INSITUFORM EAST, INCORPORATED
3421 Pennsy Drive
Landover, Maryland 20785-1608
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
FRIDAY, DECEMBER 8, 2000
To the Stockholders of Insituform East, Incorporated:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Insituform East, Incorporated, a Delaware corporation (the "Company" or
the "Corporation"), for the fiscal year ended June 30, 2000 will be
held at the Club Hotel by Doubletree, 9100 Basil Court, Landover,
Maryland 20774 on Friday, December 8, 2000, at 10:30 a.m. local time,
for the following purposes:
1. Proposal No. 1: To elect directors of the Corporation;
2. To transact such other business as may properly come before the
meeting and any adjournments thereof.
The Board of Directors has fixed the close of business on October 12,
2000, as the Record Date for determining stockholders entitled to notice of, and
to vote at, the Annual Meeting.
A copy of the Corporation's Annual Report on Form 10-K for the fiscal
year ended June 30, 2000, a Proxy and a Proxy Statement accompany this Notice.
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE SIGN, DATE AND
PROMPTLY MAIL THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED. NO POSTAGE IS
REQUIRED IF MAILED IN THE UNITED STATES. A PROMPT RESPONSE WILL ASSURE YOUR
PARTICIPATION IN THE MEETING AND REDUCE THE CORPORATION'S EXPENSE IN SOLICITING
PROXIES. IF YOU ARE PRESENT AT THE MEETING, YOU MAY, IF YOU WISH, WITHDRAW YOUR
PROXY AND VOTE YOUR SHARES PERSONALLY.
By Order of the Board of Directors,
/s/ Robert F. Hartman
Robert F. Hartman
Secretary
Landover, Maryland
October 30, 2000
<PAGE>
INSITUFORM EAST, INCORPORATED
3421 Pennsy Drive
Landover, Maryland 20785-1608
ANNUAL MEETING OF STOCKHOLDERS
DECEMBER 8, 2000
PROXY STATEMENT
SOLICITATION AND REVOCABILITY OF PROXIES
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Insituform East, Incorporated, a
Delaware corporation (the "Company" or the "Corporation"), for use at the Annual
Meeting of Stockholders to be held at the Club Hotel by Doubletree, 9100 Basil
Court, Landover, Maryland 20774 on Friday, December 8, 2000, at 10:30 a.m. local
time, and any adjournments thereof (the "Meeting").
The Board of Directors has fixed the close of business on October 12,
2000, as the record date (the "Record Date") for the determination of
stockholders who are entitled to notice of, and to vote at, the Meeting.
Stockholders are requested to complete, sign and date the enclosed
Proxy and return it promptly to the Company in the enclosed envelope. Any proxy
given pursuant to this solicitation may be revoked by the person executing it at
any time prior to or at the Meeting.
Shares of Common Stock and shares of Class B Common Stock represented
by valid proxies received in time for the Meeting, and not revoked, will be
voted as specified therein. If no instructions are given, the respective shares
of common stock will be voted as follows: (i) FOR the election as directors of
the Company of those nominees for director designated for election by holders of
shares of Common Stock and listed under the caption "Proposal No. 1 -- Election
of Directors" herein; (ii) FOR the election as directors of the Corporation of
those nominees for director designated for election by holders of shares of
Class B Common Stock and listed under the caption "Proposal No. 1 -- Election of
Directors" herein; and (iii) if authority is given to them, at the discretion of
the proxy holders, on any other matters that may properly come before the
Meeting.
The cost of preparing, assembling, and mailing this Proxy Statement,
the Proxy and the Notice of Annual Meeting will be paid by the Company.
Additional solicitation by mail, telephone, telegraph or personal solicitation
may be done by directors, officers or regular employees of the Company. Such
persons will receive no additional compensation for such services. Brokerage
houses and other nominees, fiduciaries and custodians nominally holding shares
of Common Stock or Class B Common Stock of record will be requested to forward
proxy soliciting material to the beneficial owners of such shares, and will be
reimbursed by the Company for their reasonable expenses.
This Proxy Statement and the accompanying Notice of Annual Meeting of
Stockholders, Proxy, and Annual Report on Form 10-K for the fiscal year ended
June 30, 2000, are first being mailed to the Company's stockholders of record on
or about October 30, 2000.
OUTSTANDING SHARES AND VOTING RIGHTS
As of the Record Date, there were outstanding 4,059,266 shares of
Common Stock, par value four cents ($.04) per share (the "Common Stock"), and
297,596 shares of Class B Common Stock, par value four cents ($.04) per share
(the "Class B Common Stock"), which are the only classes of stock of the
Corporation outstanding. A quorum shall be constituted by the presence at the
Meeting of a majority of the outstanding shares of Common Stock, or 2,029,634 of
such shares, and a majority of the outstanding shares of Class B Common Stock,
or 148,799 of such shares.
Each share of Common Stock is entitled to one vote, and each share of
Class B Common Stock is entitled to ten votes, except with respect to the
election of directors and any other matter requiring the vote of Common Stock or
Class B Common Stock separately as a class. The holders of Common Stock, voting
as a separate class, are entitled to elect that number of directors which
constitutes 25% of the authorized number of members of the Board of Directors
and, if such 25% is not a whole number, then the holders of Common Stock are
entitled to elect the nearest higher whole number of directors that is at least
25% of such membership. The holders of Class B Common Stock, also voting as a
separate class, are entitled to elect the remaining directors. The affirmative
vote of the holders of a majority of each class of common stock present in
person or represented by proxy, provided a quorum of that class is present, is
necessary for the election of directors by the class. For purposes of
determining whether a proposal has received a majority vote, abstentions will be
included in the vote totals with the result that an abstention will have the
same effect as a negative vote. Where authority to vote shares is withheld,
including instances where brokers are prohibited from exercising discretionary
authority for beneficial owners who have not returned a proxy (so-called "broker
non-votes"), those shares will not be included in the vote totals and,
therefore, will have no effect on the vote.
SECURITY OWNERSHIP
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following information is furnished with respect to each person or
entity who is known to the Company to be the beneficial owner of more than 5% of
any class of the Company's voting securities as of the Record Date:
<TABLE>
<CAPTION>
Name & Address of Amount & Nature of Percent
Beneficial Owner Title of Class Beneficial Ownership of Class
<S> <C> <C> <C>
CERBCO, Inc. Common Stock 1,414,850 34.9% 1/
3421 Pennsy Drive Class B Common Stock 296,141 99.5% 1/
Landover, MD 20785
George Wm. Erikson 2/
CERBCO, Inc.
3421 Pennsy Drive
Landover, MD 20785
Robert W. Erikson 2/
CERBCO, Inc.
