<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. __)
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
WASTE TECHNOLOGY CORP.
------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(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:
<PAGE>
WASTE TECHNOLOGY CORP.
5400 RIO GRANDE AVENUE
JACKSONVILLE, FLORIDA 32205
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON
JULY 11, 1997
TO THE STOCKHOLDERS:
Notice is hereby given that the 1996 annual meeting of stockholders
(the "Annual Meeting") of Waste Technology Corp. (the "Company") has been called
for and will be held at 11:00 A.M., local time, on Monday, July 11, 1997, at the
offices of the Company, 5400 Rio Grande Avenue, Jacksonville, Florida 32205 for
the following purposes:
1. To elect two (1) Class I Directors, Alan Morrison and Russell
McElroy, and two (2) Class II Directors, Morton S. Robson and Ted C. Flood, to
the Board of Directors to hold office for three (3) years and until their
successors shall have been elected and qualify;
2. To ratify the appointment by the Board of Directors of Coopers &
Lybrand, to serve as the independent certified public accountants for the
current fiscal year; and
3. To consider and transact such other business as may properly come
before the Annual Meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on June 4, 1997
as the record date for the determination of the stockholders entitled to notice
of, and to vote at, the Annual Meeting or any adjournments thereof. The list of
stockholders entitled to vote at the Annual Meeting will be available for
examination by any stockholder at the Company's offices at 5400 Rio Grande
Avenue, Jacksonville, Florida 32205, for ten (10) days prior to July 11, 1997.
By Order of the Board of Directors
/s/ Ted C. Flood
Ted C. Flood, President
Dated: June 5, 1997
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE FILL IN, SIGN,
AND DATE THE PROXY SUBMITTED HEREWITH AND RETURN IT IN THE ENCLOSED STAMPED
ENVELOPE. THE GRANTING OF SUCH PROXY WILL NOT AFFECT YOUR RIGHT TO REVOKE SUCH
PROXY IN PERSON SHOULD YOU LATER DECIDE TO ATTEND THE MEETING. THE ENCLOSED
PROXY IS BEING SOLICITED BY THE BOARD OF DIRECTORS.
<PAGE>
WASTE TECHNOLOGY CORP.
PROXY STATEMENT
GENERAL
This proxy statement is furnished by the Board of Directors of Waste
Technology Corp., a Delaware corporation (sometimes the "Company" or "Waste
Tech"), with offices located at 5400 Rio Grande Avenue, Jacksonville, Florida
32205, in connection with the solicitation of proxies to be used at the annual
meeting of stockholders of the Company to be held on July 11, 1997 and at any
adjournments thereof (the "Annual Meeting"). This proxy statement will be mailed
to stockholders beginning approximately June 9, 1997. If a proxy in the
accompanying form is properly executed and returned, the shares represented
thereby will be voted as instructed on the proxy. Any proxy may be revoked by a
stockholder prior to its exercise upon written notice to the President of the
Company, or by a stockholder voting in person at the Annual Meeting.
All properly executed proxies received prior to the Annual Meeting will
be voted at the Annual Meeting in accordance with the instructions marked
thereon or otherwise as provided therein. Unless instructions to the contrary
are indicated, proxies will be voted FOR the election of the two (2) Class I and
two (2) Class II Directors named therein, and FOR the ratification of the
selection by the Board of Directors of Coopers & Lybrand, as the independent
certified public accountants of the Company.
A copy of the annual report of the Company for the fiscal year ended
October 31, 1996 ("Fiscal 1996"), which contains financial statements audited by
the Company's independent certified public accountants, accompanies this proxy
statement.
The cost of preparing, assembling and mailing this notice of meeting,
proxy statement, the enclosed annual report and proxy will be borne by the
Company. In addition to solicitation of the proxies by use of the mails, some of
the officers and regular employees of the Company, without extra remuneration,
may solicit proxies personally or by telephone, telegraph, or cable. The Company
may also request brokerage houses, nominees, custodians and fiduciaries to
forward soliciting material to the beneficial owners of the Common Stock. The
Company will reimburse such persons for their expenses in forwarding soliciting
material.
VOTING SECURITIES AND
PRINCIPAL HOLDERS THEREOF
The Board of Directors has fixed the close of business on June 4, 1997
as the record date (the "Record Date") for the determination of stockholders
entitled to notice of, and to vote at the Annual Meeting. Only stockholders on
the Record Date will be able to vote at the Annual Meeting.
