SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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 14(a)-12
KBF POLLUTION MANAGEMENT, INC.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) filing Proxy Statement, if other than 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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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<PAGE>
/ / 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:
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(2) Form, Schedule or Registration Statement no.:
-----------------
(3) Filing Party:
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(4) Date Filed:
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<PAGE>
PROXY MATERIAL
KBF POLLUTION MANAGEMENT, INC.
ONE JASPER STREET
PATERSON, NJ 07522
---------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
to be held on June 14, 2000
---------------
To The Shareholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the
"Meeting") of KBF POLLUTION MANAGEMENT, INC., a New York corporation ("KBF" or
the "Company"), will be held at The Brownstone House located at 351 West
Broadway, Paterson, New Jersey, on June 14, 2000, at 10:00 a.m., local time, for
the following purposes:
1. To elect eight (8) members of the Board of Directors to serve until
the next Annual Meeting of Shareholders and until their successors have been
duly elected and qualified; and,
2. To transact such other business as may properly be brought before
the Meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on May 12, 2000
as the record date for the determination of shareholders entitled to notice of
and to vote at the Meeting. Only shareholders of record on the stock transfer
books of KBF at the close of business on that date are entitled to notice and to
vote at the Meeting.
By Order of the Board of Directors
/s/ Kathi Kreisler
Kathi Kreisler
Secretary
Dated: May 19, 2000
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING YOU ARE URGED TO FILL IN,
DATE, SIGN AND RETURN THE ENCLOSED PROXY. UNLESS YOUR SHARES ARE OWNED OF RECORD
IN YOUR OWN NAME, TO BE ADMITTED TO THE MEETING YOU WILL BE REQUIRED TO SHOW
EVIDENCE SATISFACTORY TO THE COMPANY THAT YOU ARE A SHAREHOLDER, WHICH EVIDENCE
INCLUDES A BROKERAGE ACCOUNT STATEMENT DATED WITHIN 30 DAYS PRIOR TO THE MEETING
DATE.
<PAGE>
KBF POLLUTION MANAGEMENT, INC.
ONE JASPER STREET
PATERSON, NJ 07522
---------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
June 14, 2000
---------------
INTRODUCTION, RECORD HOLDERS, VOTING
This Proxy Statement is being furnished to shareholders by the Board of
Directors of KBF Pollution Management, Inc., a New York corporation (the
"Company"), in connection with the solicitation of proxies for use at the 2000
Annual Meeting of Shareholders of the Company (the "Meeting") to be held at The
Brownstone House located at 351 West Broadway, Paterson, New Jersey, on June 14,
2000, at 10:00 a.m., local time, or at any adjournments thereof.
The approximate date on which this Proxy Statement and the accompanying
Proxy will first be sent or given to shareholders is May 16, 2000.
Only shareholders of record at the close of business on May 12, 2000,
the record date (the "Record Date") for the Meeting, will be entitled to notice
of, and to vote at, the Meeting and any adjournment(s) thereof. As of the close
of business on the Record Date, there were outstanding 77,004,778 shares of the
Company's Common Stock, $.0001 par value (the "Common Stock"). Each outstanding
share of Common Stock is entitled to one vote. There was no other class of
voting securities of the Company outstanding on the Record Date. A majority of
the outstanding shares of Common Stock present in person or by proxy is required
for a quorum.
Shares of Common Stock represented by Proxies, which are properly
executed, duly returned and not revoked, will be voted in accordance with the
instructions contained therein. If no instruction is indicated on the Proxy, the
shares of Common Stock represented thereby will be voted (i) For the election as
Directors of the persons who have been nominated by the Board of Directors, and,
(ii) at the discretion of the person or persons voting the Proxy with respect to
any other matter that may properly be brought before the Meeting. The execution
of a Proxy will in no way affect a shareholder's right to attend the Meeting and
vote in person. Any Proxy executed and returned by a shareholder may be revoked
at any time thereafter if written notice of revocation is given to the Secretary
of the Company prior to the vote to be taken at the Meeting, or by execution of
a subsequent proxy which is presented at the Meeting, or if the shareholder
attends the Meeting and votes by ballot, except as to any matter or matters upon
which a vote shall have been cast pursuant to the authority conferred by such
Proxy prior to such revocation. Abstentions and broker non-votes are counted for
purposes of determining the presence or absence of a quorum for the transaction
of business.
The cost of solicitation of the Proxies being solicited on behalf of
the Board of Directors will be borne by the Company. In addition to the use of
the mails, proxy solicitation may be made personally or by telephone or telegram
by officers, directors and employees of the Company. The Company will, upon
request, reimburse banks, brokerage firms and other custodians for their
reasonable expenses in sending soliciting material to the beneficial owner of
the shares.