3421 Pennsy Drive
Landover, MD 20785
1/ Through its ownership of such percentages of the outstanding shares of
Common Stock and Class B Common Stock, CERBCO, Inc. is entitled to cast
62.2% of all votes entitled to be cast on matters on which holders of
shares of both classes of the Company's common stock vote together.
2/ Messrs. George Wm. Erikson and Robert W. Erikson own 39.5% and 44.9%,
respectively, of the outstanding shares of Class B Common Stock of CERBCO,
Inc. On the basis of their stockholdings and management positions in
CERBCO, Inc., they could act together to control either the disposition or
the voting of the shares of the Company's Common Stock or Class B Common
Stock held by CERBCO, Inc. Messrs. George Wm. Erikson and Robert W. Erikson
are brothers.
</TABLE>
SECURITY OWNERSHIP OF MANAGEMENT
The following information is furnished with respect to all directors of
the Company who were the beneficial owners of any shares of the Company's Common
Stock or Class B Common Stock as of the Record Date, and with respect to all
directors and officers of the Company as a group:
<TABLE>
<CAPTION>
Amount & Nature of Beneficial Ownership
Name of Beneficial Owner Title of Class Owned Outright Exercisable Options Percent of Class
<S> <C> <C> <C> <C>
George Wm. Erikson 1/ Common Stock 16,500 75,000 2.0%
Robert W. Erikson 1/ Common Stock 0 75,000 1.7%
Webb C. Hayes, IV Common Stock 0 75,000 1.7%
Paul C. Kincheloe, Jr. Common Stock 0 75,000 1.7%
Thomas J. Schaefer Common Stock 0 75,000 1.7%
All directors and officers as Common Stock 17,000 375,000 8.7%
a group (11 persons, Class B Common Stock 0 0 0.0%
including those named above)
1/ Messrs. George Wm. Erikson and Robert W. Erikson own 39.5% and 44.9%,
respectively, of the outstanding shares of Class B Common Stock of CERBCO,
Inc. On the basis of their stockholdings and management positions in
CERBCO, Inc., they could act together to control either the disposition or
the voting of the shares of the Company's Common Stock or Class B Common
Stock held by CERBCO, Inc. Messrs. George Wm. Erikson and Robert W. Erikson
are brothers.
</TABLE>
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
The Board of Directors is currently comprised of seven directors. The
terms of all presently serving directors expire upon the election and
qualification of the directors to be elected at the Meeting. The directors
elected at the Meeting will serve subject to the By-laws until the next Annual
Meeting of Stockholders for the fiscal year ending June 30, 2001, and until
their respective successors shall have been duly elected and qualified.
All of the seven persons presently serving as directors are nominees to
be elected at the Meeting and are listed below. It is intended that the
individuals named in the enclosed form of Proxy will vote their proxies in favor
of these nominees for the Company's directors, unless otherwise directed. The
Board has no reason to believe that any of the nominees will not be available
for election as director. However, should any of them become unwilling or unable
to be nominated, it is intended that the individuals named in the enclosed Proxy
may vote for the election of such other person as the Board may recommend.
PRESENT DIRECTORS WHO ARE NOMINATED FOR RE-ELECTION
Two of the seven nominees for election to the Company's Board of
Directors identified below have been designated for election by the holders of
shares of Common Stock, and only the holders of such shares may vote with
respect to these nominees. The remaining five nominees have been designated for
election by the holders of shares of Class B Common Stock, and only the holders
of such shares may vote with respect to these nominees. Accordingly, the
following list contains a designation as to those nominees to be elected by
holders of shares of Common Stock and those nominees to be elected by holders of
shares of Class B Common Stock:
<TABLE>
<CAPTION>
Name, Age, Principal Occupation, First Became Class of Common Stock
Business Experience and Directorships A Director For Which Nominated
<S> <C> <C>
George Wm. Erikson, Age 58 1/ 1984 Class B Common Stock
Chairman, member of the Chief Executive Officer Committee
and General Counsel since 1986, Chairman of the Board of
Directors from 1985 to 1986; CERBCO, Inc. -- Chairman,
General Counsel and Director since 1988; CERBERONICS, Inc.
-- Vice Chairman since 1988, Chairman from 1979 to 1988,
Secretary from 1976 to 1988, General Counsel since 1976 and
Director since 1975; Capitol Office Solutions, Inc. --
Chairman, General Counsel and Director from 1987 to June 30,
1997.
Robert W. Erikson, Age 55 1/ 1985 Class B Common Stock
President since September 1991, Vice Chairman and member
of the Chief Executive Officer Committee since 1986, Vice
Chairman of the Board of Directors from 1985 to 1986;
CERBCO, Inc. -- President, Vice Chairman and Director since
1988; CERBERONICS, Inc. -- Chairman since 1988, President
from 1977 to 1988 and Director since 1974; Capitol Office
Solutions, Inc. -- Vice Chairman and Director from 1987 to
June 30, 1997; Director of The Palmer National Bank from
1983 to 1996, and Director of its successor, The George
Mason Bank, N.A., until June, 1997.
Webb C. Hayes, IV, Age 52 3/ 1994 Class B Common Stock
Managing Director of Private Client Services at Friedman,
Billings, Ramsey Group, Inc.; Director and Vice Chairman of
United Bank from June 1997 to May 1999; Director and
Executive Vice President of George Mason Bankshares, Inc.
and Chairman, President and CEO of The George Mason Bank,
N.A., from 1996 to 1997; Chairman of the Board of Palmer
National Bancorp., Inc. and The Palmer National Bank from
1985 to 1996, President and CEO from 1983 to 1996; Director
of CERBCO, Inc. since 1991; Director of Capitol Office
Solutions, Inc. from 1992 to June 30, 1997; Director of the
Federal Reserve Bank of Richmond from 1992 to 1995.
Paul C. Kincheloe, Jr., Age 59 1994 Class B Common Stock
Practicing attorney and real estate investor since 1967;
Partner in the law firm of Kincheloe and Schneiderman since
1983; Director of CERBCO, Inc. since 1991; Director of
Capitol Office Solutions, Inc. from 1992 to June 30, 1997;
Director of Herndon Federal Saving & Loan from 1970 to 1983;
Director of First Federal Savings & Loan of Alexandria from
1983 to 1989.
Trent H. Ralston, Age 62 2/ 4/ 2000 Class B Common Stock
Independent business consultant since 1999; President of
TRB Specialty Rehabilitation, Inc. from 1985 to 1999;
Executive Vice President and Chief Executive Officer of
Technical Grouting Services, Inc. from 1980 to 1985;
Director of the North American Society for Trenchless
Technology (NASTT) from 1993 to 1999, Chairman in 1999, past
Chairman in 2000; Director of the National Association of
Sewer Service Companies (NASSCO) in 1990 and from 1993 to
1994, President in 1992.
