ALANCO ENVIRONMENTAL RESOURCES CORPORATION
15900 North 78th Street, Suite 101
Scottsdale, Arizona 85260
(480) 607-1010
PROXY STATEMENT
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held November 5, 1999
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 Company's offices, 15900 North 78th Street, Suite 101,
Scottsdale, Arizona 85260, on November 5, 1999, at 10:00 a.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 OF DIRECTORS
Proposal No. 2 APPROVAL OF A PROPOSAL TO AUTHORIZE THE BOARD OF DIRECTORS
TO DECLARE, ONLY IF NECESSARY, A REVERSE SPLIT OF THE
OUTSTANDING COMMON STOCK ON THE BASIS OF ONE SHARE OF
COMMON STOCK FOR UP TO THREE SHARES OUTSTANDING. IF THE
BOARD OF DIRECTORS HAS NOT EFFECTED THE ACTION CONTEMPLATED
HEREUNDER BY OCTOBER 31, 2000, THIS AUTHORIZATION WILL
CEASE.
Proposal No. 3 APPROVAL OF THE ALANCO ENVIRONMENTAL RESOURCES CORPORATION
1999 STOCK OPTION PLAN.
Proposal No. 4 APPROVAL OF THE ALANCO ENVIRONMENTAL RESOURCES CORPORATION
1999 DIRECTORS AND OFFICERS STOCK OPTION PLAN.
Proposal No. 5 APPROVAL TO CHANGE THE CORPORATE NAME OF ALANCO
ENVIRONMENTAL RESOURCES CORPORATION TO ALANCO TECHNOLOGIES,
INC.
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 October 6, 1999, 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.
JOHN A. CARLSON
SECRETARY
Scottsdale, Arizona
October 6, 1999
Alanco Environmental Resources Corporation
15900 North 78th Street, Suite 101
Scottsdale, Arizona 85260
(480) 607-1010
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 5, 1999
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 Company's offices, 15900 North 78th Street, Suite 101, Scottsdale,
Arizona 85260, on the 5th day of November, 1999, at 10:00 a.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 15, 1999.
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,
1999, 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 October 6, 1999 are entitled to notice of and to
vote at the Meeting or any adjournment thereof. On October 6, 1999 the Company
had 5,342,486 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 and approve each proposal. Cumulative voting in the
election of Directors is permitted.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND OF MANAGEMENT
The Company does not know of any person beneficially owning more than five
percent (5%) of the outstanding shares of the Registrant, except for Robert R.
Kauffman, Chief Executive Officer and Chairman of the Board, who owns 7.48% of
the outstanding shares.
Current Directors and Officers
The following table sets forth the directors and officers and number of shares
of the Company's Common Stock beneficially owned as of September 15, 1999, by
individual directors and executive officers and by all directors and executive
officers of the Company as a group.
% of Shares
Name Title(1) Age Shares Outstanding
- -------------------- ------------------- ---- ------- ------------
Harold S. Carpenter Director 65 132,511 2.48%
James T. Hecker Director 42 29,287 0.55%
Steven P. Oman Director 50 30,000 0.56%
Thomas C. LaVoy Director 39 23,500 0.44%
Robert R. Kauffman Director/COB/CEO 59 399,500 7.48%
John A. Carlson Secretary/CFO 52 187,958 3.52%
Officers and Directors as a Group (6 individuals) 802,756 15.03%
(1) COB is Chairman of the Board; CEO is Chief Executive Officer; CFO is Chief
Financial Officer
Committees: Meetings of the Board
The Company has a Compensation/Administration Committee and an Audit Committee.
The Compensation/Administration Committee and the Audit Committee were formed
in 1995. Messrs. Harold Carpenter and James Hecker comprise both the
Compensation/Administration Committee and the Audit Committee. The
Compensation/Administration 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 Compensation/Administration Committee
met two (2) times during the fiscal year ended June 30, 1999, and the Audit
Committee met two (2) times during the fiscal year ended June 30, 1999.
