Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. __)
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-b(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to " 240.14a-11(c) or " 240.14a-12
ECOS Group, Inc.
----------------
(Name of Registrant as Specified in Its Charter)
N/A
---
(Name of Person(s) Filing Proxy Statement if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(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 registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:________________________________________________
2) Form, Schedule or Registration Statement No.:__________________________
3) Filing Party:__________________________________________________________
4) Date Filed:____________________________________________________________
<PAGE>
ECOS GROUP, INC.
14505 Commerce Way, Suite 400
Miami Lakes, Florida 33106
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 11, 2000
The annual meeting of shareholders of ECOS Group, Inc. ("ECOS") will be
held on Friday, August 11, 2000 at 10:00 a.m. at 14505 Commerce Way, Suite 400,
Miami Lakes, Florida for the following purposes:
1. to elect six directors to the Board of Directors for a term of
one year and until their successors are duly elected and
qualified;
2. to adopt the ECOS Group, Inc. 2000 Equity Compensation Plan;
and
3. to transact such other business as may properly come before
the meeting or any adjournment thereof.
Only shareholders of record at the close of business on July 14, 2000
will be entitled to notice of and to vote at the meeting or any adjournments or
postponements thereof.
A Proxy Statement and a proxy solicited by the Board of Directors are
enclosed herewith. Please sign, date and return the proxy promptly. If you
attend the meeting, you may, if you wish, withdraw your proxy and vote in
person.
By Order of the Board of Directors,
CHARLES C. EVANS
Chairman and Chief Executive Officer
Miami Lakes, Florida
July 18, 2000
YOUR VOTE IS IMPORTANT. PLEASE COMPLETE AND RETURN THE ENCLOSED
PROXY PROMPTLY SO THAT YOUR VOTE MAY BE RECORDED AT
THE MEETING IF YOU DO NOT ATTEND PERSONALLY.
<PAGE>
ECOS GROUP, INC.
14505 Commerce Way, Suite 400
Miami Lakes, Florida 33106
-----------------------
PROXY STATEMENT
----------------------
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of ECOS Group, Inc. ("ECOS") for the Annual
Meeting of Shareholders to be held at 10:00 a.m. on Friday, August 11, 2000 at
14505 Commerce Way, Suite 400, Miami Lakes, Florida 33016 and thereafter as it
may from time to time be adjourned.
You are requested to complete, date and sign the accompanying proxy,
and return it to ECOS in the enclosed postage prepaid envelope. Proxies may be
revoked at any time prior to the meeting by giving written notice of revocation
to the Secretary of ECOS, by giving a later dated proxy or by attending the
meeting and voting in person. Proxies duly executed and received in time for the
meeting will be voted in accordance with the shareholder"s instructions. If no
instructions are given, proxies will be voted as follows:
1. FOR the election of six directors to the Board of Directors
for a term of one year and until their successors are duly
elected and qualified;
2. FOR the adoption of the ECOS Group, Inc. 2000 Equity
Compensation Plan; and
3. In the discretion of the proxy holders, FOR or AGAINST such
other business as may properly come before the meeting or any
adjournment thereof.
The Board of Directors has fixed the close of business on July 14, 2000
as the record date for determining the shareholders entitled to notice of and to
vote at the annual meeting. On the record date, there were 31,271,860
outstanding shares of ECOS' common stock, par value $.012 per share (the "Common
Stock"). Holders of the Common Stock are entitled to one vote per share held as
of the record date. Under ECOS' bylaws, the presence, in person or by proxy, of
one-third of the shares eligible to vote is required for a quorum. If a quorum
is not present, the shareholders present in person or by proxy may adjourn the
meeting from time to time, without notice other than announcement at the
meeting, for a period not to exceed sixty days at any one adjournment, until the
number of shares required for a quorum shall be present.
The affirmative vote of a plurality of the votes cast by holders of
outstanding shares of the Common Stock is required for the approval of the
election of the directors. The affirmative vote of a majority of the votes cast
by holders of outstanding shares of Common Stock is required for approval of
Proposal 2 and any other matters to be voted upon at the meeting or any
adjournment thereof. With regard to Proposal 1, votes may be cast in favor of,
or withheld from any or all nominees. Votes that are withheld with respect to
this matter will be excluded entirely from the vote and will have no effect,
other than for purposes of determining the presence of a quorum.
