ALANCO TECHNOLOGIES, INC.
15575 North 83rd Way, Suite 3
Scottsdale, Arizona 85260
(480) 607-1010
PROXY STATEMENT
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held November 22, 2002
TO THE SHAREHOLDERS OF ALANCO TECHNOLOGIES, INC.
NOTICE HEREBY IS GIVEN that the Annual Meeting of Shareholders of Alanco
Technologies, Inc., an Arizona corporation ("Alanco" or the "Company"), will be
held at 15900 North 78th Street, Scottsdale, Arizona 85260, on November 22,
2002, at 10:00 a.m., Mountain Standard Time, and at any adjournment or
postponement 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 SINGLE REVERSE
SPLIT OF THE OUTSTANDING STOCK ON A BASIS NOT TO EXCEED
ONE SHARE OF STOCK FOR UP TO TEN SHARES OUTSTANDING. IF
THE BOARD OF DIRECTORS HAS NOT EFFECTED THE ACTION
CONTEMPLATED HEREUNDER BY DECEMBER 31, 2005, THIS
AUTHORIZATION WILL CEASE.
Proposal No. 3 APPROVAL OF THE ALANCO 2002 STOCK OPTION PLAN.
Proposal No. 4 APPROVAL OF THE ALANCO 2002 DIRECTORS AND OFFICERS STOCK
OPTION PLAN.
Proposal No. 5 APPROVAL OF A PROPOSAL AUTHORIZING THE BOARD OF
DIRECTORS TO CHANGE THE CORPORATE NAME OF THE COMPANY, IF
AND WHEN THE BOARD BELIEVES IT IS APPROPRIATE, PRUDENT,
AND IN THE BEST INTERESTS OF ALANCO AND ITS SHAREHOLDERS.
THIS AUTHORIZATION WILL BE IN EFFECT UNTIL DECEMBER 31,
2005.
Holders of the outstanding Common Stock and Preferred Stock of the Company of
record at the close of business on October 16, 2002, will be entitled to notice
of and to vote at the Meeting or at any adjournment or postponement 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.
Scottsdale, Arizona ADELE L. MACKINTOSH
October 16, 2002 SECRETARY
ALANCO TECHNOLOGIES, INC.
15575 North 83rd Way, Suite 3
Scottsdale, Arizona 85260
(480) 607-1010
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 22, 2002
GENERAL INFORMATION
The enclosed Proxy is solicited by and on behalf of the Board of Directors of
Alanco Technologies, Inc., an Arizona corporation (the "Company"), for use at
the Company's Annual Meeting of Shareholders to be held at 15900 North 78th
Street, Scottsdale, Arizona 85260, on the 22nd day of November, 2002, at 10:00
a.m., Mountain Standard Time, and at any adjournment or postponement thereof. It
is anticipated that this Proxy Statement and the accompanying Proxy will be
mailed to the Company's shareholders on or before October 28, 2002.
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.
Shares not voting as a result of a proxy not marked or 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.
All shares represented by valid proxies will be voted in accordance therewith at
the Meeting unless such proxies have previously been revoked. Proxies may be
revoked at any time prior to the time they are voted by: (a) delivering to the
Secretary of the Company a written instrument of revocation bearing a date later
than the date of the proxy; or (b) duly executing and delivering to the
Secretary a subsequent proxy relating to the same shares; or (c) attending the
meeting and voting your proxy in person (although attendance at the Meeting will
not in and of itself constitute revocation of a proxy.)
The Company's Annual Report to Shareholders for the fiscal year ended June 30,
2002, 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
Voting rights are vested in the holders of the Company's Common Stock and
Preferred Stock. Only shareholders of record at the close of business on October
16, 2002 are entitled to notice of and to vote at the Meeting or any adjournment
or postponement thereof. As of October 16, 2002, the Company had 17,549,059
shares of Common Stock outstanding and 50,632 shares of Preferred Stock
outstanding. Each Common share is entitled to one vote and each Preferred share
is entitled to thirteen votes, which is the equivalent number of common shares
into which the preferred stock is convertible. If the number of common shares
into which the preferred stock is convertible (the "common stock equivalent") is
considered, the total shares eligible to vote, including the common stock and
the common stock equivalent, on the record date are 18,207,275 shares, 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.