The Company's Board of Directors held four (4) meetings during the fiscal
year ended June 30, 1999, at which time all current Directors, except for Mr.
Thomas LaVoy, who was absent for three of the four meetings due to business
conflicts, were present or consented in writing to the action taken at such
meetings.
Compliance with Section 16(a) of Securities Exchange Act of 1934
To the Company's knowledge, during the fiscal year ended June 30, 1999, 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 _ Fiscal Year Ended June 30, 1999
The following table shows for the fiscal year ending June 30, 1999, 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"):
Securities
Name and Other Underlying
Principal Annual Compensation Annual Options
Position Salary Bonus Compensation (1) (#shares) (2)
- ------------------ -------- ------------ ---------------- -------------
Robert R. Kauffman $81,000 None $14,400 1,200,000
C.E.O.
(1) Represents supplemental executive benefit reimbursement for the year.
(2) See Option Grants in Last Fiscal Year below.
Robert Kauffman was appointed CEO effective July 1, 1998. No executive officer
earned more than $100,000 during the current fiscal year.
Option Grants in Last Fiscal Year
The following table sets forth each grant of stock options made during the
fiscal year ended June 30, 1999, to each of the Named Executive Officers. No
stock appreciation rights ("SARs") have been granted by the Company.
Individual Grants
Number of
Securities
Underlying
Options Exercise
Granted Price Grant Expiration
Name (#) ($/Sh) Date Date
- ---------------- ---------- -------- -------- ----------
Robert Kauffman 1,000,000 $0.43 (1) 8/25/98 8/25/08
200,000 $0.75 6/16/99 6/15/09
John Carlson 100,000 $0.43 (1) 9/09/98 9/09/08
50,000 $0.50 11/16/98 11/16/08
100,000 $1.00 4/15/99 4/15/09
50,000 $0.75 6/16/99 6/15/09
Harold Carpenter 20,000 $0.75 8/12/98 8/11/03
20,000 $0.75 6/16/99 6/15/09
James Hecker 20,000 $0.75 8/12/98 8/11/03
20,000 $0.75 6/16/99 6/15/09
Steven Oman 20,000 $1.00 8/12/98 8/11/03
20,000 $0.75 6/16/99 6/15/09
Thomas LaVoy 20,000 $0.50 11/06/98 11/06/08
20,000 $0.75 6/16/99 6/15/09
Other 410,000 $.50-$1.00 Various (2)
---------
Total 2,070,000
(1) Robert R. Kauffman and John A. Carlson stock options were not issued
pursuant to any pre-established compensation plan but issued pursuant to
their initial engagement of employment with the Company. Robert R.
Kauffman was elected as Chief Executive Officer effective July 1, 1998,
and
John A. Carlson was appointed Senior Vice President, Corporate Development
effective September 9, 1998, and Chief Financial Officer effective October
16, 1998.
(2) Options for 230,00 shares of the 410,000 shares will expire five (5) years
from the date of grant. The balance of 180,000 shares will expire ten
(10)
years from the date of grant.
Of the options granted during the fiscal year, Robert Kauffman received 58.0%,
John Carlson received 14.5%, Harold Carpenter received 1.9%, James Hecker
received 1.9%, Steven Oman received 1.9% and Thomas LaVoy received 1.9% of the
total options granted. All others accounted for 19.8% of the total options
granted during the fiscal year ended June 30, 1999. Unless otherwise noted,
options are granted at "grant-date market."
Options Exercised in Last Fiscal Year and Fiscal Year End
Option/Values
The following table sets forth the number and value of the exercised and
unexercised options held by each of the Named Executive Officers at June 30,
1999.