2
<PAGE>
As of the Record Date, making adjustments to reflect the 2:1 stock
split declared by the Company on May 15, 1997, 4,863,102 shares of the Company's
common stock, $.01 par value per share ("Common Stock") are outstanding, and
each share will be entitled to one (1) vote, with no shares having cumulative
voting rights. Holders of shares of Common Stock are entitled to vote on all
matters. Unless otherwise indicated herein, a majority of the votes represented
by shares present or represented at the Annual Meeting is required for approval
of each matter which will be submitted to stockholders. The Company also has
1,000,000 shares of Preferred Stock, $.0001 par value per share authorized, none
of which are outstanding.
Management knows of no business other than that specified in Items 1
and 2 of the Notice of Annual Meeting which will be presented for consideration
at the Annual Meeting. If any other matter is properly presented, it is the
intention of the persons named in the enclosed proxy to vote in accordance with
their best judgment.
The following table sets forth information, as of June 4, 1997 with
respect to the beneficial ownership of the Company's Common Stock by each person
known by the Company to be the beneficial owner of more than five percent (5%)
of the Company's outstanding Common Stock:
Amount and Nature of Approximate
Name Beneficial Ownership(1) Percentage of Class
- ---- --------------------- -------------------
Ted C. Flood 1,166,814(2) 23.9%
9448 Preston Trail West
Ponte Vedra Beach, FL 32082
Morton S. Robson 586,854(3) 12.1%
666 Third Avenue
New York, NY 10017
- --------
(1) Unless noted to the contrary, all shares of Common Stock are
directly held with the sole voting and dispositive power residing in the persons
indicated. The amount of shares stated has been adjusted to reflect the 2:1
stock split declared by the Company on May 15, 1997.
(2) Consists of 628,000 shares held directly; and 538,814 shares owned
by the Waste Technology Corp. Employees Profit Sharing Trust of which Messrs.
Flood, Robson and Morrison are Trustees.
(3) Consists of 78,454 shares held directly; 2,400 shares held as
custodian for his minor son; 505,000 shares held by Robson & Miller, of which
Mr. Robson is the senior partner; and 1,000 shares held by the Robson & Miller
pension plan. Excludes 89,728 shares held by Kenneth N. Miller, a partner of Mr.
Robson who is the beneficial and record owner of such shares. Does not include
the 538,814 shares owned by the Waste Technology Corp Employees Profit Sharing
Trust of which Messrs. Flood, Robson and Morrison are trustees since these
shares are included in Mr. Flood's holdings and their inclusion here would be
duplicative.
3
<PAGE>
Charles B. Roth and 315,336(4) 6.5%
Marta M. Roth
1840 Spice Circle
Jacksonville, FL 32215
PROPOSAL NO. 1:
ELECTION OF DIRECTORS
General
The Board of Directors is divided into three (3) classes of directors
("Class I", "Class II", and "Class III"), with each class having as nearly the
same number of directors as practicable. The term of each Class I Director has
expired and election of each of these Directors was to have been held at the
1995 Annual Stockholder's meeting. However, an Annual Meeting for 1995 was not
held. As a result, the election of such Class I Directors will be held at the
1996 Annual Meeting of Stockholders. The term of each Class II Director expires
at the 1996 annual meeting of stockholders and the term of each Class III
Director will expire at the 1997 Annual Stockholder's meeting to be held in in
1998. Stockholders elect such class of directors, Class I, Class II, or Class
III, as the case may be, to succeed such class directors whose terms are
expiring, for a three (3) year term, and such class of directors shall serve
until the successors are elected and qualify.
The following is the apportionment of existing directors into classes:
No. of Class Term Expires Members/Nominees
- ------------ ------------ ----------------
Class I 1995 Annual Alan Morrison
Stockholder's Meeting Russell McElroy
(to be elected at 1996
Annual Stockholder's
Meeting)
Class II 1996 Annual Morton S. Robson
Stockholder's Meeting Ted C. Flood
(July 11, 1997)
Class III 1994 Annual Vacant/Robert Roth
Stockholder's Meeting
(to be held in 1998)
- --------
(4) Includes shares owned by family members of Robert Roth as follows:
his wife, Patricia B. Roth (114,182), his son, Steven F. Roth (83,968), his
daughter, Kathie Cecile Roth (10,000) and his son Charles B. Roth and his wife,
Marta Roth (107,188).
