SCHEDULE 14(A) 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
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant toss.240.14a- 11 (c) orss.240.14a- 12
EVANS ENVIRONMENTAL CORPORATION
(NAME OF REGISTRANT AS SPECIFIED in ITS CHARTER)
------------------------------
(Name of Person(s) Filing Proxy Statement If Other Than Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11 (c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2), or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(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 0-111 ---------------------------
4) Proposed maximum aggregate value of transaction:
--------------------------------------------------------------
Set forth the amount on which the filing fee is calculated and state how it
was determined.
[X] 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: 125.00
2) Form, Schedule or Registration Statement No.: Preliminary Proxy
3) Filing Party: Registrant
4) Date Filed: August 16, 1996
<PAGE>
EVANS ENVIRONMENTAL CORPORATION
1000 SOUTHERN BOULEVARD, SUITE 405
WEST PALM BEACH, FLORIDA 33405
--------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
OCTOBER 18, 1996
--------------------------------------------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Evans
Environmental Corporation, a Colorado corporation (the "Company"), will be held
on Friday, October 18, 1996, beginning at 3:00 o'clock P.M., Eastern Time, at
the PGA National Resort & Spa, 400 Avenue of the Champions, Palm Beach Gardens,
Florida for the following purposes, which are set forth more completely in the
accompanying proxy statement:
(1) To elect seven directors representing the Common Stock shareholders;
(2) To approve a change of name of the Company to ECOS Group, Inc.;
(3) To approve the Company's 1996 Stock Option Plan;
(4) To approve an increase in the authorized shares of Common Stock to
75,000,000; and
(5) To transact such other business as may properly come before the
Meeting.
Pursuant to the Company's By-laws, the Board of Directors has fixed the
close of business on August 16, 1996 as the record date for the determination
of shareholders entitled to notice of and to vote at the Annual Meeting. Only
record holders of the Company's Common Stock are entitled to notice of and to
vote at the Annual Meeting. A form of proxy is enclosed.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, WHETHER OR
NOT YOU PLAN TO BE PRESENT IN PERSON AT THE ANNUAL MEETING, PLEASE SIGN AND DATE
THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE, WHICH DOES NOT
REQUIRE POSTAGE IF MAILED WITHIN THE UNITED STATES OF AMERICA.
BY ORDER OF THE BOARD OF DIRECTORS
Claire Lardner, Secretary
West Palm Beach, Florida
September 4, 1996
<PAGE>
EVANS ENVIRONMENTAL CORPORATION
1000 SOUTHERN BOULEVARD, SUITE 300
WEST PALM BEACH, FLORIDA 33405
PROXY STATEMENT
GENERAL
The enclosed proxy is solicited by the Board of Directors of Evans
Environmental Corporation, a Colorado corporation, for use at the Annual Meeting
of Shareholders to be held on Friday, October 18, 1996, beginning at 3:00
o'clock P.M., Eastern Time, at the PGA National Resort & Spa, 400 Avenue of the
Champions, Palm Beach Gardens, Florida. The approximate date on which this
Statement and the enclosed proxy were first sent to shareholders was September
4, 1996. You are urged to indicate your vote on each matter in the space
provided. Proxies will be voted as marked. If no space is marked, a proxy will
be voted by the persons therein named at the Annual Meeting: (i) FOR the
election of the seven nominees for director, (ii)FOR the approval of the change
of the Company's name to ECOS Group, Inc., (iii) FOR the approval of the
Company's 1996 Stock Option Plan, and (iv) FOR the approval of an increase in
the authorized number of shares of the Company's Common Stock to 75,000,000.
Whether or not you plan to attend the Annual Meeting, please fill in, sign and
return your proxy card in the enclosed envelope, which requires no postage if
mailed within the United States.
The cost of the Board of Directors' proxy solicitation will be borne by
the Company. In addition to solicitation by mail, directors, executive officers
and employees of the Company may solicit proxies personally and by telephone,
telecopy and telegraph, all without extra compensation.
At the record date for the Annual Meeting, the close of business on
August 16, 1996, the Company had outstanding 17,040,126 shares of Common Stock,
$.012 par value per share (the "Common Stock"). Each share of Common Stock
entitles the holder thereof on the record date to one vote on each matter
submitted to a vote of shareholders. Only Common Stock shareholders of record at
the close of business on August 16, 1996 are entitled to notice of and to vote
at the Annual Meeting. In the event that there are not sufficient votes in
attendance at the meeting in person or by proxy for approval of any of the
matters to be voted upon at the Annual Meeting, the Annual Meeting may be
adjourned in order to permit further solicitation of proxies. The quorum
necessary to conduct business at the Annual Meeting consists of the holders of a
majority of the issued and outstanding shares of Common Stock present in person
or by proxy. The affirmative vote of a majority of the issued and outstanding
shares of Common Stock is necessary for the adoption of the proposals to change
the name of the Company and to increase the number of authorized shares of the
Company's Common Stock. The affirmative vote of a majority of those voting is
required for the approval of the Company's 1996 Stock Option Plan. The seven
persons receiving the highest number of votes for director will be elected as
directors. Abstentions and broker non-votes are counted for purposes of
determining the presence or absence of a quorum for the transaction of business,
are counted as votes against approval of the change of name of the Company and
against approval of an increase of the Company's authorized stock, and are not
counted in regard to the vote on the approval of the Company's 1996 Stock Option
Plan. There are no dissenters' appraisal rights with respect to any of the
proposals submitted.
Page 1
<PAGE>
A SHAREHOLDER WHO SUBMITS A PROXY ON THE ACCOMPANYING FORM HAS THE POWER TO
REVOKE IT AT ANY TIME PRIOR TO ITS USE BY DELIVERING A WRITTEN NOTICE TO THE
SECRETARY OF THE COMPANY, BY EXECUTING A LATER-DATED PROXY OR BY ATTENDING THE
MEETING AND VOTING IN PERSON. PROXIES THAT ARE PROPERLY EXECUTED WILL BE VOTED
FOR THE PROPOSALS SET FORTH THEREON AND IN FAVOR OF THE ELECTION OF THE SEVEN
NOMINEES FOR DIRECTOR NAMED HEREIN.
SECURITY INTEREST OF CERTAIN BENEFICIAL OWNERS,
DIRECTORS AND MANAGEMENT
The following table sets forth certain information, as of August 16,
1996, regarding the Company's Common Stock and Series B Convertible Preferred
Stock (the "Series B Preferred Stock") owned of record or beneficially by (i)
each shareholder who is known by the Company to beneficially own in excess of 5%
of the outstanding shares of Common Stock or of the Series B Preferred Stock,
(ii) each director and the executive officer named in the Summary Compensation
Table below, and (iii) all directors and executive officers as a group. Except
as otherwise indicated, each shareholder listed below has sole voting and
investment power with respect to shares beneficially owned by such person.
In accordance with Rule 13d-3, promulgated under the Securities Exchange
Act of 1934, as amended, shares that are not outstanding but that are issuable
within 60 days upon exercise of outstanding options, warrants, rights or
conversion privileges or which are otherwise required by Rule 13d-3 to be
included have been deemed to be outstanding for the purpose of computing the
percentage of outstanding shares owned by the person owning such right, but have
not been deemed outstanding for the purpose of computing the percentage for any
other person. As of August 16, 1996, there were 17,040,126 shares of Common
Stock issued and outstanding and 1,000,000 shares of Series B Preferred Stock
issued and outstanding.