Brokers who hold shares in "street name" for customers have the
authority under the rules of the various stock exchanges to vote on certain
items when they have not received instructions from beneficial owners. Brokers
that do not receive instructions are entitled to vote those shares with respect
to the election of directors, Proposal 1, but may not vote on Proposal 2. A
failure by brokers to vote those shares will not have an effect on Proposal 2 as
approval of Proposal 2 only requires a majority of the votes cast. Any
abstentions will have the same effect as votes against the proposal.
This Proxy Statement and the accompanying proxy are first being mailed
to shareholders on or about July 18, 2000.
1
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of ECOS' Common Stock as of June 30, 2000 by (i) each
person known by ECOS to be the beneficial owner of more than five percent (5%)
of the outstanding shares of our Common Stock; (ii) each director and named
executive officer of ECOS; and (iii) all current directors and executive
officers of ECOS as a group. Unless otherwise indicated, each shareholder has
sole voting and investment power with respect to the indicated shares. As of
June 30, 2000, there were 31,271,860 shares of ECOS' Common Stock outstanding.
<TABLE>
<CAPTION>
Common Stock (1)
---------------------------------------------
Name and Address Number of Shares % of Class
---------------- ---------------- ----------
<S> <C> <C>
Wendell R. Anderson
Director 803,846 (2) 2.54%
Luis De La Cruz
Director 511,538 (3) 1.62%
Leon S. Eplan 942,308 (4) 2.97%
Director
Charles C. Evans 6,739,846 (5) 19.60%
Chairman of the Board of Directors and
Chief Executive Officer
Timothy R. Gipe 6,178,924 (6) 18.01%
Director
Joseph F. Startari 496,154 (7) 1.58%
Director
All Directors and Executive Officers as a 15,985,436 (8) 41.08%
group
Strategica Capital Corporation 2,460,193 (9) 7.29%
</TABLE>
---------------
Except as otherwise indicated, the address of each person named in this table is
c/o ECOS Group, Inc., 14505 Commerce Way, Suite 400, Miami Lakes, Florida 33016.
(1) Pursuant to rules of the Securities and Exchange Commission, shares of
Common Stock subject to options, warrants, rights or conversion privileges
held by directors and executive officers that are exercisable within 60
days of June 30, 2000 are deemed outstanding for purposes of determining
the total number and percentage of shares beneficially owned by such person
and are not deemed outstanding for such purpose for all other shareholders.
(2) Includes 376,923 shares of Common Stock issuable under options.
(3) Includes 230,769 shares of Common Stock issuable under options.
(4) Includes 446,154 shares of Common Stock issuable under options.
(5) Includes 3,119,923 shares of Common Stock issuable under options.
2
<PAGE>
(6) Includes 2,889,462 shares of Common Stock issuable under options and
150,000 shares of Common Stock issuable under options by Mr. Gipe's wife as
to which shares Mr. Gipe disclaims beneficial ownership.
(7) Includes 223,077 shares of Common Stock issuable under options.
(8) Includes 7,492,718 shares of Common Stock issuable under options and
150,000 shares of Common Stock issuable under options by Mr. Gipe's wife as
to which shares Mr. Gipe disclaims beneficial ownership.
(9) Includes 175,000 shares of Common Stock issuable under options granted to a
predecessor corporation and 2,285,193 shares of Common Stock issuable upon
conversion of shares of Series A Convertible Preferred Stock.
3
<PAGE>
PROPOSAL ONE
ELECTION OF DIRECTORS
The Board of Directors of ECOS consists of six directors serving for
one-year terms.
Each of the nominees has consented to being named in this Proxy
Statement and to serve as a director of ECOS if elected. In the event that any
nominee withdraws or for any reason is not able to serve as a director, then the
proxy will be voted for such other person as may be designated by the Board of
Directors, but in no event will the proxy be voted for more than six nominees.
ECOS has no reason to believe that any nominee will not serve if elected.
The following persons have been nominated by the Board of Directors for
election to the Board of Directors as directors to succeed themselves for a term
of one year, expiring at the 2001 Annual Meeting of Shareholders, and until
their successors are elected and qualified or until the earlier of death,
resignation, removal or disqualification of the director.
Wendell R. Anderson, 67, a director since 1994, is former Governor of
the State of Minnesota. For more than five years, Mr. Anderson has practiced law
in Minnesota.
