ALANCO ENVIRONMENTAL RESOURCES CORPORATION
15900 North 78th Street, Suite 101
Scottsdale, Arizona 85260
(602) 607-1010
PROXY STATEMENT
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held November 7, 1997
TO THE SHAREHOLDERS OF ALANCO ENVIRONMENTAL RESOURCES CORPORATION
NOTICE HEREBY IS GIVEN that the Annual Meeting of Shareholders of Alanco
Environmental Resources Corporation, an Arizona corporation (the "Company"),
will be held at The Holiday Inn, 7353 E. Indian School Road, Scottsdale,
Arizona on November 7, 1997, at 1:00 p.m., Mountain Standard Time, and at any
and all adjournments thereof, for the purpose of considering and acting upon
the following Proposals:
Proposal No. 1. ELECTION AS DIRECTORS
Proposal No. 2. CONFIRMATION OF SINGER, LEWAK, GREENBAUM & GOLDSTEIN LLP,
CERTIFIED INDEPENDENT ACCOUNTANTS, AS AUDITORS OF THE
COMPANY'S FINANCIAL STATEMENTS
This Annual Meeting is called as provided for by Arizona law and the Company's
By-laws.
Only holders of the outstanding Common Stock of the Company of record at the
close of business on September 10, 1997, 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 Annual 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.
CYNTHIA L. CASTELLANO
SECRETARY
Scottsdale, Arizona
October 9, 1997<PAGE>
Alanco Environmental Resources Corporation
15900 North 78th Street, Suite 101
Scottsdale, Arizona 85260
(602)607-1010
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 7, 1997
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 Annual Meeting of Shareholders to be held
at The Holiday Inn, 7353 E. Indian School Road, Scottsdale, Arizona, on the 7th
day of November, 1997, at 1:00 p.m.,Mountain 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
October 10, 1997.
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 registered in the name of
a broker-dealer or similar institution for beneficial owners to whom the
broker-dealer distributed notice of the Annual Meeting and proxy information
and which such beneficial owners have not returned proxies or otherwise
instructed the broker-dealer as to voting of their shares, will be counted as
part of the total shares voting in order to determine whether or not a quorum
has been achieved at the Meeting. Abstaining proxies and broker-dealer non-
votes 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,
1997, 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 with each common share entitled to one vote. Only shareholders of
record at the close of business on September 10, 1997, are entitled to notice
1<PAGE>
of and to vote at the Meeting or any adjournment thereof. On September 10,
1997, the Company had 35,346,527 shares of its Common 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 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 sets forth persons known to the Company as
beneficially owning more than five percent (5%) of the outstanding shares of
the Registrant.
% of Shares
Name and Address Shares Outstanding
- ------------------------------- ------------ --------------------
Harbinger Capital L.P.
4365 Executive Drive, Suite 740
San Diego, CA 92121 7,455,720 21.1%
(b) The following table sets forth the number of shares of the Company's
Common Stock beneficially owned as of June 30, 1997, by individual directors
and executive officers and by all directors and executive officers of the
Company as a group.
% of Shares
Name and Address Shares Outstanding
- ------------------------------ --------------- -------------------
Dennis Schlegel 204,445 (1) 0.58%
Harold S. Carpenter 728,986 (2) 2.06%
John E. Haggar 50,000 0.14%
Charles Clay Miller 13,000 0.04%
John Gilchrist 80,747 (3) 0.23%
Officers and Directors as a
Group (5 individuals) 1,077,178 3.05%
(1) Includes 153,440 shares indirect ownership
(2) Includes 256,606 shares indirect ownership
(3) Includes 5,747 shares indirect ownership
PROPOSAL NO. 1. ELECTION AS DIRECTORS
The Articles presently provide for a Board of Directors of not more than nine
(9) 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
2<PAGE>
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 cumulatively vote for the remaining nominees, or
for a substitute nominee or 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 63 Director 1995
Dennis Schlegel 47 Director 1995
Edward J. Maley 54 Director/President/C.E.O. 1997
James T. Hecker 40 Director ---
Leiv Lea 43 Director ---
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 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 a 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.
Dennis Schlegel: Mr. Schlegel was appointed to the position of C.E.O. in
April, 1997, and resigned on October 9, 1997, in favor of the appointment of
Edward Maley as temporary C.E.O. Mr. Schlegel was elected Chairman of the
Board in September, 1996. 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
this, Mr. Schlegel owned and operated Schlegel Investment Co., in Des Moines,
3<PAGE>
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.
