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
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
COMPREHENSIVE ENVIRONMENTAL SYSTEMS, INC.
(Name of Registrant as Specified In Its Charter)
Name of Person(s) Filing Proxy Statement if other than the Registrant: N.A.
Payment of Filing Fee (Check the appropriate box): N.A.
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(1), 14a-6(2) or item
22(a)(2) of schedule 14a
[ ] $500 per each party to the controversy pursuant of
Exchange Act Rule 14a-6(I)(3).
[ ] Fee computed on table below per Exchange Act
Rules 14a-6(4) 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:
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 registrant 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:
No Exhibit Index
Total Number of Pages: 9
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COMPREHENSIVE ENVIRONMENTAL SYSTEMS, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
March 19, 1997
Notice is hereby given that the 1997 Annual Meeting of the Stockholders
(the "Annual Meeting") of Comprehensive Environmental Systems, Inc., a Delaware
corporation (the "Company"), will be held at 9:00a.m. eastern time on March 19,
1997 at the corporate offices at 72B Cabot Street, West Babylon, NY 11704, for
the purpose of considering and acting upon the following matters:
1. The election of four directors of the Company to serve until the
next Annual Meeting or until their successors shall be elected and qualify;
2. The approval of an amendment to the Company's Certificate of
Incorporation so as to change the name of the Company to "Trade-Winds
Environmental, Inc.";
3. The approval of Price Waterhouse, LLP as the Company's certified
public accountants for the fiscal year ended April 30, 1997;
4. The transaction of such other business as may properly come before
the meeting.
The Board of Directors has fixed the close of business on January 23, 1997
as the record date for determining the stockholders entitled to notice of and to
vote at the Annual Meeting and any adjournment thereof.
A list of stockholders eligible to vote at the Annual Meeting will be
available for inspection during normal business hours for purposes germane to
the meeting during the ten days prior to the meeting at the offices of the
Company, 72B Cabot street, West Babylon, NY 11704.
By Order of the Board of Directors,
/s/Anthony Towell
---------------------------------
West Babylon, New York Anthony Towell, Secretary
January____, 1997
THE MATTERS BEING VOTED ON AT THE ANNUAL MEETING ARE IMPORTANT TO THE COMPANY,
AND CERTAIN OF THE MATTERS REQUIRE THE APPROVAL OF THE HOLDERS OF A MAJORITY OF
THE OUTSTANDING SHARES OF COMMON STOCK. IN ORDER THAT YOUR VOTE IS COUNTED AT
THE ANNUAL MEETING, PLEASE EXECUTE, DATE AND PROMPTLY MAIL THE ENCLOSED PROXY
CARD IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED
STATES. THE GIVING OF A PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON AT
THE ANNUAL MEETING IF THE PROXY IS REVOKED IN THE MANNER SET FORTH IN THE PROXY
STATEMENT.
<PAGE>
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Comprehensive Environmental Systems, Inc., a Delaware
corporation (the "Company"), of proxies for use at the Company's 1996 Annual
Meeting of Stockholders (the "Annual Meeting") to be held at 72B Cabot Street,
West Babylon, NY 11704, on March 19, 1997 at 9:00 a.m. or at any adjournment
thereof. This Proxy Statement and the related proxy and 1996 Annual Report to
Stockholders (the "Annual Report") are being mailed to stockholders of the
Company on or about January 31, 1997.
At the Annual Meeting, stockholders will vote on (a) the election of four
(4) directors to serve until the 1998 Annual Meeting of Stockholders or until
their successors shall be elected and qualified, (b) the approval of an
amendment to the Company's certificate of incorporation to change the name of
the Company to "Trade-Winds Environmental, Inc.", (c) the approval of Price
Waterhouse, LLP as the Company's independent certified public accountants for
the fiscal year ending April 30, 1997, and (d) the transaction of such other and
further business as may properly come before the meeting. The Board of Directors
does not know of any other matters which will be voted upon at the Annual
Meeting.
Stockholders are encouraged to review the detailed discussion presented in
this Proxy Statement and either return the completed and executed proxy or
attend the Annual Meeting.
