ATEC GROUP, INC.
90 Adams Avenue
Hauppauge, New York 11788
----------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 21, 1999
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 21, 1999, 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, 2000;
and
3. 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 12, 1999 (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 1999 Annual Report for the fiscal year ended June 30, 1999.
By Order of the Board
of Directors
Ashok Rametra, Secretary
Hauppauge, New York
November 15, 1999
<PAGE>
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
21, 1999, 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 12, 1999. The
principal executive offices of the Company are located at 90 Adams Avenue,
Hauppauge, New York 11788, telephone (516) 231-2000.
OUTSTANDING SHARES AND VOTING RIGHTS
Only stockholders of record at the close of business on
November 12, 1999 are entitled to receive notice of, and vote at the Annual
Meeting. As of November 12, 1999, the number and class of stock outstanding and
entitled to vote at the meeting was 7,326,963 shares of Common Stock, par value
$.01 per share ("Common Stock"), 8,451 shares of Series A Preferred Stock, 1,458
shares of Series B Preferred Stock and 320,100 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 7,656,972 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. 1
and 2. 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. Prior to June 1994 Mr. Rametra was president
of a subsidiary of the Company. 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.
ASHOK RAMETRA was appointed President in January 1999. Prior thereto he was the
Treasurer, Chief Financial Officer and Director of the Company since June 1994.
From June 1994 to March 1995 Mr. Rametra also served as the Company's president.
Prior to 1994 Mr. Rametra was the president of a subsidiary of the Company. Mr.
Rametra received a Bachelor of Science Degree from St. Johns University in
Accounting in 1980.
GEORGE D. EAGAN was appointed as a Director in November 1997. Mr. Eagan serves
as president of Waterford Capital. Mr. Eagan has been in the financial industry
for the past twenty years working with both private and public companies as a
financial advisor. 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 as a Director in November 1997. Since 1969, Mr.
Reback has been partner with Reback & Potash, LLP, a law firm specializing in
litigation, appellate matters and real estate. Mr. Reback received a BA from
Syracuse University, and in 1965 he received a law degree from Syracuse
University College of Law.
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.
<PAGE>
MANAGEMENT
The following table sets forth the names and ages of all current
directors and officers of the Company and the position in the Company held by
them:
Directors are elected to serve until the next annual meeting of stockholders and
until their successors have been elected and have qualified. Officers are
appointed to serve until the meeting of the Board of Directors following the
next annual meeting of stockholders and until their successors have been elected
and qualified.
Name Age Position
---- --- --------
Surinder Rametra 59 Chairman of the Board and
Chief Executive Officer
Ashok Rametra 47 President,Treasurer and
Director
James J. Charles 57 Chief Financial Officer
George Eagan 42 Director
David Reback 57 Director
SURINDER RAMETRA was appointed the Chief Executive Officer and Chairman of the
Board of the Company in June 1994. Prior to June 1994 Mr. Rametra was president
of a subsidiary of the Company. 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.
ASHOK RAMETRA was appointed President in January 1999. Prior thereto he was the
Treasurer, Chief Financial Officer and Director of the Company since June 1994.
From June 1994 to March 1995 Mr. Rametra also served as the Company's president.
Prior to 1994 Mr. Rametra was the president of a subsidiary of the Company. Mr.
Rametra received a Bachelor of Science Degree from St. Johns University in
Accounting in 1980.
JAMES C. CHARLES was appointed Chief Financial Officer in January 1999. Prior to
his appointment he was a financial consultant to several public companies
(1994-1998), Chief Financial Officer of a printing company (1990-1994) and a
partner in the firm of Ernst & Young (1966-1990).
GEORGE D. EAGAN was appointed as a Director in November 1997. Mr. Eagan serves
as president of Waterford Capital. Mr. Eagan has been in the financial industry
for the past twenty years working with both private and public companies as a
financial advisor. 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 as a Director in November 1997. Since 1969, Mr.
Reback has been partner with Reback & Potash, LLP, a law firm specializing in
litigation, appellate matters and real estate. Mr. Reback received a BA from
Syracuse University, and in 1965 he received a law degree from Syracuse
University College of Law.