Edward J. Maley. Mr. Maley joined the Company in January 1997 as Vice
President of the Fry Guy division. He is currently President of Alanco and
President of the Fry Guy subsidiary. Mr. Maley was appointed to the Board of
Directors in September 1997 and was appointed temporary C.E.O. on October 9,
1997. Prior to joining Alanco, Mr. Maley was President of the U.S. operations
for Rhea Vendors, a Milan, Italy, manufacturer of Espresso/Cappuccino
equipment. He was also Vice President of U.S. operations for Aqua Di Heppi, a
Rome, Italy, bottler of sparkling waters. He holds a Bachelors degree in
Political Science from Fairleigh Dickinson University and is a Marine Corps
veteran.
James T. Hecker. Mr. Hecker is both an Attorney and a Certified Public
Accountant. Since 1987 Mr. Hecker has been Treasurer and General Counsel of
Hawley and Wright, Inc., Evergreen, Colorado, a private capital management
company which manages a $60 million portfolio. He also served since 1992 as a
trustee of an $11 million charitable trust. From 1984 to 1987, Mr. Hecker was
the Controller of Northern Pump Company, Minneapolis, Minnesota, a multi-state
operating oil and gas company with more than 300 properties, with
responsibility of all accounting and reporting functions. Prior to that, from
1981 to 1984, Audit Supervisor of Total Petroleum, Inc., Denver, responsible
for all phases of internal audit and development of audit and systems controls.
Mr. Hecker received a J.D. degree from the University of Denver in 1992, and a
B.B.A. degree in Accounting and International Finance from the University of
Wisconsin in 1979. He is a member in good standing of the Colorado and the
American Bar Associations, the Colorado Society of CPAs, and the American
Institute of CPAs.
Leiv Lea. Since 1996 he has been a consultant, and acted in the capacity of
temporary Chief Financial Officer, for several companies with sales in the
range of $25 million to $100 million. From 1986 to 1996 Mr. Lea was with
Margaux, Inc., Atlanta, Georgia and Fremont, California, a public company which
manufactured electronically controlled refrigeration equipment. He served as
Vice President of Finance and CFO, as well as a member of the Board of
Directors. From 1983 to 1985 he was Vice President - Finance of Kearney
Magnetics/Xerox Magnetics, San Jose, California, a subsidiary of a public
company. Mr. Lea was with Deloitte Haskins & Sells in San Jose and Los Angeles
from 1979 to 1982. Mr. Lea holds an M.B.A. degree in Accounting from the
University of California, Los Angeles, as well as a Bachelor of Science degree
from the University of California, Davis. Mr. Lea became a Certified Public
Accountant in 1981; however, Mr. Lea is no longer practicing public accounting.
Committees: Meetings of the Board
The Company has an Compensation/Administration Committee and an Audit
Committee. The Compensation/Administration Committee and the Audit Committee
were formed in 1995. Messrs. Harold Carpenter and Charles Miller comprise the
Compensation/Administration Committee and Messrs. Harold Carpenter and John
Gilchrist are the Audit Committee. The Compensation/Administration Committee
4<PAGE>
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
Compensation/Administration Committee met five times during the fiscal year
ended June 30, 1997, and the Audit Committee met two times during the fiscal
year ended June 30, 1997.
The Company's Board of Directors held seven meetings during the fiscal year
ended June 30, 1997, 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, 1997, 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.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table shows for the fiscal year ending June 30, 1997, the
compensation awarded or paid by the Company to its Chief Executive Officer and
any of the executive officers of the Company whose total salary and bonus
exceeded $100,000 during such year (The "Named Executive Officers"):
5<PAGE>
<TABLE>
<CAPTION> Long Term Compensation
Awards
Restricted Securities
Name and Stock Underlying All Other
Principal Fiscal Annual Compensation Awards Options Compen-
Position Year Salary Bonus ($) (#shares) sation
- ---------------------- --------- --------- ------------ --------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
Norman E. Meyer 1996 $ 81,250 - $209,000 150,000 -
President, Chief 1997 $156,526 - - - -
Executive Officer <F1>
Dennis Schlegel 1997 $ 10,000 - $ 50,625 100,000 -
Chief Executive 120,000 <F3>
Officer <F2>
<FN>
<F1> Mr. Meyer served as C.E.O. and President from April 1995 until April 1997.
<F2> Mr. Schlegel was elected C.E.O. in April 1997.
<F3> See Director Compensation Section.
</FN>
</TABLE>
No other executive officer earned more than $100,000 during the current
fiscal year.
Option Grants in Last Fiscal Year
The following table sets forth each grant of stock options made during the
fiscal year ended June 30, 1997, to each of the Named Executive Officers. No
stock appreciation rights ("SARs") have been granted by the Company.