Stockholders Entitled To Vote; Outstanding Securities And Voting Rights
Stockholders of record of the common stock, par value $.0001 per share
(the "Common Stock"), of the Company at the close of business on January 23,
1997 (the "Record Date"), will be entitled to vote at the Annual Meeting. The
number of shares of Common Stock outstanding at the close of business on the
Record Date was 9,128,488.
The only voting securities of the Company are shares of Common Stock, and
each share of common stock entitles its owner to one vote on each matter to be
voted upon at the Annual Meeting.
The presence in person or by proxy of holders of one-third of the
outstanding shares of Common Stock of the Company entitled to be voted shall
constitute a quorum for the transaction of business at the Annual Meeting. If a
stockholder files a proxy or attends the Annual Meeting, his or her shares are
counted as being present at the Annual Meeting for purposes of determining
whether there is a quorum, even if the stockholder abstains from voting on all
matters. The vote required for the election of directors and approval of other
proposals is set forth in the discussion of each proposal.
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<PAGE>
Each stockholder of the Company is requested to complete, sign, date and
return the enclosed proxy without delay in order to ensure that his or her
shares are voted at the Annual Meeting. The return of a signed proxy will not
affect a stockholder's right to attend the Annual Meeting and vote is person.
Any stockholder giving a proxy has the right to revoke it at any time before it
is exercised by executing and returning a proxy bearing a later date, by giving
written notice of revocation to the Secretary of the Company, or by attending
the Annual Meeting and voting in person. There is no required form for a proxy
revocation. All properly executed proxies not revoked will be voted at the
Annual Meeting in accordance with the instructions contained therein.
If a proxy is signed and returned, but no specification is made with
respect to any or all of the proposals listed therein, the shares represented by
such proxy will be voted for all the proposals, including the Election of
Directors. Abstentions and broker non-votes are not counted as votes "for" or
"against" a proposal, but where the affirmative vote on the subject matter is
required for approval, abstentions and broker non-votes are counted in
determining the number of shares present or represented.
Cost Of Solicitations
All costs of this Proxy Statement and the Proxy and the cost of soliciting
Proxies relating to the Annual Meeting will be borne by the Company. It is
anticipated that the solicitation of Proxies for the Annual Meeting will be made
only by use of the mails. However, the Company may use the services of its
directors, officers and employees to solicit Proxies personally or by telephone,
without additional salary or compensation to them. Brokerage houses, custodians,
nominees and fiduciaries will be requested to forward the Proxy soliciting
materials to the beneficial owners of the Company's shares held of record for
such persons, and the Company will reimburse such persons for their reasonable
out-of-pocket expenses incurred by them in connection therewith. Total expenses
of the solicitation are estimated to be nominal.
BENEFICIAL OWNERSHIP OF SECURITIES
The following table sets forth, as of January 15, 1997, certain information
as to the Common Stock of the Company beneficially owned by each person known by
the Company to own more than 5% of the Company's Common Stock, (ii) each
director of the Company and nominee for director, (iii) each of the named
executive officers; and (iv) all officers and directors as a group.
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<PAGE>
Amount and Nature(1) of
Name and Address(6) Beneficial Ownership Percent of Class
- ------------------- -------------------- ----------------
Michael O'Reilly 660,000(2) 6.8%
David Behanna 100,000(3) *
Anthony Towell 175,000(4) 1.9%
Samuel Sadove 100,000(3) *
JoAnn O'Reilly 50,000(5) *
All officers and directors as
a group (5 persons) 1,085,000(2)(3)(4)(5) 10.7%
- ----------
* Less than 1%
1 Unless otherwise indicated, each person has the sole voting and sole
investment power and direct beneficial ownership of the shares.
2 Represents 10,000 shares of common stock owned and 650,000 shares beneficially
owned pursuant to options currently exercisable. Does not include 50,000
shares of Common Stock issuable upon the exercise of options held by JoAnn
O'Reilly, Mr. O'Reilly wife, as to which he disclaims beneficial ownership.
Excluding a 2,000,000 share option not yet vested and exercisable only on the
happening of future events, namely change in control of outstanding shares or
the Board of Directors, etc.
3 Represents shares of common stock issuable upon options currently exercisable.
4 Includes 25,000 shares of common owned and 150,000 shares beneficially owned
pursuant to currently exercisable options.