<PAGE>
PROPOSAL 1. ELECTION OF DIRECTORS AND MANAGEMENT INFORMATION
The persons listed below are nominees for election as directors at the
Meeting. Unless otherwise specified, all Proxies received will be voted in favor
of the election of the nominees listed below. Directors shall be elected by a
plurality of the votes cast, in person or by proxy, at the Meeting. Management
has no reason to believe that any of the nominees will be unable or unwilling to
serve as a director, if elected. Should any of the nominees not remain a
candidate for election at the date of the Meeting, no substitute candidate will
be selected and the Proxies will be voted only in favor of those nominees still
standing for election.
Capacities
Period Served in which currently
Age as Director serving.
- --------------------------------------------------------------------------------
Lawrence M. Kreisler 53 Since 1984 Chairman
CEO, Director
Kathi A. Kreisler 49 Since 1984 Vice President
Secretary, Treasure
Director
Kevin E. Kreisler, Esq. 27 Since 1998 Acting President
Director
Dr. Stephen Lewen 47 Since January 1998 Director
Joseph J. Casuccio, Jr, CPA 48 Since January 1998 General Counsel
Vice President
Director
Christopher Jones 48 Nat Applicable Nominee for Director
James Green 46 Not Applicable Nominee for Director
Lawrence M. Kreisler, President of the Company, is a Co-founder of the
Company and has been its Chairman of the Board and a Director since March 1984.
Mr. Kreisler invented the technology with which the Company transacts its
principal businesses (See "Patents and Proprietary Information"). He served as
Vice President, Secretary and Treasurer from March 1984 through December 1994.
In January 1995, Mr. Kreisler accepted the Board nomination to serve as
President of the Company. From 1973 to 1984 Mr. Kreisler managed pollution
treatment systems for several companies in the metal finishing industries. Mr.
Kreisler is the husband of Kathi Kreisler, Vice President, Secretary, Treasurer
and a director of the Company. He is the father of Kevin Kreisler, Vice
President and a director of the Company.
Kathi Kreisler is a Co-founder of the Company and served as its
President from 1984 through December 1994. She has been a Director since March
1984. In January 1995, Ms. Kreisler became Vice President, Secretary and
Treasurer of the Company. From 1979 to 1984, Ms. Kreisler was a principal in
Kreisler Bags (subsequently incorporated as Kreisler Bags and Filtration, Inc.,
which name was subsequently changed to KBF Pollution Management, Inc.). Ms.
Kreisler is the wife of Lawrence Kreisler, CEO Chairman of the Board of the
Company. She is the mother of Kevin Kreisler, acting President and a director of
the Company.
Kevin Kreisler has recently been appointed acting President and served
as Vice President since January 1998 and director since July 1998. Mr. Kreisler
has continuously worked for the Company in various part and full time capacities
since 1990. He has also worked as a law clerk for several law firms and clinics
during his tenure at law school (September 1995 to December 1997). Mr. Kreisler
is a graduate of Rutgers University College of Engineering (B.S., Civil and
Environmental Engineering, 1994), Rutgers University Graduate School of
Management (M.B.A., 1995), and Rutgers University School of Law (J.D., 1997).
Mr. K. Kreisler is admitted to practice law in New Jersey and the United States
District Court for the District of New Jersey. He is the son of Lawrence
Kreisler, CEO and Chairman of the Company, and Kathi Kreisler, a Vice President,
Secretary, Treasurer and a director of the Company.
Joseph J. Casuccio's, Jr., CPA has served as a Chief Financial Officer
of the Company since July 1998, and as Vice-President and director since January
1998. Since 1985, Mr. Casuccio's has been a partner at Werblin, Casuccio &
Moses, a public accounting firm, which provides accounting services to the
Company (See "Certain Relationships and Related Transactions"). Mr. Casuccio is
a graduate of Suffolk County Community College and Long Island University.
<PAGE>
PROPOSAL 1. ELECTION OF DIRECTORS AND MANAGEMENT INFORMATION (continued)
Dr. Lewen has been a physician, and a member of Suffolk Opthamology
Associates, P.C. in Bayshore, New York. Dr. Lewen is a graduate of Cornell
University, Columbia University and Chicago Medical School.
James L. Sonageri, Esq., has served as Vice President and General
Counsel of the Company since September 1, 1999, and as a director since January
2000. Mr. Sonageri is admitted to practice law in New Jersey, New York and the
United States District Courts for the District of New Jersey, the Southern and
Eastern Districts of New York, and the United States Supreme Court. He earned
his J.D.
degree from The John Marshall School where he was a member of the Law Review and
the Gavel Society and received his B.S. degree in accounting from Fairleigh
Dickinson University. He is a member of the New Jersey State and New York State
Bar Associations and a former member of the Board of Trustees of the Criminal
Law Section of the New Jersey State Bar Association. By appointment of the
Superior Court of New Jersey, Mr. Sonageri serves as a mediator in the Chancery
Mediation Program. He is a Master in the C. Willard Heckel Inn of Court, which
is sponsored by Rutgers School of Law. He serves on the New Jersey Publications
Advisory Committee for Lawyers Cooperative Publishing. He has appeared as an
expert guest commentator on Court TV for both civil and criminal cases. Mr.