Luis De La Cruz, 47, a director since 1996, has practiced law with De
La Cruz & Cutler, P.A., a law firm in Coral Gables, Florida since 1990. Mr. De
La Cruz's legal expertise is in the areas of real estate and commercial
transactions. He is also a director with De La Cruz & Cutler, P.A.
Leon S. Eplan, 71, a director since 1993, has served since 1996 as a
City Planning Consultant for Eplan Consulting, an Atlanta based international
consulting firm that provides client services in urban planning and
revitalization, urban economic analysis, real estate development and growth
management. He was formerly the Commissioner of Planning and Development of the
City of Atlanta.
Dr. Charles C. Evans, 43, a director since 1993, was appointed interim
Chief Executive Officer of ECOS in February 1998 and was appointed to Chief
Executive Officer in June 1998. From 1986 until March 1995, Dr. Evans was
continuously employed as President of one or more of the subsidiaries of Evans
Environmental & Geosciences ("EE&G").
Timothy R. Gipe, 36, a director since 1999, joined ECOS as General
Manager of EE&G in 1996. Since 1996, Mr. Gipe has been responsible for directing
and managing EE&G, with an aggressive focus on growth and profitability. In
1998, Mr. Gipe was appointed President of EE&G. Prior to joining ECOS, Mr. Gipe
was employed by a national environmental engineering firm, SCS Engineers, where
he served as their Miami Branch Office Director from 1990 to 1995.
Joseph F. Startari, 52, a director since 1996, is a director of
Biotechna Environmental (2000) Corporation, an environmental/biotechnology
company, and Biotechna USA, Inc., a majority owned subsidiary (referred to
collectively as "Biotechna"). Mr. Startari joined Biotechna in December 1995.
Prior to joining Biotechna, Mr. Startari held various senior positions in
operations, marketing, research and development and materials management during
his 18-year tenure at Olin Corporation (Ordinance Division) and also served as
Executive Vice President of Olin Services, Inc.
4
<PAGE>
Committees of the Board of Directors
The Board of Directors held three meetings during the fiscal year ended
March 31, 2000. With the exception of Mr. Anderson and Mr. De La Cruz, each
director attended at least 75% or more of the aggregate number of meetings held
by the Board of Directors and the committees on which he served.
The Board of Directors has established a Compensation Committee, of
which Mr. De La Cruz is Chairman and Mr. Anderson is a member. The Compensation
Committee reviews and approves annual salaries and bonuses for all executive
officers and reviews, approves and recommends to the Board of Directors the
terms and conditions of all employee benefit plans or changes, including the
granting of stock options pursuant to ECOS' stock option plans. The Compensation
Committee did not hold any meetings during the fiscal year ended March 31, 2000.
The Board of Directors also established an Audit Committee of which
Mr. Startari is Chairman, Mr. Eplan and Dr. Evans are voting members and Ms. Ana
Caminas is a non-voting member. The Audit Committee oversees ECOS' Chief
Financial Officer, meets periodically with ECOS' outside auditors, and is
generally responsible for ECOS' financial and accounting policies. The
Compensation Committee held one meeting during the fiscal year ended March 31,
2000.
Certain Relationships and Related Transactions.
In July 1995, ECOS borrowed $85,000 from the spouse of Dr. Evans, the
Chairman of the Board of Directors. The note was due upon demand, bearing
interest at 12% per annum. The note was settled during fiscal year 2000 with a
cash payment of $7,500, issuance of 198,128 shares of ECOS' Common Stock and
options to purchase 198,128 shares of ECOS' Common Stock at a price of $0.06875
per share.
In May 1997, ECOS borrowed $72,000 from the mother of Enrique A. Tomeu,
a former Chief Executive Officer of ECOS. The loan was due upon demand, bearing
interest at 12% per annum. The balance of $72,000 plus interest of $22,817 was
settled for $40,000 on January 17, 2000 from ECOS' internal funds. A $54,519
gain was recognized on the early extinguishment of this debt.
During 1997, ECOS' remediation division had a note payable to
Transportation Financial, which is partially owned by Mr. Tomeu, for $303,000
with a 13.5% interest rate. On November 17, 1998, a mutual agreement was reached
between ECOS and Mr. Tomeu to terminate his four-year employment contract dated
July 8, 1996. In exchange for termination of the employment contract, Mr. Tomeu
agreed to release ECOS from $354,337 obligation payable to him in the form of a
note payable as well as surrender 633,365 shares of Series B Convertible
Preferred Stock of ECOS.