Number of
Unexercised Value of
Shares Options at Unexercised
Acquired On Value FY-End (#) Options at
Name Exercise (#) Realized ($) Exercisable FY End (1)
- ------------------ --------------- ------------ ----------- ------------
Robert Kauffman 0 0 1,200,000 $836,000
John Carlson 0 0 300,000 $148,500
Harold Carpenter 0 0 40,000 $ 12,200
James Hecker 0 0 40,000 $ 12,200
Steve Oman 0 0 40,000 $ 12,200
Thomas LaVoy 0 0 40,000 $ 22,200
Cynthia Castellano (2) 25,000 $17,500 0 $ 0
(1) Calculated as the difference between bid price on June 30, 1999, and
exercise price multiplied by the number of options.
(2) Cynthia Castellano held the position of Corporate Secretary until her
resignation on May 14, 1999.
Option Grants Subsequent to Fiscal Year End
Number of
Underlying
Securities
Options Date of Date Expiration Option
Name Granted Grant Exercisable Date Price
- ------------------- ---------- ------- ----------- ----------- -------
Robert R. Kauffman 200,000 (2) 9/9/99 9/9/99 9/8/09 $1.08
John A. Carlson 100,000 (2) 9/9/99 9/9/99 9/8/09 $1.08
Harold S. Carpenter 40,000 (1) 9/9/99 9/9/99 9/8/09 $1.08
Steven P. Oman 20,000 (1) 9/9/99 9/9/99 9/8/09 $1.08
Thomas C. LaVoy 20,000 (1) 9/9/99 9/9/99 9/8/09 $1.08
(1) Issued pursuant to the 1998 Directors & Officers Stock Option Plan.
(2) Issued pursuant to the 1998 Stock Option Plan.
Employment Agreements and Executive Compensation
The named Executive Officers are at-will employees without employment
agreements.
1995 and 1998 Stock Option Plans
Shareholders approved the 1995 and 1998 Stock Option Plans (the Plans) on
December 16, 1995, and November 6, 1998, respectively. The purpose of the
Plans is to advance the business and development of the Company and its
shareholders by affording to 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 may be "Incentive
Stock Options" within the meaning of Section 422 of the Internal Revenue Code
of 1986, as amended, for certain key employees. An Administrative Committee of
the Board of Directors administers the Plans. Members of the Committee,
currently Mr. James Hecker and Mr. Harold Carpenter, are elected for a one-year
term.
The 1995 Plan was established to issue Options to acquire up to 750,000 shares
to key employees. (The 1995 Plan was adjusted to reflect a reverse stock
split, effected in May of 1998, that reduced the number of shares under the
Plan to 107,143.) The 1998 Plan was also established to issue Options to
acquire up to 750,000 shares. As of October 4, 1999, there are no shares
remaining available for grant under the 1995 Stock Option Plan and 380,000
shares are remaining to grant under the 1998 Stock Option Plan. The aggregate
number of shares within the Plans and the rights under outstanding Options
granted hereunder, both as to the number of shares and Option price, will be
adjusted accordingly in the event of a split or a reverse split in the
outstanding shares of the Common Stock of the Company.
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 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 (5) years from the date of grant for the 1995 Plan and ten (10)
years for the 1998 Plan. The Plans may be terminated, modified or amended by
the Board of Directors upon the recommendation of the Administrative Committee.
The issuance of options pursuant to these Plans is not expected to be a taxable
event for qualified recipients until such time that the recipients elect to
sell the shares received upon exercise of the Options, whereupon the recipients
are expected to recognize income to the extent the sales 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.
1996 and 1998 Directors and Officers Stock Option Plans
The 1996 Directors and Officers Stock Option Plan was approved by the Board of
Directors on September 9, 1996. Shareholders approved the 1998 Directors and
Officers Stock Option Plan on November 6, 1998. The purpose of the 1996 and
1998 Directors and Officers Stock Option Plans (the D&O Plans) is to advance
the business and development of the Company and its shareholders by affording
to the Directors and Officers 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 are not "Incentive Stock Options"
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended. The issuance of such non-qualified options pursuant to these D&O
Plans is not expected to be a taxable event for the 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 options on date of exercise. The
Administrative Committee of the Board of Directors administers the Plans.