Sonageri served as a Special Assistant United States Attorney in the United
States Attorney's Office for the District of New Jersey and as the Supervisor of
the White Collar Crime Unit in the Union County Prosecutor's Office. Since 1995,
Mr. Sonageri has been a partner in Sonageri & Fallon, LLC, a law firm with
offices in Hackensack, New Jersey and Garden City, New York, which firm provides
legal services to the Company.
Christopher Jones is the President of R.M. Jones & Co., Inc., the
company's joint venture partner. Mr. Jones is a nominee to the Board of
Directors of the Company.
James Green is the Vice President of R.M. Jones & Co., Inc., the
company's joint venture partner. Effective May 6, 2000, Mr. Green was appointed
President of KBF Environmental Services, Inc., the company's 80% owned joint
venture subsidiary and Senior Vice President of Sales for the company. Formerly
employed as the Chief Operations Officer for Heritage Environmental Services,
Mr. Green was responsible for over eight hundred employees in all aspects of
sales and operations. Prior to his employ with Heritage, he was a vice president
for Laidlaw, Inc., where he was responsible for twenty-four operations in North
America with over fifteen hundred employees and $175 million in revenue. He has
also served as president of North East Solvents, where he grew a profitable $40
million company from sales of $4 million within four years. Under his sales
management, Mr. Green grew R.M. Jones' sales by 400% in three years. Mr. Green
is a nominee to the Board of Directors of the Company.
The Company's executive officers are appointed by and serve at the
discretion of the Board of Directors, subject to the terms and conditions of the
employment agreements described below. There are no arrangements or
understandings between any of the Directors of the Company and any other person
pursuant to which such person was selected or nominated as a Director of the
Company.
INFORMATION REGARDING BENEFICIAL OWNERSHIP OF PRINCIPAL SHAREHOLDERS, DIRECTORS,
AND MANAGEMENT
The following table sets forth information regarding the beneficial
ownership of shares of the Company's Common Stock by all persons known by the
Company to own beneficially 5% or more of the outstanding shares of the
Company's Common Stock, the nominees for directors, the Company's Chief
Executive Officer, and the four other highest paid executive officers ("Named
Executive Officers") and the directors:
<PAGE>
INFORMATION REGARDING BENEFICIAL OWNERSHIP OF PRINCIPAL SHAREHOLDERS, DIRECTORS,
AND MANAGEMENT (continued)
Name
and Address of Amount and Percentage
Beneficial Nature of of Outstanding
Holder or Identity of Group Beneficial Ownership Stock
- --------------------------------------------------------------------------------
Kathi A. Kreisler 13,901,953 17.85%
14 Maria Drive (1) (2)
Sparta, NJ 07871
Lawrence M. Kreisler 15,255,370 19.61%
14 Maria Drive (1) (3)
Sparta, NJ 07871
Steven Lewen 2,607,258 3.70%
10 Cabriolet Lane (4)
Melville, NY 11747
Kevin E. Kreisler 2,594,028 3.61%
14 Maria Drive (5)
Sparta, NJ 07871
Joseph J. Casuccio, Jr., CPA 3,464,906 4.83%
7 North Equestrian Court (6)
Hauppauge, New York 11789
James L. Sonageri, Esq. 2,055,000 2.89%
2 Strawberry Lane (7)
Upper Saddle River, NJ 07458
All Officers & Directors 39,878,515 41.90%
as a group seven persons.
Kreisler Family as A Group 31,751,351 35.56%
(8)
1) Mr. and Ms. Kreisler each disclaim beneficial ownership of the shares
of Common Stock owned by the other.
2) Includes 10,489,278 shares of exercisable options for Common Stock.
3) Includes 8,892,778 shares of exercisable options for Common Stock.
4) Includes 1,302,258 shares of exercisable options for Common Stock.
5) Includes 2,594,028 shares of exercisable options for Common Stock.
6) Includes 2,584,800 shares of exercisable options for Common Stock.
7) Includes 2,005,000 shares of exercisable options for Common Stock.
8) Includes stock and options held by Lawrence M. Kreisler, Kathi A.
Kreisler, Kevin E. Kreisler and Scott C. Kreisler.
