SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. 1)
Filed by the Registrant (x)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
(x) Preliminary Proxy Statement ( ) Confidential, for Use of the
(Amendment #2) Commission Only (as permitted
by Rule 14a-6(e)(2))
( ) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
ETS International, Inc.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
(x) $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
or 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(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:
Common Stock without par value
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(2) Aggregate number of securities to which transaction applies:
13,415,697
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(3) Per unit or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing
fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
- -----------------------------------------------------------------------
(5) Total fee paid:
$125
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(x) Fee paid previously with preliminary materials.
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( ) 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 date of
its filing.
(1) Amount Previously Paid:
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<PAGE>
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
October x, 1996
Dear Fellow Shareholder:
The Fiscal 1997 Annual Shareholders' Meeting of ETS International, Inc.
("ETSI" or the "Company") will be held at 10:00 a.m. on Friday, October
25, 1996, at ETSI headquarters, 1401 Municipal Road, NW, Roanoke,
Virginia 24012. Enclosed you will find formal Notice of Annual Meeting,
Proxy and Proxy Statement, detailing the matters which will be acted
upon. Directors and Officers of the Company will be present to help
host the meeting and to respond to any questions from our shareholders.
I hope you will be able to attend.
Please sign, date and return the enclosed Proxy without delay in the
enclosed envelope. If you attend the Meeting, you may vote in person
even if you have previously mailed a Proxy by withdrawing your Proxy
vote at the meeting.
The Company's Board of Directors believes that a favorable vote for each
matter described in the attached Notice of Annual Meeting and Proxy
Statement is in the best interest of the Company and its shareholders
and unanimously recommends a vote "FOR" each such matter. Accordingly,
we urge you to review the accompanying material carefully and to return
the enclosed Proxy promptly.
Thank you for your investment and continued interest in ETS
International, Inc.
Sincerely,
John D. McKenna, Ph.D.
President and Chairman
<PAGE>
NOTICE OF FISCAL 1997 ANNUAL MEETING OF SHAREHOLDERS
TO THE SHAREHOLDERS OF ETS INTERNATIONAL, INC.:
NOTICE is hereby given that the Fiscal 1997 Annual Meeting of
Shareholders (the "Meeting") of ETS International, Inc. ("ETSI") will
be held at the ETSI headquarters, 1401 Municipal Road, NW, Roanoke,
Virginia 24012 on Friday, October 25, 1996, at 10:00 a.m., local time,
for the following purposes:
1. Election of Directors for the ensuing year.
2. Approval of the appointment of independent auditors for fiscal
year 1997.
3. Approval of an amendment to ETSI's Articles of Incorporation which
would increase the authorized number of shares of common stock without
par value from 20,000,000 shares to 30,000,000 shares.
4. Approval of an amendment to the Articles of Incorporation of ETSI
which would authorize the issuance of 5,000,000 shares of preferred
stock without par value.
5. Transaction of such other business as may properly come before the
Meeting, or any adjournments thereof.
Only shareholders of record at the close of business on August 31, 1996
are entitled to notice of and to vote at the Meeting or any
adjournments thereof.
Your attention is directed to the Proxy Statement accompanying this
notice for a more complete statement regarding matters proposed to be
acted upon at the meeting.
TO ASSURE THAT YOUR SHARES ARE REPRESENTED AT THE MEETING, PLEASE
COMPLETE, DATE, SIGN AND MAIL PROMPTLY THE ENCLOSED PROXY, FOR WHICH A
RETURN ENVELOPE IS PROVIDED. YOUR PROXY IS REVOCABLE AT ANY TIME PRIOR
TO ITS EXERCISE.
BY ORDER OF THE BOARD OF DIRECTORS
John C. Mycock
Secretary to the Board of Directors
October x, 1996
<PAGE>
PROXY STATEMENT
FOR FISCAL 1997 ANNUAL MEETING OF SHAREHOLDERS
ETS INTERNATIONAL, INC.
1401 Municipal Road
Roanoke, Virginia
USA 24012-1309
Solicitation of the enclosed fiscal 1997 proxy is made by and on behalf
of the Board of Directors (the "Board of Directors") of ETS
International, Inc. ("ETSI" or the "Company") to be used at the Fiscal
1997 Annual Meeting of Shareholders to be held at the ETSI headquarters,
1401 Municipal Road, NW, Roanoke, Virginia 24012 on Friday, October 25,
1996 at 10:00 a.m., and at any adjournments thereof. The mailing date of
the Proxy Statement and the accompanying Proxy is October 7, 1996.
The cost of the solicitation of proxies will be borne by the Company.
Solicitations will be made only by use of the mails, except that, if
necessary, officers, directors and regular employees of ETSI, or its
subsidiaries, ETS, Inc. ("ETS"), ETS Analytical Services, Inc. ("ETSAS")
and ETS Water and Waste Management, Inc. ("ETSW") may solicit proxies by
telephone, telegram, facsimile or by personal contact. It is
contemplated that brokerage houses and nominees may be requested to
forward proxy solicitation material to the beneficial owners of the
stock held of record by such persons; and ETSI may reimburse them for
their charges and expenses in this connection.
All properly executed proxies delivered pursuant to this solicitation
will be voted at the Annual Meeting in accordance with any instructions
thereupon. Any person signing and mailing the enclosed proxy may,
nevertheless, revoke the proxy at any time prior to the actual voting
thereof by attending the Annual Meeting and voting in person, by
providing written notice of revocation of the proxy or by submitting a
signed proxy bearing a later date. Any written notice of revocation
should be sent to the attention of the Secretary of the Board at the
address above.
