SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
MERCURY WASTE SOLUTIONS, INC.
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(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 transactions 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:
<PAGE>
April 20, 1998
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders
of Mercury Waste Solutions, Inc. to be held in Minneapolis at the Radisson Plaza
Hotel Minneapolis on Wednesday, May 27, 1998, beginning at 3:30 p.m. I encourage
you to attend. Whether or not you plan to attend the meeting, I urge you to vote
your proxy.
On behalf of your Board of Directors and employees, thank you for your
continued support of Mercury Waste Solutions.
Sincerely,
Brad J. Buscher
Chairman of the Board
<PAGE>
MERCURY WASTE SOLUTIONS, INC.
302 NORTH RIVERFRONT DRIVE, SUITE 100A
MANKATO, MINNESOTA 56001
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 27, 1998
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To the Shareholders of Mercury Waste Solutions, Inc.:
Please take notice that the Annual Meeting of Shareholders of Mercury
Waste Solutions, Inc. (the "Company") will be held, pursuant to due call by the
Board of Directors of the Company, at the Radisson Plaza Hotel Minneapolis, 35
South Seventh Street, Minneapolis, Minnesota on May 27, 1998 at 3:30 p.m.
(Minneapolis time), or at any adjournment or adjournments thereof, for the
purpose of considering and taking appropriate action with respect to the
following:
1. To elect six directors.
2. To increase the number of shares reserved for issuance under
the Company's 1996 Stock Option Plan.
3. To transact any other business as may properly come before the
meeting or any adjournments thereof.
Pursuant to due action of the Board of Directors, shareholders of
record on April 7, 1998, will be entitled to vote at the meeting or any
adjournments thereof.
A PROXY FOR THE MEETING IS ENCLOSED HEREWITH. YOU ARE REQUESTED TO FILL
IN AND SIGN THE PROXY, WHICH IS SOLICITED BY THE BOARD OF DIRECTORS, AND MAIL IT
PROMPTLY IN THE ENCLOSED ENVELOPE.
By Order of the Board of Directors
MERCURY WASTE SOLUTIONS, INC.
Mark G. Edlund, Secretary
April 20, 1998
<PAGE>
MERCURY WASTE SOLUTIONS, INC.
302 North Riverfront Drive, Suite 100A
Mankato, Minnesota 56001
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PROXY STATEMENT
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ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
MAY 27, 1998
PROXIES AND VOTING
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Mercury Waste Solutions, Inc. (the
"Company") to be used at the Annual Meeting of Shareholders of the Company to be
held May 27, 1998. The approximate date on which this Proxy Statement and the
accompanying proxy were first sent or given to shareholders was April 20, 1998.
Each shareholder who signs and returns a proxy in the form enclosed with this
Proxy Statement may revoke the same at any time prior to its use by giving
notice of such revocation to the Company in writing, in open meeting or by
executing and delivering a new proxy to the Secretary of the Company. Unless so
revoked, the shares represented by each proxy will be voted at the meeting and
at any adjournments thereof. Presence at the meeting of a shareholder who has
signed a proxy does not alone revoke that proxy. Only shareholders of record at
the close of business on April 7, 1998 (the "Record Date") will be entitled to
vote at the meeting or any adjournments thereof.
VOTING SECURITIES AND
PRINCIPAL HOLDERS THEREOF
The Company has outstanding one class of voting securities, Common
Stock, having a par value of $.01 per share, of which 3,480,097 shares were
outstanding as of the close of business on the Record Date. Each share of Common
Stock is entitled to one vote on all matters put to a vote of shareholders.
The following table sets forth as of April 1, 1998 certain information
regarding the beneficial ownership of shares of Common Stock by each director of
the Company, each of the executive officers listed in the Summary Compensation
Table, each person known to the Company to be the beneficial owner of more than
5% of the outstanding shares and all directors and executive officers as a
group. Except as otherwise indicated, each shareholder has sole voting and
investment power with respect to the shares beneficially owned. Unless otherwise
indicated, the address of the directors and executive officers is 302 North
Riverfront Drive, Suite 100A, Mankato, Minnesota 56001.
<PAGE>
NAME OF BENEFICIAL OWNER NUMBER PERCENTAGE
- ---------------------------------------- ------ ----------
Brad J. Buscher(1)...................................... 1,257,890 34.98%
Mark G. Edlund(2)....................................... 674,237 19.08%
Alan R. Geiwitz(3)...................................... 260,339 7.44%
Joel H. Gottesman(4)(5)................................. 213,835 5.97%
Robert L. Etter(5)...................................... 113,600 3.17%
Frank L. Farrar(6)...................................... 19,723 0.57%
All directors and executive officers as a group
(eight persons)(7)...................................... 2,446,624 64.72%
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(1) Includes 116,180 shares not outstanding but deemed beneficially owned by
virtue of such person's right to acquire such shares pursuant to exercise
of warrants within 60 days.
(2) Includes 54,237 shares not outstanding but deemed beneficially owned by
virtue of such person's right to acquire such shares pursuant to exercise
of warrants within 60 days.
(3) Includes 20,339 shares not outstanding but deemed beneficially owned by
virtue of such person's right to acquire such shares pursuant to exercise
of warrants within 60 days.
(4) Includes 925 shares not outstanding but deemed beneficially owned by virtue
of such person's right to acquire such shares pursuant to exercise of
warrants within 60 days.
(5) Includes 100,000 shares held as co-trustee of an irrevocable trust for the
benefit of Brad J. Buscher's children.
(6) Includes 1,541 shares not outstanding but deemed beneficially owned by
virtue of such person's right to acquire such shares pursuant to exercise
of warrants within 60 days.
(7) Includes 193,222 shares not outstanding but deemed beneficially owned by
virtue of such person's right to acquire such shares pursuant to the
exercise of warrants within 60 days, 7,000 shares not outstanding but
deemed beneficially owned by virtue of such person's right to acquire such
shares pursuant to the exercise of stock options within 60 days, and
100,000 held in an irrevocable trust for the benefit of Brad J. Buscher's
children.