4
<PAGE>
The Board of Directors consisted of five (5) persons during Fiscal
1996. There are two (2) nominees for Class I members of the Board, Alan Morrison
and Russell McElroy, and two (2) nominess for Class II Members, Morton S. Robson
and Ted C. Flood. Unless authority is withheld, the proxies in the accompanying
form will be voted in favor of the election of Messrs. Morrison and McElroy as
nominees for Class I Directors and Messrs. Robson and Flood as nominees for
Class II Directors at the Annual Meeting. If the nominees should subsequently
become unavailable for election, the persons voting the accompanying proxy may
in their discretion vote for a substitute.
The Class I and Class II directors were each elected at the annual
meeting of stockholders held in October 1993. The present Class III Director was
elected by the stockholders at the Company's last annual meeting of stockholders
held in October 1995. With the exception of Ted C. Flood, the officers are
elected annually by the directors and serve at the discretion of the board of
directors. See "Executive Compensation- Employment Agreements". There are no
family relationships between executive officers or directors of the Company.
However, Robert Roth is the father of Patricia B. Roth, Steven F. Roth and
Charles B. Roth, major shareholders of the Company. See "Certain Transactions".
Board of Directors
The Board of Directors has the responsibility for establishing broad
corporate policies and for the overall performance of the Company. Although only
two (2) members of the Board are involved in day-to-day operating details, the
other members of the Board are kept informed of the Company's business by
various reports and documents sent to them as well as by operating and financial
reports made at Board meetings. The Board of Directors did not hold any formal
meetings in Fiscal 1996.
During Fiscal 1996 Messrs. Robson and Morrison and were the members of
the Company's audit and compensation committees. In Fiscal 1996 the compensation
committee and the audit committee did not hold any formal meetings.
Management has agreed to use its best efforts to have Robert Roth
elected as a director for so long as Patricia Roth and Steven Roth, his family
members, own more than one (1%) percent of the outstanding shares of Common
Stock. See "Certain Transactions- Related Party Transactions - Robert Roth".
Other than with regard to Mr. Roth, there is no understanding or arrangement
between any director or any other persons pursuant to which such individual was
or is to be selected as a director or nominee of the Company.
The following table sets forth information, as of the Record Date with
respect to the beneficial ownership of the Company's Common Stock by the
executive officers and directors of the Company and the directors and officers
of the Company as a group:
5
<PAGE>
Amount of
Name and Address of Beneficial Approximate
Beneficial Owner Ownership(1) Percent of Class
Ted C. Flood 1,166,814(2) 23.9%
9448 Preston Trail West
Ponte Vedra Beach, Fla. 32082
Morton S. Robson 586,854(3) 12.1%
666 Third Avenue--18th Fl.
New York, N.Y. 10017--4011
Alan Morrison 240,000(4) 4.7%
875 E. Camino Real,
Apt. 10-C
Boca Raton, Fla. 33432
Russell McElroy 155,920(5) 3.1%
1623 Louvre Drive
Jacksonville, Fla. 32256
- --------
(1) Unless otherwise stated, all shares of Common Stock are directly
held with sole voting and dispositive power. Amount of shares stated have been
adjusted to reflect the 2:1 stock split declared by Company on May 15, 1997.
(2) Consists of 628,000 shares held directly; and 538,814 shares owned
by the Waste Technology Corp. Employees Profit Sharing Trust of which Messrs.
Flood, Robson and Morrison are Trustees.
(3) Consists of 78,454 shares held directly; 2,400 shares held as
custodian for his minor son; 505,000 shares held by Robson & Miller, of which
Mr. Robson is the senior partner; and 1,000 shares held by the Robson & Miller
pension plan. Excludes 89,728 shares held by Kenneth N. Miller, a partner of Mr.
Robson who is the beneficial and record owner of such shares. Does not include
the 538,814 shares owned by the Waste Technology Corp Employees Profit Sharing
Trust of which Messrs. Flood, Robson and Morrison are trustees since these
shares are included in Mr. Flood's holdings and their inclusion here would be
duplicative.
(4) Consists of options to purchase 240,000 shares. Does not include
the 538,814 shares owned by the Waste Technology Corp Employees Profit Sharing
Trust of which Messrs. Flood, Robson and Morrison are trustees since these
shares are included in Mr. Flood's holdings and their inclusion here would be
duplicative.
