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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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
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[_] Filed by the Registrant
[x] Filed by a Party other than the Registrant
Check the appropriate box:
[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 Rule 14a-11(c) or Rule 14a-12
INSITUFORM TECHNOLOGIES, INC.
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(Name of Registrant as Specified in Its Charter)
JEROME KALISHMAN
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(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)(1)
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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PROXY STATEMENT OF THE COMMITTEE
TO RESTORE VALUE TO IT IN
OPPOSITION TO THE SOLICITATION
BY THE BOARD OF DIRECTORS OF
INSITUFORM TECHNOLOGIES, INC.
-----------------------------
ANNUAL MEETING OF THE STOCKHOLDERS
OF
INSITUFORM TECHNOLOGIES, INC.
This Proxy Statement and the accompanying [Blue] Proxy Card
are being furnished to stockholders by The Committee To Restore Value to ITI
(the "Committee") formed by Jerome Kalishman ("Kalishman") and Robert W.
Affholder ("Affholder") in connection with the solicitation by the Committee of
proxies from the holders of Class A Common Stock, par value $0.01 per share (the
"Common Stock"), of Insituform Technologies, Inc., a Delaware corporation (the
"Company"), for use at the Annual Meeting of the Stockholders of the Company,
including any adjournments or postponements thereof (the "Annual Meeting"),
scheduled to be held at The New York Marriott East Side Hotel, 525 Lexington
Avenue, New York, New York on Tuesday, July 15, 1997, at 10:00 A.M., local time.
At the Annual Meeting, four Class II Directors of the Company will be elected.
For the reasons discussed in this Proxy Statement, the Committee is soliciting
proxies to nominate and elect to the Company's Board of Directors (the "Board")
Affholder (who also has been nominated for election by the Board) and the three
other individuals named herein in opposition to the election of the nominees of
the Board, other than Affholder (such other individuals, together with
Affholder, being hereinafter referred to as the "Committee Nominees"). The
principal executive offices of the Company are located at 1770 Kirby Parkway,
Suite 300, Memphis, Tennessee 38138.
THE COMMITTEE RECOMMENDS THAT YOU
VOTE IN FAVOR OF THE COMMITTEE NOMINEES
Stockholders of record of shares of Common Stock on May 23,
1997 (the "Record Date") are entitled to vote at the Annual Meeting. It is
anticipated that this Proxy Statement and accompanying [Blue] Proxy Card will
first be furnished to stockholders of the Company on or about June , 1997. On
the Record Date, members of the Committee and their affiliates beneficially
owned an aggregate of 4,405,706 shares (or approximately 16.4%) of the Common
Stock. The members of the
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Committee and their affiliates intend to cause all of such shares to be voted
FOR the Committee Nominees. See "Voting Securities and Principal Holders
Thereof."
IMPORTANT
YOUR VOTE IS EXTREMELY IMPORTANT. If you agree with the
Committee's efforts, we ask for your support by immediately signing, dating and
mailing the enclosed [Blue] Proxy Card.
SHARES IN YOUR NAME. No matter how many shares you own, vote
"FOR" the Committee Nominees by signing, dating and mailing the enclosed [Blue]
Proxy Card. Sign the [Blue] Proxy Card exactly as your name appears on the stock
certificate regarding your shares.
SHARES IN YOUR BROKER'S OR BANK'S NAME. If you hold your
shares in the name of a brokerage firm, bank or other nominee, your broker, bank
or other nominee cannot vote your shares for the Committee Nominees unless it
receives your specific instructions. Please sign, date and mail as soon as
possible the enclosed [Blue] Proxy Card in the envelope that has been provided
by your broker, bank or other nominee to be sure that your shares are voted, or
contact the person responsible for your account and instruct that person to
execute a [Blue] Proxy Card on your behalf.
WE URGE THAT YOU DO NOT SIGN AND RETURN THE [COLOR] PROXY CARD
PROVIDED BY THE COMPANY. If you have already done so, your [Color] Proxy Card
automatically will be revoked if you sign and return the enclosed [Blue] Proxy
Card.
QUESTIONS AND ASSISTANCE. If you have any questions or
need assistance in voting, please call D.F. King & Co., Inc.,
Toll-Free, at 1-800- .
PLEASE REMEMBER TO DATE YOUR PROXY CARD, AS ONLY YOUR LATEST
DATED PROXY WILL COUNT AT THE ANNUAL MEETING. IF YOU HAVE ANY DOUBTS AS TO
WHETHER YOUR PROXY WILL BE RECEIVED IN TIME TO BE CAST AT THE ANNUAL MEETING,
PLEASE CALL D.F. KING & CO., INC.
PROMPTLY.
