligibility
The class of employees eligible to participate under the Plan shall
include, employees of the Corporation, key consultants or professionals and
non-employee directors of the Company and its subsidiaries (collectively and
individually, "Employees"). Nothing in the Plan or in any agreement thereunder
shall confer any right on an Employee or key vendor of goods and services to
continue in the employ of the Corporation or shall interfere in any way with the
right
<PAGE>
of the Corporation or its subsidiaries, as the case may be, to terminate his
employment at any time.
4. Shares Subject to the Plan
Subject to adjustment as provided in Section 7, an aggregate of 6,000,000
shares of Common Stock shall be available for issuance under the Plan. The
shares of Common Stock deliverable upon the exercise of Options may be made
available from authorized but unissued Shares or Shares reacquired by the
Corporation, including Shares purchased in the open market or in private
transactions. If any Option granted under the Plan shall terminate for any
reason without having been exercised or settled in Common Stock or in cash
pursuant to related Common Stock appreciation rights, the Shares subject to, but
not delivered under, such Option shall be available for other Options.
5. Grant Term and Conditions of Options
The Board or if so designated the Committee, may from time to time after
consultation with management select employees to whom Stock Options shall be
granted. The Options granted may be incentive Stock Options ("Incentive Stock
Options") within the meaning of Section 422 of the Internal Revenue Code, as
amended (the "Code"), or non-statutory Stock Options ("Non-statutory Stock
Options"), whichever the Board, or if so designated the Committee, shall
determine, subject to the following terms and conditions:
(a) Price. The purchase price per share of Common Stock deliverable upon
exercise of each Incentive Stock Option shall not be less than 100 percent
of the Fair Market Value of the Common Stock on the date such Option is
granted. Provided, however, that if an Incentive Stock Option is issued to
an individual who owns, at the time of grant, more than ten percent (10%)
of the total combined voting power of all classes of the Company's Common
Stock, the exercise price of such Option shall be at least 110% of the
Fair Market Value of the Common Stock on the date of grant and the term of
the Option shall not exceed five years from the date of grant. The Option
price of Shares subject to Non-statutory Stock Options shall be determined
by the Board of Directors or Committee in its absolute discretion at the
time of grant of such Option, provided that such price shall not be less
than 85% of the Fair Market Value of the Common Stock at the time of
grant. For purposes of this plan, Fair Market Value shall be: (i) the
average of the closing Bid and Ask prices for the Common Stock on the date
in question.
(b) Payment. Options may be exercised only upon payment of the purchase
price thereof in full. Such payment shall be made in such form of
consideration as the Board or Committee determines and may vary for each
Option. Payment may consist of cash, check, notes, delivery of shares of
Common Stock having a fair market value on the date of surrender equal to
the aggregate exercise price, or any combination of such methods or other
means of payment permitted under the Delaware General Corp. Law.
2
<PAGE>
(c) Term of Options. The term during which each Option may be exercised
shall be determined by the Board, or if so designated the Committee,
provided that an Incentive Stock Option shall not be exercisable in whole
or in part more than 10 years from the date it is granted. All rights to
purchase Common Stock pursuant to an Option shall, unless sooner
terminated, expire at the date designated by the Board or, if so
designated the Committee.
The Board, or if so designated the Committee, shall determine the date on
which each Option shall become exercisable and may provide that an Option
shall become exercisable in installments. The Shares comprising each
installment may be purchased in whole or in part at any time after such
installment becomes purchasable, except that the exercise of Incentive
Stock Options shall be further restricted as set forth herein. The Board,
or if so designated the Committee, may in its sole discretion, accelerate
the time at which any Option may be exercised in whole or in part,
provided that no Option shall be exercisable until one year after grant.
(d) Limitations on Grants. The aggregate Fair Market Value (determined at
the time the Option is granted) of the Common Stock with respect to which
the Incentive Stock Option is exercisable for the first time by an
Optionee during any calendar year (under all plans of the Company and its
parent or any subsidiary of the Corporation) shall not exceed $100,000.
The foregoing limitation shall be modified from time to time to reflect
any changes in Section 422 of the Code and any regulations promulgated
thereunder setting forth such limitations.
(e) Termination of Employment.
(i) If the employment of an Employee by the Company or a subsidiary
corporation of the Company shall be terminated voluntarily by the Employee
or for cause by the Company, then his Option shall expire forthwith.