BOARD COMMITTEES
The Company has the following standing committees: an Audit Committee,
Executive Compensation Committee and a Dilution Management Committee. The Audit
Committee is comprised of Mr. Casuccio and Dr. Lewen. The Executive Compensation
Committee, which comprised of Mr. Casuccio and Dr. Lewen, recommends to the
Board of Directors compensation for the Company's Chief Executive and other
principal executive officers. In February 2000, the Board formed a Dilution
Management Committee and merged the Stock Option Committee into the Dilution
Management Committee. The Dilution Management Committee is comprised of Mr.
Casuccio, Dr. Lewen and Mr. Sonageri.
The Audit Committee discussed has discussed the financial statements with
Management and has received a letter from the Company's auditors disclosing
their status as independent. The Audit Committee recommended the inclusion of
the financial statements in the 1999 Form 10-KSB. Dr. Lewen is an independent
member of the Audit Committee.
The Board of Directors held four meetings during the fiscal year ended
December 31, 1999. A majority of the Directors attended each meeting. From time
to time, the Board acted by unanimous written consent pursuant to the laws of
the State of New York.
<PAGE>
Identification of Executive Officers
Name Age 1999 Office Held
- --------------------------------------------------------------------------------
Lawrence Kreisler 53 Chairman, CEO
Kathi Kreisler 49 Vice President, Secretary, Treasurer
Kevin Kreisler 27 Acting President
Joseph J. Casuccio Jr. 48 Vice President, CFO
James Sonageri, Esq. 43 Vice President, General Counsel
Information on the named officers and significant employees who are also
nominees for director can be found in the description of the director nominees
above.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
The following table provides certain summary information concerning the
compensation paid or accrued by the Company during the fiscal year ended
December 31, 1999 to or on behalf of the Company's President and the other named
executive officers of the Company (hereinafter referred to as the "named
executive officers") for services rendered in all capacities to the Company
whose total aggregate salary and bonus exceeded $100,000:
<TABLE>
<CAPTION>
=====================================================================================================================
SUMMARY COMPENSATION TABLE
- ---------------------------------------------------------------------------------------------------------------------
Long Term Comp.
Annual Compensation
===================================
- ---------------------------------------------------------------------------------------------------------------------
Name and Salary ($) Bonus ($) Other Awards, Options/ All Other Comp.
Principal Year Annual SARs
Position Comp.
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Kathi A. Kreisler 1999 $80,000 - - 100,000 -
Vice President
- ---------------------------------------------------------------------------------------------------------------------
1998 $65,267 - - 7,500,000 -
- ---------------------------------------------------------------------------------------------------------------------
1997 $3,500 - - 500,000 -
- ---------------------------------------------------------------------------------------------------------------------
Lawrence M. 1999 $165,000 - - 100,000 -
Kreisler, CEO,
Chairman
- ---------------------------------------------------------------------------------------------------------------------
1998 $167,791 - - 5,400,000 -
- ---------------------------------------------------------------------------------------------------------------------
1997 $152,503 - - - -
- ---------------------------------------------------------------------------------------------------------------------
James L. 1999 $5,200 - - 1,875,000 -
Sonageri
Vice President
Gen Counsel
- ---------------------------------------------------------------------------------------------------------------------
Joseph J. 1999 $5,200 - - 1,856,250 -
Casuccio Jr.
Vice President,
CFO
- ---------------------------------------------------------------------------------------------------------------------
Kevin E. Kreisler 1999 $50,000 - - 12,944,028 -
Acting President 1998 $30,000 - - -
=====================================================================================================================
</TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
There were stock options granted to the named executive officers during
1997, 1998 and 1999. The following table sets forth information concerning
option exercises and option holdings for the fiscal year ended December 31, 1999
with respect to the Company's named executive officers. No stock appreciation
rights were exercised or outstanding during such fiscal year.
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR (continued)
<TABLE>
<CAPTION>
=========================================================================================================================
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
- -------------------------------------------------------------------------------------------------------------------------
Value of Unexercised in-the-
Value Number of Securities Money Options at FY-End Market
Realized Underlying Unexercised Options Price of shares at FY-End ($) less
Shares Market price at at Fiscal Year-End exercise price
acquired FY End (#)
- ------------------- on Exercise less ---------------------------------- ------------------------------------
Name exercise exercise price) Exercisable Unexercisable Exercisable Unexercisable
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Kathi A. 0 N/A 10,489,278 - $323,508 N/A
Kreisler
- -------------------------------------------------------------------------------------------------------------------------
Lawrence M. 0 N/A 8,892,778 - $458,493 N/A
Kreisler
- -------------------------------------------------------------------------------------------------------------------------
Kevin E. 0 N/A 2,594,028 11,500,000 $115,500 0
Kreisler
- -------------------------------------------------------------------------------------------------------------------------
Joseph J. 0 N/A 2,584,800 - $112,131 N/A
Casuccio Jr
- -------------------------------------------------------------------------------------------------------------------------
James L. 0 N/A 2,005,000 - $51,800 N/A
Sonageri
=========================================================================================================================
</TABLE>
EMPLOYMENT AGREEMENTS
The Company has entered into an employment agreement with Lawrence M.