A copy of the Company's Annual Report for the fiscal year ended May 31,
1996, has been mailed to you, but should not be considered proxy
solicitation material.
<PAGE>
Shareholder nominations for Directors and shareholder proposals for the
Fiscal 1998 Annual Meeting should be sent to the Company in writing on
or before July 31, 1997. ETSI has received no shareholder nominations
or proposals for the Fiscal 1997 Annual Meeting.
ETSI has only one class of shares outstanding. The Company has fixed the
close of business on August 31, 1996 as the record date for
determination of shareholders entitled to notice of and to vote at the
meeting or any adjournments thereof. As of July 31, 1996, there were
outstanding 12,550,733 shares of common stock without par value ("Shares
of Common Stock") each share entitled to one vote on each matter to be
voted on at the Annual Meeting. The holders of a majority of shares
entitled to vote and represented in person or by proxy at the Annual
Meeting will constitute a quorum for the transaction of business at the
Annual Meeting. In general, Shares of Common Stock represened by a
properly signed and returned proxy card will be counted as shares
present and entitled to vote at the meeting for purposes of determining
a quorum, without regard to whether the card reflects absentions (or is
left blank) or reflects a "broker non-vote" on a matter (i.e., a card
returned by a broker because voting instructions have not been received
and the broker has no discretionary authority to vote). Holders of
Shares of Common Stock are not entitled to cumulative voting rights.
SECURITY OWNERSHIP OF MANAGEMENT
AND CERTAIN BENEFICIAL OWNERS
As of July 31, 1996, there were 12,550,733 Shares of Common Stock
outstanding and entitled to vote at the Annual Meeting. Each Share of
Common Stock is entitled to one vote on each of the matters to be voted
on at the Annual Meeting. The following table sets forth, as of July 31,
1996, the beneficial ownership of each current director, each of the
executive officers named in the Summary Compensation Table, the
executive officers and directors as a group and each shareholder, known
to management of the Company, to own beneficially more than 5% of the
outstanding Common Stock. Unless otherwise indicated, the Company
believes that the beneficial owner set forth in the table has sole
voting and investment power.
<PAGE>
Title of Name of Amount and Nature Percent of
Class Beneficial Owner of Beneficial Class
Ownership
Common Stock Dr. John D. McKenna (2) 1,228,100 (1) (3) 9.8%
Common Stock John C. Mycock (2) 336,450 (1) (4) 2.7%
Common Stock Coleman S. Lyttle (2) 1,091,334 (1) (5) (11) 8.7%
Common Stock Navin D. Sheth (2) 532,208 (1) (6) 4.2%
Common Stock David F. Tompkins (2) 6,106 (1) (7) 0.1%
Common Stock Thomas W. Marmon 1,084,288 (1) (8) (10) 8.6%
Common Stock Lee A. Raver 341,800 (1) (9) 2.7%
Common Stock Roberta Greiner 1,276,000 10.2%
Common Stock Dr. Allen Kahn 971,834 (1) 7.7%
Common Stock Directors and executive
officers as a group 4,620,286 36.8%
1. Pursuant to the rules of the Securities and Exchange Commission,
Shares of Common Stock which are not outstanding but which a person has
the right to acquire within 60 days of July 31, 1996 are considered as
shares outstanding for purposes of computing the percentage of Shares of
Common Stock owned by such person, but such shares are not deemed
outstanding for the purposes of computing the percentage of Shares of
Common Stock owned by any other person.
<PAGE>
2. Named executive officer.
3. Includes 120,000 shares issuable upon the exercise of options as
follows: 100,000 shares pursuant to the 1992 Nonstatutory Option Plan
and 20,000 shares pursuant to the 1994 Nonstatutory Option Plan.
4. Includes 80,000 shares issuable upon the exercise of options as
follows: 60,000 shares pursuant to the 1992 Nonstatutory Option Plan and
20,000 shares pursuant to the 1994 Nonstatutory Option Plan.
5. Includes 20,000 shares pursuant to the 1994 Nonstatutory Option Plan.
6. Includes 20,000 shares pursuant to the 1994 Nonstatutory Option Plan.
7. Includes 64,604 shares issuable upon the exercise of options as
follows: 6,000 options issued to laboratory employees in 1992, 4,000
shares pursuant to the 1992 Incentive Option Plan and 20,000 shares
pursuant to the 1994 Nonstatutory Option Plan.
8. Includes 120,000 shares issuable upon the exercise of options as
follows: 100,000 shares pursuant to warrants issued in February, 1992
and 20,000 shares pursuant to the 1994 Nonstatutory Option Plan.
9. Includes 470,000 shares issuable upon the exercise of options as
follows: 100,000 shares pursuant to warrants issued in February, 1992,
350,000 shares pursuant to options issued in July, 1993 and 20,000
shares pursuant to the 1994 Nonstatutory Option Plan.
10. Includes shares registered in the name of the Thomas W. Marmon Trust.
11. Does not include shares in the name of the Estate of Stamie E.
Lyttle of which Coleman Lyttle is executor and certain trusts created
thereby of which he is trustee. Mr. Lyttle is not a beneficiary of the
estate or the beneficial owner of Shares of Common Stock owned by the
estate or by any such trust.
SUMMARY COMPENSATION TABLE
Unless the context otherwise requires, the term the "Company" as used in
connection with executive compensation refers to ETSI and its wholly
owned operating subsidiaries, ETSl, ETSAS and ETSW. All employees are
paid cash compensation by the various subsidiaries and not by ETSI. The
following table provides information as to annual, long-term and other
compensation paid by the Company to its Chief Executive Officer and to
each of the other named executive officers of the Company who earned in
excess of $100,000 per year for services rendered in all capacities to
the Company and/or its subsidiaries.