<TABLE>
<CAPTION>
SERIES B
COMMON STOCK PREFERRED STOCK
------------ ---------------
NAME AND ADDRESS AMOUNT % OF CLASS AMOUNT % OF CLASS
---------------- ------ ---------- ------ ----------
5% HOLDER
- ---------
<S> <C> <C> <C> <C>
Strategica Capital Corporation 2,540,193(1) 13.0% ____ ____
1221 Brickell Avenue
Suite 2600
Miami, Florida 33131
COMMON STOCK DIRECTORS
Wendell R. Anderson, Esq. 30,000(2) * ____ ____
720 Baker Building
Minneapolis, MN 55403
</TABLE>
Page 2
<PAGE>
<TABLE>
<CAPTION>
SERIES B
COMMON STOCK PREFERRED STOCK
------------ ---------------
NAME AND ADDRESS AMOUNT % OF CLASS AMOUNT % OF CLASS
---------------- ------ ---------- ------ ----------
<S> <C> <C> <C> <C>
Luis De la Cruz 0 ____ _____ ____
241 Sevilla Avenue
Suite 805
Coral Gables, Florida 33134
Leon S. Eplan 37,500(3) * ____ ____
55 Trinity Avenue, S.W.
Suite 1450
Atlanta, GA 30335
Charles C. Evans 705,042(4) 4.1% ____ ____
99 Southeast Fifth Street
Fourth Floor
Miami, Florida 33131
Raimundo Lopez-Lima Levi 0 ____ ____ ____
815 N.W. 57th Avenue
Suite 304
Miami, Florida 33126
John B. McCracken, Esq. 0 ____ ____ ____
505 S. Flagler Drive
7th Floor
West Palm Beach, FL
33401
Joseph F. Startari 0 ____ ____ ____
Biotechna Environmental
Limited
2600 McCormick Drive
Third Floor
One Prestige Place
Clearwater, Florida 33619
SERIES B PREFERRED STOCK
DIRECTORS
Antonio L. Contreras, Jr. 8,325(5) * ____ ____
1000 Southern Blvd.
Suite 300
West Palm Beach, FL 33405
</TABLE>
Page 3
<PAGE>
<TABLE>
<CAPTION>
SERIES B
COMMON STOCK PREFERRED STOCK
------------ ---------------
NAME AND ADDRESS AMOUNT % OF CLASS AMOUNT % OF CLASS
---------------- ------ ---------- ------ ----------
<S> <C> <C> <C> <C>
Michael S. Klein 3,585,723(6) 18.1% 275,880 27.6%
100 Shoreline Highway
Suite A190
Mill Valley, CA 94941
Enrique A. Tomeu 8,233,650(7) 35.2% 633,365 63.3%
1000 Southern Blvd.
Suite 300
West Palm Beach, FL 33405
Enrique J. Tomeu, Sr. 0 ____ ____ ___
1000 Southern Blvd.
Suite 300
West Palm Beach, FL 33405
Robert J. Underbrink 10,508(8) * ____ ___
1000 Southern Blvd.
Suite 300
West Palm Beach, FL 33405
Carlos M. Vergara 0 ____ ____ ___
1000 Southern Blvd.
Suite 300
West Palm Beach, FL 33405
NAMED EXECUTIVE OFFICER
John C. "Jack" Reynolds 0(9) ____ ____ ___
R.G. Quintero & Co.
145 Fourth Avenue
New York, NY 10003
All Directors, Nominees, 12,610,748(9)(10) 70.0% 909,245 90.9%
and Executive Officers as
a Group (15 persons)
<FN>
- ----------
* Less than 1%.
Page 4
<PAGE>
(1) Includes (i) 175,000 shares of Common Stock issuable under warrants
granted to a predecessor corporation and (ii) 761,731 shares of Series A
Convertible Preferred Stock issuable under warrants. The shares of Series
A Convertible Preferred Stock are convertible into 2,285,193 shares of
Common Stock. (2) Represents 30,000 shares of Common Stock issuable under
options.
(3) Represents 37,500 shares of Common Stock issuable under options.
(4) Includes 11,200 shares of Common Stock issuable under options.
(5) Does not include 5,370 shares of Common Stock owned by Mr. Contreras'
wife as to which shares Mr. Contreras disclaims any beneficial interest.
(6) Includes conversion of 275,880 shares of the Series B Preferred Stock at
the rate of ten shares of Common Stock for each share of Series B
Preferred Stock.
(7) Includes conversion of 633,365 shares of the Series B Preferred Stock at
the rate of ten shares of Common Stock for each share of Series B
Preferred Stock.
(8) Held jointly with Mr. Underbrink's wife.
(9) Does not include 231,250 shares of Common Stock issuable under options
granted to R.G. Quintero & Co., an accounting and consulting firm of
which Mr. Reynolds is an employee. Mr. Reynolds is not a director,
officer or shareholder of R. G. Quintero & Co. See "Election of Directors
- Compensation Agreements."
(10) Includes options to purchase 78,700 shares of Common Stock and conversion
of 909,245 shares of the Series B Preferred Stock at the rate of ten
shares of Common Stock for each share of Series B Preferred Stock..
</FN>
</TABLE>
PROPOSALS
PROPOSAL 1. ELECTION OF DIRECTORS
The Board of Directors of the Company has nominated the following persons
to serve as directors representing the Common Stock shareholders:
IN OFFICE
NAME AGE POSITION(S) SINCE
--------------------- --- ---------------------- -----
Wendell R. Anderson 63 Director 1994
Luis De la Cruz 43 Director(1) 1996
Leon S. Eplan 67 Director 1993
Page 5
<PAGE>
IN OFFICE
NAME AGE POSITION(S) SINCE
--------------------- --- ---------------------- -----
Dr. Charles C. Evans 39 Chairman of the Board of 1993
Directors
Raimundo Lopez-Lima Levi 35 Director(2) 1996
John B. McCracken 50 Director(3) 1996
Joseph F. Startari 48 Director(4) 1996
- ----------
(1) Mr. De la Cruz was appointed to the Board of Directors effective August
22, 1996.
(2) Mr. Levi was appointed to the Board of Directors effective August 21,
1996.
(3) Mr. McCracken was a Series B Preferred Stock Director from July 16, 1996
until August 15, 1996 when he resigned and was appointed as a Common
Stock director.
(4) Mr. Startari was appointed to the Board of Directors effective August 19,
1996.
In addition to the directors representing the Common Stock shareholders,
the Articles of Incorporation of the Company provide that the holders of the
Series B Preferred Stock shall elect six directors. The six directors
representing the Series B Preferred Stock shareholders are listed below. All the
Series B Preferred Stock directors have been in office since July 16, 1996
except Enrique A. Tomeu who has held his offices since July 10, 1996 and Michael
S. Klein who held his office since August 15, 1996. Holders of Common Stock do
not vote for the election of the Series B Preferred Stock directors.
SERIES B PREFERRED STOCK DIRECTORS
NAME AGE POSITION
------------------------- --- --------------------------------
Antonio L. Contreras, Jr. 45 Director
Michael S. Klein 41 Director
Enrique A. Tomeu 41 Chief Executive Officer, President and
Director
Enrique J. Tomeu, Sr. 63 Director
Page 6
<PAGE>
NAME AGE POSITION
------------------------- --- --------------------------------
Robert J. Underbrink 35 Director
Carlos M. Vergara 34 Director
The Company has one additional executive officer, David C. Langle, 46, who has
been the Chief Financial Officer of the Company since July 16, 1996.
WENDELL R. ANDERSON has been Of Counsel to the law firm of Larkin,
Hoffman, Daly & Lindgren, Ltd., based in Minnesota, since 1979. He is also a
director of the following public companies: Fingerhut Corp. (since 1991),
National City Bank Corporation (since 1981) and Super Mail International (since
1994). Mr. Anderson is a former United States senator and governor of the State
of Minnesota.
LUIS DE LA CRUZ since 1990 been president and a shareholder of De la
Cruz & Cutler, P.A., a law firm in Coral Gables, Florida. His principal areas of
practice are real estate and commercial transactions. He has a B.S. degree in
civil engineering and a J.D. degree from the University of Florida.
LEON S. EPLAN has been the Commissioner of Planning and Development
of the City of Atlanta since October, 1991 and assisted in the preparations of
the 1996 Summer Olympic Games. In addition, Mr. Eplan is a part-time professor
at the Graduate School of Planning at the Georgia Institute of Technology. For
over 13 years prior to October, 1991, Mr. Eplan had been employed by Leon S.
