NOTICE OF WRITTEN CONSENT OF SHAREHOLDERS
TO FILL VACANCY ON THE BOARD OF DIRECTORS
To the Shareholder of
Auto-Graphics, Inc.
Enclosed is a Proxy Statement and a Written Consent of Shareholders
of Auto-Graphics, Inc., a California corporation (the "Company"). The
Written Consent ("Consent") is for the following purpose:
1. To fill the vacant seat on the Board of Directors of Auto-
Graphics, Inc. to serve until a successor shall have been duly elected and
qualified.
In accordance with the Company's Bylaws, June 14, 2001 has been fixed
as the record date for the determination of shareholders entitled to vote to
fill the vacancy
Shareholders who wish to vote in favor of filling the vacancy on the
Company's Board of Director with the nominee, James R. Yarter, are urged to
complete, sign and date the enclosed Consent and mail it in the envelope
provided.
Shareholders who oppose the filling of the vacancy on the Company's
Board of Directors with the nominee, James R. Yarter, should not complete,
sign and date the enclosed consent.
Very truly yours,
By: /s/Robert S. Cope
_____________________
Robert S. Cope
Pomona, California
June 20, 2001
PROXY STATEMENT
INTRODUCTION
This Proxy Statement and Written Consent of Shareholders ("Consent")
of Auto-Graphics, Inc., a California corporation (the "Company"), located at
3201 Temple Avenue, Pomona, California 91768, is furnished to shareholders on
June 20, 2001 in connection with filling a vacant seat on the Company's Board
of Directors.
SOLICITATION OF PROXY STATEMENT
AND CONSENT
The Proxy Statement and accompanying Consent is solicited by Robert
S. Cope. Robert S. Cope intends to solicit the Consent principally by use of
the mails and electronic media. The cost of soliciting the Consent will be
borne by Robert S. Cope, including reimbursement of any expenses incurred by
banks, brokerage houses, custodians, nominees and fiduciaries in connection
with such solicitation.
The Proxy Statement and accompanying Consent is not being solicited
on behalf of the Company's Board of Directors.
VOTING
If you are in favor of filling the vacancy on the Board of Directors
with the nominee, James R. Yarter, then the Consent should be signed, dated
and returned in the enclosed envelope as soon as possible. If you are not in
favor of filling the vacancy on the Board of Directors with James R. Yarter,
then you should not the sign the Consent. Any shareholder executing and
returning the Consent as provided for herein may revoke such Consent by
providing written notice of such revocation to the Secretary of the Company
at any time prior to the time that the Consent with the number of shares
required to authorize the filling of the vacancy on the Board of Directors
has been filed with the Secretary of the Company. The number of shares
required to fill the vacancy with the nominee, James R. Yarter is 2,498,618
shares.
VOTING BY EXECUTING THE CONSENT
The execution by a shareholder of the Consent is a vote in favor of
the election of James R. Yarter, the nominee, to fill the vacancy on the
Company's Board of Directors. The record date for the determination of
shareholders entitled to execute the Consent to fill the vacancy on the Board
of Directors is June 14, 2001. All voting rights are vested exclusively in
the holders of the Company's Common Stock. As of the close of business on
the record date, there were 4,997,234 shares of the Company's Common Stock
outstanding.
Each share of Common Stock is entitled to one vote on filling the
vacancy on the Board of Directors; however, any shareholder eligible to vote
for the election of directors is entitled to cumulate votes and give one
candidate a number of votes equal to the number of directors to be elected
multiplied by the number of votes to which the shareholder's shares are
entitled, or to distribute the shareholder's votes on the same principle
among as many candidates as the shareholder thinks fit.
To be entitled to exercise cumulative voting rights for the election
of directors, a shareholder must give notice to the Secretary of the Company
of such person's desire to cumulate votes for one or more candidates whose
name(s) have been placed in nomination prior to the commencement of voting
for the election of directors. If any shareholder exercises the right to
cumulate votes for the election of directors, then all shareholders are
entitled to cumulative voting rights for the election of directors. The
enclosed form of Consent being solicited by Robert S. Cope does not provide
for cumulative voting rights.