(5) Consists of 35,920 shares beneficially owned as an IRA beneficiary,
and options to purchase 120,000 shares.
6
<PAGE>
Robert Roth 3,300(6) Less than 1%
Georgetown Electric, Ltd.
Unit 17, 2501 W. Third Street
Wilmington De., 19805
William E. Nielsen 192,006(7) 3.9%
5400 Rio Grande Avenue
Jacksonville, Fla. 32254
All Officers and
Directors As A
Group (6 persons) 2,660,232(8) 54.5%
Background of Executive Officers and Directors
The following is a brief account of the experience, for at least the
past five (5) years, of each nominee for director, each director whose term does
not expire at the Annual Meeting, and each executive officer of the Company:
Ted C. Flood, age 66, was elected as the President and Chief Executive
Officer of the Company on February 23, 1993. He is also the President and Chief
Executive Officer of Consolidated Baling Machine ("CBM"), a wholly-owned
subsidiary, and International Baler Corp. ("IBC"), a majority owned subsidiary
of the Company. He was elected as a Director of the Company in May, 1989. From
1960 to 1972 he was president of Peabody Solid Waste Management Company (EZ
Pack). From 1972 to 1975 Mr. Flood was a corporate vice-president of marketing
for Browning Ferris Industries. During the period from 1977 to 1988 he was the
principal shareholder and president of Solid Waste Recovery Systems.
Morton S. Robson, age 74, was elected a Director and the Secretary of
the Company in 1989. On February 23, 1993, he was elected Executive Vice
President of the Company. Since 1977 Mr. Robson has been the senior partner of
the law firm of Robson & Miller, LLP (and its predecessor firms) which acts as
general counsel to the Company. Mr. Robson obtained an LLB degree from St.
John's University School of Law.
- --------
(6) Excludes an aggregate of 315,338 shares held by family members.
(7) Consists of 142,006 shares held jointly with his spouse and options
to purchase 50,000 shares.
(8) Includes shares owned by family members of Robert Roth as follows:
his wife, Patricia B. Roth (114,182), his son, Steven F. Roth (83,968), his
daughter, Kathie Cecile Roth (10,000) and his son Charles B. Roth and his wife,
Marta Roth (107,188). Also includes options to purchase 410,000 shares.
7
<PAGE>
Alan Morrison, age 70, has served as a Director of the Company since
January, 1986. Mr. Morrison has been a management consultant and private
investor since 1971. In 1970, he was the founder of SCA Services, Inc., a waste
disposal company. For more than 25 years, he has been a director of the Dauphin
Deposit Bank of Hanover, Pennsylvania.
Russell McElroy, age 69, was appointed by the Board Of Directors as a
Director of the Company in March 1993. Mr. McElroy has been active in sales of
balers, and other recycling equipment, and sales management of baler companies
for the past 21 years. He has been an employee of IBC since 1986. He is
currently Assistant To the Chairman of IBC and CBM. From 1978 to 1985, Mr.
McElroy was an officer and director of Selco Products Company, Baxley, GA.
Robert Roth, age 71, is the Chairman of the Board and Treasurer of
Georgetowne Electric, Ltd., and a director of Keystone Insurance Co., both
publicly held companies. For more than the past five (5) years, in addition to
being the Chairman of the Board and Treasurer of Georgetowne Electric, Ltd., he
has also been the President and Chief Executive Officer of Browning Weldon
Corp., a privately held financial company.
William E. Nielsen, age 49, joined the Company in June 1994 as its
Chief Financial Officer. Prior to joining the Company, Mr. Nielsen acted as a
financial consultant to Fletcher Barnun Inc., a privately held manufacturing
concern, from October 1993 through June 1994. He was the Vice President,
Administration and Finance at Unison Industries, Inc. (1980- July 1993),
Division Controller at Clow Corporation (1977-1980), Assistant to the Controller
at Bliss & Laughlin Industries, Inc. (1974-1977), Financial Analyst at Northwest
Industries, Inc. (1972-1974) and served in the United States Army from
1970-1972. Mr. Nielsen received a B.B.A in Finance and an M.B.A. at Western
Illinois University in 1969 and 1970, respectively.