<PAGE>
Option/SAR Grants in Last Fiscal Year Table
The following table provides information as to options granted to the
named executive officers during fiscal 1996. No separate stock
appreciation rights ("SARs") were granted in fiscal 1996.
Annual Compensation Long Term Compensation
Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Name and Other All
Principal Fiscal Salary Bonus Annual Restricted Options LTIP Other
Position Year ($) ($) Compen- Stock SARs Payouts Compen-
sation Awards # ($) sation
($) ($)
John D. 1996 $93,783
Mckenna. 1995 100,301
President 1994 45,823
and
Chairman
of the
Board
Coleman
Lyttle 1996 $150,943
Presi- 1995 127,464
dent of 1994 206,603
a sub-
sidiary
and a
Director
<PAGE>
Aggregated Options Granted and Exercised in Last Fiscal Year and
Fiscal Year End Option/SAR Values
The following tables sets forth certain information concerning the
number of stock options held by the named Officers as of May 31, 1995.
Option/SAR Grants in Last Fiscal Year Table
The following table provides information as to options granted to the named
executive officers during fiscal 1996. No separate stock appreciation rights
("SARs") were granted in fiscal 1996.
Potential
Realizable Value
at Assumed Annual
Rates of Stock
Price Appreciation
Individual Grants For Option Term
Number of Percent of
Securities Total Options
Underlying Granted to Exercise or
Options Employees in Base Price Expiration
Name Granted Fiscal Year ($/share) Date 5%($) 10%($)
John D.
McKenna
Coleman
S. Lyttle
Aggregated Options Granted and Exercised in Last Fiscal Year and
Fiscal Year End option/SAR Values
The following tables sets forth certain information concerning the number of
stock options held by the named Officers as of May 31, 1995.
Number of
Shares Dollar value
underlying of unexercised
unexercised (in-the-money)
options/warrants options/warrants
on 05/31/96 on 5/31/96
Shares Exer- Non- Non-
Acquired on Value cise Exer- Exer- Exer- Exer-
Name Exercise Realized Price cisable cisable cisable cisable
John D.
McKenna 120,000
Coleman
S. Lyttle 20,000
<PAGE>
Compensation of Directors
Directors who are not employees of the Company are entitled to receive
the base level of stock options awarded to executives. Outside
directors do not receive any fees for attending meetings of the Board
but are reimbursed for their out-of pocket expenses in connection
therewith.
Board of Directors' Report on Executive compensation
The compensation of the Company's executive officers and key managers,
("executives") is reviewed and approved annually by the Board of
Directors. In addition to reviewing and approving executive officers'
salary and bonus arrangements, the Board of Directors establishes
policies and guidelines for other benefits and administers the awards
of stock options pursuant to the Company's stock option plans.
Compensation Policies and Procedures Applicable to
Executives for Fiscal 1996
General.
Compensation of the Company's executives is intended to attract, retain
and award persons who are essential to the corporate enterprise. The
fundamental policy of the Company's executive compensation program is to
offer competitive compensation to executives that appropriately rewards
the individual executive's contribution to corporate performance. The
Board of directors utilizes subjective criteria for evaluation of
individual performance and relies substantially on the key managers in
doing so. the Board focuses on two primary components of the Company's
executive compensation program, each of which is intended to reflect
individual and corporate performance: base salary compensation and long-
term incentive compensation. The Company has not paid cash incentive
bonuses during fiscal 1996.
Base Salary Compensation.
Executives' base salaries are determined primarily by reference to
compensation packages for similarly situated executives of companies of
similar size or in comparable lines of business with whom the Company
expects to compete for executive talent. The Board also assesses
subjective qualitative factors to discern a particular executive's
relative value to the corporate enterprise in establishing base
salaries. Each year, base salaries of executives are increased by
increases in an average of local and national of cost of living indexes.
In fiscal 1996, each executive accepted decreases in salary as a result
of the Company's operational losses. No bonuses were awarded to
executives in fiscal 1996. The Board intends to award year-end bonuses
to executives, but only in the event the Company is profitable. The
total of all bonuses will be based on the Company's overall economic
performance. Relative bonuses will be awarded pursuant to the Board's
subjective analysis of each executive's performance.
<PAGE>
Long Term Incentive Compensation.
It is the Board's philosophy that significant stock ownership by
management creates a powerful incentive for executives to build long-
term shareholder value. Accordingly, the Board believes that an integral
component of executive compensation is the award of equity-based
compensation, which is intended to align executives' long-term interests
with those of the Company's shareholders. Awards of stock options to
executives have historically been at then-current market prices and, in
keeping with the Company's objective to link pay with corporate loyalty,
generally vest over a period of one to five years. The Board believes
that option grants should be considered on an annual basis. In general,
a fixed minimum option grant is awarded to all executives and additional
grants may be awarded from time to time consistent with the relative pay
levels of the executives.
CEO John McKenna's Compensation.
In reviewing and approving Dr. McKenna's fiscal 1996 compensation, the
Board of Directors considered the same criteria detailed herein with
respect to executives in general. Dr. McKenna's base salary for fiscal
1996 (effective December 1, 1995) was established at $97,594 which is
below the midpoint of base compensation for CEO's of comparable
companies. This amount represented a 3% cost of living increase over the
base salary which was awarded to Dr. McKenna in fiscal 1995.
Audit Committee.