BACKGROUND AND REASONS FOR THE SOLICITATION
Kalishman and Affholder and their respective affiliates
acquired their shares of Common Stock in October 1995 as a result of the
consummation of the merger (the "IMA Merger") of a wholly-owned subsidiary of
the Company with and into Insituform Mid-
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America, Inc. ("IMA"). At the time of the IMA Merger, Kalishman and Affholder
were the Chairman of the Board and CEO and the Vice Chairman, respectively, of
IMA and its largest shareholders. Pursuant to the IMA Merger, the shares of IMA
stock held by Kalishman and Affholder and their respective affiliates were
converted into the right to receive shares of Common Stock. Pursuant to the
agreement (the "IMA Merger Agreement") entered into by the Company and IMA in
connection with the IMA Merger, the size of the Company's Board was increased
from 10 to 13 persons and Kalishman, Affholder and a third director of IMA were
elected as directors of the Company. In the IMA Merger Agreement, the Company
agreed to nominate and recommend for reelection the 10 persons who were serving
as directors of the Company at the time of the IMA Merger as well as the IMA
directors who were added to the Board. This agreement is in effect until
December 9, 1998. Affholder's current term as a director of the Company expires
at the Annual Meeting and Kalishman's term expires at the 1998 annual meeting of
stockholders.
At the time of the IMA Merger, Kalishman and Affholder entered
into agreements with the Company regarding Kalishman's service as the Vice
Chairman of and a consultant to the Company and Affholder's employment as an
executive officer of the Company. Kalishman currently serves as Chairman of the
Board of the Company and Affholder is the Senior Executive Vice President of the
Company. Kalishman is the Company's largest stockholder.
The Committee has been greatly disappointed in the Company's
performance prior to the election in November 1996 of Anthony W. Hooper as
President and Chief Executive Officer and Kalishman as Chairman of the Board.
The Committee believes that a change in the composition of the Board is needed
to provide the current management team with greater support and prevent against
a reversion to the strategies and policies that were in place prior to the
election of Messrs. Hooper and Kalishman to their current management positions
and which led to a substantial decrease in the value of the Company's Common
Stock from the levels in effect at the time of the IMA Merger.
The Committee also believes that the Company's current Board
of Directors is not effectively and adequately representing the interests of the
Company and its stockholders. In the view of the Committee, the proceedings and
effectiveness of the Board have been substantially impaired by personal
allegiances that exist among groups of Board members that were directors at the
time of the IMA Merger. This has resulted in divisive debate and dissension
which, in the Committee's view, has affected and will continue in the future to
undermine the effectiveness of Mr.
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Hooper and the current management team. Further, the Committee considers it
wholly inappropriate that Messrs. Brian Chandler (a director of the Company) and
Douglas K. Chick (a director of the Company and a member of the Board's slate of
nominees for election at the Annual Meeting) are engaged in the development of
technology that could be used by third parties to compete with the Company, have
been selling their Common Stock and defaulted on a non-recourse loan from the
Company, with the value of the collateral at the time of foreclosure being
approximately $2,000,000 less than the amount due and owing the Company.
The Committee believes that the election of independent highly
qualified individuals as directors of the Company would greatly improve the
Board, providing to current management the support necessary to increase
profitability at the Company and enhance the value of the Company and its stock
and also minimizing the adverse effects of apparent conflicts of interest
between the Company and Messrs. Chandler and Chick. Kalishman and Affholder have
held a number of discussions with certain of the other directors of the Company
regarding their concerns and ideas to improve the Board and the role it plays in
the management of the Company. These discussions have not been fruitful and the
other directors have refused to consider any changes in the composition of the
Board. The Committee believes that the Company would benefit from the election
of its nominees to the Board. The Committee believes that its nominees are
highly qualified businessmen who do not have any prior allegiances to any
faction of the Board and who will bring a wealth of experience, specialized
knowledge, enthusiasm and vigor that will enhance the Company and its future
activities and growth.
ELECTION OF THE COMMITTEE NOMINEES AS DIRECTORS
The Company currently has 13 directors. The terms of
Affholder, Paul H. Biddelman, Douglas K. Chick and Steven Roth will expire at
the Annual Meeting. The Committee is proposing that the stockholders of the
Company elect the Committee Nominees to the Board at the Annual Meeting.
Affholder also has been nominated by the Company. The Committee Nominees named
in the table below, each of whom has consented to serve as a director, if
elected, would serve until the Company's annual meeting of stockholders in 2000
and until his successor has been elected and qualified.
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PRESENT PRINCIPAL
NAME, AGE AND OCCUPATION AND FIVE YEAR
BUSINESS ADDRESS EMPLOYMENT HISTORY
Robert W. Affholder (61) Mr. Affholder has been Senior Executive Vice
17988 Edison Avenue President of the Company since August 1996;
Chesterfield, Missouri 63005 Senior Vice President-Chief Operating
Officer of North American Contracting
Operations of the Company from October 1995
to August 1996; Vice Chairman, Insituform
Mid- America, Inc. ("IMA") from 1993 to
1995; President of IMA from 1994 to 1995 and
from prior to 1992 to 1993; Director of the
Company since 1995.