Executive Compensation
The following table sets forth a summary of all compensation awarded
to, earned by or paid to, the Company's Chief Executive Officer and each of the
Company's executive officers whose compensation exceeded $100,000 per annum for
services rendered in all capacities to the Company and its subsidiaries during
fiscal years ended October 31, 1996, October 31, 1995 and October 31, 1994(1):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long Term Awards
<S> <C> <C>
</TABLE>
- --------
(1) The law firm of Robson & Miller, LLP and its predecessor firms have
provided legal services for the Company. Morton S. Robson, the Executive Vice
President and Secretary and a Director of the Company, is the senior partner of
Robson & Miller, LLP. During the Fiscal 1996, Robson & Miller, LLP received
$77,333 from Waste Tech and $37,232 from IBC as payment for legal services
rendered. As of the end of Fiscal 1996 accrued but unpaid legal fees due to
Robson & Miller, LLP from Waste Tech amounted to $315,696. Further, Robson &
Miller exercised an option in June, 1995 to purchase 250,000 (pre 2:1 stock
split) shares of Common Stock at $1.00 per share. See "Certain Relationships and
Related Party Transactions".
8
<PAGE>
<TABLE>
<CAPTION>
Name and Year Salary Bonus Other Annual Number All Other
Principal Position ($) ($) Compensation of Compensation
($) Options
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Leslie N. Erber, 1996 -0- -0- -0- -0- -0-(3)
former Chief
Executive Officer 1995 -0- -0- -0- -0- -0-
and President of
the Company and IBC 1994 50,000(2) -0- -0- -0- -0-
Ted C. Flood, 1996 190,422(4) -0- -0- -0- -0-
Chief Executive
Officer and 1995 150,034(5) -0- -0- -0- 203,125(7)
President of
Company and IBC 1994 125,134(6) -0- -0- 250,000 -0-
</TABLE>
No director of the Company received remuneration for services as a
director during Fiscal 1996.
The following table sets forth certain information relating to stock
option grants during Fiscal 1996 to the Company's Chief Executive Officer and
each of the Company's most highly
- --------
(2) Leslie N. Erber, formerly President of the Company, received a
monthly consulting fee of $5,000 after his termination as an executive officer
of the Company.
(3) As of October 31, 1996, Mr. Erber owned no restricted shares of the
Company's Common Stock.
(4) Ted C. Flood, President of the Company and President of the
Company's subsidiaries received $164,340 in compensation from IBC and IPS during
the fiscal year ended October 31, 1996 and $26,082 from Consolidated during that
period.
(5) Ted C. Flood, President of the Company and President of the
Company's subsidiaries received $130,501 in compensation from IBC during the
fiscal year ended October 31, 1995 and $19,533 from Consolidated during that
period.
(6) Ted C. Flood, President of the Company and President of the
Company's subsidiaries received $103,434 in compensation from IBC during the
fiscal year ended October 31, 1994 and $21,700 from Consolidated during that
period.
(7) Such other compensation is equal to the difference between the fair
market value of the Common Stock acquired on the date of exercise ($1.8125 on
June 13, 1995) and the exercise price ($1.00) of the option. As of October 31,
1996, Mr. Flood held 309,500 shares of restricted Common Stock of Waste Tech,
with an aggregate value of $619,000 based upon the average of the bid and asked
price of the Common Stock of $2.00 on October 31, 1996, as reported by The
Nasdaq Stock Market, Small Cap.
9
<PAGE>
compensated executive officers whose compensation exceeded $100,000 for Fiscal
1996:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individualized Grants
- -------------------------------------------------------------------------------------------
Name Number of Securities Percent of Total Exercise or Expiration
Underlying Options/SARs Base Price Date
Options/SARs Granted to ($/Sh)
Granted (#) Employees in Fiscal
1996
<S> <C> <C> <C> <C>
Ted C. Flood -0- NA NA NA
</TABLE>
No options were exercised during Fiscal 1996 by the Company's Chief
Executive Officer or any of the Company's most highly compensated executive
officers whose compensation exceeded $100,000 for Fiscal 1996.
Employment and Severance Agreements
On September 15, 1996, Ted C. Flood, the President and Chief Executive
officer of the Company entered into an employment agreement with the Company.