Thomas J. Schaefer, Age 62 2/ 3/ 1981 Common Stock
Independent private investor since 1995; Director,
President and CEO of Columbia First Bank, N.A. from 1988 to
1995; President and CEO of Signet Bank, N.A. from 1981 to
1988 and Director of Signet Bank, N.A. from 1978 to 1988;
Director of CERBCO, Inc. from July 1990 to November 1990.
William "Will" C. Willis, Jr., Age 47 2/ 4/ 2000 Common Stock
Director, President and CEO of Global Technovations, Inc.
since 1997, Chairman of the Board since 1998; Chairman of
Willis & Associates from 1995 to 1997; President and COO of
MBf USA, Inc. from 1994 to 1995; President and CEO of
Insituform Technologies, Inc. from 1990 to 1993; President
of The Paper Art Company, Inc., a division of The Mennen
Company, from 1985 to 1990.
1/ Messrs. George Wm. Erikson and Robert W. Erikson are brothers.
2/ Member of Audit Committee.
3/ Member of Stock Option Committee.
4/ Elected by the Board to fill a Board vacancy on September 8, 2000.
</TABLE>
COMMITTEES OF THE BOARD OF DIRECTORS
AND MEETING ATTENDANCE
The Board of Directors has an Audit Committee, the members of which are
all outside directors. The names of the committee's members are indicated in the
table above. The Board of Directors does not have standing nominating or
compensation committees, or committees performing similar functions.
The Audit Committee, among its functions, reviews the Corporation's
financial policies and accounting systems, reviews the scope of the independent
public accountants' audit, and approves the duties and compensation of the
independent public accountants, both with respect to audit and any non-audit
services. The Audit Committee meets periodically with the independent public
accountants outside the presence of corporate management or other employees to
discuss matters of concern, receive recommendations or suggestions for change
and have a free exchange of views and information.
The Stock Option Committee administers the 1999 Employee Stock Option
Plan. Generally, the Stock Option Committee has the authority to determine,
subject to the provisions and conditions of the plan, to whom options are
granted, the number of shares to be subject to the options and the terms and
conditions thereof, including the duration of the options and the times at which
they become exercisable.
During the fiscal year ended June 30, 2000, the Board of Directors met
on six occasions. The Audit Committee met on two occasions. The Stock Option
Committee did not meet. Each incumbent director attended more than 75% of both
(i) the total number of meetings of the Board of Directors, and (ii) the total
number of meetings held by all committees of the Board on which he served.
EXECUTIVE OFFICERS OF THE COMPANY
Information concerning Messrs. George Wm. Erikson and Robert W.
Erikson, who are executive officers and directors, is provided under the section
entitled "Present Directors Who Are Nominated For Re-election." The following
table sets forth the name, age, position(s) held and business experience of the
individuals who were executive officers, but not directors, of the Company
throughout fiscal year 2000:
Raymond T. Verrey, Age 54
Vice President, Treasurer and Chief Financial Officer since 1988, Principal
Accounting Officer since 1987; employed by Touche Ross & Co. from 1975 to
1987, serving as an Audit Manager from 1981 to 1987.
John F. Mulhall, Age 54
Vice President of Sales and Marketing since 1988, Director of Sales and
Marketing from 1987 to 1988; employed by Translogic Corporation, a material
conveying system manufacturer, from 1972 to 1987, serving as Eastern
Regional Manager from 1979 to 1987.
Gregory Laszczynski, Age 46
Vice President of Operations since 1989, Director of Operations from 1987
to 1989; employed by FMC Corporation from 1984 to 1987, serving as a
Project Engineer.
Robert F. Hartman, Age 53
Vice President of Administration and Secretary since 1991; Vice President
and Controller of CERBCO, Inc. since 1988, Secretary since 1991, Treasurer
and Chief Financial Officer since 1997; Vice President and Treasurer of
CERBERONICS, Inc. since 1988; employed by Dynamac International, Inc. from
1985 to 1988, serving as Controller; employed by CERBERONICS, Inc. from
1979 to 1985, serving as Vice President and Treasurer from 1984 to 1985.
EXECUTIVE COMPENSATION
JOINT COMPENSATION REPORT BY THE BOARD OF DIRECTORS
GENERAL
Pursuant to the Company's By-laws, the Chief Executive Officer
Committee (the "CEOC") -- consisting of the Chairman, the Vice Chairman, the
President, and such other officers of the Corporation as may from time to time
be determined by the Board -- performs the functions of the Chief Executive
Officer of the Company. Since August 30, 1991, the CEOC has consisted of George
Wm. Erikson, Chairman, and Robert W. Erikson, Vice Chairman and President.
The Company does not have a compensation committee. The CEOC, with the
annual review and oversight of the Board, determines the compensation for all
officers of the Company except the members of the CEOC. The Board as a whole
considers compensation arrangements proposed by and for members of the CEOC,
and, pursuant to the By-laws, is the ultimate determiner of compensation
arrangements for members of the CEOC. When considering CEOC compensation
arrangements, Board review may be conducted with or without the presence (or
participation) of the CEOC members who are also members of the Board as the
Board deems appropriate under the circumstances. Resolutions of the Board
altering CEOC compensation arrangements, in any material way, are voted upon by
the Board with such CEOC members abstaining. A second vote is then taken with
all directors participating.
PHILOSOPHY
The executive compensation philosophy of the Company (which is intended
to apply to all of the executive officers of the Company, including the CEOC
members) is aimed at: (i) attracting and retaining qualified management to
implement the Company's business plan; (ii) establishing a direct link between
management compensation and the achievement of the Company's annual and
long-term performance goals; and (iii) recognizing and rewarding individual
initiative and achievement. The Board and CEOC believe that management
compensation should be set at levels that are competitive with compensation
arrangements provided by other companies with which the Company competes for
executive talent, and by other companies of similar size, business or location.
It is also the view of the Board and the CEOC members that the compensation of
management should have a significant component which is contingent upon the
Company's level of performance, thereby encouraging executive officers to
enhance the profitability of the Company and thus increase shareholders' value
by aligning closely the financial interests of the Company's executive officers
and those of its shareholders. The Board reviews on an annual basis the
compensation arrangements of the Company's executive officers to ensure that
such arrangements are consistent with this executive compensation philosophy.
COMPONENTS OF COMPENSATION
The compensation program for the Company's officers, including members
of the CEOC, consists of: (a) base salary; (b) compensation pursuant to plans;
and (c) incentive cash bonuses.