<TABLE>
<CAPTION>
Individual Grants
Percent of
Number of Total Potential Realizable
Securities Options Mkt Assumed Annual Rates
Underlying Granted to Exer- Price of Stock Price
Options Employees cise Date Appreciation for
Granted(1) in Fiscal Price of Expir Option Term (2)
Name (#) Year ($/Sh) Grant Date 5% 10% 0%
- ---------------- ----------- ------------ ------- ------- --------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Dennis Schlegel 100,000 100.0 $0.90 $1.406 9/10/01 89,500 136,500 50,600
</TABLE>
(1) Options for common shares only, granted through the 1996 Directors and
Officers Stock Option Plan.
(2) Calculated based on given interest rate for the five year life of the
option. The column headed 0% shows the potential gain (assuming no
restrictions) upon exercise of Directors and Officers Options at market price
on the date of grant.
<TABLE>
<CAPTION>
Option Grants Subsequent to Fiscal Year End
Number of
Securities
Underlying
Options Date of Date Expiration Option
Name Granted Grant Exercisable Date Price
- ---------------- ----------- ---------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Wang Yee Lin 40,000 7/16/97 7/16/97 7/16/2002 .875
Edward Maley 40,000 7/16/97 7/16/97 7/16/2002 .875
Charles Miller 40,000 7/16/97 7/16/97 7/16/2002 .875
Charles Miller 40,000 8/27/97 9/01/98 8/27/2002 .672
Dennis Schlegel 50,000 8/27/97 9/01/97 8/27/2002 .672
Dennis Schlegel 70,000 8/27/97 9/01/98 8/27/2002 .672
</TABLE>
6<PAGE>
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End
Option/Values
The following table sets forth the number and value of the unexercised options
held by each of the Named Executive Officers at June 30, 1997. None of the
Named Executive Officers who hold unexercised options exercised options in the
fiscal year ended June 30, 1997.
Value of
Number of Unexercised
Unexercised In-the-Money
Options at Options at
Shares Acquired Value FY-End (#) FY-End ($)
Name On Exercise (#) Realized ($) Exercisable Exercisable
- ------------------- --------------- ------------ -------------- ------------
Dennis Schlegel 0 0 100,000 0
Norman Meyer 0 0 50,000 (1) 0
John Haggar 0 0 50,000 0
Cynthia Castellano 0 0 7,500 0
(1) Option expired subsequent to year end
Employment Agreements and Executive Compensation
Dennis Schlegel, Chairman of the Board, has a two year employment agreement
with the Company whereby he receives during the first year, $6,250 per month in
regular compensation and options to purchase 50,000 shares of the Company stock
at $0.672 per share, and during the second year, a minimum of $10,000 per month
in regular compensation and options to purchase 70,000 shares of the Company
stock at $0.672 per share. Mr. Schlegel's employment agreement with the
Company expires August 31, 1999.
Mr. Maley, the Company's President and Chief Executive Officer, is currently
serving with no employment contract at a rate of $8,000 per month in regular
compensation and has options to purchase 40,000 shares of the Company stock at
$0.875 per share.
Mr. Haggar, the Company's Chief Financial Officer and Vice President, receives
$8,000 per month in regular compensation under the terms of an employment
agreement valid through April 24, 1998.
On August 27, 1997, the Board of Directors approved a two year employment
contract for Charles Miller in which Mr. Miller was awarded another option to
purchase an additional 40,000 shares of stock pursuant to the Company's 1996
Directors and Officers Stock Option Plan at an exercise price of $0.672 per
share exercisable at the beginning of the second year of the employment
contract.
7<PAGE>
Incentive Stock Option Plan
On December 16, 1995, the Shareholders approved the Company's 1995 Incentive
Stock Option Plan (the Plan). The purpose of the Plan is to advance the
business and development of the Company and its shareholders by affording to
the key employees of the Company the opportunity to acquire a propriety
interest in the Company by the grant of Options to acquire shares of the
Company's common stock. The Options granted are "Incentive Stock Options"
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended, for certain key employees. The Plan is administered by an
Administrative Committee whom shall serve a one year term. The Administrative
Committee is composed of the Board's Compensation/Administration Committee.
The current members of the Compensation Committee are Charles Miller and Harold
Carpenter. The Plan was approved by the Board of Directors on September 28,
1995, approved by the Shareholders on December 16, 1995, and shall terminate on
September 28, 2005.
