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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /x/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/x/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
Green Isle Environmental Services, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(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), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (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:
------------------------------------------------------------------------
/ / 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.:
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3) Filing Party:
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4) Date Filed:
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Green Isle Environmental Services, Inc.
410 Eleventh Avenue South
Hopkins, Minnesota 55343
July ____, 1995
Dear Shareholder:
You are cordially invited to attend the 1995 Annual Meeting of Shareholders of
Green Isle Environmental Services, Inc. The meeting will be held on Friday,
August 25, 1995 at 2:00 p.m. local time at Minneapolis Marriott Southwest, 5801
Opus Parkway, Minnetonka, Minnesota 55343. We suggest that you carefully read
the enclosed Notice of Annual Meeting and Proxy Statement.
We hope you will be able to attend the Annual Meeting. Whether or not you plan
to attend, we urge you to complete, sign, date and return the enclosed proxy
card in the enclosed envelope in order to make certain that your shares will be
represented at the Annual Meeting.
Very truly yours,
James W. Taylor
PRESIDENT AND CHIEF EXECUTIVE OFFICER
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Green Isle Environmental Services, Inc.
410 Eleventh Avenue South
Hopkins, Minnesota 55343
-----------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 25, 1995
-----------------------------
TO THE SHAREHOLDERS OF GREEN ISLE ENVIRONMENTAL SERVICES, INC.:
The Annual Meeting of Shareholders of Green Isle Environmental Services, Inc.
will be held on Friday, August 25, 1995, at 2:00 p.m. local time at Minneapolis
Marriott Southwest, 5801 Opus Parkway, Minnetonka, Minnesota 55343, for the
following purposes:
1. To elect one director to serve a two-year term, and to elect three
directors to serve a three-year term, or until their successors are elected
and qualified.
2. To consider and act upon a proposal to amend the Company's 1991 Stock
Option Plan to increase the number shares from 200,000 to 500,000 shares.
3. To consider and act upon a proposal to amend the Company's Restated
Articles of Incorporation to change the Company's name to Reuter
Manufacturing, Inc.
4. To consider and act upon a proposal to ratify the appointment of Coopers &
Lybrand as auditors for the Company for the fiscal year ending December 31,
1995.
5. To transact such other business as may be properly brought before the
Annual Meeting or any adjournments thereof.
Only shareholders of record as shown on the books of the Company at the close of
business on July 14, 1995 will be entitled to vote at the Annual Meeting or any
adjournments thereof.
By Order of the Board of Directors
William Johnson
SECRETARY
July ____, 1995
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GREEN ISLE ENVIRONMENTAL SERVICES, INC.
410 ELEVENTH AVENUE SOUTH
HOPKINS, MINNESOTA 55343
(612) 935-6921
-------------------------------
PROXY STATEMENT FOR
ANNUAL MEETING OF SHAREHOLDERS
AUGUST 25, 1995
-------------------------------
INTRODUCTION
The 1995 Annual Meeting of Shareholders of Green Isle Environmental Services,
Inc. (the "Company") will be held on Friday, August 25, 1995, at 2:00 p.m.
local time at Minneapolis Marriott Southwest, 5801 Opus Parkway, Minnetonka,
Minnesota 55343, or at any adjournments thereof, for the purposes set forth in
the Notice of Meeting.
A proxy card is enclosed for your use. You are solicited on behalf of the Board
of Directors to SIGN AND RETURN THE PROXY CARD IN THE ACCOMPANYING ENVELOPE. No
postage is required if mailed within the United States. The cost of soliciting
proxies, including the preparation, assembly and mailing of proxies and
soliciting material, as well as the cost of forwarding such material to the
beneficial owners of Common Stock, will be borne by the Company. Directors,
officers and employees of the Company may, without compensation other than their
regular compensation, solicit proxies by telephone, telegraph or personal
conversation. The Company may reimburse brokerage firms and others for expenses
in forwarding proxy material to the beneficial owners of Common Stock. This
Proxy Statement, the Proxy and the Notice of Meeting are being mailed to
shareholders beginning on or about July __, 1995.
Any shareholder giving a proxy may revoke it at any time prior to its use at the
Annual Meeting either by (i) giving notice of such revocation to the Secretary
of the Company prior to the Annual Meeting, or by appearing at the Annual
Meeting and giving written notice of revocation to the Secretary of the Company
prior to use of the proxy, (ii) filing a duly executed proxy bearing a later
date with the Secretary of the Company, or (iii) appearing at the Annual Meeting
and voting in person. Proxies will be voted as specified by shareholders.
Signed proxies on which no specification is made will be voted in favor of the
nominees for director listed in the Proxy Statement and for the proposals in the
Notice of Annual Meeting.
Shares represented by a Proxy Card including any broker non-votes on a matter
will be treated as shares not entitled to vote on that matter, and thus will not
be counted in determining whether that matter has been approved. Shares
represented by a Proxy Card voted as abstaining on any of the other proposals
will be treated as shares present and entitled to vote that were not cast in
favor of a particular matter and thus will be counted as votes against that
matter. In general, shares of Common Stock represented by a properly signed and
returned Proxy Card will be counted as shares present and entitled to vote at
the Annual Meeting for purposes of determining a quorum, without regard to
whether the card reflect abstentions (or is left blank) or reflects a broker
non-vote on a
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matter (i.e., a card returned by a broker on behalf of its beneficial owner
customer that is not voted on a particular matter because voting instructions
have not been received and the broker has no discretionary authority to vote).
