ROCHEM ENVIRONMENTAL, INC.
610 North Milby Street
Houston, Texas 77003
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held March 27, 1997
Notice is hereby given that the Annual Meeting of Stockholders of Rochem
Environmental, Inc. (the "Company") will be held at the Company's corporate
office located at 610 N. Milby St., Houston, TX 77003 at 10:00 a.m., Central
Standard time, on Thursday, March 27, 1997, for the following purposes:
1. To elect four Directors;
2. To ratify the selection of Coopers & Lybrand L.L.P. as independent
auditors of the Company for the fiscal year ended September 30,
1997;
3. To transact such other business as may properly come before the
meeting.
Common stockholders of record at the close of business on February 12,
1997 will be entitled to notice of and to vote at the meeting.
By Order of the Board of Directors,
/s/ ERICK J. NEUMAN
Erick J. Neuman
President
<PAGE>
ROCHEM ENVIRONMENTAL, INC.
610 NORTH MILBY STREET
HOUSTON, TX 77003
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
This Proxy Statement is being furnished to stockholders in connection with
the solicitation of proxies by the Board of Directors of Rochem Environmental,
Inc., a Utah corporation (the "Company"), for use at the Annual Meeting of
Stockholders of the Company to be held at the corporate office of the Company
located at 610 N. Milby St., Houston, TX 77003 at 10:00 a.m., on Thursday, March
27, 1997, and at any adjournments thereof for the purpose of considering and
voting upon the matters set forth in the accompanying Notice of Annual Meeting
of Stockholders. This Proxy Statement and the accompanying form of proxy are
first being mailed to stockholders on or about February 21, 1997.
The close of business on February 12, 1997, has been fixed as the record
date for the determination of stockholders entitled to notice of and to vote at
the Annual Meeting and any adjournment thereof. As of the record date, there
were 19,084,751 shares of Company common stock, par value $.001 per share
("Common Stock"), issued and outstanding. The presence, in person or by proxy,
of a majority of the outstanding shares of Common Stock on the record date is
necessary to constitute a quorum at the Annual Meeting. Each share of Common
Stock is entitled to one vote on all questions requiring a stockholder vote at
the Annual Meeting. A plurality of the votes of the shares of Common Stock
present in person or represented by proxy and entitled to vote at the Annual
Meeting is required for the election of directors nominated in Item 1 as set
forth in the accompanying Notice. The affirmative vote of a majority of the
shares of Common Stock present or represented by proxy and entitled to vote at
the Annual Meeting is required for the approval of Item 2 as set forth in the
accompanying Notice. Stockholders may not cumulate their votes in the election
of directors.
All shares represented by properly executed proxies, unless such proxies
previously have been revoked, will be voted at the Annual Meeting in accordance
with the directions on the proxies. If no direction is indicated, the shares
will be voted (i) TO ELECT FOUR DIRECTORS, (ii) TO RATIFY THE SELECTION OF
COOPERS & LYBRAND L.L.P. AS INDEPENDENT AUDITORS OF THE COMPANY FOR THE FISCAL
YEAR ENDING SEPTEMBER 30, 1997; AND (iii) TO TRANSACT SUCH OTHER BUSINESS AS MAY
PROPERLY COME BEFORE THE MEETING. The enclosed proxy, even though executed and
returned, may be revoked at any time prior to the voting of the proxy (a) by the
execution and submission of a revised proxy, (b) by written notice to the
Secretary of the Company or (c) by voting in person at the Annual Meeting.
<PAGE>
ANNUAL REPORT
The Annual Report to Stockholders, covering the Company's fiscal year
ended September 30, 1996, including audited financial statements, is enclosed
herewith. The Annual Report to Stockholders does not form any part of the
material for solicitation of proxies.
The Company will provide, without charge, a copy of its Annual Report on
Form 10-KSB upon written request to Ann K. Tanabe, Investor Relations Manager,
at 610 N. Milby St., Houston, TX 77003. The Company will provide exhibits to its
Annual Report on Form 10-KSB, upon payment of the reasonable expenses incurred
by the Company in furnishing such exhibits.
ITEM 1
TO ELECT FOUR DIRECTORS
The Bylaws of the Company provide that the number of directors will be
determined by the Board of Directors, but shall consist of not less than three
or more than nine directors. The directors are elected annually by the
stockholders of the Company at each annual meeting of the stockholders of the
Company. Any director elected to fill a vacancy or newly created directorship
resulting from an increase in the authorized number of directors shall hold
office until his successor is elected and duly qualified. Any vacancy on the
Board, howsoever resulting, may be filled by a majority of the directors then in
office, even if less than a quorum, or by a sole remaining director. Any
director elected to fill a vacancy shall hold office until his successor is
elected and duly qualified. The stockholders will elect four directors for the
coming year, with four of the nominees presently serving as directors of the
Company.