The agreement is for a term of five years commencing on October 1, 1996 and
terminating on September 30, 2001. Pursuant to the agreement, Mr. Flood shall
receive compensation of $150,034 for the first year with increases of 5% per
annum during the term of the agreement. However, in the event the Company is not
profitable in any year, the Company's Board of Directors has the right to defer
the 5% increase earned during that year. Such increase in income that is
deferred shall be carried forward and paid in the next profitable fiscal year at
the end of such fiscal year in a lump sum payment. The agreement further
provides that in the event of a merger, consolidation, sale of substantially all
of the Company's assets, or a sale of either a majority or plurality of the
Company's stock, Mr. Flood shall have the option to allow the agreement to
remain a binding obligation of the Company or the surviving or successor
corporation or at such time of such event receive the balance due him under the
agreement.
On June 3, 1989, IBC entered into a Severance Agreement (the
"Agreement") with Ted C. Flood, its President. The Agreement provides, among
other things, that, in the event of a change in control of IBC as that term is
defined in the Agreement, and the subsequent termination of Mr. Flood's
employment by IBC other than for cause or by Mr. Flood for good reason, (as such
terms are defined in the Agreement), IBC shall pay to Mr. Flood, in addition to
his salary at the date of termination, a lump-sum severance payment equal to
2.99 times the
10
<PAGE>
greater of his annual salary rate in effect as of the date of termination or
such rate in effect immediately prior to the change in control, together with
compensation for other benefits to which he would have been entitled.
The initial term of the Agreement was from May 3, 1989 through April
30, 1991. It was, and thereafter it shall be, automatically extended for one
year periods, unless IBC shall give written notice of termination, at least one
year prior to the termination date, of its desire not to extend the Agreement.
In the event of a change in control of the Company, however, the Agreement shall
continue in effect for not less than 24 months after such change in control.
Certain Transactions
Related Party Transactions
Loans to Officers and Directors
The Company and IBC entered into an agreement with Mr. Flood
dated as of December 29, 1995 pursuant to which IBC assigned all of its interest
in a life insurance policy it owned on Mr. Flood's life to Mr. Flood. In
consideration for this assignment Mr. Flood agreed to pay IBC the sum of
$145,727 which amount represented the cash surrender value of the policy as of
the date of the agreement. This amount is to be paid out of the proceeds Mr.
Flood or his Estate receives upon surrender of the policy or from the living
proceeds or death benefit proceeds from the policy, whichever occurs first.
Interest on Mr. Flood's obligation accrues at the rate of 6% per annum from the
date of the agreement to the date of payment. The agreement further provides
that no payment of principal or interest of this obligation shall be required to
be made until such time that Mr. Flood or his Estate shall receive the proceeds
from the policy. This obligation of Mr. Flood to IBC is evidenced by a
promissory note executed by Mr. Flood to the order of IBC.
The agreement further provides that all premiums due on the
policy after ownership has been transferred from IBC to Mr. Flood shall be
advanced by the Company. Each time that such advance is made for a premium by
the Company, Mr. Flood shall execute a promissory note to the order of the
Company in the amount of such premium advanced. Such note shall accrue interest
at the rate of six per cent per annum and no payment of principal or interest of
such notes shall be required to be made until such time that Mr. Flood or his
Estate shall receive the proceeds from the policy, either upon the surrender of
the policy or from the living proceeds or death benefit proceeds, whichever
occurs first. As of the date of this report, the Company had advanced funds to
pay two premiums on the policy each in the amount of $20,000. Mr. Flood has
executed two promissory notes, each in the amount of $20,000, to the order of
the Company evidencing his obligation to repay these loans to the Company.
11
<PAGE>
As of the date of this report, Morton S. Robson, the Company's
Executive Vice President and Secretary and a Director and corporate counsel, was
indebted to the Company. The transaction giving rise to the obligations owed to
the Company by Mr. Robson is described below.
On April 12, 1990, four individuals, including Leslie N. Erber, then
Chairman of the Board and President of the Company, and Morton S. Robson entered
into an agreement with a group of dissident shareholders to purchase an
aggregate of 294,182 shares at a purchase price of $4.00 per share. Mr. Erber
and Mr. Robson each purchased 134,951 shares of stock. Such number of shares and
purchase price have been adjusted to reflect the one for four (1:4) reverse
stock split effected on November 13, 1991 and do not reflect the recent 2:1
stock split declared by the Company. The dissidents had previously filed Forms
14B with the Commission indicating their intention of seeking control of the
Company through the solicitation of consents from shareholders to a reduction in
the number of directors and the replacement of the present directors with
directors nominated by the dissident group. As part of the agreement to purchase
the shares, the dissident shareholders who were selling their shares agreed
that, for a period of ten years, they would not seek to obtain control of the
Company or solicit proxies in opposition to the Board of Directors on any
matter.