Only holders of Common Stock of record at the close of business on July 14,
1995 will be entitled to vote at the Annual Meeting. On June 1, 1995, the
Company had 3,191,520 outstanding shares of Common Stock, each such share
entitling the holder thereof to one vote on each matter to be voted on at the
Annual Meeting. Holders of shares of Common Stock are not entitled to
cumulative voting rights. The presence at the Annual Meeting, in person or by
proxy, of the holders of a majority of the outstanding shares of Common Stock
(1,595,761 shares) is required for a quorum for the transaction of business.
ELECTION OF DIRECTORS
(PROPOSAL NO. 1)
NOMINATION
The Company's Restated Articles of Incorporation provide that the Board of
Directors shall consist of not less than three nor more than 15 members, as
determined from time to time by the Board, divided into three classes of as
nearly equal number as possible. The term of each class is three years and the
term of one class expires each year in rotation. The Board of Directors has
determined that there will be six directors of the Company for the ensuing year.
The Company did not hold an annual meeting of shareholders in 1994, but the term
of James H. McGuire would have expired in 1994 if the Company had held a meeting
of shareholders. The terms of Gary W. Laidig, James W. Taylor and Caroline Avey
expire at the Annual Meeting. The terms of the remaining two members of the
Board of Directors will not expire this year, but rather will expire in 1996.
Accordingly, the Board has nominated Mr. McGuire to serve as a director of the
Company for a term of two years, expiring at the 1997 Annual Meeting of
Shareholders, or until a successor is elected and shall qualify. In addition,
the Board has nominated Mr. Laidig, Mr. Taylor and Ms. Avey to serve as
directors of the Company for a term of three years, expiring at the 1998 Annual
Meeting of Shareholders, or until a successor is elected and shall qualify. All
of these individuals are current members of the Board of Directors.
Proxies can only be voted for the number of persons named as nominees in this
Proxy Statement. The election of a nominee requires the affirmative vote of a
majority of the shares of Common Stock voting in person or by proxy for
directors at the Annual Meeting. The Board recommends a vote FOR the election
of the nominees listed below. In the absence of other instructions, the proxies
will be voted for the nominees listed below. If, prior to the Annual Meeting,
the Board should learn that directors will be unable to serve by reason of
death, incapacity or other unexpected occurrence, the proxies that would have
been voted for such nominee will be voted for a substitute nominee as selected
by the Board of Directors. Alternatively, the proxies may, at the Board's
discretion, be voted for such fewer number of nominees as results from such
death, incapacity or other unexpected occurrence. The Board has no reason to
believe that the nominees will be unable to serve.
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INFORMATION ABOUT NOMINEES AND OTHER DIRECTORS
NAME OF PRINCIPAL DIRECTOR
NOMINEES OCCUPATION AGE SINCE
- -------- ---------- --- -----
NOMINEES FOR THE THREE-YEAR TERMS EXPIRING IN 1998:
Gary W. Laidig Minnesota State Senator 46 1990
James W. Taylor President, Chief 77 1989
Executive Officer and
Chief Financial Officer of
the Company, President
of Taylor Consultants,
Inc. (management and
financial consulting)
Caroline Avey** Independent Consultant 38 1992
NOMINEE FOR TWO-YEAR TERMS EXPIRING IN 1997:
James H. McGuire* President of NJK Holding 51 1990
Corporation (Investment
and Management
Company)
DIRECTORS NOT STANDING FOR ELECTION THIS YEAR WHOSE TERMS EXPIRE IN 1996:
Edward E. Chairman of the Board of 68 1989
Strickland* Directors of the
Company
Kenneth E. Professor, University of 56 1990
Daugherty** North Texas
- --------------------
* Members of Audit Committee
** Members of Compensation and Stock Option Committee
OTHER INFORMATION ABOUT DIRECTORS AND NOMINEES
Except as indicated below, there has been no change in principal occupations or
employment during the past five years for the nominees. There are no family
relationships between or among the nominees of the Company.
Mr. McGuire has been President of NJK Holding Corporation since October 1992.
He has also been the Chairman of the Board of Intercim Corporation, a supplier
of factory floor information software and services, since January 1989 and was
Chief Executive Officer of Intercim from 1987 to 1992.
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Mr. Taylor also is a director of Compositech Ltd.
Ms. Avey has been a director since 1992. She had been an Account Executive with
Business Incentives, Inc., a performance services company, from April 1991 until
January 31, 1994 and is now performing consulting work for a major utility.
Prior to April 1991, Ms. Avey was employed by U.S. West Financial Services,
Inc., a financial services company, most recently as Manager, Project Finance.
Mr. Strickland served on the Executive Committee of the Board of Directors,
which performed the duties of Chief Executive Officer, from October 1, 1990
until January 28, 1991. He has been Chairman of the Board of Directors since
that time. He has been an independent financial consultant for more than seven
years. Mr. Strickland also serves as a director of Bio-Vascular, Inc., Hector
Communications Corp., Communication Systems Inc. and AVECOR Cardiovascular Inc.
Dr. Daugherty also serves as a director of TRAC Laboratories, Inc., The KEDS,
Inc. and Pyro Industries, Inc.
INFORMATION ABOUT THE BOARD AND ITS COMMITTEES
Standing committees of the Board of Directors include the Audit Committee, the
Compensation and Stock Option Committee and the Nominating Committee.