5 Represents 50,000 shares of Common Stock issuable upon exercise of presently
exercisable options, and does not include (a) 10,000 shares of Common Stock
owned by Michael O'Reilly, Ms. O'Reilly's husband, or (b) 650,000 shares of
Common Stock issuable upon the exercise of presently exerciable options held
by Mr. O'Reilly, as to all of which she disclaims beneficial ownership.
6 The address of each person is c/o Comprehensive Environmental Systems, Inc.,
72B Cabot Street, West Babylon, NY 11704.
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<PAGE>
ELECTION OF DIRECTORS
Directors of the Company are elected annually by the stockholders to serve
until the next annual meeting of stockholders and until their respective
successors are duly elected. The bylaws of the Company provide that the number
of directors comprising the whole board shall be determined from time to time by
the Board of Directors, but can be no less than one and no more than fifteen
members. The Board of Directors has established the size of the board at four
directors and is recommending that the four incumbent directors of the Company
be re-elected. Only Mr. O'Reilly was elected at a meeting for which proxies were
solicited. Messrs. Anthony Towell and Samuel Sadove and Ms. JoAnn O'Reilly were
elected by the board in September 1996. If any nominee becomes unavailable for
any reason, a situation which is not anticipated, a substitute nominee may be
proposed by the Board of Directors, and any shares represented by proxy will be
voted for any substitute nominee, unless the Board reduces the number of
directors.
All directors receive restricted stock awards for each year they are a
board member. Prior to 1996, each director had received 1,000 shares of Common
Stock as consideration for each year they served on the board. Beginning in
1997, each director will receive 5,000 restricted shares of common stock per
year for each year of service on the board. In addition, non-employee directors
also receive non-qualified stock options granted at the discretion of the Board
of Directors. As of October 31, 1996, 300,000 non-qualified options have been
granted to non-employee directors.
The nominees for director, including certain information regarding each
such person, are set forth below. Each director so elected will hold office
until the next Annual Meeting or until his/her successor is elected and
qualified. The person named as proxy in the Proxy has been designated by the
Board of Directors and intends to vote for all four persons nominated in the
election of the Board of Directors. If the contingency should occur that any
such nominee is unable to serve as a director, it is intended that the shares
represented by Proxies will be voted in the absence of contrary indication for
any substitute nominee that the Board of Directors may designate. All nominees
have advised the Company that they are willing to serve as directors if
re-elected or elected, respectively.
The following table sets forth certain information concerning the nominees for
director:
<TABLE>
<CAPTION>
Name Age Position with the Company Director Since
---- --- ------------------------- --------------
<S> <C> <C> <C>
Michael O'Reilly 46 President, Chairman of the Board, 1994
Chief Executive Officer and Director
Anthony Towell(1)(2) 65 Director 1996
Samuel Sadove(1)(2) 42 Director 1996
JoAnn O'Reilly 44 Director 1996
</TABLE>
- ----------
1 Member of the audit committee.
2 Member of the compensation committee
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<PAGE>
Michael O'Reilly has been a President and CEO of the Company since September,
1996, and has been President of the Company's wholly-owned subsidiary,
Trade-Winds Environmental Restoration, Inc., since December, 1993. He was
previously Vice President of North Shore Environmental Remediation, Inc. a
provider of environmental clean-up services and asbestos and lead removal
services, from January, 1990 to January, 1994. From January, 1981 to January,
1989, Mr. O'Reilly was President and owner of Branch Services, Inc., also a
provider of environmental clean-up services.
Anthony Towell is currently the Vice President of Finance, Treasurer and Chief
Financial Officer of Eastco Industrial Safety, Corp. and has been a director
since 1989. Since July 1991, Mr. Towell was also a director of Ameridata
Technologies, Inc. until its recent sale to General Electric Capital, Inc. He
had also been in the petroleum business with the Royal Dutch Shell group since
1957. Mr. Towell is also a director of NYTEST Environmental Inc.
Samuel Sadove is a marine biologist and the founder and director of the Okeanos
Ocean Research Foundation, Inc. since 1980. He is considered an expert on
wildlife issues and environmental research including ecology of marine systems.
Mr. Sadove currently serves on numerous professional, environmental and
educational committees.