This committee makes recommendations to the Board of Directors with
respect to the Company's financial statements and the appointment of
independent auditors, reviews significant audit and accounting policies
and practices, meets with the Company's independent public accountants
concerning, among other things, the scope of audits and reports, and
reviews the performance of the overall accounting and financial controls
of the Company. Members of the Audit Committee are John D McKenna, John
C. Mycock and Lee A Raver.
The Board of Directors does not have a standing compensation committee
and responsibility for reviewing and approving the salaries, bonuses and
other compensation and benefits of executive officers, reviewing and
advising management regarding benefits and other terms and conditions of
compensation of management and administering the Company's stock option
plans are the responsibility of the entire Board of Directors.
<PAGE>
The Board of Directors does not have a standing nominating committee.
Nominations for election to the Board of Directors may be made by the
Board of Directors, or by any shareholder entitled to vote for the
election of directors, Nominations made by shareholders must be made by
written notice received by the Secretary of the Company by July 31 of
the year preceding the annual meeting or within ten days of the date on
which notice of a special meeting for the election of directors is first
given to shareholders.
The Board of Directors meets on a quarterly basis. Special meetings are
held from time to time to consider matters for which approval of the
Board of Directors is desirable or is required by law. Four meetings of
the Board of Directors were held during fiscal 1996. The Audit Committee
meet three times in Fiscal 1996. Each incumbent director had an
attendance record of 75% or greater at meetings, including meetings of
the Audit Committee.
PERFORMANCE GRAPH
The following graph compares the cumulative returns of $100 invested on
June 1, 1992 in (a) the Company, (b) the index of companies which are
trading on the Emerging Company Marketplace of the American Stock
Exchange and (c) the service sub-index of the American Stock Exchange
assuming reinvestment of all dividends.
GRAPH
5/31/92 5/31/93 5/31/94 5/31/95 5/31/96
ETS International, Inc. $100 $ 58 $ 56 $ 63 $ 32
AMEX Market Value Index $100 $111 $112 $125 $155
AMEX Service Sub-Index $100 $118 $119 $135 $151
<PAGE>
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
The Directors elected at the Annual Meeting will serve until the next
Annual Meeting of Shareholders and until their successors are elected
and qualified. The Board of Directors of ETSI has nominated John D.
McKenna, John C. Mycock, Coleman S. Lyttle, Navin D. Sheth, David F.
Tompkins, Thomas W. Marmon, and Lee A. Raver. All directors were elected
by shareholders at the last Annual Meeting.
JOHN D. MCKENNA, Ph.D. (age 56) has been President of the ETSI since
1988, and serves as Chief Executive Officer of ETS and ETSAS and ETSW.
He was President of ETS from 1978 to 1991 and has been a Director of ETS
since its incorporation in 1973. Dr. McKenna received his B.S. in
Chemical Engineering from Manhattan College in 1961. He received his
M.S. in Chemical Engineering from New Jersey Institute of Technology in
1968 and his M.B.A. from Rider University in 1974. In 1991, Dr. McKenna
received his Ph.D. from Walden University, Minneapolis, MN. Dr.
McKenna's expertise in air and water pollution control applications
includes economic evaluation applications, pilot plant and full scale
studies of alternative pollution control techniques. He has written a
textbook on air pollution technology and has authored or co-authored 31
publications on the subject of air pollution control. On May 1, 1992,
Dr. McKenna was chosen by the Centennial Committee to Select Outstanding
Engineering Graduates of Manhattan College of Engineering as one of
Manhattan College's Outstanding Engineering Graduates. He is a member
of the Tau Beta Pi, the National Honor Society of Engineering; the
National Association of Environmental Professionals; and is listed in
Who's Who in Engineering, Environmental Registry, Finance and Industry,
the World and Science and Engineering. He is past Chairman of the State
of Virginia Advisory Board on Air Pollution.
JOHN C. MYCOCK (age 57) has been Secretary/Treasurer and Director of
ETSI since 1988 and serves as and Secretary/Treasurer of ETS and ETSAS.
He has been an Officer and Director of ETS since 1979. He has more than
twenty years experience in the field of air pollution control. Mr.
Mycock currently is responsible for all precontract sales and marketing
activities of ETS. He has been involved in startup and testing of
scrubbers, precipitators and fabric filters. His experience has been
heavily oriented to utility boiler control systems for both particulate
and sulfur oxide emissions. He is the author of the handbook of Air
Pollution Control Engineering and Technology and author or co-author of
fifteen publications. Mr. Mycock attended Mercer County Junior College
and Trenton State College.
<PAGE>
COLEMAN S. LYTTLE (age 43) has served as President of ETS Water and
Waste Management, Inc. since June 1994. From 1982 to 1994, he was
President of Stamie E. Lyttle Company, Inc. and Lyttle Utilities, Inc.
From 1975 to 1982, he was Senior Estimator and Project Manager of Stamie
E. Lyttle Company, Inc. Mr. Lyttle received his B.S. in Business
Administration from Virginia Polytechnic and State University in 1975.
NAVIN D. SHETH (age 50) has served as Executive Vice-President of ETS
Water and Waste Management, Inc. since June 1994 and Chief Operating
Office since January 1996. From 1972 to May 1994, he was associated
with Stamie E. Lyttle Company, Inc. in the following capacities: from
1982 to 1994 - Vice President-Finance; from 1979 to 1982 - Controller;
from 1972 to 1979 - Operations Analyst. Mr. Sheth was Assistant
Professor, Virginia College, Lynchburg, Virginia from 1971 to 1972. He
received his B.S. in chemistry in 1967 from Bombay University and his
MBA in 1971 from Atlanta University, Atlanta, Georgia.
DAVID F. TOMPKINS (age 48) has been President of ETSAS since its
formation in 1990. From 1978 to 1990, he was employed by Centec
Analytical Services, Inc. for which he served as President from 1985.