The Audit Committee provides assistance to the Board in satisfying its fiduciary
responsibilities relating to the accounting, auditing, operating and reporting
practices of the Company. The Audit Committee reviews the annual financial
statements of the Company, the selection and work of the Company's independent
auditors and the adequacy of internal controls for compliance with corporate
policies and directives. The members of the Audit Committee are
Messrs. Strickland and McGuire. Although this committee did not formally meet
in 1994, it took action by written consent one time in 1994.
The Compensation and Stock Option Committee reviews general programs of
compensation and benefits for all employees of the Company, reviews salary
levels, bonuses and other form of compensation paid to the Company's officers,
makes recommendations to the Board concerning such compensation and administers
the Company's stock-based employee benefit plans. The members of the
Compensation and Stock Option Committee are Ms. Avey and Mr. Daugherty.
Although this committee did not formally meet in 1994, it took action by written
consent two times in 1994.
The Nominating Committee identifies, evaluates and nominates persons for
election to the Board and makes recommendations to the Board with respect to
such persons. The Nominating Committee will consider nominees recommended by
shareholders if submitted in writing to the Secretary of the Company at the
Company's principal office address specified at the beginning of the first page
of this Proxy Statement. All directors who are not employees of the Company are
members of the Nominating Committee, and it did not meet during 1994.
The Company's Board of Directors met six times during 1994. All of the
Directors attended 75% or more of the meetings with the Board of Directors and
all committees on which they served during 1994.
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DIRECTOR COMPENSATION
All directors of the Company, except for Messrs. Taylor and Strickland,
currently receive compensation for their services as directors at the rate of
$400 per month as well as a meeting fee in the amount of $500 for each Board and
committee meeting attended. Directors are not compensated for telephonic
meetings.
The Company has entered into a consulting agreement with Mr. Strickland, which
may be terminated at any time by the Company. Under this agreement, Mr.
Strickland is paid a retainer of $2,000 per month, plus reimbursement for all
reasonable business expenses. During 1994, Mr. Strickland received $26,000 for
services under this agreement.
In November 1992, the Company entered into a consulting agreement with Taylor
Consultants, Inc. ("Taylor Consultants") whereby Taylor Consultants agreed to
provide the services of James W. Taylor to act as President and Chief Executive
Officer of the Company. Taylor Consultants is paid $13,000 per month for its
services and reimbursed for all reasonable expenses. Taylor Consultants is an
independent contractor, and neither it nor Mr. Taylor is an employee of the
Company. The agreement may be terminated by either party upon 30 days written
notice. During 1994, Taylor Consultants received $156,000 for services under
this agreement. See "Summary Compensation Table."
Under the Company's 1991 Non-Employee Director Stock Option Plan, adopted by the
Board of Directors in 1991 and approved by the shareholders at the 1992 Annual
Meeting, members of the Board of Directors who are not employees of the Company
or any subsidiary receive periodic grants of non-qualified stock options.
Options granted under the Plan have an exercise price equal to 100% of the fair
market value of the Common Stock on the date of grant, have 10-year terms and
may not be exercised before the next annual meeting of shareholders after the
date of grant. Options generally terminate one year after termination of
director status. On the effective date of the Plan, each non-employee director
automatically received a one-time option grant to purchase 10,000 shares of
Common Stock, and new non-employee directors subsequently elected to the Board
will automatically be granted a 10,000 share option upon their election. In
addition, each non-employee director will be automatically granted an additional
option at the first annual shareholders meeting occurring more than 35 months
after the director was initially elected to the Board to purchase a number of
shares equal to 2,000 times the number of years between the date of grant and
the expiration of the director's term. Initial grants under the plan become
exercisable on a cumulative basis on the dates of the Company's annual
shareholder meetings after the date of grant over a period of one to three
years, depending on the director's period of Board service prior to grant (in
three annual installments for directors with one or few prior years of service).
Additional options granted under the plan become exercisable, on a cumulative
basis, to the extent of 2,000 shares each year. An option generally will
terminate one year after an optionee ceases to serve as a director (and will
remain exercisable during that time to the extent exercisable on the date
director status terminated), except that an option held by an optionee ceasing
to serve as a director by reason of death or disability when served as a
director for at least one continuous year following the option grant will become
immediately exercisable in full and remain exercisable for an additional three
years after termination of service (but not beyond the option's original term).
On July 26, 1994, Mr. McGuire was granted an option to purchase 15,000 shares of
Common Stock at a price of $.31 per share in lieu of the option he would have
received under the Plan if the Company had held an annual meeting of
shareholders in 1994. He was granted an option to purchase 15,000 shares rather
than 6,000 shares to account for the difference between the fair market value of
the Common Stock on May 17, 1994, of $.125 per share, the date the Option would
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have been granted under the Plan, and the fair market value on July 26, 1994.
The Plan was terminated in April 1995 and no further options will be granted
under the Plan.
EXECUTIVE COMPENSATION AND OTHER BENEFITS
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table provides summary information concerning cash and non-cash
compensation paid or accrued by the Company to or on behalf of the Company's
Chief Executive Officer and each of the executive officers of the Company whose
cash and non-cash salary and bonus exceeded $100,000 in 1994.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
----------------------- ------------
SECURITIES
NAME AND UNDERLYING
PRINCIPAL POSITION YEAR SALARY OPTIONS
- ------------------ ---- ------ -------
<S> <C> <C> <C>
James W. Taylor (1) 1994 $156,000 (2) 100,000
Chief Executive Officer 1993 $156,000 (2) 4,000
1992 $71,150 (2) 25,000
- ---------------------
<FN>
(1) Mr. Taylor joined the Company as Chief Executive Officer in 1992. Prior to
that time, Mr. Taylor was not an officer or employee of the Company.
