ALANCO ENVIRONMENTAL RESOURCES CORPORATION
4110 North Scottsdale Road, Suite 200
Scottsdale, Arizona 85251
(602) 874-0448
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PROXY STATEMENT
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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held February 17, 1996
TO THE SHAREHOLDERS OF ALANCO ENVIRONMENTAL RESOURCES CORPORATION
NOTICE HEREBY IS GIVEN that a Special Meeting of Shareholders of Alanco
Environmental Resources Corporation, an Arizona corporation (the "Company"),
will be held at The Aladdin Hotel, 3667 Las Vegas Boulevard South, Las Vegas,
Nevada, on February 17, 1996, at 10:00 a.m., Pacific Standard Time, and at any
and all adjournments thereof, for the purpose of considering and acting upon the
following Proposals:
Proposal No. 1. MANAGEMENT'S PROPOSAL FOR A FIVE (5) MEMBER BOARD OF
DIRECTORS AND MANAGEMENT'S NOMINEES FOR ELECTION AS
DIRECTORS
Proposal No.2. A SHAREHOLDERS PROPOSAL FOR A SEVEN (7) MEMBER BOARD OF
DIRECTORS AND THE PROPONENTS' NOMINEES FOR
ELECTION AS DIRECTORS
This Special Meeting is called at the written request of a holder of 10% or more
of all issued and outstanding shares of the Company stock, as provided for by
Arizona law and the Company's By-laws. The express purpose for calling this
Special Meeting was to elect a Five (5) Member Board of Directors. The business
of the Special Meeting will be confined to this purpose as stated herein, and to
such additional matters as the Chairman of the meeting may rule to be germane to
such purpose. Management considers the Shareholders Proposal (Proposal No. 2)
to be germane to the stated purpose of the Special Meeting.
Only holders of the outstanding Common Stock and Class A Preferred Stock of the
Company of record at the close of business on December 28, 1995 will be entitled
to notice of and to vote at the Meeting or at any adjournment or adjournments
thereof.
All shareholders, whether or not they expect to attend the Special Meeting of
Shareholders in person, are urged to sign and date the enclosed Proxy and return
it promptly in the enclosed postage-paid envelope which requires no additional
postage if mailed in the United States. The giving of a proxy will not affect
your right to vote in person if you attend the Meeting.
BY ORDER OF THE BOARD OF DIRECTORS.
DEAN A. DOUGLAS
SECRETARY
Scottsdale, Arizona
January 12, 1996<PAGE>
Alanco Environmental Resources Corporation
4110 North Scottsdale Road, Suite 200
Scottsdale, Arizona 85251
(602) 874-0448
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD FEBRUARY 17, 1996
GENERAL INFORMATION
The enclosed Proxy is solicited by and on behalf of the Board of Directors of
Alanco Environmental Resources Corporation, an Arizona corporation (the
"Company"), for use at the Company's Special Meeting of Shareholders to be held
at The Aladdin Hotel, 3667 Las Vegas Boulevard South, Las Vegas, Nevada, on the
17th day of February, 1996 at 10:00 a.m., Pacific Standard Time, and at any
adjournment thereof. It is anticipated that this Proxy Statement and the
accompanying Proxy will be mailed to the Company's shareholders on or before
January 16, 1996.
Any person signing and returning the enclosed Proxy may revoke it at any time
before it is voted by giving written notice of such revocation to the Company,
or by voting in person at the Meeting. The expense of soliciting proxies,
including the cost of preparing, assembling and mailing this proxy material to
shareholders, will be borne by the Company. It is anticipated that
solicitations of proxies for the Meeting will be made only by use of the mails;
however, the Company may use the services of its Directors, Officers and
employees to solicit proxies personally or by telephone without additional
salary or compensation to them. Brokerage houses, custodians, nominees and
fiduciaries will be requested to forward the proxy soliciting materials to the
beneficial owners of the Company's shares held of record by such persons, and
the Company will reimburse such persons for their reasonable out-of-pocket
expenses incurred by them in that connection.
All shares represented by valid proxies will be voted in accordance therewith at
the Meeting. Shares not voting as a result of a proxy marked to abstain will be
counted as part of total shares voting in order to determine whether or not a
quorum has been achieved at the Meeting. Shares will not be counted as part of
the vote on any business at the Meeting on which the shareholder has abstained.