In his positions with ETSAS and, previously with Centec, he has been
responsible for technical administration of the Inorganic Analytical
section as well as strategy, policy and financial planning and control
of business operations. Mr. Tompkins received his B.S. in Geology from
Kent State University in 1971; his B.A. in Chemistry from Kent State
University in 1973 and his M.Ad. in Business Management from Lynchburg
College in 1985. He was appointed a Director of the Company in 1992. He
holds a patent and was the recipient of an IR 100 Award in 1984 on the
PCB Field Test Kit of which he was a co-inventor.
THOMAS W. MARMON (age 64), a retired businessman, became a Director of
ETSI in 1992. He has, since 1990, served as a Director of Ceres, Inc.,
an incentive motivation company. From 1989 to 1991, he was a Director
of Western Canada Water, Vancouver, B.C., a bottled water company. From
1971 to 1987, he was a partner in Darmon, and from 1973 to 1984, he was
President and a principal stockholder of Forest View Psychiatric
Hospital, a provider of inpatient and outpatient psychiatric services.
From 1981 to 1987, he was President and a principal stockholder of
Comus, Inc., a consumer electronic manufacturer and distributor. The
assets of these Grand Rapids, Michigan-based businesses were sold upon
the retirement of the principals from active participation.
<PAGE>
LEE A. RAVER (age 54) has served as a Director of ETSI since its
incorporation in 1987. His educational background includes a B.S.
degree in Business Administration from the University of Tennessee in
1966. For the past fifteen years, Mr. Raver has acted principally as a
venture capitalist and private investor in multifamily real estate and
emerging growth companies. He presently is President of Raver Realty,
Inc., a real estate brokerage firm located in Richmond, VA and a
director of Claycomb Press, Inc., a private publishing company located
in Chevy Chase, Maryland.
It is the intention of the persons named as proxies in the accompanying
proxy, unless instructed otherwise, to vote for the persons nominated by
the Board. If any nominee should become unavailable to serve, the proxy
may be voted for the election of such substitute nominee as may be
designated by the Board. The Board has no reason to believe that any of
the nominees will be unable to serve if elected.
Any proposals to nominate a director or directors, other than those
persons nominated by the Board, must be present in person at the
meeting. The Board is not aware of any other proposals or nominations.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ABOVE-NAMED NOMINEES.
ROPOSAL NO. 2 - APPROVING THE APPOINTMENT OF KPMG PEAT MARWICK AS
INDEPENDENT AUDITORS FOR FISCAL 1997
The Board of Directors appointed KPMG Peat Marwick as independent public
accountant to audit the financial statements for Fiscal 1997 and has
determined that it would be desirable to request that the shareholders
approve such appointment. A representative of KPMG Peat Marwick is
expected to attend the meeting with the opportunity to make a statement
and/or respond to appropriate questions from shareholders. Shareholder
approval is not required for the appointment of KPMG Peat Marwick since
the Board of Directors has the responsibility for selecting auditors.
However, the appointment is being submitted for the approval at the
Annual Meeting. No determination has been made as to what action the
Board would take if shareholders do not approve the appointment.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF KPMG PEAT
MARWICK AS INDEPENDENT AUDITORS.
<PAGE>
PROPOSAL NO. 3 - APPROVING AN AMENDMENT TO THE COMPANY'S CERTIFICATE OF
INCORPORATION INCREASING THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
WITHOUT PAR VALUE FROM 20,000,000 SHARES TO 30,000,000 SHARES.
As of the Record Date, in addition to the 13,415,697 Shares of Common
Stock issued and outstanding, an additional 5,194,573 Shares of Common
Stock were reserved for issuance under the Company's Statutory and
Nonstatutory Option Plans and an additional 98,679 Shares of Common
Stock were reserved for issuance upon exercise of outstanding warrants.
Therefore, as of the Record Date, there were a total of 18,708,948
Shares of Common Stock either issued and outstanding or reserved for
issuance out of a total of 20,000,000 authorized Shares of Common Stock,
leaving a total of 1,291,051 Shares of Common Stock remaining available
for subsequent issuance or reservation.
The Board of Directors believes that the increasing the number of
authorized Shares of Common Stock contemplated by the proposed amendment
is desirable to make additional unreserved Shares of Common Stock
available for issuance or reservation without further shareholder
action. Authorizing the Company to issue more shares than currently
authorized by the Certificate of Incorporation will not affect any
substantive rights, powers or privileges o holders of Shares of Common
Stock, except to the extent such holders are diluted, pro rata, by the
issuance of additional Shares of Common Stock. The Company has no
current commitment to issue any additional Shares of Common Stock except
pursuant to outstanding options and warrants as summarized above.
The Company has issued options in the past to reward performance and
intends to continue this program for both management and non-management
personnel. To carry out this program, the Company must reserve adequate
numbers of authorized but unissued shares. In addition, the Company has
made a number of acquisitions during the past several years and intends
to continue seeking suitable target companies for acquisition. Most of
its acquisitions have been for shares of its common stock. The Company
presently has not selected a suitable company for acquisition nor is it
negotiating any acquisition. However, it may do so in the future. To
accomplish its objective of growing through acquisitions, it needs
additional authorized shares of common stock. In addition, it is
possible that the Company must expend funds to improve the equipment,
facilities, staff or marketing of any acquired company.