Members of the Committee, currently Mr. James Hecker and Mr. Harold Carpenter,
are elected for a one-year term.
The 1996 D&O Plan was established to issue Options to acquire up to 750,000
shares. (The 1996 Plan was adjusted to reflect a reverse stock split, effected
in May of 1998, that reduced the number of shares to 107,143.) The 1998 D&O
Plan was also established to issue Options to acquire up to 750,000. As of
October 4, 1999, there are 1,073 shares remaining available for grant under the
1996 Stock Option Plan and 20,000 shares are remaining to grant under the 1998
Stock Option Plan.
The exercise price for Options issued under the 1996 D&O Plan shall be set by
the Administrative Committee. The Board shall determine the period for the
exercise of each Option, but in no instance shall such period exceed five (5)
years from the date of the grant of the Option.
The exercise price for the Options issued under the 1998 D&O Plan shall also be
set by the Administrative Committee but shall not be for less than 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 ten (10) years from the date of grant. The Plans may be terminated,
modified or amended by the Board of Directors upon the recommendation of the
Administrative Committee. Provided, however, if the Plans have been submitted
to and approved by the shareholders of the Company, no such action by the Board
may be taken without approval of the majority of the shareholders of the
Company which: (a) increases the total number of shares of Stock subject to
the Plan; (b) changes the manner of determining the Option price; or (c)
withdraws the administration of the Plan from the Committee.
All Directors and Executive Officers of the Company are eligible to participate
in both the 1996 and 1998 Plans. Newly appointed Directors shall receive an
option to purchase 20,000 shares of common stock at fair market value. Upon
each subsequent anniversary of the election to the Board of Directors, each
non-employee Director will receive an additional option to purchase 10,000
shares of common stock at fair market value. The aggregate number of shares
within the Plans and the rights under outstanding Options granted hereunder,
both as to the number of shares and Option price, will be adjusted accordingly
in the event of a split or a reverse split in the outstanding shares of the
Common Stock of the Company.
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 $750 per meeting per day up to a maximum of $1,500.
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 named
Executive Officer which results or will result from the resignation, retirement
or
<PAGE>
any other termination of employment with the Company, or from a change in the
control of the Company.
Transactions with Management
On September 9, 1999, the Company loaned John A. Carlson, Chief Financial
Officer, $87,500 in the form of a Promissory Note that bears interest at 7% per
annum. The loan was specifically related to the exercise of stock options
(100,000 shares at an average price of $0.875). As of September 30, 1999,
payments of approximately $35,000 have been received, reducing the loan balance
to approximately $52,500. The Note is due and payable by December 31, 1999.
On September 9, 1999, the Company loaned Steven P. Oman, Director, $20,000 in
the form of a Promissory Note that bears interest at 7% per annum. The loan
was specifically related to the exercise of stock options (40,000 shares at an
average price of $0.875). This Note is payable through legal services to be
performed by Mr. Oman through March 31, 2000.
Proposal No. 1. ELECTION OF 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 or 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 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,
and the period during which he has served as such:
Year
Name Age Position First Director
- --------------------- ------- ---------------------- --------------
Harold S. Carpenter 65 Director 1995
James T. Hecker 42 Director 1997
Robert R. Kauffman 59 Director/C.O.B./C.E.O. 1998
Thomas C. LaVoy 39 Director 1998
Steven P. Oman 50 Director 1998
Business Experience of Nominees
Robert R. Kauffman: Mr. Kauffman was appointed as Chief Executive Officer
and Chairman of the Board effective July 1, 1998. Mr. Kauffman was formerly
President and Chief Executive Officer of NASDAQ-listed Photocomm, Inc., from
1988 until 1997 (since renamed Golden Genesis, Inc.). Photocomm was the
nation's largest publicly owned manufacturer and marketer of wireless solar
electric power systems with annual revenues in excess of $35 million. Prior to
Photocomm, Mr. Kauffman was a senior executive of the Atlantic Richfield
Company (ARCO) whose varied responsibilities included Senior Vice President of
ARCO Solar, Inc., President of ARCO Plastics Company and Vice President of ARCO
Chemical Company. Mr. Kauffman earned an M.B.A. in Finance at the Wharton
School of the University of Pennsylvania, and holds a B.S. in Chemical
Engineering from Lafayette College, Easton, Pennsylvania.