The Company's Annual Report to Shareholders for the fiscal year ended June 30,
1995 has been previously mailed or is being mailed simultaneously to the
Company's shareholders, but does not constitute part of these proxy soliciting
materials.
SHARES OUTSTANDING AND VOTING RIGHTS
All voting rights are vested exclusively in the holders of the Company's Common
Stock and Class A Preferred Stock, voting as a single group with each common or
preferred share entitled to one vote. Only shareholders of record at the close
of business on December 28, 1995 are entitled to notice of and to vote at the
Meeting or any adjournment thereof. On December 28 , 1995, the Company had
32,048,140 shares of its Common Stock and 26 shares of its Class A Preferred
Stock outstanding, each of which is entitled to one vote on all matters to be
voted upon at the Meeting, including the election of Directors. No fractional
shares are presently outstanding. A majority of the Company's outstanding
voting stock represented in person or by proxy shall constitute a quorum at the
Meeting. The affirmative vote of a majority of the votes cast, providing a
1<PAGE>
quorum is present, is necessary to elect the Directors. Cumulative voting in
the election of Directors is permitted.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND OF MANAGEMENT
The following table presents information with respect to shares of the Company's
Common Stock beneficially owned by the Company's Directors and Officers and by
all Directors and Officers of the Company as a group and by the nominees for
election to the Board of Directors who beneficially own shares in the Company,
and by all other persons known by management to own beneficially five percent
(5%) or more of the Company's Common Stock as of December 28, 1995. As defined
in Rule 13d(d)(1) under the Securities Exchange Act of 1934, beneficial
ownership includes shares issued and outstanding, convertible preferred stock
and all options and warrants to acquire common stock.
Amount and
Name and Address Nature of Bene- Percent
of Beneficial Owner ficial Ownership of Class
- ----------------------------- ---------------- -----------
Lyons Capital Partners, L.P.,
4365 Executive Dr., #740
San Diego, CA 92121, 6,051,220 18.9%
Peter Van Oosterhout (1)(5) 895,349 2.8%
2544 Chamberlain Road
Akron, OH 44333
James Ricketts (5) 10,500 0.033%
4110 N. Scottsdale Rd., #215
Scottsdale, AZ 85251
Norman E. Meyer (2)(3)(5) 105,500 0.33%
4110 N. Scottsdale Rd., #200
Scottsdale, AZ 85251
Kevin L. Jones (2)(4)(5) 1,000,143 3.12%
4110 N. Scottsdale Rd., #200
Scottsdale, AZ 85251
Dean A. Douglas (2)(3) 50,550 0.157%
4110 N. Scottsdale Rd., #200
Scottsdale, AZ 85251
John E. Haggar (2)(3) 50,000 0.156%
4110 N. Scottsdale Rd., #200
Scottsdale, AZ 85251
Larry Nelson (2)(3)(5) 25,500 0.08%
4110 N. Scottsdale Rd., #200
Scottsdale, AZ 85251
Harold S. Carpenter (5) 817,649 2.55%
939 Office Park Road, Suite 120
West Des Moines, IA 50265
Dennis Schlegel (5) 148,740 0.46%
Ione, Washington
Officers and Directors
as a Group (9 individuals) 3,103,931 9.68%
2<PAGE>
(1) Includes 890,349 shares in the name of River Capital Corporation of which
Mr. Van Oosterhout is President. Mr. Van Oosterhout disclaims any
beneficial ownership of the above shares.
(2) Does not Includes Options to acquire Shares granted under the Company's
Incentive Stock Option Plan and subject to a vote by the Shareholders
approving the Incentive Stock Option Plan.
(3) Includes 100,000 shares issuable to Mr. Meyer, 50,000 shares issuable to
Mr. Douglas, 50,000 shares issuable to Mr. Haggar and 25,000 shares
issuable to Mr. Nelson upon the exercise of Options granted at $0.10 per
share pursuant to the Company's Officers and Directors Stock Option Plan.
(4) Includes 541,100 shares held by Arjon Enterprises, Inc., a trust of which
Mr. Jones is a beneficiary. Mr. Jones disclaims beneficial ownership of
these shares.
(5) Current Director.
