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Octus Inc · PRE 14A · For 6/7/97

Filed On 4/18/97 · SEC File 0-21092 · Accession Number 936392-97-528

  As Of               Filer                 Filing     On/For/As Docs:Pgs              Issuer               Agent

 4/18/97  Octus Inc                         PRE 14A     6/07/97    1:14                                     936392

Preliminary Proxy Solicitation Material · Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: PRE 14A     Preliminary Proxy Statement                           14     84K

Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (RTF, XML, et al.) Employment Agreements and Termination of Employment
1	1st Page
10	Employment Agreements and Termination of Employment

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SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the Registrant /X/

Filed by a Party other than the Registrant / /

Check the appropriate box:

· Enlarge/Download Table

/X/ Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12

--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

/X/ No fee required.

/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:

(2) Aggregate number of securities to which transaction applies:

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):

(4) Proposed maximum aggregate value of transaction:

(5) Total fee paid:

/ / Fee paid previously with preliminary materials.

/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

(2) Form, Schedule or Registration Statement No.:

(3) Filing Party:

(4) Date Filed:

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OCTUS, INC.

NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS AND PROXY STATEMENT

TO THE SHAREHOLDERS OF OCTuS, INC.:

Notice is hereby given that the Annual Meeting of the Shareholders of
OCTuS, INC. (the "Company" or "OCTuS"), will be held in the Challenger Board
Room of the Four Points Sheraton Inn, 8110 Aero Drive, San Diego, California
92123 on Saturday, June 7, 1997 at 11:00 a.m. for the following purposes:

1. To elect directors for the ensuing year to serve until the next
Annual Meeting of Shareholders and until their successors have been elected
and qualified. The present Board of Directors of the Company has nominated
and recommends for election the following six persons:

Donald O. Aldridge
John C. Belden
Robert A. Freeman
Gilbert N. Holloway
Lucile Lansing
Lawrence W. Taggart

2. To approve an amendment to the Company's Amended and Restated
Articles of Incorporation to increase the number of authorized shares of
Common Stock from 10,000,000 to 20,000,000 shares.

3. To transact such other business as may be properly brought before
the Annual Meeting or any adjournment thereof.

The Board of Directors has fixed the close of business on April 18, 1997 as
the record date for the determination of shareholders entitled to notice of and
to vote at the Annual Meeting. A list of such shareholders shall be open to the
examination of any shareholder at the Annual Meeting and for a period of ten
days prior to the date of the Annual Meeting at the offices of OCTuS, Inc., 4520
Executive Drive, Plaza Two, San Diego, California 92121-3018.

Accompanying this Notice is a Proxy. WHETHER OR NOT YOU EXPECT TO BE AT THE
ANNUAL MEETING, PLEASE SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT PROMPTLY.
If you plan to attend the Annual Meeting and wish to vote your shares
personally, you may do so at any time before the Proxy is voted.

All shareholders are cordially invited to attend the meeting.

BY ORDER OF THE BOARD OF DIRECTORS

Lawrence W. Taggart
Secretary

April 18, 1997
San Diego, California

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PRELIMINARY COPY

NO FORM OF PROXY WILL BE DISTRIBUTED TO ANY SHAREHOLDER UNLESS THE
SHAREHOLDER CONCURRENTLY RECEIVES, OR HAS PREVIOUSLY RECEIVED, A DEFINITIVE
PROXY STATEMENT WHICH HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION. NO SHAREHOLDER IS BEING REQUESTED TO EXECUTE A PROXY AT THIS TIME.

OCTUS, INC.
4520 EXECUTIVE DRIVE, PLAZA TWO
SAN DIEGO, CALIFORNIA 92121-3018

PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
JUNE 7, 1997

The Board of Directors of OCTuS, Inc., a California corporation (the
"Company" or "OCTuS") is soliciting the enclosed Proxy for use at the Annual
Meeting of Shareholders of the Company to be held on June 7, 1997 (the "Annual
Meeting"), and at any adjournments thereof. This Proxy Statement will be first
sent to shareholders on or about May 6, 1997. Unless contrary instructions are
indicated on the Proxy, all shares represented by valid proxies received
pursuant to this solicitation (and not revoked before they are voted) will be
voted for (i) the election of the Board's nominees for directors and (ii) the
approval of an amendment to the Company's Restated Articles of Incorporation
increasing the authorized number of shares of Common Stock from 10,000,000 to
20,000,000. As to any other business which may properly come before the Annual
Meeting and be submitted to a vote of the shareholders, Proxies received by the
Board of Directors will be voted in accordance with the best judgment of the
holders thereof.

A Proxy may be revoked by written notice to the Secretary of the Company at
any time prior to the Annual Meeting, by executing a later Proxy or by attending
the Annual Meeting and voting in person.