Kreisler, as the Chairman of the Board and CEO of the Company, on November 7,
1997 (the "Lawrence Kreisler Employment Agreement"). The Lawrence Kreisler
Employment Agreement provides for a five-year term and shall be extended
automatically each day for an additional day so that the remaining term of this
agreement will be five years at all times. Either party may, by written notice,
fix the term of the Lawrence Kreisler Employment Agreement at five years without
additional extension and would then end on a date five years from the date of
notice. Pursuant to the Lawrence Kreisler Employment Agreement, Mr. Kreisler's
annual base salary shall be $165,000, with annual cost of living adjustments.
Mr. Kreisler is entitled to receive an annual bonus equal to 6% of the Company's
annual net income before taxes, reimbursement of business related expenses, use
of a Company automobile and participation in any employee benefits provided to
all employees of the Company. The Company shall contribute 6% of the base weekly
salary to Lawrence Kreisler's 401(k) savings plan.
Lawrence Kreisler's employment may be terminated by the Company at any
time for cause (as defined in the Lawrence Kreisler Employment Agreement) and
his employment may be terminated at any time by the mutual consent of the Board
of Directors and Mr. Kreisler. If Mr. Kreisler is terminated by the Company for
cause, the Company is obligated to pay him all amounts due under the Lawrence
Kreisler Employment Agreement, which have accrued but are unpaid as of the date
of termination. The Lawrence Kreisler Employment Agreement also includes
non-competition provisions which prevent Mr. Kreisler, during the term of the
agreement, from participating, directly or indirectly, in the ownership,
control, management or employ of any business entities other than the Company
without the prior written consent of the Board of Directors.
In January 1998, the Company issued 400,000 stock options to Lawrence
Kreisler for past services rendered as a result of voluntarily reducing his
salary. Each of these stock options is convertible into one share of common
stock at $0.40 per share, for a period of ten (10) years from the date of
issuance. These options were revised in 1999 as described below under `Stock
Options.'
The Company entered into an employment agreement with Kathi Kreisler,
as Vice President, Secretary and Treasurer, on November 7, 1997 (the "Kathi
Kreisler Employment Agreement"), which provides for a five-year term from the
date signed and shall be extended automatically each day for an additional day
so that
<PAGE>
EMPLOYMENT AGREEMENTS (continued)
the remaining term of this agreement will be five years at all times. Either
party may, by written notice, fix the term of the Kathi Kreisler Employment
Agreement at five years without additional extension and would then end on a
date five years from the date of notice. Pursuant to this agreement, Ms. K.
Kreisler shall receive an annual base salary of $80,000, with cost of living
adjustments. Ms. K. Kreisler is entitled to receive an annual bonus equal to 4%
of the Company's annual net income before taxes, reimbursement of business
related expenses, use of a Company automobile and participation in any employee
benefits provided to all employees of the Company. The Company shall contribute
6% of the base weekly salary to Ms. Kreisler's 401(k) savings plan.
Kathi Kreisler's employment may be terminated by the Company at any
time for cause (as defined in the Kathi Kreisler Employment Agreement) and her
employment may be terminated at any time by the mutual consent of the Board of
Directors and Ms. Kreisler. If Ms. Kreisler is terminated by the Company for
cause, the Company is obligated to pay her all amounts due under the Kathi
Kreisler Employment Agreement, which have accrued but are unpaid as of the date
of termination. The Kathi Kreisler Employment Agreement also includes
non-competition provisions, which prevent Ms. Kreisler, during the term of the
agreement, from participating, directly or indirectly, in the ownership,
control, management or employ of any business entities other than the Company
without the prior written consent of the Board of Directors.
Kathi Kreisler voluntarily lowered the amount of her 1997 salary to
$3,500, her 1996 salary to $8,325.00, her 1995 salary to $2,153, her 1994 salary
to $20,000 and deferred all 401(k) payments. In January 1998, the Company issued
Ms. Kreisler 7,500,000 stock options, each convertible to one share of common
stock, at $0.40 per share for a period of ten (10) years from the date of
issuance for past services rendered. These options were revised in 1999 as
described below under `Stock Options.'
The terms of the Mr. Kevin Kreisler's employment agreement for 1999
included an annual base salary of $80,000, with an automatic 10% annual
increase. Mr. Kevin Kreisler will be entitled to an annual bonus equal to 3% of
the Company's net income before taxes, reimbursement of business expenses, use
of a Company automobile and participation in any employee benefits provided to
all employees of the Company.
The terms of Mr. Casuccio's employment agreement with the Company for
1999 were an annual salary of $5,200 and the issuance of performance based stock
options, as further described in `Stock Options', below. The agreement is
negotiated annually.