PROPOSAL NO. 1. MANAGEMENT'S PROPOSAL FOR A FIVE (5) MEMBER BOARD OF
DIRECTORS AND MANAGEMENT'S NOMINEES FOR ELECTION AS
DIRECTORS
The Bylaws presently provide for a Board of Directors of not more than eleven
(11) members. The number of Directors of the Company has been fixed at five (5)
by the Company's Board of Directors. The Company's Board of Directors
recommends the election of Directors of the five (5) nominees listed below to
hold office until the next Annual Meeting of Shareholders and until their
successors are elected and qualified or until their earlier death, resignation
or removal. The persons named as "proxies" in the enclosed form of Proxy, who
have been designated by Management, intend to vote for the five (5) nominees for
election as Directors unless otherwise instructed in such proxy. If at the time
of the Meeting, any of the nominees named below should be unable to serve, which
event is not expected to occur, the discretionary authority provided in the
Proxy will be exercised to vote for such substitute nominee and nominees, if
any, as shall be designated by the Board of Directors.
Nominees
The following table sets forth the name and age of each nominee for Director,
indicating all positions and offices with the Company presently held by him, the
period during which he has served as such, and the class and term for which he
has been nominated:
Year
Name Age Position First Director
- ------------------- ----- ------------- --------------
Harold S. Carpenter 61 Director 1995
Steven H. Davis 42 Director 1995
Bradley L. Gordon 43 Director 1995
Norman E. Meyer 50 Chairman/C.E.O./President 1994
Dennis Schlegel 45 Director 1995
Business Experience of Nominees
Harold S. Carpenter: Mr. Carpenter is presently the President of Superiorgas
Co. , Des Moines, Iowa which is engaged in the business of trading and brokering
3<PAGE>
bulk refined petroleum products with gross sales of approximately $500 million
per year. He is also the General Partner of Superiorgas L.P., an investment
company affiliated with Superiorgas Co. Mr. Carpenter founded these companies
in 1984 and 1980 respectively. Mr. Carpenter is also the President of Carpenter
Investment Company, Des Moines, Iowa which is an real estate investment company
holding properties primarily in central Iowa. From 1970 until 1994, Mr.
Carpenter was the Chairman of the George A. Rolfes Company of Boone, Iowa which
manufactured air pollution control equipment. Mr. Carpenter is currently a
member of the board of directors of the Allied Group, Inc., a publicly owned
insurance company headquartered in Des Moines, Iowa. Mr. Carpenter graduated
from the University of Iowa in 1958 with a Bachelors of Science and Commerce
degree.
Steven H. Davis: Mr. Davis is presently and since 1991 has been the
President/CEO and a member of the Board of Directors of CET Environmental
Services, Inc., of Tustin, California. CET is a publicly owned company engaged
in the business of environmental remediation. Prior to 1991, Mr. Davis was
the Managing Partner with Lincoln Property Company, Irvine, California with
responsibility for more than 3 million square feet of commercial building space
in California and Colorado. Mr. Davis has over twenty years of experience in
construction, development and financing of real estate and other businesses. Mr.
Davis graduated from Brown University and received his Masters of Business
Administration from the University of Southern California.
Bradley L. Gordon: Mr. Gordon is presently and since January, 1993 has been the
President/CEO and a Board Member of Quality Franchise Systems, Inc., a $20
million franchising company headquartered in Sacramento, California with over 70
operating locations for its Mountain Mike Pizza restaurants. From November,
1983 to September, 1992, Mr. Gordon held positions with Pace Membership
Warehouse, Inc., Denver, Colorado including Executive Vice President/Sales,
Senior Vice President/Operations and Vice President/Human Resources.. Pace
Membership Warehouse was a $5 billion wholesale cash and carry membership club.
Mr. Gordon had responsibility for all operational aspects, managed a staff of
six regional vice presidents and national directors of purchasing and marketing.