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 Bachelor of
Science and Commerce degree.
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, Mr. Hecker was 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.
Steven P. Oman: Mr. Oman was appointed to the Board in June 1998. Since 1991
Mr. Oman has been in the private practice of law in Phoenix, Arizona. From
1986 to 1991, Mr. Oman served as Vice President and General Counsel of
Programmed Land, Inc., a Scottsdale-based diversified holding company engaged
in real estate, including ownership, development, marketing and management of
properties, as well as non-real estate subsidiaries involved in the electronics
and automotive industries. Prior to that, from 1978 to 1986, Mr. Oman was
President and General Counsel of Charter Development, Inc., a real estate
development firm in St. Paul, Minnesota. Mr. Oman received a J.D. degree, cum
laude, in 1975 from William Mitchell College of Law, St. Paul, and a Bachelor
of Mechanical Engineering degree from the University of Minnesota, Institute of
Technology, Minneapolis, in 1970.
Thomas C. LaVoy: Thomas C. LaVoy has served as Chief Financial Officer of
SuperShuttle International, Inc., since July 1997 and as Secretary since March
1998. From September 1987 to February 1997, Mr. LaVoy served as Chief
Financial Officer of NASDAQ-listed Photocomm, Inc. Mr. LaVoy was a Certified
Public Accountant with the firm of KPMG Peat Marwick from 1980 to 1983. Mr.
LaVoy has a Bachelor of Science degree in Accounting from St. Cloud University,
Minnesota, and is a Certified Public Accountant.
Proposal No. 2: APPROVAL OF A PROPOSAL TO AUTHORIZE THE BOARD OF
DIRECTORS TO DECLARE, ONLY IF NECESSARY, A REVERSE
SPLIT OF THE OUTSTANDING COMMON STOCK ON THE BASIS OF
ONE SHARE OF COMMON STOCK FOR UP TO THREE SHARES
OUTSTANDING. IF THE BOARD OF DIRECTORS HAS NOT
EFFECTED THE ACTION CONTEMPLATED HEREUNDER BY OCTOBER
31, 2000, THIS AUTHORIZATION WILL CEASE.
On September 9, 1999, the Board of Directors approved submitting a reverse stock
split of the Company's Common Stock to the Company's Shareholders if Management
determines that a reverse split would be necessary to keep the Common Stock
eligible to be quoted on The NASDAQ Stock Market ("NASDAQ"). The effective
date and the precise number of shares to be converted to be determined by the
Company's Board of Directors at a later time. (This is the same proposal the
Shareholders approved at the Shareholder Meeting of November 6, 1998.
Authorization under that proposal extended to October 31, 1999, and has not
been used. The Board of Directors believes the continuation of that proposal
through October 31, 2000, is prudent for the reasons explained below.) The
Board is requesting Shareholder authorization to declare up to 1 for 3 reverse
stock split of the Company's Common Stock, only if necessary, to keep the
Common Stock eligible to be quoted on The NASDAQ Stock Market ("NASDAQ"). The
Board of Directors desires not to effect such a reverse stock split but
believes that retaining the Company's listing on NASDAQ is crucial to
Shareholder value and liquidity and the Company's long-term business prospects.
It is recommended that the shareholders give authorization until October
31, 2000, to the Board of Directors to effect up to a 1 for 3 reverse stock
split of the Company's Common Stock. The Board of Directors will declare a
reverse split only upon notice from NASDAQ that it must achieve compliance with
the minimum bid price or be de-listed. Assuming that a reverse stock split
would cause the trading price of the Company's Common Stock to increase in the
same proportion as the amount of the split, a reverse stock split would result
in a proportionate increase in the quoted bid price of the Common Stock,
thereby maintaining NASDAQ eligibility of a bid price of not less than $1.00.