Each shareholder present, either in person or by proxy, will have cumulative
voting rights with respect to the election of Directors. Under cumulative
voting, each shareholder is entitled to as many votes as is equal to the number
of shares of Common Stock (or common stock equivalent) of the Company held by
the shareholder on the Record Date multiplied by the number of directors to be
elected, and such votes may be cast for any single nominee or divided among two
or more nominees. The seven nominees, or such fewer number of nominees as may
stand for election, receiving the highest number of votes will be elected to
the Board of Directors. There are no conditions precedent to the exercise of
cumulative voting rights. Unless otherwise instructed in any proxy, the persons
named in the form of proxy which accompanies this Proxy Statement (the "Proxy
Holders") will vote the proxies received by them for the Company's seven
nominees set forth in "Election of Directors" below. If additional persons are
nominated for election as directors, the Proxy Holders intend, unless otherwise
instructed in any proxy, to vote all proxies received by them in such manner
in accordance with cumulative voting as will assure the election of as many of
the Company's nominees as possible, and, in such event, the specific nominees
for whom votes will be cast will be determined by the Proxy Holders. If
authority to vote for any nominee of the Company is withheld in any proxy, the
Proxy Holders intend, unless otherwise instructed in such proxy, to vote the
shares represented by such proxy, in their discretion, cumulatively for one or
more of the other nominees of the Company.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND OF MANAGEMENT
Security Ownership of Certain Beneficial Owners
The following table sets forth certain information with respect to each
shareholder known by Alanco to be the beneficial owner of more than 5% of the
outstanding Alanco common stock as of October 16, 2002. Information regarding
the stock ownership of Robert R. Kauffman, Alanco Chairman and Chief Executive
Officer, and Donald E. Anderson, Alanco Director, is also shown in the table in
the following section, Current Directors and Officers.
Five Percent Owners
Total
Stock and
Total Options &
----- ---------
Shares Total Exercisable Stock Owned Warrants
------ ----- ----------- ----------- --------
Common Preferred Owned Common Stock And Percent of
------ --------- ----- ------ ----- --- ----------
Shares Shares Percent of Share Options & Options & Common Equiv.
------ ------ ---------- ----- --------- --------- -------------
Owned Owned Class (5) Equivalent Warrants Warrants Class (6)
----- ----- --------- ---------- -------- -------- ---------
Technology Systems 6,000,000 0 34.19% 6,000,000 0 6,000,000 32.95%
International, Inc. (1)
Robert R. Kauffman (2) 850,132 0 4.84% 850,132 1,655,000 2,505,132 12.61%
Donald E. Anderson 825,322 0 4.70% 825,322 520,000 1,345,322 7.18%
M. Jamil Akhtar, M.D. (3) 0 50,632 100.00% 658,216 500,000 1,158,216 6.19%
EMS Technologies, Inc. (4) 1,000,000 0 5.70% 1,000,000 0 1,000,000 5.49%
(1) Technology Systems International, Inc. (TSI) is a privately owned entity
with no person or entity owning in excess of 25% of the outstanding shares.
Shareholders who beneficially control 10% or more of the outstanding shares
of TSI are as follows: Richard C. Jones, owner of 5,301,826 TSI shares,
representing 23.10% of the outstanding TSI shares, and EMS Technologies,
Inc., a publicly owned company, owner of 3,138,364 TSI shares, representing
13.67% of the outstanding TSI shares. (Also see footnote 3 below for EMS
Technologies, Inc. ownership of Alanco common stock.) Robert R. Kauffman,
Chairman and Chief Executive Officer of Alanco, is also a shareholder of
TSI and beneficially owns 455,000 shares of TSI stock, representing an
ownership position of less than 2% of the outstanding TSI shares. No other
executive officer or director of the Company owns shares of TSI. The
Company anticipates that TSI will distribute the 6,000,000 shares of Alanco
common stock on a pro-rata basis to their shareholders. TSI's address is
15575 North 83rd Way, Suite 4, Scottsdale, Arizona 85260.
(2) In addition to the shares shown above, Robert R. Kauffman, Alanco Chairman
and Chief Executive Officer, also beneficially owns 455,000 shares of TSI
stock. If TSI distributes the 6,000,000 shares of Alanco common stock owned
by TSI to TSI shareholders on a proportionate basis, Mr. Kauffman will
acquire an additional approximately 118,700 shares of Alanco common stock,
thereby increasing his percentage of common shares owned to approximately
5.52% and total stock and options percentage of common equivalent owned to
approximately 13.21%.
(3) M. Jamil Akhtar, M.D. currently owns 100% of the outstanding Series B
Convertible Preferred Stock of the Company. Each share of preferred
stock is convertible into thirteen (13) shares of Class A Common Stock.
Dr.Akhtar's address is 1454 South Dobson, Suite One, Mesa, Arizona 85202.
(4) Pursuant to a $100,000 note agreement with TSI, EMS may convert all, or any
portion, of the principal balance due on the note into shares of Alanco
common stock at a conversion price of one share for each dollar converted.
The above table does not reflect this conversion right. The address for EMS
Technologies, Inc., a publicly owned company, is 660 Engineering Drive,
Norcross, Georgia 30092.
(5) The percentages for Common Stock shown are calculated based upon 17,549,059
shares of common stock outstanding on October 16, 2002. The percentages for
Preferred Stock are calculated based upon 50,632 shares of preferred stock
outstanding on October 16, 2002.
(6) In calculating the percentage of ownership, option and warrant shares are
deemed to be outstanding for the purpose of computing the percentage of
shares of common stock owned by such person, but are not deemed to be
outstanding for the purpose of computing the percentage of shares of common
stock owned by any other stockholders.
Current Directors and Officers
The following table sets forth the number of exercisable stock options and the
number of shares of the Company's Common Stock beneficially owned as of October
16, 2002, by individual directors and executive officers and by all directors
and executive officers of the Company as a group.