(2) Mr. Taylor's annual salary for 1992 includes $9,600 for directors fees and
$32,550 in consulting fees which were earned before Mr. Taylor became Chief
Executive Officer of the Company in November 1992. Mr. Taylor's annual
salary for 1993 and 1994 represents consulting fees paid to him for
services rendered as President and Chief Executive Officer of the Company.
</TABLE>
OPTION GRANTS AND EXERCISES
The following tables provide information for the year ended December 31, 1994 as
to individual grants and aggregate exercises in options to purchase shares of
the Company's Common Stock by each of the named executive officers of the
Company.
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OPTIONS GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS
UNDERLYING GRANTED TO EXERCISE OR
OPTIONS EMPLOYEES IN BASE PRICE EXPIRA-
NAME GRANTED (1) FISCAL YEAR ($/SHARE) TION DATE
- ---- ----------- ----------- --------- ---------
James W. Taylor 100,000 (2) 83% .50 9/26/04
- --------------------
(1) All of the options granted to the executive were granted under the
Company's 1991 Stock Option Plan. Options granted under the plan are
exercisable as determined by the committee granting the options, except
that options may not be exercised prior to six months from the date of
grant. Options granted under the plan remain exercisable so long as the
executive remain in the employ of the Company or one of its subsidiaries.
(2) These options were granted on September 27, 1994 and are exercisable in
full immediately upon grant.
AGGREGATED OPTION EXERCISES IN
LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES(1)
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FISCAL YEAR END AT FISCAL YEAR END (2)
-------------------------- ----------------------
NON- NON-
EXERCISABLE EXERCISABLE EXERCISABLE EXERCISABLE
----------- ----------- ----------- -----------
James W. Taylor 137,000 2,000 0 0
- -------------------
(1) In the fiscal year ended December 31, 1994, no options were exercised by
the named executive officer. The exercise price may be paid in cash or, in
the Compensation and Stock Committee's discretion, in shares of the
Company's common stock valued at fair market value on the date of exercise
or pursuant to a cashless exercise procedure under which the executive
provides irrevocable instructions to a brokerage firm to sell the purchased
shares and to remit to the Company, out of the sale proceeds, an amount
equal to the exercise price plus all applicable withholding taxes. The
Compensation and Stock Option Committee also has the discretion to grant a
supplemental cash bonus to an optionee in connection with the grant or
exercise of an option or both the grant and an exercise of an option.
(2) The fair market value of the Common Stock on December 30, 1994 was less
than the exercise price of all such options.
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PROPOSAL TO AMEND THE
1991 STOCK OPTION PLAN
(PROPOSAL NO. 2)
INTRODUCTION
Effective December 16, 1991, the Board of Directors of the Company adopted the
1991 Stock Option Plan (the "1991 Option Plan"), which was approved by the
Company's shareholders on June 23, 1992. On January 25, 1995, the Board of
Directors amended the 1991 Option Plan, subject to shareholder approval, to
increase the number of shares of Common Stock subject to the plan from 200,000
to 500,000. At the Annual Meeting, the Company's shareholders are being asked
to approve this amendment.
The increase in the number of shares reserved for issuance under the 1991 Option
Plan is necessary to permit the Company to continue operation of the Plan for
the benefit of new participants as well as to allow additional awards to current
participants. As of March 1, 1995, the Company had issued options to purchase
an aggregate of 190,000 shares of Common Stock under the 1991 Option Plan. If
this amendment is approved, 310,000 shares will be available for future grants.
The Company anticipates that it will issue additional options in the future.
SUMMARY OF THE 1991 OPTION PLAN
A general description of the basic features of the 1991 Option Plan is outlined
below. This summary is qualified in its entirety by the terms of the 1991
Option Plan, a copy of which may be obtained from William Johnson, the Secretary
of the Company.
GENERAL. The 1991 Option Plan provides for the granting to employees of the
Company or any subsidiary of options to purchase shares of Common Stock that
qualify as incentive stock options ("Incentive Options") within the meaning of
Section 422 of the Internal Revenue Code of 1986 (the "Code"), and the granting
to employees, nonemployee directors, consultants and independent contractors of
the Company or any subsidiary of options to purchase shares of Common Stock that
do not qualify as such incentive stock options ("Non-Qualified Options")
(Incentive Options and Non-Qualified Options are sometimes collectively referred
to as "Options"). The purpose of the 1991 Option Plan is to advance the
interests of the Company and its shareholders by enabling the Company and its
subsidiaries to attract and retain persons of ability to perform services for
the Company and its subsidiaries by providing an incentive to such persons
through equity participation in the Company and by rewarding such persons who
contribute to the achievement by the Company of its long-term economic
objectives.
As of March 1, 1995, there were approximately 120 persons who may be deemed
eligible to receive Options under the 1991 Option Plan. On June 22, 1995, the
average of the closing bid and asked prices of the Company's Common Stock was
$.53 per share.