<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 Arvin Gulati to assist him
in improving existing operations on behalf of the Company. The Stock Option
Committee is also comprised of Ashok Rametra and James Charles. 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.
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION
----------------------
The Company's Summary Compensation Table for the years ended June 30, 1999,
1998 and 1997 is provided herein. This table provides compensation information
on behalf of the Company's existing officers and directors who earned in excess
of $100,000. There are no Option/SAR Grants, Aggregated Option/SAR Exercises or
Fiscal Year-End Option/SAR Value Table for the years ended June 30, 1999, 1998
and/or 1997. There are no long-term incentive plan ("LTIP") awards, or stock
option or stock appreciation rights except as discussed below.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
For the Years Ended June 30, 1999, 1998 and 1997
Annual Compensation Awards Payouts
Year Compen- Options/ LTIP
Name Position Ended Salary($) Bonus($) sation($) SARs Payouts
- ---- --------- ----- --------- ------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Surinder Rametra CEO 6/30/99 $202,733 15,2625(5) NONE NONE
6/30/98 $170,020 14,4301(1) NONE NONE
6/30/97 $160,680 6,7373(3) NONE NONE
Ashok Rametra President 6/30/99 $174,980 11,6526(6) NONE NONE
6/30/98 $170,000 14,0772(2) NONE NONE
6/30/97 $150,020 19,3724(4) NONE NONE
</TABLE>
(1) Major Medical $6372, Leased Auto $8,058
(2) Major Medical $4,380, Leased Auto $9,697
(3) Major Medical $6,737
(4) Major Medical $4,727, Leased Auto $4,645, Interest Income 10,000
(5) Major Medical $6,472, Leased Auto $8,790
(6) Major Medical $4,484, Leased Auto $7,168
<PAGE>
Year End Option Table. The following table sets forth certain information
regarding the stock options held as of June 30, 1999, by the individuals named
in the above Summary Compensation Table.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUE
Securities Underlying Value of Unexercised
Unexercised Options at In-the-Money-Options
Fiscal Year End(#) at Fiscal Year End (3) at Fiscal Year End (3)
Shares Acquired Value -------------------------------- -------------------------------
Name on exercise (#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
- ---- --------------- ---------- ------------ -------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Surinder Rametra (1) 0 0 897,000 0 $ 3,045 0
Ashok Rametra (2) 0 0 145,000 0 $ 10,020 0
</TABLE>
(1) Represents options to acquire: (i) 500,000 shares at $5.00 per share
exercisable through March 2008; (ii) 7,000 shares at $3.44 per share
exercisable through August 8, 2007; (iii) 250,000 shares at $4.67 per share
exercisable through September 27, 2008; and (iv) 140,000 shares at $4.26
per share exercisable through June 29, 2009
(2) Represents options to acquire: (i) 10,000 shares at $3.44 per share
exercisable through August 8, 2007; (ii) 35,000 shares at $3.7125 per share
exercisable through October 8, 2008; and (iii) 100,000 shares at $6.80 per
share exercisable through December 14, 2008
(3) omputation based on $3.875 which was the June 30, 1999 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, 1999,
by the Company to the individuals named in the above Summary Compensation Table.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
% of Total
Options
Granted to
Employees in Exercise Price Expiration
Name Granted (#) Fiscal Year $ / Share Date
- ---- ---------- ------------ -------------- ----------
<S> <C> <C> <C> <C>
Surinder Rametra 250,000 29.5% $4.67 2008
Surinder Rametra 140,000 16.5% $4.26 2009
Ashok Rametra 35,000 4.0% $3.7125 2008
Ashok Rametra 100,000 11.8% $6.80 2008
</TABLE>
<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 $47,000 for the year ended June 30, 1999.