The number of shares beneficially owned by each director or executive officer is
determined under rules of the Securities and Exchange Commission, and the
information is not necessarily indicative of the beneficial ownership for any
other purpose. Unless otherwise indicated, each person has sole investment and
voting power (or shares such power with his or her spouse) with respect to the
shares set forth in the following table.
Securities of the Registrant Beneficially Owned (1)
-------------------------------------------------------------------------------
Shares Total Total
Owned Stock Stock and
Number Percent Exercisable Owned Options
Name of of Shares of Class Stock And Percent of
Beneficial Owner Title (2) Owned (7) Options (8) Options Class (9)
---------------------------------------------------------------------------------------------------------------------------
Robert R. Kauffman (3) Dir/COB/ 850,132 4.84% 1,655,000 2,505,132 13.04%
CEO
John A. Carlson Dir/EVP/ 154,958 0.88% 575,000 729,958 4.03%
CFO
Harold S. Carpenter Dir 136,441 (5) 0.78% 100,000 236,441 1.34%
James T. Hecker Dir 27,393 (6) 0.16% 100,000 127,393 0.72%
Steven P. Oman Dir 20,000 0.11% 125,000 145,000 0.82%
Thomas C. LaVoy Dir 91,930 0.52% 80,000 171,930 0.98%
Donald E. Anderson (4) Dir 825,322 4.70% 520,000 1,345,322 7.45%
Officers and Directors as a Group 2,106,176 12.00% 3,155,000 5,261,176 25.41%
(7 individuals)
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission ("SEC") and generally includes voting
or investment power with respect to securities. In accordance with SEC
rules, shares that may be acquired upon conversion or exercise of stock
options, warrants or convertible securities which are currently
exercisable or which become exercisable within 60 days are deemed
beneficially owned. Except as indicated by footnote, and subject to
community property laws where applicable, the persons or entities named
in the table above have sole voting and investment power with respect to
all shares of Common Stock shown as beneficially owned.
(2) Dir is Director; COB is Chairman of the Board; CEO is Chief Executive
Officer; EVP is Executive Vice President; CFO is Chief Financial
Officer.
(3) In addition to the shares shown above, Robert R. Kauffman, Alanco
Chairman and Chief Executive Officer, also beneficially owns 455,000
shares of TSI stock. If TSI distributes the 6,000,000 shares of Alanco
common stock owned by TSI to TSI shareholders on a proportionate basis,
Mr. Kauffman will acquire an additional approximately 118,700 shares of
Alanco common stock, thereby increasing his percentage of common shares
owned to approximately 5.52% and total stock and options percentage of
common stock owned to approximately 13.66%. The address for Mr. Kauffman
is: c/o Alanco Technologies, Inc., 15575 N. 83rd Way, Suite 3,
Scottsdale, AZ 85260.
(4) The number of shares and warrants owned includes The Anderson Family
Trust, owner of 505,322 shares of Alanco common stock and 200,000
exercisable warrants, Programmed Land, Inc., owner of 320,000 shares of
Alanco common stock and 200,000 exercisable warrants, both of which Mr.
Anderson claims beneficial ownership, and 100,000 exercisable warrants
owned by The Anderson Family Trust. Mr. Anderson's address is 11804 North
Sundown Drive, Scottsdale, Arizona 85260.
(5) Excludes 432,632 shares of Common Stock and 20,000 warrants to purchase
Common Stock owned by Heartland Systems Co., a company for which Mr.
Carpenter serves as an officer. Mr. Carpenter disclaims beneficial
ownership of such shares.
(6) Excludes 522,260 shares of Common Stock and 20,000 warrants to
purchase Common Stock owned by Rhino Fund LLLP. The fund is
controlled by Rhino Capital Incorporated, for which Mr. Hecker serves
as Treasurer and General Counsel. Mr. Hecker disclaims beneficial
ownership of such shares.
(7) The percentages shown are calculated based on a total of 17,549,059
shares of common stock outstanding on October 16, 2002. The percentages
do not include 50,632 shares of preferred stock outstanding, each share
of which is convertible into thirteen shares of common stock and
therefore equivalent in voting power to 658,216 shares of common stock.
(8) Represents unexercised stock options issued to named executive officers
and directors. All options issued to the executive officers and directors
were exercisable at October 16, 2002.
(9) The number and percentages shown include the shares of common stock
actually owned as of October 16, 2002 and the shares of common stock that
the identified person or group had a right to acquire within 60 days
after October 16, 2002. In calculating the percentage of ownership,
shares are deemed to be outstanding for the purpose of computing the
percentage of shares of common stock owned by such person, but are not
deemed to be outstanding for the purpose of computing the percentage of
shares of common stock owned by any other stockholders.
Meetings and Committees of the Board of Directors
The Board of Directors has a Compensation/Administration Committee, which was
formed in 1995 and is composed of independent directors who are not employees of
the Company. The Compensation/Administration Committee is comprised of Messrs.