During Mr. Gordon's tenure, Pace grew from 25 to 73 locations nationwide with
sales of over $3.5 billion. From 1975 through 1983 Mr. Gordon held Human
Resources management positions with the Taco Bell Division of PepsiCo., Inc.,
and the Winchells Donut House Division of Denny's Restaurants, Inc. Mr. Gordon
received his Masters of Science Degree in Human Resources Management from the
College of Business of the University of Colorado in 1975 and a Bachelors Degree
in Business Management for the University of South Florida 1974. Mr. Gordon
is also on the Board of Directors of the Kempe Center for the Prevention of
Child Abuse in Denver, Colorado and the American Red Cross Denver Chapter. In
the course of his position with Quality Franchise Systems, Inc., in November
1994 Mr. Gordon and several other corporations and individuals were named as a
defendant in Clark v. O&S Management, et al. , Sacramento Municipal Court, which
sought damages in a dispute involving a franchising fee allegedly paid by the
Plaintiff. In July, 1995 the case was dismissed upon the Plaintiff's motion.
Mr. Gordon believes the case was frivolous and without merit.
Norman E. Meyer: Mr. Meyer joined the Company's Board of Directors in December,
1994, was appointed President and Chief Executive Officer of the Company in
April, 1995, and was elected Chairman of the Board in December, 1995. Mr. Meyer
has over twenty-eight years of experience in the insurance industry and for the
last fifteen years he has held executive positions of increasing operational
responsibility. From December, 1994, to November, 1995, Mr. Meyer served as
Chief Executive Officer and a Director of Phoenix Medical Management, Inc., a
Phoenix based out-patient, rehabilitation/Surgical facility. Beginning in 1984
and until December 1994, Mr. Meyer served in various positions including Chief
Operating Officer, Director and Chairman of the Board of Realistic Adjustment
Company, Inc., a Phoenix, Arizona based insurance claims adjusting company.
From January, 1995 to May, 1995 Mr. Meyer also served as Vice President of
4<PAGE>
Operations, and remains a Director and Chairman of the Board of Travel Services
of America, a Branson, Missouri travel agency. From 1992 to 1994, Mr. Meyer
served as consultant to the United Labor Counsel Local 615 Welfare Fund wherein
Mr. Meyer advised the Counsel on claims processing. The Union, the Welfare Fund
Trustees, the Welfare Fund Insurance Underwriters and Mr. Meyer were named as
Defendants in a 1992 civil action filed by the U.S. Department of Labor which
alleged breach of fiduciary duty by the Defendants in the operation of the
Welfare Fund under the Employee Retirement Income Security Act of 1974(ERISA).
Mr. Meyer filed an Answer denying all allegations based upon the fact that Mr.
Meyer did not control or serve in the operation of the Welfare Fund and that the
Department of Labor's extension of the definition of a _fiduciary_ under ERISA
to include non-controlling consultants is unwarranted. Mr. Meyer believes
there is a high probability of dismissal of the action against him if the matter
goes to trial.
Dennis Schlegel: Since 1987, Mr. Schlegel has been an independent investor in
small and start-up companies as well as a consultant to small and start-up
business in the areas of corporate management and financing. Prior to Mr.
Schlegel owned and operated Schlegel Investment Co., in Des Moines, Iowa and
Schlegel Ranch Company, in Ione, Washington, both of which were engaged in land
development. Mr. Schlegel attended one year at Drake University until he
withdrew to devote his full time to business pursuits.
Committees: Meetings of the Board
The Company has an Employment Compensation Committee and an Audit Committee.
The Employment Compensation Committee and the Audit Committee were formed in
1995. Messrs. Van Oosterhout, Jones and Ricketts comprise the Employment
Compensation Committee and Messrs. Nelson, Jones and Van Oosterhout are the
Audit Committee. The Employment Compensation Committee recommends to the Board
the compensation of executive officers and will serve as the Administrative
Committee for the Company's Stock Option Plan. The Audit Committee serves as a
liaison between the Board and the Company's auditor. The Employment
Compensation Committee met two times during the fiscal year ended June 30, 1995
and the Audit Committee met two times during the fiscal year ended June 30,
1995. During 1995, the Company also had an Executive Committee composed of Dean
Hough, D.R. Ellenbecker and Norman E. Meyer. The Executive Committee was formed
in August, 1992 to oversee operations and was disbanded in August, 1995 after
meeting six times during the past fiscal year.
The Company's Board of Directors held nine meetings during the fiscal year ended
June 30, 1995, at which time all the then Directors were present or consented in
writing to the action taken at such meetings. No incumbent Director attended
fewer than 100% of said meetings.