The terms of Mr. Sonageri's employment agreement with the Company for
1999 were an annual salary of $5,200 and the issuance of performance based stock
options, as further described in `Stock Options', below. The agreement is
negotiated annually.
These employment agreements provide for option issuance in lieu of
salary on an as needed basis to cover cash payment shortfalls against the agreed
upon annual salaries and incentive stock options. These issues are further
described in `Stock Options,' below.
STOCK OPTIONS
The following is a schedule of options granted in 1998 and 1999. For an
accounting of the total options outstanding on December 31, 1999, see Note 14 of
the Company's 1999 Financial Statements, attached hereto.
In 1998, the Company issued, for unpaid prior years salaries, to Kathi
Kreisler and Lawrence Kreisler 7,500,000 and 400,000 options respectively. The
options are exercisable for a period of ten years, at $0.40 per share, equal to
the market value at grant date. Mr. Lawrence Kreisler was also issued 5,000,000
options for new patent technology, (See Patents and Proprietary Information).
The options are exercisable for a period of ten years at $0.20 per share, equal
to the market value at grant date. These options were revised in 1999 as
described below under `Stock Options.'
<PAGE>
STOCK OPTIONS (continued)
In 1998 the Company issued to unrelated third parties, 2,775,000
options for the debt financing for the facility expansion project. The options
are exercisable for a period of five years and exercisable at $0.15-$0.21 per
share, equal to the market value at grant date. These options were rescinded in
1999.
In 1998 the Company issued to unrelated third parties, in payment of
services rendered in connection to various consulting services, 325,000 options
were issue exercisable for a period of five years, at $0.20 per share, equal to
the grant date. In 1998 the Company issued to unrelated third parties, in
payment of services rendered in connection with facility construction, 812,000
options issue exercisable for a period of ten years at $0.10 - $0.21 per share,
with a market value of a lesser amount at grant date. In 1998, in connection
with previously reported capital raises, the Company issued 2,695,000 options to
an investment banking institution exercisable for a period of five years, at
$0.15-$0.25 per share, with a market value of $0.25-$0.32 at grant date. These
options were renegotiated upon the termination by the Company of the investment
banking institution's relationship with the Company. On September 8, 1998, the
former warrants were replaced with new warrants to purchase a total of 1,500,000
shares at $0.15 and 250,000 shares of restricted stock. The warrants and the
underlying shares are exercisable between September 8, 1998 and August 30, 2003
and are callable by the Company at $0.01 per option.
During 1999 the company issued 26,862,919 options, called 857,680
options, canceled 2,775,000 options, and reduced other outstanding options by
1,900,000. The result was a net increase in the outstanding options of
18,912,919. Of these, 11,500,000 options vest upon performance based benchmarks
as the Company achieves increased revenue to $28,000,000 per annum. These
options are further described below.
DIRECTORS AND OFFICERS
12,944,028 options were granted to Kevin Kreisler during 1999,
11,500,000 options are incentive options, which vest gradually with performance
based benchmarks as the Company achieves increased revenue to $28,000,000 per
annum in accordance with the following schedule:
Annual Revenue Option
Target Shares
($mil) Vesting
------- -------
$ 3.750 1,150,000
4.688 1,150,000
5.859 1,150,000
7.324 1,150,000
9.155 1,150,000
11.444 1,150,000
14.305 1,150,000
17.881 1,150,000
22.351 1,150,000
27.940 1,150,000
----------
11,500,000
==========
These options are exercisable for a period of ten years, at $.21 per
share, equal to the market value at grant date. They vest after 9.5 years
regardless of the foregoing benchmarks, provided Mr. K. Kreisler continues as an
employee until that time.
444,028 options were granted to Mr. K. Kreisler for the salary
differential between the contractual salary and the amount paid in cash, for
services from January 1, 1998 through December 31, 1999. 1,000,000 options were
granted as a bonus for the development of a management, investor, supplier and
advisor network during the same period. The options are exercisable for a period
of five years, at $.22 per share, equal to 110% of the market value at grant
date.
950,000 options were granted to the Company's Directors during 1999.
400,000 of these options were for 1998 service and 550,000 options were for 1999
service. The 1998 service options are exercisable for a
<PAGE>
STOCK OPTIONS (continued)
period of ten years, at $.40 per share, equal to the market value at grant date.
The 1999 service options issued to members of the Kreisler family are
exercisable over a period of five years, at $0.22 per share, equal to 110% of
market value at grant date. The balance of the 1999 service options are
exercisable at $.20 per share, equal to the market value at grant date.
3,531,250 options were granted to officers of the Company during 1999.