Eplan & Associates, an urban planning consulting firm of which he is the
principal. Mr. Eplan is a member of Board's Audit Committee.
DR. CHARLES C. EVANS joined the Company as Chairman of the Board of
Directors in January, 1993. Until March, 1995, Dr. Evans served as the President
and Chief Executive Officer of the Company and also as the President of Evans
Environmental, a subsidiary of the Company. Since 1986 and until March 1995 Dr.
Evans had been continuously employed as president of one or more of Evans
Environmental's subsidiaries.
RAIMUNDO LOPEZ-LIMA LEVI has been the managing partner of Lopez Levi
& Associates, P.A., CPA., a public accounting firm in Miami, Florida since May
1990. From 1985 to 1990 Mr. Levi was in the tax division of Arthur Andersen
& Co.
JOHN B. MCCRACKEN is a shareholder of Jones, Foster, Johnston &
Stubbs, P.A., a law firm in West Palm Beach, Florida, with which he has been
associated since 1970. His areas of practice are corporate, real estate, and
estate planning. Mr. McCracken has served as president of the Palm Beach County
Bar Association and as president of the Young Lawyers Section of the Palm Beach
County Bar Association. He has also twice served as chairman of the Florida Bar
Grievance Committee and as a member of the Board of Governors of the Young
Lawyers Section of the Florida Bar. He has served as commissioner of the Port of
Palm Beach, chairman of the Young Friends of St. Mary's Hospital, and as Senior
Warden of Holy Trinity Episcopal Church. He is a graduate of Tufts University
and of Vanderbilt University School of Law. Mr. McCracken was a Series B
Preferred Stock Director from July 16, 1996 until August 15, 1996, when he
resigned and was replaced by Michael S. Klein.
JOSEPH F. STARTARI from December, 1995 has been president and CEO of
Biotechna Environmental Limited, an environmental technology company, traded on
the stock exchange in Alberta, Canada. From June,
Page 7
<PAGE>
1978 until December, 1995 Mr. Startari worked in a variety of positions in the
Ordinance Division of Olin Corporation, a defense contractor. Most recently,
from February, 1995 until he left Olin Corporation, he was Vice
President-Recovery Systems and Executive Vice President of Olin Services, Inc.
ANTONIO L. CONTRERAS, JR. joined Sugar Cane Growers Cooperative of
Florida in 1984 and is currently the vice president of marketing and legislative
affairs. Mr. Contreras is also on the Board of Directors and the Executive
Committee of Florida Sugar Marketing and Terminal Association. He is past
president and currently a director of the Florida Molasses Exchange, Inc. Mr.
Contreras is a past director of the Florida Sugar Cane League. Mr. Contreras is
a graduate of the University of Miami where he obtained his Bachelor of Business
Administration and has a Masters of International Marketing from Thunderbird
Graduate School of International Management at Glendale, Arizona.
MICHAEL S. KLEIN from 1987 to 1995 was chairman and chief executive
officer of ViTel International, a company specializing in network facsimile
services. Since January, 1995 Mr. Klein has devoted his time to a variety of
public service and environmental conservation activities.
ENRIQUE A. TOMEU became a member of the board in July, 1996, at which
time he was elected President and Chief Executive Officer. Since August, 1994,
Mr. Tomeu had been the sole owner of American Remedial Technologies, Inc., an
environmental remediation company which he founded and which the Company
acquired on July 8, 1996, and has over 15 years of experience in construction
and environmental industries. From 1980 to the present, he has been president of
Siboney Contracting Co., a trucking and waste hauling company, and was president
of American Asphalt Inc., a highway paving company, from March, 1987 to January
1, 1996. Mr. Tomeu attended the University of Florida and General Motors
Institute.
ENRIQUE J. TOMEU, SR. has owned and operated fertilizer and chemical
plants for over 35 years. Since 1974, he has been the owner and president of
Siboney International Corp. which is an export broker and seller of fertilizer
products in international markets. Mr. Tomeu has served on the Board of
Directors of Flagship Bank and Suburban Bank Shares.
ROBERT J. UNDERBRINK is general manager of King Ranch-Florida, an
agribusiness division of King Ranch, Kingsville, Texas. Mr. Underbrink started
with King Ranch-Florida in 1984 and became general manager in 1987. King
Ranch-Florida grows and markets sugar cane and sod at the Florida site, and Mr.
Underbrink directs and manages all activities of the operation. Mr. Underbrink
has a Bachelor of Science degree in Agricultural Business from Texas A & I
University, Kingsville, Texas. Mr. Underbrink is a member of the Board of
Directors of Sugar Cane Growers Cooperative of Florida and is treasurer of the
Florida Rice Council, Inc.
CARLOS M. VERGARA since August, 1994 has been the president of
Gargrove, Inc., a citrus grove developer, and since October, 1994 has been
chairman of the board of Takaho Corporation. Since 1987, Mr. Vergara has been a
senior vice president of Sovereign Venture Capital, Inc., general partner of
Sovereign Capital Group, Coral Gables, Florida, a registered SEC investment
advisory company. He has a degree in Political Science from the American College
in Paris.
DAVID C. LANGLE has 16 years of experience in public and private
accounting and business management. Prior to his employment with American
Remedial Technologies, Inc. in May, 1995 he served in various senior management
capacities as vice president, chief financial officer and director for two
public companies, Solar Financial Services, Inc. (1993 to 1995) and Frenchtex,
Inc. (1991 to 1993). In March, 1995, Solar Financial Services, Inc. filed a
petition for relief under the federal bankruptcy laws, and the proceeding was
converted to
Page 8
<PAGE>
a liquidation proceeding under Chapter 7 of the Bankruptcy Code in June, 1995.
During Mr. Langle's tenure at Frenchtex, he also served as financial director
and acting general manager of the Company's European manufacturing subsidiary.
From 1982 to 1991, Mr. Langle was employed by the Miami office of Spicer &
Oppenheim, an international accounting and consulting firm where he completed
his tenure as an audit partner. He has a Bachelor of Science degree in
Accounting and Business Administration from the University of Illinois at
Chicago and he maintains professional registration as a certified public
accountant in the State of Florida.
Directors are elected annually at the Company's annual shareholders'
meeting. Each director of the Company serves until his successor is elected and
qualified or until the earlier of death, resignation, removal or
disqualification of the director. The officers of the Company serve at the
pleasure of the Board of Directors.
Enrique A. Tomeu and Enrique J. Tomeu, Sr. are father and son.
Enrique A. Tomeu, Carlos Vergara and Tony Contreras are brothers-in-law. Carlos
Vergara and Tony Contreras are the sons-in-law of Enrique J. Tomeu, Sr.
ATTENDANCE AT BOARD AND COMMITTEE MEETINGS
During the Company's fiscal year ended March 31, 1996 the Board of
Directors held eight meetings. Each director attended at least 75% of the
combined number of meetings of the Board and any committee of which he or she
was a member.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has a Compensation Committee, of which Richard
Salpeter, Scott Salpeter and Kelly Evans were members until August 15, 1996. Mr.
Scott Salpeter, Mr. Richard Salpeter and Ms. Evans are directors who are not
seeking re-election. On August 15, 1996 the Board of Directors appointed Robert
Underbrink, Charles C. Evans, and John McCracken as the members of the
Compensation Committee. The functions of the Compensation Committee are to
review and approve annual salaries and bonuses for all executive officers and
review, approve and recommend to the Board of Directors the terms and conditions
of all employee benefit plans or changes thereto, including the granting of
stock options pursuant to the Company's stock option plans. The chairman of the
Compensation Committee is John McCracken. The Compensation Committee met three
times in the fiscal year ended March 31, 1996.