The Company will bear the cost of solicitation of Proxies. In addition to
the use of mails, Proxies may be solicited by personal interview, telephone or
telegraph, by officers, directors, and other employees of the Company. The
Company will also request persons, firms, and corporations holding shares in
their names, or in the names of their nominees, which are beneficially owned by
others to send or cause to be sent Proxy material to, and obtain Proxies from,
such beneficial owners and will reimburse such holders for their reasonable
expenses in so doing.

The Company's mailing address is 4520 Executive Drive, Plaza Two, San
Diego, California 92121-3018.

VOTING

Shareholders of record at the close of business on April 18, 1997 (the
"Record Date") will be entitled to notice of and to vote at the Annual Meeting
or any adjournments thereof.

As of that date the following shares of stock of the Company were issued
and outstanding: (i) 4,222,922 shares of common stock, no par value of the
Company ("Common Stock"); and (ii) 250,000 shares of Series C Preferred Stock of
the Company ("Preferred Stock"), representing the only voting securities of the
Company. Each share of Common Stock is entitled to one vote; each share of
Preferred Stock is entitled to ten votes. The Common Stock and Preferred Stock
are sometimes referred to herein collectively as the "Voting Stock."

Votes cast by Proxy or in person at the Annual Meeting will be counted by
the person appointed by the Company to act as Inspector of Election for the
Annual Meeting. The Inspector of Election will treat shares represented by
Proxies that reflect abstentions or include "broker non-votes" as shares that
are present and

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entitled to vote for purposes of determining the presence of a quorum.
Abstentions or "broker non-votes" do not constitute a vote "for" or "against"
any matter and thus will be disregarded in the calculation of "votes cast." Any
unmarked Proxies, including those submitted by brokers or nominees, will be
voted in favor of the nominees of the Board of Directors, as indicated in the
accompanying Proxy card.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding the beneficial
ownership of the Company's Voting Stock as of March 1, 1997, by (i) each of the
Company's named executive officers and directors; (ii) the Company's named
executive officers and directors as a group; and (iii) shareholders known by the
Company to beneficially own more than 5% of any class of the Company's voting
securities. For purposes of this Proxy Statement, beneficial ownership of
securities is defined in accordance with the rules of the Securities and
Exchange Commission and means generally the power to vote or exercise investment
discretion with respect to securities, regardless of any economic interests
therein. Except as otherwise indicated, the Company believes that the beneficial
owners of the securities listed below have sole investment and voting power with
respect to such shares, subject to community property laws where applicable.
Unless otherwise indicated, the business address for each of the individuals or
entities listed below is c/o OCTuS, Inc., 4520 Executive Drive, Plaza Two, San
Diego CA 92121-3018.

· Enlarge/Download Table

NUMBER OF NUMBER OF SERIES C
COMMON SHARES PREFERRED SHARES
BENEFICIALLY BENEFICIALLY
NAME OWNED OWNED PERCENT OF CLASS
-------------------------------------- ------------- ------------------ -------------------------

OFFICERS AND DIRECTORS
Donald O. Aldridge(1)(2)............ 35,000 0.8% of Common Stock
Chairman; Director 0.5% of Voting Stock
John C. Belden(1)..................... 189,799 4.3% of Common Stock
President & CEO, Director 2.7% of Voting Stock
Robert A. Freeman(1)(3)............... 25,000 0.6% of Common Stock
Assistant Secretary, Director 0.4% of Voting Stock
Gilbert N. Holloway(1)................ 25,000 0.6% of Common Stock
Director 0.4% of Voting Stock
Lucile Lansing(1)(4).................. 81,511 1.9% of Common Stock
Director 1.2% of Voting Stock
Lawrence W. Taggart(1)................ 25,000 0.6% of Common Stock
Secretary, Director 0.4% of Voting Stock
Advanced Technologies
International,...................... 3,000,000 250,000 44.6% of Common Stock
Ltd.(5) 100% of Preferred Stock
56.6% of Voting Stock
Allen Holding Inc.(6)................. 351,655 7.8% of Common Stock
5.0% of Voting Stock
EXECUTIVE OFFICERS AND DIRECTORS AS A
GROUP 8.4% of Common Stock
(6 persons)(1)...................... 381,310 5.4% of Voting Stock

---------------

* Represents less than 1% of the voting rights held by holders of Voting
Stock.

(1) Includes the following shares issuable upon exercise of stock options which
are exercisable within 60 days from April 15, 1997: Mr. Aldridge, 25,000;
Mr. Belden, 189,799; Mr. Freeman, 25,000; Mr. Holloway, 25,000; Ms. Lansing,
25,000 and Mr. Taggart, 25,000.
(2) Mr. Aldridge's address is 159 Orange Blossom Circle, Folsom, California
95630-8117.
(3) Mr. Freeman's address is 1149 Wales Place, Cardiff, CA 92007.
(4) Shares shown include 48,514 shares of Common Stock held by Special
Opportunities, L.P., of which Lansing Financial Group, Inc., Lucile Lansing,
President, is General Partner. Ms. Lansing holds 7,297 shares pursuant to
the Lansing Financial Group Pension Plan; the Lansing Financial Group
Pension Plan also holds public warrants to purchase 700 shares of Common
Stock.