Compliance with Section 16(a) of Securities Exchange Act of 1934
To the Company's knowledge, during the fiscal year ended June 30, 1995 the
Company's Officers and Directors complied with all applicable Section 16(a)
filing requirements. This statement is based solely on a review of the copies
of such reports furnished to the Company by its Officers and Directors and their
written representations that such reports accurately reflect all reportable
transactions.
Family Relationships
There is no family relationship between any director, executive or person
nominated or chosen by the Company to become a director or executive officer.
5<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the cash compensation paid by the Company during
the fiscal year ended June 30, 1995, to its top executive officers whose annual
compensation exceeded $60,000, which represents all of the executive officers of
the Company.
Name of Individual Capacities Served Cash Compensation Stock Options
- --------------------------------------------------------------------------------
Norman E. Meyer (1) President, CEO $0 100,000
Dean Hough (2) President, CEO $48,000 300,000
Harrison Gentry (3) President, CEO $110,126 200,000
Richard Steinke (4) CEO $34,000
Kevin L. Jones (5) Chief Fin. Officer $58,500
Dean A Douglas (6) V-P, Secretary $ 8,000 50,000
John E. Haggar (7) Treasurer $ 6,000 50,000
(1) Mr. Meyer is presently serving without an employment contract. On
October 12, 1995 he was awarded five year options to acquire 100,000
shares of stock pursuant to the Company's Officers and Directors Stock
Option Plan at a exercise price of $ 0.10. The above information does
not include additional five year options to acquire 50,000 of stock
granted to Mr. Meyer pursuant to the Company's Incentive Stock Option
Plan at an exercise price of $1.89 per Share.
(2) Mr. Hough served as President and CEO from December, 1994 to April, 1995
when he stepped down in favor of Mr. Meyer and then assumed management
responsibilities for the Company's manufacturing subsidiary and then the
Company's restaurant equipment subsidiary. Pursuant to Mr. Hough's
employment agreement he was to receive $8,000 per month plus options to
purchase 20,000 shares of common stock at $1.00 per share each month
until December, 1996. Mr. Hough's employment contract was terminated
effective November 1, 1995. Pursuant to the terms of his employment
agreement, Mr. Hough has an option to acquire a total of 300,000 shares
of the Company's common stock exercisable at $1 per share.
(3) Mr. Gentry was elected President/COO in February, 1994 and was elected
to the additional position o f CEO in October, 1994. Mr. Gentry held
these positions until December, 1994. During the term of his
employment, Mr. Gentry was awarded stock options to acquire 200,000
shares of Stock exercisable at $1.00 per share.
(4) Mr. Steinke served as CEO from July, 1994 to October, 1994.
(5) Mr. Jones receives $6,000 per month for his services as Chief Financial
Officer and Chief Executive Officer of the Company's manufacturing
subsidiary. On September 27, 1995 he was awarded five year options to
acquire 50,000 shares of stock pursuant to the Company's Incentive Stock
Option Plan at a exercise price of $ 1.89.
(6) Mr. Douglas receives $6,000 per month for his services as Vice President
and Secretary. On September 27, 1995 he was awarded five year options
to acquire 50,000 shares of stock pursuant to the Company's Directors
and Officers Stock Option Plan at a exercise price of $ 0.10. The above
does not include options to acquire an additional 50,000 shares granted
under the Company's Incentive Stock Option Plan.
(7) Mr. Haggar receives $6,000 per month for his services as Treasurer. On
September 27, 1995 he was awarded five year options to acquire 50,000
shares of stock pursuant to the Company's Directors and Officers Stock
Option Plan at a exercise price of $ 0.10. The above does not include
6<PAGE>
options to acquire an additional 50,000 shares granted under the
Company's Incentive Stock Option Plan.