The Board of Directors also has an Audit Committee of which Richard
Salpeter and Leon S. Eplan were members until August 15, 1996 when the Board of
Directors replaced them with Carlos Vergara and Raimundo Lopez-Lima Levi. The
functions of the Audit Committee are to oversee the Company's chief financial
officer, meet periodically with the Company's outside auditors, and generally be
responsible for the Company's financial and accounting policies. The Chairman of
the Audit Committee is Carlos Vergara. The Audit Committee met four times in the
fiscal year ended March 31, 1996.
The Company has no nominating committee.
COMPENSATION OF DIRECTORS
Under the new director compensation plan adopted by the Board of
Directors on August 15, 1996 each director who is not an executive officer or
employee of the Company is entitled to a fee of $300 per meeting. Further, for
serving on the Board of Directors, directors each year will receive 10,000
options to purchase
Page 9
<PAGE>
Common Stock with 5,000 additional options for service on any committee of the
Board except that the chairman of a committee will receive 10,000 options.
Options are granted on April 1st of each year at an exercise price equal to the
fair market value of the Company's Common Stock on that date. Directors are
eligible to receive any additional compensation authorized by the Board of
Directors.
SECTION 16 BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's officers and directors and persons who beneficially own
more than 10% of the Company's Common Stock to file forms of securities
ownership and changes in such ownership with the Securities and Exchange
Commission (the "SEC"). Officers, directors and greater than 10% beneficial
owners also are required by rules promulgated by the SEC to furnish the Company
with copies of all Section 16(a) forms they file. The Company does not know of
any such forms required to be filed during or for the fiscal year ended March
31, 1996 except that directors Dr. Charles Evans, Scott Salpeter, Kelly Evans,
Richard Salpeter, Leon Eplan and Wendell Anderson did not file any Forms 4 or
Forms 5 with respect to 2,500, 3,750, 5,000, 5,000, 3,750 and 2,500 options,
respectively, which they received during the fiscal year ended March 31, 1996.
EXECUTIVE COMPENSATION
The following table sets forth information about the compensation
paid or accrued by the Company during the fiscal years ended March 31, 1996,
1995 and 1994 to the Company's Chief Executive Officer, the only employee whose
aggregate compensation exceeded $100,000 for the fiscal year ended March 31,
1996.
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
------------------
AWARDS
ANNUAL COMPENSATION ------------------
NAME AND ---------------------------------- SECURITIES
PRINCIPAL POSITION YEAR SALARY BONUS UNDERLYING OPTIONS
- ----------------------- ---- ------ ----- ------------------
John C. "Jack" Reynolds 1996 $164,500 $0 200,000
Interim President 1995 $7,000 $0 31,250
and Chief Executive 1994 $0 $0 0
Officer(1)
- ----------
(1) Mr. Reynolds was employed as Interim President through July 11, 1996
pursuant to a consulting arrangement with R.G. Quintero & Co.
("Quintero"), a privately owned accounting and consulting company. None
of the above compensation was paid to Mr. Reynolds. All compensation
payments and option issuances were made directly to Quintero. Mr.
Reynolds is not a shareholder, officer or director of Quintero. See
"Compensation Agreements."
Page 10
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information concerning options granted
during the Company's 1996 fiscal year for the person named in the Summary
Compensation Table.
<TABLE>
<CAPTION>
PERCENT OF
NUMBER OF TOTAL OPTIONS
SECURITIES GRANTED TO EXERCISE
UNDERLYING EMPLOYEES IN OR BASE EXPIRATION
NAME OPTIONS GRANTED FISCAL YEAR PRICE ($/SH) DATE
- -------------------------- --------------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
John C. "Jack" Reynolds(1) 200,000 63% $0.29-$0.31 Sept 13, 1997
<FN>
- ----------
(1) Mr. Reynolds was employed as Interim President through July 11, 1996
pursuant to a consulting arrangement with Quintero. None of the above
options was issued to Mr. Reynolds, but they were issued directly to
Quintero. Mr. Reynolds is not a shareholder, officer or director of
Quintero. See "Compensation Agreements."
</FN>
</TABLE>
AGGREGATED OPTION EXERCISES
IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
The following table sets forth information concerning the value of
unexercised stock options at the end of the Company's 1996 fiscal year for the
person named in the Summary Compensation Table.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF
UNDERLYING UNEXERCISED
SHARES UNEXERCISED IN-THE-MONEY
ACQUIRED OPTIONS AT OPTIONS AT FISCAL
ON VALUE FISCAL YEAR END YEAR END ($)
NAME EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- --------------------------- -------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
John C. "Jack" Reynolds(1) 0 0 231,250 / 0 $77,469 / $0
<FN>
- ----------
(1) Mr. Reynolds was employed as Interim President through July 11, 1996
pursuant to a consulting arrangement with Quintero. None of the above
options was issued to Mr. Reynolds, but they were issued directly to
Quintero. Mr. Reynolds is not a shareholder, officer or director of
Quintero. See "Compensation Agreements."
</FN>
</TABLE>
COMPENSATION AGREEMENTS
Enrique A. Tomeu is employed as the chief executive officer and president
of the Company pursuant to a four year employment agreement dated as of July 8,
1996. As compensation thereunder, Mr. Tomeu receives an annual salary of
$150,000, an automobile, a $900 per month non-accountable expense allowance, an
expense account for business travel and other expenses, six weeks' paid vacation
annually, health insurance for himself
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<PAGE>
and his family, and a $3,000,000 life insurance policy on his life payable to
his designees. Upon termination of his employment with the Company for other
than cause (as defined in the agreement), Mr. Tomeu is entitled to convert any
Series B Convertible Preferred Stock which he then may own to Common Stock as
though the earnouts had been earned. See "Proposal 4. To Approve an Increase in
the Authorized Number of Shares from 25,000,000 to 75,000,000." As a part of his
employment agreement, Mr. Tomeu has agreed not to compete with the Company's
business for a period of one year following his voluntary resignation or the
termination of his employment for cause.
Dr. Charles Evans is employed by the Company pursuant to a three year
employment agreement and a three year consulting agreement both entered into on
July 3, 1996. The employment agreement provides for an annual salary of $24,000,
a $500 auto allowance, an expense account for business travel and other
expenses, and eight weeks' paid vacation annually. The consulting agreement
provides for annual fees of $50,000 and an expense account for business travel
and other expenses. In addition, Dr. Evans may be entitled to a bonus based on
the performance of the Company in the discretion of the Board of Directors. Dr.
Evans has agreed not to compete with the Company's business for a period of one
year following his voluntary resignation or the termination of his employment
with the Company for cause.
John C. "Jack" Reynolds was employed as Interim President through July
11, 1996 pursuant to a consulting arrangement with Quintero. In consideration
for these services, Quintero received a weekly payment of $3,500 and options to
purchase 31,250 shares of Common Stock, awarded in advance each quarter. In
addition, Quintero was reimbursed for all reasonable and necessary out-of-pocket
expenses. The Agreement was terminated on July 31, 1996. Mr. Reynolds is not a
shareholder, officer or director of Quintero.
CERTAIN TRANSACTIONS
In July 1995, the Company borrowed $85,000 from the spouse of the
Chairman of the Board of Directors. The note is due upon demand and bears
interest at 12% per annum. The Chairman disclaims any beneficial interest in the
loan. The highest balance due under the note during the year ended March 31,
1996 and the balance outstanding on March 31, 1996 was $85,000.
Mr. Enrique A. Tomeu owns 50% of the stock of Terrac Technologies,
Inc., a Florida corporation ("Terrac"), which is a possible competitor of the
Company. The terms of Mr. Tomeu's employment agreement with the Company permit
him to hold not more than 52% of Terrac's stock until no later than July 8,
1997. He is not permitted during the term of his employment or for one year
thereafter, if he is terminated for cause or leaves voluntarily, to participate
in bids or solicit work in competition with the Company. If he does not sell his
Terrac stock by July 8, 1997 or if Terrac is not acquired by the Company by that
date, Mr. Tomeu must place his Terrac stock in a blind trust and have no role in
the management of Terrac.
See also "Compensation Agreements" regarding John C. "Jack" Reynolds.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE SEVEN NOMINEES
FOR DIRECTOR.