The reverse split will be effective within 10 days of the Company's notice to
NASDAQ that the Board has declared the reverse split.
As a result of the possible up to 1 for 3 reverse stock split, each three
issued shares of the Company's Common Stock held on the effective date will
automatically be converted into one share of Common Stock. No fractional
shares will be issued and no cash will be paid for fractional shares. Instead,
each fractional share would be rounded up to a whole share.
EFFECT OF REVERSE SPLIT ON HOLDERS OF ODD LOTS OF SHARES
If the maximum 1 for 3 reverse split is authorized and declared, the reverse
split would result in holders of 297 or fewer shares holding an "odd lot" of
less than 100 shares. The reverse split may also result in shareholders having
an odd lot of shares if their resulting total number of shares is not a
multiple of 100. A securities transaction of 100 or more shares is a "round
lot" transaction of shares for securities trading purposes and a transaction of
less than 100 shares is an "odd lot" transaction. Round lot transactions are
the standard size requirements for securities transactions and odd lot
transactions may result in higher transaction costs to the odd lot seller.
Proposal No. 3. APPROVAL OF THE ALANCO 1999 STOCK OPTION PLAN
On September 9, 1999 the Company's Board of Directors approved submitting the
Alanco Resources Corporation 1999 Stock Option Plan to the shareholders for
approval. The Board of Directors recommends approval of the Plan. The purpose
of the Plan is to advance the business and development of the Company and its
shareholders by affording to Employees of the Company the opportunity to
acquire an equity interest in the Company by the grant of Options to acquire
shares of the Company's common stock.
The Options granted to Employees can be either "Incentive Stock Options" within
the meaning of Section 422 of the Internal Revenue Code of 1986, as amended, or
"Non-Statutory Options." The issuance of qualified Incentive Stock Options
pursuant to this Plan is not expected to be a taxable event for qualified
recipients until such time that the recipient elects to sell the shares
received from the exercise whereupon the recipient is expected to recognize
income to the extent the sale price of the shares exceeds the exercise price of
the option on the date of sale. The issuance of Non-Statutory Stock Options
pursuant to this
Plan is not expected to result in a tax liability to the recipient since the
options are granted at fair market value on date of grant. The recipient is
expected to recognize income to the extent the market price of the shares
exceeds the tax basis of the option on the date of exercise.
The Plan is administered by an Administrative Committee of the Board of
Directors. The Plan may issue Options to acquire up to 1,500,000 shares to
Employees. The Company will not receive any consideration for the grant of
options under the Plan and the approximate market value of the shares to be
reserved for the plan is $2,040,000 based upon the average ten trading day
closing price for the Company's common stock for the period ending October 4,
1999. The maximum number of shares subject to Incentive Stock Options granted
to any one 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.
Fair market value shall mean the average of the closing price for ten
consecutive trading days at which the Stock is listed in the NASDAQ quotation
system ending on the day prior to the date an Option is granted. The period in
which Options can be exercised shall be set by the Administrative Committee not
to exceed ten years from the date of Grant. Incentive Stock Options are
exercisable once vested. Twenty-five percent (25%) of the shares issuable
under the Options shall vest six months from date of Grant provided that the
Optionee has remained an Employee of the Company for not less than six months
from date of Grant, twenty-five percent (25%) of the shares issuable under the
Options shall vest one year from date of Grant provided that the Optionee has
remained an Employee of the Company for not less than one year from the date of
Grant, and the remaining fifty percent (50%) shall vest two years from date of
Grant provided that the Optionee has remained an Employee of the Company for
not less than two years from the date of Grant. Otherwise, the Incentive Stock
Options shall lapse. The Incentive Stock Options must be exercised within 90
days following termination of relationship with the Company, or within one (1)
year following death or permanent and total disablement of the Optionee. The
vesting schedule, and the exercise schedule following termination, death or
total and permanent disablement of the Optionee, of Non-Statutory Stock Options
will be determined by the Committee at the time of grant. The Plan may be
terminated, modified or amended by the Board of Directors upon the
recommendation of the Administrative Committee. Provided, however, if the Plan
has been submitted to and approved by the shareholders of the Company, no such
action by the Board may be taken without approval of the majority of the
shareholders of the Company which: (a) increases the total number of shares of
Stock subject to the Plan; (b) changes the manner of determining the Option
price; or (c) withdraws the administration of the Plan from the Committee.