Compensation of Directors
Each director who is not an executive officer or employee of ECOS is
entitled to a fee of $300 per meeting attended. In March 1999, the Board of
Directors granted each non-employee director shares of Common Stock options to
purchase shares of Common Stock in lieu of any past due unpaid compensation.
Specifically, Mr. Anderson received 376,923 shares valued at $14,700; Mr. De La
Cruz received 230,769 shares valued at $9,000; Mr. Eplan received 446,154 shares
valued at $17,400 and Mr. Startari received 223,077 shares valued at $8,700. In
addition, each of these directors was granted an equal number of options. These
options had an exercise price of $0.06875 per share and a one-year vesting
period. The options expire on March 2, 2004. If the ECOS 2000 Equity
Compensation Plan is approved by Shareholders, then each non-employee director
will also be eligible to receive options, at the discretion of the Board of
Directors.
5
<PAGE>
EXECUTIVE COMPENSATION
The following table presents certain summary information for the fiscal
year ended March 31, 2000 concerning compensation earned for services rendered
in all capacities by ECOS' Chief Executive Officer and the other most highly
compensated executive officers of ECOS or of ECOS' subsidiaries (the "Named
Executive Officers") whose total annual salary and bonus exceeded $100,000
during fiscal year 2000.
<TABLE>
<CAPTION>
Summary Compensation Table
---------------------- -------- ---------------------------------------------- ---------------------------------
Annual Compensation Long-Term Compensation
--------------------- -------- ---------------------------------------------- ---------------------------------
Awards
---------------------- -------- ---------------------------------------------- ---------------------------------
Restricted Securities
Name and Other Annual Stock Award Under-
Principal Position Year Salary Bonus Compensation $ Lying
Options
---------------------- -------- ----------- ---------------- ----------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Charles Evans 2000 $102,500 $10,000 * -- --
Chairman and Chief 1999 $ 92,708 (1) * $104,200(3) 2,671,795
Executive Officer 1998 $ 51,702 -- * -- --
---------------------- -------- ----------- ---------------- ----------------- ---------------- ----------------
Timothy Gipe 2000 $100,000 $10,000 * -- --
President 1999 $ 95,042 (1) * $102,939(4) 2,639,462
1998 $ 71,354 $36,654(2) * -- --
---------------------- -------- ----------- ---------------- ----------------- ---------------- ----------------
</TABLE>
* The value of perquisites and other personal benefits paid does not exceed the
lesser of $50,000 or 10% of the total annual salary & bonuses reported for
executive officers.
(1) Executive officer elected to receive restricted stock in lieu of cash
bonus.
(2) Represents bonus paid in fiscal year 1999 for services performed in fiscal
year 1998.
(3) Dr. Evans was awarded 2,671,795 shares of restricted stock in lieu of
compensation owed. These shares are valued at $0.039 per share, the closing
market price of ECOS' Common Stock on the date of the grant. The restricted
stock was fully vested upon grant. Dr. Evans has the right to receive all
dividends paid upon such stock. As of March 31, 2000, Dr. Evans held
3,619,923 shares of restricted stock valued at $622,265 (based upon a
closing price of ECOS' Common Stock of $0.1719 per share as of March 31,
2000).
(4) Mr. Gipe was awarded 2,639,462 shares of restricted stock in lieu of
compensation owed. These shares are valued at $0.039 per share, the closing
market price of ECOS' Common Stock on the date of the grant. The restricted
stock was fully vested upon grant. Mr. Gipe has the right to receive all
dividends paid upon such stock. As of March 31, 2000, Mr. Gipe held
3,139,462 shares of restricted stock valued at $539,674 (based upon a
closing price of ECOS' Common Stock of $0.1719 per share as of March 31,
2000).