NOMINATION AND ELECTION OF DIRECTOR
TO FILL VACANCY ON
BOARD OF DIRECTORS
Election of Director
The Company's Articles of Incorporation provide that the authorized
number of directors shall be three members. The number of persons
constituting and comprising the Company's Board of Directors is currently
two. Robert S. Cope is proposing one nominee as candidate for election to
fill the vacancy on the Company's Board of Directors. Consent received by
the Shareholders will only be voted for the nominee set forth in this Consent
and within the Consent solicitation. The nominee named below will be elected
to serve until the next annual meeting and/or until a successor shall have
been duly elected and qualified.
Nominee for Election as Director
Set forth below is certain information pertaining to the person who
is proposed as nominee for election to fill the vacancy on the Company's
Board of Directors.
Shares of the
Company's
Common
Name and Principal Year First Stock Owned Percent
Occupation or Employment Became Beneficiary as of
Relationship of Nominee Age a Director of Record Date Class
- ----------------------- --- ---------- -------------- ------
James R. Yarter 62 2001 -0- -0-
Director
Advaset, Inc.
James R. Yarter is a first time nominee for election to the Company's
Board of Directors. Mr. Yarter is not the beneficial owner of any shares of
the Company's Common Stock. Mr. Yarter's prior business background and
experience covers a period of 35 years. His experience includes being the
Chief Executive Officer of several companies, including two companies listed
on the NASDAQ Stock Exchange. Presently Mr. Yarter serves on the board of
directors of Advaset, Inc.
Other Business
The Consent may be executed in counterparts and facsimile signatures
are recognized as original signatures.
INFORMATION CONCERNING THE BOARD OF DIRECTORS
During 2000 the Company's Board of Directors did not hold any formal
meetings, however, there were eight (8) actions by unanimous written consent
as authorized by the California Corporations Code and the Company's Bylaws.
The Company's Board of Directors does not maintain standing audit,
nominating or compensation committees. These matters are considered and
acted upon by the entire Board of Directors. Directors receive no fees for
serving on the Board of Directors or attending meetings.
EXECUTIVE COMPENSATION
The following table summarized the aggregate annual cash compensation
and long-term incentive compensation of the Company's Chief Executive Officer
and each of the named executive officers whose total cash compensation for
the fiscal year ended December 31, 2000 for services rendered in all
capacities exceeded $100,000 and cash compensation received by each named
executive officer for the Company's two previous fiscal years:
Summary Compensation Table
Long-Term Compensation
Principal Annual Compensation Number of Securities
Name Position Year Salary Underlying Options
- ----------- -------- ------ ------ --------------------
R. S. Cope CEO 2000 $137,000 None
1999 156,000
1998 133,000
M.K. Skiles President 2000 $102,000 None
C.M. Patick EVP 2000 $145,000 None
D.E. Luebben CFO 2000 $108,000 None
1999 93,000
1998 100,000
W. J. Kliss COO 2000 $ 69,000 None
1999 138,000
1998 138,000
There have been no restricted stock awards for the three years ending
December 31, 2000. Restricted stock holdings (owned personally) as of the
fiscal year ended December 31, 2000 are as follows: R.S. Cope, 1,614,675
shares, C.M. Patick, 91,980 shares, and D.E. Luebben, 15,000 shares,
respectively. Mr. Kliss is no longer employed by the Company as of April,
2000. Mr. Patick is no longer employed by the Company as of January, 2001.
Mr. Luebben is no longer employed by the Company as of February 2001. See
item 12 Security Ownership of Certain Beneficial Owners of Management.