All Employees of the Company and its subsidiaries are eligible to participate
in the Plan. An Employee is defined in the Plan as a person, including
officers and directors, employed by the Company who in the judgment 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. Neither the Board of Directors nor the Administrative Committee have
estimated the number of Options to be granted to Employees and are expected to
make this determination on a discretionary basis. The aggregate number of
shares within the Plan and the rights under outstanding Options granted
hereunder, both as to the number of shares and Option price, will be adjusted
accordingly in the event of a split or a reverse split in the outstanding
shares of the Common Stock of the Company.
Proposal No. 4. APPROVAL OF THE ALANCO 1999 DIRECTORS AND OFFICERS
STOCK OPTION PLAN
On September 9, 1999, the Company's Board of Directors approved submitting the
Alanco Environmental Resources Corporation 1999 Directors and Officers Stock
Option Plan to the shareholders for approval. The Board of Directors
recommends approval of the Plan. The purpose of the Plan is to advance the
business and development of the Company and its shareholders by affording to
the Directors and Executive Officers of the Company the opportunity to acquire
an equity interest in the Company by the grant of Options to acquire shares of
the Company's common stock.
The Options granted are not "Incentive Stock Options" within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended. The issuance of
such non-qualified 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.
The Plan is administered by an Administrative Committee, which shall consist of
up to three (3) individuals appointed by the Board from among its members, at
least two (2) of which are non-employee Directors. The Plan may issue Options
to acquire up to 500,000 shares to Directors and Executive Officers. The
Company will not receive any consideration for the grant of options under the
Plan and approximate market value of the shares to be reserved for the plan is
$680,000 based upon the average ten trading day closing price for the Company's
common stock for the period ending October 4, 1999. 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.
Fair market value shall mean the average of the closing price for ten
consecutive trading days at which the Stock is listed in the NASDAQ quotation
system ending on the day prior to the date an Option is granted. The period in
which Options can be exercised shall be set by the Administrative Committee not
to exceed ten years from the date of Grant. Options are exercisable once
vested. All of the shares issuable under the Options shall vest one year from
date of Grant provided that Optionee has remained a Director or Executive
Officer of the company for not less than one year from the date of Grant.
Otherwise, the Options shall lapse. The Plan may be terminated, modified or
amended by the Board of Directors upon the recommendation of the Administrative
Committee. Provided, however, if the Plan has been submitted to and approved
by the shareholders of the Company, no such action by the Board may be taken
without approval of the majority of the shareholders of the Company which: (a)
increases the total number of shares of Stock subject to the Plan; (b) changes
the manner of determining the Option price; or (c) withdraws the administration
of the Plan from the Committee.
Proposal No. 5 APPROVAL TO CHANGE THE CORPORATE NAME OF ALANCO
ENVIRONMENTAL RESOURCES CORPORATION TO ALANCO
TECHNOLOGIES.
As required to amend the Articles of Incorporation, the Company's Board of
Directors approved on September 9, 1999, submitting the name Alanco
Technologies, Inc. to Shareholders for approval as the Company's new name.
The Board of Directors recommends approval of the name change. The purpose
of the name change is to have a corporate name more descriptive of the
Company's current and future business activities. The Company has not been
exclusively in the environmental industry for a number of years and does not
intend to move exclusively to environmental products. If approved, the Company
will change the corporate name as soon as practical after the shareholders'
meeting.