JoAnn O'Reilly is an environmentalist presently involved with Michael O'Reilly
in the United States Fish and Wildlife Services (USFWS) Captive Bred Wildlife
Program, specifically caring for listed endangered tortoise species under
special license. In addition, Ms. O'Reilly is a licensed cardio-pulmonary
therapist.
The Company presently has two committees, the audit and compensation
committees, which consists of the two non-management directors. The audit
committee reviews the Company's financial statements and accounting policies.
The independent auditors report directly to the audit committee. The
compensation committee meets when required to determine the reasonableness of
new employment agreements and option grants to executive officers of the
Company.
The Board of Directors recommends a vote for the nominees listed above
Executive Compensation
The following table sets forth the aggregate compensation paid or accrued
to all executive officers of the Company for the year ended April 30, 1996:
<TABLE>
<CAPTION>
Name and Restricted Securities All Other
Principal Fiscal Compen- Stock Underlying Compen-
Position(s) Year Salary($) Bonus($) sation($) Awards($) Options sation($)
- ----------- ------ -------- -------- -------- ------------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Michael O'Reilly 1996 156,000 140,180 -0- -0-(4) 250,000(1) -0-
Chairman & CEO (1) 1995 158,500 -0- -0- -0- -0- -0-
David Behanna, CPA 1996 99,000 4,500 -0- -0-(4) 100,000 -0-
Chief Financial Officer 1995 22,000 -0- -0- -0- -0- -0-
Donald Kessler (2) 1996 99,000 4,500 -0- -0- 100,000(2) -0-
Former Chairman & 1995 6,667 -0- -0- -0- -0- -0-
CEO
Leo Mangan (3) 1996 160,000 6,000 -0- -0- 250,000(3) 432,000
Former COO 1995 78,000 -0- -0- -0- 2,000,000(1) 325,000
</TABLE>
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<PAGE>
(1) Effective September 15, 1996, Mr. O'Reilly base annual salary increased to
$200,000. Also on that date, he was granted 400,000 additional options under the
1994 option plan at an exercise price of $.53 per share.
(2) Effective September 12, 1996, Mr. Kessler signed a termination agreement
with the company in settlement of an existing compensation arrangement for
$216,000 plus other miscellaneous benefits.
(3) Effective September 12, 1996 Mr. Mangan signed a termination agreement with
the Company in settlement of an existing employment agreement totaling
approximately $1,450,000 including transferring an investment in non-marketable
securities of $528,000, options and other miscellaneous benefits.
(4) Mr. O'Reilly and Mr. Behanna have accrued 3,000 and 2,000 shares,
respectively, of restricted common stock to be issued during fiscal 1997.
CHANGE OF CORPORATE NAME
The Board of Directors has proposed an amendment to the Company's
Certificate of Incorporation which would change the name of the Company to
"Trade-Winds Environmental, Inc." The board believes the new name will better
apprise investors and the public of the Company's business operations related to
its primary subsidiary, Trade-Winds Environmental Restoration, Inc. The
identification of the Company with its most active subsidiary will be beneficial
to the Company, since the name under which the Company operates and the name
which is recognized in the business community will be the same.
Vote Required
The amendment to the certificate of incorporation requires the approval of
the holders of a majority of the outstanding shares of Common Stock.
The Board of Directors recommends a vote FOR the proposal
SELECTION OF INDEPENDENT AUDITORS
It is proposed that the stockholders approve the selection of Price
Waterhouse, LLP, as the independent public accountants for the Company for the
year ending April 30, 1997.
The Board of Directors has approved the selection of Price Waterhouse, LLP
as independent auditors. However, in the event approval of the proposal is not
obtained, the selection of the independent auditors will be reconsidered by the
Board of Directors. It is anticipated that a representative of Price Waterhouse,
LLP will be present at the Annual Meeting to respond to appropriate questions
and will have the opportunity to make a statement if so desired.
The Company has a newly formed audit committee for the year ending April
30, 1997. The Board of Directors had performed such function in prior fiscal
years.
For the fiscal years ended April 30, 1995 and 1996, Capraro, Centofranchi,
Kramer & Co., P.C. served as the Company's independent public accountants whose
report on such financial statements is included in the Company's annual report
on Form 10-KSB for such fiscal years. Representatives of such firm are not
expected to be present at the Annual Meeting.