Subject to anti-dilution provisions, the Plan may issue Options to acquire up
to 1,000,000 shares to Key Employees. The maximum number of shares subject to
Options granted to any one Key Employee shall not exceed 100,000 shares. The
exercise price for Options shall be set by the Administrative Committee but
shall not be for less than the fair market value of the shares on the date the
Option is granted. The period in which Options can be exercised shall be set
by the Administrative Committee not to exceed five years from the date of
Grant. The Plan may be terminated, modified or amended by the Board of
directors upon the recommendation of the Administrative Committee. The
issuance of options pursuant to this Plan is not expected to be a taxable event
for recipient until such time that the recipient elects to exercise the option
whereupon the recipient is expected to recognize income to the extent the
market price of the shares exceeds the exercise price of the option on the date
of exercise. All Key Employees of the Company and its subsidiaries are
eligible to participate in the Incentive Stock Options. A Key Employee is
defined in the Plan as a Company employee who in the judgement of the
Administrative Committee has the ability to positively affect the profitability
and economic well-being of the Company. Part time employees, independent
contractors, consultants and advisors performing bona fide services to the
Company shall be considered employees for purposes of participation in the
Plan.
Compensation of Directors
Directors are entitled to receive reimbursement for all out-of-pocket expenses
incurred for attendance at Board of Directors meetings. In addition, all
Directors not otherwise employed or compensated by the Company are entitled to
receive up to January 1997, $500, or beginning in February 1997, $750, per
meeting per day up to a maximum of $1,500, or $250 per telephonic meeting, in
cash, in common stock at the market price per share, or in health insurance
benefits. Pursuant to these directors fees, no shares of common stock were
issued. In addition, on September 10, 1996, Harold Carpenter and Dennis
Schlegel were awarded options to acquire 100,000 shares each of stock pursuant
to the Company's 1996 Directors and Officers Stock Option Plan at an exercise
price of $0.90 per share. At the April 1997 Board of Directors meeting, the
8<PAGE>
Board accelerated the vesting of Norman E. Meyer's previously reported option
of 100,000 shares of stock issued pursuant to the 1995 Directors and Officers
Stock Option Plan. Also, on July 16, 1997, Wang Yee Lin, Charles Miller and
Edward Maley were awarded options to acquire 40,000 shares each of stock
pursuant to the Company's 1996 Directors and Officers Stock Option Plan at an
exercise price of $0.875 per share.
On August 27, 1997, the Board of Directors approved a two year employment
contract for Charles Miller in which he was awarded another option to purchase
an additional 40,000 shares of stock pursuant to the Company's 1996 Directors
and Officers Stock Option Plan at an exercise price of $0.672 per share
exercisable at the beginning of the second year of the employment contract.
Under a two year employment agreement approved by the Board of Directors on
August 27, 1997, Dennis Schlegel was awarded an option to purchase 50,000
shares of stock pursuant to the Company's 1996 Directors and Officers Stock
Option Plan at an exercise price of $0.672 per share exercisable at the start
of contract. The Board of Directors also separately authorized Dennis Schlegel
another option to purchase 70,000 shares of stock (exclusive of the Company's
1996 Directors and Officers Stock Option Plan) at an exercise price of $0.672
per share exercisable at the beginning of the second year of his employment
contract.
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
During the fiscal year ended June 30, 1997, 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 January, 1997, the Board of Directors approved the conversion of 26 shares
of the Company's Series I Preferred Stock held by Kamco Holdings Inc., into
345,866 shares of the Company's Common Stock. These shares were originally
issued in 1995 to K. D. International, S.A., as part of the acquisition price
paid for Unique Systems, Inc. d/b/a National Affiliated Adjustment Company, and
later acquired by Katherine Meyer in an unrelated transaction. Mrs. Meyer is
the wife of the Company's former C.E.O. and President, Norman E. Meyer, and a
shareholder of Kamco Holdings Inc.
9<PAGE>
PROPOSAL NO. 2: CONFIRMATION OF SINGER, LEWAK, GREENBAUM & GOLDSTEIN LLP,
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS, AS AUDITORS OF
THE COMPANY'S FINANCIAL STATEMENT.
The Board of Directors recommends that the shareholders of the Company vote for
the confirmation of Singer, Lewak, Greenbaum & Goldstein LLP, Certified
Independent Accountants, as independent auditors to examine the financial
statements of the Company for the fiscal year ending June 30, 1998. This firm
served as independent auditor of the Company for the fiscal years ended June
30, 1997 and 1996. A representative of Singer, Lewak, Greenbaum & Goldstein,
will be at the annual meeting, will have an opportunity to make a statement if
the representative so desires and will be available to respond to appropriate
questions during the meeting. A favorable vote of a majority of those shares
voting, in person or by proxy, is required for confirmation of the selection of
the independent auditors.