Unless otherwise instructed or unless authority to vote is withheld, the
enclosed proxy will be voted for the election of the nominees listed herein.
Although the Board of Directors of the Company does not contemplate that any of
the nominees will be unable to serve, if such a situation arises prior to the
Annual Meeting, the persons named in the enclosed proxy will vote for the
election of such other person(s) as may be nominated by the Board of Directors.
WILLIAM E. BRACKEN, vice president (age 59). Mr. Bracken has served as
vice president of the Company since December 1992. Mr. Bracken served as
operations manager of EnClean's Environmental Group from January 1989 to
December 1992. Mr. Bracken served as a sales engineer with HydroKem from
September 1985 to January 1989. Prior thereto, Mr. Bracken held a variety of
positions in the petrochemical industry from June 1956 to September 1985.
Mr. Bracken has been a director of the Company since December 1992.
DAVID A. LAMONICA, director (age 51). Mr. LaMonica is currently serving as
president and chief executive officer of Rochem Separation Systems ("RSS"), and
has held these positions since January 1991. Prior thereto, Mr. LaMonica served
as president and chief executive officer of Bola Chemicals, Ltd. from December
1976 to December 1990 and was the West Coast Sales Manager for Rochem Limited
from June 1974 to December 1976.
Mr. LaMonica has been a director of the Company since December 1992.
PHILIP LEFEVRE, director (age 47). Mr. LeFevre has served as president of
Lefco Environmental Technology since January 1991. Prior thereto, Mr. LeFevre
served as president of Lefco Corporation from 1979 to December 1990 and directed
various businesses such as concrete pumping services, construction services and
real estate development.
Mr. LeFevre has been a director of the Company since March 1995.
<PAGE>
MR. ERICK J. NEUMAN, director (age 35). Since January 1996, Mr.
Neuman has served as president and chief executive officer of the Company.
Mr. Neuman served as director, Technology and Technical of Waste Management
Italy, a subsidiary of WMX Technologies, Inc., from September 1992 to
December 1995. Prior thereto, Mr. Neuman held various positions with Chemical
Waste Management, Inc. from 1985 to 1992 and IIT Research Institute from 1979
to 1985. Mr. Neuman received a Bachelor of Science degree in Chemical
Engineering from Illinois Institute of Technology in 1983.
Mr. Neuman has been a director of the Company since March 1996.
BOARD OF DIRECTORS, COMMITTEES, AND MEETINGS
The Board of Directors held 6 meetings during fiscal 1996. During fiscal
1996, each director attended at least 75% of the total number of Board meetings.
The Company does not maintain an audit, nomination, compensation or any other
committee.
DIRECTORS' FEES
Effective May 1994, the Company discontinued paying directors $500
compensation per meeting for services on the Board of Directors. All directors
are reimbursed for their reasonable expenses incurred for each Board meeting
attended.
THE BOARD HAS RECOMMENDED A VOTE FOR THE ELECTION OF MESSERS. BRACKEN,
LAMONICA, LEFEVRE AND NEUMAN. SUCH RATIFICATION REQUIRES THE AFFIRMATIVE
VOTE OF THE MAJORITY OF THE HOLDERS OF OUTSTANDING SHARES OF COMMON STOCK
PRESENT OR REPRESENTED BY PROXY AT THE ANNUAL MEETING.
<PAGE>
ITEM 2
RATIFY THE SELECTION OF COOPERS & LYBRAND L.L.P. AS INDEPENDENT AUDITORS OF
THE COMPANY FOR THE FISCAL YEAR
ENDING SEPTEMBER 30, 1997
The Board of Directors have approved the engagement of Coopers & Lybrand
L.L.P. as its independent auditors of the consolidated financial statements for
the fiscal year ending September 30, 1997. The Board of Directors wishes to
obtain from the stockholders a ratification of the Board's action in appointing
Coopers & Lybrand L.L.P. as independent auditors of the Company for the fiscal
year ending September 30, 1997. The engagement of Coopers & Lybrand L.L.P. for
audit services has been approved by the Board of Directors.
There have been no disagreements with the independent auditors on any
matter of accounting principals or practices, financial statement disclosure, or
auditing scope procedure. None of the independent auditor's reports contained an
adverse opinion or disclaimer of opinion and were not qualified or modified as
to uncertainty, audit scope or accounting principles.