Compensation of Directors
Directors are entitled to receive all out of pocket expenses incurred for
attendance at Board or Committee meetings. In addition, all Directors, not
otherwise employed or compensated by the Company, are entitled to receive $500
for each Board Meeting attended which may be taken as either cash, common stock
at the market price per share, or in health insurance benefits. In May, 1995
the Board of Directors reduced the prior Directors Fees of $1,500 to the present
$500. Pursuant to these directors fees, as of the proxy date and for accrued
but unpaid directors fees from prior fiscal years, Mr. Ricketts was issued
10,500 shares of common stock, Mr. Van Oosterhout was issued 5,000 shares of
common stock, Mr. Meyer was issued 5,500 shares of common stock and Mr. Nelson
was issued 500 shares of common stock. In addition, from August, 1995, through
December 15, 1995, Mr. Ricketts has received a fee of $3,000 per month for being
Chairman of the Board. On October 12, 1995 Norman Meyer was awarded options to
acquire 100,000 shares of stock and on September 27, 1995 Larry Nelson was
awarded options to acquire 25,000 shares of stock both pursuant to the Company's
Directors and Officers Stock Option Plan at a exercise price of $0.10 per share.
Messrs. Meyer, Jones and Nelson in their capacities as Key Employees have also
each been granted options to acquire an additional 50,000 shares each under the
Company's Incentive Stock Option Plan.
Other Arrangements
There are no other arrangements pursuant to which the Company's Directors
receive compensation from the Company for services as Directors.
Termination of Employment and Change of Control Arrangement
There is no compensatory plan or arrangement with respect to any individual
named above which results or will result from the resignation, retirement or any
other termination of employment with the Company, or from a change in the
control of the Company.
Transactions with Management
The Company entered into the following transactions with entities in which
certain of the Company's officers and directors may have a direct or indirect
interest.
In June, 1995, the Company issued 390,400 shares of its common stock to River
Capital Corporation upon the exercise of a common stock purchase warrant issued
to River Capital in 1990. The Company received proceeds of $244,000 from the
exercise of the warrant. Peter Van Oosterhout, a director of the Company is
also the sole officer and director of River Capital Corporation.
In December, 1994, the Company exchanged a Note Receivable in the principal
amount of $850,000 from Phoenix Medical Management, Inc.(PMM), for seventy
percent (70%) of the outstanding common stock of PMM. Norman E. Meyer, a
director of the Company and its President and Chief Executive Officer became a
director of PMM following the transaction in order to represent Alanco's
interest . Larry Nelson had been a director of PMM prior to the exchange and
7<PAGE>
subsequently became a director of the Company and executive officer of Alanco
Financial Services Corp. In addition, Mr. Nelson owns approximately 12% of the
outstanding common stock of PMM. Subsequent to the acquisition of the interest
in PMM, the Company sold a substantial portion of its investment for a Note
Receivable and presently owns approximately 8% of the outstanding common stock
of PMM.
In May, 1995, the Company acquired 100% of the capital stock of Unique Systems,
Inc., doing business as National Affiliated Adjustment Company (NAAC) from KD
International, Ltd., in exchange for 1,750,370 shares of the Company's common
stock and 26 Shares of the Company's Class A Preferred Stock. Subsequent to the
Company's acquisition and in a transaction independent of the Company's
acquisition, Katherine Meyer, the wife of Norman E. Meyer, a director of the
Company and its President and Chief Executive Officer, acquired the Class A
Preferred Stock. Mrs. Meyer is the Chief Executive Officer and President of
NAAC.
8<PAGE>
PROPOSAL NO. 2: A SHAREHOLDERS PROPOSAL FOR A SEVEN (7) MEMBER BOARD OF
DIRECTORS AND THE PROPONENTS' NOMINEES FOR ELECTION AS
DIRECTORS
On January 10, 1996, the Company received the following Shareholders
Proposal and Supporting Statement from Kevin L. Jones, Peter Van Oosterhout and
River Capital Corporation who each own greater than one percent (1%) of the
Company's outstanding stock. The Company has determined that the Shareholders
Proposal is germane to the purpose for which the Special Meeting was called.
The addresses of the Proponents and the number of shares held of record by the
Proponents shall be provided to any person upon oral or written request. The
Shareholders Proposal and Statement are reproduced below verbatum as received.
Management expresses no opinion as to the truth and accuracy of the Shareholder
Supporting Statement.
- --------------------------------------------------------------------------------
Proposal
That the Board of Directors shall consist of seven members and we recommend
the following seven individuals:
Peter D. Van Oosterhout Kevin L. Jones
Harold Carpenter Larry G. Nelson
Dennis Schlegel Norman Meyer
Bradley Gorden
Supporting Statement
There has been a lot of criticism of prior management and the Board of
Directors of the Registrant by Stockbrokers and investment advisors who for some
unexplainable reason believe they have the knowledge to manage the business
affairs of a multifaceted corporation. Why this criticism exists we are not
sure.