6
<PAGE>
The following table provides information regarding the options
exercised by the Executive Officers during fiscal year 2000 and the value of
options outstanding for such individuals at March 31, 2000:
<TABLE>
<CAPTION>
Aggregated Option/SAR Exercises In Last Fiscal Year
And Fiscal Year End Option/SAR Values
------------------------- ------------------ ------------------ ---------------------- ----------------------
Number of Securities
Underlying
Unexercised Value of Unexercised
Options/SAR's at In-the-Money
fiscal year end (#) Options/SAR's at
Shares Acquired Exercisable/ fiscal year end ($)
on Exercise (#) Value Realized Unexercisable Exercisable/
($) Unexercisable (1)
------------------------- ------------------ ------------------ ---------------------- ----------------------
<S> <C> <C> <C> <C> <C> <C>
Charles Evans
Chairman and Chief -- -- 2,869,923/2,869,923 $493,340/$493,340
Executive Officer
------------------------- ------------------ ------------------ ---------------------- ----------------------
Timothy Gipe
President -- -- 2,639,462/2,639,462 $453,723/$453,723
------------------------- ------------------ ------------------ ---------------------- ----------------------
</TABLE>
(1) As of March 31, 2000, the closing price of ECOS' Common Stock was
$0.1719.
On July 1, 1998, Dr. Evans and Mr. Gipe were granted 300,000 and
500,000 stock options, respectively; each of which was, (i) for 3 years, (ii)
immediately exercisable and (iii) at an exercise price of $0.10 per share (the
market price on the date of the grant). On March 3, 1999, the stock options were
cancelled and an equivalent number of shares of Common Stock were issued to Dr.
Evans and Mr. Gipe. These stock grants were made by the Board of Directors as a
form of non-cash compensation for past services.
Employment Agreements
In June 1999, Dr. Evans executed a one-year agreement to serve as Chief
Executive Officer of ECOS. Pursuant to the terms of the agreement, Dr. Evans
received a salary of $104,000, a car allowance of $600 per month, a performance
based bonus of up to $10,000 per year, a stock option bonus incentive of up to
250,000 shares, reimbursement for business travel and expenses and eight weeks
paid vacation per year. The agreement also provides that he will not compete
with ECOS' business for a period of one-year following his voluntary resignation
or the termination of his employment for cause. In June 2000, ECOS renewed Dr.
Evans' contract for another one-year term, including a 2.5% base salary
increase.
In June 1999, Mr. Gipe executed a one-year agreement to serve as
President of EE&G. Pursuant to this agreement, Mr. Gipe received a salary of
$100,000 per year, a performance based bonus of up to $10,000 per year, a stock
option bonus incentive of up to 250,000 shares, reimbursement for business
travel and expenses and four weeks paid vacation per year. The agreement also
provides that Mr. Gipe will not compete with ECOS' business for a period of
one-year following his voluntary resignation or the termination of his
employment for cause. ECOS renewed Mr. Gipe's contract in June 2000 for another
one-year term, including a 2.5% base salary increase and paid vacation of five
weeks per year.
7
<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires ECOS' officers and directors, and persons who beneficially own more
than 10% of ECOS' Common Stock, to file reports 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 ECOS with copies of all
Section 16(a) forms they file. Based solely upon a review of the copies of such
forms furnished to ECOS and written representations that no other reports were
required, ECOS believes that, for the fiscal year ended March 31, 2000, its
officers complied with all Section 16(a) filing requirements applicable to such
officers, directors and greater than 10% beneficial owners.
8
<PAGE>
PROPOSAL TWO
ADOPTION OF THE ECOS GROUP, INC.
2000 EQUITY COMPENSATION PLAN (THE "PLAN")
Adoption of the Plan. On July 11, 2000, the Board of Directors adopted
the Plan, subject to shareholder approval, authorizing the Compensation
Committee of the Board of Directors to grant stock options and restricted stock
awards for up to 3,127,186 shares of ECOS Common Stock to ECOS' employees,
officers and directors. The Board of Directors approved the Plan to provide
competitive compensation for ECOS' employees, incentives for ECOS' officers and
directors and to align the interests of these persons with the interests of the
shareholders.
Administration of the Plan. The Plan is currently administered by a
committee consisting of not less than two persons appointed by the Board of
Directors from among its members who are not officers of other salaried
employees of ECOS and who are outside directors within the meaning of Section
162(m) of the Internal Revenue Code of 1986, as amended (the "Code") and
non-employee directors within the meaning of Rule 16b-3 (the "Committee"). The
Committee is authorized to determine, from time to time, the persons to whom
awards or grants will be made, and the term, exercise price, settlement terms,
forfeiture provisions and other terms and conditions of each award or grant. The
Committee has the power to establish and waive, in its discretion, vesting
provisions for awards or grants.