Stephen P. Cortinovis (47) Mr. Cortinovis has been the Vice President -
800 West Florissant International and President - Europe of
St. Louis, Missouri 63136 Emerson Electric Co., a diversified
manufacturing company, from January 1992 to
present.
Hulas Kanodia (47) Mr. Kanodia has been the Chairman, Chief
9275 Genaire Drive Executive Officer and President of Trans
St. Louis, Missouri 63134 States Airlines, a domestic airline, from
September 1986 to present.
Minor W. Perkins (51) Mr. Perkins has been the President of RFS
850 Ridgelake Boulevard, Hotel Investors, Inc., a real estate
Suite 220 investment trust owning equity interests in
Memphis, Tennessee 38120 hotel properties ("RFS"), from April 1996 to
present. Prior to such date, Mr. Perkins had
been at Morgan Keegan & Company, Inc., as
co-head of its investment banking department
since 1993 and as a managing director since
1991. Mr. Perkins is a director of RFS and
of Knight Transportation, Inc., a company
that transports consumer goods and
commodities.
It is anticipated that each Committee Nominee, upon election,
will receive director's fees, consistent with the Company's compensation
policies and plans applicable to all of its directors. According to the
Company's Proxy Statement dated June 6, 1997 for the Annual Meeting (the
"Company's 1997 Proxy
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Statement"), non-employee directors of the Company received $12,000 in 1996, and
an additional $1,000 for each Board meeting attended in person or by telephone.
The Company's 1997 Proxy Statement also indicated that such directors also were
reimbursed for all reasonable expenses incurred in connection with their
services. Annex I sets forth certain information with respect to the Common
Stock owned by the Committee Nominees.
VOTE AND RECOMMENDATION. Assuming that a quorum is present,
directors are elected by vote of a plurality of the shares of voting stock
present and entitled to vote, in person or by proxy, at the Annual Meeting.
Accordingly, the four nominees receiving the greatest number of votes cast at
the Annual Meeting upon the presence of a quorum will be elected as directors.
Since the directors will be elected on the basis of the number of votes cast,
proxies which are marked "Withhold Authority" or on which a broker or other
nominee has indicated a lack of discretionary authority ("broker non-votes")
will not be counted in the election of directors. Although it is anticipated
that each Committee Nominee will be able to serve as a director, should any
Committee Nominee become unavailable to serve, the proxies will be voted for
such other person or persons as may be designated by the Committee.
THE COMMITTEE RECOMMENDS A VOTE
"FOR" THE COMMITTEE NOMINEES
IF YOU PROPERLY SIGN, DATE AND RETURN THE BLUE PROXY CARD,
BUT DO NOT INDICATE YOUR INSTRUCTIONS THEREON, YOUR SHARES WILL BE VOTED FOR
EACH OF THE COMMITTEE'S NOMINEES
CERTAIN INFORMATION REGARDING THE COMMITTEE,
THE COMMITTEE NOMINEES AND OTHER PARTICIPANTS
Mr. Kalishman (age 69) has been a director of the Company
since October 1995 and the Chairman of the Board of the Company since November
1996. He served as the Company's Vice Chairman from the time of the IMA Merger
in October 1996 to his election as Chairman of the Board in November 1996. From
prior to 1992 to 1995, Mr. Kalishman was the Chairman and Chief Executive
Officer of IMA. His business address is c/o Insituform Technologies, Inc., 17988
Edison Avenue, Chesterfield, Missouri 63005-3700.
For biographical information concerning Mr. Affholder,
see "Election of the Committee's Nominees As Directors" above.
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As of the Record Date, the members of the Committee and their
affiliates, in the aggregate, beneficially owned 4,405,706 shares of the Common
Stock.
The Committee and the Committee Nominees are sometimes
referred to herein as the "Participants" in this solicitation. Additional
information with respect to the Participants is set forth below under "Voting
Securities and Principal Holders Thereof" and in Annex I.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The shares of Common Stock constitute the only class of
outstanding voting securities of the Company. Accordingly, only holders of
Common Stock are entitled to vote at the Annual Meeting or execute proxies in
connection therewith. The Company stated in the Company's 1997 Proxy Statement
that as of the Record Date, there were 26,916,294 shares of Common Stock
outstanding. Each share of Common Stock entitles its record holder to one vote.
Stockholders of the Company do not have cumulative voting rights.
The following table sets forth, as of May 1, 1997 with respect
to the number of shares of Common Stock owned, to the best of the Committee's
knowledge, by (i) each person who beneficially owns more than 5% of the
outstanding shares of Common Stock, (ii) each director of the Company who owned
beneficially any shares of Common Stock, (iii) each executive officer of the
Company named in the Company's 1997 Proxy Statement, and (iv) all directors and
executive officers of the Company as a group. The information below (except with
respect to the Committee and footnotes (2) and (6)) is based on information
reported by the Company in the Company's 1997 Proxy Statement.