ADMINISTRATION. The 1991 Option Plan is administered by the Compensation and
Stock Option Committee of the Board (the "Committee"). The 1991 Option Plan
vests broad powers in the Committee to administer and interpret the 1991 Option
Plan, including the authority to select optionees to be granted Options, to
determine the terms of the Options (including the number of shares to be covered
by each Option, the Option exercise price, the duration of each Option, the
manner in which each Option will become exercisable and the restrictions and
other conditions on the exercisability of each Option), and to prescribe other
provisions of the Options as the
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Committee may deem necessary or desirable as consistent with the terms of the
1991 Option Plan. The Committee may amend or modify the terms of any
outstanding Option in any manner (with the consent of the affected optionee) as
long as the amended or modified terms are permitted by the 1991 Option Plan as
then in effect. With the consent of the affected optionee, the Committee may,
among other things, modify the exercise price, number of shares or other terms
and conditions of an Option, extend the term of an Option, accelerate the
exercisability or vesting or otherwise terminate any restrictions relating to an
Option, accept the surrender of any outstanding Option or authorize the grant of
new Options in substitution for surrendered Options.
OPTION GRANT. Incentive Options must be granted with an exercise price equal to
at least the fair market value of the Common Stock on the date the Options are
granted, except that Incentive Options granted to persons owning stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company or any subsidiary may not be granted at less than 110% of
the fair market value of the Common Stock on the date of grant. For purposes of
the 1991 Option Plan, "fair market value" is the average of the closing bid and
asked prices of the Common Stock on the date of grant. Non-Qualified Options
may be granted at a price determined by the Committee, except that such price
shall not be less than 50% of the fair market value of one share of Common Stock
on the date of grant. Under the 1991 Option Plan, the Committee has the
discretion to grant a cash bonus to an optionee in connection with the grant,
vesting or exercise of an Option.
Incentive Options will have a maximum term fixed by the Committee, not to exceed
10 years from the date of grant or, in the case of an optionee who owns,
directly or indirectly, more than 10% of the total combined voting power of all
classes of stock of the Company or any subsidiary, five years from the date of
grant. The aggregate fair market value (determined as of the time the Option is
granted) of shares of Common Stock with respect to which Incentive Options
become exercisable for the first time by an optionee under the 1991 Option Plan
(or any other incentive stock options held by the optionee) during any calendar
year may not exceed $100,000. Non-Qualified Options have a maximum term fixed
by the Committee. Options granted under the 1991 Option Plan become exercisable
at such times and in such installments (which may be cumulative) as are
determined by the Committee at the time the Option is granted (although Options
may not be exercised prior to six months from the date of grant).
No right or interest in any Option may be assigned or transferred by an
optionee, either voluntarily or involuntarily, except by will or the laws of
descent and distribution, or subjected to any lien or otherwise encumbered,
directly or indirectly. During the lifetime of an optionee, an Option may be
exercised only by the optionee.
MANNER OF EXERCISE AND PURCHASE. Options may be exercised by delivery of
written notice of exercise to the Company, along with payment in full of the
total Option exercise price for the shares to be purchased. This payment must
be made in cash, except that the Committee, in its sole discretion, may allow
payment to be made (in whole or in part) by delivery of a "broker exercise
notice" (pursuant to which the broker or dealer is instructed to sell enough
shares of Common Stock or to loan the optionee enough money to pay the exercise
price and to remit such sums to the Company) or promissory note or by transfer
of shares of Common Stock (either previously owned by the optionee or to be
acquired upon Option exercise), valued at fair market value.
TERMINATION OF OPTIONS. Upon the termination of an optionee's employment or
other service with the Company and all subsidiaries because of the optionee's
death, disability or retirement, all outstanding Options held by the optionee
will become immediately exercisable in full and will for
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30 days remain exercisable to the extent exercisable on the date of termination
(but in no event after the expiration date of the Option). Upon the termination
of an optionee's employment or service for any other reason, all rights of the
optionee under the 1991 Option Plan (including the right to exercise outstanding
Options) will immediately terminate without notice of any kind. However, the
Committee may, in its sole discretion (which may be exercised before or
following termination), cause Options then held by a terminated optionee to
become exercisable and remain exercisable following termination (up to the
original expiration date of the Options), as determined by the Committee.
PLAN AMENDMENT AND TERMINATION. Under the terms of the 1991 Option Plan, the
Board may amend the plan in any respect that the Board deems to be in the best
interests of the Company without shareholder approval, unless shareholder
approval is then required pursuant to Rule 16b-3 under the Securities Exchange
Act of 1934 (which generally requires shareholder approval of amendments
materially increasing benefits to plan participants, materially increasing the
number of shares issuable under the plan or materially modifying the
requirements for eligibility to participate in the plan), Section 422 of the
Code or the applicable rules of any securities exchange or the NASD. The 1991
Option Plan will terminate on December 15, 2001, unless sooner terminated by
action of the Board of Directors. No Options may be granted after termination
of the 1991 Option Plan, although Options outstanding at the time of termination
will continue to be exercisable in accordance with their terms.
FEDERAL INCOME TAX CONSEQUENCES
The following description of federal income tax consequences is based on current
statutes, regulations and interpretations. There are, however, pending
legislative proposals which would affect the taxation of capital gains. The
description does not include state or local income tax consequences. In
addition, the description is not intended to address specific tax consequences
applicable to an individual optionee who receives an Option.