Notwithstanding the foregoing, the full Board of Directors may
administer the Plan with respect to grants to our employees, except with respect
to matters which under Rule 16b-3 or Section 162(m) of the Code are required to
be determined by the Committee. In addition, the Board of Directors shall
conduct the general administration of the Plan with respect to options granted
to non-employee directors.
Grants. Incentives under the Plan may consist of any of incentive stock
options, non-qualified stock options and restricted stock awards. Shares subject
to options or awards, which expire or are forfeited become available to be
granted again under the Plan.
Eligibility for Participation. Employees, officers, and directors (or
employees, officers, or directors of any current or future subsidiaries of ECOS)
are eligible to receive grants under the Plan ("Participants"). As of March 31,
2000, there were two employee and four non-employee directors of ECOS, 58
employees of ECOS and its subsidiary (including two officers of ECOS and three
officers of its subsidiary).
Options, Term and Exercise Price. The exercise price of the Common
Stock subject to an option is the fair market value of the stock on the date the
option is granted. However, incentive stock options ("ISOs") granted to a person
who owns more than 10% of the voting power of ECOS are required to have an
exercise price of not less than 110% of the fair market value of the Common
Stock on the date of grant. On June 30, 2000, the fair market value of a share
of Common Stock was $0.2031 per share.
The Committee determines the option exercise period for each option,
not to exceed ten years from the date of grant, except that ISOs granted to a
person who owns more than 10% of the voting power of ECOS are required to have
an exercise period of not greater than five years.
Transferability of Options. In general, options are not transferable,
except by will or the laws of descent or distribution. In addition, the Plan
permits a grantee to transfer nonqualified stock options to family members or
entities (including trusts) established for the benefit of the grantee or the
grantee's family members; provided that the grantee may not receive
consideration for the transfer of such option and the transferred option must
continue to be subject to the same terms and conditions as were applicable to
the option immediately before the transfer.
9
<PAGE>
Awards under the Plan. The Plan provides that the Committee may grant
or issue stock options, or restricted stock, or any combination thereof to any
eligible employee, officer, or director. Each such award will be set forth in a
separate agreement with the person receiving the award and will indicate the
type, terms and conditions of the award.
Nonqualified Stock Options, ("NQSOs"), will provide for the right to
purchase Common Stock at a specified price which, except with respect to NQSOs
intended to qualify as performance-based compensation under Section 162(m) of
the Internal Revenue Code, may be less than fair market value on the date of
grant (but not less than par value), and usually will become exercisable (in the
discretion of the Committee) in one or more installments after the grant date,
subject to the participant's continued employment with us. NQSOs may be granted
for any term specified by the Committee.
Incentive Stock Options will be designed to comply with certain
restrictions contained in the Internal Revenue Code. Among such restrictions,
ISOs (i) must have an exercise price not less than the fair market value of a
share of Common Stock on the date of grant; (ii) may only be granted to
employees; (iii) must expire within a specified period of time following the
optionee's termination of employment; and (iv) must be exercised within ten
years after the date of grant, but may be subsequently modified to disqualify
them for treatment as ISOs.
Restricted stock may be issued to participants and made subject to such
restrictions as may be determined by the Committee. Restricted stock shall be
forfeited if the conditions or restrictions are not met. In general, Restricted
stock may not be sold, or otherwise transferred, until restrictions are removed
or expire. Holders of restricted stock, unlike recipients of options, will have
voting rights and will receive dividends prior to the time when the restrictions
lapse.
Amendment and Termination of the Plan. The Board of Directors may amend
or terminate the Plan at any time, provided that shareholder approval is
required for any amendment that requires shareholder approval in accordance with
the regulations issued under Section 16 of the Securities Exchange Act of 1934
and any amendment that would impair the rights of a grantee requires the
grantee's consent. The Plan will terminate on July 11, 2010 unless terminated
earlier by the Board of Directors. Awards granted prior to July 11, 2010 may
extend beyond that date.
Adjustment Provisions. If there is any change in the Common Stock as a
result of a stock dividend, recapitalization, stock split, or combination or
exchange of the Common Stock, or a merger, reorganization or consolidation of
ECOS or any other change in the capital structure made without the receipt of
consideration, then unless such event results in the termination of all
outstanding grants under the Plan, the number of and class of shares available
for grants and the number and class of such shares covered by outstanding
grants, and the price per share or the applicable market value of such grants,
will be proportionately adjusted by the Committee to reflect any increase or
decrease in the number or kind of issued shares of Common Stock.