Except as provided in subparagraphs (ii) and (iii) of this Paragraph (e),
if such employment shall terminate for any other reason, then such Option
may be exercised at any time within three (3) months after such
termination, subject to the provisions of subparagraph (iv) of this
Paragraph (e). For purposes of this subparagraph, an employee who leaves
the employ of the Company to become an employee of a subsidiary
corporation of the Company or a corporation (or subsidiary or parent
corporation of the corporation) which has assumed the Option of the
Company as a result of a corporate reorganization, etc., shall not be
considered to have terminated his employment.
(ii) If the holder of an Option under the Plan dies (a) while
employed by, or while serving as a non-employee Director for, the Company
or a subsidiary corporation of the Company, or (b) within three (3) months
after the termination of his employment or services other than voluntarily
by the employee or non-employee Director, or for cause, then such Option
may, subject to the provisions of subparagraph (iv) of this Paragraph (e),
be exercised by the estate of the employee or non-employee Director or by
a person
3
<PAGE>
who acquired the right to exercise such Option by bequest or inheritance
or by reason of the death of such employee or non-employee Director at any
time within one (1) year after such death.
(iii) If the holder of Option under the Plan ceases employment
because of permanent or total disability (within the meaning of Section 22
(e) (3) of the Code) while employed by the Company or a subsidiary
corporation of the Company, then such Option may, subject to the
provisions of subparagraph (iv) of this paragraph e, be exercised at any
time within one year after his termination of employment due to
disability.
(iv) An Option may not be exercised pursuant to this Paragraph (e),
except to the extent that the holder was entitled to exercise the Option
at the time of termination of employment, termination of Directorship, or
death, and in any event may not be exercised after the expiration of the
Option. For purpose of this Paragraph (e), the employment relationship of
an employee of the Company or of a subsidiary corporation of the company
will be treated as continuing intact while he is on military or sick leave
or other bona fide leave of absence (such as temporary employment by the
Government) if such leave does not exceed ninety (90) days, or, if longer,
so long as his right to reemployment is guaranteed either by statute or by
contract.
(f) Nontransferability of Options. No Option shall be transferable by a
Holder otherwise than by will or the laws of descent and distribution, and
during the lifetime of the Employee to whom an Option is granted it may be
exercised only by the employee, his guardian or legal representative if
permitted by Section 422 and related sections of the Code and any
regulations promulgated thereunder.
(g) Listing and Registration. Each Option shall be subject to the
requirement that if at any time the Board, or if so designated the
Committee, shall determine, in its discretion, the listing, registration
or qualification of the Common Stock subject to such Option upon any
securities exchange or under any state or federal law, or the consent or
approval of any governmental regulatory body, is necessary or desirable as
a condition of, or in connection with, the granting of such Option or the
issue or purchase of Shares thereunder, no such Option may be exercised in
whole or in part unless such listing, registration, qualification, consent
or approval shall have been effected or obtained free of any conditions
not acceptable to the Board, or if so designated the Committee.
(h) Option Agreement. Each Employee to whom an Option is granted shall
enter into an agreement with the Corporation which shall contain such
provisions, consistent with the provisions of the Plan, as may be
established by the Board, or if so designated the Committee.
(i) Withholding. Prior to the delivery of certificates for shares of
Common Stock, the Corporation or a subsidiary shall have the right to
require a payment from an Employee to cover any applicable withholding or
other employment taxes due upon the
4
<PAGE>
exercise of an Option. An Optionee may make such payment either (i) in
cash, (ii) by authorizing the Company to withhold a portion of the stock
otherwise issuable to the Optionee, (iii) by delivering already-owned
Common Stock, or (iv) by any combination of these means.
6. Stock Appreciation Rights
The Board or Committee may grant stock appreciation rights ("SARs") in
connection with all or any part of an Option granted under the Plan, either
concurrently with the grant of the Option or at any time thereafter, and may
also grant SARs independently of Options.
(a) SARs Granted in Connection with an Option. An SAR granted in
connection with an Option entitles the Optionee to exercise the SAR by
surrendering to the Company, unexercised, the underlying Option. The Optionee
receives in exchange from the Company an amount equal to the excess of (x) the
Fair Market Value on the date of surrender of the underlying Option (y) the
exercise price of the Common Stock covered by the surrendered portion of the
Option.
When an SAR is exercised, the underlying Option, to the extent
surrendered, ceases to be exercisable, and the number of Shares available for
issuance under the Plan is reduced correspondingly.
An SAR is exercisable only when and to the extent the underlying Option is
exercisable and expires no later than the date on which the underlying Option
expires. Notwithstanding the foregoing, neither an SAR nor a related Option may
be exercised during the first six (6) months of its respective term: provided,
however, that this limitation will not apply if the Optionee dies or is disabled
within such six (6) month period.