INCENTIVE OPTIONS. There will not be any federal income tax consequences to
either the optionee or the Company as a result of the grant or the exercise of
an Incentive Option under the 1991 Option Plan, except that (a) an amount equal
to the excess of the fair market value of the shares acquired upon exercise of
the Incentive Option, determined on the date of exercise, over the amount paid
for the shares by the optionee will be includable in the optionee's alternative
minimum taxable income for purposes of the alternative minimum tax, and (b) the
optionee may be subject to an additional excise tax if any amounts are treated
as excess parachute payments (see explanation below). Special rules will apply
if previously acquired shares of Common Stock are permitted to be tendered in
payment of an Option exercise price.
If the optionee disposes of the shares acquired upon exercise of an Incentive
Option, the federal income tax consequences will depend upon how long the
optionee has held the shares. If the optionee does not dispose of the shares
within two years after the Incentive Option was granted, nor within one year
after the optionee exercised the Incentive Option and the shares were
transferred to the optionee, then the optionee will recognize a long-term
capital gain or loss. The amount of the long-term capital gain or loss will be
equal to the difference between (a) the amount the optionee realized on
disposition of the shares and (b) the Option price at which the optionee
acquired the shares. The Company is not entitled to any compensation expense
deduction under these circumstances.
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If the optionee does not satisfy both of the above holding period requirements
(a "disqualifying disposition"), then the optionee will be required to report as
ordinary compensation income, in the year the optionee disposes of the shares,
the amount by which the lesser of (a) the fair market value of the shares at the
time of exercise of the Incentive Option, or (b) the amount realized on the
disposition of the shares exceeds the Option price for the shares. The Company
will be entitled to a compensation expense deduction in an amount equal to the
ordinary income includable in the taxable income of the optionee. This
compensation income may be subject to withholding and employment-related taxes,
and the Company may be required to withhold in order to receive a deduction.
The remainder of the gain recognized on the disposition, if any, or any loss
recognized on the disposition, will be treated as long-term or short-term
capital gain or loss, depending on the holding period.
NON-QUALIFIED OPTIONS. Generally, neither the optionee nor the Company incurs
any federal income tax consequences as a result of the grant of a Non-Qualified
Option. Upon exercise of a Non-Qualified Option, an optionee will recognize
ordinary compensation income, subject to withholding and employment-related
taxes, in an amount equal to the difference between (a) the fair market value of
the shares purchased, determined on date of exercise, and (b) the consideration
paid for the shares. The optionee may be subject to an additional excise tax if
any amounts are treated as excess parachute payments (see explanation below).
Special rules will apply if previously acquired shares of Common Stock are
permitted to be tendered in payment of an Option exercise price.
At the time of a subsequent sale or disposition of any shares of Common Stock
obtained upon exercise of a Non-Qualified Option any gain or loss will be a
capital gain or loss. Such capital gain or loss will be long-term capital gain
or loss if the sale or disposition occurs more than one year after the date of
exercise and short-term capital gain or loss if the sale or disposition occurs
one year or less after the date of exercise.
In general, the Company will be entitled to a compensation expense deduction in
connection with the exercise of a Non-Qualified Option for any amounts
includable in the taxable income of the optionee as ordinary compensation
income, provided the Company complies with any applicable withholding
requirements. The Company will be entitled to the deduction in the Company's
tax year in which the optionee is taxed.
EXCISE TAX ON PARACHUTE PAYMENTS. The Code also imposes a nondeductible 20%
excise tax on the recipient of "excess parachute payments," as defined in the
Code and denies tax deductibility to the Company of excess parachute payments.
Generally, parachute payments are payments in the nature of compensation to
employees of a company who are officers, shareholders or highly compensated,
which payments are contingent upon a change in ownership or effective control of
the company, or in the ownership of a substantial portion of the assets of the
company. For example, acceleration of the exercisability of Options upon a
change in control of the Company may constitute parachute payments and, in
certain cases, "excess parachute payments."
SECTION 162(m). Under Section 162(m) of the Code, the deductibility of certain
compensation paid to the chief executive officer and each of the four other most
highly compensated executives of publicly held companies is limited to
$1,000,000. Compensation for this purpose generally includes any items of
compensation expense described above in connection with Options under the 1991
Option Plan. However, certain types of compensation are excepted from this
limit, including compensation that qualifies as "performance-based
compensation." Under Section 162(m), any compensation expense resulting from
the exercise of Options under the 1991 Option Plan with exercise prices equal to
(or greater than) the fair market value of the Common Stock on the date
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of grant should qualify as "performance-based compensation" excepted from the
limit of Section 162(m). However, compensation expense in connection with any
other Options under the 1991 Option Plan would be subject to this limit.
OPTIONS GRANTED UNDER THE 1991 OPTION PLAN
As of the date of this Proxy Statement, the Compensation and Stock Option
Committee has approved the grant of Options under the 1991 Option Plan as
summarized in the table below. THE OPTIONS GRANTED IN FISCAL 1994 TO JAMES W.
TAYLOR ARE ALSO DISCLOSED IN THE SUMMARY OF COMPENSATION TABLE AND THE OPTION
GRANTS IN LAST FISCAL YEAR TABLE, AS REQUIRED BY THE RULES OF THE SECURITIES AND
EXCHANGE COMMISSION.