Harold Carpenter and James Hecker. The Compensation/Administration Committee
recommends to the Board the compensation of executive officers and serves as the
Administrative Committee for the Company's Stock Option Plans. The
Compensation/Administration Committee met two times during the fiscal year ended
June 30, 2002.
The Board of Directors also has an Audit Committee, also formed in 1995. The
Audit Committee, comprised of Messrs. Harold Carpenter, James Hecker, and Thomas
LaVoy, all of whom have significant business experience and are deemed to be
financially knowledgeable, serves as a liaison between the Board and the
Company's auditor. The Audit Committee provides general oversight of the
Company's financial reporting and disclosure practices, system of internal
controls, and the Company's processes for monitoring compliance with Company
policies. The Audit Committee reviews with the Company's independent auditors
the scope of the audit for the year, the results of the audit when completed,
and the independent auditor's fee for services performed. The Audit Committee
also recommends independent auditors to the Board of Directors and reviews with
management, and internal audit, various matters related to its internal
accounting controls. The Audit Committee is comprised of independent members as
defined under the National Association of Securities Dealers listing standards.
The Audit Committee met four times during the fiscal year ended June 30, 2002.
All meetings held by the Board of Directors' committees were attended by each of
the directors serving on such committees.
The Company's Board of Directors held four meetings during the fiscal year ended
June 30, 2002, at which time all Directors were present.
In July 2002 Mr. Robert H. Friesen submitted his resignation as a member of
Alanco's Board of Directors due to personal reasons. Upon nomination and
approval by the Board, Mr. Donald E. Anderson was elected to serve as a Director
until the next election of the Board of Directors by the Shareholders. All
current members of the Board of Directors' committees are expected to be
nominated for reelection at a meeting of the Board of Directors following the
annual meeting.
Compliance with Section 16(a) of Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and Directors, and persons who own more than 10% of a registered class
of the Company's equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission ("SEC"). Officers,
Directors and greater than 10% shareholders are required by SEC regulations to
furnish the Company with copies of all Section 16(a) forms they file. Based
solely upon a review of the copies of such forms furnished to the Company, or
written representations that no Forms 5 were required, the Company believes that
as of the date of filing of this Proxy Statement, all Section 16(a) filing
requirements applicable to its officers, Directors and greater than 10%
beneficial owners were satisfied.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth the compensation paid or accrued by the Company
for the services rendered during the fiscal years ended June 30, 2002, 2001 and
2000 to the Company's Chief Executive Officer and Chief Financial Officer, whose
salaries and bonus exceeded $100,000 during the last fiscal year (collectively,
the "Named Executive Officers"). No stock appreciation rights ("SARs") have been
granted by the Company to any of the Named Executive Officers during the last
three fiscal years.
Annual Compensation Long Term Compensation
---------------------------------------------- ----------------------
Name and Other Securities (# shares)
-------- ----- ---------------------
Principal Annual Annual Underlying Options
--------- ------ ------ ------------------
Position Salary Bonus Compensation (1) Granted during FY
-------- ------ ----- ---------------- -----------------
Robert R. Kauffman, C.E.O.
FY 2002 $134,812 None $17,400 250,000
FY 2001 $129,000 None $17,400 200,000
FY 2000 $111,000 None $17,400 200,000
John A. Carlson, C.F.O.
FY 2002 $124,270 None $9,280 100,000
FY 2001 $119,250 None $8,980 100,000
FY 2000 $102,000 $25,000 $7,965 100,000
(1) Represents supplemental executive benefit reimbursement for the year and
Company matching for Alanco's 401(K) Profit Sharing Plan.
Option Grants in Last Fiscal Year
The following table sets forth each grant of stock options made during the
fiscal year ended June 30, 2002, to each of the Named Executive Officers and/or
Directors and to all other employees as a group. No stock appreciation rights
("SARs") have been granted by the Company.
INDIVIDUAL GRANTS
Number of
Securities % of Total
Underlying Options Exercise
Options Granted to Price Grant Expiration
Name Granted (#) Employees ($/Sh) Date Date
Robert Kauffman 250,000 7.81% $1.00 10/29/01 10/29/11
John Carlson 100,000 3.12% $1.00 10/29/01 10/29/11
Harold Carpenter 20,000 0.62% $1.00 8/1/01 8/1/11
James Hecker 20,000 0.62% $1.00 8/1/01 8/1/11
Steven Oman 20,000 0.62% $1.00 8/1/01 8/1/11
Steven Oman 25,000 0.78% $1.00 5/16/02 5/16/12
Thomas LaVoy 20,000 0.62% $1.00 8/1/01 8/1/11
Robert Friesen 20,000 0.62% $1.00 8/1/01 8/1/11
Other Employees 2,727,500 85.17% $1.00 Various (1)
Total 3,202,500
(1) These options expire ten years from the date of grant. Options for
625,000 of the 2,727,500 shares vest over a two-year period from grant
date, and the balance of 2,102,500 shares, which were granted to
employees of Technology Systems International, Inc., vest over a
three-year period from date of grant.
Unless otherwise noted, options are granted at "grant-date market." During the
fiscal year, 1,058,858 previously granted stock options expired or were
cancelled.