What we are sure of is the painstaking efforts taken by the prior Board of
Directors to formulate and implement sound governing policies to ensure that no
one single individual or group of individuals could take unfair advantage of
business developed within the Registrant. Under the prior Board of Directors,
the Registrant has grown from a mining company with a potential breakthrough
technology in the air pollution control industry to a Company with operations in
Industrial Manufacturing, an air pollution control technology tested by an
independent laboratory in China which has successfully reduced SOx emissions
well below China's pollution control standards at a capital cost which is about
one-tenth that of any alternative solution, acquired operations in the
distribution of a patented table top deep frying unit in which the Registrant
has working relationships with Ore-Ida, Walmart and Tyson Foods and acquired a
service business in insurance claims adjusting.
This growth started at the end of 1993 with the acquisition of the
Industrial Manufacturing Company Assets. These Assets were acquired at a time
when the Company had limited working capital and over 75% of the acquisition
price was common stock valued at $3.00 per share. Since the acquisition, this
business segment has been turned around and now is a profitable operation. This
was accomplished in only eighteen months.
During the Registrant's Fiscal Year Ended June 30, 1995, the Board of
Directors dealt with operational management that had made a decision to abandon
China and to disregard all prior work accomplished in the perfecting of the
patented air pollution control technology. The result of this was an operating
proto-type of the patented Charged Dry Sorbent Injection System (CDSI) was sent
to China for testing. In November of 1995, at the request of high ranking
officials in the Chinese Government, Alanco held a news conference sponsored by
9<PAGE>
the Government in the Peoples Hall. Something that is considered about as high
an honor that can be bestowed upon anyone or any entity in China. The reason
for this happening was the successful testing that the CDSI underwent at Dezhou
Heating & Power Company. Due to the equipment low capital cost, the Chinese
people see that their currency can stretch much further and accomplish a great
deal more with regard to their air pollution control problem.
There are many other things which we would like to elaborate on, but we can be
technical cut off at five hundred words and have met this limitation. Mr. Van
Oosterhout and Mr. Jones have worked diligently and in the best interest of the
shareholders rights and value and hope that you will vote in favor of this
proposal to elect a seven member board composed of those individuals that we
have recommended.
- --------------------------------------------------------------------------------
DATE FOR RECEIPT OF SHAREHOLDER PROPOSALS
Any proposal by a shareholder to be presented at the Company's 1996 Annual
Meeting, including nominations for election as directors must be received at
the offices of the Company, 4110 North Scottsdale Road, Suite 200, Scottsdale,
Arizona 85251, no later than July 31, 1996.
DEAN A. DOUGLAS
SECRETARY
Scottsdale, Arizona
January 12, 1996
10<PAGE>
1
PROXY SOLICITED BY THE BOARD OF DIRECTORS OF
ALANCO ENVIRONMENTAL RESOURCES CORPORATION
The undersigned appoints Norman E. Meyer, (and Dean A. Douglas, if Mr. Meyer is
unable to serve),as the undersigned's lawful attorney and proxy, with full power
of substitution and appointment, to act for and vote all of the undersigned's
shares of the Common Stock and/or Class A Preferred Stock of Alanco
Environmental Resources Corporation, an Arizona corporation, at the Special
Meeting of Shareholders to be held at The Aladdin Hotel, 3667 Las Vegas
Boulevard South, Las Vegas, Nevada, at 10:00 a.m. Pacific Standard Time, on
February 17, 1995, and any and all adjournments thereof, for the following
purposes:
SHAREHOLDERS MUST VOTE IN FAVOR OF ONE OR THE OTHER PROPOSAL. VOTING IN FAVOR
OF BOTH PROPOSALS WILL RESULT IN A SPOILED PROXY WHICH WILL NOT BE VOTED.
VOTING IN FAVOR OF ONE PROPOSAL AND AGAINST THE OTHER IS PERMITTED. A
SHAREHOLDER VOTING IN FAVOR OF A PROPOSAL MAY USE CUMULATIVE VOTING FOR THE
NOMINEES OF THAT PROPOSAL BY VOTING THE NUMBER OF THE SHARES HELD TIMES THE
NUMBER OF DIRECTORS BEING ELECTED ON A SINGLE OR GROUP OF CANDIDATES.