PROPOSAL 2. CHANGE OF NAME OF THE COMPANY
The Board of Directors has proposed that the name of the Company be
changed to "ECOS Group, Inc." The Board believes that in light of the Company's
expanded activities in the area of
Page 12
<PAGE>
remediation since the acquisition of American Remedial Technologies, Inc., in
July, 1996, a new name would better describe the nature and activities of the
Company. The Board believes that a change of name would alert potential
investors, shareholders, analysts, the media, and the general public to the new
and expanded activities of the Company. "ECOS" is the Company's trading symbol
on the Nasdaq Small Cap Market and is identifiable by many people who have an
interest in following the Company.
If approved by the shareholders, Article FIRST of the Company's
Articles of Incorporation will be amended to read in its entirety as follows:
"The name of the corporation is ECOS Group, Inc."
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF CHANGING THE NAME
OF THE COMPANY.
PROPOSAL 3. APPROVAL OF THE COMPANY'S 1996 STOCK OPTION PLAN
The Evans Environmental Corporation 1996 Stock Option Plan (the "1996
Plan") would make available options for 2,000,000 shares of the Company's Common
Stock. On August 15, 1996, the Board of Directors authorized the 1996 Plan,
subject to shareholder approval.
The following is a summary of the material features of the 1996 Plan. A
copy of the 1996 Plan is attached as Exhibit A and the following summary is
qualified in its entirety by reference to the 1996 Plan.
PURPOSE OF THE 1996 PLAN AMENDMENT
The purpose of the 1996 Plan is to ensure that the Company has
sufficient options available to accomplish the objective of aligning management
and shareholder long-term interests and to attract, motivate, and retain
experienced and qualified management personnel. Assuming approval of the
proposed 1996 Plan, 2,000,000 shares will be available for issuance upon
exercise of options granted under the 1996 Plan, which 2,000,000 shares
represent approximately 11.7% of the Company's Common Stock outstanding on
August 16, 1996 and approximately 2.7% of its authorized Common Stock assuming
the increase to 75,000,000 shares is approved by the shareholders.
ADMINISTRATION
The 1996 Plan is administered by either (i) the Board of Directors or
(ii) a committee consisting solely of two or more non-employee directors
appointed by the Board in compliance with the provisions of Rule 16b-3
promulgated by the SEC under the Securities Exchange Act of 1934, as amended.
For purposes of this 1996 Plan description, the term "Committee" shall mean the
Compensation Committee of the Board.
The Board of Directors and the Committee each has the discretion to
select the employees and directors to whom options may be granted (an
"Optionee"), to determine the number of shares granted under each option, and to
make all other determinations which it deems necessary or appropriate in the
interpretation and administration of the 1996 Plan. The Board of Directors or
the Committee, in its discretion, may accelerate the vesting of any option, may
reduce the exercise price of any option, and amend or modify any option
(provided
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<PAGE>
that such amendment may not impair the rights of any Optionee unless mutually
agreed otherwise by the Optionee and the Board of Directors or Committee).
ELIGIBLE PARTICIPANTS
Only persons who are directors or key employees of the Company are
eligible to participate in, and to receive options under, the 1996 Plan.
Currently, no shares of Common Stock have been issued upon exercise of options
granted pursuant to the 1996 Plan. There are 96,783 shares of Common Stock
subject to options granted, but unexercised, under the Company's 1993 Stock
Option Plan and 3,217 shares of Common Stock reserved for which options have not
yet been issued. The Company has discontinued the 1993 Stock Option Plan and
will not issue any additional options under that plan. An Optionee may be
granted more than one option under the 1996 Plan and any option that terminates
without being exercised reverts to the 1996 Plan and becomes available for
future grant. Shares which are tendered to the Company or which are withheld
upon exercise which give rise to reload options, as discussed below, may be
again reserved for issuance under the 1996 Plan.
TERMS OF OPTIONS
The 1996 Plan provides for the grant of incentive stock options
("ISOs") as defined in Section 422 of the Internal Revenue Code of 1986, as
amended, or nonstatutory stock options ("NSOs"). Options granted to non-employee
directors are nonstatutory stock options.
The purchase price per share payable by an Optionee upon the exercise
of each ISO granted under the 1996 Plan equals the fair market value of the
Company's Common Stock on the date of the grant. The fair market value of a
Company's Common Share is deemed to be the average of the highest and lowest
quoted selling price of the Company's Common Stock as quoted on the Nasdaq Small
Cap Market. The purchase price per share payable by an Optionee upon the
exercise of each NSO granted under the 1996 Plan is determined by the Board of
Directors or the Committee, as the case may be.
The exercise price of an option granted under the 1996 Plan may be paid
in cash, in shares of the Company's Common Stock, or in the discretion of the
Board of Directors or the Committee in any other manner. The Board of Directors
or the Committee, may authorize a Company loan to the Optionee to allow him to
exercise his options. In general, if an Optionee's employment with the Company
is terminated for any reason, options exercisable as of the date of termination
may be exercised for a period of three months following such date. Options yet
to be exercisable terminate immediately upon the date of the termination.
However, the Board of Directors or the Committee may grant options under the
1996 Plan which survive the termination of an Optionee's employment with the
Company and may accelerate the vesting of options upon such terms and
conditions as the Committee may determine.
Options granted under the 1996 Plan are evidenced by a written
agreement between the Company and the Optionee, containing the specific terms
and conditions of each option.
ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
Subject to adjustment in the case of certain changes in the capital
structure of the Company, and subject to the shareholders' approval of the 1996
Plan as proposed hereby, a maximum of 2,000,000 shares of the Company's Common
Stock will be reserved for issuance pursuant to options to be granted under the
1996 Plan.
Page 14
<PAGE>
In the event of a change in the number or spilt, recapitalization,
reorganization, merger, exchange of shares, or other similar capital adjustment,
a proportionate adjustment may be made in the number of shares reserved for
issuance under the 1996 Plan and will be made to the number, class, and exercise
price of the shares subject to any outstanding options under the 1996 Plan in
order to maintain the purpose of the original grant.
RELOAD OPTIONS
In the discretion of the Board of Directors or the Committee, if an
Optionee exercises his options by delivery of currently held shares of the
Company's Common Stock or shares are withheld upon exercise to pay federal
income tax withholding, he receives "reload" options equal in number to the
number of shares he surrendered upon exercise or which were withheld, as the
case may be. The exercise price of a reload option is the fair market value of a
share of Common Stock on the day tendered by the Optionee or withheld from the
Optionee, as the case may be, and it expires on the later of one year from the
date of grant or the original expiration date of the options being exercised.
All other terms and conditions of the reload options are the same as those of
the options being exercised.
AMENDMENT AND TERMINATION OF THE 1996 PLAN
The 1996 Plan was effective upon the adoption by the Company's Board of
Directors subject to approval by the Company's shareholders. It will terminate
on June 30, 2006, unless earlier terminated by the Board of Directors. However,
the Company's Board of Directors may, at any time, terminate the 1996 Plan on an
earlier date, provided that such termination will not affect the rights of the
Optionees under any outstanding options previously granted under the 1996 Plan.
In addition, the Company's Board of Directors may amend the Plan at any time but
may not increase the number of shares reserved for ISOs without shareholder
approval.
FEDERAL INCOME TAX CONSEQUENCES
The following discussion of the federal income tax consequences of the
1996 Plan is intended to be a summary of applicable federal law. State and local
tax consequences may differ. ISOs and NSOs are treated differently for federal
tax purposes. ISOs are intended to comply with the requirement of Section 422 of
the Code. NSOs need not comply with such requirements.