<PAGE>
<TABLE>
<CAPTION>
PERFORMANCE GRAPH (1)
Total Shareholder Returns - Dividends Reinvested
Annual Return Percentages
Years Ending
Company/Index Name June 95 June 96 June 97 June 98 June 99
================================================================================================
<S> <C> <C> <C> <C> <C>
ATEC GROUP INC. -86.20 -8.72 -46.63 142.20 -47.46
S&P SMALLCAP 600 INDEX 20.36 26.01 21.69 19.46 -2.31
PEER GROUP 69.26 48.27 -18.16 47.45 -2.54
<CAPTION>
Indexed\Cumulative Returns
Years Ending
Base
Period Return Return Return Return Return
Company/Index Name Jun94 June 95 June 96 June 97 June 98 June 99
===================================================================================================
<S> <C> <C> <C> <C> <C> <C>
ATEC GROUP INC. 100 13.80 12.59 6.72 16.28 8.55
S&P SMALLCAP 600 INDEX 100 120.36 151.67 184.57 220.48 215.39
COMPUTER (SOFTWARE &
SVCE) - SMALL 100 169.26 250.96 205.38 302.83 295.14
===================================================================================================
</TABLE>
(1) Source: Standard & Poor's, Octobers 20, 1999
<PAGE>
Security Ownership of
Certain Beneficial Owners and Management
----------------------------------------
The following table sets forth as of November 12, 1999, 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) 741,242 9.0%
1762 Central Avenue
Albany, NY 12205
Surinder Rametra #(3) 1,505,140 17.0%
90 Adams Avenue
Hauppauge, NY 11788
James Charles #(4) 65,000 **
90 Adams Avenue
Hauppauge, NY 11788
George Eagan #(5) 3,500 **
C/O 90 Adams Avenue
Hauppauge, NY 11788
David Reback #(6) 7,500 **
C/O 90 Adams Avenue
Hauppauge, NY 11788
All directors and #(2)(3)(4)(5)(6) 2,322,382 26%
executive/officers as a group (5 persons)
----------------
** Less than 1%
(1) Computed based upon a total of 7,326,963 shares of Common Stock, 8,451
shares of Series A Preferred Stock, 1,458 shares of Series B Preferred
Stock and 320,100 shares of Series C Preferred Stock. Each share of
Common Stock and Preferred Stock possesses one vote per share.
Accordingly, the foregoing represents an aggregate of 7,656,972 votes.
<PAGE>
(2) The foregoing figure reflects the ownership of 209,146 shares of Common
Stock by Mr. Rametra and 387,096 common shares owned by Mr. Rametra's
spouse and children. The foregoing amount also assumes the exercise by
Mr. Rametra of options to acquire 145,000 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) The foregoing figure reflects the ownership of 408,140 shares of Common
Stock by Mr. Rametra and 200,000 shares by Mr. Rametra's spouse. In
addition, the foregoing assumes the exercise by Mr. Rametra to acquire
897,000 shares of the Company's 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) The foregoing figure reflects ownership of 10,000 shares of Common
Stock by Mr. Charles. The foregoing amount also assumes the exercise of
by Mr. Charles of options to acquire 55,000 shares of common stock.
(5) The foregoing figure reflects options for the purchase of 3,500 shares
of Common Stock.
(6) The foregoing figure reflects options for the purchase of 7,500 shares
of Common Stock.
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company has not been a party to any significant transactions in the last
fiscal year.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Surinder Rametra, an executive officer of the Company, failed to report
on his Form 4 in March of 1999, the sale of 62,761 shares by his spouse, which
shares Mr. Rametra disclaims beneficial ownership. Additionally, Mr. Rametra
failed to report on his Form 4 for the month of April 1999, the sale of 2,900
shares by his spouse, which shares Mr. Rametra disclaims beneficial ownership,
and his purchase of 7,500 shares for the month of September, 1999. Ashok
Rametra, an executive officer of the Company, failed to report on his Form 4 in
April of 1999, the sale of 2,700 shares, the purchase of 5,000 shares in May of
1999, and 15,000 shares in September of 1999. The failure of the reporting
persons to report was inadvertent and has been corrected on a subsequent Form 4.
<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 2000 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 2000
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 or she 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 that 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.
<PAGE>
STOCKHOLDERS' PROPOSALS
It is anticipated that the Company's 2000 Annual Meeting of
Stockholders will be held in December 2000. 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, 2000.
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 and 2.
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 15, 1999
<PAGE>
ATEC GROUP, INC.
Annual Meeting of Stockholders -- Tuesday, December 21, 1999
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 21, 1999 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 No. 2 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. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
<PAGE>
(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, 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