<PAGE>
Finally, the Company, in order to grow its environmental construction
business, particularly in the area of trenchless sewer and water main
rehabilitation, believes that it is desirable to purchase new
specialized construction equipment, to upgrade existing equipment and to
market its services throughout Florida and Virginia. In addition, the
Company continually purchases and upgrades its laboratory equipment and
markets its laboratory services and environmental products. Although its
last quarter has been profitable, it may, in the future, desire to raise
equity capital rather than depend solely on reinvestment of positive
cash flow to fund these areas of potential growth. In the immediate
future, the Company expects to seek additional equity financing to fund
a portion of its planned capital improvement and expansion needs for
calendar year 1997. There can be no assurance that the Company will
receive commitments for such financing on terms acceptable to it. Such
financing is not presently expected to require the issuance or
reservation of any of the additional Shares of Common Stock to be
authorized by the amendment, although the actual number of shares issued
or reserved will depend on, among other things, the structure of any
such financing and future market conditions, which cannot be predicted
at this time. The Board of Directors believes, however, that having
additional shares authorized and available for issuance or reservation
will allow ETSI to have greater flexibility in considering potential
future actions involving the issuance of stock which may be desirable or
necessary to accommodate ETSI's growth plans, including capital arising
transactions and acquisitions. The Company does not presently
contemplate seeking stockholder approval for any future issuances of
capital stock unless required to do so by an obligation imposed by
applicable law or a regulatory authority, such as its obligation under
the terms of its listing of the Emerging Company Marketplace of the
American Stock Exchange to obtain shareholder approval for certain stock
issuances. Except as indicated above, the Board of Directors has no
current plans to effect any such potential actions.
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF AN AMENDMENT TO
THE COMPANY'S CERTIFICATE OF INCORPORATION INCREASING THE NUMBER OF
AUTHORIZED SHARES OF COMMON STOCK WITHOUT PAR VALUE FROM 20,000,000
SHARES TO 30,000,000 SHARES.
PROPOSAL NO. 4 - APPROVING AN AMENDMENT TO THE COMPANY'S CERTIFICATE OF
INCORPORATION AUTHORIZING 5,000,000 SHARES OF PREFERRED STOCK WITHOUT
PAR VALUE.
As discussed above under "Proposal No. 3" the Company anticipates that
it may need additional capital to fund its capital requirements and
growth. In the immediate future, the Company expects to seek additional
equity financing to fund a portion of its planned needs for calendar
year 1997.
This amendment to ETSI's certificate of incorporation would authorize
the creation of 5,000,000 shares of preferred stock. Under the terms of
the amendment, the preferred stock may be issued, from time to time, in
one or more classes. The attributes of each such class would be
designated by the Board of Directors prior to issuance. Attributes which
may but need not be given to any given class by the board include
preference over the common stock in the event of liquidation of the
Company, dividend (cumulative or noncumulative) dividend rights either
on a fixed or variable basis, the right to participate in dividends
declared to shareholders of Common Stock, voting and conversion into
Shares of Common Stock at a fixed ratio or variable ratio dependent on
factors such a the market price of the Common Stock.
This flexibility of structure makes the existence of preferred stock a
powerful tool to raising capital. On the other hands, shareholders of
Common Stock may be adversely affected by this flexibility. For example,
their dividends may be reduced by dividends declared and paid to holders
of one or more classes of preferred stock; their percentage ownership of
ETSI may be reduced by conversion of shares of preferred stock into
Shares of Common Stock; their control of ETSI may be reduced by voting
rights, including super voting rights, which may be granted holders of
one or more classes of preferred stock.
<PAGE>
There can be no assurance that the Company will receive commitments for
such financing on terms acceptable to it. The Board of Directors
believes, however, that having preferred stock authorized and available
for issuance or reservation will allow ETSI to have greater flexibility
in considering potential future actions involving the issuance of stock
which may be desirable or necessary to accommodate ETSI's growth plans,
including capital arising transactions and acquisitions. The Company
does not presently contemplate seeking stockholder approval for any
future issuances of preferred stock unless required to do so by an
obligation imposed by applicable law or a regulatory authority, such as
its obligation under the terms of its listing of the Emerging Company
Marketplace of the American Stock Exchange to obtain shareholder
approval for certain stock issuances. Except as indicated above, the
Board of Directors has no current plans to effect any such potential
actions. The Company has no present intention to issue any shares of the
preferred stock to be authorized pursuant to this proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF AN AMENDMENT TO
THE COMPANY'S CERTIFICATE OF INCORPORATION AUTHORIZING 5,000,000 SHARES
OF PREFERRED STOCK WITHOUT PAR VALUE.
<PAGE>
Exhibit
PROPOSED AMENDMENT TO ARTICLES OF AMENDMENT
"The Articles of Incorporation of ETS International are he hereby
amended by deleting Article III in its entirety and substituting in
place thereof the following:
2. (a) The aggregate number of shares which the Corporation is
authorized to issue is as follows:
Class Number of Shares Par Value
Common 20,000,000 No Par Value
Preferred 5,000,000 No Par Value
(b) The Board of Directors of the Corporation (the "Board of Directors")
may, by amending these Articles of Incorporation (the "Articles") by
filing Articles of Amendment with the Virginia State Corporation
Commission, fix in whole or in part the preferences, limitations and
rights, within the limits set by law, of (i) any class of shares, before
the issuance of any shares of that class, or (ii) one or more series
within a class, before the issuance of any shares within that series.