ELECTION OF DIRECTORS
Six directors are to be elected at the meeting, each director to hold
office until the next Annual Meeting of Shareholders, or until their successor
is elected and qualified. All of the persons listed below are now serving as
directors of the Company. All of the persons listed below have consented to
serve as a director, if elected. The Board of Directors proposes for election
the nominees listed below:
BRAD J. BUSCHER, age 42, has been Chairman of the Board and Chief
Executive Officer of the Company since its inception. Mr. Buscher has also been
the Chairman and Chief Executive Officer of Bankers American Capital Corp., a
privately held merchant banking company, since 1993. From 1981 to 1994, Mr.
Buscher was President and Chief Executive Officer of American Bancshares, a
multi-bank holding company. From 1986 to 1994, Mr. Buscher was also Chief
Executive Officer of American Banks, a subsidiary of American Bancshares. Mr.
Buscher also served as Chief Executive Officer of Eagle Insurance Agencies,
Inc., a full line property, casualty, life, health and crop insurance agency,
from 1987 to 1994. From 1993 to the present, Mr. Buscher has served as the
managing general partner of BRB Development, LLC, a commercial and retail land
development company. Mr. Buscher also holds various other managing positions in
private investment partnerships. Mr. Buscher is a director, Vice President and
Treasurer of the Mankato State University Foundation, is chairman of the
Investment Committee of the Foundation, and is a member of the Foundation's
Executive Committee.
<PAGE>
MARK G. EDLUND, age 44, has been President and Chief Operating Officer
and a Director of the Company since its inception and Secretary since November
1996. From 1993 to January 1996, Mr. Edlund served as President of U.S.
Environmental, Incorporated, which sold substantially all of its assets to the
Company. From 1987 to 1992, Mr. Edlund was President of Professional Resources
International, Inc., a manufacturer and retailer of ophthalmic products.
ALAN R. GEIWITZ, age 46, has been a Director of the Company since
September 1996. Mr. Geiwitz has been President and Director of Orion Financial
Corp. since 1982. Mr. Geiwitz is also a member of the Board of Directors of
Midwest Financial Services, Inc., BMD Company, Inc., a re-manufacturer and
distributor of parts for agricultural equipment, and Southwest Capital
Corporation, a publicly-traded corporation with no current operations.
JOEL H. GOTTESMAN, age 49, has been a Director of the Company since
January 1996. Mr. Gottesman has been Senior Vice President, General Counsel and
Secretary of Green Tree Financial Corporation, a diversified financial services
company, since September 1995. Prior thereto, from 1983 through September, 1995,
Mr. Gottesman was a shareholder of Briggs & Morgan, P.A., and served as the
firm's Treasurer and on its Board of Directors.
ROBERT L. ETTER, age 52, a certified public accountant, has been a
Director of the Company since May 1996. Mr. Etter has been a shareholder and
Executive Board Member of Wolf, Etter and Co., Certified Public Accountants
since 1973. Mr. Etter heads the firm's financial institutions department for
tax, auditing and consulting.
FRANK L. FARRAR, age 68, has been a Director of the Company since
January 1997. Mr. Farrar has been Chairman of the following companies since
1983: (i) Beresford Bancorporation, Inc., a South Dakota thrift holding company,
(ii) Capital Bancorporation, Inc., a south Dakota bank holding company, and
(iii) Uptown Bancorporation, Inc., an Illinois bank holding company. Mr. Farrar
has also been Chairman of Fulda Bancorporation, a Minnesota bank holding company
since 1986.
PROXIES AND VOTING
The affirmative vote of the holders of the greater of (a) a majority of
the outstanding shares of Common Stock of the Company present and entitled to
vote on the election of directors or (b) a majority of the voting power of the
minimum number of shares entitled to vote that would constitute a quorum for
transaction of business at the meeting, is required for election to the Board of
each of the six (6) nominees named above. A shareholder who abstains with
respect to the election of directors is considered to be present and entitled to
vote on the election of directors at the meeting, and is in effect casting a
negative vote, but a shareholder (including a broker) who does not give
authority to a Proxy to vote, or withholds authority to vote, on the election of
directors, shall not be considered present and entitled to vote on the election
of directors.
All shares represented by proxies will be voted FOR the election of the
foregoing nominees unless a contrary choice is specified. If any nominee should
withdraw or otherwise become unavailable for reasons not presently known, the
proxies which would have otherwise been voted for such nominee will be voted for
such substitute nominee as may be selected by the Board of Directors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR ALL OF
THE NOMINEES LISTED ABOVE.
<PAGE>
NON-DIRECTOR EXECUTIVE OFFICERS
The following persons are executive officers, but not directors, of the Company:
TODD J. ANDERSON, CPA, age 34, has been Chief Financial Officer of the
Company since November 1997. From September 1985 until October 1997 he was
employed by McGladrey & Pullen, LLP, a public accounting and consulting firm,
where he served in increasing capacities, with the most recent being Senior
Manager since July 1995.
DONALD J. WODEK, age 47, has been Executive Vice President-Operations,
Legal and Regulatory Affairs since January 1997. From June 1994 to March 1997,
he served as District Manager of the Hennepin Conservation District, a local
unit of government which manages environmental programs in Hennepin County,
Minnesota. From May 1992 to June 1994, he served as general Counsel and
Environmental Manager for Dynex Industries, Inc., a corporation which manages,
transports and recycles hazardous wastes. From September 1991 to May 1992, Mr.
Wodek was in the private practice of law handling environmental and employment
matters.
EXECUTIVE COMPENSATION
The following table sets forth the cash and noncash compensation from January 2,
1996 (inception) through December 31, 1997 awarded to or earned by the Chief
Executive Officer:
SUMMARY COMPENSATION TABLE
Other Annual
Name and Principal Position Year Annual Salary Compensation
- --------------------------- ---- ------------- ------------
Brad J. Buscher 1997 $60,000 0(1)
Chairman of the Board 1996 0 0(1)
and Chief Executive Officer
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(1) Pursuant to a Management Consulting Agreement with Bankers American
Capital Corporation ("BACC"), a Minnesota corporation wholly-owned by
Brad J. Buscher, the Company pays $10,000 to BACC on a monthly basis
for certain consulting and administrative services provided to the
Company.
OPTION GRANTS IN LAST FISCAL YEAR
There were no grants of stock options to the Company's executive officers named
in the Summary Compensation Table during the last fiscal year.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
There were no options held by the executive officers named in the
Summary Compensation Table at the end of fiscal 1997.