1997 Non-Qualified Stock Option Plan
The Company adopted a 1997 Non-Qualified Stock Option Plan effective
December 31, 1997. The Plan consists of 300,000 shares of the Company's
authorized but unissued Common Stock which shares have been reserved for
possible future issuance under the Plan. The plan is a non-qualified plan
covering only senior executives and related persons. At the inception of the
Plan, the Company granted options to four (4) persons whereby they were
entitled to purchase up to a total of 142,500 shares over the next five years
at a price of .055 per share. In 1999, all options granted were relinquished
by the participants, except for 10,000 shares and as of December 31, 2000
there were 10,000 outstanding grants of options under the Plan. The Plan was
filed as an exhibit (10.25) to the Company's Annual Report to the SEC on Form
10-K for the year ended December 31, 1997, and is incorporated herein by
reference.
The Company's management intends to propose for approval by the
Company's stockholders at the Company's 2001 Annual Meeting of Stockholders a
qualified (incentive stock option) plan consisting of approximately 10%
(currently 500,000 shares) of the Company's then issued and outstanding
shares of Common Stock to be reserved for future issuance to employees of the
Company.
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
The table below reflects information pertaining to certain beneficial
owners of the Company's Common Stock known to own more than five percent (5%)
of the Company's Securities and all officers and directors of the Company as
a group as of June 1, 2001:
Shares of the
Company's
Common
Stock Owned Percent
Beneficially as of
Names of Beneficial Owner of Record Date Class
- ------------------------- --------------- -------
R.S. Cope 2,176,527 44%
Chairman of the Board and Director
Auto-Graphics, Inc.
Paul R. Cope 373,602 7%
Chief Technology Officer
Auto-Graphics, Inc.
Robert H. Bretz 309,000 6%
Director
Auto-Graphics, Inc.
All Officers and Directors 2,111,925 42%
as a group (5 persons)
The shares listed above as beneficially owned by Robert S. Cope are
owned by him and his wife as Trustees of the Cope Family Trust (32%) or by
certain members of his immediate family (12%), inclusive of 373,602 shares
(7%) owned by Paul R. Cope.
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors, executive officers and ten percent (10%) shareholder to
file forms with the SEC to report their ownership of the Company's shares and
changes in said ownership. Anyone required to file forms with the SEC must
also send copies of the forms to the Company. Based on information provided
to the Company by such persons, the Company is not aware of any delinquencies
in the filing of such reports.
CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS
Warrants
In May 1999, the Company entered into a selling agreement with an
associate pertaining to the Company's 1999 private placement offering, which
raised $1,251,000 in equity investment and resulted in the sale/ issuance of
an additional 1,501,200 shares of the Company's (restricted) Common Stock.
In November 2000, the Company sold and issued 240,000 3-year warrants for
$800 entitling the associate to purchase one share of the Company's
(restricted) Common Stock for each warrant for $.033 per share.
Subsequently, the associate sold the warrants to the Company's outside
director for an amount representing a substantial discount for the
(restricted) shares of the Company's Common Stock underlying such warrants as
compared to the reported market price for "free trading" shares of the
Company's Common Stock; and the purchaser/transferee then exercised the
warrants and purchased, and the Company caused to be sold and issued, the
240,000 shares of the Company's (restricted) Common Stock covered by such
warrants for the exercise (purchase) price for such shares under the warrants
(aggregating $8,000 or $0.033 per share). There are no warrants outstanding
at December 31, 2000.
Option to Purchase Restricted Stock
In May 1999, Robert S. Cope and the Cope Family Trust granted an
option to Corey M. Patick to purchase 1,125,000 (or 22%) of the Company's
Common Stock for $1.67 per share (adjusted for the 3-for-1 stock split
effective February 28, 2000). Patick subsequently exercised the option in
November of 2000 and the closing for the purchase of and payment for the
option shares, originally scheduled for November 2000, has been extended
several times by the parties; and such closing is currently scheduled to take
place no later than August 31, 2001. Mr. Patick owns 91,980 of 2% of the
shares of the Company's Common Stock (without taking the option shares into
account). Purchase of the option shares by Mr. Patick would increase his
stock ownership to 1,216,980 shares or 24% of the Company's issued and
outstanding stock and would represent a "change of control" of the Company
(under applicable securities law definitions).