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(5) As reported in a Schedule 13D filed by Advanced Technologies International,
Ltd. ("ATI") on July 12, 1996. ATI owns warrants to purchase 3,000,000
shares of Common Stock at prices ranging from $.43 to $.75 per share. ATI's
address is Suite 2200 Two La Salle Street, Chicago, IL 60602.
(6) As reported in Amendment No. 1 to Schedule 13G filed jointly by Allen
Holding Inc. ("AHI") and Allen & Company Incorporated ("ACI") on February
14, 1997. Includes warrants to purchase 284,167 shares of Common Stock at an
exercise price of $5.49. AHI and ACI have their principal office at 711
Fifth Avenue, New York, New York 10022.

CHANGE IN CONTROL

In June 1996, the Company sold to Advanced Technologies International, Ltd.
("ATI") 250,000 shares of Series C Preferred Stock for $150,000 and issued to
ATI warrants to purchase up to an additional 3,000,000 shares of the Company's
Common Stock at an initial exercise price of $0.43 per share. As a result of
transaction, ATI controls 56.6% of the voting power (assuming exercise by ATI of
the warrant) of the of the Company's Voting Stock. While voting power was
disbursed among the Company's shareholders prior to the ATI transaction, ATI

PROPOSAL 1

ELECTION OF DIRECTORS

The Board of Directors of the Company has nominated and recommends for
election as directors the six persons named below, all of whom are currently
serving as directors of the Company. The enclosed Proxy will be voted in favor
of the persons nominated unless otherwise indicated. If any of the nominees
should be unable to serve or should decline to do so, the discretionary
authority provided in the Proxy will be exercised by the present Board of
Directors to vote for a substitute or substitutes to be designated by the Board
of Directors. The Board of Directors has no reason to believe that any
substitute nominee or nominees will be required.

In voting for the election of directors of the Company under California
General Corporation Law, if, prior to the commencement of voting, any
shareholder has given notice of his intention to cumulate his votes at the
meeting, then all shareholders may cumulate their votes in the election of
directors for any nominee if the nominee's name was placed in nomination prior
to the voting. Under cumulative voting, each shareholder is entitled in the
election of directors to vote one vote for each share held by him multiplied by
the number of directors to be elected, and he may cast all such votes for a
single nominee for director or may distribute them among any two or more
nominees as he sees fit. If no such notice is given, there will be no cumulative
voting. In the absence of cumulative voting, each shareholder may cast one vote
for each share held by him multiplied by the number of directors to be elected,
but may not cast more votes than the number of shares owned for any candidate
and therefore a simple majority of the shares represented and voting will elect
all of the directors. Under either form of voting, the candidates receiving the
highest number of votes, up to the number of directors to be elected, will be
elected.

In the event of cumulative voting, the Proxy solicited by the Board of
Directors confers discretionary authority on the proxies to cumulate votes so as
to elect the maximum number of directors. The Proxy may not be voted for more
than six persons.

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INFORMATION REGARDING NOMINEES

The information set forth below as to each nominee for Director has been
furnished to the Company by the respective nominees for Director:

· Enlarge/Download Table

NAME PRESENT POSITION WITH THE COMPANY DIRECTOR SINCE
-------------------------------- ------------------------------------------------- --------------

Donald O. Aldridge.............. Chairman of the Board; Director 1995
John C. Belden.................. President and Chief Executive Officer; Chief 1989
Financial Officer; Director
Robert A. Freeman............... Director; Assistant Secretary 1983
Gilbert N. Holloway............. Director 1997
Lucile Lansing.................. Director 1990
Lawrence W. Taggart............. Director; Secretary 1997

Mr. Aldridge was appointed to the board in June 1995 and has served as
Chairman of the Board since October 1995. Since 1991, he has served as an
independent management consultant, advising a variety of clients in joint
ventures, locating investment capital, market research, and strategic planning.
From 1988 to 1991, Mr. Aldridge was Vice Commander-in-Chief of the Strategic Air
Command, where he served as chief operating officer of the largest command in
the United States Air Force.

Mr. Belden has served as a director of the Company since October 1989, as
its President and Chief Executive Officer from March 1990 to November 1994, and
as its Chairman from November 1994 to October 1995. He was reappointed President
and Chief Executive Officer in June 1995 following Ray M. Healy's resignation.
From November 1990 to July 1992, and since August 1994, he has also served as
the Company's Chief Financial Officer. From March 1995 to January 1997, he
served as Corporate Secretary. From June 1984 until assuming his current
position, Mr. Belden served as Vice President, Marketing of the American
Electronics Association.