Aggregated Options - Exercised in Last Fiscal Year and Option Values at Fiscal
Year End
The following table sets forth the number of exercised and unexercised options
held by each of the Named Executive Officers and/or Directors at June 30, 2002,
and the value of the unexercised, in-the-money options at Fiscal Year End.
Value of
Unexercised Unexercised
Shares Value Options at In-The-Money
Acquired On Realized Fiscal Year End Options (3)
Name Exercise ($) (1) (Shares) (2) At FYE
---- --------- ------- ------------ ------
Robert Kauffman None $0 1,505,000 $50,000
John Carlson None $0 500,000 $5,000
Harold Carpenter None $0 80,000 $0
James Hecker None $0 80,000 $0
Steven Oman None $0 105,000 $0
Thomas LaVoy None $0 60,000 $0
Donald Anderson None $0 500,000 $0
(1) Calculated as the difference between closing price on the date exercised
and the exercise price, multiplied by the number of options exercised.
(2) Represents number of securities underlying unexercised options at
Fiscal Year End. All options issued to Named Executive
Officers and Directors were exercisable at Fiscal Year End.
(3) Calculated as the difference between closing price on June 28, 2002 and
the exercise price, for those options with an exercise price less than
the closing price, multiplied by the number of applicable options.
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 150,000 (1) 9/23/2002 9/23/2002 9/23/2012 $0.75
John A. Carlson 75,000 (1) 9/23/2002 9/23/2002 9/23/2012 $0.75
Harold S. Carpenter 20,000 (2) 9/23/2002 9/23/2002 9/23/2012 $0.75
Steven P. Oman 20,000 (3) 9/23/2002 9/23/2002 9/23/2012 $0.75
Thomas C. LaVoy 20,000 (2) 9/23/2002 9/23/2002 9/23/2012 $0.75
Donald E. Anderson 20,000 (2) 9/23/2002 9/23/2002 9/23/2012 $0.75
(1) Issued pursuant to the 2000 Stock Option Plan.
(2) Issued pursuant to the 2000 Directors & Officers Stock Option Plan.
(3) Issued pursuant to the 1999 Directors & Officers Stock Option Plan.
Employment Agreements and Executive Compensation
The named Executive Officers are at-will employees without employment
agreements.
Compensation of Directors
During Fiscal Year 2002, non-employee Directors were compensated for their
services in cash ($750 per meeting per day up to a maximum of $1,500 per
meeting) and through the grant of options to acquire shares of Common Stock as
provided by the 1996, 1998, 1999, and 2000 Directors and Officers Stock Option
Plans (the "D&O Plans") which are described below. All Directors are entitled to
receive reimbursement for all out-of-pocket expenses incurred for attendance at
Board of Directors meetings.
The 1996 Directors and Officers Stock Option Plan was approved by the Board of
Directors on September 9, 1996. Shareholders approved the 1998, 1999, and 2000
Directors and Officers Stock Option Plans on November 6, 1998, November 5, 1999,
and November 10, 2000, respectively. The purpose of the 1996, 1998, 1999, and
2000 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. All Directors and
Executive Officers of the Company are eligible to participate in the 1996, 1998,
1999, and 2000 Plans. Newly appointed Directors 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 receives an additional option to purchase 20,000 shares of common stock
at fair market value.
Transactions with Management
During the fiscal year 2002 first quarter, Robert R. Kauffman, Chief Executive
Officer, repaid in full a personal promissory note in the amount of $47,875,
plus all accrued interest.
The following directors and officers of the Company participated in Alanco's
December 2001 private offering. Robert Kauffman, Chief Executive Officer,
purchased one-half unit, consisting of 20,000 shares and 5,000 warrants with an
exercise price of $1.00 per share, for a purchase price of $12,500; Programmed
Land, Inc., beneficially owned by Donald E. Anderson, a member of the Board of
Directors and a nominee, purchased eight units, consisting of 320,000 shares and
200,000 warrants with an exercise price of $1.00 per share, for a purchase price
of $200,000; and The Anderson Family Trust, also beneficially owned by Donald E.
Anderson, purchased eight units, consisting of 320,000 shares and 200,000
warrants with an exercise price of $1.00 per share, for a purchase price of
$200,000. The Rhino Fund LLLP, controlled by Rhino Capital Incorporated, for
which James Hecker, a member of the Board of Directors and a nominee, serves as
Treasurer and General Counsel, purchased two units, consisting of 80,000 shares
and 20,000 warrants with an exercise price of $1.00 per share, for a purchase
price of $50,000. Mr. Hecker disclaims beneficial ownership of these shares.
Heartland Systems Co., a company for which Harold Carpenter, a member of the
Board of Directors and a nominee, serves as an officer, purchased two units,
consisting of 80,000 shares and 20,000 warrants with an exercise price of $1.00
per share, for a purchase price of $50,000. Mr. Carpenter disclaims beneficial
ownership of these shares.
Mr. Steve Oman, a member of the Board of Directors and a nominee, received
compensation in the amount of $99,310 for legal services to the Company for
the fiscal year.