Messrs. Erber and Robson and the two other persons borrowed the
aggregate amount of $1,244,328 from the Company in 1990 and 1991 to purchase
these shares. Most of the loan (91.5%) was made in equal amounts to the
President and the Secretary. Those advances were secured by a lien on the
294,182 shares of Common Stock. In addition, Mr. Erber agreed to transfer to the
Company as additional collateral, 156,000 shares of stock of the Company.
Approximately one-half of this sum was advanced on April 12, 1990 and the
balance during 1991. In April 1990, promissory notes evidencing the first half
of the funds were executed by these persons bearing interest at the rate of 9%
per annum and payable in three annual installments commencing on April 12, 1991.
Thereafter, independent members of Waste Tech's Board of Directors unanimously
extended the payment due date of each payment for one (1) year. New promissory
notes to Waste Tech were thereafter executed for the full amount of the advance,
payable in three annual installments commencing April 12, 1992. The notes were
secured by a lien on all of these shares which were acquired. In June 1992,
$200,000 of the principal amount of these loans was repaid to the Company
through a sale of 100,000 of the acquired shares at $2.00 per share. Payment of
the remainder of the principal due in 1993 and 1994, together with the accrued
interest, was deferred for two years by the Company's Board of Directors, and
subsequently deferred again until 1997.
Thereafter, Mr. Erber, in connection with his termination as President
of the Company, turned in all of his stock in to the Company and IBC in full
satisfaction of his obligation of $698,527.
12
<PAGE>
In June 1995 Robson & Miller exercised a stock option to purchase
250,000(1) shares of Common Stock (the "250,000 Shares") at $1.00 per share, by
offsetting $250,000 of the fees that were due and owing from the Company. As of
the end of fiscal 1995, the Company owed Mr. Robson's law firm the sum of
$160,130 for legal fees and disbursements. The Company has acquired a security
interest in the 250,000 Shares held by Robson & Miller as collateral security
for repayment of the outstanding loan of Mr. Robson. As of October 31, 1996 Mr.
Robson still owed the Company $448,364 together with accrued interest, and has
indicated that Robson & Miller intends to commence to sell such shares to
satisfy the obligation of Mr. Robson. The largest aggregate outstanding loan
balance of Mr. Robson during the past two (2) fiscal years was $681,261.
Legal Services
The law firm of Robson & Miller, LLP and its predecessors have provided
legal services for the Company and its subsidiaries. Morton S. Robson, the
Secretary and a Director of the Company is a partner of Robson & Miller, LLP,
general counsel to the Company. During the fiscal 1996, Robson & Miller, LLP
received $77,333 from Waste Tech and $37,232 from IBC as payment for legal
services rendered. As of the end of fiscal 1996 accrued but unpaid legal fees
due to Robson & Miller, LLP, from the Company amounted to $315,696. In fiscal
1994 Robson & Miller was granted an option to purchase 250,000(2) shares at
$1.00 per share for a five year period, in consideration of forbearing
collection of past due legal fees. As noted above, on June 13, 1995, Robson &
Miller exercised a stock option to purchase the 250,000 Shares at $1.00 per
share, by offsetting $250,000 of the fees that were due and owing form the
Company.
Conflicts of Interest
Each of Messrs. Flood and Robson are directors of both Waste Tech and
its majority owned subsidiary, IBC. Conflicts of interest may arise for Messrs.
Flood and Robson in transactions between Waste Tech and IBC. Additionally,
counsel to the company is Robson & Miller, LLP, of which Mr. Robson is the
senior partner. Conflicts of interests may arise as the result of such
relationship.
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(1) The amount of shares stated have not been adjusted to reflect the
2:1 stock split recently declared by the Company. As a result of this stock
split the number of shares now being held as collateral by the Company for this
obligation is 500,000 shares.
(2) The shares stated have not been adjusted to reflect the recent 2:1
stock split declared by the Company since this transaction occurred well prior
to the stock split.