Commencing in 1994, a publicly held corporation may not, subject to
limited exceptions, deduct for federal income tax purposes certain compensation
paid to certain executives in excess of $1 million in any taxable year (the
"Deduction Limitation"). While the Company's compensation programs generally are
not intended to qualify for any of the exceptions to the applicability of the
Deduction Limitation, it is not expected that compensation to executives of the
Company will exceed the Deduction Limitation in the foreseeable future.
(a) Base Salary. Typically, the base salary level for each executive
officer (including members of the CEOC) is considered annually in September and
yearly adjustments, if any, are made effective on or about October 1st of each
year. The timing of such yearly reviews permits consideration of information
which is developed each year for the Company's annual report, including audited
financial statements for the fiscal year then ended June 30th. The CEOC is
empowered to adjust the annual base salary level of executive officers (other
than members of the CEOC) at other times during the year should it deem any such
adjustments appropriate, with such adjustments included in the annual officer
compensation review and approvals conducted by the Board each September.
The annual September review of base salary levels is subjective. No
specific factors, targets or criteria, such as the market value of the Company's
stock, are employed in any formula or other quantitative prescription to
determine base compensation. However, consistent with the Company's compensation
philosophy, consideration is given to individual initiative, individual
achievement and the Company's performance, as well as information on salaries
and other remuneration at other companies of similar size, business or location.
Applying the Company's compensation philosophy during the annual review in
September 1999, it was the judgment of the CEOC and the Board that the base
salary of each executive officer (including members of the CEOC) should be
increased 4% effective October 1, 1999.
(b) Compensation Pursuant to Plans. Officers of the Company (including
members of the CEOC) are eligible to participate in the Employee Advantage Plan.
The plan is a non-contributory profit sharing retirement plan, and includes a
salary reduction feature under Section 401(k) of the Internal Revenue Code.
Participation in, and benefits acquired under, the Employee Advantage Plan are
on a nondiscretionary formula basis applicable to all employees. No contribution
was authorized for the fiscal year ended June 30, 2000.
Officers of the Company (including members of the CEOC) are also
eligible to participate in the 1999 Employee Stock Option Plan. Stock option
awards to any employee, including any officer, are discretionary and determined
by the Company's Stock Option Committee. The Stock Option Committee must
consider the following factors, articulated in the Stock Option Plan and
consistent with the Company's compensation philosophy: (i) the duties and
responsibilities of eligible employees; (ii) their past and prospective
contributions to the success of the Company; and (iii) the extent to which they
are performing, and will continue to perform, outstanding service for the
benefit of the Company. No options available under this plan were granted to, or
exercised by, any officers of the Company during fiscal year 2000.
Three of the executive officers of the Company are eligible to receive
plan compensation through the Company's Supplemental Executive Retirement Plan
(the "IEI SERP"). The remaining three officers of the Company (including members
of the CEOC) do not participate in this plan, but are participants in a similar
plan offered by the Company's parent holding company, CERBCO, Inc.
Pursuant to the IEI SERP, the covered executives will receive a monthly
retirement benefit for life equivalent to 25% of the final monthly salary such
executive received from the Company as defined in and limited by the executive's
agreement. The terms of the IEI SERP require the Company to establish a trust to
facilitate the Company's satisfaction of its obligations thereunder to pay
supplemental retirement benefits to the covered executives. The Company has
established such a trust, which has been funded by life insurance policies. The
Board views the IEI SERP as providing important benefits to the covered
executives after their retirement. Further, the Board believes that the adoption
of the IEI SERP is fully consistent with Insituform East's compensation
philosophy and is a customary form of supplemental executive retirement similar
to that adopted by comparable companies.
(c) Incentive Cash Bonuses. In addition to base compensation, the Board
annually considers, at its sole discretion, the award of an annual
return-on-equity ("ROE") incentive cash bonus for each of the officers of the
Company (including members of the CEOC). The incentive bonus amount, if approved
by the Board at the annual September review following the fiscal year in which
the ROE bonus is earned, is calculated by multiplying the Company's annual ROE
percentage (net earnings divided by weighted average equity less current
earnings) times the base compensation paid to the officers over the fiscal year.
The maximum annual individual incentive bonus eligible to any officer is limited
to an upper cap of 30% of the officer's base compensation. The underlying
concept of the ROE bonus is to have officer incentive compensation rise and fall
in direct parallel with the Company's overall profitability results obtained by
the officers on behalf of the shareholders. For the fiscal year ended June 30,
2000, due to negative net earnings, no incentive cash bonuses for officers were
either earned or approved.
COMPENSATION OF MEMBERS OF THE CEOC
On September 7, 1999, the Board approved a 4% increase in base annual
salary from $216,607 to $225,271, effective October 1, 1999, for each current
member of the CEOC, namely, George Wm. Erikson and Robert W. Erikson. Approval
came after a review of total compensation conducted without members of the CEOC
present. The decision made by the Board was subjective, taking into account the
philosophical aim of setting executive compensation, and was not based upon any
particular performance criteria. As a consequence of the Company's reported
negative net earnings, the members of the CEOC did not receive any cash
incentive bonuses for fiscal year 2000. Members of the CEOC participated in the
Employee Advantage Plan during fiscal year 2000 but did not receive profit
sharing contributions. Mr. George Wm. Erikson did receive a 401(k) plan matching
contribution of $2,400 and both members of the CEOC received allocations of
forfeitures along with all other plan participants. No stock options were
granted to either George Wm. Erikson or to Robert W. Erikson under the 1999
Employee Stock Option Plan.
In approving the compensation of the CEOC members, the Board took into
account that, while George Wm. Erikson and Robert W. Erikson were devoting the
predominate portion of their time and effort to the Company, they were also
devoting a portion of their time and effort to the parent company, CERBCO, Inc.,
and to its wholly-owned subsidiary, CERBERONICS, Inc. The Board believes the
base salary levels set for George Wm. Erikson and Robert W. Erikson were
commensurate with the time and effort devoted to the activities of, and their
duties and responsibilities with, the Company.
The Board of Directors
George Wm. Erikson
Robert W. Erikson
Webb C. Hayes, IV
Paul C. Kincheloe, Jr.
Trent H. Ralston *
Thomas J. Schaefer
William "Will" C. Willis, Jr. *
* Service as a Director began September 8, 2000.