An Optionee is not taxed on the grant or exercise of an ISO. The
difference between the exercise price and the fair market value of the shares on
the exercise date will, however, be a preference item for purposes of the
alternative minimum tax. If an Optionee holds the shares acquired upon exercise
of an ISO for at least two years following grant and at least one year following
exercise, the Optionee's gain, if any, upon a subsequent disposition of such
shares is long-term capital gain. The measure of the gain is the difference
between the proceeds received on disposition and the Optionee's basis in the
shares (which generally equals the exercise price). If an Optionee disposes of
stock acquired pursuant to exercise of an ISO before satisfying either of the
one and two-year holding periods described above, the disposition disqualifies
the option from favorable tax treatment as an ISO, and the Optionee will
recognize ordinary income in the year of disposition. The amount of the ordinary
income will be the lesser of (i) the amount realized on disposition less the
Optionee's adjustment basis in the stock (usually the exercise price) or (ii)
the difference between the fair market value of the stock on the exercise date
and the exercise price. The balance of the consideration received on such a
disposition will be capital gain. The Company is not entitled to an income tax
deduction on the grant or exercise of an ISO or on the Optionee's disposition of
the shares after satisfying the holding period requirement described above. If
the
Page 15
<PAGE>
holding periods are not satisfied, the Company is entitled to a deduction in
the year the Optionee disposes of the shares in an amount equal to the ordinary
income recognized by the Optionee.
An Optionee is not taxed on the grant of an NSO. On exercise, however,
the Optionee recognizes ordinary income equal to the difference between the
exercise price and the fair market value of the shares on the date of exercise.
The Company is entitled to an income tax deduction in the year of exercise in
the amount recognized by the Optionee as ordinary income. Any gain on subsequent
disposition of the shares is long-term capital gain if the shares are held for
at least one year following exercise. The Company does not receive a deduction
for this gain.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF APPROVAL OF THE
1996 STOCK OPTION PLAN.
PROPOSAL 4. TO APPROVE AN INCREASE IN THE AUTHORIZED NUMBER OF SHARES
FROM 25,000,000 TO 75,000,000.
The Company proposes to increase its authorized shares of Common Stock
from 25,000,000 to 75,000,000. The Company is obligated to maintain sufficient
authorized shares available to permit conversion of the 1,000,000 issued and
outstanding shares of Series B Preferred Stock which are eligible to be
converted into 10,000,000 shares of Common Stock during a three year period
commending after March 31, 1997 upon the attainment by the Company of certain
earnings goals as described below. As of August 16, 1996, the Company had only
557,523 authorized shares of Common Stock available to be used for conversion of
the Series B Preferred Stock after allowing for (i) the conversion into
2,285,193 Common Stock shares of 761,731 shares of Series A Convertible
Preferred Stock which would be outstanding upon exercise of certain currently
exercisable warrants, (ii) the exercise of 1,004,658 currently exercisable
options held mostly by current and former officers and directors of the Company,
(iii) the exercise of 942,500 other currently exercisable warrants held
principally by Strategica Capital Corporation and by an off-shore broker which
acted as placement agent for the Company in a recent offering of its shares,
(iv) the exercise of 600,00 additional currently outstanding warrants held by a
public relations consultant which may become exercisable, (v) currently existing
contractual obligations to issue 570,000 shares principally to a public
relations consultant, and (vi) the reservation of 2,000,000 shares under the
Company's new 1996 Stock Option Plan (assuming it is approved by the
shareholders).
The Company has an obligation under the terms of the Series B Preferred
Stock, which terms form part of its Articles of Incorporation, which was issued
on July 8, 1996 in the closing of a transaction under a Stock Sale Agreement
dated March 14, 1996 (the "Sale Agreement") with Enrique A. Tomeu, a director
and chief executive officer of the Company, to reserve 10,000,000 shares of
unissued Common Stock of the Company for exercise of the Series B Preferred
Stock. Mr. Tomeu and Michael Klein, directors of the Company and the owners of
633,365 shares and 275,880 shares, respectively, of the Series B Preferred
Stock, have agreed to subordinate their claims to reserved Common Stock to the
foregoing enumerated claims on the Common Stock providing that the Company
promptly seeks and obtains on or before March 31, 1997 shareholder approval to
increase its authorized Common Stock. Messrs. Tomeu and Klein were not obligated
to subordinate their claims to the Company's reserved Common Stock but did so
because they believed it to be in the best interests of the Company to have
shares of Common Stock currently available for the above enumerated commitments.
Failure of the Company to have sufficient shares available for conversion of the
Series B Preferred Stock after March 31, 1997 would render the Company in breach
of the requirements of its own Articles of Incorporation as well as the Sale
Agreement.
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<PAGE>
The terms of the Series B Preferred Stock require conversion into
1,500,000 shares of Common Stock of 150,000 shares of Series B Preferred Stock
if the Company's consolidated earnings before debt, interest and income and
franchise taxes ("EBIT") exceed $1,000,000 for a fiscal year of the Company
commencing with the fiscal year ending March 31, 1997. Any excess of EBIT over
$1,000,000 permits conversion of one share of Series B Preferred Stock into ten
shares of Common Stock at the rate of one share of Series B Preferred Stock for
every $10 of EBIT over $1,000,000. Not more than an additional 100,000 shares of
Series B Preferred Stock may be converted each year unless the EBIT is
$3,000,000 or more in which case all remaining Series B Preferred Stock is
converted. The last fiscal year for which the Series B Preferred Stock can be
converted is the fiscal year ending March 31, 2000.
The increase in authorized shares would also permit the Company to have
approximately 40,557,523 additional authorized but unissued shares available for
sale to raise capital, for issuance to acquire other companies, or for other
corporate purposes. Although the Company from time to time in the past has
offered and sold shares to raise capital, it has no currently identified
prospective purchaser of shares. Although the Company has used its shares in the
past to make acquisitions, and from time to time is in discussions with other
companies regarding possible acquisition by the Company, it currently has no
companies designated for acquisition and no other identified use for the
proposed increase in authorized shares except the reservation for the Series B
Preferred Stock as discussed above.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF INCREASING THE
COMPANY'S AUTHORIZED COMMON STOCK.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Coopers & Lybrand, L.L.P., Miami, Florida, served as the Company's
independent public accountants for the fiscal year ended March 31, 1996. The
Board of Directors of the Company anticipates selecting Coopers & Lybrand,
L.L.P. to serve as independent public accountants for the current fiscal year
ending March 31, 1997. A representative of Coopers & Lybrand, L.L.P. is expected
to be present at the Annual Meeting and to be available to respond to
appropriate questions. Its representative will have the opportunity to make a
statement if he desires to do so.
FUTURE PROPOSALS OF SECURITY HOLDERS
Any shareholder who intends to submit a proposal for consideration at
the 1997 Annual Meeting of Shareholders pursuant to the applicable rules of the
Securities and Exchange Commission must send the proposal to reach the Company's
Secretary by May 7, 1997. All proposals should be addressed to the Secretary.
Page 17
<PAGE>
OTHER MATTERS
No other business is expected to come before the Annual Meeting.
However, if additional matters properly come before the meeting, proxies will be
voted at the discretion of the proxy holders.
BY ORDER OF THE BOARD OF DIRECTORS
Claire Lardner, Secretary
September 4, 1996
West Palm Beach, Florida
44820-4
Page 18
<PAGE>
EXHIBIT A
EVANS ENVIRONMENTAL CORPORATION
1996 STOCK OPTION PLAN
1. DEFINITIONS: Wherever used herein, the following terms shall have
the following meanings:
(a) "Plan" shall mean this Stock Option Plan.
(b) "Corporation" shall mean Evans Environmental Corporation, a
Colorado corporation, or any successor thereof.
(c) "Committee" shall mean the administrative stock option committee
designated by the Board of Directors of the Corporation, or, if none is
designated, the Board of Directors itself.
(d) "Participant" shall mean any individual designated by the
Committee under Paragraph 4 hereof for participation in the Plan.
(e) "Non-Employee Director" shall mean a director who is not an
officer of the Company (as defined in Rule 16b-1(f) under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or
any subsequently amended definition therein) or of any subsidiary, is
not otherwise currently employed by the Company or any subsidiary, and
is not otherwise excluded from being a non-employee director under Rule
16b-3 under the Exchange Act.