NEW PLAN BENEFITS
1991 STOCK OPTION PLAN
NUMBER OF SHARES
NAME AND POSITION UNDERLYING OPTIONS
----------------- ------------------
James W. Taylor . . . . . . . . . . . . . . . . . . . . 125,000
President and CEO
Executive Officers Group. . . . . . . . . . . . . . . . 125,000
Non-Executive Director Group. . . . . . . . . . . . . . 15,000
Non-Executive Employee Group. . . . . . . . . . . . . . 50,000
Total. . . . . . . . . . . . . . . . . . . . . . . . . 190,000
BOARD OF DIRECTORS RECOMMENDATION
The Board of Directors recommends a vote FOR approval of the proposed amendment
to the 1991 Option Plan. The affirmative vote of a majority of shares of the
Common Stock of the Company voting in person or by proxy on the proposed
amendment to the 1991 Option Plan at the Annual Meeting is necessary for
approval of the amendment. Unless a contrary choice is specified, proxies
solicited by the Board of Directors will be voted FOR approval of the proposed
amendment to the 1991 Option Plan.
PROPOSAL TO AMEND THE RESTATED ARTICLES OF INCORPORATION
TO CHANGE THE NAME OF THE COMPANY
(PROPOSAL NO. 5)
The shareholders of the Company are being asked to approve an amendment to the
Company's Restated Articles of Incorporation to change the name of the Company
to Reuter Manufacturing, Inc. The current name, Green Isle Environmental
Services, Inc., had been approved by the shareholders in 1992. However, later
in 1992 the Company relinquished all rights to its Pembroke Pines, Florida waste
processing facility to the lender of that facility, and the respective assets
and liabilities were deconsolidated on the Company's balance sheet. In November
1994, the Company sold its Eden Prairie, Minnesota waste processing facility.
During this time, the Company has continued to use the "Reuter" name for its
precision manufacturing division. The Company is now focussing on its precision
manufacturing business, which was its core business prior to entering the waste
processing business. Prior to 1992, the Company's name was Reuter, Inc., and
the new name was chosen because of the name recognition associated with the
Company's old name and the Company's current focus on its precision
manufacturing business.
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The Board of Directors recommends a vote FOR approval of the amendment to the
Company's Restated Articles of Incorporation to change the Company's name from
Green Isle Environmental Services, Inc. to Reuter Manufacturing, Inc. The
affirmative vote of a majority of shares of Common Stock voting in person or by
proxy on this proposal at the Annual Meeting is necessary for its approval.
Unless a contrary choice is specified, proxies solicited by the Board of
Directors will be voted FOR approval of this amendment to the Company's Restated
Articles of Incorporation.
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PRINCIPAL SHAREHOLDERS AND BENEFICIAL
OWNERSHIP OF MANAGEMENT
The following table sets forth information regarding the beneficial ownership of
the Common Stock of the Company as of the dates indicated by each shareholder
who is known by the Company to own beneficially more than 5% of the outstanding
Common Stock, by each director, each executive officer named in the Summary
Compensation Table below under the heading "Executive Compensation and Other
Benefits -- Summary of Cash and Certain Other Compensation" and by all executive
officers and directors of the Company as a group.
SHARES OF COMMON STOCK
BENEFICIALLY OWNED (1)(2)
----------------------------
NAME AMOUNT PERCENT OF CLASS
---- ------ ----------------
Edward E. Strickland 260,250 (4) 8.1%
520 Warbass Way
Friday Harbor, WA 98250
James W. Taylor 237,600 (7) 7.1%
719 Lenape Trail
Westfield, NJ 07090
Richard W. Perkins 184,200 (3) 5.8%
730 East Lake Street
Wayzata, MN 55391
Kenneth E. Daugherty 143,100 (5) 4.5%
University of North Texas
P.O. Box 5068
Denton, TX 76203
Gary W. Laidig 15,000 (6) *
Room 155 - State Office Building
St. Paul, MN 55155
Caroline Avey 10,000 (8) *
16341 Wild Plum Circle
Morrison, CO 80465
James H. McGuire 18,000 (9) *
7803 Glenroy Road
Bloomington, MN 55439
All current directors and executive officers
as a group (6 persons) 691,850 (10) 20.2%
- -----------------------------------
* Less than 1% of the outstanding shares.
(1) As of May 1, 1995, unless noted. Unless otherwise noted, all of the shares
shown are held by individuals or entities possessing sole voting and
investment power with respect to such shares.
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(2) Shares not outstanding but deemed beneficially owned by virtue of the right
of a person or member of a group to acquire them within 60 days are treated
as outstanding only when determining the amount and percent owned by such
person or group.
(3) According to a Schedule 13D dated February 9, 1995, as filed with the
Securities and Exchange Commission. Does not include 65,900 shares
beneficially owned by Perkins Capital Management, Inc. as to which shares
Mr. Perkins disclaims beneficial ownership.
(4) Includes 36,000 shares that Mr. Strickland has the right to acquire within
60 days upon the exercise of options.
(5) Includes 14,000 shares that Mr. Daugherty has the right to acquire within
60 days upon the exercise of options.
(6) Includes 14,000 shares that Mr. Laidig has the right to acquire within 60
days upon the exercise of options.
(7) Includes 139,000 shares that Mr. Taylor has the right to acquire within 60
days upon the exercise of options.
(8) Includes 10,000 shares that Ms. Avey has the right to acquire within 60
days upon the exercise of options.
(9) Includes 17,000 shares that Mr. McGuire has the right to acquire within 60
days upon the exercise of options.
(10) Includes an aggregate of 228,000 shares that executive officers and
directors have the right to acquire within 60 days pursuant to outstanding
options.