AMOUNT AND
NATURE OF
NAME AND ADDRESS BENEFICIAL PERCENTAGE
OF BENEFICIAL OWNER OWNERSHIP(1) OF CLASS
- ------------------- ------------ ---------
Jerome and Nancy F. Kalishman............ 3,097,848(2) 11.5%
17988 Edison Avenue
Chesterfield, Missouri 63005
T. Rowe Price Associates, Inc............ 2,667,825(3) 9.9
100 East Pratt Street
Baltimore, Maryland 21202
Interstate Properties.................... 1,660,072 6.2
Park 80 West-Plaza Two
Saddle Brook, New Jersey 07663(4)
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David Mandelbaum....................... 1,660,072(5) 6.2
80 Main Street
West Orange, New Jersey 07052
Steven Roth............................ 1,670,072(5) 6.2
Park 80 West-Plaza Two
Saddle Brook, New Jersey 07663
Russell B. Wight, Jr................... 1,664,744(5) 6.2
Park 80 West-Plaza Two
Saddle Brook, New Jersey 07663
Robert W. Affholder.................... 1,307,858(6) 4.9
Paul A. Biddelman...................... 380,877(7) 1.4
Brian Chandler (8)..................... 183,590 (9)
Douglas K. Chick (8)(10)............... 917,231 3.4
William Gorham......................... 9,425(11) (9)
James D. Krugman....................... 278,664(12) 1.0
Alvin J. Siteman....................... 246,190(13) (9)
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Silas Spengler........................... 2,000 (9)
Sheldon Weinig........................... 12,099 (9)
Anthony W. Hooper........................ 114,800(14) (9)
Jean-Paul Richard........................ 310,000(15) 1.1
William A. Martin........................ 28,000(16) (9)
Dale T. Harden........................... 12,500(16) (9)
Raymond Toth............................. 12,000(16) (9)
Directors and Executive
Officers as a group (19 persons)......... 8,189,755(17) 29.5
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(1) Except as otherwise indicated, as of May 1, 1997 all of such shares are
owned with sole voting and investment power.
(2) Represents: (i) 146,159 shares beneficially owned by Jerome and Nancy
F. Kalishman as tenants by the entirety, (ii) 2,869,274 shares
beneficially owned by Xanadu Investments, L.P. (the general partners of
which are The Jerome Kalishman Revocable Trust, as to which Jerome
Kalishman acts as trustee, and The Nancy F. Kalishman Revocable Trust,
as to which Nancy F. Kalishman acts as trustee), and (iii) 82,415
shares (the "Fund Shares") beneficially owned by Jerome Kalishman, as
trustee of The Jerome and Nancy Kalishman Family Fund; Nancy F.
Kalishman disclaims beneficial ownership of the Fund Shares. Excludes:
(i) 302,463 shares beneficially owned with sole voting and investment
power by John Kalishman, (ii) 302,463 shares beneficially owned with
sole voting and investment power by James Kalishman, (iii) 302,462
shares beneficially owned with sole voting and investment power by
Susan Kalishman, (iv) 302,463 shares beneficially owned with sole
voting and investment power by Thomas Kalishman and (v) 115,000 shares
held by The Jerome and Nancy F. Kalishman Irrevocable Grandchildren's
Trust, as to which John, James, Susan and Thomas Kalishman (all of whom
are adult children of Jerome and Nancy F. Kalishman) act as co-trustees
and have shared voting and investment power; Jerome and Nancy F.
Kalishman disclaim beneficial ownership of such shares.
(3) Includes 1,087,125 shares beneficially owned by T. Rowe Price New
Horizons Fund, Inc. (the "Fund"), a registered investment company. In a
Statement on Schedule 13G, as
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amended, filed with the Securities and Exchange Commission, T. Rowe
Price Associates, Inc. ("Associates"), a registered investment advisor,
and the Fund have reported that Associates has sole investment power
over all such 2,662,825 shares, and that Associates and the Fund have
sole voting power over, respectively, 355,700 shares and 1,087,125
shares.
(4) In a Statement on Schedule 13D filed with the Securities and Exchange
Commission by Interstate Properties and its partners, such parties have
reported that Interstate Properties is a general partnership consisting
of David Mandelbaum, Steven Roth and Russell B. Wight, Jr.
(5) Includes 1,660,072 shares beneficially owned by Interstate Properties.
(6) Includes 3,000 shares beneficially owned by Affholder as trustee of the
Robert W. and Pamela Rae Affholder Grandchildren's Trust.
(7) Includes 350,877 shares issuable pursuant to currently exercisable
warrants granted by the Company to Hanseatic and held for discretionary
customer accounts and for an affiliate in which Hanseatic is the
indirect managing member. Mr. Biddelman is Treasurer of Hanseatic and,
accordingly, would hold shared voting and investment power in the event
of exercise of such warrants. See "Compensation Committee Interlocks
and Insider Participation".