<PAGE>
DIRECTOR COMPENSATION
Non-employee Directors currently receive $250 for each meeting
attended.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Compensation Committee (the "Compensation Committee")
consists of Alan R. Geiwitz, Joel H. Gottesman and Robert L. Etter.
EMPLOYMENT AGREEMENTS
In January of 1997, the Company entered into an employment agreement
with Brad J. Buscher pursuant to which Mr. Buscher serves the Company as Chief
Executive Officer. The Company or Mr. Buscher may each terminate the Agreement
upon 90 days written notice following the first year term of the agreement.
Pursuant to the Agreement, Mr. Buscher will receive an annual salary of $60,000
and a bonus based on a certain percent of pretax income. There were no bonuses
paid to Mr. Buscher in 1997. Pursuant to the agreement, Mr. Buscher may not
disclose confidential information about the Company and has agreed not to
compete with the Company for a one year period following any termination of
employment.
In March 1998, the Board of Directors adopted a 1998 management
incentive compensation plan (the "Management Plan"). The Management Plan is
subject to final review and approval by the Compensation Committee. Under the
Management Plan, Mr. Buscher would forego all compensation under his 1997
employment agreement, but would participate in an incentive compensation pool
with the management group. The incentive compensation pool would be based on the
Company obtaining certain pretax income goals. In addition, participants of the
Management Plan would be granted certain incentive stock options for the
purchase of the Company's Common Stock at the fair market value on the date of
grant. Mr. Buscher would receive options to purchase 30,000 shares under the
proposed Management Plan.
CERTAIN TRANSACTIONS
The Company issued to Brad J. Buscher, Chief Executive Officer and
Chairman of the Company, a $2 million secured revolving credit note, dated
January 4, 1996, authorizing the Company to borrow up to $2,000,000 from Mr.
Buscher for working capital purposes. A portion of this revolving credit note
was assigned to various parties (see below) and exchanged for stock (see below)
and was accordingly replaced with a similar revolving credit note in the amount
of $1,660,000, dated September 16, 1996. Such debt accrued interest at a
adjustable rate of 2% above the prime rate. Interest was payable each quarter
with the principal being due on January 1, 2001. The note was secured by all of
the Company's tangible and intangible assets. On December 4, 1996 the $1,660,000
revolving credit note held by Mr. Buscher was paid in full with proceeds from a
$1,660,000 revolving line of credit ("Revolver") with Norwest Bank, N.A. The
Revolver bore interest at 2% over prime, was secured by all the assets of the
Company, was due in January, 1998 and was personally guaranteed by Brad J.
Buscher, the Company's majority shareholder. The Revolver was repaid out of the
net proceeds of the Company's initial public offering and was terminated.
In September 1996, Mr. Buscher assigned a total of $114,600 of the
original amount of the revolving credit note to the 1996 Irrevocable Trust of
Bradley J. Buscher ($50,000), Joel Gottesman ($51,000), Robert L. Etter ($6,800)
and to an employee of the Company ($6,800 ). Mr. Gottesman and Mr. Etter are
directors of the Company. All of these amounts were then exchanged for the
Company's Common Stock based upon a Common Stock price of $.50 per share. Mr.
Buscher converted $225,400 of the revolving credit note into 450,800 shares of
the Company's Common Stock.
<PAGE>
The Company has a $600,000 revolving credit promissory note with Mr.
Buscher, its Chairman and Chief Executive Officer dated January 22, 1997, of
which $0 was outstanding as of December 31, 1997. The note accrues interest at a
adjustable rate of 2% above the prime rate and is secured by all of the
Company's tangible and intangible assets.
The Company owed U.S. Environmental, Incorporated ("USE") approximately
$448,257 pursuant to a secured note made in connection with the Company's
purchase of substantially all of USE's assets. This amount was reduced by
approximately $28,690 in September, 1996 due in part to uncollectible accounts
receivable purchased by the Company from USE. The note was subsequently assigned
to Capital Partners, Ltd, ("Capital Partners") a Florida corporation wholly
owned by Mark Edlund, which then assigned an interest equal to $160,000 in the
note to Mark Edlund. Mr. Edlund subsequently converted his $160,000 note into
320,000 shares of the Company's Common Stock.
The Company and USE entered into the Distribution Rights Bill of Sale
Agreement ("Distribution Rights Agreement") whereby the Company had potential
liability to USE in the amount of $460,000 for certain amounts in connection
with the on-going sale of the Model 2000B lamp recycler and other mercury
recycling equipment. The exact amount depended upon the number of Model 2000B
units and other mercury recycling equipment sold by the Company. In March 1997,
the Company settled this obligation for $250,000 by paying $75,000 in cash and
the balance of $175,000 in a note. This amount, which was also assigned to
Capital Partners, together with the amounts already owing Capital Partners are
payable pursuant to notes bearing interest at 10% in installments totaling
$11,550 a month through December 2000. As of December 31, 1997, the total amount
owing Capital Partners was $357,936.
The Company and Bankers American Capital Corporation, a corporation
wholly-owned by Brad J. Buscher ("BACC"), entered into a management consulting
agreement on January 4, 1996 (the "Management Consulting Agreement"), pursuant
to which BACC provides certain management, accounting and other administrative
services to the Company for $10,000 per month. The Management Consulting
Agreement terminates in January, 1999. In January of 1996, the Company
reimbursed BACC $53,000 for out-of-pocket costs incurred by BACC in connection
with the acquisition of USE.
As part of a private placement completed in September, 1996, the
Company received proceeds of $135,000 of subordinated debt that bore interest at
two percent (2%) over the prime rate and was due September 25, 1998. The debt
was due to Orion Financial Corp. Money Purchase Plan which entity is for the
sole benefit of and controlled by Alan R. Geiwitz. In connection with such debt,
Orion Financial Corp. Money Purchase Plan received warrants to purchase 120,000
shares of the Company's Common Stock at $1.125 per share. The debt was canceled
concurrently with the Company's initial public offering of stock as payment of
the exercise price of the warrant for the purchase of 120,000 shares of Common
Stock.
The Company and Capital Partners, entered into a consulting agreement
on January 1, 1998 (the "Consulting Agreement"), pursuant to which Capital
Partners provides certain management and consulting services to the Company for
$5,000 per month. The Consulting Agreement terminates on its one year
anniversary.