(f) "Nonqualified Option" shall mean an option to purchase Common
Stock of the Corporation which meets the requirements set forth in the
Plan but does not meet the definition of an incentive stock option set
forth in Section 422 of the Internal Revenue Code of 1986, as amended
(the "Code").
(g) "Incentive Option" shall mean an option to purchase Common Stock
of the Corporation which meets the requirements set forth in the Plan
and also meets the definition of incentive stock option set forth in
Section 422 of the Code and which is granted to an individual subject
to having personal income taxed under the Code.
(h) "Reload Option" shall mean an option granted to a Participant
equal to the number of shares of already owned Common Stock delivered
by the Participant to pay for exercise of an option, as more fully
described in Section 8, below.
2. ADMINISTRATION: The Plan shall be administered by the Committee
which, if the Company is a reporting company under the Exchange Act, shall
consist solely of at
<PAGE>
least two Non-Employee Directors. Subject to the provisions of the Plan, the
Committee is authorized to interpret the Plan, to promulgate, amend and rescind
rules and regulations relating to the Plan and to make all other determinations
necessary or advisable for its administration. Interpretation and construction
of any provision of the Plan by the Committee shall be final and conclusive. The
foregoing provisions of this Section 2 to the contrary notwithstanding, the
Board of Directors may also exercise any power given to the Committee under the
Plan. The Board of Directors expressly grants authority to the Committee to
issue options pursuant to the provisions of this Plan.
3. MAXIMUM NUMBER OF SHARES SUBJECT TO PLAN: The Committee may from
time to time provide for the option and sale of up to but not exceeding an
aggregate of 2,000,000 shares of Common Stock, value $0.012 per share, of the
Corporation which may consist in whole or in part of the authorized and unissued
or reacquired Common Stock of the Corporation. The Committee and the Board of
Directors may issue Nonqualified Options and Inventive Options, as well as both
of such options. Shares covered by canceled or expired options under the Plan
shall again be available for option and sale. Shares which are issued upon
exercise of options or which are withheld in payment of income tax withholding
shall again be available for reservation for the issuance of options but only to
the extent Reload Options are granted in such transaction.
In the event that the outstanding Common Stock of the Corporation shall
be increased by a stock dividend or changed into or exchanged for a different
number or kind of shares of stock or other securities of the Corporation or of
another corporation, whether by reason of merger, consolidation,
recapitalization, reclassification, split-up, combination of shares or
otherwise, the number, price and kind of shares available for option and the
shares subject to any option shall be appropriately and equitably adjusted in
such manner as the Committee or the Board of Directors shall, in its discretion,
determine. The Committee or the Board of Directors shall have the power under
such conditions to accelerate the exercisability of any outstanding options.
4. PARTICIPANTS: The Committee or the Board of Directors shall
determine and designate from time to time, in its discretion, those directors
and key management employees of the Corporation (or of any subsidiary in which
the Corporation owns more than 50% of the total combined voting power of all
classes of stock) to whom options are to be granted and who thereby become
Participants under the Plan. The term "key management employees" shall be
construed to include any and all key personnel (whether or not officers of the
Corporation) who may be so designated by the Committee for participation in the
Plan.
5. ALLOTMENT OF SHARES: The Committee or the Board of Directors shall
determine and fix the number of shares of stock to be offered to each
Participant; provided, that no Incentive Option may be granted under the Plan to
any one Participant which would result in his being able to exercise for the
first time in any calendar year an aggregate fair
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<PAGE>
market value, determined as of the date the option is granted, of underlying
stock subject to all incentive stock options granted to that Participant under
any incentive stock option plan maintained by the Corporation exceeding
$100,000.
6. OPTION PRICE: The option price per share for options granted under
the Plan shall be determined by the Committee or the Board of Directors, as the
case may be, but shall not be less than: (i) with respect to an Incentive
Option, the fair market value of the stock on the date on which such option is
granted; provided, that with respect to an Incentive Option grant to an employee
who at the time of the grant owns (after applying the attribution rules of
Section 424 of the Code) more than 10% of the total combined voting stock of the
Corporation or of any parent or subsidiary, the option price shall not be less
than 110% of the fair market value of the stock subject to the Incentive Option
on the date such option is granted; and (ii) with respect to a Nonqualified
Option, such percent of the fair market value of the stock on the date on which
such option is granted as shall be determined from time to time by the Committee
or the Board of Directors, as the case may be. Fair market value of a share
shall be determined by the Committee or the Board of Directors, as the case may
be, and shall mean, if the stock is publicly traded, the average of the highest
and lowest quoted selling prices of the Corporation's stock on such date or if
there are no sales, the closing bid and asked prices of the Corporation's stock
on such date, or if there are no sales or reported bid and asked prices of the
Corporation's Common Stock on such date, on the next following day on which
there are sales or quoted prices.
7. GRANTING AND EXERCISE OF OPTION: The granting of options hereunder
shall be effected in accordance with determinations made by the Committee or the
Board of Directors, as the case may be, pursuant to the provisions of the Plan,
by execution of instruments in writing in form approved by the Committee.
At the time the option is granted, the Committee or the Board of
Directors, as the case may be, shall determine the date or dates upon which the
option may be exercised. Except as provided in Paragraphs 10 and 11, options may
be exercised only while the Participant is an employee or director, as the case
may be, of the Corporation or a subsidiary.
Each option granted hereunder shall expire not more than 20 years from
the date of the granting thereof (10 years for Incentive Options); provided,
that with respect to an Incentive Option grant to an employee who at the time of
the grant owns (after applying the attribution rules of Section 424 of the Code)
more than 10% of the total combined voting stock of all classes of stock of the
Corporation or of any parent or subsidiary, such option shall expire not more
than five years after the date of granting thereof.
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<PAGE>
8. PAYMENT OF OPTION PRICE:
(a) At the time of the exercise in whole or in part of any option
granted hereunder, payment in full in cash or, with the consent of the Committee
or the Board of Directors, in Common Stock of the Corporation, shall be made by
the Participant for all shares so purchased. No Participant shall have any of
the rights of a shareholder of the Corporation under any such option until the
actual issuance thereunder of shares to said Participant. The Committee or the
Board of Directors may, in its discretion, authorize the Corporation to lend
funds to a grantee in order to enable him to exercise his options. The terms of
the loan shall be in the discretion of the Committee.
(b) Whenever a Participant holding any option outstanding under this
Plan (including Reload Options previously granted under this Section 8)
exercises the option and makes payment of the exercise price pursuant to this
Section 8, in whole or in part, by tendering Common Stock previously held by the
Participant then the Corporation shall, in the sole discretion of the Board of
Directors or the Committee, grant to the Participant a Reload Option for the
number of shares of Common Stock that is equal to the number of shares tendered
by the Participant on payment of the exercise price of the option being
exercised.
(c) Subject to Section 6, above, the Reload Option exercise price
per share shall be an amount equal to the fair market value per share of the
Corporation's Common Stock, determined under Section 6, above, as of the date of
receipt by the Corporation of the notice by the Participant to exercise the
option.
(d) Subject to Section 6, above, the exercise period of the Reload
Option shall expire, and the Reload Option shall no longer be exercisable, on
the later to occur of (i) the expiration date of the originally surrendered
option or (ii) one year from the date of grant of the Reload Option.
(e) Any Reload Option granted under this Section 8 shall vest
immediately upon grant under Section 8 (b), above.
(f) All other terms of the Reload Options granted hereunder shall be
identical to the terms and conditions of the original option, the exercise of
which gave rise to the grant of the Reload Option.
9. NONTRANSFERABILITY OF OPTION: No option granted under the Plan to a
Participant shall be transferable by him otherwise than by will or the laws of
descent and distribution, and such option shall be exercisable during the
lifetime of the Participant only by the Participant or by his guardian or legal
representative in the event of disability. For purposes of this Paragraph 9,
"disability" shall mean mental or physical inability to carry
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<PAGE>
out the option holder's duties as an employee or director of the Corporation, as
determined by the Committee or the Board of Directors its sole discretion. The
Board of Directors or the Committee may in its discretion waive the provisions
of this Section 9 to the extent permitted by the Code or the regulations
promulgated under Section 16(b) of the Exchange Act.