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<PAGE>
The Company has been advised that neither Capraro, Centofranchi, Kramer &
Co., P.C. nor any member thereof, had any direct financial interest in or any
material indirect interest in the Company or any of its subsidiaries.
The Company changed accountants as a result of its need for more
sophisticated accounting and related services. This decision was made by the
Company's board of directors, subject to stockholder approval at the Annual
Meeting. There were no disagreements with Capraro, Centofranchi, Kramer & Co.,
P.C., whether or not resolved, on any matter of accounting principles or
practices, financial statement disclosure or auditing scope or procedure.
Vote Required
The proposal to approve the selection of Price Waterhouse, LLP as the
Company's independent accountants requires the approval of a majority of the
voting shares present and voting, provided that a quorum is present.
The Board of Directors recommends a Vote FOR the Proposal
STOCKHOLDERS PROPOSALS
In order for stockholder proposals to receive consideration for inclusion
in the Company's 1997 Proxy Statement, such proposals must be received at the
Company's offices at 72B Cabot Street, West Babylon, New York, 11704, Attention:
Chairman, By July 31, 1997.
INCORPORATION BY REFERENCE
The Company incorporates the form 10-KSB/A-3 for the fiscal year ended
April 30, 1996 and form 10-QSB for the six months ended October 31, 1996 by
reference in this Proxy Statement. The form 10-KSB/A-3 includes, among other
information, a description of the Company's business and its audited financial
statements for the year ended April 30, 1996. A copy of these filings are being
mailed to stockholders of record on the Record Date concurrently with the
mailing of this Proxy Statement. Additional copies will be provided by the
Company without charge upon request.
OTHER BUSINESS
The Board of Directors is not aware of any matter, other than the matters
described above, to be presented for action at the meeting. However, if any
other proper items of business should come before the meeting, it is the
intention of the person or persons acting under the enclosed form of proxy to
vote in accordance with their best judgement on such matters.
By Order of the Board Of Directors
/s/Michael O'Reilly
------------------------------------
Michael O'Reilly
Chairman of the Board
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COMPREHENSIVE ENVIRONMENTAL SYSTEMS, INC.
1997 Annual Meeting of Stockholders--March 19, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Michael O'Reilly and Anthony Towell or
either one of them acting in the absence of the other, with full power of
substitution or revocation, proxies for the undersigned, to vote at the 1997
Annual Meeting of Stockholders of Comprehensive Environmental Systems, Inc. (the
"Company") to be held at 9:00 A.M., local time, on 19th Day, March, 1997, at the
offices of the Company, 72B Cabot Street, West Babylon, New York 11704, an at
any adjournment or adjournments thereof, according to the number of votes the
undersigned might cast and with all powers the undersigned would possess if
personally present.
(1) To elect the following four (4) directors:
Michael O'Reilly, Anthony Towell, Samuel Sadove, and JoAnn O'Reilly
[ ] FOR all nominees listed above (expect as marked to the contrary below).
[ ] Withhold authority to vote for all nominees listed above.
Instruction: To withhold authority to vote for any individual nominee,
print that nominee's name below.
---------------------------------------------
(2) To approve an amendment to the Company's certificate of incorporation to
change the name of the Company to Trade-Winds Environmental, Inc.:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
(3) To approve the selection of Price Waterhouse, LLP as the independent
certified public accountants of the Company for the fiscal year ending
April 30, 1997:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
(4) In his discretion, upon the transaction of such other business as may
properly come before the meeting;
all as set in the Proxy statement, dated January___, 1997.
The shares represented by this proxy will be voted on Items 1,2 and 3 as
directed by the stockholder, but if no direction is indicated, will be voted FOR
Items 1,2,3 and 4.
If you plan to attend the meeting please indicate below:
<PAGE>
I plan to attend the meeting [ ]
DATED:______________________, 1997
_____________________________________
_____________________________________
(Signature(s))
Please sign exactly as name(s)
appears hereon. When signing as
attorney, executor, administrator,
trustee or guardian, please give
full title as such. Please date,
sign and mail this proxy in the
enclosed envelope, which requires
no postage if mailed in the United
States.