<PAGE>
PROPOSAL TO INCREASE THE NUMBER OF SHARES
RESERVED FOR ISSUANCE UNDER THE 1996 STOCK OPTION PLAN
Subject to the approval of the shareholders on May 27, 1998, the Board
of Directors amended the Mercury Waste Solutions, Inc. Stock Option Plan (the
"Plan") to increase the number of shares of Common Stock reserved for issuance
pursuant to the Plan by 185,500 shares. The brief summary of the Plan which
follows is qualified in its entirety by reference to the complete text, a copy
of which is attached to this Proxy Statement as Annex A.
GENERAL
The purpose of the Plan is to provide an incentive to eligible
employees and directors whose present and potential contributions are important
to the continued success of the Company, to afford them an opportunity to
acquire a proprietary interest in the Company, and to enable the Company to
enlist and retain in its employ the best available talent for the successful
conduct of its business. It is intended that this purpose will be effected
through the granting of options to buy Common Stock of the Company ("Options").
As of the date of this Proxy, options aggregating 170,000 shares of
Common Stock have been granted to certain non-executive employees of the
Company. In order to continue to provide incentives to new and existing
employees, the Company desires to increase the number of shares available under
the Plan from 185,500 to 371,000.
Subject to certain exceptions set forth in the Plan, both Incentive
Stock Options and Nonstatutory Stock Options may be granted to employees
(including officers and directors who are also employees) of the Company and
Nonstatutory Stock Options may also be granted to consultants to or other
independent contractors of the Company.
The Plan is administered by a compensation committee (the "Compensation
Committee") presently consisting of Alan R. Geiwitz, Joel H. Gottesman and
Robert L. Etter, which has the discretion to determine the number and purchase
price of shares subject to Options, the term of each Option which may not be
below 85% of the fair market value of the Common Stock on the date granted, the
term of each Option, and the time or times during its term when the Option
becomes exercisable. The Compensation Committee may accelerate the
exercisability of any Option or may determine to cancel Options in order to make
a participant eligible for the grant of an Option at a lower price. The
Compensation Committee may approve the purchase by the Company of an unexercised
Option for the difference between the exercise price and the fair market value
of the shares covered by such Option.
The Option price may be paid in cash, check, bank draft or by delivery
of shares of Common Stock valued at their fair market value at the time of
purchase or by withholding shares from the shares issuable upon exercise of such
options valued at their fair market value or as otherwise authorized by the
Compensation Committee. In the event that an optionee ceases to be an employee
of the Company for any reason, including death, any Option or unexercised
portion thereof which was otherwise exercisable on the date of termination of
employment shall expire at the time or times established by the Compensation
Committee.
AMENDMENT OF THE PLAN
The Board of Directors may amend or discontinue the Plan at any time.
However, no such amendment or discontinuance may, subject to adjustment in the
event of a merger, recapitalization, or other corporate restructuring, (a)
change or impair, without the consent of the recipient thereof, an option
<PAGE>
previously granted, (b) materially increase the maximum number of shares of
Common Stock which may be issued to all employees under the Plan, (c) materially
change or expand the types of option that may be granted under the Plan, (d)
materially modify the requirements as to eligibility for participation in the
Plan, or (e) materially increase the benefits accruing to participants. Certain
Plan amendments require shareholder approval, including amendments which would
materially increase benefits accruing to participants, increase the number of
securities issuable under the Plan, or change the requirements for eligibility
under the Plan.
FEDERAL INCOME TAX CONSEQUENCES
The following discussion sets forth certain United States income tax
considerations in connection with the ownership of Common Stock. These tax
considerations are stated in general terms and are based on the Internal Revenue
Code of 1986, as amended. This discussion does not address state or local tax
considerations with respect to the ownership of Common Stock. Moreover, the tax
considerations relevant to ownership of the Common Stock may vary depending on a
holder's particular status.
When a non-qualified stock option granted pursuant to the Plan is
exercised, the employee will realize ordinary income measured by the difference
between the aggregate purchase price of the shares of Common Stock as to which
the Option is exercised and the aggregate fair market value of shares of the
Common Stock on the exercise date, and the Company will be entitled to a
deduction in the year the option is exercised equal to the amount the employee
is required to treat as ordinary income.
Options which qualify as incentive stock options are entitled to
special tax treatment. Under existing federal income tax law, if shares
purchased pursuant to the exercise of such an option are not disposed of by the
optionee within two years from the date of granting of the option or within one
year after the transfer of the shares to the optionee, whichever is longer, then
(i) no income will be recognized to the optionee upon the exercise of the
Option; (ii) any gain or loss will be recognized to the optionee only upon
ultimate disposition of the shares and, assuming the shares constitute capital
assets in the optionee's hands, will be treated as long-term capital gain or
loss; (iii) the optionee's basis in the shares purchased will be equal to the
amount of cash paid for such shares; and (iv) the Company will not be entitled
to a federal income tax deduction in connection with the exercise of the Option.
The Company understands that the difference between the Option price and the
fair market value of the shares acquired upon exercise of an incentive stock
option will be treated as an "item of tax preference" for purposes of the
alternative minimum tax. In addition, incentive stock options exercised more
than three months after retirement are treated as non-qualified options.
The Company further understands that if the optionee disposes of the
shares acquired by exercise of an incentive stock option before the expiration
of the holding period described above, the optionee must treat as ordinary
income in the year of that disposition an amount equal to the difference between
the optionee's basis in the shares and the lesser of the fair market value of
the shares on the date of exercise or the selling price. In addition, the
Company will be entitled to a deduction equal to the amount the employee is
required to treat as ordinary income.
If the exercise price of an Option is paid by surrender of previously
owned shares, the basis of the shares received in replacement of the previously
owned shares is carried over. If the option is a nonstatutory option, the gain
recognized on exercise is added to the basis. If the option is an incentive
stock option, the optionee will recognize gain if the shares surrendered were
acquired through the exercise of an incentive stock option and have not been
held for the applicable holding period. This gain will be added to the basis of
the shares received in replacement of the previously owned shares.