AUDIT COMMITTEE REPORT (1)
The Audit Committee of the Board of Directors is currently comprised of three
independent directors, and operates under a written charter adopted by the
Board. The members of the Audit Committee are Harold S. Carpenter, James T.
Hecker, and Thomas C. LaVoy.
The Audit Committee provides general oversight of the Company's financial
reporting and disclosure practices, system of internal controls, and the
Company's processes for monitoring compliance by the Company with Company
policies. The Audit Committee reviews with the Company's independent auditors
the scope of the audit for the year, the results of the audit when completed,
and the independent auditor's fee for services performed. The Audit Committee
also recommends independent auditors to the Board of Directors and reviews with
management, and internal audit, various matters related to its internal
accounting controls. During the last fiscal year, there were four meetings of
the Audit Committee.
Management is responsible for the Company's internal controls and the financial
reporting process. The independent auditors are responsible for performing an
independent audit of the Company's consolidated financial statements in
accordance with generally accepted auditing standards and issuing a report
thereon. The Audit Committee is responsible for overseeing and monitoring the
quality of the Company's accounting and auditing practices.
The members of the Audit Committee are not professionally engaged in the
practice of auditing or accounting and may not be experts in the fields of
accounting or auditing, or in determining auditor independence. Members of the
Audit Committee rely, without independent verification, on the information
provided to them and on the representations made by management and the
independent accountants. Accordingly, the Audit Committee's oversight does not
provide an independent basis to determine that management has maintained
procedures designed to assure compliance with accounting standards and
applicable laws and regulations. Furthermore, the Audit Committee's
considerations and discussions referred to above do not assure that the audit of
the Company's financial statements has been carried out in accordance with
generally accepted auditing standards, that the financial statements are
presented in accordance with generally accepted accounting principles or that
the Company's auditors are in fact "independent."
Review of Audited Financial Statements
In this context, the Audit Committee reviewed and discussed the Company's
audited financial statements with management and with the Company's independent
auditors. Management represented to the Audit Committee that the Company's
consolidated financial statements were prepared in accordance with generally
accepted accounting principles. Discussions about the Company's audited
financial statements included the auditor's judgments about the quality, not
just the acceptability, of the accounting principles, the reasonableness of
significant judgments and the clarity of disclosures in its financial
statements. The Audit Committee also discussed with the auditors other matters
required by Statement on Auditing Standards, ("SAS") No. 61 "Communication with
Audit Committees," as amended by SAS No. 90, "Audit Committee Communications."
The Company's auditors provided to the Committee written disclosures required by
the Independence Standards Board Standard No. 1 "Independence Discussion with
Audit Committee." The Audit Committee discussed with the auditors their
independence from the Company, and considered the compatibility of non-audit
services with the auditor's independence.
Audit Fees
The aggregate fees billed by Semple & Cooper, LLP, the Company's independent
auditor, for professional services rendered for the audit of the Company's
annual financial statements for the fiscal year ended June 30, 2002 and the
review of the financial statements included in the Company's Forms 10-QSB for
such fiscal year were approximately $45,000.
Financial Information Systems Design and Implementation
There were no fees billed for the professional services described in Paragraph
(c)(4)(ii) of Rule 2-01 of Regulation S-X rendered by Semple & Cooper, LLP for
the fiscal year ended June 30, 2002.
All Other Fees
Semple & Cooper, LLP billed the Company during the current fiscal year a total
of approximately $7,000 for tax preparation and tax consulting services. The
Audit Committee has considered whether the provision of these services is
compatible with maintaining the principal accountant's independence.
Recommendation
Based on the Audit Committee's discussion with management and the auditors, and
the Audit Committee's review of the representations of management and the report
of the auditors to the Audit Committee, the Audit Committee recommended to the
Board of Directors that the audited financial statements be included in the
Company's Annual Report on Form 10-KSB for the year ended June 30, 2002, filed
with the Securities and Exchange Commission.
AUDIT COMMITTEE
Harold S. Carpenter
James T. Hecker
Thomas C. LaVoy
-------------------------------
(1) The material in this report is not "soliciting material," is not deemed
filed with the commission and is not be to incorporated by reference in any
filing of the Company under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, whether made before or after the
date hereof and irrespective of any general incorporation language in any such
filing.
Proposal No. 1 ELECTION OF DIRECTORS
The Articles of Incorporation presently provide for a Board of Directors of not
more than nine members. The number of Directors of the Company has been fixed at
seven by the Company's Board of Directors. The Company's Board of Directors
recommends the election of the seven 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 seven 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 68 Director 1995
James T. Hecker 45 Director 1997
Robert R. Kauffman 62 Director/C.O.B./C.E.O. 1998
Thomas C. LaVoy 42 Director 1998
Steven P. Oman 53 Director 1998
John A. Carlson 55 Director/E.V.P./C.F.O. 1999
Donald E. Anderson 68 Director 2002
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 Kyocera Solar, 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
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 Vice President, Treasurer and
General Counsel of Rhino Capital Incorporated, 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.