Office Lease
The Company leases its corporate office and production facility from
a limited partnership owned by Robert S. Cope and former director/stockholder
of the Company, Douglas K. Bisch ("Lessor"). During 1999 and through April,
2000, the Company leased 29,260 square feet having an annual base rent of
$351,000 (plus expenses). In April 2000, the Company completed a planned
consolidation, which reduced the square footage occupied by the Company from
29,260 to 19,460 for a reduction in the Company's annualized rent expense of
$118,000 (plus expenses). During 2000, the Company paid base rent of
$273,000 (plus expenses) to the Lessor. The Company presently plans to enter
into a new lease agreement with the Lessor prior to the expiration in June
2001. The Company also has an option to purchase a one-third interest in the
Lessor from Mr. Bisch for an amount not to exceed $150,000.
Director
Robert H. Bretz is a director of the Company and also served as the
Company's outside legal counsel until May 9, 2001. In 2000, Mr. Bretz' firm
billing to the Company for legal services and expenses totaled approximately
$340,000
ADDITIONAL INFORMATION
Upon request of any shareholder, the Company will furnish without
charge a copy of the Company's latest Annual Report to the Securities and
Exchange Commission on Form 10-K, which contains certain additional
information about the Company which is not included in either this Proxy
Statement or the Company's accompanying Annual Report to Shareholders. All
such requests should be directed to the Chief Financial Officer at the above
corporate headquarters' address.
By: /s/ Robert S. Cope
______________________
Robert S. Cope
June 20, 2001
PLEASE SIGN, DATE AND MAIL OR FAX YOUR CONSENT
MAILING ADDRESS: ROBERT S. COPE
3201 TEMPLE AVENUE
POMONA, CALIFORNIA 91768
FACSIMILE PHONE NO. (909) 595-3506
THANK YOU
WRITTEN CONSENT OF SHAREHOLDERS
OF
AUTO-GRAPHICS, INC.
a California corporation
The undersigned shareholders, who together hold more than 50% of the
outstanding stock of Auto-Graphics, Inc, a California corporation, pursuant
to Section 603(d) of the California Corporation Code, hereby consent to and
adopt the following resolutions:
ELECTION OF DIRECTOR TO FILL VACANCY ON THE BOARD OF DIRECTORS
RESOLVED: That James R. Yarter be and hereby is elected to the board
of directors of this corporation to fill the vacancy on the board of
directors of this corporation. James R. Yarter shall serve on the board of
directors until the expiration of the term for the office and until a
successor has been elected and qualified.
EXECUTION
RESOLVED FURTHER: This Written Consent may be executed in
counterparts, each of which shall be deemed an original and all of which,
taken together, shall constitute one and same instrument. The execution of
this Written Consent by a shareholder completed by facsimile signature of the
shareholder shall constitute an original signature of such shareholder.
The undersigned shareholders of record of the corporation, hereby
consent to the adoption of the above foregoing actions on the ____ day of
June, 2001.
Dated:__________________________ ___________________________________
_________________________, Owner of
___________________shares of common
stock of Auto-Graphics, Inc.
Dated:__________________________
___________________________________
_________________________, Owner of
___________________shares of common
stock of Auto-Graphics, Inc.
Dated:__________________________
___________________________________
_________________________, Owner of
___________________shares of common
stock of Auto-Graphics, Inc.
Dated:__________________________
___________________________________
_________________________, Owner of
___________________shares of common
stock of Auto-Graphics, Inc.
Dated:__________________________
___________________________________
_________________________, Owner of
___________________shares of common
stock of Auto-Graphics, Inc.