SUMMARY COMPENSATION
The following table sets forth information concerning the compensation
paid by the Company to each of the named executive officers for the fiscal years
ended June 30, 2000, 1999 and 1998:
<TABLE>
SUMMARY COMPENSATION TABLE
Long-Term Compensation
Annual Compensation Awards Payouts
Securities
<CAPTION>
Name Other Total Restricted Underlying
and Annual Annual Stock Options/ LTIP All Other
Principal Fiscal Salary Bonus Compensation Compensation Awards SARs Payouts Compensation
Position Year ($) ($) ($) 2/ ($) ($) (#) ($) ($) 3/
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
George Wm. Erikson 2000 $223,106 $0 $0 $223,106 $0 15,000 $0 $3,540
Chairman & General 1999 216,607 0 0 216,607 0 15,000 0 $15,476
Counsel 1/ 1998 215,030 0 0 215,030 0 15,000 0 4,745
Robert W. Erikson 2000 $223,106 $0 $0 $223,106 $0 15,000 $0 $1,140
President 1/ 1999 216,607 0 0 216,607 0 15,000 0 13,076
1998 215,030 0 0 215,030 0 15,000 0 2,345
John F. Mulhall 2000 $130,532 $0 $0 $130,532 $0 0 $0 $1,552
Vice President of 1999 126,729 0 0 126,729 0 0 0 10,308
Sales & Marketing 1998 125,806 12,000 0 137,806 0 0 0 2,573
Gregory Laszczynski 2000 $142,055 $0 $0 $142,055 $0 0 $0 $3,177
Vice President of 1999 137,917 0 0 137,917 0 0 0 12,878
Operations 1998 136,913 17,000 0 153,913 0 0 0 4,535
Raymond T. Verrey 2000 $106,780 $0 $0 $106,780 $0 0 $0 $2,297
Vice President & 1999 103,670 0 0 103,670 0 0 0 8,776
Chief Financial 1998 102,915 1,000 0 103,915 0 0 0 2,840
Officer
Robert F. Hartman 2000 $94,962 $0 $0 $94,962 $0 0 $0 $1,004
Vice President of 1999 92,195 0 0 92,195 0 0 0 7,626
Administration & 1998 91,524 2,000 0 93,524 0 0 0 2,874
Secretary
1/ The Company's Chief Executive Officer Committee, consisting of the Chairman
and the President, exercises the duties and responsibilities of the Chief
Executive Officer of the Company.
2/ None of the named executive officers received perquisites or
other personal benefits in excess of the lesser of $50,000 or 10%
of his total salary and bonus.
3/ Contributions to the Insituform East, Incorporated Employee Advantage
Plan, as described on pages 9 and 10.
</TABLE>
COMPENSATION PURSUANT TO PLANS
Insituform East, Incorporated Employee Advantage Plan
The Company maintains a noncontributory profit sharing (retirement)
plan, the Insituform East, Incorporated Employee Advantage Plan (the "IEI
Advantage Plan"), in which all employees not covered by a collective bargaining
agreement and employed with the Company for at least one year are eligible to
participate. No employee is covered by a collective bargaining agreement. The
IEI Advantage Plan is administered by the Company's Board of Directors which
determines, at its discretion, the amount of the Company's annual contribution.
The Insituform East Board of Directors can authorize a contribution, on behalf
of the Company, of up to 15% of the compensation paid to participating employees
during the year. The plan is integrated with Social Security. Each participating
employee is allocated a portion of the Company's contribution based on the
amount of that employee's compensation plus compensation above FICA limits
relative to the total compensation paid to all participating employees plus
total compensation paid above FICA limits. Discretionary amounts allocated under
the IEI Advantage Plan begin to vest after three years of service (at which time
20% vests) and are fully vested after seven years of service. No contribution
was authorized for the fiscal year ended June 30, 2000.
The IEI Advantage Plan also includes a salary reduction profit sharing
feature under Section 401(k) of the Internal Revenue Code. Each participant may
elect to defer a portion of his compensation by any whole percentage from 2% to
16% subject to certain limitations. As mandated by the plan, the Company
contributes an employer matching contribution equal to 25% of the participant's
deferred compensation up to a maximum of 1.5% of the participant's total paid
compensation for the fiscal year. Participants are 100% vested at all times in
their deferral and employer matching accounts. During the fiscal year ended June
30, 2000, the Company made the following matching contributions for the
Company's officers:
<TABLE>
<CAPTION>
Names and Capacities in Which Contributions for Vested Percent
Cash Contributions Were Made Fiscal Year 2000 as of 10/30/00
---------------------------- ---------------- --------------
<S> <C> <C>
George Wm. Erikson, Chairman $2,400 100%
Robert W. Erikson, President 0 100%
John F. Mulhall, Vice President of Sales & Marketing 663 100%
Gregory Laszczynski, Vice President of Operations 2,169 100%
Raymond T. Verrey, Vice President & Chief Financial Officer 1,630 100%
Robert F. Hartman, Vice President of Administration & Secretary 337 100%
All Executive officers as a group (6 persons) $7,199 N/A
1/ Total contributions to employees of $78,810 include Insituform East's
matching contribution of $54,760 and reallocated amounts totaling $24,050
forfeited by former participants who terminated employment with Insituform
East during fiscal year 2000.
</TABLE>
Insituform East, Incorporated Supplemental Executive Retirement Plan
During fiscal year 1998, the Company entered into Supplemental
Executive Retirement Agreements with Messrs. John Mulhall, Gregory Laszczynski
and Raymond Verrey pursuant to a Supplemental Executive Retirement Plan (the
"IEI SERP"). Each agreement provides for monthly retirement benefits of 25% of
the executive's final aggregate monthly salary from the Company as defined in
and limited by the executive's agreement. Each covered executive's benefit under
the plan is payable in equal monthly amounts for the remainder of the covered
executive's life beginning as of any date on or after his 62nd birthday (at the
covered executive's election) but not before his termination of service.
Payments under the IEI SERP are not subject to any reduction for Social Security
or any other offset amounts but are subject to Social Security and other
applicable tax withholding.
To compute the monthly retirement benefits, the percentage of final
monthly salary is multiplied by a ratio (not to exceed 1) of:
the completed years (and any fractional year) of employment by the
Company after 1997
to
the total number of years (and any fractional year) of employment by
the Company after 1997 that the executive would have completed if
he had continued in employment to age 65.
In the case of Messrs. Mulhall and Laszczynski, if the executive dies
prior to retirement, the executive's beneficiary will receive a pre-retirement
death benefit under a split-dollar insurance arrangement. The executive's
beneficiary will receive a one-time lump sum payment in the amount of $700,000.
In the case of Mr. Verrey, the executive's beneficiary will receive a
pre-retirement death benefit of 25% of the executive's final monthly salary for
180 months. If any executive dies after commencement of the payment of
retirement benefits, but before receiving 180 monthly payments, the executive's
beneficiary will continue to receive payments until the total payments received
by the executive and/or his beneficiary equal 180.