(c) The preferred stock (including any shares of preferred stock
restored to the status of authorized but unissued preferred stock
undesignated as to series pursuant to this Article 2(c)) may be divided
into one or more series and issued from time to time with such
preferences, privileges, limitations, and relative rights as shall be
fixed and determined by the Board of Directors. Without limiting the
generality of the foregoing, the Board of Directors is expressly
authorized to the fullest extent permitted form time to time by law to
fix:
(i) the distinctive serial designations and the division of shares of
preferred stock into one or more series and the number of shares of a
particular series, which may be increased or decreased (but not below
the number of shares thereof then outstanding);
(ii) the rate or amount (or the method of determining the rate or
amount) and times at which the form in which, and the preferences and
conditions under which dividends shall be payable on shares of a
particular series, the status of such dividends as cumulative, partially
cumulative, or noncumulative, the date or dates from which dividends, if
cumulative, shall accumulate, and the status of such series as
participating or nonparticipating with shares of other classes or
series;
<PAGE>
(iii) the price or prices at which, the consideration for which, the
period or periods within which and the terms and conditions, if any,
upon which the shares of a particular series may be redeemed, in whole
or in part, at the option of the Corporation or otherwise;
(iv) the amount or amounts and rights and preferences, if any, to which
the Holders (as defined in Article 3 below) of shares of a particular
series are entitled or shall have upon any involuntary or voluntary
liquidation, dissolution or winding up of the Corporation;
(v) the rights and preferences over or otherwise in relation to any
other class or series (including other series of preferred stock), as to
the right to receive dividends and/or the right to receive payments out
of the net assets of the Corporation upon any involuntary or voluntary
liquidation, dissolution or winding up of the Corporation
(vi) the right, if any, of the Holders of a particular series, the
Corporation or another person to convert, or cause conversion of shares
of such series into shares of other classes or series or into other
securities, cash, indebtedness or other property, or to exchange or
cause exchange of such shares for shares, classes or series or other
securities, cash, indebtedness or other property, and the terms and
conditions, if any, including the price or prices or the rate or rates
of conversion and exchange, and the terms and conditions or adjustments,
if any, at which such conversion or exchange amy be made or caused;
(vii) the obligation, if any, of the Corporation to redeem, purchase or
otherwise acquire, in whole or in part, shares of a particular series
for a sinking fund or otherwise, the terms and conditions thereof, if
any, including the price or prices and the nature of the consideration
payable for such shares so redeemed, purchase or otherwise acquired;
(viii) the voting rights, if any, including special, conditional or
limited voting rights, of the shares of a particular series in addition
to those required by law, including the number of votes per shares and
any requirement for the approval by the Holders of shares of all series
of preferred stock, or of the shares of one or more series thereof., or
of both, in any amount greater than a majority up to such amount as in
accordance with applicable law or these Articles, as a condition to
specified corporation action or amendments to the Articles;
<PAGE>
(d) shares of preferred stock shall rank prior or superior to the common
stock in respect of the right to receive dividends and/or the right to
receive payments out of the net assets of the Corporation upon any
involuntary or voluntary liquidation, dissolution or winding up of the
Corporation. All shares of preferred stock redeemed, purchased or
otherwise acquired by the Corporation (including shares surrendered for
conversion or exchange) shall e canceled and thereupon restored to the
status of authorized but unissued shares of preferred stock undesignated
as to series.
(e) The Holders of common stock, to the exclusion of any other class of
stock of the Corporation, have sole power to vote for the election of
directors except as (i) otherwise expressly provided in the serial
designation of any series of preferred stock, (ii) otherwise expressly
provided in these Articles and (iii) otherwise expressly provided by the
ten existing laws of the Commonwealth of Virginia. The Holders of common
stock will have one vote for each share of common stock held by them.
(f) No Holder of shares of stock of any class of the Corporation will
have any preemptive or preferential rights of subscription to any shares
of any class of stock of the Corporation, whether now or hereafter
authorized, or to any obligations of the Corporation convertible into
stock of the Corporation, issued or sold, nor any right of subscription
to any thereof."
<PAGE>
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Exchange Act required ETSI officers and directors,
and persons who own more than ten percent of a registered class of the
ETSI's equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission (SEC). Officers,
directors and greater than ten percent shareholders are required by SEC
regulation to furnish ETSI with copies of all Section 16(a) forms they
file.
Based solely on a review of the copies of such forms furnished to ETSI,
the company believes that during fiscal 1996 all Section 16(a) filing
requirements applicable to its officers, directors and greater than ten
percent beneficial owners were complied with.
REVOCABILITY OF PROXY
Shares represented by valid proxies will be voted in accordance with
instructions contained therein, or, in the absence of such instructions,
in accordance with the Board of Directors' recommendations. Any
shareholder of the Company has the unconditional right to revoke his or
her proxy at any time prior to the voting thereof by any action
inconsistent with the proxy, including notifying the Secretary of the
Company in writing, executing a subsequent proxy, or personally
appearing at the Annual Meeting and casting a contrary vote. However,
not such revocation will be effective unless and until such notice of
revocation has been received by the Company at or prior to the Annual
Meeting.
PROPOSALS OF SHAREHOLDERS
A proper proposal submitted by a shareholder in accordance with
applicable rules and regulations for presentation at the Company's
Annual Meeting of Shareholders for fiscal 1998 and received at the
Company's executive offices no later than July 31, 1997, will be
included in the Company's Proxy Statement and form of proxy relating to
such Annual Meeting.
<PAGE>
OTHER MATTERS
The Board of Directors is not aware of any matter to be presented for
action at the meeting other than the matters set forth herein. Should
any other matter requiring a vote of shareholders arise, the proxies in
the enclosed form confer upon the person or persons entitled to vote the
shares represented by such proxies discretionary authority to vote the
same in accordance with their best judgment in the interest of the
Company.