Change in Control of ECOS. In the event of a change in control, unless
otherwise provided in an award agreement, the Committee or the Board of
Directors may provide on a case-by-case basis that some or all Options may
become fully vested and immediately exercisable, and the restrictions on any
restricted stock grants may lapse with such grants becoming fully vested.
Federal Income Tax Consequences. Set forth below is a general
description of the federal income tax consequences relating to grants under the
Plan.
10
<PAGE>
Non-Qualified Stock Options. There are no federal income tax
consequences to grantees or to ECOS upon the grant of an NQSO under the Plan.
Upon the exercise of NQSOs, grantees will recognize ordinary compensation income
in an amount equal to the excess of the fair market value of the shares at the
time of exercise over the exercise price of the NQSO, and ECOS generally will be
entitled to a corresponding federal income tax deduction. Upon the sale of
shares acquired by exercise of an NQSO, a grantee will have a capital gain or
loss in an amount equal to the difference between the amount realized upon the
sale and the grantee's adjusted tax basis in the shares (the exercise price plus
the amount of ordinary income recognized by the grantee at the time of exercise
of the NQSO).
Incentive Stock Options. Grantees will not be subject to federal income
taxation upon the grant or exercise of ISOs granted under the Plan, and ECOS
will not be entitled to a federal income tax deduction by reason of such grant
or exercise. However, the amount by which the fair market value of the shares at
the time of exercise exceeds the stock option price (or the grantee's other tax
basis in the shares) is an item of tax preference subject to the alternative
minimum tax applicable to the person exercising the ISO. A sale of shares
acquired by exercise of an ISO that does not occur within one year after the
exercise or within two years after the grant of the ISO generally will result in
the recognition of long-term capital gain or loss in the amount of the
difference between the amount realized on the sale and the stock option price
(or the grantee's other tax basis in the shares), and ECOS will not be entitled
to any tax deduction in connection with the sale.
If the sale occurs within one year from the date of exercise of the ISO
or within two years from the date of grant (a "disqualifying disposition") and
is a transaction in which a loss, if sustained, would be recognized, the grantee
generally will recognize ordinary compensation income equal to the lesser of (i)
the excess of the fair market value of the shares on the date of exercise over
the exercise price (or the grantee's other tax basis in the shares), or (ii) the
excess of the amount realized on the sale of the shares over the exercise price
(or the grantee's other tax basis in the shares). In the case of a disqualifying
disposition where a loss, if sustained, would not be recognized, the grantee
will recognize ordinary income equal to the excess of the fair market value of
the shares on the date of exercise over the stock option price (or the grantee's
other tax basis in the shares). Any amount realized on a disqualifying
disposition in excess of the amount treated as ordinary compensation income (or
any loss realized) will be a long-term or a short-term capital gain (or loss),
depending upon the length of time the shares were held. ECOS generally will be
entitled to a tax deduction on a disqualifying disposition corresponding to the
ordinary compensation income recognized by the grantee.
Restricted Stock. A grantee normally will not recognize taxable income
upon the award of a restricted stock grant, and ECOS will not be entitled to a
deduction, until such stock is transferable by the grantee or no longer subject
to a substantial risk of forfeiture for federal tax purposes, whichever occurs
earlier. When the Common Stock is either transferable or is no longer subject to
a substantial risk of forfeiture, the grantee will recognize ordinary
compensation income in an amount equal to the fair market value of the Common
Stock at that time and ECOS will be entitled to a deduction in the same amount.
A grantee may, however, elect to recognize ordinary compensation income in the
year the restricted stock grant is awarded in an amount equal to the fair market
value of the Common Stock at that time, determined without regard to the
restrictions. In this event, ECOS will be entitled to a deduction in the same
year. Any gain or loss recognized by the grantee upon subsequent disposition of
the Common Stock will be capital gain or loss. If, after making the election,
any Common Stock subject to a restricted stock grant is forfeited, or if the
market value declines during the restriction period, the grantee will not be
entitled to any tax deduction or tax refund.