The IEI SERP is technically unfunded, except as described below. The
Company will pay all benefits from its general revenues and assets. To
facilitate the payment of benefits and provide the executives with a measure of
benefit security without subjecting the IEI SERP to various rules under the
Employment Retirement Income Security Act of 1974, the Company has established
an irrevocable trust called the Insituform East, Incorporated Supplemental
Executive Retirement Trust. This trust is subject to the claims of the Company's
creditors in the event of bankruptcy or insolvency. The trust has purchased life
insurance on the lives of Messrs. Mulhall and Laszczynski to provide for
financial obligations under the plan. Assets in the trust consist of the cash
surrender values of the executive life insurance policies and are carried on the
Company's balance sheet as assets. The trust will not terminate until
participants and beneficiaries are no longer entitled to benefits under the
plan. Upon termination, all assets remaining in the trust will be returned to
the Company.
The following table sets forth the annual retirement benefits that
would be received under the IEI SERP at various compensation levels after the
specified years of service:
<TABLE>
Pension Plan Table Where Formula Provides 25% of Compensation 1/
------------------------------------------------------------- -
<CAPTION>
(Final) Years of Service (Under Plan)
Remuneration 15 20 25 30 35
------------ -- -- -- -- --
<S> <C> <C> <C> <C> <C>
50,000 11,719 12,500 12,500 12,500 12,500
75,000 17,578 18,750 18,750 18,750 18,750
100,000 23,438 25,000 25,000 25,000 25,000
125,000 30,925 31,250 31,250 31,250 31,250
150,000 30,925 36,420 37,500 37,500 37,500
175,000 30,925 36,420 40,211 43,750 43,750
200,000 30,925 36,420 40,211 44,396 49,017
250,000 30,925 36,420 40,211 44,396 49,017
300,000 30,925 36,420 40,211 44,396 49,017
350,000 30,925 36,420 40,211 44,396 49,017
400,000 30,925 36,420 40,211 44,396 49,017
1/ Assumes at the time the Plan was established (i) the individual is age 50,
(ii) maximum covered compensation is $100,000 and is increased 2% (
compounded annually) each year of service after 1997, and (iii) retirement
is effective at age 65.
</TABLE>
Each executive's covered compensation under the IEI SERP is equal to
his final base salary as defined in and limited by the executive's agreement.
The maximum covered compensation for each executive is his salary as of December
31, 1997, increased 2% annually beginning in 1998.
The following table sets forth information concerning vested annual
benefits as of October 30, 2000 for the three executives covered by the IEI
SERP:
<TABLE>
<CAPTION>
Years of Credited Current Annual Vested Vested
Name Service Under Plan Covered Compensation Percentage Annual Benefit
---- ------------------ -------------------- ---------- --------------
<S> <C> <C> <C> <C>
John F. Mulhall 3 $ 131,798 21.43% $ 7,061
Gregory Laszczynski 3 $ 143,434 13.64% $ 4,891
Raymond T. Verrey 3 $ 107,817 21.43% $ 5,776
</TABLE>
1999 Board of Directors' Stock Option Plan
The Company adopted, with stockholder approval at the 1999 Annual
Meeting of Stockholders, the Insituform East, Incorporated 1999 Board of
Directors Stock Option Plan. The purpose of the plan is to promote the growth
and general prosperity of the Company by permitting the Company, through the
granting of options to purchase shares of its Common Stock, to attract and
retain the best available persons as members of the Company's Board of Directors
with an additional incentive for such persons to contribute to the success of
the Company. The term of the plan is for ten years, unless terminated sooner by
the Board of Directors. The plan is administered and options are granted by the
Board of Directors. Under the terms of this plan, up to 525,000 shares of Common
Stock have been reserved for the Directors of the Company.
Each grant of options under the plan will entitle each director to whom
such options are granted the right to purchase 15,000 shares of the Company's
Common Stock at a designated option price, anytime and from time to time, within
five years from the date of grant. Options are granted under the 1999 Board of
Directors Stock Option Plan each year for five years to each member of the Board
of Directors serving as such on the date of grant; i.e., for each director
serving for five years, a total of five options covering in the aggregate 75,000
shares of Common Stock (subject to adjustments upon changes in the capital
structure of the Company), over a five year period.
On December 10, 1999, options on a total of 105,000 shares of Common
Stock were granted to directors of the Company (options on 15,000 shares to each
of seven directors) at a per share price of $1.328. No options available under
this plan were exercised by directors of the Company during fiscal year 2000.
1994 Board of Directors' Stock Option Plan
Insituform East adopted, with stockholder approval at the 1994 Annual
Meeting of Stockholders, the Insituform East, Incorporated 1994 Board of
Directors Stock Option Plan (the "IEI 1994 Directors' Plan"). The purpose of
this plan is the same as the IEI 1999 Directors' Plan. The term of the plan is
for ten years, unless terminated sooner by the Board of Directors. Options were
first granted to directors on December 9, 1994 and each of the four succeeding
Board of Directors meetings following the Annual Meetings of Stockholders in
1995, 1996, 1997 and 1998. Each grant of options under the plan entitles each
director to whom such options were granted the right to purchase 15,000 shares
of Insituform East's Common Stock at a designated option price, any time and
from time to time, within five years from the date of grant. Although no further
options are anticipated to be granted under this plan, options previously
granted, and which have not already been exercised or expired, will remain in
effect until exercise or expiration, whichever comes first. No options available
under the plan were exercised by directors of Insituform East during fiscal year
2000. Under the terms of this plan, up to 360,000 shares of Insituform East
Common Stock remain reserved for the directors of Insituform East.
1999 Employee Stock Option Plan
The Company adopted, with stockholder approval at the 1999 Annual
Meeting of Stockholders, the Insituform East, Incorporated 1999 Employee Stock
Option Plan. The purpose of the Plan is to advance the growth and development of
the Company by affording an opportunity to full-time employees of the Company to
purchase shares of the Company's Common Stock and to provide incentives for them
to put forth maximum efforts for the success of the Company's business. Any
employee of the Company who is employed on a full time basis is eligible for
participation. The plan is administered by the Incentive Stock Option Plan
Committee consisting of Messrs. Thomas J. Schaefer and Webb C. Hayes, IV.
No options were granted to or exercised by executive officers of the
Company under this plan during the fiscal year ended June 30, 2000.
OPTIONS/SAR GRANTS TABLE
The following table sets forth information concerning options granted
to each of the named executive officers, who are also directors, during fiscal
year 2000 under the 1999 Board of Directors' Stock Option Plan:
<TABLE>
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
<CAPTION>
Potential Realized Value at
Assumed Annual Rates of Stock
Individual Grants Price Appreciation for Option Term
% of Total
Options/SARs
Granted to Exercised or
Options/SARs Employees Base Price Expiration
Name Granted (#) in Fiscal Year ($/Share) Date 5% ($) 10% ($)
<S> <C> <C> <C> <C> <C> <C>
George Wm. Erikson 15,000 1/ 14% $1.32 12/10/04 $5,505 $12,165
Robert W. Erikson 15,000 1/ 14% $1.32 12/10/04 $5,505 $12,165
1/ Option grants under the 1999 Board of Directors Stock Option Plan, as
described on page 12.