In the event the appointment of Coopers & Lybrand L.L.P. as independent
auditors for fiscal 1997 is not ratified by the stockholders, the adverse vote
will be considered as a direction to the Board of Directors to select other
auditors for the following year. However, because of the difficulty in making
any substitution of auditors so long after the beginning of the current fiscal
year, it is contemplated that the appointment for fiscal 1997 will be permitted
to stand unless the Board finds other good reason for making a change.
Representatives of Coopers & Lybrand L.L.P. are expected to be present at
the meeting, with the opportunity to make a statement if desired to do so. Such
representatives are also expected to be available to respond to appropriate
questions.
THE BOARD HAS RECOMMENDED THE RATIFICATION OF COOPERS & LYBRAND L.L.P.
AS INDEPENDENT AUDITORS. SUCH RATIFICATION REQUIRES THE AFFIRMATIVE VOTE OF
THE MAJORITY OF THE HOLDERS OF OUTSTANDING SHARES OF COMMON STOCK PRESENT OR
REPRESENTED BY PROXY AT THE ANNUAL MEETING.
<PAGE>
STOCK OWNERSHIP
The table below sets forth information to the best of the Company's
knowledge with respect to the total number of shares of the Company's Common
Stock beneficially owned by each person known to the Company to beneficially own
more than 5% of its Common Stock, each named executive officer, director and the
total number of shares of the Company's Common Stock beneficially owned by each
director and officer, as a group, as reported by each such person, as of January
7, 1997.
NAME AND ADDRESS OF COMMON STOCK
BENEFICIAL OWNER (1) BENEFICIALLY OUTSTANDING
- -------------------- ------------------------------
NUMBER PERCENTAGE
--------- ----------
ARGENTAURUM SA 9,139,714(2) 47.9%
54 rue Agasse
P.O. Box 56
1211 Geneva 17 Switzerland
David A. LaMonica (3) 9,139,714 47.9%
3904 Del Amo Blvd., #801
Torrance, CA 90503
William E. Bracken 950,000 5.0%
610 N. Milby Street
Houston, TX 77003
Lefco Environmental Technology, Inc. 2,018,841 10.6%
15001 Walden Rd, #203
Montgomery, TX 77356
Philip LeFevre (4) 2,018,841 10.6%
15001 Walden Rd, #203
Montgomery, TX 77356
Erick J. Neuman (5) 251,400 1.3%
610 N. Milby Street
Houston, TX 77003
All officers and directors
AS A GROUP (4 PERSONS) 12,359,955 62.3%
- ---------------------------
(1) Unless otherwise noted, each person has sole voting and investment power
over the shares listed opposite his name, subject to community property
laws where applicable.
(2) Includes 1,000,000 shares of Company Common Stock owned by RSS, an
affiliate of ARGENTAURUM SA.
(3) Mr. LaMonica is an affiliate of ARGENTAURUM SA and RSS.
(4) Mr. LeFevre is an affiliate of Lefco Environmental Technology, Inc.
(5) Mr. Neuman owns 251,400 shares and warrants to purchase 750,000 shares of
Common Stock, none of which are exercisable within 60 days of January 7,
1997.
<PAGE>
EXECUTIVE OFFICERS
The following table lists the present officers of the Company as of the
date hereof and the capacities in which they serve.
NAME OF INDIVIDUAL CAPACITY
------------------ --------
Erick Neuman President and Secretary
William E. Bracken Vice President
Biographical information with respect to Mr. Neuman and Mr. Bracken was
previously described under Item 1. There is no family relationship between
any present executive officers and directors.
COMPENSATION
The following table sets forth the compensation with respect to the chief
executive officer. No other executive officer of the Company received total
annual salary and bonus for the fiscal year ended September 30, 1996 in excess
of $100,000.
Summary Compensation Table
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------- ------------
STOCK WARRANTS
NAME AND PRINCIPAL FISCAL OPTIONS ISSUED
POSITION YEAR SALARY (*) (SHARES) SHARES
- ------------------ ------ ---------- -------- --------
Erick J. Neuman 1996 $115,000 - 250,000
Chief Executive Officer
- ------------------
(*) Mr. Neuman received certain perquisites and other benefits in the above
referenced fiscal year; however, the Company has concluded that the aggregate
amount of such personal benefits and other compensation is less than 10% of the
total of Mr. Neuman's annual salary. No bonus was paid to Mr. Neuman during the
1996 fiscal year.
EMPLOYMENT AGREEMENTS
In December 1992, the Company entered into a three-year employment
agreement with Mr. Bracken which automatically extended for additional one year
term unless terminated six months prior to the end of such term. Mr. Bracken's
current salary is $90,000. Mr. Bracken's employment agreement allowed for an
automatic one year extension and currently expires on December 31, 1997. This
agreement will automatically extend for an additional year if not terminated by
June 30, 1997.