SHAREHOLDERS MAY ALSO WITHHOLD AUTHORITY TO VOTE FOR A NOMINEE(S) BY DRAWING A
LINE THROUGH THE NOMINEE'S NAME(S). FOR EXAMPLE A SHAREHOLDER WITH 1,000
SHARES MAY CAST A TOTAL OF 5,000 VOTES (# OF SHARES X 5 DIRECTORS) FOR ALL, ONE
OR A SELECT NUMBER OF CANDIDATES.]
VOTE FOR ONLY ONE PROPOSAL
PROPOSAL NO. 1. MANAGEMENT'S PROPOSAL FOR A FIVE (5) MEMBER BOARD OF DIRECTORS
CONSISTING OF THE FOLLOWING NOMINEES.
___ FOR a Five (5) Member Board of Directors and all Management nominees
listed below equally among all the nominees OR IN FAVOR OF A FIVE
(5) MEMBER BOARD OF DIRECTORS AND VOTED AS FOLLOWS:
Harold S. Carpenter: ____Shares Steven H. Davis: ____Shares
Bradley Gordon: ____Shares Norman E. Meyer: ____Shares
Dennis Schlegel: ____Shares
___ AGAINST Management's Proposal for a Five (5) Member Board of Directors
IN THE EVENT THE SHAREHOLDER DOES NOT INDICATE A PREFERENCE ON PROPOSAL NO. 1,
MANAGEMENT INTENDS TO VOTE FOR PROPOSAL NO. 1.
PROPOSAL NO. 2. A SHAREHOLDERS PROPOSAL FOR A SEVEN (7) MEMBER BOARD OF
DIRECTORS CONSISTING OF THE FOLLOWING NOMINEES.
___ FOR a Seven (7) Member Board of Directors and all or the Nominees
listed below equally among all the nominees OR IN FAVOR OF A SEVEN (7)
MEMBER BOARD OF DIRECTORS AND VOTED AS FOLLOWS:
Harold S. Carpenter:____Shares Bradley Gordon: ____Shares
Kevin L. Jones: ____Shares Norman E. Meyer: ____Shares
Larry G. Nelson: ____Shares Peter Van Oosterhout: ____Shares
Dennis Schlegel: ____Shares
___ AGAINST the Shareholder Proposal for a Seven (7) Member Board of
Directors
IN THE EVENT THE SHAREHOLDER DOES NOT INDICATE A PREFERENCE ON PROPOSAL NO. 2,
MANAGEMENT INTENDS TO VOTE AGAINST THE PROPOSAL. <PAGE>
2
SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AT THE MEETING IN ACCORDANCE WITH
THE SHAREHOLDER'S SPECIFICATION ABOVE. THIS PROXY CONFERS DISCRETIONARY
AUTHORITY IN RESPECT TO MATTERS FOR WHICH THE SHAREHOLDER HAS NOT INDICATED A
PREFERENCE OR IN RESPECT TO MATTERS NOT KNOWN OR DETERMINED AT THE TIME OF THE
MAILING OF THE NOTICE OF THE SPECIAL MEETING OF SHAREHOLDERS TO THE UNDERSIGNED.
The undersigned revokes any proxies heretofore given by the undersigned and
acknowledges receipt of the Notice of Special Meeting of Shareholders and Proxy
Statement furnished herewith and the Annual Report to Shareholders previously
provided.
Dated: __________________ , 1996 ____________________________________________
____________________________________________
Signature(s) should agree with the name(s) hereon. Executors, administrators,
trustees, guardians and attorneys should indicate when signing. Attorneys
should submit powers of attorney.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF ALANCO
ENVIRONMENTAL RESOURCES CORPORATION. PLEASE SIGN AND RETURN THIS PROXY TO
ALANCO ENVIRONMENTAL RESOURCES CORPORATION, 4110 NORTH SCOTTSDALE ROAD, SUITE
200, SCOTTSDALE, ARIZONA 85251. THE GIVING OF A PROXY WILL NOT AFFECT YOUR
RIGHT TO VOTE IN PERSON IF YOU ATTEND THE MEETING.<PAGE>