Mr. Freeman, a co-founder and an original director of the Company, has
served as a director since 1983 and as Assistant Secretary of the Company since
1996. In addition, he has served in other positions with the Company, including
Vice President, Marketing, in 1988 and Vice President, Research and Development,
from 1983 to 1987. Since 1989, Mr. Freeman has provided consulting services from
time to time in addition to his duties as a director. Since 1991, Mr. Freeman
has been a partner in RJ Engineering which has, from time to time, provided
consulting services to the Company. Mr. Freeman also served as Chief Operating
Officer of Pan Pacific Technology Group from 1989 to 1991.

Mr. Holloway was appointed to the board in January 1997. Since April 1996,
he has served as President of Basic Research Corporation, a San Diego based
technology development firm. From 1991 to 1996, he was Associate Professor of
Management at New Mexico State University. From 1969 to 1991, he was President
of Holloway Distributing Company, a major distributor of NIKE products in the
Western United States. Prior to 1969, he held various sales and marketing
positions with the XEROX Corporation.

Ms. Lansing has served as a director of the Company since February 1990;
she previously served as a director from August 1989 to October 1989. Since
1979, Ms. Lansing has been President of Lansing Financial Group, Inc., the
General Partner of Special Opportunities, L.P., a shareholder of the Company.
Ms. Lansing also serves as a director for Nord Pacific Limited.

Mr. Taggart was appointed to the board in January 1997. Since April 1996,
he has served as Vice President, Secretary/Treasurer and in-house legal counsel
for Basic Research Corporation, a San Diego-based technology development firm.
From 1994 to 1996 he was a sole legal practitioner. During this period he also
served as President of Basic Research Corporation. From 1993 to 1994, he served
as "Of Counsel" to the law firm of Fedynyshyn & Gallo. From 1990 to 1992, he was
a partner in the firm of Taggart & Johnston, attorneys.

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BOARD MEETINGS; COMMITTEES AND COMPENSATION

The Company's Board of Directors held three regularly scheduled meetings
and eighteen special telephonic meetings during 1995. For that year, no nominee
for director who served as a director during the past year attended fewer than
75% of the aggregate of the total number of meetings of the Board of Directors
and the total number of meetings of committees of the Board of Directors on
which he or she served. During 1996, the Board of Directors did not have any
regular meetings but had ten special telephonic meetings. No nominee for
director who served as a director during the 1996 attended fewer than 75% of the
aggregate of the total number of meetings of the Board of Directors and the
total number of meetings of committees of the Board of Directors on which he or
she served. The Board of Directors has established the following Standing
Committees: Audit Committee, Compensation Committee, 1987 Nonstatutory Stock
Option Plan Committee, 1988 Nonstatutory Stock Option Plan Committee, and 1993
Directors' Stock Option Plan Committee. There is no standing Nominating or
Investment Committee.

Audit Committee. Lucile Lansing and Gilbert Holloway. The Audit Committee
recommends for the approval of the Board of Directors the independent public
accountants to be employed by the Company. The Audit Committee also reviews the
results of the independent accountants and internal auditors' examinations, the
accounting principles applied by the Company in financial reporting and the
adequacy of internal controls. The Audit Committee met one time in 1995 and one
time in 1996.

Compensation Committee. Donald Aldridge and Robert Freeman. The
Compensation Committee makes recommendations to the Board of Directors
concerning the Company's various compensation programs, reviews management's
compensation actions for executive officers and other key personnel. The
Compensation Committee met three times in 1995 and twice in 1996.

1987 Nonstatutory Stock Option Committee. John Belden and Robert Freeman.
The 1987 Nonstatutory Stock Option Plan Committee administers the Company's 1987
Nonstatutory Stock Option Plan which provides option grants to the Company's
employees and consultants who are not executive officers. The 1987 Nonstatutory
Stock Option Plan Committee met one time in 1995.

1988 Nonstatutory Stock Option Plan Committee. Gilbert Holloway and Lucile
Lansing. The 1988 Nonstatutory Stock Option Plan Committee administers the
Company's 1988 Nonstatutory Stock Option Plan which provides option grants to
the Company's executive officers. The 1988 Nonstatutory Stock Option Plan
Committee met one time in 1995.

Directors' 1993 Stock Option Plan Committee. John Belden and Lawrence
Taggart. The Directors' 1993 Stock Option Plan Committee administers the
Company's Directors' 1993 Stock Option Plan which provides option grants to
directors who are not otherwise employees or consultants of the Company. The
Directors' 1993 Stock Option Plan Committee met one time in 1995.