(8) Represents 183,590 shares of Common Stock beneficially owned by
Ringwood Limited ("Ringwood"), a holding company whose shareholders are
Mr. Chandler and Barford Limited, as trustee of the Anthony Basmadjian
Settlement ("Barford"), and held with shared voting and investment
power with Mr. Chandler, Barford and, as a result of the arrangements
described under footnote (10), Mr. Chick.
(9) Less than one percent.
(10) Represents 183,590 shares of Common Stock beneficially owned by
Ringwood Limited, in which Barford is a shareholder (see footnote (8)),
and 733,641 shares of Common Stock beneficially owned by Parkwood
Limited, as trustee of the Anthony Basmadjian "P" Settlement
("Parkwood"). The shares beneficially owned by Barford and Parkwood are
held with shared voting and investment power with Mr. Chick under oral
agreements pursuant to which Barford and Parkwood,
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respectively, will not vote or dispose of any securities of the Company
without the written approval of Mr. Chick having first been obtained.
Such parties have reported that the settlor of the settlements as to
which Barford and Parkwood, respectively, act as trustees has further
expressed his wishes to the effect that the powers of trustee be
exercised in consultation with Mr. Chick with due regard to any
suggestions made, and that, accordingly, Mr. Chick has an informal
ability to influence decisions of Barford and Parkwood, respectively,
regarding securities of the Company held by them as trustees, but,
under governing law, no right to enforce such settlements,
respectively, so as to override or compel the trustees or the
councilors who nominate beneficiaries in the exercise of a trust power
or discretion in a particular manner.
(11) Represents 9,425 shares jointly owned with Gail Gorham, Mr. Gorham's
wife.
(12) Includes 195,000 shares issuable upon exercise of stock options granted
by the Company and exercisable at May 1, 1997, 40,364 shares held by a
general partnership whose managing partner is James D. Krugman and
33,300 shares, as to which Mr. Krugman holds shared voting and
investment power, held by a general partnership in which Mr. Krugman's
mother has an interest.
(13) Represents: (i) 210,348 shares held by Mr. Siteman as trustee of the
Alvin J. Siteman Revocable Trust; (ii) 5,174 shares held by Mr. Siteman
as trustee of trusts for the benefit of members of his immediate
family; and (iii) 30,668 shares issuable upon exercise of stock options
granted by the Company and exercisable at May 1, 1997.
(14) Includes 99,500 shares issuable upon exercise of stock options granted
by the Company and exercisable at May 1, 1997.
(15) Includes 300,000 shares issuable upon exercise of stock options granted
by the Company and exercisable at May 1, 1997.
(16) Represents shares issuable upon exercise of stock options granted by
the Company and exercisable at May 1, 1997.
(17) Includes 816,461 shares issuable upon exercise of stock options granted
by the Company and exercisable at May 1, 1997 and currently exercisable
warrants held by Hanseatic.
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INFORMATION CONCERNING THE SOLICITATION OF PROXIES
The costs of this solicitation will be borne by the Committee.
In addition to solicitation by mail, the Committee and the Committee nominees
may solicit proxies in person, by telephone, by telegram, by personal interview,
by e-mail, or by telecopier. No Committee member or Committee Nominee will
receive additional compensation for such solicitations. The Committee will
request banks, brokerage houses and other custodians, nominees and fiduciaries
to forward its proxy materials to the beneficial owners of the shares of Common
Stock they hold of record and obtain authorization for the execution of Proxy
Cards. The Committee will reimburse these record holders for customary mailing
expenses incurred by them in forwarding the Committee's materials. The Committee
also has retained D.F. King & Co., Inc. to assist the Committee in connection
with communications with stockholders and to provide other services in
connection with the solicitation of proxies. The fee of D.F. King & Co., Inc. is
estimated to be $__________ plus reasonable out-of-pocket costs and expenses.
D.F. King & Co., Inc. will employ approximately 35 people in its efforts.
Neither the Committee nor, to the best of the Committee's
knowledge, any person acting on its behalf has retained any other person to make
solicitations or recommendations to security holders on its behalf in connection
with the solicitation of proxies.
Costs related to the solicitation of proxies with respect to
the election of the Committee Nominees include expenditures for attorneys, proxy
solicitors, printing, postage, and related expenses and fees and are expected to
aggregate approximately $250,000. To date, the Committee has spent approximately
$25,000 of such total estimated expenditures.
The Committee intends to seek reimbursement from the Company
for the costs incurred in connection with this proxy solicitation. Such request
for reimbursement will not be submitted to a vote of the Company's stockholders.