13
<PAGE>
Robert Roth
Members of the immediate family of Robert Roth, one of the Directors of
the Company own an aggregate of 6.5% of the Company's outstanding and issued
stock. The shares of stock are owned by his wife, Patricia B. Roth (114,182)(1),
his son, Steven F. Roth (83,968), his daughter, Kathie Cecile Roth (10,000) and
his son Charles B. Roth and his wife, Marta Roth (107,188). Pursuant to the
terms of an agreement dated May 11, 1993 between Patricia Roth, Steven Roth and
Robert Roth so long as Patricia Roth and Steven Roth are the owners of more than
one percent (1%) of the number of outstanding shares of Common Stock, the
Company has agreed to use its best efforts to cause the election of Robert Roth
as a member of the Board of Directors.
PROPOSAL NO. 2:
RATIFICATION OF SELECTION OF
COOPERS & LYBRAND AS INDEPENDENT AUDITORS
The Board of Directors has selected the firm of Coopers & Lybrand,
independent certified public accountants, to audit the accounts for the Company
for fiscal year ending October 31, 1996 ("Fiscal 1996"). The firm of Coopers &
Lybrand has audited the Company's financial statements since 1991. The Company
is advised that neither that firm nor any of its partners has any material
direct or indirect relationship with the Company. The Board of Directors
considers Coopers & Lybrand to be well qualified for the function of serving as
the Company's auditors. The Delaware General Corporation Law does not require
the approval of the selection of auditors by the Company's stockholders, but in
view of the importance of the financial statement to stockholders, the Board of
Directors deems it desirable that they pass upon its selection of auditors. In
the event the stockholders disapprove of the selection, the Board of Directors
will consider the selection of other auditors. The Board of Directors recommends
that you vote in favor of the above proposal in view of the familiarity of
Coopers & Lybrand with the Company's financial and other affairs due to its
previous service as auditors for the Company.
A representative of Coopers & Lybrand is expected to be present at the
Annual Meeting with the opportunity to make a statement if he desires to do so,
and is expected to be available to respond to appropriate questions.
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(1) The number of shares stated for members of the Roth family
reflects the 2:1 stock split declared by the Company on May 15, 1997.
14
<PAGE>
Unless otherwise directed by the stockholder giving the proxy, the
proxy will be voted for the ratification of the selection by the Board of
Directors of Coopers & Lybrand as the Company's independent certified public
accountants for Fiscal 1996.
STOCKHOLDERS' PROPOSALS
Proposals of stockholders intended to be presented at the 1997 annual
meeting must be received in writing, by the President of the Company at its
offices by March 20, 1998 in order to be considered for inclusion in the
Company's proxy statement relating to that meeting.
By Order of the Board of Directors
/s/ Morton S. Robson
Morton S. Robson, Secretary
15
<PAGE>
WASTE TECHNOLOGY CORP.
THIS PROXY IS SOLICITED ON BEHALF
OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Ted C. Flood and Morton S. Robson as
proxies (the "Proxies"), each with power of substitution and resubstitution, to
vote all shares of Common Stock, $.01 par value per share, of Waste Technology
Corp. (the "Company") held of record by the undersigned on June , 1997 at the
Annual Meeting of stockholders to be held at the offices of the Company, 5400
Rio Grande Avenue, Jacksonville, Florida 32205, on Friday, July 11, 1997 at
11:00 A.M. local time, or at any adjournments thereof, as directed below, and in
their discretion on all other matters coming before the meeting or any
adjournments thereof.
Please mark boxes / / in blue or black ink.
1. Election of two Class I Directors: Alan Morrison and Russell McElroy,
and one two Class II Directors: Morton S. Robson and Ted C. Flood
(Mark only one of the two boxes for this item)
/ / VOTE FOR all nominees named above except those who may be named on
this line:
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(OR)
/ / VOTE WITHHELD as to all nominees named above.
2. Proposal to ratify appointment of Coopers & Lybrand as the Company's
independent certified public accountants:
FOR / / AGAINST / / ABSTAIN / /
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
When properly executed, this Proxy will be voted as directed. If no
direction is made, this Proxy will be voted "FOR" Proposals 1 and 2.
Please mark, date, sign and return this Proxy promptly in the enclosed
envelope.
Please sign exactly as name appears hereon. When shares are held by
joint tenants, both should sign. When signing as attorney or executor,
administrator, trustee or guardian,
<PAGE>
please give full title as such. If a corporation, please sign in full corporate
name by president or other authorized officer. If a partnership, please sign in
partnership name by authorized person.
Dated: _______________________ , 1997
X ____________________________
Signature
X _____________________________
Print Name(s)
X ____________________________
Signature, if held jointly