John A. Carlson: Mr. Carlson, Executive Vice President and
Chief Financial Officer of Alanco Technologies, Inc., joined the Company in
September 1998 as Senior Vice President/Chief Financial Officer. Mr. Carlson
started his career with Price Waterhouse& Co. in Chicago, Illinois. He has
over twenty-five years of public and private financial and operational
management experience, including over twelve years as Chief Financial
Officer of a Fortune 1000 printing and publishing company. He earned his
Bachelor of Science degree in Business Administration at the University of
South Dakota, and is a Certified Public Accountant.
Donald E. Anderson: Donald E. Anderson is President and owner of
Programmed Land, Inc., a Minnesota and Scottsdale, Arizona, based company.
Programmed Land is a diversified holding company engaged in real estate,
including ownership, development, marketing and management of properties.
He is also majority owner of a company involved in the automotive industry.
From 1988 until 1997, Mr. Anderson was Chairman of the Board of NASDAQ-listed
Photocomm, Inc., a company involved in the solar electric business. Since
1983, Mr. Anderson has also been President of Pine Summit Bible Camp,
a non-profit organization that operates a year-round youth camp in Prescott,
Arizona. Mr. Anderson has a B.A. degree in accounting.
Proposal No. 2 APPROVAL OF A PROPOSAL TO AUTHORIZE THE BOARD OF
DIRECTORS TO DECLARE, ONLY IF NECESSARY, A SINGLE REVERSE
SPLIT OF THE OUTSTANDING COMMON STOCK ON THE BASIS OF ONE
SHARE OF COMMON STOCK FOR UP TO TEN SHARES OUTSTANDING. IF
THE BOARD OF DIRECTORS HAS NOT EFFECTED THE ACTION
CONTEMPLATED HEREUNDER BY DECEMBER 31, 2005, THIS
AUTHORIZATION WILL CEASE.
The Board of Directors has recommended a proposal to the Company's Shareholders
authorizing the Board of Directors to declare a reverse stock split of the
Company's Common Stock 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") or for other suitable reasons that the Board determines is
appropriate and in the best interests of the Company and its Shareholders. The
effective date and the precise number of shares to be converted is to be
determined by the Company's Board of Directors at a later time, but under no
circumstances would the reverse stock split be greater than 1 for 10. (This is a
similar proposal that the Shareholders approved at the Shareholder Meeting of
November 6, 1998, at the Shareholder Meeting of November 5, 1999, and at the
Shareholder Meeting of November 10, 2000. Authorization under those proposals
extended to October 31, 1999, October 31, 2000, and October 31, 2002,
respectively, and has not been used. The Board of Directors believes the
continuation of that proposal through December 31, 2005, is prudent for the
reasons explained below.) The Board is requesting Shareholder authorization to
declare up to a 1 for 10 reverse stock split of the Company's Common Stock, only
if necessary, in order to keep the Common Stock eligible to be quoted on The
NASDAQ Stock Market ("NASDAQ") or to effect any other suitable cause that is in
the best interests of the Company and its shareholders. Approval of this
proposal would authorize the Board to declare one reverse split from the time of
approval until December 31, 2005. 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.
As of the date of this Proxy Statement, the Company has received notice from
NASDAQ that the Company's stock price does not meet the NASDAQ listing
eligibility requirement of a minimum closing bid price of $1.00. However, NASDAQ
has determined that the Company does meet the initial listing requirements for
the NASDAQ SmallCap Market and has given the Company until February 10, 2003, to
meet the closing bid price requirement. If this requirement is not satisfied by
that date, the Company will receive written notification from NASDAQ that the
Company's securities will be delisted. At that time, the Company may appeal
NASDAQ's delisting determination to a Listing Qualification Panel.
It is recommended that the shareholders give authorization until December 31,
2005, to the Board of Directors to effect up to a 1 for 10 reverse stock split
of the Company's Common Stock. 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
exceeding NASDAQ's minimum bid price of $1.00, or providing compliance with
stock price requirements for any other purpose.
For example, if the Board of Directors elects to effect a 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. At the discretion of the Board of
Directors, fractional shares created by the reserve stock split may either be
rounded to the nearest whole share or cash will be paid for such fractional
shares.
EFFECT OF REVERSE SPLIT ON HOLDERS OF ODD LOTS OF SHARES
If the maximum 1 for 10 reverse split is authorized and declared, the reverse
split would result in holders of 990 or fewer shares holding an "odd lot" or
less than 100 shares. 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 2002 STOCK OPTION PLAN
The Company's Board of Directors approved submitting the Alanco Technologies,
Inc. 2002 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 exercise price 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 $951,000 based upon the average ten trading day closing
price for the Company's common stock for the period ending August 23, 2002. 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,
or other alternative vesting as may be determined by the Administrative
Committee. 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 2002 DIRECTORS AND OFFICERS
STOCK OPTION PLAN
The Company's Board of Directors approved submitting the Alanco Technologies,
Inc. 2002 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 $317,000
based upon the average ten trading day closing price for the Company's common
stock for the period ending August 23, 2002. The vesting and 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. 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. 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. 5 PROPOSAL AUTHORIZING THE BOARD OF DIRECTORS TO CHANGE
THE CORPORATE NAME OF THE COMPANY, IF AND WHEN THEY
BELIEVE IT IS APPROPRIATE, PRUDENT, AND IN THE
BEST INTERESTS OF ALANCO AND ITS SHAREHOLDERS. THIS
AUTHORIZATION WILL BE IN EFFECT UNTIL DECEMBER 31, 2005.