On April 16, 1996, Billie J. Allred, the Company's Certifying Accountant for
the fiscal years ended June 30, 1995 and 1994, declined to stand for re-
election as auditor. Singer Lewak Greenbaum & Goldstein LLP, Certified Public
Accountants, were engaged to serve as the Company's new auditors. The
selection of Singer Lewak Greenbaum & Goldstein LLP, was approved by the Audit
Committee of the Company's Board of Directors.
Mr. Allred's report on the financial statements for the fiscal years ended June
30, 1995 and 1994 contained a qualification based upon the Company's ability to
continue as a going concern. Except for this qualification, Mr. Allred's
reports have not contained an adverse opinion or a disclaimer of opinion, or
was qualified or modified as to uncertainty, audit scope, or accounting
principles. Nor has there been any disagreement with Mr. Allred on any matter
of principles or practices, financial statement disclosure or auditing scope or
procedure.
DATE FOR RECEIPT OF SHAREHOLDER PROPOSALS
Any proposal by a shareholder to be presented at the Company's next Annual
Meeting of Shareholders, including nominations for election as directors must
be received at the offices of the Company, 15900 N. 78th Street, Suite 101,
Scottsdale, Arizona 85260, no later than July 31, 1998.
CYNTHIA L. CASTELLANO
SECRETARY
Scottsdale, Arizona
October 9, 1997<PAGE>
Proxy Solicited by The Board of Directors of Alanco Environmental Resources
Corporation
The undersigned appoints Dennis Schlegel (and Edward Maley, if Mr. Schlegel is
unable to serve), as the undersigned's lawful attorney and proxy, with full
power of substitution and appointment, to act for and in the stead of the
undersigned to attend and vote all of the undersigned's shares of the Common
Stock of Alanco Environmental Resources Corporation, an Arizona corporation, at
the Annual Meeting of Shareholders to be held at the Holiday Inn, 7353 E.
Indian School Road, Scottsdale, Arizona, at 1:00 pm. Mountain Standard Time, on
November 7, 1997, and any and all adjournments thereof, for the following
purposes:
A SHAREHOLDER 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.]
PROPOSAL NO. 1 ELECTION TO THE BOARD OF DIRECTORS
___ FOR Management nominees listed below equally among all the nominees
OR VOTED AS FOLLOWS:
Harold S. Carpenter : ___Shares James T. Hecker: ___Shares
Edward Maley: ___Shares Leiv Lea: ___Shares
Dennis Schlegel: ___Shares
___ AGAINST Management's nominees for the Board of Directors,
MANAGEMENT INTENDS TO VOTE SHARES FOR ALL OF THE FIVE (5) NOMINEES NAMED ABOVE
UNLESS OTHERWISE INSTRUCTED IN THIS PROXY. IF AT THE TIME OF THE MEETING, ANY
OF THE NOMINEES SHOULD BE UNABLE TO SERVE, THE DISCRETIONARY AUTHORITY PROVIDED
IN THE PROXY WILL BE EXERCISED TO CUMULATIVELY VOTE FOR THE REMAINING NOMINEES,
OR FOR A SUBSTITUTE NOMINEE OR NOMINEES, IF ANY, AS SHALL BE DESIGNATED BY THE
BOARD OF DIRECTORS.
PROPOSAL NO. 2. CONFIRMATION OF SINGER, LEWAK, GREENBAUM & GOLDSTEIN LLP,
AS THE COMPANY'S INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
___ FOR confirmation of Singer, Lewak, Greenbaum & Goldstein LLP, as the
Company's Independent Certified Public Accountants.
___ AGAINST confirmation of Singer, Lewak, Greenbaum & Goldstein LLP as the
Company's Independent Certified Public Accountants.
IF THE SHAREHOLDER DOES NOT INDICATE A PREFERENCE, MANAGEMENT INTENDS TO VOTE
IN FOR THE PROPOSAL.
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 ANNUAL MEETING OF SHAREHOLDERS TO THE UNDERSIGNED.
In the Shareholder's discretion the Proxy is authorized to vote on such other
business as may properly be brought before the meeting or any adjournment or
postponement thereof.
The undersigned revokes any proxies heretofore given by the undersigned and
acknowledges receipt of the Notice of Annual Meeting of Shareholders and Proxy
Statement furnished herewith and the Annual Report to Shareholders previously
provided.
Dated: , 199
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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, C/O AMERICAN SECURITIES TRANSFER,
INC., 938 QUAIL STREET, SUITE 101, LAKEWOOD, CO 80215-5513. THE GIVING OF A
PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU ATTEND THE MEETING.
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