</TABLE>
AGGREGATED OPTION/SAR EXERCISES AND FISCAL YEAR-END OPTION/SAR VALUE TABLE
No option or Stock Appreciation Right grants made under the 1999 or
1994 Board of Directors Stock Option Plans to any of the named executive
officers were exercised during fiscal year 2000. The following table sets forth
information concerning option or Stock Appreciation Right grants held by each of
the named executive officers, who are also directors, as of June 30, 2000:
<TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<CAPTION>
Number of Securities Underlying Value of Unexercised
Unexercised Options/SARs at In the Money Options/SARs
Fiscal Year-End (#) at Fiscal Year-End ($)
Shares Acquired Value
Name on Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
George Wm. Erikson 0 $0 75,000 1/ 0 $6,108 $0
Robert W. Erikson 0 $0 75,000 1/ 0 $6,108 $0
1/ Options exercisable under the IEI 1999 and 1994 Board of Directors Stock
Option Plans, as described on page 12.
</TABLE>
REPRICING OF OPTIONS/SARs
The Company did not adjust or amend the exercise price of stock options
or SARs previously awarded to any of the named executive officers during fiscal
year 2000.
LONG-TERM INCENTIVE PLAN AWARDS
The Company does not have any long-term incentive plans.
DEFINED BENEFIT OR ACTUARIAL PLANS
The Company maintains a defined benefit plan called the Insituform
East, Incorporated Supplemental Executive Retirement Plan to provide annual
retirement benefits to covered executives. See "Compensation Pursuant to Plans"
as to the basis upon which benefits under the plan are computed.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
There are no employment contracts between the Company and any named
executive officer. There are no arrangements between the Company and any named
executive officer, or payments made to an executive officer, that resulted, or
will result, from the resignation, retirement or other termination of employment
with the Company, in an amount that exceeded $100,000.
COMPENSATION OF DIRECTORS
Non-officer directors of the Company are paid an annual fee of $5,000
plus $1,000 for each meeting of the Board of Directors, and each committee
meeting, attended in person. Meetings attended by telephone are compensated at
the rate of $200. Directors who are also officers of the Company receive no
remuneration for their service as directors but are eligible with all other
directors to participate in the 1999 and 1994 Board of Directors' Stock Option
Plans, as described under the section entitled "Compensation Pursuant to Plans."
All directors of the Company are reimbursed for Company travel-related expenses.
CERTAIN BUSINESS RELATIONSHIPS
Messrs. George Erikson and Robert Erikson, both members of the Board of
Directors and executive officers of the Company, holding the offices of Chairman
& General Counsel and of President, respectively, are also both members of the
Board of Directors and executive officers of CERBCO, Inc., a parent holding
company with controlling interest in Insituform East. Insituform East maintains
a $6,000,000 Intercompany Line of Credit facility with CERBCO, collateralized by
substantially all tangible and intangible assets owned by the Company. Loans
against the facility are due on demand with interest payable monthly at the
commercial bank prime lending rate.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS
The Company's Board of Directors does not have a Compensation
Committee; the Board of Directors serves in that capacity. Messrs. George Wm.
Erikson and Robert W. Erikson, both members of the Board of Directors and
executive officers of the Company, participate in, and during fiscal year 2000
participated in, deliberations of the Board of Directors concerning executive
officer compensation.
In their capacity as directors of CERBCO, Inc., Messrs. George Wm.
Erikson and Robert W. Erikson participate in, and during fiscal year 2000
participated in, deliberations of the CERBCO, Inc. Board of Directors concerning
executive officer compensation for CERBCO, Inc.
PERFORMANCE GRAPH
The following graph compares the total stockholder return on the
Company's Common Stock to the Total Return Index for the NASDAQ Stock Market
(U.S. companies) and to a Peer Group Index based on NASDAQ Stocks SIC Code 162,
"Heavy Construction, Except Highway," for the last five fiscal years:
<TABLE>
Comparison of Five-Year Cumulative Total Returns
Performance Report for
Insituform East, Incorporated
Prepared by the Center for Research in Security Prices
Produced on 08/17/2000 including data to 06/30/2000
Company Index: CUSIP Ticker Class Sic Exchange
45766210 INEI 1620 NASDAQ
Fiscal Year-end is 06/30/2000
Market Index: Nasdaq Stock Market (US Companies)
Peer Index: NASDAQ Stocks (SIC 1620-1629 US Companies)
Heavy Construction, Except Highway and Street Construction
<CAPTION>
Date Company Index Market Index Peer Index
<S> <C> <C> <C> <C>
06/30/1995 100.000 100.000 100.000
07/31/1995 100.000 107.344 99.020
08/31/1995 105.714 109.522 107.704
09/29/1995 117.143 112.046 106.110
10/31/1995 108.571 111.400 101.872
11/30/1995 94.286 114.014 98.415
12/29/1995 97.143 113.411 104.460
01/31/1996 94.286 113.978 97.357
02/29/1996 85.714 118.323 99.784
03/29/1996 85.714 118.720 109.378
04/30/1996 85.714 128.556 134.894
05/31/1996 88.571 134.451 161.230
06/28/1996 72.698 128.390 143.823
07/31/1996 72.698 116.962 140.058
08/30/1996 71.244 123.534 144.919
09/30/1996 71.244 132.980 163.518
10/31/1996 63.975 131.502 188.577
11/29/1996 63.975 139.654 185.954
12/31/1996 61.067 139.537 198.508
01/31/1997 75.606 149.436 222.940
02/28/1997 72.698 141.166 211.403
03/31/1997 66.883 131.962 234.393
04/30/1997 66.883 136.075 227.335
05/30/1997 63.975 151.486 237.646
06/30/1997 59.555 156.144 250.492
07/31/1997 64.021 172.596 294.315
08/29/1997 56.577 172.339 365.230
09/30/1997 61.043 182.552 395.974
10/31/1997 53.599 173.041 406.707
11/28/1997 66.999 173.953 336.883
12/31/1997 71.465 170.955 344.625
01/30/1998 63.277 176.370 313.263
02/27/1998 58.066 192.955 351.812
03/31/1998 58.066 200.086 409.353
04/30/1998 55.832 203.459 444.941
05/29/1998 55.832 192.154 433.327
06/30/1998 53.599 205.577 364.660
07/31/1998 55.088 203.178 297.893
08/31/1998 52.110 162.900 224.851
09/30/1998 50.621 185.504 271.180
10/30/1998 38.710 193.656 241.445
11/30/1998 31.266 213.345 190.553
12/31/1998 31.266 241.063 197.277
01/29/1999 19.355 276.035 199.154
02/26/1999 44.666 251.324 183.822
03/31/1999 29.777 270.331 262.573
04/30/1999 30.522 279.046 299.412
05/28/1999 28.288 271.598 282.111
06/30/1999 29.777 296.026 330.119
07/30/1999 32.755 290.590 301.154
08/31/1999 35.733 302.808 300.739
09/30/1999 40.944 303.218 264.616
10/29/1999 23.077 327.496 255.239
11/30/1999 38.710 367.345 265.834
12/31/1999 29.777 448.121 296.920
01/31/2000 38.710 431.540 315.763
02/29/2000 40.944 513.782 421.090
03/31/2000 44.666 503.038 454.741
04/28/2000 32.011 422.971 429.186
05/31/2000 34.244 371.945 457.168
06/30/2000 34.244 437.267 507.303
The index level for all series was set to 100.0 on 06/30/1995
Copyright(C)2000
</TABLE>
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Deloitte & Touche, LLP was engaged to audit the financial
statements of the Company for the fiscal year ended June 30, 2000. A
representative of Deloitte & Touche will be at the Meeting and will have an
opportunity to make a statement if he or she desires to do so. The
representative will also be available to respond to appropriate questions from
any stockholders present at the Meeting.