The Board of Directors recommends Shareholder approval of an Amendment to the
Company's Articles of Incorporation authorizing a change of the corporate name
of the Company. The purpose of this proposed name change is to have the
corporate name more accurately depict the Company's current and future business
activities. This authorization would allow the Company's Board of Directors to
change the corporate name of the Company, if and when they believe it is
appropriate, prudent, and in the best interests of Alanco and its Shareholders.
If the Board of Directors has not effected the action contemplated hereunder by
December 31, 2005, this authorization will cease.
INDEPENDENT AUDITOR
Semple & Cooper, LLP, Phoenix, Arizona, was appointed as the Company's
Independent Auditor for the fiscal years ended June 30, 2000, 2001, and 2002.
The Company anticipates the appointment of Semple & Cooper, LLP to audit the
Company's financial statements for the fiscal year ending June 30, 2003. A
representative of Semple & Cooper, LLP is expected to attend the Shareholders'
Meeting and will have an opportunity to make a statement if the representative
desires to do so and is expected to be available to respond to appropriate
questions.
REQUEST FOR COPY OF FORM 10-KSB
Shareholders may view a copy of the Form 10-KSB online via the Company's website
at www.alanco.com, or may receive a copy, without charge, via e-mail request to
alanco@alanco.com, by calling the company at (480) 607-1010, Ext. 857, or by
writing to the Company, to the attention of the Company's Corporate Secretary at
15575 N. 83rd Way, Suite 3, Scottsdale, Arizona 85260.
SHAREHOLDER PROPOSALS TO BE PRESENTED AT THE NEXT ANNUAL MEETING;
DISCRETIONARY AUTHORITY; OTHER BUSINESS
Any shareholder who intends to present a proposal at the annual meeting of
shareholders for the year ending June 30, 2003 and have it included in the
Company's proxy materials for that meeting generally must deliver the proposal
to us for our consideration not less than 120 calendar days in advance of the
date of the Company's proxy statement released to security holders in connection
with the previous year's annual meeting of security holders and must comply with
Rule 14a-8 under the Securities Exchange Act of 1934, as amended. In accordance
with the above rule, the applicable proposal submission deadline for the 2003
annual meeting of shareholders would be June 18, 2003.
Pursuant to Rule 14a-4 under the Securities Exchange Act of 1934, as amended,
the Company intends to retain discretionary authority to vote proxies with
respect to shareholder proposals properly presented at the Meeting, except in
circumstances where (i) the Company receives notice of the proposed matter a
reasonable time before the Company begins to mail its proxy materials (including
this proxy statement), and (ii) the proponent complies with the other
requirements set forth in Rule 14a-4.
The Board of Directors is not aware of any other business to be considered or
acted upon at the Meeting other than that for which notice is provided, but in
the event other business is properly presented at the Meeting, requiring a vote
of shareholders, the proxy will be voted in accordance with the judgment on such
matters of the person or persons acting as proxy (except as described in the
preceding paragraph). If any matter not appropriate for action at the Meeting
should be presented, the holders of the proxies shall vote against the
consideration thereof or action thereon.
ADELE L. MACKINTOSH
SECRETARY
Scottsdale, Arizona
October 16, 2002
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Robert R. Kauffman, Chief Executive Officer of Alanco Technologies, Inc.,
certify that:
1. The Proxy Statement of Alanco Technologies, Inc. for use at the Company's
Annual Meeting of Shareholders to be held on November 22, 2002, as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), which
this statement accompanies, fully complies with the requirements of Section
13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of Alanco
Technologies, Inc.
/s/ Robert R. Kauffman
-----------------------
Robert R. Kauffman
Chief Executive Officer
October 16, 2002
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, John A. Carlson, Chief Financial Officer of Alanco Technologies, Inc.,
certify that:
1. The Proxy Statement of Alanco Technologies, Inc. for use at the Company's
Annual Meeting of Shareholders to be held on November 22, 2002, as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), which
this statement accompanies, fully complies with the requirements of Section
13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of Alanco
Technologies, Inc.
/s/ John A. Carlson
--------------------
John A. Carlson
Chief Financial Officer
October 16, 2002
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Adele L. Mackintosh, Secretary of Alanco Technologies, Inc., certify that:
1. The Proxy Statement of Alanco Technologies, Inc. for use at the Company's
Annual Meeting of Shareholders to be held on November 22, 2002, as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), which
this statement accompanies, fully complies with the requirements of Section
13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of Alanco
Technologies, Inc.
/s/ Adele L. Mackintosh
------------------------
Adele L. Mackintosh
Secretary
October 16, 2002