PROXY PROCEDURES
Unless contrary instructions are indicated on the proxy, all
shares of Common Stock represented by valid proxies received pursuant to this
solicitation (and not revoked before they are voted) will be voted for the
election of the Committee Nominees. A proxy executed by a holder of shares may
be revoked at any time before its exercise by sending a written revocation
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(as provided below), by submitting another properly executed proxy with a later
date prior to the time of the Annual Meeting or by giving notice of revocation
at the Annual Meeting. The mere presence of any stockholder at the Annual
Meeting will not operate to revoke his or her proxy. The revocation may be
delivered to D.F. King at 77 Water Street, New York, New York 10005-4495 or any
other address provided by the Company. Although a revocation or a later dated
proxy delivered to the Company but not to the Committee will be effective, the
Committee requests that if a revocation or a later dated proxy is delivered only
to the Company, a photostatic copy of the revocation or later dated proxy also
be delivered to the Committee so that it will be aware of such revocation or
later dated proxy. All revocations received by the Committee will be delivered
by it to the Company, but will be effective only upon their receipt by the
Company. The Committee intends to deliver any such revocation to the Company
immediately prior to the convening of the Annual Meeting. Stockholders who have
executed and returned a proxy and who then attend the Annual Meeting and desire
to vote in person are requested to so notify the Committee prior to the time of
the Annual Meeting.
IF YOU WISH TO VOTE FOR THE ELECTION OF THE COMMITTEE NOMINEES
TO THE BOARD, PLEASE SIGN, DATE AND RETURN PROMPTLY THE ENCLOSED [BLUE] PROXY
CARD IN THE POSTAGE-PAID ENVELOPE PROVIDED OR FAX BOTH SIDES OF THE ENCLOSED
BLUE PROXY CARD TO THE COMMITTEE AT _______. THE COMMITTEE RECOMMENDS THAT YOU
VOTE "FOR" THE COMMITTEE NOMINEES.
SHAREHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
According to the Company's 1997 Proxy Statement, any
stockholder proposal intended for inclusion in the Company's proxy materials for
the 1998 Annual Meeting must be received in writing by the Company on or before
February 6, 1998. The inclusion of any proposal will be subject to applicable
rules of the Commission.
OTHER MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING
Except as set forth above, the Committee is not aware of any
matter to be considered by the Company's stockholders at the Annual Meeting.
However, the Committee's proxies are soliciting authority to vote for any
proposal to adjourn the Annual Meeting to a later date which is proposed or
recommended by the Committee and against a proposal to adjourn the Annual
Meeting to a later date which is not proposed or recommended by
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the Committee. Should any other matter come before the Annual Meeting, the
Committee's proxies will vote in their discretion all shares covered by [Blue]
proxy cards with respect to such matters.
COMPANY INFORMATION. Except as otherwise noted herein, the
information concerning the Company contained in this Proxy Statement has been
taken from or is based upon documents and records on file with the Commission
and other publicly available information. Although the Committee does not have
any knowledge that would indicate that any statement contained herein based upon
such documents and records is untrue, the Committee does not take any
responsibility for the accuracy or completeness of the information contained in
such documents and records, or for any failure by the Company to disclose events
that may affect the significance or accuracy of any such information.
Dated: June [__], 1997
THE COMMITTEE TO RESTORE VALUE TO ITI
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ANNEX I
Within the past two years, neither any Committee member nor
any Committee Nominee have engaged in any transactions in securities of the
Company except that Kalishman, Affholder and certain of their affiliates
received the shares of Common Stock shown as being beneficially owned by them in
the Proxy Statement in connection with the IMA merger that was effected on
October 25, 1995 and Kalishman on December 28, 1995 disposed of by gift 1,700
shares of Common Stock and on June 5, 1996 disposed of by gift an aggregate of
3,289 shares of Common Stock.
Except as set forth in this Proxy Statement, none of the
Committee, the Committee Nominees or any other Participant, or any associate of
the foregoing, directly or indirectly owns any securities of the Company or any
subsidiary of the Company beneficially or of record, has the right to acquire
beneficial ownership within 60 days or has purchased or sold such securities
within the past two years.
To the knowledge of the Committee, except as set forth in this
Proxy Statement, none of the Committee, the Committee Nominees or any other
Participant has any substantial interest, direct or indirect, by security
holdings or otherwise, in any matter to be acted upon at the Annual Meeting,
except for the election of directors.
During the past 10 years, none of the Committee, the Committee
Nominees or any other Participant has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors).
No part of the purchase price of any of the shares of Common
Stock beneficially owned by any of the Committee, the Committee Nominees or any
other Participant is represented by funds borrowed or otherwise obtained for the
purpose of acquiring or holding such securities.
Pursuant to the IMA Merger Agreement, Kalishman and Affholder
serve as members of the Board of Directors. The Company has agreed that until
December 9, 1998, the Company will nominate and recommend for re-election
Kalishman and Affholder to its Board of Directors, upon expiration of their
respective terms. Affholder's current term as a director of the Company expires
at the 1997 Annual Meeting and Kalishman's term expires at the 1998 annual
meeting of stockholders.