11
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OTHER EXECUTIVE OFFICERS
Ana R. Caminas, 46, was hired in March 1999 as Chief Financial Officer
of ECOS. From 1991 to 1998, Ms. Caminas served as Vice President of J.I. Kislak
Mortgage Corporation. Ms. Caminas graduated from Florida International
University with a Bachelor of Science degree in Business Administration. She has
a Master's Degree in Accounting from the University of Miami and maintains
professional registration as a Certified Public Accountant in the State of
Florida.
INDEPENDENT PUBLIC ACCOUNTANTS
Morrison, Brown, Argiz & Company served as independent auditors of ECOS
for the fiscal year ended March 31, 2000 and have been selected by the Board of
Directors to serve as independent auditors of ECOS for the fiscal year ending
March 31, 2001. Representatives of Morrison, Brown, Argiz & Company are expected
to be present at the annual meeting and will have the opportunity to make a
statement if they desire to do so and to respond to appropriate questions.
GENERAL INFORMATION
Other Matters. The Board of Directors does not intend to present any
matter for action at this meeting other than the matters described in this Proxy
Statement. If any other matters properly come before the annual meeting, it is
intended that the holders of the proxies hereby solicited will act in respect to
such matters in accordance with their best judgment.
Deadline for Shareholders Proposals. The deadline for submission of
shareholder proposals pursuant to Rule 14a-8 of the Securities Exchange Act of
1934 for inclusion in ECOS' proxy statement for the 2001 Annual Meeting of
Shareholders is March 20, 2001. Additionally, ECOS must receive notice of any
shareholder proposal to be submitted at the 2001 Annual Meeting of Shareholders
(but not required to be included in ECOS' proxy statement) by June 3, 2001, or
such proposal will be considered untimely pursuant to Rule 14a-4 and 14a-5(e)
under the Exchange Act and the persons named in the proxies solicited by
management may exercise discretionary voting authority with respect to such
proposal.
Expenses of Solicitation. Proxies will be solicited by mail, telephone,
or other means of communication. Solicitation also may be made by ECOS'
directors, officers and regular employees. The entire cost of solicitation will
be borne by ECOS.
By Order of the Board of Directors,
CHARLES C. EVANS
Chairman and Chief Executive Officer
Miami Lakes, Florida
July 18, 2000
12
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ECOS GROUP, INC.
Annual Meeting of Shareholders
Friday, August 11, 2000
The undersigned appoints as agents to vote all shares of common stock
of ECOS Group, Inc., a Florida corporation, that the undersigned is entitled to
vote at the annual meeting of shareholders, to be held at 14505 Commerce Way,
Suite 400, Miami Lakes, Florida 33016, on Friday, August 11, 2000, at 10:00 a.m.
Eastern Time, and at any adjournments. As more fully described in the proxy
statement for the annual meeting, such persons (or their substitutes) are
directed to vote as indicated on this card and are authorized to vote in their
discretion upon any other business that properly comes before the meeting.
Our Board of Directors is soliciting this Proxy.
Our Board of Directors recommends a vote "For" the listed proposals.
(1) To elect six directors to the Board of Directors to serve for one year and
until their successors are duly elected and qualified.
[ ] For all nominees listed below (except as indicated to the contrary
below)
[ ] Withhold authority to vote for all nominees
Nominees: Wendell R. Anderson, Luis De La Cruz, Leon S. Eplan, Dr. Charles
C. Evans, Timothy R. Gipe and Joseph F. Startari
Instruction: To withhold authority to vote for any individual nominee,
write that nominee's name in the space below:
_______________________________________
(2) To adopt the Ecos Group, Inc. 2000 Equity Compensation Plan.
[ ] For [ ] Against [ ] Abstain
(3) To vote in accordance with their best judgment with respect to any other
matters as may poorly come before the meeting or any adjournment thereof.
If no instructions are specified, this proxy will be voted "For" the listed
proposals.
Date: _____________________________
Shareholders' Signature: _____________________________
Signature of C0-shareholder (if any): _____________________________
Please detach this proxy card and sign, date and mail it in the postage-paid
envelope provided.
The above-signed shareholder acknowledges receipt from Ecos Group, Inc., prior
to the execution of this proxy, of a notice of the annual meeting and a proxy
statement dated July 18, 2000.
Please sign exactly as your name appears on this card. When signing on behalf of
a corporation, estate, trust or another shareholder, please give such entity's
full name and your full title.
Please act promptly.
Sign, date & mail your proxy card today.