Until February 1995, directors who were not otherwise paid employees or
consultants of the Company received $1,000 per regular Board meeting each such
director attended in person, plus, at his or her election, either (i) a $500.00
expense allowance if the director was required to travel more than 50 miles to
attend the meeting, or (ii) reimbursement of such director's actual reasonable
travel and lodging expenses incurred in attending the meeting. Directors who
participated in regularly scheduled Board meetings by telephone received $250
per meeting and directors who participated in special telephonic board meetings
received $100 if the meeting lasted thirty minutes or less or $250 if it lasted
more than thirty minutes. In February 1995, the Board voted to indefinitely
suspend this compensation schedule due to the Company's financial condition.

In addition, directors who are not otherwise employees or consultants of
the Company automatically receive, upon appointment to the board, an option
grant of 25,000 shares under the Company's Directors' 1993 Stock Option Plan.
Such grants typically carry a vesting schedule of 1/4 of the total amount of the
grant per year over a period of four years.

However, in June 1995, the Directors' 1993 Stock Option Committee approved
the board's recommendation to grant the issuance of fully vested stock option
grants to those directors who are not otherwise employees or consultants of the
Company, at an exercise price of $0.25 per share (the closing price of the
Company's

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Common Stock the day before the grant date) in lieu of providing compensation to
such outside directors. These option grants were issued as follows: Mr.
Aldridge, 25,000 shares; Mr. Freeman, 25,000 shares; and Ms. Lansing, 25,000
shares.

RECOMMENDATION OF THE BOARD OF DIRECTORS

The Board of Directors recommends that shareholders vote FOR the slate of
nominees set forth above. Proxies solicited by the Board of Directors will be so
voted unless shareholders specify otherwise on the accompanying Proxy.

PROPOSAL 2

AMENDMENT TO RESTATED ARTICLES OF INCORPORATION

The Company's Amended and Restated Articles of Incorporation currently
authorizes it to issue 10,000,000 shares of Common Stock and 2,000,000 shares of
Preferred Stock. As of April 15, 1997, the Company had 4,222,922 shares of
Common Stock issued and outstanding, 1,045,422 shares reserved for issuance upon
the exercise of stock options granted under its various stock option plans,
633,633,281 shares reserved for issuance upon the exercise of warrants granted
in connection with the Company's public offering of Common Stock in 1993 and
3,000,000 shares reserved for issuance upon the exercise of warrants granted to
ATI.

The Company currently is seeking to acquire new technologies and likely
would issue shares of Common Stock as consideration for rights to any such
technologies. The Company does not currently have any agreements or
understandings to acquire rights to new technologies, but an increase in the
authorized shares of Common Stock would allow for prompt issuance of Common
Stock in the event attractive opportunities arise in the future. The proposed
increase in the number of authorized shares of Common Stock also would provide
Common Stock for possible future stock splits or stock dividends, possible
future stock option or benefit plans, or for any other appropriate corporate
purchase as the Board of Directors may deem advisable. As a result, the Board
believes that the Company's authorized but unissued Common Stock should be
increased. Accordingly, the Board has approved an amendment to the Company's
Amended and Restated Articles of Incorporation (the "Amendment") that would
increase the number of authorized shares of Common Stock from 10,000,000 to
20,000,000. The Amendment will make no change in the number of authorized shares
of Preferred Stock. Shareholder approval of the Amendment requires the
affirmative vote of the Voting Stock of the Company.

If adopted, the Amendment would cause the first paragraph of Article III of
the Company's Amended and Restated Articles of Incorporation to read as follows:

"This Corporation is authorized to issue two classes of shares,
designated, respectively, 'Common Stock' and 'Preferred Stock.' The
Corporation is authorized to issue 20,000,000 shares of Common Stock and
2,000,000 shares of Preferred Stock, of which 300,000 shares are designated
'Series A Preferred Stock' and 910,000 shares are designated 'Series B
Preferred Stock.' The Preferred Stock may be divided into such number of
additional shares as the Board of Directors may determine. The Board of
Directors is authorized to determine and alter the designations,
preferences and relative, participating, optional or other rights,
including without limitation, voting rights, and the qualifications,
limitations or restrictions granted to and imposed upon, the Preferred
Stock, or any series thereof, and to fix the number of shares of any series
of Preferred Stock and the designation of any such series of Preferred
Stock. The Board of Directors within the limits and restrictions stated in
any resolution or resolutions of the Board of Directors originally fixing
the number of shares constituting any series, may increase or decrease (but
not below the number of shares of such series then outstanding) the number
of shares of any series subsequent to the issue of shares of that series."

The proposed increase in authorized shares of Common Stock is not the
result of knowledge by management of any specific effort by any person or group
to obtain control of the Company, and the Company has no present intention of
issuing additional shares to discourage any such effort. Nonetheless, authorized
but unissued shares of Common Stock, as well as of preferred stock, could be
issued in the future by the Board of

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Directors in ways that would make more difficult a change in control of the
Company, for instance, through a private sale diluting the stock ownership of
the person seeking to gain control of the Company. Any such action could have
the effect of deterring an offer for the Company's outstanding Common Stock at a
substantial premium over the then current stock market price of the securities,
even if such an offer were favored by a majority of the Company's shareholders
who were not affiliates of the Company.