<PAGE>
PROXIES AND VOTING
The affirmative vote of the holders of the greater of (a) a majority of
the outstanding shares of Common Stock of the Company present and entitled to
vote on the proposed Plan amendment or (b) a majority of the voting power of the
minimum number of shares entitled to vote that would constitute a quorum for
transaction of business at the meeting, is required to approve the proposal to
increase the number of shares of common stock reserved for issuance under the
Plan. A shareholder who abstains with respect to the proposed Plan amendment is
considered to be present and entitled to vote at the meeting, and is in effect
casting a negative vote, but a shareholder (including a broker) who does not
give authority to a Proxy to vote on the proposed Plan amendment shall not be
considered present and entitled to vote on the proposed amendment. All shares
represented by proxies will be voted for approval of the proposed Plan amendment
unless a contrary choice is specified.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE
INCREASE IN SHARES RESERVED FOR ISSUANCE UNDER THE PLAN.
PROPOSALS OF SHAREHOLDERS
All proposals of shareholders intended to be presented at the 1999
Annual Meeting of Shareholders of the Company must be received by the Company at
its executive offices on or before December 19, 1998.
OTHER MATTERS
BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors held seven (7) meetings during fiscal 1997. The
Company has an Audit Committee and a Compensation Committee, but does not have a
nominating committee of the Board of Directors.
The Company's Audit Committee, which consists of Messrs. Alan R.
Geiwitz, Joel H. Gottesman and Robert L. Etter, held one meeting during fiscal
1997. The Audit Committee recommends to the full Board the engagement of the
independent accountants, reviews the audit plan and results of the audit
engagement, reviews the independence of the auditors, and reviews the adequacy
of the Company's system of internal accounting controls.
The Company's Compensation Committee, which consists of Messrs. Alan R.
Geiwitz, Joel H. Gottesman and Robert L. Etter, did not hold any formal meetings
during fiscal 1997 but took action through the entire Board of Directors. The
Compensation Committee reviews the Company's remuneration policies and
practices, makes recommendations to the Board in connection with all
compensation matters affecting the Company and administers the Company's 1996
Stock Option Plan.
<PAGE>
COMPLIANCE WITH SECTION 16(a) OF THE 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 ten percent 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
(the "SEC") and the Nasdaq National Market. Officers, directors and greater than
ten percent shareholders are required by SEC regulation to furnish the Company
with copies of all Section 16(a) forms they file. Based solely on review of the
copies of such forms furnished to the Company, or written representations that
no Forms 5 were required, the Company believes that during fiscal year 1997, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than ten-percent beneficial owners were complied with.
SOLICITATION
The Company will bear the cost of preparing, assembling and mailing the
proxy, Proxy Statement, Annual Report and other material which may be sent to
the shareholders in connection with this solicitation. Brokerage houses and
other custodians, nominees and fiduciaries may be requested to forward
soliciting material to the beneficial owners of stock, in which case they will
be reimbursed by the Company for their expenses in doing so. Proxies are being
solicited primarily by mail, but, in addition, officers and regular employees of
the Company may solicit proxies personally, by telephone, by telegram or by
special letter.
The Board of Directors does not intend to present at the meeting any
other matter not referred to above and does not presently know of any matters
that may be presented to the meeting by others. However, if other matters come
before the meeting, it is the intent of the persons named in the enclosed proxy
to vote the proxy in accordance with their best judgment.
By Order of the Board of Directors
MERCURY WASTE SOLUTIONS, INC.
Mark G. Edlund,
SECRETARY
<PAGE>
ANNEX A
MERCURY WASTE SOLUTIONS, INC.
STOCK OPTION PLAN
1. PURPOSE OF THE PLAN
The purpose of this Stock Option Plan (the "Plan") of Mercury Waste
Solutions, Inc. (the "Company") is to provide an incentive to
eligible employees and directors whose present and potential
contributions are important to the continued success of the Company,
to afford them an opportunity to acquire a proprietary interest in
the Company, and to enable the Company to enlist and retain in its
employ the best available talent for the successful conduct of its
business. It is intended that this purpose will be effected through
the granting of stock options.
2. DEFINITIONS
Wherever used in the Plan, the following terms have the meanings set forth
below:
2.1 "Board of Directors" means the Board of Directors of the Company.
2.2 "Code" means the Internal Revenue Code of 1986, as amended from time
to time, and the rules and regulations promulgated thereunder.
2.3 "Incentive Stock Option" or "ISO" means a stock option which is
intended to qualify as an incentive stock option as defined in
Section 422 of the Code.
2.4 "Non-Statutory Stock Option" or "NSO" means a stock option that is
not intended to, or does not, qualify as an incentive stock option
as defined in Section 422 of the Code.
2.5 "Option" means, where required by the context of the Plan, an ISO or
NSO granted pursuant to the Plan.
2.6 "Optionee" means a Participant in the Plan who has been granted one
or more Options under the Plan.
2.7 "Participant" means an individual described in Section 5 of this
Plan who may be granted Options under the Plan.
2.8 "Rule 16b-3" means Rule 16b-3 promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934.
2.9 "Stock" means the par value, $.01 per share of the Company.
2.10 "Subsidiary" means any corporation, other than the Company, in an
unbroken chain of corporations beginning with the Company if each of
the corporations other than the last corporation in the unbroken
chain which at the time the Option is granted owns 50% or more of
the voting stock in one of the other corporations in such chain.
3. ADMINISTRATION
3.1 The Plan shall be administered by the Board of Directors, which
shall have full power, subject to the provisions and restrictions of
the Plan, to grant Options, construe and interpret the Plan,
establish rules and regulations with respect to the Plan and Options
granted hereunder, and perform all other acts, including the
delegation of administrative responsibilities, that it believes
reasonable and necessary.
3.2 The Board of Directors shall have the sole discretion, subject to
the provisions of the Plan, to determine the Participants eligible
to receive Options pursuant to the Plan and the amount, type, and
terms of any Options and the terms and conditions of option
agreements relating to any Option.
<PAGE>
3.3 The Board of Directors may correct any defect, supply any omission,
or reconcile any inconsistency in the Plan or in any Option granted
hereunder in the manner and to the extent it shall deem necessary to
carry out the terms of the Plan.
3.4 Any decision made, or action taken, by the Board of Directors
arising out of or in connection with the interpretation and
administration of the Plan shall be final, conclusive and binding
upon all Optionees.