SECTION 16 COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the
Company's directors and executive officers, and persons who own more than 10% of
the Company's Common Stock, to file with the Securities and Exchange Commission
(the "SEC") initial reports of ownership and reports of changes in ownership of
Common Stock and other equity securities of the Company. Executive officers,
directors and greater than 10% shareholders are required by SEC regulations to
furnish the Company with copies of all Section 16(a) reports they file. To the
Company's knowledge, based solely on review of the copies of such reports
furnished to the Company during
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the year ended December 31, 1994, all Section 16(a) filing requirements
applicable to its executive officers, directors and greater than 10%
shareholders were met.
INDEPENDENT AUDITORS
The Board of Directors has appointed Coopers & Lybrand as independent auditors
to make an examination of the accounts of the Company for the fiscal year ending
December 31, 1995 and to perform other appropriate accounting and audit services
at the request of the Company. Although not required to do so, the Board of
Directors wishes to submit the selection of Coopers & Lybrand to the
shareholders for ratification. The Board of Directors recommends a vote for
ratification of Coopers & Lybrand as independent auditors for the fiscal year
ending December 31, 1995. Unless a contrary choice is specified, a proxy
solicited by the Board of Directors will be voted for the selection of Coopers &
Lybrand. If the selection of Coopers & Lybrand is not ratified, the Board of
Directors will reconsider its selection. The Company has requested and expects
a representative of Coopers & Lybrand to be present at the Annual Meeting to
make a statement if he or she so desires and to respond to appropriate
questions.
PROPOSALS FOR THE NEXT ANNUAL MEETING
Shareholder proposals intended to be presented in the proxy materials relating
to the next annual meeting of shareholders must be received by the Company at
its principal executive offices on or before __________, 1996.
OTHER BUSINESS
The Company knows of no business which will be presented for consideration at
the Annual Meeting other than that described in this Proxy Statement. As to
other business, if any, that may properly come before the Annual Meeting, it is
intended that proxies solicited by the Board will be voted in accordance with
the judgment of the person or persons voting the proxies.
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ANNUAL REPORT ON FORM 10-K
THE COMPANY WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS ANNUAL REPORT ON FORM
10-K (EXCLUSIVE OF EXHIBITS) FOR THE FISCAL YEAR ENDED DECEMBER 31, 1994 TO EACH
PERSON WHO IS A SHAREHOLDER OF THE COMPANY AS OF JULY 14, 1995, UPON RECEIPT
FROM ANY SUCH PERSON OF A WRITTEN REQUEST FOR SUCH ANNUAL REPORT. SUCH REQUEST
SHOULD BE SENT TO REUTER MANUFACTURING, INC., 410 11TH AVENUE SOUTH, HOPKINS,
MINNESOTA 55343, ATTENTION: SECRETARY.
BY ORDER OF THE BOARD OF DIRECTORS
William Johnson
Secretary
Minneapolis, Minnesota
July ____, 1995
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GREEN ISLE ENVIRONMENTAL SERVICES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints JAMES W. TAYLOR and WILLIAM H. JOHNSON, and each
of them, as Proxies, each with power of substitution, and hereby authorizes each
of them to represent and to vote, as designated below, all the shares of Common
Stock of Green Isle Environmental Services, Inc. held of record by the
undersigned on April 28, 1995, at the Annual Meeting of Shareholders to be held
on August 25, 1995, or any adjournment thereof.
1A. ELECTION OF DIRECTORS FOR THREE YEAR TERM EXPIRING IN 1998
[ ] FOR all nominees listed below [ ] AGAINST all nominees listed below
(EXCEPT AS MARKED TO THE CONTRARY BELOW)
Gary. W. Laidig James W. Taylor Caroline Avey
(INSTRUCTION: TO VOTE AGAINST ANY INDIVIDUAL NOMINEE, PRINT THAT NOMINEE'S
NAME ON THE SPACE BELOW.)
-------------------------
1B. ELECTION OF DIRECTOR FOR TWO YEAR TERM EXPIRING IN 1997
[ ] FOR all nominees listed below [ ] AGAINST all nominees listed below
(EXCEPT AS MARKED TO THE CONTRARY BELOW)
James H. McGuire
(INSTRUCTION: TO VOTE AGAINST ANY INDIVIDUAL NOMINEE, PRINT THAT NOMINEE'S
NAME ON THE SPACE BELOW.)
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2. PROPOSAL TO APPROVE AN AMENDMENT TO THE 1991 STOCK OPTION PLAN
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. PROPOSAL TO APPROVE AN AMENDMENT TO THE COMPANY'S RESTATED ARTICLES OF
INCORPORATION TO CHANGE THE COMPANY'S NAME TO REUTER MANUFACTURING, INC.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. PROPOSAL TO RATIFY THE APPOINTMENT OF COOPERS & LYBRAND AS AUDITORS FOR
THE FISCAL YEAR ENDING DECEMBER 31, 1995
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1-4 ABOVE.
(Please sign on Reverse Side)
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THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE NOMINEES LISTED IN PROPOSALS 1A. AND 1B. AND FOR PROPOSALS 2-4
ABOVE. Please sign exactly as name appears below. When shares are held by
joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
Dated: ------------------------------, 1995
-------------------------------------------
Signature
-------------------------------------------
Signature if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY
CARD PROMPTLY USING THE ENCLOSED ENVELOPE