Under the Company's Amended and Restated Articles of Incorporation, no
shareholder is entitled to preemptive rights in respect of any future issuances
of capital stock. In addition, the Company does not presently contemplate
seeking shareholder approval for any future issuances of capital stock unless
required to do so by an obligation imposed by applicable law, a regulatory
authority or a third party.

RECOMMENDATION OF THE BOARD OF DIRECTORS

The Board of Directors recommends that shareholders vote FOR the Amendment.
Proxies solicited by the Board of Directors will be so voted unless shareholders
specify otherwise on the accompanying Proxy.

EXECUTIVE COMPENSATION AND OTHER INFORMATION

EXECUTIVE COMPENSATION

The following table sets forth, for the fiscal years ending December 31,
1995 and 1996, the cash compensation paid by the Company, as well as certain
other compensation paid or accrued for those years, to (i) Mr. Belden, who
served as Chief Executive Officer of the Company until November 1994, and has
served as the Company's Chief Executive Officer since May 31, 1995; and (ii) Mr.
Ray Healy, who served as Chief Executive Officer from November 1994 to May 1995.
No other officers were employed by the Company in 1995 or 1996 who earned over
$100,000 in annual salary and bonuses (the "named executive officers").

· Enlarge/Download Table

LONG-TERM COMPENSATION
AWARDS
ANNUAL COMPENSATION -----------------------
--------------------------------------
(E) (F) (G) (H)
(A) OTHER RESTRICTED SECURITIES ALL OTHER
NAME AND (B) (C) (D) ANNUAL STOCK UNDERLYING COMPENSATION
PRINCIPAL POSITION YEAR SALARY($)(1) BONUS($) COMPENSATION AWARDS($) OPTIONAL(#) ($)(2)
-------------------------------- ---- ------------ -------- ------------ --------- ----------- ------------

John C. Belden(1)(2)(3)......... 1996 97,000 0 0 0 0 2,640
President & CEO 1995 127,500 0 0 0 0 2,150
Ray M. Healy(4)................. 1995 41,665 0 0 0 0 0
Former President & CEO

---------------

(1) Includes compensation that was accrued and deferred pursuant to the
Company's 401(k) Plan.
(2) Includes premium for life insurance policies paid by the Company, 401(k)
contributions by the Company, and with respect to Mr. Belden, cash out of
accrued and unused service pay.
(3) Mr. Belden was President & CEO of the Company until November 1994. In
November 1994, he was promoted to Chairman of the Company. He was
reappointed President and Chief Executive Officer following Mr. Healy's
resignation in May 1995.
(4) Mr. Healy joined the Company as President and CEO in November 1994; he
resigned in May 1995.

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STOCK OPTION GRANTS TABLE

The following table provides information concerning the grant of stock
options to the named executive officers of the Company during fiscal 1996 and
1995. The Company does not have any outstanding stock appreciation rights.

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NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE
OPTIONS EMPLOYEES IN OR BASE EXPIRATION
NAME GRANTED(#) FISCAL YEAR PRICE($/SH) DATE
---------------------------------------- ---------- ------------ ----------- -------------

John C. Belden.......................... 1996 200,000 100% $0.25 July 17, 2001
1995 0 0 N/A N/A
Ray M. Healy............................ 1995 0 0 N/A N/A

OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUE TABLE

The following table provides information with respect to the named
executive officers, concerning the exercise of stock options during fiscal 1996
and 1995 and unexercised options held as of the end of fiscal 1996 and 1995.

· Enlarge/Download Table

NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
FY-END(#) FY-END($)
SHARES --------------- -------------
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE
------------------------------------- ----------- ----------- --------------- -------------

John C. Belden....................... 1996 0 0 189,799/200,000 0/0
1995 0 0 189,799/0 0/0
Ray M. Healy......................... 1995 0 0 0/0 0/0

EMPLOYMENT AGREEMENTS AND TERMINATION OF EMPLOYMENT

In June 1992 the Company entered into a three-year employment agreement
with Mr. Belden. In May 1993, the agreement was extended for an additional
one-year term. However, in February 1995, the agreement was amended to shorten
its term by five months, to December 31, 1995. This amendment arose in
connection with the settlement of Mr. Belden's $50,000 promissory note to the
Company, dated October 6, 1993 (the "Note"). In addition to the shortening of
the term of his agreement, Mr. Belden also agreed to a $75,000 reduction in his
annual salary in exchange for the Company's retirement of the entire unpaid
principal balance and accrued interest of the Note. However, in July, 1996, the
Company entered into a new employment agreement with Mr. Belden for a two year
period at a salary of $96,000 per year.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On October 6, 1993, the Company made a $50,000 unsecured loan to its
Chairman, John C. Belden (then its President and Chief Executive Officer),
pursuant to a promissory note at two percent above the index calculated by the
Federal Home Loan Bank of San Francisco for the Eleventh Federal Home Loan Bank
District. The unpaid principal balance and accrued interest under said note was
due and payable October 1, 1994. However, in February 1995, the Company agreed
to retire the entire unpaid principal balance and accrued interest due under the
Note in exchange for Mr. Belden's agreement to reduce the term of his employment
contract by five months to December 31, 1995, as well as a $75,000 reduction in
his annual salary. However, see "Employment Agreements and Termination of
Employment" above with respect to the Company's entering into a new employment
agreement with Mr. Belden.