METHOD OF COUNTING VOTES
Unless a contrary choice is indicated, all duly executed proxies will be
voted in accordance with the instructions set forth on the proxy card. A
broker non-vote occurs when a broker holding shares registered in street
is permitted to vote, in the broker's discretion, on routine matters
without receiving instructions from the client, but is not permitted to
vote without instructions on non-routine, and the broker returns a proxy
card with no vote (the "non-vote") on the non-routine matter. Under the
rules and regulation of the primary trading markets applicable to most
brokers, both the election of directors or the ratification of the
appointment of accountants are routine matters on which a broker has the
discretion to vote if instructions are not received from the client in a
timely manner. Under Virginia law, broker non-votes will have no impact
on the election of directors or the ratification or the appointment of
the Company's accountants. Abstentions will be counted as present for
purposes of determining a quorum but will not be counted for or against
the election of directors or the ratification of accountants. As to Item
1, the Proxy confers authority to vote for all of the seven persons
listed as candidates for a position on the board of directors even
though the block in Item 1 is not marked unless the names of one or more
candidates are lined out. The Proxy will be voted "for" Items 2, 3, and
4 unless "against" or "abstain" is indicated. If any other business is
presented at the meeting, the Proxy shall be voted in accordance with
the recommendations of Management.
AVAILABILITY OF ANNUAL REPORT ON FORM 10-K
ETSI has filed with the Securities and Exchange Commission its Annual
Report on Form 10-K. Shareholders wishing to receive a copy of ETSI's
1996 Form 10-K may receive it without charge by writing ETS
International, Inc., 1401 Municipal Road, NW, Roanoke, Virginia 24012-
1309.
BY ORDER OF THE BOARD OF DIRECTORS
John C. Mycock
Secretary to the Board
October 4, 1996
<PAGE>
PROXY
FISCAL 1997 ANNUAL MEETING OF SHAREHOLDERS
ETS INTERNATIONAL, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
OF THE CORPORATION
The undersigned Shareholder of ETS International, Inc., Roanoke,
Virginia, having received the Notice dated October x, 1996, of the
Fiscal 1997 Annual Meeting of Shareholders, hereby nominates,
constitutes, appoints and authorizes David F. Tompkins and Elizabeth H.
Wirt, and each of them with full power to act alone, as proxies with
full power of substitution, for me and in my name, place and stead, to
vote all the common stock of said corporation standing in my name on its
books on August 31, 1996, at the Fiscal 1997 Annual Meeting of
Shareholders to be held at the ETSI headquarters, 1401 Municipal Road,
NW, Roanoke, Virginia 24012 at 10:00 a.m., Friday, October 25, 1996 or
at any adjournments thereof, with all the power the undersigned would
possess if personally present, as follows:
1. The election of the seven (7) directors listed in the Proxy
Statement dated October x, 1996, accompanying the Notice of said meeting
for terms of one year each and until their successors are elected and
qualify. CUMULATIVE VOTING IS NOT PERMITTED.
IF YOU WISH YOUR VOTES TO BE CAST FOR ALL OF THE SEVEN (7) PERSONS
LISTED BELOW, PLACE AN "X" IN THIS BOX [ ].
IF YOU DO NOT WISH TO VOTE FOR ALL OF THE CANDIDATES, LINE OUT THE
NAMES OF PERSONS FOR WHOM YOU DO NOT CHOOSE TO VOTE:
DIRECTORS:
John D. McKenna
John C. Mycock
Coleman S. Lyttle
Navin D. Sheth
David F. Tompkins
Thomas W. Marmon
Lee A. Raver
<PAGE>
2. Approval of the appointment of KPMG Peat Marwick as independent
auditors for Fiscal year 1997.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. Approval of an amendment to the Company's certificate of
incorporation increasing the number of authorized shares of common
stock without par value from 20,000,000 shares to 30,000,000 shares.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. Approval of an amendment to the Company's certificate of
incorporation creating 5,000,000 authorized shares of preferred stock
without par value.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
5. Upon such other business as may be brought before the meeting or any
adjournments thereof. The Board of Directors at present has no other
business to be presented.
THIS PROXY CONFERS AUTHORITY TO VOTE FOR ALL OF THE SEVEN PERSONS LISTED
EVEN THOUGH THE BLOCK IN ITEM 1 IS NOT MARKED UNLESS THE NAMES OF ONE OR
MORE CANDIDATES ARE LINED OUT. THIS PROXY WILL BE VOTED "FOR" ITEMS 2,
3, AND 4 ABOVE UNLESS "AGAINST" OR "ABSTAIN" IS INDICATED. IF ANY OTHER
BUSINESS IS PRESENTED AT SAID MEETING, THIS PROXY SHALL BE VOTED IN
ACCORDANCE WITH THE RECOMMENDATIONS OF MANAGEMENT.
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND THE COST
OF SAME IS BORNE BY THE CORPORATION. THIS PROXY MAY BE REVOKED BY
WRITING THE SECRETARY TO THE BOARD, ETS INTERNATIONAL, INC., 1401
MUNICIPAL ROAD, ROANOKE, VIRGINIA 24012-1309 OR IN PERSON AT THE FISCAL
1997 ANNUAL MEETING OF SHAREHOLDERS AT ANY TIME PRIOR TO ITS EXERCISE.
Date: ____________________________________
Name:_____________________________________
Beneficial Shareholder (Please Print)
Address:__________________________________
__________________________________
Signature(s) ______________________________
(All Shareholders must sign.)
NUMBER OF SHARES VOTING __________________
IF SHARES ARE NOT REGISTERED IN YOUR NAME, PLEASE GIVE THE NAME AND
ADDRESS OF THE PERSON OR ENTITY IN WHOSE NAME THEY ARE REGISTERED.
________________________________________
________________________________________
________________________________________
(This must be completed if applicable.)
Please date, fill in your complete name and address and sign above
exactly as your name or names appear hereon, and return this proxy
promptly in the enclosed envelope. When signing as attorney, executor,
administrator, trustee or guardian, please give full title. If there is
more than one fiduciary, all should sign. All joint owners must sign.