4. SHARES SUBJECT TO THE PLAN
4.1 NUMBER. The total number of shares of Stock reserved for issuance
upon exercise of Options under the Plan is 185,500. Such shares
shall consist of authorized but unissued Stock. If any Option
granted under the Plan lapses or terminates for any reason before
being completely exercised, the shares covered by the unexercised
portion of such Option may again be made subject to Options under
the Plan.
4.2 CHANGES IN CAPITALIZATION. In the event of any change in the
outstanding shares of Stock of the Company by reason of any stock
dividend, split, recapitalization, reorganization, merger,
consolidation, combination, exchange of shares, or rights offering
to purchase stock at a price substantially below fair market value,
or other similar corporate change, the aggregate number of shares
which may be subject to Options under the Plan and the terms of any
outstanding Option, including the number and kind of shares subject
to such Options and the purchase price per share thereof, shall be
appropriately adjusted by the Board of Directors, consistent with
such change and in such manner as the Board of Directors, in its
sole discretion, may deem equitable to prevent substantial dilution
or enlargement of the rights granted to or available for Optionees.
Notwithstanding the preceding sentence, in no event shall any
fraction of a share of Stock be issued upon the exercise of an
Option.
5. ELIGIBLE PARTICIPANTS
The following persons are Participants eligible to participate in the
Plan:
5.1 INCENTIVE STOCK OPTIONS. Incentive Stock Options may be granted only
to employees of the Company or any Subsidiary, including officers
and directors who are also employees of the Company or any
Subsidiary.
5.2 NON-STATUTORY STOCK OPTIONS. Non-statutory stock options may be
granted to (i) any employee of the Company or any Subsidiary,
including any officer or director who is also an employee of the
Company or any Subsidiary; and (ii) any consultant to, or other
independent contractor of, the Company who is not a director of the
Company.
6. GRANT OF OPTIONS
6.1 DISCRETIONARY GRANTS. Subject to the terms, conditions, and
limitations set forth in this Plan, the Company, by action of the
Board of Directors, may from time to time grant Options to purchase
shares of the Company's Stock to those eligible Participants as may
be selected by the Board of Directors, in such amounts and on such
other terms as the Board of Directors in its sole discretion shall
determine. Any grant of Options to officers who are subject to
Section 16 of the Securities Exchange Act of 1934, as amended, shall
be made only by a committee of two or more directors, each of whom
is a "disinterested person" as defined in Section 16b-3(c)(2) of the
Exchange Act cited above.
6.2 LIMITATIONS. Options specified under Section 6.1 above may be (i)
"Incentive Stock Options" so designated by the Board of Directors
and which, when granted, are intended to qualify as incentive stock
options as defined in Section 422 of the Code; (ii) "Non-Statutory
Stock Options" so designated by the Board of Directors and which,
when granted, are not intended to, or do not, qualify as incentive
stock options under Section 422 of the Code; or (iii) a combination
of both. The date on which the Board of Directors approves the
granting of an Option shall be the date of grant of such Option,
unless a different date is specified by the Board of Directors on
such date of approval. Notwithstanding the foregoing, with respect
to the grant of any Incentive Stock Option under the Plan, the
aggregate fair market value of Stock (determined as of the date the
Option is granted) with respect to which Incentive Stock Options are
exercisable for the first time by an Optionee in any calendar year
(under all such stock option plans of the Company or Subsidiaries)
shall not exceed $100,000. Each grant of an Option under the Plan
shall be evidenced by a written stock option agreement between the
Company and the Optionee setting forth the terms and conditions, not
inconsistent with the Plan,
<PAGE>
under which the Option so granted may be exercised pursuant to the
Plan and containing such other terms with respect to the Option as
the Board of Directors in its sole discretion may determine.
7. OPTION PRICE AND FORM OF PAYMENT
7.1 OPTION PRICE AND FORM OF PAYMENT. The purchase price for a share of
Stock subject to an Incentive Stock Option granted hereunder shall
not be less than 100% of the fair market value of the Stock. The
purchase price for a share of Stock subject to a Nonstatutory Stock
Option granted hereunder shall be determined by the Board of
Directors at the time of such grant. For purposes of this Section
7.1, the "fair market value" of the Stock shall be determined as
follows:
7.1.1 If the Stock of the Company is listed or admitted to unlisted
trading privileges on a national securities exchange, the fair market
value on any given day shall be the closing sale price for the Stock, or
if no sale is made on such day, the closing bid price for such day on such
exchange;
7.1.2 If the Stock is not listed or admitted to unlisted trading
privileges on a national securities exchange, the fair market value on any
given day shall be the closing sale price for the Stock as reported on the
NASDAQ National Market System on such day, or if no sale is made on such
day, the closing bid price for such day as entered by a market maker for
the Stock;
7.1.3 If the Stock is not listed on a national securities exchange,
is not admitted to unlisted trading privileges on any such exchange, and
is not eligible for inclusion in the NASDAQ National Market System, the
fair market value on any given day shall be the average of the closing
representative bid and asked prices as reported on the NASDAQ System, and
if not reported on such system, then as reported by the National Quotation
Bureau, Inc. or such other publicly available compilation of the bid and
asked prices of the Stock in any over-the-counter market on which the
Stock is traded; or
7.1.4 If there exists no public trading market for the Stock, the
fair market value on any given day shall be an amount determined in good
faith by the Board of Directors in such manner as it may reasonably
determine in its discretion, provided that such amount shall not be less
than the book value per share as reasonably determined by the Board of
Directors as of the date of determination or less than the par value of
the Stock.
Notwithstanding the foregoing, in the case of an Incentive Stock
Option granted to any Optionee then owning more than 10% of the
voting power of all classes of the Company's stock, the purchase
price per share of the Stock subject to such Option shall not be
less than 110% of the fair market value of the Stock on the date of
grant of the Incentive Stock Option, determined as provided above.
Except as provided herein, the purchase price of each share of Stock
purchased upon the exercise of any Option shall be paid:
7.1.5 In United States dollars in cash or by check, bank draft or
money order payable to the order of the Company; or
7.1.6 At the discretion of the Board of Directors, through the
delivery of shares of Stock, having initially or as a result of successive
exchanges of shares, an aggregate fair market value (as determined in the
manner provided under this Plan) equal to the aggregate purchase price for
the Stock as to which the Option is being exercised; or
7.1.7 At the discretion of the Board of Directors, by a combination
of both 7.1.5 and 7.1.6 above; or
7.1.8 By such other method as may be permitted in the written stock
option agreement between the Company and the Optionee.