(b) Independent SARs. The Board or the Committee may grant SARs without
related Options. Such an SAR will entitle the Optionee to receive from the
company on exercise of the SAR an amount equal to the excess of (x) the fair
market value of the Common Stock covered by the exercised portion of the SAR, as
of the date of such exercise, over (y) the fair market value of the Common Stock
covered by the exercised portion of the SAR as of the date on which the SAR was
granted.
SARs shall be exercisable in whole or in part at such times as the Board
or the Committee shall specify in the Optionee's SAR grant or agreement.
Notwithstanding the foregoing, an SAR may not be exercised during the first six
(6) months of its term: provided, however, that this limitation will not apply
if the Optionee dies or is disabled within such six (6) month period.
(c) Payment on Exercise. The Company's obligations arising upon the
exercise of an SAR may be paid in cash or Common Stock, or any combination of
the same, as the Board
5
<PAGE>
or the Committee may determine. Shares issued on the exercise of an SAR are
valued at their fair market value as of the date of exercise.
(d) Limitation on Amount paid on SAR Exercise. The Board or the Committee
may in its discretion impose a limit on the amount to be paid on exercise of an
SAR. In the event such a limit is imposed on an SAR granted in connection with
an Option, the limit will not restrict the exercisability of the underlying
Option.
(e) Persons Subject to 16(b). An Optionee subject to Section 16(b) of the
Securities Exchange Act of 1934, may only exercise an SAR during the period
beginning on the third and ending on the twelfth business day following the
Company's public release of quarterly or annual summary statements of sales and
earnings and in accordance with all other provisions of Section 16(b).
(f) Non-Transferability of SARs. An SAR is non-transferable by the
Optionee other than by will or the laws of descent and distribution, and is
exercisable during the Optionee's lifetime only by the Optionee, or, in the
event of death, by the Optionee's estate or by a person who acquires the right
to exercise the Option by bequest or inheritance.
(g) Effect on Shares in Plan. When an SAR is exercised, the aggregate
number of shares of Common Stock available for issuance under the Plan will be
reduced by the number of underlying shares of Common Stock as to which the SAR
is exercised.
7. Adjustment of and Changes in Common Stock
In the event of a reorganization, recapitalization, stock split, stock
dividend, combination of Shares, merger, consolidation, distribution of assets,
or any other changes in the corporate structure or Shares of the Corporation,
the Board, or if so designated the Committee, shall make such adjustments as it
deems appropriate in the number and kind of Shares and SARs authorized by the
Plan, in the number and kind of Shares covered by the Options granted and in the
exercise price of outstanding Options and SARs.
8. Mergers, Sales and Change of Control
In the case of (i) any merger, consolidation or combination of the
Corporation with or into another corporation (other than a merger, consolidation
or combination in which the Corporation is the continuing corporation and which
does not result in its outstanding Common Stock being converted into or
exchanged for different securities, cash or other property, or any combination
thereof) or a sale of all or substantially all of the business or assets of the
Corporation or (ii) a Change in Control (as defined below) of the Corporation,
each Option or SAR then outstanding for one year or more shall (unless the
Board, or if so designated the Committee, determines otherwise), receive upon
exercise of such Option or SAR an amount equal to the excess of the Fair Market
Value on the date of such exercise of (a) the securities, cash or other
property, or combination thereof, receivable upon such merger, consolidation or
6
<PAGE>
combination in respect of a share of Common Stock, in the cases covered by
clause (i) above, or (b) the final tender offer price in the case of a tender
offer resulting in a Change in Control or (c) the value of the Common Stock
covered by the Option or SAR as determined by the Board, or if so designated the
Committee, in the case of a Change in Control by reason of any other event, over
the exercise price of such Option, multiplied by the number of shares of Common
Stock with respect to which such Option or SAR shall have been exercised
provided that in each event the amount payable in the case of an Incentive Stock
Option shall be limited to the maximum permissible amount necessary to preserve
the Incentive Stock Option status. Such amount may be payable fully in cash,
fully in one or more of the kind or kinds or property payable in such merger,
consolidation or combination, or partly in cash and partly in one or more such
kind or kinds of property, all in the discretion of the Board or if so
designated the Committee.
Any determination by the Board, or if so designated the Committee, made
pursuant to this Section 8 may be made as to all outstanding Options and SARs or
only as to certain Options and SARs specified by the Board, or if so designated
the Committee and any such determination shall be made (a) in cases covered by
clause (i) above, prior to the occurrence of such event, (b) in the event of a
tender or exchange offer, prior to the purchase of any Common Stock pursuant
thereto by the offeror and (c) in the case of a Change in Control by reason of
any other event, just prior to or as soon as practicable after such Change in
Control.