In November 1996, the Company supplemented its prior
arrangements with Kalishman to provide that the appointment of him as Chairman
of the Board of Directors, and his service in
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such position, would, during the period thereof, substitute for the Company's
and his respective obligations undertaken in October 1995 in connection with the
IMA Merger, under which Kalishman became Vice Chairman of the Board for a term
expiring on December 9, 1998 at an annual salary of $100,000. Upon completion of
the IMA Merger, the Company also entered into a consulting agreement with
Kalishman pursuant to which the Company engaged Kalishman as a consultant in
connection with the business of the Company for a two-year term at an annual fee
of $150,000. Such agreements are terminable by Kalishman at any time upon at
least 60 days' written notice, and are terminable by the Company upon the
failure of Kalishman to perform his duties thereunder owing to illness or other
incapacity, if such failure continues for a period of six months, or for other
cause (as defined in such agreements). Kalishman's arrangements with the Company
include health insurance benefits and use of an automobile. In the event of
Kalishman's death, such agreements terminate automatically. Kalishman has also
entered into a non-competition agreement with the Company extending from the
completion of the IMA Merger until the later of five years thereafter or two
years after all service to the Company has ended.
The Company's arrangements with Affholder, entered into in
October 1995 in connection with the IMA Merger, provided for Affholder initially
to serve as Senior Vice President - Chief Operating Officer of North American
Contracting Operations of the Company, and currently as Senior Executive Vice
President, over a term of three years at an annual salary of $250,000. In the
event of Affholder's death, such arrangements terminate automatically, and are
terminable by the Company upon the failure of Affholder to perform his duties
thereunder owing to illness or other incapacity, if such illness continues for a
period of six months, or for other cause (as defined in such agreement).
Affholder's arrangements with the Company entitle him to participate in medical
and other employee benefit plans and to the use of an automobile. Affholder has
also entered into a non-competition agreement with the Company extending from
the completion of the IMA Merger until the later of five years thereafter or two
years after all service to the Company has ended.
A subsidiary of the Company is party to a tunnelling equipment
lease agreement with A-Y-K-E Partnership, in which Kalishman and Affholder are
partners. Such agreement covers equipment held by such partnership for lease
both to the Company's subsidiary and other parties, as available, and is
terminable upon 30 days prior notice by either such partnership or the Company's
subsidiary. During the year ended December 31,
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<PAGE>
1996, such partnership was paid $384,575 under such arrangements, $29,050 of
which was attributable to equipment overhaul invoiced on a cost pass-through
basis. From time to time, such partnership has offered to sell all or any of its
equipment to the Company at appraised fair market values, all of which offers
have been rejected by the Company.
In connection with the IMA Merger, Xanadu Investments, L.P.
(the general partners of which are The Jerome Kalishman Revocable Trust, as to
which Kalishman acts as trustee, and The Nancy F. Kalishman Revocable Trust, as
to which Nancy F. Kalishman, Kalishman's spouse, acts as trustee) ("Xanadu") and
Affholder entered into an agreement with the Company and pursuant thereto
received certain registration rights covering the shares of Common Stock held by
them and their affiliates. Such agreement terminates in December 1998. Pursuant
to such agreement, Xanadu and Affholder may demand registration under the
Securities Act of 1933 on one occasion (unless the Company is entitled to use a
registration statement on Form S-3, in which case Xanadu is entitled to three
demand registrations) of no less than 500,000 shares of Common Stock. In
addition, Xanadu and Affholder are entitled to incidental registration rights
during the term of such agreement.
Except as described above or elsewhere in this Proxy
Statement, none of the Committee, the Committee Nominees or any other
Participant is, or within the past year has been, a party to any contract,
arrangement or understanding with any person with respect to any securities of
the Company.
Except for the arrangements described above or elsewhere in
this Proxy Statement, none of the Committee, the Committee Nominees or any other
Participant, or any associate of the foregoing, has any arrangement or
understanding with any person (A) with respect to any future employment by the
Company or its affiliates or (B) with respect to any future transactions to
which the Company or any of the affiliates will or may be a party.
There are no pending legal proceedings in which any of the
Committee Nominees or any of their associates is a party adverse to the Company
or any of its affiliates or in which any of the Committee Nominees or any of
their associates has an interest adverse to the Company or any of its
affiliates.
Except for the arrangements described above or elsewhere in
this Proxy Statement, none of the Committee Nominees holds any position or
office with the Company or any parent,
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<PAGE>
subsidiary or affiliate of the Company, and none has ever served as a director
of the Company or any parent, subsidiary or affiliate of the Company.
Except for the arrangements described above or elsewhere in
this Proxy Statement, none of the Committee Nominees has any family
relationship, by blood, marriage or adoption, to any director, executive office
or person nominated or chosen by the Company to become a director or executive
officer of the Company. During the last three fiscal years, no compensation was
awarded to, earned by, or paid to any of the Committee Nominees, except for Mr.
Affholder, by any person for any services rendered in any capacity to the
Company or its subsidiaries.