In January 1993, the Company completed its initial public offering of
Common Stock. RAS Securities Corp. ("RAS") acted as representative for the
underwriters of the public offering. In connection with the public offering, the
Company agreed: (i) to grant RAS a right of first refusal for a period extending
until the

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earlier to occur of (a) four (4) years after the public offering or (b) the
Company's sale of $50,000,000 of its securities (without giving effect to the
securities sold in the initial public offering). RAS has agreed to waive such
right of first refusal in the event, at the Company's sole option, that the
Company pays an amount equal to one percent of the gross proceeds of any
financing up to an aggregate maximum payment of $200,000 during the term of this
right of first refusal; (ii) upon RAS' request, for a period of five (5) years
after the initial public offering, to use its best efforts to cause one
individual designated by RAS to be elected to the Company's Board of Directors,
which individual may be a director, officer, employee or affiliate of RAS; and
(iii) to grant to RAS for nominal consideration, five year warrants ("RAS
Warrants") to purchase 222,722 Units (as adjusted following the Company's
private common equity offering in July 1994) (the "Units") from the Company,
each Unit consisting of one share of Common Stock and one warrant to purchase
Common Stock. The RAS Warrants are initially exercisable for a period of four
years commencing one year from the date of the public offering at a price per
Unit equal to $8.89 per Unit (as adjusted per the transaction noted above) and
the warrants included in the Units underlying the RAS Warrants are exercisable
at an exercise price equal to $10.71 per share (as adjusted per the transaction
noted above) of Common Stock. The RAS Warrants contain antidilution provisions
providing for adjustment of the Exercise Price and the number and type of
securities issuable upon exercise of the RAS Warrants upon the occurrence of
certain events. For a period of five years commencing twelve months from the
date of the public offering, the Company agreed, upon the written demand of
holder(s) representing a majority of the RAS Warrants, to use its best efforts
to register, under the Securities Act of 1933, as amended, on one occasion, at
the Company's expense, the securities issuable upon exercise of the RAS
Warrants. In addition for a period of seven years from the date of the initial
public offering, the Company has agreed to provide certain "piggyback"
registration rights for the holder(s) of the RAS Warrants. Pursuant to an
agreement dated August 8, 1996, RAS and the Company mutually released each other
from all claims and obligations.

The Company currently has been meeting its additional liquidity needs
through loans from Basic Research Corporation, a subsidiary of ATI. The loan
balance has been increasing at approximately $15,000 per month. The Company pays
10.0% simple interest on such loans and the loan is due within five (5) days of
the Company's receiving sufficient funds from the exercise of warrants by ATI.

GENERAL

INDEPENDENT ACCOUNTANTS

The Board of Directors has selected Hollander, Gilbert & Co. to serve as
the Company's independent accountants for the 1997 fiscal year.

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

Under Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange
Act"), as amended, directors, officers and beneficial owners of 10 percent or
more of the Company's Common Stock ("Reporting Persons") are required to report
to the Securities and Exchange Commission (the "Commission") on a timely basis
the initiation of their status as a Reporting Person and any changes with
respect to their beneficial ownership of the Company's Common Stock. Based
solely on its review of such forms received by it and the written
representations of its Reporting Persons, the Company has determined that no
Reporting Persons known to it were delinquent with respect to his or her
reporting obligations as set forth in Section 16(a) of the Exchange Act.

SHAREHOLDER PROPOSALS

A proposal to be considered for inclusion in the Company's proxy statement
for the next annual meeting shall be received at the Company's principal
executive offices not later than January 16, 1998.

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ANNUAL REPORT

The Annual Reports of the Company for the fiscal years ended December 31,
1996 and 1995 will be mailed to shareholders of record on or about May 6, 1997.
The Annual Reports do not constitute, and should not be considered, a part of
this Proxy solicitation material.

If any person who was a beneficial owner of Common Stock of the Company on
the record date for the Annual Meeting of Shareholders desires additional
information, a copy of the Company's Annual Report on Form 10-KSB will be
furnished without charge upon receipt of a written request identifying the
person so requesting a report as a shareholder of the Company at such date.
Requests should be directed to John Belden, c/o OCTuS, Inc., 4520 Executive
Drive, Plaza Two, San Diego California 92121-3018.