A "Change in Control" shall be deemed to have occurred if (a) any person,
or any two or more persons acting as a group, and all affiliates of such person
or persons, shall own beneficially 25% or more of the Common Stock outstanding,
or (b) if following (i) a tender or exchange offer for voting securities of the
Corporation, or (ii) a proxy contest for the election of directors of the
Corporation, the persons who were directors of the Corporation immediately
before the initiation of such event cease to constitute a majority of the Board
of Directors of the Corporation upon the completion of such tender or exchange
offer or proxy contest or within one year after such completion.
9. No Rights of Shareholders
Neither an Employee nor the Employee's legal representative shall be, or
have any of the rights and privileges of, a shareholder of the Corporation in
respect of any Shares purchasable upon the exercise of any Option, in whole or
in part, unless and until certificates for such Shares shall have been issued.
10. Plan Amendments
The plan may be amended by the Board, as it shall deem advisable or to
conform, to any change in any law or regulation applicable thereto; provided,
that the Board may not, without the authorization and approval of shareholders:
(i) increase the aggregate number of Shares available for Options except as
permitted by Section 7; (ii) Materially increase the benefits accruing to
participants under this Plan; (iii) extend the maximum period during which an
Option
7
<PAGE>
may be exercised; or (iv) change the Plan's eligibility requirements. Any
discrepancy between the Board and any committee regarding this Plan shall be
decided in any manner directed by the Board.
11. Term of Plan
The Plan shall become effective upon its approval by the Corporation
shareholders. No Options or SARs shall be granted under the Plan after the date
which is ten years after the date on which the Plan was approved by the
Corporation shareholders.
8
[Letterhead of Silverman, Collura, Chernis & Balzano, P.C.]
March 5, 1998
ATEC Group, Inc.
90 Adams Avenue
Hauppauge, New York 11788
Re: Registration Statement on Form S-3
Gentlemen:
We have acted as counsel to ATEC Group, Inc. (the "Company"), a Delaware
corporation, pursuant to a Registration Statement on Form S-8, as filed with the
Securities and Exchange Commission on March 5, 1998 (the "Registration
Statement"), covering an aggregate of 1,200,000 shares of the Company's Common
Stock, $.001 par value (the "Common Stock") issuable pursuant to the Company's
1997 Employee Stock Option Plan.
In acting as counsel for the Company and arriving at the opinions as
expressed below, we have examined and relied upon originals or copies, certified
or otherwise identified to our satisfaction, of such records of the Company,
agreements and other instruments, certificates of officers and representatives
of the Company, certificates of public officials and other documents as we have
deemed necessary or appropriate as a basis for the opinions expressed herein.
In connection with our examination we have assumed the genuineness of all
signatures, the authenticity of all documents tendered to us as originals, the
legal capacity of natural persons and the conformity to original documents of
all documents submitted to us as certified or photostated copies.
Based on the foregoing, and subject to the qualifications and limitations
set forth herein, it is our opinion that:
1. The Company has authority to issue the Common Stock in the manner and
under the terms set forth in the Registration Statement.
2. The Common Stock has been duly authorized and when issued, delivered
and paid for by recipients in accordance with their respective terms, will be
validly issued, fully paid and non-assessable.
<PAGE>
ATEC Group, Inc.
March 4, 1998
Page 2
We express no opinion with respect to the laws other than those of the
State of New York and Federal Laws of the United States of America, and we
assume no responsibility as to the applicability or the effect of the laws of
any other jurisdiction.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and its use as part of the Registration Statement.
We are furnishing this opinion to the Company solely for its benefit in
connection with the Registration Statement. It is not to be used, circulated,
quoted or otherwise referred to for any other purpose. Other than the Company no
one is entitled to rely on this opinion.
Very truly yours,
SILVERMAN, COLLURA, CHERNIS
& BALZANO, P.C.
[Letterhead of Weinick Sanders Leventhal & Co., LLP]
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement of
Atec Group, Inc. on Form S-8 of our report dated August 18, 1997 on our audits
of the consolidated financial statements of Atec Group, Inc. and Subsidiaries as
at June 30, 1997 and 1996 and for the three years ended June 30, 1997, which
report is included in the Company's annual report on Form 10-K/A#1 filed with
the Securities and Exchange Commission pursuant to the Securities Exchange Act
of 1934. We also consent to the reference to our firm under the caption
"Experts".
/s/ Weinick Sanders Leventhal & Co., LLP
WEINICK SANDERS LEVENTHAL & CO., LLP
New York, N.Y.
March 4, 1998