Of these, 1,656,250 options were granted to the Company's CFO, 250,000 options
for 1998 service and 1,406,250 for 1999 service, in addition to $5,200 of cash
salary and 1,875,000 options were granted to the Company's general counsel for
1999 service, in addition to $5,200 of cash salary. The options are exercisable
for a period of ten years, at $0.19 per share, equal to the market value at
grant date.
Other Options Granted
3,299,775 options were granted to unrelated third parties during 1999,
in connection with the Company's New World project (Note 1). The options are
exercisable for a period of ten years, at between $0.10 and $0.16 per share.
1,038,000 options were granted to unrelated third parties during 1999,
to arrange for debt financing for the New World project (Note 1). The options
are exercisable for a period of ten years, at $0.10 per share.
5,099,866 options were granted to various employees during 1999. These
options were granted to numerous management positions including plant manager,
regulatory compliance officer, telemarketing manager, facility development
manager, and marketing development manager. The options are exercisable for a
period of ten years, at $0.19 - $0.26 per share.
Options Called, Exercised, Canceled and Reduced
In 1999 the Company called certain options which became callable during
the year. 857,680 options were not exercised and were repurchased by the Company
for $0.0001 per share. 842,320 options were exercised at between $0.15 and $0.25
per share. 1,500,000 options were exercised at $0.10 per share. The Company
canceled 2,775,000 options for nonperformance, which were granted during 1998.
The Company reduced 7,900,000 options held by Kathi Kreisler
(7,500,000) and Larry Kreisler (400,000) by 1,900,000 shares, or from 7,900,000,
to 6,000,000, in exchange for a reduced exercise price, from $0.40 to $0.25 per
share, subject to a one year lockup. The reduced exercise price exceeded the
market price on the day of the reduction.
STOCK OPTION PLAN
In May of 1999 the shareholders of the Company approved and adopted the KBF 1998
Stock Option Plan (the "ISO Plan"). The Plan superceded and replaced the
Company's 1994 plan, under which no options were issued. The Plan covers
50,000,000 shares of the Company's Common Stock , pursuant to which employees,
including officers of the Company are eligible to receive incentive stock
options as defined under the Internal Revenue Code of 1986, as amended. In
addition, non-qualified stock options may be granted under the Plan to employees
and consultants. Under the ISO Plan, options may be granted at not less than
100% (110% in the case of 10% shareholders) of the fair market value (100% of
the closing bid price on the date of grant) of the Company's Common Stock on the
date of grant. Options granted under the ISO Plan must be exercised within ten
years from the date of grant (five years, in the case of 10% shareholders). The
optionee may not transfer any option except by will or by the laws of descent
and distribution. Options granted under the ISO Plan must be exercised within
three months after termination of employment for any reason other than death or
disability, and within one year after termination due to death or disability,
unless extended by the Board of Directors. The Board of Directors of the Company
has the power to impose additional limitations, conditions and restrictions in
connection with the grant of any option. Stock covered under the Plan has been
registered with the Securities and Exchange on Form S-8. As of the date of this
report, 4,654,966 options have been issued under this plan.
<PAGE>
CERTAIN RELATED TRANSACTIONS
In May 1996, a new company was formed to service the transportation
needs of the Company. The new company, Metal Recovery Transportation Corp. is
owned solely by Lawrence Kreisler. (See "Certain Relationships and Related
Transactions.") Metal Recovery Transportation Corporation was formed without any
financial assistance from KBF. Metal Recovery Transportation has permits in New
York, New Jersey, Connecticut, Rhode Island, Massachusetts and New Hampshire.
Metal Recovery Transportation Corp. billed the company $276,792, and $286,919 in
1998 and 1999 respectively. Metal Recovery Transportation Corp. has operated at
virtually break-even levels since inception and, as such, Management believes
that the Company is benefiting from favorable pricing as compared to those which
could be obtained from unrelated parties.
Joseph J. Casuccio, Jr., CPA, Chief Financial Officer, Vice President
and a director of the Company, is a partner of the accounting firm, Werblin,
Casuccio & Moses, which firm is the internal accountant for the Company. (See
"Management.")
KBF's patented Selective Separation Technology(TM) (U.S. Pat. Nos.:
5,753,125; 5,908,559) and other patent-pending and proprietary Resource Recovery
Technologies separate, remove and recover a wide range of metals from liquid and
solid wastes as well as other production and manufacturing media. Through
resource recovery, KBF's technologies recycle metals, both hazardous and
non-hazardous, in their elemental state at highly competitive prices. Wastes
managed with KBF's technologies become products that are comparable and superior
to the quality of virgin ore material extracted from the ground. Use of KBF's
technologies eliminates the federally mandated `cradle-to-grave' liability for
which a waste generator would otherwise remain perpetually liable. KBF's
technologies apply to manufacturing, industrial and municipal waste processes
that contain metals or otherwise produce a metal bearing waste by-product. The
Company has many other patent-pending and proprietary resource recovery
technologies and processes. Pursuant to a license agreement between Mr. Lawrence
Kreisler and the Company, executed in November 1997 and ratified by the
shareholders of the Company, the Company is able to utilize the processes in its
operations, as well as other related technologies which remain proprietary and
for which patents are currently pending. In accordance with the License
Agreement with Mr. Kreisler, the conditions upon which royalty payments begin to
accrue, have not yet been attained by the Company. Accordingly, no royalty
payments have been made or accrued. The license agreement has a minimum 15 year
minimum term, and subsequent five year evergreen terms. The license agreement
can be terminated after the minimum term by either party.