OTHER MATTERS

The Board of Directors does not know of any matter to be presented at the
Annual Meeting which is not listed on the Notice of Annual Meeting and discussed
above. If other matters should properly come before the meting, however, the
persons named in the accompanying Proxy will vote all Proxies in accordance with
their best judgment.

ALL SHAREHOLDERS ARE URGED TO COMPLETE, SIGN AND RETURN
THE ACCOMPANYING PROXY CARD IN THE ENCLOSED ENVELOPE.

BY ORDER OF THE BOARD OF DIRECTORS

Lawrence W. Taggart
Secretary

Dated: April 18, 1997

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[FRONT OF PROXY CARD]

The undersigned shareholder(s) of OCTuS, INC. (the "Company") hereby
constitutes and appoints John C. Belden and Lawrence W. Taggart, and each of
them, attorneys and proxies of the undersigned, each with power of
substitution, to attend, vote and act for the undersigned at the Annual Meeting
of Shareholders of the Company to be held on June 9, 1997, and at any
adjournment or postponement thereof, according to the number of shares of
Common Stock or Series C Preferred Stock of the Company which the undersigned
may be entitled to vote, and with all powers which the undersigned would
possess if personally present, as follows:

· Download Table

1. ELECTION OF DIRECTORS: ___ FOR all ___ WITHHOLD
nominees listed AUTHORITY to vote
below (except as for all nominees
marked to the listed below
contrary below)

Donald O. Aldridge
John C. Belden
Robert A. Freeman
Gilbert N. Hollaway
Lucile Lansing
Lawrence W. Taggart

(INSTRUCTION: To vote for all nominees listed above, mark the "FOR" box; to
withhold authority for all nominees listed above, mark the "WITHHOLD AUTHORITY"
box; and to withhold authority to vote for any individual nominee listed above,
mark the "FOR" box and write the nominee's name in the space provided below.)

--------------------------------------------------------------------------------

THIS PROXY WILL BE VOTED FOR THE ELECTION AS DIRECTOR OF ALL NOMINEES SET
FORTH IN THE NOTICE OF ANNUAL MEETING AND PROXY STATEMENT, UNLESS THE CONTRARY
IS INDICATED IN THE APPROPRIATE PLACE.

2. AMENDMENT OF THE COMPANY'S AMENDED AND RESTATED ARTICLES OF INCORPORATION
TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK FROM 10,000,000 TO
20,000,000 SHARES:

FOR AGAINST ABSTAIN
--- --- ---

THIS PROXY WILL BE VOTED FOR THE AMENDMENT OF ARTICLES OF INCORPORATION AS
DESCRIBED IN THE NOTICE OF ANNUAL MEETING AND PROXY STATEMENT, UNLESS THE
CONTRARY IS INDICATED IN THE APPROPRIATE PLACE.

(Continued on reverse side)

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[REVERSE OF PROXY CARD]

In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.

The undersigned revokes any prior proxy at such meeting and ratifies all
that said attorneys and proxies, or any of them, may lawfully do by virtue
hereof. Receipt of the Notice of Annual Meeting of Shareholders and Proxy
Statement is hereby acknowledged.

Dated: , 1997
----------------------------

----------------------------------------

----------------------------------------
(Signature(s) of shareholders)
Please sign exactly as name appears
herein. When shares are held by joint
tenants, both should sign; when signing
as an attorney, executor,
administrator, trustee or guardian,
give full title as such. If a
corporation, sign in full corporate
name by President or other authorized
officer. If a partnership, sign in
partnership name by authorized partner.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF OCTUS, INC.
PLEASE COMPLETE, SIGN, DATE AND MAIL PROMPTLY IN THE POSTAGE-PAID ENVELOPE
ENCLOSED

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Dates Referenced Herein and Documents Incorporated By Reference

		Referenced-On Page
This PRE 14A Filing	Date	First	Last	Other Filings

	10/6/93	10
	10/1/94	10
	5/31/95	9
	12/31/95	9	12
	7/12/96	5
	8/8/96	11
	12/31/96	9	12	10KSB
	2/14/97	5		SC 13G/A
	3/1/97	4
	4/15/97	4	8
Filed On / Filed As Of	4/18/97	2	12
	5/6/97	3	12
For The Period Ended	6/7/97	2	3	DEF 14A
	6/9/97	13
	1/16/98	11
	7/17/1	10

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Filing Submission - Alternative Formats (Word / Rich Text, HTML, Plain Text, SGML, XML, et al.)

Octus Inc · PRE 14A · For 6/7/97

Filed On 4/18/97 · SEC File 0-21092 · Accession Number 936392-97-528

Preliminary Proxy Solicitation Material · Schedule 14AFiling Table of Contents

Document Table of Contents

Dates Referenced Herein and Documents Incorporated By Reference

Preliminary Proxy Solicitation Material · Schedule 14A
Filing Table of Contents