In January 1996, Mr. Neuman entered into a five-year employment agreement
with the Company which provides for an annual base salary of $115,000. In
addition, Mr. Neuman was granted the following five year warrants: (i) one
warrant to purchase a total of 250,000 shares at $0.001 per share provided that
Mr. Neuman is employed with the Company on December 31, 1996, which Mr. Neuman
exercised in January 1997; (ii) a warrant to purchase a total of 250,000 shares
at $0.001 per share which warrant vests 25% per calendar quarter of 1997
provided that Mr. Neuman is employed by the Company on these dates; (iii) a
warrant to purchase 250,000 shares at $0.10 per share which warrant vests based
upon the Company attaining certain financial goals; and (iv) a warrant to
purchase 250,000 shares at $0.25 per share which warrant vests based upon the
Company attaining certain financial goals.
<PAGE>
WARRANTS
Mr. Neuman is the sole officer and director that beneficially owns
warrants to purchase shares of Common Stock. Mr. Neuman owns warrants to
purchase 750,000 shares as described in "Employment Agreements."
The Company has not established, nor does it provide for, long-term
incentive plans or defined benefit or actuarial plans. The Company does not
grant any stock appreciation rights.
CERTAIN TRANSACTIONS
On October 1, 1993, the Company entered into an expanded distributor
agreement for the Disc Tube technology from RSS, an affiliate of Mr. LaMonica.
This new agreement expanded the Company's exclusive right to utilize the Disc
Tube system in petroleum waste water application from Texas and Louisiana to
include all 48 contiguous states. Pursuant to this agreement, RSS was issued
1,000,000 shares of Series A Preferred Stock which, on December 31, 1993, were
converted to 5,764,714 shares of Common Stock.
The Company entered into an agreement in November 1993 with Lefco
Environmental Technology ("Lefco"), an affiliate of Mr. Philip LeFevre. The
transaction resulted in the Company paying $246,189 in cash, reduced certain
receivables from Lefco, received certain assets, and issued 200,000 shares of
the Company's Common Stock. Also, the Company issued 800,000 shares of Series B
Preferred Stock to Lefco. As a result of this transaction, Mr. LeFevre was
elected to the Company's Board of Directors, to serve as Lefco's representative,
as long as the Series B Preferred Stock was outstanding. In March 1994, Lefco
converted all of its Series B Preferred Stock, which resulted in the issuance of
1,159,841 shares of the Company's Common Stock. In addition, the Company agreed
to pay, for a three year period, sales commissions ranging from 8% to 12% for
projects identified by Lefco and referred to the Company. Additionally, in
January 1996, Lefco agreed to convert its January 1995 $50,000 loan into 500,000
shares of Company Common Stock and provided a $50,000 credit facility to be
utilized by the Company to meet working capital needs during the 1996 fiscal
year.
GH Securities, Ltd. was a placement agent that participated in offerings
of Company securities that raised gross proceeds of approximately $3,500,000
from September 1993 to July 1995, and in connection therewith, was paid
commissions and non accountable expense reimbursements aggregating 20% on the
first $255,000 and an aggregate of 18% on the balance of the gross proceeds that
it placed. During fiscal year 1994 the Company paid GH Venture Group, an
affiliate of GH Securities, Ltd., $40,000 in consulting fees. In January 1996,
the Company agreed with GH Venture Group to terminate its consultant service
agreement and in connection therewith convert the outstanding payable into
500,000 shares of the Company Common Stock and the payment of $5,000.
In January 1996, the Company entered into an agreement with Rochem AG, an
affiliate of ARGENTAURUM SA, whereby Rochem AG converted the principal amount of
its January 1995 $50,000 loan into 500,000 shares of Company Common Stock,
purchased an additional 500,000 shares of Company Common Stock for $50,000, and
agreed to provide the Company a $100,000 credit facility to meet working capital
needs during the 1996 fiscal year. In contemplation of this credit facility,
Rochem AG advanced $25,000 in December 1995, and the Company currently has
$75,000 available under the January 1996 credit facility. Furthermore, in
January 1996, the Company agreed with RSS to convert approximately $100,000 of
accounts payable due to RSS into 1,000,000 shares of Company Common Stock. In
addition, the Company obtained rights to buy equipment and modules directly from
Rochem AG at a preferred price and the right to become the exclusive agent for
RSS for applications utilizing the leachate and desalination systems in the
State of Arkansas.