If such form of payment is permitted, the Board of Directors shall
determine procedures for tendering Stock as payment upon exercise of
an Option and may impose such additional limitations and
prohibitions on the use of Stock as payment upon the exercise of an
Option as it deems appropriate.
<PAGE>
If the Board in its sole discretion so agrees, the Company may
finance the amount payable by an Optionee upon exercise of any
Option upon such terms and conditions as the Board may determine at
the time such Option is granted under this Plan.
7.2 WITHHOLDING TAXES. The Company shall have the right to require that
payment or provision for payment of any and all withholding taxes
due upon the grant or exercise of an Option hereunder or the
disposition of any Stock or other property acquired upon exercise of
an Option be made by an Optionee. In connection therewith, the Board
shall have the right to establish such rules and regulations or
impose such terms and conditions in any agreement relating to an
Option granted hereunder with respect to such withholding as the
Board may deem necessary and appropriate.
8. EXERCISE OF OPTIONS
8.1 MANNER OF EXERCISE. An Option, or any portion thereof, shall be
exercised by delivering a written notice of exercise to the Company
and paying to the Company the full purchase price of the Stock to be
acquired upon the exercise of the Option. Until certificates for the
Stock acquired upon the exercise of an Option are issued to an
Optionee, such Optionee shall not have any rights as a shareholder
of the Company with respect to such Stock.
8.2 LIMITATIONS AND CONDITIONS ON EXERCISE OF OPTIONS. In addition to
any other limitations or conditions contained in this Plan or that
may be imposed by the Board of Directors from time to time or in the
stock option agreement to be entered into with respect to Options
granted hereunder, the following limitations and conditions shall
apply to the exercise of Options granted under this Plan:
8.2.1 No Incentive Stock Option may be exercisable by its terms
after the expiration of 10 years from the date of the grant thereof.
8.2.2 No Incentive Stock Option granted pursuant to the Plan to an
eligible Participant then owning more than 10% of the voting power of all
classes of the Company's stock may be exercisable by its terms after the
expiration of five years from the date of the grant thereof.
8.2.3 To the extent required to comply with Rule 16b-3, Stock
acquired upon exercise of an Option granted under to the Plan may not be
sold or otherwise disposed of for a period of six months from the date of
grant of the Option.
9. INVESTMENT PURPOSES
Unless a registration statement under the Securities Act of 1933 is
in effect with respect to Stock to be purchased upon exercise of
Options to be granted under the Plan, the Company shall require that
an Optionee agree with and represent to the Company in writing that
he or she is acquiring such shares of Stock for the purpose of
investment and with no present intention to transfer, sell or
otherwise dispose of such shares of Stock other than by transfers
which may occur by will or by the laws of descent and distribution,
and no shares of Stock may be transferred unless, in the opinion of
counsel to the Company, such transfer would be in compliance with
applicable securities laws. In addition, unless a registration
statement under the Securities Act of 1933 is in effect with respect
to the Stock to be purchased under the Plan, each certificate
representing any shares of Stock issued to an Optionee hereunder
shall have endorsed thereon a legend in substantially the following
form:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, THE SALE
IS MADE IN ACCORDANCE WITH RULE 144 UNDER THE ACT, OR THE CORPORATION
RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THESE SECURITIES
REASONABLY SATISFACTORY TO THE CORPORATION STATING THAT SUCH SALE,
TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.
<PAGE>
10. TRANSFERABILITY OF OPTIONS
No Option granted under the Plan shall be transferable by an
Optionee (whether by sale, assignment, hypothecation or otherwise)
other than by will or the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined under
the Code or Title I of the Employee Retirement Income Security Act,
or the rules thereunder. An Option shall be exercisable during the
Optionee's lifetime only by the Optionee or, if permissible under
applicable law, by the Optionee's guardian or legal representative.
11. TERMINATION OF OPTIONS
11.1 GENERALLY. Except as otherwise provided in this Section 11, if an
Optionee's employment with the Company or Subsidiary is terminated
(hereinafter "Termination"), the Optionee may exercise any Option
granted under the Plan, to the extent the Optionee was vested in and
entitled to exercise the Option at the date of Termination, for a
period of three months after the date of Termination or until the
term of the Option has expired, whichever date is earlier.
11.2 DEATH OR DISABILITY OF OPTIONEE. In the event of the death or
Disability of an Optionee prior to expiration of an Option held by
him or her, the following provisions shall apply:
11.2.1 If the Optionee is at the time of his or her Disability
employed by the Company or a Subsidiary and has been in continuous
employment (as determined by the Board of Directors in its sole
discretion) since the date of grant of the Option, then the Option shall
be immediately exercisable in full and the Optionee shall be 100% vested
on the date of Optionee's Disability; provided, however, that such Option
must be exercised within one year of the date of the Optionee's
Disability, and in no event later than the date of expiration of the
Option. The term "Disability" shall mean any physical or mental impairment
of Optionee, whether total or partial, which prevents Optionee, in the
reasonable judgment of the Company, from carrying out or performing the
major duties of his or her association with the Company. The determination
of whether an Optionee has a Disability within the meaning of this Section
11.2.1 shall be made in writing by the Board of Directors in its sole
discretion.
11.2.2 If the Optionee is at the time of his or her death employed
by the Company or a Subsidiary and has been in continuous employment (as
determined by the Board of Directors in its sole discretion) since the
date of grant of the Option, then the Option shall be immediately
exercisable in full by the Optionee's estate or by a person who acquired
the right to exercise the Option by will or the laws of descent and
distribution, and the Optionee shall be 100% vested on the date of
Optionee's Death; provided, however, that such Option must be exercised
within two years of the date of the Optionee's Death, and in no event
later than the date of expiration of the Option.
11.3 TERMINATION OF EMPLOYMENT. The Board of Directors shall have the
right to cancel any Options granted to the Optionee under the Plan
if the employment of an Optionee is terminated by the Company or a
Subsidiary.