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<PAGE>
BENEFICIAL OWNERSHIP OF SHARES
BY THE COMMITTEE NOMINEES
The following table sets forth the ownership of the Common
Stock as of the Record Date by each of the Committee Nominees. Unless otherwise
indicated, such persons have sole voting and investment power with respect to
such shares, and all such shares were owned beneficially by the person
indicated.
AMOUNT OF
BENEFICIAL PERCENT
NAME OWNERSHIP OF CLASS
- ---- --------- --------
Robert W. Affholder 1,307,858 4.9%
Stephen P. Cortinovis 0 0
Hulas Kanodia 0 0
Minor W. Perkins 0 0
- -------------------------
(1) Based on the Common Stock shown as outstanding as of the Record Date
in the Company's 1997 Proxy Statement.
I-5
<PAGE>
Preliminary Copy--Subject to Completion [Form of Proxy Card]
BLUE PROXY CARD
ANNUAL MEETING OF STOCKHOLDERS OF
INSITUFORM TECHNOLOGIES, INC.
TO BE HELD ON JULY 15, 1997 TO VOTE FOR THE
DIRECTOR NOMINEES SET FORTH BELOW
THIS PROXY IS SOLICITED BY THE COMMITTEE TO RESTORE
VALUE TO IT AND NOT BY THE COMPANY'S BOARD OF DIRECTORS
The undersigned hereby appoints Jerome Kalishman and Robert
W. Affholder, and each of them, each with full power of
substitution, as proxy of the
undersigned to vote all of the class A common stock, par value $.01 (the
"Common Stock"), of Insituform Technologies, Inc. (the "Company") that the
undersigned is entitled to vote if personally present at the
Annual Meeting of Stockholders of the Company to be held at
The New York Marriott East Side
Hotel, 525 Lexington Avenue, New York, New York on Tuesday,
July 15, 1997, at 10:00 A.M., and at any and all
adjournments or postponements thereof.
1. ELECTION OF DIRECTORS.
THE COMMITTEE RECOMMENDS A VOTE FOR THE FOLLOWING DIRECTOR NOMINEES
Election of Robert W. Affholder, Stephen P. Cortinovis, Hulas Kanodia, and
Minor W. Perkins.
[ ] FOR ALL NOMINEES LISTED ABOVE [ ] WITHHOLD AUTHORITY TO
(EXCEPT AS MARKED TO THE CONTRARY VOTE FOR ALL NOMINEES LISTED
BELOW) ABOVE
INSTRUCTIONS. To withhold authority to vote for the election of one or more of
such candidate(s), mark FOR above and write the name(s) of the person(s) with
respect to whom you wish to withhold authority in the following space.
---------------------------------------
(CONTINUED AND TO BE DATED AND SIGNED ON REVERSE SIDE)
Proposals to Adjourn the Annual Meeting
The Committee recommends that you vote for Item 2 and against Item 3.
--- -------
2. Proposal to adjourn the Annual Meeting to a later date which is proposed
or recommended by the Committee.
[ ] Against [ ] For [ ] Abstain
3. Proposal to adjourn the Annual Meeting to a later date which is not
proposed or recommended by the Committee.
[ ] Against [ ] For [ ] Abstain
<PAGE>
The above-named proxies of the undersigned are authorized to vote, in
their discretion, upon such other matters as may properly come before the Annual
Meeting and any adjournment or postponement thereof.
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER MARKED
HEREIN BY THE UNDERSIGNED. IF NO MARKING IS MADE, THIS PROXY WILL BE VOTED "FOR"
THE ELECTION OF THE COMMITTEE'S NOMINEES DESCRIBED ABOVE, FOR ITEM 2 AND AGAINST
ITEM 3. THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE PROXY STATEMENT OF
THE COMMITTEE DATED JUNE , 1997, SOLICITING PROXIES FOR THE ANNUAL MEETING.
ALL PREVIOUS PROXIES GIVEN BY THE UNDERSIGNED TO VOTE AT THE ANNUAL
MEETING OR AT ANY ADJOURNMENT OR POSTPONEMENT THEREOF ARE HEREBY REVOKED.
Dated: , 1997
-----------------------------
---------------------------------------------
Signature
---------------------------------------------
Signature, if held jointly
---------------------------------------------
Title of Authority
Please date this Proxy and sign it exactly
as your name or names appear on your stock
certificates or on a label affixed hereto.
When shares are held jointly, EACH joint
owner should sign. When signing as attorney,
executor, administrator, trustee, guardian,
corporate officer, etc., give full title as
such. If shares are held by a corporation,
please sign in full corporate name by
President or other authorized officer. If
shares are held by a partnership, please
sign in partnership name by an authorized
person.
PLEASE SIGN, DATE AND MAIL YOUR PROXY PROMPTLY IN THE ENCLOSED
ENVELOPE TO D.F. KING & CO., INC., WALL STREET STATION,
P.O. BOX 411, NEW YORK, NY 10269-0069
If you need assistance in voting your shares, please call D.F. King & Co, Inc.
toll free at 1-800-[000-0000].