INDEPENDENT AUDITOR
Hein + Associates LLP, Denver, Colorado, has been the Company's Independent
Auditor for the fiscal years ended June 30, 1998 and 1999. A representative of
Hein + Associates is not expected to attend the Shareholders' Meeting. The
Audit Committee of the Board of Directors is reviewing proposals and
anticipates selecting the Auditor for fiscal year ended June 30, 2000, by
December 31, 1999.
REQUEST FOR COPY OF FORM 10K
Shareholders may request a copy of the Form 10K by writing to the Company's
offices, 15900 N. 78th Street, Suite 101, Scottsdale, Arizona 85260.
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, 2000.
JOHN A. CARLSON
SECRETARY
Scottsdale, Arizona
October 6, 1999
Proxy Solicited by The Board of Directors of Alanco Environmental Resources
Corporation
The undersigned appoints Robert R. Kauffman (and John A. Carlson, if Mr.
Kauffman 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 (Alanco), an Arizona
corporation, at the Annual Meeting of Shareholders to be held at the offices of
the Company, 15900 N. 78th Street, Suite 101, Scottsdale, Arizona, at 10:00
a.m.
Mountain Standard Time, on November 5, 1999, 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
Robert R. Kauffman _________ Shares Thomas C. LaVoy ________ Shares
Steven P. Oman _________ Shares
____ AGAINST Management's nominees for the Board of Directors,
PROPOSAL NO. 2 APPROVAL OF A PROPOSAL TO AUTHORIZE THE BOARD OF DIRECTORS
TO DECLARE, ONLY IF NECESSARY, A REVERSE SPLIT OF THE
OUTSTANDING COMMON STOCK ON THE BASIS OF ONE SHARE OF
COMMON STOCK FOR UP TO THREE SHARES OUTSTANDING. IF THE
BOARD OF DIRECTORS HAS NOT EFFECTED THE ACTION CONTEMPLATED
HEREUNDER BY OCTOBER 31, 2000, THIS AUTHORIZATION WILL
CEASE.
____ FOR ____ AGAINST ____ ABSTAIN
IF THE SHAREHOLDER DOES NOT INDICATE A PREFERENCE, MANAGEMENT INTENDS TO VOTE
FOR THE PROPOSAL.
PROPOSAL NO. 3 APPROVAL OF THE ALANCO 1999 STOCK OPTION PLAN
____ FOR ____ AGAINST ____ ABSTAIN
IF THE SHAREHOLDER DOES NOT INDICATE A PREFERENCE, MANAGEMENT INTENDS TO VOTE
FOR THE PROPOSAL.
PROPOSAL NO. 4 APPROVAL OF THE ALANCO 1999 DIRECTORS AND OFFICERS STOCK
OPTION PLAN
____ FOR ____ AGAINST ____ ABSTAIN
IF THE SHAREHOLDER DOES NOT INDICATE A PREFERENCE, MANAGEMENT INTENDS TO VOTE
FOR THE PROPOSAL.
PROPOSAL NO. 5 APPROVAL TO CHANGE THE CORPORATE NAME OF ALANCO
ENVIRONMENTAL RESOURCES CORPORATION TO ALANCO TECHNOLOGIES,
INC.
____ FOR ____ AGAINST ____ ABSTAIN
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.
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__
______________________________________
____________________________________
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. PLEASE
SIGN AND RETURN THIS PROXY TO ALANCO ENVIRONMENTAL RESOURCES CORPORATION, C/O
AMERICAN SECURITIES TRANSFER & TRUST, INC., 12039 W. ALAMEDA PARKWAY, SUITE Z-
2, LAKEWOOD, CO 80228. THE GIVING OF A PROXY WILL NOT AFFECT YOUR RIGHT TO
VOTE IN PERSON IF YOU ATTEND THE MEETING.