12. AMENDMENT AND TERMINATION OF PLAN
12.1 The Board of Directors, may at any time and from time to time
suspend or terminate the Plan in whole or in part or amend it from
time to time in such respects as may be in the best interests of the
Company; provided, however, that no such amendment shall be made
without the approval of the shareholders if it would: (a) materially
modify the eligibility requirements for Participants as set forth in
Section 5 hereof; (b) increase the maximum aggregate number of
shares of Stock which may be issued pursuant to Options, except in
accordance with Section 4.2 hereof; (c) reduce the minimum Option
price per share as set forth in Section 7 hereof, except in
accordance with Section 4.2 hereof; (d) extend the period of
granting Options; or (e) materially increase in any other way the
benefits accruing to Optionees.
12.2 No amendment, suspension or termination of this Plan shall, without
the Optionee's consent, alter or impair any of the rights or
obligations under any Option theretofore granted to him or her under
the Plan.
12.3 The Board of Directors may amend the Plan, subject to the
limitations cited above, in such manner as it deems necessary to
permit the granting of Incentive Stock Options meeting the
requirements of future amendments to the Code.
<PAGE>
12.4 In the event of the proposed dissolution or liquidation of the
Company, each Option will terminate immediately prior to the
consummation of such proposed action, unless otherwise provided by
the Board of Directors. The Board of Directors may, in the exercise
of its sole discretion in such instance, declare that any Option
shall terminate as of a date fixed by the Board of Directors and
give each Optionee the right to exercise his or her Option as to all
or any part of the Option, including Stock as to which the Option
would not otherwise be exercisable. In the event of a proposed sale
of all or substantially all of the assets of the Company, or the
merger of the Company with or into another corporation, the Option
shall be assumed or an equivalent option shall be substituted by
such successor corporation or a parent or subsidiary of such
successor corporation, unless the Board of Directors determines, in
the exercise of its sole discretion and in lieu of such assumption
or substitution, that the Optionee shall have the right to exercise
the Option in full including Stock as to which the Option would not
otherwise be exercisable. If the Board of Directors makes an Option
fully exercisable in lieu of assumption or substitution in the event
of a merger or sale of assets, the Board of Directors shall notify
the Optionee that the Option shall be fully exercisable for a period
of thirty (30) days from the date of such notice, and the Option
will terminate upon the expiration of such period.
13. MISCELLANEOUS PROVISIONS
13.1 NO RIGHT TO CONTINUED EMPLOYMENT. No person shall have any claim or
right to be granted an Option under the Plan, and the grant of an
Option under the Plan shall not be construed as giving an Optionee
the right to continued employment with the Company. The Company
further expressly reserves the right at any time to dismiss an
Optionee or reduce an Optionee's compensation with or without cause,
free from any liability, or any claim under the Plan, except as
provided herein or in a stock option agreement.
13.2 TRANSFER OF STOCK AND PAYMENT OF WITHHOLDING TAXES. The Company
shall have the right to require that payment or provision for
payment of any and all withholding taxes due upon the grant or
exercise of an Option hereunder or the disposition of any Stock or
other property acquired upon exercise of an Option be made by an
Optionee. The Board of Directors shall have the right to establish
such other rules and regulations or impose such other terms and
conditions in any agreement relating to an Option granted hereunder
with respect to tax withholding as the Board of Directors may deem
necessary and appropriate.
13.3 GOVERNING LAW. The Plan shall be administered in the State of
Minnesota, and the validity, construction, interpretation, and
administration of the Plan and all rights relating to the Plan shall
be determined solely in accordance with the laws of such state,
unless controlled by applicable federal law, if any.
14. EFFECTIVE DATE
The effective date of the Plan is September 17, 1996. No Option may
be granted after ten (10) years; provided, however, that all
outstanding Options shall remain in effect until such outstanding
Options have expired or been canceled.
IN WITNESS WHEREOF, of the adoption of this Stock Option Plan, the
Company has caused its President to execute this Plan on the 17th
day of September, 1996.
MERCURY WASTE SOLUTIONS, INC.
By:
-------------------------------------
Its: President
<PAGE>
MERCURY WASTE SOLUTIONS, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS - MAY 27, 1998
The undersigned, a shareholder of Mercury Waste Solutions, Inc., hereby
appoints Brad J. Buscher and Mark G. Edlund, and each of them, as proxies,
with full power of substitution, to vote on behalf of the undersigned the
number of shares which the undersigned is then entitled to vote, at the
Annual Meeting of Shareholders of Mercury Waste Solutions, Inc. to be held
at the Radisson Plaza Hotel Minneapolis, 35 South Seventh Street,
Minneapolis, Minnesota on May 27, 1998 at 3:30 p.m. (Minneapolis time),
and at any and all adjournments thereof, with all the powers which the
undersigned would possess if personally present, upon:
1. Election of Directors:
[ ] FOR all nominees [ ] WITHHOLD AUTHORITY FOR ALL
[ ] WITHHOLD AUTHORITY FOR ONLY THOSE PERSONS CROSSED OUT BELOW
Brad J. Buscher Mark G. Edlund Alan R. Geiwitz
Joel H. Gottesman Robert L. Etter Frank F. Farrar.
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, PLACE
AN "X" THROUGH THAT NOMINEE'S NAME ABOVE.
2. Proposal to increase in number of shares reserved for issuance under the
1996 Stock Option Plan from 185,500 to 371,000:
[ ] FOR [ ] WITHHOLD AUTHORITY
3. Upon such other business as may properly come before the meeting or any
adjournments thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES,
AND FOR INCREASE IN THE NUMBER OF SHARES
RESERVED FOR ISSUANCE UNDER THE 1996 STOCK OPTION PLAN.
The undersigned hereby revokes all previous proxies relating to the shares
covered hereby and acknowledges receipt of the Notice and Proxy Statement
relating to the Annual Meeting of Shareholders.
(Continued, and TO BE COMPLETED AND SIGNED on the reverse side)
<PAGE>
(Continued from other side)
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. When properly
executed, this proxy will be voted on the proposals set forth herein as
directed by the shareholder, but if no direction is made in the space
provided, this proxy will be voted FOR the election of all nominees for
director.
Dated _________________, 1998
____________________________________________
Signature
____________________________________________
Signature if held jointly
(Shareholder must sign exactly as the name
appears at left. When signed as a corporate
officer, executor, administrator, trustee,
guardian, etc., please give full title as
such. Both joint tenants must sign.)