James L. Sonageri, Esq., Vice President and General Counsel and a
director of the Company is a partner in the law firm of Sonageri & Fallon, LLC,
which firm provides legal services to the Company.
<PAGE>
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION
OF EACH OF THE NOMINEES FOR DIRECTOR.
INDEPENDENT PUBLIC ACCOUNTANTS
For the year ended December 31, 1999, the principal accountant was
Irving Handel & Co. P.C. The Company does not expect that a representative of
Irving Handel & Co. P.C. will attend the Meeting, and therefore would not be
making a statement at the Meeting or be available to respond to appropriate
questions from shareholders.
ANNUAL REPORT
All shareholders of record as of the Record Date have been sent, or are
concurrently herewith being sent, a copy of the Company's Annual Report on Form
10-KSB for the fiscal year ended December 31, 1999. The Form 10-KSB contains
certified consolidated financial statements of the Company and its subsidiaries
for the fiscal year ended December 31, 1999.
SHAREHOLDER PROPOSALS
The Company must receive any shareholder proposal intended to be
included in the Company's proxy materials for the 2001 Annual Meeting of
Shareholders not later than December 31, 2000.
By Order of the Company,
/s/ Kathi Kreisler
Kathi Kreisler
Secretary
Dated: May 19, 2000
<PAGE>
REVOCABLE PROXY - KBF POLLUTION MANAGEMENT, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
The undersigned hereby appoints Lawrence Kreisler, Kathi Kreisler,
Kevin Kreisler, and each of them, proxies, with full powers of substitution, to
act for and in the name of the undersigned to vote all shares of Common Stock,
$.0001 par value (the "Common Stock"), of KBF Pollution Management, Inc. (the
"Company" or "KBF") which the undersigned is entitled to vote at the Annual
Meeting of Stockholders (the "Annual Meeting") and any adjournment thereof. The
Annual Meeting will be held at The Brownstone House located at 351 West
Broadway, Paterson, New Jersey, on June 14, 2000, at 10:00 a.m., local time.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NOMINEES FOR
DIRECTORS LISTED BELOW AND "FOR" ITEM 2
1. Election Of Directors.
___ FOR all nominees listed below ____ WITHHOLD AUTHORITY
(except as marked to the to vote for all nominees
contrary below) listed below
Lawrence M. Kreisler, Joseph J. Casuccio, Jr., Kathi A. Kreisler, James
L. Sonageri, Esq., Kevin E. Kreisler, Esq., Stephen Lewen, Christopher Jones and
James Green.
(Instruction: To withhold authority to vote for any individual nominee,
print that nominee's name on the line provided below.)
2. Approval of such other matters that may properly be brought before
the Meeting in accordance with the judgment of the person or persons voting the
Proxy.
FOR _____ AGAINST ______ ABSTAIN ______
The shares represented by this proxy will be voted as directed by the
undersigned.
IF NO INSTRUCTIONS ARE SPECIFIED, THE UNDERSIGNED'S VOTE WILL BE CAST
"FOR" THE ELECTION OF THE NOMINEES NAMED IN PROPOSAL 1, "FOR" PROPOSAL 2, AND IN
THE DISCRETION OF THE PROXIES AS TO ANY OTHER MATTERS PRESENTED AT THE ANNUAL
MEETING.
At the present time, the Board of Directors knows of no other business
to be presented at the Annual Meeting.
The undersigned stockholder may revoke this proxy at any time before it
is voted by delivering to the Secretary of the Company either a written
revocation of the proxy or a duly executed proxy bearing a later date, or by
appearing at the Annual Meeting and voting the shares subject to the proxy by
written ballot. In their discretion, the proxies are authorized to vote upon
such other business as may properly come before the Annual Meeting and any
adjournment thereof.
Please sign exactly as your name appears on the certificate or
certificate or certificates representing shares to be voted by this proxy. When
shares are held jointly, both holders should sign. When signing as attorney,
executor, administrator, trustee or guardian, please give your full title. If
the signer is a corporation, the full corporate name should be signed by a duly
authorized officer.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY CARD.
____________________________ ____________________________
Signature Signature, if held jointly
Date: __________________, 2000 Date: __________________, 2000