The Audit Committee of the Board of Directors has not yet recommended,
and the Board has not yet approved, the appointment of independent public
accountants to audit the financial statements of the Company for the fiscal year
ending June 30, 2001. It is anticipated that the Audit Committee will make its
recommendation to the Board and that the appointment of independent public
accountants will be made by the Board prior to June 30, 2001.
OTHER MATTERS
The Board of Directors is not aware of any other matters which are
likely to be brought before the Meeting. However, if any other matters are
properly brought before the Meeting, it is the intention of the individuals
named in the enclosed form of Proxy to vote the proxy in accordance with their
judgment on such matters.
ANNUAL REPORT AND FINANCIAL STATEMENTS
Financial statements of the Company are contained in the Company's
Annual Report on Form 10-K for the fiscal year ended June 30, 2000, a copy of
which is enclosed herewith.
DEADLINE FOR SUBMITTING STOCKHOLDER PROPOSALS
FOR INCLUSION IN THE BOARD'S PROXY STATEMENT IN CONNECTION
WITH THE FISCAL YEAR 2001 ANNUAL MEETING
A proposal submitted by a stockholder for action at the Company's
Annual Meeting of Stockholders for the fiscal year ending June 30, 2001 must be
received by the Company no later than July 4, 2001, in order to be included in
the Company's Proxy Statement for that meeting. Any stockholder proposal that is
received later than September 17, 2001 will be deemed to be untimely. It is
suggested that proponents submit their proposals by certified mail-return
receipt requested.
A proponent of a proposal must be a record or beneficial owner entitled
to vote at the next Annual Meeting on the proposal and must continue to be
entitled to vote through the date on which the meeting is held.
By Order of the Board of Directors,
/s/ Robert F. Hatman
Robert F. Hartman
Secretary
Landover, Maryland
October 30, 2000
<PAGE>
ATTACHMENT A
INSITUFORM EAST, INCORPORATED
3421 Pennsy Drive
Landover, Maryland 20785-1608
(301) 386-4100
ANNUAL MEETING OF STOCKHOLDERS - DECEMBER 8, 2000
PROXY - COMMON STOCK
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints G.Wm. Erikson and R.W. Erikson, and
each of them, with full power of substitution, the Proxies of the undersigned to
represent and to vote, as designated on the reverse side hereof, all the shares
of Common Stock of INSITUFORM EAST, INCORPORATED held of record by the
undersigned on October 12, 2000, at the Annual Meeting of Stockholders to be
held on December 8, 2000 or any adjournments thereof.
(Continued and to be signed on reverse side.)
/ X / Please mark your votes as in this example.
FOR, all nominees WITHHOLD Nominees: T.J. Schaefer
listed at right (except authority to vote W.C. Willis, Jr.
as marked to the for all nominees
contrary below) listed at right
1. Proposal - / / / /
Election of
Directors.
(INSTRUCTION: To indicate that you do not wish to have your shares voted for an
individual nominee, check the FOR box above and print the name of such nominee
on the line provided below.)
----------------------------------------
2. In their own discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER(S). IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSAL 1.
PLEASE SIGN, DATE AND RETURN PROMPTLY USING THE ENCLOSED ENVELOPE.
----------------------- --------------------------
SIGNATURE SIGNATURE (IF HELD JOINTLY) Dated:--------------, 2000
NOTE: Signature(s) should be exactly as names(s) appearing on your certificate.
If stock is held jointly, each holder should sign. If signing is by attorney,
executor, administrator, trustee, guardian or corporate officer, etc., please
give your full title as such.
<PAGE>
ATTACHMENT B
INSITUFORM EAST, INCORPORATED
3421 Pennsy Drive
Landover, Maryland 20785-1608
(301) 386-4100
ANNUAL MEETING OF STOCKHOLDERS - DECEMBER 8, 2000
PROXY - CLASS B COMMON STOCK
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints G.Wm. Erikson and R.W. Erikson, and
each of them, with full power of substitution, the Proxies of the undersigned to
represent and to vote, as designated on the reverse side hereof, all the shares
of Class B Common Stock of INSITUFORM EAST, INCORPORATED held of record by the
undersigned on October 12, 2000, at the Annual Meeting of Stockholders to be
held on December 8, 2000 or any adjournments thereof.
(Continued and to be signed on reverse side.)
/ X / Please mark your votes as in this example.
FOR, all nominees WITHHOLD Nominees: G.Wm. Erikson
listed at right (except authority to vote R.W. Erikson
as marked to the for all nominees W.C. Hayes, IV
contrary below) listed at right P.C. Kincheloe, Jr.
T.H. Ralston
1. Proposal - / / / /
Election of
Directors.
(INSTRUCTION: To indicate that you do not wish to hav your shares voted for an
individual nominee(s), check the FOR box above and print the name(s) of such
nominee(s) on the line provided below.)
-----------------------------------------------
2. In their own discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER(S). IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSAL 1.
PLEASE SIGN, DATE AND RETURN PROMPTLY USING THE ENCLOSED ENVELOPE.
----------------------- --------------------------
SIGNATURE SIGNATURE (IF HELD JOINTLY) Dated:--------------, 2000
NOTE: Signature(s) should be exactly as names(s) appearing on your certificate.
If stock is held jointly, each holder should sign. If signing is by attorney,
executor, administrator, trustee, guardian or corporate officer, etc., please
give your full title as such.