10. DEATH OF PARTICIPANT: With regard to Incentive Options, in the
event that the employment of the Participant by the Corporation, or a subsidiary
thereof, is terminated by the death of the Participant, or in the event of the
death of the Participant within three months of the termination of his
employment, his option, to the extent that it is exercisable by the Participant
at the date of his death, may be exercised within 12 months after the date of
his death, but in no event subsequent to the expiration date of the option, by
the legal representative of the Participant or the person or persons to whom the
rights of the Participant shall pass by will or by the laws of descent and
distribution.
11. RETIREMENT OF PARTICIPANT: With respect to Incentive Options,
unless the Committee or the Board of Directors shall otherwise decide at the
time of his termination or in the terms of the grant, or the Code shall
otherwise permit for Incentive Options, in the event that a Participant shall
cease to be employed by the Corporation without having fully exercised any
option, such Participant shall have the right for a period of three months
following the date of such cessation of employment, but in no event subsequent
to the expiration date of the option, to exercise that portion of the option, if
any, which is exercisable by him at the date of the termination of his
employment. Any options not exercisable on such date of cessation of employment
shall be extinguished unless the Committee or the Board of Directors shall
otherwise decide at the time of such termination, or the grant of the option
shall have otherwise provided.
12. CONTINUANCE OF EMPLOYMENT: The Committee or the Board of Directors
may require that any Participant under the Plan to whom an option shall be
granted shall agree in writing as a condition of the granting of such option to
remain in the employ of the Corporation or a subsidiary for a period of two
years from the date of the granting of such option, or for such other period as
shall be fixed by the Committee or the Board of Directors.
Nothing contained in the Plan or in any option granted pursuant to the
Plan, nor any action taken by the Committee hereunder shall confer upon any
Participant any right with respect to continuation of employment by the
Corporation or a subsidiary nor interfere in any way with the right of the
Corporation or a subsidiary to terminate his employment at any time.
13. SECURITIES ACT OF 1933: Unless a registration statement covering
the stock offered pursuant to the Plan is in effect under the Securities Act of
1933, as amended, all stock purchased upon the exercise of an option granted
hereunder shall be acquired for
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<PAGE>
investment and not with a view to or for sale in connection with any
distribution thereof and each notice of the exercise of such option shall be
accompanied by a representation in writing signed by the Participant or any
other person exercising an option granted hereunder to the effect in form
satisfactory to the Committee. The Corporation may place a legend upon any
certificate representing shares purchased pursuant to exercise of an option
granted hereunder noting that the transfer of such shares may be restricted
under the Securities Act of 1933.
14. WITHHOLDING PAYMENTS:
(a) If upon the exercise of any option there shall be payable by the
Corporation any amount for income tax withholding, either the Participant shall
pay such amount to the Corporation in cash or the number of shares of Common
Stock delivered by the Corporation upon exercise of the Nonqualified Option
shall be appropriately reduced to reimburse the Corporation for payment. The
Committee or the Board of Directors shall have the authority to accept other
payment arrangements in its sole discretion.
(b) Whenever shares of Common Stock instead of cash are used to pay
income tax withholding under Section 14(a), above, the Board of Directors or the
Committee in its sole discretion may grant Reload Options for the number of
withheld shares in accordance with the provisions of Sections 8(c) to 8(f),
above, applicable as appropriate to this Section 14(b).
15. SHAREHOLDER APPROVAL: No Incentive Option granted under the Plan
shall be exercisable unless and until the Plan shall have been approved by the
shareholders of the Corporation as permitted under the laws of Colorado.
16. INTERPRETATION:
(a) This Plan shall be administered and interpreted so that all
Incentive Stock Options granted under this Plan will qualify as Incentive Stock
Options under Section 422 of the Code. If any provision of this Plan should be
held invalid for the granting of Incentive Stock Options or illegal for any
reason, such determination shall not affect the remaining provisions hereof, and
this Plan shall be construed and enforced as if such provision had never been
included in this Plan.
(b) With respect to persons subject to Section 16 of the Exchange
Act, transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the Exchange Act. To the extent
any term or provision of this Plan or any act or action by the Committee or the
Board of Directors fails to so comply, it shall be deemed null and void and of
no force or effect, to the extent deemed advisable by the Committee or the Board
of Directors. Moreover, in the event this Plan does not include a term or
provision required by Rule 16b-3 to be stated herein, such term or
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<PAGE>
provision (other than one relating to eligibility requirements, or the price and
amount of awards) shall be deemed automatically to be incorporated by reference
into this Plan insofar as participants subject to Section 16 of the Exchange Act
are concerned.
(c) This Plan shall be governed by the laws of the State of
Colorado.
(d) Headings contained in this Plan are for convenience only and
shall in no manner be construed as part of this Plan or affect the meaning or
interpretation of any part of this Plan.
(e) Any reference to the masculine, feminine, or neuter gender shall
be a reference to such other gender as is appropriate.
17. DURATION AND TERMINATION OF PLAN: No options may be granted
hereunder after June 30, 2006. The Plan may be abandoned or terminated at any
time by the Board of Directors of the Corporation except with respect to any
option outstanding under the Plan upon the effective date of such termination.
18. AMENDMENT: For the purpose of conforming to any changes in
applicable law or governmental regulations or for any other purpose which at the
time may be permitted by law, the Board of Directors of the Corporation, may,
from time to time, amend or revise the terms of this Plan, providing that no
such amendment or revision shall increase the maximum number of shares in the
aggregate which may be sold pursuant to Incentive Options granted under the
Plan, or change the minimum option prices set forth in Paragraph 6, or without
the consent of the holder thereof alter or impair any option previously granted
under the Plan.
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PROXY EVANS ENVIRONMENTAL CORPORATION
1000 SOUTHERN BLVD., SUITE 405 THIS PROXY IS SOLICITED ON
WEST PALM BEACH, FLORIDA 33405 BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Enrique A. Tomeu and Charles C.
Evans, or either of them, as Proxies, each with the power to appoint his
substitute, and hereby authorizes them to represent and to vote, as designated
below, all the Common Stock of Evans Environmental Corporation held of record by
the undersigned on August 16, 1996, at the Annual Meeting of Shareholders to be
held on October 18, 1996, or any adjournment or postponement thereof.
<TABLE>
<CAPTION>
<S> <C> <C>
1. TO ELECT THE FOLLOWING DIRECTORS: FOR ALL NOMINEES LISTED BELOW WITHHOLD AUTHORITY
(except as marked to the to vote for all nominees
contrary below) [ ] listed below [ ]
</TABLE>
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE
STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW)
Wendell R. Anderson, Luis De la Cruz, Leon S. Eplan, Charles C. Evans,
Raimundo Lopez-Lima Levi, John B. McCracken, Joseph F. Startari
2. TO CHANGE THE NAME OF THE COMPANY
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. TO APPROVE THE COMPANY'S 1996 STOCK OPTION PLAN
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. TO INCREASE THE AUTHORIZED SHARES OF THE COMPANY TO 75,000,000
FOR [ ] AGAINST [ ] ABSTAIN [ ]
5. In their discretion, the Proxies are authorized to vote upon such other
matters as may properly come before the Meeting.
PLEASE DATE AND SIGN ON THE REVERSE SIDE
This proxy when properly executed will be voted in the manner directed herein by
the undersigned shareholder. If no direction is made, this proxy will be voted
FOR the proposals listed and FOR the directors listed.
When shares are held by joint tenants, both should sign. When signing as
attorney, personal representative, administrator, trustee or guardian, 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.
-----------------------------------
Signature
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Signature, IF HELD JOINTLY
Dated:__________________, 1996
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY
CARD PROMPTLY USING THE ENCLOSED ENVELOPE