<PAGE>
OTHER MATTERS
Management is not aware of any other matters to be presented for action at
the meeting. However, if any other matter is properly presented, it is the
intention of the persons named in the enclosed form of proxy to vote in
accordance with their best judgment on such matter.
COST OF SOLICITATION
The Company will bear the costs of the solicitation of proxies from its
stockholders. In addition to the use of mail, proxies may be solicited by
directors, officers and regular employees of the Company in person or by
telephone or other means of communication. The directors, officers and employees
of the Company will not be compensated additionally for the solicitation but may
be reimbursed for out-of-pocket expenses in connection with the solicitation.
Arrangements are also being made with brokerage houses and any other custodians,
nominees and fiduciaries of the forwarding of solicitation material to the
beneficial owners of the Company, and the Company will reimburse the brokers,
custodians, nominees and fiduciaries for their reasonable out-of-pocket
expenses.
STOCKHOLDER PROPOSALS
Proposals by stockholders intended to be presented at the 1998 Annual
Meeting of Stockholders must be received by the Company for inclusion in the
Company's proxy statement and form of proxy relating to that meeting no later
than October 20, 1997.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ ERICK J. NEUMAN
Houston, Texas Erick J. Neuman
February 21, 1997 President
<PAGE>
REVOCABLE PROXY
[X] PLEASE MARK VOTES ROCHEM ENVIRONMENTAL, INC.
AS IN THIS EXAMPLE
<TABLE>
<CAPTION>
ANNUAL MEETING OF STOCKHOLDERS The proxies are instructed to vote as follows:
MARCH 27, 1997
<S> <C>
With- For All
The undersigned stockholder of For hold Except
ROCHEM ENVIRONMENTAL, INC. (the
"Company") hereby appoints Erick J. 1. Approval of the election of [ ] [ ] [ ]
Neuman and William E. Bracken the four Directors (the Board of
true and lawful attorneys, agents Directors recommends a vote
and proxies of the undersigned, to FOR)
vote all the shares of Common Stock
of ROCHEM ENVIRONMENTAL, INC. which BRACKEN, WILLIAM E. LEFEVRE, PHILIP
the undersigned may be entitled to LAMONICA, DAVID A. NEUMAN, ERICK J.
vote at the Annual Meeting of
Stockholders of ROCHEM INSTRUCTION: TO WITHHOLD AUTHORITY
ENVIRONMENTAL, INC. to be held at TO VOTE FOR ANY INDIVIDUAL NOMINEE,
the Company's corporate office MARK "FOR ALL EXCEPT" AND WRITE THAT
located at 610 N. Milby St., NOMINEE'S NAME IN THE SPACE PROVIDED
Houston, TX 77003, on Thursday, BELOW.
March 27, 1997 at 10:00 am, and any
and all adjournments thereof, with ---------------------------------------
all of the powers which the For Against Abstain
undersigned would possess if 2. Ratification of the selection [ ] [ ] [ ]
personally present, for the of Coopers & Lybrand L.L.P. as
following purposes. independent auditors of the
Company for the fiscal year
ending September 30, 1997 (the
Board of Directors recommends a
vote FOR)
3. Other Matters:
In their discretion, the
Please be sure to sign and date proxies are authorized to vote
this Proxy in the box below. upon such other business that
Date may properly come before the
--------- meeting.
- --------------------------------------- THIS PROXY IS SOLICITED ON
Stockholder sign above BEHALF OF THE BOARD OF DIRECTORS OF
ROCHEM ENVIRONMENTAL, INC. THE
- --------------------------------------- SHARES REPRESENTED BY THIS PROXY
Co-holder (if any) sign above WILL BE VOTED IN ACCORDANCE WITH THE
CHOICES SPECIFIED ABOVE.
</TABLE>
DETACH ABOVE CARD, SIGN, DATE AND MAIL IN POSTAGE PAID ENVELOPE PROVIDED.
ROCHEM ENVIRONMENTAL, INC.
THIS PROXY WILL BE VOTED FOR THE CHOICES SPECIFIED. IF NO CHOICE IS
SPECIFIED FOR ITEMS 1 AND 2 THIS PROXY WILL BE VOTED FOR THESE ITEMS.
The above signed hereby acknowledges receipt of the Notice of Annual
Meeting and Proxy Statement dated February 21, 1997 as well as the Annual Report
for the fiscal year ended September 30, 1996.
Please sign exactly as your name appears on stock certificate(s). Joint
owners should each sign. Trustees and others acting in a representative capacity
should indicate the capacity in which they sign.
PLEASE ACT PROMPTLY
SIGN, DATE, & MAIL YOUR PROXY CARD TODAY
